City Council - workshop

Tuesday, September 15, 2026, and it's the 2027 budget overview session number five. I'll turn it over to staff.

Good evening, Mayor and Council. This is the final budget work session of the year. So what tonight represents is really the finished budget based on all the other conversations we've had over the past couple of months pertaining to the 2027 budget. One of the things I do want to bring to Council's attention I believe it was during the utility, the enterprise discussion, we did show $25,000 per utility for AMP software for a total of $100,000. I have removed that from the 2027 budget. So therefore, the utilities will be plus $25,000 to reflect that change, which Curtis has already incorporated Incorporated into the budget for next year So just wanted to bring that to council's attention since we did show that as an expenditure coming out in next year's budget So the council is duly informed about that with that because this is an overview I'll go ahead and turn it over over to our finance director Curtis Adams, and he will take it from here Thank you, sir.

Good evening mayor Clark and council upon us is budget session number five as Cody stated the intention of this particular presentation is are just a reminder of key elements. There should be no surprises, no new information. It's just what are the key factors moving forward, primarily in the general fund for 2027. We'll be going over, as I stated, the general fund, what the overhead transfers look like into the general fund, what the citywide summaries look like by fund type, and then our next steps, which are two remaining dates. So one of the things that has changed, and I believe I stated it verbally in our last session, was that via Weld County, the assessor's office, the city will actually receive a 1.45% increase in the net assessed valuation as it concerns to property tax revenue. And so what that equates to is 268 million from 2025, to $272 million in the current year for 2027 property tax distribution. So at our mill levy rate of 3.56 mills, what that equates to is a $13,000 increase in preliminary property tax revenue from current year to 2027. It is a modest increase, but it's worth noting. We are moving forward based upon our comp and class presentation, a city pay structure increase of 3% to those pay grades, and that maintains our alignment with the current labor market. Also as a reminder, we're increasing our police step plan with officers receiving a 7% increase and Sargent's a 3% increase. And I believe that with thorough vetting from the finance team and revenue projections, I believe that that is sustainable into the future, residing in the general fund. And finally, with flat budgeting implemented for supplies and service costs, that does account for a 3% contractual increase with our vendors. I'm anticipating that to be self-sustaining And that includes a 6.45% increase in total revenues as far as our projections are concerned going into next year. The general fund as a result is expected to incur a $641,000 net gain for next year, which to me is very positive. And that does continue to provide our essential municipal services to the community. So here's a quick snapshot of what the overall income statement or beginning resources plus revenues less expenditures looks like. What does that impact as far as numerically to the general fund? So I'm anticipating going into next year with a beginning fund balance in the general fund of $20.4 million. We have estimated revenues coming in at $23.8 million, less expenditures of $23.1 There is your projected net gain for next year in the general fund of $641,000. I'm projecting the ending fund balance to be just over 21 million in the general fund. One of the things we didn't talk about, but I thought I would just highlight the methodology. That's really the takeaway is so the general fund is set to receive. If you look on the total column, this says 2.6, it's actually 2.8. I noticed an error on this from the ERA. This is actually supposed to be 600,000. And so what's missing in there is $150,000 allocation for personnel related costs for staff effort. So if you add that 150, This 2.6 is actually 2.8 is the total transfer total into the general fund. And how it's, the methodology by which that occurs is by personnel, so that is essentially allocated time and effort. what the share of supplies and services is from each of these funds. And that includes things like financial audit, IT support, insurance, things of that nature. They're not carrying their fair share. And so they're paying it in the form of a transfer out of that particular fund and a transfer into the general fund. So it's their share of supplies and services. And then the refuse fund has historically transferred 5% of its total revenues for the same. And that's in that allocation line here. So all that to say, the following funds are paying their fair share of staff efforts, supplies and services from the refuse fund, water, wastewater, storm drainage, road tax and ERA into the general fund for a total of what will be around 2.8 million. This is, I wish I could make this bigger, but here are the takeaways from this. This is the general fund, essentially the long range financial plan. You've seen this before and these figures have not changed. And so again, we have a beginning fund balance of roughly 20.4 million. We're adding revenues and transfers of 23.8. With our personnel expenses, SNS, and AMP-related costs, our expenditures do tie per previous slide at 23.1. For there's your net result at 641,000 as far as a net gain is concerned for the general fund. That leaves an ending fund balance of 21 million. We are maintaining our internal policy of 35% from a reserve standpoint, which is $8.5 million, leaving an available fund balance of $12.5. One of the things that the finance team did was to really true up what are the future projections look like in the general fund, because I think that was a concern from the mayor last time on what is ultimately the sustainability with the increase to personnel costs, contractual costs. Are we going to be required to maintain flat budgeting in our SNS? What does that really look like? I want to give credit to Elsa. She did a great job at truing up kind of what that SNS looks like. And so I believe in putting focus from 28 to 2031, what we're anticipating from a net loss standpoint is only about two to 3% in those future years with actually about a 75,000 planned net gain to the general fund in 2028. So I think we have reduced what we believe is surplus. And it's just to make a note that I believe the general fund really is in good shape going into those future years. So this is essentially highlighting the reserve specific to the general fund. You can see that we have earmarked $8.5 million internally, and what that equates to is 35% of prior year expenses. So in the event of an economic emergency, we're setting aside roughly 35% of our operating activity moving into 2027. And one of the desires of a city manager's office is to actually increase that or make that more robust, which I think is wise, and I agree that the intent is to move that to 40% in 2028. and onward. And what that does is that increases the reserve from eight and a half to roughly 9.3 in 2028 and 9.6 in 2029. And that essentially is an internal segregation or set aside of that ultimate unrestricted fund balance in the general fund. So that's our aim is to increase that back to 40% from 28 to 31. And then the final two slides, basically these will populate our budget publication. The finance team, we're actively working on finishing that publication, which is roughly 150 pages. And that will be essentially the backup documentation or the full assembly of the budget for our first reading October 6th. So this essentially is a fund statement by type. And the first slide is essentially the revenue segregation. So what it does is it provides detail for the general fund with your total revenues. See, there's the transfer activity we just talked about, the 2.8 million, and your total available resources of 23.8. What we've done is we've now segregated and summarized all of the rest of your governmental funds, which are your special revenue funds. That total revenue is 4.5 million. Our capital projects funds have been consolidated for total revenue of 10.3. We have our enterprise funds that has been summarized at 21 and a half million. And then we have one fiduciary fund, the cemetery trust fund, which is $6,000, but it's always segregated in your financials because it is a fiduciary fund. And so we have a total beginning fund balance for all revenues across the city. The takeaway is 76 million as beginning revenues. We're adding 57 million, leaving total available revenues of 60,250,000. Now we'll move to your expenditures. And again, it's segregated in the same fashion, general, special revenue, capital, enterprise, and fiduciary. We have total disbursements out of the general fund at $23 million, special revenue at 5.1, our capital projects funds, which obviously is going to be infrastructure and nature, at 8.4. Enterprise outflows is $25 million. The fiduciary matches at $6,000. Total disbursements, we're looking at $61,883,000, leaving citywide ending fund balances at $75,163,000. So what the timeline looks like to conclude this process is that we will have a first reading on October 6th. the budget book itself will be provided as part of that first reading. And then October 20th will include the resolution and ordinance to conclude the process. So before I open it up for questions, of course, I just wanted to state that in my three months here with a fresh set of eyes, I just wanted to state that I believe all of your funds are in really good, healthy operating condition. What I want to confirm is that Cody has been saying multiple times that there is considerable deferred maintenance, and I believe that to be the case. And so the takeaway in all of this is while all of these funds, I believe, have healthy fund balances, what we need to be mindful of is that the fund balances increase slowly. And so Cody has been very intentional to be conservative in what capital we're moving forward. And I think that leaves our funds in a financially healthy place. Of course, we want to fulfill as many infrastructure and improvements that we possibly can, but you put the financial health of these funds at risk if you don't pace it appropriately. And so the deferred maintenance is significant, but I believe he's done a great job at prioritizing what capital needs to move forward while maintaining the financial health of these funds. And so operationally, there is enough revenue for them to remain in a good financial condition, but with the slow fund balance gain, we just need to continue to be mindful and prioritize what capital should be moving forward. And with that, I'm happy to answer any questions or obviously take notes and can provide you detail via email if it's not known right off the cuff. So, thank you.

Great. Thank you for the presentation. And again, thank you to you and your staff for this, another great budget season and everything and putting all these numbers together. And thank you to the Finance Committee for also being a part of this as well. So, looking forward to this. So, Mayor Pro Temp.

I just have a quick question for you. On the slide where the overhead transfers, I think it's just a few in, two or three in, from the refuse fund, we allocate $70,050. May I ask? What or where, why that is? I think I'm confused on that one.

Yeah, what I found in the notes, and Cody might be able to help with this or perhaps Ty, but what we've historically done, and I'm not sure the exact reason, but for the last five or six years, we have transferred exactly 5% of the projected revenue from that fund. And my assumption is, without digging into further notes of the past, is that is essentially that 5% is its share of the same thing, personnel time and effort that doesn't exist in the fund, SNS that doesn't exist in the fund, because it's essentially an in and out. We're paying contractual costs, right? So I think they just made a determination at one point that 5% essentially represented that. allotment of its share of personnel on SMS.

I think that sounds about right. I just can't remember. Sure, yeah. So thank you for the refresher.

Of course.

That's all I have.

That was my assumption on how that was derived.

Well, again, great presentation. I don't see any more questions or comments. So great presentation. Again, thank you to you and your staff for all your hard work and effort in this. I'm looking forward to having the first reading on October 6th.

Thank you, Mayor. Appreciate it. Mr. Mayor, if I may, at the last budget work session, Councilman Crabtree had asked questions about cost analysis on the refuse, the community cleanup events. I just want to provide a little bit of information for you guys there. So the question was, does the cleanup day voucher revenue cover the cost of the event? And the short answer is no, and I can go through the... Covers about a third of the revenue. But we sell those for $15 in advance of the event at the CSU windows and then the day of the event at the gate. We sell those for $15 annual cost. And we're going off 2025 information because we haven't finished this year yet. But annual cost in 2025 was $95,342 for the cleanup event. Total voucher revenue that we brought in was $32,884, which is a difference of about $62,458. So we have been notified by Waste Management of a 5.1% rate increase for 2027. which Curtis and his team have worked into the budget as well. So just giving you guys this information, I know that according to their website, City of Greeley has recently increased their vouchers to $25 per car or pickup and $35 per trailer. Last year it was at $15. I'm not recommending this. I'm simply providing this as information so you know what Some of our neighboring communities are at Milliken's, $20 per load. Johnstown is free for trash customers, $20 for other residents. So we're in the ballpark as to what are the communities a little bit lower than what other communities do provide. So at $15, based on 2,126 vouchers sold and $82,843 in expenditures, $15 Yields $31,890 in revenue for a $50,953 net loss. Vouchers at $20 generates $42,520, resulting in a $40,323 loss. And then $25 vouchers generates $53,150 for a $29,000 loss. $693 net loss. So I'm providing this information just so the council, to follow up on Councilman Crabtree's question, so the council understands what it is that we're generating from those vouchers, but also what is the cost. As waste management continues to increase costs on us, we should expect that it, that will increase, that net loss will increase for the city. But really it comes down to the policy question is, does the city council want to leave it at $15, or do you want to consider some other further adjustment? If the council's interested in further adjustments, we can bring this information back to the council at a future work session, if that would be of interest to the city council. We can also look at other options, such as adding a nominal fee to the monthly utility bill to where citizens are paying for some amount of, some level of participation in the community cleanup event during the year as they're paying the utility bills There's a lot of different things we can look at. Or if the council's happy with where we're at, we can leave it at $15. Just please understand that as waste management increases their costs, that could have a negative impact on the fund balance of the refuse fund.

I'm in favor of bringing it back for another discussion at a later work session.

I too but I would like to ask the question of can we have a partner like waste management help contribute some discounts to offset the loss. But I'd be curious to have that conversation in the future. DIRECTOR DEWOLF.

I would be curious to see also what that nominal cost would be if if residents were to pay for that if it's because it may be less than paying the $15 a month. I agree with doing a work session just to see the various types of ways where we can be cost effective and that where it makes sense and we also consider our residents. But I also agree with Council Member Crabtree having a partner if waste management can also partner with this as well. So that'd be a great consideration as well.

Yeah, I think I'd have to refer back to our waste management contract. I think some of these items pertaining to community cleanup are included in our contract, so I can review that and get better information for you. I think the other thing the city council should take into consideration as we're considering the community cleanup is ability to pay. but also alignment with city council goals for community beautification would be two areas that I would encourage the city council to be thinking about as we go into that work session. My staff will put together some information and bring it back to you here at an upcoming work session. We can determine then what you guys want to do for 2027.

I'm also curious, when does the contract end?

That's a good question. So the contract ends 31 December of 2027. So I've already got Curtis Cunningham working on RFPs for the next round of trash collection that we will be, he and Andy Val are already working on that, as I understand, and so we'll be preparing to send that out here in the near future.

That would be a great consideration.

Absolutely. Absolutely.

I don't know if we have the data, but one thing I would be interested to see in that collection work session is also what percentage of Evans actually uses it. Because we know numbers, but we don't know, I mean, because ultimately we are subsidizing it by $60,000. Are we subsidizing that for 2% of the population or are we subsidizing it for 50% of the population? I think that's an important thing to know.

Right.

So.

Right. I think we have that.

It would be great. Yeah.

Sure, I think that could be an interesting GIS project that we could bring back to you guys, certainly. So that is, if the council's in agreement, we'll go ahead and bring that back in an upcoming work session for further consideration. And if nothing more, it's a good check-in just to see where we're at, cost versus revenue. The other thing, since we're talking the culmination At the last meeting, we did talk about water rates, in-city water rates versus out-of-city water rates, and the timing was great. If there is great timing, At the end of that week, we did have a pretty substantial water main failure in the Hill and Park subdivision build at in-city rates at a cost of $40,000 to repair. So real numbers, real timely, just something that we need to take into consideration. I know Ed and Ty are currently putting some information together so we can further those conversations with the city council. again at an upcoming work session. But just wanted to share with you that we do have very timely data for council to be thinking about as well as it pertains to in-city versus out-of-city rates. Mr. Mayor, that's all I've got tonight.

All right, great. Thank you, Cody. I appreciate it. All right, seeing that there's nothing else in our work session, we'll go ahead and head up to the dais and get ready for our ERA meeting. Thanks.