February 2, 2022 CBJ Assembly Finance Committee Meeting

Are you ready, Ms. Spiegel? I am, Chair Trinh. Okay, let's get this party started. I will call the Assembly Finance Committee meeting of February 2nd to order. Today is Marmot Day.

Happy Marmot Day, everybody. And before I forget, if If you haven't been to City Hall lately, it is binder season, so don't forget to go pick up your budget binder. Okay, so roll call. Ms. Beagle, will you please note our roll? The roll has been noted.

Thank you. Any approval of minutes? Any, uh, additions, corrections, edits to the minutes of January 5th?

Seeing none, so those minutes are approved. We'll get started right away on our agenda topics. First one is the investment manager report, and we have some guests with us tonight, but Mr. Rogers, do you want to kick this off? Yeah, thank you, Chair Treme. So just, just by way of memory lane, CBJ used the same investment advisor for several decades.

Actually, we went out for a public RFP on an investment manager as my predecessor was leaving. That process resulted in us awarding the contract for our investment management to Insight Investments, which is an arm of BNY Mellon. They took over control of our portfolio in late October, early November 2019, and have been our advisor since. And I've certainly had an excellent working relationship with them. And the code, believe it or not, requires me to bring an investment update to you 4 times a year.

I managed to do it once, which I think may be all that you have the tolerance for anyway. So I'm eager to have Mr. Winho and Mr. Celente present to us tonight.

Okay, Mr. Celente, Mr. Winho, you can get started. And I, I think I see a PowerPoint in our packets. I think you'll have a presentation to give us. So Assemblymembers, if you have questions during the presentation, if you raise your hand, I'll probably see it. And we're also— well, good evening everyone, first of all, and it's nice to see everyone again and to be back with you.

We would have loved to have been up there in person, but just COVID's holding us back still. So we're hoping to possibly get up there in about 6 months or so and if the— if it allows us to, to come back that way and everyone gets back together. We're going to try and share our screen to do the presentation. Let's see how we can make this work. And I'm going to try sharing my screen.

Ah, okay, perfect. Is it— can you see it now? Yep. Okay, perfect. Let me, let me just kind of walk you down through.

I'm— with our presentation, we'd like to start out at least recapping, uh, what, what went on last year and setting the context, uh, economically with what we see happening in 2022 and then beyond. So we want to try and set the— it's, it's the pretext for the strategy And then I'm going to go through the economic part, and then Jason's going to talk a little bit more about the strategy, and then we're going to open it up for questions. So let's take a look.

And this is just a summary for what happened in— it's in the package. I'm just going to touch on some highlights for Q4 2021. We just got GDP in, and GDP is gross domestic product. That's the broadest measure of economic activity. In other words, that takes in all possible economic activity in the country just to measure it and see, you know, how the economy's doing.

Uh, it— in the fourth quarter, the economy was very robust. I mean, the, the chairman of the Federal Reserve talked about it just the other day. Uh, we had a 6.9% a year-over-year increase in the fourth quarter. And that's big. That's robust.

Just to set the context for you, before the pandemic, the average GDP for the year was running just about 1.9%, so just under 2%. And that's for a 10-year average before the pandemic set in. So yes, we had in 2020 we had a negative GDP. It was down 3.4%. But in 2021, uh, the average for the entire year was 5.7%, and the last quarter was actually running at 6.9%.

So the economy's doing very, very well. We do expect that to slow down because, as I said, that's running way above average. It should be running around 2 or 2.5%. Our anticipation for 2022 is that it's going to run about 3.9%. We're a little more optimistic than some of our, uh, uh, other firms out there and some of the other economists that are seeing out there.

They're looking at 3.7 or 3.8%, but we really think that some of the problems that we're having with the pandemic and with these supply chain issues are actually going to start to resolve themselves as we move forward. So let's look at some of the things that might impact GDP growth in 2022. Well, one of the first things— it's going to be positive, but it's going to be lower than it was. The dark bars are the, uh, those drivers for 2021, and the light green ones are the drivers for 2022. So as you can see, personal income, it's going to be down a little bit because we are going to not get as much fiscal stimulus in 2022 as we did in 2021.

We had a lot of fiscal stimulus, particularly early in the year, just as the President Trump was moving out of office in 2020. He he put in some stimulus and then as the Biden administration came in, they put in more stimulus. So last year was definitely robust as far as fiscal stimulus and stimulus checks and all that sort of thing. So that's going to be down this year. Personal spending is also gonna be down a little bit as people have fewer dollars from the stimulus checks.

And, you know, private residential construction, it picked up tremendously, and we had a lot of housing starts in 2021, but we haven't had as many housing completions because there's a lot of supply chain issues, and some of these builders can't get the, the supplies they need to finish the houses that they started. So we think that's going to continue to be a little bit slower in 2022. Some of the things that are going to pick up, we think, exports are going to pick up as the world economy starts to come out of a little bit of downturn. The U.S. is leading the world out of the downturn, and with our strong economy, and as our strong economy kind of ripples around the world, other economies will get stronger and our exports will pick up. But as you see at the end here, uh, federal spending is going to be way down, and that's going to be one of what we would call a headwind for the economy next year.

Let's get down and take a look at that. Every time, uh, the economy gets in a little bit of trouble, um, we have fiscal spending, you know, try to stimulate the economy. This time they sent out stimulus checks. Um, there were a lot of support for a number of different groups. You saw the SBA came out with the PPP loans, uh, things like that.

So We saw it back— if you see the last big blip back in October of 2008, when we had the great financial crisis, you saw there was some stimulus there. But compare the stimulus that we saw in 2020 and in 2021 with what we had during the great financial crisis. It's, it's significantly more. We had probably more fiscal stimulus going on in the economy than we had had literally since World War II. Now, much of that's going to be curtailed in 2022.

We're not going to see a lot of that. It's going to slow down. You see the Biden's Build Back Better plan really having a tough time getting through Congress. And there's a lot of inflation out right now. We're going to talk about that.

Some of the fiscal stimulus that we've had in the past has caused or led to increased demand, and that increased demand, of course, leads to increased inflation if we haven't— supply can't meet that demand. And that's the problem we're having right now. Supply just cannot meet the demand. So with that withdrawal of the fiscal stimulus, uh, that's going to slow the economy down. But like I said, it was ending the year at 6.9%, so even if it slows down to 3.9%, that's That's still twice the rate it was running before the pandemic started.

So the other thing that we're going to start to see withdrawal of is monetary stimulus. And what we mean by monetary stimulus, we're talking about low interest rates. So the Federal Reserve, in order to keep the economy going, moved interest rates down to their lowest level, near zero, and kept it there for about 2 years. Now, the Federal Reserve Chairman just came out last week and said, "Boy, you know, we can't keep interest rates at zero forever. We're going to have to start to raise interest rates." It looks like they're going to start that in March and probably continue with interest rate increases through the rest of this year and likely into 2023.

So we're probably going to get 3 to 5 increases in the Federal Reserve's overnight funds rate. It's right now between 0 and 25, so it's going to go up at 25 basis points a move, so that's 1/4 of 1%, and it's— we're going to end the year somewhere around 1.25% funds rate. And so, and the other thing they're going to start doing is stop what we call quantitative easing, and by that What the Federal Reserve was doing was, was buying bonds out into the marketplace and, and putting that cash— when they bought the bonds and put it into their own portfolio, they put cash out into the marketplace, and that increased liquidity, which was good in, in a marketplace that needed liquidity. But they're going to stop doing that, and they've already started to pare that back, and we think that they'll be done with that probably by March. So we're going to withdraw the fiscal stimulus from, from, you know, the White House and then Congress, and we are going to start to withdraw monetary stimulus.

So we are very likely going to slow the economy down, but we hope that that also slows down some of the inflation. Let's talk about inflation for just a minute. Oh, before we go there, I want to talk about unemployment. Unemployment looks very good. We're almost down to where we were pre-pandemic.

We're down at— and we're going to get another number on this coming Friday. But the last read for the month of December was 3.9% unemployment. That's pretty good. The Fed wanted to get it down to about 3.5%. It's getting down there.

We think we're going to be down there by the mid to the end of this year. And so it's going in the right direction. It might not drop out any on Friday because we have some problems with, uh, the number for January. Omicron was so, uh, difficult. There were so many people that were staying home and staying out of work, uh, because they got COVID, um, during the month of January that is distorting the month, uh, the employment numbers for January.

So you're going to see it on Friday. It might come out to be a negative number. I wouldn't pay too much attention to that. The employment situation is very, very strong, and we think those numbers are going to be distorted on Friday because of the Omicron situation, where— because people who, who were sick that didn't have paid leave are considered to be unemployed. So there were so many people who were sick during this January period that it's going to distort those numbers.

So that's really not a good number. We won't have a really good read until we get the February numbers. Mr. Wilhelm, I'm going to interrupt you just a second to note that Assemblymember Hale has joined us. And for those of you listening who can't see us, we do have all 9 assembly members now. Oh, great.

Perfect. I'm just going to talk for a moment about the labor force. One of the things that we— that's odd that is holding back some of these unemployment rates is that a number of people have left the labor force and they call missing workers. They say there's up to 3 million missing workers. But what we're determining now is that many of these people actually went out and started their own companies.

And so they're not working for employers and they're not necessarily unemployed. They're actually starting the companies. And there have been a great creation of new companies out there where people are saying, you know, I don't want to work in this traditional setting, and they've gone out to work for themselves. And so we're going to have to figure out a way to measure those. We don't measure that effectively right now.

So we're going to have to figure out over the next year or two how to measure those new startup companies and, and so that we can catch that in the employment numbers. Because we're missing it right now.

I will finish up with one more slide. Let me see, let me get down slide number 13. I want to finish up with this last slide because this is going to be, uh, the big thing coming up. Now we are going to, as I said, we're going to see a slowdown in the economy, but right now, uh, core PCE, which is personal consumption expenditures, it's like CPI, which you're used to seeing, and, and the Consumer Price Index. But this is the measure that the Fed uses.

You see the Consumer Price Index on the right, they measure similar stuff. It's a measure of inflation. And we have not seen these levels of inflation. In fact, in, in December, we had CPI running at 7% inflation. We haven't seen these levels of inflation since I first started in the business.

That was back in in, uh, 1982. So it's been a long time, uh, since we've seen these kind of levels of inflation. And in fact, we were trying to get inflation to run around 2%, uh, before the pandemic started, and it was bouncing around just under 2%, and now it's running at, uh, 7%. So this is a big theme, and this is one of the things that the Federal Reserve wants to try and control because, uh, it's driving costs everywhere, whether it's housing costs or food costs or energy costs. And unfortunately, inflation hurts.

It does hurt the, the people who can afford it least the most. So that is absolutely true. It affects everyone. But as a percentage of their income, it actually affects the poorest Americans the most. So the Biden administration is really feeling the heat on this.

They want the Federal Reserve to get inflation under control. Like I said, once it starts, it can be very difficult to get under control. That's why we're seeing a withdrawal somewhat of fiscal stimulus. We're also seeing that withdrawal of monetary stimulus and raising of interest rates. That could get inflation to come down.

We will start to see it, we believe, this spring start to moderate a little bit. We haven't seen it yet. Um, and it actually probably increased from the December numbers in January. We don't have those numbers out yet, but, uh, we think that January— January numbers actually went up a little bit. So, um, it's going to take a number of months, but we think some of the supply chain issues are starting to solve themselves.

And as those supply chain issues solve themselves, uh, we are going to see, um, uh, a little bit bit of a meeting between the supply and demand, more supply than demand, maybe moderating a little bit as the Federal Reserve raises interest rates, and that should get things back in balance. We expect inflation to be, uh, pretty tame getting close to the end of the year. It should end the year somewhere around 3% or so. And, and with that, it kind of gives you the footing of what we're doing, what we think is going on in the economy. And I'm going to turn it over to Jason to talk a little bit about what the portfolio has done in the past, and what our strategy is going forward.

Thank you, Dave, and good evening, everyone. Dave, if I can ask you to turn to page 21, please.

Are you able to move it? Can you hear me?

There you go.

Okay, so as Dave is turning to page 21, and just to remind the Finance Committee, uh, what we're, what we're doing on your behalf is we're managing a portion of the city's funds, approximately $167 million, what we would call the intermediate-term portfolio. So this is the portion of the portfolio that isn't necessary there to meet your incoming and outgoing cash needs. It has the ability to invest a little bit longer than those cash needs. And by doing that, we're investing in, in, uh, in fixed income or bonds. Okay, and if you look on page 21, and when you think about fixed income, uh, what are the sources of return that we're trying to generate on your behalf?

And you can see on this slide that there are 3 main building blocks. One, that first one there called duration, and that is the piece that is that is reflecting the interest rate sensitivity of the portfolio. Okay? So as the Federal Reserve is raising interest rates, how sensitive is the portfolio to those changes? And you can see what we identified here is that we have what's known as the Powell pivot, right?

Last year we were talking about how the Fed was going to be patient. As Dave outlined, inflation proved to be a lot more durable than what everyone was expecting. So Chairman Powell and the Federal Reserve pivoted to what we're going to expect to be much more aggressive interest rate policy here in 2022, 3 to 5 interest rate hikes, as he mentioned. So when you think about that as our outlook, what we want to do is we want to remain defensive to those rising interest rates. And by that, we mean we want to be a little bit shorter in maturity or a little bit shorter in what they call duration on the portfolio.

The next two main building blocks really have to do with sector and security selection. And when you think about sectors in, in the fixed income market, you're thinking about things like US Treasuries, US agencies, and corporate bonds. And how do you make allocation decisions among those sectors that give you the best risk-reward trade-off on behalf of your portfolio, on behalf of the city. So when we think about this transition, right, we've had this pivot and now we're transitioning to a higher interest rate environment, which sectors are probably gonna perform best or which sectors are likely to perform best? And one of the things that we want to be careful of owning are those sectors that are perhaps a little bit more sensitive to that rising interest rate environment.

And what we've identified here in that middle narrative or that middle column is really looking at agency mortgage-backed securities, because Dave mentioned one of the things that the Fed has been buying has been agency mortgage-backed securities. As they begin to wind that down, that sector needs to find a new buyer to make up for that demand. Prices are going to have to get a little bit more attractive. For the private buyer to go ahead and buy those types of investments. Within corporate bonds, lastly, what we're talking about here conceptually is moving from a recovery phase of the economy to more of a mid-cycle phase.

And as that occurs, you have corporations that are, number one, priced very well or priced for perfection, as we like to say. And then number two, need to try to find different ways to generate return. And when they get into that mode, that mid-cycle mode of having to move into other ways to find return, what they end up doing is they end up taking on more debt to benefit your stockholder. And since we're the debt, we're the fixed income investors, as that is occurring, you can be prone to downgrades. Now, this isn't a reason for panic in terms of owning corporate bonds.

Your portfolio is a very high-quality portfolio of investment grade, which is the very top tier of the corporate bond universe. So it's not about default, but what we do have to be mindful of is downgrade risk. So to the degree that a single A security could be downgraded to BBB, which is permitted by your investment guidelines, but more importantly, those BBB securities that could get downgraded to below BBB, or what we call high yield. So you want to be really careful about the types of bonds that we're picking within the corporate bond universe. To avoid that downgrade risk.

I'm just going to speak to one more page in the interest of time, and I know you have a busy agenda, and— but that's going to be on page 22, which is going to be your summary snapshot of the portfolio and its performance over the last year and 2 years since we've taken on, um, as, as an advisor for, for the city. And what you're looking at here in the top part of the, of the of the slide here is that performance. And what you're gonna see here year to date is -0.96% versus a benchmark of -0.97%. And you're saying, well, page 22, Dave. And you're saying, well, gee, that doesn't really feel that good.

But you have to remember there's a couple of things going on here. Number one, in 2020, we really had a very strong pull forward of returns as the Federal Reserve was lowering interest rates rather aggressively. Being long that duration, being long that expectation that rates are going to go lower generates positive returns. Now that it's starting to go the other way, we really pulled forward very strong positive returns. And as we're readjusting at this part of the cycle, we're going to give some of that back.

So if you look at the right-hand side of the column, you can see since inception, the portfolio has returned nearly 2%, 1.97% versus the benchmark of 1.75%. So it's been a good outcome for the last 2 years. This last year was a little bit more challenging from an absolute return perspective and a relative return perspective, but it's about how we're thinking about positioning the portfolio going forward, primarily to those things that I outlined. In terms of, of sector selection and security selection. But what really does pop on this page is in the blue box that I outlined, which is that effective duration years, that idea of being short, that interest rate sensitivity, the expectation that rates are going to rise.

And you can see that the portfolio is at 2.51 years versus the benchmark of 2.74. So we think that that'll give us an opportunity to get a little bit back versus the index this year. From an absolute return perspective, it'll probably be a little bit challenging again because we're just at the beginning of the hiking cycle, but as that plays out, you build in more yield and more income to the portfolio, and that should flatten out and start generating positive returns again later in the interest rate cycle. So I'm going to stop there and I'll pass it back to Dave who can start answering questions.

Thanks, Jason. I'm sorry, I think my internet connection is a little unstable. So, but you know, one thing I wanted before I opened up for questions, one thing I wanted to point out, and this is mostly for Jeff because this is something, one of the things that We—.

I think we lost Dave. Oh, he's just—. Remember we had that discussion about active security selection and that duration management? That duration management's key, particularly in risk management in this rising interest rate environment. You want to bring that portfolio in You don't want to be portfolio duration neutral.

You want to be able to bring that portfolio in and make it shorter, and that reduces your risk during this rising interest rate cycle and eventually will—. Um, Chair Triem, I might just recommend that we turn to questions with Mr. Celente. I think he's probably able to respond.

Can you hear me now at all? Jason, I'm going to turn it over to you to answer the question because my internet seems to be a little unstable right now. Sounds good. Okay, are there any questions from Assembly members?

I have a quick question, um, Mr. Celente. How frequently are we— are the things that are in our portfolio changing? That are being bought or sold? How often does that happen? Sure.

That happens quite regularly. So there's a statistic in portfolio management known as turnover, which measures how much you're moving the portfolio around. And the turnover in this portfolio, while I haven't looked at it that closely recently, is usually somewhere between, I would say, 10 and 15 buy-sell transactions per month.

Mr. Smith. Thank you, Chair Treme. Um, thank you, gentlemen, for being here. Just a quick question on the ESG. Um, I'm trying to remember what that stands for, but I know what it means.

But, um, any changes on that? And I can't remember if we have given you additional guidance on ESG direction, or if we— that was kind of a pending conversation. Sure, so we, we did speak about it at this time last year, and we came back with, uh, essentially a working group study that we did with Mr. Rogers around what we can do around ESG. And where, where we left it was, here are some of the options. They ranged from having a high-level statement overview what are the values of the city and borough of Juneau and how you put that into your investment policy statement, all the way to the other side of like, "Gee, we're going to want to restrict certain companies or certain types of industries from the investment portfolio." What our recommendation was at the time and still is today is as you begin to think about this, our recommendation is to to go slow and show incremental progress, okay?

Because one of the challenges is if you go all the way to the side of we're going to restrict a certain, a certain sector or certain company, then what's the, what's, what's the point where you're going to say that I'm going to go ahead and now reinclude it because they've improved? And one of your members had brought up the point of, you know, we don't necessarily want to be in the business of picking picking bonds or picking companies because of that, that type of dynamic. So it was left as an open issue. It was left as something that was going to be contemplated over the course of whatever time frame that the, you know, your team has, has got capacity to deal with. And we stand ready to be able to implement, you know, the beginning stages of that when you are.

I'll make one final point on page 27. What we are doing with ESG today, and I'm not sure if you're going to be able to see it or if I can share it, but what you are doing with ESG today is it is part of your investment portfolio in the sense that it is part of our investment process. It is a key input into how we make the selections on those corporate bonds. And we're measuring those attributes that are very well scored from an ESG perspective versus ones that aren't. And we scale that between 1 and 5.

And our philosophy is we're going to avoid the worst offenders. We're going to try and focus on the best-in-class issuers. And to the degree that we start seeing a company worsen or improve, we go ahead and we actively manage around that and try and stay in best-in-class. Mr. Rogers, did you want to add anything to that? Chair Triem, thank you.

I would just acknowledge that I have been remiss in getting this back to the committee. We do have some materials on ESG options from Insight, and it has just gotten bogged down by other priorities. I think that I am ready to bring back to the committee at any time at your pleasure some considerations about ESG. We could we can queue that up for March, or we can queue it up for the summer, whatever the committee's interest is. Thank you, Mr. Rogers.

Mayor Weldon.

Thank you, Madam Chair. I think Mr. Whitholme touched on this, but I'm just making sure I understand. I'm looking at page 25. So we are investing in some BBB companies, and I'm assuming that's similar to private investment where you have a few little more risky stuff that gives you a little high yield. Is that correct?

Thank you. So if I can, if I can set the rating scale here, investment grade, which is permitted by your policy, is AAA, AA, single A, and BBB. So those, those bars that you're seeing there, B, I, G, is short for below investment grade. That's not permitted by policy. That would be considered high yield.

And yes, what I'm saying is that you're in the top tier of corporate bonds.

Okay. Are there any other questions?

I don't see any. Mr. Whiton, Mr. Celente, thank you for joining us, and hopefully we can bring you up here in person at a better time of the year with better weather. So maybe this summer. Thank you. Good luck with the rest of your meeting, and we'll follow up with Mr. Rogers, uh, later this week.

Thank you.

And Miss Spiegel, have you Have you brought over our next presenters? Chair Treme, I have. Jennifer Mannix has joined us. Thank you. So next on our agenda is an insurance risk update, and Mr. Rogers, I'll let you introduce this.

So thank you, Chair Treme. We try to do this update regularly. I think we didn't do it last year. I think we did 2 years ago about this exact same time. You know, it's a big area of exposure for the city.

How we're insured against various calamity is a big part of our structure of liability and fiduciary responsibility. So I think it's useful to touch these things every year. We've included it particularly at this point in the budget cycle because the cost of insurance, particularly property casualty insurance, is going up exponentially. And, and the risk manager will talk about that. Obviously, the risk manager is an employee of the Human Resources Department, so we work in collaboration together.

This is not strictly a Finance Department function, but Finance stays heavily involved. So I am as eager to hear this update as you are. Thank you, Mr. Rogers. Ms. Mannix, whenever you are ready.

Okay, thank you. Thank you for this opportunity. I will share my screen.

Okay. My goal with this presentation is to give you a pretty high-level view of our risk management program, and we'll dive into some details about the biggest cost to our program, specifically health insurance and property insurance, a little bit more.

So, first of all, I'm Jennifer Mannix. I'm the Risk Management Officer for the City and Borough of Juneau. I've I've been in this position for about 8 years, and I am happy to— I've learned a ton over these last many years, but we have a broker that helps me with all of this stuff, so I get a lot of good information from them as well. Our risk management program involves self-insured programs and fully insured programs, with our property being kind of in the middle. A self-insured program, for anyone who doesn't really know how that works, is we have buckets of money that we pay directly we budget for these expenses, try to estimate them as best we can, and keep fund balances for different self-insured programs so that we can pay claims directly out of them.

And that's the column on the left. Health benefits, general liability for a lot of our operations, but not all of them. Employment practices, which would include stuff like wrongful termination or an employee discrimination claim. Something like that. And then finally, workers' compensation program.

The fully insured parts of our program are property insurance. We have a deductible that we pay, and then it's considered just a deductible, and we are considered fully insured, but we have a large deductible. So I'll go into that a lot more later. Special policies. So our general liability coverage that we have for a lot of our city operations is really Specific to standard municipal type operations, but there are some that fall outside of that, and that would include airport, docks and harbors, Bartlett Regional Hospital professional and general liability, Eagle Crest ski area, and then a portion of CCFR's services that they provide that specifically the medical paramedic EMT services need a professional liability policy that falls outside of general liability.

So, those are fully insured, lower deductible policies. This is a snapshot of what our FY22 expenditure budget looks like. It is, as you can see, health gobbles up a huge portion of it. Health insurance is an ever-growing, very expensive program. And then, all of the rest of our programs fit into that last, a little bit less than a quarter and mostly, you know, lower cost.

The highlights of those— the more expensive programs would be workers' comp, general liability, and property. So I'm going to talk about health benefits first because it is such a large dollar amount.

So our health insurance plan is a self-insured plan. We've budgeted $22.5 million for FY22. Based on what we know so far with the claims this year, we're probably within $1 million of that, but that's actually considered a good estimate because it's very hard to estimate what our claims expenses are going to be in any given year. And our claims expenses take up about 5% of our— I'm sorry, 95% of our total program. So, we don't have a lot of control over that cost, and it's and it's rising nationally as you hear in the news.

And so, that's how the dollars kind of flush out. We cover about 1,080 members and are— we cover all benefited employees at the City and Borough of Juneau and Bartlett Regional Hospital. And then we have a small group of benefited employees at Juneau School District that are also covered. And that includes— so, with our employees and their dependents, we're at about 2,500 covered lives. We are self-insured.

I already talked about that. That self-insured fund pays not for not just claims, but that other million dollars in expenses, million dollars plus. It will also cover our administration of our plan, which is Premera Blue Cross Blue Shield. They're the ones that handle all of our claims for us. Aon Consulting is our health benefits and employee benefits consultant.

So, we work a lot with them and Premera. To try to work on how to contain those costs. And then finally, our stop-loss insurance. Stop-loss insurance for any given medical claim that exceeds $250,000, so any really large claim, is we have insurance that will cover the difference above that $250,000. So, it's like an excess insurance.

And I already mentioned Premera. That's our administrator.

This graph, I like to show this. We get Aon, our consultant, to update this every year or two. This shows national trends. Aon has— they have a large consulting— they're a very large company and they have a lot of national data on healthcare and health expenses. And what it shows is good in that We're the green line, and our trended increases in healthcare costs every year is about 2%, maybe a little more now.

I think it's gone up a little bit from this graph. But you'll see the national average is about 5%. And so, our goal is always to stay well below the national average, and we have lots of— we have several different strategies that we use. But we're doing well at pacing ourselves at a slower increase than the rest. They're going to— costs are going to go up because they are nationally, and we can't control that, but maintaining our health benefits program at a lower rate of increase is the goal.

So, every year we get a report from Premera, and we're about to get a new report tomorrow. This is data from the last time we met last January, I believe. We get a report from Premera, Blue Cross Blue Shield, that shows us what our highest cost drivers are in our program. And I just I just did a screenshot of the top 5. We get a long list, a pretty long list, and what we use it for, this is one of the ways we can just kind of target different areas of our healthcare spends to try to lower those costs in the future.

And, you know, some of them we don't have control over so much, but cardiovascular disease, that was number 1 in our last report last year. You know, we have a wellness program that can direct Lots of information and incentivize programs that help reduce people's risk for cardiovascular disease. So, we, we do a lot of different things in that area trying to target these different high-cost drivers for our programs. And then I wanted to point out that line at the bottom that says 2.1% of our members drove about 48.3% of our costs. When you think about a $22, $23 million health health claim budget.

That's a lot of expense for a very small amount of our members. And I think it always just blows us away when we see those statistics because that doesn't change over the years. It's always about something like that. Um, we, we have a very small population of covered members within our plan who, who have lots of risk factors and have a lot of high claims. And so if we can try to work towards getting this smaller group healthier That's a huge goal and it's challenging, but it's also, it's a way to reduce costs more efficiently.

And that's what we're trying to do for cost containment. There's, first of all, there's, I'm going to talk about the wellness program because that's where we try to work on that aspect. We have ongoing communication with Premera and Aon. We're always talking about ways to modify our coverage, provide more resources to our members to try to reduce these risk factors in our members, and also just work on things like plan design. When we're a self-insured plan, we have a lot of flexibility in how our health plan looks, and we can be kind of creative sometimes, and we can try different things just to try to contain those costs a little bit.

We promote medical consumerism. We want our employees and our members, all of our members to think about healthcare as another consumer item, right? You don't have to— you can go to an in-network provider. You can, you know, do you really need to go to the emergency room for certain things? We have virtual care that can help with that.

We have a nurse line. I mean, we have ways to direct people to the right level of care because anytime you go to certain types, you're going to— one's going to cost more than others, and sometimes it's not necessary and sometimes it is. We have finally, we have this wellness program that— Siti Namburabudino has been, was so ahead of the game. They started this wellness program in the late '80s and we've had it for over 30 years now. And we work really hard.

I'm going to go to the next slide and talk a little bit about that. Our wellness program is, the goals of it are to assist employees in leading healthier lives Anytime we can get people to move towards healthier lifestyle and healthier choices, they're going to have fewer injuries and illnesses. They're going to have better well-being. It's absolutely going to make them healthier and happier outside of work, and it's hopefully going to improve productivity and morale in the workplace because we— I mean, we have a lot of people that participate in various wellness programs, and it's a cool thing to know that your employer is investing in you in these ways. And our wellness coordinator works with all of our covered employees and is in touch with spouses.

And it's really— it's a neat program, and it's— I've always been a big fan of it, and I think it really helps with containing all these challenging costs. So, from there, I'm going to switch gears from health and wellness to our property casualty program. Again, I talked about self-insured at the beginning versus fully insured. So, We have these different programs, general and auto liability. The auto liability and employment practices programs extend for all of CBJ, including our enterprises, all of Bartlett, and all of the school district.

Workers' compensation is for everybody as well. We have our programs cover all three organizations fully. The general liability program that is self-insured extends to the school district and all of the CVJ operations that aren't mentioned in the special policies on the right-hand side. So again, these fully insured policies for the enterprises, as well as CCFR's professional liability, are insured with small deductibles. They're separate little specialty niche-type coverages.

And then again, I'll talk about property in a few minutes. It's technically fully insured, but We have a huge deductible now, huge for us. Let me show you a little bit about our property casualty program. This is that small little quarter of the pie that we had in the beginning. This is how it looks when you spread it out to the 6 different lines of coverage that we have in our property casualty program.

You can just see that workers' comp and general liability and property are really the 3 biggest components. The property program, I put an asterisk there, that dollar amount that we budgeted for expenses, we were surprised in our June 2021 renewal, that's the policy year that we're in right now. We were surprised that this is what we budgeted for the entire program for that year. Our insurance premium went up to about $1.4 million this policy year when we really weren't anticipating that high of an increase. So it shocked us, and so that's why that number is what we budgeted, but we're going to exceed that by quite a bit, I think.

Big picture revenue. So to fund our insurance, our risk management programs, we— and this is not including health, this is everything else— we need to charge out our programs to all of our city, city of Sacramento departments, enterprises, Farley Regional Hospital, and the school district. So this is in FY22. This year we charged about 5— a little over $5 million. And you'll see that it's going up by almost a million for the next year, for FY23.

And that is almost completely because of our property insurance need for more revenue to bring into our property program. And you'll notice that The school district is ending up going up higher. I should have put numbers on this. I'm sorry I didn't, but the school district portion is increasing significantly because they have so many buildings, as opposed to Bartlett Regional Hospital that has a small percentage of our buildings. And so they don't have to contribute as much to our property program.

And then the city's increases is also due to the property increase. So, so it's a, it's a significant increase in our what we're charging to our various participants in our program.

One look— another look at our just insurance premiums, you see the top two layers are actually workers' comp and special policies. Those insurance policies have really remained pretty steady as far as our premium increases. They haven't been very— they have increased at pretty low rates. But when you get into our excess liability, which is our general liability, policy that covers school district and part of CBJ. That has seen a pretty dramatic increase, and then property insurance premiums have gone up really fast over the last few years.

Both of them are considered hard national and global insurance markets right now, so that's, that's part of the reason. And I have percentages down there. It's been a very painful several years of renewals for increases.

Okay. Let's drill down to property for a few minutes. You'll see that just since FY '18, when we started really seeing an increase in the purple, the property insurance premiums, it just kept going higher and higher. There were a couple different reasons for that. There's, first of all, the hard insurance market.

So, if you think of the property insurance market as a global— market of insurers. There really are not that many large insurers that cover property programs such as ours and other public entities. The historical losses over the last several years, including really dramatic hurricane losses and, you know, natural disasters in many different forms— forest fires, a lot of hurricanes and tornadoes, you know, there's just all kinds of global markets, and not even just in the U.S., of course, global. So, so that is a big driver for insurance premiums. And what happened at the same time is we started seeing more losses, and they weren't lots of high-dollar losses.

We had, we had one big one in '17, that would be Project Playground, which was over $2 million. And then we had, we've had other losses. Our loss history has increased over the last several years. So when it, when we go to renew our policies, they look at the global market and then they look at our loss history and they say they've just determined that we really need some serious increases. So it's been, it's been a bad combination.

I want to say perfect storm. That's kind of fun. Anyways, I'll say it anyways. It's a perfect storm of those two things aligning. And now when we go into our FY23 renewal, we're also going to see the inflation that was just discussed in the previous presentation is absolutely going to affect our property insurance renewal along with our loss history.

And I'm going to talk about that a little bit more here.

So, we have had— since FY15, we've had— we had a $100,000 property insurance deductible up until our July of 2021 renewal. So, last summer. This current policy year, our deductible got raised to $500,000 for property insurance. So, a significant change in what we budget for. We budget for any of our losses to only $100,000 max.

Now, it's a whole different ballgame, and we weren't— we didn't budget for that $500,000, that change, that $400,000 increase. So, we're kind of catching up from that. But anyways, what it would have meant if we had over the last 6 years, I'm not going to count '22 yet, FY '22, we had 11 claims that went over $100,000. So, if we had added a $500,000 deductible school, looking back to FY '15, we're talking about a very large increase of paying $1.65 million more out of our self-insured fund. And thankfully, we didn't have to, but we do have— we still have to consider any new loss and how much it's going to cost us.

And that does include the one that just happened a couple weeks ago, the Riverbend Elementary School pipe burst, two pipes burst. Likely to go, I think, a fair amount over $2 million as a claim. So we're on the hook for that first $500,000 for this claim, and it's the first large claim we've had since we had this change in our property insurance policy. So it's a— there's not much positive to talk about our property insurance right now. It's really hitting us hard, and I think given this new large claim claim and the property market that has still not softened, we're likely to see a pretty tough renewal this spring too.

So for the July 1 renewal. So that's just the state of property.

And I'm going to go— I'm just going to give you a quick snapshot of our auto and general liability claims history over the last few years just to show— this is the only thing I want to demonstrate here is that we It's volatile and it's hard to predict when you're going to get that next large claim. Fortunately, there's not any percolating right now, and I always have to knock on wood when I do that. I'm very suspicious about— superstitious about that, not suspicious. But we have good years and bad years, and so we have to try to budget appropriately and predict how bad is any given year going to be. Hopefully, we can contain most things, but unfortunately accidents happen and claims happen.

And lastly, this is the bright spot, and I saved it for one of the last slides. It's not the last one, sorry, but workers' comp. Workers' comp is actually looking the best of all of our programs right now. We have a $1.25 million self-insured retention, which is a lot, but the good news is, is that that's only going to be used for catastrophic claims. And we haven't had one for a long time, and that's another knock on wood situation.

But our workers' comp programs are doing really well. We always have concerns and we're always keeping an eye on— we cannot control medical costs. Expenses for workers' comp claim can get volatile if someone has a pretty serious injury. There's a lot of— there's some challenges with that, and the larger claims will grow over a few years if someone's someone needs ongoing medical care. But the way we counteract that is we have a very strong safety management program.

It's always, always trying to evaluate and improve it. We have a safety officer in our office who works with all 3 entities. Remember, workers' comp covers all of CBJ, all the enterprises in CBJ, Bartlett, and the school district. And we have committees within that bring these 3 different groups together to discuss— we have a lot of resources that we haven't always tapped well and shared amongst the three organizations, but we all have the same motivating factors. We want to keep our workers' comp costs at bay, and the best way to do that is to reduce our seriousness of accidents, reduce the number of accidents, and try to keep our costs down that way.

We also have a strong work return-to-work and light-duty program that we were always trying to promote. And we have a really close relationship with our third-party adjuster who handles all of our claims, and we communicate with them weekly. We have a monthly call, and we're always in communication with them about challenging claims. So that's workers' comp.

I wanted to give you just a quick— this is the one slide I changed from your packet on Friday, so I just wanted to point out that I had taken this slide from data when I didn't have FY21 actual risk fund balance information. So I just— what this number is now is for FY21, it's the actual risk fund balance at the end of 2021. So remember that this is actually the risk fund balance for all of our programs, including health and including all the property casualty. So you just— the program. So you can see how it goes up and down.

Quite a bit, and I think it's at a pretty healthy level. I wouldn't want to see it drop much from here because as our health claims go up, we're spending about $2 million a month on health claims as it is right now, maybe slightly less than that. So we don't want to see that go further down. We need that reserves for things like large property claims and stuff like that. So that's our health fund, risk fund balance.

Just a brief snapshot. And finally, this is finally, let's talk about cyber liability briefly because that's definitely a hot topic. You hear about a lot of cyber attacks nationally, and unfortunately public entities have been the targets of some of these. So cyber liability coverage is a really good thing for us to have. It's also becoming really hard for us to get.

So So we have currently $2 million as part of a $40 million aggregate amongst everybody in our property insurance program. So it's a decent limit, but it's also— it's not ideal. I mean, we would like to have more. The year before that, we had $2 million excess above that, but we weren't able to secure that for this policy year because they had a huge premium increase and they were requiring security requirements that we didn't— amongst our 3 organizations, Bartlett School District and CBJ, we didn't meet all of the security criteria. So since that renewal, we've been, we've been working with all 3 of our IT departments to try to get better ground covered on all of the security.

Everybody's got different systems and everybody has different security protocols in place, but, but it wasn't— we didn't have everything everywhere. So we're working, we're all working hard to get there for the renewal this coming July. So that is a brief summary of cybersecurity, and that's everything, everything risk management at CVJ. Thank you. If you will stop sharing your screen, we'll see.

Oh yeah, absolutely. Thank you. There are Assembly members with questions. Mr. Bryson.

Thank you, Madam Chair, and thank you, Miss Mannix, for coming. I love insurance. I could talk about insurance all day, so thank you. Very lovely topic. Thank you.

Our risk fund balance of roughly $7.5 million is our risk fund balance in an ordinance meaning that CBJ already set, like, we should have X percentage of payroll or X percentage of city property valuations. Is there any city code that says how much money should be in the risk fund balance, or you guys are just using estimates and track record to determine the risk fund balance? Thank you for the time, ma'am.

Thank you. It's not in an ordinance. We buy by program. We try to have a— we try to think about what our exposure is in any given program and what we should keep. Like, for instance, for our health fund, which is, you know, the largest, we're shooting for 2 to 3 months' worth of claims costs, so somewhere between probably $4 million and $5, $6 million.

So, that's the goal with the health fund. We've been told by actuaries that that's a good target right around there. I think 2 is on the low end and 3 is a little higher. We like that better. Love to have that all the time.

Then for other programs, what's our self-insured retention? What are our known claims? That sort of thing. So, we just— we internally manage that.

Very well done. Thank you, Madam Chair, and thank you, Ms. Maddox. Unlike Mr. Bryson, I don't like talking about insurance, not my favorite topic at all. Um, I'm not— your page number— your slide presentation doesn't have page numbers, but I'm looking at the property casualty program with CBJ, JSD, and BRH, and you said why JSD is higher is because they have more properties, but technically it's our properties, so I'm not sure why theirs is higher. It's because they're operating it?

Yes, they are, they're all city property, correct? But what I'm understanding, we actually have looked into this before and Jeff could probably chime in, but the The school district manages their facilities, and they are considered owners as far as funding. Funding all of the maintenance and upkeep and overhead for those facilities, which includes insurance, is something they have to include in their budget under the CAP. Is that the correct way to say it, I think, Jeff? Yes.

So, yeah, so that is why they are considered school district properties.

Mr. Rogers, did you want to add to that? Yeah, this is the one comment I had, Chair Treme, was about the school district. So as we have seen these increases coming from some distance away, I did let Superintendent Weiss, Dr. Weiss, know, and I believe she passed along to the school board at that point in their budget planning that there— we, we expect that the property insurance rate costs for the school district will double, fully double. So about $430,000 a year is what they have paid insurance, or what they do pay for insurance in FY22, and we expect that to be in excess of $800,000 next year. It's a super unfortunate circumstance.

As you know, you hear the way the school board likes to talk about dollars. I mean, $400,000 is 4 teachers. I mean, that's, that really is the way the math works out. So It will be challenging for the school district to absorb that cost, that increased cost of insurance, at the same time that they are also absorbing all kinds of other cost increases and an aspiration, desire to do new good stuff as a school district. And it is a problem that the Assembly cannot solve with additional funding.

You are bound by the cap. Insurance costs are subject to the cap. You cannot fund insurance costs outside the cap, so it will be a challenging circumstance for the school board, but it is not a financial challenge that will manifest itself for the assembly.

Thank you, Mr. Rogers. Ms. Hale, did I see you raise your hand? Okay, Mr. Bryson.

All right, I had two things real quick, and I'll be very fast, Madam Chair. Um, and then I just drew a blank on both of them. Um, so Madam Chair, I'll just go to the one thing that I thought of. Okay, so we pay insurance for Bartlett employees to have medical insurance, and we pay for 2,080 people to have insurance, and we own our own hospital. Would it be too out there to think any city employee that uses Bartlett for their medical services could receive a small discount, which would then be savings for the city, which controls the finances of all employees and Bartlett's budget.

So we own a hospital, and the biggest issue we have are raising health costs. Could we think like the private sector and use our own hospital to lower our healthcare costs by charging our own selves a little less? It's so crazy, it might work, but we literally have raised— rising healthcare costs and we own a hospital. So I don't know, to me there just seems like a very practical solution that we could use our hospital, city-owned hospital, to lower our healthcare costs. I'm sure I'm oversimplifying it, Ms. Mannix.

If you could explain to me why I'm wrong, I would love to hear it.

Thank you for the time, Madam Chair.

Well, I absolutely wouldn't say that you're wrong, and I know we have talked about this in the past. There are other kind of secondary impacts to doing that, and so we haven't ever tried to just make it happen. Obviously, that means a little lower revenue for BARTlett. There are other impacts in how— if city employees get discounts at BARTlett but the rest of the community does not, and BARTlett employees get discounts, it's a little bit of an optics thing. And so we absolutely have brought it up before.

Before, and it's always— it gets revisited every year or so as we talk about— like, you know, we go into our health insurance and health program renewal cycle with our administrator. We talk about other ways that we can— you know, when we talk about restructuring our plan and things like that, we also have talked about discounting at Bartlett, and I don't think that's a dead issue. It's just not happened yet. So, I mean, I— I don't think it's wrong to think about that as an option, for sure.

Go ahead, Mr. Grayson. One more question. Oh, thank you, Madam Chair. That was a wonderful answer, Ms. Maddox, and I will push a couple of buttons for the— on the right people. I wanted to bring up a point that, as I told you, my insurance is one of my favorite topics, and what I've discovered is that whatever your deductible is, if you have an incident and the total claim only incre— is only double the deductible.

So say you have a $1,000 deductible on your car and your accident is $2,000. It is to the person's advantage to just pay the $2,000 because you save money on your premium over the long run. So now we're faced with a scenario where we're at $500,000 as our deductible. So that means that any claim that's in the $600,000, $700,000, $800,000 range, we have to have a discussion or kind of look at, should we pay that whole thing? Let's say we lose a CBJ building and we have an $800,000 claim, $500,000 deductible.

So we're gonna put in a claim for $300,000. The only outcome of that is it will raise our insurance rates further. So now that we have a sky-high deductible, we have to have discussions whenever we have major events, because trying to put in a claim, $600,000, we have $500,000 deductible, we get $100,000, but we will pay more on that $100,000 in the long run. So having a $500,000 deductible has a lot more impact on any major catastrophe that we face as a city. Thank you for the time, Madam Chair.

Sorry to take so long. That's okay, Mr. Bryson. Um, I believe Mr. Watt has a final comment to wrap up this topic. Uh, thank you, Chair. I just, uh, would like to wish Ms. Mannix a, uh, upcoming happy retirement.

She's been with CBA for many decades And if I remember correctly, as a new city employee in 1993, she helped show me the ropes. So we're going to miss her greatly and wish her well. She's with us for several more months, and we're going to be looking for a risk manager. Well, thank you. It's advertised today.

Thank you. Thank you, Ms. Mannix. We'll let you go then, and I think it is time for a break. Let's come back at 7:20.

Okay, we're all back. We'll bring the meeting back to order. Next on our agenda is real estate price disclosure amendments. Mr. Rogers. Thank you, Chair Taryn.

Uh, we did, uh, really good getting through the first two agenda items in an hour and 20 minutes. That's about what we were targeting for. So let's keep that up, I guess. Apologize for the long agenda tonight. Okay, so next on your agenda is consideration of amendments to the Real Property Sale Price Disclosure Ordinance.

We have updated you with the memo that's on packet page 75, not to be confused with the memo that follows that— or a memo that follows later that's from a prior year.

We've updated you on a couple of things. One, we— I've noted several places the letter from the Chamber that requested changes, and that letter is included in your packet. Maybe I'll just— I'll cut to the chase and say that staff is recommending that the Assembly consider doing 3 things. One is to repeal the confidentiality provision that was adopted as part of the ordinance requiring price disclosure. The arguments for that are in this memo, and they're also stated by the Chamber.

Also, it has simply made the appeal process much more difficult. Prior to confidential disclosures, appellants were able to come into the assessor's office and we could show them all the sale prices we had, and we cannot do that now. And, you know, one, it has created an imbalance of information between us and the appellant, which is not in the appellant's favor. But I think more importantly, it's created a sense of distrust. It's created a sort of black box feeling that the assessor has information that they can't share.

And that's very challenging for appellants. And we did forecast and anticipate that. However, I think at the time, confidential disclosure process was more— was perceived to be more advantageous, and I think we have a different view of that question now. Second thing is a compliance mechanism on the disclosure requirements. So you passed this ordinance a little more than a year ago.

And in that time since you passed the ordinance, maybe 15 months ago, we have— we are— we have knowledge via the Recorder's Office of about 500 sales that are subject to that disclosure ordinance for which we have not received a disclosure from the buyer. So a very, very significant rate of non-compliance. Generally speaking, we receive about the same number of disclosures that we did before, but just to quantify that, about 500 sales have recorded since you passed the ordinance, and we have not received sales prices for those. So we do think if the assembly continues to believe that the law is important, it will, it will require a compliance mechanism in order to get buyers to follow that law. Third on the list, and this is noted by the, by the Chamber, but I also just observing the BOE process I concur completely.

It will be useful for the Assembly to spell out in CBJ code a more prescriptive process for the Board of Equalization. I've included in the packet a memo from former City Attorney John Hartle, which we all routinely refer to as the Hartle memo, that, that dictates the generalities of how BOE hearings should go, it leaves a lot of discretion to individual BOEs and individual chairs. And just as a reminder, the Board of Equalization is not a monolith. So the Board of Equalization is 9 members appointed by you, but they sit in panels of 3, and each of those panels of 3 nominate and elect a chair at the beginning of each meeting. So what happens in practice is we could have 3 Board of Equalization hearings in one week with 9 different members sitting in 3 panels of 3 with 3 different chairs.

And the Hartle memo is the only real direction that we give to those panels and to those chairs, and it gives them significant discretion. And what it means is that those hearings for various appellants could proceed differently. We, we agree generally that codifying some specific rules of procedure for the BOE is in the city's best interest and really truly equally in the assessor's best interest and in the appellant's best interest and frankly in the Board of Equalization's best interest. I think too much discretion causes them to get a little high-centered, as you can imagine. We—.

And by we, I mean myself and the city attorney. Propose or recommend that the Assembly consider doing two things, which we've drafted into an ordinance in your packet, 2022-13, to remove the confidentiality provision, which is on packet page 78. You'll see that that confidentiality provision is removed. And then also on that same page and the following page, the institution of a Penalty for failure to disclose would be $50 per day after 90 days. I think that the rest of the documents sort of speak for themselves, and I'm happy to take any questions and hear committee feedback, as is Mr. Palmer.

Any questions on this topic? Mr. Bryson. Thank you, Madam Chair. Mr. Rogers, I noticed in your memo that you included that a professional paid-for appraisal would provide more information. Could that— would I have to get a— could I work with the attorney and get an amendment to add?

Would that go in this ordinance? If I had that included? So for property disclosure, instead of the actual purchase price, you could provide the professional third-party appraisal. Would that go in this ordinance, or would that need to be a separate ordinance?

I can defer to Mr. Palmer if that's better.

We are having some audio issues.

Well, while Mr. Palmer is trying to sort out his audio, I think, yes, I think it can go in this ordinance. I think that you could amend it tonight, we could introduce it the way that it is, we could amend it at public hearing, we could amend it in another committee. I think that kind of idea can ride in this ordinance, and that kind of idea is welcomed by the assessor. There are challenges just having an appraisal, but the reality is an appraisal gives us a lot of information we don't otherwise have. Obviously, the appraisers working out in the private market have access to multiple listing service, which means they have access to all of the sales prices that we don't have access to, which means that they're— the appraisal will usually contain several comparables that are valuable to the assessor.

Madam Chair, I will work offline with Attorney Palmer. I'll have an amendment to go for the next time that we see this rather than try to squeeze in an amendment tonight. Thank you for your time, Madam Chair. Thank you, Mr. Bryson. Mr. Palmer, let's check your audio.

I think Mr. Bryson got his question answered. How about that? All right, uh, we'll go to Ms. Hale next.

Um, thank you, Madam Chair. Um, I, I, uh, I would say about the idea of including the appraisal, while on face value it could be, um, a good idea, it also could have, uh, sort of unforeseen consequences like sort of the Heisenberg uncertainty principle where we touch it by including the appraisal and then that suddenly has an effect on how the appraisals work. So I just would be cautious about that, but that's not why I wanted to— that's not why I raised my hand. I just had to have that little comment. This is a question for Mr. Rogers or maybe Mr. Palmer if he can get his sound working.

On page 79, Number 3, the third line. I think what that section is saying is that since we passed the ordinance, whenever we did it last year, if people haven't revealed that, though, if they haven't disclosed, then they have to disclose as of the effective date of this ordinance, or they start accruing a fine. Is that correct? Correct. I see a nod.

Mr. Rogers, you said, I think, just a little bit ago that we have been getting about the same percentage of values revealed before and after the passage of that ordinance. Is that correct?

Yes, assembly member Hale, I think that that's a fair assessment, a little less than half. So I don't know if I, if I disagree with this section or not, but, you know, I think this ordinance is going to cause a bit of a firestorm, just as the previous one did. And maybe we think about lessening the blow by just making it effective when this is effective rather than going back to the beginning of that ordinance. Just a thought.

Okay, Miss Blaschewski. Thank you, Madam Chair. I, you know, when we passed this originally, I was in favor of the confidential part because it seemed like a reasonable compromise, but I, given that we have experience of the last year and what happened with all the appeals, I am in favor of changing the ordinance. And the same thing with the penalty. I mean, we thought that, or I certainly thought people would comply, but they're not.

So, but my question is, it says the grantee on page 1 of 3, line 16, the grantee shall provide. Who's the grantee versus the grantor? I thought they both parties were required, but who under this is required to provide this information and to whom does the penalty accrue? The way it's written, Mr. Palmer. Should we try Mr. Palmer again?

How about that? You hear me now? Oh my goodness, it's been a sound problem day for this computer. Uh, let me go back to the ordinance. Give me one moment.

It says the grantee shall provide.

Is that the buyer or the seller?

So that would be the buyer. Sorry. Okay. So in, in, in all this, this case, it's the buyer that's required to disclose and the buyer who accrues the penalty. Correct.

Just says any person in the penalty part. It doesn't say the same language. It doesn't say the grantee. It says any person. So then I was like, well, Well, are there two persons?

So that's the question. Right now it's one person, whoever the buyer is, but I could use grantee if you want me to swap the language. Well, no, I personally wish it would say buyer, but for some reason you put grantee and I don't know if two, and then it doesn't, just doesn't define who that is. And so, they'll— someone have to call and say, is that me or is that him? That's all.

So I— so you're the drafter, but that's what I see when I read it. Thanks.

Ms. Wall. Thank you, Madam Chair. Not 100% sure anyone will be able to— here will be able to answer this question, but reading this letter from the chamber, I'm not quite sure I'm not sure. Maybe you all have more, more context. Are they asking for the mandatory disclosure to be removed as well when they, when they ask for the ordinance to be repealed, or are they just interested in the privacy piece of it?

Mr. Rogers, do you have any insight? Yeah, thank you, Assemblymember Wall. I too find myself confused by the language in the Chamber's letter, and I hedged a little bit how I described it in my memo. I, I've reread this letter many times, and I too struggle to understand if the Chamber's position is advocating for a repeal of the entire ordinance or a repeal specifically of the confidentiality provision. It is ironic that Mr. Dahl sent me an email today on this subject, and I don't— I'm hesitant to think that he was speaking for the Chamber.

I think that this is a complicated issue, and there are good reasons to support it, and others would advance arguments to oppose it. I do think the thing that is abundantly clear from the Chamber is that they do think that the confidentiality provision is hurting the appeal process specifically. And I think that a question about whether or not the Chamber opposes the entire ordinance is probably better directed to the Chamber. I think I see some members of the Chamber on the Zoom, so maybe they can write us another letter. Kind of clear that up, or we can ask them to do that after this meeting.

Mayor Walden.

Thank you, Madam Chair. Um, Ms. Glodyshevsky brought up the same question I had, that the grantee is kind of weird. So I don't know if we can put in parentheses the buyer there, or define, have a definition section with who the grantee is, because the only reason I knew it was the buyer is because I knew what this ordinance was about. But that would be very helpful.

And then I don't see anybody else. Oh, Wade raised his hand, so I'll make a motion after Wade talks.

Uh, okay, uh, Mr. Bryson— oh, you guys are jumping around. Mr. Bryson and Mr. Smith and Mayor Bolden, I have a question to you before you make a motion. So, Mr. Bryson, go ahead. Um, I had a couple of conversations where my understanding is the removing the confidentiality is absolutely the direction they were going. They'd love to have this go away.

No business owner, no commercial property owner wants to say how much they pay for this, but if they do, having everybody's information on the table seems to be far more fair And I would only speak to the personnel— the personal effect of it. And that's why I keep advocating for the appraisals, because asking me how much I paid is a way different question than me being able to say, this is what the professional appraiser said that this property was worth. My negotiating skills have no bearing on the price that I paid, or the price that I'm disclosing the city. This is its professional assessment. So, uh, removing the confidentiality, I think, was the Chamber's, uh, or my understanding what the business community was going for, for what that's worth.

Thank you, Madam Chair. Thank you, Mr. Bryson. Um, Ms. Glotczewski, did I see your hand? You did, but I was going to ask for— if you wanted a motion, but the mayor already is in line, so I'm good. Okay, Mr. Smith.

Thank you, Madam Chair. I was just curious if there is a way to keep this information from the general public but, but allow it to be used. I mean, it seems like the Chamber's letter is— the issue is that on these appeals there's, there's this behind-the-curtain type of thing going on. Um, is there a way that this information could be It wouldn't be available to the general public, but it would be available in cases of appeals.

Maybe for Mr. Palmer.

I, I can take that. You know, I'll say this, and this probably stir up a little chaos. We are the only party who is not currently involved or apprised of property values. So let me break that down. Obviously the buyer and seller, they know their property values, and those property— when I say property values, the sales price— that information is not confidential.

That information is, you know, posted on, uh, trade practice, uh, databases. And then as some of you have mentioned, Mr. Bryson in particular, that when somebody else, another property owner, orders an appraisal and there's comparables used the sales— the assessed value or appraised value of that property is noted in there. So there's nothing secretive about the information, and that's kind of where we've run into problems in this current appeal cycle, that some of these properties that we received during the confidentiality provision, it's kind of locked in a box and we can't share it. So I, I think we need to put that out there, and I'll say that It's not a direct case, but the Alaska Supreme Court has kind of touched this issue a little bit and described that more detailed information about who sold can be ordered to be disclosed through APOC filings. And we're only talking about the sales price.

We're not even talking about the more confidential pieces that the Supreme Court has said are disposable through APOC. So I just don't know if this is a path that delivers a lot of fruit at the end.

Follow-up?

So if that information is out there and it's not confidential, why can't we get it? Good question.

If the question is, can we log on to the MLS or can we log on to sales databases, the answer has been no. The trade groups have not allowed us. Now, that's not necessarily true in other jurisdictions. The assessor in other jurisdictions, it's about— it's been allowed to get in, but it's not the case here.

Another follow-up, Mr. Smith? I mean, I guess so. I mean, is there a way we can legally compel them to— I just wonder if— I mean, I'm looking at this and I mean, I have concerns about a $50 daily fine and I want to know about how many notices people are going to get. I'm just wondering, like, is there not a better way for us to get this information than relying on every seller to follow their mail and send us this thing? And if they don't, charge them $50 and have to deal with that.

I mean, is there not a better way or another way we can get the information that helps us assess, you know, the true and fair value?

I'll tell you that the finance office is very good at sending out the notices because I bought a house this summer and forgot to send in the thing, and I got a lot of follow-ups. So I apologize to the finance department for being tardy, but they were very good at Following up.

Sure, and I still want to have that question answered, but I mean, I experienced the same thing. It's just, it's a lot of work, and then we have to track, you know, and then we're charging people $50. And anyway, I mean, if we choose to set it at $50, which I'm not sure I want to set it at, but I mean, is there a way we can compel the trade group to share, to allow us access to this, to the MLS or whatever? And is all the Is all sales data in the MLS?

Mr. Palmer, you're muted. Mr. Palmer, how about that? I can try to tag team this with Mr. Rogers. So is all the value— are all the prices in MLS? No, they're not.

All in there. Now, the vast majority are because of the way that people buy and sell property with appraisers and with real estate professionals. So it's definitely the, you know, a great resource. Are there other ways to do it? Possibly.

You know, we could look at focusing on other people. We could look at focusing on real estate professionals instead of buyers and sellers, but that— there's some tricky components there. I don't recall the details, but we, you know, the last time we discussed this roughly a year and a half ago, we had explored ideas of trying to figure out how to work with the MLS service. And I just recall it ending on without any traction. And maybe Mr. Rogers can enlighten me as to what the reasons were, but we weren't able to easily get there.

Mr. Rogers, do you have anything to add? No, Chair Treme, I don't. I certainly would be willing to attempt to engage with the real estate professional community about getting access to the MLS if that was an Assembly direction. But we— that process to us has seemed like a bit of a black box. So we find ourselves on the other side of that situation.

Ms. Hale, you are muted. Ms. Hale. Yeah, thank you. Um, my memory might, might not be serving me correctly, but I think that I seem to recall that this confidentiality clause was added by the assembly last time we looked at this. Like, it wasn't there when this came to us.

And then somebody added it, and then we kind of went around about it, and, um, and it's not done. It's not helped the situation. And I, I guess, um, you know, I think we have our staff in the finance department and the law department that have put an awful lot of effort and thought into this, and I really hope we don't noodle with it too much and try to go off on different tangents because they have been working with this for now quite some time, many years actually, with trying to get the values of properties. And I hope that we as an assembly trust their judgment on this and don't try to tweak it too much.

Thank you, Ms. Hale. I have a question that is kind of a follow-up to the line of questioning Mr. Smith was asking. Mr. Palmer, is there a way we could separate commercial and residential properties when it comes to the confidentiality? I understand that the commercial property owners are asking that that be removed because they have had quite a few appeals this year, but I suspect that the majority of average homeowners would not like to have that data be public since it has not ever been public in Juneau.

Uh, Chair Treme, I don't believe there's a way to do it. I can look into it a little bit more. I'll say that interesting thing about residential property owners is that many times we can get a fair— we can get close to estimating what they paid based on a deed of trust that's also recorded. So we can get close. It's not accurate enough to pinpoint appraisal, but it— or an assessment, but it's— it can get us close.

So residential property is actually a little, a little bit less confidential than commercial property. Uh, Ms. Youskandis. Uh, thanks, Madam Chair. I just wanted to— this is a good time for us to be asking questions and floating out ideas, but I just wanted to echo Ms. Hale's comments. My memory of when we went through this last year, we went through pretty thoroughly, and the idea of the confidentiality as being a compromise, personally, I really wouldn't want us to explore trying to make sure that we keep some measure of that in.

Um, and I think— I just think this is a good direction for us to go, and, uh, I felt strongly it was the right thing to do last time, so, um, I think we should forward this.

Thank you, Ms. Husky and Ms. Wall. Thank you, Madam Chair. Um, my question is, um, probably something you all discussed, um, before, before I was here when this— when the confidentiality was being considered the first time. Um, so if we were to remove that, that provision that this remains confidential, um, and I wanted to know how much the house down the street had sold for How would I find that information in this— in that scenario? How public is this data?

Sure, Treeve, I'll venture that. I mean, it would be a public record that is kept by the assessor's office. I don't foresee that we would have any good reason to publish a list of sale prices, although what will likely happen is that an appellant to the BOE will say, "I'm requesting all the sales prices received in the last year that have been considered as part of the ratio study that goes into my assessed value." So when that request is made, we will publish such a list, and it will be included in the BOE packet. Otherwise, anybody could simply call the assessor's office and ask for that information of the public record.

Very well done.

Thank you, Madam Chair. Since people are starting to do statements rather than questions, I'll make a motion now.

And I move Ordinance 2022-13 to the full assembly. And if I may, I may speak to it briefly, very briefly.

I was never in favor of disclosing the, the sale price from the very beginning, but I think that we did, as Ms. Hale pointed out, create a wrinkle when we put a confidentiality clause. So that's why I'm moving the motion, and I think we should get it out there so people can talk about it in the public.

Thank you, Mayor Weldon. Ms. Grzeszewski. Thank you, Madam Chair. I would ask for a possible amendment if the city attorney— unless there's a reason not to— to change grantee on line 16 to buyer and to change Uh, that's on page 1. On page 2, to change— well, I guess any person's okay, right?

Anyway, is that— Mr. Palmer, is that a reason not to do that?

Through the chair, uh, Miss Leshevsky, I can definitely do something like that. I'd prefer to leave it as grantor/grantee and then maybe put in parentheses buyer or seller. Because technically that's how most deeds are drafted. Okay, uh, that would, uh— so that's the motion for Mr. Palmer to insert some language to clarify that the grantee is the buyer. Uh, Mr. Rogers.

Thank you, Chair Treme. I, I appreciate the indulgence. I, I want to make one comment about the concept of allowing an appraisal, um, which is I think just a policy decision for the Assembly. But I think it's maybe worth remembering the Subport lot sale. And I know that that sale is extraordinary in many ways, but it really— what it gave us was a bird's-eye view of how a complex, unique commercial property actually trades in the world.

So, and we just— because it happened to be being sold by a government, we were able to see see the entire process. So the appraisal, as you might remember, for that property was about $4.5 million. That was the appraised value of the subport lot. And as you know, there was a bid in the range of $9 million. There were several bids in the range of $13 million.

And then obviously it was purchased for $20 million. So just bear that in mind when you think about the value of an appraisal. Certainly that appraisal— so that appraisal for the subport lot was conducted by the most knowledgeable, best appraiser in Southeast Alaska on commercial properties. There was nothing wrong inherently with the appraisal. It's just that the appraisal doesn't always capture the real market value of a property.

And obviously, or perhaps you don't know this, but the assessed value today of the subport lot is about $7.5 million. That's the result of the impact of the ratio study. We do not set property values based strictly on an appraisal or on the sale price. I— we talk about this often. It's complicated.

It's a little uncomfortable. The appraisal was wrong to the low by several million dollars, and Norwegian Cruise Lines paid many millions more than it's worth. And so those are sort of uncomfortable facts, but it points to the value of having an actual sales price rather than appraisal. I only offer it for consideration. I think that that is a policy decision for the Assembly.

Thank you, Mr. Rogers. Ms. Gladyshevsky, I think, just made a motion to amend, but it reminded me of a question that I have really quickly, and I don't know if this is this is for Mr. Rogers or Mr. Palmer, but is there a reason that we would be asking the buyer to take on this duty instead of the seller? Is there a case for one versus the other? I can venture a plausible reason why it happens that way. So when a property is transferred from one person to another, it is the responsibility of the buyer to record that transaction.

That's how, I mean, really, uh, Mr. Palmer can speak to this, but really under American law, a property doesn't actually change hands until it's been recorded by an appropriate government. Right. So, and, and the recording of a property transaction is the responsibility of the buyer. And for most states that have disclosure requirements, that disclosure requirement is met at the, uh, stage of recording, which is the reason that another jurisdiction actually doesn't need a penalty because they simply won't record the sale about the sale price. Mr. Palmer may have additional comments, but it stems from the fact that it is the buyer's obligation to record the sale.

Got it. Okay, so I think we have an amendment to the mayor's motion. Is that what you did, Ms. Gladyshevsky? Okay. Objection to Ms. Gladyshevsky's amendment.

I see none, so that amendment passes. So we're back to the mayor's original Motion. Anybody? Ms. Wah. Thank you, Madam Chair.

I'm just objecting for another question. Um, can someone talk me through the, um, decision to make the penalty $50 a day?

Um, Chair Cream, I'll try any other amount. Yeah, I'll try to field that. I don't—. There's no magic about $50 a day. Um, Mr. Palmer may be able to say that a aligns or doesn't align with other kinds of penalties in the code.

Obviously, you just— as a policy matter, you just have to pick a number. You have to pick a number that's actually going to make somebody or compel somebody who owns a multimillion-dollar property to disclose the price. Obviously, you could make it $1 a day and they could perhaps go many years without disclosing it. Before the accrued fine becomes bothersome to them. Or you could make it $500 a day and they probably wouldn't let more than one day go by.

I think it's just a policy decision. $50 Is not an insurmountable fee for somebody who forgets and discloses on day 91 or day 92. But it is enough money that on a weekly basis it accrues fast enough to compel somebody to follow I'll remove my objection. Thank you, Ms. Wall.

I don't see any other objections, so the mayor's motion passes. Um, Mayor Wall, I have yet another motion to make. I move that the assembly work on codifying the Board of Equalization rules of procedure. After all, 2021 appeals have been heard and it's past budget time. I'm throwing it to Ms. Gladyshevsky and the CAL.

Thank you, Madam Mayor. Any objection to that motion? Okay, I see none. That motion passes. Do we need another break right now before we get into our next topic, which is the debt service fund, or do you want to keep going?

Keep going. Okay, so we will move on to agenda topic D, which is the FY22-23 debt service fund. Mr. Rogers. Thank you, Chair Kreams. So items D and E fit together a little bit, so if we might a bit consider them together, and you could take separate action if you need to, but they do go together.

I might have— should have weaved them together. In any event, one of the things that happens in the current fiscal year FY22 is that as a result of school bond debt being reimbursed at 42% of the state's obligation rather than 100%, we owe an additional amount to the debt service fund to make it whole for that unreimbursed school bond debt. Obviously, we didn't perhaps contemplate this at the time, but the other thing the assembly could have done was simply set the debt service mill rate enough to, to, to, to gain that money back, right? So we could have set the debt service mill rate at 1.6, 1.7, 1.8. I don't believe that there was any reason that the assembly would have considered that palatable at the time.

What, what you see at the bottom of packet page 95 is that we would owe— we, CBJ, would owe $2.8 million of general funds into the debt service fund in this year to have it close at a zero balance, which is what it should do every year. What I'm offering the possibility is that the assembly would tell us not to transfer general funds into the debt service fund. Fund. And, and the reason for that is that in FY23, depending on decisions you make about the airport general obligation bond debt— so what if you, if you chose to endorse the approach that's on the next memo, the debt service mill rate would fall from 1.2 to 0.82. Now that number will change a little bit once we have final assessments for this current year, but the, the thing that, that gives you the ability to do is to let the debt service fund go negative, and then in the manager's budget, the manager would retain the 1.2 debt service mill rate in the next year, and you would owe less general funds into the debt service fund.

So based on what I know today, if you made no transfer of general funds into the debt service fund in FY22 and the manager retained the 1.2 debt service mill rate, the Assembly would still in FY23 owe a certain amount of funds into the debt service mill— into the debt service fund. The current calculation says it's about $650,000. That will change once we have assessed values. I recommend this approach. You know, it is— I don't— it is a little unorthodox to allow funds to go negative.

In the way that we have. But I think as we have managed really uncertain circumstances and the ex— just the extremity of the pandemic, it has been a useful strategy that allowed us to make better decisions over time, to simply allow funds to go briefly negative with anticipation that they would return to a positive or zero balance in the coming year. So this is a little bit of a complicated idea. I hope I have explained it in, in in terms that are easily understood. Happy to take questions if there are any.

Miss Hale.

There, I remembered to unmute myself. Um, Mr. Rogers is another way of saying what you're saying, uh, that we could, rather than transfer general funds into the debt service fund, we could keep the debt service mill rate the same, and that the money that that debt service fund needs would come from the property taxpayers through their property tax payment, because that mill rate is kept the same. Rather than them getting a reduction and us paying for it through the general fund. Is that this? Is that what you're saying?

Is that another way of saying it? Assemblymember Herr— Chair— Chair Triem, yes, I think that is correct. This would save the general fund about $2 million, a little more than $2 million, and instead that amount would be paid by all property taxpayers next year as part of the mill rate that's set. Remember that the debt service mill rate is just one component of the total mill rate. And if you make the size transfer this year that is sort of technically required to retain a zero balance, the debt service mill rate would fall considerably next year, which would reduce property taxes.

Follow-up. Thank you.

I'm guessing that one reason that we might do this is that we expect to have additional debt, and it, it can be a lot of up and down by the debt service mill rate going lower than going higher. And, and so that's one possible way, reason that we might keep it at the same.

Assemblymember Hale, Chair Triem, that, that is exactly right. I mean, most property taxpayers like 2 things. One, they like stability, and 2, they like tax rates to go down. So I don't know that anybody would advocate against a lower property tax rate, but certainly stability is a good thing. And the Assembly, you know, this Assembly is on a path likely to consider general obligation debt next fall.

And as you consider general obligation debt next fall, you will be in a different position depending on whether or not retain the 1.2 debt service mill rate into next year, or if we allow it to fall by subsidizing the debt service fund with general funds. Thank you very much.

Any other questions on this? Mr. Rogers, did you also want to talk about the next topic, or would you like us to take an action first. Chair Trim, that's probably a good idea because they depend on each other to some degree, and a decision on one would impact the other. So what you see on packet page 97 is a relatively straightforward idea. So for the last 2 fiscal years, the Assembly has directed, indicated, requested, however, whatever language you'd like to use, that the airport should pay its own general obligation debt service on the terminal construction project from federal funds that it's received related to the pandemic.

That has saved the general fund about $1.3 million over that time. It, you know, alternatively, those costs could be paid by the debt service mill rate. And instead of the— the reason these are related is that instead of the 0.82 debt service mill rate that it would fall to. Instead, it would be 0.9-something. I think that it's— I'm reluctant to say this is an easy choice.

I think you see in the memo the airport has a relative abundance of federal money. The airport itself has received, just in consideration of its overall operations, a really disproportionate amount of federal funding, and I think we should all be very, very grateful for that. And we're grateful for that. At the same time, that significant large federal funding has given the option to the Assembly to assign the general obligation debt costs for construction of the North Terminal to the airport. It is only an option available to you for the next 2 fiscal years, FY23 and FY24.

That will be the date of the expiration of those funds for the airport, and it will again become a responsibility of the general fund. Irrespective of what decision you make for FY23 and '24.

Thank you, Mr. Rogers. Any questions on that? Mr. Smith. Thank you, Madam Chair. I'm no longer the Airport Board liaison, but just was curious to know if there's been any indications from the Board or airport staff, anything about, about this plan and impacts on their plans.

Mr. Bryson, are you raising your hand to answer that? Okay, go ahead, Mr. Bryson. Thank you, Madam Chair, and thank you, Mr. Smith. At the last airport board meeting, they laid out a schedule of when the CARES, CRISA, and ARPA funds were laid out, so they know exactly how much funds they're dealing with. Forgive me, I couldn't quote you exactly.

I want to say they've got like $17 million at their disposal. And they know stuff runs out this year, next year, and the year after that. And they gave, at the last airport board meeting, they gave a full schedule. So they're aware of what funds run out when, and they are doing their best right now to use the funds with the shortest time limit, make sure those are appropriately spent. Um, and so they're taking expiration dates for those funds into extreme consideration.

It's their, their highest priority. They're like, when does this money run out? When do we need to use it? So that, that's how they're leading that conversation. And I don't remember specific pots of money, but they have roughly $17 million in their, uh, in their savings fund, I believe.

Thank you, Madam Chair. And Madam Chair, Go ahead, Mr. Smith. Thanks. And Mr. Bryce, totally understand if you don't remember or didn't— they didn't discuss it. Do you know if those plans included potential additional general fund or additional fund support for the GO bond debt for the next 2 years?

Or were those— was that not— I mean, have they planned for that or not? Mr. Bryce. No, they were not planning on paying back city funds. They were figuring out how they could we could use it for airport purchases and projects.

I don't recall a line item of a general fund payback, but I could be mistaken. Forgive me.

Okay, do we have it? No one else had another—. I had another question, just briefly. Yeah, go ahead, Mr. Smith. Thanks.

And that's, will the renovated terminal lead to additional revenue for the airport?

Mr. Smith, I don't know that I know the answer to the question. Probably, probably a better question for the airport board and the airport manager.

Yeah, I can't mention— I mean, I think the obvious answer is likely yes. It makes a better airport, it makes a better tenant environment, it should make it more possible for them to operate efficiently. But I can't speak for the airport board about what they intend to do with tenant revenues. Ms. Gladyshevsky. Are you ready for a motion, Madam Chair?

Okay, I move that the Finance Committee direct the airport to, well, to assign repayment of the GO bond debt to the airport for '23 and '24, fiscal '23 and '24.

Any objection to that motion?

Mayor Weldon.

Were you raising—. No objection. I was going to do another motion. Okay, okay, I got ahead of myself. Um, okay, I see no objection to that motion.

That motion passes. Mayor Walton? Uh, I didn't want Ms. Glashef to have all the fun. I move the Assembly Finance Committee direct staff to lapse the FY 2022 budgeted transfer of general funds to the debt service fund totaling $2,546,600.

And ask for unanimous consent.

See no objection to that motion. That motion also passes. Okay, I need a short break. Let's take a 5-minute break and come back and we'll work on sales tax. 8:15?

Yeah, 8:15. Thank you. Early. Thank you, Miss Spiegel. Um, we will move on to sales tax on food.

As we can tell by the materials in our packet, this is a conversation the assembly has been having for a long time and was part of our goals in our retreat, uh, a couple of months ago. So it is here before the Finance Committee, and Mr. Roderich, I will let you take it from here. Yeah, thank you, Chair Tream. So obviously, you know, it's already quarter after 8. We are not going to solve or settle the question of sales tax on food tonight.

I think the question is, many assemblies have wrestled with this before you. Many of you have wrestled with it once or more in the time that you've served on the assembly. And I, in my kind of going back and reviewing all of the touches that this issue has had, in the last several decades.

It's interesting because the Assembly never votes it down. It just, it's just a hard thing to do, and it eventually falls by the wayside as other things become more, more pressing. So I think the question for the Assembly, for this Assembly, is, is this an issue that you want to devote yourself to sufficiently? In the next period while this group of people is here and can stay focused on the issue to move it across the finish line. And if you do, I think that, you know, I will bring every ounce of ability we have in the finance to bear on getting you the information you need to do that.

Or you simply agree, perhaps, that it's just too much for right now and you set it aside. So I think there's a policy decision for the Assembly that is not necessarily about do you want to repeal sales tax on food, it's do you want to commit to the process that would get this idea across the finish line for the first time after, after many decades of discussion. So I'll make one little note about the data. And it's the only thing I'll probably say about this. All of the data that's in the packet, particularly on the analysis of livability and the information that would be that I would show you in a sales tax model, which I still have the same model we looked at last time.

I've made no updates to that. That is actually based on data from 2018, calendar year 2018. That obviously seems way out of date, but I would offer that probably in practice, the data from 2018 is probably a lot more like the future than the last 2 years. If I was to try and update this data and sharpen this data for you now, I would probably have to navigate around the last 2 years. So, um, obviously you're going to need good information.

You can count on me and rely on me for good information, but at the same time, um, the information that we had 3 years ago is probably more accurate than information that I would somehow update for you today. So that's— we will try to thread that needle the best we can, but making a big change to sales tax policy is complicated in the wake of a couple of years where sales taxes were upended by something as significant as the pandemic. So I just make one— that one offering about the data. Thank you. Thank you, Mr. Rogers.

I see we have hands. Ms. Gladyshevsky. Thank you, Madam Chair. I would— and you are— Mr. Rogers is correct, we're not going to like decide things tonight, but the decision is, should we work on this now or not? I would, I would urge us, the answer to that is yes, we should.

I've been on the assembly for 7 years. Prior to my tenure, there was a tax, long tax discussion. And but, but since then, while we've brought it up a couple of times in passing, we really have not like worked on, worked it, worked, worked, worked it. It's always a bad time. Either there's, we don't have enough money or, you know, the pandemic.

It's never a great time to do this because it is a really, it's a big lift and hard to do. But I think, I don't think we should put it off one more time. I would like to see this assembly take some time to work on it myself. It's kind of not going to be easy. It's a matter of how do you make up $5 million in revenue if you take sales tax off food.

That's a base— that's better if something like that is the number. That's basically the exercise, and I, I personally would like us to work on it. So that's my vote. Thank you, Ms. Glodowski. Ms. Hale.

Thank you, Madam Chair. Um, I 100% agree with Ms. Kolodziejski that we should be working on this, and I think that now is a really good time to do it. I had an earlier— a conversation earlier today with Mr. Rogers, um, because, um, our, uh, remote sales tax is is going to be somewhere around $2 million or more this year. That's what we're projecting. And we're talking about making up $5 or maybe $6 million in the sales tax that we would lose if we take food off the sales tax.

We also, at the same time, have been talking about a pretty darn good pot of general fund money that we have sitting in the general fund. And I've only been, you know, this is my 4th year on the assembly, but what I've seen during that time is it just keeps growing. We're pretty conservative. We follow a pretty conservative path, and that money keeps growing. And I don't know exactly where we're going to end up.

I don't know that we have to try to make up dollar for dollar what we might lose in sales tax revenue from the food, because our sales tax revenue has been increasing. I'll also point out that with inflation, food costs are increasing, and that paradoxically increases the amount of money we get from that sales tax. And I guess as well, with inflation increasing, people could really use that break. And so I, I am hoping that we can not make this too complicated and try to, you know, maybe we have to make an adjustment in a couple of years, and maybe we have to come up with a different revenue a new source.

But our fund balance has been increasing. The last thing I'd like to say is there's a— you know, Mr. Rogers does have a paragraph about defining food, and the SNAP definition is a really easy one to go with, and the grocery stores are accustomed to going with that definition. That's what is used for the senior tax exemption. Thanks. Thank you, Ms. Hale.

Well, I thought I saw your hand up there for a second. Did you want to join the queue? No, I agree with what's been said. Mr. Rogers answered my question before I got a chance to ask it. Okay, Ms. Hughscandies.

Uh, thanks, Madam Chair. These can get shorter and shorter as folks go ahead and you see that people agree with you, but I just wanted to say that I really, I appreciate, uh, Mr. Rogers, all the materials you put in there, and I do appreciate it's going to be a big lift for us to, to get it across the finish line at last. But I really wholeheartedly, I, this is something I really think we should work on, and, um, the folks that it's going to benefit the most, I think the timing is just right and And, you know, when you think of the speed of government, and the longer that I'm on the Assembly, the more I get the sense of just what it takes to get something done. And this has long been something that, you know, someone said when I got on, like, maybe pick one thing. And if you put all your focus on getting that one thing done, maybe you'll get to see that done.

But I really, I would love to see us to work on this and to get this accomplished for all the reasons stated by other folks.

Thank you, Miss Husky. And Ms. Marweldon.

Thank you, Madam Chair. While I appreciate what the former, or what the assembly members before me have spoken about, looking through all this paperwork today, and it's quite a bit, it's been studied, it's been evaluated and we've considered it many, many times. So, you know, if we want to spend the time, that's going to be fine, but it's going to be a lot of time, um, and we do need to find the revenue to make up for it. Um, I know we have a huge balance, but people are thinking it's all from taxes. It's not.

There's a lot of CARES Act and ARPA money in that fund balance, and that's why we have such a significant fund balance. And Ms. Hale, you pointed out that we have $2 million in off— in remote sales tax, but I would guess a huge percentage of that is actually for food. Um, but so if we want to spend the time, that is fine. I don't know that we'll be able to come up with an answer. And while I will agree with Ms. Hale that the SNAP is, um, maybe the way to go, remember that when we talked about this with the seniors, everybody had lots of exemptions they wanted to make to the SNAP program, and we need to not make too much of a burden on our people that are selling this stuff.

That's my only comments. Thank you, Mayor Weldon. Miss Wall.

Thank you, Madam Chair. I, um, agree with, with what's been said. I, um, hesitate—. Well, I, I would also be interested in considering as part of this discussion, if it— if we might as well do it at the same time to be talking about residential utilities as well. If it's going to make the conversation way more complicated, way harder, I take that feedback from those of you who have gone down these paths before.

But if we're just going to kind of crank through the math, I'd like to see that issue explored as well.

Thank you, Ms. Wall. Mr. Bryson. Thank you, Madam Chair. I wanted to point out that the very first presentation that we got tonight by the investment group pointed out how they expect economic retraction in the next year. While 2020 and 2021 had more spending than anybody could have predicted due to economic stimulus, government subsidies, but we've had so much growth and, and record inflation, and we're gonna— we already heard that interest rates are gonna rise.

While I don't mind working on this, I would love to be able to give something back to the community in the form of like sales tax removed from their food. We have economic conditions that will be changing over the next couple of years that could have significant impacts on both tax revenue and sales tax revenue, for that matter, as we are trying to figure out this very complicated issue.

That the future, the next couple years, are going to be pretty tough. The one additional thing I'd like to add, Madam Chair, is that we also had 4 prior mayors' attempt to get a raise for the assembly members. It had been attempted for almost 17 years to raise the assembly rate of pay, and it was this assembly that was able to accomplish that. So if there was ever an assembly that was poised to tackle a tough issue and get a resolution to it, it'd be this one. I appreciate you guys.

Thank you for the time, Madam Chair. I appreciate that, Mr. Bryson. I think we have to give Mr. Jones a lot of credit for that too. So, Mr. Smith. Thank you, Madam Chair.

Um, I think I'm willing to— I think in the data you can see that it— that there's going to be benefits accrued to those in our community who need it the most. Um, I think it can help reduce the cost of living, albeit pretty slightly, but I think it moves in the right direction. You know, I have my ideas for probably how we could at least replace some of the revenue, and that would probably require a vote by the public, which helps give me some confidence in that we kind of have a good sense on how the community feels. I guess kind of more on the question of just process, and I'm not sure what that looks like. I'd be open to suggestions from from the manager or others.

Um, and then I'm just gonna throw it out there. I, I can imagine why it just isn't feasible, but I don't know if— anyway, I was gonna say some type about income limits or something, but that just may be such a ball of wax or just way too hard to administrate. Um, I mean, I do kind of look and wonder, you know. Anyway, those make those with very high incomes, you know, and I've heard— I've talked to people with those and they'd say I'd continue to pay sales tax on food, um, whereas— but I, I can understand why that maybe just isn't a feasible way to, way to proceed. Anyway, just my thoughts, but I'm open kind of more to the, to the just kind of what the process would look like.

Thank you. Thank you, Mr. Smith. I'm going to jump in since I think everybody else has had a chance. I think that now is probably the right time, especially given inflation, which is something somebody my age has never seen before. So this is not an exciting marker of adulthood.

Um, I would be only interested though if we are talking about some kind of, uh, systemic ongoing way to replace that revenue. I know we have a large fund balance, but The last thing on our packet today is ways we can spend that fund balance. And of course, we also have our contract negotiations, which will increase our budget by some amount yet to be determined. So I will say I support almost everything people have said tonight, but I would really like to focus on ways we can either get to the same amount of revenue or very close to it. Before looking at this exemption.

And with that, I will move back to Ms. Glashewski.

Thank you, Madam Chair. Just briefly, I know some of the history of looking at some of these taxes, and often the committee tries to reduce— no, no, we have a list of exemptions. And whenever you open up those lists of exemptions to try to reduce them, what happens instead is you add more. And that's just kind of been a historic truth. And so when people start talking about how about this and also that and what about feminine products and how about to take this off, you know, that gets really complicated.

And that's what's really— that is part what has sunk this in the past. You saw Mr. Rogers' memo about— he brought up all the complicated things. If we could— the simpler thing we could make it, the more likely we have a chance to get something through. And then another assembly can amend it later and make it better. But if we try to do it all, I think this is another one that will sink.

And having been here for the senior sales tax and what is food and what isn't food, I completely agree with, you know, get the simplest food. And it's not going to be perfect, but please, please If we do try to get too more complicated, this too will sink. So that's my big speech, and I'll stop. And I agree with what everyone said about— I mean, the reason I'm really passionate about this is I want to reduce the cost of living for people who need it the most. And it's not going to be perfect, and there'll be other criticisms, but let's try, in my opinion.

Thank you. Sorry, I'll shut up. Head up. Thank you, Miss Glasschesky. I think that was very, very wise.

Mr.

Watt. Thank you, thank you, Chair. So I'm just going to advise in terms of process. My advice is the Assembly has to do it. I don't think you can get an advisory committee like the TERC that was tried in 2015.

I think, I think you have to do it yourselves.

You are about to embark on the budget process, so your Wednesdays starting in April are going to be consumed. I think the Finance Committee is going to have very limited meeting capacity until after the budget. And if the hope is to find that new revenue vehicle, through a sales tax increase, you've got a mid-July deadline staring at you to get on this year's ballot. So I think Mr. Rogers' opening comments really are good in that the Assembly has to be willing to spend its time and resources on this topic, and I don't think you can delegate that.

Thank you, Mr. Watt. Ms. Hale.

Thank you, Madam Chair. And I think, you know, we also— I appreciate Mr. Rogers and Mr. Watts' comments about us spending the time and the timeline. We also don't have to rush to make sure we get it on this year's ballot. We can lay out a process. We don't have to dawdle over it.

But we don't have to rush through it right in the middle of trying to put together a budget and who knows what else we're dealing with. I would like to return to the replacement of the revenue question. Obviously, if we discover that we need to replace the revenue, I am completely supportive of figuring out how to do that. I am not completely confident at this point that We know that we have to do that. I think we tend to be conservative about revenue and about our, our fund balance.

But at the same time, we have people writing letters to the editor saying you shouldn't have that fund balance, and here's how you should spend that fund balance and don't waste it. And we also have people who've been around for a long time saying, you don't need that size of a fund balance. We haven't really had that. We try, I mean, we look at it and we look at it every year and we have conservative sort of ways of approaching it. So I'm hoping, and I don't know exactly how, maybe through our budget process, that conversation will get a little bit more rounded as we move into this.

Maybe we end up saying let's replace half the revenue. I just don't see it as a given. Knowing that even before CARES and ARPA money, we had a big fat fund balance, and then we got really worried about it, and then it didn't go away. So that's a good thing. So I'll just close with that.

Thank you, Ms. Hale. Mr. Rogers, do you feel like you have enough from the committee tonight? Yeah, thank you, Chair Trim. So I think what we'll do is we'll put this back on the agenda for March, um, and we'll, we'll go from there. And I will, um put some additional documents in the packet.

We'll probably see some of these again.

And I've certainly heard the discussion. I think I can try to just be brain expansive and brainstorm about the ways you can approach the revenue problem. But yes, I think it's enough direction for now. So we'll plan to put it on the agenda for March for additional discussion, hopefully in a less constrained format. And then, as the manager has suggested, it may need to be kicked to another committee for further consideration while we simultaneously work on the budget.

Okay, that sounds good. That sounds like we're at a good place for tonight. Mr. Smith? Thanks, Madam Chair. I guess my only thought would just be— I'm just somebody to consider— we can discuss it in March, but, you know, should we have a small work group or something to work on this?

Maybe, and maybe in March we can just try to decide on some principles supported by the whole assembly so that maybe that could give the workgroup a direction and to figure out some details and then come back. Just a thought, but thanks. Thank you, Mr. Smith. We can, we can add that to the March discussion. So with that, we will move on to agenda topic G, hospital bond proceeds.

Mr. Rogers. Thank you, Chair Treme. Uh, this is mostly a cleanup clerical item, but it is not unimportant. So every time I bring you a bond ordinance, one of the things that I say is this is not your last opportunity to touch this, um, but this appropriation probably is, right? So you will always pass a bond ordinance, uh, and at some point you'll pass an appropriation, and the appropriation is really where the assembly is saying yes, we endorse the specific use of proceeds from the bond, rather than saying we endorse in concept the issue, the concept of debt.

So this will— this is an appropriation of the $20 million of bond proceeds for the emergency department addition and the crisis stabilization center. And for those of you that were in Public Works and Facilities last week, which I believe was the 24th of January, this $20 million appropriation replaces to other appropriations that you heard during that meeting. I worked with Director Kester on a comprehensive approach that would not have everybody trying to piecemeal all of the appropriations over a long period of time for these projects. Little complication in here, which is that there's kind of a switcheroo of funds. So we are appropriating all $20 million of the bond proceeds, but inside In so doing, we deappropriate $4 million of hospital fund balance that was previously appropriated to the crisis stabilization center.

So this should be fairly straightforward, but if there are any questions, I'm happy to take them. Questions?

Mayor Weldon.

Thanks, Madam Chair. I move ordinance 2021-08-1 VAMX to the full assembly and ask for unanimous consent. See no objection, that motion passes.

Our next item is agenda topic H, the celebration 2022 request. Mr. Rogers. Thank you. So on packet page 114, you'll see a memo requesting funds for the 2022 celebration from President of Sealaska Heritage Institute Rosita Worl, Dr. Worl. The—.

Just a little mea culpa on our part, we finance staff have bobbled this, not entirely of our own making, but just confusion about what year celebration would be post- pandemic, a little bit of confusion about, or just uncertainty about what was not going to be a celebration and became a virtual celebration for which they did use funds. It was in the FY22 budget. We took it out because our understanding was that they didn't need the funds. We are putting it forward as a supplemental appropriation for FY22, which I, which follows our prior historical pattern. It will also be in the manager's budget for FY23.

2024. So we will be back on an even year pattern. And hopefully it's, it's straightforward from there, but the pandemic and decisions about celebration made this unnecessarily complicated. It's what we like to do. Thank you, Mr. Rogers.

Mayor Weldon.

Thank you, and I appreciate Dr. Worrell bringing this to my attention, which is how it got to the packet. So I move ordinance ordinance 2021-08BAMY to the full assembly.

I see no objections, so that motion passes.

Okay, we're cruising. Agenda topic I, Eagle Crest Gondola. Mr. Rogers. Thank you, Chair Treme. You'll see a manager's report on page 115 of your packet.

There is a draft ordinance on page 116, and the manager has put together a memo on just generally allocation of fund balance, which I think you may choose to consider with this subject. I actually think I should probably— this appropriation was specifically requested by Mr. Bryson, so I think I should probably defer to him to speak to it. Mr. Bryson, do you want to speak to this?

Thank you, Madam Chair. Um, I will, uh, do my best to summarize it briefly and then give us a strategy moving forward. A company in Austria, the, is taking down their used gondola. The person happened to know Dave Scanlon, and they offered a gondola that the Eagle Crest Task Force was looking at, $22 million price tag. They offered it to Dave Scanlon and Eagle Crest for $1.35 million or $1.385 million, just under $1.4.

To get it into the Eagle Crest parking lot, about another half million dollars, so they've asked for $2 million to buy this used gondola. Now, I know how we need more time, we need to find out a little bit more information about it. The price tag in there that they had was $4.5 million for installation on top of the $2 million.

Eagle Crest is right now applying for a grant that could offset that cost. They are looking for donors to help offset that cost, and the Eagle Crest Foundation has come up with $250,000 to use as a down payment, uh, to purchase this. Um, the recommendation that I was going to ask for is I was going to ask that this be moved to the assembly and introduced on, uh, February 7th, next Monday, then be referred to the CAO on the 14th so we could get lots of information to you, tell you roughly where they put it, what what the plan is, and then that would make it available for public testimony on February 28th. Uh, the one little piece that I would add on this is that the reason why I'm asking for this speedy of a, of a process is because we are in competition with the private sector. If we do not take advantage of this, uh, great opportunity.

Um, there's a Russian company that is already waiting, that is second place. So if we don't actively move on this, uh, by having this plan of having it introduced, we could potentially lose out on this. Now, we were looking at $22 million. Let's say that it does come out to be $6 million. We're bringing $14 million of value to the community by bringing in an opportunity at a substantially lower cost.

And the other thing that could happen, and this is why I'm asking for it to be this quick, is that if for some reason we got it and it lands in the Juneau— at the Eagle Crest parking lot, and the community decides absolutely we don't want to install this, that gondola would have a greater value that— I mean, you can't buy the materials for the price that they're trying to sell us the gondola for. So let's say if we made this investment, we decided we didn't want to put it up, we could probably still even double our money selling this used gondola which there's probably 1 or 2 gondolas available on the planet right now, used gondola packages. So it has a resale value. We have a minimized risk. They're looking at working on other processes to help pay for this.

I'm just asking tonight for the process to get it introduced on the 7th so we can tell this company in Austria that yes, the City of Juneau is serious about getting, uh, your used gondola for $1.4 million. So that would be the motion I'd have, is to introduce this on the 7th, CAO on the 14th, and public testimony on the 28th, because we are competing with the private sector. I'll take other questions, but I'll reserve all my— there's so much other information that I didn't want to overwhelm the committee or the assembly tonight with too much information. That's just the real high level of why we need to do this quickly and why it would be beneficial to the community.

Thank you, Mr. Bison. Let's ask— let's let people ask questions. And, Mr. Walden, did you just have your hand raised from the last motion? Okay, Ms. Glodowski. Um, and so I understand we're not going to really talk about this, the merits of this now, and that seems appropriate since we have really nothing So I don't object to what Mr. Bryson suggests.

I'm way not ready to vote for this kind of money. So what I'd like to know is I'd like to hear from the Eelcrest Task Force. Have they met recently? What do they say about this? I know these are part of bigger plans.

I used to be on that task force, but I'm not anymore. So I don't know if they've met recently, if they've— what information they have. All of that stuff, that's all the kind of information we would need at the CoW to— for me to even remotely consider such a quick thing. You know, we just went through a whole process of prioritizing projects, and, you know, that's the list we should use, and we should try to knock off that list, and suddenly there's this thing off to the side, you know, and then the manager just wrote a memo to us about Why don't you set aside this $15 million? Some of those things are not on the, you know, are not on the top of our priority list.

So we have this priority list, we should use it. And I'm not saying that I wouldn't vote for this. I'm just saying there's a reason we have a priority list so that we're not just running off, you know, randomly spending money since You know, that's all. Thank you. I don't object to Mr. Bryson's motion.

Miss Madam Mayor.

Thank you, Madam Chair. While I appreciate Mr. Bryson putting this forward and anything, first of all, this should have been a formal request from the Eagle Crest Board, and I have a little problem with that. I got a phone call about it too, and initially I was for it because it was $2 million. $1 Million, and then all of a sudden it's more closer to $6 million. So we're getting this rushed down our throat, and I disagree with that wholeheartedly.

I mean, I don't know if we even checked to see if there's room on the COW on the 14th, because I understand it was very full. So, so it should have been a formal request. We haven't seen no pro forma or anything that this is actually going to help them. And this— we're looking at estimated numbers of the additional costs, and I would doubt they are going to be able to raise $4.5 million to private donors. I could be wrong, so you can count me as an objection to this.

Thank you, Mayor Walden. Mr. Watt, and if you— I don't know what you were going to say, but if you also want to talk about the memo that was— it was a red folder item, so it wasn't in our paper packets, so some of us might have missed it.

Thank you, Chair. I was not going to comment on the gondola proposal. What I did put in the red folder was a memo. I anticipated at some point the Assembly was going to get to a point where it would want to discuss unbalanced usage in a more holistic manner, and when I saw the Gondola proposal on the agenda, I figured now is the time to at least try and point you towards your goals. So like the Deputy Mayor mentioned, that's what that is, a start.

I pulled out your assembly goals that you adopted in December, and I pulled out your legislative priority list. And, you know, it's not straight down each list, but that tries to approximate the goals that we've been working on and that you've stated. And that may give you a good point of departure for a bigger view of what to do about fund balance.

Thank you, Mr. Watt. Mr. Smith. Thank you, Madam Chair. To Ms. Kladyshevsky's question, the Eagle Crest Summer Operation Task Force has not yet met, planning for meeting in 2 weeks.

I imagine we'll be discussing these type of things. I'm open to— I mean, I need to hear more about it as well. I'm open to introducing it. Unsure if that, you know, if that timeframe is— anyway, if there's space on the CAO and if that timeframe will work. But, and imagine we would discuss this and just Eagle Crest summer operations plans at the task force meeting in 2 weeks' time.

Thanks. Thank you, Mr. Smith. Ms. Wall.

Thank you, Madam Chair. Um, I would object to this as well. I really appreciate Mr. Bryson's enthusiasm for supporting summer operations in Eagle Crest. I think that's a great long-term play. I, I, but I agree with the mayor that I would much rather see a a formal resolution or request from the board before I'm ready to introduce this, just so we know we have all of the support we need to have those conversations.

And also, I'd like to say that I really appreciate Mr. Watts' memo. I think that's what I'm looking for in terms of our long-term planning for capital projects is a Straw dog to start working through as an assembly. Thank you. Thank you, Ms. Wall. And I guess I'll just add a comment that we don't have to use fund balance solely for capital projects.

We have other things to spend money on. So, um, I don't see any more hands. Mr. Bryson made a motion, and Ms. Hughes-Candies.

Thank you, Chair Trim. So to clarify, I'm of mixed minds on this because, uh, I certainly would like to hear more information about it, um, and we don't really have a lot to go on here. So, um, to— I wanted to clarify Mr. Bryson's motion to see if it was something I could be okay with. So it was to introduce on the 7th and then refer it to the CALP? And that's as far as the motion went.

Um, yeah, go ahead. My official request, uh, or my official motion was introduction on the 7th to the CAL on 14th, and that would make it available for public testimony on the 28th.

And again, I— this process is in competition with the private sector. If we're not able to produce at least a commitment in a timely fashion, a private sector company will be able to buy this out from under us. And that's, that's the worry I have. That's why I wanted to have it introduced so that way we could get the information that you guys are looking for, that to answer the things like it has a mid-station, so it actually would increase the number of days that Eagle Crest could operate. Lengthening or strengthening Eagle Crest so that way on low snow years or low snow yields it can have a mid-mountain pickup and so people could ski in conditions that they wouldn't be able to ski in right now.

And so there were just so many advantages to doing this, but we are in competition with the private sector, which is why I requested the 7th 14th and 28th. Sorry, thank you, Madam Chair. Thank you, Mr. Bryson. Did you have any follow-up, Ms. Suskiandis? I do.

Thank you, Madam Chair. I feel like this is a process question which I feel like I should know the answer to by now, but if we introduce an ordinance, um, and refer it to a committee, if it's not referred back to the— by the committee to the full assembly, does it go to the next agenda automatically, or does it— is that— if someone could answer that for me, because I, and I will say, because I would be fine with introducing it to keep the window open and hearing more about it or being able to talk about it, but I'm not sure I would be fine setting a date for public hearing based on so little information. Madam Chair, I can address that. That's what I was just going to say. If it goes to the cow, it can live or die in the cow.

It doesn't have to be moved on. So it just allows for it to be— so that's why I'm okay with it because it could go to the cow. If we're not satisfied, then that's the end of that.

Thank you, Miss Glodishevsky. How's the, uh, Mr. Bryson, you're the Eagle Crest liaison, I assume? No, Miss Eagle Crest. Um, Madam Chair, I was the Eagle Crest liaison for the last 3 years, and I have great relationships with those guys. Um, kind of how that came about.

I was just curious, Mr. Smith, you're the Eagle Crest liaison? Has the Eagle Crest board discussed this?

Yes, I'm trying to remember in what official capacity, and I'm sorry if— I'm sorry if I'm not recollecting in what full route. Can maybe Mr. Scanlon, or I don't know if he's actually still on. Anyway, I don't know if someone else can give me a hand on that. That's a That's okay.

It's, it's, uh, um, Miss Yuskendis.

Oh, thank you, Madam Chair. I was just gonna say, I know they have at least once. I called a board member earlier to see how deeply they'd gotten into it, and they want to get into it more deeply because they also have more to discuss. Okay.

Okay, is there any more discussion? We do have a motion and objection. And so, uh, Ms. Spiegel, will you please call our roll? Thank you, Chair Traim. Assemblymember Bryson?

Yes.

Mayor Weldon? No.

Assemblymember Smith?

Yes.

Assemblymember Hughes-Scandies? Yes. Assemblymember Wall.

No. Assemblymember Glatoszewski.

Yes.

Assemblymember Hale. Yes. Assemblymember Wachol-Gedoc. Yes. Motion passes.

Oh, I apologize, Chair Trinh. I'll vote no. The motion passes 6 ayes, 3 nays.

Okay, so that was the last topic for action on our agenda, but just, uh, for information, our proposed budget Schedule is in the packet. I don't know if Mr. Rogers, if there's anything you want to say about that. No? If there are any questions on that now, we can address them, but just remember that's draft. A lot of things on that will move and shift.

Yeah, don't forget to pick up your binder.

I think that's it. Anything else to come before the Finance Committee meeting tonight? I see you I see your binder, even though it keeps disappearing. Ms. Gladyshevsky, thank you for the binder. It's very nice.

I appreciate it. Okay, with that, we are adjourned. Have a good night. Bye. Thank you, everybody.