All right. Um, I'm going to call this meeting of the fiscal committee here on Friday, October 30th to
order, uh, would be Stossburg district three and Sherry. It's about people on Smith, district one. That'd
be mayor. Jeff McKim, say controller. Sophia McDowell, chief deputy clerk. There's an online Dave,
Dave Rallo, uh, council district four.
So we have a forum, and today our meeting is all about the controller. We have updates for them on third
quarter, on bonds and debt, on VCFR, on the audit, and then public comment, notes about speculative,
and then we'll adjourn. So unless anybody has any objections or concerns about the agenda,
it's all you, Jeff.
Thank you very much. I'm not sure I would characterize it as all about the recorder, or about the controller
rather, but it was definitely in that. I will kind of convey to you just a bunch of topics that I think
are of interest at this point of the year related to the kind of where we are with respect to the budget
and third quarter numbers, and then we'll move on to talk about city debt.
But just, first of all, let me kind of give everybody an understanding of where we are with respect
to the budget. As you know, the council has adopted the 2027 budget, and the adopted figures were entered
into Gateway. The budget is now being reviewed by the Department of Local Government and Finance, which
is the next stage of the game. But we will not receive actual budget approval by the DLGF until the
disposition of the 2026 GO bond.
So after that's over, then we'll be able to, however it goes, we'll be able to get our final budget
approval. All of the council members, as well as the controller, the clerk, and the mayor are going
to receive what's known as 1782 statements from the Department of Local Government Finance. Have you
all gotten those in the past? Thanks. Yes.
Yeah. Okay. Yeah. So you'll receive those in email that summarize all of the budgets and tax rates for
DLGF controlled funds. And this is the 1782 statement is a very important opportunity to review them
for errors.
So basically, we have 10 days to be able to review them to make sure that we're not seeing anything
wrong, that the budgets and tax rates are what you adopted, and that there aren't any glitches. The
department did not misunderstand something.
I don't know how that has gone and this is my first time I'm going through this at the city.
In the county, the county council used to review those 1782 statements pretty carefully and have definitely
discovered errors and collections that need to be made. We'll see what happens. The annual year-end
additional appropriation and transfer ordinance, which right now is at board 2026-05, is scheduled to
be heard on December 2nd.
And that ordinance is going to include any additional appropriation requests and inter-category transfer
requests. So just so everybody remembers and for the public's benefit, departments internally can transfer
within expense categories. So they can transfer, say, from a fuel line to a supply, a different supply
line within the same category.
but inter category transfers need to be approved by the city council. So we have gathered all the information
from departments from their year end requests. And so far we're not seeing any additional appropriation
requests. Everything we're seeing is just a transfer from one category to another, which is good.
And then finally at the Council's last meeting of the year on December 16, the Office of the Controller
is going to provide a brief report down here into the record, the appropriations that are going to be
encumbered from 2026 to 2027.
You know, encumbrance is allowed when there is a specific contract or purchase order. Salaries,
for example, cannot be encumbered, but capital purchases and services that have a contract can be. Entering
these encumbrances into the record at the last State Council meeting of the year is a new process for
the City, but it is strongly recommended by the State Board of the Council for Transparency. So anybody
have any questions about the
budget follow-up. So just to make sure I understand, so December 16th council meeting, we won't be asked
to approve a listed conference, is that a carryover? No, it is just going to be entered as a report.
That's the recommendation from state board of mechanics. It's just entered into the record at the last
meeting of city council. And December 2nd is the meeting that we're going to have.
the last end of the year transfer of affiliations. All right. So I just want to kind of go through a
couple of topics that I have that are of interest, I think, in the third quarter numbers that were included
in the packets. When they get converted to PDF, I never know how
how readable they actually are in PDF. Usually they're not very readable. In the folder, we have accessible
spreadsheets and documents that I think provide them in a clearer way. But there's a lot of numbers
here. I'm just going to call attention to a couple of things that I think are of interest. You all can
ask questions about things that you think are of interest. So first.
Yeah. Thank you. How's that? Is that better? Okay, I think that'll be good.
So these, I provided you all of the fund balances since I provided them for all funds and then a separate
tab for kind of more frequently requested fund balances that, and I provided that just January 1st balances
from the beginning of each year. And then also the September 30th of this year balance. And there's.
There's an FYI in the packet that starts at page 100.
Oh, they must have put the bond presentation first. All right, great. And so there's not a whole lot
to note here in the fund balances. Most things look normal. I just wanted to call attention to a couple
of things. The funds that receive property taxes, so in particular in this case, the General Fund Motor
Vehicle on Highway and Parks and Recreation General,
They tend to be because property taxes only received twice a year it's received in June and December.
That in around you know the fall so far at the end of the third quarter, they tend to be in a relatively
low point. Because that second settlement to property taxes hasn't yet. So, you know, we're seeing that
the general fund has has dropped since it's dropped about you know over $10 million but
That's because it's kind of at a low point and once the second settlement from property taxes are received,
it'll bounce back over with it. So that's generally true with property taxes. The PSAP lift, I know
we've just recently discussed the PSAP in the context of the
tax rate, but I just wanted to confirm to everybody that all of the transfers from the PSAP balance
that is shown here in September 30th includes all of the transfers that were part of your app board
in 2025-03 from last year that corrected the commingling of PSLIT and PSAP. So that September balance
is essentially after all the corrections. And then the other fund I just wanted to call attention to,
just because I get questions about it all the time, is the Housing Development Fund. In some,
the DLGF list, it's called the Housing Trust Fund. It's no longer the Housing Trust Fund, but it is
what you call the Housing Development Fund, and that's the balance with it. So those are really the,
You know, kind of the balances that I don't need to call attention to. Then just some comments on third
quarter appropriation and revenue balances. As usual, I provided kind of a detailed spreadsheet. And
then also for expenses, I provided a summary spreadsheet that summarizes it by category. And you'll
remember that there are four categories, personnel, supplies, services, and capital.
Let's see, what I want to call attention to here. And all this data, by the way, is all available through
the spreadsheets that are provided on the city's transparency portal. So these are actually rebuilt
every single day and made available to anyone who wants to develop pitotapists that are kind of the
same way I've done. I did create a separate tab, and presumably there's a separate page here.
that for just personnel, because that's always something useful to look at. Where are we at the end
of the third quarter in terms of personnel expenditures? And so, you know, we'll see that the general
fund remaining personnel expenditures is about 26.53, which means that there'll be some reversions in
unspent personnel through vacancies, but by and large, most of that will be spent. That's roughly where
you would expect to be after nine months.
Um, the, uh, and, and there will be at least one, um, end of the year transfer request that's actually
from the city council budget from your category ones to your category threes because of your, uh, kind
of work meeting to pay your, uh, interim attorney out of the, uh, out of the services line. So that
we will expect to be kind of right on target with some reversions, but not a lot in the general,
So this is, I'm sorry, this is spending in category one. This is just category. I'm sorry, I'm not keeping
up with the packet. What are the headers here? Oh, sorry. The approved amount, the actual amount, the
amount remaining, and the percent remaining. So what? The human resources, what is that? $35,000?
Uh, because most of the human resources budget is out of the EDIB fund. This is in the general fund.
I don't remember why there's one little piece of HR still in the general fund, but it's not the, it's
not the majority. Um, this is on page 47 of the packet. Well, thanks. And we'll say Dave has a question
too. Go ahead, Dave. Uh, thanks. Uh, well, there was just a question. I think it's a good one. Um, uh,
from the public, um, and it's the, uh,
the basis of accounting. So the question is, is it cash plus encumbrances, I guess, or is it, I guess,
gap, which is generally accepted accounting principles? What method is used to derive these numbers,
Jeff? This is what's called modify and accrual, but essentially it's cash.
I mean, what we're talking about here is not fund balances. These are appropriations. So this is how
much you have approved versus what has actually been spent against or encumbered. So okay,
now I'm understanding the nature of the question. When it says remaining, that is minus anything that's
actually been spent or encumbered by that day. Okay, yeah, I think he was referring to the previous chart.
The fund balance is true. Okay. Okay. Then we've got a little bit more available salaries. There's still
31% left after nine months. So we'll expect to see some reversions there. And then
The other one I just wanted to call attention to that will probably come as no surprise to you is in
peace staff lit. We know that staffing has been an issue. And so we're seeing 37%, 37.6% of available
salaries have been unspent at the end of the 1990s. So that just kind of matches what we're seeing in
terms of finances.
Some of these, like the NVH funds, are down to only 12.6% remaining. Are the vehicles, I'm sorry, the
salaries that come from the NVH respected, will the rest come from a different fund to cover those for
the end of the year?
So for MVH restricted, you'll see there's only a small amount of salary that is budgeted out of that
fund. And so that will presumably be spent out of the MVH. I mean, it's up to, Public Works has a couple
of different funds that they budget personnel out of, but presumably if they run out of money in MVH
restricted for personnel, then there'll be,
paying the personnel, paying out of straight MVH. Restricted is obviously more restricted than MVH.
So they're going to use that and then anything that's not spent out of that. So I don't know the details
of that particular situation, but I'm just saying that any personnel that can be paid out of MVH restricted
can also just be paid out of MVH. Just one other note in kind of interpreting
information here. When you see that the amount spent, so in, say, expenses detail or expenses summary,
let's say, you'll see that the actual amount is higher than the approved amount. That means that that
generally is going to be one of two things. There's going to have been an intercategory transfer, which
hasn't happened yet, or it's going to be an encumbrance from the previous year.
So people often wonder, why is the actual amount more than the approved amount? It's because the actual
amount is going to include expenses that were encumbered from previous subdivision. And finally, the,
well, not finally, sorry, I have a couple more things on this. Let's pause here for just a second, because
are there any questions thus far about what Jack has
Well, I just want to say we're receiving this the afternoon before the meeting. It doesn't give me enough
time to actually read any of this. No, I'm not blaming anybody. I'm just saying. Well, it was my fault.
I would have more questions if I had asked. Well, you're welcome to send questions and I can answer
them next time or answer them in a way that they can be posted
In the minutes of the meeting, so the other thing I want to say is that because we don't have this as
a spreadsheet format. There are no headaches to tell us what each.
So that has always been, I've mentioned that as an issue every single, every single meeting. I,
you know, I don't know what the answer is, but converting these big spreadsheets to a PDF. I mean, I'm
not the one who does it, but I, that doesn't seem to be a very effective way of getting information
out, especially for a fiscal committee where you're actually looking at the data. I don't know about
Sarah, we don't need to do that, but. Well, whoever does convert it to PDF,
No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no.
Planned admission does that for all of their stuff. And that was an accessibility thing. I think that
when we lost our staff, Jake Frank, I guess you can say that. When council lost our staff, we just went
back to doing the PDF packets, but other departments are doing this from agendas. That is the standard
way going forward. It makes it a lot easier with spreadsheets. Yeah.
Yeah. Yeah. Yeah.
There you go. I just shared that because it will be a fair price, not in terms of taxes. Yeah, one of
the frustrating things I know is that with Google Sheets, if you then export that to, print that to
a PDF, the tab titles don't show up. And so it's really, that's a problem we're gonna have out here.
Yeah, we'll definitely, we'll just, I'll kind of take note of that. Figure out how to make those money from
the agenda. We have a guide that we can send to you. What was that? We have a guide that we can send
to you. And I do have a question. If you could just clarify again, it goes back to the fund balance
stuff. How the amount of PSAP funds were determined that need to get transferred into the PSAP account.
But I think that that was the question.
Last week, I think we just went through what process we used to figure out. Well, I did not go through
that process. I mean, I did review it after the fact, but that was a process that the formal controller
went through and the city council approved through AdWords 2025-03. So basically, it was going back
through all of the
expenses that were in the PS Lit Fund, but were still coded as the dispatch center. So those expenses
were still coded as dispatch center in the financial system. And so it was looking at all the revenue
that came in from PSAP versus all of those expenses. And then the net was, I'm just remembering around
$2.4 million.
I may be wrong, and that's just my memory. One million of that was transferred at the very end of last
year. The controller's office, because there was no controller there, they kind of wanted to wait. They
did a million, but then wanted to wait to complete the transfer until the new controller came. And so
I did that in April. I transferred the remaining balance. And the two transfers totaled up to exactly
what was authorized in Apple 2025.
So basically in the original accounting between in the PS lit, there were things like everything dispatch
related dispatch. Yes, it was just that program. The math done to determine. Thank you. I thought that's
what I was, but there was a question about that last week in the picture. Claire, play that again.
Dave, do you have any other questions at this point? All right, great. No. OK, just a couple more things
on these numbers. I took kind of the three biggest operational funds, general, parks and rec general,
and ED lit. And just, first of all, we looked at the budget for 2026, looked at what kind of surplus
or deficit was
budgeted for each of them. So we had about $9.5 million deficit budgeted for general, $1.8 million deficit
budgeted for parks, and about $400,000 for ED-lit deficit. Then I took the current revenue to date through
the third quarter, all the expenditures to date and annualized them. So basically,
kind of projected them out to the end of the year, taking into account, for example, with general that
the property tax only comes twice a year, also with Parks and Rec General, property tax only comes twice
a year, and came out with just another projection of where we would actually be with both of those,
with all three of those funds by the end of the year. Now that's just, again, it's just a projection
given the information we have now, and it might wind up being
different from that. But we wind up with that $5.4 million decrease in the general fund, $1.5 million
increase in parks and rec, and that $4.5 million increase in EB lit. And again, that was just projection
based on what we, the numbers we've had up to September. So,
In the beginning of the year, we did the budget last year, we guessed that we would have a nine and
a half million dollar deficit. But right now, we're saying that that's really under five and a half
million. And instead of having a deficit in Parks North and Lyft, we're actually going to have a surplus
in those two. That's what this is telling us. Right, exactly. And that's generally what we expect. The
paper deficit winds up being either substantially less or not a deficit of not having
Okay, so I just want to get a couple more things done before we move on to bonds. I did want to talk
about PS lit because that has come up a couple of times and just kind of go through where the PS lit
position is. So I started out with the fund balance as of October 19. So this isn't actually technically
at the end of the third quarter. I did this on the 19th.
And that was about $5.2 million fund balance in PSLIT. Then we expect after that three more payments
of revenue from October through December. Then I actually, we talked to the fire department and police
department, which are the two budgets that are in PSLIT.
and they gave their best projection as to where they thought how much of their appropriations they would
be spending by the end of the year, winding up with just under a $5 million end of the year fund balance.
Then we look at what we project for revenue, which is a pretty good projection for lit revenue for 27,
And then the police and fire budgets that can project in that fund for 27. And then we wind up with
an estimated $1.9 million fund balance at the end of 2027, which is about 24% of the budget. Any questions
about that? Sorry.
And just as a reminder, Jeff, we like to have a healthy operating balance at the end of the year so
that we can do payroll and other things at the beginning of the year, right? Right, although this one,
this fund doesn't have payroll in it. So this one can be, that's why we're not, I'm not fussing that
it's not 30, but yeah, that's, for funds that have payroll, it's just extremely important that we have
that level of operating balance. Yeah.
And of course, of course, the live revenue for next year is based on the same tax rate. Correct. And
so the budgets. And that is actually based on the certified numbers from the. And that's does that include
the what about the 4 million dollars that the county is giving us from reserves?
This is only right exactly now it's easier to consider this in isolation. Coming. Well, guys, and it's
standing me in the books with the song. See you later. Oh, yes.
And I did have want to go for just one more thing on the third quarter numbers before we move on to
bonds. Just because I get this question a lot and that's about gas tax and where we are on gas tax because
we all know that there's been a gas tax holiday. So I went through and again, this data is in this document
is already in the folder is available for you. That doesn't this document doesn't get to the public
phone right now.
It's. Yeah. Yeah. I think I called it notes or something. Um, but just wanted to show, so there are
three funds that received gas taxes, motor vehicle, highway motor vehicle, highway restricted and local
one of the streets. And, um, I just want to.
to look, we can just look at the totals for motor vehicle highway. The others kind of follow the same
pattern, but what I did is I compared January through September of 2025 versus 2026, just to see where
we are. And what you can see is that we actually wind up, we've actually received,
gas tax holiday reimbursements from the state. The state did promise that and indeed the state has carried
through that we have received gas tax holiday reimbursements. And so you can see based on January through
September totals to date compared with the same thing of last year, we're $102,000 ahead of where we
were last year.
And we've actually already, after I did this report, just I think on Friday, or maybe on Monday, we
received the August gas tax holiday reimbursement of about $42,000. So our gas tax is keeping up, which
is good because that's obviously critically important for us to be able to continue to both pay the
streets department and continue to pave roads.
But of course, on the other hand, we're seeing the cost of fuel bill, too. So it's kind of a two-inch
solar. But because I get this question a lot about whether state is actually kicking in, I wanted to
make sure everybody knew that. So that's all the notes I had on third quarter numbers. So I don't know
if you'd let me know if you have any questions.
And again, I'm happy to answer any questions in writing that you might have after. Thank you. Dave,
go ahead. Yeah, just back to just so I can wrap my head around this, Jeff. We became aware that the
County Council, Monroe County Council doesn't have a PSAP fund, but it has PS lit. And it's sitting on
several million dollars, and we have a need for PSAP funding, that fund in the county isn't restricted.
I mean, they can use it for, I assume, capital purchases and things like that. Could you help me understand
the transfer to specifically
You know PSAP from the county. Go ahead. The county's PSAP fund is distinct from their PSLIP fund. Ours
was not in previous years. Okay. The county's is distinct. Those reserves that are in that PSAP LIP
fund are absolutely required to be used for
dispatch functions. And in fact, we will be at, we discussed this at the, at the LIT meeting the other
day on a detail where we will be receiving some of that to be able to make the budget whole just because
the expenses are probably going to exceed the revenue that they would have given in the past or the
new revenue coming. So they will be transferring some of that over the last part of it. I mean, only
we can spend it, right? So,
It's very odd to me that it wouldn't just sort of automatically be transferred. I mean, we spend it
right now because we run the dispatch then. Yeah. You know, that's not absolute. The county could start
their own if they wanted to. I don't think it would be particularly efficient to have to, but they could
run their own thing. OK. It's kind of weird. It's a weird artifact, I suppose.
Yes. Okay, good. Well, thanks. On that note though, like the area, instead of having the city do the
dispatch center, the county could do the dispatch center instead. The county could? Right. So it was
decided at some point 2018 for, I mean, I wasn't there, I don't know, the city. Well, the city has really
run, I mean, it used to be that some, the city has been running with dispatch center for a long time.
It used to be that some of the employees were county employees, even though they actually physically
showed up to work at the city police run dispatch center. They were actually county employees. And it
was a big pain because they'd get different benefits based on who's their employer. And in their eyes,
you can imagine that would be kind of a nightmare as far as the employees go. All right, can I move
on to debt?
So I just will also say that I do appreciate having me since I've been at Isabel's point, and it's a
lot of information, but I think about asking questions, but it's something that I use at different times
just to look at information. So I appreciate your going through whatever work you have to go through
to make these documents. All right, well, I then wanted to, this question has come up.
A lot from members of council council member walls as this question. So members public where are,
you know, what are what's the big picture on city debt? Like, not just geo bonds, but of all of our
debt and how do we pay it back? And so I just thought I would do a quick review, hopefully quick review of.
Of our bond, you know, our overall debt situation where what all our debts are and how they how they
get paid. And so I created a kind of a detailed spreadsheet and I'm not going to go for every Every
slide here because some of them. I didn't try to create a slide that's specific to each debt issue,
which I don't necessarily
want to go in detail, but I can if there's anything you ask. And I just wanted to kind of lay it all
out in one place. So also if there's other information that's not on there that you wish there were,
I can certainly update the slideshow and create, put some more information. But I just, like I said,
I kind of wanted to just give you the big picture of where all the data is. So first of all, probably the most
I wouldn't say the most important, but the most frequently talked about debt is general obligation or
geobonds. And as you can see, we have right now, this chart shows all of our outstanding geobonds, including,
so we have six outstanding geobonds, although one of them, you'll see the series 2024, I should actually
just make this up.
Mostly. Yeah, that's okay. That's all. You'll see that that one of the geo bond series 2024 is paid
off at the end of this year. And then we have two geo bonds that are paid off at the beginning of 2028
as well. So we have a couple that are are going to be rolling off. And then we have the proposed 2026
geo bond that we've already done the first reading for
at City Council. And so we will be doing the next second reading in November. So what are general obligation
bonds? Well, those are bonds that are guaranteed by the full faith and credit of the city of Lund. The
key is that they are paid for with a dedicated property tax rate. So they're basically always going
to be paid. It's not something we have to try to figure out each year.
how to pay these bonds. They are automatically, at the time that they are approved, the dedicated property
tax rate is created to service those bonds. The property tax rate generates what is needed for the debt
service, and then it automatically goes away. So you don't have to think about limiting the property
tax rate or generating more revenue than is needed to pay out, or less than is needed to pay off the
debt. The property tax rate generates it and goes away.
That property tax rate is only for service of the geo bond and it can't be diverted for other purposes.
For geo bonds, generally they have the lowest borrowing costs and I think conserved very secure because
your property tax rate, property tax base, particularly for counties like Wimbledon that are very financially
secure are considered very secure bonds. They are subject to Indiana constitutional debt limits, which
I'll talk about in a minute.
As you know, they all get approved by city council. I have a sheet here on the geobond tax rates. I
don't want to go through this in detail, but this was part of the deck that was given to you for the
2026 geobond. We financial will be available at the second reading also to talk about this in more detail.
But I just wanted to put this here so that
students will be able to, yeah. So just to spend a bit of general questions. In terms of saying the
2016 students, which we go to the city one, it has $7 million in it, but it's not going to be paid off
for another 10 years. Whereas this new one that is proposing is almost the exact same principle, but
it's estimated and anticipated to be paid off hopefully in at least six years.
So then that has some kind of impact on the actual percentage rate down here in this. So what are the
relative pros and cons of having the lower rate, longer payoff sort of bond? Well, so first of all,
longer bonds tend to have a higher interest rate.
Overall, it's not necessarily a huge difference, but that's the shorter of the term, the lower the interest
rate you're going to want to see. And another issue is you don't want your term of the bond to be longer
than the asset life of the assets that you're going to need. So because, yeah, you just don't want to
be paying off your car that's already a junker by taking a 10-year loan to pay off your car that's going
to last a little.
And the other thing is just keeping your tax rates check. You're always looking at your tax rates. And
so the longer you stretch out the bonds, the lower the tax rates are going to be. But the constitutional
debt limit is based on your outstanding principles. So you're going to have
If you stretch it out longer, you're also tying yourself up longer because of those constitutional death
limits. And I've got a slide that will tell you that. Constitutional death limits as well. Looking at
the Geo bonds on this table, the interest rates are variable.
And so what determines the interest rates? These are tax rates. Yeah. So the tax rates. Well, the tax
rate is basically what your payment is based on the amortization schedule and then divided by your net
assessed value. So it's just like any other tax rate. The tax rate is computed based on the assessed
value of your tax base.
and your, and then what the actual payment is going to be. Because these rates, the purpose of these
rates is to raise just the amount of money that you need to pay the debt and number. I didn't want to
talk about constitutional debt limits because this comes up a lot.
There are three separate constitutional debt limits for the city, the civil city, the parks district,
and the redevelopment district. And each debt limit is 2%, but one third of the certified net assessed
value for each year. And so for 2026, that figure comes out to about $36.5 million. And the constitutional
debt limits only apply to general obligation.
So this, I did put in a table there that shows what our constitutional debt limits look like right now.
So I told you we had $36.5 million in three different buckets or three different districts where if
the 2026 bond is approved, then we will have 21.2 left in the general civil city. We have $23.8 million
in parks, and we've not done any general obligation bonds in the readabout.
district. So that's just kind of a status of where we are as far as the constitutional events. Redevelopment
district is the TIF? It is, but it's not. TIF bonds, I know this is kind of counterintuitive, but TIF
bonds don't count against this. The redevelopment district could theoretically issue general obligation
bonds. But it's the same key graph. Yes.
Do you happen to know, kind of going back to what you said about, you know, wanting to have the term
of the bond be about the same as the assets, do you know what those 2016 build-ons were for? Because
that just seems like, that's like a 20 year. So I have slides. And like I said, I did not plan to like
actually go, because we'll be here forever. And I do want to get through all the categories, but yes.
Oh, and then it's 915, so we should stop by 920.
in order for public comment. Okay, well then let me just at least go through all of that. Okay, so those
are the GEO bonds, and there's a slide for each one of those. Then we have TIF revenue bonds, which
are paid out of TIF revenues. These don't affect property owners' taxes. They're not guaranteed by the
full faith and credit of the city, and they're not subject to the constitutional debt limits. Each TIF
allocation area has a different sunset date, and those sunset dates are taken into account
the, in calculating how much the, um, the TIF can bond for. So it's a fairly complicated capital. It's
not like you could just look at, you know, overall, what is the TIF bringing in? It's because different
pieces of the TIF expire on different, uh, uh, at different times. The term refunding, you'll see a
lot in bonds and refunding just means that bond refinanced a previous one. So it's just, it's like a,
a homely finance. Um,
The TIF revenue bonds have to be approved by both the Redevelopment Commission and the City Council.
And when we issue TIF revenue bonds, the primary fiscal consideration is what's called coverage. And
that means how much your annual revenues are through the life of the bond compared to the bond payment.
And we expect over 125%.
Um, coverage before we really even really consider, uh, requesting a bond and probably, you know, anything
lower than that would be, would be higher risk and we've been presumably paying higher interest rate.
Are TIF bonds usually have a higher interest rate? A little bit. Yeah. Yeah, they, they do. Um, and
so right now we have four, um, TIF revenue bonds right now. You'll see that, uh, two of those are parking garages.
the 4th Street garage and the trades district garage. And again, I have slides on each of these individually,
if you want details, plus two refunding bonds. So bonds that have refinanced previous bonds. And again,
I have slides for each of those. Future TIF revenue bonds that are planned. You know that we're interested
in an adaptive reuse of the 714 South Roger Street property as police station.
That would be, we're looking at a $30 million TIF revenue bond for that. We also have applying requests
for Summit District and hopefully TIF revenue bonds, but those aren't as, I would say well formed at
this time. Other revenue bonds, and this is, so these are revenue bonds. These are not general obligation
bonds, they're revenue bonds other than TIF revenue.
And one of these is very important. That's that general revenue bond of 2022, what you call the public
safety bonds. And I will talk about that in a bit more detail if we have time. Plus we have the solar
bonds, which are bonds that were originally, which you probably know about the guaranteed savings contract
and solar panels that were done as a lease. These bonds basically brought out that lease.
And so we're paying for those through 2038. If you want my editorial opinion, paying for solar panels
through 2038, probably not what I would recommend in the future, but any kind of technology. It's just,
yeah, exactly. And then there's a parks district refunding bond that's used to pay for Twin Lakes Recreation
Center that matures in 2029.
So just the public safety bond, this one's really important because this is the only one that's really,
that we actually have to think about how to pay for. All the rest of the bonds that I talked about kind
of come with an automatic or have a sort of an obvious repayment plan. The public safety bonds, they're
currently $2 million a year paid for from ED lit. Obviously, ED lit is going away, so those have to
be paid for from the general fund.
Unlike a general obligation bond, these general revenue bonds don't include a separate tax rate set
aside debt. So despite the fact that he lives on to go away, we're going to have to figure out how to
make those statements. For how many years? Through 2043. I tried to put all the information.
out here. Leases, we have a couple of leases that are of concern, well not of concern, but of interest.
We have the Convention Center lease rental for expansion of the Convention Center, and then we have
two parking garage leases. The Mercury Garage, which is the Morton Street garage, we're paying a lease
out of the TIF for that. So it's not TIF bond, it is a lease, but those payments are made out of the
TIF. And then the 7th and Walnut Street garage, we're also making
Payments out of the tip for those garage. And then, of course, you know about the Convention Center
lease rental, which is paid for by food and beverage tax. It doesn't count towards the debt limit. And
it's structured as a lease from the city of Bloomington Public Building Corporation to the city. Utilities
bonds. Sorry, I just have two more categories.
Uh, the city Bloomington utilities issues bonds through two fiscally separate utilities, water
and wastewater. These bonds are paid solely by utility rates, not by taxes. And there's no pledge of
full faith and credit of the city government. Um, they're approved by the utility service board and
the city council. And we have several, um, outstanding water, water utility bonds that they call water
works bonds.
Plus the and I thought I would mention this the the waterworks revenue bond 2026 a was just passed was
just closed down a couple of weeks ago. This is the first tranche and 71 million in water utility bonds
that you've already authorized in 2025. This is about 33 million dollars in.
bombs, and the projects were all related to improvement to the water treatment plant, rehabilitation
of a booster station, and replacing of water mains and other system infrastructure improvements. This
particular tranche did not include the service center, the operations center in these projects, so I
know that that questions. We also have wastewater, outstanding wastewater utility bombs. And then finally,
we have what's called conduit debt.
And these are not city obligations, but you all have asked to pass a condo with debt from time to time.
These are bonds issued by the city on behalf of private or nonprofit entities and it's the entity, not
the city that's responsible for repayment and the bonds are not an obligation of the city.
They're often used for affordable housing projects. They're also using some places for healthcare and
economic development. The primary risk to the city is reputational. The project goes badly. The city
is not on the hook fiscally, but it can still look bad. Your outstanding conduit debt right now, limestone crossing,
Wilmington Housing Authority Mental Assistance Demonstration Project, RAD 1 and 2, and Country View
Affordable Housing on Rockport Road. And you all have also already approved additional BHA bonding for
acquisition of apartments. They have already done pricing on that or planning to close in the next week
or two on that. So that's our consistent conduit debt. Again, it's you have to approve it as city council,
but it doesn't consist of, it's not an actual obligation of the city.
Okay, so that's in a nutshell, all of the debt that the City of Wilmington has. And again, there's lots
of detailed slides there for more information, and I'm happy to take over. Looks like Dave's got it.
Great. Go ahead, Dave, and then we'll go to public comment. Okay, real quick, Jeff, thanks for that.
So we vote on the rates, utility rates, but we'll also have a vote on the bond for the utility service
center, is that correct?
No, you have already approved, let's see, $71 million, your ordinance 2025-36, you have approved $71
million in water utility bonds. And so the utility service board can move forward with the remaining
amount of water utility bonds. Now there may be, I don't know exactly what other levels of approval
would be needed, you know, planning.
and that sort of thing. But in terms of the issuance of bonds, 71,000 has already been honed. OK. Let's
go ahead and go to public comments so we can make sure to get some comments from the public here before
we close the meeting. Members of the public, there's none in the room. Online, who are interested in
making a comment about this information that Kohler and Kim has presented, you can raise your hand.
And you'll be asked to unmute. I can't see the participant list on this screen. There's one. They've
been asked to unmute. All right. Can you hear me? Yeah, go ahead. And you've got three minutes. I'll
find you on my watch. Kevin Keough. First, Monday's City Council PSAP discussion. Discuss the interlocal
agreement, which I assume requires compliance. I would like to raise an issue about Article 6.
referred to as the accounting section of this interlocal agreement. It calls for an annual itemized
expense report to be shared among the governments, the Dispatch Policy Board. It also calls for the
city controller and the county auditor to share year-end financial reports, so both have an accurate
accounting of dispatch funds. Seems that the county kept records it had a PCEP-lit account as part of
their books. I have no idea if there was a meeting
I have not established that those requirements were violated, but Monday's difficulty in presenting
a clear combined picture of city and county-held resources makes it important to find out how Article
6 was carried out. I asked the committee to request a year-by-year account of which reports were prepared,
when they were shared, and who reviewed them, and whatever any differences remained unresolved.
That review should inform any renegotiation of the agreement. You did see the report just today where
the PSAP fund balance was zero until 2026. One of the years had a dollar. I don't know about that. I
have seen the calculated net cap position, not the fund balance spreadsheet that was prepared. I cannot
resolve it had been vetted, reviewed, or audited. The figure was, however, approved by the City Council
on 4-2-25.
Second, the city's audit, the ACFR, especially the single audit, I'm referring to the single audit for
federal compliance for the year end, December 31st, 2025, report serious control findings. Finding 25.001
is material weakness in the review of the financial statements prepared by the outside auditors. The
auditors identified misstatements that required adjustments. Finding 25.002 is a significant deficiency
in federal grant reporting.
Reports were submitted without documented secondary review, and the cumulative expense did not agree
with the prior federal expenditure schedules. The auditors explicitly identified the findings as a repeat
of the 2024 findings.
The audit also reports a separate material weakness in our compliance and federal grants reporting.
Finding 2503 included an overclaim of 109,000 in 2023. I do not suggest these grants findings are PSAP
findings, but they do show how document review, reconciliation, and follow-through deserves the committee's
attention. I asked the committee to schedule a public update on all three findings.
what the corrective actions management is committed to, and who owns each action, what has been completed,
and how the City will test whether new controls work. Please also identify when the Committee will review
the progress. Monday's tax vote did not resolve the underlying accounting and oversight questions. Clear
records and public follow-through will help the City and County plan reliable dispatch funding and give
residents reasons to trust the financial information behind the future decisions.
Hopefully the packet will be available. For today's meeting, I sure do have an interest in the comprehensive
jet schedule you just talked about today. Thank you. Thank you. There's no one else on there. There's
no one else? No, their hands raised. OK, wonderful. Great, and we still have about three minutes. So
any other questions or comments from committee members?
Um, did you have an update on the, uh, the, uh, yes. Um, although, um, Mr. Kio has already outlined
the, uh, the negative findings. I will just say the, uh, the audited ACFR was approved on September
30th and it was posted to the city website. It's available also now on the state board of council portal.
The City Council is one of the key audiences for this report, so you're encouraged to download and read
the entire report. We had the exit conference on September 22nd, and Council Member Stosford participated
as well. We did receive an unmodified opinion, which is what you want, and we did manage to get the
ACFR audit completed on time for the first time since the City was required to report on GATT.
You have probably heard Mr. Keough calling for us to get the next ACFR in by June 30th, which is the
best practice. And that's exactly what we intend to do for the 2026 audit. And let's see. So Mr. Keough
already mentioned the findings with respect to GAAP. One of them was a CIB adjustment. This is
related to the auditors, including the capital improvements board in our audit as what's called a discreetly
presented component unit of the city for purposes of the gap financial statement. This is the first
year doing so. The city had recorded a December
$4 million convention center construction invoice as construction in progress and payable to the CIB,
but the corresponding transaction had not been recorded on the CIB's votes. Because the CIB was contractually
obligated to the contractor, the audit adjustment added $4.1 million of CIB accounts receivable and
revenue from the city, along with an equal amount of accounts payable and expense. So the adjustment
increased the CIB's gross assets
liabilities, revenues, and expenses, but had no net effect on its net position because they'd had out.
And I will say this one in particular was the subject, a pretty vigorous debate between our gap accountants
and the auditors. Ultimately, we made the auditors adjustments and we'll make sure we treat late in
the year invoices similarly this year. But it took a lot of research on the parts of the auditors and
our gap accounts, and it was not at all
And even though it shows up as a finding it was not as obvious and there was no, no way any amount of
diligence would have caught that because it was essentially philosophical difference in how to handle
things. The second was related to complex NPO project.
The city had recorded the full amount of several INDOT administered projects as capital contributions
at the beginning of the project. Even though those projects were still underway, INDOT had not yet incurred
that amount of eligible project costs. So after, again, this was pretty extensive discussion that required
the auditors to get with INDOT and state board of accounts and do some research. The auditors determined
that only the eligible costs actually incurred by INDOT through year end should have been recognized.
And so the adjustment reduced.
capital contribution revenue by approximately $4.9 million. And we are working on meeting with engineering
and our GAP accountants to come up with a new set of procedures to make sure that we're only recognizing
what's actually been expended by the end of the year rather than the entire amount of these projects.
So that ACFR is available on the city's city's website and staple. Other questions. All right, I'm going
to point out a couple of things then, which is maybe about schedule and maybe just general information.
First of all,
There was a reference to the Bloomington Housing Authority most recent bond and those five properties.
There was an information session about that yesterday. And I did just look and I think that it says
on the caps under the Community Videos tab and it's the most recent one from Thursday, October 29th.
It looks pretty short, so maybe that means that there weren't any questions asked of them. But I read
it right still over there this week, as you mentioned.
But that was going through. So that's really exciting news about those properties. And a must task force
update, which is that there was a system must task force meeting last Friday, the 23rd. So that would
be the date that I spent the last time we had a meeting. And that was the date for where I put it in
my calendar, which was in my personal calendar, not in my city calendar, which is why I can find it.
Um, and so the members of that task force for that, yeah, the task force did agree on a statement to
send to the state. And I'm looking for the finalized statement online right now, and I'm not finding
it. There is a draft in the agenda, and they did make some slight changes. Jeff, I don't know if you
know where that final draft is.
Not offhand, but yeah. Anyway, so overall, it's a pretty generalized statement that we, as they couldn't
give final determination because we did not have the information, but there were implications in there
wanting to make sure that all of our local units would be made full with
partnership and financial contributions, et cetera, et cetera. So I think overall good positive things
on that front. And then I guess the only other scheduling notes would be that our next meeting of this
was November 13. And my intention is to go back to reviewing budget stuff.
And we didn't quite ever finish the conversation, giving feedback on budget presentation stuff this
year and what we want to see and how we're going to proceed with that next year. And that would be my
intention. The elected official salary ordinance should be having first reading this coming week. Dave,
do you have a question? Yeah, just one I forgot to ask Jeff. Jeff, real quick.
I saw that there was some debate at the county council and among county commissioners about the food
and beverage tax and whether it should be used for various things, including the hotel and even parks
and their parks department. But as I recall, we had a backup fund for the convention center and that
was in case revenue were to fall from the FAB tax.
Is that fund limited in terms of how much it can accrue? Because if revenue falls, my fear is that we're
obligated as the city from the general fund. So do you have a comment about that real quick? Sorry to
not ask that earlier. Yeah. So you'll remember that in this year's budget, I'm sorry, this year meaning
the 2027 budget that you just adopted,
We actually also appropriated two additional lease payments. So there's two lease payments a year. You
appropriate four lease payments. Two of those are essentially extras and they're going to be transferred
to the bond trustee to an interest bearing count. And so those will essentially act as the loss stabilization
fund if the revenue were to go down.
So we would actually be able to accommodate an entire year's worth of zero revenue. Of zero revenue?
Right. I mean, there are two entire lease payments. So the idea is that then, assuming things go as
we hope and as they happen so far, we'll just use those two payments as the last two lease payments.
Yeah. So we're well
Well, stopped as far as the food management. Okay, great. That that's very helpful. Thanks. Any other
last questions or statements about anything concerns, et cetera, et cetera. All right. Seeing none.
Happy Friday. Happy Halloween.