City Commission - Special Meeting

City Commission special call meeting to order. Today is Tuesday, March the 10th, 2026. It's 1:00 p.m. Uh we have a very short agenda, so I'm going to turn the meeting over to city manager, Mr. Earl Coffee.

Thank you, Mayor. Um this is a budget presentation for information. The um just intended to be a really a financial update for the city. Um and certainly uh um we're we are uh trying to this is the second step of of what we call our budget process where we we demonstrate what we estimate to be the year end and estimate what our our financial position uh is and will be. Um, and so our finance director has done a lot of work and I will let her go through the slides. Uh, the the spreadsheets are on your on your table and then we do have some uh comparable tax rates that are on your table as well as well as the full presentation. Okay, I will get started. Um, as a reminder, um, this is our outlined budget schedule for the year. We are in step two, which is our year-end review. Um, we'll compare it to our budget, where we're at year to date, our projected year end, and a comparison to where we ended the year last year. Um, as I'm going through, if anyone has any questions, please let me know. Um you do have your spreadsheets that give us the last um several fiscal years budget to actuals and then you for the last two years you have your budget compared to actuals your as of midFebruary and a projected year end. Sorry.

And next meeting will be on I'll remind you again at the end March 24th which will be your department presentations. That will be a full day meeting. Um so be prepared to hang out all day with me. It starts at 9 on March 24th.

Okay. Okay. Um and just as a kind of big picture reminder for our budget in the current year, some of the um initiatives and impacts on our current year budget in fiscal 26. Um citywide, we uh did pay increases for all city staff, which equated to approximately 4% um a 4% increase to the um average employee. that um was the result of a step increase on our scale plus the scales being adjusted by COLA last year which is cost of living um which was 2.9%. Um in total that impacted the city budget by about $560,000. Our health insurance also increased uh by about 499,000. Um, but we were able to maintain the level of benefit that um, we had previously experienced and Randy was able to enhance a few um, and provide full family coverage uh, to all our employees which is a selling point that we do like to use as a recruitment tool. We also had some position reclassifications and additions. We had um several out of the general fund, three between legislative department, finance department reclassifications, um three within the police department and one within utility administration. We also added a patrol officer and two firefighters, one battalion chief. And within the utility fund, we added a water utility manager, a wastewater utility manager, and a wastewater um trainee, a wastewater operator trainee. We also were able to provide funding um for 16 agencies within the community to

help support their missions. Um along with supporting our agency partners, our shared agencies including planning and zoning, the airport board, economic development, um along with setting aside some money for our 250th celebration. Okay. So we will get into general fund revenues. That is page one of your large spreadsheets here. So we ended um what you're seeing on the chart. Um you got a black and white copy because I'm saving you some money on the printer. Uh but your color copy shows you our various um general fund categories of revenue and you have three columns. You have in the first the blue column on your um color version is your projected fiscal year 26 year end. So what we project for the current year that middle column is as of 21726 when the we started um our behind the scenes process for budget review um your which is in the red your orang-ish brownish color column is your um comparison to last year. So that's where you ended the year for fiscal 25 and the line that goes along with it is your current year budget. So where you're at in comparison to your budget. So there's a lot going on in this chart. So stop me if you have questions. Property taxes. So this includes real estate, your tangible motor vehicle taxes. 2025, fiscal 25, you ended the year at 2.5 million. We're projected to end the

year at 2.5 million. There's a little bit of variance. We're seeing um a slight decrease in month-over-month collections in your tangible tax. So that is tax that is assessed on inventory and non-real estate things and that varies significantly. That comes directly from the assessments come directly from the department of revenue at the state. It's not done by your local PVA. Sometimes that can um generate significantly more revenue than we budgeted. Sometimes it's less. Um, we are projecting to to collect um slightly less based on our collections um year-to- date compared to our budget, but overall uh pretty close to where we budgeted at 2.25 million. your license and fees, which is your largest source of general fund revenue, which includes your occupational license fees, your net profits, your insurance premiums, which are your three biggest sources within um that category, are projected to end the year at 19,530,000, which is a about 700,000 more than we budgeted. So, we're projected to increase compared to budget. Um in total there are a few items that we are projecting to be slightly less than we budgeted or net profits specifically. Net profits are based on the income that's reported by businesses who are submitting those annual returns. And we are seeing month overmonth in the current year slightly less than we collected in the previous year. So right now we do have a projection that that is going to be lower than our budget. However, our insurance premiums are um being collected at a higher rate than um budget and compared to prior year. So, we are anticipating that that um comes

in above budget and is helping to um put that overall number in that category above budget. Your penalties and forfeitures, we won't spend any time hardly talking about them. You're projected to collect 10,000 uh by the end of the year. Those are penalties that are assessed um by other entities. It's a very minor category of revenue. Your service revenue, which includes um contracts with other entities, including Boil County Fiscal Courts, uh Junction City Parable um for services uh provided for 911. We're projected to end the year collecting 968,000 um compared to your budget of 870. Compared to last year at 936, you're projected year-over-year an increase of about 30,000. Your other recurring revenue includes um insurance proceeds, sale of property, interest. Um, we receive um funds from the state for 911 services. Um, we receive funds from your school systems for um school officers, school resource officers. We're projecting to end the year at 831,000 which is over budget uh by about 150,000 um but it is lower than the previous fiscal year um due to some large insurance um proceeds that we collected which is essentially due to act we lost a street sweeper last year which increases your insurance proceeds but then you also subsequently increase your expenses when you buy a new street sweeper. Your intergovernmental revenue had a

huge change um compared to prior year. Um in 2025, fiscal 25, we um allocated the last of the city's ARPA funds, which greatly increased your intergovernmental revenue. Um, we're projected 487,000 by the end of the year, which is a little lower than budget of 540, but that is due to some grant income that we will not get until probably next year. So, in total, we're projecting to end the year 22 24,341,000 in general fund revenue. Uh, we budgeted 23 23,430, so approximately 900,000. um higher than budget

on the any reason I mean the net profits you said they're down do you think?

Yeah. Um partly that is there was some changes um there was some changes in how businesses report um a certain type of income. The federal the state government saw that change in their um their income reported too. They revised their budget estimates down um mid year uh because essentially the way the law changed they had to report it's a certain type of pass through income um in one time period. So it would have hit in our 25 and then it reduces 26. Um I think part of it is also there are there are people who are reporting less true income. Um, so we partner with the occupational tax office with the county for their collections. Um, so we rely on them to to make sure they're collecting correctly, auditing um returns and and ensuring that um our local businesses are reporting um what they're required to recall we we were talking about the last meeting that things are projected kind of flat right now and these numbers reflect that

and I know we talk about it like I've mentioned it probably a couple times but like looking at all of our fees. Yeah. Have we done that to make sure that we're charging the appropriate amount for fire or for Yeah. police? I don't know that we have you know but um those things. So we're in the process partly that's that's I just haven't got it. Enforcement fees.

Yeah. We're looking at what um specifically right what license fees are the various business license versus a fireworks permits those kind of things. Um I'm hoping to have it done by the end of this fiscal year. The you know the big picture is that those um won't make a huge impact. Um we do want to make sure we're charging appropriately though. Um, and I think there are some that definitely need revision. Um, but some some there may be that we bring to you that aren't worth the despite the fact that it cost us more to issue the license or to um provide the enforcement for it, it may not be a smart decision um just to just to increase the fees. So, that'll be discussion points. I just that's that's just me. I haven't gotten quite where we need.

No problem. I just want to keep bringing that up. So,

okay. So, we will move to general fund expenses. So, that leads you through two through two through page 11 of your large spreadsheets. Um, so you can see each department has its own page. Um toward the back the end our non-EP departmental and capital items get um and debt kind of share a couple pages but our individual working departments have their own page. So you can look through those as you get some time to kind of um analyze their individual budgets. um from a big picture um projection of 24,341,000 in revenue, projected expenses 25 million. Uh so you're having a reduction in your a projected reduction in your fund balance of $693. And that is comprised of your capital for the year, which is typically how we fund um our quote unquote operational capital items, you know, routine replacement for things um like PD equipment or um trailers or um you know uh just general general things. Um we also uh had transfers to um other funds in the amount of 1.8 million. Uh in total based on those impacts that we talked about at the beginning of the slides. um you're going to have a slight increase in most of your departments compared to prior year due to the increased cost of personnel, the increased cost of um

health insurance. Um there are going to be a few departments that when we do our budget amendment at the end of the year, we'll tidy up just because some have had, you know, some have had the need for more overtime than others um or additional costs that we didn't anticipate in the original budget. Um but for the most part, everyone everyone is uh pretty close to on track with their projected year-end budgets. So, in total, your legislative budget is projected to end at 1.18 million. Oh, I'm sorry, that's finance department 1.18 million. Uh, legislative at 1.92. your IT department, one of the one of the ones that is very very good about coming in under budget most years at 584,000 when they were budgeted at 670. Um PD at 6.7 fire departments projected at 5.1 911 budgeted or projected to end at 1.6 6 million, code enforcement at 108,000, public works at 2.3 million. Uh your community agencies, we anticipate spending total uh full budget at 144,000. Um your non-EP departmental, which includes your transfers to other funds plus your shared agencies, uh the bulk of which is your transfers to other funds at 2.4 4 million, dead service at

2.2 million, and your capital at 585,000. Most of your operational expenses do come in the form of personnel costs. So, compared to this time last year, um we at this time last year, we had some pretty large budget amendments planned because of opportunities that had occurred midyear to acquire um the property on Fourth Street where US Bank was. um and the opportunity to provide funding to the EDA for capital acquisition this year. We've not yet seen any way. Um and um so your budget amendment is really just tidying up

your budget amendment is just tidying up um your um any sort of budget overages that we may or may not have had. So, I'm going to keep going through these. If you all think of a question about a specific department or about a specific number, let me know and we can always go back. Your municipal aid fund, which is page 12 of your large spreadsheet. Um in the current year fiscal 26 we had um budgeted and planned for activity significant activity on Bofin Avenue. As you all are aware we have had some hiccups in um the permits uh easement I believe is area and so we have not gotten significantly as much work done as we had originally planned. So, we're projecting to end the year um with 367,000 in revenue, which is derived from a little bit of interest um and largely your municipal aid funds, which are your gas tax funds that come from the state. And we're projected to end the year in expenditures at 700,000 which is comprised of your routine paving uh your contribution to the general fund and um some work on Buffanet Avenue, but we also were able to um do a few other small paving works um out uh out near the development of Isuga that Josh was able to they just do. These

might So, that leaves our um our municipal aid fund in good shape. Um and we should be able to take advantage of that Bofman Avenue grant and finish that out in fiscal 27. Okay. Um we have four smaller governmental funds. Um most of the three of the four most of their revenue is derived from either grants or transfers from the um uh general funds. Um this runs page 13 through uh 16. Um your opioid settlement fund um that is restricted to opioid abatement. Um, we have not yet spent any of those funds. Um, as of the end of February, we have 304,000 in the bank, specifically restricted to opioid abatement. Um, I do know we've been discussing, um, partnering with other organizations. Um, we're exploring that potential for use of those funds, but we do have to be very conscious of what those are spent on because they are restricted by the settlement. Uh so no projected expenses um for the end of the year. Your police safety fund which is um the expenses related to your highway safety grant. We're projecting to end the year at 14,000. Um those are specifically related to traffic enforcement. Um and that is a reimbursement grant from the Kentucky Transportation Cabinet. So um police will go out and do the traffic safety um and then we get reimbursed by Kentucky Transportation Cabinet. Your drug

forfeiture funds um are also restricted in use. Um those are funds that are collected based on um drug enforcement crimes that we receive from the circuit court. Uh we're projected to end the year spending about 7,800. Um, that's a pretty minor fund as well. And then your streetscapes fund. This is a capital projects fund where essentially we track the expenses related to capital improvements for the downtown core area. Um, in the current year, we're projected to end the year at 80,000. Um, that did go up. You all approved last night. Um, one of the invoices included in that 80,000 just due to replacement of ballards and street lights and some minor repairs. Your last governmental funds is your park and recreation fund. Uh, the largest source of revenue that begins on page 17 of your large spreadsheet. your largest source of revenue is your um transfer from your general funds. We are anticipated to increase um our transfer slightly compared to last year. Uh we do have a little bit more capital work planned in the current year than we did previous year. Um when you look at your spreadsheet, um it'll tell you how much is transfers for operations of the fund versus capital of the fund. um 652,000 approximately is for um capital expenditures and 874,000 is transfers from the city general fund for operations of parks. Um they are projected to end the year on

with service revenue which includes um rentals of various parts facilities at the park. So, building rentals, um, pavilion rentals, rental at Jenny Rogers at 75,000. Your park revenue, which includes your park program revenue, which is fees for, um, sports, baseball, softball, dance, um, that kind of thing. Your facility use fees, which is your, um, fee to use Bunny Davis Gym. And then parks concessions is projected to end of the year at 376,000. Your other recurring revenue is kind of a miscellaneous category. Um Jenny Rogers concessions that's not related to a program. Um your um investment interest miscellaneous at 20,000. Sponsorships are projected to the end end the year at 42,000. your intergovernmental revenue which includes any grants we may have um and the contribution from the Boil County Fiscal Court at 390,000. Um that category we did budget a $80,000 grant for I believe it was the playground at Butler Park. Um but Josh has has let us know that that will probably be moved into fiscal 27. Total parks revenue um ending projection for the year at 2.4 million

and the city from the general fund puts in 874,000 about right for the operation. just for operations. Yes. And then the counties is 390 total for operations and total for operations. Yes. So, so they they are contributing in the current year capital funding, right, for their projects. That's not included in your 390, right?

So, that is a separate um up to 432,000. um accounting the way the accounting works on it um because of the ownership of those facilities that at the end will reduce our expense and it does not actually qualify as revenue. Um but I will give you guys an update later in the year of what they have contributed year to date and how much we've spent year to date. um because some of those some of those projects that they have that we've agreed to share um have gotten started um but not made a lot of progress like the ball fields have made a lot of progress and we've invoiced accordingly but for instance the skate park um they've only been invoiced for a few of the smaller planning um invoices and it doesn't it doesn't always make sense to send them one invoice for $500 when we can wait three weeks and send them one invoice for $30,000. So, sometimes the timing of that is a little off, but we'll keep you all updated on what we've spent on those shared projects and um what we've received for reimbursement.

I just wanted to see the difference in operation cost and I mean, but yes, their their contribution strictly is for operations, right?

Strictly for operations. is projected uh based on the agreement it will go up by cola which for fiscal 27 will be an increase of 2.7%. And the city's method has been to essentially capture the difference of of the shortfall. Okay. So your expenses um you have several categories of expenses. Debt service for park system includes your fleet vehicles. We have a few fleet vehicles tied to parks and more recently your equipment lease related to the Bunny Davis Fitness Center. Uh projected to end the year at 15,000. Millennium Park projected to end the year at 948,000. You budgeted 944. Um, so they've really done a good job tightening um that up over the last several years. Um, thanks in large part to Tommy and you bet. Um, doing a good job. Your fitness center is projected to end the year at 478,000. That is a little high compared to budget. Um, mostly in your part-time salaries they've utilized. your pool is projected to end the year at 95,000. Jenny Rogers, um you'll notice obviously we don't have a huge um history of budgeting for Jenny Rogers. This is only its second full year in budgeting. So, um we're still working on a few kinks on what we need at the facility to recur some things. You know, that's a one-time expense. Um, but we're projected to end the year at 286,000.

And then your capital, we're projected to end the year at 826,000. Total total expenses in parks fund of 2.68 for the year. Um, so we will need a budget amendment to kind of capture that difference um compared to where we were um as a transfer. that that's one of those things we'll clean up at the end of the year. Um on your PowerPoint, I did include your shared um your approved capital projects for um the park system. A few that are on the list are not shared with the county. a fewer city onlyly projects um which include roof repair at um Jenny Rogers your your indoor aquatics which I didn't include on your chart here at 22 million as a placeholder due to it skewing our our chart and not if you stick it on there everything else is just so tiny. Um, and then your Butler Drive, uh, playground, which we think will get moved, shifted into fiscal 27. Um, like I said, we're in the planning stages of the skate park. Um, the Alam Springs Mountain Bike, the park, the county is leading the charge on that work. Uh, but we agreed to fund 125,000. Um, your central playground. Um I don't believe any no financial activity has happened at this point. Um that may be something that's uh takes a lot of lead time for those um park playground pieces to get shipped and ordered and um delivered and then paid

for. Um your ball field rehab, if I'm not mistaken, should be pretty close to done. We did purchase a utility vehicle for the parks. Um, and then they've been working on the Millennium Park furnishings, which included some new cameras. They've got doors ordered. Um, that kind of thing. So, the county did a commit 432,000 for capital expenses. Okay. So, we'll move on to our enterprise funds. Those are funds that operate um more similar to a business um than a traditional government entity. Um for us, that includes your cemetery, your storm water, your garbage, utility, museum, and parking funds. Um, we didn't have a ton of activity in our cemetery, storm water, and garbage. Um, so, so we've kind of condense these, so I'll go through these semi quickly. Uh, but stop me if you have questions. Cemetery, um, cemetery revenue, you're projected to end the year at 254,000. um 120 of that is going to come from operating fees of the cemetery, cemetery lot sales and job work. That fluctuates unfortunately with um activity in the cemeteries. Um some years it peaks um some years it's is more stagnant like this year. Um you other you also have a transfer from the general fund to help support that activity. we were deliberately spending down our fund

balance this year in the cemetery fund. Um your expenses are 496,000 compared to what we budgeted your projected expenses of 407. If you remember we did um the fence at U Belleview Cemetery. We improved the fence at Belleview Cemetery. That was budgeted for and completed in June of last year, but unfortunately they did not get it wrapped up and invoiced until this current fiscal year. So, we'll have a minor budget adjustment to tidy that up. Um, but otherwise, um, your expenses are pretty on track with budget and very similar to last fiscal year. Um debt service in the cemetery fund is related to your fleet vehicles only. Your storm water fund um current year expenses, I'm sorry, current year revenues are going to come in significantly under what we budgeted um in the current year. We budgeted 1.3 million. It'll we're projecting 718,000. that is due to the potential debt issuance that we thought we may need for the Twin Brook Cobbrook. Um that project came in significantly under budget compared to where we originally thought it would be. Um and so um originally thought it would be around that 600 mark. Um and it came in at 250ish 260ish. And so we proceeded with that project with no debt service um using the fund balance in the stormwater fund. Um and so that does uh reduce our projected revenue. Your projected expenses um in the stormwater fund are uh ending the year at 1.15

compared to budget um at 1539. And again, that is due to the um the Twin Brook project coming in significantly under budget. We are able to do a few more small projects in the storm water because it it was so far under where we originally budgeted when we um bid that out. Your debt service in the storm water fund, you do have some fleet vehicles. Um, you do also have um one uh bond that is scheduled to be paid um off in 20 I believe it's 2028. Um so that the life on that debt service is is almost up. your garbage fund. That's page 27 of your large spread spreadsheets. We're projected to end the year at 1.59 in revenue. Um slightly under where we budgeted at 1.6 and expenses at 1.7. Um that includes your contract for um Republic to provide our trash service. um along with our contribution to the Bo County Fiscal Court for um their recycling program of 45,000. Um Josh has um I believe he will be renegotiating that contract um in the upcoming future. Um we've really tried in the last year to mitigate some of the um it's hard to bill for trash service uh because we people move, right? And so trash service sometimes is still collected for a

couple weeks after someone moves, right? Nobody may be in the house or apartment paying the trash bill or the water bill. Um but trash is still stopping by to collect that. And so sometimes there are gaps. Um Josh um and his department have done a lot of a lot of work to close the gap. Um but it's it's it's an ongoing and and continual process. Your utility fund current year projected revenues for the utility fund are 13.3 million. um that is mostly derived of your operating fees for water, sewer. Um you have a few other occurring revenues which includes your um interest. Um and then in the current year, we're anticipating approximately 270,000 in um grant funds um related to one is related to leaden copper um reimbursement and then um some an EDA grant uh for the work that we will be starting on for that project compared to last year. Uh we're in your operating revenue. You're approximately 200,000 um over last year in your um water and sewer revenue. compared to your projected operating expenses, you um surplus isn't the right word, but you have projected operating revenues ending the year at 13.1 million and your projected operating expenses ending the year at 119. Um Marshall has been able to do a lot of capital improvements

without the use of debt service or um debt funding for those projects. Um, we kind of made a note of what year to date we have been able to accomplish by him being conservative in his expenses. Um, work on the McKenna waterline project of 439,000, work on your ghost pike balls branch project of 401,000. um you were able to um perform the GAC um your granu granuated active carbon activated carbon removal and rehab and reactivation of 134,000. All of which you were able to do with no additional debt to your utilities. So, um, in your water utility funds, um, compared to last year, a few of your departments are seeing, um, some significant decreases in your expenses. Part of that is some health claims that we had in the utility fund last year. Part of that is Marshall's strategy on um, hiring and positions um, and holding on some positions. uh reassessing the need for some positions. Um some of his departments are projected to end slightly above budget uh like utility administration at 1.54 uh compared to budget at 1.52 million. Um however, some are projected to end the year um under budget like your water plant at 2.9 compared to budget at 3.05. total expenses in your utility fund.

You can see that on page 35 of your large spreadsheet. I'm just kidding. That just that's the one that didn't total. Uh it's zero. We just we did not spend a thing. uh 11 11 million in your operating um expenses and then two 1.543 in your capital expenses. Um the ongoing capital expenses are include your work on um Lebanon Road um which is about to kick off um and some things that we're going to wrap up for um Balls Branch McKenna um a few minor things. So, we didn't get quite as much done as we budgeted at 6 million or 6.9. Um, but a lot of those projects are in the engineering and kind of um beginning phases and will get moved uh will probably progress more significantly next year. Your last two enterprise funds are your museum fund and your parking fund. Your museum fund includes the um cost of the maintenance and operation of um the operating maintenance that the city is responsible for as the owner of the old federal building. And then the secondary um building we bought here at 411 West Main. Um, we did budget some capital repairs

in the current year for approximately 150,000. However, Josh has been able to um mitigate a full roof repair with um some other other repairs. So, we're going to end the year um significantly under budget at the moment. In your museum fund, we're projected to end the year in expenses at 57,000. Um we budgeted 72,000. Um your revenue in your museum fund is derived almost solely from transfers from the general fund. Um you do have a minor amount of interest. Your parking fund um covers the operations of our parking garage and our parking enforcement officer. Um revenue is derived somewhat from a transfer from the general fund. um your lease fees for your parking garage and your lots and then um your just a minor amount of interest. Um your lease fees for your garage and your lot. Um we have made initial steps to um follow our lease schedule and make sure that those costs are capturing the cost to maintain and operate the garage a little better. Um, total revenue projected at 418,000. Total expense is projected at 462. We did deliberately budget a slight fund balance spend down in the current year of your um uh parking fund. Um, your largest um your largest expense in your parking fund is the debt service related to building the garage. Um Earl and I had a a kind of a debt update or briefing um the other day. We're projected to have

all the current debt for the parking garage um paid by 2038. So total expenses at 462,000. So, our last slide is really not related to specifically to numbers in the budget. Do you all want to go back to anything or do we want to move on? Have the police and fire pension fund. I'm sorry. Do we still have the police and fire pension fun? So, we do still have the police and fire pension fund. We just don't budget it because it's a fiduciary fund, right?

Um, we have four police and fire pension members left. Um yes, four left. Um as of the end end of January, I believe um we had approximately a million dollars in that pension fund. Um, when we had our last actuarial report, we get one every year that essentially tells us how much we still owe as a liability and how much we should be contributing to the fund. Um, due to the the great performance of that investment account and the unfortunate passing of the members, um, they essentially said we shouldn't contribute anything. We do in the general fund still contribute a minor amount, $5,000 essentially so that as the years pass, right, if something happens to Earl or me or all of us at the same time, somebody in the future knows, oh, that's there and we still have it and somebody needs to pay attention to it. So, we budgeted in the current budget $5,000 um to be a general fund contribution to um the police and fire pension fund, but we also u budgeted a draw down of the fund of approximately 80,000 um and our liability was fully funded.

So, it's in really good position. Okay. Donna, the um in in actual of 2024 that contribution was 135,000. We started pulling that down. We we could have started pulling we could have reduced the number prior to that. We started pulling it down officially. Um in 2025 we contributed $40,000 and then this past year we contributed or we're budgeting the $5,000

this year. Okay. And and again to reiterate, just so if something happens, somebody will will see that and they'll wonder where that money is going and they'll be able to track it. They'll they'll take, you know, they'll they'll investigate and you'll be able to see that that's the contribution for that, right? That fun. Okay. I didn't know. I thought there was four left. I didn't know

there are four left. um they and they have gotten um approximately this the same increase to their pension each year that staff gets. So last year average increase was about 4% and that's what the pensioners got. And so um so our last slide is really more of a kind of discussion point and it goes along with your um large printouts or your medium. I guess this is our medium print out. Um just to kind of remind um our previous commissioners and um to kind Audrey know since she is new to the process kind of um for building our budget. We want to make sure you know this is kind of where we see it. Um and then this is kind of the baseline. This is how we get to our baseline general fund revenue. And so, you know, we can't in future budgets when we when we build our fiscal 27 budget, we can't build an unbalanced budget. And our operating revenues need to cover our operating cost. And so, your largest sources of revenue, which is your property taxes, your occupational taxes, and your insurance premium taxes, those are really your foundation of your budget. And while some some some places may want to take the track of well let's build our base to match what we think we want. Our philosophy has been more of a well let's let's build a base that's stable and sustainable and is competitive with other economic um areas and other jurisdictions and then build the budget from there. So we found comparative cities. In the past, we've compared geographically um to a lot of other cities, but we're

we're kind of looking at um a different set of cities this year that seem to be more in line compared to us by um we did population by metro area. So, included here, you have a comparison of your um property tax rates. So, your real estate tax rate, tangible tax rate, your insurance premium tax rate, your occupational license fee, and your net profit rate compared from Danville um to other cities including Somerset, Frankfurt, Richmond, and then the Lexington, Fyet area. So those are all kind of geographically um near us but also areas that um operate as a hub really

for the for the regional economy I guess if you will. uh there seem to be the centers for goods and services, retail, medical, and so those are areas of of economic activity the way we look at it, not just a an urban boundary with a with a simple population. And so what we'd like to see is is look and see how we compare to what we would consider our true regional competitors, if you will. So those are cities that are very very compar in including cities that are very comparable to Danville where we think people are if they're moving into the area they're making a decision between those cities not necessarily all the the minor areas inside of those metro areas. Although that may happen but we're we we don't want to look at it like that. We're trying to to look at it more uh at a at a 10,000 foot view versus that interlocal assessment. So, we do have the lowest um real estate rate other than Richmond. Um and then we do have one of the lower um occupational license rates. Some of those folks that are have lower occupational net profit rates um are are trending with a higher um real estate or property tax rates or have an additional source of um taxing that we may not have available to us. Um but we think we're we're pretty competitive in that respect. Um and our current proposal, unless we hear different as we move forward, um or our current budget

process will include um you utilizing the compensating rate like we had before for property taxes to build our budget. Um utilizing our health insurance premium rates at 8%. Um and then using our current occupational tax rates to build our our projections for next year. Yes. Yeah.

What this demonstrates for us is that we are economically competitive competitive with the rates. Uh our tax rates is Nicholasville. Did you not? They're in the Lexington metro area and so we we didn't break them out separately. I just wonder because that's a we can similar we could add some cities like that there. What what we some of those have a different economy.

So so like in in terms of Georgetown, a lot of people want to compare us to say Georgetown, but they clearly are a bedroom community to Lexington. They don't have the same local economy that we we have in that sense. Um so so Nicholasville is very similar. They are they don't have the same industrial base that that Damville has. They are a different economy. They you have a lot of of doicile in in Nicholasville that work in Lexington, work in Faget County. And so we didn't peel them them out. their their rates will probably look different than than Danville's because their economy is different than Danville's

but but we can certainly fill that out if you want to see and if there's any other city you want to see the information's out there and we can certainly write it and add it to the table if that's what you want but Nicholasville being one of them if there's anyone else just let us know and we can we can add that to the table and get it back out to It really boils down into those those are really sub regions in the Bluegrass area including Somerset

and actually because I I've been looking at them recently. Nicholasville is very high. Their real estate rate is 0.186 as well as their tangible. Um, I'd have to do some digging on their insurance premium or their occupational, but their real estate um is is quite high.

When when you don't have that industrial base, those occupational license, the th those are always made up on the real estate side, that gap, which is why their real estate's higher. And so, for example, Somerset metro area is is a their real estate being slightly higher offsets the lower insurance premium tax because they have that that heavy commercial corridor that's taxed on property. That really doesn't necessarily add add uh significantly in other areas because of the um tourism to towards the lake. You have a lot of assets that are taxed at a property tax rate that's does not not very typical for areas where you don't have large boats, for example, or you don't have large large storage of those things.

Do those other cities have I mean, I'm sure they all have different taxes based on where they are. Some have restaurant, probably not any of these, but most of these don't have a restaurant tax because they're bigger. because of their bigger. Yeah. Somerset. Yeah. Yeah. Like a transient room, right?

Tax. Um they they do theirs a little differently from the research I did. They don't have a separate tourism board in Somersets. So they collect and keep all of their own transient room tax. Then garbage. Every city pretty much the same. they have garbage fee. I mean, because it cost us a lot of money to have I mean it that one I don't know for sure. The only one I I noted was Lexington because there's is a is a specific tax rate for it in certain jurisdictions of their or certain taxing districts in the city. Um they have a specific rate for tax collection. Um we'd have to do a little more research to tell you what other places do, but it is it is expensive. But like I said, Josh has been working on that contract and I think he's I don't know if he's brought it to Earl yet. Um, but that that'll be up for renewal this year.

We were we were trying to to consider if if we could amend the contract to extend it to to align with the counties so that when they're renewed the next time, they were both renewed. But then if it's extended three more years or two more years, could we evaluate an alternative like what if they build or what if they did this or what if they did that? So he's working through various strategies to try to mitigate the general fund expense and and also though try to stabilize the rate as well. So there's a lot of dialogue happening. Uh Josh and I have had a lot of conversations about it and he's working with Republic on a proposal.

Yeah, I appreciate So that should be forthcoming because it like a $200,000 difference this year, right? Yeah, we're running a negative fund balance a negative fund balance of about $200,000.

So if you add that up over the years, think how much money the city is putting in to those garbage. Well, yeah, it's it's I think we've got it down so that it compared to last year, um the fund balance the the the fund balance was ended in 25 at 177 um and could potentially end at 290. Um, so that's um $120,000 in the current year that essentially we're not recapturing in billing because Republic,

right, they bill us every single can. Whereas we aren't billing every single can because of things like those um rentals where somebody's moved out um or apartment complex where you know maybe two apartments aren't filled but the trash is collected. So um a few things like that. So that's a tough It's a tough problem to have, but it's money that we need on the other side, you know, that we are putting out. So, absolutely. It's a lot of money over the years. I'm sorry.

I say that's one way to look at it, but if we capture that $200,000, we'd have to increase our fees quite a bit. I Well, part part of it I mean, you don't want to recapture the fees by charging other people more, right? or the ideal scenario is that every can that is collected is charged the fee and they pay it. I don't want to say raise the rates. I'm not saying that. I'm saying I think we should capture what we're um yeah it's it's a lot it's it's a lot more difficult than you know three years ago when I startedounding Josh about it and he's like oh yeah that is a problem. Um, so it is really difficult and they've

so if I have if I have three kids instead of the two cans, there's a difference. There is. Yeah. So they've done a lot of auditing and tried to clean up making sure that we are billing appropriately. Right. That's one part of it. Um, another part of it is making sure that we're communicating with Republic um better than we were. I think that's help it's helped a lot that Josh's um position, executive assistant position is filled. um they've taken on that person has taken on a lot of um responsibility of of the back and forth that comes along with being essentially the middleman in billing. Um theoretically, if if I got one recyclable and one garbage,

I pay a f a flat rate. Uh if I get two garbage and two recycle, got four cans. Mhm. The public needs to know that so we can know to be that person for all that. So it's it's happening. It's happening. It is it's happening in reverse though, right? You'll get your cans and then we get notified to start billing you. Yeah. So we've paid for your cans maybe one month and then the next month you start getting builds. Well, and the other example is that I have two cans. Garbage comes once a week. recycles once every other week, but I put my two kids only out one time a month.

But we're still getting bill city for the storage. Well, that I think that is personal choice if you don't put it out. But you are paying Yeah. in theory for the service every every time. But it's it is be a nightmare. It is. Oh, can they direct bill? They can. They can. They can. And that's one of the things that Josh is talking about. Yeah. Yeah. I mean, actively trying to figure out what how could we because the the

when when we the last I'm trying to think of the year, the last time we did the RFP, the idea was to to bill individual cans that are above the number the baseline, right? But the lag between when they they get the can and when we are able to get the information in the computer and bill it result has is not been not that has resulted in a divergence between what they're billing us and what what we're collecting

rather rather than the idea was well if we go through more detail then we'll close that gap but because of the lag that gap didn't close it went away from each other Right. And it's it's purely based on the lag. Yeah. And and so Josh has figured that out to the point where well, okay, now what now how can we do it? And so he's meeting with the Republic and trying to analyze how can we make those as close to one as we can get them. A direct well direct bill to me again opens up Pandora's box again for Republic. But in the long run when we go back to bid it's going to it it'll be an increased cost for us. I think somebody's got to pay for the post direct bill,

right? It's it's I don't know just sort of a win-win lose. Looking at money that you know we could capture. Yeah. No, in an ideal scenario we are are only paying for the services that we are billing for. Um, but Josh has got he's got some good some good thoughts and and him and Earl kind of sit down soon and then bring it to you guys.

So then we when we looked at the tax rates, we didn't really see anything out of line set like that. So there's nothing that that jumps out at you when folks say, "Well, you've got high high taxes there or you've got these." That's that's just demonstrabably not true. your your taxes are low here compared to the other communities that are comparable to Danville economically. Um, so, so we're in a we're in a fairly good position, I would argue, from an economic development competitiveness perspective, including in with with all the taxes. Um, outside of Somerset, among those competitors, you're the lowest occupational license fee. And so, um, you know, we I think from a recommendation standpoint, I I'd still go back to Danville is a very stable stable economy currently. Um, we have been growing. Um, over the last few years, we've been expanding. The the economy has been increasing. This year, I think nationally, and you'll see it in the stock market, I think we're we're everything's kind of taking a breath trying to see how things shake out. the estimated year ends reflect that. I think um I I appreciate Lee's assembling the information. uh as we get into the next round of meetings in the future um we we'll try to do we'll take a minute as we get into the department presentations as we start the meeting we'll try to provide a little bit of of analysis of maybe what this means what's our trends that will open up our our discussion at the next meeting and as we get into department heads that'll be in two weeks

um we really don't have a lot of other information to share today. We wanted, you know, we're trying to kick it off and trying to just get information your direction so that we can get towards a baseline budget in the future. Um so that's about two meetings away. Um to try to circle turn this into a baseline proposal next year. So, so then um we will we will talk about personnel changes, recommendations to the overall compensation plan at the department head meeting or the uh department presentation meeting. Uh that will be on the 24th. Um you know, we I we we can't see a reason why you need to change any of your tax rates. So the revenue discussion will be based on if if when we put that draft together, if it's upside down or if there's some issue that we're seeing, then then we'll circle back to that revenue discussion. Other than that, the future revenue discussions will will just be a a repeat of are we still stable? Are we still projecting what what we think we're projecting right now? We'll we'll revisit that again. Um on that impacts on fiscal year 26 budget

that citywide personnel impact. I'm scary. Those are those are definitely big numbers. Yeah, that was and that was in the current year budget. So next year next year your cola

to increase your step um in theory is um 2.7%. So, I don't know, Randy, we'll have to do the analysis of what um that looks like from a big picture. Um the fiscal 26 cola, I'm sorry, the fiscal 25 cola that we would have used was 2.9. So, it's gone down slightly, but not a lot. Um so, I would I would anticipate a similar number um just a similar dollar number at at the very minimum just because um the colas are very similar.

Yeah. So they they are big numbers unfort unfortunately like we all want you know to to provide those increases um for staff because we know they they work hard and deserve it but they are big numbers. Yeah. Well in every agency I've ever been involved in personnel has always been the most expensive one. But I understand that because that's real people and real families and we're doing a we're doing a great job both of those areas. We just got to make sure we can can continue and can't afford to continue. Pray that we do. Okay. Other questions or comments?

Thanks a lot to look at. Thank you for all this week. And I want to thank you two ladies for showing up. Our other two commissioners both have medical issues today, but it's good to get out and hear this stuff. It's important, but we won't have we won't have another budget meeting till the 24th then. So, our next budget meeting is the 24th. March 24th at 9:00 a.m. is your department presentations. Uh we will be providing lunch. We will be providing lunch. Don't get excited, Audrey. It's breakfast and lunch.

Uh it's a eat while you work kind of situation. Um and then the next after that will be March 31st with our draft operating budget um and review and then uh community agencies following on this April 2nd. Is that Yeah, that that week will be a busy week. Yeah. the u the 24th will be 9:00 am the the 31st will be at 1 and then that that will be Tuesday then that that very next Thursday morning that two days later we'll have the community agency presentation

the community agency is at 8 a.m. actually is Yes. is on the 14th of April. And that's at nine or one. That will be at one. Should be at one. One. Okay. All of them are at one except for the two. Okay. It's a long way from 11:30. But you'll see you'll see what I told Lee just for the Kevin Codle side of it. We're turning the corner on the budget process right there. When you get that capital, when you turn the corner.

Yes. Okay. Any other comments or questions? If there aren't any, then we'd like to entertain a motion for adjournment. I'll make a motion to adjurnn. I second it. probably move the second that we journ. All those in favor say I. I. Next, I'd like to