Finance & Debt Oversight Committee - Regular Meeting

Good afternoon. Welcome to the monthly regular monthly meeting of the Finance Debt and Budget Oversight Committee. The clerk will call the roll.

Sorrento?

Here.

Driscoll? Gaddis? Hartman? Here. Hobbs? Martinez? Also, present Gomez?

Thank you, madam clerk. Good afternoon, everybody. Director of finance, Melanie Campbell, good afternoon.

Thank you.

Begin.

Thank you. Good afternoon, Chairman Surantu, members of the committee. Here today to present April revenue and expenditure reports. I'm joined at the table by Commissioner John Zavisha, our tax commissioner and Tom Buckley, our accounts commissioner. In the audience today, do have our interim purchasing commissioner, Nelly Bronagh, as well. Hopefully everyone has the April packet in front of you, and I will turn it over to Commissioner Zavisha to start on the income tax.

Good afternoon. Through the month of April, the withholding category has collected just over $51,900,000 and is about as flat as flat can be. We're just off $47,876 from last year's number. When we dig a little deeper into this withholding number, it's definitely companies in our top 20 that are down a little bit and then everything else sort of reverses that. So the top 20 is down about $1,200,000 and all other companies are up 1,200,000.0 So this is definitely something we're watching coming forward.

A couple of companies within that top 20 that we're just going to see how the months continue to progress on that. You might notice in April, we're down 9.3%, but like we've sort of talked about in prior meetings, this gets back to where some months have five Fridays and those months usually throw our withholding numbers. With February being the in between one where your February numbers would have been paid during the month of March, That's why March doesn't come into play in this. So you're really comparing the February growth of $1,900,000 the April being short 1,600,000.0 And again, that comes out to pretty flat for that overall. This will happen one other time this year.

If you look at a calendar, you'll get to October, it'll have five Fridays when last year it was November. So it'll be pretty late in the year before we see this type of situation again. For both the business and individual category, both being up, we are watching that again, this is the first year we were using the lockbox for tax returns. So if you had filed a Toledo return, you owed the money, you were actually sending it on to the 5th 3rd location, the check could get cashed first and then we do our processing on the back end. So with both of these categories being strong at this point, business for the year being up 648,000 and individual being up 861,000, we're now going to start to watch May.

Normally, we've caught up with everything by Mother's Day is usually our goal each year. We have done that this year. So we're just watching for the final May numbers to come in, see how they reflect towards that to see how much of this is true growth and how much of it is just simply money coming in early. For the year, we're up just over $1,460,000 or 2.3%. And again, we're really going to be watching withholding as you can sort of tell so far this year withholding is just over 80% of what we collect.

So with that category being a little flat, that's at least us watching that for just to see how that's going to be coming forward here. If we move on to the next page, we've got our projections, the 2024 unaudited hasn't changed at all at this point. The 2025 projections is right now 229,900,000.0 Do want to sort of come down to the refunds through April 30 are $216,000 Last year that number was about $303,000 The refund sort of start a little slow over the next three months. Like to use last year as an example, we gave out $2,200,000 in refunds in that little short period there. So we'll also be tracking to see how the refunds go because last year, even though we were only at $303,000 we ended the year at over $5,500,000 So like that number will continue to grow as we head into the later in the year.

And with that, if there's any questions on these two pages, I'd be glad to answer.

So basically, you're not overly concerned about the withholding numbers at this point?

Yes. Right now, would still say this is a little early. We have a good indication of who in the top 20 was off and why they were off. They seem to be more onetime events. But again, we'll still sort of watch that we were expecting some growth in the withholding category and with the written rate now it not being there. Like I said, we'll follow these next few months and see how that changes. But at this point, we're still within 1% of our budget numbers. So no concerns at this point.

Okay, great.

Do you want to cover IRS stacks also? Sure. For the IRS unit through the month of April, so far this year they've collected $2,100,000 which is up a little more than $125,000 compared to last year, which we actually consider this to be a really good number. As you can sort of tell from twenty twenty three to twenty twenty four, we had collected $1,100,000 more than we had the prior year. So we were actually expecting this year to have a little bit

of

a lesser amount because we were going after our computer program allows us to sort of focus on certain companies and with getting that first batch done, the second batch would be a little of a lesser group there. So the fact that we're actually positive at this point is a really good indicator so far. But again, we'll see how the rest of the year goes with that as well.

Okay. Thank you, Commissioner.

You. With that, I'll continue on to Page four, which shows the general fund revenues through April at 33% of the year complete. Revenue collections for 2025 are at about 28.5% of the total budget. Not unusual to see that at this point in the year given that we do have things that come in quarterly and semi annually. As you see last year, we were at about 27% of the budget through the same period.

Looking through the report, you'll see property taxes at 54%. We did receive those in February. We won't have our second half taxes until likely in August, but at 54% rate on track compared to budget. Licenses and permits overall at 37% where we would expect it to be for the year. Within the intergovernmental category, the other tax category, the bulk of those collections we won't see until December.

I do want to mention though, we did receive the first quarter casino revenue. We hadn't received that yet when we reported last month. So at $1,700,000 it's 25% of the budget estimate, which is right where we want to be, for that first quarter. Charges for service category, overall at 42%, ahead of the 33% pace for the year. The EMS fees, 4,500,000.0 in collections that is reflective of one annual payment that comes in from the county for that.

That's why it's at 67% right now. And then cable franchise fees at 2.8%. Last year we didn't receive those until May, so I expect we'll see those in May. And then as you look through the rest of the report, just draw your attention to the other financing sources. This does include the transfer from CIP, which we don't make until year end. And then transfers from other areas include the toll lot as well as transfer in budget from the ARPA fund. But overall, at our 97,500,000.0 in total revenues within our budget estimates, and we wouldn't recommend making any adjustments at this point to those estimates.

Now BLS transport was at $2,400,000

Yes, yes. And I look at kind of the EMS fees and the BLS transport together in terms of the billing that happens for the advanced life support and the basic life support. And so between those two and what's being billed is about $5,300,000 and with 2,400,000.0 collected, we're at about 45%. So running a little bit ahead and something that we're kind of watching as we head through the rest of the

So is the EMS fee representing ALS?

It does include ALS in the budget estimate.

Separate? Yes. That you've got. Okay. All right. At some point, will we meld both together?

I think that we will for the 2026 budget. Okay. Now that we'll have one full year of the ALS being run through, fire and rescue.

Okay. Very good. Okay. Continue.

Moving on to the next page. Page five is the general fund expenditure summary. We're at 33.2%, so right about on budget through these first four months. As you look through the categories of the report though, you'll see labor costs and overtime costs are under budget on a year to date basis. I believe it's a trend we saw similar last month.

We are watching employment tax and medical costs. You see it's just slightly ahead of budget at $56,000 We have seen increases in medical costs over the past several months. So that's something that we will be monitoring as we head towards midyear to determine if there's any adjustments warranted to that budget estimate. And then in the supply and service category, you'll see that on a year to date basis, both are running ahead of budget. But like we saw last month, it's due to some onetime purchase that happened early in the year on the supply side.

And then on the service side, we have payments that have been made for the Regional Council of Governments are ready for two quarters of the year as well as obligations for mowing that will happen throughout the rest of this year and summer. The next page, Page six, is a breakdown by cost center. And again a couple of those areas I mentioned, in urban beautification, that's where we see the blight and the mowing dollars that have been committed, Safety administration is the Regional Council of Governments payment. We do have on here, I want to mention because we didn't see it last month, in the housing division, you'll see is at 47%. That does include the $250,000 that's an annual payment for the tenants' right to counsel that goes to legal aid.

So that's already committed for the year and that's what's causing this variance. Like the revenue side, no issues as we see it through April, just continuing to monitor the healthcare expenditures.

The JED payments, you're monitoring those, do we have any that are delinquent?

We do not at this point in time.

Okay. So everyone's up to date in terms of the economic agreements. Okay. Very good. Thank you. Next.

The last couple of pages are the all funds revenue and expenditure reports. And I'd be happy to take any questions that you might have. And then I can also cover CIP and ARPA.

Okay. Any questions from members of council? Okay. All right.

Next, I'll move to the ARPA report, the one page summary of the Toledo Recovery Plan. Now reporting through April 2025, you'll see that, everything is obligated as we've met that deadline at the 2024 and $37,200,000 remains to be expended between now and the 2026.

Okay. All right. No seeing no questions. Anything else?

And then lastly, we did include in the packet the CIP report. And if there's any questions on that, we'd be happy to take them as well.

Okay. When does the transfer take effect from CIP? Is that

We'll do that as we close out 2025.

Okay, very good. Okay and then our audit is in full operation commissioner, so an update on that?

Yes, we're on track to submit the financial statements to the Henkel system on Friday and then the auditors will show up in the June to do their audit and then they'll turn that over to the auditor state by the June and hopefully by the August, September, they'll release the audit.

Okay. And when you say auditors are going to be here, those are the outside auditors?

Right, Clark, Schafer and Hackett.

Okay. Very good. All right. Any other questions? Anyone that concludes your report. Oops, I'm sorry, Constance Mukomayes.

No need for apologies. I have a question. The last hearing that we had, we talked about or it was actually brought up by the chair about collections for backwater bills. I believe that our collection on tax side has been going well over these last couple of years. Do we know if we use that same service in DPU to collect back water bills? I'm asking, know that you're not the director, but you are the director of finance. So maybe you know the answer to this, but

The strength in our collections on the income tax side, is that what you're Yeah. Yeah. That's really commissioner Zavisha's IRS unit

Mhmm.

Who is able to use IRS data to look for people that would owe taxes to the city and it's really focused just in that area.

Right. Okay. I guess I was just curious if the collection agency itself was like the successful part of that and if we

can engage them on water bills, but In that case, it's staff in techs that are doing that program.

So we can just internally hire our own folks to do that. Got you. Well, great. Thanks for clarifying that. I'm curious to see how we can collect on some of those water bills too. So I was just anxious to see if that was happening how that was happening on the IRS side. So appreciate the answer.

Thank you, councilman. Any other questions? Anyone from the audience, care to address the committee? All right. I appreciate how basically, we do also have collection efforts for employers who are not registered with City of Toledo and I see our esteemed leader of that area in the audience. And I was just wondering how are things going with the collection efforts, if you want to step up to the podium.

Thank you Chairman, members of the committee. It's going very well. Mark and I are getting back into busy construction season and our efforts are continuing to make sure that contractors and actually any companies working in the City Of Toledo are abiding by the wage theft ordinance, treating people who should be classified as employees as employees not ten ninety nine ing them, not engaging in any sort of wage theft and the contractors living up to their requirements of seven ninety eight which is registering with the city of Toledo, and being proper and paying their income tax. We are seeing a lot of self reporting, a lot of contractors in the area that hire subcontractors are requiring their subs to provide a letter of, certificate of compliance prior to starting on-site. So word is definitely, circulating in the industry that, hey you need to do this.

The city is actually checking up on this and coming out to site and you better get proper before you're on-site in Toledo.

Great. Well, I appreciate your efforts. You and Mark have done a very fine job of going after employers and employees, making sure they are registered in the city. And I know that from personal experience because I've observed some situations where you guys were out there right away. And some were definitely compliant and some were not. And we just need to be vigilant with that And because it's not fair to the people that are paying taxes and registered. So we appreciate your efforts.

Absolutely, our pleasure.

Thank you so much.

Thank you.

Director, anything else?

No, thank you.

Okay. Our city auditor is out ill today unfortunately, so he'll have a report for us next meeting. And seeing no other business before the committee, we stand adjourned.