Finance & Debt Oversight Committee - Regular Meeting

Yeah. Sorry.

Good afternoon. The regular monthly meeting of the finance budget and debt committee will come to order, and the clerk will call the roll.

Sorrento? Here. Driscoll? Gaddis? Here. Hartman? Here. Hobbs? Martinez? Present. Floor present.

Okay. Thank you very much. Good afternoon, director Campbell. And I will turn the agenda over to you with the finance report.

Thank you. Good afternoon, chairman Sirantu, members of the committee. Here today to present February revenues and expenditures. Joined at the table by Tax Commissioner John Zavisha, our Accounts Commissioner Tom Buckley, and Dan Mori, our Wage and Our Compliance Commissioner is with us in the audience. Hopefully everyone has our packet in front of you. And I will turn it over to Commissioner Zavisha to start with an income tax update.

Good afternoon, Commissioner.

Good afternoon. Yes, starting on page two, I'll go over the February numbers for for 2025. The withholding category in the month of February we were up just over 1,900,000.0. As it happens a few times a year, this is just one of those where it's a timing issue. The month of January had five Fridays. Last year that month was March. So the interesting thing in this one is normally it's the very next month that will reverse. In this case those numbers won't reverse till April since February is exactly twenty eight days. So you don't get that fifth Friday to the following month. So withholding overall after the first two months, up over just over 2,000,000 or 12.5%.

You'll notice in the business and individual category there's very little money that comes in during that time. Since we do have a thirteenth period, everything that's 2024 or prior actually went back to 2024. So what you're really seeing here in these two categories is truly payments for 2025. And with those payment the first quarter payment not actually being due until April 15, it's the smaller numbers. So these two categories actually combine to be less than a quarter of $1,000,000.

But the business category is up just over 11,000, individuals up just over five. So overall this puts us up 2,100,000.0. But again, we have to watch that the majority of this is simply the withholding number coming in advance on that. So this makes up about 8.2% of what we'll collect for the entire year. So just getting ready to head into our most busy months. If there's no questions on this, I'll move on to page three. Okay. Page three. Okay. On page three here, I'd like to focus more on the 2024 unaudited numbers.

So again, like we had talked about last month, by the time we would come down here this month, we have a much better idea of where 2024 is going to land. So for the general fund, after after we take our projected refunds for 2025 out, that'll leave us with a number of 237,700,000.0. The budget was 226,400,000.0. The majority of that difference ended up coming in in our business category. The interesting thing about the business category is it's a small group of companies that their net profit return can really move that number one way or the other.

This year for example, it happened to be that those five companies actually represent 56.9% of the total business collections for the city of Toledo for a year. So you can definitely see how a very small group of companies can really move that needle positive or negative depending on how they are. Road improvement fund after the projected refunds for 2025 are taken out that leaves it at twenty six point one. It had a budget of 24.6. So in both cases those numbers came across as better than what we had expected on that.

And then there's also then the breakdown to show for 2025 where January and February's are the actuals. Everything else we're giving sort of a monthly estimate of where everything else should land for that year. And if there's any questions on either of those pages, I can take those.

So Commissioner, for the results of '25 so far year to date, things seem to be moving along as we projected at this point.

Yes. Because like I said, I mean we are up. But you know, you have to just sort of watch that at this point to go what was the reason for the gain. And it's the five Fridays in the month. And then like I said, just on the net profit side, it's so early in the year for that.

Okay. And then when do you expect the total income tax revenue, road tax revenue, will be audited and complete?

That will flow through our normal year end audit process. So we'll submit our financial statements to the state at the May. And then the auditors will finish their audit during June Okay. With a report released at that point.

Have we ever had a substantial difference between your number unaudited and what the auditors have come with on income tax revenue?

Not that I recall.

I can't recall any Okay. Very good. Okay. Any questions from members? If not, next.

Thank you. Page three of the report continues with the general fund revenues. You'll see through February 25, revenues in total are at 10.6 of the total budget estimate. Comparatively, at the same point last year, we were at 9.6%. So doing just a little bit better overall. Again, still very early in the year with several of our categories of revenue impacted by payments that might come in quarterly and haven't been received yet. But as you look through the report, you'll see property taxes towards the top of the report. We did expect in February we would receive that first half settlement. We're at 54% of the budget. So aligned with where we would expect to be since those come in twice a year.

Licenses and permits at 11.4% through February '25. Down just a little bit compared to where we were last year, but at this point not a cause for concern. Intergovernmental revenue overall is at 8.4 ahead of where we were through the same period last year. We do have in this category though, a couple different areas where we get quarterly payments that we haven't seen yet. Casino revenue for example would be one of those.

Charges for services overall at 13 percent. Again in this category doing a little bit better than what we saw at the same period last year. EMS fees that is also one that is impacted by quarterly payments. We have not seen those ones yet as well as cable franchise fees. As you look through the rest of the report, I'll just draw your attention down towards the other financing sources.

This does include the budgeted transfer in from CIP, which we make at year end, as well as any other transfers which for 2025 include transfers from the toll lot and from the ARPA fund due to interest earnings that were in the budget and plan to be transferred to the general fund. But overall, still early in the year, but nothing at this point that would cause us to recommend changing any of our estimates.

Okay. Very good. Any questions? Okay. Next.

Next, we move into the general fund expenditures on the next two pages. The first is a summary by category. We're at again 16.7% of the year expenditures for '25. Committed and actual are at 16.8. So right in line overall with where we would expect to be.

As you look at the report, a couple of things to note within the labor categories. We do have early in the year stipends that are contractual, that are paid, that impact the labor cost in that first row as well as the other labor expenses. And so we do see variances early in the year due to those. But we do expect those to go down as the year progresses. Overtime costs overall are under budget, a trend that we also saw last year.

As you look at the non labor categories of the report, supplies, we do have 18% of the budget committed or expended. That does include clothing and linen. That's a big line item within that category. And that covers uniforms for police and fire. And then in our service category, we saw this last month as well. We do have some quarterly or semi annual payments which cause that variance. We do have quarterly payments for the nine eleven Council of Governments as well as our building and space rental. And then on the semi annual basis payments for CJCC and the health department. So again, not a cause for us to recommend any changes to the budget at this point.

All right.

And then breakdown on the next page is by different cost centers within the general fund. A couple areas as you look shaded that are running more than 10% ahead of where we would expect them to be through the year. Human resources, we do have funds committed or encumbered for contractual services that covers like our EAP services, neogov, testing that happens for police and fire. And again, the departments will commit those funds and then spend them throughout the year. So not a cause for concern on their budget.

Finance ERP, we saw this one last month. It's related to our annual licensing that covers the entire year for the SAP ERP system. In urban beautification, beautification, those are funds that are committed for the demo program for disposal services and landfill costs. And then as I mentioned on the first page, under safety administration, you'll see the impact of the regional council of government's quarterly payment and CJCC semi annual payment that have already been made at this point in the year. Happy to answer any questions on So

pretty much everything is according to where we thought we would be pretty close to that.

Yes. Again nothing concerning within

Human the resources is a little bit higher but you could explain that. Yes. Thank you.

Next. All funds revenues and expenditures on the next two pages. Again, through February we're early in the year so we have certain things that we haven't seen, debt payments for or payments come in. But again, nothing that would cause us to recommend any changes to the budget at this point. Okay.

We do also in addition to our revenue and expense reports have our monthly ARPA, IRS and CIP reports I can touch on for the committee. Okay. Maybe starting with the ARPA report. From when the program started in 2021 through February, we do have all of the federal funds obligated. It's 185,000,000. That obligation deadline was at the 2024. And then we have, 43,500,000.0 approximately remaining to spend of the funds that have been obligated. And the deadline for expenditure of those funds is at the 2026.

Okay. Could you just list a few of the ones that we have that we still have to spend the money on for the benefit of members?

Sure. So residential and commercial demolitions would be one. That program is continuing this year. We do have a little bit in, know, example, blight reduction as we're waiting for equipment to come in. The recreation facilities and playgrounds, those are big projects. We're doing a lot of improvements at city parks. So those funds have been obligated, but those projects will be ongoing over the next couple years. As well as under the Brownfield site redevelopment that runs through our department of development. There are funds there that will be spent over the next couple years.

On the Wayman Palmer YMCA, there is still money that we have to send over to that project?

Yes.

We're obligated for '23 and we've spent 13,000,000? Yes. Essentially. Okay. Because they'll be they'll be opening very shortly. Grand opening. Okay. And I don't see anything else here that we need to be aware of. The demolition money, where does that come from? What are the sources of demolition?

So the ARPA funds here are combined with Ohio Department of Development funds that were received as a grant in partnership with the land bank. So it's those two sources that are probably about 900 demos across the program in the city of Toledo.

In a given year? No,

over the three to four year period. Oh,

three to four year period. Okay. Great. Councilperson Gaddis.

Thank you, chair. I just had a question about some of this ARPA and when the projected date of expending it would be for the street lights. When are we waiting on project completion?

That we have that should be moving pretty soon. All the areas have been identified. Public service working with Toledo Edison. I believe they already have you know those areas and work order that Toledo Edison I believe prepares like a work order for the types of lights and where they're going. And so those I expect to see those moving pretty soon. We did have a conversation about that process. It's a little bit different than our normal contract process working with the utility. But I do expect we'll see that start to flow.

Okay. I figured it was something like that. And then the, to the Starbase and the Metroparks. Is there a timetable on when that will be expended?

That council member Gaddis, I would have to check on what was drafted within the agreement about how those funds would flow.

Okay. Okay. Appreciate that. Thank you, chair.

Thank you, council person. In a related matter, by way of referral, could you get us the balance in the fire escrow fund, please? Sure. By way of referral. Thank you. Councilperson Gaddis.

I'm sorry, I missed one question. I'm sorry. Other thing I had a question on was the medical debt forgiveness program. Everything's been obliged. But when will we

see payout for that? We've had some so far. A little more than half. I know I approve those and there's some more that are moving through our workflow payment process right now. So we'll see those. We should see them on the next report.

Okay. All right. I appreciate that. And thank you, chair.

Thank you, councilperson Gennis. Okay. Next.

Next, I'll touch on the CIP report. Again, this is the project list for everything in CIP broken by department and original year the project was approved. Overall, you can see what's budgeted, what's been committed towards projects, actuals and the remaining balance. Be happy to take any questions if you have them.

Okay. Seeing none, we will proceed.

And then lastly, just want to touch on our IRS report update. So through the first couple months we have increased assessments over the prior year as well as contacts. Actual collections in January and February are down compared to 2024. We do slow down in terms of what's being assessed and sent out towards the end of the prior year. So it's not unusual that we're seeing that and not right at this point a cause for concern on the collection side.

Okay. And commissioner, we're fully staffed in stacks at this point? Yes. Yes, sir. Great. Okay. And any questions on the IRS report? I know you had a record year last year, so we appreciate that. I had a question of commissioner Buckley. Where are we now with the outside auditors? What has begun?

I just stopped out last week just to go over some accounts payable, but they won't be doing most of their work until June. So we're still just wrapping up the financials. We hope to have a good trial balance by mid April and go from there.

And then Hinkle is due

May 30. June 30. No, May. May 30. That's right. We'll do it at May.

Okay. That's our preliminary report to the state.

Right.

Right. Okay. Great. All right. Anything else from the finance department?

Nothing further. Thank

you. Okay. Any members of council? Thank you very much.

Thank you.

Next we'll have the city auditor's report. Mr. Revolski, good afternoon.

Good afternoon. I'll provide a quick monthly update for the city auditor. I have completed the survey analysis for the performance measure audit, and I'm working on finalizing the final report for that. And then I've also helped with certain city council members have had data requests for me, and I've been helping them with that. Let me know if you have any questions. Thank you.

Any questions from members for the city auditor? Okay. Thank you very much, mister Auditor. Alright. Our next meeting will be I know we said it. Last Wednesday. Yeah. I've I wrote it down, but I got mine. Yep. Our next meeting will be Wednesday, April 30.

And we'll have it Wednesday, April 30. Seeing no other business, is there anyone in the audience who care to address the finance committee? Seeing none, we stand adjourned.