Transaction and Use Tax Oversight Committee - Regular Meeting

Alright. Good morning. The 09/18/2025 meeting of the transaction and use tax oversight committee is now called to order. Madam executive assistant, could you call the roll, please?

Committee member Jones.

Present.

Vice president Penko.

Present. Chair Oiwole. Present.

Let the record reflect that all committee members are present.

Alright. Thank you. Please rise for the pledge of allegiance led by committee member, Pincko.

Ready to begin.

Thank you. All right. So we now move to the approval of the agenda. Are there any changes to the agenda? Okay. May I have a motion and a second to approve the agenda?

I'll a second.

Alright. We have a motion and a second. Please vote. Alright. So we now move to public comment. Any person may address the governing bodies on any subject pertaining to Citi business. Normally, no action may be considered or taken by the governing body on any monitor not listed on the agenda. Each speaker will be limited to three minutes. Madam executive assistant, do we have any public comment request?

Seeing none.

Alright. Okay. Thank you. Consent agenda is next. Items in the consensus, calendar are considered routine and may be enacted by one motion and vote. There will be no discussion of these items unless specific items are removed from the consent calendar for separate motions. Are there any other requests from the committee to pull any consent calendar items for discussion or abstain from voting?

No. No.

Okay. Madam executive assistant, are there any members of the public requesting to speak on a consent calendar item?

Seeing none. Alright.

Can I have a motion

and a second? I'll make a motion and a second. Alright.

We have a motion and a second. Please vote.

Motion carries unanimously. Three, zero.

All right. Thank you. Now move on to the administrative update by the Finance Director. Mr. Finance Director, any updates for the committee?

Good morning, Chairperson Wally, Vice Chair Penco, and, Committee Member Jones. Thank you again for your time this morning to receive a report from staff. We appreciate the time that you have taken to review the reports, and primarily for your fiduciary duties that you have as the Oversight Committee. As far as administrative updates, since our last meeting back in March, we have been extremely busy with operation in our finance department for the city. As you may know, we have completed our budget development process, of which the operating budget, which includes the Measure T fund, was adopted in June.

Since then, we have also working on the preliminary audit as well as currently right now, working on finalizing our final audit, which staff have been working very diligently over the last three, four months to get prepared for the audit. We plan to turn over the balance sheets and general ledger to our auditors this week. And so it has been really crunch time for us during the last couple of weeks. And our goal is to finalize the audit in the next couple of weeks. Orders will be on-site.

And our goal is to complete the financial statements by December. Our finance manager is here. She is leading the efforts, with the audit and has been a lot of, teamwork with our staff, including Erin, management analyst and all staff members in our team. So, and along with the audit, we have been working with several RFPs completions. That includes banking services, financial advisor services, and we're in the process of doing an RFP for investment services as well.

So it's been a busy time during the last six months. Nevertheless, we appreciate your patience as we prepare the reports to you on a monthly basis. Today, you cannot receive the preliminary financial status of the Measure T as of June 2025. Please note, as I shared with you, audit is not complete yet, so those numbers may change. I don't expect to change significantly, but it may change depending of the audit outcome. And that's all I have in terms of administrative updates.

Thank you so much. I know I'm going through the same process in my day jobs and is it this time of the year for the accounting professionals. So thank you for your work. Any questions for all right. Okay. So I'm sorry, do you have a I said no. All right. So we go into the discussion item, Measure T Oversight Committee report for fiscal year ending 06/30/2025. Staff, may we have a staff report, please?

Good morning, again, oversight committee members. My name is Javier Carcumo, Director of Finance. And to my right is Efrain Croquette, our management analyst, who you may know, by email, who has been sending you monthly reports, since, our last meeting. We have a lot of information, for you, so please bear with us. If you have any questions, please let us know at the same time as well.

So on our first item, it is our, fiscal year twenty twenty four, twenty twenty five budget to actual report. So the adopted budget revenue budget for fiscal year twenty twenty four, twenty twenty five, which was adopted in essence over two years ago as part of our biannual budget adoption process was $31,400,000 During that time, based on the CD consultants sales tax consultants projections, considering that was back in 2023, we had some good years during the COVID period as a result of both inflations, but also the influx of federal funds into the economy. Nevertheless, as we progress throughout the years, during the last four quarters, primarily, we have amended our revenue budget down to $29,000,000 and one point and subsequently further amending the budget down to $27,900,000 As of June 2025, the year to date revenue totals approximately $28,300,000 and that represents approximately 99% of the I'm sorry, 102% of the amended budget. If we compare the $28,300,000 in revenue compared to the adopted budget of $31,400,000 then we would have been under budget by 10%. So we would have collected approximately 90% of that budget.

The revenues on a monthly basis is averaging approximately $22,300,000 with quarter ends typically September and typically December, and June being the quarter end months with higher collections primarily because one is because of the holidays and the other one primarily because of true up that happens throughout the year. Nevertheless, the average is $2,300,000 When we compare the total sales tax revenue of $28,300,000 in fiscal year twenty twenty five to the prior year fiscal year twenty twenty four, we received approximately $66,800 more, which in essence, it's pretty flat in terms of revenues collections between the two fiscal year. So that said, and I believe I have a graph later in the presentation that shows per year's collections and our projection for the next two years. But we feel that our revenue trend is steady, but stable, currently, despite of the some of the economic concerns that we have nationwide. The last four years has been pretty flat in terms of revenues, and it's averaging approximately $28,000,000 Some of the groups business groups that have the most significant revenue collections or sales tax collections for the city, it falls under the general consumer goods, and that is what people buy on a daily basis at the store.

That accounts for 28%. Auto sales, both new and used auto sales accounts for approximately 22%. Online sales, which those are collected through the county pool and then subsequently allocated, based on a percentage to all the county side cities that accounts approximately 15%. The amended expenditure budget for fiscal year twenty twenty four-twenty twenty five is 22,900,000 The year to date as a preparation of this report, we have a total of $25,100,000 or approximately 109% when compared to the amended budget. The percentage spent excluding the CAP component, so excluding the 1,500,000 of CAP expenses, equates to approximately 102.8% of the amended budget.

Budget. The year to date personnel cost, is approximately $14,100,000 That went over its budget by 11%. The primarily the deficit or the variance between the amended budget and actuals is driven by various components. One primarily one is the negotiated salary increases for senior staff, over time, primarily for our police and fire. Leave buyout, that's primarily when a well, in accordance the MOU, that allows staff to sell back some of their leave balances voluntarily.

But at same time, when an employee separates from the city as part of their benefit package, those leave buyouts those leave are also pay out at that time.

Can I ask a question? Yes. Are you talking about a separation of employment and then you have maybe some benefits or some time off that they didn't take and they get cash? Or is it a severance? The

first your first comment. So it is time that they have on the books, whether it's for vacation. Well, it's we have one relief type, which they can use for both vacation and sick. If there's any time left on the books for them, at time of separations, that will be paid out to the employee as part of the benefit package. Increasing health insurance premiums, and that has been very unique to the City Of Murrieta.

It is likely a national type of issue challenges that most cities and counties are facing in terms of premium increases. Pension costs and pension costs are usually also driven with salary increases. Workers' compensation has been one of the expenses that have seen a significant increase over the years, primarily in our public safety. And lastly, our budget, our personnel costs was also amended through the year with to include a vacancy savings rate, primarily to account for separations where a position it's become vacant and then there's some salary savings. So we want to capture that by adjusting the budget accordingly.

The operation and maintenance expenses amounted to approximately 73% of its budget or $647,000 And our capital outlay had a balance of approximately $100,000 approximately 13%, below their amended budget. The total CAP related expenses account for $1,500,000 As As you will notice, there's no budget in the operating budget primarily because those expenses those, CAP are budgeted on the capital improvement plan. For the purpose of presenting the cost and expenses paid by Measure T, we're presenting those to you as well. However, the budget for all the capital improvement plan projects are approved and authorized by council in prior years.

Could I ask a question on that? Yes. The capital improvements, are they things like the expansion of the library? Yes. Or okay. And then just a quick question, follow-up. Transfer's out, is that mostly departments within the city we're transferring money out to pay those payrolls and things like that? Is that correct?

Yes. It's very specific. The transfers from Measure T is very specific to three different funds. Primarily is the Fire District. The Fire District fund currently and over the years is not self sustained. And in order to maintain level of services and operations, a transfer is necessary from Measure T to maintain those services.

Got

it. The same primarily with the Community Services District. So this is what handles the parks, maintenance and all the community events that happens throughout the year as well as some of the, programs that we have with the youth center and our senior center and our I'm getting a blank here on the other community the community center as well. And so we do have a transfer to the Community Services District Fund. And very recently, the library district fund as well will be needing a subsidy or financial system from the Measure T as well.

Currently, very minimum, but they're getting to the point where a transfer will be necessary.

Got it. Thank you.

This is the same information slide I shared with you. The only difference is, as recommended by our chairperson, to present the capital improvement project cost separately from the operating, which is a great observation. So we're presenting that this information this way moving forward.

Thank you.

So some of the, accomplishment, utilizing Measure T fund. During the March, oversight committee meeting, we had both Chief Malloy and Chief Henry from our Fire and Police departments. They provided you with great information in terms of how Measure T has positively impacting their operations. Currently, as of fiscal year twenty twenty four, twenty twenty five, with the Measure T fund, we are able to fund 67 positions since the beginning. Primarily, those are with the public safety departments, which relates to approximately 77% of the Measure T fund go towards public safety.

That is one of the commitments we made from the beginning to our community that Measure T will be fully utilized for the most part towards enhancing services in public safety. Some of the significant purchases made by our fire operations includes the replacement of their you know what that stands for, the SCB, a breathing apparatus

tanks.

That's a breathing apparatus breathing tank that they utilize on fires. They have a use for life, but they had to replace 72 of those equipments. The public safety infrastructure communication radio system, recently our fire department joined, the county. I believe they are the first fire department that joins the radio system. Measure T also pays for a significant number of emergency software subscriptions, equipment replacements, the PPE gear and safety equipment that they wear.

Fire station facilities maintenance and repairs, while some of our fire stations, especially like Fire Station one, it looks fairly new from the outside. From the inside, they do need some significant tender and care, let's put it that way. And so we have funding some of repairs, for the various fire stations, replacing the fire station generator to ensure that, in case of a blackout, they continue to have electricity, and their equipment continue to operate for emergencies. In our police operations during this year, it funded some police vehicles, that will change moving forward as a result of a fleet replacement fund program that we're setting up starting in fiscal year twenty twenty six. But it also provided funding for public safety equipment for new hires, the police tasers and body worn cameras, equipment, their licenses.

Usually, a lot of these new equipment, they require subscriptions, and that's kind of the way business are nowadays. Police license plate reader software and the equipment itself, we have 40 of those license plate readers cameras throughout the city. And also, you get a little brief more information during the last meeting about their drone program, of which they're going to expand it, during fiscal year 2026. Other funding sources, other operations, Measure T is funding is on our economic development, with market research and event marketing, the efforts to continue to advertise our city in various events and bring more businesses, graffiti and weed abatement, vehicle lease program, which we do through enterprise. Currently, we only have a handful of vehicles, we're probably over 10 vehicles, which we're no longer going through the program, but it was necessary five, six years ago due to the cash was the cash flow.

Needless to say, we're not leasing those vehicles anymore, but we're going to meet our obligations, for those vehicles that we leased in prior years. And lastly, Measure T has been significant had a significant contribution to the city's reserve balances, to ensure that we can maintain the level of services in case there is a change in our economic condition. We have significant number of projects completed through the capital improvement plan. Some of those significance are the police locker room remodel that is to allow for more locker rooms. Our police workforce continue to increase on an annual basis.

That facility is over twenty years old. It was not built to have over 100 officers. And currently, we probably have somewhere around 115, 118 sworn officers. That doesn't include the administrative staff. Police building, exterior paint, office expansion, again, kind of the same objective due to additional staffing.

Library roof replacement as well as the HVAC system, the City Hall annex improvements. City Hall also went through the reconfigurations of cubicles. Nevertheless, that was not enough. And we are leasing a property across the street here. We call that the City Hall Annex, and we were able to utilize some of the funding to accommodate the some staff to staff in that area.

Various top lots improvements and of course, the Townsquare parking lot and the Monument sign, which you can see it has been completed and we're clearly enjoying that. Projects in the near future, we're looking at the children's area expansion, library building improvements, Fire Station one, sewer and concrete replacement. Fire Station one is the oldest fire station we have, and they're still not in the not connected to the sewer system. And as well as doing some building improvements within, we're setting aside funding for a new PD mobile command center, a citywide pickleball court project and this one a little bit funding that a lot is to do a repair for the Cowal Oaks Sports. Here's photos of some of the projects either completed or in process or in coming up in the near future, Townsquare parking lot, the Toddlot replacements, the children's area expansions project.

This is the old mobile command center. In essence, if our dispatch is not able to provide services from their center, the mobile command center should be the alternate location. However, this mobile command center is quite old and has not been maintained with equipment. And CD has awarded a grant to purchase a new one. And see the there is a match component, local match component that is required and we're utilizing about $120,000 of Measure T for the new purchase.

The locker room projects, we got the license plate readers and the drone program. Our fire engines and trucks are very expensive. They do last about twenty years. So but it does cause a significant requirement of funding when they're purchased. So and lastly, citywide sales and city hall annex project.

And with that, completes the budget to actual reports to you for the fiscal year 2025 financial activities. This is the receipt on file for this report. If you have any questions, I'm happy to answer those at this point.

Thank you so much. Any questions from the committee members? No. Okay. I did forwarded a couple of questions to you. I don't know whether you got a chance to about that. I was I think I just looked through the report earlier. So you talked a little bit of I think you addressed a couple of them already. Talk about the sub, which is just a technical change, the suggestions on the subtitle subtotal. So just kind of show the operating expenses from CIP.

So thank you for that. Now the $1,500,000 reported expenditure for CIP for fiscal year 2025, I was wondering whether that's a because we don't have a budget for it, right, in twenty four, twenty twenty five. So I was just wondering how the mechanics of that work. Do you just take that from Reserves? Yes, reserves or allocation on a signed fund balance?

Yes, yes. So the any commitment that happens through the year either as part of the capital improvement plan project budget development process, and we do those on an annual basis. Or throughout the year, if there's a new project coming through, when council adopts and approves, it sets a commitment out of unassigned fund balance. And so it moves that fund balance from unassigned into commitment primarily for capital improvement plan projects.

Okay. So then staying on this page, I think my next question was, if I'm looking at this now, so what's the contribution to fund balance for this year? And that's one of the reason why I was thinking that should probably be separated. I'm not quite sure whether it's a 3,200,000.0 which is the difference between your revenue and your 25,100,000.0 or 4,800,000.0 which is the difference between your 28,300,000.0 and 23,500,000.0 which is really operating? Yes.

So the change in fund or the contribution to fund balance will be the difference between revenues and operating expenses. So that will be the 4.8 There might be other components through the year that may impact, unassigned fund balance. But the to respond to your question specifically, it will be the difference between the revenues and operating expenses.

Okay. Thank you. That's what I would think it would be, but which is why when I was looking at the 1.57 kind of the result of the number, if I'm comparing. So that makes sense. Thank you. Also, I think I had another one. I don't know whether you got a chance take a look at that. When I look at the CIP projects citywide, I don't see that $1,000,000 commitment that we have for the expansion already here rolled over into that report. So I don't know whether you've got a chance to take a look at it or Yes. Okay. Was that a commitment that was made out of Measure T funds and or is it no longer a commitment? It's on this report, but it's not on the citywide.

Yes. So the report you're looking in the citywide or the capital improvement plan report, that was adopted back in June '25. The $1,075,000 commitment was approved by City Council on August 19. So that was subsequent to the preparation of the report and that's the reason why it's not on the citywide report. However, the city council presentation August 2019, there were several items that were approved by council.

One of them is the approval of an interfund loan between Measure T and the Library Development Impact Fee Fund. And then the other recommendation and approval by counsel was the allocation or commitment of $1,075,000 from Measure T in order to fully fund expansion project.

Okay. So future reports would reflect that, I guess. I just want to I guess my question is really relating to making sure that whatever Measure T's funding rolls over correctly into the citywide

the transparency. Capital improvement plan that we'll be developing in starting like in January to be adopted in June '26 would include the 1,000,070 Okay. $5,000

Thank you. Okay. Yes. So I think I had a question on the interfund loan as well. You can talk about that next item because I think it's in the budget, right? And then Item two. Yes. So but with that, thank you for the detailed report and especially highlighting some of the accomplishment of Measure T as it relates to public safety. We've been talking about that since we came on board. That's kind of our understanding that that's the primary reason.

So 77% is pretty good. So and actually seeing some of those impact is very helpful and of course the presentation we had last meeting. So appreciate, the highlights there. All right. If there are no other question or comments, Madam Executive Assistant, are there any public comments regarding this item?

Seeing none. Okay.

We had our comments. Thank you. No action is needed. And this is the receive and file item. So we move on to Item two, adopted Measure T operating budget for fiscal years twenty five-twenty six and twenty six-twenty seven. Staff, may we have a staff report please?

Yes. Good morning again. Chairperson Wally, Vice President Penco and Committee Member Jones, thank you again for your time this morning. Our report for the item number two is to provide you details of the 2526 adopted budget for Measure T. So this is the budget that starts on 07/01/2025 and goes all the way through 06/30/2026.

A little bit of background primarily for our residents who may be watching us online or they may refer back to the meeting is the Measure T funding is derived from a voted measure that was approved by our residents, gracefully approved, that allows for a $01 district sales tax. This really revenue source allows Citi to maintain the long term funding for general services, but primarily focusing on public safety in regards to improving response time to emergencies, improve our protection paramedic services, increase the number of police sworn officers to strengthen crime prevention and gang activities, address graffiti removal, which we have budget for that purpose as well provide funding for parks recreation and street maintenance. The establishment of the district transaction district tax also requires, as part of our municipal code, requires an oversight committee to which required to meet semiannually and receive a monthly reports from our staff on both revenues and expenditures and provide guidance to staff in regards or questions to staff in regards to the financial activities. And this fulfills the requirement for both staff as well as the oversight committee. This graph represents a historical sales tax revenues for Measure T, but also project the next two years.

As you can see, since fiscal year 2022, we have received approximately $28,000,000 Over the years, we have received slightly less in 2023 and 2024. 2025 was a little bit higher than 2024 by approximately 66,000. This really represent, a revenue source that has been flat over the last four years. As part of our projection for the fiscal year 2026 and 2027, we're hopeful in projecting an increase of 3% year over year, primarily with the intent of to account for increase in population as well as increase in new businesses. Of course, we will monitor those as we go through the fiscal year 2025, 2026 and amend the budget accordingly.

So we have a $28,600,000, in revenues. Our expenditures, budgeted is 27.2 The allocation of the Measure T funds to the various programs and departments includes approximately $7,700,000 to our police department that accounts for approximately 29% of the budget. The fire district or fire services, including the transfers that they get to the fire district fund accounts for 48% of the budget or $13,100,000 Our CSD program for parks maintenance accounts for $3,100,000 11%. Public works and engineering or municipal services department now, I believe, have a budget of approximately $1,000,000 Our library accounts for approximately $200,000 or 1%. And the remaining includes the remaining funding includes approximately $1,300,000 for administration, accounts for 5% and our Community Development Services department, which is approximately $600,000 or 2% of the budget.

When we look at the budget, it's primarily on the expenditure side based on expense category. Our adopted budget of 27,200,000.0 includes approximately 52% of it towards personnel costs as $13,800,000 about $2,100,000 or $2,200,000 in operations and maintenance, primarily this to address some of the programs that are funded for police and fires and for softwares and, small equipment. Our capital outlay accounts for equipments, significant equipments for primarily for police and fire. Internal service charges, this is primarily to recover costs associated with providing workers' compensation insurance, and general liability insurance as well as workers' compensation insurance and also our IT services, information to the various departments. That accounts for approximately $1,700,000 And then the transfer out again to the Fire District, CSD District and Liberia District accounts for $8,900,000 So our contribution to fund balance based on our budget is $1,400,000 for fiscal year twenty twenty six and approximately $681,000 for fiscal year twenty twenty seven.

So when we compare personnel the various expenditure allocations in comparison to the entire personnel costs accounts for approximately 51%, 52% average on both years. So transfers out significant approximately 32%, 33%. And if my math is correct, the remaining somewhere around 16% is allocated towards operations, capital outlays, internal service charges. So some of the significant budget requests and budget items requested through the next two years. Personnel, we're currently, we have 67 authorized position.

This is the same that we had back in fiscal year twenty twenty five. So that will remain the same. In fiscal year twenty twenty seven, we are adding three additional firefighters. And so fire personnel will go from 15 to 18, police will remain at 31 and unsafety will remain at 21. The three firefighter positions, is primarily related to have the appropriate number of personnel when the city received the tiller truck.

And that's a new equipment, a new truck we're expected to receive before fiscal year twenty twenty seven. If you're familiar with the Taylor truck, this is the truck that has a person in the back driving it. It's a truck that allows to have very sharp turns and be able to access most be able to access all roads within our city. And so because of the required number of personnel to have per engine, which is currently at three, this specific truck require four personnel. And so we have three shift, and we need to have a personnel to be able to drive that truck in the back.

So that will account for the three additional positions in fiscal year twenty twenty seven. It's pretty neat. The allocation between safety and unsafety continues to be aligned with prior years. It's approximately 77% towards public safety. These are some of the significant allocation this year for the Fire District.

I would mention some. So we have a number of several emergency related softwares and subscriptions, that allows our Fire Department to provide their services. We also have funding towards the CAT system. This is the system integrated with our police who take emergency calls. Their mobile data terminals.

These are the terminals they have, their fire engines. They have to go through equipment testing for ladders and hose. They're required. And then subsequently, they may have to be replaced as well depending on the test. Ultimately, we want to make sure that our hose are working properly at the time that we can actually need them.

PPE's extractor, this is in case of there is a crash accident and they have to extract someone out of a vehicle. Fire service agreement with CAL FIRES is very essential, especially in our area, where if the city needs assistance from CallFire, we have an agreement already in place. And that limits really our cost. If we're not prepared, we don't have that service agreement ready. For our police operations, public safety equipment for new hires, NARCAN, which is a treatment for opioid overdose emergencies.

This is for both, anyone from the public that may need it as well for in case our police officer gets exposed as well. So they have those in each vehicle. Police taser and body worn cameras, equipment and license, these are on annual costs. Again, it's all based on subscription. Police license plate readers.

And as I shared with you, our police aircraft and accessories, this is our drone program, which they're expanding this year. They will probably be seeking allocation from HRT, but this will be a huge game changer for our police department because they will be able to dispatch a drone from our police station in very specific location. That drone will probably get there much faster than a police officer. And so they will be able to have eyes on the sky way before our police gets there or fire gets there. So they have a better understanding of what the situation is and be able to capture someone on time.

So they're expanding that program. Other operations funded by Measure T, it includes our citywide press relations, newsletters or magazines and the community survey, continued to support economic development efforts to bring new businesses, professional growth development for our staff, the enterprise leased vehicles, again, that will subsequently will go away once that lease agreement is completed, wheat abatement and water efficient landscaping throughout the city, operating transfer for Fire, and Library and ultimately, continue to support the city's operating and sustainabilities reserves. Speaking of operating sustainabilities reserve, here's the balances that we have as of fiscal year twenty four-twenty twenty five, which is the beginning of fiscal year twenty twenty five-twenty twenty six. We have approximately $35,400,000 As part of the budget adoption, we ask counsel to maintain a 30% operating at the different funding that we have for both for the Measured Tea itself, but also for Fire and CSD and Library. That contribution is approximately $1,070,000 coming from unassigned fund balance into a reserve.

And that's an increase in fiscal year twenty twenty five, twenty twenty six, because our budget increases on the second year as well and our reserve is based on a percentage of our budget. So that requirement of reserve increases as well, and that's the contribution in fiscal year twenty twenty six, twenty twenty seven. That contribution is approximately $841,000 During fiscal year twenty twenty five, twenty twenty six, we are, planning to use some of the reserves. We have the $1,200,000 coming from the fleet replacement into it's a transfer from reserve into the fleet replacement fund. The $1,200,000 is primarily for the purchase of a new fire engine, which we expect to receive in fiscal year going full year able the replacement fire, year the $3,800,000 I'm sorry, the 1,200,000.0 is actually a contribution from the replace from the Measure T reserve into the fleet replacement for future purchases of vehicles.

The $3,800,000 is for the fire engine and also the dealer truck. So the two, apparatus is $3,800,000 The $1,200,000 we're expecting that the cost of the fire apparatuses is 3,800,000.0 but if there is a change order, increase in cost, then we'll have a little bit more funding that is available to pay for that. Under the uses for fiscal year twenty twenty five, twenty twenty six, we have a $3,500,000, coming out of the facilities to prepare. Currently, we have $5,600,000 This $3,500,000 is primarily the interfund loan between Measure T and the library development impact fee fund. In the analysis that we brought forward to council back in June 2024 and subsequently was approved by council recently in August 2019, was based on a cost analysis and a cost opportunity cost analysis between doing an interfund loan and also a normal bonding type of funding issuance.

When we look at the cost of interest expense, if we would have done a normal bond, especially currently with the current interest rate, it far exceeds the loss in our revenue income or revenue investment income. And so there is a benefit to the city to do the interfund loan as opposed to a normal bonding for the $3,500,000 And yes?

A couple of quick questions. So the bond, does that normally go on to our tax bill? So the bonds normally roll over into a tax bill and

it's paid by taxpayers? Not very specifically on this one. The bonding we would have done on this one would have been like lease revenue type of bonding. It's not a general obligation bond, which those are paid by our residents through property tax. This would have been a different type of bonding, which would been collateralized by other funding sources like sales tax.

So instead, you created a loan from your reserves or from your balances so you can fund the project. I also was at an event, and they were asking for donations for the project. Are we slightly under budgeted for it, or

do we not have enough funds to complete the project? So we do have committed or Council has committed enough funding sources to fully fund the project. The we do have an assumption of fundraising and donations we are accounting for, and we're still trying to meet that target. And so funding donations efforts continues through the process. Otherwise, if what we target for in terms of fundraising or donations comes short, then the city would have to commit additional Okay.

Funding

Thank you.

The loan, just to give you a few terms on that, it's for a thirty year loan, for 1%. This will be paid out of the library development impact fee fund, which is the obligation of that fund, right? That's primarily and that's one of the reason that we're doing the loan. It's not to remove that obligation. Development impact fee is the primary loan source for future developments as a result of housing developments and growth in population.

Okay. Thank you.

So with that said, the projected ending balance in our reserves for fiscal year twenty twenty five, twenty twenty six is $28,000,000 For fiscal year twenty twenty six, twenty seven, it's 28,800,000.0 I want to touch a little bit about fund balance and that is the resources that are available at each year end. Based on the numbers that we have today, we can project fund balance, but Jennifer will probably be working on fund balance classification, our finance manager, in the next two, three weeks as she works with our auditors to start working on the financial statements. So these two preliminary numbers until we determine fund balance based on the very specific government accounting standards. But we have a projection of approximately $20,100,000 in unassigned or available fund balance. In total, we have $63,700,000 in fund balance, but what's available for future use or commitment is approximately $20,100,000 The committed fund balance represents 68%.

So that includes commitments towards reserves and towards capital improvement plan projects. There's a little bit specifically for non spendable. This is primarily tied to assets that are not in a spendable format like inventory prepaids and things like that. And that concludes the presentation for the fiscal year twenty twenty fivetwenty twenty six. This is a receipt on file report.

If you have any questions in regards to our fiscal year twenty twenty fivetwenty twenty six, we're happy to answer those at this point.

Okay. Thank you very much for that. I think you addressed my question on the interfund loan. So it will be paid back from development Impact fees. That's what I heard, right? Yes. Okay. So for now, CSD doesn't need that money, right? The $3,500,000,000 that was allocated I mean, that was reserved for that.

Correct. And primarily, it was reserved for facilities repairs. And so we found we believe that it's an appropriate reserve to use for

replacement fund, I think my comment was, it's a very good idea to move that. But once we move those reserves into that new fund, then it's not really visible in Measure T report anymore, whatever it's done. So I just wondering how we're to make sure we're capturing whatever that particular money was spent.

Yes, absolutely. Great question on that. So with the fire engines and the fire the tiller truck, we're definitely going to report those back to you when we pay those out of the fire out of the fleet replacement fund. The fire the I'm sorry, the fleet replacement fund follows kind of the same or general ledger organization keys or organization codes. So we will be able to identify when a purchase is when a vehicle is purchased for a very specific department.

So we'll be able to identify. And primarily, that funding the additional funding of $1,200,000 primarily will probably be related to public safety. But we will be able to report back to you on the purchase of the two engines or the two apparatus for fire. And we'll make sure that and I believe our fire engines that are also purchased, I believe that on the actual truck, we do have a decode that said that is funded by Measure T as well. I believe that we're doing that.

But so in different ways, we do ensure that we report it back to you that how we're spending that funding out of the now in this case, of the future fleet replacement fund.

Okay. So on an annual basis, does that mean the allocations replacement would be effectively moved to that fund?

Yes. I mean

but we'll be recording as expenditures in this fund anyway, right? So this $5,000,000 you're capturing as an expense of Measure T, right? Yes. This coming

We're recording that as a transfer out. And so it will be, an expenditure will be show as an expenditure in Measure T.

Okay. Any other questions from committee?

I have a quick one. So on the onset of all this building that's going on, I assume people there will be more people in those buildings that have been built, and obviously more spending, so we'll see more income revenue from Measure T. Personnel costs will probably need to go up higher, though I would imagine. I see only just three people for the following year. Maybe two years from now, do you anticipate that going up significantly?

Yes. Considering some of the metrics that we primarily are police and fire would like to maintain in terms of time response. Our police department likes to have a metric of one police officer per 1,000 residents. Wow. Yeah.

So as population increases and we don't have a new position for police, but I would expect that subsequently after these two years, they will be asking for additional police officers. And so that could be budgeted depending, again, of the financial resources and the economic condition at that point in time could be funded by Measure T as a new positions for public safety.

Thank you.

All right. The last slide that you had in your presentation, that's what I was asking for. So I appreciate that. Can we put that in the report to the committee at least once a year, the end of the fiscal year, like this report right for example, right. You have the estimates already.

I know that these are not final because you still got to be audited, but it's good information to it doesn't have to have the chart, but these two table projected fund balance classification at the end of the annual report. That will be helpful. Will do. Thank you. Yes, I mean, I think when we talked about the budget last October, I believe, when we had $31,000,000 we had that discussions, right, and we're talking about that's too high.

So I'm pleased that's what I kind of thought we were going to come in at by '28 or something when we had that discussion. So that ends up being around where we came in. Yes, as you indicated, we're kind of pretty much flat to, right. We have new businesses coming up, but we kind of have these the economy that's not quite taking off yet. So this is a very good projection from my perspective.

That's kind of what we also were flat with respect to 25%, 26% and maybe a little uptick in 26%, 27% we're hopeful. So but 25%, 26% we kind know is going to be pretty much flat. So pleased to see that projection. Thank you very much for that. I don't have any other questions.

I'd like to welcome Evan and Jennifer. Thank you for your work to support the committee and for coming to the City Of Marietta. It's good to see you guys and nice to meet you. I'm looking forward to working with you both along with our Finance Director and our Finance Manager. All right. So that's I think that's all of it. This is a receiving file item. So there's no action needed.

Any

announcements All from the committee right. I think with no further business, this meeting will be adjourned until next time.

Thank you, everyone.

Very

Thank you very much everyone.