Finance & Debt Oversight Committee - Regular Meeting

The regular monthly meeting of the finance committee will come to order. Clerk will call the

roll. Sorantu? Here. Driscoll? Gaddis? Hartman? Here. Hobbs? Martinez? Two present.

Thank you. Also, present, is the city auditor, mister John Rovalski. And, we will now turn it over to the director of finance, Melanie Campbell. Good afternoon.

Thank you. Good afternoon, chairman Surantu, council president Hartman. Happy to be here today to present January financial reports. I'm joined today at the table by our Tax Commissioner John Zavisha, Accounts Commissioner Thomas Buckley. In the audience, we do have Dan Mori, our Wage and Compliance Commissioner, as well as joining us today our Interim Purchasing commissioner, Natalie Bronagh. Hopefully everyone has a copy of the packet. We're going to give the committee today a brief update on the income tax collections for 2024. And then we'll go in into the January '25 revenues and expenditures. And with that, I'll turn it over to commissioner Zavisha.

Good afternoon. I'll be starting on page two of the report. On page two, we have our preliminary and unaudited numbers for the year ending December 31. There's actually, as we've talked in the past, a thirteenth period that revenues that come in from January 1 through February 28 that relate to prior years. Those numbers get added back into the 2024 numbers.

So, that thirteenth period, it is still a projected number that currently is sitting at $29,745,000 So, after the projected refunds get moved off of that number, that would end up making the end number for income tax currently at just over $237,000,000 We'll probably have those cleared up in the next fifteen to thirty days. I mean, there's still bad checks that if they come in have to be taken out of that. We do audit certain things. We'll review to make sure this is an odd time of the where again some of our revenues coming in go towards 2025. Different revenue comes in for 2024.

So, we do run some checks on that stuff that will sometimes move the money from the one category to the other. We also do the full year audit for the JEDs and that could affect a number one way or the other. It's usually not a big change to the plus or the minus, but it does end up happening then. So, for currently where we're sitting, we're looking at the 2024 tax number to be just over $237,000,000.

And the original projected, estimate?

Was 02/26. 02/26. Okay. And that's attributable to business income? Business net profits for sure on that one. We do have a couple of, larger employers in town where until they file their tax return, usually in October and November on federal extension, until that time comes in can, move that number positively or negatively. And luckily for us this year that did turn out to be, additional bonus

for us on that. So, it strengthens that number. Okay. And commissioner, what figure are you gonna use, for banking the, refunds so that we have that ability? For

for next year?

Yeah. In other words, if these people have overpaid, if in that instance, obviously we're gonna have to refund. Is there is there a number that you're estimating might be used for refunds?

Yeah. I think at this point we don't have a final one. Right now, we're floating probably 6,000,000. Okay. Because again, the projected refunds for this past year are about 5.4, which is definitely higher than it's been in the past. And definitely looking at a few communities around us and some of the bigger ones in the state, know, again as remote work takes hold more and stuff, know, they're seeing an increase in refunds. So, I would probably say at this point, we would probably, make that close to 6,000,000.

Okay. And then, going back last year, what did we project the possibility of what what the refunds would be? Was it 5,400,000.0? Was it less or more?

No. We definitely started the year earlier projecting refunds probably closer to $4.08, which again, same type of thing. We were going a little higher than the year before, but obviously, again, this year that it truly got up to over 5,000,000.

Okay. Okay. Well, I mean, I think it's good that we're banking that number so we're not hit with any surprises in that.

Correct. I do think that sometimes, you know, people do forget, especially with the business net profits, a lot of that income that comes in on a yearly basis is just simply estimate payments. And it is until the filing of those tax returns. Right. That can either result in a decent sized refund or additional funds being owed. They just have to have 90% of that number paid to avoid penalties.

Right. Appreciate the, emphasis on being cautious and again, assuming that there could be refunds of that figure. If it's less than that, that's fine. If it's a little bit more, at least we budgeted most of that money for refunds. Anything else?

Just so that I'll continue on to page three then. Yeah. And again, page three is the twenty twenty five numbers. But as you'll be able to tell, the grand total on that one is just over 2,300,000.0. So, you know, approximately 1% of what we'll completely collect for the year.

For withholding monthly payments, the first monthly payment isn't due till February 1 or February 15. Quarterly's won't even be due till April. And then on the business and individuals, you're mostly just getting payments of people that are making their estimates early, but those aren't even really the first quarter estimates barring fiscal's is until April 15. So, we do see that each category has slight growth with holdings up 155,000, businesses up just over or just under 15,000, and then individual under just 10. So, we are up a 100 and just under a $180,000. But again, for January, we're looking at like 1% of the entire budget for the year.

Okay. And again, if citizens have questions on tax, they're calling Engage Toledo 936-2020. And, again, the speed of the return call from the tax department is essentially

Correct. We usually like to try to make them back within twenty four hours. We do note that, you know, especially during the busier time, it can take up to forty eight hours. Right. And then we just have a system that if something exceeds that time that a member of the supervisor staff is then getting to who it was assigned to, to move forward on that. Now we did have it this week. Obviously, there was some the phones were down a little bit yesterday and stuff like that. So, I know engaged Toledo said that that was an issue yesterday that's been rectified today. We're we are starting to see the calls come back in again. So Okay. Good. What's the update on that?

Well, gets a weekly report. And this last report we just got, I think yesterday, indicated that, again, the the highest volume of calls were tax related calls to engage Toledo. So I'm glad that that's working out and that we're getting back to the residents with their questions. It seems to be working very, very well. And I appreciate your efforts to make that work so well.

Thank you.

Alright. Next.

Thank you. Continuing on.

Any question? I'm sorry. Any questions from anyone? Okay. Go ahead.

Continuing on to page four, you'll see the, general fund revenue report through the 2025. 8.3% through the year and revenues are 2% of the budget estimate. It's not uncommon at this early point in the year to have a percentage that low. We were at 1.7% of the total budget at this point last year. And as you look through the report, you'll see the various categories.

Several are impacted by payments that come in quarterly and in some cases semi annually. And it's just early so early in the year that we haven't seen them yet. Property taxes, for example, last year we saw the first half payments there coming in February. I expect we'll have that similarly for this year. Licenses and permits are at 6% overall. Again, right in line with where we were last year. The intergovernmental category, we do have several areas where we will see quarterly payments. For example, within the casino revenue, our JEDS payments. The other taxes category within there, the bulk of those collections actually come in December. We saw that last year as well.

Charges for services, you'll look and see is at 7.6% overall. One category running a little bit ahead as you look at the other fees and charges at 13%, that does include the 275,000 that comes in from the county for the plan commission that's already been received and that's an annual amount. Court fees and fines are at 6%, other revenue at 8%. That category is ahead of this time last year. I think the school resource officer agreement payment for Washington Local has already come in and been receded.

That falls in that category. And then lastly in the other financing sources, you'll see the budgeted transfer in from the capital improvement fund. That's an amount that we make at the end of the year. That transfer. And then the transfers in from other include both the TOLA as well as a transfer in from the ARPA fund of interest earnings that were included in the 2025 budget. I'll be happy to take any questions if you have them. Okay.

Next.

The next couple pages move into the general fund expenditures. As you'll see on page five, again, 8.3% through the year. And commitments and actuals for 2025 for that first month are actually right at 8.3% in total. Looking through the different categories on the report, starting at the top, you'll see labor expenditures on a year to date basis are running ahead of that year to date budget. They're at 9.3%.

Last year was at about 10%. It's not unusual within this category and a couple of the other ones due to some contractual obligations that are paid early in the year. For example, our police career enhancement, there's service allowances within the other labor expenses. We have things like clothing maintenance stipends, professional development stipends. So, a lot of those hit early in the year.

And we don't expect that to cause any issue though as we progress through the year. One month in, overtime costs are trending under budget. We saw positive variances there last year as well. ARPA reimbursements, 2024 was the last year, so we don't have any ARPA reimbursements in the '25 budget. And then as you look into the non labor categories of the report, you'll see supply expenditures are at 5.8%, which is under the year to date budget.

Service expenditures at 10.2% is running ahead. But that's largely related to quarterly payments that are made early in the year. And those are for the nine eleven regional council of governments as well as building rent for this building, the government center. Page six is the breakdown by cost center. And again, just a few areas on there that are, you know, more than 10% ahead of where we would expect to be at this point in the year.

The first one as you look through the report is in finance ERP. That's related to the annual licensing for the ERP system. So, that's a payment that's made at the start of the year but covers for the entire year those licensing costs. We'll see that variance go down as the year goes on. In urban beautification, you'll see is at 20.2%.

Again, that's related to contract services related to the demo program. Funds that are encumbered for spending as we go through the next several months on that program for disposal fees. And then lastly, in safety administration at 20%, that's where the nine eleven regional council of government's quarterly payment is made and that's made at the start of the year. Next couple pages are all funds, revenues and expenditures. Like we've seen with the general fund pages, we do have several areas where not a lot of activity here January and probably not a lot for the next couple months even given the timing of when certain revenues and debt payments are made.

But we'd be happy to take any questions if you have them before we move to the next report.

Okay. Seeing none, proceed. Anything else?

Next, I'd like to move to another Just

a quick summary, commissioner, on the stacks unit, IRS. Everything pretty much status quo in a record year.

Yes. They Coming off of the 2024 record year, which was, approximately $1,100,000 over the previous high. For the month of January, collections are down about a 100,000 for the month. Normally, December assessments are lower as it gets closer to the Christmas season. We, shift more off of the assessments to the collections. 2024 was a strong year for us to pursue the collections. We'll probably get back a little more in the 2025 in getting, the assessments out and getting stuff to court for unpaid balances. So we'll see how that progresses in the next few months.

Alright. And commissioner Buckley, the audit is in process. I don't know if they've really started anything yet, but

No. Don't don't expect them to be on-site for at least another couple weeks. Okay.

Alright. We have, Clark, Schafer, Hackett are the, are the one set of auditors, and then we also have that other firm that also helps in preparation for the audit. And that is, I forgot their name.

It's Julian and Gruen.

Yes, Julian. Right. We've had them for several years. Okay. Alright. Well, just keep us posted on that. Is there anything else in your finance department?

Just like to move to briefly to the ARPA and the CIP report.

Very

good. The ARPA report reflects all of the projects within the Toledo recovery plan from the start of the program through January 2025. At this point, all of the federal ARPA dollars have been allocated towards the projects on the list And have all been obligated which meant the obligation deadline that was at the 2024. And then there's as you look at the very end of the page, 49,000,000 remaining to be spent of those obligations. And those have to be spent by the 2026.

Right. And the fact of the matter is, again, we've selected, council has selected what groups those will be, the various vendors and that all had to be done by the end of last year. Correct. So, that's why we're still showing that amount of money to be spent, but we have committed to various vendors. Okay. Anything else?

Then lastly, in your packet is the CIP report. Yes. Through January '25. This report now reflects all of the approved 2025 CIP projects. And it's organized by department. And it does reflect projects that have been closed out. They're no longer in the report. And be happy to take any questions if you have them on anything within CIP.

Okay. Any questions? All right. Thank you very much. Appreciate that. Our our next finance meeting will be March 26. At that point, we'll have the February financials and may have a pretty good indication where we end up tax revenue wise. Okay. Yes. Okay. Thank you very much.

Thank you. Thank you.

Next on the agenda is the city auditor report. Mister Rovulski, proud father of another daughter.

That's right. Thank you. Two months old. She just had her two month checkup today.

That's great.

Good afternoon. John Revolsky, city auditor. I'll provide a quick monthly update. The advisory audit committee met in February, and we met with interim director Campbell and accounts commissioner Buckley, and we had a good meeting with everyone in the room. And that was beneficial to talk about the financial statement process, the annual financial statement process.

And then also I released the investment review for the six months ending June 2024, and there were no new exceptions or notes related to that. And lastly, I'm working through the surveys for the performance measure audits, and then I'll be working on a revised 2025 annual internal audit plan. Let me know if you have any questions.

Very good. And I just want to confirm that the audit advisory committee has met and they looked at the 2023 well, actually, 2022 and 2023 audit reports. Reaction from the committee was essentially And everything seemed to be in order. Am I correct on that?

That's right. Okay. Excellent.

And then, once the audit for 2024 is completed, then the audit advisory committee per our regulations will also look at that. So, we are current with that. So, appreciate that. Any questions for the auditor? Is there any other business from the audience before the finance committee? If not, we will meet again on March 26 at four p. M. And we stand adjourned.