Finance & Debt Oversight Committee - Regular Meeting

Good

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

roll. Here.

Hartman? Hobbs? Martinez? Two present.

Okay. Thank you. Also, our city auditor, mister John Revolski, is also here too. Thank you. And we will proceed. Good afternoon, director.

Thank you. Good afternoon, chairman Sirantou, members of the committee. Happy to be here today presenting the first quarter's revenue and expenditure reports. Okay. Joined today at the table by Commissioner of Tax, John Zavisha our Accounts Commissioner, Tom Buckley. We do have in the audience Dan Mori, our Wage and Hour Compliance commissioner, as well as our interim purchasing commissioner Natalie Bronagh.

Okay. Great.

With that though, I will go ahead and turn it over to commissioner Zavisha who will update us on income tax.

Okay. Thank you. Commissioner, afternoon. Good afternoon.

I'll be starting on page two of the report. For withholding for the month of March, the city of Toledo was down 514,000 or about 2.9%. Where I want to go backwards a little bit is just sort of getting to last month and then heading to next month. So last month that increased to 13.2% was a five versus four Fridays. And this is just that reminder that March is really the money that comes in from the month of February.

So you don't see that reversal yet. So the fact that this is down 2.9 is more of an even twenty eight days. Last year it was twenty nine days on that. In this case for March, it is a company that's in our top 20 that was down for the month that has actually pulled the number sort of negative. But just sort of also pre warning that when the April numbers come in that will be the reversal of the February numbers.

So we are expecting a down April. So what will end up happening from a withholding point of view, we want to get through April and that will give us a good understanding of where withholding is so far this year. However, at this point through March withholding is actually up 4.6% or 1,500,000. For the business category and the individual category, in both cases the tax department has sort of been expanding our electronic filing, our lockbox where our payments go directly to the bank and then come into our office. So we are seeing an increase in both of those two categories.

In the business category 1,100,000.0 in the individual category just over 400,000. Again on this one we'd still like to sort of watch what's going to end up happening over these next few months March, April and Normally for the stuff that's truly mailed into our office, that stuff will trickle into May still coming in. So at this point, we can't say that this you know 1,500,000.0 between the two categories is true growth. It can just simply be money coming early. But we'll be watching that these next couple of months where again so for business net profits for this tax year, it'll probably be the May numbers reporting that will give us the numbers.

So we're sort of again, we're just sort of early in the process at this point. So overall for income tax we're up just over $3,000,000 or 8.4% through March. To continue then on to page three. Again early in the process here. The 2024 numbers are still unaudited at this point.

We don't really see a change from that 02/30/1977 coming. Not that it could happen, but you know we're not seeing anything at this point that would have us coming off of that as our income tax number. And then through to 2025 our projected numbers changed a little bit, up a little. The budget was 231.3. This one would show 02/30/2018. But again, over these next couple of months, we'll start to see the rest of that money come in to give us a better indicator of where we're at.

Okay. So originally the projection for 2024 was 226,000,400, somewhere in that neighborhood. Yes. And so at this point unaudited, but it looks pretty consistent. It would be at 237.7.

Yes. Again on that one, business net profit category in our top five companies, we had a strong end of the year on that which ended up allowing us to head a little higher there.

Right. And that would include the refund issue?

Correct. Yes. Cause what ends up happening is it really obviously comes out to be $2.40 about $2.43. And then we take the 90% of our refund money goes to the general fund, 10% to street.

And again, you attribute that increase from 02/26 to February. In what category would you attribute?

Business net profits and definitely within our top five companies in What that ends up happening is the increase was great enough that over half of our business net profits actually came from those five companies.

Okay. Very good. Okay. Next. Do you want to cover the IRS? Sure. Issue also while we're talking?

So the little packet that comes with it for the IRS. They had a strong collection month from March. It'll push them into the positive territory. So they're up about 48,000 for the year, which actually is a very good sign for that. From '23 to '24 we had a huge increase of just under $1,100,000 So we were actually expecting that category to come back a little bit closer to the 6,000,000 for 2025.

But you know for these first three months of the year we're actually $48,000 stronger than last year. So a lot of good news in that category. There's probably something that I'm watching a little bit on that is obviously we're getting all of this information from the IRS. So changes at the federal level to employment levels and stuff like that could have an effect on when we're receiving information from them and some of our support that we get from them. So we'll just be keeping an eye on that.

Okay, great. Thank you. Thank

you. Continuing on to page four, you'll see the general fund revenue report for the first quarter. Overall, collections are at 18.3% of the budget. Doing a little bit better than the same period last year where collections were at 17% of the budget estimate. As you look through the categories of the report, I'll start kind of with property taxes. You'll see at 54% we did receive those dollars in February. We had that last month. Those come in semi annually. So right where we would expect to be at the budget estimate. Within the category of licenses and permits, we're at 28%.

We do have in that first permit an annual payment that comes in for street permits. That's about 350,000. That's been received at this point this year. In the intergovernmental category, we're at 18%. Not unusual there though because we do have quarterly items that impact the collections there.

Casino revenue, we receive those funds after the first quarter has ended. Similarly with JEDS, they do have quarterly payments that can affect those collections. We did receive as you look kind of right in the middle of intergovernmental, the homestead and rollback funds came in March. Comparatively last year we didn't receive those until April. So doing a little bit better in that category compared to last year.

In charges for services, overall 18 of the budget. In this category, we do have some quarterly payments with regards to the cable franchise fees. As you look at EMS fees, I look at those in combination with the BLS transport, which both run through fire. So that's of about 4,500,000.0 that comes in a payment from the county. And that for 2025 will be an annual payment.

I expect we'll see that in April. And then outside of that annual payment, there's billing for transports for EMS and BLS. And so that's about 5,300,000.0 of the budget total. And with the 1.8 that's been collected so far under BLS, that puts us actually a little bit ahead of the budget estimate at this point in the year. Looking through the remainder of the report, I'll just touch on the other financing sources.

You'll see at 2.8% the transfer in from CIP we won't make until the end of the year. The transfer in from other, that's a combination of about 2,300,000.0 that's transferred in from the toll lot. And then for 2025, the budget estimate includes 3,300,000.0 from ARPA and that is interest earnings that would be transferred to the general fund that are not subject to any ARPA program guidelines. And that was included for 2025 only.

Okay. And could you go back to transfer end of May? What

Correct. That's two items. That's a transfer in from the toll lot that's completed monthly. And then 3,300,000.0 from ARPA.

Right. Okay. Very good. All right. Next.

The next two pages move into the general fund expenditure summary. On page five you'll see the breakdown by expenditure category. Starting kind of at the top, labor and over time costs on a year to date basis are running under budget. We continue to see positive good news on over time compared to budget. We had that same experience last year.

Employment tax and medical expenditures are just slightly over the year to date budget at 25.4%. Within that category, we have workers' comp, Medicare as well as just general healthcare medical expenditures. That variance that we're seeing right now is driven by healthcare costs. So that's something that we'll have to monitor here and see if that trend continues. Other labor expenses is at 60% of the budget.

That's not uncommon. We were at about 60% last year. And that's just due to when certain contractual payments are made and some of those good portion of them occur earlier in the year. In the supply and service category, you will see on a year to date basis, both are running ahead of budget. Supplies, that's driven by clothing and linen purchases that happen for public safety.

As well as law enforcement equipment. For example, the city makes an annual payment for tasers that's already been completed at this point in the year. So not a cause for concern being ahead of the year to date pace. On the services side, it's driven by contractual payments that are done quarterly for the regional council of governments, as well as semi annual payments for CJCC and the health department. And then we also have some encumbrances that will cover purchasing during the summer, for example, for our mowing program.

So not uncommon that on a year to date basis through this first quarter we'd be ahead of budget. Nothing that would warrant us recommending making any changes at this point to the budget.

Director, police and fire overtime is significantly lower. Is that typical in the first quarter? Or is that unusually low?

I think it can vary. With police, I think they do tend to see some overtime pickup when you get closer to summer months. Fires overtime will vary based on when there's retirements, when they have a new class. I think with a class graduating late last year I believe it was, that helps their overtime numbers.

Okay. Right. And the police class graduated in mid January. They're out on the streets now. Good. All right. Next.

The next page is a breakdown by cost center within the general fund. And there's a couple areas and actually they were on our report last month where we're running ahead of the year to date budget pace in HR. That's driven by contract services for EAP, for testing for police and fire. So they've committed those funds for spending throughout this year. On the ERP side, that's driven by our annual licensing payment, which has already been made for this year.

As well as our contracts we have set up for monthly hosting and support for the system. I mentioned safety admin on the first page. That's where we do pay the regional council of government bills. And we've paid two quarters so far at this point. And then just the last one to note on the page under urban beautification. This is where we do have the encumbrances for all the mowing and blight programs that will be spent during the summer. Okay. Pages seven and eight lay out the all funds revenue and expenditure reports. I'd be happy to take any questions that you might have on them. Any questions?

Okay.

Thank you.

Thank you. If I may chair, I just kind of give a brief overview on the ARPA report.

Yes. Let's go to all.

So the ARPA one page program report shows the program through March 2025. You'll see that of the 185,000,000 in the Toledo recovery plan, All funds have been obligated meeting the deadline for that obligation for the 2024. There's 145,700,000.0 in total expenditures through the March and thirty nine point three remaining left to spend before the end of the program period which is at the 2026.

Okay. And obviously everything has been appropriated by the deadline of December 31.

All appropriated and obligated.

Okay. And then we'll have some interest coming in from the remaining balance for this year as you mentioned earlier.

I'm sorry, say that.

In terms of interest on the ARPA money that we've not expended, there will be some of that coming into the

general Yes. Did project that income for 2025 on interest earnings. Think about 250,000 projected for '25. Okay. Great. And then lastly, we did send over the CIP report through All the capital projects broken down by cost center. I'd be happy to take any questions.

And the total for everyone's benefit, the total on the CIP budget for 2025 is how much?

It's currently about 198,000,000. Now that includes all city funded projects as well as debt service and any of our projects that are funded through grants or loans.

Okay. And then the transfer is at 24,000,000? Correct. To the general fund. Okay. Very good. Okay. All right. Any questions on CIP? Okay. And anything else?

Nothing further.

Okay. And the audit, the commissioner of the audit has begun in terms of the outside auditors that are here and so forth. They're not planning to come back until mid June Okay. After we finish the INCL filing, which is due at the May. Right. We're on track to meet all those deadlines. Okay. Great. All right. Thank you. Anything else from finance?

No. Thank you.

Okay. Any questions, Mr. Auditor? Okay. All right. Thank you very much. Okay. Next on the agenda, the final item is a report from the city auditor. Mr. Revolsky, good afternoon.

Good afternoon, everyone. John Revolsky, city auditor. I'll provide a quick update. I'm currently working through internal audit plan, and I'm seeking input from all of counsel for that. And that process is underway. And then for the performance measure internal audit, I've added another section to that report and anticipate releasing that in early May. Please let me know if you have any questions.

Any questions? Councilwoman Gaddis.

Thank you. And thank you for your email. I do have a couple of suggestions, but I didn't know if it would be best to email you or schedule a sit down time to talk. What would work better?

Either is fine. You know, we could set up a time to discuss or email works, you know, whichever works for your schedule.

Okay. Okay. I'll make sure to set something up. Thank you. Thank you, chair.

Thank you, council person. Okay. Seeing no, is there anyone in the audience who would care to address the finance committee? Okay. Seeing none, councilman Hobbs is here if you can make a note of that. All right. No other questions, we stand adjourned.