and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. >> Well, good morning for this Carver County Board of Commissioners work session today. We're going to talk about a lot of fun things uh uh as we head into and begin to end our budget uh talks. Um uh so anyway, we uh item 2.1, we are going to have the annual report from Carver County Mental Health Local Advisory Council. Good morning. Doesn't look like we have the right slide deck. >> Oh, the other one. >> Yeah, I'm not the budget. >> You want me to [laughter] wing it? >> I'll switch with you. [gasps and laughter] >> I don't know if I'd take this topic. >> Oh, true. >> I got [snorts] my own budget to deal with. I don't want to deal with this one, [laughter] too. >> That's right. You do. >> There we go. Okay. Um, is my microphone on? Perfect. Okay. >> Chairman, members of the uh commissioners, my name is Kayla Pasco. I'm the chair of the mental health local advisory committee for Carver County. And this is the annual report. You guys saw me last year. I'm here again this year. And uh we've got a lot of good information for everyone [snorts] this year. Um, so as a reminder, we are a statutory organization, uh, under Minnesota statute 2454875 for children and 245466 subdivision 5 for adults. You guys have to listen to me and take into effect what I say. You don't have to do anything I say, but you do have to listen to me, which is why I'm here. So, it's our job to review mental health in the county. We're supposed to identify any unmet needs and present them to the commissioners for consideration as they plan their budgets and their mental health plans for the county. This year we uh finished nine, actually at this point it's more like 11 monthly committee meetings. We've had three new members since September of last year. So, thank you for appointing them. They've been wonderful. and we have monthly community discussions and presentations on local mental health topics. This includes the members of HHS and people who do mental health here for the county. It also includes partners in the community um and nonprofit organizations that work in this space in Carver County. Our goal is to find actual gaps, not gaps that the county has, but or perceived gaps, but actual gaps in the in the system that can't be met by other organizations that are already in place. We celebrated mental health awareness month with the community. We had a very nice presentation from the NAMI organization and we have collaborated with the state advisory council and their work group. Um and of course there's always the public health comprehensive mental health needs assessment that happens. Um you guys asked us last year and we've done it again this year. We need to identify those key unmet mental health needs and then explore both short and long-term solutions for some of those issues. In order to assess those needs, we partnered with Carver County Public Health and the mental health department um to create a randomized community health survey. This was all done uh through HHS. So, thank you very much, Heather. You did a wonderful job on that. Um we had interviews and listening sessions with clients with lived experience again through HHS. All of the surveying client care and a mental health chemical related data. This was all things that were done by staff and then presented to us as part of our planning and um decision-making process. This is what they discovered. So the mental health data tells us that about one to four most people have about one to four days where they don't have good mental health. About a third are always good. Um and really that kind of troubling category is about 10% have 10 or more days a month where they don't feel that their mental health is good. Since COVID, about threearters of peopleish have had the same mental health since COVID and about equal parts have improved or worsened. So, we're kind of static. Um, obviously not individual static, but as a community fairly static when it comes to mental health since co and about 20% of people sent sought mental health uh help from a professional last year. This is where it really matters for us. Why did you not seek help if you did not seek help? A lot of it is things that the county we can't do. This is insurance problem. So the deductible is too high, insurance not accepted, insurance doesn't cover, no insurance. You get the idea. As you continue to go down though, we start to run into things that we've seen as a uh board that we've seen multiple times. And the big one here is that transportation, um no appointments, care is too far away. These are things that we hear constantly as we're talking to people in the system. Uh accepted community acceptance. So, we talked last year a little bit about this, but really that strength of community, that feeling like you're part of community, that lack of isolation is something that really drives mental health in general. And we're seeing that about 79% feel fully accepted, about 16% do not feel accepted, and 5% don't feel accepted at all by the community. So that social connectedness again, it's not an individual issue. This is really how happy you are, how well fulfilled you feel, how strong your mental health is, is deeply tied to your community. This is part of what's driving during COVID, what drove the rural mental health crisis. People were truly isolated in rural communities. Um, and we kind of saw that in the data over the last few years following COVID. And it's this loneliness and isolation um that is driving all of this. So you can see in 2023 the surgeon general showed a direct connection. Um there's a bunch of statistics here but really what it comes down to is loneliness and isolation increases the mortality rate. It has serious impacts on health and has serious impacts on mental health in particular. So what we did as a community is or as a uh board as an LAC is that we talked to people. We talked to the people on our committee. You guys have done a wonderful job of selecting the members of our committee because we have people with lived experience and we have mental health providers as part of this board. So they have that experience. They understand what's happening. In addition to those people and their feedback, we also again spoke with various organizations throughout the county. We have a normed question sheet. So um we sat down a couple of years ago and said what do we really want to know from these community organizations when they come in and talk to us? And it's things like, you know, where do you see weaknesses in your system? What data would you like? If you had unlimited resources, what would you change? These are questions that we always ask. And it gives us a better idea of where they see gaps in the system that we may not see from the county [snorts] side. And we talk to them. Um we kind of our our year is kind of divided into two parts. So the first half of the year is planning for this, having our conversations about what we want to present to you. The second half of the year is data gathering from those community organizations. And so then we go ahead and map the strengths and gaps in the system and we vote on the priorities that we think are going to have the greatest impact. So what we've found is working overall people are pretty happy with the Carver County mental health system. If they have lived mental health issues, they seem to be uh fairly well served by the community uh systems that we have and that we know for a fact that personal relationships are the most important part when it comes to mental health. The gaps that we discovered are transportation. This is our most cited, biggest gap, biggest need. We hear this all the time. And [snorts] as you guys know, there are issues at the state level that may lead to decreased transportation opportunities in Carver County. So, I always put this out there. It's one of our um so I'm on the city council in Carver. It's actually one of our legislative priorities every year. Um they want to take away Southwest Prime. Um they want to go the the legislature wants to consolidate all Metro Transit into the Metro Transit Authority. The Metro Transit Authority has stated that they will not cut essential services. Their definition of essential services is fixed route buses specifically to downtown. They do not include Southwest Prime in that calculation. And as you guys know, and I know you know this because we've had those discussions with you at the city level, Southwest Prime is how Carver County gets its transportation services. So cutting that is going to cause some really serious problems for those people who are accessing mental health services in the county. There's also concerns about provider turnover and we hear both sides. Some people think there's too much virtual care. Some people think that there's not enough. Unfortunately, there's not a happy medium in today's world about what that looks like with all of the gaps that we have in providers nationwide, not just in Minnesota and not just in Carver County. There's also stigma, isolation, and gaps in understanding, issues with availability and reliability, and then of course sensory friendly and occupational therapy style activities. Um, some other gaps and services that have been identified. You can see here, um, these are things that have been identified by the surveys and the staff. These are not the official recommendations of the uh LAC, but you can see trauma focused therapy, autism care, eating disorders, residential and in home services, and of course, always the psychiatric provider shortages and limited beds at the state hospital. Again, a lot of these are not things that we can fix at the county level, but they're ongoing problems that we have in the mental health. Um so uh the suggested improvements um expanded support groups increased transportation off uh op options crisis intervention services older adults um but these are our recommendations. So mental health local advisory committee this year after sitting down and talking to everybody the theme is we have to make sure that we have access to our services. That was the biggest theme that came out of this year's specific conversations. So, we want to start out by thanking you guys. You have always done a really good job of making sure that the community as a whole has what it needs for mental health. Um, but these are the things that we see come going forward. And interestingly enough, it's not necessarily places we have gaps right now. Um, more of what we're seeing, more of what we're uh wanting to highlight is places where we see gaps that may open up in the future. So the big one is um continued health uh continued support for teleaalth options for clients. As transportation becomes more difficult to get in Carver County, we're going to be seeing patients who need more teleaalth options. And in a lot of cases, this involves things like grants for devices that allow them to access it. So um that's a program that's been supported in the past and it's something that we would like to see continue to be supported in the future. Additionally, you guys have got a big building project coming up here just across the hall. Um, part of that we see that we would really like to see a dedicated mental health treatment space as part of that plan. Chaza Chanhassen is the largest space need. It's where most of the clients for mental health in Carver County come from. And as of right now, they have to go to Wakonia to get their service. So having something local to them means that they're more able to access it and they're going to have more opportunities to do that. And then finally, again, um you guys have done a great job making improvements to the First Street Center. It's helped a lot, but there's obviously improvements to be made going forward as well. I know it's in the plan a few years down the road, but the first street center was not designed to be a mental health facility. it was a telecom building and it's now being used to treat patients and there are issues with accessibility. There are issues um with making sure that they're getting the best possible care in that facility and while it serves well and the improvements have been incredibly helpful, more improvements can obviously be made and then um community engagement is always important as well. So these are the things that we have recommended as an MHLAC. Uh I am happy to take any questions that you may have. Um, we've got I've got everything. I've got the list of everything we talked about, all of our options that we talked about, as well as any other themes or community comments that we talked about in our sessions as well. So, >> Councilwoman Pasco, thank you very much and thanks for bringing up that Southwest Transit. Very important. One of those little underlying things that we battle every day. >> And uh, but anybody have any questions? >> Yes. How long have you been fighting the uh Southwest uh the killing of Southwest as a legislator? You've been doing that for about 30 years, haven't you? They've been trying they've been trying to kill it >> at least. >> Oh, yeah. [clears throat] It got too close for comfort last year, I have to say. [laughter] >> Well, I don't know if it got that close. Uh but, uh and I don't think anybody watching at home probably understands what we're talking about, but uh I think you I think you said it well. The uh Met Council wants to the people who are about two billion over on a light rail project and about 10 years behind on the light light rail project want to take over our local bus uh service and we don't think that's a pretty good idea. So, how's that for a good explanation? [laughter] Anybody else? Commissioner. >> Yes. >> Thank you for being here. Great u presentation. Do you want to go back a couple of slides? Um, keep going. When you talk about the survey was >> the provider survey or the listening sessions? >> No, the prior survey. Just keep going back into your uh your pie charts there. For example, can you tell me about the randomized adult community health survey? How many people participated? When was it done? Etc. I promised I wouldn't throw back to staff, but I wasn't in charge of the survey, so I have to throw back to staff on this one. >> Melissa's got it. >> You got to come to the phone. >> Open meeting laws. Melissa, you should know this by now. >> We'd like to hear you, too. [laughter] >> Great. Thank you. I will pull it up. Um, part of the adult mental health needs assessment included a randomized mailed survey. And I'm gonna I have it. I'll pull it up quickly. Oops. Okay, here it is. So, it was a random sample of Carver County residents. And here's the number was mailed out to Carver County residents November and December of 2025. Um, there were 452 responses. So it was a statistically valid sample at 95% confidence level plus or minus 5%. >> Thank you. >> Yes. >> Appreciate. And then just one other question Kayla and that's >> towards the end of your presentation on the slide where you talk about the strategies >> uh the recommendations the improvements >> the support strategy. Sorry. strategies be this way. >> Yes. This one. >> Oh, you were just that one. >> That one. Okay. >> Got it. >> Yes. >> Uh the communities of belonging. >> Yes. >> Are they involved in this? Are they supportive? [snorts] >> Yes, they are part of all of this. Um that kind of falls under the community engagement. So, we want to have continued support for that. Uh and that has been very helpful. We've uh tried this last year to kind of work with them a little bit for our mental health month, awareness month. Um it's we've been working on that. It's a separate organization from what we do on the MHLAC, but obviously it all plays into that and it is an important part of that community engagement and and building those communities. >> And currently those communities of belonging, I know the Cologne one is very active. Yes. Um, are the Jas and Chanhassen groups very active? >> Are they active? Are they sufficiently active? >> I think >> fairly staff says barely. >> Those are the only three currently >> in Car. So, >> thank you. >> We actually our mental health awareness month event was held at the Clone Community Center this year. We had pretty good turnout for it. So, >> yeah. >> Great. Thank you, >> Commissioner Herman. >> Uh, thank you for being here. I think you mentioned some of the staff in the room, but behind our staff members are even more people and they live it every single day. And just showing up to a meeting is probably not the answer for a lot of people that are experiencing mental health challenges and so on and so forth. Super complex. Um, communities of belonging has been a great effort. Um, but it's the people that are experiencing it in an emergency that they're not going to look for a meeting. And so you brought a lot of good things to the table. I think the number one you keyed in on was transportation. The board put money in. for those that don't know, um to explore what it looked like to address transportation for people's own vehicles. Um same thing with this stuff, too. It really becomes a funny issue. And we recognize that the state um has lowered the reimbursement rate for mental health, not because they don't care about people that are experiencing mental health, but because it's so significantly costly. And so, in the spirit of solutions, it's like, okay, we got to figure out where is that funding, especially when we're in a budget challenging ch times, right? The state's putting a pinch on you. You don't have those resources available. So, when you're talking about transportation, one of the things that has come across our desks um is um the potential of partnering with Southwest Transit to expand. And the board has [snorts] been supportive of that and put a lot of money into exploring that in different ways, not just for mental health, but for um um medical uh uh transportation to get to the grocery store, people that are aging, people that are in disabled, etc. And so I just ponder because I know that there's some buckets for active transportation if we could potentially look into accelerating um what Eden Prairie is doing in partnership with Southwest Transit which is autonomous where you can push a button the vehicle can come out grab somebody and and take them where they need to go and so I just offer that as a solution because there are dollars associated with that and sometimes active transportation we don't necessarily use those dollars fully. Yeah. >> And so problem solution funding right >> so those are some thoughts to throw up. Um also, uh from a win standpoint, just to share with the group, I like the communities of belonging. I know Commissioner Fehee, myself, others, um have been um at that when they had all the all the cities. I think every city in the county was represented for communities of belonging at um um uh Paradise Commons wasn't all that well attended. Um it was probably 100 people. When you look at 114,000 in population, that may sound like a big number for some people for a meeting. It's it's not a whole lot when it comes to reach, but there's the effort to be had there. But a word we hear a lot here is upstream. And so one [clears throat] of the things as it relates to upstream that I've seen is good and maybe it's something that we can share as a best practice is in youth co coaching they're starting to integrate mental health into training and preparing the leaders if you will. So train the trainers so that you can get to the team. And it's interesting because a lot of times when we talk to some of these coaches it's like well we got to throw and we got to hit and we got to field and we got to do all these other things. We don't have time for it. And what I've come to understand is it's an overlay. And so I think as we move upstream, that's a good example of how we're how leagues are helping prepare the coaches that's available to them for them to get to the younger generations because >> on that point about I think two months ago we actually had an organization come in and speak with us that that's what they do. They do mental health for for teens [clears throat] particularly in sports and reaching out to those coaches. So >> and not just sports but other activities. And then finally your point about First Street Center, it's on my radar as well and I know that we've offered some suggest suggestions and solutions. That building was platted in 59, built in like late60s, early '7s, never intended to be the useful life that it is now. And I think that that's next up on the docket once we get done with the 600 building is to figure out creative funding and how we can make that happen. So, thank you for being here. Thanks for your thoughts. One last thing I would say is how can the county and cities work together because you say feet on the ground and you're in your role as the city as well. How can we move into the city organizations where you're you're sometimes the closest you're the first call when somebody wants something done or you're the closest to it? It's not just about water and sewer and taxes. It's also about the the um human infrastructure. Are you seeing any best practices and things are happening in city of Carver or other cities that we can gleam from uh and learn as a board? >> Yeah. Um we were actually just talking my one of my favorite things about being in Carver is uh our work sessions are done around a table. Uh we love that work sessions are supposed to be a conversation. So that's my big you know and and we talked about how at the new center at the new building you guys might have that opportunity and it just changes the tone of something like this you know being able to have an actual conversation as opposed to feeling like you have to be rigid and formal has worked really really well for us. I'll have to think harder about other things that have come up but that was just something we talked about as a group before the meeting even started. So >> thank you. >> Uh let's be careful. I was platted in 1959 [laughter] and uh platted and uh I'm in pretty good good form I might [laughter] say about myself. Uh Commissioner Anderson. >> All right, Kayla, thank you so much um for continuing to be our chair um for that. I know that um you've had a lot of things going on in your life, so I appreciate you doing that. And I also just want to appreciate the staff that are in the room. I won't make you talk. [snorts] Um, but Melissa and Stephanie and Heather and all you put into this. So, first of all, thanks for that. Um, I did want to kind of touch a little bit on on a couple of things. Um, one is I do echo the comment about it would be great if we could have something here in this building um, regarding mental health and and it is if transportation is our our biggest issue then then trying to get it closer to where the majority of the people live would be helpful. So, so that's something I'm not sure if that's on the radar or in the plans. So for those of you who are interested in January or February, we had the sheriff's department come out and present on mental health policing and the statistics show and obviously we don't have statistics on Chanhassen because the sheriff's department doesn't do Chan Hass or sorry Chaska >> they do Chanhassen not Chaska so we don't have Chaza statistics >> but Chaza Chanhassen is the number one call for mental health in the county. Um, number two I believe was Victoria, three was Watertown, and four was Waconia. >> Um, I've since talked to Watertown. They have a group home in Watertown that [snorts] is a very high call rate for both medical and mental health issues. That's why their numbers have been driven up so high. The city is aware of that situation. So, you know, you can throw Watertown out of the statistics there if you want. Um, but we're looking obviously Chanhassen, likely Chaza, Victoria, and Wakonia as our biggest mental health calls for Carver County from the sheriff's department. >> And and as Commissioner Uterman is has mentioned, I believe um mental health is is an upstream activity for the most part, especially with our youth. And um so I recently came back from I sit on the association of Minnesota counties board recently came back from that strategic planning session and really looking that organization is looking at more focus on children's mental health and and how we do that. One of the issues as we continue to talk about is beds. But the problem is when we and we there have been facilities that have created more beds. There aren't enough staff to support those facilities. So, um we talk a lot about beds, but but the biggest problem is um there there aren't enough staff. There aren't enough people to do that work. Um, we have hired um, and Heather, I'm sorry I'm going to call on you, but but we have hired a a new psychologist, psychiatrist. We we have hired someone. That position was open years and years and years. So, that's been a big win for us for our um services in in Carver County. And um, back to the insurance issue. Um, I recently became aware of a and people who use our services. Um, we bill if if that's if that's an option. Um, and recently became aware of how much of that has been turned down by insurance. So, we suffer from that as a provider for mental health as well. And that that continues to be, as you would say, a sticky wicket that is really really difficult to solve. >> And that's uh across the board. You know, last year we uh moved the mental health crisis team from in-house to Canvas Health. They've been doing an amazing job, but that caused insurance problems when it comes to our co-responders and what we can bill for with our co-responders and how important that program is. And so it's amazing how much of our mental health gaps we run into are tie back to that insurance problem. >> Insurance issue. >> Yeah. And um so if if we have anyone who can help with that [laughter] >> would be really awesome. >> Yeah. >> Um so but again thank you uh for all your work. Thank you for leading um our I I'm just a liazison so I'm actually not a board member but thank you for le um leading that group with with such professionalism and dignity. We really appreciate all the work you do. >> Thank you. Commissioner Commissioner Anderson's been a great asset. We've loved having her join us for our meetings and we always put her on the spot. I always do staff updates at the end and uh so she's she's always >> tries to come in with something. Sometimes there's not a lot, but we do make sure that that you guys are heard on our commission as well. >> Being put on the spot is kind of our job, isn't it? [laughter] >> And we'll be in. So, all good. Thank you. Thank you. >> All right. Anybody else? Seeing none, Kayla, thank you for all you do on this important issue. And >> thank you, Commissioner. I appreciate it. >> We're we we're we're behind you. >> Yeah, we're doing the best we can. >> All right. [laughter] Thank you. >> Thank you. I see Mr. Hemsy heading towards the podium because we're going to talk about his budget, county administrators recommended preliminary 2027 budget and levy. >> I think it's our our budget. Oh, you are our budget. [laughter] >> Uh nice and it is what a team effort uh to lift this one up and try and figure it out. So, I appreciate the work that's gone in. I'm going to give a real high level brief introduction this morning. I'll do that summary and then uh Dave will dive into the remainder. Uh as you saw in your packet, a lot of detail and and it's complex. So I'm trying I have a tough job here of trying to simplify [snorts] the story and bring this puzzle together and I'll I'll do my best, but I know you may have some questions. So please ask those. Uh but I would go back to the team effort. Thank you board for uh the multiple uh uh you know opportunities and input uh the thoughtful discussion over over the multiple months here. It is a long cycle. It goes all the way back to the spring before that even if you think about the various efforts that are in place like the our legislative priority document for example and the strategic plan that we did in uh was that February March May. Yeah, May. All of those things are real critical then to help help me help other staff get this in the shape and form it is today. And of course, we're talking about the preliminary levy and budget, and we'll be coming back next week to ask for your formal adoption of the preliminary levy, which is that ceiling of the levy, and it can come down, but it can't go up, just as a reminder. So, so again, uh back to the the teamwork, [snorts] I would say this partic uh this one seems as hard as anyone I've ever dealt with. And so to me it is so important then to have this this these different perspectives come in to try and try and shape it because of the the degree of get difficulty if nothing else. [clears throat] And I think you you see that you feel it with with this budget as it as it comes through. So I'm going to again try and simplify this but to to finish that you know how did we get here thought uh the division directors in particular uh their staff really instrumental uh in in getting to where we are and you you can see that in these solutions and the complexity of the multiple solutions that are that are in the packet. Uh I'd be >> I need to mention Mary Kay too because she keeps us all honest gets the numbers gets the numbers in shape. So re a real critical piece of the puzzle. Uh budget pressures. So I have three slides. First is budget pressures. The other two are strategies. And as I thought about the budget pressure pressures, I I put them into four different I'd call them buckets. Uh where is that pressure coming from? And likely no surprises here. You felt it as we all have. Top of the list, top of mind are the the state and federal cost shifts. Now, I put this in context of 27 and beyond, but it's really this has been been going on for multiple years, quite frankly, perhaps since my career started 30 plus years ago. It always seems like, especially at the county level, we're we're facing these cost shifts, burden shifts, uh trying to figure out, you know, how how can we take care of it because nobody else can. In the end, we seem to figure figure out a way. All those things have been present but but not as evident as the past few years and certainly when you look at year 26 67 and 8 as we package up the budget and try and explain the story uh which I'm trying to do here those those state and federal cost shifts requiring an estimated 1.5% levy search charge in 27 that's in the budget packet right the recommendation And as a reminder, every percent used to be 700, now it's 8. Was it 700? 750. >> Now it's 800. Right? So every percent is $800,000. Keep things in perspective in levy. So in the recommendation, there's 1.5 and 27 and then uh a difficult one to predict and budgets are always a prediction game, right? But 28, we think there's going to be another two and a half% coming in 28. And Dave has the the details on where that how that fits together. But uh the high level picture again if you think back to 26 27 28 that's that 6%. So we had talked back last year about 222 this levy searchcharge coming from the state. The state saying you shall [clears throat] do these things and by the way you shall do these other things and we're not going to fund them like we should. That's the that's the real kind of sort of bottom line. So 222, that's 6% over a three-year period. Uh that's troubling, right? That if you look at that over three years, it's almost $5 million in levy that's coming at us. That again is really the the start of the troubling uh budgetary process and the you know, one of the reasons that some of these recommendations just quite frankly aren't real pretty and required these difficult decisions. uh we're going to be working on all these and I have strategies but that that right out of the shoot is troubling. I I would say number two uh in terms of scale is even a a more difficult challenge just given the the fact that we're in the service business uh we have the employees providing that service that is by far the line share of our budget. So no surprise that's that's where the pressure is going to come from. So that that is uh you know right in there as the top concern. Of course, we always talk about that it's not just wages and benefit, but it's also benefits. I think we've done a nice job managing [clears throat] health insurance, for example, as u I'd say as good as others have, if not better, but it definitely is right on top of their uh top of the list. And if you look at, again, keep this in a longer range perspective and get into crystal ball as you look in as we look into 28, we've heard from the sheriff, he he thinks we need, I think he put out three FTEEs, perhaps three uh dispatchers. There's a core function for you. Uh Chaza Library is coming. How do we manage that? And there's there are multiple other areas that have staffing pressures that I think are going to be uh starting to again reveal themselves. this this particular budget carry process given the pressures my direction was no requests unless they're coremandated requests and you'll see that in the recommendation but those other pressures will again they're not going to go away right so I I think you know of these top four that's just the biggest challenge that we have uh and then of course inflation we all know about that we experience it in our daily lives and it if not uh you know well beyond into our operations here. Uh, inflation's been tamed a little bit from from some soaring inflation not not too far too long ago. It's averaging around 3.2% for the past year. However, you need to remember if you look at how that accumulates over five years, that's 22% accumulation. And while we've seen some relief, not much. So, so in other words, things go up 22% and they stay there relatively, right? So, that's part of this challenge is how do we how do we manage that without that relief? And that that's real and you you will again see that in the recommendations. And then the last pressure that I'd list, the last bucket would be of course capital. We're just talking about the need for a new facility. I think you you're in agreement as a board, we need a new facility. uh 1965 building, not quite as the old old as a mental health facility, but I'd argue it's in at least as bad a shape as that perhaps worse shape than the uh mental health first street center about those one-time capital needs. How do we how do we manage those? And I'll get into the strategies in a minute. Uh how do we manage an $82 million bill that we know is coming? How do we prepare for that? How do we stick to that plan? Uh how do we manage the other big one? There's multiple uh needs. These are the two big ones. How do we manage the Chiasa library? While I think it's a great partnership that the cities uh do the bricks and mortar, we still get stuck with a pretty big bill uh beyond operations, right? That's probably the biggest bill is the the staffing side, but you also have the the library books and and shelving that that uh is estimated at $4.4 million. So those are the four big pressure points. which are it's great to put them out there, but then the question is what do you do about it? How do we manage this? So, as Dave goes through then the the various numbers these these strategies will come come up time time and time again, but they're core fundamental ways that we've approached our budgetary process and ultimately the budget recommendations that are packaged up. Uh there there are eight of them that I've listed uh there. So two slides. First and foremost, the I would say the most challenging, most difficult is the service level, right? We're in the service business. How do we how do we determine and ultimately uh what where does the board land on the level of services that we provide? So addressing those mandated needs with a a review and then prioritizing those and balancing those mandated services against the discretionary services extremely difficult in especially the county business where the majority of those if not all of those discretionary services are extremely popular. Right? So that's a very hard thing to do. Uh as a reminder, we did uh again refresh the the list of uh man discretionary services. We had talked about that in various formats including the uh the uh the strategic planning session that we had. So that's still out there. If you if you need need me to resend it to you, I'll do that. I just revisited it yesterday sort of as a check check back to go, you know, is this is this in how's this look, you know, compared to that that list? And uh I would I you know I would say I feel quite frankly uncomfortable. It it should make you feel uncomfortable that when we start talking about you know these difficult cuts it's just the nature of of these. But then you go back to that list and you go well the rest of these on on this list would make me feel even more uncomfortable. Right? So that's the the real challenge and and uh I think your role is extremely difficult uh you know as compared to my role or staff role but in the end that really is is what it many of these choices do boil down to is what do what are your priorities uh number two an easier one I would say if we can find external revenue uh that's that's a great solution right plug it in it's not as uh debatable I would say you know the numbers are somewhat debatable, but but an easy plug and play to go, well, wow, it's not just about cutting. Maybe we can come up with some new revenue. So, thank you for the staff that work on that. You know, it just doesn't happen. Uh, for example, in uh in our jail, uh, $450,000 more. And keep in mind, uh, budgeting is an is a evolving process. So, we start with a request and we move into a recommendation. So that we had an original number that was plugged into the budget for example for that example with jail jail revenue and I don't recall what it was. Was it around million dollars? >> 300 that's all it was. I was going way back to the old days. Okay. So so the sheriff plugged in. Here's my request. $300,000. As this process evolved and we look closer at our US Marshall contract and then the the trends, we always do trend analysis. Uh my recommendation is to bump that up because of what we think was really going to happen in year 20 27. So there's another $450 in the budget. So almost threequarters of a million dollars, right? For I see I always check with Mary Kay. Is my number right? >> Contract. >> Oh, both of them. Okay. All right. All right. Uh but the the story is still true here. You know, we want to make sure we're maximizing revenue. Uh there are efforts not only with that particular issue, multiple efforts going on. Heather's got all sorts of ways to to to go at that issue and challenges related to it. But uh but that's again back to strategies, those are all behind the scenes. Another another example would be uh investment income as we talked about that topic in past sessions. Uh we we want to make sure we're maximizing our investments without too much risk, right? It's always that balance. We have related policies, but in particular this last cycle, we've looked at can we make sure that we have the the cash available to maximize. So, we're collecting collecting from others, the state of Minnesota, for example, and we're doing that with public works and ma making sure we maximize then our ability to to gain interest on our money. So, I I think that additional amount and uh toward the tail end was a $250,000 kind of number. So those kind of things add up quickly and are mixed into the the recommendations. Uh the third one, one of my favorites, you hear me talk about it all the time. I I didn't know how to exactly label this. I come calling it fiscal sustainability. Uh we talk a lot about make sure your base funding is in place to address ongoing expenditures. be be wary and cautious against spending one-time money for ongoing things. And there is no other evolving story that tells that tale better than Dakota County. You're probably hearing from your colleagues, your sister-in-law, uh you're hearing the the challenges that they're facing, the multiple layoffs that they have. I sent a text to Commissioner the board chair Workman. They're talking about maybe getting their bond rating downgraded. I think they're AAA. Have you heard that? >> That's all alarm bells, right? Why is that? If you look at their cash balance, the chart literally goes off the cliff, right? So, we don't want to we don't want to make those same mistakes. I think in Noa County a few years ago went down the same the same path and they've since made some corrections. And both of those stories align in the sense that they cause these spikes. then these tax taxes go up because of the recovery that's needed in a shorter term because of the exponential problem. Now, I would admit there there is some one-time money that is is applied to ongoing problems if you look at the sort of the inside baseball in this budget. However, we're proposing a solution quickly. So, we're flipping over into 28 and saying, you know, we want we're going to take care of this now. We know it's going to be a number in 28 and here's what's needed in 2028. Part of that built into the uh one of the first issues that I laid out, this mandated cost shift that one and a half and two and a half, you know, arguably maybe we need two and 27, right? Uh part of that strategy, there's a method to the to the the approach which is we're hopeful that 2028 maybe isn't two and a half, right? Maybe that comes down and maybe we can force help force that to come down through our legislative efforts and other approaches, right? Uh the fourth item on this slide, uh capital needs, maintaining those long-term financing plans. I would say that it's tempting uh to get off track. If you think about the government center, that is a $450 additional allocation that's been over a 5year period. I think Dave will lay that out, too. I think we have three years left. Uh it's tempting to go, well, let's just maybe not do that for this following cycle, right? Well, then you don't have to come up with a 450 you can apply. That's not what we've done here. you know, we we're we're very diligent about staying on track because we know as was just mentioned in the in the previous topic, not it's not only the government center, it's the first street center, right? The libraries coming. There's all there's multiple other pieces that if you get off track, all those things get log jammed up. So, one more slide for me. Uh and of course, personnel management, it's one of the key strategies. uh very challenging multiple faceted when you look at the various options solutions that are out there I listed many of them on the slide here soft hiring freezes uh I review all the requisitions that come through and um make I make sure that I'm comfortable that that not only the the the position in its current form shape makes it makes sense to move forward with it but perhaps has a thorough thorough thorough review thorough enough review been done to make sure we couldn't do that job differently. So all that's been going on for for years I believe at least a couple years if not more than that behind the scenes. Uh vacancy eliminations there's a number of those in the budget. Not perfect uh in terms of just taking those and saying well we're we're going to remove those. They're definitely it's a budgetary solution. However, built into the the package, if you see a a vacancy eliminated, there's a there's strategy behind it to offset the need for whatever that vacancy was going to do, right? So, so you might see for example uh some sort of a reorg number to realign existing staff if if a position was taken out to make sure the duties are covered perhaps uh by applying the skill set of the this existing staff in a different way to make sure that duties are covered uh work and I mentioned the workforce realignments that's a good example of it we've already had in place and it's been successful reduced work weeks voluntary furloss there's a couple pretty big numbers I'm I'm not going to cite those exactly, but uh I know one's on one's Can you help me with that? >> They both have 100,000 >> two equal 100. >> Okay. >> Yeah, both equal 100. >> So 100,000 budgeted in uh the package. Uh outsourcing talked a lot about that as a as an intentional strategy. uh it's helpful to reduce the overhead burden of existing staff among other uh uh opportunities that come along with outsourcing but carefully looking at that I would note if you look at some of the uh specific items you've probably heard about some of these already you know outsourcing custodial work very carefully thought through making sure that the work is will be performed by the vendor in an as good or better manner at a at a lower rate. So all that's been uh thoughtful, thoughtfully uh vetted through the process and is in the package. I would say it's very those are very difficult cuts because those are existing staff that are impacted. Uh all of those kinds of things uh ultimately produce some savings that can be plugged into the budget package. uh operational improvements. Uh looking at the the various uh different I would label that as the the way we're providing services. A good a good example there would be electronic access in the library system. Uh I and I would say that there is pressure being placed on our library system if nothing else through through some holes of positions and that's that soft breeze right so holding back some vacancies and a strategic way to try and determine how does our long-term library model what's it look like long term how are we providing those services and I think a big part of uh the solution is electronic access so providing more access for our citizens use to use that service perhaps with a lower ultimate cost for staff. Right? So that's behind that that whole effort. Not perfect and not without it controversy, but it's definitely an automation improvement that is very intentionally done to help offset ongoing budgetary challenges. intergovernmental collaboration. Great example there would be the uh Three Rivers Park District uh contract. Some of these most of these uh on the second slide uh don't immediately show up at least full scale in a one-year budgetary cycle. And that that's a real good example. The the three park contract, we think that over a period of time we'll capture more and more savings. in a one-year cycle. I think we we built in around $100,000 of savings into into the 27 cycle. So, multiple efforts and I could list numerous other ones like the scale health insurance partnership working on multiple other efforts to try and create more efficient and cost effective services. And finally, uh state going back to the the beginning a state and federal role reset. Uh that really to me is one of the again more broad overall problematic challenges that that we're seeing evolve more recently over even the past few years. When you think about again I I stated over three decades it's always been there over the past few years though it's never been more evident that the roles are dramatically changing. Uh and the best example would be when the federal government is now asking us to pick up benefits, right? SNAP benefits. The benefit cost burden onto us that is not typical. I don't remember when that that ever occurred, but for the last few years. And that's that's a relative. It's a big one, but there are other big ones that are potentially coming our way. And Heather can provide more insight. But but that whole RO issue is to me it's it's a it's going to blow up the budget >> quite frankly. And back to our legislative strategy, I think uh others are are paying more and more attention to this in the local government, business and counties in particular. I think we really need to pay close attention to make sure that doesn't throw things off track because behind behind the math then is this pressure on property taxes. So property taxes I don't think [clears throat] were intended to cover those kind of benefits. Right? So that whole re ro reset and then trying to shift the the decisions that come not only out of our state capital but our federal level that's a real important strategy as we move ahead. So that's the high level. Unless there's questions for me, Mr. Chair, I'll have Dave dive into the detail. Okay, David. >> And actually, he's going to back up a little bit. He's going to go look at this year first, right? >> Thank you, Administrator Hezy. And good morning, board chair and board members. Um, as Dave mentioned, I'll start with our 2026 our second quarter review. Uh, we do this strategically. Um, we meet with the um finance meet with all the division directors quarterly. Uh, then we provide an update to the board on what we've heard. Uh this one is especially helpful because not only tells us where we're at for 2026, it can give us some uh ideas on trends and uh good news, bad news about that we need to um start accommodating for in 2027. Um you'll see various um parts of this uh discussion and what we've seen um in 2026, how it's been um included in the 2027 recommendation. A high level overall uh revenues expenditures are relatively stable. Um we we you know there there's a lot of moving parts, there's a lot of numbers. Um but overall we're we're we still maintain we're in still pretty good shape. Um the the good news, really good news, the biggest news is Health and Human Services are um the DNMC did not meet criteria. Uh good news that uh that um that cost is uh we're no long we no longer have that. Um you can see that is reflected in our 2027 budget recommendation. uh is a big number. It's that $900,000 uh cost um for one individual that we've been struggling with. Um so that's good news um in the second quarter that's going to roll into the 2027 budget recommendation. Um uh the opposite but not as uh as significant is our juvenile placement costs are running higher. Um the trend is running higher. Uh that also has been reflected in the 2027 budget recommendation. Uh similar with land records and vitals. uh recording fees. Uh they're increasing, but they're still below budget. Uh we've taken some of the budget pressure off uh with the transfer uh from it, and that's included in the 2027 budget recommendation. Dave mentioned the jail uh inmate revenues. Uh those those are uh trending up. Uh we're already u have already exceeded the budget for 2026. Um and we still got, you know, several months to go. Uh so that's what's driving that $450,000 increase that administrators mentioned earlier. public works. Uh this is a this is a big uh a big uh concern that we've had. We shared the concern with the board. We've talked to public works about it on a regular basis. Uh their reimbursements for their capital projects, those big road and bridge projects uh has gone negative. You know, $10 million negative. It's been that uh that between 1015 last couple months. Um but it's all related to the reimbursements from the various partners uh state and federal levels. Um but they are they are promising to get that back uh to be a positive um a positive number. I wrote here in fall of 2026. Mary Kay just whispered to me I should say late fall of 2026. So that's the that's the latest update. Um but that's a driving factor because when we're negative we got a black hole that means we can't uh we don't have as much money to invest as Administrator Hemsy said. If we can get that the plan is to get that back positive uh then then we're confident we can um increase our investment income in 2027 uh by 250,000. So we're going to keep an eye on that. Uh but that that's how uh you know what one division is doing impacts what other people can do but as Dave mentioned we work as a team uh and and we've been uh discussing that and we think we've got a plan that we can rely on for 2027. terms of license center. Uh this is also uh something we've been sharing with the board last several years. Uh the projection for 2026 is uh expenses are going to be higher than revenues by 300,000. Uh it compares real close with 2025 actual 282. Uh the good news is on on the budget we actually we we project higher um last several years. So we've we've stopped the bleeding um in terms of uh the license center. [clears throat] Um the bottom line, uh we still need some help from the legislature in terms of those fees because our our fe we can't we can't adjust our fees as our costs increase related to to wages and benefits. Um so we haven't seen a a fee increase uh for several years. Um and that negatively impacts us and all of the other license centers um across the state. That's been a priority uh of of the county board last several years. Uh we plan to revisit that as well. Um but we're hoping we're uh we have made several changes um in terms of our our management team um and we're able to now bring when we bring people in well a we're we're actually attracting people with some experience so they're able to hit the ground running sooner um and then the people that don't have experience we got to train them up. We're able to train them up faster than we used to. So they're able to generate revenue sooner. Uh that's been a strategic uh priority of ours for the last several years. that's starting to to really pay off as well as the training uh of all of our staff so everyone can um learn from each other um and everyone can can process transactions faster which also means we provide a higher level customer service so they go they really go well together we uh implemented a self-service kiosk in Jan uh for appointments uh so and checking in you can do that now without having to talk to somebody you go right in get yourself in line uh with the kiosk and and that's helped uh um from a customer efficiency as well as staff productivity. >> Dave, does that suggest that from 25 actual to 27 will roughly double the loss out of the DMV from >> uh No, that the the 27 budget is is reflective of the 26 budget. Uh we're actually going to look at that in in fall. Now I mentioned we've stopped the bleeding. You know, we're consistently beating our budget and it might be time to adjust our budget is what that reflects. our budget might be might be um is not might not be reflecting the efficiency and the and the staff productivity that we're experiencing, you know, in real in real in the real world. So, it's related to turnover. It's hard it's hard for us to gauge um when we got, you know, staff turning over and we got new people in new spots and um you know, really to kind of be able to say how much are they going to be able to uh to generate. Uh but now that they've done it two years in a row, it's it's gonna we feel more confident that maybe we've made some uh significant u budget adjustment type of level changes um in our in our revenues compared to expenditures. So yeah, we might be budgeting. We might be too negative on on the budget. We might that might be able to come down. That'll be something we're going to look at for um between now and December. >> Dave, on on that, what about the private license centers? Are they >> they're they're struggling as well. um they they uh they their strategy is to limit their a lot of them their strategy is to limit the the types of services they provide. They're they're a limited service. They don't do everything that we do. Um they tend to do the ones that that are a little more profitable. Um the the the tabs um and the title transfers, they they don't do the driver's license renewals, um the real ID because those those can they they take time. There's a lot of paperwork involved. Um and that's, you know, a driving factor. uh the state keeps pushing more work on us um and and doesn't pay us, but the the um the private sector has has the ability to limit u they're not a full-ervice um uh license center. Um so that's that's that's their main strategy. Um you know there are other strategies as well, but that that's the one I've heard the most about. >> Thank you. >> And Dave, was there any changes in when people mailed in their payment for the tabs? Are we ultimately going to get reimbursed? >> Yeah, that's that's um that is that's a the top priority um for the legislature there. The the the legislators hired two consultants uh to look at this uh state and local government relationship in terms of the license center license center operations. And both of them um recommended that their revenue share um for when uh the state collects um payments that used to come to us. the as Commissioner Pay mentioned the um you know being able to mail in that was something that during COVID became real popular um and the state gets that money and then and then the then obviously the the local license center doesn't get that um but the recommendation is to share those those online revenues those mail revenues that the state's receiving with the local governments that used to get that. >> [clears throat] >> Um and and um similar to what the private sector does um the states taking the easier um u you know most most profitable transactions. They're offering that online. They're often through the mail. Uh and then we get stuck with the harder ones and the ones that are more complicated and there's a you know divorce involved with a with a title transfer. Well then you got to figure all that out. And the state's not doing those online. They're not doing those kind of transactions through the mail. Um so the the recommendation by two consultants is that they should share the money. the states uh had their own fiscal problems. So their answer is you know we need we need all the money uh we can't share it. So that that's been an ongoing discussion. Um we actually have a resolution that we'll be bringing forward um next month um from the uh um the deputy registars recommending putting in writing you know that that um the county board supports our legislative priority to try and uh get revenue sharing in place with the state. So ongoing ongoing discussion, but we'll be hitting that one with for 2027 uh with the board. Uh so that was that's 2026 as I mentioned that that definitely plays a factor into the recommendation. The trends that we're seeing uh the other big factor uh is the is the taxbased trends. Uh overall the taxable market value has increased uh over five and a half%. It's now 25 uh billion dollars. Uh that's you know uh all levels apartments, commercial, egg, residential, majority of that's residential about 70%. Um a key number is our new construction uh that adds the tax base. The county board's able to increase the levy by 900,000 because of that new construction without impacting the existing tax base. Uh so that's obviously a big number. It's it's a little low compared to where we've been. There is a uh kind of up and down. Um but that's that's a key number in terms of the tax impact on the average real home or all taxpayers I guess. Uh you can see the market value changes there. Um the bottom line is there's a their tax burden shift from uh or to apartment and commercial from the um the types of commercial the types of property residential egg that are um the values are increasing slower. Um so there's a shift behind the scenes regardless of the tax levy that the board um adopts. there'll be a shift to the apartments and commercial from egg and residential. Now, um so far there've been a lot a lot of discussion on on in terms of the narrative kind of and the strategies and the pressures. Uh now we now we shift to actual numbers. Uh and the first number we'll start with is the administrator's recommended preliminary 2027 levy increase. You can see that's the middle um uh highlighted uh numbers and that's at 8 and a half% and that's made up of a a base increase 7% and then the one and a half legislative uh impact search charge that administrator hems talked about for 2027. Uh that would generate 6.9 million. Um and then the monthly impact in the average [clears throat] home would be $10. You can see that the uh or the median value home is increased um 1.7% and the annual impact on that home would be just under um 8%. And the difference between that 8 and a half and and the 79 is the new construction. It's also fis the fiscal disparities um where we're sharing our commercial tax base with the other um metro counties. And you can see in 2026 and 2025 with the levy increase um the difference between that levy uh the levy increase and the county tax impact uh there's a much higher percentage uh uh difference there. Um that's due to the new construction number as well as the fiscal disparities. Uh we're doing better in previous years on fiscal disparities. We're not we didn't do as well in 2027 because we're growing uh faster than than other counties. So then fiscal disparities shares that growth um either either the commercial growth in new construction or the value uh in terms of the um um the value of the commercial property. >> Did our median house value change because I was working a half a million dollars as of last year. >> You know that uh that's a um we're we're kind of working through that that you're probably looking at the average value home. But what happened to average oil on this now we shifted to the median value. Um and we gota uh we're gonna we're gonna work through make sure we're consistent on that. But we the average value uh means a certain thing in certain times and then the median value um you know represents a different number. You know they're they're relatively the same. Uh but what we found out is that most the other counties in the metro area at least are using median value for this uh average value home. So we're in the process of switching that. So that's probably what's the the different numbers are you're looking at. terms of the budget summary. Uh uh as uh administrator Hemsy often uh reminds me this this is my favorite slide of all all the ones that we put together. Uh this this shows [clears throat] you know uh 2027 the recommended budget as well as uh 2025 and 2026. So historically looking back the previous two years as well as looking ahead to uh next year and you can see we split up all the discussions all of the divisions all of the things going on and we break it down into into these um these seven line items and the top one is the county levy increase. I just mentioned that you can see uh the trend for that number uh over over the last the last two years and then what we're projecting or recommending for 2027. That's that 6.9 million I just mentioned. And then as county administrator MZY mentioned, you know, the the biggest number on this uh summary every year is the projected salaries and benefits increase. We're a service um organization and we uh we have people that to deliver those services and you can see that's that's our our projection to to maintain competitive levels um and and address the uh benefit increases. So, $8 million, that's that's a, you know, obviously the biggest driver of our budget for 2027. Um, and I should mention that is uh we had um at this point we don't have any um contracts uh labor agreements for 2027. Um so that that's a a little harder obviously a harder number to uh get our hands around. U but that at this point that's our uh based on where the market's at. That's our our projection for 2027. legislative impacts. You can see uh that the asterric there in 2025 as administrator he mentioned this has always been going on this these cost shifts um and and you know unfunded mandates uh they've been going on forever but they haven't been going on at an un as unprecedented level as we're seeing in it started in 2026 and we're seeing it in 2027 and we're projecting it to continue right now uh in in law it's going to happen. and we we're not sure exactly because it could could move a little bit. Um but that we we talk about in 2028. So it's just it's at an unprecedented level. So we started tracking it um and because of such a big number um the 1.5 was the 2% um uh for in the 2026 adopted budget and the 1.2 is what's recommended. Um and that's the one and a half% search charge. the uh debt service for master space plan that is a government center project. Um as Dave alluded, that's 450,000. Um and this will be our third year uh in a in a five-year plan. Uh so this we got um you know, including 2027, we got three left, but including 2027. Uh then we only we'd have two left, 2028 and 2029. I have a slide that'll um that'll highlight that as well. But you can see that that's obviously a big impact on on our budget is planning for that um $82 million project. Countywide adjustments, division adjustments. Uh those are those are the trends. Um and we we split them out between countywide. Those are those are the big things um that impact across the county like investment income um as an example and the countywide um and as well as a division. each individual division what they've come up with and you can see the how that's changed was you know kind of every year um it was it was we got most of the um adjustments in 2025 at the countywide level almost a million dollars um then that shifted a little a little bit in 2026 where over a million came from the divisions and then this year you can see uh the the significant impact and the significant change uh came from the divisions the over over $2 million in uh in adjustments And then the levy funded FTEES. Um you can see uh how that's changed. That represents uh levy savings from FTEES uh over $400,000 included in the administrator's recommended budget which he mentioned in terms of uh vacancy eliminations um and outsourcing um various various services. Uh so that that that's the that's the big picture on how we get to a budget uh get to zero. So, we know there's no longer a budget gap. Um, then I have a number of slides that'll provide more detail on uh these numbers. Um, and then included in your packet will be even more detail. I'll just I'll just summarize them at a high level in the remaining slides, but then there's more detail for each one of those slides in your packet. Okay. The legislative impacts. Uh, we got two years 2027 budget. Um you can see how those uh although we got them all listed out there. We wanted to just detail all those. Um and then the big one right in the middle is the we call it the act. Um that's court-ordered child protection costs uh over 1.3 million for 2027. It's a new law. Um, so it's it's kind of hard to get a crystal ball on it, but uh, Heather and her team have done a great job um, analyzing that and they've come up with uh, this is our the impact for uh, 2027 or 1.3 million. If you add up all the the legislative impacts for 2027, it'd be 2.5 million. And you can see then the levy search charge we would need to in we that number would need to be 3% um, and then 1% in 2028. So, so more in in 2027 and then less in in uh 2028 as a strategy that [laughter] the administrators um discussed uh using one-time money to lower that impact in 2027 and then shift it to 2028 um is is a strategy that's that's a key part of this uh 2027 recommendation. And I should point out that uh and I have a slide to break it out, but there the state gave us one-time money for the these impacts to try and soften the blow. Uh so the so the state, you know, put some of the money on the table to um shift this from, you know, uh this impact from 2027 to to put to to push 2028. And then we're recommending additional county funds to uh that 1.23 23 million shift that we we lower the cost in 2027 uh on a onetime basis and then we shift it to to 2028. What that does then is then the the 2027 levy search charge is now goes from 3% cuts it in half goes down to one and a half% and then it shifts um the one and a half% in 2028 from 1% initially up to the 2 and a half%. And as administrator Hemsey mentioned, you know, we're still hopeful that in 2028, we'll be able to to uh drive that number down a little bit, but on the other hand, it could go up as well, but at this point, we're projecting uh 2.1 million, which works out to about 2 and a half% uh uh levy search charge for 2028. >> Can I interrupt you for Mr. Chair? >> Yes, sir. >> So, there is one more number we're waiting on from the state of Minnesota in Heather's World, >> and it's a potential big one. Uh is it uh LTSS? >> That's what it's on at 200,000. Um >> yeah, there it is. >> Yeah. >> Well, okay. So, so that's an unknown. Uh we we put a $200,000 plug number in here expecting that kind of cut. Uh we're hopeful that won't won't happen. So hopefully within the next week or two or three, maybe even by the next board meeting, we'll have that number. >> That's the LTSS. No, >> no, no. I'm sorry. >> Oh, right, right, right. >> Right. >> I I do know as far as the LTSS, other counties are not budgeting for that. >> Anything? >> Nothing. Well, uh, maybe. >> Right. >> I'm hearing, you know, some school of thought thinking, well, boy, if we budget for [clears throat] it, the state's going to say, "You solved the problem. We're not going to fix it." >> Right? >> Are they budgeting for it? >> Are aren't they? I think some are perhaps putting that in contingency somewhere and not talking about as much. >> That's not our approach. >> You know, we're much more transparent, put it out there. I I think it's better to do that for a number of reasons. But but back to that 200 number, even if that number came in, let's say equal to what we're getting now, we still have this fundamental problem of the 28 issue. So I wouldn't necessarily recommend taking that and driving the the levy down. So I think, you know, that'd be my recommendation unless that number is really just crazy a crazy number that surprises us. But stay tuned on that one. I just want to make sure that and you know and by the way that's unprecedented too. I don't ever remember being sitting in the room at this date going well we're waiting on a big number from the state of Minnesota. >> Yeah. Just to give some context there's uh health and human resources gets 32 allocations from the state. Um and they've always it's always been a a delay from the when the rest of our budgets put together but the delay is usually was was end of May. >> Yeah. So >> late July. >> Yeah. >> So we've got 30 so far now as of today. Well 31. We just got one last Friday. But the big one the last big one of course is the big one. Um and that's the one. So we got a $200,000 contingency. Um expecting uh not to get good news on that, but as Dave as Dave mentioned, we we'll see. Wait and see. But yeah, 31 out of 32. um which is which is really really really late and obviously makes it our budgeting harder because we don't we don't know what the state and they there's no explanation there's no it's kind of a black box there's no way to predict it uh they just come out and say you know we're changing this on you guys so >> Dave on the ax line uh in 2028 budget is it really zero >> is that right >> well it's a great point I should explain the 2028 is is the incremental cost we'll still have the 1.35 million if that holds that'll still be in 2028 but we're not projecting any additional any new and increased costs in in 2028. So the numbers you see there in 2028 are uh what we what we believe the 2028 increase will be compared to 2027 as you see LTSS is on there. We think half of it's going to happen in 2027. The other half's coming in 2028 according to you know how how we read the law at this point and how we project it. Um, so that's the additional um, it's just an incremental increase in 2028, which isn't that significant, 873. Um, it would only be a 1%. Um, but that by shifting it now, then it would go up to two and a half%. >> But we'll still try and work that down as much as we can, but we buy ourselves a year to see, including the act, which is a, you know, a new a new law. Um, hard hard to hard to get the crystal ball on how that's going to come out. Um, but we'll have we'll we'll buy ourselves some time and then and then we'll have a better projection for 2028. >> I mean, to to Commissioner Unman's point, I I do wonder if if that I mean, we'll have to see how this goes, but I mean, it's optimistic to keep that at a zero at this point. But, >> Mr. Chair, >> I would also add it's to me it's the inverse of our outsourcing strategy, >> right? >> So, here come these costs, these mandates from the state, they don't cover it. You'll see it on attachment B, the staffing list. >> We staff up to to address these problems. [clears throat] >> Then we take the burden of these staff, not only for 27, but beyond. Right? So all these costs >> that that we're trying to get away from to some degree are now piled on and not covered by the state, which I think zero is the wrong number quite, but for presentation purposes, it's right, but it's not going to be zero. I'm I'm hopeful though that that gets overtaken and uh much reduced by by a change in what they're requiring. That's the real key to me from my perspective is if you're not going to fund it, don't make us do so much, right? Change change the law. Scale it back. Don't require some of these things we think are counterproductive uh requirements that don't meet the needs of these children. Right? >> Many of them, if not most. And this is I'm treading into on thin ice here because I don't know Heather's world, but I know enough to tell you that, >> right? [clears throat] >> Uh and it it to me it's just a fundamental uh poor decision at a different level that's now propelling our budget in the wrong direction. >> I I'm not hopeful, Dave, but I appreciate your optimism. >> I am. Yeah. >> I'm I'm I'm even more optimistic, but that >> I'm hopeful because you're not sitting in the in the rooms. I think it's so these conversations. Usually [clears throat] it takes just such a obvious egregious right problem to >> stop the pendulum at least and >> move it back the other way and that that's the pendulum I the other pendulum swing is that benefit shift you see it in here >> benefit and admin that right stamp there's that other the other one Heather's that is that the waiver issue >> yeah LTSS is the waiver issue >> that's the the grandfather of of all of these things if they start shifting those those benefit costs to us which you know that those are all our clients were taken care of all the benefits that expensive you know expensive costs of and I think those are just more justified to me than some of these other pieces >> but to to justify us taking the benefit is that's why this number so jumps out I guess so much >> yeah the and just to highlight that federal SNAP cost shift that that's the other one where there's a benefit and an administrative piece and the benefit piece is coming in 2028. So that's the 650,000 which is a big number and it's a huge change. We've never as Dave mentioned we haven't we haven't been responsible for the benefit side. There's been some administrative costs that we've been part of and stuff but not the actual benefit piece. So yeah that is a huge black hole um and and and has a a significant impact on us. The thing I will point out part of my optimism just so um it's not just crazy uh the 1.35 >> I never said that word by the way. >> Yeah. Yeah. Fair fair point. um that that was a much larger number last year at this time. So, you know, we we did make progress on that number uh from a year ago last year and what we thought that number would be for 2027. So, um there has been good news on that. Obviously, it's still it's still a big number. Uh we got more hopefully more good news to to come. Um but as Dave mentioned, we it's a it's a crystal ball. It's just it's a all all budgeting is a crystal ball. But some of it you got a pretty good handle on and some of it's very cloudy and you know there's a couple numbers in here that very cloudy at this point. But you know we we as Dave mentioned we like to be transparent. We we we share the board uh the the the news we have good bad ugly whatever. Um and then we just then we all can work together to manage it and and do the best including um legislative um discussions and priorities. >> I I would add if I could the SNAP issue I believe that's in the farm proposed farm bill. >> It is. Is that where it's pardon? >> It is. And there is discussion about at least covering it temporarily [clears throat] and I know uh there is some hope there. I have a little optimism, right? That's why because you see the debate at the federal level. >> So call me crazy if I'm relying on the the federal level to to solve our problems, but that's where it starts >> and and that is what's holding up the farm bill. So, and and there's a lot of work being done um by AMC to to continue to put pressure on those state officials, those federal officials >> um to to alleviate some of that. So, >> and and if we're discussing line items, there's the targeted case management rates where according to Heather, they arbitrarily the state arbitrarily just changed the payments for us without anything legislatively. Um, we're in a discussion here about our preliminary budget and we're still waiting for the for the state to report to us on numbers that normally we'd get in May. Um, and you want us to adopt a preliminary le levy. If the state won't, can we delay this? >> Well, you have a statutory requirement to adopt a preliminary. >> Do they have a statutory requirement to actually give us numbers we need to do our budget? >> Probably not. [snorts] Well, if they do, they they're they're uh they went by it. They're not paying [clears throat] attention to it. >> I do think related to that though, one of our strate one of the strategies to think about it's preliminary levy against the ceiling. You can bring it down, right? >> Uh now, again, I'm not I'm not >> again, but that 200,000 number could come at 800,000. >> It could uh I don't know. Now, budgeting isn't there's art behind this. I doubt it. I don't know. >> I mean, our our other one that we've been waiting came in just pretty flat and you know kind of slight increase. >> You got to come up to get picked up on the mic. >> I'm sorry. >> The allocation we just received this last Friday uh came in pretty flat. Uh we had a very very slight increase um in that but for all intents and purposes stayed flat. I'm expecting I guess I'm feeling a little more optimistic. I'll use Dave's term. uh a little more optimistic that this last one will come in flat as well just because of the drag and I think the fact that it is taking so long um probably will lean towards not much change is is kind of I guess my my best optimistic hope at this point but uh I would be surprised if it's a huge shift at this I don't think I don't think 800,000 maybe 50 is where my where I'm at my gut says 50 >> office pool going here I guess [laughter] >> a lot of hoping guts Yeah. >> Feelings. >> 20 some years of experience here. >> Throw it at a dark. >> Hey, legislature. This is no way to treat your siblings. >> We do uh trend analysis with other issues. It is it is sort of that dark, right? Investment income on and on. The list goes uh salaries even with turnover, right? So, so we'll we'll keep you updated, but again, uh process-wise, we do have that flexibility to move through through the preliminary into December. And um just might go back and make a point that that Dave made earlier, but just reiterate if if that $200,000 number that we have for this last program comes in and it and there is savings. It's only a 50,000 impact, you know, Heather's guess or it is zero or whatever. We don't ant we Dave he mentioned this. I'm just repeating what he said. He would not recommend lowering the levy um in 2027 to reflect that. We would lower that search charge shift the onetime money that we're using the 1.23. we would lower that down by that amount. So that could become 1.21 and then we would shift that. So 2027 would stay the same. There'd be no change there, but it would uh lower the impact in in 2028 is how that would play out. So we're not we're not waiting on that to actually set the levy number. We're just waiting on that and and vice versa. If it did come in higher, uh our recommendation use more one-time funds and keep that levy where it is in 2027 and then shift the impact to 2028. Are cities waiting for There's 87 counties still waiting for numbers. Are cities still waiting for numbers? >> Yeah. Um, cities uh cities could be, but they don't have they don't have the revenue streams >> um that that uh >> social services. >> Yeah, they don't have the social services. I mean, there might be some other number they're waiting on, but um yeah, that it's all health and human services, which is a county function, not a city. So, I would guess not. >> Mr. makes question my >> choice of becoming a county administrator versus >> we won't go there but it it is more difficult I think to package our budget up because of >> you know they're not the cities are not experiencing the seismic shift that we are they have a lot of these other variables >> uh but much different world I did want to before you flip off this chart point out AIS inspections which is >> a very uh popular if nothing else service it is a difficult recommendation ation for me to make personally to as an environmentalist to to uh cut the and let me let me make it clear the inspection side of aquatic invasive species. We are I'm not recommending cutting the monitoring and ongoing education but one of the dynamics is that the first of all the state legislator legislature cut it h half of it. >> Yeah. Yep. Yeah. It's a top line item on our charts. So it's it's really the only only item that I could look at and go well this it's not a mandate. The state cut it and we can cut it right. So there is some logic behind that. But I'm well aware of the impact of that and the concern that all citizens will have and the folks that are uh shore you know lake shore owners etc. Uh there's a couple of wrinkles in there too with you know Chanhassen covering they they pay for their inspections we provide the the staff. So we've already uh given Lori a heads up at Chanhass that well we're going to get out of the business under this recommendation. So so I'm not sure what they're going to do. Uh we're working on jointly some communications. Uh maybe they'll continue it with somebody else. Uh uh I'm not sure. It it's definitely a big challenge to to staff the these roles, you know, the the seasonal roles if nothing else. It's kind of like, you know, that overhead is it gets you get gets this number then the cost associated with it again when this mandate I think the DNR should be taking care of it, right? Why why isn't the DNR handling their responsibility? Why are we stepping up to the plate? But is it's a tough cut. It does go back to the the service level and choices that are in front of you. It's not the only only tough one, but it is right on top of the list. Not a huge number. Uh, and each of those are, I would say, are they have different different components to them. Each of the uh each of the reductions in the discretionary service level area, but I did want to point that one out as it was up in the board here. >> And thank you. I have gotten, you know, feedback, push back on that one because it's an upstream activity and, you know, there's concerns, but we have a lot of difficult decisions to make. >> That's one of them. >> Thank you. >> Okay. Uh, moving on. The rest of the numbers uh are numbers that we've seen in p past budgets. um they're much more um the typical kind of uh increases we're seeing. So, we're just kind of updating for the trends um and the adjustments that we're seeing uh as we look into 2027. I mentioned the 450,000 um that comes out of our long-term financial plan along with um an increase in levy for our facilities, vehicles, and equipment replacement. We have a five-year schedule for everything that we can think of that has wheels or that um uh [snorts] that needs to be replaced uh in a schedule. Um and this increase allows for us to continue on that replacement schedule. Um and it's really driven by um public works with all their trucks and you guys have seen the um the aging of the fleet. Um this responds to that. Uh, so it's real strategic and it is a five-year plan and it is part of our long-term plan to continue uh to um put additional dollars towards that as as the uh cost to replace those uh vehicles, equipment um and facilities uh all increases. There's a transfer uh from our operating budget to fund our one-time projects. That's um a a strategic shift for two reasons. One is to reduce the reliance uh of our operating budget on state CPA. that has been something that's been um has fluctuated uh up and down over time and reduce our uh the state aid coming in into the the general fund which pays for our salaries and the lights and the heat um and and shift it to capital uh projects. So, we have a little bit more flexibility in our budgeting should that uh state CPA number ever get cut, which has uh in since I've been here, it's been cut uh drastically um as the board members back um in the plenty years when we have that Christmas surprise where half of our CPA was cut. Um and then the second part of that is it does provide one-time funding for our our capital projects um on attachment E. So, um it it has has two purposes to do that. That's why it's part of our uh our long-term plan to continue doing that investment income. We mentioned that um that was that was something we've been working on. Mary Kay has been leading that effort. Uh we're transitioning the board um approved uh hiring a third party investment advisor. As we shift from uh an individual doing that to more of a team and a third party involved in it, um that team's been able to unlock some um investments that that we can't we couldn't get to. uh but being a larger firm, they're able to do that. And then I just having a group of people working on that, watching our cash flow, watching our investment strategies where there's a number of factors in that 250 um including public works lending their cash balance back to positive numbers in late fall. Uh that now shifting to uh those those are countywide ones. now shifting to the division trends um and requests and and additional revenue um and adjustments. And um you can see the three buckets there uh that that we went through. Um, and just to clarif or, uh, to point out the biggest change from when we're talking, uh, we presented the numbers, the initial, uh, budget strategy back in our strategic planning session in the end of May. Um, that number was 1.3 million additional levy for all these trends, all these costs, kind of the inflationary things that Dave mentioned earlier. um you know the the various costs that we're seeing uh that got trimmed down to um just over 900,000 um as of as of today. And then from the two other buckets uh close to $2 million in revenue increases um from the sheriff's office. Dave mentioned the jail as well as the contract revenue uh was significant factor um and then the other um divisions as well. So that was a that was a big change. As of uh April, we hadn't looked at the revenues yet. We had we were focused on the expenditure side and then we shifted to the revenue side and you can see that was a very big positive number um for for 2027. And then the other piece was uh we call them the close budget gap adjustments things that uh changes that we're making um uh outsourcing of some some services that Dave mentioned various that that was over a million dollars. Um so you can see the shift um you know basically uh three months u of work hard work by the divisions and their staff hard work by the lead leading the effort by the county administrator um and and then Mary Kay keeping track of all the details. So that's uh that's the big change from um you know the the workshop that we had to uh today's presentation and today's recommendation for 2027 staffing. Uh that's our attachment B. um various numbers in there. You can see the red is where we're eliminating position positions um and uh highlight the ones that are that are vacant. Um and then the one uh down below where it's not um in the public services area uh you can see that the recommended FTEES um is actually a decrease and you can see that over $400,000 and you saw that back in the budget summary um that were that there in terms of levy savings for um our FTEES overall in the county. um that does not include the additional um staff um in response to the act the legislative impact number that we mentioned before. Um and this is um this is being funded by that levy search charge. So part of that 1.5 million that we saw earlier on the act um that's that's impacting us in 2027 um what were these were the staff uh requests here the three social workers a case aid the parillegal as well as the u half of the assistant county attorney. Um so that the so the the net cost is 626,000 but that's being funded by that one and a half% um levy search charge. Uh so now big picture, you know, the $100 of our county levy, how is it allocated? Where where does that go? Um you can see uh health and human services and probation, you know, uh just over a quarter. Um and then the various other divisions uh with the county sheriff operations um all the way all the way through. And then there is a kind of description down at the bottom to to um to help you know uh break out the combined areas. and then historical data just to kind of give it some context on um where the where the 2027 recommendation compares to previous budgets. Um you can see that the biggest factor in terms of the total budget where we're at is the darker blue and that's the capital outlay. That'd be road road and bridges um in the in public works. And you can see 2026, you know, was was down in terms of capital projects significantly from 2025 and then 2027 is going back up again. Those were all um not all but uh almost all of that is from uh sources of funds other than the county levy. Um so it's you know from the state, from feds, um our various partners are paying for all those projects. You can see the other uh personnel, non-personnel in debt services, you know, smaller um increases uh over time, but um definitely just kind of gives you some some in the last five years where the where the budget increases and decreases come from. >> Dave, does that dark blue on the right top for 2027 recommended include the dollars we have allocated for the building? Uh that would actually be um right now um where would that that's a great Mary Kay question. >> I was going to guess but I think we might as just get the source >> in debt service. So it's in the debt area debt service area >> because I know that our county maybe even compared to cities with in our county our debt service is minuscule sub6 million >> but I know when you bring on an 808 $82 million building and then face the prospect of a first street center what that might be that debt service will grow but it'll still be I guess responsible compared to peers at the county level and minuscule compared to maybe some of the spending that's happening at the city level. Is that accurate? Yeah, I'd say I'd include school districts in that as well. Not all a lot of school districts. They have much larger debt service. >> Yeah. Bigger. Way bigger. >> Yeah. Way bigger. But you can see in ICI ours is green. We, you know, we haven't issued debt um new debt in in in a long time. Um we we've uh refinanced some debt, you know, when interest rates are lower. But in terms of new debt, we haven't done it for a while. We've been paying it off. um and why that number is increasing um 450,000 you know for for the last three budget cycles. Uh but the debt that has been paid off is being redirected toward this new one. So that's why that number hasn't hasn't gone down as debt that's been paid off because it's just been redirected and then the 450 has been added into that which barely shows up because it's a relatively small number compared to our large budget. Will we see the 600 building or in future first street center building appear in capital outlay ever or would will always be cons contained within debt service? >> No, you'll we're you'll see the capital um uh capital project. It'll come through uh well the the the cycle actually might not fit with uh a budget. It's more likely to come in when we're when we're ready to go. Uh we'll come into the boardroom and say let's do it, but it'll be June, July, you know, whatever whatever month it'll be. So, the board will see it and then it will uh it'll roll into it. But, yeah, we're um the timing is not likely to line up that we're going to have that project in in an actual budget, but it will be obviously approved by the board, but the financing for it is every year coming in front the boardroom as I mentioned at 450 and we got two more years to go. Uh a quick summary slide on CPA, a county program aid from the state. Um this is the one I mentioned that um our strategy has been to reduce um the reliance on our uh the operating budget and that's that $100,000 shift and you can see that reflected um in the dark blue the one-time projects uh whereas 440,000 back in 2021 um and then uh in 2027 it's up to 985,000. I I described this to the uh administrator he as one of my legacies that we we are taking the CPA and taking it out of our operating budget and putting into our one-time projects because our one we have one-time projects that come up. We have a a a very good long-term plan. We got a very good five-year replacement schedule. You know, we are we are looking for things. We have, you know, we have a master space plan. Um but even with all that planning, there are things that come up that we hadn't anticipated uh that now we need to have money for. uh this, you know, close to a million dollars is is a is a every year we'll have that million dollars. We're able to supplement that last couple years because of that debt service that has been uh redirected, paid off, and we're saving it for this government uh center project. So, it's actually we're going to see that we have more more than the million dollars, but uh eventually that that that service is going to get uh uh going to have to get redirected towards the bond sale and then we won't be able to use it for for attachment E. But we'll always we'll well not always we will have this million dollars um and then it does allow us flexibility in the future and we have cut this in the past when needed um you know when it makes sense if uh so you know because we have more flexibility on our capital projects obviously than in our operating budget when we got to pay salaries we got to pay um uh keep the lights on and stuff so just >> the legacy comment by the way talked me out of cutting it pretty effective I think it it is a great strategy >> yeah it is one to me it is one of those So >> yeah, >> isn't it it's a great strategy. It's nice, but it's $100,000 pressure. >> Exactly. And it was I I He put it in there and I took it out and told him it was my legacy. That doesn't mean we can't take it back out again, you know, if we get to that point, but it's just I didn't want to I didn't want to go to that too early because that that that that's a big number. And um we we want to be able to uh that that's a that's a key number to be able to each year have uh a source of funds that we can use for things that come up that that were unexpected that we didn't have a chance to plan for. And we'll actually we'll have a a chart showing that on attachment E coming up here. Vacancy savings. Uh that's another number that uh as Dave mentioned is is uh kind of crystal ball. you know, finance just just tracks the trend um and and watches where it goes and then tries to anticipate, you know, based on the the past five years is as the best uh uh indicator of where we're going in the future. And you can see how that numbers moved around. The the darker blue shows that we are not increasing vacancy savings in our operating budget for 2027, but we have reduced the amount that we're setting aside for [clears throat] our cash flow. uh because every year our our budget increases and then we need uh 30% of that set aside for cash flow. So as the budget goes up, we need more cash. We need more cash uh to be able to to uh pay for um salaries and and the lights and everything until we get our u our property tax allocation that comes in May. Um so that that's a key number to be able to make sure we have the cash uh increase our cash flow uh account as our budget increases. And this is our main strategy to do that. Uh that that those are those are our operating numbers. Uh now looking into our our their CFPS or capital improvement plans. Um and then our um highlight on the uh facilities vehicle and equipment replacement. Um I mentioned before the road and bridge that's that big capital number that you've seen fluctuate. Um was really high two years ago and then down last year and then now up again for uh 2027. you know, it's $46 million, but it's all federal, state, sales tax, money, city, um, our various partners. The the piece that's counting tax levy in that number is the 2.3 million. Um, and that's what we use for road preservation. That that levy number did not change. Same as 2026. Then the various other uh CIPs. Um, and you can see no county tax levy in any of those um capital improvement plans. And then attachment D, it does break out um for for 2027 uh how that 2.2 million is uh is being uh allocated and it is 105 increase from 2026. Um and that that actually reflects uh one of the adjustments that we made. It was originally um the plan according to their long-term plan would have been $150,000 increase to give more money for public works for um the the uh their fleet um as as they explained in their um their budget presentation. Um but we were able to uh shift they still got their uh $50,000 increase to get to 150, but they were able to reduce 45,000 uh from a different division um and offset that. So, uh, that was kind of an odd number, 105, but it was, uh, part of the recommendation to lower that from the original 150. You know, taking a big, uh, look at our all of our, uh, the financial plan behind our capital, behind our CIPs. Um, this kind of starts getting into the the top one there is the number I've been talking about in terms of, uh, the debt service that h is available for the um, the the government center. uh bond sale 4.15 and then uh 450,000 increase. Final goal is uh 5.4. We expect to get there in 2029 if we get those two more years after that. Um so that'll be the debt service for the bond sale. And then uh our road and bridge I mentioned the 2.3 uh that's planned to stay at 2.3. um Lyndon's Lyndon's able to continue the road preservation with that 2.3 million by um you know using other other revenue sources or that you know that's enough for the foreseeable future to continue the preservation plan that we that he has for our road and bridges uh parks and trails that that is 200,000 at this point it's ongoing and we have the relationship with potential relationship with three rivers parks um so that'll be uh we continue to look at that as well as our u five-year replacement schedule um it is in our long-term plan to go up to 150. Um, and but not sure when the final is, right? When it we get to a point we can stop that or we'll be 150. But at least for the for the foreseeable future, we're looking 150,000, but we don't have a a final year at this point. And then the one-time projects, um, there's from CPA, we got the 900,000 and then we're adding that 100,000. Um, and that ongoing is in terms of how long do we keep continuing that. Um, but at this point that's, you know, that's the summary of our financial the the financing numbers behind our CIPs. And I I mentioned the onetime capital projects. This is uh what what the county minister is recommending for uh 2027. have $8 million available with a a recommended year-end savings transfer of the yes account um to fund to get to that 8 million along with the debt service that's available and then the million dollars from um the county program aid as well as some public safety uh from the sheriff's. uh he had a one-time aotment and he's uh he's uh transferring that in to to help cover the $8 million for a specific uh public safety um project. And the recommendations from how how that's spent uh 2.8 of it comes out of our long-term financial plan. uh various um a big software purchase for um our pay our payroll and uh ER software replace that and then IT equipment various roofs and different things and then um 5.2 2 division requests. Uh 2 million is is being allocated for the government center project cash transfer which will reduce our the bond sale amount as well as 2 million for the JASA library. The total I have a slide that'll show but that's uh that's for 2027 uh those 2.2. So the five million is really made up of the four million um there and then various other one-time things that that uh we need to uh decided we needed to do in [clears throat] 2027. >> Dave, quick question. Um, where's the other two million for the Chesca Library going to come from? Ah, >> give me one more slide that it's coming. >> I thought I saw it somewhere else. >> Yeah, it's coming. I'll summarize. This is just for 2027, but then I'll I'll show you what we've done already for for the Walts project and what we're going to do uh what the plan is for 2028. >> Got it. Yeah, I just uh give me but I want to point out the the two big requests that were not recommended by the county for funding uh was the one 1.5 from the township sewer phase one phase one of that project. That would have been half of the cost. Uh then there was parks projects uh that we put a freeze on um terms of the three rivers parks. We we didn't want to commit to those at this time. We'll get through that and then we'll use them uh going forward for uh for future um park projects. Um and then a new slide attachment E2. Uh we used to have just A1 and then we added uh A2 as you recall to um because we we want to be able to highlight those legislative impacts. Well, uh now we have one-time funding for services. The previous attachment E1 was for onetime funding for projects. Now we're doing onetime funding for services. Uh and I because partly it was driven by the state because um they the states gave us one-time money to offset some of these costs. Um so we are recommending the 750,000 to split the the act cost the 1.5. Half of that we're paying for levy in 2027. Half of it we're paying for one time uh uh onetime funding. And then in uh 2028 we'll we'll increase the levy. The plan will be increase the levy by the other half. Um then in terms of uh these these are actually where the money would go to um a six-month contingency for that uh did not meet criteria. Um and then the SNAP admin benefit and you can see down below the onetime funding came from uh state aid the 329,000 that's how much we got from the state and then um 150,000 um of vacancy savings and then just under a million dollars we transferred out of yes and that's the that's to um allow that or pay for that 750 mainly that 750 for the act shifting it from 2027 take the pressure off the levy in 2027 and shift [clears throat] it to 2028 that's um um coming from mainly coming from our urine savings account. That's a shift. We have not done this before. That's but it's got a new attachment um um and that's why we wanted to highlight and really break these out to make [clears throat] sure everyone's aware of the shift onetime funding and then shifting it to 2028. >> Mr. Chair, if I could just comment on this one because at first it might appear, boy, you're breaking your golden rule. Why why you spending onetime money on ongoing things? But again to clarify my comments I made originally in 2028 there is a plan to level the field here to apply the enough money to the base for ongoing services. That that to me is the key to recognize it have a plan in place does take a commitment right from the board. Um hopefully again that in by 2028 things are better than expected and some of this eases back etc. But I I think you can also pick up what there's some some big u question marks in here. It does not the DNMC does not meet criteria. >> Okay, the individual is no longer in the facility. Might he come back or somebody else? Maybe that that's a you know that's a percent right or a half percent right there, right? >> But I think from my perspective obviously it's in my recommend recommendation. I think it's smart smart to think about the likelihood that might happen. Right. Uh, so let's let's at least put some onetime money aside to buy some time then >> to pay for that sort of budget busting kind of event, which is all contingent, crazy enough, on perhaps one individual. Could be two, right? Or could be zero. We're we're hoping it's zero and then we we just keep this in a retainer. So I I mentioned our year in savings account. This is a quick update. You can see where we started. uh we went all the way back to the January 1st of 2025 uh how that then was increased uh based on 2025's results and then in for what we had in 2026 last year at this time uh the board approved the county commissioner recommended the board approved spending a million dollars of that year in savings on attachment E. Uh we just had attachment E at that point just onetime projects. Uh another 200,000 was was spent um board approved back in uh last week I guess um and in the boardroom for that employee relations contract and that gives about 10 million and the the minister's recommendation includes uh spending 4.23 two, three of that transferring for capital. I highlighted that before on E1 and then almost a million dollars in E2 for services, which would bring us down to um just under five million in our [clears throat] our projected year end savings for uh 2027. And uh so a real quick summary of the master uh space plan, the project uh just because that's such a big number, right? The 82 million. Um, talking about the objective, uh, the scope, [clears throat] it it includes tearing, uh, one building down and then significant, uh, what does Nick call it? Heavy heavy remodel. I think he calls it a heavy remodel of of this building. The shell is going to stay the same, but the everything else is going to come out and get redone. Uh, the timeline is in there uh, coming up quick in 2027. And then the estimated budget is 82 million. Um, and but with the bond sale at this point, we're saying 78 million because of the 2 million we put in uh recommended for 2027 as well as 2 million from from uh previous budgets. So, uh 78 78 million bond sale in 2028. And just to recap, you know, we need uh 5.4 million for that. Uh we have 4.1 already and then we got 450 uh coming through the budget process for the next for 2027 as well as the next two years. I would add a quick comment there would be what are interest rates D. >> Yeah. Well, right. >> If you knew that, we'd all be rich, right? It certainly looks like they're trending up that the borrowing >> uh percentages. And so, we'll have to keep an eye on that. But that was also a thought I had when we're sort of buying down this $82 million number. You know, it might all come unfortunately come out in the wash in the end if that rate goes up a percent plus. >> We'll have to see, but uh we'll be revisiting that with others. And then looking ahead to our long-term uh financial plan, we have road and bridges, which I mentioned funded by the sales and wheelage taxes, our local money, as well as federal and state um buildings and miscellaneous, the the large $82 million U project that's coming. And as well as the the 4.4 Chaza Library, one time books and shelves we've been talking about. Um yeah, here's the number you were thinking of. Yeah, that that's where I saw that. >> 500,000 back in 2023 was set aside. Um and then 2 million for this is included in the recommendation for this year. And then the plan would be a $2 million request for for next year. And that would that would get us to the um the 4.4 actually 100,000 more. But uh we'll wait and see how that comes. >> Contingency. >> Yeah. Little contingency. Yeah. There you go. >> And parks and trails. We have our five-year plan. Um, you know, our goal was to the the very poor condition, if you remember that pie chart. Um, and to reduce that very poor condition down to zero is was our goal for 2027. Um, you know, we'll see how we can how we can uh attack that if we make the change in the partnership uh with Three Rivers. Um, but then fiveyear to try and get to the poor condition that less than 25%. Those were our long-term objectives uh that we'll be working with. Um whichever way we go, uh we'll continue to focus on uh our our parks and trail um five-year plan for projects. And in terms of operations, um minimize the uh the requests uh for staffing through technology, innovation, cooperations. We spent a lot of time on that. Um and levy impacts uh in 2028. additional staff for the new Jaza Library. How many FTEEs still has kind of a number that's being floated around a little bit, moving around a little bit. And then the three FTEs is um county minister mentioned before about the public safety uh telecommunicators. We may not need all of them in in uh in 2028, but we do the need is there. So, we need to come up with a strategy in terms of how to add those to our budget over the next couple years. Then health insurance. Uh Dave mentioned we had a 7% increase for uh 2027 and then 2028 we'll be back uh talking with scale which is the C uh cooperative agreement with um Scott County and some of their other cities and seeing if there's a way to pull our um our responsibilities and our the costs in terms of uh for health insurance for employees. >> Dave, [clears throat] a quick question on that. is the Chaza Library. When are they gonna break ground on that project? >> Um, that's a that's a >> I'll know a lot more in a couple of weeks. I have one of those things coming. >> Do you know the ultimate cost to >> I do not? >> 20 million. >> 20 million plus four and a half uh furnishings plus uh I think an incremental million plus in staffing for that one library. And that doesn't include the potential for Carver to have the population to support a library in the next 1015 years. Victoria outgrowing its space and I think there's a request for a library in the western part of the county um on the table as well. So if you add up all that for buildings and whatnot in the next 10 to 15 years it could be nearing 80 to90 million of library expense just on the capital side. >> I think we only asked about the chest weather though. Thank you for that. >> I think it's good to have a complete look because if we're going to continue to do stuff in Chaza and it bleeds over to the other communities we have to look at it holistically. Sometimes we look in isolation of the next 12 or 18 months. I think we have to have a view that looks out 10 or 20 years because these are huge dollar amounts to be had there. Just like the first street center, we haven't planned that. We don't have any budget for that. We're looking at it in 12 and 18month chunks. We have to look out 10 to 20 years. So, >> which is which is why I'm um as library layers on, we're looking at a 30-year comprehensive plan. So, thank you. >> But my assumption is it'll probably break ground next year. And >> be open until 2028 is the time. >> Yeah. >> Yeah. >> 12 months to build it or >> Yeah. >> Yeah. [clears throat] >> That timeline escapes me at this point. >> Yeah. And it's intuitive, but uh that's Commissioner F. That Nick is Nick. Well, yeah. Nick is the our staff person is the libraries. Yeah. Just to remind the board the the cities, you know, pay for the cost of the new building. That's going to be a city expense. You don't see that cost in our budget, obviously. Uh it's going to be a city and then um the agreement the long historical agreement's been um the county then pays the the one-time cost for the furnishings and the shelves and the books and then we do provide the staff. So that's been that's been the agreement for a long time. >> Yes. Yes. >> Okay. Then the the budget calendar. Um you can see the uh the various meetings that we've had uh throughout u you know starting back in April. Dave mentioned, you know, staff starts working on that um before April, but then we start um meeting with the board at various times and um we're at the work session and then the plan would be to come back in next week in the board meeting and adopt request the board to adopt a preliminary levy and budget for 2027. And you can see the the remaining meetings um pretty much follow the um the past um past years. Other than the the the December 1st uh meeting, usually that's in November, but the way the calendar worked, we're we're uh recommending that the public hearing be on the first and then board would uh take the final uh adoption in 12:15, which is a little bit later. U then we've done, but just the way the calendar worked out and that's what that's those are the dates we came up with. And with that, just the um this point it'll for board input and direction. Um the the county minister's recommendation at this point will be uh uh ne on next Tuesday, we'll the board adopt the levy, you know, with 8 and a half% increase, the base amount and the search charge amount, which would be a levy increase of 6.9 million. Thank you, David. Um well, we're kind of getting getting down to it. Um you know, next Tuesday is a big day. Uh we are going to finalize the CDA levy. It's not a preliminary. We're going to finalize it. Um we will be passing hopefully our preliminary levy. It'll be at that time. Commissioner Udman, if you want to bring up negating the CHAS library um or eliminate license centers or whatever, next week probably we should hear more about the missing middle program that you want to probably have the CDA uh be working on and what that might cost taxpayers. So, next week is a big day for all of that to balance our uh our budget out. So, thank you. Any comments? I I have a few. I know we often talk about this being Dave's budget. It's it's not. It's the budget of 114,000 people that live in Carver County. Um 2,700 employers and 12,000 businesses plus the people own land um and property, right? It's their budget. we just have the responsibility of doing so. Uh impacting that. Um we don't get to choose egg prices or gas prices um to a degree. We don't get to choose insurance prices, but we do get to choose um the levy that's part of the the county. And um 33 to 35% of people uh budget is going towards housing costs of which we get to control that that levy. And so I appreciate you recognizing some of the areas where I've said let's take a look at it. Um, I don't know that we can blame the state on their shifts if we continue to take shifts. Do I want to get rid of the DMV? No. I just don't know that that's our responsibility to operate it. It's a state function. And so we went from I think it was like a half a million plus surplus six, seven, eight years ago to I think u budgeted right now is a $552,000 loss next year. And so those are the pragmatic things for us to have pragmatic conversations. And if we don't have another conversations, so be it. Um, I also know that create constraints foster creativity. Sometimes we look at these and say, "Oh my gosh, we got to raise taxes or we got to cut costs. There's a couple other options, too. There's efficiencies, there's creativity, and there's um generating revenues." And I have been a proponent for unlocking the potential of Highway 212 with a $300 million investment to potentially have $50 billion of increased tax base over the course of a number of years. 2050 would be probably pretty soon for that. And that's that's met resistance. And so if we continue to say no to some of these areas where we can generate revenue, we're really backed into the corner of saying it becomes taxes or cuts. And so I wanted to throw that out there. We also as a board have to answer the question, what is too much? And so I've been very consistent in the last six years is saying too much for me is anything that leads to a tax rate increase. So um three years ago, uh I think it was a historic, at least one I've never seen before, 6.8% increase. Last year it was 8%. This year we started at 14.5 and whittleled it down which is good and encouraging to 8 8.5. But if we take the context of 114,000 residents, that 8.5% increase represents a doubling of your property taxes on the county line every 8 and a half years. I just don't think that's right. And so we have to get creative about that. I also think that we need to look out 10 to 20 years, not just in the isolation of 27 or 28. And I think we're doing a better job of that in a lot of different ways. I just want to say a couple concerns and worries that I have because current I can't support 8.5 and for all the reasons I've shared. Number one on my mind is affordability. I think we're seeing a number of people in the middle middle class um slipping into to to to the unaffordability of being subsidized. And if we don't take care of it upstream, then we pay for it downstream. We also pay for it downstream and shifts not just from state and federal government but from our cities. When cities build a whole bunch of houses and they don't build a whole lot of balance when it comes to commercial and industrial, we pay the price of that as county and it's one taxpayer pocket, but we're on the hook for it because we're seeing that shift to property taxes. And if we continue to raise our taxes, we'll have more people that are going to be dependent on the services that Heather and her team provide. I also think that the concerns of a library, not just in the isolation of a conversation with Chaza, and nobody loves our libraries more. If you look at our data, I'd venture to guess my family's probably used the library more than most people in this room. We have young kids. We value that. It's not that I don't value it, but we can't continue to not look at some of the data when we look at our solutions. Our library, our library usage has gone down 43% in the last decade. That's even taking into account COVID, right? If you take from 2016 to current, library utilization has gone down 43%. I think the Chesa library had 60,000 visitors last year. And if you say if you take the average um user comes about 12 times a year heavy user that's about 5,000 users at that library. I want there to be a lot more. And if there's a new library, there will be more. But we can't close our eyes to say that Carver is going to want a library when their population hits a certain point. Ch Victoria is going to want a different library when they outgrow their use. There's a western um library. And so we need to have pragmatic conversations because 20 million bucks a building plus the staffing and plus the stuff that goes into it is not insignificant. And so again, I love our libraries. I've been a supporter of our libraries. I help advocate against a lot of people pushing back on extended access. And I'll just make the point, I've always said we need to keep maintain at least a minimum of what our staff is currently in our libraries. I've never been an advocate to cut any of our library hours, but we need to be responsible as we grow that those don't creep in as well. And then um a couple more things and then I'll be quiet. We certainly we currently don't have any budget or planning for the First Street Center as it is right now. And I know it's going to be expensive, but that's an obsolete dated building for our services. Um, we five years ago, we didn't have a plan for our parks. I'm very pleased to see that we have plan for our parks. We were 20 years deferred maintenance there. And I'm pleased to see we're finally addressing the 600 building. So, there's a lot of good things. Last thing I would say is it's awful hard to pass a budget when we're putting money towards uh entities that generate surplus, and it's awful hard to see the lack of funding for our historic society. um I don't I don't think that that's going to be viable if we continue to give them a 0% increase. And so those are a couple areas where I can't support it as it is right now. Um but I'm encouraged that we're moving in the right direction a lot of different ways. And I would strongly urge my peers to to continue to look at 212 um as an opportunity to accelerate our tax base and grow more so that we can continue to provide great services. >> Anybody else? Commissioner Anderson, >> Dave, Dave, Mary Kay, all the division directors. Um, I want to say huge thank you um for for this budget and getting us First of all, big thing is setting expectations on the FTE requests. I think that saved a lot of time, effort, and energy and and being clear on on what we can and cannot do. So, thank you for for sending that note early on. Um, and thank you for the change in the budget hearings so that all commissioners can participate. Um, while those were not televised, they were open meetings and public could attend. And I think personally as a commissioner, it gave me a bigger picture on what's happening in each individual budget and I appreciated that and hope that can continue. Um, mainly I want to give creativity in solving this problem. I know director Goodwin was given a huge task on how to manage the lion share of those unfunded mandates and I know you have a patchwork quilt of funding and it's super complicated, probably the most complicated budget in the entire county. So, thank you for um trying to come up with a solution that minimizes that cost on to taxpayers. And we're all holding our breath as to what's going to happen in the future and what un uh other unfunded mandates might come our way and what those numbers will be. Um, I fear the day that we're no longer able to pull a rabbit out of our hat and and figure out how to minimize the costs of these. Um, the primary costs related to the increase in this budget is the increase of workforce costs and our increased demand of services. That's the bottom line. the cost shifts continue to exacerbate our um continuing our continuing costs and and and that's that's where we're at. Um we live in a community that that wants a DMV. We live in a community that that wants to continue to see the high quality services that they've always seen. And um we we need to kind of continue to ask the questions of how much is too much and continue to to push back on that. Um I think this while it's not ideal, it's where we're at right now and a a realistic a realistic number knowing that this is the highest this levy can be and it could still go down by December when we have more information. Okay. Anybody else debate? >> Yeah, I'm getting my notes and questions ready here. Mr. Chair, I can start. Definitely, we are in the service business. I think Dave and Dave both mentioned that and I think it's something that we're going to continue to do at the county level. We talked about the fiscal sustainability with ongoing the base funding and that strategically with the one-time strategy that we've been using. I still continue that's hard to believe that that's very critical in what we do and and just definitely keep the eye on the ball. I hopefully in 2028 when we come back and try to remember that things are as rosy as we're projecting them to be. And then the license centers. Um we'll have to continue to make that one of our legislative priorities if we can continue to push back on that increase of the fees because that's something that basically they're holding our heads under under the water and say counties you do all these tasks and we're going to take the easy fees and not have any expense. So, we'll hopefully continue to to push back on all of that. Um, the library usage uh with why build new libraries if usage is down. Commissioner had made that statement. So, why are we building new libraries? And that's something maybe a question for the city of Chaska. They're moving forward in that process. And just for the presentation, Dave, on page 25, that's I just kind of chuckled. That's an old image of Wonia Regional Park. You got the old ballroom in there. Maybe >> need to update that one, Mr. >> That picture. And then three river parks. We have that discussion. That's going to be more discussion for for us to to definitely go forward. We talked about, [clears throat] excuse me, HHS and we continue to get those allocations later and later and and how that impacts us. We talk about the budget and the increases and that's such a large number and it really concerns me on the state's responsibility to be able to delay to delay those payments to us and and here we sit and I think that's going to get worse and we'll just have to effort to adjust of all all of those allocations and and those delays and the mandates etc. And just my final um there might be another one in here Mr. Mr. chair, but you talked about the debt service and the capital outlay overall with our triple bond rating and the debt service that we have today is so minor and minuscule compared to school districts and you look back at 10, 20, 30, 40, 50 years, I think what the county and the county staff Dave Dave and Dave and and your team um and Mary Kay as we manage that debt service. We've done a heck of a job managing the county debt service >> just with my banking perspective and talking about debt service every day. It's incredible where we are and that's just one of the good things and that is a sign of the commissioners before us. It's the sign of commissioners Lynch and Workman of all the work that they've done. with the staff help and with administrative hemp to control that debt service. I think that's just a huge win-win. And just a comment on Commissioners Utterman, that $50 billion revenue coming out of Highway 212. Um, that's a phenomenal number and and to try to put your arms around that. But at what cost? Is that a cost to the county that's going to build industrial parks in the various townships or is that a cost to the city of Ches for example that's purchased the big woods industrial park 436 36 acres where the new indust or Amazon center is going. That's an investment that the city of Chesca has taken based on the improvements to Highway 212 from Eden Prairie to Carver. That was a huge investment that this county was part of to make that happen. And now the county helped with the investment from Carver to Cologne and now from Cologne to NYA and the investments that the city of NYA have done in their industrial park to let that revenue come that way. So how is that revenue going to come and but at what cost? Is that a c more of a county's cost to help build those industrial parks or is that an example? Was it more of a county cost to help with the sewer and water systems in the city of Cologne in the city of NYA? There's needs there. So, more conversations coming and the doubling of the the county taxes. If we're already doubling the county taxes every year or every eight years, well, then the county must be doing something wrong. But if we want to continue to help and help and help and help, well, our taxes are going to go up. So, what's what's the compromise and what's the process? We go through this process every year and it by far is getting challenging or more and more challenging every year. We definitely, I feel, are doing a great job and and trying to keep the impact as [snorts] low as possible and to continue to keep our head above the water and not go to a 2% tax increase when it's going to cost us 20% three years down the road. >> Thank you, Mr. Chair. >> Okay, Commissioner Lynch. Dave mentioned this is a very difficult budget and I think it really really is because we're still waiting for social services numbers that we should have had and Heather says in May um there's [clears throat] a prayer I always prayer it's God grant me the serenity to accept the things I cannot change courage to change the things I can and wisdom to know the difference and all I can control is what I can control. We control the county budget and what the county does but we don't control the fed and state the federal and the state. Um, we we make we're the cities. We make agreements [clears throat] with to rebuild a state road and we apply for the grants. We get all and we get all the agreements done. We build the road and then they delay the payments to us. Um, it's unbelievable to me. Uh, I think that we do a really great job and we've been budgeting for our our 600 building and uh the remodel in here. putting aside the 450 every year is doing a wonderful job. Um, but there's so many invariables that are tossed at us. One was the the act. I thought that was sold as that was going to be budget neutral and yet it looks like it's going to cost us 1.35 million in one year and just arbitrarily like the targeted case management where without an agreement the state just makes a decision and cuts us 340,000. Uh it's unbelievable to me and uh no I don't like to support this and I really hate the search charges but uh uh I will support this next week. [snorts] Okay, thank you. Uh I think I've made enough comments. I'll make some more next week. Um, so anybody doesn't have