Finance & Debt Oversight Committee - Regular Meeting

Regular monthly meeting of the Finance Debt Budget Oversight Committee will come to order and the clerk will call the roll.

Sorrento? Here. Driscoll? Here. Gattis? Here. Hobbs? Here. Jones? Here. Martinez? Five present.

Excellent. Thank you very much. Good afternoon, everyone, on this warm sunny day. We will begin with the Director of Public Utilities and also Megan Robson, Director of Public Services here. So Director, go right ahead. Our first item on the agenda is the progress report on the collection of delinquent bills for DPU. Good afternoon. Thank you, Councilman, for inviting me to the committee to

present. So since July 2025, we have had a little over 2,700 people enroll in a payment plan to pay past due bills. Counting the people who were already enrolled, we are currently at 4,800 and some change plans, $8.50 or so plans. 90% of those plans that people are on, they are on track with payment, meaning they're not slipping on either their current bill or their past due bill. Since May 2025, and this is through the end of the year, my data is only good through the end of last year, we've collected $10,570,000 and we still have $6,200,000 that we expect to collect coming from the current payment plans.

And in that collection, we had just under 2,700 people who paid one time for their past due balance.

That means they paid 100% of what they owed? Correct.

They paid in full, yes.

And how many directors did you just say were pending or you expected to collect?

Well, we still there are still 4,850 or so active accounts, and we expect about $6,200,000 to continue to come in from those specific accounts in collections. Now we have done 142 work orders we sent out for turn off. And as you know, this was commercial. We hit a lot of the very large balances last year that we discussed at previous committees. And of the 142, 54% or 38% of those people paid when we went to once they got the notice for disconnection.

79 people we actually performed disconnection on. Again, this is commercial businesses. And some of these admittedly, I don't think we're currently operable when we disconnected, and thus probably why they were not paying. Of those 79 we disconnected, 32 got reconnected, so about forty percent and forty seven are accounts that never paid and we closed those accounts. They didn't reach out or make payment. And they're

not getting services now then?

Correct. They're not getting services now. Have, right now, nine pending disconnections, and that's out for work order that we're doing. Again, those are commercial industrial. And we are heading into very soon to be able to where we're going start going at higher end balances for residential.

We have got some discussions we have to have to finalize the program, and then we'll be able to start doing those turn offs. But there's been a lot of hard work by my team and working with Deputy Mayor Arnold to get us to where we can handle this program. We've got a good plan. And people are going to have plenty of opportunity to get on a payment plan with us before we would turn anyone off.

So are the are all of the ones where they were threatened with turn off, are those all commercial accounts? Or

Those were all commercial at this point. Commercial industrial. We have sent notices to the people who are residential that are in the dollar threshold and up, and they are aware that they are subject to disconnection, but they have not received a disconnection hangar. That's the step we have not yet taken. And so once we I think we have a finalized plan and we're making sure we like that and then we're going to move forward with that and we can share that as counsel pleases. When do you

estimate that they'll get a hangar on their door saying that they'll be disconnected on such and such a date?

So I would like to say that sometime by the February or March, we would be into full swing being able to go to residential. There are just a couple more behind the scenes pieces we have to make sure we have in place so that we can properly manage it and make sure that not only are we getting to those disconnections or hangars, but that we're able to serve those customers who are trying to come current with us.

Okay. All right. The commercial industrial accounts that did not respond, were

they were cut off? Were they large balances?

Yes. For commercial and industrial, it was anything right now over $4,000 we went with. So there were larger balances. Most of the very large balances that were over, let's say, dollars 100,000 or $50,000 they all by and large, they all paid. I believe I don't have the data on exactly what accounts closed.

But a lot of times, what we found was it's a defunct business that was no longer operating. We'd have empty storefront and a bill that had not been paid. So that I believe that really speaks for the volume of closed accounts. But I don't have exact figures for what the condition of those businesses were. But they are currently out of service.

So you're saying the vast majority of those that did not respond and been cut off are closed businesses, not operational?

I believe so, yes. All

right. Okay. All right. Councilman and Vice Chair Driscoll.

Thank you, Chair Sorrente. So one of the reasons I asked the DPU budget hearing to see revenue was for this topic. I'm curious, do we project in the DPU budget, do we project the $6 or so million that you plan to collect? Is that projected in the budget? And is it included in the rate structure for future years?

So yes, yes it is. So we traditionally we're approaching 97% collectability rate, which I think compared to larger cities, I think is pretty good. I'd like to see us back there. We're at about 95.5 right now for collectability. In our current rates, we have projected about a 3% non collectible in our revenue.

So that's in there. And we actually, in our budget, go into our accounts. And I'm not sure the exact accounting term for it, but we have an account set up that is meant to offset that revenue in the budget. So we do account for that loss in both the budget and in our rates.

Then I'm not asking if you account for the loss. I'm asking if you account for collections of delinquent.

So we I guess we don't we account for full revenue. So essentially, we project the revenue, that revenue that we project has been based upon assuming a certain non collectible, right? And then as we collect revenue throughout the year, that revenue is what we bill and cash receipts is different. So we kind of watch the cash receipts versus the revenue that we've billed and we look to see how closely that billed revenue comes to the cash receipts. And that's kind of how we kind of compare back to what we assume when we come up with our revenue model and our budget.

So it is worked into that

$6,000,000 or

whatever is worked

into? Yes, it is. And I know on the water side, as we had went into the regional water and came up with rates, it's been, I think, five years now. We had a seven year rate plan, rate structure with the outside communities to bring them all to one wholesale rate and started to change the rates in Toledo. They end in 2028 and we're starting to do our new rate model.

And when we do that new rate model, we'll be incorporating the assumptions that we have now. But to date, we have landed within about one percent to one percent point of what the rate model projected. And it's always been conservative in our favor. So we have I will say through previously Warren Henry and through Robert Kruszyski, who manages our finances in DPU right now, we have stayed very well within that rate model and we track that tight.

Yes, I guess I was just trying to get at like what do we if this is like money that we were counting on, what happens to it? But it sounds like it is accounted for

in Yes. Some It's accounted for. So it's not like we found $20 in our pocket. We already we're

So accounting for the $6,500,000 or whatever that you expect to collect this year, is that all commercial then?

No, no. Most of that is residential. Is residential, okay. So let me see. It is there's 69 commercial in that number. Roughly So 70 commercial. And now I don't know if that all collects this year because the plans are, right now we're kind of we're allowing eighteen months on a residential and twelve months on a commercial. So some of it I mean, we're going to collect a good amount of it this year, but it just kind of depends on when their payment plan expires. Okay.

And then when you say commercial, do you mean like are any multifamily rental units included in that? Or is that strictly side?

They are considered commercial. I don't know if any of those are included in these 70.

Okay.

I could look and see if you wanted that by referral or

Yes. I think we will ask for a referral on that because I guess the concern there is that somebody's water could be turned off and it's not their fault. You know, it could be that the landlord isn't paying the bill.

And I will say in the plan that we're working on for our full rollout of the turn offs, we are accounting for process for multi unit.

Okay.

That's one of the things that we're being very deliberate about that.

Okay, thank you very much.

Thank you, Vice Chair. Consulperson Gaddis.

Thank you, and thank you for your hard work. When you said there are 69 commercial businesses that are on the payment plan list, does that include industrial in that definition?

It would, yes.

Is there a way by referral we get a list of all 69?

Just the names of them? Yep. Okay, we can

do And zip code would be helpful.

We can do that, yes.

I appreciate that. And then when I look, I love to compare two eleven data to our data and they have that. I don't know if you guys utilize their data as well. They have a utilities for when people call in looking for help for utilities. And do you share information with them so as, people are calling for help and they reach out to two eleven in the Toledo area, they can give them links to our payment plans, links to the help that we have.

I will have to do that by referral. I'm not sure if we do. I know that Commissioner Geronimo has a pretty significant plan for outreach, and I know that our outreach coordinator, Cynthia Wilkes, she works to connect people to resources when they call in. But whether they do 211 specific, we'll have to look at that.

Okay. I appreciate that. Yes, it looks like last year there were in Lucas County and that you know, I know there's other other cities in there, but they had about a thousand requests. So even if a portion of that's us, that's a portion of people that maybe are desperate and don't know to reach out to the city. So I think that might be really important.

Okay.

With that, thank you. Thank you, Thank

you, council person. Next is councilwoman Jones.

Thank you, chair. My question is regarding the delinquent businesses. So do you often do like a cross reference to maybe a business or I don't know if it's like a business registry or a list of businesses that have closed so that will tie to when you would have to cut off the water or just to avoid you're not going to get the money back. It's you know kind of like wasting resources if you don't have that list to refer to. So is that something in place?

That is not in place. Typically, everything is run through the SAP system for us. So when we have a different level, so level 10 is when somebody is past due and they get a reminder and at level 30, they get a notice, hey, you're past due and you're subject to shut off. Level 40 is a turn off. So we run through that way, but usually we don't have any software system that cross references that or people who look at that.

It's all automated in our system. But once we do have them at the 40 where they're going to be disconnected and we're going to do a hangar, We go look at each business individually and check when they made their last payment. We check to make sure they didn't get current between the time that we said, hey, you were subject to disconnection and we're going to send an actual work order out to turn them off. It's something we could look at. I just I don't know how or where we'd exactly have to be able to fit that in the process.

But usually we find out a business is vacant or they're going to be closing because they've either, a, called and done a turn off so they don't accumulate more bill. Or in the case of, I think, some of these people were just didn't pay their bill and they vacated and now we're struggling to collect.

Yeah, those are the businesses I'm talking about. Like I don't know if it's something that is in existence, but I think that would be helpful at least, you know, as soon as they get a delinquency notice, you know, just check on whatever it is, maybe the chamber has something, I don't know, some registry of business just to check to see if they're even in existence. And then as they keep either ignoring or you're not getting any response, then that should send up some red flags like, oh, maybe we should check out this physical spot because you know, some people leave and don't notify you. So, I think that will help also in terms of just the funding so we don't keep running water to a place that's not even using it, thus trying to chase them down.

And we actually and again, this is some of the benefits of the new system that as it's come online and we're starting to be able to reallocate resources because of some of the benefits of efficiency in areas in meter shop and so forth. We're starting to look at processes, for example, we get a report that says there's zero consumption. So if your house normally does four CCF a month and we know, we know, we know and all of a sudden there's a zero consumption, we look at that. And so there we're looking at processes for how we get more efficient with checking those out. There are some things we can do in the office over the network.

And then there are sometimes it requires a truck roll to send someone out to say, is this vacant? What's going on? Is there something broken? So we do have some resources that way too that as we go through the next year or two, we want to start using the bells and whistles of our system. I'm really happy with the efficiency of getting actual reads and being able to get bills out now. But now we're getting down to trying proactive utility and go the direction you're talking about.

Okay, perfect. Well, thank you very much. Thank you, Chair.

Thank you, Doctor. Jones. I have a couple of follow-up questions. So I want to make sure we got this right. About 10,000,005 and $25,000 has been collected?

10,570,000.00

10,570,000.00 Okay, great. All right. And then was that your expectation looking at today from the $66,000,000 that was originally owed? Are you do you feel that we that you met the expectation or is that low or is it high?

I think given I think it's been high given the fact that we have not yet went into full turn offs for residential. We got good response from the companies that are active to pay us last year on the commercial industrial side. And there were certainly spikes in times where people were enrolling in our payment plans when the media would hit and say, hey, the city is turning off. I think to have 4,000 plans, I mean, that's you're talking somewhere about 3% of our customer base is on a plan right now or a little more. So I think for the way we have rolled the program out, we've gotten a very good result.

And I hope that as we continue to build out our efforts to collect, I'm hoping that we're going to see even more improvement. But for what we've done, I think it's been a good result.

Okay.

All

right. And then with how much do you have any idea how much you might collect during this year, 2026? Too early early to tell.

I mean, I would expect that we would probably still remain in that $10,000,000 range. This data was only from May to the end of last year, so there's four months missing. But we also collected on a large industrial balances that kicked that up. So I would project that it's possible to still collect around 10,000,000 And some of that will depend on how many people are one time payers paying off their balance or how many of them go to an eighteen month payment plan.

So maybe an additional 10,000,000 on top of the $10

Well, I think, well, I mean, I think grand total will come to maybe $20 ish million, but I think we'll collect maybe in total about $10,000,000 of the past due.

And how if you know, how does that stack up against other Ohio cities, Cincinnati, Columbus, Dayton as an example?

That's something we can research. I don't have their collectability rates. I talked to a guy from Detroit area. And again, he said he worked at he was a guy who worked in the finance area, but I don't know how accurate this is. I thought they were somewhere around 40% non collectible. So in certain cities, it just varies. But we could research that and see if we can get collectibility rates from some of our peers here in Ohio.

I'm asking that because there was a Toledo Blade article a few months ago that basically said Toledo had the highest amount of unpaid water bills, DPU bills compared to Cincinnati, Columbus. I don't have the article in front of me, but as I recall, we were leading the state in uncollected.

I remember that article and one of the things that we're to do to look at that. So right near, I would say it was probably around 2014, 2015, Department of Public Utilities adopted a write off policy. And using our write off policy and the debt schedule for collectability that comes from the Department of Finance, we use those to determine how much is going to be uncollectible and how is due to us past due. So one of the things we're setting up is so Raftelis, they're an advisor for utilities and they have done sewer model and they're doing our water model as far as rates. And then we have PFM and I think most of you are familiar with Bethany Pugh, who's come and presented.

Between those two entities and our finance section, we're looking this year to put together a different look at what we should be doing for a write off plan. And so we think five years based on talking to them is too long. So for example, maybe Cincinnati has a two year write off plan for their past due balances. And so comparatively, they may if they were at the same five years as us, they may have ballooned past us, we just don't know. So some of how we look at our write off policy does affect us.

But that's something we know that we want to be up to current and with the way utilities are handling this today. The other piece of that, even if we were to go from a five year plan, let's say, to a three year or two year write off plan, finance Robert, my finance head, he could explain a little better. But essentially, because of the way we would have to offset those past due balances, it would probably take a couple of years to transition into, let's say, a three year or a two year look. You just wouldn't go from five to three in an instant. But we are looking at that.

And I think we'll probably have to, when we reach out for collectability, see what their policies are too because it would make a difference in comparing an apple to an apple.

Yes. I think it would serve as well in your communications with other cities, our size or larger, seeing what they have done in their efforts to collect on delinquencies. And maybe someone has a better idea, probably not, but I don't think it hurts to ask.

Yes. Well, I think one thing I kind of want to give us some credit for here in Toledo. We've worked a lot on affordability and the other piece of that is, is part of that is our ability to give payment plans. And it's my understanding that Columbus doesn't even do payment plan. So that's one of the things I think recognizing some of the needs of our customers and the community. We try and be lenient with getting people into plans as opposed to one time collections and so forth. So sometimes that slows the rate that we can collect, but it's more affordable and our customers are able to true up with the city.

Right. Thank you very much. Councilman Martinez?

Thank you, Mr. Chair. Just a quick question. So I want to make sure I understand. So outstanding debt that we were showing is a combination of how many years?

It's a five year period.

Five years. So that's $60,000,000 over a five year period? Yes. Okay. And then so now we're looking at readjusting that to a shorter period and Yes. They have a write off policy, That's probably more in line with other municipalities. And then we have payment plan.

Correct.

And then so I guess my last question is, it seems like we're going in the right direction in terms of bringing ourselves in line to what modern municipalities are doing right now. So on that bad debt, instead of writing off, do we have like a workout plan or maybe a percentage So we

do so there are times when you get your water disconnected and people can come do settlements with us. We work through that. There's a process.

So you do have settlement plans? We do have settlements. That's what I was trying

to allude to. Okay.

We have settlements. At the same time, just because it's went past the five years doesn't mean we haven't sent it to debt collection. And we're looking we've been talking to law about looking at how we might be able to improve debt collections. One of the things right now is our debt collections don't go against somebody's credit score. And so the question is, can that go against the credit score?

Should we put it against the credit score? So there's some questions out there right now. I mean, as you know, it's pretty easy with modern technology to see who's calling and you're going to just hit end if there's nobody impacting credit score. So it can make it a little harder on the collection side. But we still go after collections even after five years.

Got you. So then of that bad debt, do you have like a breakdown of residential versus industrial business? Like what does that look like? Is it like fifty-fifty? Is it 25 residential, 75% business? 75% residential, 25% business?

So ballpark, don't don't have that that is that's not something we generally have in our standard report. I could look into seeing how well that could be created. I might be able to get us at least in an idea of a ballpark without it being exact. I just I don't know the complexity of going into the system and trying to figure all that out. But we can certainly get an idea of

that. That would

be super helpful. Just so we kind of can at least identify where some of the pinch points are for collections. It's one thing to go after a resident and you can turn off the water because they don't really have any other place to go. It's another to go after a business who may be in a separate LLC or maybe flip their properties or whatever because the water runs with the land, not the current owner, correct, or the user, so to speak. I'd be curious in terms of what type of workout plans are available for landowners who had bad tenants that never paid that are now under.

Because at the end of the day, the landlord is still stuck with this bill that may not be able to pay. Now you have a dead property that they can't reactivate because they have an outstanding water bill that they can't get turned on. So I know these get a little bit into the weeds and complex, but we should really start thinking about especially around our industrial and business areas, how do we reactivate these sites. I don't know if it's a forgiveness or hey, let's restart Mr. Landowner, you want to get this business back up and running or you want to get someone in your space.

How do we have that conversation with the owners to be able to help them get their space occupied and not hold them accountable for bad actors that they may have rented to? Now don't get me wrong, there's probably some bad actors just not paying their water bill. I'm not and we shouldn't disregard that. But I think if we're looking at from a business standpoint to be a little bit more business friendly and not create dead properties. We we should try to have some sort of strategy about how do we help landowners and even multifamily tenants who may be victim of abuse from their tenants because of retribution or what have you.

As a landlord, I have seen some crazy things with water because that's the way they can get back at the landlord for being evicted or what have you. So and vice versa. I mean, it goes in two ways. So I I just wanna make sure that we're being conscientious, not punitive, but have an accountability, but to a certain degree.

It's So for us, we do talk about that. I can't say that we have come up with great solutions. And I think that's probably industry wide. As the utility, it's very hard for us, even when there's agreement between landlord and tenant agreement and so forth to get into like who's at fault, things like that. So we know it goes both ways.

We know it's not always a tenant, it's not always a landlord. But we do look at that, try and consider it. And it is in our thinking when we're talking about residential or apartment units. So we are aware of it. And then I think you probably know there's some legislation that state, I don't know where it's ended up, but last year it was circulating around to address some of this, which would have impact our ability to collect. But we're still waiting to see what happens with some of that.

At the state level?

Yes. Got

it. Oh, yes, yes, yes, Got it. Okay. All right. Thank you. Thank you.

Thank you, Councilman. I just want to follow-up. So in your judgment with collections being what they are and perhaps $20,000,000 will be collected by the end of this year, what effect will that have on sewer rates?

It really won't affect sewer rates because everything that we collect, we've already considered revenue. So again, we build in when we look at our rate model, we say there's a certain percent that we don't expect to collect. And that's part of making sure we still can collect enough revenue knowing that we're not going to get 100% of that revenue. But once we book that as revenue in the accounting system, that actual collected bill revenue, we've already accounted for the money that comes short. So if we booked $20,000,000 in revenue in the first quarter and we collected $18,000,000 of that in actual cash receipts, it's still considered that we met the revenue projection.

And so when we find when we collect money that was uncollectible or didn't get paid on time or whatever, we go get past due money, we've already accounted for it. So it doesn't really give us any extra cash boost. For us, it's trying to get collections in line with what our collectability rate we assumed in the rate model is. Want to get those cash receipts as close revenue build as we possibly can. And like I said, right now we predict about 3%.

So we're trying to kick that up another 1%, 1.5 at a minimum. So that way we're within what we're projecting. And if we're not able to do that, the next time we go for rates, we might have to say, well, we're going to have to consider 4% uncollectible. And then our team would work with Raftelis to put that in that rate model and say, what does that mean to the rate? Does it mean instead of going up three, it goes up 3.2 or 3.1, that would depend on the factors in the model.

I mean, as you know, and we've had numerous discussions on this, we still have many customers that are very upset about the elimination of winter averaging on their sewer bill. And clearly, during the winter months, we haven't had many complaints, but you know what's going to happen once spring arrives and people are watering their lawns and filling their pools. And I can tell you that people continually have mentioned to me that they're hopeful something can be done. I've asked the law department for an opinion probably two months ago regarding the legality of having the city pay for a separate meter, separate irrigation system going in people watering their lawns and filling their pools. I haven't gotten that answer back yet.

Apparently, it's a very complex issue that's taking probably about two months, at least two months I asked for this in writing. I've had discussions with the law director and I'm I'm as many of you know, I am an eternal optimist. So I'm at hopefully hopefully, a miracle will occur and we'll get an opinion from the law department as to whether we can pay for the installation of that type of system and then charge customers each month over a twelve month period. Columbia Gas has offered this. I know Toledo Edison has offered that on post lamps.

So I'm hopeful that we'll get an answer from the law department because we need to address this and that may be somewhat of a solution to good people that are paying their bills. 95.5% of our customers are paying their bills on time. And I think we owe it to these folks to get an answer, so they can plan accordingly. Most recently, I had a doctor's office on Sylvania Avenue contact me because again, they only have a automatic sprinkler system in the front yard of their office. That's it.

They don't have in the back as a parking lot. And the other thing that we're hearing is when we water or when we fill the pool, the water is not going in the sewer, why are we being charged extra for sewers? And then of course the other concern I'm getting from people is that outside of the city of Toledo, people are still enjoying the winter averaging rates, Sylvania, Ottawa Hills and so forth, Maumee. But citizens of Toledo who by the way built the system, built the water plant, invested lots of money in those facilities that we have so that we can be compliant with the EPA. They're saying, hey, how about cutting us some slack?

So I just bring that up as a reminder. Am eternally optimistic that someday I'll get an opinion from the law department, but I know it's been at least two months.

Okay. Now I'll make sure I relay your comments to

Thank you. Thank you very much. Any other questions from members of council? Okay. We appreciate your time here today, Director and Director. Thank you very much.

Thank you.

Okay. Thank you. Next, we'll hear from the finance department. Good afternoon.

Thank you. Good afternoon Chairman Sorantu, Vice Chairman Driscoll, members of the committee. Melanie Campbell here today with the team to present our December finance reports. Joining me at the table, have Commissioner Tom Buckley, Commissioner John Zavisha and Commissioner Natalie Bronagh from purchasing. Before we dig into the December reports, just want to start by saying that although we're reporting on December for us, the year is hardly closed.

We're going through our year end processes right now, which includes collections on income tax that will happen through the February as well as accruals, invoices are processed against 2025 and then have actuarial adjustments. So I say that to say that as we're looking at numbers here today, they will change as those processes occur and we head into the audit later this year. But we're happy today to give you an update on where we're at. And with that, I will turn it over to Commissioner Zavisha for an update on income tax.

Good afternoon. Going be reporting on Pages two and three of the report. For the month of December, withholding was down just shy of $1,000,000 But like I'd mentioned last month, this is some months you have five Fridays, some months you have four and stuff. So the strength of November then is offset by December. So I really look at those numbers to sort of take November and December together.

Combined those two months were up about 2,300,000 or 7%. So that does now push us to just over 3.1% for the year in the withholding category or $5,400,000 So took us a little bit more in the second half of the year to get these numbers going, but we're definitely where we want the withholding number to be. Business net profits for the month up $275,000 just shy of 10%. Just a reminder on that one business net profit, your fourth quarter estimate payment is made December 15. So this isn't sort of an important month for us, but our Ohio opt in payments won't come in until the thirteenth period.

So in this category, although we're up $4,000,000 or 15%, we do already know in the thirteenth period the numbers will be down. We had a very successful twenty twenty three, twenty twenty four where we got some strong payments from the opt in program in the thirteenth period. We already know these aren't coming in this year. Some of them we just simply saw earlier in the year as you can see there were three different months where our collections were up over $1,000,000 for that individual month. So although business net profits shows currently as a positive number, it will actually end the year in a negative number.

In the individual category, those estimate payments weren't due till January 15, so we'll see those numbers in the thirteen period, but we were up $153,000 for the month, putting us up $5,800,000 for the year. So, on a year to year basis 24,000,000 to $25,000,000 we actually show currently being up $10,100,000 or 4.8%. I'm going to continue on to Page three then because on this page you can better see where the thirteenth period number actuals for 2023 and 2024, dollars 28,000,000, dollars 30,000,000. This year we were only projecting about 21,000,000 We'll probably come in close to that. We're hoping to stay within 1% of this $238,000,000 number that was the budget.

So we'll keep an eye on that projected refunds was $6,000,000 we're currently at 4,800,000.0 same thing we should come pretty close to that $6,000,000 once our thirteenth period calculations are done which obviously run from January 1 till February 28. And I am open for any questions on these two pages.

Any questions from members of council? Okay, next.

I'll move on to Page four of the report, which is an update on general fund revenues. You'll see overall, collections are at 95.2% of the total. As you look through the report, commissioners Avisha noted, we'll still be collecting income tax through the February and expect that number to move closer to the budget estimate as we close out the year. Property taxes and licenses and permits, we've met our budget estimate on property taxes for licenses and permits were at 93 percent. I don't expect as we close out the year we'll see much movement in final revenues in that category.

As you look at intergovernmental though, we do have one casino quarterly payment that will still come in. We expect we'll see that in February. And with that last quarter's payment, we should be hopefully right on, if not maybe a little ahead of budget there. In the category of charges for services, overall, we're at 95% as we've seen throughout the year that the revenues in the EMS and the BLS category have overall helped our charges for services totals. We do have some quarterly payments that will come in with the cable franchise fees though there in that category.

Investment earnings at $5,800,000 we've actually exceeded that budget estimate at this point in the year. And then fines and forfeitures at 97 percent, again, I don't expect we'll see much movement in that category, so we're right around that $2,800,000 that we had projected. In the other revenue category, we've touched on this I think in previous finance committees. We did have some settlement proceeds that came in related to PFAS litigation and that's what's driving that revenue collection through December. And then lastly, you'll see in the transfers, dollars 24,000,000 has been transferred in from CIP and then the other transfers come in from the TOLA and ARPA, which are just at about that $5.55600000.0 dollar budget estimate.

I'd be happy to take any questions.

Councilwoman, Gavis.

Thank you. Up where, it says licenses and permits for group b, we've we've brought in a lot more than we, accounted for. It's up six points. Is there a reason why it's higher than what you guys projected?

The category of group b are building electrical license renewals. So we'd have to check with building inspection and see if there's just more people that have gotten those licenses or if timing wise people have renewed them earlier this year than they have in prior years, they're due around the end of the year, I believe.

Okay. Is there and I can I'll do this by way of referral, but can we get a list of what each permit, license fees, group A and B, what falls under those categories? Yes. We can send that. Okay. Thank you. Thank you, chair.

Thank you, council person. Councilman Martinez. Thank you, mister chair. Just a quick question on other fees charges, 3,800,000.0 and we're at $3,100,000 exactly is that?

There is a year end entry that we'll do related to a cost allocation that's charged to the road improvement fund for the cost of collection that tax does. And so that's something that will be completed at year end. It's budgeted at about $400,000 Great.

Thank you for the clarification.

Thank you, Councilman. Just a follow-up on the EMS and BLS transport. Do you expect additional revenue to be coming in that would apply to 2025?

I would have to double check if there is any, I think it would be minimal.

Okay.

Yeah.

I'm just because again, we took over ALS for the county and I'm just wondering if those numbers are reflecting that, but what you're saying essentially they do reflect Yes. Okay, thank you. Councilman and Vice Chair Driscoll.

Thank you, Chair. So, Dirk Campbell, at what point in the year do we do the transfer in from the Budget Stabilization Fund?

We actually don't make an entry into the system, it's as we close out the year and the audit is finalized. It's really how did the final revenues look compared to the final expenditures. And then as we reported in our financial statements, you'll see that use of fund balance.

Okay. And so it's projected as best you know to be about what we thought it would be? Yes. Which is like around 23?

Closer to like $30 plus million.

Oh, in the $25 yes, right, the $24

budget.

Yes, okay. Or in the $25 budget, Okay. Excuse Thank you.

Okay.

All right. Speaking of audit, how many findings did we have in last year's audit?

The audit was completed, there was one finding.

One finding? Yes. Right, which is very good.

Yes and it is posted on the city's website as well.

It was not a major finding. It was essentially an accounting issue and it was considered more of a minor issue. Am I correct on that?

Yes. Some entries that we had to make after we filed our basic financial statements with Hinkle, but before our final ACFR was presented.

Okay, great. Okay. Thank you. Proceed to the next item. Thank

you. Moving on to the expenditure pages on five and six, you'll see the general fund breakdown by category and by cost center. Overall at 96.6% of the budget, you'll see positive variances overall in labor as well as in services and supplies. We saw positive variances in the non labor categories through most of the year. And as we close out the year, I expect we will have some savings overall compared to budget in those categories.

They will be impacted though by our final accruals, close out of internal service funds. So we will see some change within those numbers. On the labor side, the biggest piece we continue to watch as we finalize everything this year is the healthcare costs. You'll see overall employment tax in medical, we did amend the budget, it's running slightly under, but we will have final actuarial adjustments and closeouts that could impact that medical number.

Is there a specific attribution to the increase in police over time that went over budget?

Combination of two things. The first would be the retro that happened once their contracts were finalized, which would have covered '24 and then '25 as well as some special events that would have happened during 2025.

Okay, great. Thank you.

The next page is a breakdown by cost center. You'll see again like we've seen throughout the year several areas where we have trended under budget. Facility operations area is ahead of budget. That's chargebacks that happen for work done on community centers and at the health department. So that one did exceed the budget estimate. Although we will have final reconciliation and close out of all of those costs. We could see some change in that number as we close out the year. Pages Okay. Seven and eight summarize the all funds. And again, we will see movement in these numbers.

There are several areas we'll be making year end debt entries as well as transfers for debt and other charges that happen throughout the year. I'd be happy to take any questions on the report.

My understanding is that the administration has applied for a grant to demolish the health department building. I don't think we've heard anything on that. Do you know anything about that?

I will have to double check on that one. Yes, I'm aware of the application, but I cannot recall if it was received or not.

Okay. That would be from the state of Ohio. So that would be great news if we could get that. That would save us a considerable amount of money. Okay. Is there anything else you want to present?

I just wanted to mention that we submitted the CIP report, which shows all the projects through the December as well as the ARPA update that we typically give from when the program started through the December. The report reflects on the ARPA side, there's 13,000,000 remaining to spend by the deadline of twelvethirty onetwenty six. We did include an update. We asked each department to provide an update on their spending plan just to make sure that they're on track to spend all of those dollars by the end of that timeframe that was in the back of the report. And we just also want to mention that we have our quarterly ARPA report due which will be submitted at the end of this month.

That's a requirement for U. S. Treasury as part of the ARPA guidelines. I'd be happy to take any questions.

Regarding the issue that several council members have discussed and asked about, the interest that we earned on the ARPA monies, my understanding is that it's approximately $176,000 and that was deposited into the general fund. Am I correct on that?

We've earned when we built the budget for 2026, we had done a calculation of interest at that point projected that could be used for the general fund. It was about $1,000,000 So we did program that into the 2026 budget to be transferred in and support general fund operations. Since that time making that budget estimate back in October, we took a look at how year end looked for interest earnings in ARPA and there was an additional approximately 176,000 that could be programmed into transfer to the general.

I should have made that clear, but I'm glad you clarified that. Okay. So that $176,000,000 goes into the general fund and then we go from there?

It could be right now we've only in the budget proposed a million at the time we were doing the budget it was about 1,000,000.

Because as you and I have spoken, we have several council amendments where it has been stated that they'd like to get that out of the extra interest that we earned $176,000 So I just bring that up to clarify that. Great. Vice Chair Driscoll.

Thank you, Chair. On that note, in the budget though, we show that we're putting it into the general fund, the ARPA interest, correct, the investment earnings?

We do, dollars 1,000,000.

I don't think the amendments can necessarily say that they're spending from the ARPA investment if that money is essentially already obligated. Is that correct? I mean really, really we're taking from the range.

That $1,000,000 would be obligated. The additional estimate, it's 172,000. Since we did the budget estimate, that number has gone up by roughly 172,000. So that would be a thing

That's that's not programmed to not but I think the amendments use that as the source are well over $172,000 I don't know if you've seen the list, but I'm just from an accounting standpoint, it's coming out of the rainy day fund at the end of

the day.

Some of these so I appreciate this report and I know that it wasn't you don't know what I'm holding up. This is the ARPA expenditure update. I appreciate this report. Thanks for getting it in time. Some of these I just think

are

insufficient answers and I think we'll probably need to dig down a little further in terms of referral here. We just there's an LED there's a street lighting thing on the current agenda and we've got $8,000 It says the remaining amount is currently being programmed for final expenditure. I know you think that about all of these things, but this isn't really an explanation. And then again, is not your fault because it's not the finance department, but we need a little further explanation than, oh yes, we're going to spend the money, which obviously you think you're going to spend all this money down. So I just have a few questions about some of those.

I think I'm just going to it's tricky because it's not necessarily your responsibility, the finance department's responsibility to respond to these referrals. But yeah, found some of these. I would encourage everybody on council to take a look at these, but I found some of them to be pretty insufficient in terms of the detail. This is at the end of ARPA summary. Normally we just get this one pager from finance department, but at, yeah.

But I had submitted a referral just to get a detailed explanation of how we were going to spend the rest of the ARPA dollars. And some of these, well they lack sufficient detail in my opinion. That's not really your like I said, it's not the finance department's responsibility, but we do need an answer on some of that I think we don't know. It's like the medical debt forgiveness as an example. You said we had the final invoice. Is that invoice for $147,000 or $147,779

Yes, it would expend. For that one I can answer Councilman Driscoll, it would expend the entire balance.

Got it. Okay. So there's just a few examples like that that I think there's still a little work to do on this, but I appreciate what you've compiled so far. Thank you.

Okay. And I would just add to that our city auditor, Mr. Revolski, did do some research on if there were any unspent ARPA dollars for various projects. If there was $50,000 from the YMCA project, for example, the Raymond Palmer project. And the research that the auditor found was essentially that why don't you explain it? Here's the CPA, not me.

Sure. So I was looking at I believe the Department of Treasury State and Local Fiscal Recovery Fund Faxing Questions and then that it goes over guidance on what could be reallocated if those funds weren't spent or if a project weren't spent maybe came in under budget or for whatever reason they couldn't be spent for that project or if for whatever reason the original purpose was found to not be aligned with those ARPA guidelines. But it looks like to me at least that the funds would need to be spent. They could be reallocated towards something that was obligated as of the obligation date. So, I'm sure you guys are aware as you're going forward, but that's a good source of guidance.

Okay. Thank you for that explanation. Councilperson Gaddis.

Thank you. And thank you for the report. I would like to bring forth to present to chair that as an oversight committee perhaps we could host the categories, the people that were in charge of these programs, if we could host a special meeting or have it in our monthly meetings to be able to ask questions. Councilwoman Doctor. Jones and I were invited to a meeting this month with representative capture about the ECDI Erie Street market that we put half $1,000,000 for.

And I think the complex nature of this is ECDI was defunded then SIFT was defunded and when we built these projects, we built these projects with the SMART goals and the amplification. So how are we taking for example the Erie Street market, we put $05,000,000 in, representative capture was able to put $1,100,000 in and she had a meeting with us saying, hey, this money has to be spent in three weeks and we were unaware of ECDI not being funded and so the implications of some of this ARPA funding and the tie ins with other opportunities I think as the countdown is coming and things are changing with the new administration at the federal level maybe dedicating time to actually meeting some of these people that are in charge of the projects here or asking them to come so we can get down into the nitty gritties, hear their success stories for the great ones and then also be made aware of some of these problems because I was grateful that representative capture came to us, but it would have been nice for us to have known and not received some of that information firsthand. So I'm just presenting that idea to this committee that perhaps we could invite and then have detailed five minute presentations or whatever.

Thank you, Chair.

Thank you, Councilperson. I think that's a great idea. And why don't Doctor. Jones and you and I get together and make sure that we've got the individuals that need to be here and also if the finance director can also be here for that to answer any other questions. I think it would be great to have a progress report and to see exactly what was done and if there were any issues that came up that we need to be aware of and also the successes. So, I absolutely agree with. So, let's talk about it. We'll schedule something in the next in the next month. No reason we can't. Okay.

You very much for that suggestion, Doctor. Jones and Councilperson Gaddis. All right. Councilman Driscoll, Vice Chair.

Thanks again, Chair. Yeah, I think the money allocated for SIP probably the most obvious example because in this explanation we've been given from the administration says, the department remains confident that an eligible project will be identified. So maybe that's good, maybe it's not, but I would recommend the ARPA plan initially was a collaborative process between counsel and the administration. The amendment that we did almost two years ago, year and a half ago was a collaborative process between the council administration. If we don't know what this money is going to be spent on and six or seven or eight months from now, the administration comes to the council with a plan that we don't agree with, we could be very well at risk of losing the dollars.

And I think if there is any money to be reallocated in so far as we can according to the guidelines that our auditor has briefed us on, we should again, this is not a finance department thing necessarily, but we should engage in another round of a collaborative process between counsel and the administration if we do have to reallocate any of this money. Thank you.

Thank you, Vice Chair. Anything else?

Just one item to mention because I've been in a couple conversations on the one you mentioned specifically Councilman Driscoll with the law department and in that case a lot of the conversation has surrounded that it's been obligated and the obligation needs to stay the same for something in that original intent of small business assistance and food. So we've had those conversations, but I will share your feedback as well with Director Sellehors. Nothing further from finance.

Nothing further, okay. Commissioner, the stacks unit proceeding according to plan at this point?

Yes. Like I mentioned in earlier meetings, our projected budget for them was $6,000,000 this year, and they ended December at $6,200,000 Second strongest year in twenty five years of the program.

Alright. Any other questions from members? Is there anyone in the audience who care to address the finance committee while the finance department is here? Seeing none, we'll proceed to the city auditor's report. Thank you very much.

Afternoon. John Rovulski, city auditor. I'll provide a quick monthly update. I've been working on investments reviews, which that's in progress and should be released shortly. Also, the grass cutting audit is underway, and I'm reviewing support provided by the administration. I've also been assisting counsel with various budget questions and advising there. Let me know if you have any questions. Thank you.

Okay. Any questions for the auditor? Seeing none, is there any other business before the committee? Seeing no other business, we stand adjourned.