Please stand for the pledge, and I'll ask Commissioner Avila Vasquez if she can lead us to the pledge. Okay, this time we're going to go ahead and enter into business, like in a fiscal year 2025-2026 budget discussions. Mr. McKinney, you're up. Commissioner, how are you all doing this evening? At this time, I would like to call Jeremy with PFM up to go over the debt process overview. If you can please turn on your mic. How's that? Good evening. Jeremy Neafelt with PFM, financial advisor to the city. Good to be here in front of you. It's been a couple of years, but John wanted me to go through a quick process of the debt issuance approach and talk a little bit and see if there were any questions on where we're heading. There's three parts to the agenda here. We'll just do a quick debt overview, then we'll talk about the plan of finance, and I've got a quick market update just to present some information on where the market rates are. So the city's debt policies intend to establish a framework, essentially some ground rules for how the city issues debt. It takes affordability, you know, a comprehensive approach to make sure the city doesn't become overleveraged. It takes into effect the financial planning and management objectives. It creates the community attitude and government philosophy and sets limits to preserve flexibility for the city going forward. There are several different types of debt. There's self-supporting debt, and that's debt that's essentially tied to an enterprise fund like a utility. There's non-self-supporting debt. That's essentially to cover general obligations for the city. The debt burden measures are usually rates that are set to cover operations and debt service. The city's commission has committed through their policy to increase rates when necessary to ensure reasonable ability to address current operations with PAYGO and establish debt with regard to non-self-supporting debt to ensure current and future flexibility. Here's a quick snapshot of your current debt profile. As you can see here, it's made up of a stormwater assessment note, some clean water of state revolving funds, a capital improvement note, and a taxable utility system bond series. Total outstanding principal is $150 million. Of that $150 million, approximately three-quarters of it is utility debt, as you see in the picture there with the brown and the blue area. Then you have capital improvement notes and then a small stormwater note. This is what the city budgets and pays for in debt service each year. You can see each group of debt is categorized by color, and you have 25 years of debt outstanding on that utility system revenue bond. So quickly, just to touch on plan of finance, I guess I'll pause if there's any questions on the current debt. None? Is there any questions from anybody on the dais? No? No. Please move on. Thank you. So the plan of finance is really based on needs and based on addressing those capital needs in a meaningful way that fits your debt policy parameters by the wish of the commission. So looking here at the five-year master plan, there's approximately $200 million in priority projects that have been identified. Significant needs of about $70 million in the next year, followed by almost $50 million in the two years following. Currently, it's planned for about $35 million of debt funded, $75 million of cash and grant funded, and approximately $100 million of the capital needs have not yet been funded or identified on how they would be funded. And as you can see, a significant portion of next year is cash and grant funded. The portion that is planned to be debt funded next year is a water wastewater utility project. It's a total of $50 million with $22 million debt financed. In 26, you're also starting out a fire station project. It's planned to be about a $20 million project, cash funded for about $13 million, and then $7 million will be debt financed, planned to be issued next year. Jeremy, if I could jump in here for a second. I know this is everything that we discussed at the May 3rd budget workshop. One of the things I just want to throw out there real quick is that this was the snapshot as of May 3rd. Next week at the upcoming workshop for the fire stations, you're going to see that they're going to be asking for some more money. So this was as of May 3rd's workshop. So as I've always said, the budget's a fluid process, and as it's evolved, so that will potentially change based on the mayor and commission's concurrence on changing that five-year outlook. Sorry, Jeremy. No, thank you, Joe. Appreciate it. So, again, the fire station is $20 million is the prior plan. Parks have about $1 million in unfunded projects. Water and wastewater has about $17.5 million that are currently unfunded. And stormwater has about $14 million of projects that are unfunded. So our recommended plan of finance is to essentially consider both bonds and bank loans. The city currently has both. Long useful life assets, utility improvements and roads and things of that nature structures typically perform well when you issue as a bond transaction in the public market. But bank loans are an option. Bank loans are issued on a competitive basis to banks that are interested in high credit quality loans to governments. It's something that's done commonly in the state of Florida. The shorter useful life assets, leases for vehicles and things like that, are typically done with a bank loan approach. A smaller transaction would absorb the fees in a significant way if you're to deal with a bond deal. So we take all those factors into consideration when we work with staff to develop a plan of finance. So if the city moves forward with a publicly offered deal, it typically takes four to six months. That includes going through a ratings process, the required documentation. If the process we end up selecting with your blessing is a bank loan, that's a shorter process. It's cheaper to implement and takes typically three to four months to put in place. So below the estimated timeline, we would bring back a recommendation when it's time to do a financing. Once we have direction from the commission, we would distribute a bank loan RFP or start the bond process. We would receive those proposals and then bring back a recommendation with a resolution at that time. Since we're not yet in the process to begin moving forward on the financing today, we just wanted to have a brief overview of the current market. As you all know, there's been some conflict recently that's driving interest rates down. So, you know, the front end of the curve is anticipated to go down. As you can see here, it's relatively flat. So the benefit of short net isn't necessarily realized when you compare it to fixed and long-term net over 30 years. And rates have improved steadily over the last month since the tariff trade. That's all I had. So, Mayor, Commission, as kind of we spoke at the May 3rd, if we were looking at vehicles, you know, those would be a capital lease. You and I, that would be a write-out purchase, you know, bank loan. You know, in government, it's a capital lease. That would typically be we would only look to do that for like a fire engine, maybe a transport, a back-on truck, something that's over $100,000. Anything that is $15 million to $20 million or less that, you know, has a lifespan of 20 years or less, we would typically want to look at a bank loan. And then if it's anything that has a useful life of 25 years or greater, anything associated with a wastewater or water treatment plant, a major building such as a city hall, just using that as an example, you know, that has a life greater than 25 years, that might be something that you would, you know, you would do a bonded debt so that, you know, you get a better return. Anything that's under $10 million, we didn't really go over that, but that is typically anything $10 million or less is tax-free. Anything greater than $10 million, then there's a tax component. First and foremost, we also want to look at is there like an SRF loan. So if there's a federal or state funding agency, depending on the project, that typically offers a much better interest rate than a bank loan or bonded debt. You know, so we would always do go after those funding sources first before we would go after any time of bonded or bank loans. We didn't really go into the market analysis because at this time, just based on what we discussed again, May 3rd, we're not looking at issuing any potential debt until this time or later, next fiscal year, as we start the Fisher project for that $22 million loan. So that's all that we have at this time, as Jeremy stated. We haven't issued any debt since 2021. There's a lot of new members of the commission. So I just wanted to bring your financial advisor before you so you could hear from him exactly the process for issuing any type of debt. And so you could hear our outstanding debt that I'm sure your auditors will be discussing shortly as well. So just bringing everyone to light as we go through this budget process. Commissioner Howington, the Vice Mayor, Harriet. So for the $205 million that we're seeing on the five-year plan, is that in addition to the $149, or is that all-inclusive of the $149, plus an additional new debt of just under $60 million? Yes, so the $150 million is the outstanding debt balance. The $200 million is the capital improvement plan, of which a portion of that is scheduled to be debt financed. Of the grants, how many do we know that we are guaranteed to receive? Right now, the only guarantee is the $22 million. Okay. Thank you. Vice Mayor Harriet, Commissioner Lully, and then Commissioner Colwell. Thank you, Mayor. You mentioned that on one of the slides that a lot of the rates and the method of funding, financing, depends on the city's credit rating. Do you mind sharing with us what the city's credit rating is and then where that lies in the overall structure of the municipal credit rating? Yeah, that's a great question. So the utility debt is rated in the AA category. So A plus AA category is a good quality credit. It's a good name that you can price in the market on your own terms. You know, if you were to have a debt issue that's rated low single A or triple B plus, you would look at bond insurance or some other type of liquidity instrument to enhance your rating. We would anticipate the city's debt gets issued on a standalone basis without liquidity support or without insurance. Really, the trading spread to the benchmark, and that's what we're looking at here is this is the treasury curve. Your trading spread would be 30 to 40 basis points, depending on where on the curve you're looking. And the tighter you get to the benchmark, the higher quality the rating is. So high-yield trades are made on lower credits, and they're yield-seeking. You know, city government trades really well and competitive to the benchmark. So you would be seen as a high credit quality. Thank you. Can we go back to the slide that showed what our current debt is? And it looks like that also indicates when it falls off, that back two or three, the other way, that one. This one. So does that indicate when some of our current debt falls off? Yes, sir. Yep, great question. That's exactly what we're showing here is your stormwater special assessment note has about five years remaining on it. And then, as you can see, the capital improvement note goes through 2046. Your SRF notes get paid off in 2044, but they step down significantly in 2035. And then your larger taxable utility moms go out to 2050. Okay, and it looks like, I can't hardly read what the colors are indicating, but the light blue or the gray, so the utility notes, 10 years from now, they don't go away, but they drop significantly. Am I reading that correctly? That's correct. Okay, thank you. Yep. I have two questions for staff. I just want to clarify that these came from the work session that we all discussed these a few, I guess, two months ago at this point. These have not been approved by the commission. So I want to make that clarification for us and the public. Absolutely correct. These have only been talking points May 3rd. There has been no approval from the commission to issue any new debt. Okay, thank you. And then the second question, what has the city seeked in terms of alternative funding or alternative implementation strategies that would allow us to reduce the amount of debt that we have to take out? Your water sewer staff, your finance department, and myself, we've all been working with our grant consultant applying left and right for grants towards future projects that the commission has approved and getting ready that if any of these projects are approved by the commission as part of the October 1st, 2025 budget cycle, we'd be ready to submit applications for grants. Have we looked at partial implementation of some of these projects so that we didn't have to, you know, we could maybe pay for the majority of the projects in cash as we went versus taking on new debt? So, as stated previously, once we finalize the fiscal year 24 ACPR, which it is complete, we would have a better understanding of our available fund balance, and that is going to be discussed this evening, how much is unassigned and can be used towards some of these projects. Thank you, sir. Thank you, Mayor. Commissioner Lully, then Commissioner Caldwell. Thank you, Mayor. Just a note for the back, the John and the mics up here sound much better, but the podium is just a little weak. But thank you for getting us this new setup. The audio is much better. Have there been any studies conducted for incurring this new debt, or would that be part of the process as we go along? Yeah, that's a great question, Commissioner. So, no studies have been done directly for your credit to the market. We would typically wait until we're closer, and we can provide staff with updates on the market, current trends, you know, things that are relevant to the structure of the financing and what the alternatives are. So, there's various approaches, whether it's, you know, a commercial-type structure with a construction loan or with a fixed-rate, two-term bond deal, and there's all sorts of analysis that goes into that. In general, we would have a good level to provide an estimate on what the payments would be. We would not actually know that until we go to the market. In the case of a bank loan, we would come for permission to proceed with an RFP process, and then before the deal gets approved, we would bring back a recommendation memo that shows what the results of that process were, what the rates are, what the structuring alternatives are, what the prepayment provisions are. So, there's a lot that goes into that recommendation, but we would work with staff to lead up to that point when we present what the plan of finance options are being recommended, and then we come back and present what the results of that process are. Thank you. And then my other question is just before the new debt would be incurred, would there be an assurance that the other part, like the $20 million, that that would be already on hand before the debt is taken out? I mean, that's a question for staff. The answer would be yes. Yes, most of the main debt that we've been discussing of late is related to the water-wastewater areas, and all of that debt is taken into account in the rate studies for the anticipated future debt service required for any new debt. So, that part of the study is done on a pretty regular basis. In terms of any other debt, let's just say, you know, a new fire station, that would just be something that we would budget and appropriate as part of the annual budget. But if we're getting $20 million in federal dollars for the wastewater plant, would we get the $20 million first and then take out the debt, or would there be a chance that we would take on this new debt, and then the $20 million is pulled out from under us, and we have to figure out additional money? No. So, if we know for a fact we're getting the $22 million from an agency, and we know we need an additional $22 million, we would have to issue that debt in advance so that we have all the money obligated to pay the expenditures as they come in. So, we would have to notice for proceeds going out October 1st of 25. We would already have that debt in play issued so that the cash is on hand as invoices come in. Because, you know, when you're dealing with an agency, it could be two to three months before we get reimbursed. So, you know, not everything is eligible on the grant, too. So, you issue that debt to pay for the portion that the grant might not pay for and submit for reimbursement the portions that are eligible for that grant reimbursement. Thank you. You get Commissioner Lully. Commissioner Caldwell, and then Commissioner Howington. My question is along the same as Mr. Lully's here as far as doing studies. Assuming we're going to do a $70 million bond, I believe that's a number that's been thrown around, 20-some million of that's going to go to stormwater, and the other $50 million, where would we apply that at? We have in reserves within the water and wastewater department the difference. Will some of that money be used for fire stations, things like that? Not the money that's in water and wastewater. That would be for the general fund. And we have over $20 million available in the general fund at this time. We're having a lot of talk about redoing fire stations, moving fire stations, things like that. Has there been a study done where that's something needed here in the city? I would defer to the fire chief to answer that question, only because he's got more history here with the city and can answer that better. Hi. Yes, we partner with a company called Dark Horse. They're an analytic company that works with fire departments. We had them do an assessment of where the best place would be to put new fire stations, and they got back with us on that as well. We also had a group called Finch and Associates that came in about a couple years ago and did some fire station assessments as well to determine the best locations for fire stations with certain travel times. So all those studies have been completed? Yes. That's all. Thank you, Mayor. And, Commissioner Lilly, when the window opens back up in February of 26 at FDEP, we will be submitting additional applications to try and bridge the difference between any debt, the $22 million, and reserves needed to complete that project. Commissioner Howington? I'm going to talk in hypotheticals for a minute. There's been talk about eliminating property tax. As we look at taking on new debt and not knowing what's going to happen with the future of property taxes and how the tax revenue is going to flow into the city, are we taking any of that into consideration when looking into taking on new debt? Yes, ma'am. That is, I will tell you, in preparation for the upcoming operating budget workshop, we have been very conservative in the approach that we take in terms of state revenue as well as the potential for a reduction in ad valorem proceeds. So, that is something that we will be looking at, even if they take it all away and do a complete redistribution across all the counties across the state of Florida. Ma'am, honestly, I don't know how to approach that yet until it comes to reality. That is a third of the general fund budget is ad valorem proceeds. So, a reduction in ad valorem taxes, a reduction in state revenue sharing, et cetera, it's got to be made up somewhere. Right, because for us, I mean, we have to commit that if we take on new debt, we have to be able to pay for it. That is correct. I do know that in utilizing CRA, for example, if there was a change in CRA, but you've already obligated yourself to future debt repayment, then you're allowed to continue certain things. So, that would still be on the table is that if we were to go out there and issue debt and there was a change in the ad valorem structure, then if we secure the debt with pledged ad valorem proceeds, then we would have that on the table first and foremost, that we would be able to continue a military to pay for the debt, no different than general obligation debt proceeds. And what would be the backup plan if we lost that ad valorem revenue and could not pay? Will we have to start laying staff off? What would be the outcome? I would discuss that with the city manager and deputy city manager first, but I can tell you that I have been discussing that with everyone, the city manager and deputy city manager of just where would we go. I just don't know that at this time that's something that, you know, just based on what I'm listening to the state legislature at this time, I don't see that happening in this current fiscal year that's looming in front of us. Would it be possible that it should be prudent for us to limit our expenditures for the current year, our capital projects, until we know what the future holds, given that we will be on the hook for having come up with a way to pay it back? I believe I would come back to you at the July 14th workshop with that kind of information. I believe that's a good question, but one that I kind of need to see what's going to happen here in the next week or two as the state wraps up their budget season. Okay, thank you. You're welcome. Commissioner Vila-Vasquez and Vice Mayor Harriet. Thank you, Mayor. I have a question. I don't know if it's for the city manager or for Chief Schneider, but the studies for the fire stations, are they available for us to view? Because I've not seen anything presented to the commissioners to even look at. I have no information as to what all these studies are. I know, Commissioner, all that information will be towards the commission as we get ready for the workshop in the next few weeks, but Chief? Yes, the Finch study I can make available. The Dark Horse study was more of a recommendation from the company. We have their software program, and we use their software to predict performance on how well we perform as it relates to National Fire Protection Association standards. So we had gotten with them and asked them. We were looking to increase our performance across the city and what would be the best way to go about doing that, and they made some recommendations to us. So I guess technically it's not an official study, but it is a projection of where we would be performance-wise based on the recommendations from this company. So I don't have an official document that I can hand out. I can try and get something from them on how they got to where they're at, but I don't have an official document that I can hand out on that. I can't on the Finch study. Okay. I look forward to seeing something that we can look at because I wasn't officially notified, but I've heard that a new fire station is being thought of for my district. I have no idea where it's going to be. I have no knowledge of it. I think it would have been nice for me as the district three commissioner to be brought up to date on it. You know me. I'm not against anything for our fire department. I'm 200% to give to our fire department. But I do want to be updated on what's going on. So when a resident comes to me and says, am I supposed to give up my home because the fire station is going to be built on my block? I have no answer for that. Yeah. Next Monday we are doing a workshop where I'm going to lay out exactly where the dark horse study recommended all of the stations go. We're looking at several different stations, adding a couple, some things like that. And so we're planning to present that to the entire commission at that time. I appreciate it, Chief. Thank you. Mayor, we will, under the finance department, under budget documents, I'll create a tab that's fiscal year 25, 26 documents. And within there I'll put all the presentations that we've presented so far for this budget cycle plus the presentation that then the chief was just, a study that the chief was just recommended. That way it's in one area. And to make sure I clarify the other question, you know, we have rate payers and taxpayers. So the ad valorem side of the house when it comes to the fire stations, et cetera, that's definitely, you know, a concern of mine that we're looking at when it's coming to our enterprise, our water or wastewater, those are based off of user fees. So obviously there's a difference approach on issuing debt related to anything related to water, sewer, plants, or underground infrastructure. So, but I will make sure that I have that for everyone when we discuss that at the July 14th workshop as well as when we come back the following week, July 21st, because both of those dates will have major information regarding the budget. Vice Mayor Harriet. Thank you, Mayor. John, if you would, just, you touched on what I was going to ask right there, but can we go back to slide 10, I believe. It's the five-year master CIP. If I'm looking at this correctly, for utilities, the $49,000, almost $50,000, this is the bulk of the debt that is being considered by staff right now is in the utility enterprise fund, correct? That is correct. So that would not, does that, does utility enterprise fund receive any ad valorem revenue? No, sir. Okay. So the bulk is in the rate payer versus the tax payer? That is correct. Everything in utilities is 100% rate payer. Okay. It's more or less the other line items that would be subject to ad valorem tax revenue, correct? I could go right from the top, sir, if you would like. That would be great. Building services, that's 100% user fees. Buyer would be general fund, ad valorem proceeds. Park projects would be ad valorem. Could be impact fees. It could be grants. Transportation, for the most part, that's your local option gas tax. So those are, again, a user fee for every time you put fuel in your vehicle. Utilities is user fees supported by charges for service for water and wastewater. And your stormwater, as I've said a few times, is a lot of these projects will not be able to continue without some sort of general fund assistance. The stormwater utility fees cannot support, at the current time, $34.85 million without some kind of additional support. And I believe that, you know, it's a broad statement to say I've not seen any stormwater fund in the state of Florida be able to do major stormwater utilities upgrades without some sort of general fund or other assistance. Absolutely. I understand. Thank you, sir. You're welcome. Commissioner Howington. For the utility user fees, would that mean that we would have to raise our water fees if something happened and we couldn't afford that extra $30 million that's not covered by the grant? That is a potential, yes, ma'am. So it's not covered by Advil or it's paid for by the users, so that would mean that we would have to increase utility fees. Yes, ma'am. In the coming months, you will see the consultant come before us. We provided them with this five-year outlook as he's wrapping up the fee study. Okay. Thank you. You're welcome. Question, Jonathan. The debt that we're looking to acquire specifically for stormwater and things like that, does that include any of the potential federal funds that we're awaiting? That does include the federal funds for Catalina and Elcam. Okay. All right. There's no other questions. I don't see any other questions from the dais. Thank you. All right. Thank you. At this time, we'll go to public comment. Courtney Crossberg, please. It's a little buy-in with the little person. You'll see the light turned green. There it is. I had just two quick questions, and he kind of touched on part of it. With all the talk of the impact fees being raised, is that being taken into consideration with our budget? Yes. And with the fire station, is it just for the new stations, or is that also including the training center that they wanted? There was a combination in the five years, both fire stations and the training grounds. Okay. Because I didn't think that part of it had passed the commission. Okay. Thank you. Mayor, if you don't mind, I just want to reiterate that none of this has been voted on by the commission. It's all a work in progress at this point. Thank you. Correct, commissioners. Some of that fire information was given to you at the workshop a couple months ago or so. That's why some of that has gone public. It just wasn't presented to the commission. We didn't get around to it, but it will be next week. That is public comment. Okay. Is there any comments from city manager? That completed the debt portion. The next item for this hour was the special assessments. Go ahead. Okay. Thank you. So, this evening, I wanted to go through our current process for how we notify the parcel owners for the special assessments. Currently, we mail notices to every parcel owner within the city of Deltona for both stormwater, solid waste, Lake McGarrity, et cetera. Last year, we spent a little over $32,000 to send out those notices. I received the estimated cost for this year, and it was just under $36,000. So, and then after we send those notices out in the July-August timeframe every year, we bring that information to you as part of an agenda item where we talk about what the assessments need to be for the upcoming fiscal year to cover the cost to the city. My proposal for this year is instead of sending out the notices to the parcel owners as an individual letter from the city is I had the opportunity actually to be on a plane. The passenger happened to work for Volusia County Property Appraiser, and we talked about all of these notices, is that per the trim requirements, we do qualify under Florida Statute 197 to utilize the trim notice for disseminating the information for the increased rates for any non-avalorum assessment. We already pay, or the parcel owners already pay, 77 cents per assessment to the property appraiser for that trim notice. So, I felt, as I relayed to the city manager, that we could get more bang for our buck and save the city some money by utilizing this year that trim. So, when we come to you for July 21st, for setting those maximum assessment rates, no different than we would do the maximum avalorum, we could submit all of that to the property appraiser so that they would put what we anticipate those fees to be, and it would be put on the non-I'm sorry, the trim notice. Then, we already have scheduled the second hearing for September 15th. That is the last date that we can actually notify the property appraiser of what any of the non-avalorum assessments would be. So, it's only staff's recommendation to change the methodology. Other cities around us also use the trim notice for notification of any increases for the special assessments, and we're already paying the property appraiser for the fee for the assessment. So, I just figured it was a way to save the city this fiscal year $34,000. If that's not something that the commission would like to do, we've already prepared the letters that we can get out within two weeks so that we would still be able to do this as part of an August commission meeting. Vice Mayor Herriot. Thank you, Mayor. So, if I am hearing this correctly, so they would still receive a notice in the mail in future years. It would just be part of that trim notice rather than a standalone notice. That is correct. Okay. So, everybody would still receive in year two, three, four, and five, they would still receive a written notification in the mail. It would just be a part of the trim and not its own because currently everybody receives an extra envelope. That is correct. Essentially. I mean, that's ultimately what we're talking about, right, is we're just talking about that we would combine mailings in future years. That is correct. Okay. You wouldn't get the one-page memo letter from the city. It would all be incorporated on the trim notice in its own section. Remember, we talked about this before. Above the line is your avalorum taxes, the county, the city, the state, et cetera. Below the line are all the non-avvalorum assessments, and it's very clear on the trim notice. We're already getting those every year. It's just we're not using that as the official notification. This year, it would be the official notification mechanism for the increase. Thank you, sir. And honestly, I believe most people sometimes see a letter, and it just goes over here. When they see that trim notice, they pull it up, they read it, and they see everything. Any other questions on the dais? Public comment? Okay. City manager, do you have any comments? No, we're just going to be busy the next number of weeks, as you heard, some of the workshops and for the budget as well as the regular commission meetings. That's it. Thank you. Okay. Workshops adjourned, and special meeting now starts at 630. Thank you.