City Council - Regular Meeting

Good afternoon, financial services director and today we are on general fund and capital in the general fund. tomorrow. Current proposed yesterday instead of head proposed budget for the city for fiscal year 247 with 151,964. This is a history from the budget that was in July of last year for the final budget of 177,85,000 373. I don't know this year.

So much easier to deal with full numbers. We also plan on ending the fiscal year 26 lower budget at 15352 the 26 budget and 27 budget. So I'm going start off with balance in reverse. Um this is something that we talk about every year. What is our fund balance fund balance you get from the annual comprehensive financial report? It is the carry over for the general fund or whatever fund you are looking for and it gives you what that fund balance is. balance is not fun. equipment would be something that you could quickly not permanent but easily liquidated. So our fund balance for fiscal year 20 was 335. So then you carry that number over into that fun balance as a revenue and then you put all your expenses towards all your revenue all your fund balance and then the remaining amount left over balance for the budget. when we were creating the 26 budget

there was a lot of discussion about using our funds and not having too much in socion project and so all most of that money came from the general fund came from So, we'll get to that again in a minute. So, every fund, not every year, and typically we budget to every question. Reserves reserves are what budget we have items that we consider as a reserve. We have the the uh regular budget reserve which we are not really just preparing for. Revenue the economy drops something happen to cover aside in the past we have been doing for a

very long time the recommended amount which is 16.67% 67% of the prior year ongoing revenue ongoing revenue not something that's a one time for things that continue on top of the last year we have 25% of that revenue and then this year during discussions itself we decided 35. I may have asked this question last year. The budget fun% in the budget. Yes.

It's not really gone towards other expenses. So um also it general fund funds all the other revenue fund which is street library airport all those enough revenue to cover the general fund over special. So by this we're not transferring that money to any other fund from this year. We're going to save it and make sure that we have a good solid reserve balance to move forward. This reserve even though it's only for the general fund will then cover expenditures in the other funds if they were needed. So even though the reserve is normally 35% of the general fund, the general fund would also be a special fund. It really is that we need to maintain the entire reserve in case of an emergency where we need to find those other funds. They have ongoing operational and we do not have any other careful

and I know on a favor I will tell you as finance person I am all about the reserves and having to be able to support your ongoing expenses and so of course 35% really makes me happy it does affect what you can spend in that part of the year but we are reducing our fund balance everything but this reserve for our budget. So as you see on this slide I'm saying in 26 we are coming to 26 and we will not have an increase or decrease in our fund balance in 27 because the only part of our fund balance that will be there is Um I don't know why column area of the car So the column for example in 2027

the column up and down column is what we plan on doing for the balance that the area the blue is the 27 at the end of 27 will only be our reserve. Whereas this year when we came into the year We're going to be sending if I can emergency It's very transparent. By the time we came out of because of that, I remember that. But also look at that million. talking about elimination. And so,

you know, we have and so that usually turns over to an economic perspective. And this allows us have that security so that we have that amount of down. We don't have to lay off employees. We don't have to services without having saving money to them. understand that too, you know, down. Medical

I'm all about making sure to cover those expenses. The reason that we could do project and pay for it out of our reserve was because we built these types of reserves from meters and that unbalance to be able to know people like driving down this new road and I was thinking to myself didn't do that because he knows how expensive it is to do and how hard it is to specifically save to be able to do those And that is why you have a larger reserve stays there in the future to do a large rather than bonding. Um so at the present time at the end of fiscal year 27 we will have a total of $35 million of the principal on their five different two whipple loans and three the loans are for done for the funding of the bonds that were used to purchase What happened? 2005 interest rate

which is final payment will be on July 1st of 2027. So not in fiscal year 27 but at the beginning of fiscal year 202 we also anticipate that we purchase a city building for city hall and we will most likely have to bond to that building. We're going to replace currently the bond payment obviously if you look at the you can see that was about 1.3 month at the present interest I could come up with I don't have a good figure. I would say

yeah it's not we are not we do not We didn't want to go to that reserving funds to be able to pay as we The amount of declined over a couple years ago about We did ask one So as I stated earlier the general fund basically

the revenue fund. So that's where the transfer is out. This is us transferring funds from the general fund to those funds to cover their you can see on this chart is for 2025 2024 2025 the ending year of 26 and then again 27 there is um about 10 million that went to and that was so we started transferring those funds in 25 even though we did not start the project in 25 we just wanted them to have the reserve be able to as large as it is and then the library Um, one of the other large transfers that we always have the library very little portion of the library budget $130,000 this next year of million dollar budget over million. So that There's always a transfer from the home to the library to cover operations. We also have to transfer out to the cemetery because you want to talk about not making money. Cemetery makes

most of the sold many many years ago, many ago. And really the only thing that the cemetery brings in is the burial. So any other cemetery are covered by the general fund beyond the four $600 that they know percentages. Yes, there is a way. No, it is not because we are part of library network. We offer to all restore a lot of our funding for the library 90,000 be kicked away. So this current board supervisor will work with us supervisor meeting up

2627. And then the airport also requires some kind of it was prod. It just depends on what other projects need to happen. So you can see in this chart, you know, it ranges anywhere from 42,000 to 184,000. It kind of depends on the year and how their fuel go and how everything else happens at whatever else happens at the airport. The other trans we go to is to the capital improvement fund. which is fun. And that's for things like purchasing or building or those large ticket items that we do throughout the city that really don't belong to any specific department that are citywide capital improvements and typically only larger projects. We do allocate money every year as part of the sales funding and then use whatever resource

Okay. So, now on to um where do we want to go in the general? One of the main items that we always have to look at when we are getting ready to budget for the next fiscal year is what is it going to be? What are the rates going to be for retirement and for public safety reason? Um there's the majority of our employees are on air retirement who are sworn officers and 50 total. So next year the rate for retirement. and the employal for next year is anticipated to do one point for Arizona public safety retirement. Like I said, we employ retirement. Their rates are slightly different. depending into the system. Tier one are people who were hired on or before 2011 I think um and their contributions will

always be 76 what they can It will never amount that contributes based on whatever the unfunded liability is. You have to match it and then it increases if your unfunded liability is higher. We did a bond a few years ago to pay down the unfunded liability. And then if you look at the chart of leaf and fire, you can see that leaf's rate is kind of creeping up. because their unfunded liability has grown slightly and we probably need to start from that uned for thinking that I'm going to do that this year and hopefully keep them down at the 100% level by the end of the year. So their rate for tier one is 7.65% 5% for the employee and 18.35% for the employer where fire is overunded% funded almost 11.3% anyone after 2011 and their pay 7.65% If the employer pays around and then tier three and then a little bit extra for employees of help with liability

and you can see that in this chart we anticipate that the contributions for Arizona fiscal year 27 about $862,000 and then the bond the debt service is about that and I listed out what the assets are in those funds and what the liability is difference that retirement safety retirement also is that um when you're doing retirement you're part of a big pool everybody together of the 15 billion that is the United States those numbers that is You are your own. Nobody else is in that pool with you. For whatever, whatever your liability is, it's your liability. So you take on any tier one you take on that liability. So it liability is not to say well we got to hire somebody with you because

But if you attend and you're in tier one, your liability. So that is kind of why it's been also quite a few years ago when they decided that everyone should report retirement years ago. We started having to report this as part of reported liability. And we're going to see in 2019, 2020, 2021, our contribution, we're in the 1.7 million range. And so that was why we liabilities over the life years when we bonded, we we will save money. Even though it seems this year, it really does

because we would have been we were headed in the 65 to 70% that mean that means that the city 75% of your salaries into the retirement. So for every officer that we had that was in tier one we would have been paying 65 to 70% and then on top of this we now have a hard time understand I can see more fires that are used to help fund a few years ago that we had no more retirees from that and so there was about 250 there was enough fund for those retirees that you could apply to liability. So we did pay those and then fewer people and fewer That is why

the investig on those agencies. What you have to It was in 2014.

And at the time we found that we did not have to work. There were other churches. There were well over some of them were at there's another contin to maintain these benefits to employees. We we offer a very good insurance package because it's a good benefit. Uh this year we saw 12% increase over last year's rate and we try not to 100% employed. As I'm sure everyone is aware in fiscal year 267 we anticipate budget. If you're looking at those below you'll see that in 26 we budgeted 4.8 But we only have people in the high

employees. Would you take any of the plans of the PTO0000% the children and spouse and Four times. compensation. So I think you all heard me say before that compensation is one of the highest but we are provide services. We are anticipating that total cost for all department will be 30.7 million for employee salary.

All those are all of the benefits. salary and other average cost for benefits. Um, so this year we had We had 10 requests from employees and one was a request for a request to fund the parttime intern level college while they're going to school or high school to get them to want to come for a couple basically classification. So that means that it changes where they fall

and five of them are only able to get the transit program as you are aware is 75% grant funded by and so we requested in application in March for the federal fiscal year which begins in October to increase the funds to allow for you not awarded because that's when you would start receiving the increase. traffic enforcement officer they also have applied for a DOS grant grants are also federal grants so that's why it says October they in the grant funding for two officers to be paid for and only they requested to help security.

Yes, I don't have that number here. And then we also said for the income program at high school or college level, whatever just experiment. We often have people who want to be able utilities. Um, it was just determined I think at the time when they didn't be a questions.

Yeah. One question is how many positions were savings on it? I do not have that number. that I would say that we've had several come and go to 100 people have come and gone and then some of them are for a few months while you're question we don't plan on eliminating the city. So in this past year we had fulltime city attorney because we weren't sure 100% if we contacted or city attorney but in the budget currently for the only position that we are attorney position we are not funding the meeting for the position he wants to back to

how many police officers with the police officer and concern. So I just wanted to know what is the situation in terms of expect probably overition. Another

question was when I was looking at the for positions that are not going to be filled. A lot of them have to do with regulatory certifications. So what be possible to have that would address management compiance compiance one. I would say that it's hard to go across. I will say that I think we have good for our city of ours and allies that you have to really person that it would be hard to do I'm used to doing strongly echo what M said Um the medical

is when it comes to compensation costitional staff asked years. You're looking at looking at what's going to be folks. We don't have the luxury of having operally very comments that come in on social media. We've been reporting

to do that and folks a problem that comes to us as well. Wonderful work that we do for the community and There's always going to be some also based on our population. You had questions about employees and thought that you know people off but um may not be in order to cut when I got here. You're not sure the myself. But it's still worth looking at each and every opportunity.

Our funding 27 revenue budget 27. 45. I think that we try very hard to make sure that our employees are compensated correctly and that we are providing quality benefits and they all part of the budget. I was telling them about money and we still wanted to make sure that we realized that they deserve to be compensated and they work hard. So they are a priority and again the priority over that conversation at lunch today organization that they want to be a part of. employees employ

employers here. Thank you. Make sure that we're right. I don't know if we perform budget. I don't know how to municipality always. I think you don't need that department every day services that provide the quality of life. What can you say is more more than twice as fast?

I understand. That's the number of fulltime in our budget and then this next year we will have a total of 253.8 And the point is the judge. She is only% of her time and No, we are not going to instrument and then we are also doing longevity. as part of that compensation where every level in that range for how many years that they work for the city and the two

study. So the we in the past Our whole I want everyone. The majority of the funding for that is actually my favorite. So this is a chart that shows the last 11 years. You can see that we had down and that was due to raising tax. So of course the following two years Crazy that no one anticipated

outdoors and we were an outdoor area. So a lot of people came up here. So we had a few good years of 11 17 12% back to our average% increase every year for this year down% known as always. I would much rather budget that we are lower than we bring in. So that is where he says ahead of me. So 59% of our sales tax is retail that would be Walmart usually 17 to 18 weekend construction. And then the rest is very small.

You'll see I'm trying to compare marks. So you can see where it really has construction up but construction is very up and down depending on what's happening in the area and then In January 2025, they eliminated the residential rental that completely additional bed taxes. I only get the additional one. of the three and a half and a half Right.

We have I can get that for you. My other favorite. This is the last 10 years. These projected number for 27 are what they're going to cut off of what are they? 14 of that 27 is downlight and then urban is up a little bit and then lose your motor vehicle. funds which are highly revenue funds revenue funds for streets and street project and then

hasn't passed the budget yet. arguing over at the moment. Part of the budget for the urban revenue faired years ago and then we get that. years really. And as always, the state is always Okay. So there are other revenues in the Google fund obviously about 25 million about 16 million in other We do charges for services in utility interest in interest rates going up

people. question. Basically, 15 opportunity. years. I hear I don't want to call

Sergeant I don't know why. We'll come back to that tomorrow. the grants. So in fiscal year 26 we budgeted that we would receive 9.4 million grant and then million in expenditures for the looking is that we will bring in about 5.2 Grant funding.3 transit program. So what are the expenses associated with the grants or what is that anytime you get funding you have to pay

the sole 3.6 to operate the transa about million grants and a large employee. You can call it department total for the general fund is going to be 16 million52,250 Last year's total budget was 17 million and you'll see that the reason it is the reason

question. So the reserves are budgeted in council budget million budgetal. As you can see only about 4 So this is the chart that just kind of shows the changes department as I earlier have requested the city manager, but there's no system. And then security. used to be natural resources. This is a much bigger years.

I do have a note um by since 2022 we've added 25 employees 174 because of the for the public director is again this is the salary just to show you. So your 174 employees And then on the capital here we had about seven and a half 7.5 million hospital in the budget current

there of What is happening? I did the information that you were all putting in the budget. A lot of was let's make sure we're maintaining let's make sure we're upgrading our facilities. Make sure that we are maintaining council chamber. um is not going to be held until we find out building something to go ahead with. So the um design and remodel are carrying it over next year to be able to work. You should have some information on what it looks like for the end of the year.

related to that request for separately request. request 27 department hopefully get the added the budget. What's in the budget in that column is actually in the current budget total 15 million that we have for the whole entire city budget. It includes those capital. We will be going over that. It's not quite finished. There's still some items. There's no power to it. Thank you. Questions. So maybe I'll just question the last

want. So I wanted to first congratulate you on the decision that was reallyful in terms of addressing the community interested into the budget. So number one for them was once again budgeting a million dollars as a reserve housing. development. We've been budgeting that the last three years available to help with anything. Even though it's set as a reserve, it's there for housing and then there's also a small budget remaining program that was developed four years ago, five years ago. And we had put,000 into that down for homewood

employment. for economic development. And budget would be for economic development and specifically budget under economic development. We have I think you know mentioned last. I think the one thing that is important for the public is unfortunately economic development themselves and we don't our job on the economic development side economic development funding contract strategy to staff working to develop an opportunity here. We have all around

council amendments and possible stand economic development budget $47. It's a little lower. So I was just looking for just explain that briefly for equipment. all of your capital equipment. So you look at that 4100 all those items in the budget all up to what's listed on the budget. That's why it nothing.

Yes, thank you. One of the things that was earlier was service area and I did see where other services that we get for the creation month. Next year we have we have agreements with all of those organizations I think now agreements I think next year and that's all of the organization put together a recording system to inhouse system. Um so my question is when the system won't be any funding for the next year after some discussions remoding this area

to put that funding with this remodel not already found What other questions you have? Construction. someone that It's our favorite artist.

services. Either way, Don't have to ask questions for Everyone favor.