Finance Committee - Regular Meeting

Good evening. Good evening and welcome to the finance committee meeting for February 10th. Uh my name is Jeff Sassy, chairman and like to uh go around the room and let you introduce yourselves. So why don't we start on this side? Thank you. Mark Burgdor, alderman, board one vice chair. Tamar Ingresol, finance director. Julie Evans, auditor from Baker Tilly. And Ken Youngstead, auditor from Baker Tilly. Andy Gilly, parks director. Mark Evans, Ward Six, finance committee. Donna Wars, W two. Jay Rbeck, economic development. Eddie Robertson, board six.

Well, I want to welcome you all back. Uh, this is our first meeting after after the big storm. And so, we're we're glad to be back. There's a lot to talk about, so we'll jump right into it. Um, first of all, I need to accept the agenda. I'll make a motion. Oh, go ahead. You did it. I'll make a motion to accept the agenda. All right. Any changes? All those in favor? I. I. And that's uh approved. Pass unanimously. Uh next we have the minutes from December 9th, which I mean does anyone remember December 9th? So much has happened since then. I ran over. Good times. Good times.

Any uh do you notice any changes here or or No. All right. All those in favor of approving? We need a motion. We need a motion. I make a motion. Took seven minutes. Second. I. All those in favor? I. That passes unanimously. Uh, next public comments. Do we have anyone signed up? No, we do not. So, we can skip right through there. Next is ordinances and resolutions. Reading ordinance 2026-2. That's the first 26 ordinance. Ordinance amending budget ordinance 20250 to reflect midyear adjustments to the city's 2026 fiscal year budget. So I need a motion to discuss it. So moved. Second.

All right. Um take it away. Actually Tamara, you want to give a summary of what we're looking at here on page nine. I have it at nine. It's actually seven, isn't it? No, it's 10. It's 10. It's page 10 in your packet. Um, I have a bigger copy so I can see it.

Um, so we went through um started with doing um revenue projections toward for the end of the fiscal year. Um, look, we looked at all of our line items of revenue um and then um basically took what we thought the um impact was going to be and narrowed it down to these three line items. Um the local option sales tax is coming in strong. We'll talk about that later. You can see this number is a little lower than what is reported on there and that is because there are some other multiple smaller revenue sources that are coming in a little bit under budget. So, we want to make sure that we're not um you know putting ourselves in a position where overall revenue is coming in low, but it is a good sign that both the local option and state sales um are coming in high. We're anticipating an increase there. And then um interest earnings and this is important. This is just the general fund portion. The um interest earnings um go across all of our funds, but that we're this budget amendment is 100% everything in here is related to the general fund. So that first section are the revenues.

Um on that can I just point something out for lines two and three says current budget. Uh the current budget and the adjusted budget are the same. So just we need to adjust the adjusted budget. Thank you. Thank you. Um and this second section um that we have on here lines 4 through 8. Um these are um all of this is um specific for parks and it's all offset with donations. So there's increased um expenditures for a couple of projects, but um parks did receive donations that are specific to fund these. Um so that's where that second that next section um in form of grants or what are the donations?

Um private private citizens private citizen don.

And then this third section is adjustments that we're making to the budget for the winter storm primarily for the debris cleanup. Um on here it is we are anticipating the use of the rainy day fund um to front the majority of the debris cleanup until we get the FEMA reimbursement which How long does that take?

Somewhere between 18 months and two years usually. So once we receive those FEMA funds, we'll um then replenish that rainy day fund at that point in time. Um, and then we're adding a little bit um of funds to the insurance line item specific for the storm as well as there are a handful of facilities that had damage that are covered under insurance that we'll need to be able to um pay for for the um winter storm plan. Do we set a receivable up for that or do we wait until we know that that's coming in or We set a receivable up once FEMA obligates the funds. Okay. Okay. Yeah. But not until not until FEMA obligates the funds.

Okay. Is that part of the 18 months to two years or is that sooner? Um what's the ballpark on that? We usually get the notice of obligation four to 6 months before we receive the money. So it could be in the same fiscal year. It could um we could obligate it in one fiscal year and note it as a receivable and then the funds. Yeah. We can apply for it, but we have to wait still a year to know anything. Yeah. It takes it takes a while before they process everything through. So would it make sense to at least account for it and then write it off at the end at the end of the years if we don't receive it? I would say no because until FEMA obligates that money, we do not know for sure that it when or if it's coming.

That makes sense. Yeah. I wouldn't want to put anything down as a receivable until I know for sure that it's been obligated. Yeah. Um the next section Any other questions on Okay, go ahead.

Um the next section which is lines 12 through 14, these are three um new projects that are being um proposed and they all have pretty significant implications. Um the first the big um tanks at Freehill Road for fuel and refueling um are not functioning. The gas system is not functioning. is completely inoperable, which means that we can't fill the big tanks and then have our folks fill up there, which means they're all going to the gas stations instead of filling up there. And there is an increased cost in the fuel by doing it that way because we're not buying it in bulk.

Um the second project on there is the fire suppression system here at city hall. It is beyond its um useful life and is um had several repairs recently. Okay. And then the um last one is re um replacing the HVAC and doing some foundation repair at fire station 3. I have a couple of questions. My Jesse maybe you can help me figure this one out. Maybe you'll review either as well. Fuel man and contract fuel services. Is that any cheaper than getting replacing the tanks and having our own available to us? Have you explored that option?

We do contract and we get fuel shipped in on a tanker. The great thing about a tanks is in the case of the gas stations losing power like a winter storm we have a backup. So parks has tanks. Uh we have tanks. Um so is absolutely necessary. I I think yes absolutely because we need police and fire to always respond. Yeah. Um and it's you know in the long run it might cost about the same because we get a break on bulk fuel.

Okay. All right. Thank you. I was looking for that. Good question. Um, fire station three, the HVAC system. Is is it down or what's the status of that? The HVAC station 3. Oh, it is it is under size for the building. Um, so we are um getting quotes. We've gotten quotes and we're going to go out to bid for uh new units that are property for that building. So, it was built a while ago. Yeah. Uh AC was just under size. Got it. Okay.

All right. Um the next um lines 15 and 16 um the first of those lines is um utilizing some tree bank to put into the um planning budget so they can um continue to um utilize um the tree bank funds to plant additional trees. Is that the resolution that we approved? We That's 916. Yeah, 9:16. The next one is the resolution that y'all approved um at the last meeting to um refund the um tree bank funds. I'm actually talking even before then we we a lot we said we wanted to use more tree bank funds. I think it was actually a budget last year. Oh yes. Wasn't at budget or budget.

We're planting a lot of trees. Yeah. This is in addition to what was added in the budget last year. Rockland Road appreciates your trees. Yeah. But we have the funds, you know, we have funds sitting in an account. So, it's pretty How much is in that fund right now? It's pretty healthy. Yeah. I don't know the exact dollar amount. I I want to say there's close to 300,000 in the tree bank fund right now. Did we lose any trees during the storm that we need to replace? Is that we Yeah. Okay. Good. Yeah. Yeah. So, that's using the tree bank funds and then um that refund that was approved on the prior resolution. But these tree bank funds have to be used within public or city property. It can't be used for just replacement of any tree. That's correct.

Okay. Yeah. All right. And then this last sections, lines um 17 through 28 are um a lot of different things that don't that are all just in this one group because they don't fit in a group by themselves. Um the first line, um beautiful Hendersonville is asking for just under $2,500 to purchase a storage container to keep all of their um all the decoration supplies, you know, all the garland that they had um put up and everything. And they would place it at the public works yard. That's what my question was. What is a storage container? Is that one of those shipping containers?

Where are they storing their stuff? Yeah. Um in a storage unit that is rented by one of the committee members and at the Batty farmhouse heritage park house. Yeah. It's about to be torn down and I believe they have some at public works as well. It's kind of all over the place with central lights all in one place. Mhm. Okay. Um the next line is adding um funds to be able to do a public safety recognition event in the spring. That's $3,000. Um, and then the I'll say the next three kind of go I just want to make sure that's for fire and police. Yes.

Okay. Thank you. Yeah. Um, and then the next three lines go kind of hand in hand. So it um needs $20,000 additional funds to cover some software costs that came in beyond projection what they were projecting. But the next two lines are out of finance budget. Um the first one, the $7,600 we're requesting to reduce because that was the portion of our um technology for property tax that is now in Tyler Munice, which is falls under it budget as opposed to the old software that was in finances budget.

And then also um we're we're requesting to reduce 25,000 um for implementation costs because some of the um implementations that we've been doing came in less than what we anticipated. Go Tamara. Yeah. Thank you. Woohoo. Um, and then ask Jesse to give you that check. I know. Can I have a bonus? We're considering your rules and regs tonight. So, that's anything's possible. Um, then the next line going down is an assistant. I know.

I do. um is requesting some additional funding for the repair and maintenance of the vehicles for the fire department. Um they they've had a couple of large repairs that they had to do. I think they had two engines that had turbo go out and those cost about 13 grand 14 grand a piece to um repair um and some other significant um I'm sorry. Is there anything like a warranty on those or have we expired the warranties on those turbines? Sorry, there are warranties. Yes. Uh so we there's two companies that we use because they're certified for emergency vehicles

and these are, you know, it's a big piece of equipment. So you don't just, you know, drive it into your local mechanic to get it fixed. So it's thousands of dollars every time we do anything, right? Uh and the newer the newer equipment has more electronics on it than the old equipment. So everything's more expensive to repair. And both the technicians that we use charge us an hourly rate. So the time that they come to spend on it, um they're very responsive. So they come to our they come to Mars. Sometimes they have to tow it to their shop, so they're mobile, but we're talking about how expensive it is to repair buyer apparatus.

And it's not something where we're like, "Hey, let's go out and shop six different quotes." We have an engine down. We do have a backup that we use, uh but we have two guys, two companies. Loss and service. No laps. That's right. That's right. So, it's a goal of ours just to get that equipment back on ASAP. So, we I I'm I'm a little confused by this because we have budget for repairs and maintenance. Why is this not just dipping into that fund? Have we used all that up already? Oh, yeah. Or close to it. Yeah. So, we will be exceeding budget.

Right now, it's at 250,000 for the the repair and maintenance. And we're estimating it's going to be by the end of the year 390. So we're going to need another 140. And this is just like Tamara said, the accident that one of the engines got into that was covered by insurance. No, it would be turbochargers that go out. Uh when you get tires, you just the back tires are $4,000 for a set of two tires on the front. Everything that has to do with those trucks bumper to bumper is ridiculously expensive. And and a lot of I'm in the wrong business, guys. Did we not say that the other day?

Our labor rates alone are about $175 to $200 an hour just for the labor rates. You're looking at, you know, for any kind of medium repair, anywhere from 6 to 8 hours minimum on on a labor rate. And we've just had excessive repairs that need to be done this fiscal year or it's not just this fiscal year. I was going to say I recall this was the problem last year. We had a the same conversation last year, too. We increased the budgets, too.

Yeah. We just we thought we might have to do this at midyear. We can't come in and we knew we might have to do this at midyear and now we have station seven on. So that's another engine that we have as well too. So um it's just it's very expensive. I would say the average bill that comes in it's I'm around $10,000 eight or nine. Yeah, somewhere that you know that's we need to seriously consider that this budget needs to be and not wait for mid mid year. We need to make sure the budget's what it needs to be at the beginning of the year. Yeah. I don't I don't like a surprise like this. Yeah, I agree. I know you don't either. No, none of us do. But I'm sure you don't.

I mean, if we have a history of of it being a certain amount for two or three years running, then we should go ahead and budget for that at the beginning of the year. Yeah. All right. All right. I don't just add more to No, no, no. Question. I do not on that one, but I do on 23. Okay. Which one's 20 23? Oh, the overtime salaries. That's the next line. Next slide. Okay. Um yeah, requesting additional overtime um salaries for fire.

And so the only thing I have to say about that is that is another thing that's the same thing where we're we're doing the same thing every year. And I don't know what the answer is there. And and do we need to put more budget in there for this line item or is this a situation where we need to have more staff to have in a rotation where you're not having to pay overtime salaries but you're having you have people that are on on staff. Something to consider. Yeah. Like the ice storm that we just had though, we pulled, you know, we pulled a lot of extra people in where Sure. you know, even if we had another two or three people on shift, well, I think we brought even maybe five or six people on shift some days.

Um, but we'll probably need to just consider upping over time more permanently as seven is on now. Now, you know, we could you could put on another three employees, which will cost you about 300,000. But I don't know that you would really see much anything of an overtime savings because in times of, you know, true. You got to have the people. You got to have the people that come in. So I, you know, overtime I think is you want to see some overtime budget. If you never have an overtime budget, probably most of the time, you know, you don't maybe need all those folks in. So I think we want to see some overtime budget. We just may need the front end bump this up a little.

It just concerns me that this was the same. We had the same thing last year and every year we're adding, you know, 150 to 200,000 overtime budget. So I'd rather do that again on the front end. Yeah. All right. And then the next line, line 24, is requesting additional funding to cover um the retirement payout for two employees that were not identified um in the original budget when we went through the process. So that's vacation and and sick basically for two tenure employees. Yeah. And that's we have to do that.

Yeah. Yeah. So I'm going to ask the question here. So, uh, and I think we've we've asked this question before. What do we need to make sure that we're doing? Maybe the idea of polling your managers, your directors, who who's thinking about retiring, retiring. Maybe that might be somewhat helpful, but maybe it might be antiquated. and that look at the people that you do have and making sure that we have a mechanism in place so that we're making sure that we're covering for that cuz hindsight and and I know that we did the best that we could but we knew that this was going to happen and we should have had that set aside in some way. So, now that I know that this big one is out of the way, are there others that we need to be considering and that we need and I think uh Eddie and I had talked about this. Do we need to have something where we're acrewing 50,000 or something like that so that we're setting that aside and not getting hit with something like this every year?

Yeah. When it happens, I think that's a good point. We do poll when we before we budget, we do poll folks to say, "Hey, is anyone thinking about retirement?" and we build that into the schedule for the departments. Um, typically for police because we don't always hire 100%. You know, we'll have five or six or seven or eight throughout here who aren't on the book. So, we can absorb those. Sometimes that happens with buyer too. The smaller departments, not so much. Um, but we can like in our central services, we we can set a budget aside for and this is kind of like just a guesstimate, right? we're going to just put in $100,000 a year for unexpected

and that could kind of just sit in there every year. So we do that for capital projects. We put in, you know, a couple hundred,000 a year for contingency. If something goes over, we have that bucket of money we can use. So we can do something like that central services because we don't always know even though we pull we have some room. This is an example. But in addition to you poll and your your fin, but you have an you have an idea of maybe people's age or you know kind of what they're thinking or the fact that they've you know you've heard people talking. So maybe you can kind of add that on to what you might know. I'm just trying to Yeah. And I'm just Yeah. And I'm just trying to think in terms of okay, how can we do this where it's not

a big lump sum at one time when we kind of should be preparing for that? And I get that this is one extraordinary item and probably not going to see that again. Yeah, I think this is the the the one employee um is substantially higher than anybody else on the books by like at least I want to say double. There's nobody else that even comes close to the amount of sick time that'll get to get a payout like that. We can certainly do that. It's just sometimes it's difficult when we're like, "Hey, are we going to cut a street back? Are we going to cut colas down?" Because, you know, we got to set that money aside. But we certainly can do that. We can put some money in like a a retirement unexpected retirement account and do it.

It would somewhat be a guess because we're trying to bake that into schedules already. But, you know, that's certainly something that can be, but we have some history of knowing, you know, how much even if you took this anomaly out of there and if you look back at others, did we have to make any kind of adjustments? And maybe you didn't because you had um some higher lag in there where you could cover it. But, uh, if you're running your departments at, you know, 90 to 100%, you don't have that that room in your budget where you can do that. So, we we do need to, in my mind, set something aside for that.

I agree. And it really is only a few years of doing that, banking that money and not having one. Now, you have substantial, you know, that Yeah, we're going to have to, you know, tighten our belts for a few years, a little bit, like you said, remove a street or something, but I think it's a necessary step. uh to to build that up. Yeah. And some of the the big retirements will roll off because you can't cash out sick anymore. So So that will wind down. So something years ago to wind that down. But certainly we could put something in the budget every year. Yeah. And it's the sick time payout that's the hard hitter. It's not the vacation because there's a cap on the vacation. It's it's the sick time that really it's is rough.

Yeah. Okay. Um, we don't wish anyone to get sick. Like, no. No. But if you want to use some hours, go for it. Um, the next line on here is to add $20,000 to um the water for paying for water service for parks. Um, there have been issues with the well system and there's been leaks this fiscal year. Um, it's just been one of those years. Um, so in order to pay the water bill, we need a little bit of extra funding in parks budget for that. Okay. Um and then any questions on that? No, it seems pretty straightforward. Yeah. Um I was like I'll clarify it. Okay.

The the issues is that rugby rugby fields were built on a well system that you tap into for irrigation. Okay, that fails all the time. And when it does, we have to switch over to White House water. Okay, for irrigation. And if you know anything about Bermuda grass and irrigation, in the summer you got to water the heck out of it. So when we do have to switch to city water, it can trigger a three or $4,000 a month bill when if we're on the well it's $200. What is your failure rate with this? Uh, every time there's a good rain, it deals it messes up the floats and the pumps and then it's there's about one company that'll come out and work on it and

it's it's just the way it's built in a flood plane and you know when it works good it's great. Maybe you need to hire a uh flood plane pump uh specialist. There's one of those. Yeah, they come out. What do you think about that? In regrilling they come out. Or we we do a budget amendment for 20,000. Okay, thank you.

Um the next line, item number 26 on here is requesting some additional um funding for the part-time salaries lines for parks. um that is to fully fund the required employees for all of the programs that um parks does as well as adding in a 6.7% increase for the part-time employees that are on that pay scale um TO1 that did not get an increase during the budget. That's for the parks maintenance workers. So why was this not included in the annual budget in the fiscal year budget? I guess we didn't It was Yeah, it was only the full-time employees got the

I don't think I don't think necessarily that everybody realize that you when y'all did the raise for all employees the way that was done did not include part-time or seasonal people. Yeah. So, this is this isn't paying for their regular salaries. This is this is all paying for that increase for No, a piece of it is the increase and then a piece of it is to fully fund the the total. So that's my question. I'm not asking I'm not questioning the in the raises. I'm questioning why we didn't fund their their actual salary or their original salaries, the programs that are I can explain that probably better than anybody.

Okay. for nine or 10 years because I've had to go back and look at it myself until Tamara took over honestly. Um the department heads really were out of the salary line items during the budget process. We were just kind of told take care of operations and assets and projects. Salaries were budgeted. You know that let me just say this. the these folks have really tightened the belt on full-time salaries which sometimes covered other areas. I I don't know how else to better explain that to you. Okay.

Um part-time parks people, there's like two or three different line items. Part-time special, part-time seasonal, part-time. It's been a process for two or three years for us to try to figure out how many we need, what hours can they work, what what are we offering, how many maintenance people we need. We have over 80 part-time seasonal people. Wow. In the parks, that's a lot. Um, over the last year,

over the last year, we have increased the number of gyms that we use for basketball by 10 to 15. So every time we add a new gym, which allows us to run the basketball league, we have to put one or two people in that gym every night of the week and all day Saturday this this time of year, sometimes on Sundays. So that that right there is an extra 20 part-time people in the last two years just for our basketball league. Mr. Chair, can I add some? Yes.

Okay. So I want to add to what Andy says, all very very important. And if you all remember, however, when we were setting the budget and we talked about raises, it got very confusing. It was people who didn't get a raise, but in this area, but who shouldn't get the same raise as the folks over here, and then you scale it down for the for the other employees below that. It got very, very confusing when we were setting a budget as far as who was getting what raise. Um, and after we passed it, Tamar and I sat down and Andy and we thought, we're not real sure if this group of employees got raises. Well, like I said, that the raises are not my not what I was questioning. You know, I totally get that. Okay.

And I know we've had mo I'm sorry to to interrupt and and I want you to finish your thought, but that's that wasn't the purpose of my question. My purpose of my question was why did we not fund their original their act their regular salaries, not necessarily their raises, but go ahead. Okay. Um, yeah, there's some confusion there whether we actually had done that. So, so that's why we got together afterward. And, um, I I'll be real quick here. And the the reason it's important to me that we do this now is because I think we've just went through a couple weeks, which shows that our paying our staff competitively is very, very important.

So, we used to have some room in salaries to cover part-time where we've budgeted regular salaries tighter now. And we've added gyms. Yeah. I mean, there there's been years over the last we I went back and kind of just looked at it. You know, what's part-time salaries been for eight or nine years.

And there there were years when it stayed the same for two or three years while all our programs and leagues and things were increasing. There were there was a couple years where all these things were increasing and part-time salaries got cut, but we were never over budget in salaries. So, I think what they've tried to do is really, and you see that in the next couple line items, when you're adjusting police salaries, they've looked at full-time salaries and really done a better job of being accurate with that, which has forced us to look more closely at the line items under that in part-time and figure out how many do we need, how many hours can they work. You know, they can work 30 hours a week. We have 13 full-time maintenance guys. I think we have 24 part-time maintenance guys. So, you know, you start looking at some of those guys can work three days a week, some of them work one day a week for 12 hours. It's uh is quite the puzzle.

And I I think this year we were more accurate than we were last year because I think our amendment last year to to figure all this out was larger. So hopefully this coming year we'll have an even better idea of what we're doing. Well, especially after we met um I don't know, it's probably been six weeks ago or so to really look at, you know, total number of leagues and how many people it takes to run them so we can really do a hope a better job of the next. He shifted a full-time guy to work

uh Monday through Friday 3:00 p.m. to 11:00 p.m. which that took our part-time calendar and we we shaved 20 to 30 hours off of that because of that person going to the night time. Most of our part-time people work nights and weekends. So that's a long answer to a very short question. the the biggest increase is in the basketball program supervisors having to hire 20 extra people to run the basketball leagues. So, here's a quick follow-up question kind of piggybacking on what Evan Alderman Evans was saying. Are we planning for an increase in budget request next year when we come to the budget?

I I I think we'll probably have to increase over what we started with this year. Over this year? Yes. Do I think it's going to have to be at this level that we're matching right now? I don't know that yet. Not. I hope not, but Okay. Well, I hope we can look at everything and figure out where we can shave a little bit. It's tough because, you know, you go play a basketball game at We We use Pope John Paul High School. Sure. They have two gyms and they're very nice to let us play there and it's really nice. So, we're going to put two or three people in there. Sure. And we go, you know, you go to Jean Brown for practice. That's You walk in the door, there's the gym, you walk out, you only have to have one person, right? You go to Liberty Creek High School, two gyms, got to have four people pretty much,

right? So, it's it's very uh it's very tricky. Well, and the maintenance side of it is tricky when you start talking about adding the Sanders Greenway. And here I will I'll tell you right now, by the summertime, Heritage Park, the the hiking and walking trails are going to be ours. If you look at me right now and say, Andy, how you going to maintain that? I'm going to tell you, I don't know yet. a new park, right? Yeah. The walking trails on the hill. I mean, that's what we were talking about when we when we were discussing approving that, right? You didn't know that? No, no, no. That's not that's not the farm part. I'm talking about the hill part. Just walking that's going to get turned over to us. 38 acres of bike trails and walking trails. Oh, I I consider it all one.

Right. Okay. That's going to be open real quick. Yeah. Okay. Yeah. I get a little nervous about that. um talked to Daniel last night about that. Matter of fact, I would be very interested to see a comparison of of um the population growth versus our parks growth. Honestly, I mean, I know we you've done a great job building up that program and and starting all those additional

uh programs for our parks and we're grow we've grown it. I I think it's been great what you've done and the parks that have uh that have been built in there. I'm just I like I mentioned to you before, I just think I I'm afraid we're doing too much. Um, and it's not sustainable. And we're going to be putting that that cost on our residents because the people that we like when we've looked at the budget, the amount of money we're getting in on parks does not uh equal the amount going out on parks, which it never will and it never should, but as long as they're both rising at the same rate,

I think it makes sense uh to continue on that path, that trajectory. Are we are they both is the income on the parks rising at the same rate that the that the um population is rising? Mhm. That's all I'm looking for. I will tell you that we're about to do a 5-year parks master plan update as you probably know. Yeah. probably will be done by July, August, and you'll get a you'll get a comparison of what our system looks like compared to what the national average looks like in terms of how much park land we have per person, how many parks we have per person, how many FTE full-time equivalent maintenance people we have compared to what you should have, all the things. So hopefully that'll help you. Yeah, look forward to seeing it.

Absolutely. And I don't think we'll be going backwards anytime soon. A lot of the horses are out of the barn. Yeah, we keep thinking it's going to level off and doesn't level off. Let's promote volunteerism. That's the volunteer state. Volunteer is great. But, you know, you need somebody to supervise the volunteer. That's what I was going to tell you. You know, we have two assistant directors whose main job is to work with all these leagues that volunteers run, right? That that's like managing full-time employees at times. Well, y'all are doing a great job. Thank you for what you do. Well, we need to move on. So, I think Alderman Robertson had a question behind. I'll wait and ask during tonight. Isn't it's on the agenda?

Yes, it is.

The last two lines on here um are actually where we've identified some cost savings. Um line number 27 um looking at um the police department's budget, their salaries um line because they have had um several vacancies throughout the year. we identified that we can utilize and reduce their budget by about $250,000 to offset some of these increased expenses and then um the cost that we paid to the county for the um emergency communication center um is coming in less than what was budgeted and so we identified we could reduce that cost by a little that budget by a little bit um to offset some of these. Bottom line on this budget amendment is that um after this amendment is done we are at a net zero. there's no um no longer a deficit on our operating budget with this amendment.

That's good. I'll make a motion we accept these um adjustments and that we present it to Bumble with a positive recommendation. Second. All those in favor? I I that passes unanimously. Okay. Thanks. Uh let's move on to uh the next item here which is the report, right? All right. Give me a little report. Take it away. All right. Well, thank you so much. Um, we have about three and a half minutes.

Okay. Well, we know what time it is, so we will be we will be brief. And I I will say our main purpose for being here in front of you all today is to be able to answer your questions. And so, we obviously can't cover everything with documents that are that thick. Um, and so just a uh a few things. So, first I'm Ken Youngstead with Baker Tilly here with Julie Evans, a director with our firm. Julie led our team. It's been involved for a number of years uh with your audit. So, um, the two documents that we have, I'll just first cover a couple of brief comments on this letter, uh, which is, uh, just to report out to to those in a governance role about the, uh, results of the audit. And, um, I will tell you that this is all, you know, pretty standard language. We go through a a risk assessment. We plan our, um, audit procedures around, uh, some of that assessment. Um, we perform the audit in accordance with government auditing standards. You also have a single audit. Julie will cover a few things about our our reporting um in there, but um you know, basically uh the the first few pages just talk about our audit planning and approach and uh where we see risks and where we had focus areas. And so uh pretty standard or what you'd expect. Um so um I go through and you have questions about something like that, I can go in more detail, but um on page six, uh there's no new accounting policies that were adopted this year. It's a pretty quiet year from a standard standpoint. So very similar uh we have a listing in the middle of page six of the major estimates that are involved in your audit. Um all audits have estimates um or financial statements have estimates. As we go into the next page um again we didn't have any significant difficulties or disagreements. Had great cooperation from you know the whole team here. So there's a lot of people that we uh that we work with but uh Tamara has been um integral in us getting us to the point where we issued in late December. Um there's a section that talks about uncorrected or corrected misstatements. I'll just tell you that uncorrected misstatements there was like a a nominal thing that was based on a projection talk. I think from a governance standpoint you should feel very good about the condition of the books and records. I think the correctedness

statements also very nominal or things that we'd expect uh or that we've come to uh kind of work through in just terms of presentation and and things like that. So I think u that your team's done a great job you know on that front. um concur.

Yeah. Uh the next few pages again uh if we have things like we um you know have uh you know consultations or see compliance issues, things like that, we like to report those out to you in a uh in a manner like this. Um, we do have on page nine a reference to uh some of the required supplementary information that um you know that you all present and then there's also some information that's required by the state of Tennessee and uh uniform guidance things like that. So um you know we talk about our opinions on those um but we'll cover that in the report and then otherwise we have the management representation letter that you provided to us that basically say these financial statements are the cities and uh we provide an opinion on those but these are your statements and so uh we ask that um you know that you all acknowledge to us that you've you know given us what we've asked for and that you've reviewed and things like that. So that's the purpose of the representation letter and um you know the um I think in terms of now I'm flipping to page um gosh it doesn't have a page number but it's close to the back like three or four pages from the end

counting talk about new standards that are coming and and really they're just a couple of minor presentation you know kind of things for next year's audit that uh that will adjust in terms of a standards u change. So, it's going to be pretty simple. In your opinion, is the city in a healthy financial position? I Yeah, I think so. I was going to say you all have definitely improved over the last several years. I know and I can't remember at this point four, five, six years ago that that we were saying maybe there's room to improve your unrestricted fund balance and you all have done that. Done that. Yeah. Yeah. Yeah, I think we were all sweating a little bit back then, you know.

Good. Thank you. Thank you.

You had some some good policies and good oversight with all that. So, I'm I'm just going to touch briefly on this packet of about 150 orund and so pages of information. No, I'm going to I'm going to tell you where to focus your your information. So, there's several pages before you get to page one, but there there is the transmitt letter from the city and and to the city and the board of mayor and alderman that just talk about current conditions in the city and some expected things. And then page one is the independent auditor's report. So, this is our opinion on the financial statement. So the first two paragraphs in there are really the most important part that talks about the opinion which is that we've given an opinion that your financial statements are fairly stated. Um we look at the governmental activities, the business type activities, what's considered to be a major fund and then all the aggregate other smaller funds and give opinions on each of those. But we do believe everything that is in here is fairly stated and properly disclosed. So, those opinions are the kind of opinion you'll need. Um, but then there's two or three more pages that talk about the audit process and kind of our responsibilities, management's responsibilities, and then some of the other things that are included in the financial statements. And then what follows that is as a citizen or someone in a governance role, this management's discussion and analysis is really the best highle um oversight of the financial highlights for the year. It takes the information that's in the bulk of this report and kind of breaks it down into something a little more digestible. So that would be where I would tell you all to focus um that information on. if you want details, pretty much the entire middle section is there. And then once you get to it's page 102, there's an other

report section. So, as Ken mentioned, we do the audit under government auditing standards, just generally accepted auditing standards, and the single audit, which is the federal compliance. So, page 102 and 103 is an opinion on um financial reporting and internal control over that process. And so we're happy to report. We don't have anything to tell you findings-wise there. Um page 104 to 106 is the report um that's required by the uniform guidance. So we do specific tests over your federal award programs. And so this year um we were doing it on last couple years has been on highway projects. This year was on the water and wastewater um system. Really the storm water.

Yeah. ARPA money. ARPA money from the TEK. So, we looked at that and looked at the reimbursement requests and things like that. And so, we believe you're in compliance with um those laws and regulations. So, happy to report clean opinions there. And then page 107 is really a summary. So, you can see this is something that the federal government requires with the with the single audits is a summary that says your financial statement audit was unmodified. said we didn't have any material weaknesses or significant deficiencies, but that we had either on your financial statements or the federal awards, it talks about what our major program was. And then if we had any findings, those would be on this very last page and we're happy to report. There's nothing to report to you. So

that's what you want to see. That's what the state wants to see. So Tamar, do we make this publicly available? It's on the website already. Fantastic. Fantastic. So, anyone out there, if you want to take a look at it, just go to hvilletn.org and uh finance, right? Yeah. If you look under finance department, you'll see it under financial reports, and you'll be able to look at the city's fin responsibility is to get this to the state. Do we? So, we file we f we're under a three-way contract between our firm, the city, and the state. Okay. And so, we file that with them before your end is when we're required to do that. So, thank you. Fantastic. Thank you so much. Any other questions?

Thank you. No, it was wonderful. Thank you, uh, Tamron, Jesse, all all the staff doing a great great job keeping us in the black. Yep. Okay. Thank you, Kevin. Thank you, Julie. All right, let's move on. We've got 15 minutes here. Uh, so next on the agenda is discussion of a letter from Sun County regarding payments of adequate facilities tax. This is a recurring um agenda item. I think I think Lance has an update on that. Lance has an update. Good timing, right? Well, I was behind you. Come on over here. See me. So, um, were you giving anybody ears? Yep. Watch.

Uh, the, uh, the letter, um, sent a a more specified itemized list of permits that it claims that we issued without ver verification. And it also requested some documents supporting some of those permits. um the codes director, Greg Story, um came and sat with me and we went through all of these um we got all the documentation and requested and then we went through these uh items and all all of them were either not related to development. So, in other words, a permit was pulled because um something to do with a crawl space or a pavilion um something that didn't relate to development. And then the other ones were

all of them you said

uh none of them were really anything that we did wrong based on what they were for or the timing because the timing of it was uh we we maintained that the communication they sent us in February of 20 24 did not specify that we were to start verifying for commercial um aft adequate facilities tax uh in April of 2025 when we did get the word that that's what we were supposed to be doing, we started doing that on all new permit applications. So, the rest of these had to do had came in after the permit was applied for. So based on that and some other legal theories that we've discussed before and I put in the memo, I I believe the city should maintain its current position, which is that uh it's not something that we're liable for. But we do want to provide all this information to the county like they requested and give some more specificity as to some of these permits, what they were for and why they didn't apply.

Uh when Yeah. When do you expect to have that prepared and ready? Um, I just want to put it in a spreadsheet and just put it in a letter. So maybe give me a week if that's okay. Okay. Can you share with us? I guess. Yeah, absolutely. I'll send it to you to the committee first and if uh if if you uh approve, then we'll send it on to Okay, fantastic. And um will you be including a letter with that? Yes. Do you need us to cosign with that with your findings? Um, I don't need that, but I mean if if that's where I'll send it to you and you can the committee can look at it and see if it if it's I want to put this to bed is what I want this to Well, I'm not sure this will put it to bed.

I don't think it will either. It's either it's either this or come up with $278,000.

Sorry. When we don't owe it. Go ahead. Sorry. Sorry. Yes. Based upon your estimations, how many of the uh How many did you find that were partially correct and partially completely wrong? Do you have an estimate? Just a half and half or I can't find any of them that that fell outside the parameters I just mentioned which are which are that uh they were before or they they uh occurred after the um permit was applied for. Yes. Or that they were they had anything to do with development. when somebody pulls a permit to fix their crawl space, you know, uh that's not an AFT. Okay.

I'm also under the impression, too, and Lance, feel free to back me up or tell me I'm wrong, that even if we make a mistake in this situation, we are not liable for the the loss funds. Yeah, I tend to agree uh just based on the information that we've received and you've shared with us and and and thank you've shared all a lot all the data with us and we've all reviewed it pretty extensively. Yes. And I didn't I I know none of us saw anything that would lead us to believe that we owed anything. I agree.

It's already have to go through all that, but thank you. Greg's story does a great job and his and his team back there, you know, as soon as soon as he found out word that that's what they were supposed to be doing, uh they immediately put together a plan uh to do that and immediately began doing that. So, um that's all just to be clear. So, these that they have sent to us, how am I going to ask this? If we had been doing things, would we have paid any of these? If um I guess if if we were reviewing it correctly at that time. I mean,

I'm trying to understand whether it's a we verify. We don't collect it. Answer your question. Okay. Um they do not pay the county's adequate facility tax to the city. The city is supposed to just verify that it has been paid to the county, right? But what I'm where they have come to us and said these are all the things that you should have or you should have verified or whatever.

We you've you've said something about some of these were not like crawl spaces or whatever and they they were never should have never be included as an adequate facilities tax issue to begin with. Is that what I hear you saying? I'm confused as far as why you I'm I'm trying to understand how to Well, I think the spreadsheets I put together will Okay. make it a little clearer.

Yeah. And I'll put together all the reasonings that we have for each of these items. I'll also include all the permits. I guess I want to say I like the fact that if you found any that they would have never been adequate facilities tax under the old way versus the new way um versus we didn't understand you a cut off at this time of February 2024 and now we're doing it you know that's kind of what I've been understanding that this the whole issue was uh to begin with it's a mix of those things you know

see I'm I'm having I have a little bit of trouble with it being the timing of things and um that if you know the rules changed or whatever they were made and he kind of gets into the the situation maybe we didn't understand the rules or or we should have I don't know what it is but I have a harder time agreeing with this if it's an issue where we it's a time situation as opposed to these were issues that don't fall under the adequate facility stat

and I think both of them lead to a strong position that the city isn't liable. The county um started doing this in 1999 when the resolution was was passed for industrial development. Okay. In 2025, it looked under the industrial uh things that fall under uh the the sixth the uh standards um that that could fall under industrial. So just a year ago uh a year and a half ago,

it started uh interpreting commercial now to be included in industrial. Okay. But the communication that went out just stated um please review what's included under industrial under the sick you know the standardized industrial indications and I I'm I I get that we have an opinion but what is the opinion of other like organizations I mean

what I'm looking for is okay this is going to get into a match between county and the city about which one's right but what's precedent or what's happening in other government agencies where who made the decision ision that this that these should have been included under that sick and should have been a part. That's kind of where it's getting to who made that call. Yeah. And so who's going to make the call about which one's right? I think it's a commercial and development board. Was it a Do you recall what I think it was just the county attorney who made that determination. It was during a conversation. It came up in a conversation. He made the decision then set a committee to do it. I don't know. So that's where the decision came.

But um but as soon as we were made aware, we started Yes. verifying. Yeah. I that's where the distinction is. I don't think that we actually have standing uh to challenge the particular decision unless it's litigated that um we actually that we're sued upon this this but as far as I have a feeling that's where we're going to be heading to this. It might be. Yeah. Okay.

Jay, I think. So half about half of this bill that they're saying that we're responsible for is the Molly Walton Music City Studios repurposing that that site and the buildings over there. Have they provided us like they say these are the ones that you you never verified. Do we know that these were not paid by those businesses on their own? We don't know if they've been paid or not. So they could be double dipping on some of these requests. Possibly. Was that Lincoln? The Lincoln properties properties. And if Lincoln knew that they needed to pay this, they probably will pay that. So it's I'm just wondering if they demonstrated that they actually never received these funds.

It's a great question. We'll ask that of the county to verify which of these have been actually paid. Well, you would think that if it if it came to us that they would have to prove that? Absolutely. Yeah. Thank you. Good point. Good point. Um we're running short on time and any other questions? No. Okay, we can move on from there. The next one is discussion of summer county regarding funds bequathed to the Hendersville Public Library. Who's taking that one? I guess I said I guess I'm I don't think that there's actually an update on that one. Um at least there wasn't when I talked to the mayor last week. Okay. All right. Well, then we can move on sale.

All right. I'm going to whip through these really, really fast because we've got about two minutes. Um first one that you have in front of you is the local option sales tax report. This is revenues through December. Um revenues uh are still up a little bit which is filmed that in looking good. We're looking right now a little over 500,000 projected over budget for our great. Yes. December came in really strong. Are we over a percentage for the year to date? Um year to date we are 3% 3% over um over from over last year over last year. Over last year we're we're about just under two and a half% over budget projected.

Very good. Uh state share sales tax. Um very similar trajectory as the local option sales tax. Um December came in strong for that one as well. um about something three and three/4ers percent over the prior year um with about about the same percentage over our anticipated um our budget for year end estimations. Yeah, both of them are a little bit below budget, right? Estimate I see 99.9% down here at the bottom of budget. Oh, last year. Last year they we came in 99. Oh, that's last year. Yeah. You want you want to look at the one that's in the box.

Sorry. Yeah. And the next category, which Mr. Gilly stepped out, but the hotel motel is continuing to be up every single month this year. Has been above the prior year. So, we're back in um full operation with all of the hotels. Um since the one got repaired after the um tornado. So, the hotel motel is is looking really um strong as far as their revenues that that'll come in. Um I think it's probably a little bit um over budget. Okay, good. That's my very

investment earnings. We keep anticipating um that they will um go down and you can on our um LGIP investments. You can see that the interest rate is continuing to just gradually come down and down and down on there. Um but we are anticipating um when we budgeted we anticipated those rates dropping a little bit quicker than they have. So we are still coming in above budget on our investment um earnings.

Fantastic. which is fantastic. Um, storm water um, collections through Jan. This one I actually have updated through January where the other ones are up are through December because storm water is it's real time not there's no aars on that one. Um, through January we're about 14,000 above where we were through January of last year. Um, that one's looking strong. Is that because people are paying taxes earlier?

Mhm. You can see where we really saw the um the difference was in October. We got the tax bills out so early this year um the first week of October like um we're supposed to um that we had a lot more folks coming in early and paying um plus there's a little bit more every year. So we're right on target to hit budget on this and real short on PIP and real short on PIP on PIP. That one also is looking strong. Revenues look less than last year but that's because we we um took the extra off of the grocery. we no longer have that on on there, which we did last year. Um, and you know, I think we're right where we are anticipating on that one. Maybe even projecting a little bit over we're projecting a little bit over budget on our pit um revenues. Good.

Great. Thank you. Okay. Anything else? No. Uh we need make a motion