City Council - Regular Meeting

All right. Good evening everyone. It is 6:00 p.m. on Tuesday, May 12th, 2026, and I now call to order the 2,180th regular meeting of the city of College Place City Council. Madame Clerk, will you please take roll call? Um, just it's 2,180 second. 2,182nd. Okay, this one I thought I was being clever. Council member Green present. Council member Cleveland present. Council member Stuckline present. Council member Sherman present. And council member Bole is excused. And then Mayor Hernandez present.

And we do have a quorum. Thank you so very much. Will you all please join me in the pledge of allegiance? It's now time for public comment. Madame clerk, did anyone submit a written comment in advance or request to speak via telephone or virtually?

I have a written comment that was submitted. It's a letter from the chief executive officer Karen Haden from the YMCA. It says to College Place City Council regarding College Place Community Opportunity Center at Lions Park. Dear members of the College Place City Council and guests, the YMCA of Walawala is pleased to support the city's efforts to advance the construction and operation of the College Place Community Opportunity Center at Lions Park. We applaud the city's vision in thoughtfully addressing the needs of its constituents by advancing this project to include a rural library, licensed child care center, and community gathering space. As the valley's largest provider of licensed child care, the Y believes that the center will offer working families the ability to access quality child care in a centrallylo facility. Studies have shown that child care acts as a key component of each community's critical economic infrastructure by enabling parents to participate in the workforce. This boosts productivity, reduces employee turnover for local businesses and drives tax revenue. The integration of the library in the center is an added benefit to the community and child care alike as it brings essential resources that complement and advance learning at all ages. The Y was active in the design development phase of this plan multipleuse facility and provided funding support through a department of commerce grant for the design of the child care space to be colllocated in the center. The Y will continue to work with the city library and others to pursue op pursue opportunities for the needed funding to complete the cent's construction. We urge your support of the contri continued efforts to advance the city the center for the city of

College Place. Sincerely, Karen Hadine, chief executive officer.

All right. Thank you. If anyone is in council chambers who would like to speak during public comment period, please raise your hand. Mr. McAndrews, I saw that hand raised really high. Right. Seeing none, we're going to move on to our consent agenda, which consists of the agenda for tonight, May 12th, 2026. Approving the council regular meeting minutes for April 28th, 2026. Approving the resolution 26-006, fiscal year 2026, community grant program allocations.

That's not on. I don't. Okay, let's scratch that resolution. Sorry. It's okay. Um, excusing the absence of council member Bole. I was like, I'm sure that one's got to be right. Um, and approving the expenditure for tenant improvements to create three workstations in the city hall basement. Are we banishing some three people? Um, that's good. Okay. Thank you. Sorry about that. It's okay. Are there any items any member of the council would like removed from the consent agenda at this time? Make a motion to approve the consent agenda. We have a motion. Is there a second?

I'll second. Green. Council member Green. Second. All in favor say I. I. I.

Any opposed? And any abstensions? The eyes have it and the motion is passed. So we have three pro uh three presentations tonight. First two are proclamations that I will um read. So city of college place proclamation office of the mayor. Whereas public works services provide provided in our community are an integral part of our residents everyday lives. And whereas the support of an understanding and informed community is vital to the efficient operations of public works systems and programs such as water, sewers, streets, and capital improvement projects. And whereas the health, safety, and comfort of this community greatly depend on these facilities and services. And whereas the quality and effectiveness of these facilities are vitally dependent upon the efforts and skills of public work officials. And now therefore, I, Norma Alernandez, mayor of the city of College Place, do hereby proclaim May 17th through the 23rd, 2026 as College Place public works week in the city of College Place and call upon all residents to recognize our public works officials contribution contributions to our health, safety, and comfort every day dated this 12th day of May, 2026. Mr. would you like to come on behalf of your team?

We greatly appreciate here's good.

Thanks guys.

And please thank them because upfront looks lovely. It really does. And next, city of college place proclamation office of the mayor. Whereas the congress of the United States of America has designated May 10th through the 16th as national police week and May 15th to be police memorial day in honor of the federal, state, and municipal officers who have been killed or disabled in the line of duty. And whereas the city of College Place is proud of our law enforcement officers and wishes to recognize their contributions to the public safety profession. And whereas College Place Police are committed to the highest professional standards, working in partnership with our community members to improve safety and quality of life for all. Now therefore, I, Norma Alernandez, mayor of the city of College Place, do hereby proclaim May 15, 2026 as Police Memorial Day and the week of May 10th to May 16th, 2026 as College Place Police Week, dated the 12th day of May, 2026. And Sergeant Smith, would you

Thank you so much for being here. We appreciate it. Who are we going to look at first? Troy in the middle. Thank you folks. Perfect. Thank you. And please thank your team.

Give a speech. So, uh, thank you. Just appreciate the ongoing support. Um, I will share this with the team people that makes this a reality because now one of us is the giant team. So, um, very appreciative for that. You have any questions for me? I mean, you got a got an ear for the police department. I'm here for a second. Anything? Actually, what's the size of our Oh, sorry. What's the size of our department today? We've got one in academy right now, which puts us at 18 uh sworn officers. So, he'll be back here in about just just over one month. So, pretty excited about that. We're good squared away kit. So, all right. Yeah, we're we're doing good. So, no problem. Perfect. That's wonderful. Growing. Council member Sherman. Okay. Thank you. Yeah. Well, please give them all all our appreciation. We really appreciate everything they do.

All right. And Brian will present our 2025 prelim preliminary, excuse me, Brian, year and results.

Uh, thank you, Mayor. Uh, if you can put up the preliminary fund balance. Okay. Um, as I've talked about in prior meetings, uh, we were substantially behind in our financial reporting due to staff coverage and whatnot. We were up to eight months behind. Uh, fortunately, they're working on February uh, this week. So, uh, we're almost caught up, which will be nice. Um so we met with the uh finance committee on uh April 21st and we discussed at that point in time where we at financially and it wasn't great in a couple funds uh current expense and the street improvement fund were showing there was more showing a negative balance at that point in time but we weren't finished processing the year end so there was adjustments to go through and allocate ations to be made. So, we went through and we're about 99% done with the financials at this point and it's concerning that we have a couple funds which are in a negative balance. I'll kind of go through uh a majority of the funds and just talk about where we're at and and the situation with them. We'll get into detail on the couple that are the most uh relevant to this conversation. um current expense. Uh you can see that we are showing a deficit balance of $13,000. Um it was anticipated in the budget um when we went through the budget last September that we were seeing a decline in um in fund balance for current expense. And we went through and there was cuts made. Uh it was varied between 20 to $40,000 per department were cut. And at that time we anticipated the um

beginning fund balance was going to be um it's very similar to where it began for the actuals for 2025 but it's the ending that's come in significantly lower than we thought and I'll go through some detail about how we got there and you know what basically happened in the process. Um but we had talked about um during that budget process that we may have to use the current expense reserve funds to bring up our current expense balance to um what our reserve requirement is. And our reserve requirement is 17% of budgeted revenues in the prior year. And in order for us to get there this year, we would need a balance of just under 1.5 million. uh and I'll get into the details and that and a couple other items but um so our uh if you go through the funds you can see the 061 fund which is our employee benefit reserve is shows down considerably although um with the passing of the that is to cover the cost of our left one employee which was the prior police chief and we had to cover all of his medical costs under that plan. Um it t it typically cost about $200,000 a year uh to fund. Um unfortunately uh uh Leiani passed away last month, I believe. So we have enough funds in there right now to cover. Other than that, we'd have to use current expense uh funds to cover any deficit. So fortunately, we're uh we're in a good position there. you can see in the street fund. Um, so what happens with current expense is they fund a lot of different areas of the city. They fund

the parks, they fund police, they fund fire, they fund um parts of the street that aren't covered by the tax revenue we receive. And you can see that the street fund is um, you know, just above a break even point. Um, traditionally the current expense would help prop that up and fund more, but we just don't have the current expense balance to uh fund it at this point. Few of the other funds um are seeing a reduction. You can see the hotel motel tax which funds a lot of our um um activities or festivals is in in pretty healthy position. um the street the reed funds um those are the funds that do some of the street work some of the parks and that's where Lions Park came out and was funded through there um we didn't have we don't have a lot of carry forward in the REIT but we don't have any uh parks projects planned for the next couple years and as uh you may remember for the new uh council member members is that we had to uh take a loan from our tiff fund in order to fund Lions Park and that was back late in 2024. So uh those funds are pretty much depleted for the next 2 to 3 years. You can see the street improvement fund is at a deficit of 585. That seems concerning but what that really is is a timing of cash flow. Uh we are a cashbased city. So, we record expenditures when we pay the cost and we recognize revenue when we receive the revenue. Of that $585,000, there's about $700,000 in grants

receivable. But as a cash basis city, we can't record that receivable. So therefore, you know, we have a cash flow issue there. And we'll talk about the remedy for that and a little bit later. Um then the funds ranging in the balance of the 300 series those have declined a little bit. The facilities maintenance reserve the equipment reserve fund those have all seen a reduction due to the inability of current expense to add additional funds into those programs. Um but we feel there's sufficient balances uh moving forward into 26. You can see the big one is the tax increment financing at 5.4 million. That is our our tiff that is funding uh four major projects. The um parking lots across the street, the major road project, not all of it, but a portion of that going to Maja Road and the East West Road design and the traffic circle design are all included in that 5.4. uh we had anticipated in the budget that a lot of those projects would have moved forward in 25 and a lot of spending done so the draw down on that fund didn't occur as anticipated and you'll see later in some variance analysis that that shows um the good thing I won't go into all the detail on all the 400 level accounts that's um our utility accounts and those um are very healthy uh so uh They had an opening fund balance totaling 7.7 million and at the end of 20 uh 25 uh we're anticipating a $10.8 million ending fund balance for all the utilities. That's a $3 million increase in funds. Although we are accumulating

some funds in our uh capital reserves for anticipated project costs. Um you know we do have some funding gaps on a couple of the projects. the water tower, the wastewater treatment plant have potential um gaps in the funding of the those projects. So, we may need those funds to help uh uh true up those projects. And then the equipment maintenance rental and replacement fund is in good shape and the flexible benefit plan is small dollar amount, but that is also in good shape. Now, as far as uh current expense, um can you bring up the um the balance history? So just to get into the detail on current expense that negative3,529 in effect in our um in our bud in our uh finance committee meeting we talked about using the 514,000 we have in the current expense reserve. That's an emergency fund and um it's our opinion in finance that this is an emergency that warrants using those funds and that'll come up as a later action item if you approve to use those funds um to supplement the current expense. Uh we had put that into the u um into the 2026 budget that those funds would be used to supplement current expense. Um, also within current expense, there's a half a million dollars that was of expenses that were incurred in December on the uh fire station escort project, the HVAC system. That's a $1.2 million project of which um Mckinstry build us h over half a million dollars in December. And of course, it's that cash flow thing. We

have to recognize the expenses because they were incurred in the last couple months. But yet I couldn't submit the uh I didn't know of the expenditures till we paid them. And then I wasn't able to submit the grant reimbursements until uh I think it was February. And um so that's sort of a timing flow there. So, of that 1.5 million, if you look at the $514 in current expense reserve and the half a million in in cash flow on the uh fire department project, that brings us up to a million dollars. And we had anticipated it to be a $1.5 million at the end of the year. So, there's a variance, a net variance of about half a million that were we're down. And that's a combination of revenues uh versus expenditures. It's not one area but a combination. And we can get into some uh detail on that. Um if you look up onto the screen now here is our to get this in a little perspective. We you know you may ask the question well you know how did we get to this point where our fund balance in current expense was so low and you know it bounces around quite a bit. You can see we had a high in 2021 of $3.7 million. Um, but that included, you know, $1.3 million in COVID funds that we didn't expend until the next couple years. And again, in 2022, we received another $1.3 million in in COVID funds. and we expended those over I think it was the next it was definitely 23 and possibly into 24 when we finalized the expenditures on on the COVID money. So you can see we had an additional $2.6 million in revenue but then didn't have any

corresponding expenditures. So those came out over those next few years and by the end of 23 we dropped down to $2.1 uh million which was we were quite happy with that at the time that exceeded our um our expense uh reserve requirement of 17% of budgeted revenues which at that time was about uh I think 1.7 million so we were comfortable with that and then 24 we saw a half a million dollar reduction ction and that half a million dollars was to support the Lions Park project which when it all was said and done came to a $2 million deficit. Um I'll bring det I brought that information to the finance committee and I'll bring that to council at a future meeting to show how those costs broke down and exactly what happened in a cost revenue perspective. Um so at 1.5 million uh we're still in compliance on our reserve requirements. That's the balance of the end of 2024. Um but uh S&P 500, who uh is our bonding um agency, they want us to have a $2 million um uh current expense reserve. So at the end of 24 they did do a percentage drop in our credit rating uh as a bond for the bonding agency. So not great but they said it's not critical unless you were going out for bonding and we didn't have a plan for bonding for the next couple years. So it's not a critical issue. Um, in the budget you can see that we uh budgeted for a $1.539 million ending balance in compliance with the reserves, but that also included the $500,000 expense from the

emergency reserve funds included in that. So technically it was a million dollar. So you can see we've seen a steady drop in our current expense uh fund over the last 5 years. Um it wasn't alarming until um we started completing our financials um in the first quarter here and realizing oh no uh what happened in 2025 which shows the uh largest not the largest drop but a drop that you know we keep reducing it a little and a little and not having compensating uh uh revenues and that's uh part of our issue and that's part of our push for development is to get that develop ment revenue. And part of the issue in current expenses is that for the last 2 or 3 years, we had anticipated uh permitting and revenue for the major projects. Um um the uh project across from the high school uh you know that we anticipated that going. If you look at our capital projects, we had expected to be completed with Majana Road. now uh it was to be completed in the in the last half of 2025 and we're not even starting uh construction yet. So um we always looked at the potential for our development revenue to be if there's a 50% chance that the it's going to go forward, we're going to recognize the revenue. Um, unfortunately that's bit us now that it hasn't happened yet, but we're sure it's going to happen. It's just we need to bridge that difference and you know until we get that revenue coming in. We are seeing some revenue in 2026 already coming in thanks to community development. Um, so you know fingers crossed that we get there. We'll definitely look at it

harder in the 2027 budget process to make sure that that 50% maybe isn't a high enough threshold in order to recognize it. Cuz what happens is if you anticipate a revenue, you're going to anticipate a cost to offset that revenue or to match that revenue. And if you don't get the revenue, but you incur the costs, you're you're in trouble. And I think we have some of that happening. Um, so you can see in that the bottom squared box line, the 2025 actual, you can see where we're at. So, um, and then you can see in the 2026 budget, that's my, you know, that's my biggest concern is going into 2026, we anticipated having that $1.5 million uh, beginning fund balance and we're going to be about a half a million dollars short of that. So, um, we can talk about that and what the plan is is to get through our, uh, financial reporting. It's due to the state, uh, by May 30th. So, we're scrambling right now to get that all prepared. And part of the resolution to the current negative fund balances, we'll cover in a in a couple uh uh a couple items moving forward. But um if you want to get into some more detail, I'm not sure how much detail you want to go into. I can talk for a long time about where we're at and what got us here. Uh I'll just highlight some stuff. If you can bring up the um um it's the which one?

It's uh it's by department. Yeah. Um, so this is a breakdown of current expense and this is by department and you can see where we're at. Um, you can see I'll just hit the major ones that I've highlighted. There's a lot of negatives and and offsetting um, positives. Ultimately, you can see that current expense based on our on our budget. That's revenues less expenditures were negative 1.47 47 uh million dollars under what we had anticipated to be at. Um and that's a mixture of revenue and expenditures. Um like I said, there's half a million dollars in if you can see in the on the on the capital, there was a lot of money there. like we had $1.14 million in um in capital projects for current expense. That was the Sallyport renovation plus the work on the ESCO project on the fire department and we incurred um well the actuals aren't this is driven from the forecast but um definitely we came under but then if you look at our revenues we're not showing the revenues for any uh grant reimbursement. So it's um it's a combination of the cash flow of incurring expenditures but not getting the grant reimbursement and then if we had expenditures in for capital projects that we didn't get compensated for then that revenue is reduced as well as the expenditures are reduced. So um we don't move forward with the projects unless they're funded of course. Um,

so you can see that the revenues we anticipated were about $348,000 under what the forecast had said. Um, and that is associated with the $500,000 in um, grant revenue that we didn't receive from commerce on the fire station upgrade. So, if you back that in, then we're I think we're very close to what we had anticipated in the revenue side. Um, as far as costs go, you know, the major ones, you can see the police is over by $232,000. That is a um um combination of things there. And I do have more detailed variance analysis that we can get into if we want to talk about it. I'll let you guys decide if you want me to get into like the real real heavy detail. You can see community development costs were over by 130,000. Um uh buildings costs were over by 83,000 and then capital was over by um uh 502,000. I think that's the wrong direction of the negative. Um, sorry. Um, I think in that forecast that I did on 326 included some uh capital expenditures that weren't um weren't incurred. So overall that explains the the variance. Um so if I want to get into some more detail I can touch on it on it some of

this stuff briefly. If you bring up the um the next one is the variance analysis. Um just to highlight some some of the areas you can see down in non-b businessiness licenses and permits. This is taking the um the actual amount with the full year budgeted and comparing and getting the variances. You can see in some of the revenues we anticipated um real property taxes uh were higher uh budgeted higher. That's a number we get from the county, but that will represent people that hadn't paid their bill by the end of the year that will carry forward into the next year. So, uh we only get the revenues that they receive and not what was necessarily build to the um the residents. Retail sales tax was a little lower than we had anticipated. Um, you know, some of these numbers when we go through them, we do escalate them from the prior year, but we try to be reasonable with them, but again, you can be off and just happen to be off. Overall, you can see the business and occupation taxes. Um, I think one of the major ones there is that we had included in the budget was the uh storm water utility tax um for $74,800, but that wasn't implemented until 2026. So, we'll see that revenue uh this year. and some other variances between um you know the cable telephone and we just use historical trends and um I don't know the exact reason why our cable utility number would be lower than what was anticipated um probably relating to people going

with more streaming stations and not anting up with the cable companies Um, the next section I'll talk about is the non-b businessiness licenses and permits. You can see that we'd anticipated $650,000 in revenue. And then there's a big variance of $443,000 and that's what I was talking about us anticipating those uh permitting revenues that didn't transpire. Um, that's that 50/50 rule. Um you can see down there's a variance of a million dollars in in revenue there. That was the Sallyport conversion that we were anticipating getting a grant for that didn't materialize and that uh of course we didn't have the expenditures so our capital costs will be reduced by that. So not a real impact on the bottom line. Um there's a bunch of grant revenue there that we had anticipated receiving. Uh some are coded to different lines. uh ultimately the coupled uh we didn't get grants for so we didn't move forward with the project. There's the flex light industrial study uh and then there's a grant with commerce that we didn't get. Um also the task force grant for the police. We had anticipated that this uh wallala was going to get additional granting but it it didn't materialize. So therefore we're under in our grant amount there. And then you can see that there's um there's $500,000 there in um grants for state other that was the two grants for the Lions Park Community Center grant and those are the actual revenues were received a couple lines down for that 326. So, a little bit of um coding issues with where the grants

uh were budgeted for versus where they are actually coded. Um you can see a positive variance in the MO reimbursement for the fire station. Um those would offset some of the costs that were incurred on the fire department as far as as far as what their variance was as far as costs. And if you look back, they had a total cost variance of 76,000 negative, but they those costs were included in in the MOB costs that we get reimbursed for. So that offsets their uh negative variance in total costs. Um you can see the the plan checking fees and development fees were a positive in total and the traffic uh penalties went up uh to you know improved by 13,000 which is nice to have some positives there. You can see on the next page you it's my page I can read it. Um so some variances positive and negative throughout. You can see in the developer bond deposits we had anticipated with those capital projects that we'd be getting some bond deposits from the contractors which didn't materialize completely. Little negative variance there and interfers from ambulance we had anticipated at 400,000 but uh we couldn't take as much as we required. So you can see in total if you back out the million dollars in the uh Sallyport conversion grant revenue um we're about you know 1.3 million behind in in revenue and some of that was some of that grant stuff that didn't materialize. Um so getting into the cost side of it uh there's a lot of numbers there. You can

see in the first part um under judicial judicial activities the um district court expenses were considerably higher. That's that second line in there for $179,000. And we had only anticipated 90 which was our historical trend. But in the last couple years, we've seen an increase in our prosecution with the um uh with the county court and then therefore our costs have gone up and more than what we had anticipated. So that is a negative variance. Um you can see in the executive activities there's professional services and there's no budget in there for 28,000. That was the city administrator search that we went through last year when Mike Rizatello left and we're looking for Troy. Um then you go down into the uh legal activities. Um we did have some and because we're uh prosecuting more, we also have to do indigent defense more. So therefore, that second line under legal activities, professional legal services retainer, that's our indigenous defense, and that came in at $167,000. Um the professional service, the next two columns down, those were our uh outside legal fees, Rio Folultz, and Ferguson. As you recall, we had in the 2025 budget that we were having an in-house attorney. Um, so she left in the first quarter of 2025, but we continued to pay her severance for the up until September of 2025. So therefore, city attorney costs were still there, but then we had to hire a prosecuting attorney and then an outside attorney. So you can see we have

about $160,000 in costs that uh weren't budgeted that we didn't anticipate. So that was a big hit to uh current expense. Um the Ferguson numbers are allocated out to the individual departments that use the services, but the RIO faults which is the prosecuting attorney's costs are all just kept in current expense. So a big variance there. Um, also going going out throughout this entire thing, our professional services in as a total were considerably higher than prior years and and what we had anticipated spending. Um, we did the um um investment grade audit in in 2025 that cost $52,000 of which was grant reimbured, but I just received that grant reimbursement from the state uh this past month. So there we had cost incurred that we uh hadn't received the grant reimbursement for. Um just trying to hit my notes here. uh down in the community planning and economic development the halfway down on the second page you can see that we had um oh sorry

that's been off the whole time no I I tapped my screen and I think I must have shut you shut you off my apologies I've never done that

yeah we had our ss project in there and there's the there's another um project going on and and the SDS again was another reimbured uh um that we didn't receive the I think we received the money but the costs were more than what we had anticipated um you know we do get some positives in that um our planning professional services for grant reimbursement ment because we didn't move with those projects. Uh there's no grant reimbursement. So we do save, you know, close to 293,000. Um down near the bottom of that page under park facilities, you can see that uh the costs for utility services and the parks was up considerably and that is our our power bill at Lions Park is the major contributor to that. uh operating the splash pad and whatnot is cost us considerably more than what we had anticipated. And then we have a developer bond deposit return. Um, typically bond um deposits will go on your balance sheet as a as a um um as a liability, but we have to record it as a revenue when we receive it and an expenditure when we paid it out. So, we hadn't expected it to be paid out last year, but we did have a $73,000 bond deposit we had to re repay, which goes in as an expenditure. Um on the last page um you can see that Lions Park design was in that uh last part before the transfers out. Uh um it was a positive variance, but we did have

um you know $453,000 in costs there that were um incurred for the Lions Park Community Center design. And you can see some other positive variances in you can see the million dollar or half a million dollar savings under under the building improvements that was the the grant that we anticipated receiving for doing the Sallyport conversion that we didn't get and the actual costs in there are the costs of the ESCO project. Um the other uh interfund transfers uh those are approved in the budget and what we do is we monitor those and move the money around when it's appropriate appropriate for fund balances. So um ultimately um we have an expense variance of um 1.97 million um offset by the oh it might not be adding up properly. Bear with me a second. Yeah, the total the expense variance of 330,000 taking all the positives and negatives into account. So ultimately where where does this put us? Um well we have to deal with uh the negative variance on current expense and then we also have to we have those cash flow items to deal with and the one is in the street improvement fund. Overall if you look at the total fund balance if you could bring back the fund balance report.

Yes. You can see that we had an opening fund balance of $7.8 million $17.8 8 million and we ended with a fund balance of 16.9 which is a reduction of about $900,000. But we do have those uh grant reimbursements of over a million dollar. So if you take those into account and if we were able to apply those we'd actually be very similar in opening closing balance. So I'm happy in the fact that overall we seem to be okay. It's just current expense is getting hit by a lot of expenditures. Um you know we have the issue where we've seen uh cost inflation over the last two three maybe four years is starting to outstrip our revenue increases. You can see that when I if we went back to that chart on what our you know our core revenues are for current expense is taxes and most of those we don't have any control over. So, um, if those flatline, but you're dealing with 5 to 7%, uh, cost inflation, it's it's an issue, and I have a feeling it'll be an issue moving forward. So, the plan is to have a um get through the the reporting to the state by the end of May and then immediately go in and look at a forecast for 2026 to make sure we're uh where we're at. And that's anticipated to be completed by the middle of June. I know that's a lot of information, but um questions,

Council Member Green. I I don't have any questions. I got to answer or ask lots of questions, I should say, in the the committee meeting. And I appreciate a really really thorough presentation. I didn't didn't leave a lot of room for needing much more info. So, thanks for that. Council member Cleveland,

what are some lessons learned here so that we can kind of prevent this sort of stuff from sneaking up on this again? And and ultimately, it seems like we're sort of headed in the right direction. There's things we can do, but I guess I'm kind of thinking about how do we get to where we want to be as soon as possible with current expense. Um well, we're going to find out a lot of information once we do our uh our forecast and depending on where that it will kind of set a course of what we'd have to do. Secondary, we're going to look real hard at the um at what we acrew for development uh revenue and being more uh pessimistic as opposed to optimistic that we don't think we're not sure it's going to happen, maybe we don't recognize it. Um that's one thing. Um uh and development is is what's we're going to have to grow out of this. Um we need that development revenue to increase property taxes to increase sales tax and increase BNO taxes. Those are all positives to the city. So you know hopefully um there's risk in when we do the forecast that what revenues we are anticipating for the balance of the year. That'll be the challenge. How accurate are you? And that's always the case when you are dealing with a forecast is it's only as good as you know the information you have at the time. When I did the forecast for 2025 back in September, we knew there was going to be a reduction, but not as much as there was. So, um, you know, it's just what you anticipate. You can make it look as good or as bad as you want depending on what you anticipate will happen in those next, you know, five to six months. The lessons learned in the finance department is is that we need to have our financial reporting out in a more timely basis. Um, yes, I have excuses of why we got to

where we're at, but ultimately having that information more readily available will allow you to react faster. And um, we're going to get to that point within the next few months. and we have the staffing now that will be able to support getting those uh financials done in a more timely basis. Well, thank you so much for all your hard work on this. I know it's not fun to bring bad news. Um but I'm I'm glad that we're, you know, got some good plans in place. Y um and I just forgot the other thing I was going to say, but yeah, thank you for your work on this. Appreciate you. Mr. Raburn, you have something to say.

Yes. I just wanted to um take council member Cleveland's question um what lessons can we learn from this maybe a step further. Um one of my observations since arriving 5 months ago is that um we work with a lot of our consultants um agreements and contracts as opposed to them working with our agreements and contracts. That needs to change. I think I mentioned it to the um budget finance committee when we convened on April 21st. So, that's something that I'm going to be looking into once we get our city attorney in place. Second, within those agreements and contracts, we can insert language that minimizes, for example, change orders or if a change order is necessary that they have to come to the city um with specific types of information and in addition, they have to endeavor to, you know, minimize change orders. But all of those things will come in the not too distant future. So to answer your question or take it a step further,

Council Member Stline, um I was just going to ask about I know you can't you don't have a crystal ball and you can't see the future. Um but I know you mentioned a couple of grants that um didn't either come in or come in at a at the time frame that we were hoping that it would come in. Are there any other things like that that you can foresee? Um well the only good thing is if we don't get a grant we don't move ahead with the project.

So then therefore there's offsetting uh revenues and expenditures. So it doesn't affect your fund balance. The risk is is when you start a project especially in the last quarter of a year um it's hard to get the revenue the the revenue reimbursement by the end of the year. So then you run into this timing issue and we've had that issue before with the utilities but their reserves are so healthy that we're able to reser we're able to absorb that cash flow. Current expense is not in that situation. So you have a million dollar project um and you if you had a million dollars expenditure but hadn't been reimbursed yet, you run into this cash flow issue and that's happened both with current expense and for the street fund. Thank you. No other questions,

Council Member Sherman? Um, no, I don't have any questions either. I was in the committee meeting and I appreciate um the additional information that you shared tonight and thank you for for all your work on getting us caught up and and keeping us there. Thank you, Brian. A quick question for the public who may be listening or will listen. Um overall, so um we had approximately $500,000 grant rescended by the federal government of expenses we already had expensed cuz we were contracted to receive that reimbursement which was then taken away from us unexpectedly.

Um had those had that grant not been taken away where what would we be looking like today? Well, current ex there. So, the Lions Park project was two and a $2 million over budget, give or take a few dollars. Um, of that $1.5 million was funded by tax increment financing and the other amount was uh supported by current expense. So, there is half a million dollars potentially that cost current expense. Um, I think that's important to to remember

and that's looking back, you know, a couple years probably to 24 probably or may early 25 that would have transpired if we would have got that grant. Yeah. So, it would look a little different had that not been done to Yeah. Also, the refunds would look better. We did receive close to half a million dollars in uh um RCO grant reimbursements in the first quarter of 2026, but that's just going to help pay back the loan to TIFF in 2026.

Okay, council members, any other questions before we move on or let him off the hot seat for this second? No. All right, thank you so much. and we appreciate it. So, that being said, we're going to move on to our action item and we have two of them um on the agenda tonight. Action items. And we have two of them. The first one is um Mr. Carlton will review the use of the 005 emergency funds that he um mentioned during the last discussion.

Thank you, Mayor. Yes. uh any movement of the funds out of the 005 emergency fund have to be um approved by council as I mentioned previously and we talked about that in our finance committee meeting also in the budget uh process last fall. So I'm asking for approval of council to allow us to move the the dollar amounts from our reserve fund into the current expense fund. and the reasoning and we've talked about it extensively here.

Council member Green, any questions or comments? No. Council member Cleveland, none. Council member Stackline, no. Council member Sherman. All right. If there's no questions or comments, do we have a motion? All motion to authorize the finance director to transfer 2025 year end balance in the current expense reserve fund to the current expense fund effective 12312025. Thank you. That was council member Cleveland. Is there a second? I'll second. Council member Stline second. Any additional discussion? All right. Hearing none. All in favor say I.

I. I. All opposed? Any abstensions? All right, the eyes have it and the motion is passed. Thank you, Brian, for providing us all that information so we can make a thoughtful decision. Um, and next you're going to present information for the two interfund loan transfers. Yeah, I touched on

Thank you. Um, I'm asking for council to approve uh the total between two loans, a total of $1.7 million. Uh, the first one is um from the uh wastewater fund would be to support uh current expense. You remember half a million dollars of that will be received once the grant reimbursements to repay half of that loan. So, it's basically a cash fund loan. And if you look at our um uh financial policy under inner fund loans, that's one of the areas that is very commonly used and it's in our policy to use for inter fund loans is to handle that cash flow difference. So half a million dollars is cash flow, half a million dollars is to support current expense. Um uh those loans I think were of a term for 2 years maybe two or 3 years and also interest rate has to be given to the utility lending the money and that's set at our LGIP rate and I think it's 3.8% on a annual basis. That's the That's the first loan and that requires a resolution of of approval to uh to uh operate that loan. The second one is from our street project and that is strictly a cash flow item. Um it's in there for I think in the detail I have there's an error on the historical perspective it says 600,000 but the number is actually 700,000. It's in the action. um that is a cash flow item and the inner fund loan will come from our water fund and as I talked in the um in the prior item is that there is sufficient reserves in the utilities in

order to lend this money and also meet their reserve uh requirements. So unless there's more questions. Okay. Um I do have a question. So out of that, let's just kind of I know it can break down to more minutia, but I just want to see think um overall. So total 1.7 of that 500,000 is expected to come back from reimbursements that the state's kind of slow on reimbursing grants or state and federal. They're not really slow. It's just the timing of when we incurred the expenditure and I could submit the reimbursement request.

Okay. Um, yes, they can be slow at reimbursements, but I don't know if I use Okay. I could be slow at So, we're expecting 500,000. So, in total, a million. Total a million. Yeah. A million from current or 500,000 from current expense and I think the total for the street improvement is close to the 700,000. Okay. So, at 1.7 a million in reimbursement, that brings us to 700,000. Yeah. Had we not have to expense at 500,000, we might just be at 200,000. Well, yes, that would be correct, right? Yeah. It wouldn't be so gnarly had that not happened. Okay. Thank you, Council Member Green. Questions or comments?

Nothing for me. Council member Cleveland, Council Member Stline. No. Council member Sherman. All right. If there's no further questions or comments, do we have a motion for resolutions 26-008 and resolution 26-009? Can we do them separately? All right. Do we have a motion for resolution 26-008?

I'll make a motion to approve resolution 26-008, interfocal transfer from account 401 to account 001 for $1 million. Hm. Oh, interfund loan transfer. Sorry. Thank you. From account 41 to account 001 for $1 million. Thank you. We have a first from council member Green. Is there a second? I'll second. Council member Sherman second. Let's vote. All in favor say I. I.

Any opposed? Any abstensions? All right. The eyes have it. And resolution 26-008 is approved. Now, do we have a motion for resolution 26-009? I'll um move to approve resolution 26-009, inter fund loan transfer from account 410 to account 311 for $700,000. Second. We have a Cleveland. Okay. First from line, second from council member Cleveland. It doesn't matter.

All right. Any discussion? Hearing none. All in favor say I. I.

Any opposed? Any abstensions? The eyes have it and the motions are the motion is passed. Thank you everybody. Let's see. We have no administrative reports which we are down to the end of our meeting. Is there any other business for good of the order from any council member? No. From any member of the staff? No. All right. Hearing none. Do we have a motion to conclude? So moved. And I was sure this was the one that was going to take us to 8:00 looking at the agenda, but it didn't do it. Yeah. No, I'm good. I'm good. So moved. All right, we have we have a motion. Is there a second?

I'll second. Thank you, Council Member Stline. So, there's no objections. The meeting is concluded at 7:01 p.m. We went one minute over. Thank you everybody. Appreciate your time. And thank you staff. Appreciate all the information. Have a good evening everyone.