WEBVTT 00:00:00.482 --> 00:00:07.726 - All right. Um, I'm going to call this meeting of the fiscal committee here on Friday, October 30th to 00:00:07.726 --> 00:00:15.254 - order, uh, would be Stossburg district three and Sherry. It's about people on Smith, district one. That'd 00:00:15.254 --> 00:00:22.284 - be mayor. Jeff McKim, say controller. Sophia McDowell, chief deputy clerk. There's an online Dave, 00:00:22.284 --> 00:00:25.054 - Dave Rallo, uh, council district four. 00:00:26.594 --> 00:00:36.058 - So we have a forum, and today our meeting is all about the controller. We have updates for them on third 00:00:36.058 --> 00:00:45.161 - quarter, on bonds and debt, on VCFR, on the audit, and then public comment, notes about speculative, 00:00:45.161 --> 00:00:53.363 - and then we'll adjourn. So unless anybody has any objections or concerns about the agenda, 00:00:53.363 --> 00:00:55.166 - it's all you, Jeff. 00:00:55.458 --> 00:01:03.081 - Thank you very much. I'm not sure I would characterize it as all about the recorder, or about the controller 00:01:03.081 --> 00:01:10.354 - rather, but it was definitely in that. I will kind of convey to you just a bunch of topics that I think 00:01:10.354 --> 00:01:17.697 - are of interest at this point of the year related to the kind of where we are with respect to the budget 00:01:17.697 --> 00:01:22.942 - and third quarter numbers, and then we'll move on to talk about city debt. 00:01:23.234 --> 00:01:29.713 - But just, first of all, let me kind of give everybody an understanding of where we are with respect 00:01:29.713 --> 00:01:36.580 - to the budget. As you know, the council has adopted the 2027 budget, and the adopted figures were entered 00:01:36.580 --> 00:01:43.318 - into Gateway. The budget is now being reviewed by the Department of Local Government and Finance, which 00:01:43.318 --> 00:01:49.796 - is the next stage of the game. But we will not receive actual budget approval by the DLGF until the 00:01:49.796 --> 00:01:51.934 - disposition of the 2026 GO bond. 00:01:52.098 --> 00:01:58.925 - So after that's over, then we'll be able to, however it goes, we'll be able to get our final budget 00:01:58.925 --> 00:02:05.751 - approval. All of the council members, as well as the controller, the clerk, and the mayor are going 00:02:05.751 --> 00:02:12.647 - to receive what's known as 1782 statements from the Department of Local Government Finance. Have you 00:02:12.647 --> 00:02:15.582 - all gotten those in the past? Thanks. Yes. 00:02:15.714 --> 00:02:26.378 - Yeah. Okay. Yeah. So you'll receive those in email that summarize all of the budgets and tax rates for 00:02:26.378 --> 00:02:36.836 - DLGF controlled funds. And this is the 1782 statement is a very important opportunity to review them 00:02:36.836 --> 00:02:38.078 - for errors. 00:02:38.338 --> 00:02:46.966 - So basically, we have 10 days to be able to review them to make sure that we're not seeing anything 00:02:46.966 --> 00:02:55.594 - wrong, that the budgets and tax rates are what you adopted, and that there aren't any glitches. The 00:02:55.594 --> 00:02:59.390 - department did not misunderstand something. 00:02:59.650 --> 00:03:05.622 - I don't know how that has gone and this is my first time I'm going through this at the city. 00:03:05.622 --> 00:03:12.557 - In the county, the county council used to review those 1782 statements pretty carefully and have definitely 00:03:12.557 --> 00:03:18.979 - discovered errors and collections that need to be made. We'll see what happens. The annual year-end 00:03:18.979 --> 00:03:25.528 - additional appropriation and transfer ordinance, which right now is at board 2026-05, is scheduled to 00:03:25.528 --> 00:03:27.198 - be heard on December 2nd. 00:03:27.394 --> 00:03:35.579 - And that ordinance is going to include any additional appropriation requests and inter-category transfer 00:03:35.579 --> 00:03:43.920 - requests. So just so everybody remembers and for the public's benefit, departments internally can transfer 00:03:43.920 --> 00:03:51.949 - within expense categories. So they can transfer, say, from a fuel line to a supply, a different supply 00:03:51.949 --> 00:03:54.366 - line within the same category. 00:03:54.498 --> 00:04:02.180 - but inter category transfers need to be approved by the city council. So we have gathered all the information 00:04:02.180 --> 00:04:09.442 - from departments from their year end requests. And so far we're not seeing any additional appropriation 00:04:09.442 --> 00:04:16.286 - requests. Everything we're seeing is just a transfer from one category to another, which is good. 00:04:16.546 --> 00:04:22.805 - And then finally at the Council's last meeting of the year on December 16, the Office of the Controller 00:04:22.805 --> 00:04:28.944 - is going to provide a brief report down here into the record, the appropriations that are going to be 00:04:28.944 --> 00:04:30.750 - encumbered from 2026 to 2027. 00:04:30.946 --> 00:04:37.229 - You know, encumbrance is allowed when there is a specific contract or purchase order. Salaries, 00:04:37.229 --> 00:04:44.298 - for example, cannot be encumbered, but capital purchases and services that have a contract can be. Entering 00:04:44.298 --> 00:04:50.973 - these encumbrances into the record at the last State Council meeting of the year is a new process for 00:04:50.973 --> 00:04:57.780 - the City, but it is strongly recommended by the State Board of the Council for Transparency. So anybody 00:04:57.780 --> 00:04:59.678 - have any questions about the 00:05:00.098 --> 00:05:07.803 - budget follow-up. So just to make sure I understand, so December 16th council meeting, we won't be asked 00:05:07.803 --> 00:05:15.214 - to approve a listed conference, is that a carryover? No, it is just going to be entered as a report. 00:05:15.214 --> 00:05:22.772 - That's the recommendation from state board of mechanics. It's just entered into the record at the last 00:05:22.772 --> 00:05:28.862 - meeting of city council. And December 2nd is the meeting that we're going to have. 00:05:29.634 --> 00:05:38.751 - the last end of the year transfer of affiliations. All right. So I just want to kind of go through a 00:05:38.751 --> 00:05:48.499 - couple of topics that I have that are of interest, I think, in the third quarter numbers that were included 00:05:48.499 --> 00:05:54.366 - in the packets. When they get converted to PDF, I never know how 00:05:54.466 --> 00:06:02.132 - how readable they actually are in PDF. Usually they're not very readable. In the folder, we have accessible 00:06:02.132 --> 00:06:09.230 - spreadsheets and documents that I think provide them in a clearer way. But there's a lot of numbers 00:06:09.230 --> 00:06:16.540 - here. I'm just going to call attention to a couple of things that I think are of interest. You all can 00:06:16.540 --> 00:06:21.438 - ask questions about things that you think are of interest. So first. 00:06:25.122 --> 00:06:49.406 - Yeah. Thank you. How's that? Is that better? Okay, I think that'll be good. 00:06:50.498 --> 00:06:58.972 - So these, I provided you all of the fund balances since I provided them for all funds and then a separate 00:06:58.972 --> 00:07:07.606 - tab for kind of more frequently requested fund balances that, and I provided that just January 1st balances 00:07:07.606 --> 00:07:15.681 - from the beginning of each year. And then also the September 30th of this year balance. And there's. 00:07:15.681 --> 00:07:19.998 - There's an FYI in the packet that starts at page 100. 00:07:21.058 --> 00:07:29.369 - Oh, they must have put the bond presentation first. All right, great. And so there's not a whole lot 00:07:29.369 --> 00:07:37.927 - to note here in the fund balances. Most things look normal. I just wanted to call attention to a couple 00:07:37.927 --> 00:07:46.485 - of things. The funds that receive property taxes, so in particular in this case, the General Fund Motor 00:07:46.485 --> 00:07:50.846 - Vehicle on Highway and Parks and Recreation General, 00:07:50.946 --> 00:07:57.579 - They tend to be because property taxes only received twice a year it's received in June and December. 00:07:57.579 --> 00:08:04.408 - That in around you know the fall so far at the end of the third quarter, they tend to be in a relatively 00:08:04.408 --> 00:08:11.171 - low point. Because that second settlement to property taxes hasn't yet. So, you know, we're seeing that 00:08:11.171 --> 00:08:16.894 - the general fund has has dropped since it's dropped about you know over $10 million but 00:08:17.154 --> 00:08:26.094 - That's because it's kind of at a low point and once the second settlement from property taxes are received, 00:08:26.094 --> 00:08:34.372 - it'll bounce back over with it. So that's generally true with property taxes. The PSAP lift, I know 00:08:34.372 --> 00:08:39.422 - we've just recently discussed the PSAP in the context of the 00:08:40.034 --> 00:08:49.209 - tax rate, but I just wanted to confirm to everybody that all of the transfers from the PSAP balance 00:08:49.209 --> 00:08:58.384 - that is shown here in September 30th includes all of the transfers that were part of your app board 00:08:58.384 --> 00:09:07.742 - in 2025-03 from last year that corrected the commingling of PSLIT and PSAP. So that September balance 00:09:08.002 --> 00:09:15.072 - is essentially after all the corrections. And then the other fund I just wanted to call attention to, 00:09:15.072 --> 00:09:21.587 - just because I get questions about it all the time, is the Housing Development Fund. In some, 00:09:21.587 --> 00:09:28.518 - the DLGF list, it's called the Housing Trust Fund. It's no longer the Housing Trust Fund, but it is 00:09:28.518 --> 00:09:35.518 - what you call the Housing Development Fund, and that's the balance with it. So those are really the, 00:09:35.714 --> 00:09:43.581 - You know, kind of the balances that I don't need to call attention to. Then just some comments on third 00:09:43.581 --> 00:09:51.220 - quarter appropriation and revenue balances. As usual, I provided kind of a detailed spreadsheet. And 00:09:51.220 --> 00:09:58.785 - then also for expenses, I provided a summary spreadsheet that summarizes it by category. And you'll 00:09:58.785 --> 00:10:05.214 - remember that there are four categories, personnel, supplies, services, and capital. 00:10:05.730 --> 00:10:13.522 - Let's see, what I want to call attention to here. And all this data, by the way, is all available through 00:10:13.522 --> 00:10:20.873 - the spreadsheets that are provided on the city's transparency portal. So these are actually rebuilt 00:10:20.873 --> 00:10:28.224 - every single day and made available to anyone who wants to develop pitotapists that are kind of the 00:10:28.224 --> 00:10:35.134 - same way I've done. I did create a separate tab, and presumably there's a separate page here. 00:10:35.234 --> 00:10:41.889 - that for just personnel, because that's always something useful to look at. Where are we at the end 00:10:41.889 --> 00:10:48.677 - of the third quarter in terms of personnel expenditures? And so, you know, we'll see that the general 00:10:48.677 --> 00:10:55.466 - fund remaining personnel expenditures is about 26.53, which means that there'll be some reversions in 00:10:55.466 --> 00:11:02.387 - unspent personnel through vacancies, but by and large, most of that will be spent. That's roughly where 00:11:02.387 --> 00:11:05.182 - you would expect to be after nine months. 00:11:05.346 --> 00:11:12.542 - Um, the, uh, and, and there will be at least one, um, end of the year transfer request that's actually 00:11:12.542 --> 00:11:19.738 - from the city council budget from your category ones to your category threes because of your, uh, kind 00:11:19.738 --> 00:11:26.725 - of work meeting to pay your, uh, interim attorney out of the, uh, out of the services line. So that 00:11:26.725 --> 00:11:33.502 - we will expect to be kind of right on target with some reversions, but not a lot in the general, 00:11:33.986 --> 00:11:44.145 - So this is, I'm sorry, this is spending in category one. This is just category. I'm sorry, I'm not keeping 00:11:44.145 --> 00:11:53.829 - up with the packet. What are the headers here? Oh, sorry. The approved amount, the actual amount, the 00:11:53.829 --> 00:12:03.134 - amount remaining, and the percent remaining. So what? The human resources, what is that? $35,000? 00:12:03.362 --> 00:12:09.782 - Uh, because most of the human resources budget is out of the EDIB fund. This is in the general fund. 00:12:09.782 --> 00:12:16.265 - I don't remember why there's one little piece of HR still in the general fund, but it's not the, it's 00:12:16.265 --> 00:12:22.876 - not the majority. Um, this is on page 47 of the packet. Well, thanks. And we'll say Dave has a question 00:12:22.876 --> 00:12:29.423 - too. Go ahead, Dave. Uh, thanks. Uh, well, there was just a question. I think it's a good one. Um, uh, 00:12:29.423 --> 00:12:31.902 - from the public, um, and it's the, uh, 00:12:32.066 --> 00:12:41.882 - the basis of accounting. So the question is, is it cash plus encumbrances, I guess, or is it, I guess, 00:12:41.882 --> 00:12:51.507 - gap, which is generally accepted accounting principles? What method is used to derive these numbers, 00:12:51.507 --> 00:12:58.654 - Jeff? This is what's called modify and accrual, but essentially it's cash. 00:12:58.850 --> 00:13:06.187 - I mean, what we're talking about here is not fund balances. These are appropriations. So this is how 00:13:06.187 --> 00:13:12.798 - much you have approved versus what has actually been spent against or encumbered. So okay, 00:13:12.798 --> 00:13:20.353 - now I'm understanding the nature of the question. When it says remaining, that is minus anything that's 00:13:20.353 --> 00:13:28.126 - actually been spent or encumbered by that day. Okay, yeah, I think he was referring to the previous chart. 00:13:30.274 --> 00:13:42.103 - The fund balance is true. Okay. Okay. Then we've got a little bit more available salaries. There's still 00:13:42.103 --> 00:13:51.454 - 31% left after nine months. So we'll expect to see some reversions there. And then 00:13:52.354 --> 00:14:01.360 - The other one I just wanted to call attention to that will probably come as no surprise to you is in 00:14:01.360 --> 00:14:10.456 - peace staff lit. We know that staffing has been an issue. And so we're seeing 37%, 37.6% of available 00:14:10.456 --> 00:14:19.552 - salaries have been unspent at the end of the 1990s. So that just kind of matches what we're seeing in 00:14:19.552 --> 00:14:21.246 - terms of finances. 00:14:21.474 --> 00:14:32.781 - Some of these, like the NVH funds, are down to only 12.6% remaining. Are the vehicles, I'm sorry, the 00:14:32.781 --> 00:14:44.198 - salaries that come from the NVH respected, will the rest come from a different fund to cover those for 00:14:44.198 --> 00:14:46.526 - the end of the year? 00:14:46.658 --> 00:14:54.834 - So for MVH restricted, you'll see there's only a small amount of salary that is budgeted out of that 00:14:54.834 --> 00:15:03.333 - fund. And so that will presumably be spent out of the MVH. I mean, it's up to, Public Works has a couple 00:15:03.333 --> 00:15:11.508 - of different funds that they budget personnel out of, but presumably if they run out of money in MVH 00:15:11.508 --> 00:15:15.070 - restricted for personnel, then there'll be, 00:15:15.970 --> 00:15:23.564 - paying the personnel, paying out of straight MVH. Restricted is obviously more restricted than MVH. 00:15:23.564 --> 00:15:31.537 - So they're going to use that and then anything that's not spent out of that. So I don't know the details 00:15:31.537 --> 00:15:39.739 - of that particular situation, but I'm just saying that any personnel that can be paid out of MVH restricted 00:15:39.739 --> 00:15:45.662 - can also just be paid out of MVH. Just one other note in kind of interpreting 00:15:46.146 --> 00:15:53.313 - information here. When you see that the amount spent, so in, say, expenses detail or expenses summary, 00:15:53.313 --> 00:16:00.411 - let's say, you'll see that the actual amount is higher than the approved amount. That means that that 00:16:00.411 --> 00:16:07.647 - generally is going to be one of two things. There's going to have been an intercategory transfer, which 00:16:07.647 --> 00:16:13.214 - hasn't happened yet, or it's going to be an encumbrance from the previous year. 00:16:13.570 --> 00:16:22.080 - So people often wonder, why is the actual amount more than the approved amount? It's because the actual 00:16:22.080 --> 00:16:30.426 - amount is going to include expenses that were encumbered from previous subdivision. And finally, the, 00:16:30.426 --> 00:16:39.181 - well, not finally, sorry, I have a couple more things on this. Let's pause here for just a second, because 00:16:39.181 --> 00:16:43.518 - are there any questions thus far about what Jack has 00:16:43.938 --> 00:16:51.521 - Well, I just want to say we're receiving this the afternoon before the meeting. It doesn't give me enough 00:16:51.521 --> 00:16:58.961 - time to actually read any of this. No, I'm not blaming anybody. I'm just saying. Well, it was my fault. 00:16:58.961 --> 00:17:06.115 - I would have more questions if I had asked. Well, you're welcome to send questions and I can answer 00:17:06.115 --> 00:17:10.622 - them next time or answer them in a way that they can be posted 00:17:11.682 --> 00:17:22.553 - In the minutes of the meeting, so the other thing I want to say is that because we don't have this as 00:17:22.553 --> 00:17:29.694 - a spreadsheet format. There are no headaches to tell us what each. 00:17:29.794 --> 00:17:35.615 - So that has always been, I've mentioned that as an issue every single, every single meeting. I, 00:17:35.615 --> 00:17:41.859 - you know, I don't know what the answer is, but converting these big spreadsheets to a PDF. I mean, I'm 00:17:41.859 --> 00:17:47.922 - not the one who does it, but I, that doesn't seem to be a very effective way of getting information 00:17:47.922 --> 00:17:54.046 - out, especially for a fiscal committee where you're actually looking at the data. I don't know about 00:17:54.046 --> 00:17:58.654 - Sarah, we don't need to do that, but. Well, whoever does convert it to PDF, 00:17:59.042 --> 00:18:15.902 - No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no. 00:18:16.194 --> 00:18:24.258 - Planned admission does that for all of their stuff. And that was an accessibility thing. I think that 00:18:24.258 --> 00:18:32.480 - when we lost our staff, Jake Frank, I guess you can say that. When council lost our staff, we just went 00:18:32.480 --> 00:18:40.623 - back to doing the PDF packets, but other departments are doing this from agendas. That is the standard 00:18:40.623 --> 00:18:46.078 - way going forward. It makes it a lot easier with spreadsheets. Yeah. 00:18:47.234 --> 00:19:17.214 - Yeah. Yeah. Yeah. 00:19:18.370 --> 00:19:25.786 - There you go. I just shared that because it will be a fair price, not in terms of taxes. Yeah, one of 00:19:25.786 --> 00:19:33.058 - the frustrating things I know is that with Google Sheets, if you then export that to, print that to 00:19:33.058 --> 00:19:40.401 - a PDF, the tab titles don't show up. And so it's really, that's a problem we're gonna have out here. 00:19:40.401 --> 00:19:48.254 - Yeah, we'll definitely, we'll just, I'll kind of take note of that. Figure out how to make those money from 00:19:49.346 --> 00:19:57.992 - the agenda. We have a guide that we can send to you. What was that? We have a guide that we can send 00:19:57.992 --> 00:20:06.552 - to you. And I do have a question. If you could just clarify again, it goes back to the fund balance 00:20:06.552 --> 00:20:15.454 - stuff. How the amount of PSAP funds were determined that need to get transferred into the PSAP account. 00:20:15.454 --> 00:20:18.878 - But I think that that was the question. 00:20:19.426 --> 00:20:27.917 - Last week, I think we just went through what process we used to figure out. Well, I did not go through 00:20:27.917 --> 00:20:36.491 - that process. I mean, I did review it after the fact, but that was a process that the formal controller 00:20:36.491 --> 00:20:44.736 - went through and the city council approved through AdWords 2025-03. So basically, it was going back 00:20:44.736 --> 00:20:46.302 - through all of the 00:20:46.530 --> 00:20:55.284 - expenses that were in the PS Lit Fund, but were still coded as the dispatch center. So those expenses 00:20:55.284 --> 00:21:04.037 - were still coded as dispatch center in the financial system. And so it was looking at all the revenue 00:21:04.037 --> 00:21:12.877 - that came in from PSAP versus all of those expenses. And then the net was, I'm just remembering around 00:21:12.877 --> 00:21:14.078 - $2.4 million. 00:21:14.626 --> 00:21:21.468 - I may be wrong, and that's just my memory. One million of that was transferred at the very end of last 00:21:21.468 --> 00:21:28.377 - year. The controller's office, because there was no controller there, they kind of wanted to wait. They 00:21:28.377 --> 00:21:35.153 - did a million, but then wanted to wait to complete the transfer until the new controller came. And so 00:21:35.153 --> 00:21:41.929 - I did that in April. I transferred the remaining balance. And the two transfers totaled up to exactly 00:21:41.929 --> 00:21:44.254 - what was authorized in Apple 2025. 00:21:44.482 --> 00:21:53.661 - So basically in the original accounting between in the PS lit, there were things like everything dispatch 00:21:53.661 --> 00:22:02.753 - related dispatch. Yes, it was just that program. The math done to determine. Thank you. I thought that's 00:22:02.753 --> 00:22:11.326 - what I was, but there was a question about that last week in the picture. Claire, play that again. 00:22:11.938 --> 00:22:21.205 - Dave, do you have any other questions at this point? All right, great. No. OK, just a couple more things 00:22:21.205 --> 00:22:30.208 - on these numbers. I took kind of the three biggest operational funds, general, parks and rec general, 00:22:30.208 --> 00:22:39.122 - and ED lit. And just, first of all, we looked at the budget for 2026, looked at what kind of surplus 00:22:39.122 --> 00:22:40.446 - or deficit was 00:22:40.898 --> 00:22:51.399 - budgeted for each of them. So we had about $9.5 million deficit budgeted for general, $1.8 million deficit 00:22:51.399 --> 00:23:01.900 - budgeted for parks, and about $400,000 for ED-lit deficit. Then I took the current revenue to date through 00:23:01.900 --> 00:23:10.046 - the third quarter, all the expenditures to date and annualized them. So basically, 00:23:10.146 --> 00:23:16.107 - kind of projected them out to the end of the year, taking into account, for example, with general that 00:23:16.107 --> 00:23:22.184 - the property tax only comes twice a year, also with Parks and Rec General, property tax only comes twice 00:23:22.184 --> 00:23:27.972 - a year, and came out with just another projection of where we would actually be with both of those, 00:23:27.972 --> 00:23:33.818 - with all three of those funds by the end of the year. Now that's just, again, it's just a projection 00:23:33.818 --> 00:23:37.406 - given the information we have now, and it might wind up being 00:23:37.954 --> 00:23:48.280 - different from that. But we wind up with that $5.4 million decrease in the general fund, $1.5 million 00:23:48.280 --> 00:23:58.910 - increase in parks and rec, and that $4.5 million increase in EB lit. And again, that was just projection 00:23:58.910 --> 00:24:05.086 - based on what we, the numbers we've had up to September. So, 00:24:05.378 --> 00:24:11.110 - In the beginning of the year, we did the budget last year, we guessed that we would have a nine and 00:24:11.110 --> 00:24:16.842 - a half million dollar deficit. But right now, we're saying that that's really under five and a half 00:24:16.842 --> 00:24:22.861 - million. And instead of having a deficit in Parks North and Lyft, we're actually going to have a surplus 00:24:22.861 --> 00:24:28.764 - in those two. That's what this is telling us. Right, exactly. And that's generally what we expect. The 00:24:28.764 --> 00:24:33.694 - paper deficit winds up being either substantially less or not a deficit of not having 00:24:37.378 --> 00:24:44.400 - Okay, so I just want to get a couple more things done before we move on to bonds. I did want to talk 00:24:44.400 --> 00:24:51.423 - about PS lit because that has come up a couple of times and just kind of go through where the PS lit 00:24:51.423 --> 00:24:58.723 - position is. So I started out with the fund balance as of October 19. So this isn't actually technically 00:24:58.723 --> 00:25:02.686 - at the end of the third quarter. I did this on the 19th. 00:25:02.786 --> 00:25:12.196 - And that was about $5.2 million fund balance in PSLIT. Then we expect after that three more payments 00:25:12.196 --> 00:25:21.792 - of revenue from October through December. Then I actually, we talked to the fire department and police 00:25:21.792 --> 00:25:27.102 - department, which are the two budgets that are in PSLIT. 00:25:27.234 --> 00:25:36.285 - and they gave their best projection as to where they thought how much of their appropriations they would 00:25:36.285 --> 00:25:45.423 - be spending by the end of the year, winding up with just under a $5 million end of the year fund balance. 00:25:45.423 --> 00:25:54.302 - Then we look at what we project for revenue, which is a pretty good projection for lit revenue for 27, 00:25:54.402 --> 00:26:06.011 - And then the police and fire budgets that can project in that fund for 27. And then we wind up with 00:26:06.011 --> 00:26:18.432 - an estimated $1.9 million fund balance at the end of 2027, which is about 24% of the budget. Any questions 00:26:18.432 --> 00:26:20.638 - about that? Sorry. 00:26:22.402 --> 00:26:29.024 - And just as a reminder, Jeff, we like to have a healthy operating balance at the end of the year so 00:26:29.024 --> 00:26:35.844 - that we can do payroll and other things at the beginning of the year, right? Right, although this one, 00:26:35.844 --> 00:26:42.531 - this fund doesn't have payroll in it. So this one can be, that's why we're not, I'm not fussing that 00:26:42.531 --> 00:26:49.352 - it's not 30, but yeah, that's, for funds that have payroll, it's just extremely important that we have 00:26:49.352 --> 00:26:51.934 - that level of operating balance. Yeah. 00:26:52.066 --> 00:27:02.365 - And of course, of course, the live revenue for next year is based on the same tax rate. Correct. And 00:27:02.365 --> 00:27:13.275 - so the budgets. And that is actually based on the certified numbers from the. And that's does that include 00:27:13.275 --> 00:27:21.534 - the what about the 4 million dollars that the county is giving us from reserves? 00:27:22.242 --> 00:27:36.904 - This is only right exactly now it's easier to consider this in isolation. Coming. Well, guys, and it's 00:27:36.904 --> 00:27:46.014 - standing me in the books with the song. See you later. Oh, yes. 00:27:46.178 --> 00:27:53.014 - And I did have want to go for just one more thing on the third quarter numbers before we move on to 00:27:53.014 --> 00:28:00.329 - bonds. Just because I get this question a lot and that's about gas tax and where we are on gas tax because 00:28:00.329 --> 00:28:07.712 - we all know that there's been a gas tax holiday. So I went through and again, this data is in this document 00:28:07.712 --> 00:28:14.548 - is already in the folder is available for you. That doesn't this document doesn't get to the public 00:28:14.548 --> 00:28:15.710 - phone right now. 00:28:16.162 --> 00:28:26.968 - It's. Yeah. Yeah. I think I called it notes or something. Um, but just wanted to show, so there are 00:28:26.968 --> 00:28:38.207 - three funds that received gas taxes, motor vehicle, highway motor vehicle, highway restricted and local 00:28:38.207 --> 00:28:43.070 - one of the streets. And, um, I just want to. 00:28:43.330 --> 00:28:52.633 - to look, we can just look at the totals for motor vehicle highway. The others kind of follow the same 00:28:52.633 --> 00:29:02.028 - pattern, but what I did is I compared January through September of 2025 versus 2026, just to see where 00:29:02.028 --> 00:29:09.598 - we are. And what you can see is that we actually wind up, we've actually received, 00:29:10.434 --> 00:29:19.013 - gas tax holiday reimbursements from the state. The state did promise that and indeed the state has carried 00:29:19.013 --> 00:29:27.513 - through that we have received gas tax holiday reimbursements. And so you can see based on January through 00:29:27.513 --> 00:29:35.611 - September totals to date compared with the same thing of last year, we're $102,000 ahead of where we 00:29:35.611 --> 00:29:36.894 - were last year. 00:29:36.994 --> 00:29:44.815 - And we've actually already, after I did this report, just I think on Friday, or maybe on Monday, we 00:29:44.815 --> 00:29:52.949 - received the August gas tax holiday reimbursement of about $42,000. So our gas tax is keeping up, which 00:29:52.949 --> 00:30:00.770 - is good because that's obviously critically important for us to be able to continue to both pay the 00:30:00.770 --> 00:30:04.446 - streets department and continue to pave roads. 00:30:04.898 --> 00:30:12.310 - But of course, on the other hand, we're seeing the cost of fuel bill, too. So it's kind of a two-inch 00:30:12.310 --> 00:30:19.649 - solar. But because I get this question a lot about whether state is actually kicking in, I wanted to 00:30:19.649 --> 00:30:27.134 - make sure everybody knew that. So that's all the notes I had on third quarter numbers. So I don't know 00:30:27.134 --> 00:30:30.622 - if you'd let me know if you have any questions. 00:30:32.994 --> 00:30:42.624 - And again, I'm happy to answer any questions in writing that you might have after. Thank you. Dave, 00:30:42.624 --> 00:30:52.255 - go ahead. Yeah, just back to just so I can wrap my head around this, Jeff. We became aware that the 00:30:52.255 --> 00:31:02.174 - County Council, Monroe County Council doesn't have a PSAP fund, but it has PS lit. And it's sitting on 00:31:02.434 --> 00:31:14.999 - several million dollars, and we have a need for PSAP funding, that fund in the county isn't restricted. 00:31:14.999 --> 00:31:28.046 - I mean, they can use it for, I assume, capital purchases and things like that. Could you help me understand 00:31:28.046 --> 00:31:31.550 - the transfer to specifically 00:31:32.866 --> 00:31:43.358 - You know PSAP from the county. Go ahead. The county's PSAP fund is distinct from their PSLIP fund. Ours 00:31:43.358 --> 00:31:53.447 - was not in previous years. Okay. The county's is distinct. Those reserves that are in that PSAP LIP 00:31:53.447 --> 00:31:57.886 - fund are absolutely required to be used for 00:31:58.210 --> 00:32:04.718 - dispatch functions. And in fact, we will be at, we discussed this at the, at the LIT meeting the other 00:32:04.718 --> 00:32:11.353 - day on a detail where we will be receiving some of that to be able to make the budget whole just because 00:32:11.353 --> 00:32:17.671 - the expenses are probably going to exceed the revenue that they would have given in the past or the 00:32:17.671 --> 00:32:24.053 - new revenue coming. So they will be transferring some of that over the last part of it. I mean, only 00:32:24.053 --> 00:32:25.822 - we can spend it, right? So, 00:32:26.946 --> 00:32:34.574 - It's very odd to me that it wouldn't just sort of automatically be transferred. I mean, we spend it 00:32:34.574 --> 00:32:42.507 - right now because we run the dispatch then. Yeah. You know, that's not absolute. The county could start 00:32:42.507 --> 00:32:50.516 - their own if they wanted to. I don't think it would be particularly efficient to have to, but they could 00:32:50.516 --> 00:32:56.542 - run their own thing. OK. It's kind of weird. It's a weird artifact, I suppose. 00:32:58.594 --> 00:33:05.380 - Yes. Okay, good. Well, thanks. On that note though, like the area, instead of having the city do the 00:33:05.380 --> 00:33:12.166 - dispatch center, the county could do the dispatch center instead. The county could? Right. So it was 00:33:12.166 --> 00:33:19.289 - decided at some point 2018 for, I mean, I wasn't there, I don't know, the city. Well, the city has really 00:33:19.289 --> 00:33:26.142 - run, I mean, it used to be that some, the city has been running with dispatch center for a long time. 00:33:26.562 --> 00:33:33.636 - It used to be that some of the employees were county employees, even though they actually physically 00:33:33.636 --> 00:33:40.780 - showed up to work at the city police run dispatch center. They were actually county employees. And it 00:33:40.780 --> 00:33:47.994 - was a big pain because they'd get different benefits based on who's their employer. And in their eyes, 00:33:47.994 --> 00:33:54.998 - you can imagine that would be kind of a nightmare as far as the employees go. All right, can I move 00:33:54.998 --> 00:33:55.838 - on to debt? 00:33:58.434 --> 00:34:05.135 - So I just will also say that I do appreciate having me since I've been at Isabel's point, and it's a 00:34:05.135 --> 00:34:12.101 - lot of information, but I think about asking questions, but it's something that I use at different times 00:34:12.101 --> 00:34:18.802 - just to look at information. So I appreciate your going through whatever work you have to go through 00:34:18.802 --> 00:34:24.574 - to make these documents. All right, well, I then wanted to, this question has come up. 00:34:24.962 --> 00:34:31.919 - A lot from members of council council member walls as this question. So members public where are, 00:34:31.919 --> 00:34:39.019 - you know, what are what's the big picture on city debt? Like, not just geo bonds, but of all of our 00:34:39.019 --> 00:34:46.686 - debt and how do we pay it back? And so I just thought I would do a quick review, hopefully quick review of. 00:34:46.818 --> 00:34:53.627 - Of our bond, you know, our overall debt situation where what all our debts are and how they how they 00:34:53.627 --> 00:35:00.368 - get paid. And so I created a kind of a detailed spreadsheet and I'm not going to go for every Every 00:35:00.368 --> 00:35:07.109 - slide here because some of them. I didn't try to create a slide that's specific to each debt issue, 00:35:07.109 --> 00:35:08.862 - which I don't necessarily 00:35:09.154 --> 00:35:15.945 - want to go in detail, but I can if there's anything you ask. And I just wanted to kind of lay it all 00:35:15.945 --> 00:35:22.736 - out in one place. So also if there's other information that's not on there that you wish there were, 00:35:22.736 --> 00:35:29.527 - I can certainly update the slideshow and create, put some more information. But I just, like I said, 00:35:29.527 --> 00:35:36.990 - I kind of wanted to just give you the big picture of where all the data is. So first of all, probably the most 00:35:37.826 --> 00:35:46.927 - I wouldn't say the most important, but the most frequently talked about debt is general obligation or 00:35:46.927 --> 00:35:56.742 - geobonds. And as you can see, we have right now, this chart shows all of our outstanding geobonds, including, 00:35:56.742 --> 00:36:06.111 - so we have six outstanding geobonds, although one of them, you'll see the series 2024, I should actually 00:36:06.111 --> 00:36:07.806 - just make this up. 00:36:09.058 --> 00:36:15.857 - Mostly. Yeah, that's okay. That's all. You'll see that that one of the geo bond series 2024 is paid 00:36:15.857 --> 00:36:22.860 - off at the end of this year. And then we have two geo bonds that are paid off at the beginning of 2028 00:36:22.860 --> 00:36:29.795 - as well. So we have a couple that are are going to be rolling off. And then we have the proposed 2026 00:36:29.795 --> 00:36:33.534 - geo bond that we've already done the first reading for 00:36:33.730 --> 00:36:40.933 - at City Council. And so we will be doing the next second reading in November. So what are general obligation 00:36:40.933 --> 00:36:47.739 - bonds? Well, those are bonds that are guaranteed by the full faith and credit of the city of Lund. The 00:36:47.739 --> 00:36:54.346 - key is that they are paid for with a dedicated property tax rate. So they're basically always going 00:36:54.346 --> 00:36:59.038 - to be paid. It's not something we have to try to figure out each year. 00:36:59.234 --> 00:37:05.680 - how to pay these bonds. They are automatically, at the time that they are approved, the dedicated property 00:37:05.680 --> 00:37:11.944 - tax rate is created to service those bonds. The property tax rate generates what is needed for the debt 00:37:11.944 --> 00:37:18.029 - service, and then it automatically goes away. So you don't have to think about limiting the property 00:37:18.029 --> 00:37:24.113 - tax rate or generating more revenue than is needed to pay out, or less than is needed to pay off the 00:37:24.113 --> 00:37:27.486 - debt. The property tax rate generates it and goes away. 00:37:27.618 --> 00:37:34.406 - That property tax rate is only for service of the geo bond and it can't be diverted for other purposes. 00:37:34.406 --> 00:37:41.194 - For geo bonds, generally they have the lowest borrowing costs and I think conserved very secure because 00:37:41.194 --> 00:37:48.374 - your property tax rate, property tax base, particularly for counties like Wimbledon that are very financially 00:37:48.374 --> 00:37:55.097 - secure are considered very secure bonds. They are subject to Indiana constitutional debt limits, which 00:37:55.097 --> 00:37:56.990 - I'll talk about in a minute. 00:37:57.090 --> 00:38:05.522 - As you know, they all get approved by city council. I have a sheet here on the geobond tax rates. I 00:38:05.522 --> 00:38:14.038 - don't want to go through this in detail, but this was part of the deck that was given to you for the 00:38:14.038 --> 00:38:23.060 - 2026 geobond. We financial will be available at the second reading also to talk about this in more detail. 00:38:23.060 --> 00:38:26.686 - But I just wanted to put this here so that 00:38:26.850 --> 00:38:34.536 - students will be able to, yeah. So just to spend a bit of general questions. In terms of saying the 00:38:34.536 --> 00:38:42.452 - 2016 students, which we go to the city one, it has $7 million in it, but it's not going to be paid off 00:38:42.452 --> 00:38:50.214 - for another 10 years. Whereas this new one that is proposing is almost the exact same principle, but 00:38:50.214 --> 00:38:56.286 - it's estimated and anticipated to be paid off hopefully in at least six years. 00:38:56.642 --> 00:39:07.935 - So then that has some kind of impact on the actual percentage rate down here in this. So what are the 00:39:07.935 --> 00:39:19.006 - relative pros and cons of having the lower rate, longer payoff sort of bond? Well, so first of all, 00:39:19.006 --> 00:39:24.542 - longer bonds tend to have a higher interest rate. 00:39:24.930 --> 00:39:32.165 - Overall, it's not necessarily a huge difference, but that's the shorter of the term, the lower the interest 00:39:32.165 --> 00:39:39.198 - rate you're going to want to see. And another issue is you don't want your term of the bond to be longer 00:39:39.198 --> 00:39:46.031 - than the asset life of the assets that you're going to need. So because, yeah, you just don't want to 00:39:46.031 --> 00:39:53.064 - be paying off your car that's already a junker by taking a 10-year loan to pay off your car that's going 00:39:53.064 --> 00:39:54.270 - to last a little. 00:39:55.458 --> 00:40:04.904 - And the other thing is just keeping your tax rates check. You're always looking at your tax rates. And 00:40:04.904 --> 00:40:14.532 - so the longer you stretch out the bonds, the lower the tax rates are going to be. But the constitutional 00:40:14.532 --> 00:40:21.502 - debt limit is based on your outstanding principles. So you're going to have 00:40:21.666 --> 00:40:33.318 - If you stretch it out longer, you're also tying yourself up longer because of those constitutional death 00:40:33.318 --> 00:40:44.638 - limits. And I've got a slide that will tell you that. Constitutional death limits as well. Looking at 00:40:44.638 --> 00:40:51.518 - the Geo bonds on this table, the interest rates are variable. 00:40:51.938 --> 00:41:01.027 - And so what determines the interest rates? These are tax rates. Yeah. So the tax rates. Well, the tax 00:41:01.027 --> 00:41:10.204 - rate is basically what your payment is based on the amortization schedule and then divided by your net 00:41:10.204 --> 00:41:19.204 - assessed value. So it's just like any other tax rate. The tax rate is computed based on the assessed 00:41:19.204 --> 00:41:21.342 - value of your tax base. 00:41:21.922 --> 00:41:30.443 - and your, and then what the actual payment is going to be. Because these rates, the purpose of these 00:41:30.443 --> 00:41:39.049 - rates is to raise just the amount of money that you need to pay the debt and number. I didn't want to 00:41:39.049 --> 00:41:44.702 - talk about constitutional debt limits because this comes up a lot. 00:41:44.930 --> 00:41:52.095 - There are three separate constitutional debt limits for the city, the civil city, the parks district, 00:41:52.095 --> 00:41:59.330 - and the redevelopment district. And each debt limit is 2%, but one third of the certified net assessed 00:41:59.330 --> 00:42:06.847 - value for each year. And so for 2026, that figure comes out to about $36.5 million. And the constitutional 00:42:06.847 --> 00:42:10.078 - debt limits only apply to general obligation. 00:42:12.802 --> 00:42:20.766 - So this, I did put in a table there that shows what our constitutional debt limits look like right now. 00:42:20.766 --> 00:42:28.423 - So I told you we had $36.5 million in three different buckets or three different districts where if 00:42:28.423 --> 00:42:36.386 - the 2026 bond is approved, then we will have 21.2 left in the general civil city. We have $23.8 million 00:42:36.386 --> 00:42:42.206 - in parks, and we've not done any general obligation bonds in the readabout. 00:42:42.306 --> 00:42:51.182 - district. So that's just kind of a status of where we are as far as the constitutional events. Redevelopment 00:42:51.182 --> 00:42:59.487 - district is the TIF? It is, but it's not. TIF bonds, I know this is kind of counterintuitive, but TIF 00:42:59.487 --> 00:43:07.955 - bonds don't count against this. The redevelopment district could theoretically issue general obligation 00:43:07.955 --> 00:43:11.294 - bonds. But it's the same key graph. Yes. 00:43:11.618 --> 00:43:18.053 - Do you happen to know, kind of going back to what you said about, you know, wanting to have the term 00:43:18.053 --> 00:43:24.488 - of the bond be about the same as the assets, do you know what those 2016 build-ons were for? Because 00:43:24.488 --> 00:43:31.050 - that just seems like, that's like a 20 year. So I have slides. And like I said, I did not plan to like 00:43:31.050 --> 00:43:37.548 - actually go, because we'll be here forever. And I do want to get through all the categories, but yes. 00:43:37.548 --> 00:43:40.670 - Oh, and then it's 915, so we should stop by 920. 00:43:40.802 --> 00:43:46.852 - in order for public comment. Okay, well then let me just at least go through all of that. Okay, so those 00:43:46.852 --> 00:43:52.614 - are the GEO bonds, and there's a slide for each one of those. Then we have TIF revenue bonds, which 00:43:52.614 --> 00:43:58.548 - are paid out of TIF revenues. These don't affect property owners' taxes. They're not guaranteed by the 00:43:58.548 --> 00:44:04.483 - full faith and credit of the city, and they're not subject to the constitutional debt limits. Each TIF 00:44:04.483 --> 00:44:09.726 - allocation area has a different sunset date, and those sunset dates are taken into account 00:44:09.858 --> 00:44:16.028 - the, in calculating how much the, um, the TIF can bond for. So it's a fairly complicated capital. It's 00:44:16.028 --> 00:44:22.259 - not like you could just look at, you know, overall, what is the TIF bringing in? It's because different 00:44:22.259 --> 00:44:28.250 - pieces of the TIF expire on different, uh, uh, at different times. The term refunding, you'll see a 00:44:28.250 --> 00:44:34.360 - lot in bonds and refunding just means that bond refinanced a previous one. So it's just, it's like a, 00:44:34.360 --> 00:44:35.678 - a homely finance. Um, 00:44:35.842 --> 00:44:43.603 - The TIF revenue bonds have to be approved by both the Redevelopment Commission and the City Council. 00:44:43.603 --> 00:44:51.365 - And when we issue TIF revenue bonds, the primary fiscal consideration is what's called coverage. And 00:44:51.365 --> 00:44:59.357 - that means how much your annual revenues are through the life of the bond compared to the bond payment. 00:44:59.357 --> 00:45:01.278 - And we expect over 125%. 00:45:01.410 --> 00:45:08.451 - Um, coverage before we really even really consider, uh, requesting a bond and probably, you know, anything 00:45:08.451 --> 00:45:15.163 - lower than that would be, would be higher risk and we've been presumably paying higher interest rate. 00:45:15.163 --> 00:45:21.743 - Are TIF bonds usually have a higher interest rate? A little bit. Yeah. Yeah, they, they do. Um, and 00:45:21.743 --> 00:45:29.310 - so right now we have four, um, TIF revenue bonds right now. You'll see that, uh, two of those are parking garages. 00:45:29.570 --> 00:45:37.357 - the 4th Street garage and the trades district garage. And again, I have slides on each of these individually, 00:45:37.357 --> 00:45:44.719 - if you want details, plus two refunding bonds. So bonds that have refinanced previous bonds. And again, 00:45:44.719 --> 00:45:52.294 - I have slides for each of those. Future TIF revenue bonds that are planned. You know that we're interested 00:45:52.294 --> 00:45:57.886 - in an adaptive reuse of the 714 South Roger Street property as police station. 00:45:58.050 --> 00:46:05.985 - That would be, we're looking at a $30 million TIF revenue bond for that. We also have applying requests 00:46:05.985 --> 00:46:13.691 - for Summit District and hopefully TIF revenue bonds, but those aren't as, I would say well formed at 00:46:13.691 --> 00:46:21.778 - this time. Other revenue bonds, and this is, so these are revenue bonds. These are not general obligation 00:46:21.778 --> 00:46:25.822 - bonds, they're revenue bonds other than TIF revenue. 00:46:26.274 --> 00:46:33.734 - And one of these is very important. That's that general revenue bond of 2022, what you call the public 00:46:33.734 --> 00:46:41.122 - safety bonds. And I will talk about that in a bit more detail if we have time. Plus we have the solar 00:46:41.122 --> 00:46:48.871 - bonds, which are bonds that were originally, which you probably know about the guaranteed savings contract 00:46:48.871 --> 00:46:55.390 - and solar panels that were done as a lease. These bonds basically brought out that lease. 00:46:55.618 --> 00:47:03.843 - And so we're paying for those through 2038. If you want my editorial opinion, paying for solar panels 00:47:03.843 --> 00:47:12.230 - through 2038, probably not what I would recommend in the future, but any kind of technology. It's just, 00:47:12.230 --> 00:47:21.019 - yeah, exactly. And then there's a parks district refunding bond that's used to pay for Twin Lakes Recreation 00:47:21.019 --> 00:47:23.358 - Center that matures in 2029. 00:47:23.554 --> 00:47:30.112 - So just the public safety bond, this one's really important because this is the only one that's really, 00:47:30.112 --> 00:47:36.671 - that we actually have to think about how to pay for. All the rest of the bonds that I talked about kind 00:47:36.671 --> 00:47:43.229 - of come with an automatic or have a sort of an obvious repayment plan. The public safety bonds, they're 00:47:43.229 --> 00:47:49.535 - currently $2 million a year paid for from ED lit. Obviously, ED lit is going away, so those have to 00:47:49.535 --> 00:47:51.742 - be paid for from the general fund. 00:47:51.906 --> 00:48:00.116 - Unlike a general obligation bond, these general revenue bonds don't include a separate tax rate set 00:48:00.116 --> 00:48:08.491 - aside debt. So despite the fact that he lives on to go away, we're going to have to figure out how to 00:48:08.491 --> 00:48:16.126 - make those statements. For how many years? Through 2043. I tried to put all the information. 00:48:16.322 --> 00:48:22.647 - out here. Leases, we have a couple of leases that are of concern, well not of concern, but of interest. 00:48:22.647 --> 00:48:28.729 - We have the Convention Center lease rental for expansion of the Convention Center, and then we have 00:48:28.729 --> 00:48:34.993 - two parking garage leases. The Mercury Garage, which is the Morton Street garage, we're paying a lease 00:48:34.993 --> 00:48:41.136 - out of the TIF for that. So it's not TIF bond, it is a lease, but those payments are made out of the 00:48:41.136 --> 00:48:45.150 - TIF. And then the 7th and Walnut Street garage, we're also making 00:48:45.602 --> 00:48:52.458 - Payments out of the tip for those garage. And then, of course, you know about the Convention Center 00:48:52.458 --> 00:48:59.520 - lease rental, which is paid for by food and beverage tax. It doesn't count towards the debt limit. And 00:48:59.520 --> 00:49:06.856 - it's structured as a lease from the city of Bloomington Public Building Corporation to the city. Utilities 00:49:06.856 --> 00:49:10.078 - bonds. Sorry, I just have two more categories. 00:49:10.498 --> 00:49:16.252 - Uh, the city Bloomington utilities issues bonds through two fiscally separate utilities, water 00:49:16.252 --> 00:49:22.370 - and wastewater. These bonds are paid solely by utility rates, not by taxes. And there's no pledge of 00:49:22.370 --> 00:49:28.428 - full faith and credit of the city government. Um, they're approved by the utility service board and 00:49:28.428 --> 00:49:34.667 - the city council. And we have several, um, outstanding water, water utility bonds that they call water 00:49:34.667 --> 00:49:35.454 - works bonds. 00:49:35.842 --> 00:49:43.291 - Plus the and I thought I would mention this the the waterworks revenue bond 2026 a was just passed was 00:49:43.291 --> 00:49:50.813 - just closed down a couple of weeks ago. This is the first tranche and 71 million in water utility bonds 00:49:50.813 --> 00:49:56.382 - that you've already authorized in 2025. This is about 33 million dollars in. 00:49:56.482 --> 00:50:03.126 - bombs, and the projects were all related to improvement to the water treatment plant, rehabilitation 00:50:03.126 --> 00:50:09.835 - of a booster station, and replacing of water mains and other system infrastructure improvements. This 00:50:09.835 --> 00:50:16.479 - particular tranche did not include the service center, the operations center in these projects, so I 00:50:16.479 --> 00:50:23.518 - know that that questions. We also have wastewater, outstanding wastewater utility bombs. And then finally, 00:50:23.518 --> 00:50:25.886 - we have what's called conduit debt. 00:50:26.434 --> 00:50:32.352 - And these are not city obligations, but you all have asked to pass a condo with debt from time to time. 00:50:32.352 --> 00:50:38.212 - These are bonds issued by the city on behalf of private or nonprofit entities and it's the entity, not 00:50:38.212 --> 00:50:43.390 - the city that's responsible for repayment and the bonds are not an obligation of the city. 00:50:43.842 --> 00:50:50.542 - They're often used for affordable housing projects. They're also using some places for healthcare and 00:50:50.542 --> 00:50:57.177 - economic development. The primary risk to the city is reputational. The project goes badly. The city 00:50:57.177 --> 00:51:04.862 - is not on the hook fiscally, but it can still look bad. Your outstanding conduit debt right now, limestone crossing, 00:51:05.090 --> 00:51:10.947 - Wilmington Housing Authority Mental Assistance Demonstration Project, RAD 1 and 2, and Country View 00:51:10.947 --> 00:51:16.980 - Affordable Housing on Rockport Road. And you all have also already approved additional BHA bonding for 00:51:16.980 --> 00:51:23.071 - acquisition of apartments. They have already done pricing on that or planning to close in the next week 00:51:23.071 --> 00:51:29.338 - or two on that. So that's our consistent conduit debt. Again, it's you have to approve it as city council, 00:51:29.338 --> 00:51:33.438 - but it doesn't consist of, it's not an actual obligation of the city. 00:51:34.306 --> 00:51:40.999 - Okay, so that's in a nutshell, all of the debt that the City of Wilmington has. And again, there's lots 00:51:40.999 --> 00:51:47.500 - of detailed slides there for more information, and I'm happy to take over. Looks like Dave's got it. 00:51:47.500 --> 00:51:54.000 - Great. Go ahead, Dave, and then we'll go to public comment. Okay, real quick, Jeff, thanks for that. 00:51:54.000 --> 00:52:00.629 - So we vote on the rates, utility rates, but we'll also have a vote on the bond for the utility service 00:52:00.629 --> 00:52:02.238 - center, is that correct? 00:52:03.138 --> 00:52:11.412 - No, you have already approved, let's see, $71 million, your ordinance 2025-36, you have approved $71 00:52:11.412 --> 00:52:19.687 - million in water utility bonds. And so the utility service board can move forward with the remaining 00:52:19.687 --> 00:52:27.879 - amount of water utility bonds. Now there may be, I don't know exactly what other levels of approval 00:52:27.879 --> 00:52:30.910 - would be needed, you know, planning. 00:52:31.202 --> 00:52:38.671 - and that sort of thing. But in terms of the issuance of bonds, 71,000 has already been honed. OK. Let's 00:52:38.671 --> 00:52:46.139 - go ahead and go to public comments so we can make sure to get some comments from the public here before 00:52:46.139 --> 00:52:53.393 - we close the meeting. Members of the public, there's none in the room. Online, who are interested in 00:52:53.393 --> 00:53:00.574 - making a comment about this information that Kohler and Kim has presented, you can raise your hand. 00:53:01.570 --> 00:53:07.784 - And you'll be asked to unmute. I can't see the participant list on this screen. There's one. They've 00:53:07.784 --> 00:53:13.998 - been asked to unmute. All right. Can you hear me? Yeah, go ahead. And you've got three minutes. I'll 00:53:13.998 --> 00:53:20.457 - find you on my watch. Kevin Keough. First, Monday's City Council PSAP discussion. Discuss the interlocal 00:53:20.457 --> 00:53:26.302 - agreement, which I assume requires compliance. I would like to raise an issue about Article 6. 00:53:26.402 --> 00:53:32.695 - referred to as the accounting section of this interlocal agreement. It calls for an annual itemized 00:53:32.695 --> 00:53:38.989 - expense report to be shared among the governments, the Dispatch Policy Board. It also calls for the 00:53:38.989 --> 00:53:45.345 - city controller and the county auditor to share year-end financial reports, so both have an accurate 00:53:45.345 --> 00:53:51.764 - accounting of dispatch funds. Seems that the county kept records it had a PCEP-lit account as part of 00:53:51.764 --> 00:53:54.974 - their books. I have no idea if there was a meeting 00:53:55.970 --> 00:54:01.358 - I have not established that those requirements were violated, but Monday's difficulty in presenting 00:54:01.358 --> 00:54:06.853 - a clear combined picture of city and county-held resources makes it important to find out how Article 00:54:06.853 --> 00:54:12.618 - 6 was carried out. I asked the committee to request a year-by-year account of which reports were prepared, 00:54:12.618 --> 00:54:17.790 - when they were shared, and who reviewed them, and whatever any differences remained unresolved. 00:54:18.146 --> 00:54:24.549 - That review should inform any renegotiation of the agreement. You did see the report just today where 00:54:24.549 --> 00:54:30.890 - the PSAP fund balance was zero until 2026. One of the years had a dollar. I don't know about that. I 00:54:30.890 --> 00:54:37.419 - have seen the calculated net cap position, not the fund balance spreadsheet that was prepared. I cannot 00:54:37.419 --> 00:54:43.947 - resolve it had been vetted, reviewed, or audited. The figure was, however, approved by the City Council 00:54:43.947 --> 00:54:44.638 - on 4-2-25. 00:54:45.090 --> 00:54:51.442 - Second, the city's audit, the ACFR, especially the single audit, I'm referring to the single audit for 00:54:51.442 --> 00:54:57.980 - federal compliance for the year end, December 31st, 2025, report serious control findings. Finding 25.001 00:54:57.980 --> 00:55:04.209 - is material weakness in the review of the financial statements prepared by the outside auditors. The 00:55:04.209 --> 00:55:10.623 - auditors identified misstatements that required adjustments. Finding 25.002 is a significant deficiency 00:55:10.623 --> 00:55:12.350 - in federal grant reporting. 00:55:12.546 --> 00:55:18.274 - Reports were submitted without documented secondary review, and the cumulative expense did not agree 00:55:18.274 --> 00:55:24.286 - with the prior federal expenditure schedules. The auditors explicitly identified the findings as a repeat 00:55:24.286 --> 00:55:25.534 - of the 2024 findings. 00:55:25.794 --> 00:55:31.512 - The audit also reports a separate material weakness in our compliance and federal grants reporting. 00:55:31.512 --> 00:55:37.403 - Finding 2503 included an overclaim of 109,000 in 2023. I do not suggest these grants findings are PSAP 00:55:37.403 --> 00:55:43.578 - findings, but they do show how document review, reconciliation, and follow-through deserves the committee's 00:55:43.578 --> 00:55:48.382 - attention. I asked the committee to schedule a public update on all three findings. 00:55:48.546 --> 00:55:53.966 - what the corrective actions management is committed to, and who owns each action, what has been completed, 00:55:53.966 --> 00:55:59.336 - and how the City will test whether new controls work. Please also identify when the Committee will review 00:55:59.336 --> 00:56:04.655 - the progress. Monday's tax vote did not resolve the underlying accounting and oversight questions. Clear 00:56:04.655 --> 00:56:09.924 - records and public follow-through will help the City and County plan reliable dispatch funding and give 00:56:09.924 --> 00:56:14.078 - residents reasons to trust the financial information behind the future decisions. 00:56:14.338 --> 00:56:22.592 - Hopefully the packet will be available. For today's meeting, I sure do have an interest in the comprehensive 00:56:22.592 --> 00:56:30.317 - jet schedule you just talked about today. Thank you. Thank you. There's no one else on there. There's 00:56:30.317 --> 00:56:37.965 - no one else? No, their hands raised. OK, wonderful. Great, and we still have about three minutes. So 00:56:37.965 --> 00:56:42.206 - any other questions or comments from committee members? 00:56:43.906 --> 00:56:51.152 - Um, did you have an update on the, uh, the, uh, yes. Um, although, um, Mr. Kio has already outlined 00:56:51.152 --> 00:56:58.398 - the, uh, the negative findings. I will just say the, uh, the audited ACFR was approved on September 00:56:58.398 --> 00:57:06.078 - 30th and it was posted to the city website. It's available also now on the state board of council portal. 00:57:06.562 --> 00:57:13.077 - The City Council is one of the key audiences for this report, so you're encouraged to download and read 00:57:13.077 --> 00:57:19.718 - the entire report. We had the exit conference on September 22nd, and Council Member Stosford participated 00:57:19.718 --> 00:57:25.983 - as well. We did receive an unmodified opinion, which is what you want, and we did manage to get the 00:57:25.983 --> 00:57:31.934 - ACFR audit completed on time for the first time since the City was required to report on GATT. 00:57:32.418 --> 00:57:41.606 - You have probably heard Mr. Keough calling for us to get the next ACFR in by June 30th, which is the 00:57:41.606 --> 00:57:51.068 - best practice. And that's exactly what we intend to do for the 2026 audit. And let's see. So Mr. Keough 00:57:51.068 --> 00:57:59.710 - already mentioned the findings with respect to GAAP. One of them was a CIB adjustment. This is 00:57:59.906 --> 00:58:06.894 - related to the auditors, including the capital improvements board in our audit as what's called a discreetly 00:58:06.894 --> 00:58:13.305 - presented component unit of the city for purposes of the gap financial statement. This is the first 00:58:13.305 --> 00:58:16.382 - year doing so. The city had recorded a December 00:58:16.642 --> 00:58:23.191 - $4 million convention center construction invoice as construction in progress and payable to the CIB, 00:58:23.191 --> 00:58:30.254 - but the corresponding transaction had not been recorded on the CIB's votes. Because the CIB was contractually 00:58:30.254 --> 00:58:36.674 - obligated to the contractor, the audit adjustment added $4.1 million of CIB accounts receivable and 00:58:36.674 --> 00:58:43.159 - revenue from the city, along with an equal amount of accounts payable and expense. So the adjustment 00:58:43.159 --> 00:58:45.278 - increased the CIB's gross assets 00:58:45.410 --> 00:58:51.608 - liabilities, revenues, and expenses, but had no net effect on its net position because they'd had out. 00:58:51.608 --> 00:58:58.107 - And I will say this one in particular was the subject, a pretty vigorous debate between our gap accountants 00:58:58.107 --> 00:59:04.125 - and the auditors. Ultimately, we made the auditors adjustments and we'll make sure we treat late in 00:59:04.125 --> 00:59:10.263 - the year invoices similarly this year. But it took a lot of research on the parts of the auditors and 00:59:10.263 --> 00:59:12.670 - our gap accounts, and it was not at all 00:59:12.930 --> 00:59:19.507 - And even though it shows up as a finding it was not as obvious and there was no, no way any amount of 00:59:19.507 --> 00:59:26.084 - diligence would have caught that because it was essentially philosophical difference in how to handle 00:59:26.084 --> 00:59:29.630 - things. The second was related to complex NPO project. 00:59:29.698 --> 00:59:35.205 - The city had recorded the full amount of several INDOT administered projects as capital contributions 00:59:35.205 --> 00:59:41.036 - at the beginning of the project. Even though those projects were still underway, INDOT had not yet incurred 00:59:41.036 --> 00:59:46.814 - that amount of eligible project costs. So after, again, this was pretty extensive discussion that required 00:59:46.814 --> 00:59:52.483 - the auditors to get with INDOT and state board of accounts and do some research. The auditors determined 00:59:52.483 --> 00:59:57.990 - that only the eligible costs actually incurred by INDOT through year end should have been recognized. 00:59:57.990 --> 00:59:59.664 - And so the adjustment reduced. 00:59:59.664 --> 01:00:07.465 - capital contribution revenue by approximately $4.9 million. And we are working on meeting with engineering 01:00:07.465 --> 01:00:15.121 - and our GAP accountants to come up with a new set of procedures to make sure that we're only recognizing 01:00:15.121 --> 01:00:22.558 - what's actually been expended by the end of the year rather than the entire amount of these projects. 01:00:27.458 --> 01:00:38.079 - So that ACFR is available on the city's city's website and staple. Other questions. All right, I'm going 01:00:38.079 --> 01:00:48.598 - to point out a couple of things then, which is maybe about schedule and maybe just general information. 01:00:48.598 --> 01:00:50.014 - First of all, 01:00:50.274 --> 01:00:56.086 - There was a reference to the Bloomington Housing Authority most recent bond and those five properties. 01:00:56.086 --> 01:01:01.728 - There was an information session about that yesterday. And I did just look and I think that it says 01:01:01.728 --> 01:01:07.427 - on the caps under the Community Videos tab and it's the most recent one from Thursday, October 29th. 01:01:07.427 --> 01:01:13.183 - It looks pretty short, so maybe that means that there weren't any questions asked of them. But I read 01:01:13.183 --> 01:01:16.286 - it right still over there this week, as you mentioned. 01:01:16.514 --> 01:01:24.186 - But that was going through. So that's really exciting news about those properties. And a must task force 01:01:24.186 --> 01:01:31.639 - update, which is that there was a system must task force meeting last Friday, the 23rd. So that would 01:01:31.639 --> 01:01:39.018 - be the date that I spent the last time we had a meeting. And that was the date for where I put it in 01:01:39.018 --> 01:01:46.398 - my calendar, which was in my personal calendar, not in my city calendar, which is why I can find it. 01:01:46.626 --> 01:01:54.758 - Um, and so the members of that task force for that, yeah, the task force did agree on a statement to 01:01:54.758 --> 01:02:02.890 - send to the state. And I'm looking for the finalized statement online right now, and I'm not finding 01:02:02.890 --> 01:02:11.022 - it. There is a draft in the agenda, and they did make some slight changes. Jeff, I don't know if you 01:02:11.022 --> 01:02:13.598 - know where that final draft is. 01:02:15.074 --> 01:02:25.619 - Not offhand, but yeah. Anyway, so overall, it's a pretty generalized statement that we, as they couldn't 01:02:25.619 --> 01:02:35.963 - give final determination because we did not have the information, but there were implications in there 01:02:35.963 --> 01:02:43.294 - wanting to make sure that all of our local units would be made full with 01:02:45.186 --> 01:02:56.023 - partnership and financial contributions, et cetera, et cetera. So I think overall good positive things 01:02:56.023 --> 01:03:06.859 - on that front. And then I guess the only other scheduling notes would be that our next meeting of this 01:03:06.859 --> 01:03:14.750 - was November 13. And my intention is to go back to reviewing budget stuff. 01:03:14.914 --> 01:03:22.502 - And we didn't quite ever finish the conversation, giving feedback on budget presentation stuff this 01:03:22.502 --> 01:03:30.241 - year and what we want to see and how we're going to proceed with that next year. And that would be my 01:03:30.241 --> 01:03:38.132 - intention. The elected official salary ordinance should be having first reading this coming week. Dave, 01:03:38.132 --> 01:03:44.126 - do you have a question? Yeah, just one I forgot to ask Jeff. Jeff, real quick. 01:03:44.802 --> 01:03:52.712 - I saw that there was some debate at the county council and among county commissioners about the food 01:03:52.712 --> 01:04:00.701 - and beverage tax and whether it should be used for various things, including the hotel and even parks 01:04:00.701 --> 01:04:08.612 - and their parks department. But as I recall, we had a backup fund for the convention center and that 01:04:08.612 --> 01:04:12.606 - was in case revenue were to fall from the FAB tax. 01:04:12.930 --> 01:04:21.770 - Is that fund limited in terms of how much it can accrue? Because if revenue falls, my fear is that we're 01:04:21.770 --> 01:04:30.358 - obligated as the city from the general fund. So do you have a comment about that real quick? Sorry to 01:04:30.358 --> 01:04:39.114 - not ask that earlier. Yeah. So you'll remember that in this year's budget, I'm sorry, this year meaning 01:04:39.114 --> 01:04:42.398 - the 2027 budget that you just adopted, 01:04:42.594 --> 01:04:49.352 - We actually also appropriated two additional lease payments. So there's two lease payments a year. You 01:04:49.352 --> 01:04:56.241 - appropriate four lease payments. Two of those are essentially extras and they're going to be transferred 01:04:56.241 --> 01:05:03.458 - to the bond trustee to an interest bearing count. And so those will essentially act as the loss stabilization 01:05:03.458 --> 01:05:05.886 - fund if the revenue were to go down. 01:05:06.018 --> 01:05:14.789 - So we would actually be able to accommodate an entire year's worth of zero revenue. Of zero revenue? 01:05:14.789 --> 01:05:23.474 - Right. I mean, there are two entire lease payments. So the idea is that then, assuming things go as 01:05:23.474 --> 01:05:32.245 - we hope and as they happen so far, we'll just use those two payments as the last two lease payments. 01:05:32.245 --> 01:05:33.982 - Yeah. So we're well 01:05:34.402 --> 01:05:43.996 - Well, stopped as far as the food management. Okay, great. That that's very helpful. Thanks. Any other 01:05:43.996 --> 01:05:53.402 - last questions or statements about anything concerns, et cetera, et cetera. All right. Seeing none. 01:05:53.402 --> 01:05:56.318 - Happy Friday. Happy Halloween.