May 12, 2025 City Council Special Meeting - FY 2025-26 Budget Hearing

[1. Call to Order of the Edmond City Council Meeting.]

[00:00:07]

THAT DIDN'T SOUND VERY GOOD, DID IT? THANK .

LEMME TRY THAT AGAIN.

I VOTE YES.

OUT OF ORDER.

THANK YOU MR. MOORE.

UH, I'D LIKE TO CALL THE EDMOND CITY COUNCIL MEETING TO ORDER.

THIS IS OUR SPECIAL MEETING FOR THE FISCAL YEAR 20 25, 20 26.

BUDGET HEARING.

UM, PLEASE BE AWARE THAT THERE ARE MEETING MATERIALS AVAILABLE IN THE LOBBY, INCLUDING AGENDAS, MEETING RULES, AND OTHER GENERAL INFORMATION.

ALL THOSE MATERIALS ARE ALSO AVAILABLE ON THE CITY'S WEBSITE@EDMUNDOKAY.GOV.

[2. Public Hearing, pursuant to 11 O.S. § 17-208, on the Proposed Budget and Financial Plan for Fiscal Year 2025-26, containing the General Fund, Special Revenue Funds, Capital Project Funds, Internal Service Funds, Public Works Authority Utility Funds, and Other Enterprise Funds, to include: Presentation and Discussion of the Proposed Budget and Financial Plan for Fiscal Year 2025-26; Receive Public Comments, Recommendations, or Other Information regarding the Proposed Budget and Financial Plan for Fiscal Year 2025-26; and Discussion and Consideration of Potential Amendments to the Proposed Budget and Financial Plan for Fiscal Year 2025-26.]

WE'LL FIRST HEAR A PRESENTATION FROM STAFF WITH THE OPPORTUNITY FOR COUNCIL MEMBERS TO ASK QUESTIONS AND DISCUSS.

SECOND, WE WILL RECEIVE COMMENTS, RECOMMENDATIONS, AND OTHER INFORMATION FROM THE PUBLIC REGARDING THE PROPOSED FISCAL YEAR 20 25, 20 26, BUDGET AND FINANCIAL PLAN.

FINALLY, COUNCIL MEMBERS WILL HAVE AN OPPORTUNITY TO DISCUSS AND CONSIDER POTENTIAL AMENDMENTS TO THE PROPOSED BUDGET AND FINANCIAL PLAN FOR THE FISCAL YEAR 20 25, 20 26.

I WILL REMIND MEMBERS OF THE COUNCIL AS WELL AS MEMBERS OF THE PUBLIC THAT IF ADDITIONAL FOLLOW UP IS NECESSARY ON ANY PART OF THE BUDGET, WE DO HAVE A SECOND WORKSHOP IN MAY THAT WE COULD USE FOR THAT PURPOSE.

COUNCIL MEMBERS, ANY QUESTIONS BEFORE WE GET STARTED? HEARING NONE, MR. INS, INTERIM CITY MANAGERS RECOGNIZED FOR A PRESENTATION.

THIS WILL BE THE SHORTEST PRESENTATION I GIVE, BECAUSE I'M GONNA TURN IT OVER TO OUR BUDGET DIRECTOR, UH, KATHY PANIS.

SO, I'M SORRY.

FINANCE DIRECTOR.

I'M SORRY.

OKAY.

GOOD AFTERNOON.

GOOD AFTERNOON.

OKAY.

I CAN HEAR YOU.

SO, WELCOME TO OUR NEW MAYOR AND COUNCIL MEMBERS AND OUR FORMER COUNCIL MEMBERS EXISTING CAMPS, COUNCIL MEMBERS I SHOULD SAY.

SO THIS IS OUR BUDGET, OUR ANNUAL BUDGET HEARING, AND, UM, PLEASE STOP ME ANYTIME IF YOU HAVE ANY QUESTIONS.

UM, BUT I'LL JUST START ON THROUGH THIS AND IT'S A LITTLE BIT DIFFERENT FORMAT THIS YEAR.

WE'VE, UH, MS. PANIS, WOULD YOU TALK LIKE YOU'RE ANGRY? OKAY.

DANG.

SEE, OKAY.

OH, THAT'S BETTER NOW SOMETHING.

DID SOMEBODY TURN IT UP? ALL RIGHT.

CAN YOU HEAR ME NOW? OKAY.

OKAY, SO LET, WE'LL GET GOING ON THE BUDGET WORKSHOP TODAY OR THE BUDGET HEARING.

AND, UM, THANK YOU ALL FOR COMING.

SO NORMALLY I'LL JUST KIND OF GO THROUGH, UH, WHAT WE'VE BEEN THROUGH, WHERE WE'RE GOING, BUT WE'VE HAD TWO, THREE WORKSHOPS, I GUESS, WELL, FOUR ACTUALLY, UM, WHERE YOU DID SEE MORE OF THE DETAIL OF INDIVIDUAL BUDGETS.

THIS IS MORE OF AN OVERALL, UH, REVIEW OF, OF OUR ENTIRE BUDGET.

AND SO WE'RE AT, UH, MAY 12TH TODAY.

THIS IS OUR OFFICIAL PUBLIC HEARING ON THE BUDGET.

AND, UM, ANY MEMBERS OF THE PUBLIC CAN COME AND ASK QUESTIONS OR, UH, WE CAN FOLLOW UP WITH THAT.

AND THEN WE DO HAVE ANOTHER, AS MR. MAYOR, UH, MENTIONED, WE HAVE ANOTHER WORKSHOP COMING UP THAT IS AVAILABLE ON THE 27TH.

SO ANYTHING THAT YOU SEE THAT YOU WANNA CHANGE OR, UM, OR HAVE QUESTIONS AND WANT FURTHER EXPLANATION ON, WE CAN CERTAINLY FOLLOW UP THEN.

AND THEN JUNE 9TH IS SET FOR OUR BUDGET ADOPTION, AND THAT'S BY STATUTE, WE HAVE TO HAVE IT ADOPTED BY JUNE 15TH.

SO JUST TODAY, I'M JUST GONNA GO OVER A FEW BASICS AND ASSUMPTIONS THAT WE'VE GOT IN OUR BUDGET THIS YEAR, THE COMPARISONS TO FISCAL YEAR 25 THROUGH 26, SO WE CAN KIND OF TALK ABOUT WHAT'S HAPPENED IN THE RECENT PAST AND LOOKING FORWARD.

AND THEN WE'LL HAVE OUR ACTUAL PRELIMINARY BUDGET THAT WE'RE PROPOSING AND, UM, AT THE END THAT WE WILL HAVE MORE DETAILED CAPITAL IMPROVEMENTS PROJECTS REVIEW.

SO BASICALLY, WE'VE TALKED ABOUT THIS QUITE A BIT, BUT I WANTED TO REVIEW THE WAY THAT WE'VE DONE OUR BUDGET THIS YEAR IS WE'VE PROJECTED OUR SALES TAX FOR 26 AT A ZERO RATE.

WE DID GET GROWTH RATE, WE DID GET OUR CHECK-IN LAST WEEK, AND WE'RE STILL SITTING AT AN OVERALL NEGATIVE 0.69 OR SIX, 6%.

SO WE'RE REALLY, LAST SEVERAL MONTHS HAVE SEEN PRETTY MUCH NO GROWTH.

IT'S ACTUALLY NEGATIVE GROWTH IN SALES.

TAX USE TAX HAS BEEN UP.

SO WE BUDGETED 4% GROWTH IN USE TAX, BUT 0% GROWTH IN SALES TAX.

AND THAT'S FOR ALL FOUR YEARS TOO.

SO I THINK IT'S 1% ACTUALLY FOR THE SALES TAX GOING OUT THE YEARS OUT OR YEARS.

BUT KEEP IN MIND WE'VE BUDGETED CONSERVATIVELY AND WE'VE DONE

[00:05:01]

SO, UM, JUST TO CLARIFY, YES, FIRST COMMENT, UM, THAT GROWTH IS FROM THE, WHERE WE, WHERE WE ANTICIPATE WILL END UP AT THE END OF THIS FISCAL YEAR, RIGHT? NOT FROM THE ORIGINAL BUDGETED VALUE.

SO, I'M SORRY, SAY THAT AGAIN.

SALES TAX REVENUE AND USE TAX GROWTH ARE BASED ON WHAT OUR PROJECTED END STATE, RIGHT? FOR THIS YEAR, OUR REVISED NUMBERS, IN OTHER WORDS, YES.

SO WHEN WE DO THE 26 BUDGET, WE WILL TAKE WHAT WE PROJECT TO HAVE AT THE END OF 25, WHICH WE'RE NOT TWO YET, AND THEN HAVE NO GROWTH FROM THERE VERSUS THE ORIGINAL BUDGET NUMBERS.

YES, THAT'S ALL I'M SAYING.

OKAY.

YES, THANK.

AND SO EVERY MONTH WE DO GET OUR CHECK IN AND, AND WE KEEP UP WITH WHERE WE ACTUALLY ARE.

AND WE, WE REALLY USE FORMULAS TO TRY AND ANTICIPATE USING THE SAME, UM, RELATIONSHIP FROM THE YEAR BEFORE.

SO TYPICALLY WE'LL SEE SALES TAX GO DOWN, YOU KNOW, IN JAN IN JANUARY BECAUSE IT'S AFTER CHRISTMAS.

SO WE'VE USED THOSE SAME RELATIONSHIPS TO ESTIMATE WHAT WE THINK IS GONNA BE AT THE END OF 25, AND THEN THAT'S WHAT WE BASE 26 ON.

YEP.

THANKS.

SO, UM, AND THEN ALL OF OUR EXPENDITURES, WE'VE JUST TRIED TO REALLY TAKE A CAUTIOUS APPROACH.

WE HAVEN'T CUT EVERYTHING.

WE'VE LEFT OUR PERSONNEL WHERE EVERYBODY STILL IS GETTING THEIR STEPS.

WE'RE NOT DOING, UM, WE'RE, WE'RE LOOKING AT A HIRING FREEZE AND, AND REALLY BEING CAUTIOUS THAT WAY.

BUT WE'RE, WE, WE'VE ALLOWED EVERYBODY TO HAVE THEIR STEPS.

WHERE WE'VE TRIED TO KEEP IT FLAT WAS ON OUR SUPPLIES AND OUR CONSULTANTS, THOSE TYPES OF THINGS.

CAPITAL PROJECTS ARE ACTUALLY FUNDED IN A LITTLE BIT DIFFERENT WAY.

SO THOSE ARE GOING ON AS NORMAL, BUT, BUT, BUT OUR GOAL IS TO CONTINUE TO PRI PROVIDE THE HIGH LEVEL SERVICE THAT, THAT OUR CITIZENS EXPECT, BUT NOT OVER, OVER BUDGET OR OVERSPEND AND KEEP IT FLAT.

UM, SO I JUST RECENTLY LOOKED UP OUR INFLATION RATE RIGHT NOW IS AT 2.4%.

THE FEDERAL RESERVE TARGETS 2%, AND IF IT'S NOT 2%, THEY USUALLY WILL ADJUST TO INTEREST RATES, BUT WE HAVEN'T SEEN THAT RECENTLY.

BUT IT WAS 2.8% LAST MONTH AND 3.5% THIS TIME LAST YEAR, COUPLE YEARS AGO, IT WAS ALMOST LIKE EIGHT OR NINE.

SO IT'S REALLY COME DOWN AND THE AVERAGE IS 3.3.

SO WE'RE REALLY RIGHT WHERE WE SHOULD BE WITH INFLATION.

UM, SALES AND USE TAX COLLECTIONS YEAR TO DATE, UM, ARE DOWN FROM LAST YEAR.

IT WAS 0.58, I THINK IT'S BACK UP TO ABOUT 0.6 NOW AFTER OUR OTHER CHECK.

AND THEN WE DID, UM, TALK TO OUR CONSULTANT RECENTLY AND ASKED ABOUT THE TARIFFS AND WHAT HE THOUGHT MIGHT HAPPEN WITH THOSE TARIFFS.

AND BASICALLY HIS ANSWER IS WHAT YOU MIGHT EXPECT, IT'S NOT A GOOD THING.

IT'S GONNA AFFECT CONSUMER SPENDING IN ADDITION TO THE OTHER CHALLENGES WE HAVE, LIKE THE INFLATION AND, AND THOSE THINGS GOING ON.

SO HE SAID THAT IT WOULD HAVE A NEGATIVE EFFECT IN THE SHORT RUN.

THERE'S A, THERE, THEY DID SEE ALREADY A SIGNIFICANT INCREASE IN SPENDING PRIOR TO ANY OF THE TARIFFS GOING INTO EFFECT BECAUSE PEOPLE WANTED TO GET THOSE PRODUCTS AT THE LOWER PRICE.

SO HE THOUGHT WE MIGHT EXPECT A LITTLE BIT OF A BUMP, BUT WE REALLY DIDN'T SEE IT.

SO I GUESS THEY DIDN'T DO IT IN OKLAHOMA, THEY DIDN'T BUY MORE THINGS.

BUT, UM, THE STOCK MARKET REACTION IS SIGNALING THAT THE CONSUMER IS PREPARING FOR A RECESSION AND THE TARIFFS COULD EVENTUALLY BRING A SUPPLY CHAIN ACTIVITY BACK TO THE UNITED STATES.

SO THERE'S KIND OF A DOUBLE-EDGED SWORD RIGHT NOW WITH ALL THE PRICES GOING UP, BUT THE PRODUCT NOT AVAILABLE IN THE UNITED STATES.

BEING MADE IN THE UNITED STATES IS GONNA AFFECT EVERYONE FOR A WHILE.

SO JUST KEEP THAT IN MIND.

THE TARIFFS WERE AN ADDED, UM, CHALLENGE THAT WE WEREN'T ANTICIPATING WHEN WE FIRST STARTED THIS BUDGET.

SO I ALWAYS GIVE THIS SLIDE TOO.

IT JUST TELLS YOU ABOUT OUR SALES TAX RATE.

IT'S BEEN THIS RATE FOR A WHILE, AND, UM, AS YOU PROBABLY REMEMBER, OUR GENERAL FUND GETS 2%.

OUR LOCAL RATES 3.575%.

THE TOTAL RATE'S 8.25%, BUT FOUR AND A HALF OF THAT GOES TO THE STATE.

SO WE KEEP 3.75%, 2% GOES TO GENERAL FUND, UH, 0.75% GOES TO OUR 2000 CIP CAPITAL IMPROVEMENTS FUND 0.5% GOES TO OUR 2017 CAPITAL IMPROVEMENTS FUND, 0.25% TO FIRE 0.12, 5% TO POLICE AND 0.125% TO PARK.

THEN THE PARK TAX, WE CALL IT THE PARK TAX, A LOT OF THAT IS USED FOR MAINTAINING AND IMPROVING OUR PARKS.

SO, UM, IT IT, IT GETS USED FOR A LOT OF ONE TIME THINGS IN ADDITION TO THE NORMAL THINGS.

OKAY.

SO WE'RE GONNA GO THROUGH THIS COMPARISON AND, UM,

[00:10:02]

SO THIS WAS A GOOD EXERCISE FOR ME TO GO BACK AND, AND REALLY SEE WHY THINGS HAPPENED.

UM, SO THIS IS AN, THIS IS OUR REVENUE ONLY AND WHEN WE GO BACK TO FISCAL YEAR 23, SO YOU CAN KIND OF SEE THE DIFFERENCES, WE'RE GOING FROM 450 MILLION, 3 97, 3 79, 3 55.

SO I'LL EXPLAIN THE DIFFERENCES HERE IN A MINUTE, BUT YOU CAN KIND OF SEE RIGHT HERE.

SO THIS IS THE YEAR WE'RE IN RIGHT NOW.

WE DON'T KNOW WHAT IT'S GONNA END AT, BUT RIGHT NOW WE'RE FLAT FROM WHAT WE WERE LAST YEAR.

AND SO THAT'S ALSO WHY WE ARE PROJECTING NEXT YEAR TO BE FLAT.

IT'S MORE OR LESS IT'S FLAT, BUT, UM, THAT'S WHY, THAT'S REALLY WHY THOSE ARE LEVELING OFF THERE.

SO, UM, THE FIRST, THIS 450 MILLION, BASICALLY THE, SO THE DIFFERENCE BETWEEN THE FOUR 50 IN THE 3 97 IS A REDUCTION OF $52 MILLION.

AND BASICALLY THAT IS FROM, WE HAD A 0.25% HAY FOR SPECIAL PARK TAX.

IT DROPPED OFF ABOUT HALFWAY THROUGH THAT YEAR.

WE HAD, UM, OUR FEMA, SO IT, IT WENT DOWN.

AND SO WHAT I'M TALKING ABOUT IS THE CHANGE WHERE IT WENT DOWN ABOUT NOT 52 50 3 MILLION.

WE HAD A FEMA REIMBURSEMENT IN 22 OF 10 MILLION.

AND SO WE DIDN'T HAVE THAT THE NEXT YEAR.

UM, WE DID HAVE AN ARPA GRANT OR WE HAD ARPA MONEY THAT CAME IN AT THAT YEAR.

AND THEN WE DID HAVE SOME FEE INCREASES.

SO IT OFFSET TO BRING, UM, I'M SORRY, I'M KIND OF LOOKING AT TAX, I'M LOOKING AT EVERYTHING HERE.

SO WE DID HAVE SOME COURT, OUR COURT FEES WENT UP A LITTLE BIT.

UM, GOLF UTILITY RATES WENT UP A LITTLE BIT AND UM, OUR INTEREST WAS UP A LITTLE BIT.

BUT THE, THE BIGGEST THING THAT CHANGED THIS TO THIS IS WE HAD A LOAN HERE, AN $81 MILLION LOAN FOR THE, UH, THAT WE BOOKED AND WE PUT IN OUR BUDGET FOR THE CITY CENTER COMPLEX AND THE EDMOND Y LIBRARY AND IT'S NOT HERE.

SO THAT, THAT'S PART OF THE BIG CHANGE.

UM, WE ALSO STARTED GETTING SOME SETTLEMENTS IN, IN, UH, 24.

SO THOSE THINGS OFFSET THAT 81 MILLION TO BRING IT TO A NET CHANGE OF 52 MILLION.

THE NEXT CHANGE WAS BETWEEN 24 AND 25.

AND KEEP IN MIND, THIS IS WHAT WE PROJECT TO HAVE, BECAUSE WE'RE NOT THROUGH THIS YEAR RIGHT NOW, SO WE'RE REALLY PROJECTING OUT ALL THE WAY TO, UM, THE ANN SIX 30 OF 25.

BUT THE DIFFERENCE HERE IS AN $18 MILLION DECREASE IN REVENUE.

AND BASICALLY THAT IS MADE UP OF, UM, LET'S SEE, OKAY, SO THAT WAS, OUR TAXES WERE UP A LITTLE BIT, BUT IT WASN'T SALES AND USE, IT WAS MORE FRANCHISE THAN OUR OTHER TAXES THAT WE GET.

UH, WE HAD A GRANT FROM OUR WATER OF 13 MILLION THAT WAS ARPA MONEY, 5 MILLION OF PUBLIC SAFETY, OR SORRY, AR 5 MILLION OF ARPA A WATER GRANT OF 13 MILLION AND PUBLIC SAFETY OF 1 MILLION.

SO THAT WAS DOWN FROM THE YEAR BEFORE AND THEN MOVING ON 25, UM, THAT'S PART OF THE DIFFERENCE.

THE PRIOR THE GRANT, THOSE GRANTS WERE $19 MILLION.

SO WHEN WE'RE, THAT'S MOST OF IT, MOST OF WHAT THE CHANGE IS.

BUT ALSO, UM, WE HAD OUR WATER, WE ELECTRIC, SO ALL OF OUR EPWA FEES, UM, I MEAN I, I KIND OF COVER THIS A LITTLE BIT LATER, BUT THEY'RE UP RIGHT NOW.

WE'VE ALMOST COLLECTED, WE'VE COLLECTED BETWEEN 80 AND A HUNDRED PERCENT OF OUR UTILITY FEES ALREADY THIS YEAR THROUGH THIRD QUARTER.

UM, AND THAT'S ALWAYS DUE TO USAGE.

IF WE HAD SOME, IF WE HAVE A DROUGHT, WE HAD A KIND OF A WARM WINTER, PEOPLE USE YOUR UTILITIES MORE.

SO THAT'S WHY WE'RE AHEAD ON THAT.

UM, LET'S SEE.

WE HAVE MATURITIES AND LOAN MONEY THAT'S BEING SPENT THAT'S NO LONGER IN THE BANK TO EARN INTEREST.

SO OUR INTEREST WAS DOWN ABOUT 10 MILLION.

AND THEN WE JUST ESTIMATE CONSERVAT CONSERVATIVELY ON, UM, LIKE IN OUR, IT IS MAINLY IN OUR SPECIAL REVENUE FUNDS, BUT WE HAVE SEVERAL SETTLEMENTS AND YOU NEVER KNOW WHAT YOU'RE GONNA GET THERE.

SO WE TRY TO ESTIMATE VERY CONSERVATIVELY ON THAT.

AND THEN GOING

[00:15:01]

AND BASICALLY THAT'S BECAUSE WE'VE BUDGETED NO GROWTH.

WE HAVE SOME GRANTS OF ABOUT 4 MILLION THAT WENT UP.

UH, SYSTEM OF CARE GRANT, FIRE GRANT, CIP GRANTS FOR, UH, SAFE STREETS AND AIR QUALITY.

UM, AND AGAIN, LICENSING AND PERMITTING, WE'VE PRETTY MUCH BUDGETED NO GROWTH CHARGES FOR SERVICES ARE DOWN ABOUT 19 MILLION, BUT IT'S REALLY BECAUSE WE TRY TO BUDGET CONSERVATIVELY AGAIN.

SO IT'S JUST WHAT WE'RE SEEING THIS YEAR.

OUR CHARGES FOR SERVICES ARE UP ABOUT 20 MILLION, BUT WE BUDGET LOWER BECAUSE YOU DON'T KNOW WHAT FUEL COST IS GONNA BE.

THE FUEL COST ADJUSTMENTS IN THERE, UH, YOU DUNNO WHAT USAGE IS.

SO THAT'S WHY THAT'S DOWN.

AND THEN, UM, INTEREST DOWN AGAIN.

AND IT'S REALLY JUST BECAUSE WE'RE STARTING TO PAY OFF A LOT OF OUR NOTES.

UM, AND SO WE DON'T HAVE AS MUCH MONEY SITTING IN THE BANK EARNING INTEREST.

AND THEN, LET'S SEE, ON MISCELLANEOUS, WE JUST BASICALLY BUDGETED NO GROWTH.

ANY QUESTIONS ON THAT? THAT WAS A LOT, BUT I KIND OF GO THROUGH EACH FUND AND I'LL TELL YOU WHAT THE MAJOR POINTS ARE IN EACH FUND, EACH GROUP OF FUNDS.

OKAY, SO NOW WE'RE GONNA GO JUST TO THE GENERAL FUND.

AND I'M REALLY GONNA HIT THE HIGHLIGHTS HERE.

SO YOU CAN SEE IN, UH, FISCAL YEAR 23, WE HAD GENERAL FUND REVENUE OF AROUND 89 MILLION.

AND WE HAD, UM, MAINLY WHAT THAT WAS.

SO IT DROPS BY 7.4 MILLION IN BETWEEN 23 AND 24.

WHAT THAT WAS, IT WAS A FEMA GRANT THAT WE WERE REIMBURSED AROUND 10 MILLION IN 23.

AND THEN, UM, OFFSET WITH SOME INCREASES, WHICH WERE BASICALLY SOME USE TAX.

WE HAD SOME FEE INCREASES, INTEREST WAS UP, AND IT NETTED TO ABOUT 7.4.

SO THAT'S THE BIGGEST DROP HERE.

THE REST ARE PRETTY CONSISTENT AND IT'S REALLY JUST BECAUSE WE'RE BUDGETING AT NO GROWTH AND OUR SALES TAXES DROPPED OFF.

SO LET'S SEE, THEN WE HAVE SPECIAL REVENUE FUNDS, SPECIAL REVENUE FUNDS.

SO IN, SO IT DID GO UP, LET'S SEE, THE DIFFERENCE BETWEEN 23 AND 24 IS ABOUT 20, EXCUSE ME, 2.3 MILLION.

AND WE HAD, UM, IT REALLY, THIS IS THE, THIS IS WHERE YOU HAVE POLICE AND FIRE, BUT YOU ALSO HAVE ALL OF THE GRANTS.

AND IT'S HONESTLY, IT'S, IT, IT DEPENDS ON REALLY HOW MANY GRANTS YOU GET.

WE HAD SEVERAL IN, UM, 23 THAT DROPPED OFF LIKE THE FEMA AND THE ARP AND THE CARES.

AND THEN AS WE'VE BUDGETED, CHRISTY BATTERSON'S GROUP IS VERY GOOD ABOUT PURSUING GRANTS.

AND UM, SO SOME, SOME YEARS WE HAVE MORE.

IT DEPENDS ON IF WE HAVE MATCHING MONEY AND THAT TYPE OF THING.

SO THIS IS ALL BASED ON, UM, THERE'S WHOOPS, THERE'S A LITTLE BIT OF SALES TAX IN THERE, BUT SORRY, BUT THERE'S THAT GRANT CHANGE AS WELL.

SO CAPITAL PROJECTS, ONCE AGAIN, 23 WE WERE SPENDING MONEY, BUT UM, WE HAD THAT $81 MILLION LOAN AND WE DID START SPENDING IT.

AND THAT'S REALLY THE BIGGEST DIFFERENCE.

UH, THE DIFFERENCE BETWEEN 23 AND 24 IS A $77 MILLION DROP.

AND MOST OF IT'S BECAUSE WE HAD THAT LOAN IN 23 AND THEN IT'S A $2 MILLION DROP ON OVER FROM 24 TO 25 AND A $951,000 DROP.

SO BASICALLY PRETTY, PRETTY FLAT THERE.

UM, UTILITY FUNDS, THE BIGGEST, SO THIS IS, SO BETWEEN 23 AND 24, WE HAD A $23 MILLION INCREASE.

AND BASICALLY THAT IS FROM OUR INTEREST WAS UP.

WE DID SEE INTEREST RATES COMING UP AFTER, DURING COVID OR AS WE WERE COMING OUT OF COVID SUBSTANTIALLY, WE WERE ABOUT 0.25% INTEREST INCOME AND IT, SOME OF THEM STARTED GOING UP TO FOUR AND 5%.

SO IT WAS SUBSTANTIAL.

AND UH, WE HAD A ARPA GRANT IN WATER THAT WAS 13 MILLION.

WE HAD, UM, SLIGHT INCREASE IN RECYCLING FEE.

IT WAS ABOUT 700,000.

AND ONE THING I DID WANNA KIND OF POINT OUT YOU, I DON'T KNOW IF ANYONE CARES, BUT THERE IS SOMETHING THAT WE HAVE TO DO WHENEVER WE, WE CALL IT A CONTRIBUTED CAPITAL REVENUE.

AND IT'S WHENEVER IT, IT COMES, WHENEVER WE HAVE DEVELOPERS FINISH A PROJECT AND THERE ARE SOME EXPERTS BACK HERE IF YOU WANT MORE EXPLANATION.

BUT BASICALLY WHEN A, A DEVELOPMENT IS FINISHED, WE BOOK THAT ASSET.

SO LET'S, IT'S LIKE PAVING INFRASTRUCTURE.

WE BOOK IT SO THAT WE CAN MAINTAIN IT, WE TAKE IT OVER TO MAINTAIN IT SO IT BECOMES AN ASSET THAT WE FOLLOW

[00:20:01]

AND SO IN ORDER TO BOOK THAT, THE DEVELOPER TELLS US WHEN THAT'S DONE.

AND THEN WE HAVE TO HAVE AN OFFSET.

SO WE'RE, I'M GONNA GET ACCOUNTING HERE, WE DEBIT OUR ASSET AND THEN WE HAVE TO CREDIT, WE CREDIT CONTI CONTRIBUTED CAPITAL REVENUE.

SO THERE WAS ABOUT 3 MILLION THAT WAS INCLUDED FOR THAT THERE TOO.

NOT HUGE, BUT IT, IT MAKES A DIFFERENCE.

SO THEN, UH, GOING FROM 24 TO 25, WE HAD A DROP ABOUT 6.2 MILLION AND THEN ANOTHER, UM, DROP OF ABOUT 23 AND I'LL, I'LL, I HAVE A LITTLE SLIDE LATER THAT TELLS WHAT THAT IS.

UM, OKAY, THE NEXT ONE IS OTHER ENTERPRISE FUNDS AND THAT IS GOLF CITI LINK AND YOUR GOV SHOP.

AND THE MAJOR REASON THAT THIS WENT UP, IT WENT UP $4 MILLION WAS THE GOLF COURSE OPENED AND THEY'VE BEEN EXTREMELY SUCCESSFUL.

AND THESE ARE PRETTY FLAT, BUT I DO KNOW THAT THEY'RE USING THAT GOLF COURSE SO MUCH THAT THEY'VE TRIED TO SPREAD THEIR TEE TIMES OUT A LITTLE BIT.

SO REVENUE MAY COME DOWN A LITTLE BIT UNLESS WE RAISE FEES.

UM, SO THE NEXT ONE IS OUR INTERNAL SERVICE FUNDS.

AND THIS IS REALLY, THIS IS THE ONE WE'VE TALKED ABOUT AT THE BUDGET SUMMARY OR THE BUDGET WORKSHOP FOR GENERAL FUND.

THIS IS THE ONE WHERE WE HAVE ALLOCATIONS THROUGHOUT THE CITY AND IT REALLY KIND OF GOES BACK AND FORTH.

SO THE REASON THAT THIS WENT UP, IT WENT UP ABOUT 3 MILLION.

OOPS, I KEEP HITTING THE WRONG THING.

SORRY.

UM, IT WENT UP ABOUT $3 MILLION, BUT IT'S REALLY BECAUSE THIS YEAR WE HAD COST INCREASE AND THAT WAS WHEN WE CONSOLIDATED OUR STEPS FROM 17 STEPS DOWN TO 10, WHICH CAUSED EVERYBODY'S PERSONNEL COSTS TO GO UP IN ADDITION TO INFLATION.

'CAUSE THAT'S, YOU KNOW, EVERYTHING AND CONSULTANTS, THAT TYPE OF THING.

SO EVERYTHING WENT UP A LITTLE BIT, BUT IT'S MAINLY DUE TO THAT.

AND SO WE CHARGED OUT MORE AND THAT'S WHY IT'S A REVENUE AND EXPENSE BOTH GO UP.

ARE YOU TALKING ABOUT 14 OR 15? SLIDE FOUR I THINK, I THINK WE SKIPPED SLIDE 14.

DID I SKIP IT? I'M SORRY.

OH SHOOT.

SORRY TO CALL YOU OUT.

NO, PLEASE DO SO, SORRY.

IT'S ALRIGHT.

SO YES, THAT WAS FOR, UM, YEAH, THE $2.7 MILLION INCREASE.

SORRY, WE GOT A PREVIEW.

SO NOW WE'LL GET INTO THE EXPENSES.

SO THAT WAS ALL THE REVENUE.

ARE THERE ANY QUESTIONS ON REVENUE? JUST, UM, YOU KNOW, I I TEND TO CONCENTRATE ON THE, THE LAST COUPLE YEARS.

THAT'S WHERE WE NEED TO PIVOT FROM OR LOOK AT, YOU KNOW, IN THE CITYWIDE ABOUT 24 MILLION.

THAT'S ROUGHLY, IF I FIGURE THAT RIGHT, ABOUT 6% DECREASE SINCE WE'RE PROJECTING THAT OUT, IS THAT ON TRACK WITH ABOUT WHERE WE ARE? OR IS THAT EXTRA CONSERVATIVE A LITTLE BIT MORE CONSERVATIVE? IT'S PROBABLY CONSERVATIVE.

I, WHEN WE DO PROJECT OUR REVENUE, IT'S SPLIT INTO DIFFERENT GROUPS.

SO THE, THE RATE PAYING TYPE OF REVENUE, I DO LET THE EXPERTS DO THAT AND IT'S, YOU KNOW, THEY'VE GOT ALL OF THEIR HISTORY ON USAGE AND ALL OF THAT TYPE OF THING.

SO WE DO SPLIT IT UP WHEN WE'RE ESTIMATING OUR REVENUE.

I I TAKE CARE OF LIKE THE SALES TAX AND SO WE LITERALLY WILL PUT IN A FORMULA AND SAY 0% OR 1% OR WHATEVER, AND THEN WE JUST CARRY IT OUT AND THAT'S IT.

UM, AND WE DO IT BASED ON A PROJECTION OF WHERE WE THINK WE'RE GONNA BE THIS CURRENT YEAR.

SO, WELL I'M GONNA SAY IT'S PROBABLY CONSERVATIVE OF THAT 23.8.

WHAT ABOUT 23 IS IN UTILITY FUNDS AND, AND I THINK WE ARE, WE WE'RE GONNA TALK ABOUT THAT LATER, RIGHT? THERE'S, YEAH.

YES.

AND I MAY HAVE SOME OF THE EXPERTS COME UP TOO.

SO YES, BUT REALLY THAT'S, IT'S, IT'S, IT'S UM, DRIVEN BY THE USAGE AND SO IN YOUR WEATHER, A LOT OF IT.

AND THEN THERE'S ALSO FUEL COST ADJUSTMENT AND UM, THAT'S SOMETHING THAT WE CHARGE PROBABLY FAMILIAR WITH THAT, WHERE IT GOES UP AND DOWN BASED ON FUEL COST.

SO IT CAN BE SUBSTANTIAL AS WELL.

SO, OKAY.

AM I RIGHT? YOU'RE NOT SAYING IT'S VOLATILE, ARE YOU? PARDON? NOT SAYING THERE'S VOLATILITY, ARE YOU? NO.

WELL , SOMEBODY USED THE TERM COVID HIGH AND WE'RE COMING OFF OF IT.

SO AND YOU KNOW, THAT IS ANOTHER THING TOO.

WHEN WE DID COME OFF OF THAT COVID REVENUE, THERE WAS A LOT OF FEDERAL MONEY THAT WAS GIVEN OUT, STUDENT LOANS, FORGIVENESS, ALL THAT TYPE OF THING.

AND ALL OF THAT'S GONE NOW, SO PEOPLE JUST DON'T HAVE THE EXPENDABLE INCOME.

UM, IS ANOTHER REASON WE'RE FINDING THAT OUR SALES TAX IS STAYING FLAT.

SO ON OUR BUDGET COMPARISON, OR EXCUSE ME ON OUR EXPENSE COMPARISON THIS, SO IN 23 OUR, AND TYPICALLY WHEN WE TALK ABOUT OUR BUDGET, WE'RE TALKING ABOUT OUR EXPENSES.

AND THE REASON THAT IS TRUE IS BECAUSE YOU, THE COUNCIL GIVES BUDGET AUTHORITY AND SO THE CITY CAN'T SPEND

[00:25:01]

THAT ALL HAS TO COME FOR COUNCIL THROUGH COUNCIL.

SO ONCE IT IS SET ON JUNE 9TH, THAT'S ALL ANYBODY CAN SPEND UNLESS THEY COME TO COUNCIL AND ASK FOR AN AMENDMENT.

SO WE, WE TALK ABOUT THE, THE EXPENSE SIDE WHEN WE'RE TALKING ABOUT OUR BUDGET.

SO THIS IS THE EXPENSE SIDE AND IN 23 IT WAS 397 MILLION.

IT WENT UP 90 MILLION IN FISCAL YEAR 24, IT WENT DOWN 34 MILLION IN FISCAL YEAR 25 PROJECTED, AND THEN DOWN AGAIN IN 26.

SO BASICALLY THAT 90 MILLION PERSONNEL COSTS.

SO BETWEEN 23 AND 24 PERSONNEL COSTS WENT UP 2.6 MILLION.

AND THAT WAS BECAUSE OF THOSE, THE PAY STEP REDUCTION, THE 17 STEPS TO THE 10 MORE, MORE THAN ANYTHING ELSE.

THAT'S WHAT THAT WAS FOR SUPPLIES.

SO THAT'S JUST YOUR OFFICE SUPPLIES.

THEY WENT UP ABOUT 117,000, WHICH IS NOT VERY MUCH.

SO, UM, SO THAT DIDN'T PLAY A BIG PART, BUT OUR BIGGEST INCREASE WAS 65 MILLION IN CAPITAL IMPROVEMENT OR CAPITAL OUTLAY.

AND IT BASICALLY, WE HAD, UM, BIG PROJECTS.

SO CITY HALL WAS 44 MILLION.

THERE WAS KICKING BIRD CLUBHOUSE, PROBABLY NOT GONNA SAY THE RIGHT AMOUNTS, BUT THAT WAS AN ADDITIONAL LIKE 2 MILLION OR SO THE POLICE, UH, LAKE STATION STEVENSON PARK IMPROVEMENTS, WHICH OPENED ABOUT A YEAR AGO.

UM, AND THEN THE, SO IN THE SOCCER COMPLEX WE DID A PRETTY, PRETTY GOOD SIZE IMPROVEMENT TO THAT.

AND THEN THE REST WERE OUT OF OTHER CITY FUND CITY FUNDS LIKE GOLF, CITYLINK, THAT TYPE THING.

BUT THE MAJOR 65 MILLION WAS FROM CIP PROJECTS.

UM, AND THEN DEBT SERVICE WENT UP A LITTLE BIT BECAUSE WE HAD, WE'VE BEEN TAKING ON A LITTLE MORE DEBT.

AND THEN THE WHOLESALE POWER CHARGE, I PUT THIS IN THERE 'CAUSE IT'S SO VOLATILE AND IT CAUSED A $9.8 MILLION INCREASE BETWEEN 23 AND 24.

SO ALL OF THAT TOGETHER, THE 65 MILLION AND THE 10 MILLION FOR, UH, FUEL COST IS THE MAJOR REASON FOR THE 92.

THE, UM, SO THE NEXT, WHEN WE DROPPED 34 MILLION, BASICALLY PERSONNEL DID GO UP.

IT'S A, IT'S A FUNCTION.

PERSONNEL WENT UP ABOUT 11 MILLION AND WE HAD SOME CATCH UPS AND THE STEPS REALLY TOOK EFFECT FOR A FULL YEAR.

WE ALSO HAD INCREASE IN SUPPLIES OF ABOUT A MILLION, JUST COSTS.

IT WAS INFLATION, INFLATION IN TARIFFS.

AND THEN AGAIN, THE BIGGEST DRIVER FOR 32 MILLION GOING DOWN IS WE HAD ABOUT A $48 MILLION REDUCTION IN OUR CIP.

AND THAT'S COMPARING.

SO EVEN THOUGH A PROJECT MAY NOT BE DONE, YOU KNOW, WE'LL BUDGET IT ONE YEAR AND YOU DON'T BUDGET IT AGAIN.

THAT ALL HAPPENS THROUGH THE ENCUMBRANCE PROCESS.

SO IF A PROJECT ISN'T FINISHED, YOU HAVE YOUR BASE BUDGET, WHICH IS WHAT YOU'RE DOING RIGHT NOW, BUT WHATEVER'S NOT FINISHED ON A CAPITAL PROJECT WILL BE REEN.

IT'S ROLLED, THE ENCUMBRANCE IS ROLLED, SO IT'LL INCREASE YOUR BUDGET.

BUT WE ALWAYS TRY TO TALK ABOUT OUR BASE BUDGET 'CAUSE THAT WAY YOU DON'T GET, OH, I HAVE 44 MILLION HERE FOR CITY COMPLEX, BUT NOW I STILL HAVE 30 MILLION TO SPEND IN THE NEXT YEAR BECAUSE IT WASN'T FINISHED.

SO THIS IS A WAY TO KEEP APPLES, APPLES TO APPLES.

UM, AND THEN, LET'S SEE, WHAT ELSE DID WE HAVE THERE? WE HAD A LITTLE BIT OF DEBT SERVICE INCREASE.

AGAIN, 2.5 MILLION WHOLESALE WHOLESALE POWER WENT DOWN 4.3 FROM HERE TO HERE.

SO THAT WAS A GOOD THING.

AND, UM, SO THAT ALL THAT TOLL US UP TO ABOUT 34 MILLION REDUCTION AND BASICALLY IT'S CAPITAL AGAIN.

AND THEN THE DIFFERENCE BETWEEN 25 PROJECTED AND 26 BUDGET IS ABOUT ANOTHER 40 MILLION IN REDUCTION.

AND THAT'S BASICALLY OUR PERSONNEL WENT UP AGAIN, UM, ABOUT 3.9 MILLION, BUT IT'S, IT'S DUE TO THE STEPS, ALL THE STEPS INCREASE.

SO YOU WOULD EXPECT THAT YOUR PAYROLL'S GONNA GO UP BECAUSE WE HAVE A STANDARD 4.6% INCREASE EVERY YEAR NOW, SO YOU CAN SEE IT HAPPENING.

UM, ONE MORE TIME.

WE, SO OUR STEP INCREASES WHEN WE REDUCED IT FROM 17 STEPS DOWN TO 10, THE ANNUAL RAISE WENT FROM ABOUT 2.5% TO 4.6.

SO BASICALLY IT DOUBLED IT.

AND SO YOU WOULD, YOU WOULD EXPECT TO SEE PAYROLL COSTS GO UP AND YOU KNOW, AND WE'RE GROWING STILL.

WE'RE STILL ADDING STAFF.

SO, AND THAT'S NON-UTILITY, NON UM, PUBLIC SERVE, PUBLIC SAFETY.

SO THAT'S YOUR CIVIL, UH, EMPLOYEES SUPPLIES.

AGAIN, ECONOMY AND INFLATION

[00:30:01]

UM, SERVICES THE SAME THING.

AND I'VE ACTUALLY HAD THIS IN MY DEPARTMENT.

WE'RE JUST SEEING CONSULTANTS, EVERYBODY'S FIGHTING THE INFLATION AND SO FORTH, SO THEY'RE INCREASING THEIR FEES.

THE BIG DRIVER AGAIN THOUGH IS CAPITAL IMPROVEMENTS, CREASING THEIR FEES BECAUSE THEY'RE BETTER AT THEIR WORK OR BECAUSE THEY CAN JUST INCREASE IT COSTS MORE TO HIRE STAFF.

I MEAN, REALLY.

AND UM, YEAH, I, AND I CAN GIVE YOU AN EXAMPLE.

I MEAN EVEN OUR, OUR CONSULTANTS WERE SEEING THAT AND NOBODY WANTS TO DO IT, BUT WE EVEN HAD TO DO IT.

WE HAD A MARKET ADJUSTMENT, YOU KNOW, A COUPLE YEARS AGO TO STAY COMPETITIVE AND UM, I THINK IT'S JUST EVERYWHERE.

YEP.

SO THEN WE HAD ABOUT A ALMOST A $60 MILLION DECREASE IN, UH, CAPITAL OUTLAY.

AND SEVERAL PROJECTS ARE, ARE FINISHING UP THIS YEAR.

SO YOU HAVE AC CAPITAL OR THE SOCCER FIELDS, THE CITY HALL'S DONE.

WE'RE STARTING A NEW, THE Y , UH, YMCA LIBRARY.

BUT THE NET EFFECT OF ALL OF THOSE WAS UH, A REDUCTION OF ABOUT 60 MILLION.

AND BASICALLY PARK PROJECTS ARE DOWN ABOUT 20 MILLION IN STREETS ARE DOWN ABOUT NINE COMMUNITY, DOWNTOWN COMMUNITY UH, DEVELOPMENT WAS DOWN ABOUT 30.

SO THAT'S REALLY WHERE IT'S COMING FROM.

AND THEN, UM, WE DID HAVE, WE HAVE SOME NEW DEBT IN 25, SO THAT'S CAUSING APPROXIMATELY 9 MILLION MORE IN DEBT SERVICE.

AND THEN ONCE AGAIN, THE WHOLESALE POWER WAS ALMOST FLAT AT 300,000 INCREASE AND IT'S JUST ALL MARKET DRIVEN ON PRICES.

SO THIS REALLY JUST RECAPS WHAT I WAS JUST TALKING ABOUT.

BUT UM, SO YOU CAN SEE AS WE GO.

SO I JUST DID THREE SLIDES.

THIS IS 23 TO 24 AND YOU CAN SEE THE, THE BIG DRIVER IS CAPITAL FUND PROJECTS.

I JUST COMMENTED IT THAT OUR, THE, THE CAPITAL OUTLAY WENT UP 65 MILLION AND YOU'RE SEEING 70 HERE.

AND THAT'S BECAUSE THIS IS THE WHOLE FUND.

SO THAT HAS ALL THE PERSONNEL COSTS AND EVERYTHING ELSE IN IT.

BUT BASICALLY YOU CAN SEE THAT IT'S BECAUSE OF THE CAPITAL PROJECTS THAT OUR EXPENSES ARE GOING UP.

AND SAME THING ON 24 TO 25, IT'S DRIVEN BY THE CAPITAL IMPROVEMENT, UH, CAPITAL OUTLAY.

AND THEN THE SAME THING ON 25 TO 26, WE WE'RE JUST SEEING THERE'S THAT 54 MILLION OR 53 MILLION WE WERE JUST TALKING ABOUT.

SO IT'S JUST, IT'S REALLY DRIVEN BY CAPITAL PROJECTS.

OKAY.

SO NOW WE DID A BUDGET TO ACTUAL REVENUE RIGHT NOW, AND ONCE AGAIN, THIS IS PROJECTED REVENUE THROUGH THE END OF THE YEAR.

IT'S ABOUT A $30 MILLION INCREASE.

AND YOU CAN SEE RIGHT HERE THERE'S LIKE 28 MILLION OR 22 MILLION.

THIS IS OUR CHARGES FOR SERVICES.

THE MAIN DRIVER OF THAT IS UTILITIES.

IT'S NOT ALL UTILITIES.

THERE ARE THINGS LIKE CURB CUT FEES OR INSPECTIONS, THAT KIND OF THING ALSO ARE IN HERE.

BUT THE MAIN DRIVER ARE UTILITIES.

SO JUST PUT THIS TOGETHER SO YOU CAN KIND OF SEE WHERE IT'S FALLEN OUT.

AND AS EXPECTED, OUR TAXES ARE DOWN SO WE KNEW THAT EVERYTHING ELSE IS UP A LITTLE BIT.

THE MAIN DRIVER THOUGH IS THIS 22 MILLION.

AND IT IS BECAUSE WE'VE ALREADY HIT WHAT WE BUDGETED FOR OUR REVENUE AT THIRD QUARTER.

SO WE STILL HAVE THREE MONTHS OF COLLECTION TO GO.

AND THIS IS THROUGH THE END OF THE YEAR.

AND IF YOU HAVE ANY QUESTIONS, IF YOU'D LIKE, UH, MR. KNIFING OR MR. UH FISHER TO COME UP AND EXPLAIN ANY OF THAT, WE'RE, I'M WELCOME.

THEY CAN COME UP TOO.

BUT IT'S REALLY, WE HAD A WARM WINTER WHERE WE WATERED AND IT TURNED OUR AC ON AND NOW WE'VE GOT RAIN.

SO THIS WAS BEFORE THE RAIN, SO NOW WE, WE COULD EXPECT OUR WATER USAGE TO GO DOWN FOR A LITTLE BIT, BUT YOU JUST NEVER KNOW IT.

SO IT'S TRULY WEATHER DRIVEN.

AND THEN INTEREST ONCE AGAIN, IT'S JUST WE'VE GOT FUNDS EARNING INTEREST FROM OUR LOAN, OUR LOANS THAT ARE SITTING IN CASH UNTIL WE SPEND IT.

YES.

UH, THIS TITLE SAYS FY 2324.

IS IT ACTUALLY 24 25? DID I SAY? OH MY GOSH.

YOU ARE GOING TO, YES, I'M SORRY.

OKAY.

AND SO IT IS, I WAS JUST TRYING TO CLARIFY.

SO, SO WE'VE HAD MORE REVENUE THAN PLANNED TO THE TUNE OF ABOUT 30 MILLION, THE MAJORITY OF WHICH WAS DRIVEN BY RATE VERSUS USAGE VARIANCE BASICALLY IN THE UTILITY.

PRIMARILY IN THE UTILITY SIDE, YES.

OKAY.

AND INTEREST.

THOSE ARE THE BIG DRIVERS.

OKAY.

AND INTEREST.

OKAY.

AND YOU KNOW, WHEN WE WERE TALKING ABOUT THE BUDGET TO EVEN, WE BUDGET MORE CONSERVATIVELY EVEN IN OUR UTILITIES THAN WHAT WE MIGHT HAVE SEEN.

BUT UM, THOSE GUYS ARE PRETTY GOOD IN EPWA

[00:35:01]

THEY'RE WAY AHEAD, PLANNING WAY OUT.

THEY KNOW THEIR DEBT SERVICE OUT FOR THE WHOLE LIFE OF A LOAN.

AND SO, UM, AND THEY KNOW THEIR INDUSTRY SO THEY DO, THEY DO A GOOD JOB.

UM, OKAY, SO HERE'S BUDGET TO ACTUAL ON EXPENSE AND THEN, SORRY KATHY, SO THE NO, THAT'S OKAY.

THE INTEREST INCREASE, THAT'S INTEREST REVENUE.

SO THAT MEANS WE MADE A MILLION MORE THAN PLANNED ON OUR INVESTMENTS.

YOU, YOU SAID INTEREST? YEAH.

YEAH, IT'S, AND IT'S ALSO BECAUSE WE HAVE MORE CASH SITTING IN THE BANK AND SO WE'RE JUST EARNING MORE AND THE RATES ARE REALLY STILL GOOD.

OKAY.

UM, THE WAY WE INVEST THOSE FUNDS TOO IS WE TRY TO, WE KEEP AN OPERATING CASH ALL EVERY DAY.

WE LOOK AT IT AT OUR CASH FLOW AND THEN WE INVEST ANY EXCESS AND WE GO OUT TO BID EVERY MONDAY AND WE TAKE THE BEST BIDDER AND UM, SOMETIMES, YOU KNOW, WE'LL HAVE ANYTHING FROM A THREE MONTH INVESTMENT TO A FIVE YEAR INVESTMENT.

AND I THINK PRETTY MUCH, SO COVID, LET'S SEE, THAT WAS 21 ISH, 20 AND HERE WE ARE IN 25 STILL.

SO MOST EVERYTHING HAS MATURED NOW AND BEEN REINVESTED AT A BETTER RATE THAN 0.25%.

BUT, UM, IT REALLY, IT REALLY MAKES A DIFFERENCE.

AND WHEN YOU LOOK AT, UM, THE WAY WE ALLOCATE THAT TOO IS BASED ON HOW MUCH EACH DEPARTMENT HAS AS A CLAIM ON CASH.

SO IF WATER JUST DREW, YOU KNOW, $200 MILLION AND THEY HAVEN'T SPENT IT YET, THEY'RE GONNA HAVE A HIGHER CLAIM ON CASH, GET A LITTLE BIT MORE OF THE INTEREST, BUT IT'S JUST A BIG INTEREST POOL.

WE HAVE ONE HUGE ACCOUNT.

I JUST WANTED TO POINT IT OUT BECAUSE PEOPLE WHO DON'T PAY ATTENTION IN THE DETAILS OF THESE BUDGET BOOKS MIGHT NOT NOTICE THAT THERE WAS A BIG JUMP IN INTEREST INCOME THE LAST COUPLE YEARS BECAUSE OF SMART DECISIONS THAT I DON'T KNOW, FINANCE COMMITTEE AND STAFF HAVE MADE ON THAT INVESTMENT KIND OF POLICY.

AND SO THAT'S RESULTED IN A LOT OF, INSTEAD OF CASH SITTING IN THE BANK, A LOT MORE INTEREST REVENUE THAT THE CITY CAN USE FOR OPERATIONS.

SO KUDOS ON THAT.

THANK YOU.

AND THAT IS DEFINITELY OUR TREASURY DEPARTMENT.

SO OUR TREASURER IS HERE AND WE THANK HIM.

AND THEN WE ALSO HAVE A TREASURY, AN TREASURY ANALYST THAT WATCHES THAT STUFF EVERY DAY.

SO YEAH, THEY'VE DONE A GREAT JOB.

UM, OKAY.

ARE WE READY TO MOVE ON TO EXPENSES? OKAY, SO HERE, UM, ONCE AGAIN, MY NEXT SLIDE REALLY SHOWS WHAT IT IS, BUT THERE'S A $200 MILLION CHANGE.

AND AGAIN, YOU CAN SEE IT'S THE MAJOR DRIVER IS UTILITIES.

AND I'LL JUST GO ON TO THE NEXT SLIDE 'CAUSE IT EXPLAINS IT BETTER.

BUT WE HAD A, UM, $209 MILLION NEW PROJECT COMING UP.

WE HAVE A NEW LOAN FOR IT.

AND SO TYPICALLY WHAT HAPPENS ON, ON THE EPWA TYPE LOANS IS WE'LL DRAW IT DOWN AND THEN WE BUDGET IT.

SO YOU DON'T SEE IT LIKE NOW BECAUSE WE'RE NEVER SURE WHERE WE'RE GONNA BE ON THE PROJECT, THAT KIND OF THING.

BUT CHRIS KNIFING WILL COME TO THE COUNCIL EVERY TIME HE, HE DRAWS DOWN A LARGE AMOUNT, GET COUNCIL APPROVAL AND THEN HE'LL BUDGET IT AT THAT TIME.

AND THEN THESE ARE HUGE PROJECTS, SO THEY'RE USUALLY NOT DONE IN A YEAR AND IT'LL ROLL OVER.

BUT ONCE WE BUDGET THAT STUFF, TYPICALLY WE WILL ENCUMBER IT, GET A PURCHASE ORDER FOR IT, AND THEN IF IT'S NOT DONE, IF THE PROJECT'S NOT DONE, IT ROLLS TO THE NEXT YEAR.

SO IS, UM, PICKY, BUT WHEN WE'RE MESSAGING AND WE'RE LOOKING AT THESE KIND OF THINGS, I HATE THAT TERM GENERAL GOVERNMENT.

THAT MEANS EVERYTHING.

IT DOESN'T MEAN ANYTHING.

I MEAN, CAN WE CALL IT G AND A? CAN WE CALL IT GOVERNMENTAL ADMINISTRATION? I MEAN, SO I'LL MAKE A CONFESSION ON THIS ONE.

WE ARE WORKING IN MY DEPARTMENT ON MUCH BETTER REPORTING AND THIS, THIS WAS THE ONLY WAY I COULD ACTUALLY GET A COMPARISON YEAR TO YEAR.

'CAUSE IT'S HOW IT'S PRESENTED.

YEAH.

AND SO I AM TRYING TO MOVE TOWARD, WHICH I THINK I MIGHT HAVE IT ON THE NEXT SLIDE, WHERE IT'S REALLY SPLIT BETWEEN PERSONNEL SUPPLIES.

I PREFER THAT.

I DON'T KNOW IF YOU GUYS DON'T, I CAN DO IT BOTH WAYS, BUT YOU'RE RIGHT, IT'S KIND OF HARD.

GENERAL GOVERNMENT IS HONESTLY.

WELL, YEAH, YOU'RE RIGHT.

IT'S, IT'S DIFFICULT TO SEE EXACTLY WHAT'S GOING ON HERE.

WELL IT'S LIKE, IT'S LIKE YOUR OLD OIL AND GAS DAYS, YOU ALWAYS HAD A LINE ITEM CALLED OTHER.

YES.

I HATE STICKING STUFF IN OTHER 'CAUSE SOMEBODY SOMEWHERE DOESN'T KNOW WHAT OTHER IS.

YOU KNOW, I MEAN, YOU EVEN HAVE A HARD TIME REMEMBERING WHAT THAT IS.

WELL, AND DON'T FORGET, THERE'S AN OTHER UP THERE AS WELL.

OH, .

GOOD POINT.

IT'S REALLY SMALL THOUGH.

YEAH.

BUT IT'S THERE.

AND, AND YOU KNOW, AND THAT'S SOMETHING TOO THAT WE CERTAINLY CAN WORK ON AND NOT HAVE ANY OTHER, 'CAUSE IT'S, THERE ARE TRULY THINGS ASSOCIATED WITH

[00:40:01]

AND IT MIGHT BE A ONE TIME THING TOO, BUT, BUT NOTE TAKEN WE WILL, WE WILL DEFINITELY WORK ON THAT.

SO, UM, CAN I, CAN I POINT OUT A FEW THINGS HERE TOO? DID THAT, SORRY.

SO I THINK THIS ONE'S ALSO 24, 25.

I KNOW, I SEE THAT FOR ANYBODY WATCHING OLD.

DANG, YOU CAUGHT ME.

I IT'S SORRY.

YEAH, SORRY.

NO, THAT SHOULD BE 24, 25.

SO, UM, I'VE JUST BEEN DIGGING INTO THIS STUFF A LOT.

THINGS THAT I DIDN'T REALLY UNDERSTAND THAT I UNDERSTAND A LITTLE BETTER NOW.

I JUST WANNA POINT OUT IN CASE ANYBODY'S, UM, DORKING OUT ON THE NUMBERS LIKE I WAS WHEN I WAS LEARNING THIS STUFF.

SO, SO THIS SLIDE SAYS WE SPENT 252 MORE, MILLION MORE THAN WE PLANNED IN THE, OVER THE LAST YEAR, THE MAJORITY OF WHICH WAS, UH, WATER INFRASTRUCTURE BASICALLY LOANS.

THE, THE LOAN NUMBERS IN HERE SKEW EVERYTHING.

SO IT'S A LITTLE BIT HARD TO UNDERSTAND.

LIKE WHEN I WAS FIRST LOOKING AT THESE, IT WASN'T CLEAR BETWEEN CIP LOANS AND WATER LOANS AND ALL THAT.

UM, BUT IF YOU SEE BIG JUMPS, IT'S ESSENTIALLY LOAN OR YOU KNOW, IN MOST CASES DEBT DOLLARS COMING IN OR OUT.

AND IT'S SORT OF LIKE A, TO ME IT'S LIKE A HOME EQUITY LINE OF CREDIT OR SOMETHING LIKE WITH WATER LOANS ESPECIALLY, YOU DON'T KNOW WHAT YOU'RE GONNA DRAW UNTIL YOU GO DRAW IT AND THEN IT'S PART OF YOUR BUDGET, RIGHT? SO THAT'S KIND OF HOW I EQUATE HOW, HOW THAT GOES.

I ALSO WANTED TO POINT OUT THAT STREETS AND HIGHWAYS WERE 11 MILLION MORE THAN PLANNED HERE.

AND SO I THINK THAT'S A POSITIVE THING THAT WE WERE ABLE TO PUT A LITTLE MORE TOWARDS THAT THAN PLANNED.

I THINK THAT'S GOOD.

YES.

UM, WOULD THAT BE A KEITH QUESTION? NO.

OKAY.

I'LL GET A LITTLE MORE.

YEAH.

OKAY, THANKS.

WELL, AND ACTUALLY, AND THIS IS SOMETHING THAT IS CONFUSING, I THINK ABOUT THE BUDGET BOOK.

AND WHEN YOU LOOK AT IT THIS WAY, BECAUSE GENERAL, ALL THOSE THINGS ARE ACTUALLY NOT, ARE NOT A GROUP OF FUNDS.

IT CAN BE SEVERAL OF THEM.

SO STREETS AND HIGHWAYS IS ACTUALLY 4.6 OUT OF GENERAL FUND, 218,000 OUT OF SPECIAL REVENUE FUNDS, 31 MILLION OUT CAPITAL IMPROVEMENT, I'M SORRY.

YEAH.

YEP.

ON THE RIGHT LINE.

31 MILLION, UM, 6.8 MILLION OUT OF INTERNAL SERVICE FUNDS.

SO IT'S GOT, IT'S IT'S IT'S FOCUSED MORE ON THE TYPE OF EXPENSE THAT IT IS AND IT GETS, SO IT'S EVERY FUND ADDED UP IN THOSE CATEGORIES.

MM-HMM .

I MEAN, DO YOU, DO YOU PREFER LIKE SEEING THE PERSONNEL AND THAT TYPE OF THING? IS THAT BETTER OR WOULD YOU LIKE IT BOTH WAYS? I'M NOT SAYING CHANGE ANYTHING, I JUST WANTED TO POINT OUT WE WERE ABLE TO PUT A LITTLE MORE TOWARDS THAT THAN PLAN.

I THINK IT WAS PRIMARILY CIP, BUT UM, YEAH.

UM, IT'S A GOOD NEWS THING.

STREETS AND HIGHWAYS.

YES.

31.4 MILLION ON, UH, OUTTA CAPITAL IMPROVEMENTS.

WELL I THINK, AND YOU KNOW, I KNOW YOU PROBABLY KNOW THIS TOO, BUT IF ANYBODY EVER IS CURIOUS ABOUT WHAT WE'RE SPENDING ALL THIS ON, THEY, WE, OUR WEBSITE'S PRETTY GOOD ABOUT ALL THE PROJECTS THAT ARE IN PLACE.

AND SO YOU CAN SEE IT, BUT THERE'S A LOT OF INTERSECTIONS AND STREET OVERLAYS, THAT KIND OF THING.

AND THAT'S WHAT THAT IS.

SO VARIANCE 2 52, 82 0.9% IN WATER INFRASTRUCTURE AT 2 0 9, AND I THINK YOU HAVE SOME SLIDES LATER ON THAT WE'LL NEED TO DIG INTO AS TO HOW THAT REVENUE'S, HOW REVENUE'S PROJECTED TO GO TOWARD THAT.

IN, IN, UH, IN, IN, UH, WATER UHHUH , THAT 2 0 9, WHICH IS SO HOW REVENUE'S PROJECTED IN WATER IS THAT WAS YOUR YEAH.

HOW THAT'S GOING TO, HOW THAT'S PLANNED TO BE PAID.

PAID DOWN.

PAID OFF.

OH, OKAY.

YES.

UM, YOU DON'T REALLY SEE IT AS MUCH IN THE BUDGET PRESENTATION BUDGET BOOK, BUT CHRIS KNIFING HAS A REALLY GREAT SYSTEM.

HE PROJECTS IT OUT.

HE WILL CHANGE THAT EVEN WHEN HE'S, AS HE'S PULLING IT DOWN.

SO IT'S NOT LIKE JUST AN ESTIMATE FOR A YEAR AND OH, I THINK I'M GONNA SPEND THIS MUCH.

HE LITERALLY TRACKS IT EVERY TIME HE PULLS MONEY DOWN AND THEN CHANGES IT.

SO IT'S VERY, VERY ACCURATE.

WELL, I I JUST, WHEN WHEN WE'RE WE, WE KNOW WE'RE OFF AS SOON AS THE BUDGET'S RELEASED.

OKAY.

IT'S JUST A QUESTION OF HOW MUCH AND HOW MUCH THEN BECOMES WHERE.

AND SO THIS IS AN INDICATION OF WHERE, AND THAT'S FINE IF WE'RE ALSO AWARE ON THE OTHER SIDE OF THINGS AND HOW THAT GETS PAID.

RIGHT.

AND ONE THING TO KEEP IN MIND TOO, TO, SO WHAT WE'LL DO IS WHEN WE PULL THOSE FUNDS AND IT'S IN THE REVENUE SIDE, IT GETS, IT GETS BUDGETED THEN 'CAUSE THEY'LL COME TO COUNCIL.

AND SO YOU MIGHT HAVE $209 MILLION SITTING READY TO SPEND, WE GET AT THE END OF THE YEAR AND WE'VE ONLY SPENT 109, BUT ALL OF THAT EXPENSE WILL HAVE BEEN ENCUMBERED.

AND SO NOW WHAT HAPPENS

[00:45:01]

AND THEN LET'S JUST SAY WE CAN SPEND THAT OTHER A HUNDRED MILLION THE FOLLOWING YEAR.

WELL THE ENCUMBRANCE ROLE ADDS THAT TO YOUR BUDGET.

SO IT'S, IT EQUALS OUT, IT'S JUST OVER TWO YEARS INSTEAD OF ONE.

BUT YOU'RE RIGHT, SO IT LOOKS LIKE, OH, 209 MILLION CHANCES ARE WE WON'T GET THAT DONE IN ONE YEAR.

BUT YOU BUDGET IT CURRENTLY WE BUDGET THAT BECAUSE IT ENCUMBERS EVERYTHING AND IT'S A, IT'S A PROJECT THAT YOU WANT IT ENCUMBERED.

SO BEFORE YOU GO ON KATHY, UM, WHEN I LOOK AT SPECIFICALLY THIS PAGE, IT'S GOOD INFORMATION, BUT I MEAN, THE TRUTH IS THERE'S NO CONTEXT BECAUSE WE DON'T KNOW HOW MUCH WAS TOTALLY SPENT BY THOSE ACTIVITIES.

RIGHT.

AND THAT'S WHERE, THAT'S WHERE MY PROBLEM WITH THE WAY WE'RE DOING IT COMES IN JUST LIKE YOU'RE SAYING BECAUSE WE GO OUT THERE AND WE ENCUMBER THE ENTIRE PROJECT ON DAY ONE.

ARE YOU TELLING ME WE DON'T HAVE TIMELINES FOR THESE PROJECTS? WE DO.

IF WE DO HAVE A TIMELINE ON THE PROJECT AND WHAT THE ANTICIPATED IS, WHY ARE WE NOT BUDGETING THE ANTICIPATED WITH A, WITH A CONTINGENCY ON IT SO THAT WE DON'T GO THROUGH THAT, THAT PAIN OF HAVING TO KEEP COMING BACK TO THE COUNCIL EVERY TIME WE DO SOMETHING.