City Commission - Special Meeting

City Commission special call meeting call us to order. Today is Tuesday, March the 31st, 2026 at 1:00 p.m. Um, thank you for your attendance and uh first item is draft operating budget presented by Mr. Coffee and his team. So, Mr. Coffee,

good afternoon and I'm glad everybody made it in. Um, we appreciate that. We'll be uh going through the operating budget. As a reminder from our calendar, this is the first presentation of the draft uh um position really. We call it a draft operating budget, but what we think this is this is our beginning point on operational expenses. Um, this this is is the the baseline proposal on the uh uh and you'll you'll see this, but the baseline proposal on our personnel changes that we talked about last time and and staff's requested um um expenses with uh just some minor revisions by by really me and Lee or me specifically as as I've kind of looked at the budget a little bit and tried to tried to get to a point where it's it's functional. Um, the next step will be Thursday will be this Thursday beginning at 8 am the community agency presentations occur. So make sure you remember that this week we actually have two budget meetings. Um, and then we'll have spring break next week. Um, so u hopefully there's not as much going on for a few days there. Um so saying that then we will let uh Lee uh you can go ahead and go to the next slide and u I didn't change slides that's the calendar um again next this Thursday is uh the community agencies and then once we get past them we'll start turning the corner on on the budget process as I like to say and and so then we we really other than the the capital program and and getting some recommendations from you've really gotten all the information that you're going to get that we'll

we'll try to fit into the budget and we'll start peeling things out from there. I don't know the number. What's What did you have? I think on my list we have 21 or 22 that you all Well, you've already heard heard from New Hope. They're not on there, but you have I think it's 21 or 22 that you'll hear from on Thursday. Yeah. You're providing three meals Thursday. Sure. No, Jenny's not excited at all, is he?

So, we'll get into some of the slides. We'll let you you have your full budget spreadsheets with you uh that that represent all the numbers and and Lee did a good job with some uh variances and some things like that. And I'll let her get into it, let her describe her work.

So, we'll go through on those slides, we'll go through each fund at a high level. Um but I'll kind of go slow so that you guys can flip through the spreadsheets and um look through kind of um see if you see any areas of concern or areas you would like us to focus on more. Um but like Earl said, this is um our draft operating budget um step one. Um this does not include your shared agencies and your community agencies. Um, this does include your um, uh, cola and step um, personnel changes. It also includes um, the health insurance renewal that you all approved um, a couple meetings ago. Um, so I'm sorry, does it include uh, capital?

It does not include any capital. So um, next meeting will be community agencies. The following meeting which is on the 14th will go over capital. So this is really about our operating revenues meeting our operating expenses. Um just so that we ensure that we're not spending more for the current year expenses than we're bringing in. And this doesn't include any new personnel. Just what we got. Yes. Going forward. And you said community agencies, capital and something else. Community agencies, shared agencies. So that's planning and zoning. Um and parks it doesn't parks is in here. Parks is in here. Yeah, parks is considered operations, right? So

but they shared

So parks is in here. They are they are shared. Um the um total funding for operations that the county provides is set by our agreement and that is in um on the parks um already. So any additional funding that they provide for um capital projects or anything like that would be accounted for separately. So general fund um revenues, we'll start there. We have budgeted total operating revenues of $24,594,970 compared to your fiscal 26 budget. Um that is a slight decrease. There's a couple reasons for that. Um one of which is we we have seen a slight decrease in your net profit returns. Um that's on your front page um in your license and fees. Your net profits compared to your prior year is down about $300,000. uh somewhere between your between your fiscal 27 budget and your fiscal 25 actuals, you're down about 220,000. That's a combination of um the economy folks are reporting less profit overall. Um but your payroll is your payroll license is um trending up. So those kind of um and then along with your trend upward in your insurance premiums, those um tend to offset the loss that you're seeing or the decline, not loss necessarily, the decline in your net profit collections.

The the spreadsheet that you have when when you look at it, the blue column is what we're considering our proposed budget. So all those numbers would when totalized create your would would be the the foundation of your budget ordinance in the future. The next column is what where we project those categories to end this year. If you look at the fourth column that is the actual budget from this previous year, right? Hopefully that makes sense. And as you go on across through there that this should start to become more self-explanatory. The annual actual is what we actually where the numbers actually came in and the annual budget was what was we began the years with for those previous years. We tried to get a fiveyear snapshot uh looking back. Um and hopefully then then so so when when we are talking when when she was just then talking she's comparing how we are projecting the year year to end versus where we're going with the proposed budget. And that's true. That will be true as we go through the presentation for um expenses as well.

And in July or whatever mid July or in we'll know how we ended the year based on

Yes. So probably mid August is really where you get better full um picture just because um some some things trickle in that we we take back to um months prior um we acrew it back if if necessary. Um but usually by the end of August we have a full This is where you ended the year completely. Your FY25 I was telling Earl this the other day because we had been behind on our audits for for a while. This is the first budget season where we have a fully closed uh audit year and so therefore your your fiscal 25 numbers are are actuals and and aren't subject to change based on any audit recommendations. So usually in your budget you have a projection for fiscal 20 for the current year you're in. So for us that's fiscal 26 and that's based on um partially based on those um numbers when we originally pulled them at midFebruary. Um but for the revenue specifically we do go back before this meeting we went I went back and reassessed because you have big collection periods in March right um that's a the collections for occupational tax in March is pretty significant and so we don't we get that by March 15th um so that number between February 17th and March 15th changes significantly so we we are able to revise those revenue numbers to a more what we consider a likely to be more accurate than um the previous estimate we've done. we go through the projected year end. The the expenses on the projected year end are the the the date that is used to project those is the February 17th number. Right? So we will upgrade that at one point and usually that's towards

the end of April. We'll proof check I'll we'll try to proof check our projections on our expenses as so then that last two months you really don't have enough time to incorporate the data in those. So the ultimately where we were projecting that the year will end will be as of usually the end of April is when we we check that again and then we we check revenue consistently. We're we are consistently real time. We try to be as current with that as we can. Yeah.

So, we are projecting for the current year of the compared to the fiscal 26 budget, so FY27 to FY26, the year we're in, we're projecting a total increase in revenue for the general fund of 1.2 million. Um, like we've mentioned, this is largely derived from your occupational tax, which is trending up about five five and a half%. um your payroll tax and then your insurance premiums which are trending up 10% from the budget. Um your license and fees we are budgeting at 19.8 million compared to 18.8 in fiscal 26. your other your property tax. We are budgeting at 2.5 million um 2.75 million compared to your budget of 2.5 um two in fiscal 26. Um I did make a note on your slides just for um a reminder in FY25 actuals you do see what we consider loan and bond proceed which is due to um some deferred inflow of resources related to our um leased vehicles. So we did not acquire any new debt in fiscal 25. Um that's the accounting treatment for for leases. So, I'll keep as we're going through these, I'll keep trucking on. You guys ask questions as they come up. Um, if you want to stop or go back

on the revenue side, um, we are remember last year we talked about um, we we had been budgeting very conservatively on the revenue

and we we were talking about more narrowly estimating that going forward to get back be you know, you're going back to when COVID was was a thing. No one knew where revenue was coming from and so we were very conservative with how we projected so that we were always getting theoretically a little bit more revenue than we we had predicted. Right? Uh we didn't want to miss that the other direction. So now now what you'll see as you as you track forward our revenue projections into this fiscal year, we're we're back to like a normal normal way to project revenue, which is kind of what you would expect to receive with a margin of conservative to it. So you're you're really there's not a lot of anything cooked into your estimation of your revenue that is artificially deflating that. it is we are actually thinking these are the numbers that you'll get this year. Okay. So when you look at general fund operating expenses so that's going to run your individual departments are going to run through pages through page 11 of your largest sheets. Um like we have mentioned there's no capital in this um estimation. There are no community agencies, no shared agencies. This does include your COLA plus step increase for all departments um plus health insurance renewal. Um total operating expenses are projected at $24,387,542. This gives you an operating budget surplus of $27,376.

So when you look at these individual departments um overall um as you're reading the department each each page um other than the last few that are non-EP departmental kind of get clumped together each department has its own page. If you look at that very top line, that is that's bold. That is your department total. Um overall, when you look at the percentage change year-toear compared to budget and compared to fiscal 25 actuals, our requested budget um does not differ significantly. Um we we worked um staff worked really hard to make sure department heads worked really hard to make sure that they gave as accurate and um as accurate as request as possible and then you know Earl and I have to get those operating revenue numbers and expense numbers to match somewhere in the middle. Um but the overall change is is pretty minor for most departments. Um, a lot of them are running right around 3 to 5%. Some vary um, significantly more between certain years due to perhaps they added a new position in one year um, or lost a position in one year. Um, but overall most are running between 3 to 5%. Um

we didn't on parks and wreck we carry that $22 billion sort of placeholder are we so we haven't put we haven't put it in there yet right because that's capital so right now okay we're just operating yeah that is just this is just Uhhuh. This is just a budget to keep the lights on and to keep everybody um doing day-to-day just daily work and not the fun big exciting stuff. Yeah.

But this is totalized. So, so it does include all of the utility operations, all your storm water operations, your loose funds like your municipal aid fund, your storm water, cemetery, parks and wreck, all of your actual city employees, all the departments that are are that provide some service. This is the baseline operating budget with no new employees. So on your slides, Kevin, I did I do believe when I got through the slides on park and wreck funds, I did take out the 22 just for display purposes, but when you look at park and wreck as a fund in your large spreadsheet, page 17, you have that $22 million in revenue in there for your FY26 budget.

Now, we didn't project using like obtaining it for the end of fiscal year 26. Um and we may put it back in there for fiscal 27 um to continue that as a strategy. Um but for for current purposes for your park fund, you have 1 um 1,27,000 in general fund dollars going to support park and wreck for operations. So, like I said, we have a operating budget surplus of $27,376. Um, that will potentially be allocated out to your community agencies and your shared agencies. Um that's that's kind of where we started um where we'd like to start that process. Kind of once we understand your desires for those um entities um we can allocate those dollars out and potentially go back and revise to cover any gaps we may have.

We will we'll know more about that when they fully make their presentations this week. you'll start to have an idea for for what that's going to look like next year or what what additional dollars, if any, that you've got to figure out. We did do a a a uh we did try to clean up the proposed expenses out of this budget. We've not met with the department heads and gone through that separately. We we've looked at that individually uh with not with each other but but but you know fire chiefs back there you know Mike's proposed his operating expenses I've taken those I've I've tidied those up the way I see it but we've not gone back with him and really sat down and talked to him yet. We've not done that step either, which that will be a step that we'll try to do over the next couple weeks after after we hear from the community agencies obviously.

I mean, there's a lot of pages to look at obviously, but just looking at public works, I mean, their budget overall is lower. So, part of that is part of that is the mowing. And you'll notice that contract service is down. Yes, you'll notice that in parks because that it almost went up not exactly equivalent to that but so this year um Josh discussed it with you know Tommy and Marshall because it impacts utilities as well. Um for many years we have absorbed all mowing contracts other than cemetery into public works fund.

Um and in reality right utility fund should support its mowing. Um the park and recck fund should support its mowing. It is a big number for parks. So, we did not move the entirety of the parks contract to um parks yet. I think that's the goal in a couple years. So, we moved 40 40% of it, which is still about $120,000, right? Because it's from 486 to 175 just at one line. Yeah.

So, and and so Josh, you know, instead of saying, "Oh, okay. we'll just spend that other $120,000 in public works. Um knew that while that individual department wasn't going to spend it, it is going to be spent out of the general fund in those transfers. So that department did see a reduction in overall I believe. Um yeah uh a slight increase in total budget um but I think between the two um offset that change offset any significant increase due to healthcare and personnel

as we've continued to refine the mowing contract uh for the utilities and adding and taking away like we've done over the years. It just seemed like it was we really we we are advocates of the line items being charged for the department what it's doing and for whatever reason we never migrated the mowing contract to on the expense side. We always just did it on the reimbursement side and and so I like the idea of distributing the the expenses for each thing being mowed to its department that owns it. Right. and showing it inside of that department and showing it inside of that operating budget for whatever that is. And so that so that long term if you want to make a decision about that facility then it's not you won't forget that oh yeah we also mow the grass there and that's another $10,000 at that location. Right? By by putting them inside of those facil department budgets it will be easier to remember that going forward. Right. I I think the budget's I don't see anything glaring, you know, just looking, you know, there's just it looks like the staff does a good job of keeping everything in line.

Staff did a great job. Yeah. As far as I'm concerned, right? Yeah.

Uh and there's there's really, you know, they really are good about if there's a significant increase from year to year, there's a specific purpose for it and a reason. And it's not just, oh, I think we want to, you know, do this discretionary um big project. It it is this needs to happen for XYZ reason. And and it's usually something that they're aware that the commission desires or a really good initiative that they've talked about in house. And um so a lot of a lot of effort goes into by the individual departments um and and by Earl You get a lot of fluctuation too off of for example like IT services

and and and so one year you may buy something in a department you may not buy anything else in it for two three years and so any given cycle it numbers can move around significantly. You'll notice that as you go through those numbers. Um things like u you know the fire fire department wanting to to do more frequent uh ladder truck exercises. So that's going to increase the operating budget for example on the ladder truck. Right. So then you'll notice if you get in the fire department, you'll see that heavy machinery line going up a little bit because that's to maintain the truck that you're going to try to get more exercise out of. So if we move through general fund on to municipal aid, uh municipal aid is one that year-to-year revenues and expenses can fluctuate um significantly when you look at the variances uh because of any proposed projects we have. Um FY26 we did budget for Bofman Avenue improvements in both revenue and expenses. Um you guys Josh is giving me updates about that. It is moving forward just very very slowly. So that will roll into fiscal 27. Um we are proposing um 765,000 in revenue. Part of that is your um road aid of about 350,000. Um about 400,000 is uh anticipated grant funding from Bofman Avenue. Um and then 840,000 in expenses. We had um been working on a a bit of a fund balance spend down in some of the um capital

improvements. Um 300,000 is projected for the uh annual paving list. Um 500,000 for Bofman Avenue. Um which that that difference the 400 revenue to 500 is our uh city contribution for that grant.

Would footnote in 23 you had about $900,000 in fund balance. Uh 24 you had about 943. Then in 25 the end of July last or June last year we had 902 the spendown that we're hoping to get to this year is 603 balance and u I'm sorry 495,000 is what we're looking at and so like next year's budget so when you see that that spending profile you're you're wanting to maintain that at about a half million dollar number is what you know our without our unsp spoken reserve that we we have in our minds uh is about4 to $500,000 for that that fund. So on page 15 of the large 13 of the large spreadsheet is your opioid fund. Um we don't currently have any budgeted um expenses related to opioid fund. um that is a restricted fund. Funds can only be spent on your on opioid abatement. Um and so um very very specific projects and or um spending needs to be um utilized out of that fund. Um internally, you know, I know Earl and um police department have talked about potential ways to use those funds. um they don't have a concrete plan just yet to bring to commission. Um but those are are being discussed. Um we are anticipating about 51,000 in fiscal 27 in opioid funds um and about 10,000 in some interest. Um we have right around 300,000 currently um in cash on hand in your opioid fund. Um and we have

about a uh 10 depending on the settlement we have several different settlements. Um so depending on the settlement we have about 10 to 15 years of projected revenues um due to the city.

So the chief and I had a conversation this morning just trying to trying to figure out to the extent that we have something inhouse that we can start to allocate money to a program or something. and he he does the ASAP uh meetings and and so he's he's tied into the space of how how can the money be deployed to help. And so we we hope to have an initial if if we can come up with an initial draw down of about $30,000 a year, something programmatic that that is aligned with the purpose of the money, then then we'll try to have that ready this this spring. Not sure if if the right idea has landed yet, but but we're actively talking about it a little bit. Yeah.

And there are a lot of um there are a lot of stipulations and restrictions and requirements. So, we can't just go out and um spend it on on a lot on just whatever we think would be beneficial. Um, and there are certain if you spend it on something and potentially the opioid commission disagrees, they you could be required to pay it back. So, we want to be very cautious about what we use it on. So, uh, you have your next three governmental funds, um, small funds, police safety, drug forfeite, and streetscapes. Um, wasn't going to spend a whole lot of time on those. Your police safety fund is your highway safety grant um for um enforcement of traffic. Um when you look at your very large spreadsheets, those begin on page 14. Um, in general, these these funds we try to budget um expenses um at the same level as your revenue. Um, for your highway safety fund, your police safety, $14,273 in um expected expenses. Those are strictly related to traffic control um related to the highway safety grant. um revenues of 14,300 in your requested budget. Your drug forfeite fund which is uh funding that we get from the court system related to drug crimes that those funds are restricted to um drug related enforcement. Um and typically we use that for some software related. Um total requested revenues at 7500, total requested expenses at 7500. Um your

streetscapes fund, that's where we track any capital um projects related to your downtown um core. Uh approximately $50,000 in revenue that would be transferred from the general fund. $50,000 in expenses transferred from your general fund. Um, I would I would give this an asterk. Technically, this would probably be considered capital, but it's it's minor things like your ballards that we're replacing and things of that nature. Um, and really doesn't need a a in my opinion a large discussion during your capital project discussion. We listen, we buy them. We buy them in in packs, packs of

the the biggest thing are those big tall street lights. When those are hit, those are expensive, which why which is why they're typically set back further away from the corners. The ballards are designed to break away. They're designed to be they're not throwaway, but they're designed to break away. They have breakaway boats on them, intentional for that purpose. That's misunderstood. It's designed to to to push trucks further out into the road. Um and and so they're doing what they're supposed to do even though folks don't understand them. And they do they do have a the especially the street lights they have a pretty long lead time. So we do have to make sure like we have one on hand so if one goes down we have time to order a new one.

Um do we have a I mean and it may be in the revenue. Well, it should be like if uh insurance claims like

so we we are doing um so essentially what that will do is when we do get those in it will offset that general fund transfer um we do um especially now that Josh's executive assistant is in place and can track those a little better um because they know where which specific ballards are down which specific lights need replacing um and so We're doing we're we are collecting more on those when we are able to um essentially find out who did it. Um sometimes that's a little harder than others, but that would offset any transfer from the general fund into the streetscape fund. We haven't done it we haven't gotten that many reimbursements frankly from the ones in the past. So, we haven't got any bud funds budgeted, but um as they come in, it would offset that because that's the goal is that if somebody knocks one over, they pay for for replacement. But,

um that doesn't always happen. So, and if it's hit, does it totally destroy it every time it gets hit? No. No. No. A lot of them they set back up and and just I don't Yeah. There's a there's a little boat component at the bottom that breaks and then we we you would reconnect it with a new new connector bolt and that and that's doing its job. That's what it's made to do. Well, that's the part I think it's not getting publicized enough that every time you see one lean over it's got to be completely replaced.

Yeah. And the the just to you know take a minute to communicate it again the the city didn't extend the the curbs and relocate the curbs for aesthetics. You did it for two reasons. You did it number one to to create better space for pedestrians to walk because we do have a very pedestrianheavy downtown. And also we did it to narrow the street corners so that pedestrians could cross the street in a shorter amount of travel time. But also then the other thing is is when you narrow in your intersections, you slow cars down. So the whole purpose of the the the curb alignments is to impact the speed that vehicles can go through the intersections. It is not meant to be a a high-speed convenient thing. It's meant to make you be more deliberate, more careful with your turning movements, more careful with your through movements to be lined up be as you make those turns. There's no cutting corners as you make those turns. You have to be lined up as you enter into your your exit of the intersection. And so all of that, that's the purpose of the streetscape, right? And that's totally misunderstood. Folks, um, continue to communicate that as if it's a beautifification project. When you are relocating the curve, you want to make it attractive while you're doing that. That is the beautifification aspects of it. Uh, to the extent some folks don't like them, you know, the aesthetics, I I don't know. I mean, that's a personal preference, but that is the purpose is to impact pedestrian safety and the rate of speed through downtown. We had one of the more dangerous downtowns in this, well, we

had at one point the most dangerous main street, two blockb section in the state, right? Um, and so that's why you did the streetscape, right? And also to discourage large trucks from coming to our Yes. 16 wheelers, 24 wheelers, right? But they still do, don't they? Oh, yes. You still get some. And and you uh

you know, that's ultimately why you need an a by not a bypass, but a route that can be designated as a truck route that is efficient for trucks to use on the east side. And so so right now you're you're capturing all the trucks on the west side with 2168 and and 150 on on the west side. You got to have some corridor on the east side so trucks don't try to go through the this intersection right here that's right in the center of of your town. You've got two big limitations. You've got Clark's Run on the south which brings everybody down Houstonville Road. You've got the vioideuct on the west which brings everybody down down down Main Street in front of us. And so you what you're trying to do is provide an alternative uh location for trucks to get across Clark's Run in a in a efficient way. So it needs to be a short distance which is really the origin of of your u the routing selected or or the corridor selected for the the u east damville connector road on that east side which the public hearings tonight for that road. So the the again the purpose of that road is to provide an alternative route other than this intersection for the east side of the urban area. there's there's very little county um that is east of downtown that is not urban, right? So you therefore you want to pull that in in as close as you can towards uh this intersection, right? So hopefully we'll learn more about that tonight.

Well, um are we allowed to designate no through trucks? Can we do that on the state? Not currently. Not without an alternative. Okay. after we get the alter. I think you're going to be able to at least have the conversation after you do have an alternative right now. It's a non-starter. Yeah.

So, we will move to our park and recreation fund on your large spreadsheet. That begins on page 17. And then um total total operations um budgeted in revenue is 2 million um $2,533. Um this is derived from um a few different sources. Your largest source is your transfer from your general fund. um compared to especially when you look at the PowerPoint um but when you look at total transfers from general fund compared to the last um last year's budget and the 2025 actuals and your projection it does appear it's going down significantly but that's because those transfers did include some capital numbers. When you look at your individual spreadsheet, we have broken your transfers for operations out from your transfers for capital um 2027 budget compared to um 2025 actuals. Your transfers for operation are increasing by about $43,000. That's 4.4%. Um so year-over-year, not a huge increase in actual dollars compared to your current budget. Um total transfers um for operations from the general fund at 1,ion27,000 um and 28. service revenue, which includes rentals of um facilities such as um uh pavilion rentals, um room rentals, your um rentals at Jenny Rogers, including the rent for daycare budgeted at 125,000. Your parks revenue, which includes your program fees for baseball, softball, etc.

um facility use fees, which are your fees for um gym use at Bunny Davis, um and pool memberships, along with concessions for your parks programs at 390,000. Other recurring revenue is kind of a miscellaneous category, some interest. Um we separate out Jenny Rogers concessions to differentiate things that are not program related. So, for instance, if someone rents out the gym for wrestling, I don't know for sure that we sell concessions at the wrestling um events. I think we do um but those would be those aren't related to some of the programs we host. So, those rent those concessions are are uh recorded separately. Um that's at 17,000 $17,50. Sponsorships related to um you have sponsorships for your programs. Um we get sponsorships related to uh baseball, softball, etc. Um we have also in the last year started sponsorships for Jenny Rogers in um uh activities that um Morgan puts on for kids during spring break, fall break, Christmas break. Um she um seeks out sponsorships for lunch for the kids, for instance. That's a very um expensive cost. Um lunch and snacks, things like that. Um your intergovernmental revenue is where we record um the contribution for operations for from the Boil County Fiscal Court and any grants we may receive related to park and recck fund. Um total operation support from the fiscal court for fiscal 27 will be $400,955. So on on the revenue it looks like most of them are going down though like you

said is that what you said would be like let's say um program revenue was and actual in 25 was 191 and it's 190 and like the rental facility use and park facility use is 40,000 and it was the same in 2025 so I don't understand because there's more tournaments, you know, there's more things. So, fully full fully fully I'll admit I'm not as good at budgeting park revenue um as other revenues. And so, we're a little bit more cautious on this one. Okay. Um so, the way the parks revenue works is at the end of the year the transfers

we will transfer the full amount for any capital that is is required. But the operations our transfer because it is essentially covering the gap between what is derived elsewhere is is negotiable um is I don't think that's the right word but it's it's fluctuates right if they derive more parks revenue than we anticipate or you know they did a really good job in sponsorships that year then your transfer from your general fund is going to be less for operations. Um it's it's just which one are you pointing to, Donna, that you're talking about? Well, it's just like on parks revenue. Just take that for instance. FY25,

you know, say 4651. That one is $40,000 for this year. Looks like 40,000 in the new budget. In 2025, actually is 40,92. And I know there's more happening at our parks and our, you know, the revenue. And I know there's tournaments, so it looks to me and I'm I don't know. It looks like it would be more. Yeah, when you said going down, that confused me a little bit. It it could it could ultimately be higher. Okay.

But but we don't want to over project that. We don't want to we don't want to predict something that we can't that's going to be ultimately dependent on on participation. It's like concessions in the same time that that one, you know, two years ago it was 176. This year it's going to be 143. That's not any we don't have a lot of control over that, right? Concessions I understand. I still understand really because it's full out there. They're they're full and then the new Yeah, I think

we need revenue in the parks and I I was at I was hopeful that it was higher than this so that the general fund doesn't have to supplement so much. So I I think we we can go back and do another look um with Tommy and Josh and see where where kind of at you know the end of March we think we will be at the end of this year and therefore where we think we'll be next year. But I think you in my opinion you do want to be a little bit cautious because your general fund does have to support it right if they don't meet your revenue estimates then the general fund is what has to pick it up. So, so the program revenue, Donna, um, if you go back and look at actual of 2024 is was 166. The actual of 2025, which was the beginning, which was last summer basically, is 191. Yeah. So, it went up 20%. Right. Which is what you're talking about. all all the only thing that we're that so this year it looks like it's going to end up at 190 which is the same number we were at last summer. So to go above that right now, we don't we don't necessarily we've got to drive continue to work towards driving that up. But that 20% bump you saw that one year, we did not see that same bump this year is is is only that's the only difference, right? So we're predicting it flat with a hope that we can continue to drive it on up and drive that participation up. I will say that it is trending higher this year so far. Well, and and you look at the like the mayor was showing me too on the transfers from the general fund on the small slide.

That's positive. It's from one what it looks like from 1.5 million and then this upcoming budget it would be 1 million maybe. Well, that's that's because that includes your capital right on the slide. This includes capital because this is a total right. So on your individual, your actual transfer in 25 was 983,000. Um we're predicting 951,000 for the end of this year and then up to 1.027 million. So that um it is increasing um but not not disproportionately compared to your expenses.

I mean and I appreciate it's a great job. It's just I'm just questioned, you know, we we'll we'll definitely um we we do an exercise with like Earl talked about with the general fund revenues multiple times just because it is the driver, right? Um we haven't done that as much with parks, but we can we can start put making that a a regular part of the exercise. I guess being pleasantly surprised is better than being Well, yeah, we're playing for the worse, hope for the best. Well, I was going to also make a point that When you look at all the outdoor tournaments in the parks, there are lots and lots of people there. Yeah. They they plan to come and stay all day. Yeah.

So, lots of them are bringing their coolers and the lunches, you know, they're not getting breakfast, lunch, and dinner from our concession stand. They're getting they're bringing stuff in, which again probably okay because you can't restrict it because everywhere I go, I see that they can. And they might leave if they've got a two-hour break, they'll leave Park and go to Chick-fil-A. So, Park didn't get that, but the community gets to the balance of that, get that exposure.

So, it's all it's all sort of give and take. So we'll move to um expenses for parks. Total operating expenses are budgeted at 2 million uh $2,533. Um we do try to balance those um so that your operating expenses match your operating revenues in these um supplemental funds so that you don't um necessarily build up um large fund balances. Um your debt service includes your fleet vehicles for the parks and your equipment that we approved last year. Um pretty minor departmental total 18,126 for FY27. Um your Millennium Park budget is um1,47,683. Your fitness center at $475,891. Your pool at 92,530. Community parks at 26,000. Jenny Rogers at 273 224,000. Um and then at the request of the fiscal court um due to their contribution um our shared f joint park at Pine Knobs Trail, we're creating a new department for Pine Knob Trail. Um uh $69,79 um compared to your FY26 budget, this is an increase overall of $251,000. Part of that, like we discussed, is realigning that parks mowing contract um which was pretty significant. Um this does also include um cost of living um

your cola adjustment and step adjustment for all your full-time employees um plus the increased health care that impacts the um parks fund. 200,000.

What was the total for the B the parks? The parks total budget total budget for operations 2,2533. Okay, that's what I was looking at. And the court's operating support is excuse me, the court's operating support is 400,000 almost 400. Yes. So their their support increased by COLA this year, which is what's outlined in the agreement. Yeah. Which is 2.7%. 22. Okay. Yeah, that's the 22 million when it went from 24 million down to$2 million.

Yeah, I I should have done the I should have done the math um last year. Those variances are very very different in total for parks because we did budget that $22 million to help facilitate those discussions. Um but when you when you look at um the um individual operating departments um in your on your um expenses um similar to the other you know general fund um line some of them some of them kind of u vary a little higher the parks millennium right with the parks the mowing um in addition But most of the departments are kind of hovering between that three to 7% change overall. I think the biggest one is currently still um for just unknown better improved budgeting going forward is Jenny Rogers where it's such a new facility. We'll probably see the same trend for Pine Knob Trails where the first, you know, first few years is is us still figuring out what the community wants out of that park and how much it's going to take to maintain and um uh operate that park.

That $400,000 operating cost, that's seem like that's be expensive for for trail. Uh, no. Pine Knob Trail is 69,000. Yeah. But on the left hand side when I read it says requested a separate budget by the court 200,000 projected operating cost. So that's just your that's just your chart. That's telling you what dollar amount your chart is at. The that's just text. I should have put a text box there. Oh, okay. So yeah, 69 is what

69,000 is currently what we're estimating for Pine Knob um trail that is or Pine Knob Mountain. I'm not exactly I've not got the title down just yet. Pine Pine Knob Mountain Bike Park. Knobs. There's only one knob down there. Can you repeat that three times really quick? Um we've got a little bit of part-time salaries in there. Um we don't anticipate any full-time salaries. Uh but part-time would be if there's an event out there or just general maintenance to uh make sure trails are um available and um facilities if there ever facilities there are there.

Say say this like that the way we've estimated that to run about a third of that is some labor. So so about 20 $25,000 in labor. You're you're going to have about $20,000 of expenses out there. And then you're going to because you're going to want to go out there all the time. You're going to want to check it and you're going to so you're going to have to pass through there every day. And then you're going to have insurance and other basic, you know, electric service and and insurance makes up that other third. I think we have some rentals for portaotties if they need to be out there, you know. But but

twothird twothirds of that money is is what we think it's going to take one person driving out there on a regular basis just to observe it to to identify things that need fixed. But but a bulk of it, the other third of that is purely insurance and electric essentially. Community parks is that all is that Jackson and all. So that's all the other parks essentially. Butler Drive. Yeah, that's that's the money that we spend on other parks. I'm sorry. Yes. Yeah. Those never had their own individual budgets or and I don't know that they're really necessary. um

you you're breaking those apart and and ultimately if you want to add something to Cowan Street Park and it becomes it becomes a thing, this is where that expense would be housed, right? And so it's it's designed to so that each one of those operational expense centers, so you you know that Jenny Rogers is an expense center. So we're we we budget that trying to align the expectations with how it's being used with money necessary to operate it that way.

Right. So pine knob this is just that's a what we think this year and and as expectations are established then then we know what uh money will be necessary to maintain it at that expectation level. I think also Pine Knob um would also it is a bit necessary to have its own dedicated budget just because we do anticipate that it is used frequently. There are potentially tournaments, things like that. Um which is a little different than Jackson Street, Cowan Street, Butler Park. Well, we have joint ownership to the We do trail, right?

We do. And I was thinking on this on this chart, Millennium Park, the pool and then the Pine Dark Trail, those are the only three where we get some joint funding. That is correct. Do you all hear that? That the Millennium Park, the pool, and then now the new Pine Kn. Uh I would say I don't uh Is the pool covered? So I think technically the pool itself is not covered but potentially programs hosted at the pool are covered is that distinction

just the court making donations and to approve to improvements of these places. Millennium Park and have they done anything to improve food? We've shared that burden by ourselves. We've had they've reimbursed us as we've done some expenses out there. They have they've contributed to support uh I think the most recent Yeah. um when we had all those cracks um they did some that. So all the rest of the parks expenses besides Millennium and the pool and then for Pine Dog all the rest of them Yeah. on the city community parks, Jenny Rogers fitness centers on on the city for the most part.

Yes. And then in Lillian Park, um, it's a 50/50 it's 50/50 ownership of the park itself. 50 50/50 what? Ownership of the park itself. There are some things that I believe in the last 10, five, five years or so that the city has upgraded or improved at the parks that the county did not contribute to. Um, I think there were a playground or two. Um, but we did get some grant funding related to a lot of those.

I've been trying to sell the county's land for recreational purposes, city Rogers, community center, tennis courts, fairgrounds, you know, what does the city owns all that stuff? Well, yeah, but we want to have real partnership. Let's that you guys buying up 50%. That's my I mean that's just the thoughts on looking so deep. It's just like the revenue, you know, the city's funding a whole lot for parks. Yeah. And we need to I don't know if everything's rent, you know, rented or it's all given or, you know, at Jenny Rogers, it's a great great space.

Uh most I think there there's a mix there's a mix of a lot of rentals. Um there are some um folks that are like if they're not for profofits um we typically allow those folks to rent the space for whatever they're using for free. Um so there's a mix but I that's the same way we treat all our other park facilities and like the building out at the fairgrounds the brown building that's half owned by us and half owned by them at the top. You know, do we I know there's people in there all the time. Baseball. So, baseball does pay rent. Off the top of my head, I don't know what it is, but they pay that to the

They pay it to Yes. So, any any rent that goes to any of the facilities comes to us. Okay. In terms of parks and wreck. In terms of parks and rack. Yes. Yes. Um so right now you do have a net zero operating budget over expenses for revenue over expenses for the parks fund. um the capital improvements that come along over our next couple meetings would be supported by transfers from the general fund which is um how that that is supported. So

well before you move on if I look at just the expenses for the fitness center the pool

it's over half a million dollars. It is it requires you know the pool um itself uh doesn't include any full-time salary. So that is typically your lifeguards and any uh part-time staff there dayto-day. Your fitness center does have a um I believe one or two full-time staff charged to that department. Um but they also have a lot of part-time staff for your day camp um things like that. um and general upkeep of the building and the programs that are managed and ran from um what is our fitness center budget.

So, next we'll cover briefly um your cemetery and your garbage funds. uh cemetery. And this does on your large spreadsheet, it did go out of order a little bit just because um storm water is one of your bigger um utility or enterprise funds. And so we wanted to kind of give its own slide to that one. But your cemetery um your cemetery total revenues are 48,000. Um this is largely derived from general fund support along with sales of your um cemetery lots and the um cemetery burials things like that that is on page 23 of your large spreadsheets. Um again we have um tried to create a net zero when we have those transfers. Um compared your operating expenses to your operating revenues for the um cemetery fund. You are budgeted at 48,000 in expenses as well. Uh 220 of this is personnel. 173 is contract services which is mostly your mowing contract for the cemeteries. If you remember that mowing contract is is very large because of the detail work it requires.

Uh 11,000 just other miscellaneous items necessary for the um cemetery to be maintained. 1,000 in um debt service which is related to your fleet vehicles. How many always ask us how many employees are coming out of the regular salary? Um two. You have a cemetery sexant and and don't know what his title. I believe it's two a cemetery sexant assistant. I I'm not sure what his title is. I apologize. Is that two? I believe it's two. Yes. And that's two full times.

Two full-time. Um and I do think they get some support from public works as necessary. When you compare on your chart to prior year or budgeted end of current year um FY27 to FY26 on your slide, you do have a pretty large outlier in FY26 projected year end. That's due to um fence improvements that were budgeted um in originally budgeted in FY25. It did not get paid until FY27 due to the schedule of getting the fence installed. So, um that will um compared to your original budget, um we'll have a budget amendment before the end of the year to tidy that up. So, your garbage fund, which is page 20 26 of your large spreadsheet, there's a very large asterisk with this um budget. Um, and that is due to Josh's um, presentation from the other night. And um, you all don't yet have a um, until he finalizes that process and brings it back to you, you all don't have yet a full strategy for um, the garbage fund moving forward. So, what he has done is um, utilize one of those strategies that did not um, include the city of Danville garbage services going forward. Um, so you have a projected uh revenue of 185,000 um a projected expenses of 185,000. So this would encompass potentially one last bill cycle um due to the timing of

bill cycles um where the city of Danville build garbage directly. Um this depending on the direction you all want to go with garbage services um very easily changed um you would see if you um ultimately decide to keep billing inhouse um see a very a similar um revenue and expense to the prior year slightly increase due to cost of living adjustments required with our garbage contracts.

What was what was the number used uh last time we talked about this? Excuse me. Um cost to the city. You know, our our customers are paying a certain amount throughout the year, but then at the end there's a a fund balance that the city sort of deficit the city Oh. Um right now it's it's close to $10,000 a month. So, uh we're about $120,000 a year um that the city supports um in service in fees that we don't collect. And again, we don't PR that. We don't PR that.

Yeah. To me, that that's a major contribution to the fact that city government is having to pay for the removal of garbage and the recycled materials for what 11,000 plus customers. How many is it? Yeah, I think I think garbage customers are probably a little smaller. Maybe somewhere between seven and 8,000. 7700 7703 to be exact. That's about right, Kevin. To me, that's a beg because we had to go out and pay for our own garbage and just heaven forbid both of them.

We probably our business was probably quite something, wouldn't it? Uh I mean, anecdotally, I live in a different county. Um but I and not in town. Uh, but I do pay for garbage service and it's about $90 for three months of service. $30 a month. Yeah. Is that recyclables too? It is not recyclables. That is one can of garbage. They don't do recycling. They Well, Audrey, you're calling me out here for not recycling. Maybe. I haven't asked, but my $90 does not get me recycling. We'll just say they don't I do I do it manually. I

do it at home. Again, it's expensive in most communities to have your garbage picked up and take your I wonder how you're how that percentage of deficit compares with other places that collect their own fees. It it re it really I mean it it's not really I I don't necessarily I mean you you have a contract that that you're paying for. The goal is to to collect cover that contract expense.

I don't know that every anybody's exactly like us either in how we collect it or how we bill it or how we not every city does the billing. Not every city. So, it's really at the end of the day, it's it's what your vendor is charging at the unit. That's really your only true comparison between here and somewhere else. Yeah. If you if you double that's a lot of money what we pay for the trash and the recycling collection in our community. Yeah. You you that would be

you have about a million half dollar a year contract now. Um the uh projection is one well the last actual was 1.46. This year it would be 1.54 after the cola. Um so it it's it's a big contract. Now, the when when we changed the the last time we did a major contract change to repeat this um from the last commission meeting where we where Josh had his slide, we um tried to bill for the extra cans directly, but the lag beh between when they are reporting the can when the when that gets sent out to the customer and build. That lag has created ultimately some of the some of the the offset that general funds had to do to to fulfill the obligations of the contract.

Could they not maybe um in the contract talk to them or discuss that specific thing because I I heard all the positives and negatives of us billing versus them. If if they bill, maybe we don't they don't get paid and then they stop picking up trash, right? The city has the water that they have to pay the So, I mean, what are the positives of us versus them billing? The positives of of us billing versus

the the the connection between the customer and this the vendor. So, so your customers call us when part part of the delay in aligning the can with the user is is that folks don't call Republic, they call us. And and so it so in in the computer system for Republic, we show up as one account even though we're 7,700 individual accounts within that, right? So, we show up as one account with different service locations and it it's it's a it it is a more cumbersome way to track service request. So, if you live on Alta Avenue and you make a request, when you call Republic, it just shows up as the city of Danville, right? And so that it's highly dependent on somebody in the office out of state now to document that correct address and communicate that then through SEC so they don't have just that individual computerwide account number on on the republic side to track that can that address that service location is not tied to an account it's tied to the city of Damble right and so the biggest win will be will will be the customer service theoretically should be more responsive

if if they build.

If they bill, theoretically it should be more responsive. And then two, you're going to get a a more connected uh unit bill, meaning meaning um right now us reconciling the number of cans we're being charged for and the number of cans we're charging customers is depending on two audits. We have to audit our water accounts and we have to audit the bill they send us. So it's a it's it so at first we have to audit this one. Then we take it to our computer and audit that. And so you by doing the extra cans it's diver the the amount we're billing our customers versus the the amount we're getting build from them is diverging, right? And so, so by doing it direct bill, you only have one step in there that you're auditing rather than two sources. You only get one customer bill list, one. So, so in theory, it it's going to be more accurately build and then your customer service should be higher theor theoretic and and we don't know. We're we're that's why we're we wanted to talk about it in the way that Josh did is we wanted to to get those questions and see what your thoughts were. So that question I'll talk to Josh about and I'll I will be telling him, hey, Monday night you need to be prepared for this question. So So I'm going to take that question and we'll we'll get do a deeper dive into that. But my immediate reaction and immediate assessment.

Let me ask this question. Uh Republicans is doing all of it, right? and you got four of us sitting here. What happens if the two of us decide we don't want to deal with you for a garbage collection? So, I as an individual, you could take your garbage off yourself to the convenience centers. Um, and if you allow your garbage to then pile up, it could potentially become a code of course. But wouldn't wouldn't our contract say you have to have if it's in the city, you're going to get a gar a garbage can and a recycling can at your service address. We still have control of that.

You you that that's that that is a requirement contract. You would have to we would need to address you have required Yes. You have required you're a participant a participant by living have an address in the city. So sort of like sort of like the recycling thing, right? We weren't recycling. You everybody had to go recycling. Yeah, it's just scary to me because sometimes Oh, they do not put I guess they'll separate.

But to me that could be I guess if Republic controls it and if I want to have two garbage cans, put everything in the garbage can recycle that make it easy for public, right? If I had one one of each, that's a little bit more work for lot of scenarios. It has drastically cleaned up the city of Denver since we started. It used to be dirty. Oh, trash. Well, yes, ma'am. Would be all over the place. Be all them plastic bags and the dogs and the birds and fire trucks. Everybody would get it. You know,

it was all over the place, wouldn't it? Used to be. Yeah. I mean, I you know, the money we're spending out of the general fund, I don't think is okay because we're we're spending so much to offset all of these bills that we're getting as a city and somebody owes that bill, you know, but we're paying it. We're subsidizing it. Um, so that could help us in turn in our general fund for other things that we need. Yes. So, I see the positive, but then like I was telling, you know, I think you have to talk in the contract and that's another day, but talk in the contract about What if a person doesn't pay their bill? How do you handle that? Because we just don't want trash, you know?

Well, we have we have a lot of code enforcement folks out there. Yeah. We'll talk we we will be with that question in mind. We're getting and received a list of questions that we'll try to have answers better answers to than than so so that's a good question. How do we if if if if you send you all your billing to the Republic and you let them do that, how do you effectively um achieve compliance with the requirement of garbage collection? Yeah, that's right. Right. That's a good way to say that. And and how do you get how do you ensure people pay their bill? Right.

Yeah. Because the water bill is a great connector on the water bill. Not going to be easy. So, like I said, this is really a a placeholder budget until a final decision has been has been made. Um, and thankfully, it's a small fund in items to adjust as we need to. So, um it would be pretty easy to adjust it as we um deem necessary. Your storm water fund, we'll move on, which is on page 25 of your large spreadsheet. So, in total revenues for the current year, we have budgeted $742,500. It's a pretty significant drop in revenue, budgeted revenue compared to fiscal 26. If you remember fiscal 26, we did budget a potential debt issuance related to the Twin Brook covert project that we ultimately found was not necessary um due to the robust fund balance of storm water fund combined with the project um coming in significantly under budget. Um I think originally we thought that would be around $600,000 of a project, five or six, and it ended up being closer to three. Um which has allowed Josh to do a few smaller storm water projects in addition to um the Twin Brook covert. Um

is the Twin Brook the Twin Brook covert is it working? We'll let you know next time. Right. That's a 10 year design. So you'll know sometime between now and the next 10 years. But we don't get any phone calls about it. You say you tried something. 25 year design. So it' be once out every 25 years in theory. Wait, we get we haven't had any rain. You're going to tell me, right? Yeah. Um the um

Josh did budget um for a cola in the revenue um which he would bring back to you all um at the beginning of the fiscal year um for the storm water budget um similar to how we um uh do a cola adjustment on water rates. Um, last fiscal year was the first year the um, storm water rate had been adjusted since its inception. Currently, it's at 375 um, $3.75 uh, per unit um, which would be adjusted by the 2.7% cola. Um, in total, Josh has budgeted $742,500 in expenses. Um, this is combined with your salaries of 592,000, contract services of 46,000, 47,000 in other miscellaneous items, and 56,000 in your debt service. We do have some fleet vehicles um in the stormwater fund, but you do also have a uh bond that is um being paid for storm water improvements that is pretty close to um finalizing. I I think within the next five years, your storm water fund debt uh your bond is um completed. So, so the budget request is way down then, right?

Well, in total, like I said, in total, it's way down because we don't have that c any capital improvements yet. Um, personnel is 92. Compared to budget, it's actually a little bit um lower potentially that is due to health care does look like healthcare. So um last year we had budgeted for increased healthcare in this fund because of some known um things and it looks like that's resolved. So in total your personnel cost has gone down a little bit in this fund. Um, healthcare can can be one of those big swings in a fund like this where you have, you know, three to four employees in this fund and if if one of the members of our health plan is severely impacted by something, it can um it can swing it pretty wildly yeartoear. um salaries um did increase about 5% compared to last year's budget. So um but that would be your cola and step increase.

How many are in this? I'm just asking each one if I um budgeted in this number. I I think four. I think four, but I'm not 100% positive. Okay. Yeah, but that does include fully your storm water coordinator and program coordinator and um the gentleman that does the street sweeping. I don't know his title or name and I apologize, but I've never never seen him in person. I have seen him working. If they don't come to city hall, I don't get to meet him. You mean to get you out of that office with no window? No, I think you just need to parade them all back to finance. They can come in.

They'll be coming in doing a what? Benefits, right? Healthare. Um, that's Ry's. That's Ry's baby. And I stay in my finance corner. All right.

Uh, utility fund. Utility fund begins on page 27 of your large spreadsheets. Um, in total we are budgeting 13,369,370 in operating revenue. This is $6.68 million in water related services. Um 6.4 4 million in um sewer related service charges, 243,000 in miscellaneous other recurring revenue. Um this does show a um projected COLA increase for utility fund um for your routine services. Um, however, it also shows a pretty big jump in some of your revenue lines um due to a planned um review and um assessment of charges related to the utility fund. Um similar to some of our other charges, um those have not been adjusted in in many years, possibly even decades. Um for instance, our turnon fee is $25. um and has not been adjusted in many many years and um frankly the turnon fee does not cover the cost to turn it on. Um so um Marshall has has already started honored that review with plans to bring that forwards um in the near future with a goal of implementing next fiscal year. Um because you really want your water utility service to cover its its costs associated with it. it'll slow them down. the chart when you go back and you look all the way back to

the 23 number the trend is are these columns do indicate that trend and just what it means how it's communicated is you have a pretty stable consistent water demand is essentially what this is communicating to you on the total revenues between the 26 budget budget and projected year in it's about 4 million. Is that something we a project we haven't done?

So those are Oh yeah. So those are your um oh it's your ED it's your project I believe it is is it Spears Creek or Leon Road with the EDA on your where are you talking about K? So we're

Oh those are Yes. I think it's it's it's either Lebanon Road or Spears Creek um project and it has a um or I'm sorry, yeah, Spears Creek or Lebanon Road phase 2 and it has um a EDA grant of 1.9 million and some KIA loan funding of seven in total. We thought we would be by the end of the year when we did this budget at about 4 million through that project. It's gone a little slower um than we originally thought. Um, and so we're not projecting use of that by the end of the year. Um, but we did we do have approval and Marshall is working through getting those projects started. So once we get to the capital program, we will have some budgeted loan um and grant funding related to those projects um for for FY27. So that's the that's the difference. Your operating revenue itself is projected um to increase about five 5.7% for water services um and then 2.5 for sewer. Your total operating expenses for the utility fund are 13,369,090, which gives you an operating budget surplus of $280.

Um, I'm sorry. Go ahead, Mayor. No, I say that's just about enough for lunch. You're going somewhere expensive for lunch.

Well, it's about 10, right? Um so like the general fund this does include your um cola um your step increase. It includes healthcare increase um FY26 budget compared to FY um 27. You're about $570,000 increased in expenses. Part of this um part of that jump was um from some debt service schedules. Uh just based on those um we're seeing a slight increase. Um, yeah, your increase in your debt service um from budget 26 to budget 27 is almost 500,000 itself. So sometimes that's uh um those come up depending on the schedule itself. Uh but we do assess those and make sure they're um still appropriate um for the most part. Um we have a several

your utility tility fund has the coverage requirements for a lot of your debt and and we met with U Palmer. We u did see the profile and the the analysis of that and we are achieving all those those numbers. We expect to get some sort of uh presentation of the debt service to you all soon um as we can work it out. Lee and I have at least seen it so we we know kind of what his feedback is but we need to make that part of a formal presentation to you all sometime during during this budget cycle. Uh we we will work to get that aligned for you.

We do have later in this calendar year, it will be next fiscal year, the 2023 bond anticipation note that we um um issued for some utility projects um will be um issued into full bonds um that is scheduled for final issuance in October. So on the utility fund total unless I'm reading it wrong the or no maybe I'm wrong the total is less than 2025 well total is less than 2025 so technically yes your operating expenses um for 20 for utility funds because it's an enterprise fund um some fun things happen with a couple things. When you look at actuals for 2025, it says we spent $0 in capital. That is not accurate,

right? We spent $0 in capital, but capital projects in an enterprise fund, which is what the utility fund is, is considered an asset and not an expense. In your general fund, it is an expense. And so, for accounting purposes, those numbers get moved from your expense account, which is what this capital line is, to an asset account. Something similar happens with your debt service. So in your in your debt service, you have a a one debt and you have your principal and your interest. Well, your principal balance gets moved to reduce the liability which is not presented on your budget transaction. So it looks in in your 2025 budget, you budgeted 2.9 million for debt service. In your actuals, it says it's 1.14. You spent 2.9 million in debt service. However, the principal reduced the liability on your balance sheet and your expense is your interest. So, there are some quirks to budgeting.

They need to quit that. I know that I know. Well, that's that's that's why I'm here. That's why we have Lee here. Good.

And in your in your enterprise funds for instance, you have a depreciation expense that you can see in prior years unless sometimes I Yes. Um so 2025 your depreciation expense was 469,000 in your um utility fund. you do not also have that offsetting expense in your general fund because like we take the capital away um and change it to an asset in your um enterprise fund. You do not do that in your governmental funds. Um so technically yes in your budgetary in your budgetary comparison you did spend less than 25. Um in or you are budgeting less um

yes than 27. Um however um some of those some of those big charges are essentially adjusted at year end. And so your debt service in 27 when we present actuals in a year or so um would be closer to um oh I don't know off the top of my head 2.5. So when we do our year in projections we do project the whole amount in cash that we would spend for your debt service but your FY26 budget um or I'm sorry your projected year in FY26 you have 3.1 in debt service. In reality by the time we do budgeting next year this total your actual will be 2.5 2.6 whatever it actually is um your interest only. So just little accounting everybody that's why we set those accounting standards so that so um interestingly so it's job security so that way um

the the depreciation line is 7989. So as you scroll up from where you're at there at the bottom and then move to the right. The actual depreciation expense was 1.87 million25. Yeah. Which which is really an offset of your capital. Yeah.

Watch us, right? He's been watching us. Marshall's like, I got to get in there. What? How are how are the like the sinking fund the uh that's what we call it but we have depreciation reserve reserve. Yeah.

Yeah. So so we don't necessarily budget them um right um because that's that's really more of a cash flow. Um but they're very healthy. Um, we do have a new one that um I will need Miss Donna Peak to sign u before she leaves today um for one of our newer debts. Uh but they are they're all healthy. They're all um either on track with their scheduled um or all have what's required in them for the debt. Um some of the debts do require one. For instance, what Don is going to sign off on today is um we had the Parville Road tank project a couple years back. Well, the dep the debt service schedule got finalized last December um to get started and so there's a reserve requirement of 12 12,300 annually. Um and that specific one requires a separate reserve account based on the the debt service. Some don't. Some can some allow us to use like other um like we have a few combined reserve accounts for utilities. Um but they're all above um minimum essentially if they've already been opened. Um, but we can bring that back when we

So, so when you go back and you look at your your packets, the March 23rd commission meeting in that city manager report, there's a financial uh, and you remember I talked about it just briefly, but there's a financial update that that was that month's assessment, right? Lee did that and put put the tables together. The very last page of that, page 17 of that that city manager report was a a list of your current bank balances for all of your checking accounts and that represents cash and for each one of those accounts actual cash in each one of those accounts and in those accounts February for example there's two columns which is the very very right side of that that account listing, you have a reserved column and you have an unreserved column. And those are self-explanatory, right? The reserve side is locked in for some offset of a loan somewhere or a bond somewhere or as a security against an asset, right? And then the description of each one of those accounts is on immediately next to that that February two columns.

So So when when you get into that, you'll see you'll see pretty pretty clearly, you know, one will will be associated with and we'll say utility debt service and it has a reserve number of $83,333. If we if that number if we are not adding money to that account that I mean that means that reserve number is fully funded and so we're not we we don't need to hold more money in that account, right? So then any dollar we bring in won't go to fund a reserve number. It will be an unreserved balance for the utility in that scenario.

So that that March the 23rd commission meeting the very last page on that packet which was just a couple weeks ago. Okay. You've got a listing of all of our checking accounts. Well, I fig, you know, I had no doubt we were doing what we needed to do. I just didn't know how it was accounted for. Just didn't Yeah. So, we don't we don't budget for it. Um just because that's it's really just not a a budget tactic.

Um but those monthly transfers on the bill list um are funding those accounts essentially. And so what that does from a big picture budget standpoint, it essentially moves internally Marshall's some of Marshall's fund balance from reserve to from unreserved to reserve. So

um our museum and parking funds, your museum is on page 35 of your large spreadsheets. Um small fund uh source of revenue is derived from transfers from the general fund. $61,980 budgeted in revenue. Um $66,980 uh budgeted in expenses um just for routine operating um expenses of the facility um located on the corner of the old federal building. Um and then there is some minor debt service associated with that fund for the energy efficiency project we did in uh 204 2017ish. Um overall compared to the um FY25 um expenses and the FY26 budget, we are down um due to um we had budgeted a roof repair um in the current year. It's going to be a lot less um costly than we had originally thought. Um and then there were some additional expenses in 25 that aren't recurrent. um parking fund um covers your parking garage and the cost of your parking um enforcement. Uh total budgeted revenues at 445,000. Um total budget expenses at 445,000. Your largest expense in this fund is debt service related to the parking garage at about $270,000. Um personnel in the um parking fund is $75,000. Um expenses are strictly to maintain the garage and um the parking facilities. Um

your largest source of revenue in the parking fund is the parking garage leases um which we're budgeting at 316,000 for the current year. Good news is the debt service goes away in about 10 years. about two years in next year. 20 2037 I believe is is the year. 2037 or 2038. We might get some benefit out of that. How long's it been there now? 20 years. Don't age me and Donna like that. I'm going to just go.

Parking rental fees are the lots. Um we have those um of all the spots we have available. Um we have a few that are reserved for downtown customer parking still. Um they're all rented out currently and our parking garage is completely rented out. Um they have been they've been as soon as we usually have a waiting list for most of the lots in the garage. So, as soon as one comes available, we call whoever's next on the list and offer it up. Um, so I keep that to myself about parking and paying your parking fees, but

we do provide parking enforcement um related to our lots and um over the curb, over the line parking violations. What about on the on the streets, street parking? On street parking. We do we do uh out of stall tickets and things like that, illegal parking. Um the twohour we do try to enforce that, but that's more difficult to enforce with the limitations that the police have. We actually budgeted $7,000 for that look like parking fines and we're only at 40 or estimated to be at 4,500. So we're not doing a lot of parking. We're tough down there.

Not a lot of valid not a lot of validators. You said not a lot of enforcement. I said not a lot of validators. It it it's it's not it's not ever a huge revenue source, parking violations. Um um but so no, it is not um not a lot of ticket collections. Um, if you hire Kevin and I part time, we could take care of that thing. Well, I think that's other duties as assigned as Where'd you get her from? Junction City.

So, we briefly wanted to just touch on our revenue strategy. talked about it a little bit um for the general fund specifically um kind of our strategy budgeting um less conservatively in the past but not wanting to over overinflate it um to ensure that we do collect what we've budgeted um as a reminder we wanted to to show you our our comparison to um other hubs economic hubs in central Kentucky um where our rates fall um we're not the lowest on every rate but we're not the highest by any means. We're very competitive. Um we are budgeting our our budget recommendations for property taxes to budget based on the compensating rate which is similar to um the same strategy we've used in prior years. Um that generates the same level of revenue as the prior year. Your growth is on existing property. Your growth is derived from new development. Um occupational insurance premium occupational taxes and insurance premiums. Um, we are recommending to keep at current rates flat. Um, and our fees and user charges we've talked a bit about to follow our current ordinances but to review rates for competitiveness.

The uh footnote also is the insurance premium column is uh the city of Danville's insurance premium on health policies is set at zero. Um, other cities do collect an an rate on that and and you still don't. There Yeah, as a reminder, a lot of a lot of small cities do not, but all of the cities on our com competitive list um do have one. Zero.

Ours is zero for health insurance premiums. My aster got cut off. And kind of as a last um point for today, um next week or I'm sorry, later this week, Thursday at 8 a.m. we'll be covering community agencies and shared agencies. Um they will be providing um your your presentations. Um, we did want to, um, kind of give you a reminder of where we were at for the last couple years. Um, just Audrey, where you're not as familiar with, um, our shared agencies, the FY25 allocation is how much we paid to each of those people in fiscal year 25. The FY26 request is how much they requested that you provide to them last year in the current year. And then the FY26 budget is how much you all agreed to provide them. So next week um you'll hear from or I'm sorry Thursday. I keep saying next week. It's this Thursday. Um all of the agencies will will provide a presentation and request an amount from you. Um and then you all will go through an exercise where you say, "Okay, well this entity I want to give um I want to allocate this much money to them." them and then it's it's a it's a work in progress to narrow down how much of a recommendation we provide based on the feedback that you all provide individually. Um in total from our um presented community agencies was $71,100. um on your budget spreadsheet in your general fund, this does appear slightly higher at 144,000 because your um what we note as a shared agency of your senior citizen center is budgetarily within your community agencies.

Um and then your shared agencies are uh budgeted a little separately. Um, we also in addition to your folks that were presented on community agency day, we provided 10,000 to the Boil County Homeless Coalition. I do believe they are scheduled for presentation on Thursday. And then we also budgeted 50,000 for the 250th celebration in the current year. 40,000 of which we were allocating directly to spending by um the 250th committee and 10,000 we were allocating for expenses that we do um directly ourselves for things like banners. So, in total, $469,100 in the current year for things like your community agencies um and agency shared agency funding. Um Thursday, April 2nd, 8 a.m. community agency day. Um lunch, breakfast, lunch, and dinner, midnight snack will be provided. um

$258. Um your April 14th will be the following budget meeting where we cover capital um and where you all will get a chance to kind of discuss um directions for economic development. That is that is our presentation today. Um there is a need for executive session. Can I ask a question? Yes, please ask. What questions do you have? It was a very long numbers today. I mean, and I say it every year. I know you put it on here about looking at the ordinances versus the fees because, you know, we set our taxes. We do our water increases and our garbage increases and our things we have to increase. But

yes, and I'm not saying that's what you do, but business license is $25 and you can be here a hundred years.

Yes. Business license. I'm in the process of a review and Earl had tasked me with coming back to you guys after I had provided him a little bit of additional things and I I'm going to frankly your executive session is going to help me out a lot today and hopefully uh in the near future I can bring those back to him and then we can kind of bring a recommendation if we have one back to you guys. But I mean like all of the fees, you know, absolutely across the board because you know, you've got your I mean I'm on the with the codes and stuff people if they're not taking care of their property, what are our fees that we're charging and could we do more because it affects everything from the how the city looks to

um and and do people need to be cleaning it up? We're paying for for the yards to be mowed. You know, we're out a lot of money. So I mean, what can we do to maybe offset some of that? Mhm. I think that's something we need to look at. So the $25 license fee license fee one time. Yes. That one I paid back in 198. Yes. Wow. And that's it. So absolutely. It's going to be interesting to know what communities are doing with that. Right.

It's all over the place. Um, some of the fees are it is I would say some of the fees are a little higher. Some of them are $100. Some of them are still 25. Um, I think your biggest the biggest difference is some of them are charging it annually versus not. I like the the um concept of putting your cost exactly where your the source of your expense is. Right. So, a lot of cities will will say, "Well, we don't have a business license fee." But then they'll have other charges that are much more significant.

So, for example, the insurance premium tax on health insurance, there's cities that generate three or four million dollars with that number and yours is set at zero. Right? So, so saying that then it's easy to hide other costs and say, "Well, we have cheap business license. It doesn't cost cost us a whole lot to do business here until you get to paying the insurance premium tax. Then you see the actual expense. That's not really we we I know so far as my time is concerned I have valued if you have an expense somewhere align that with the source of that expense. Right.

And I think that's the most transparent thing you can do. And I would argue that Danville's budget is one of the more transparent local budgets, particularly at our magnitude, right? I think you have an extremely transparent budget and and and so that's that's just, you know, your immediate assessment of that that question. So when you're saying some cities don't have it, some people are all there's re, you know, some people don't want to you you to see those expenses,

you know. Well, you know, it's just like you said the where we're we're paying out a lot. Let's try to shore that up, I guess. You know, make make those fees a little more because those are user fees.

Well, and I think I think from a just if you're strictly talking about the business license um expense, the the recurrent business license, and this is my opinion, Earl may not agree. I think it's it does more than just generate revenue because if you have an annual business license fee, that business can then deduct that license fee off their net profit. So, at the end of the day, that's a net. It just depends on where it comes in. Do we bring it in or does the county bring it in and then remit it to us? but it does allow us to do a lot more and a lot better tracking of our local businesses um from a economic development standpoint. So, so that one is a little bit there's an asterct on revenue generation for a business license fee when you also have a net profit um license tax. So,

has the B County Homeless Coalition put in a request? They have. They'll be here on Thursday. Okay. Can Can does anyone recollect what the $10,000? So that was for they if you remember in January when it was so cold they came in and asked for funding to help um the for essentially support at motel hotels um for the frigid temperatures. Well, I got Oh, you're still ladies first. Yeah. Now, the other one was I know the county collects our property taxes still and I ask that

every year just to know what the fee is and is it more the sheriff's fee is 1.75 I believe for their collections. I think that's mandated that fee is mandated maybe by the state when they do our collections. Our occupational tax um is also right around one. It's either 1.75 or 2% somewhere around there for um collections for occupational tax which is around 330,000 annually. Do you still think it's best that way or in house? Is it cost effective?

Cost effective. It it it can go either way. Still the the expenditure in in the last four years with the inflation of of salaries systemwide throughout the region. Um that has made that number higher than it it made it jump. Um and it definitely crossed the threshold of the number of employees that we would have to hire to to be able to f So it is a conversation we need to have um for the end user for the taxpayer it is better to have one one place that you remit those things. It's just simpler, right? That's just demonstrabably true. Um it's it's best to keep that as at the local level, meaning at the county or city. Um so, but it is the rate that we're being charged probably is worth talking about again now. I I I it was trending that direction last year. It probably is something that we need to talk about this year and and Lee and I will will sit down when we do our, you know, annual meets and quarterly meets with those folks. We'll we'll try to have a conversation about that this year because it is worthwhile to evaluate it. Is it accurate?

What's the rate of return? You know, are we collecting at the 80% number at the 90% number? What's it going to take to move us from 80% to 90% so that everybody that is participating is being collected uniformly and you don't have some people not. Um and then what's the expense of that? Is that expense really carrying that that cost burden or is that so that analysis has to take take place this year? Yeah.

Yeah. Mine or mine is a question I guess I I keep wanting to talk to my colleagues about u us doing something major a major impact with what I'm calling quote unquote the tiny homes project and I want to sort of bring forward a request but in going through all these budget worksheets I really haven't found a place to ask be headed so but you all can sort of looking at our budget here and you can identify a place where we could put in a a one-time major contribution to the tiny homes project if the commissioners think it's approp. So, so that would be discussed during uh the capital uh section.

That would be a capital request and that's something we would want to sit down with you and try to understand what what your thinking is. And then we can we could try to put some some structure to what you're asking. And so we'll try to find time over the next next week or so because we we do have a little bit of time uh since we're not meeting next week to to sit down and go through that. And so you'll you'll be about two two weeks out before we need need to or more two or three weeks out before we need to know what you're talking about.

And I don't I don't know if the B County homeless coalition or if United Way I don't know who's heading up that project who whose project is that? If it's a nonprofit, we should figure that we can figure that out. Yeah, we'll we'll sit down. We'll you we can sit I mean you and Josh maybe we'll sit down one day next week and and go through what you're thinking. Okay. I haven't talked about it with these guys either. Yeah. The correct the correct alignment is a capital request for that appreciate very much again what you call

and the insurance premium tax not that we're putting or health insurance tax. What if you put because it's the time has passed, right, to to pass that this year and not that you not that I'm saying to pass it, but what would be the revenue? So, at a 1% when we did the assessments um a couple years ago, a 1% tax would generate about $250,000 um dollars in between 250 to $300,000 a year at 1%. And most cities are at uh our compet what we considered our competitive cities are closer to um they write their their their whatever their rate was across the board

was their rate for the health insurance which um for Lexington was 5% for Richmond 8% for Frankfurt 9% Somerset 6%. Um our rate for other insurance premium taxes was 8%. Um I don't know that you'd want to do that necessarily. We didn't assess that. Um we did um around 3% would be anywhere from five to $600,000 annually according according to the information we can discern. Yes. You really it's very difficult to predict what that actually is

because there's not a there's not a list of health insurance premiums that we can go like to the state for instance and say oh how much in health insurance premiums are we receiving or is is generated in Danville. Um so it really is we can talk to brokers and say okay what do you all generate and and kind of look at market things but it is it is a very it's an estimate with a very wide range of what actuals would be an estimate on the people explain how it's paid or who paid.

So the insurance pre the insurance carrier pays a return every quarter to the city of Danville. Um so each quarter we receive um if you have house insurance or car insurance in the city of Danville located the policy is located in the city of Danville, you would pay that insurance premium tax um to your health insurance carrier that would be on your health your your bill and then that carrier would send a tax return to the city every quarter. Um the the best I can tell on a health insurance premium tax it would be where your policy is located. Um so I believe that's where I believe it's based on where you live and not necessarily where your employer lives but before any in the future if that was ever fully discussed we would have to review that. There are exemptions for things like Medicare premiums, um, state insurance um, provided by con Kentucky. So any Kentucky employees, I believe, would be exempted. Um, high yield deductible plans are exempted. Um, so there's ex there's a lot of exemptions for the health insurance premium tax.

Yeah, there is. And and so it it's my baseline belief that that is a low estimate. I think it will be a little bit higher than the numbers that we're able to predict. The other the other side of that is when you look at your inflation um when your inflation on auto insurance policies for example is 50 56% rate on on a a auto auto premium. So that's affecting your re revenue that you're collecting on your insurance premium tax for auto policies for example. So so it there there could be an argument that could be made in an effort to balance that revenue stream a little bit. Do you reduce your others to 7% and do your health insurance at a 3% rate instead of a 2% rate? I don't I don't know. I I do think it would be if if as we go through that exercise, I do think it's it's helpful to think about those rates as a as a as a uh platform of of of really not rates but but ex revenue points I guess or or lack of better better way and maybe maybe there is an exercise to try to balance that a little bit. Right now, everything else is at 8% and this is at zero. So, if you add something to this, do you try to distribute that a little bit by lowering your 8% down to seven? That would be fair to those people that that you know that are only paying health insurance or not paying or has cars or don't have this. And, you know, I I just something that that makes my mind u want to talk about that a little bit. I I question how would how would it how would it impact

all city employees? So all city employees um well currently the city of Danville pays all health insurance premiums. Um so from an individual employee perspective they would not see a change from a city of Danville perspective. You would see an overall increase in revenue but you would also see an overall in slight increase in um health insurance costs due to the tax. So an employee as an individual wouldn't see an impact. Now maybe if their spouse works in town, they get coverage to the city. So they probably wouldn't see an impact either.

Well, I just we didn't do it for a good reason back when we decided not to do it. And we should have all those discussions. I I think the the a citizen hypothetically in the future, if you did decide to enact one, um could potentially see a change, like Earl said, in another rate they're paying on insurance premiums, but they could also see the ability to fund fire station 3, you know, staffing, um or the debt service it would take to build that building. I love Fire Station 3, but all they're going to hear is the word tax, though. We do have a need for executive session if the questions are done. Yes, ma'am.

Wait, wait, wait. We have a brief brief session, right? Brief for personnel. I'll make a motion to go into executive session for personnel pursuant to KS 618101F. You did that for memory. That's good. What? Oh, Kevin. you. Oh, see that's all right. All those in favor going into it executive session say. All right.

Thank you, sir. Is there a second? I second. Thank you, ma'am. All those in favor say I. I. I. All right. We're back in regular session. Mr. City Manager, you have a recommendation for us? I sure do. Staff is recommending the hiring of Cresa Belchure to the position of accountant. Thank you, sir. So moved. Thank you, ma'am. Is there a second? Second. Thank you, sir. All those in favor say I. I. Those opposed. Motion carries. You have another recommendation or somebody in JH. See you all Thursday. I move we adjourn. Thank you, sir. What's that? 8 a.m.

All in favor say I. I. I. Where? 8 a.m.