City Council Meeting

Good evening. I would like to call the regular meeting of October 22nd, 2024 to order. Welcome everyone to the chamber tonight. It's always good to see people here when we conduct the business of the city. If you are able and so choose, please rise for a moment of silence followed by the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. I did want to make a comment that we are one council member, fewer than we normally have. Councilmember Solem is not with us tonight. Her father passed away last week. And we send our condolences to the family and hope you keep them in your thoughts and prayers.

I am now going to ask that the friends of the library join me down front so that we can proclaim together. All right. Gather round, gather round, gather round. All the friends of the library, this is so important. All right. Whereas. Friends of the city of Fairfax Library and friends of the Virginia Room raise money that enables our library to move from good to great. Providing the resources for additional programming, materials purchases, much needed equipment, support for children's summer reading, and special events throughout the year. And whereas the work of the friends highlights on an ongoing basis the fact that our library is the cornerstone of the community, providing opportunities for all to engage in the joy of lifelong learning and connect with the thoughts and ideas of others from ages past to present.

And whereas the friends understand the critical importance of well-funded libraries and advocate to ensure that our library gets the resources it needs to provide a wide variety of services to all ages, including access to print and electronic materials, along with expert assistance in research, reader's advisory, and children's services. And whereas the friends' gift of their time and commitment to the library sets an example for all in how volunteerism leads to positive civic engagement and the betterment of our community. And now, therefore, I, Catherine S. Reed, Mayor of the city of Fairfax, do hereby proclaim October 20 through 26, 2024 as National Friends of the Libraries Week in the city of Fairfax,

and urge everyone to join the Friends of the library and thank them for all they do to make our library and our community so much better. Thank you all. Thank you. Words? Oh. Thank you. I just want to, everyone to be aware, we have our fall book sale coming up soon. We have our children's book sale, which is Saturday, November the 2nd, through Sunday, November the 3rd, 10 a.m. to 4 p.m. And then we'll have our adult sale afterwards. We have Friday, November the 8th, Saturday, November the 9th, and then there's a bag sale on Sunday, November the 10th. That's when we fill up a regular sites grocery bag. The Virginia Room will all be, will as well be having their sale during those days. Yeah, we don't do a children's sale.

Except the children's sale. But we'll be upstairs, and I should point out, these are our really big fundraisers for the library. So if you need more books in your house, please come out, and if you read them, you can bring them right back, and we'll put them in the spring book sale. There you go. It doesn't get much better than that. All right. Shall we do a picture? Absolutely. All right. Let me get off the other side. So you're in the middle. We're in the middle. We're in the middle. Yes. We're always good. We've got our, yeah, we've got our blue and green, so we're color coordinated. Thank you. Thank you. Thank you. Thank you so much. Thank you for being here. And I'm going to let Dawn, or we'll drop it off at the library so it'll be on display.

There we go. And we thank you again for all your support. Well, thank you for all you do. All right. Now you can go home. We can move to the adoption of the agenda. Is there a motion to approve the agenda? Council Member Staley. Thank you, Mayor Reed. I move adoption of the agenda as presented with the following modification. Agenda No. 8A, the Public Hearing and Council Action on a Request from ABT Mid-Atlantic LLC Applicant by Catherine Taylor, Agent Attorney, for consideration of an amendment to the Zoning and General Development Plan for Boulevard Marketplace Shopping Center at the premises identified as 1040-10160 Fairfax Boulevard, parentheses, tax map number 47-4-23-000-A and 10120 Fairfax Boulevard,

in parentheses, tax map number 47-4-23-000-D, in parentheses, and the commercial CR retail district and architectural control overlay, in parentheses, ACOD, in parentheses, and the premises, and the premises, and the premises, and the premises, and the premises, and the premises, and the premises, and the premises identified as 1020 Fairfax Boulevard, again, tax map parcel 47-4-23-000-D, and a major certificate of appropriateness for architectural and landscaping be deferred to a date certain of December 10, 2024. Is there a second? Second the motion. The motion has been made and seconded. A roll call vote. Council Member Greenfield? Aye. Council Member Ross? Aye. Council Member Staley? Aye.

Council Member Doyle Feingold? Aye. Council Member Bates? Aye. Motion passed unanimously. We will go on to the initial general public comment. I had two speakers sign up by 5 o'clock p.m. today. Our first speaker is Douglas Stewart. Good evening. Mayor, members of the council, Douglas Stewart, 10822 Maple Street. And I'm speaking about the transportation discussion you had a couple weeks ago. It was a really, I thought, great discussion, and there are a lot of great projects we have underway that I'm very excited about. And just as a matter of perspective, I've actually, I rode my bike here tonight. I've been riding my bike here to City Hall, actually, for 20 years, since we first moved here in 2004.

And one of the reasons we chose to live where we did was because my wife looked up our neighborhood. She was getting a job at George Mason, and she was like, this has a walk score of 77. And I'm like, I'm looking around Fairfax County. I'm like, gosh, I don't see places that are very walkable in Fairfax County. I'm like, I'm kind of skeptical. But in fact, we walk to, I bicycle to our gym. We walk to Aldi. We do a lot of our everyday activities on bike and on foot because we live in that kind of neighborhood. And I've always kind of been wanting to see even, you know, this become an even more walkable community, just like, you know, our plans call for. And just like I think you were discussing, really, during your meeting a couple weeks ago.

And I feel like it's happening. That's part of the exciting thing is, in my experience, we're far, this is a far better area to walk or bicycle in than it was when we first moved here. People stop for bicyclists on trails in their cars. That's a big change. It didn't happen 20 years ago. And our infrastructure is better. And our Q bus, I rode the Q bus earlier this year. I don't ride it often. It was full, both to and from the metro station. All these, and on my way here, riding my bike to Old Town Hall, I saw about at least 15 pedestrians walking toward the Avalon apartments, maybe from the Q bus stop or from George Mason, from wherever. There's a lot more feet on the street, a lot more activity.

And I guess my main message is please keep up the good work and keep doing that. And that's why I really appreciate your discussion a couple weeks ago because it was very focused on how we have continuity in this process and keep on planning and selecting our transportation projects carefully, thoughtfully, with an eye toward it being better for everyone, whether you're driving, walking, bicycling. I drive to work. I drive to a lot of places. But I like to bike and walk around the city and a lot of other people do. I will also just, I really appreciate Mr. Greenfield's comments about lighting. That is something I feel like we could address pretty quickly because there are a lot of places we know are dark where we could fix those areas without doing too much studying.

And that's a big issue because on 50, for example, gosh, there are a lot of dark places where it's not very safe. So thank you. Keep up the good work. And I really appreciate all your service. Our next speaker is Diane Hinn. She's not in the room. So we'll just move on to consent agenda. Is there a motion to approve the consent agenda? Council Member Staley. Thank you, Mayor Reed. I move adoption of a consent agenda for Agenda Item Number 7A, consideration of the October 8, 2024 special meeting minutes. Agenda Item Number 7B, consideration of the October 8, 2024 regular meeting minutes. Agenda Item Number C, consideration of boards and commissions appointments with the following amendments. Appointing John Napolitano to the Housing and Healthy Communities Advisory Board as a representative of a business in the Fairfax Circle area

for a three-year term extending through October 22, 2026. Appointing Seth Okoyaboa to the Housing and Healthy Communities Advisory Board as a representative of a residential builder or developer with extensive experience in producing single-family detached and attached dwelling units and multifamily dwelling units, preferably with affordable housing development for a three-year term extending through October 22, 2026. Agenda Item Number 7D, consideration of a resolution to approve the City's submission to the Virginia Department of Transportation for Highway Safety Improvement Program funding. Agenda Item Number 7E, consideration of a professional service contract awards to multiple contractors for engineering and construction management services.

Agenda Item Number 7F, consideration of award of construction contract in the amount of $1,695,000 to Sager's Construction Corporation for Ashby Pond, Dredging, and Retrofoad. I move to approve the Consent Agenda Item Number 7A through F and the motion accompanying Consent Agenda Item as printed. Second. A motion has been made by Council Member Staley and seconded by Council Member Ross. Are there any items Council would like pulled for additional discussion? Seeing none, a roll call vote. Council Member Bates? Aye. Council Member Doyle-Feingold? Aye. Council Member Staley? Aye. Council Member Ross? Aye. Council Member Greenfield? Aye. Council Member Staley? Motion passed unanimously. So we will move on to our second general public comment.

Is there anybody in the room that would like to speak on general items at this time? No. We will move on to the work session. Council Member Staley? I will now recess the regular meeting to go into a work session. We will stay in the council chambers for the work session room. Council Member Staley? Our first item is a presentation by Aspen Institute on Children's Day Day. Children's Bill of Rights and Sports Catherine Quinn Aspen Institute will provide the staff presentation Welcome how are you Hi it's wonderful how are you can everyone hear me Sorry I'm not used to multiple inputs but we'll do our best Anyway good evening everyone thank you so much for having me again my name is Catherine Quinn

I am with the Aspen Institute Sport and Society Program and I'm here to share some information about the Children's Bill of Rights and Sports and initiative of our program I do have a lot of slides but I'm going to go through them quickly and delighted to take your questions at the end So I'm going to start with just a quick overview of the Aspen Institute Here we go The Aspen Institute is a nonprofit nonpartisan organization headquartered in DC represents a community of leaders going back almost 75 years with the mission of facilitating dialogue convening leaders and inspiring future generations in the service of a free just and equitable society Under the Aspen umbrella are a couple dozen programs focused on a variety of issues and policies

whether that's Native American youth, religion, energy and environment, business and economy or sports which is us So the Sports and Society Program was established in 2013 by Tom Ferry who is our founder and executive director When he became a sports dad he was surprised how different youth sports were from what he thought it would be and how it was when he was younger At some point youth sports had become serious business So as a journalist Tom did what journalists do and he wrote a book about it And after giving a presentation on that book at Aspen the Sports and Society Program was born I think it's important to just sort of call attention to the fact that in the United States there are no federal or state agencies that guide sport development

There are no NGOs that focus on sport policy in the public interest So our chief asset is our role as an honest broker of ideas Our convening power research and communication assets identify and develop the best of these ideas allowing us to be able to address a variety of critical issues at the intersection of sports and society Our mission simply is to develop healthy communities through sports Approximately 95% of our work is focused on youth sports through Project Play Project Play is our signature initiative as I said And it works to build healthy communities by promoting sport participation Supporting organizations that are increasing access to sport opportunities And developing insights on the quality factors that drive sports retention and lower dropout rates

We focus on all types of sport opportunities in communities and schools for youth ages 6 to 17 A quick overview of some of the work we do and how we engage with children in sport We develop frameworks, toolkits and resources for stakeholders We publish research on youth sports participation and the benefits that derive from it So our team is small but mighty We're eight mission driven individuals with backgrounds in journalism, education, coaching, community programming, health and fitness My role is as director of the Project Play Summit Which is our signature annual event and actually one of the largest public events hosted by the Aspen By the Institute outside of the Aspen Ideas Festival So when the Sports and Society program was founded our first project was called Project Play

The idea was that we would bring leaders together from lots of different sectors Not just sports but education, health, tech, media To work out a playbook for how to fix youth sports How to make it work better for all kids And that was supposed to take two years and it did After two years of roundtables and research We came out with our youth sports playbook called Sport for All, Play for Life But the people we engaged in Project Play were so motivated and inspired and invigorated They said you can't stop here You've given us a road map to help us get from point A to point B So here's what our research told us Active kids do better in life They have better physical and mental health outcomes

They engage in fewer risky behaviors They do better in school And active parents are associated with active kids And active families build active communities We also know that active communities have better health outcomes Decreased unemployment, higher graduation rates among other benefits So through the Healthy People 2030 program The federal government for the first time ever has set a national target for youth sports participation And that's to reach 63% by the year 2030 Currently sits at about 51% It's a tremendous rallying cry to get communities invested in growing sports participation At the national level we work with key stakeholders in sports, health tech We give them networking, research, resources, best practices

And most importantly we help them communicate their values Increasing access to more sports for more kids And giving kids in sports a great experience for as long as possible In addition to leading the national conversation We also focus efforts on state and local levels Including our local state of play reports Where we survey a community to learn what kids want to play Why they want to play What are the barriers Where are the opportunities Who's doing good work we can amplify And make recommendations to help communities build capacity, opportunity and access To date we've released 14 community reports And two more currently in progress Including Washington D.C. And next week we'll be releasing our national state of play report for 2024

So if you're not subscribed to our newsletter This is a great time to like and subscribe So why am I here today? That's who we are That's what we do So let's turn our focus to why I'm here tonight Which is to talk about the Children's Bill of Rights in sports In 2021 we announced a new initiative Children's Bill of Rights in sports Drafted by our program To create a shared cultural understanding About the right of all youth to play And to develop through sports Written with the aid of human rights And sports policy experts The resource is designed to help leaders From program operators to policy makers Grow access to sports While establishing minimum conditions Under which youth are served More than 300 of the most influential organizations

In the sport and nonprofit sectors Have officially endorsed the Bill of Rights in sports And since tonight's opening night for the NBA I had to throw in Steph Curry Endorsed in 2022 And we've seen great momentum With endorsements from policy makers And state governments Earlier this year Maryland became the first state to sign on When Governor Westmore endorsed at our 2024 project Place Summit in May And also joining him endorsing were the mayors of Kansas City and Baltimore The first city to sign on was Houston in 2022 And they used the Bill of Rights as a framework for their successful bid To be a 2026 FIFA Men's World Cup host city So some of the ways they have activated against it Convening national, local and national stakeholders

To expand the network Organizing presentations Collecting data through a state of play survey And providing access to funding opportunities To help organizations operationalize the Bill of Rights And in 2022 we were pleased to have both Fairfax County And the Fairfax County Athletic Council endorsed as well And I've been a proud member of the Athletic Council for more than eight years So what is the goal What is the Children's Bill of Rights? The goals as you can see if you have the slides in front of you Highlighting the value of using human rights as a frame to grow access to sport Inspire organizations to adopt minimum standards for youth participation Unlock the full power of sports to address a range of societal needs

This was inspired by a model in Norway And asked to work with human rights and sports policy experts To design a set of normative rights So these are not legal rights They are a statement of core beliefs and goals for youth sports participation So recognizing the human rights of children is key to closing gaps in the availability and quality of sport programs And the Children's Bill of Rights in Sports identifies eight rights And I'll read through them quickly Number one, to play sports Organizations should make every effort to accommodate children's interests to participate And help them play with peers from diverse backgrounds Number two, to safe and healthy environments Children have the right to play in settings free from all forms of abuse

Physical, emotional, sexual hazing, violence, and neglect Number three, to qualified program leaders Children have the right to play under the care of coaches and other adults who pass background checks And are trained in key competencies Number four, to developmentally appropriate play Children have a right to play at a level commensurate with their physical, mental, and emotional maturity And their emerging athletic ability They should be treated as young people first, athletes second Number five, to share in the planning and delivery of their activities Children have the right to share their viewpoints with coaches And for their insights to be incorporated into activities Number six, to equal opportunity for personal growth

Programs should invest equally in all child athletes free of discrimination based on any personal or family characteristic Number seven, to be treated with dignity Children have the right to participate in environments that promote the values of sportsmanship Of respect for opponents, officials, and the game And finally, number eight, to enjoy themselves Children have the right to participate in activities they consider fun And which foster the development of friendships and social bonds And if you're following along, I'm going to skip the next one for time But the statement's chief value is encouraging the development of an adherence to program standards The U.S. sport ecosystem is programs rich and systems poor

There are more than 100,000 grassroots programs that vary widely in quality and accessibility With no government entity to drive adoption of minimum standards The U.S. Olympic Committee, now the U.S. Olympic and Paralympic Committee Who has endorsed the Bill of Rights Was tasked by Congress in 1978 to coordinate amateur activity Amateur athletic activity in the U.S. and to recognize certain rights of athletes But these definitions are vague, the mandate is unfunded And so the USOPC has focused mostly on supporting elite athletes Recognizing these rights can create benchmarks and a common language for stakeholders Improve program delivery and unlock new sources of funding by helping business, philanthropy, and government understand where to invest

They can also help cities recruit major sports events The 2026 FIFA Men's World Cup is among the first to include extensive human rights elements in its bid requirements So what does this mean for the City of Fairfax? So glad you asked Ideas and examples are included in the DEC presentation Namely endorsing the Children's Bill of Rights in sports Encouraging your network to do the same And put the Bill of Rights to use with recommendations for how different stakeholders can engage and activate against the Children's Bill of Rights Whether you're a community program, sport organization, a grant maker, parent, athlete, youth, or policy maker But there's two things that I want to point out One, it is a very helpful framework to use for grant writing

And also to think about engaging the power of the permit So rewarding and incentivizing organizations who have endorsed with priority access to facilities So think of it as a flag to plant that states these are our core beliefs and values It's up to you what you do with it But if you plant the flag and don't stand behind it, it doesn't mean as much Every community is different Every community has different needs and ways that it's most effective to activate And our team is happy to help, as always, to come up with ideas And so with that, all of this information and additional information about the Children's Bill of Rights And our programs are on our website, as.pn.childrensrights And I'm happy to take any questions

Thank you so much for that presentation So do we have questions for Ms. Quinn? Councilmember Greenfield and then Councilmember Ross Thank you, Mayor I'm curious, have you had an opportunity to brief our school board? Yes, so the school board sits on the Fairfax County Athletic Council And so they are familiar with it It has not been presented to the school board for adoption or endorsement Do you plan to do that? It's a great idea I will add it to our list of considerations for sure And especially with school athletic programs That's the school board, not that all of us don't Well, some have kids, some have got kids who recently graduated high school There's varying degrees of where kids are in the cycle of learning

But I think it would send a strong message, at least here in the city That our school board and mayor and council are supportive And then I would also encourage you to think about Perhaps coordinating with our Parks and Rec director To have conversations, if you have not already With Fairfax Little League, with Fairfax Police Youth Club You know, those are the two largest organizations here in the city That do, you know, organize sports outside of the school system So it would be great to have all of them on board with that Yeah, that's a great idea Okay, thank you, Mayor Thank you, Council Member Ross Yes, Ms. Quinn, thank you very much for this presentation And for the work of the Aspen Institute

My background in Parks and Recreation goes back more years than I care to count But I can say this is a very welcome addition to the whole field of Parks and Recreation And certainly on youth sports Because I think what it does is addresses sometimes the imbalance we see Between those families, those individuals who have strong athletic skills And those kids that don't And those kids also need to have the opportunity and the right to play As you so aptly named this particular initiative I think it's a really great credit to your organization But also to the many partners you've reached out to One follow-up thought in terms of connections I know I see as one of your partners an organization I've worked with over the years

National Recreation Park Association Which is based here in Northern Virginia And has a national network They also have state affiliates And I would encourage you if you haven't To reach out to that organization And get on the agenda of the state affiliate associations Many states have state recreation and park associations We have one in Maryland, we have one in Virginia They have conferences, they have annual training And I think this would be a great opportunity to connect with those particular groups Finally, I love the comment about youth first, athletes second Yes Father of two sons who participated in some athletics But they were not athletes, they never will be And that's fine But I think the opportunity for so many young people to participate

And as you pointed out the benefits are absolutely enormous And it leads to real positive outcomes later in life Finally, I would hope, addressing to our city staff That we will make an effort to put this word out through our marketing and communications items Periodically during the year or so people are well aware that we are a city that supports this And I know our park and recreation staff are very excited about getting involved with this And seeing it work as well as Mr. Greenfield pointed out School board and I hope and certainly our other athletic groups in the community Thank you Thank you Again, thank you for presenting this Thank you Other questions or comments? Councilmember Doyle Feingold

Thank you, Mayor So as a former athlete, maybe still athlete But I've got girls who are in youth sports and gymnastics which has been particularly in the news And FPYC that Councilmember Greenfield mentioned I think it would be helpful for the community to know how do you relate to that So as a parent, I sign a lot of things for safe sports There are a lot of rules and regulations and protections out there that are necessary now for our kids Safe sports, USA Gymnastics has a lot of stuff now that we sign up for So if you can explain to the public how you relate with those regulatory groups And how you can relate with FPYC that Councilmember Greenfield mentioned and other groups I think the school board and our other local groups will be helpful too

So just understanding how you interact with those groups that we already are signing off on Agreeing to rules that are really important And you know, you have similar but maybe a little bit bearing goals I think that would be helpful for the community to understand Thanks And I believe Don't quote me on this I believe Center for Safe Sport was a part of the drafting Yes, Center for Safe Sport was a part of the drafting of the Children's Bill of Rights We work very closely with them and are very closely aligned with them And it's all in service of all these things we've talked about Which is centering the child first And centering their human needs first Beyond competition, beyond skill development

And it's centering the child first and their well-being first And encouraging programs and policy makers and everyone in between To be thinking about how they not only create the programs that are built from that foundation But holding others accountable as well So again, not legal rights, normative rights But by creating a change in the conversation and saying we as a city, we as a county, we as a state, we as an organization or a team or a club This is what we believe in This is the foundation of how we run our program And we expect others to do the same In alignment with all of those things you talked about USA Gymnastics and Safe Sport And other organizations that are doing really, really great work in this field

So yeah, I appreciate those comments and all that feedback Councilmember Bates Thank you I just want to add my support for supporting this initiative And I want to draw particular attention to the part of it about being free from emotional and physical and sexual abuse Because that is still very much a major issue, you know, for youth And with and it is literally a life or death issue because it's you know, because the impact on mental health and potential for suicide So really but all the entire children's bill of rights and sports side strongly support. Thank you. Thank you And if I could refer back to something Councilmember Ross said, you know, you come in here with two boys who aren't athletes

You don't have to be a competitive athlete to be an athlete and kids just want to play The number one reason kids want to play is to have fun and be with their friends And so we want to encourage that we want to foster that we want to foster a lifelong love of playing And for kids who have the skill and the ambition that want to be competitive sure there are paths for that But there also needs to be a path that every kid who wants to play and engage in sport in some way has the opportunity to do so In a safe environment regardless of who they are or where they live I think these are basic basic norms that we want to continue to promote So thank you for your comments and support Councilmember Staley

Well, thank you Mary Reed and thank you for being here. You know this presentation I think was designed to sort of set the foundation for how we would engage with the rest of the community and then bring it back for adoption at a future consent agenda be it November or December whenever the people are briefed in I just want to share how amazing my experience was in Baltimore I had the opportunity to present on a panel with you Catherine to talk a little bit about youth sports in the area I have the privilege of being part of FBYC and listening to the their thinking and their thought process there as most up here know heavily involved in USA hockey USA lacrosse And I just think this is one of those moments where it was glad to know Fairfax County had adopted this already

I think the pandemic gave us a chance to really see the opportunity that sport provided and what happens when it goes away And the opportunity to come back in now with our eyes wide open for how we leverage many of the foundations that have already been set But what else we can do as a governing body to continue to push forward the expectation that many are meeting already But to really hold that flag up going forward so I really have been encouraged by my colleagues comments here I see lots of momentum going forward in here I think a conversation with the school board makes a ton of sense in there and bring it back for an adoption under this council at the appropriate time I think it would be a great way to sort of send this council off in planning that particular flag

So thank you for being here. Thank you Mary. Thank you. So my final thoughts on this is this is a great foundation The thing that jumped out at me program rich and systems poor There are a lot of programs, you know, I think we've got there are some significant barriers One of them is language. We live in a very diverse community where not every family speaks English And they may not be familiar with some of the sports that are not native perhaps to the country where they have come from Financial barriers, you know, there is scholarship money out there But a lot of parents are not going to keep filling out financial aid forms in my perfect world There would be a universal form that people fill out and that's the form you use for everything

And that is something that we need to work toward a universal form so that parents are not constantly constantly having to fill out another form I think kids don't ask their parents for enrichment programs because it is a burden on their parents in a lot of ways to even ask for the money Transportation is the other one. You know the thing about being a walkable city about the trails about the fare free bus the pedestrian walkways building connected sidewalks from a child's home to the free bus or their home to a trail so that they can ride their bike or walk to take advantage of these sports programs. You know we are working on it and we have a long way to go but I think we have to embrace the fact that there are significant

barriers and this is a good foundation for saying the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the

a flag here to say every child in this city has the right to participate in a sport of their choice then we have to address these other things and when we think about sports too we have F P Y C great organization our school sports programs are great but I see kids up at Cutner Park batting around cricket balls with cricket bats on the tennis court so I wouldn't say every sport the kids want to play is actually represented and that's something else we need to think differently about so I love this idea I am support councilmember Staley's suggestion that we need to come back to this as a resolution and we need to put forward not just planting a flag on our commitment to these things but using it

as a foundation to identify and address and figure out ways to overcome these hurdles to the children in our community being able to play sports so thank you for bringing this forward to us I appreciate it thank you so much appreciate all your comments and I'm here to be a resource and support any way I can thank you thank you our next discussion our next item is a discussion presentation by the city's financial advisors Davenport and company of a plan of finance for general government capital projects imprints 2025 bonds an overview of the rating process JC Martinez chief financial officer provide the staff report maybe the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the the

plan to fund capital expenditures per the city's FY or the city's five-year adopted capital improvement program. Davenport will be providing the plan of finance which is the second phase of the capital funding plan and time to obtain funding. This is a quick follow-up conversation from a little over a year ago in which we discussed a multi-year capital funding plan. The plan listed had three issuance over the course of three and a half years. As you are aware, we issued the first plan financing last November for $24 million and we are here tonight to discuss and recommend a second issuance in accordance with the plan. I'm going to turn it over to Kyle Lux from Davenport which I'm sure you are all familiar with and he will go ahead and

present and I'll be his clicker. Very good. Madam Mayor, members of council, always nice to see you. It's been probably a couple months and so we always appreciate the opportunity to be here. Thank you to Mr. Martinez for the introduction. We have a slide deck up but I think big picture, as Mr. Martinez mentioned, this is really an update, a continuation of the CIP process that we started really about a year and a half, maybe two years ago in terms of thinking about a multi-year funding program for the city's overall CIP. We'll walk through some of the background, give a little bit of a rating update in terms of the rating agencies and we'll talk about kind of where we go and we recommend we go from here. With that, in terms of background, again I won't belabor this page but

as Mr. Martinez mentioned, the first issuance was really last fall so it was about a year ago, time flies. It's about $24 million. It was kind of the first dollop, if you will, not a technical term, but the first portion of financing for the CIP that was very successful. We'll talk about that so we'll really hear basically a year later for the second piece of financing for that multi-year program. We don't need any action per se. Tonight we'll be back in the early November time period for the formal actions. This really is just a briefing at your workshop to answer any questions that you may have. Jason, can you go to the next page? Very good. In terms of our goals and objectives, in broad overview,

we'll talk a little bit about the rating agencies, we'll talk about the capital funding plan, we'll look at the existing debt profile of the city, and then again give you a time schedule for where we go from here. I think big picture relative to where we were in January and February, some of those cold snowy months we're talking about this, very much just the next chapter of all that planning that we've been talking about. So I think JC, if we go to the next page there, again always with the overarching plan and goal of maintaining our AAA credit ratings. And so what allows us as a city to go borrow for capital projects to make those investments that you've deemed as a council to do at the lowest

possible interest rate is those AAA credit ratings. So everything we're talking about here takes that into account, takes into account not just how do we deal with the debt portion of it, but how do we think about the finances of the city in the aggregate. We're really here a year after, obviously we're talking last year, and as we understand that you had a very good fiscal year 2024. So in terms of the next steps as we talk about the next month or so, the fact that you've come off a very good FY23, and what we understand to be a good FY24, that leads us into good positive momentum to go talk to the rating agencies again for this next portion of financing that we'll talk about. So on page four, as we mentioned, yeah, go ahead JC. I'm so sorry, I'll interrupt. So just really

quickly on this page, I wanted to point something out very, very interesting, which I think would help with our conversation when we talk about the future debt that we're talking about or proposing on issuing along with potentially the school bonds as well. All the projections that Davenport have done are off a 5% estimate interest rate. When we issued the debt last November, you can see there that we got a 4.04% interest rate on that debt, which is absolutely amazing. And as a comparison, the federal funds rate at that time back in November was 5.33%. That is a almost 25% reduction from where the federal funds rate was to where we actually got that debt issuance at. Again, to reaffirm what Kyle was

saying regarding the city's double AAA rating, our credit worthiness, our fund balance, all those things add to that. And then specifically, because we were able to get that low interest rate, that saved the $1.6 million, that's about $2.6 million, or almost the equivalent of three pennies. So just on that interest rate reduction right there. Sorry, Kyle. Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? Kyle? While you're aware of the city's financial position, you know, you're aware of the city's financial position. So as you look at what Moody's says there, they say your financial position is sound, it's supported by management's consistently conservative budgeting practices and adherence to formal policies.

So even over and above just the sheer numbers, your revenues and expenditures and fund balances, they're paying a lot of attention to do we have plans, do we have policies, are we following those policies? And the city's received very high marks historically, they would expect you expect you would going forward. In the middle of the page we've highlighted on purpose one particular attribute that again we talk a lot about even though we're talking about borrowing money we're also talking about fund balance again because that fund balance and really the reserves of the city matter a lot to the rating agencies. As we think about the capital program we know we're going to be making some very large investments in fire stations and Willard Sherwood

likely in schools as well. So we're borrowing dollars to do that and one of the best ways from a financial perspective to counterbalance that is to make sure we've got really really strong and growing fund balances and so that's something the city mayor and council with your leadership you've done an excellent job of about the last decade of growing those reserves over that time period and what they have said here is they're recognizing that and they see that growth they also see the need to likely continue to grow those reserves given the amount of investment we're going to be doing as a city going forward. So good kudos for what's happened thus far and clearly we'll show you the next couple

pages we're getting closer to those AAA medians but still even a little bit below the AAA medians in terms of fund balances but getting much much closer. Other credit strengths at the bottom of the page we talked about the economy and the trend of surpluses. While we're not per se worried about this in the short run we always watch factors that could lead to a downgrade. They talk about a trend of operating deficits and narrowing reserve levels so basically doing the opposite of what you've been doing last several years in terms of revenues expenditures and fund balance. They talk about a material slowdown in the economy and a weakening in resident income levels. Nobody has a crystal ball but we always kind of keep

that at the forefront not directly within your control but certainly watching that and then a substantial increase in leverage which is both debt and pension so that's why we do all this planning around the capital program and take that into consideration. On the next page in terms of S&P you will see a lot of similar themes here so I won't read this word for word but again very strong economy gets us to that triple-a level that's the single biggest component there and then they talk about strong managerial oversight, well embedded policies and conservative budgeting practices. So again won't read that word for word but very similar themes. Fund balance also very important to standard and poor's as you think about the overall planning of the finances of the city.

That takes us to page seven getting very directly to your unassigned fund balance and so you've got a variety of different classifications within the audit. This is arguably the most important of those. The city increased your minimum policy to 15% just a couple years ago. It was 10 for a long time then it moved up to 12 and moved up to 15. Again the rate of the rating agencies see that and appreciate that. That's helping to counterbalance the capital investment that we're making. And what you see at the bottom of the page there that ratio itself has gone from about 12% in 2019 to about 17% and rounding up there a little bit 16.8, 17% at the end of 2023. I know the 24 results are to come I think from Mr. Martinez. We understand those are going to be positive.

And so I think what we're going to underscore here is just the importance of continuing to build that unassigned fund balance knowing again that we're making some major investments in capital in the city. On the next page one of the things the rating agencies do is not just look at our city but look at how we compare to other peer cities both in Northern Virginia and the state nationally. Lots of different data points here so I won't pretend that you'll be able to see all of that on the screen but I'll take your eye to a couple bars here if you will on that bar chart. Very bottom of the page in kind of our orange gold bar you can see Fairfax 2019 that's where we as a city were in 2019 unassigned fund balance that's about 12.8% and then 2023 you see that bar has moved up to about 16.8% exactly the numbers we saw on the prior page.

If you compare that to the median Nova cities and towns so just our abbreviation median Northern Virginia cities and towns that are AAA rated so these are other AAA rated cities and towns in Northern Virginia. What you see is that median for those AAA cities and towns of our relative size is about 20% a little bit over technically if you look at that graph. And so we started about five years ago at about 12 13% you're now at about 18% we're expecting that to continue to move upwards you say what's the right level the peer median well there's a fair amount of disparity amongst those folks there is about 20 plus percent in terms of that unassigned fund balance. So we point that out give a little bit of perspective not just what we as a city are doing but also what your peers across the region whether that be the Percival's and Herndon's Falls Church Vienna the smattering of cities and towns you got to take into account the relative differences there.

But all of those are AAA rated and size wise in and around the same range as the city and again that median is about 20% a little bit above it. So on page nine we'll shift over to the capital funding plan just a couple pages on this hopefully mainly as a refresher about 225 million in the aggregate over the 25 to 29 fiscal year time period. Not all of that is debt funded but that's what we have incorporated here. As we've run those numbers really through FY25 the year we're in right now everything looks fine looks efficient. Certainly as we get into the early part of the calendar year start thinking about FY2026 we'll need to revise and refresh some of those numbers as we get into that new budget and CIP cycle.

Keeping with the historical practice we have not factored in effectively any growth in these projections. We like to do that we've done that for a long time period sort of the don't count the chickens before they hatch mentality and so as we look at all these numbers there's basically no growth factored in. And as Mr. Martinez mentioned conservative interest rates assumptions when we talk about the actual borrowing. So the idea and the goal is to be on the more conservative side and hopefully if things continue in the trend they have things will look a bit better than what we see in the next couple pages. Page number 10 in terms of interest rates they remain very favorable as Martina has mentioned.

Last year we borrowed for about 22, 23 years at a 4% fixed interest rate. Today rates are about the same place which is very favorable. We plan at 5% so we've got probably about 1% of sort of contingency in there. We like to keep that in there to be conservative. We don't control markets, you don't control markets. But as we sit here right now rates continue to be very favorable and again those are all long term fixed rates. Page 11 a nice additional benefit to this time period in terms of interest rates is we're able to take those dollars that are borrowed, reinvest them in a state program called SNAP. This program right now is basically earning on those bond proceeds for you and a bunch of local governments across the state 5% plus.

So if we're borrowing in and around 4% we're able to reinvest those monies before they're spent at about 5%. We don't count on any of those dollars in here but that is a nice sort of other contingency as we work through the multi-year CIP. Page 12 just a little refresher in terms of where we start with the debt profile. You can see that on the graph on the left hand side. We have roughly level payments for about the next 10 years. Some of that will get smoothed out with this next bond issue. But for about the next decade our debt service payments are about the same level and so we'll be adding on top of that. That's all taken into account in the projections. But we will need to be as we're thinking about FY26, as we're thinking about those future years,

certainly revisiting some of those projections as we get into the next budget cycle. But right now the city's debt is paid out at about 73% so a rapid payout ratio. The debt is not being pushed into future generations. We're basically working our way down. And as a reminder everything is borrowed on a fixed rate basis. It looks very much like a mortgage. And so each and every year we're making principal payments to reduce that current outstanding amount. Page 13. This is getting to that capital program going forward. We mentioned a couple pages ago about $225 million in total. And so you see that kind of the yellow, yellow-greenish color down there. About $160 million of that is planned to be borrowed.

So the city continues to put cash into the CIP, meaning we're not borrowing for all of that $225 million. You're putting $9, $10, $11 million of cash per year into that CIP, working through the balance of those federal ARPA funds. We've got a balance of funding mechanisms to take care of those capital needs over that time period. Very bottom of the page, the single biggest projects as we see it in terms of the CIP, Willard Sherwood and the fire station. And so as those continue to get designed and bid and built, what we're really trying to do is time these financings in such a way as we have the dollars show up as we need them, but not taking too many dollars at one time, knowing that we want to ease the debt service impact on the budget over a couple years.

Page 14, this just shows the existing and proposed new debt service. So a couple different colors in that chart. Dark green at the bottom is the existing outstanding debt. Those are existing payments. If we did nothing else, that's what the city's debt service payments look like in that dark green bar. The light green is this new bond issue of about $53 million. And so that is with these actions over the next several months, it's that light green bar that is the next component we would ask the city council to consider approving as we continue to move forward with that CIP. The lighter shading is the balance of the CIP that we're not taking out right now, and we'll have a chance to revise and revisit as new numbers come up with this next budget cycle.

We want to make sure we keep it in mind, keep it in all the numbers. But for the moment, we're really just talking about up to $53 million for this next tranche, if you will, and that is what's in that light green sort of series of bars on that graph. Flipping the page to our ratios. Again, we've got two critical debt ratios. Left-hand side is debt service to expenditures. That's basically how many pennies out of every dollar in the budget going to make a debt service payment. Right-hand side is debt to assessed value. What you'll see there is, again, similar color scheme. The dark green is the existing. The light green is the $53 million that we're talking about right now that would be added.

And then the grayish color is the future bond issues contemplated in your CIP. And so what we see there is relative to our debt service to expenditures and debt to assessed value policy, with this next bond issue, we're fine relative to those policies. Meaning the red line is at 9% debt service to expenditures. We'll be in and around, probably around 8%, probably a little bit below that, by virtue of this next bond issue. As we get into the future years of the CIP, though, and this is not new, something we've talked about in the past, especially that debt service to expenditures ratio. As we work through this next budget cycle, probably this coming winter, we want to look at some of those policies and think about that relative to where you end at 24, relative to where the next CIP is.

Again, knowing that relative to that 9% policy, which is a very conservative policy relative to your peers, if everything in the CIP happened exactly as it's contemplated, we would broach that for a couple of years. No surprises. That's been there for a couple of years. But as we contemplate the next $53 million, we're fine relative to that policy, and we think we should really go look at those during this next, again, budget CIP cycle this winter. Mr. Lux? Mr. Lux? What would be an average ratio for debt to service expenditure that would still be favorable according to the rating agencies? Good question. So, if you look at like an S&P, S&P considers anything below 15% to be strong relative to that debt service to expenditures ratio.

So, if our ratio cap right now is at 9, which has served the city well for a while, anything below 15% for standard and poor purposes is viewed as strong. You can see relative to where the CIP is right now, we get into the 10, 11% range, well below that 15%. You'll see many other policies of similar peers, probably 10 to 12 in that range. And so, I think what we'd like to do is look at that, again, relative to the next budget process, think about that in the context of the schools, and take all those different components together. Okay. And so, that, Mayor, members of Council, and happy to answer your questions. In terms of next steps, this tonight really designed just to be a briefing and maybe a refresher.

The plan would be to be back in front of you for approval with the documents that we put together by your bond council, obviously reviewed by city attorney. And that would occur on November 12th here in a couple weeks. We plan to meet with the rating agencies in mid-November, brief them on the positive developments in the last year. We have some good FY24 results, as we understand it, to talk about and bring them up to speed. Obviously, introduce them to the new folks in the management team that will be excited to do that. Over the balance of, then, the calendar year, working through the EDA, do that in December. Get some results back from the rating agencies mid-December and really be in the marketplace to sell the bonds in January is the idea.

So, be teed up really for right in that early part of the calendar year to be in the market and actually selling the bonds. So, with that, Mayor, members of Council, happy to answer any questions that you have or any other clarifications. Do we have questions from the dais? Council Member Staley. Thank you, Mayor Reed, and thank you, Kyle, for the presentation. This may be one of the last opportunities in a work session to sort of chat with you. So, I want to just thank you for your leadership, the great partnership you have with the city and all that Davenport has done. You've been excellent advisors throughout the entire experience that I've been on this dais. So, truly appreciate your leadership.

I want to talk about some forward-looking items in here. And I want to start at slide number seven for a second. As we think about what you just outlined regarding additional actions that's going to come in from the CIP, when you look at this chart here, what advice might you give us and a future council regarding that fund balance percent of revenues conversation? As I think about it now, it's 18%. While our policy says 15, we have the 3% buffer. So, in my head, it's always been 18. Are we in the ballpark? Should we be thinking higher? And to both, obviously, the CFO and yourself, any thoughts on how we should frame that conversation? It's a very good question. So, your policy is clearly the 15 and the 3.

So, that 15 and 3 is 18. So, I would agree with that as 18 is the policy. The most important of that, though, is the 15 of the unassigned fund balance. Clearly, with unassigned fund balance or any fund balance, the higher the better. And so, you as a city have been working over about the last decade or thereabouts to incrementally increase those dollars in the reserves. As we showed on, I think, the next page, to make sure that when we talk to the rating agencies, we can show and demonstrate that we are in line with our neighbors that are also AAA rated. And so, clearly, higher is better. There's always competing interests. And so, it's easier said than done, much easier for me to say than it is for you necessarily to implement and your peers, et cetera.

But higher is definitely better in terms of that unassigned fund balance. You know, if we can get ourselves to that 20% range, again, just looking at that peer graph right there, we can argue that we're right on par with the median. Your Percivilles and your Herndons, probably a little bit outliers there at like 67 and 42%. A little outliers for various reasons. We work with both of them. But again, Leesburg is in very, very good shape relative to that policy. Falls Church, Vienna, probably most directly comparable to you. So, I would say higher is better. Getting ourselves towards 20%. Doesn't have to happen all at once, but towards 20% is important. And making sure that we're filling the other buckets, if you will, which is that 3% budget stabilization fund.

Potentially putting some other dollars away as a buffer. Because what we know is given the CIP, presuming it continues forward, you're going to be borrowing some substantial dollars. This is like we've talked about, probably analogous to the early 2000s when you were doing schools, you were doing some downtown projects. There was open space things. And so we had to borrow a fair amount of money to do that. And one of the good counterbalances during that time period is we had a really strong economy. You never know if you're going to have that strong economy. Certainly we do right now. We hope we do, but we can't predict that. And so one of the things within your control as a mayor and council outside of the economy is to really make sure you build and grow that unassigned fund balance.

So hopefully, maybe a little long-winded, but hopefully helpful. If I could just add really quickly. So agree everything with what Mr. Locke said and I guess Council Member Staley. From a city standpoint, I think if we can consistently show and demonstrate that we can maintain a unassigned fund balance, the BSF completely separate, that 3%, but just the unassigned fund balance at a consistent 17% to 18% for two or three years, bring it before the council on trying to revise that new minimum from 15% to either 17% or 18% to sort of say, yes, we've been able to do it. I've told my staff that a very old supervisor of mine told me once is a data point, twice is two data points, three times is a trend.

If we can maintain a trend, then at that time I feel pretty confident that that should be the new minimum and we can bring that forward to council and see if that minimum should be revised. Well, and I appreciate that context because I think the one thing I've learned is, you know, changing fiscal policies is something you don't want to do fast and you want to tailor that, you want to inkle it if you're a card player well ahead of time and say this is where we're headed. And I think that's a really important reminder for that next episode coming through is that stay focused on that, stay focused on that, stay focused on growing that fund balance. Don't be in a hurry to move the 15 up because there's lots of things that can fluctuate in the world going down.

But when you're ready and the timing is right to make that space, and I would concur, I don't think you touch the 15% until the 3% is full. And that budget stabilization fund is intentional. It's to use for things. It's to be ready to take it on investments that may pop in a quick turnaround time that make a lot of sense for the city to be engaged in. There's lots of economic activity happening around in the area. So being ready to seize that I think is just as important, right, as raising that sort of fund balance as well. So I really appreciate that framing because I think it's going to be important. It took me a while to understand it out there, and I think just beginning that conversation and keeping it going will be very helpful for future councils.

Thank you, Mayor. Council Member Ross. Yes. Thank you, and I share my colleagues' comments. Kyle, it's been a delight working with you. I've been on the Council notes my second term. You're obviously going to have a number of new phases up here next year, and I hope we'll continue the opportunity to have work sessions, and I'm sure that will be part of the agenda for the new year, updating them and making them aware of why we do what we do and the way we do it. It could be a very dry discussion for our listening audience, but I think it's one of the most critical things we do in terms of our reputation as a community, in terms of managing our resources and maintaining that AAA bond rating that is so important to not only the present time, but the future.

Mr. Martinez, you mentioned a number. I want to go back to that for a minute in your opening comments or at the opening of this. Because we have a AAA bond rating and because we were able to get a pretty and excellent interest rate for borrowing, you mentioned savings over a number of years. Could you repeat that number again so that we can be reminded again of why we do this? Sure. Sure. So on this slide here, sort of in the middle there, the debt to service on the 2023 bonds was lower than planned. We had, again, projected about 5% our interest rate when we actually issued was slightly above 4%. The difference between that percentage point is about $130,000 a year. You multiply that by the 20 years that we're carrying the term, that's $2.6 million in savings from having the benefit of those AAA ratings,

the back end of the city, everything that the rating agency looks for compared to others who didn't have that level of a 850 credit score basically. And, I mean, that's the equivalent of almost 3 cents or a little over 3 cents right now. Well, and that's real money. I remember the old political statement being made, I think, on the federal level once that, you know, a billion here and a billion there, and pretty soon it adds up to real money. Well, on our local level, that's a considerable amount of savings. Right. And it's a great credit to, I think, the policies we've had in the past, the work of the city staff, which I think deserves to be credited for their work, and for the relationship we've had with Davenport in helping us maintain that particular process, and grateful for that.

I do want to ask one question was, I know we went through this process last year, I believe it was, of getting our credit rating established as AAA. When will that be updated again? How many years is the normal process for? It'll be updated in about a month. So we're going to go talk to the credit rating agencies in about a couple weeks, and then we'll have some results back in the middle time of December from them. Okay, so essentially they go, it's an annual process that we go through to make sure that we maintain that, or we hope to maintain that AAA bond rating. That's right, that's right. And even if we don't have, say there's a year we don't necessarily need to go talk to them, because we're not going to go borrow new dollars.

They are, they typically, I'll use a term, they're supposed to circle back around and do what they call rating surveillance. So even if we don't go to them, because those credit ratings are outstanding for such a long time period, they're really supposed to, at their own discretion, come back and sort of check in with us via surveillance. So it's usually updated about annually whether we go to them or they just do their own sort of coming to us to do surveillance. But a very important part of the process, obviously, that we need to continue to do and maintain. And I would echo my comments of my colleague on one of the key aspects of this is that unassigned fund balance and how we need to really begin to increase that so that one,

we're not falling behind our partners and our colleagues, but two, we're demonstrating to the rating agencies of our fiscal stewardship. And I think that's really an important component to underscore again with, you know, with an election coming up and a new council. We have new city staff and I think it's really important to make sure that we maintain that. And finally, I just want to reiterate how important it is. I believe that early in 2025, our new council, whoever that may be up here at the dais, has another work session on this item. So they're brought up to speed and I'm sure that will be happening, but I think it's really important. This is a really, we talk about the value of our capital improvements and what we do in the community, but this is really essential.

This allows us to do the things that are important to this community. And I want to again echo that. So thank you, Mayor. And thank you again for all the work you've done with us over the years. Thank you. Any other questions or comments? Councilmember Doyle Feingold. Thank you, Mayor. So we've gotten questions, you know, we have on the ballot, the school bond. Does this analysis include that? Not yet. This, what you see on paper right now does not. But if you go back to January and February and then we updated it in, I can make the summertime, spring, summertime, when the $220 million was sort of arrived at, that does take it into account. And so we've looked at all that and you obviously I'm a council councilman.

So that we've looked at in sort of a separate bucket, if you will, because it is so specialized relative to the schools and it's obviously subject to the voter referendum here in a couple of weeks. Depending upon the results of that, we'll be briefing the rating agencies, which is another reason we want to go talk to them now because that information will be fresh. But we're not borrowing any dollars relative to that yet. And so the other piece of sort of interacting with the rating agencies is making sure they're abreast of kind of what's coming down the pike, not just what are we doing now, but what's coming down the pike. And so certainly when we're talking to them and we go back to that analysis we ran during the winter and the springtime, all those numbers are captured in there.

So when you talk to them, it'll be after November 5th or before? After. So you're wondering, you know, you know, you're aware of the fact that you're aware of the public sector. And so what changes do you anticipate with this that that we're showing the public now in terms of, you know, our assigned fund balance, our triple A bond rating, all those things, let's say, if the school bond goes through, what do you anticipate? I think what we would anticipate is as a part of that discussion, nothing we've talked about relative to unassigned fund balance and building that and continuing to build the reserves, none of that's going to change. Right, I guess so the recommendations won't change clearly, but

I guess in terms of the impact to the community or the sort of questions that we're getting, what there, what do we expect? So how do you, I understand the unassigned fund balance is important, updating our schools is super important and something that we all support. What does that mean though for the community is what I'm trying, because a lot of people are saying now, this is on the ballot, we didn't know about it, we don't know the impact, we don't understand what this means for us. And so that's what I'm sort of trying to communicate as we can in a public meeting. What are those impacts? How do we keep that unassigned fund balance? How do we make those school updates? And what does this mean?

Because I think that, I mean, I appreciate the presentation, it's super important, but I'm just trying to look two weeks from now and what does it mean for the community? Yeah. If I could try to answer that, council member. So valid point, valid question. I've had the opportunity to be at all three community engagement regarding the bond referendum, exact same questions from the community, which are absolutely valid and need to be addressed. I will tell you exactly what I've told the public at these meetings is, a pass or a go for the bond referendum does not mean on November 6th that we take out $220 million of debt. That is not what that means. There will be additional community engagement, discussions with council, discussions with the

school board, discussions with Davenport, discussions with anyone and everyone to figure out what is needed. That $220 is the upper limit. That does not necessarily mean that that is where we need to be. We don't need to be at $219 million, $999.99. It means that is the upper limit. We may not even broach that amount. It might be less than that when it ultimately happens. We have, I'm going to go off a memory here, either seven or eight years from the passes of the bond to go ahead and issue debt against that bond referendum. I would not suggest that we wait that long because as everyone knows, the longer you wait, things get more expensive. But we would have continued dialogue with the council, with community, with the school board,

with Davenport to figure out how to plan and formulate and combine both the CIP, the regular operating and the school debt issuance and how to do that in layers as well as what was presented back in May or June by Davenport in conjunctions with Mosley, the architects and the school board as well. Did I answer that, council member? Yes. Thank you. Sure. Yeah. And maybe just to kind of run off of that for a second, that won't be long, but I think the way to think about it is that referendum is really like, it's like step one. And so that, I think the analogy that Mr. Martinez and I have talked about, it's kind of like the bank giving you the maximum you could go borrow. If you're going to go buy a house, you're going to add onto your house, whatever it is, you get

approved for a loan that is typically bigger than what you're actually going to go do. It's not up to us at Davenport, but that's like step one. And then what you have to do after that is work through the planning process of, okay, how are we going to factor this into the budget? How are we going to stage these financings over a number of years? Well, we're not engineers. What we know is it takes a long time to design, to bid, to build. So the referendum itself is really stage one, getting obviously the community to weigh in on that. And after that, there's a number of processes that will happen over a number of years and a number of budget cycles to really determine specifically what is borrowed, when it's borrowed,

how it factors in the budget, where the revenues come to make those debt service payments, so forth and so on. So hopefully it just adds a little bit of context. Okay. And so in terms of, you know, numbers, November 6th, it passes, you go to the bond rating. Do you anticipate a change? Do you anticipate, you know, what I see in a number of slides here is conservative budgeting, conservative budgeting. I've seen it in a number of places. And so what does that mean, you know, more specifically? And what do you see the difference is for us and what we need to do up here and in City Hall? Yeah. In the short run, we don't see a change because at that point, all we'll have is some action of the electorate in whatever it is the vote is.

And presuming it's yes and you go forward, that's really all we'll have at that point. And so what that really means is that in probably about three months or thereabouts, we'll probably all be back together and whoever is in the various seats to get really down to the planning process. The rating agencies don't speculate when they look at information. They're really dealing with what has actually happened. And so when we go talk to them, we'll know definitively through FY24 what's actually happened. We'll know that we're going to borrow up to $53 million with this bond issue. And then we'll be showing them a plan for probably the next five to seven years, maybe even up to 10 years by the time you factor in the whole school bond process.

So do we anticipate a change? We don't because we're not borrowing any dollars that are over and above what we've talked about in here. It'll be an initial briefing for them, just like we're having right now. And then what it'll really mean is as we get into the next calendar year, so we get into January, February, so forth and so on, we need to kind of roll the proverbial sleeves up and go back to those projections. And as Mr. Martinez mentioned, determine, all right, what do we need in terms of borrowing? When do we need it? That's a really important component of it because big school projects take a long time to design, to then go bid them, to then construct them. There's a long lead time to it.

So it's really that, I think, that FY26 budget process where we will dig into those numbers, help understand that, figure out, all right, what revenues do we need via the 26 budget, 27 budget, so forth and so on. It will not be all at once. It'll be in a series of increments, both in terms of what would be borrowed and in terms of the impact to the budget. And we'll be briefing the rating agencies along that whole time period. Is that hopefully helpful? Yeah. Thank you. Any other questions or comments? All right. Thank you so much for the presentation. I think it was very illuminating. And I'm hoping that the public paid very close attention because there could be a quiz. Probably not. But there might be.

All right. Our next item is discussion on the FY2024 preliminary results and the FY2025 first quarter financial review. JC Martinez, chief financial officer, will provide the staff report. Thank you, Mayor. Council members here again. A co-presenter tonight with me is going to be our budget director, Gwen Riddle. I'm going to go ahead and start us off and then sort of kick it off to her halfway through and just review FY2024. Please feel free to ask questions throughout or at the end. We will be more than willing and ready to answer whatever questions you might have. Let's see if I can do this correctly. There we go. So just very quickly what we do every single quarter. We come to council, sort of give you a timeline of where we are on that top left.

That's today. We should be receiving our audit results early December, bringing that to you, making everything official and final for FY24. Finalize the FY25 fall supplemental also in December. Come back to you in late January and do second quarter financial review, third quarter financial review in April, potentially a spring supplemental again also in April. And then we start off FY26 budget adoption at the end of May. And then almost six months from now, we'll be starting off a new fiscal year, FY2026 on July 1, 2025. Regarding the FY24 preliminary financial review and results, these are estimates. These are unaudited as of now. We actually just finished our final audit review last Friday, trying to finalize that information

with our auditor. Should have those results to us hopefully before Thanksgiving break. So that way we can all enjoy that long weekend and then, like I said, come back to council in early December and present to you. So on the left-hand side, the FY24, this is the budgeted amount, not anything that was reappropriated or added to it. This was the original budget. And then these are, in the middle column is the total adjustments that we are projecting and or have received regarding revenues. And then the updated FY24 amounts when you add the left column, the middle column now equals the right column there. If you note, our real estate revenues were slightly better than what we had originally budgeted, about 2.5% better.

We had a slightly better appreciation than what we had expected and were estimated, again, about 2.5%. Additionally, on other local taxes, we were also slightly better, about 4%. As noted by the commissioner of revenue towards the end of FY 2024, he had noted additional bank franchise revenue, which was realized. So kudos for him. Additionally, our meals tax was about $800,000 more than what we had expected. I will note, and I've noted this to the rating agencies as well, I think this is now the fifth consecutive year of double-digit growth for our meals tax revenue. It has slowed down ever so slightly. It used to be about 18 or 19% this year, or in FY24, it was 10%, but still double-digit, so we're making very good headway there.

I'm sure EDO in the numerous restaurant weeks helps with that as well. Another major note is the use of money. As was previously communicated, interest rates at the time that the FY24 budget was built and adopted, they were still relatively, no, about 3%, maybe high 2.9s. Interest rates shot up in FY24 to about 5%, 5.5%, as I noted in the last presentation. The treasurer realized a lot of those gains, so we had massive appreciation with how much interest we were making on the city coffers. So that was a huge 84% gain from where we had budgeted. We are not expecting that level of gain in FY25 and also not in FY26. I think when we built FY25, we actually projected interest rates to be about 5% to 4.75%.

Again, some of those conservative natures that we do when we budget just to ensure that we come in at or slightly above where we had planned to be on revenues. On miscellaneous revenue, we did have a little extra sell of surplus. That was about an additional $150,000 there. On the state revenue, our Personal Property Tax Relief Act, also known as PPTRA, was now budgeted as revenue. So there was like a $3 million credit to the Personal Property Account, which will go into the expenditure side. This was more of an accounting change just to make it more accurate. Additionally, our auditor was asking us to sort of do this just for more transparency and better tracking as well. So we made that correction or change in FY24.

And then lastly, the other financing sources. This is almost exclusively to the transfer of ARPA funds. One of the categories that was allowed in ARPA was something called revenue replacement. We had not done that prior, so we moved a good chunk of that, almost $9 million, from the ARPA fund to the general fund side to account for public safety salaries and fringe, which is completely allowable. We took the max limit that was allowed by ARPA, so we went ahead and realized that gain or that change in FY24. Going to expenditures. Again, the left column is where we had budgeted. The middle column were the adjustments throughout the year. The right column, or the FY24 estimate, is when you add the left in the middle,

and that's where we sort of ended up. Compensation, slightly higher, mostly due to about half of that increase due to overtime on public safety. We do have and continue to have a lot of vacancies within public safety, so we're paying a little more overtime out. Increase in reclassifications and regrades, and then also leave payouts and retirements in FY24 account for the majority of that $1.6 million. Regarding fringe benefits, I think I had shared this with you, and if I haven't, I'll share it tonight. We also changed when the new budget director, Gwen Riddle came on board. Sorry, Gwen. She did a complete review of how we were budgeting. She noticed that we were doing something called pulled fringe as an accounting practice for that fringe classification.

She and her team has actually gone line by line, and we are now budgeting at a line by line by benefit by fringe, making it way more accurate. And because of that, there were some savings in FY24, and we actually applied that savings when we were budgeting for FY25 as well, so there should not be as significant of a variance in FY25. Non-education county contracts, that's just increases to the CSB contract, the social human services contract. There was also the county dispatch for all public safety increase ever so slightly based on population. The school tuition contract, I do want to spend a little bit of time on this. So in early 2024, again, the left-hand side does not show the reappropriation that we took to council in early of 2024,

calendar year 2023, about $2.6 million in a supplemental appropriation. So we need to add that back into the base budget. And when you do that, that rate is actually $58.2 million. And then we also received an additional about $150,000 in school rental revenue. So the true net impact on the tuition contract is about $2.6 million, not the 5.4 that's listed there. Additionally, the city ADM increased by 78 additional students, or about 3%, from $28.35 to $29.13. So pretty significant increase there when the rest of FCPS actually went down. And the last two things I'd like to sort of touch on is the capital budget transfers. So again, ARPA played a big role here. Funds were used and transferred to the CIP for projects to about $2.6 million.

And then lastly, on other, fuel and utility prices have finally plateaued and are stabilizing, so we're starting to realize a little bit of savings from there. So when you put it all together, this is sort of what it looks like. You have the adopted budget, the total adjustments with revenue and expenditures, and then a positive variance of slightly over $6 million. And one of my favorite slides is the unassigned fund balance summary. And then, in addition, we've added in the budget stabilization fund, specifically for Councilmember Staley as well. So we know for a fact that we ended FY23 at $16.8, or about $28.3 million. When you add in that $6 million variance, but you take out $1.5 million, which is a requirement,

per the budget stabilization fund, we would potentially end up an estimated 17.9% of the general fund unassigned fund balance for FY 2024, or about a 1.1% increase from the $16.8, or about a $4.5 million increase from $28.3 million. Again, as stated earlier, when you look at the minimum adopted financial policy of 15%, that's about $27.5 million. The variance there is about $2.9, or about $5.3 million. And then our targeted fund balance ratio, based on what was being discussed by Davenport, we would aspire to be at about 22% or about $40 million in total unassigned fund balance. And then, as a note, I'd like to say something that I'm pretty sure you're all aware of, but would like to reiterate and or clarify.

Given how the unassigned fund balance is calculated, currently as a percentage of total general fund revenues, if no annual contributions are transferred to the fund balance, the listed percentage would be about 17.9, will decrease every year. The fund balance is the numerator, and the general fund revenues are the denominator. So basically, as the denominator grows, it reduces the influence over the numerator. So we should, as Davenport stated, we should be striving to always try to contribute to the unassigned fund balance to ensure that it continues to grow or at least be stable. Any questions? Council Member Staley. Thank you, Mayor Reed. I really appreciate the slide. I appreciate the call to the budget stabilization fund.

I think that's really important. I asked the question of Davenport about the numbers, because I want to understand that targeted fund balance ratio on this slide of 22%. I heard Davenport talk about numbers in a different sort of range in there, and so I just want to make sure we're aligned on that particular target and where that came from. Is that 22, 19 plus 3, or is it 22 plus 3 to get to 25? So the minimum is 15. You add the difference of the 17.9. That's the 2.9 there difference. The 22 is an aspirational target that we would like to reiterate to Council based on our peers and their fund balances and based on what rating agencies are telling us to be above 20%. I think on the graph it may not have actually shown the percentage, but it's about 21 to 22% of our peers.

So that's an aspirational target as a reiteration of where we think we need to be in order to maintain our double AAAs. Got it. So that would be an additional 3% on top of that would be the aspirational 22 plus 3% for the BSF. Correct. Excellent. Thank you for that clarification. Other questions? Council Member Greenfield. Thank you, Mayor. My recollection from when we've done this before is it's aspirational, but it's over a period of time. We're not looking at trying to go from 16.8% to 22% in one year. Is that still the way we're flying? Absolutely correct. As I stated earlier, I think if we can continue to show consistency of maintaining a fund balance at 18, trying to grow that at either a half a percent or a percent every year, once we get to a consistent 18, 19, 20%,

then try to revise that minimum and again continue to grow to a potential 20 plus percent over the course of the next four or five years. If I could just add to that, we have to look at our peers. So this is the target of peers as our debt ratios start exceeding our peer debt ratios and we go back to New York. We need to show that we're at least matching what their fund balance ratios are. If you have higher leverage than your peers in a lower fund balance, that does not look good from a rating agency standpoint. So we need to kind of have this target and have a plan to get to it. Right, I get it. But every project that we talk about, right, where we don't have the ability to go get more money, like transportation dollars,

we have to pay for that somehow. So that's why I'm saying we have to be able to cover some of those costs. Like, for example, when we bid out Sherwood and if that comes in our share, that comes in over budget, we're going to have to be able to pay for that, right? And so we have to factor in some of those costs but then still trying to be aspirational and move up every year, you know, one or two points, whatever that is. So I completely understand what you're saying. There's just a lot of factors here that I think we've got to be able to think about and know that, you know, can be coming because when you put out some of these bids, so, for example, when the school bond gets approved and eventually that goes out for bid and the bids come back more than what we put out for referendum,

we have to cover that, right? That's how we have the roof that we have on Fairfax High School is because we had to cut back because we were well over what we were able to get. But so the bond amount was X, expenses were Y, and we had to cover the delta. And it was this body that has to cover the delta but in partnership with schools to say, okay, what are we not going to do or what are we going to do differently? And so I'm just trying to work through mentally that we're still working toward, you know, strengthening our fund balance but being mindful that we've got to be prepared for covering things that are going to come in over budget. Yeah, and I agree with that. I think one of the challenges.

Excuse me. I think one of the challenges is that most organizations don't define fund balance. What are the different purposes of fund balance? And that's something I'm going to look to be doing with this upcoming budget, delineating what is the purpose of your fund balance, what are the different categories, whether it's operating cash that you need, and I'll explain what that is, what the ratios are, your rainy day fund, which the BSF is supposed to do, what's the purpose of it from a national recession standpoint, what are capital, what you described as a capital fund for overages, right? You shouldn't be tapping into your cash reserves for overages. That's just not proper financial practices.

So we will get there. We'll delineate kind of what reserve categories we should have that make up fund balance, but I think we need to be competitive with the other jurisdictions, and that's why I asked JC to add this 22% target to highlight that we need to get there if we're going to remain competitive and if we're going to be a performance-based organization and be better than our competitors or match our competitors. This is where we need to get to, especially if we're going to take on more debt than they have. Other questions from the dais? All right. Thank you. Thank you, and I'm sure we're moving on to the next thing. We are. So I'm going to go ahead and turn it over again to our budget director, Gwen Riddle,

to review the first quarter, FY 2025. Good evening, Mayor, members of council. So first we're looking at the real estate overview. This is for the calendar year for 24. You'll notice that residential housing growth is about 7%. If you look at some of the breakouts, it looks on the bottom 10.29 for median sold price. Take into account that the makeup for year over year could be different between single family and condos. So in general, it's about 7% for the residential and about 1% increase for commercial. And with the feds initiating the cutting of rates, we're looking at possibly rates coming down, which would boost more sales and more activity in the market. So next slide is just looking at a five-year projection.

For the first quarter, we are not seeing any major changes on what we've budgeted. So the projection is flat. You'll notice in the out years, we are not budgeting the use of appropriate fund balance. As per policy, we're trying to minimize the use of prior year fund balance as a budgeting tool to balance the budget. Some of the larger developments that are in the projection, we're seeing about 9.3% increase on real estate from 25 to 26 right now. That's looking at N29 or Eaton Place, the Norfax completion, and the nursing home at Norfax as well. So again, we're not looking at any major adjustments. We're looking, staying on budget for the current fiscal year, N25. And then we're looking again at the unassigned fund balance.

So starting at 17.9, what we're estimating for 24. Shortly, you'll be having another presentation for supplemental, which we were asking to use $600,000 of savings from the 24 savings to use in FY25. That will take the fund balance to 17.6, still above the 15% minimum. And then for staff recommendations, finance will continue to monitor and track all revenue and expenses. We'll be presenting to council the second quarter update in January of 25. And we're looking for council to approve the proposed fall supplemental appropriation. And then again, future, in December, you will come back with the ACFER presentation, as well as looking for approval for fall supplementals. In January, we'll come with the second quarter FY25 financial results.

Again, April for Q3 for 25, as well if there's any spring supplemental appropriations. With the adoption of the 26 budget in May, and then starting the new fiscal year again in July. So any questions? Okay. Council Member Staley. Thanks. Could you just jump back to slide 10 real quick? I just want to make sure that I'm reading the top line correctly. That shows between FY25 and FY28, $16 million in increased real estate tax revenues. Can you just talk again, just real briefly, about where that comes from? That. Yeah. Like I said, so Christine Johnson, the real estate assessor, actually looks at all of our developments that are in the pipeline. And so that is her taking into account those developments and also looking at what possible increase on the assessments

with the changes of assessed values and the sales she's seeing throughout the city. And I just wanted to pause on that because that's the whole point of economic development, right? We need economic growth to be able to continue to fund the raise that you see in the expenditures, which, as I understand, is basically assuming the general regular increase of salaries, general regular increase of cost of doing business. And so economic impact is on this slide that this and previous councils have done that results in being able to create the revenue necessary to continue the level of service that we have in here. And so that's a really important slide that I just didn't want to gloss over and go past in here

because that's the reason that councils have to be forward-looking, have to think about projects to get them across the goal line, because we voted on Northfax a long time ago, right? And you're not going to see it out of the ground until FY2028, which will be an entirely new council cycle by that particular time. And so I just didn't want to gloss over that because that's the baton form of government that we have with two-year terms, that you're passing it on every time going forward. Thank you for that. You're welcome. Council Member Ross. Yes. Thank you for that presentation, Ms. Riddle, and appreciate having you present. I think this is probably the first time you've presented to us or maybe I've.

To you, yes. But appreciate that and having a chance to share that perspective. Along those lines, if I heard correctly in another section of this, you're talking about a residential increase of about 7% on the value, which will mean we'll get even keeping the budget flat, which probably would not be the case, but we would gain additional revenues in the upcoming year. Same with commercial development. Do we have any sense of we know there's a very robust residential market out there and probably, as you pointed out, will increase given dropping interest rates. What are we seeing on the horizon in terms of the commercial market? I know at one point we were, I think, the second lowest vacancy rate in northern Virginia.

I don't know whether that's changed or not. But are we continuing to see strength in that market and the potential for that continuing to grow? I mean, I'm looking at the ratios. It's about 66% residential revenues versus 34% commercial. Are we seeing the potential for that to increase? I know that's looking into a, what do we call it, the magic ball or the crystal ball. I knew that Mr. Greenfield could help me out on that, the crystal ball. But what are we sensing? Give us a sense of what we could expect. Well, on the commercial side, we're seeing about a 1% increase, and it's largely attributed to retail. Good or bad, rents are still going up. And whether that's rental housing or retail rents or even office rents.

We are in a unique position in the city, even though we're surrounded by really high vacancy office buildings. And we have a few here in the city as well. But we have quite a few that are almost completely leased up well below what we consider stabilized vacancy. And that's why you see COSTAR reporting a vacancy rate for office at 8.8%. Now, about half of our office is what we call Class B office. And the other half, well, slightly lower than half, is Class C. Most Class C is owner-occupied. Those are your commercial condominiums. So you have a 0% vacancy rate there. A few Class A have high vacancy, but with the EDO and the EDA being in some of those buildings, that's really promoted the vacancy.

So we are surrounded by really high vacancy, office vacancy. But the city is offsetting that by various programs of getting tenants to come in, helping with the tenant improvements. And then I'm also seeing what landlords are reporting to me, that they are assisting in those tenant improvements as well and offering free rent for up to a year. So those are all incentives to keep those buildings leased up. Right, right. Well, thank you for that. And, again, I think it's a great credit to our EDA and EDO and the fact that we've continued to invest in those kind of initiatives. And, finally, I will say I think I don't know that people are aware. We are part of a collaborative in Northern Virginia which works not to compete with one another in terms of the jurisdictions,

but to find what our niche is and help to make that growth occur. And I think the success is very evident in what we're seeing and feeling. And it provides us with the important financial base that we need for future development and future investment in the community. So thank you for that information and that report. Thank you, Mayor. Any other questions or comments from the dais on this? Okay. I think we're ready for the next thing. Our next item is a discussion on a supplemental appropriation resolution in the amount of $650,000 for FY 2025 fall non-discretionary and council authorized expenditures. JC Martinez, chief financial officer, will provide staff presentation. Mayor, council, again, once more.

Just really quickly, a couple of multiple things here. Let me see if I can get the presentation up and going. So we come to you, summarized below are the staff's recommendation for the FY 2025 fall supplemental appropriations, totaling $650,000 for all funds. Specifically in the capital improvement program fund, we'll be receiving an additional $50,000 from NVTA 30 and apply towards a transit development plan for Q. The net impact of the proposed general fund appropriations results in a reduction of $600,000, as was displayed in the previous presentation, to the FY 2025 general fund fund balance. The proposed general fund supplemental appropriation is about 0.3% of the FY 2025 adopted final budget.

There are eight initiatives that are listed. I think there's actually seven that are listed here, but when we add in the fire department pharmacy item, which our good chief, O'Neill, will be coming up shortly to present and speak more on. Specifically, the seven items that are listed here are items that were discussed and on the city manager's work plan items. I will go ahead and yield to the city manager if there are any items that he would like to expand on and or discuss with council. Sure. I think just to expand for the purpose of the public so they understand what we're doing here. So these are items, priority items that we identify that we'd like to accomplish this year. Most of them were in the work plan.

The first one was not, but it was briefed in the summer for the hiring of the housing program manager sooner than what was budgeted. With the HCAB slated to begin in December with their first meeting, we're looking to hire the housing program manager, hopefully by that time. So there will be some fiscal impact related to that. The asset management plan is one of the most important plans we're going to do as a city because we have a lot of facility liabilities, as you've seen tonight. We're going to have to manage that properly. We're going to have to think about our debt and how we manage it and think about how we manage our facilities going forward. This will establish life cycles for all of our buildings.

So we properly plan for today and into the future what those liabilities are and how we properly fund them without burdening our residents significantly by doing this thing of trying to tackle everything at once and then kind of waiting. And then you want to kind of smooth things out, and that's what the asset management plan should help us do. The IT strategic plan, and actually for the asset management plan, that RFP is already ready to go out. And we'll also incorporate some green building items that we'll be forecasting for next year to hopefully get approval from council as well for our public buildings. The next item, the IT strategic plan and roadmap, that's another critically important plan for the city to really drive our future technology investments.

Kind of a 2030 technology plan for what we need to invest year by year in a sustainable manner to improve our technology portfolio. You can see the description of what that entails, but that's another critical plan that we need. The following one to the earlier point about economic development, how critical it is for improving our revenue base to cover our ongoing expenditures and those capital liabilities that we talked about in the asset management plan. We need to know what our market is, right? What can we absorb in terms of retail and housing? What can our infrastructure absorb in terms of housing? What's the demand for housing? So these are ongoing studies that we've been working with the EDO to get knocked out.

We've done some preliminary assessments, but we need some funds to knock out some additional ones so we can have a good heart to heart in 2025 with the city council about what direction we're taking with our small area plans. What are the targets that we're going to seek to accomplish to make sure we keep improving our tax base so we're not burdening our residents with the capital liabilities that we were talking about tonight. So that's the goal. Historical assets, that's going to be critical for evaluating. There was a study done prior to 2004. We're going to evaluate that study, see what else is needed. What are some gaps, specifically kind of criteria for when developments occur? What's acceptable?

What are some different criteria to help us evaluate those issues? That's that. The permitting, we've heard significantly. You know, customer service complaints about kind of our permitting process. We're taking some significant strides right now from an IT implementation standpoint, a process mapping standpoint. Tommy's doing a great job in mapping out all of our processes right now. We're looking at organizational redesign concepts as well. The next step is as we finish mapping out those business processes, is doing some business process improvement evaluation. And that's what this plan would do as well to kind of finish all those different elements that are needed for improving our permitting operations.

And then lastly, to continue to engage with our residents, understand what their priorities are, understand how we do as a city in terms of accomplishing those programs, and how do we do as a city in terms of customer service in general. It's critical that we conduct annual surveys, at least of our residents, and also do community outreach in multiple languages as well. We're going to start this process with the professional resident surveying plan to bring back to city council some recommendations for how to survey the community going forward in 2025. So those are the key ticket items from the work plan. And then as our CFO stated, our fire chief will be briefing you all on a mandate that we have now that we have to cover

that we're going to pull from the $600,000 as well. Any questions on my items as the fire chief comes up? Any questions for the city manager? Council Member Doyle Feingold. No questions. I just think it's a great idea to be surveying the residents. I know from a lot of residents they'd like that to happen. I don't. I mean, you fly on an airplane and they send you in survey. I mean, everybody is. I work in the federal government. I get a survey every year and rate my agency, and it gives a lot of good data. And I think it's a great idea both for the city staff and city residents. And so I think it's great to get out there and collect that information. It can only help us. Council Member Bates.

Thank you. I agree. I think that surveys can be very helpful and very important, and it's even more important to make sure that those surveys, the questions are drafted in an unbiased manner and the survey is administered in an unbiased manner to a representative population and not a skewed population that is representative of the city. And I look forward to seeing that through as well. Thank you. Other questions or comments? All right. Excellent. Thank you. Good evening, Mayor, City Council. It's always a hard act to follow, to follow the finance staff and the Davenport staff, and, of course, the city manager. Short presentation for you here tonight. Back in April, early April, we were notified by the state's office of EMS that hospital systems

across the Commonwealth would cease the common practice and long-time practice for one-for-one exchange of medications on or about November 27 of this year due to the enforcement by DEA and the Virginia Pharmacy Board for the track-to-trace rules. Being an old hazmat guy, environmental guy, I call it from cradle to grave tracking of medications. The intent of the policy is to mandate stricter tracking, storage, and administration of controlled substances to prevent misuse and diversion of drugs. This requires EMS systems across the state to create and manage their own pharmacies. The intent of the new regulations, EMS agencies must have comprehensive strategies, including security measures and meticulous record-keeping to buy, inventory, track, dispense, and even dispose of expired medications,

including Class 2 to Class 5 controlled substances, meeting federal and state guidelines. This includes having at least two consistent personnel to receive drugs, inventory them, track them, and manage invoices for the controlled substances for a system of checks and balances. At the state level and both regional level, fire and EMS associations and agencies, individual agencies, have been lobbying to postpone these actions, and to date there's been no indication from the state and federal government or hospital systems that this is going to change course. This slide just kind of gives you a little bit of overview of who's been involved up to this point, to include the DEA, Virginia Board of Pharmacy, Office of EMS, of course, our staff.

For a little bit of background, we currently in the fire department stock 42 different medications, including four controlled substances. In calendar year 23, we administered over 1,800 doses of 36 different medications. To prep for this, to date, we've taken actions to prepare for these changes by researching regulations. We've sought out cooperative purchasing agreements, evaluated dispensing machines, identified storage locations at each station, and have applied for necessary licenses, and started ordering some of the equipment. As I shared before, this is impacting all EMS agencies across the state. The Office of EMS has offered some learning opportunities for individual agencies to help meet the new regulations and implementation guidelines.

They've recently published the implementation guidelines. Additionally, they have offered a few limited mini-grants to assist, particularly the smaller agencies across the state, with purchasing equipment and supplies. Already, Prince William County, Loudoun County, and Fairfax County Fire Rescues have recently asked their boards for supplemental appropriations that were approved to hire four to five uniform and non-uniform positions to build and manage what they would call their central pharmacies, and kind of using a hub and spoke system to have multiple smaller pharmacies in each of their larger districts. Recently, I've even seen where the City of Charlottesville Fire Department and the Little City of Franklin, Virginia, have advertised to hire personnel

to manage this new function. So when looking at challenges and constraints, you know, the deadline for the transition is coming up soon. Again, we've not been given any indications from a Nova Hospital system or other systems or the state that this will be changing. Our existing staff is very busy. You know, we have limited or little capacity to add more to people's plates. We have limited bench strength being a lean organization. And, of course, we will have in the future this one-time and ongoing financial impacts from these changes. And as I've already mentioned, we've already started the process to start to build our own pharmacy. We have identified approximately 61,000, a little over 61,000,

in initial financial needs that we will be using as a department, our four-for-one EMS pass-through grant fundings that we receive every year. As far as unmet needs, we have limited human capital to manage this additional work and to meet the pharmacy regulations, especially when considering the two-person rules for receiving inventory tracking, quality assurance, and verifying invoices for that system of checks and balances. Obviously, our work is ongoing to meet these regulations, and we do not want to have the level of EMS care impacted by this. As far as strategy, we are seeking the FY25 supplemental appropriation, primarily to hire a dedicated pharmacy program manager to work along Battalion Chief Orndolf, who is our EMS program manager,

to help manage this program. And he joined me this evening here in the crowd as our subject matter expert. We looked at two options to present to the city manager for consideration and present this evening. The first option is our preferred as a new uniform position to serve as our program manager, with the support of Chief Orndolf as the secondary provider for those required checks and balances. This would give us some bench strength for limited collateral duties, such as ordering other EMS supplies, providing EMS continuing education, and possibly to serve as a backup to our community paramedic on the crisis response team. Oftentimes, he has required training that he has to attend to and continuing education to attend to,

so we may have some capacity for backfill with this proposed position. The second option we looked at would be to hire a civilian pharmacy technician or possibly a pharmacist. Next slide is. When looking at the pros and cons, a pro for the uniform position would be the individual to have knowledge of our response system, our current medical protocols, and possibly, like I mentioned, perform some other collateral duties. Additionally, in our department, it would give and enhance future succession planning, particularly for our EMS career members and a career path for them. When talking with our operational medical director, Dr. Nick, he stated that this was his preferred option, and as you probably already know,

we work under his license to provide medical care. A con, which is probably the obvious, with most likely a uniform position, potentially a higher salary and French benefit cost. When looking at a civilian position, particularly when it comes to a pharmacy technician, potentially it would be a lower salary and French benefit cost, not so much if you were to look at a pharmacist itself. The con to a civilian, of course, is lack of the first responder knowledge and protocols and system operations, and in some cases, pharmacy techs, when looking at them particularly, are not authorized to administer many of the medications that we carry and will be dispensing. So our request and recommendation to you this evening

is to request an EMS pharmacy program manager at the rank of captain to manage the new pharmacy regulations and requirements with a high level of accountability and oversight, of course. As I shared, this position may be able to perform some limited collateral duties. It does create that career progression for EMS with our hope to aid and retention and improving potentially morale of EMS providers, which is a competitive market, as you may see with some of our localities and some of the news headlines recently with attracting firefighter and particularly firefighter paramedics. This is also in line with our departmental strategic plan and the prior workforce future needs assessment that we did about two years ago.

Using the city manager's model here, we were asked to anticipate potential questions. Two questions that we thought of were, is there existing capacity to perform this as a collateral duty? We currently do not believe so. Existing staff have full plates already. Even with what we are proposing, Chief Orndorff will still play a critical role in this with the two-person rules and add more to his plates. So it's our hope with that uniform position that that position may be able to offload just a few minimal items from Chief Orndorff's plate with these new duties. The next question that we considered, would other staff be needed in the future for this purpose? It's currently not anticipated by us.

Based on our size of department and potential volume of drugs that we do administer, we think this will meet our needs into the future for this purpose. So for the road ahead, we've already started planning, as I've shared with you, and setting up the basics for this new program. We did identify that little over $61,000 in cost for dispensing machines, security systems, initial medications using our 4 for Life grant funding. We are requesting your consideration for the proposed 1 FTE position at the rank of captain to manage this. Additionally, we will be requesting IT-related equipment associated with this position, a portable public safety radio, laptop computer, and of course a city-provided cell phone

at an estimated cost of $13,000. for a total of $105,400 for the FY25 supplemental appropriation. If successful in this process, in FY26, we would be requesting a vehicle for this position and associated equipment in the vehicle estimated at $80,000. That would aid in this individual serving, particularly as a backup to the community paramedic with the community response team, in addition to traveling back and forth to both stations to supply stock and equipment. In FY26, as an enhancement, we will be requesting some sustainment money for the medical supplies and contract services associated with this at a little over $22,000 in projected ongoing costs and, of course, sustainment of the position

if we're successful here. Moving forward, of course, we plan to keep you, the city leadership team, our citizens informed on our program and hopeful future successes with pharmacy audits and other outcomes. And lastly, as you can expect, we will track our inputs, outputs, and outcomes for our EMS service delivery like we do, our quality insurance programs, and the pharmacy program. So with that, I will gladly answer questions or refer you to Brian to answer questions that I can't. Okay. Questions. Council Member Ross. Yes. Thank you, Chief. And I understand that this is one of those outside mandates that has been given to us by our good friends in Richmond. Is there any potential for a funding availability

from the state for these kind of positions or is it... No, sir. Not that we've been aware of. Right, right. And there's no effort being made to do that. And as I stated, with the Office of EMS, they've only offered what they call mini-grants, and that's just a minimal amount to cover initial startup equipment. Right. So they basically gave us a requirement that we had to have this position but no funding to go with it. So it's one of those sort of unfunded state mandates, if you will. Okay. Thank you, Mayor. Thank you, Mayor Reed. I understand what we're dealing with here, but I think the question I'd throw to maybe Brian as the appropriate person is let's think of the next three to five years.

Is there an opportunity here? Right. I think about pharmacy schools. I think about the relationship with George Mason. I think about being able to manage many pharmacies out there. Just I see this as an opportunity to introduce a new set of people to the fire department. I think it's a career growth opportunity as well. And so it's frustrating when we don't get funding for it from Richmond to do something that we're required to do. But I see opportunities here and so we just encourage you to think about how we can engage and leverage that particular space because I think the delivery of drugs and particular controlled substances were very close to that being done in automated ways and in ways we haven't thought about.

And so what is that sort of future look? We are where we are today. It makes complete sense. But I just encourage you to really think on the horizon. What happens when drones are delivering it? What happens when robots? What's that next phase look like? Controlled substance in and out? How do we do? I think it's a great project to work with Mason on. So I appreciate it. Thank you. Yes, sir. Thank you. Any other questions or comments? I guess my only question is even with funding, you're like, how competitive is it going to be? How certain do you feel that you'll be able to fill this with a captain if we're struggling with other jurisdictions to hire people at that level? It is our belief that we have some quality staff in-house.

Okay. Our intent would be to offer the opportunity internally for those who are qualified and promote from within and backfill with a fire medic. Okay. Well, that's a very good answer. But I will also say that looking at this as Council Member Staley has, it might be a point of entry too for somebody who's like, I'm going to be a pharmacy tech and they never ever considered a career as a firefighter until they worked with firefighters and understand that it's just, it's something they might want to do. So, I mean, I support you hiring from within for a captain, but I do think we need to think about how we do get people into these careers if there's a shortage of people going into these careers.

Is there a doorway we can create for non-traditional candidates? The flip side is my hope that we don't create that opportunity for somebody to want to go to school and leave us and pursue that. Well, I know that, but, you know, like I said, you know, you have to be bold. I mean, you have to be, you know. Historically, historically, when we lose people, we do lose people to medical school and PA school. And, you know, seldom do we lose people to other jurisdictions. It does happen for reasons that we can't control, but we lose more people to medical school and PA school than we do to other jurisdictions. Wow. All of this is, I wouldn't have known that if you hadn't told me. So that is good to know.

All right. Well, I don't think we have any more questions. I think the consensus is that we're very supportive of this. Thank you very much for your time. So thank you. Our next item is a discussion of an ordinance amending Chapter 90, M. Parent's Taxation, Article 2, M. Parent's Real Property Taxes, Division 3 of the Code of City of Fairfax, Virginia, pertain to tax relief program exemptions for the elderly and disabled. J.C. Martinez, Chief Financial Officer, will provide a staff presentation. Thank you, Melissa. Mayor, Council, I promised two more and then I'm done for the night. I am actually going to turn this over to our Finance Director, Lynn Gussman, who will go ahead and do the presentation.

Good evening, Mayor and Council members. Discussion of an ordinance amending the City Code provisions relating to tax relief program exemptions for the elderly and disabled to increase qualifying income levels and asset limits, as well as adding a new 75% exemption category. So what gives City Council the authority to amend? City Code Chapter 19, Taxation, Article 2, Real Property Taxes, specifically Division 3, Exemptions for Elderly or Disabled. The process for completing the applicant is to complete a Real Estate Tax Relief Application by April 15, provide income info, information statements, such as tax returns, bank and investment statements. Provide a list of assets and liabilities, and also sign an affidavit

to attest the information is true and correct. This slide shows the City's current criteria, which was last updated on December 13, 2022. The property needs to be titled in the applicant's name, be either 65 years of age or older, or permanently and totally disabled. Currently, the net combined financial work should not exceed $400,000, and the gross combined income should not exceed $85,000. For the tax year of 2024, we have reviewed and approved 232 applications valued at $1,211,229. Of that 232 applications, 203 were approved for 100%, 19 were approved for 50%, and 10 were approved for 25%. Previously, before the criteria was updated in December 13, previously it was $340,000 for the net combined,

$340,000 for the net combined financial worth, and $82,000 for the gross combined income. What we are proposing for the tax year 2025. On the left side of the screen is what we are proposing, and on the right side is our current criteria. So for the tax year of 2025, we are proposing to increase the net combined financial worth by 10%, which is $440,000, and the gross combined income by 6%, which is $90,000. Also, we would like to add a third tier, which is 75% exemption. We are also increasing the ranges within the tiers. For 100% exemption, we are raising it by $10,000, and the other three exemption tiers, we are raising it by $5,000. Please note that the national inflation rate increased 7.4% since December 13, 2022,

when these amounts were last revised. So, based on the tax year 2024 applications, these are the projections. For estimating in 2025, we would be approving, projecting to approve an additional four applications. And of that 236 applications, six would be an additional to the 100% tier. Ten would be approved for 75%. And then there would be a reduction of six each in the 50% and 25% tiers. The projected increase in tax year 2025 would be $62,733. Please note that these are projections and may change in 2025. This slide shows the comparison with the other jurisdictions in the area. The first two at the top is Fairfax County and Town of Vienna, which falls under Fairfax County. Both have four tiers,

which is the 100%, 75%, and 25%. Also, both jurisdictions have the net combined financial worth of $400,000, and gross combined income of $90,000. City of Alexandria has three tiers, and their net combined financial worth of $430,000, and gross combined income of $100,000. The city of Alexandria has three tiers, and their net combined financial worth is $430,000, and gross combined income $100,000. As you can see with the proposed criteria for the City of Fairfax for the tax year 2025, this would put the city in the middle of the road path. If approved, this will be effective for the tax year 2025, and this does not impact or change the disabled veteran tax exemption. The next steps would be to introduce this during our City Council meeting on November 12th,

and a public hearing during the City Council meeting on December 10th. Any questions? Council Member Staley. Thank you, Mayor Reed. I appreciate you bringing this forward. I guess my question to you all and to my colleagues is, if you go back to the comparison slide, you know, it seems to me with a couple of tweaks we could be at the, you know, 500 and 100 number pretty easily, and be sort of a leader in the area of what's going on. I only share that because this is something that we don't necessarily adopt and update every year. There's a lot of changes in marketplace in there, and, you know, we might as well set and forget and let it see how it runs for a period of time to see what the impact is on some people,

and so the dollar amount we're talking about on that shift is probably under $100,000, maybe in that $150 range, and so to make that type of gesture I think makes some sense if people are interested in that. I certainly value what Falls Church is doing, and if they think, you know, a half million is the right number to be about there, you know, we do a lot of work with the little city, and if we want to leave it at 90, great. You want to bump it a little higher, fine, but it's something that I think we should be setting and forgetting so that people have the certainty of what it's going to be over a longer period of time, and if we're going to adjust it, let's adjust it that direction. I love the 75% flexibility in there, so just put it out there from a perspective of where we might want to head there with our regional partners.

I just wanted to float that out there, Mayor. Thank you. Mayor. Councilmember Greenfield. Unless you want to say something, Mr. Martinez. I am not, but I wish I was. So Councilmember Staley, just really quickly, so we do review this every single year. We may not bring it to Council every single year, but traditionally we have pretty closely brought it every single year. We didn't last year. We looked at the rates where inflation was. Inflation was coming down. We were looking at the projections and also the comparison to other Northern Virginia localities. We were still in line. The decision and the discussion at that time internally was not to make any changes, but we do review this on an annual basis.

So if we need to amend or raise anything next year or any other year, we will bring it forward to Council, but just FYI. I yield it back to the real Councilmember Greenfield. Thank you, Mr. Martinez. I actually think we're probably the most aggressive when you look at it from the income, but then where we're at at the exemption level. This is a program that I was one of the founders of back in the day, and it's been one that, as we've said, we continue to continuous improvement, right? We, economics change. We hear from residents. We see with applications that we have a problem and we're potentially excluding folks. And so I think we're very aggressive with where we're at, especially when we look at the exemption that we provide up to $75,000 is far more aggressive than anybody else that we're looking at.

Now, I'm not naive to the fact that we upgrade our program. Other jurisdictions will want to do the same thing. So that's, hence why we do the staff does that continuous review. But I, for one, I'd like to let this go as proposed. Again, I think it's very aggressive. It's a good move. It will help more citizens in Fairfax, which I think is the goal here that we're trying to do. Thank you. Thank you. Councilmember Doyle Feingold. Thank you, Mayor, and thanks for the presentation. I agree. I agree with your proposal, and I thank you for this comparison. I think the two things I sort of think of and maybe we look at as we reanalyze it is, so does the $440,000 of net combined financial worth, let's say, a disabled adult child, parents die and they inherit the home, and it's not going to be a

It's paid off, and the average home in the city is worth more than that. Does that mean they're out of this program, or how does that work? What goes into the net combined financial worth, I guess, is my question. And you don't have to answer tonight. I'm not trying to put you on the spot, but maybe for as we look at it, I guess that's sort of what I'm thinking about. Or there are disabled adults. They own their home. There's not a mortgage. Are they, because they bought their home when it cost $50,000, are they now out of the program? And then the second part of that is the gross combined income. What is the income that someone who, you know, I know if you're a disabled veteran or a disabled person, you get Social Security income additionally.

So, I think that if you're a married couple, that might bring you above 90K a year. So, I guess sort of an understanding of the population and who falls into this umbrella and who may not, maybe for next year as we look at it. So, the gross combined income for married couple would be, if they're retired, then it would be their retirement income, Social Security, anything they report on their tax return as income. Okay. Same as if it was a disabled applicant, it would be if they received disabled, Social Security. Social Security. Yes. That would be part of their income. Okay. And if I can add, so I thought I knew it, but I just wanted to double check. Luckily, I have the code in front of me.

So, Section 90, TAC 74, Criteria for Exemption, Number 4, Council Member. It specifically states the net combined financial worth, including equitable interest as of December 31st of the immediate proceeding taxable year of the owner and the spouse of any owner, excluding the value of the dwelling and the land, not exceeding one acre. Okay. Cannot exceed, at this time, $400,000. Okay. Okay. So, I guess my, the house is excluded. I guess my question then is disability income. You know, what is it if you are receiving Social Security disability, is it going to be above that 90K? You know, where does that line end up in excluding or including people? But just as you. Yeah. And we do have, we would encourage anyone to apply.

We would go ahead and review the application. There's actually two levels of review. There's an initial review by the finance department and then another review, again, internally within another area of the finance department. And then if that application were to get denied or rejected, that individual could appeal it. And now there is an appeal process also in play where you would have the treasurer, myself, and the city attorney reviewing any appeals who are excluded directly from looking at it the first time and trying to make a decision as well. So, in any special circumstance, we would go ahead and try to review and give the best determination as well. Okay. Thank you. And thanks again.

You did a great job presenting. Thank you. Any other questions or comments? Councilmember Bates. Thank you. I believe that Councilmember Staley's proposal is definitely has merit and is at least worth considering. Maybe if we could look at what that fiscal impact would be of that, you know, for next time or, you know, for this time if we introduce it this time. And additionally, in the future, I would I think it might be worthwhile to look at this in terms of area median income for a household of that size, like we do for the affordable housing program, you know, maybe in terms of how the income threshold is set or just, you know, seeing the income threshold as proposed and then, you know, what that looks like in terms of very median income for households of different sizes.

And anyway, so yeah, that's where I am. I'd like to at least see us consider going up to 500 and 100. And I'd like to see perhaps what that impact would be. And I think it's worth for a discussion. Thank you. Thank you. Other comments or questions? Well, this is very interesting. I'm kind of supportive of the staff recommendation. I like the fact that we're adding the 75% exemption. It looks like we're overdue to do that. One other comment I would make sort of unrelated is that I would hope that everybody who applies for this is given information about Village in the City. Because we have a program that is operated and funded by the city to help people age in place and stay in their homes. And I sometimes wonder when people come through one door whether or not we're being smart or effective and how we're trying to help them with other services.

But for this one, I would hope that anyone who even applies is given information about Village in the City. Because this is just another way in addition to tax relief that we can help support people who want to stay in their homes and live in the city. I believe the treasurer's department gives out that information and also does them in the mailing, I believe, when they mail out some tax bills. I think the tax bill that's going out for December. Correct. And we can also reiterate that. So Susan Heath within the finance department, I want to say sees every single application and then some. So if she is the main point of contact or the constant in the process, we can work with Village in the City, Jason specifically, and try to see what we can do to incorporate that in there.

And I think that's helpful too because one project that HomeAid did earlier this spring for a woman who lives in the city, and she's disabled and she was a widow and her sister was helping her. I think there are people who don't know that they can apply for this too. So it goes the other direction as well, which is nonprofits and Village in the City also needs to tell people because I don't think everybody even considers the fact that they could be eligible. So, you know, better communication and outreach for everything we can do to provide support for people who are trying to just stay in the city and stay in their house. Yes, Councilmember Ross. Yes, thank you, Mayor. And I will transmit that information tomorrow night.

We're having a board meeting of the Village in the City at 6 o'clock tomorrow night. And I will remind our staff that it's really important that they coordinate with you and make sure that information should get out. But excellent suggestion. And I think that's an important thing to flag. Thank you. All right. Thank you very much for the presentation. Thank you. Next item is a discussion on the suggested updates to the FY 2026 financial policies and Council budget guidelines. JC Martinez, Chief Financial Officer, will provide the staff presentation. Mayor, Council, last one for the night for me anyways. So no presentation, just a verbal report out. We are not proposing any changes to the current financial policies.

We are asking Council to reaffirm these policies and the listed guidelines for staff to use in preparation for the proposed FY 2026 budget. Of note, and as briefed earlier in an earlier presentation, we will be funding the budget stabilization fund within the unassigned portion of the general fund balance for the first time in FY 24 and hope continue this practice in FY 25 until the accumulations reach 3% of the general fund revenues. Additionally, as mentioned by Davenport forward looking to FY 2027, we may recommend more than likely a change to the debt policies, specifically increasing the current 9% limit of annual debt service to expenditures to potentially 15 or slightly more accounting for planned debt issuance and potential school bond issuance as well.

And the current 3% limit of assessed value to potentially 5% again to account for the planned debt issuance and school bonds. But that will not be happening until FY 2027. Happy to take any questions. Questions for Mr. Martinez on this? Council Member Ross. Council Member Ross. Yes. Thank you, Mr. Martinez. I'm just curious. It looks fine to me. I went through it and I looked at the timeline and everything else. And I'm assuming this will be in the packet for the new Council members that will be coming on in January. How did this work last year? I know it was, I believe it was the first year we really had this framework in place. Were you satisfied with how it worked and was the feedback positive on this from the staff?

I would say that it was. We did make some changes last year, some minor changes regarding some of the budget policies on identifying and clarifying reviewing of stormwater, wastewater as well, and then adding minimum fund balances within those two specific funds, clearly identifying what unassigned fund balance was. I think, I don't remember what the previous word was, but we provided those changes. Again, we're not recommending any changes for FY 26, but more than likely in FY 27. Well, again, I think it worked well and it's worked well in the past. I think it's a great framework. So thank you for sharing that. Sure. And I have no further questions. Council Member Staley. Council Member Staley.

Thank you, Mayor Reed. Just a quick statement out there. I believe we should be increasing our debt ratio above 9%. I understand why we're not doing it this year, but I just want to make that statement. That's something that hasn't been touched in a fairly long time here. I think what we heard today of 15% is nowhere near where we would go. I think giving permission for future councils to move that to 10 or 11 or 12 or somewhere in that range with Davenport is an expectation we should be setting for the future. That is a good idea. We heard today why that makes sense, why we're doing the fund balance, why we're making the investments in our community. So I just want to be out there and making that statement.

I think that moving the 9 and 3 is a necessity for what we're going to do to receive what we have long term. I think it has served us well, but I think the time is right to increase it when Davenport and staff make the recommendation to it. But I think it makes a lot of fiscal sense. I think it was really important to hear today about the 15% number and that we would still be well under that as we move forward. So I just wanted to make that statement. Thank you, Mayor. Other questions or comments from the dais? I'm going to take that as a consensus that we all agree this is a good plan. Our last item from the work session is a discussion on the city's police department reorganization recommendations

and PFM consulting overview. Captain Jay Toland will provide the staff presentation. Yeah. While Captain Toland and Captain Hinesley are walking up just to provide a little kind of overview of this, the goal of this is to really maximize the proactive nature of our police department, right? So you can see kind of a goal set for 50% proactivity. This essentially lays out the plan based off of data, based off of call volume, police to population ratios for how to get there. It's a target of what that staffing looks like, what the organizational structure should look like to get there with an assumption of a 10% attrition rate built into that. That's what this lays out. We have an aggressive kind of three-year plan.

We understand that financially that might not be feasible, but we wanted to demonstrate to the community what it would take in terms of the right ratios to get to that 50% proactivity and enhanced criminal investigative capacity as well that you'll see in this report, along with the right police structure going forward. So, Captain Toland. Thank you, Mr. Balco. Thank you, Mayor and Council. Just to go over the overview of our PFM Consulting project group that we took on, just a little brief history on it. Back in 2024 this year, about from January to June, PFM Consulting conducted our organizational and staffing assessment for the police department. They came into the police department and took a lot of data from our computer system as well as calls for service and talked to pretty much, I think, all employees within the department talking about workloads

and how we can better effectively use our time out to serve the community. Their findings outlined several recommendations and considerations that included realigning our staff better to meet call demands with peak call times around about 10 a.m. to 6 p.m., creating a swing shift to cover that peak call time, creation of a second deputy chief, and increase the total authorized strength of sworn and civilian staff members to accomplish these goals. Before I start diving into this slide deck, the one thing that I would like to put out there is that when PFM looked at all these numbers and took all this data and analyzed it, they're based off national standards. That's what they base it off of.

They did look at some similar, like, false church size entities that are around us to see how they were structured as well. But the one thing that they did base these numbers off of was that the interpretation of 77 authorized sworn employees, 69 sworn with eight overhires, and then 10 dispatchers, which was eight full-time FTEs, and then two overhires. So basically, we know that our authorized strength is 69 sworn officers and eight dispatchers with those overhires. But when they did their data analysis, they based it off that 77 and 10. So it's going to show a little bit of difference in the numbers overall, but we'll work through that as we go. This presentation and proposal seeks to increase our authorized staff and add several additional FTE positions based on those research and those recommendations.

As Mr. Palco alluded to, the recommendations are based off of the goal of creating that our officers have 50% of their time for proactive police work. That is walking our trails, that is on bicycles, that is checking our businesses, that is getting out in communities. We have a couple community Halloween parades coming up, things like that, that allows them that time and the ability to go out and do those things and integrate themselves with our community members. So there's a couple different charts here. I'm going to start in the lower left-hand corner with the pie chart. So this is what PFM brought to us in regards to our percentage of what we have currently based off that 77 number of proactivity time.

So what is in blue is 35.9% is what we currently have for proactivity for officers, and the 64.1% is community-generated calls for service. Moving up towards the top there, that outlines how many officers would be needed for day shift and night shift based off the percentage of proactivity time. So 30% with 11 day shift and night shift at 6, and then at 50%, you're looking at 20 officers on day shift and 11 on night shift. Down to the right-hand corner shows where our peak call volume is, which we talked about before around 9 a.m. to about 6 p.m., 6, 7 p.m., and that's where we want to allocate as many resources as possible to give that 50% proactivity time to our officers out on the street.

So their first high-level recommendation was the creation of a second deputy chief position. Currently, we have one deputy chief that manages both our administrative and our operational activities. An additional deputy chief position would create two bureaus within our department, an administrative and operational. The deputy chief of operations would have command over our patrol operations, our community services division, and our criminal investigations division. And the chief over administration would look over our administrative services division, our professional standards division, and would be looking over our budget as well as our strategic planning moving forward. The creation of a second deputy chief allows for a more effective oversight of operations on the day-to-day.

It allows for more intricate strategic planning and goal setting for the department, what is best for the community. And then better oversight and risk management in our high liability areas, which is our hiring, recruiting, training, and policy, departmental issues, and then our tactical deployments and search warrants. It allows for them to have a better understanding of what's going on and have oversight on that. Our highly recommended the second one was to reorganize our divisions to align core responsibilities and ops resource. The purpose to realigning the patrol operations and the community service division was the biggest thing to more effectively meet calls for service demands. To accomplish this, a supervisor position of the sergeant would be moved from community services and redeployed to patrol.

That supervisor would oversee what we would call a support operation squad, which would consist of our two allocated bike team members, our community response team officer, our canine officers, and our four motor officers currently. Nine additional police officers are needed to staff the recommended swing shifts, which increases officer availability during peak time. Nine additional is four on one side and four on the other to fill that swing shift, and one additional supervisor, just to give you a breakdown of how we got to nine. The third high-level recommendation was the increase of civilian support staff. Six full-time positions is what we would be looking for. Like we talked about before, PFM went off of ten full-time dispatchers.

We are only allocated for eight and with two over hires. So the first would be to get those two additional FTE dispatchers and convert our property and evidence technician from a temp employee to one full-time employee. PFM calculated our optimal staffing for dispatch was utilizing those 10 dispatchers, and they thought that was the proper number. So that's why we were looking for two additional FTEs on that. In regards to our property and evidence technician, currently we have a temp employee. This is a critical role in a high-liability role that we have property and evidence coming in every single day in and out for court. With our current temp employee, they have to take a 30-day break, which makes for an audit beforehand and audit when they come back.

And this, while we are going through our accreditation process, is a big thing for us that we want to push forward to so that we have a full-time position and somebody having oversight over that at all times. The next one would be our criminal investigations division is adding one civilian fraud investigator and one computer forensic technician. A lot of our calls for service coming in is a lot. There's a lot of online fraud going on, especially during the tax season. There will be a lot of, we get constant, constant emails or constant phone calls about from the jail saying, hey, I've been arrested and I need X, Y, Z money. Somebody wires them money. It's a lot of, it takes a lot of time on our detectives.

So a civilian fraud investigator will allow to work through that paperwork and work with banks and things to help mitigate some of those items. And the other side of it, our computer forensics technician, everybody has a computer in their hand now on our cell phones. So we are downloading and taking cell phones probably daily. And that is a large, it's not really the downloading of the data. It's more the analysis of that data and what we're finding is taking a lot of time out of our detectives' hands. So bringing on a civilian computer forensics technician would be, would be huge for us. And then our final for our professional standards division is hiring one training administrative assistant.

This admin assistant would allow for supervisory staff in that division to focus on career development and training. We have minimum training requirements every two years. So it would allow for more training opportunities for those supervisors to put on. The admin staff would basically take on the enrollments, the paperwork, the making sure that everything is taken care of on the back end side of that. So this is a breakdown. As Mr. Palco said, we are looking at an aggressive three year approach to this. I won't get completely into the numbers side of it, but just for FY25 where we are currently, you see a one transfer of a sergeant to patrol, which we talked about. And then the five motor officers would be transferred to patrol.

There's no fiscal impact there. And then creating the second deputy chief position currently in FY25. That position can be absorbed in the current budget by reclassifying a vacant officer position from a 208 to 227. Looking forward in FY26, we would be looking to convert that property evidence technician to a full time employee and asking for one of those full time dispatchers. Two of the patrol officers we would be asking for as well in FY26. And then one sergeant full time employee and one of the admin and professional standards division. What we also are looking towards and what PFM had recommended is that moving the hiring and backgrounds to the professional standards vision, which encompasses all training and career development, was an important tactic, they believed.

And that's where that one sergeant FTE came from. FY27, we'd be looking for that second full time dispatcher, one of those civilian investigators, three of the patrol officers, and then one lieutenant's position, which would oversee that support operation squad. So we initially moved the sergeant, but we would look for a lieutenant as well to oversee that whole squad. And that would be in our proposal for FY27. And then finally in FY28, looking for that second civilian investigator, four more of the patrol officers, and then looking for a potential approval for eight overhires to address the 10% annual attrition rate. We're about a 7% to 11% attrition rate right now, so we want to be ahead of that and try and keep up with the attrition that we're seeing right now.

So implementation costs. Like I said, I won't get too much into the numbers. In addition to the numbers, I will state that these numbers do include fringe benefits as you look at them. So as you're looking through the numbers, this is the impact for salary as well as fringe. The total numbers are at the top there and just breaks down kind of how fiscally how it impacts each year and how it'll help us build out. So the breakdown of our overall staffing changes, the Office of the Chief would obtain one new deputy chief, hopefully absorbed in FY25 budget. The Patrol Operations Division would get nine patrol officers. It would reallocate the sergeant, the motor officers, the community response team, the two approved bike temps, and from CSD to POD.

One full-time lieutenant and then eight overhired positions if approved. The Criminal Investigations Division would bring on two civilian investigators, the computer forensics and fraud investigator. The Professional Standards Division would bring on the one admin assistant and one full-time sergeant if hiring and recruiting would be moved to that division. And then the Administrative Service Division would bring on the two dispatchers to bring us to the 10, and then one converting that property and evidence technician to a full-time employee. So that's our breakdown of our staffing changes. Currently, this is what our organizational chart looks like. Our Chief of Police at the top with an admin assistant and our deputy chief oversees all five divisions.

And right now from our patrol, criminal investigations, administrative, community services, and professional standards, and the breakdown is as so with our 69 sworn employees that it's budgeted for. This is what our proposed organizational chart would look at. Having the Chief of Police with an admin assistant and management analyst and dividing the two deputy chiefs for one for operations, overseeing those community services, patrol operations, and criminal investigations. And then the other side of it, the Deputy Chief over administration, which oversees the Administrative Services and Professional Standards Division. Gives a little bit more span of control and has a better insight on what is going on in each division.

And gives a little more balance to the department overall and allowing for more day-to-day insight on what is happening and what's going on. So upcoming for our end, we have already started to present this PFM executive summary to our employees and gain feedback. We just did two last week. We're gathering feedback as it goes. There wasn't much initially, but we have sent out this slide deck to our employees to gather some more feedback as to how it would impact them and how they feel that it would benefit them in their proactivity. And then determine our timeline for our phase implementation based off our current staffing levels. We are in a hiring challenge. We are short right now. So we as a department need to determine how we can integrate this over time and not do it abruptly without drastically changing too much for the community response overall.

So that is basically the breakdown of PFM and how their executive summary, I think, was given to you as well. What they presented to us and what we feel is the best, the top three recommendations and how we want to tier the approach over the next fiscal years. And Captain Hinesley is here as well to answer any questions that you all may have. Thank you very much for the presentation. Councilmember Greenfield. Thank you, Mayor. Mr. Pelka, how much did we pay for this study? Did you all know that? I was not involved when we did. It was around $170,000. And so we didn't have, with all the data analysis that we do, we didn't have talent within the department to look at where we're at and where we should be and come back to us with a recommendation?

Yeah, I think we certainly could. I think the advantage of using a company like PFM is they do this across the country so they see kind of what the trends are. They have more data that they can leverage and we would have capacity to do so. Plus, we're short staffed right now with attrition. There's a lot of requirements right now so it's not really staff bandwidth to do that and capabilities based off the national reach that PFM has. So certainly we could have brought back recommendations. It would not have been as thorough as what PFM did. Well, we'll agree to disagree on whether we have internal talent that can do that. I've sat up here for Chief Smith, Chief Skinner, Chief Scott, Chief Rapoport, Chief Pardini, and now Chief Scheibel.

And this is the first Chief that's not sat in that chair to talk about the future of the department that she's, we're talking about tonight. I mean, so to put Captain Toland in the awkward position of presenting, you did a fantastic job, by the way. But to make him make it, it just doesn't make sense to me. And let me just be clear. We have a retention problem. We don't have a recruitment problem. And if we have a retention problem, it's because we have a leadership problem. And so I appreciate where we're at. I fully support the men and women who are out there and put their lives on the line every single day. But I think this is a good thing to consider. The question is when. And I think this is something that we should perhaps.

You brought it to us tonight. And I applaud you for that. But I think we should probably set it to one side. Because there's a lot to process here and a lot to consider. Thank you, Mayor. Questions or comments? Councilmember Bates. Thank you. So first off, I believe that getting an outside analysis of the department is a really good idea to make sure that it's impartial and objective. And I think that that. Oh, a question first off. That 50% figure, does that include directed patrols? Or does that, you know, that proactive enforcement percentage, is that directed patrols outside of that? So it's more of free time for officers to conduct traffic enforcement and those special checks that are, that are some community checks that are ongoing or hot spots in the areas and things like that.

So it allows them 50% of their time to work on those things. Yeah. Yeah. Yeah. That was my impression. I believe consistent with the ICMA's roughly, you know, their rule of 60. The average workload should not, you know, exceed 60% of their, you know, their time. And I think that that 50% leaves a good amount of wiggle room there to make sure that we're not exceeding that 60% threshold. And, you know, additionally, hiring more police has been statistically shown to reduce crime, reduce violent crime, reduce homicides. And so I am strongly in support of these recommendations. Thank you. Other questions or comments? Councilmember Staley. All right. Thank you, Mary. And thank you for the information.

I just want to throw out there, as you consider there, on March 19th, we had budget memo number three that talked about fully funding the bike forces in there. And if I look at what I think I'm tracking is the future slide orientation of what the recommendation is, I still think I only see two bike patrols in there. Or is it, am I just missing the space there? No, we're under the impression that of the four that were requested, two were funded, to be funded in September. Two FTEs. Got it. And so my question is, does this recommendation include the four for, the full four, or just two? And I don't need that answer tonight, but I got it. So in which case, I would encourage you to think about the budget memo that we requested and the value of that.

And again, just incorporate in here, this is a data point for us to consider in the hopper as we think about things going forward. But I really think that that is a critical element to how we can police the city going forward. And just want to marry those pieces of information. Studies happen in different parallel tracks all the time. So just wanted to call attention to bringing that back together. And then the other question, just to be clear, the community response team officer stays at one in the additional recommendation, or did it grow? It stays at one. Got it. That's for the time being. And initially, I believe two years ago when we put in for that program, we put in for two. One was approved with the idea of growing the program.

Once we got statistics on how busy they were, I know they've been tracking all of that. So that might be something for fiscal 26 budget. I don't know what Miss Sebastian has planned for the staffing levels for that. But in the future, I do think that would be a conversation to grow that position to two. Excellent. I think those are two pieces that just as you build the package together of what a future council can look at, pulling that information back in there. I think we've heard very positive feedback from both of those initiatives. And to just figure out how they fit in a future flow shot could be very helpful. Thank you, Mayor. Council Member Ross. Yes. Thank you for this report. And I tend to agree that I think it's helpful to have an outside organization come in and look at this.

I think it's unfair to put the burden on a police department that we know is suffering limited or has some shortages of staffing. And I do not agree that that's an implication that we have poor leadership or not the right leadership for the police department. I think it's obvious that there is confidence in the release of this report by the two captains that are here tonight. I think there's a lot to consider. I hope this is not just a short-term fix, but I think in the report as I read it, this will carry us through the next few years. And I think it's important, again, for us to act accordingly to look at how to implement this and move it forward. It seems to me it makes a lot of sense. I'm not an expert in police organization, nor do I intend to become one in the next month, two months of my time on the dais.

But I think it looks like a very thorough report. I think it looks to the future. It looks to the best allocation of resources. And I commend the department for undertaking this and for going to an outside consultant. I think that was the right decision. And as you pointed out, I think it gives a perspective of an organization that can look at other models of how police departments are organized and come back with that recommendation. So thank you, Mayor. That's all I had. Councilmember Doyle Feingold. Thank you, Mayor. And thanks for coming and presenting this. I think the two deputy chiefs looks like organizationally it makes a lot of sense. I think that socializing it with the department is important and getting that feedback is really important.

I think that looking at over time what is the actual attrition rate is helpful. So then you can know, you can project and know what you have to get ahead of. You know, 10% may be national average, but what's happening here month to month and how do we make sure we're ahead of it and how can we support you in that. I think we hear consistently from the community that we have an amazing police department. Everybody is super thankful, appreciative, supportive. I am. I know all of us up here are. And we want to make sure that we can partner with you in doing the right things. And, you know, just looking at those data points over time and how we can get ahead of it and make those right choices and making sure that the whole department is involved in this and comfortable and happy and moving forward and it's the right direction, I think, is important.

Thanks. Thanks. Yeah. And we will be tracking, you know, attrition constantly because that's the purpose of the overhires is to really try to get your average staffing levels to the desired levels based off attrition. So you track that every year and make adjustments as needed. Well, I concur with Council Member Doyle Feingold. I do think that two deputy chiefs make sense. I think the organization chart makes sense. I think having an outside firm that does this across the country helps for us to understand what the level of expectation is for career law enforcement. We want the highest standards of professionalism and we want to deliver a work environment and an organizational structure where people want to work here.

So if this consulting firm is telling us what the professional level is for law enforcement career professionals, then we want that here. And so to me, this makes a lot of sense. And I do think making certain that there is a feedback from the staff you have currently, but also tracking attrition rates to see if these changes, the overhires and the other adjustments you're making are creating the environment where people want to stay here. I do think we have got to up our game in a competitive market where everyone is trying to hire from the same pool of professionals. So I think this is a very well done report. I appreciate you bringing it to us. I think this makes a lot of sense to me. Thank you.

Council Member Bates. Yeah, just one more thing. I regularly hear from our residents about how proud they are of our police force here in the city. And I believe that that should also be considered when looking at our leadership of the police department. And certainly accountability is important, but we need to make sure that we're also giving credit where credit is due. And, you know, certainly if, you know, if there are criticisms out there, then you make sure that those are founded in, you know, concrete reasoning. And I believe that it makes sense who we have here giving this report. I think it makes sense who performed the analysis to begin with, having that be an outside source. And I think that that demonstrates solid leadership in the police department.

And I also want to thank Captain Hinesley for your leadership stepping in as Acting Deputy Chief. And you've done an exemplary job as well. Thank you. Any other questions or comments? Thank you very much for this report. We appreciate it. Thank you. Thank you. Well, I'm now convening the regular meeting. Doing so, I am going to ask the manager if he has a report out. Nothing's not. Thank you. And do we have, starting with Council Member Greenfield, any comments? Thank you, Mayor. Two comments. One, a question for staff to get back to us. It seems like the last couple of nights work has been happening overnight in Mosby Woods on the streets that are being repaved. That seems unusual. I'm used to seeing that more on Fairfax Boulevard or, you know, someplace where it's out in a commercial corridor or not on a residential street.

So can we look into that? And if that is happening, can we possibly stop it? Unless we're going to notify the neighborhood that we're going to be working overnight? Thank you. Secondly, just a former city employee who really led the way, Alex Versosa, was one of our first transportation directors. We credited him for finding Wendy to be his replacement. Passed away recently. He was instrumental in, back in the day, finding the funds that we had to continue to find to get Northfax done, to be able to find funds to get George Mason Boulevard done, and lead our first study to be able to streamline the queue service delivery here in the city of Fairfax. So he continued to stay engaged after his retirement.

He did a great job in the 15 years that he was here, but I thought my colleagues would certainly join me in extending our sympathies to his family. Thank you, Mayor. Thank you for calling that out. I do think it's important for us to remember the people who did the work before the rest of us arrived. We all stand on the shoulders of other people's efforts. Councilmember Ross? Nothing. Nothing. Wait, wait, wait. Wait, that's a short moment. It's not the first time. Maybe the second. Councilmember Staley? Thank you, Mayor. Two quick comments. One, I encourage you to check out the City Band event this Saturday at 7.30. We're really excited that Derek Scott will be debuting as the new director, following Bob, and it's a fantastic opportunity.

And I would be remiss if I didn't follow up a certain communication I received right before the meeting to remind everybody that the Fairfax field hockey team is playing in the district tournament on October 24th at 7.30. That is this coming Thursday. You should be there or be square. Go Lions. Councilmember Doyle Feingold. Councilmember Bates. Thank you. No comments. All right, then. We just, you know, one thing just sorry. I just want to, you know, I know that she's not here, but again, share condolences for Councilmember Lim's father, as I'm sure that the rest of my colleagues would echo. And hearts go out to her and her family and, you know, and her brothers. And, you know, they had a beautiful memorial service on Sunday, and I wish them all well, you know, getting through this.

And I know that her father must have been very proud of her. Thank you. Thank you, Councilmember Bates. All right, we are now going to adjourn into a closed meeting. I move that the City Council convene a closed meeting under Section 2.2-3711.A1 of the Code of Virginia to discuss personnel matters. All Councilmembers in favor of the motion, please signify by voting aye. Aye. The vote is unanimous in favor of the motion. The City Council retired into a closed meeting at 10.02 p.m.