[Music] Mr. Atkinson, you want to take your seat? [Music] >> I think they're having it again today. I'm not sure. Let's see. [Music] All right. Thank you again everyone for being here today uh for more excitement and uh we will continue with our work session uh uh preparing to uh discuss or discussing our budget uh that the city manager has presented to us. And so I will at this time turn it over to our city manager to continue where we left off yesterday. >> Thank you, mayor, council. Welcome. Glad everybody came back. Didn't put anybody to sleep yesterday. So, couple of just quick overview items. Today will be part two. You can see the list um up on the screen there of what we will talk about. Um I do have a series of additional information, corrections, announcements, that sort of thing that we'll need to do at the very end today. So, I think we'll get a good uh good distance into this. As always, stop with any questions that you may have or suggestions. So, starting with enterprise, we'll jump right in with water and wastewater at the fund level. So, your combined fund level, you see where we stand here. The revenue uh is expected to be up slightly in water based on consumption. And in wastewater, we had a little bit of an aggressive budget last year. we don't think we're going to quite hit it. So, you've got a little bit of an adjustment to true that back up. Um, often times when we talk about selling water and we're reminded we've been blessed with a very wet year, typically your highest water use comes after you've had a wet year. Everybody's yards are nice and green. They look good. Now, they want to keep it that way. So, we do think that will hold. Um, I was asked about a week ago, just out of curiosity, where are we on Lake Allen Henry? Where does it stand? It's 96% full. 96%. So, we're doing really good there. All right. Uh little bit of a change in departmental operations. That's water reconnect fees where it says reimbursements from other cities. That is related to the capital portion of the cost for the Crimo cities for whom we treat their Crimo water and then send farther down the pipe. As we heard yesterday, interest earnings um doing well. Um our sewer lateral program that we spent quite a bit of time on last year. Um we're really not putting out the dollars that we thought we would pull out. So we we've tred that back down a little bit and we'll keeping on it. We've had a few people use the assistance program. A few have used that pay over 12 program, but it has been surprisingly good. surprisingly good. So, thank you all for working on that. Um, we're not dipping into reserves at the fund level for water wastewater either. So, we'll move over. That was revenue. Now, you see expense for compensation and benefits. Remember, we are adding the four water meter technicians. That's that final roll off of from LPNL doing all of that work to none. one industrial electrician, a little bit of part-time pay. We've had retirements, all the typical things that go on our operations and maintenance. So, we say this one backwards so it doesn't get confused with M property taxes. Um, you see the changes there. The debt service is up a bit. Remember that was largely the first portion of the West Lok water expansion program or project and you'll see the second half of it here in just a little while. Uh transfer to love power and light for utility billing. You heard this yesterday in solid waste. So you'll hear it with water, wastewater and storm water as well. And then some of the transfers are a little bit higher to based on capital. And then the fee, the transfer that goes over to fleet to buy the vehicles is actually going down. We're doing really good on the fleet here. So all in 162.2 million to 171 million. That's the far left and the far right. Okay. Lot of numbers on here. We'll highlight a few as we go across it. This is what we call the rate model. This captures all of the revenues, the expenses, the debt, the capital, everything gets put into here. The top section um is your revenue section. We forecast to end this calendar or this fiscal year, fiscal year 25 at 168.6 million on revenue and then projected for next year to 171.1. You come down then you've got your operations and maintenance cost this year 75.3 to 76.5. Come down to the next set, you have your indirect cost, the transfer to LPNL. Again, that is the billing cost. And then the transfers to others, that's fleet and capital and those those types of things 12.7 to 13.1. Um, and again, the largest change there is the billing office allocation. The next set where it says cash capital outlays, we're at the bottom of the page now. So, this is pay as you go funding. up from 16.8 to 20.9 in millions. We've digested all those. I'll flip to the second half of the model. Okay. Top sequence on here brings in your debt service, um, earnings, all that type of things. So where it says interest earnings on bond funds and a negative. So that's actually an earning. It's a revenue. The rest of it's an expense. Current year 161.8. Your new budget year 169. And again the largest of those changes is in the debt service and that's West Lewater expansion. So total revenues over or under expenditures we're coming in right at 2.2 2 million over. That's down from the prior year. That's not indicative of a problem. We've ramped into a year that we can do quite a bit of cash capital through here. So, the financial metrics just underneath that, uh, you've got your debt service coverage. It's a series of calculations. Um, if you're asked what is the debt service for next year, it's 60.1 million. But those two smaller numbers underneath that, these are when we get graded basically by the rating agencies. So our coverage ratio for the new budget will be 1.83. So we have 1.83 times available to cover the debt. And our target to maintain our ratings is 1.75. If we go to try to upgrade this rating and we've really only got one more step we can go up. That target rate is going to go up and in our last review it would go up so much. I just don't know that we want to hold on to that much of people's monies in exchange for what's going to amount to just a couple of basis points. So we will we'll stay on top of that. Just right now I don't see us making that run. Okay. The final set on here talks about your reserves. So the policy for this is 25% of revenue. Revenue is on the first page of the model. So carry all these numbers across. Take out the reserve fund requirements. What you see is ending this year with 3.8 predicted and ending next year at 5.2. Now this is combined. This is water and wastewater. So, we're kind of getting tight, but you can see the model bringing that back up pretty significantly in the future. So, we're okay with it. The final line is your base rate. So, the base rate for water, the base rate for sewer as a percentage of debt service. We're at 56%. It's going to come back up. That's a little bit low, but we're not at this point. uh we do not feel like we're in any jeopardy as it relates to the ratings or to the cash that we'll have on hand. That's a metric used by your rating agencies. Perfect is one. Sometimes you can get there, most times you can't questions on the model. Are there any questions? All right. Could you explain? Oh. Uh Mr. Rose first. >> Uh thank you, mayor. On this um new debt service coming on in fiscal year 27. What is that? It's 2.5 and then ramps up to 6 12 16 22 >> the second half of the West Levit project. >> Okay. >> You'll see that in the capital. >> Okay. Thank you. >> So if you issue the debt this year, your payments are in the following, >> right? Okay. All right. Any other questions? I had one. Just explain the base rate as a percentage of debt service. Explain that a little bit better to me. >> Um, so the water and wastewater both your bill is two components. You have your base rate, that's the fixed fee, and then you have your consumption, how many thousands of gallons of water and how much you know in your wastewater. It's a common metric in enterprise utility. So you'll see this these same analyses are done inside of natural gas, electric, all different types of deals. A perfect world and this is not Jarrett, this is your rating groups will tell you that your base rate should cover all of your debt service. Okay? So what we're saying here is the combination of all of your base rate revenue is the equivalent of 56% of debt service. Now we don't have increases. We're not asking for increased fees in either of these two. So if you back up, last year we were at 96%. This year we're down to 56 and you see us starting to climb back up. >> And what are the other sources that we use to cover the debt service then other than the base rate? >> We we cover debt service with all sources of revenue. So that's going to be your base rate, your volume rate, in today's world, interest earnings, and then there's a bunch of miscellaneous revenue that comes in. We make all of that available for debt. So go back up to where you have coverage ratio and coverage target. You see that our combined available revenue is 1.83 times what our debt service is. Now, obviously that doesn't count expenses and all that because this is what the people that sell you the bonds want to look at. >> All right, any other questions? >> This fund is still strong. >> Okay, >> it's strong. That base is a percent. We'll start to climb back up and we'll be pretty good. All right, those are good questions because the same stuff applies when we keep moving. Okay, so here is your rate model. Um, the easiest one to look at is to come across the top. That's your volume charges. We'll just 0 to 1,000 has nothing in it. That's because you get the first thousand gallons included in your base. The next category is a,000 to 5,000. Um, you see that we've been at $410. We're still at $410 model today. Unless there's other changes, we'll be able to stay at $410 next year. What is likely to change your volume charges? It's mainly going to be chemicals and power and things like that that affect treatment because the more of that we do, the more it costs. Go down to your base rate. Um, use the 3/4 inch meter. You can use any of them. We'll just take that top line. The current base rate is $18.75. That includes the first 1,000 gallons. We've now been flat for the two years in a row. The model does have $1 in the following year. And all this will get recalculated before your next budget to see if that's needed or not. But that's where it stands for today's purposes, for your budget's purpose. No change. If you go down to the next, you've got wastewater and you have both a volume rate there and you have a base rate there. Um, right now that model is flat all the way across the page. As we start getting closer and closer to Lake Seven, I think you're going to see that change because we've got to do the very last part of the stream quality upgrades, but right now it's showing pretty flat questions there. All right, capital. So, this is on the water side. Let me back that out just a little. um putting in uh another million dollars as we continue to work on getting the 404 or the United States Corps of Engineers permit. Um adding a million to that. That is some new cash. And where it says other, that's existing cash that we've closed out of some other project. Um locate and repair water valves. That's an essential part of keeping your system running. We try to keep dollars in that account to do that. We've had pretty good luck the last couple of years. So, we're needing to add only 600. Normally, that'll be 750 to 1 million. Move down to the large valve project. Same basis, same part of keeping your system running. Um, these are just much much more expensive per valve. So, a million and a half there. Again, all in cash. New meter sets and meter replacements. This is primarily new sets. And then it's replacing meters that have basically aged out or been damaged. So 2.535 million again in cash. North terminal storage reservoir improvements. That is one of the two big terminal storage reservoirs that's out by the airport. It's the cityside one. Remember that was built in the early 1960s. It needs some care and feeding as we continue to go along. We thought we were going to have to dredge that. We were able to do some other work that showed us no, but there's still valves and piping and things like that to keep up with. Again, all in cash. Continuing over, um, here is the second half of the West Loc water system expansion. Um, estimated today at 36.4. That's a little higher than what we expected a year ago. Um, when it says bonds, remember these are all revenue bonds. They are not on your tax levy. They are not general governmental debt. And then finally, uh, pumping system improvements phase three, um, at 500, also cash. So, all but West expansion will be cash. Are there any questions? Uh, when it says funding to date, uh, Mr. Atkinson, how do you determine the funding to date? I mean for each of these projects is there a they begin there's a beginning date for them and this is the money we've put into those projects over time. It's it's not a balance in any account or anything like that. >> No, it it is uniquely assigned to a particular project that this council has approved. >> So these are all on ongoing projects. >> They're all ongoing and I'll give you a couple of examples. Um West Loba expansion we had a very small amount two years ago and that was to get the preliminary engineering. and we paid cash. We had the big money in in last year, this current year's budget, and then you've got the new money. That project will close when the project is finished. So, it it has a we know when we start, we know when we finish. If you go back a page and you look at these maintenance accounts like locate and repair water valves, large valve projects, those are ongoing accounts. We will typically though close them and restart them about the between the third and the fourth year just depending on what it is. >> Okay, that was that's kind of my question. Some of these seem like they're ongoing without a stop. >> Some of them are four-digit numbers and some of them are five digit that that's what you're seeing us do. >> But you kind of set a period of time on them a new one. Okay. Thank you. >> Okay, we've got uh the last page of that waterline replacements. That's also your ongoing. That's how we take care of really old lines or undersized residential lines, that sort of thing. Notice that that project number is much it's a larger number, 2025007. We close the old one, we open a new one, we put the money back in the new one. Same thing with water lines ahead of street paving. We've talked about that um pretty much every budget. Fire hydrant repair and replacement also ongoing system and supply maintenance. And then the second and third street water line that allows us to ultimately decommission the old pump station number three million and a half. Those are all cash. So all in uh it's 48.9 million spend and 36.4 is out of that one West Le project and his revenue debt. So, it looks like, am I correct that you've started a new numbering system to kind of indicate what year the project is started in? It looks like >> we did that two years ago, but yeah, >> that's helpful. Thank you. >> It helps us a bunch. >> Otherwise, I'm constantly having to ask Joe, what does that mean? >> Okay, we'll move into wastewater capital. Um, sanitary sewer adjustments. um that you've got the date in it. 2324 had 80,000 a year ago. We're adding another 90 to it. Something you do constantly. And this is how we try to keep your manhole lids level with where your pavement is. So, it's mainly where we're doing new street work or new uh milling relays. Sewer ahead of Broadway. So, that's part of what we're going to be doing next summer for the bond project. 209,000 in existing cash. 791,000 that came out of us closing old projects and making the money available. Sewer ahead of street paving at 450. Some work out at the water reclamation plant. That project started in FY23 adding 1.3. It's also cash. Lift station rehabilitation 350 cash. Northwest Labuk Sanitary Sewer Expansion 950. This is one of your big interceptors. cash and then just general electrical improvements. This is mainly at the plants and the lift stations. Um 700. We will keep spending money for that because the various um NEC National Electric Code standards change and we have to upgrade equipment to stay current. Okay. Um, we need to replace one aged out pivot on one of the two farms. The SCADA improvements are twofold. The current system is hard to support. And second, we are moving to a SCADA that is much more secure in a cyber sense. Various inflow and outflow meters measuring the flows and the volumes. Major line condition assessment and repair. Manholes on the big interceptor lines. general sewer line and sewer tap replacements. Of course, sewer tap replacements that is the lateral line program and then just general maintenance. So, what you're going to see here 58.375 I'm sorry 9.4 in wastewater and it's all new cash or existing cash that came out of old projects. Between the two, it's 58.3 and again you've got the 36.4 for for the second half of Westla >> and just remind us what this the SCADA is. It's the means by which we control the valves or >> stands for supervisory control and data acquisition. Simple-minded people such as myself, it's the remote control. >> Yeah, the remote control for our system. Yeah. Okay. >> I know there's some true SCA professionals sitting out there watching us, but they've heard me call it a remote control before. Okay, so we're over to water now. These are not your water bill. These are unique and specific fees. So for water disconnects and reconnects, if you got regular hours, you have after hours or holidays. We're asking for $5 on that. And then the meter set fees, we actually have in the budget ordinance every year that these will readjust to meet actual costs. So it updates for, you know, material and labor and so forth. And you see what those changes are year-over-year. Again, if you're not getting a new meter set, you're not paying any of this. And then the last um we have a very very fancy very capable um lab and we do sample work for a lot of other cities for private parties. We need to up that. You'll remember in this budget year we just bought that giant chromatograph thing that I can't even pronounce but those costs are up just a bit. Mayor Protown. >> Um, just to confirm the reconnect and disconnect fee that is for the public for any >> Yes, that is somebody that for an extended period of time did not pay their bill and we had to turn water off. >> And then the water meter set fees would be a new development, a home business. >> Mhm. Largely. Yes. And then one just to confirm the microbiology lab service fee would be for customers utilizing our >> out outside parties. >> Okay. That's all. >> Okay. We ready for love power and light? We'll have Mr. Harvey Hall, CFO. Harvey, if you'll point at me or something, I'll advance your slides for you. >> Okay. All right. We'll do. >> So, thank you very much. It's the mission of Loving Power and Light to deliver safe, reliable energy on a consistent basis to be able to do that in a cost-effective way to maintain financial strength and health of the utility itself to preserve customer assets and also to engage our customers in an ongoing way to ensure excellent customer service. So what you'll see before you is bing. Do you ever remember in like school when they would flip to the next side, you hear the bing and it would just flick to the next thing. So I'll do I'll be I'll do his bang. So you >> go school here. >> I know. I know. I just did. Thank you very much. I'm actually 29, but um like to show here that. So what we have here is our is our uh our is our expense summary. We're going fromund about a $5.8 $.8 million drop in our uh expenses from $185 million in the prior year to just over $179 million in the current proposed budget year. Uh the main drivers for this uh I'll just walk across the aisle here on these. Um this is the sorry on the on the revenue side. So revenue went down. So for work orders, we had a decrease in our work orders here because prior year we had uh cost recovery from Hurricane Milton. We had sent our and we've done this a couple times. We've sent crews to Florida during storm events. Um part of that was cost recovery for work orders related to that we were recovering FEMA money from uh that we received last year and then we also we had some streetlight orders uh some fairly large uh developments that we covered last year. So that was so that was in the prior year. We don't anticipate that this year. So about $800,000 delta there. Uh for the net for distribution revenue, we have a decrease uh proposed from last year to this year of just about 2.4 million. That's related to what we anticipate is going to be a rate decrease. Uh we're still looking at that. We've just received our rates uh and we're going through those. It's going to be a very if there is a if there is a rate decrease, it'll be a fairly small one on the order of maybe a percent and a half. it'll be fairly small but we do increase that we would be do anticipate that we'll be available to do that. Um our fees and charges, we look for those to increase as we continue the collection of disconnect and reconnect fees um uh for for meters. And also we have for our FF our franchise free franchise fee equivalent that's the 5% that we give to the city or what we anticipate is going to be like the 5%. Now, uh we do anticipate that to go up slightly with a increase in our load because right now we look at that we have a rate that we apply to our load. As load goes up that that means there's more franchise fee revenue available for the city that we would give to the city and it's going to be rather small. We have our load increases by about a half a percent a year. So it's not there's not any big changes in there. So that's everything that we have that's known and foreseeable that we would see during the current year. our TC cost, which is our transmission cost of service revenue. That's for all of our transmission assets that sit outside the city. Uh that was part of the over $300 million worth of transmission assets that we built to connect with Urkot to get us into Urkott and into retail competition. Effectively, the TCOS revenues is really a toll booth. So, as other energy companies move their energy across our system, uh it's managed by URKT. We receive a fee for that. Uh we had budgeted last year for that to be about 38.5 million. Uh we look at that to be a little over 40 43 million this coming year or actually 44.4 million uh that we're budgeting for this year. Uh we uh got a favorable ruling from the uh public utility commission last year that that's basically enabled us to uh we thought we were going to get a rate. We thought we were going to get a cut. they actually gave us an increase that we asked for. So that was a favorable uh favorable judgment on our side. Uh so that's more money. The important piece to that is that means that for those assets that sit outside the city and the debt associated with it and the debt service associated with it, the citizens of Levik are not paying for that. It's everybody outside the city of Levik that pays for those assets. So that's a benefit that we have for the city that we have control of our we have control of our system and we also have assets that are being paid for outside the city. So that burden is being carried not by the citizens of love on that part of it. Um for our interest rates interest rates continue to remain fairly high. The Fed obviously is not backing off of interest rates. So interest rates applied to our earnings continue our reserve continue to remain robust. During the year, we used uh we used a little over $19 million in um in reserves from last year. We're going to use 12 million just about almost $12.7 million less this year. We had some major projects we were looking to get done last year. Our goal has been to as we have funds available to use cash to fund those. Uh and we've maintained that. we continue on that path and so that helps us to not have to continue to incur additional debt. That gets us to our 179 235 on the revenue. On the expense side, we have an increase in our uh compensation and benefits about 1.6 million. That includes the addition of we have one ad FTE. It's an electrical engineer one that we've added. We did make a we made an assumption on what a cola would be. Uh at the time we at the time when we made the estimation uh CPI was sitting about 3%. We just use that as a plug until the until we knew where we were eventually going to land. So that's what we have in there. Uh for professional services and training we had a uh nerk uh nerk required testing of all of our sub of of all of our substation transformers for their oil testing. It's a reliability testing to make sure they're operating properly. We had a one-time expense of that uh that we will not incur this year and we had some other expenses related to that. >> Hey Harvey, I'm not going to let you get away with calling it a nerk. >> It's National Electric Reliability Corporation. >> Thank you. >> That's the uh that's the arm of the Federal Energy Regulatory Commission, FK, that basically manages the safety and reliability of electric utilities and the transfer of energy. So, sorry about that. I just threw a nerk fk thing. So >> I know exactly exactly no excellent question. Um our city of loveic utility reimbursement is increased $1.7 million to the city. That's the services that we provide for the billing and the collection of revenue for uh for for water wastewater wastewater storm water >> solid waste >> and solid waste. But solid waste is a that's a that's not a that's true. We still do that. That's true. I almost kind of went and said that's not a but it is. You're correct. Um so that actually went up. Part of that is part of that is uh the cost associated with our Oracle system. So we're doing some beefing up in our Oracle system. Some other things too. Um other other maintenance and operation. We had some sun costs there that we put in there for tree trimming. Tree trimming is up a little bit. Um vegetation management is a very critical aspect of meaning reliability and utility. Uh that's one of the number one causes to to have system outages is if you don't maintain your vegetation. Uh we've seen obviously from centerpoint what can happen if you don't. So there can be there can be issues of that. So we maintain that. That's part of our system reliability that we maintain. Also on for uh debt service, debt service has dropped 8.4 million. Uh a large chunk of that was we made a prepayment on our 2015 revenue bond and that was a $7.2 million uh issuance that we had was on its tenyear callable period. We went ahead and extinguished that. That was a very good financial move for us. The coupon rates for that that we owed on interest would be were at a straight 5% for the next 10 years. and we're only earning in our we're earning about 4.3% or so in our in our reserves. it makes sense that when we have that available two things it saves us interest and the other other part is uh it also allow frees up cash flow for future years and then the other part too is it also increases our creditworthiness and last year we got from all three agencies we got a rating increase uh from Fitch from Standard and Pors and Moody's and so we're now up into DA territory for the first time in almost 12 years so we're doing very well there as well. Uh FFE, so our franchise fee equivalent, that expense goes up $131,000 just as it corresponds on the other side with the increase in the revenue. We include that in our rates that we collect. Uh our pilot, our payment in lie of tax is going up 46,000. And again, that's a function of uh what we're anticipating at this point and is just a small change in our assets for uh for to cover ad valerum tax. Our uh capital improvement plan um expense is going up five million just about 5.2 million and that is what we cash fund or we're using to cash fund our capital. So we're looking to increase that. We've got a number of projects that are on on tap for this year. um and some major projects. So, we continue to work with that. We'll show you that in a little more detail at least across where we're headed with our capital on the on the next page. Not yet. And then on transfers, we have a decrease of we have a actually we've got a yeah, we've got a decrease in $2.4 million there as well. So, let's go ahead and go to the next slide. So this will show you a little bit high level everything that we've really talked about here. I think some highlight points of this is if we go down to so you can see where the interest run. So on our revenue you can see where our funding funding sources are going. You can see our interest rates our interest earnings are going up. We have our rentals and recoveries. Uh that's a a big chunk of that has to do with the fee that we charge other communication companies to attach their equipment to our poles or to to the city city of Leik's poles. We also have a there's our distribution revenue system. So that is our delivery rate that we charge our customers. It's intended to cover that 129 million$129.5 million plus the franchise fee equivalent of about of 13.2 2 million. Uh together that's just a little over $142 million. That's what we collect in our rates. And as we go down, I think an important thing is we have our hold harmless credit. Um part of the cost of us going into was the agreement of a 5-year period of $110 million that we would provide a benefit to the transmission owners of Urkott. We divided that by five. So it's a $22 million a year credit that we started back in 202122. [Music] In January of 22, we've we're going to carry that through. That ends in February of 2027. And that means that's effectively $22 million a year starting in February of 27 that we can keep now for the benefit of our rateayers. And you can see that down there. probably it's about halfway down on the funding sources. You'll see that line go from 22 million 22 million 7.3 and then it stops. Um to go down below, uh I'll go down to the general use of general reserve. Uh again, there's where you see the significant drop of over $12 million that we're going to we used a little over $9.1 million in the current year for projects. We'll use about $6.4 $4 million this year, uh, another 7 million next year, and 3.3 the next the year after. And then we at that point we are sufficient to be able to stop dipping into that. A bigger a biggest the biggest contributor to that is the fact that we'll have the hold harmless. It will have fallen off at that point. Down to departmental expenses, uh, you'll see that year-over-year they remain fairly constant. They actually go down somewhat from 90.8 8 90.9 during the current year down to about 90.4 they go slightly less I mean and they remain fairly stable. On the next slide the fund level expenses um our debt service remains fairly it will actually drops in the current in the current budget year. Uh that's a reflection of the 2015 revenue bond that we extinguished and you'll see the drop in payments there. That actually represents cash flow that has been freed up. The next year you'll see it go up and that is in relation to what we're propos what we what we will be proposing is the building of participating in a project to build a westside transmission loop. Um and that will be in partnership with another utility we believe. and that project we would be needing to take out a borrowing of that. We estimate that borrowing to be somewhere near $120 million. That would be TCOS related. So the burden the the cost the debt service of that would go into our transmission cost of service. We'll look to have a full filing of that when that's completed in 2028. And then that will in turn get carried into our TCOS our T-COS revenue line which is about 44.4 right now. That will increase that what what we believe could be if all goes well with the PUC another $7 million and then that's what goes to in turn pay that debt service. So the important point there is that transaction and that debt does not increase our rates. That stays on the transmission cost of service side. And then finally uh we have uh on the debt service up above the third line down uh debt service early retirement we have projected out um three years uh actually two year three years out from today or two years beyond the budget period to look at extinguishing the 2014 and 2016 revenue bonds. We'll look at that and that's going to be considered in the future. And then I'll get to the last line. Our revenue, our revenue, basically our our reserve position. At the end of this fiscal year, we anticipate to be at about $26 million over our minimum requirement. That's 90 days cash is what that reflects. We are we're sitting right about, as we speak, we're we're sitting just a little over 170 days right now. So, we're doing fairly well on cash. um net at the end of our proposed budget year will be just about 21.2 21.3 then down to 10 million then down to 5.4 million at the lowest point and then we start to build that reserve back up when hold harmless falls off and you can see that going up to 18 and then out in the future years. So with that I will stop and refer to the city council for any questions. Are there any questions? Uh, so Harvey on the hold harmless that drops off you said in February of next year. Is that right? >> February of 27. >> 27. Okay. All right. >> Mayor Pro Tim, >> you mentioned the increase in the cost to tree trimming. >> Correct. >> Is that in partnership with parks and wreck? Is that doing some work with them or just >> No, that's work that's work for around our substations and into our wires and on our poles. So, as the trees as trees and vegetation grows up next to our infrastructure, whether it's a substation or whether the it's the poles and lines, we need to maintain a buffer of that so that in the event of a windstorm or anything like that, that's where you get a common outage is is when a limb or something collapses on a line crosses a phase, a short circuit, and then power goes out. >> Okay? Okay. So that's to make sure that's to maintain and maintain the assurance that we we keep that safe. >> All right. Any other questions? >> All right. Thank you, Harvard. >> Great. Thank you. >> Okay, council. We'll pick back up with storm water. So storm water revenue summary um 25.7 for the current year to 23.6 in the new new year. So the revenue is decreasing and that is just based on updated current year projections of where that's going. So no change in the rate. Some of this is not quite as much growth as what we anticipated when we built the budget last year. interest earnings are going down not because of the interest rate but because we're using cash on hand. Um excess reserve use for the new year um has gone down slightly because we were able to do quite a bit of work in the current year. So that's revenue side. Move over to the expense side all in 25.7 down to the 21.0. So we're having comp and benefit decreases. Um we do have some increases because of CIR pay uh TMRS etc. Everything we talked about yesterday on maintenance and operations. This is a transfer back to engineering and this is more of your city engineer and his team doing work inhouse. This is an enterprise fund. They get charged for that. Same with their IT charge. We are continuing to see debt roll off here. Um the pilot fees are going up just very slightly. That's just the values of the fixed assets. That's how that is assessed. Um the increase coming from the business office at LPNL and then other transfers is down in nearly $5 million. So revenue versus expense. Here is the model. It will be pretty similar to what we looked at a moment ago. So the first column with the numbers is your current year and then your proposed year. You see that same change in revenue from 23.8 down to 23.6. And again, that's your general metered revenue. Slight decrease in interest. Come on down through your expenditures. Same things here. Year-over-year totals. That's 25.7 million. Now the new year, 21.0. and leaving us with 2.5 million of revenue over expenditures which falls down to the bottom of the page which is where we look at the reserves. This one also requires 20% of your operating costs to be held in reserves. We ended last year or we predict to end the year at 4.99 basically five million bringing that back up to 7.5 and then you can see how it predicts over the years. Again I think more importantly on the rates no changes to the rates here. Any questions? Jared, I noticed that the uh pay as you go funding into the capital improvements goes from 4.4 down to 9,000 and then back up again. Can you explain that? What? >> Yeah, we're we're building back up to a lot of cash in hand to be able to do that in the following year. We don't have as much need this year, but we know what's coming. >> Okay. All right. >> All right. All right. The capital program for the year, 325,000 for watershed boundary and drainage studies. This is ongoing. It will always be a function as long as either A we're making drainage improvements that allows properties to come out of the flood planes or B to be able to accommodate growth and manage the water. Upland and 66 street playa drainage improvements. That is a project that is currently under construction. So, the majority was funded over the last two years. We need just a little bit more to come in and finish that one out. We've run into lots of things in our easements that were not supposed to be in our easements that we're working through. Believe this is district five. Oh, sorry. Anyway, storm water system improvements, your general ongoing here. 625,000 storm water system rehabilitation and maintenance also ongoing drainage improvement for arterial projects. That is funding available that we have as we work on these major projects for the drainage piece of it. You'll notice that all but the little bit of the storm drainage on Broadway, all of it is in the other category as far as your source of funding. Those are all prior projects that we're closing out and basically recapturing what's left within them. So, no no new associated debt on this one. Okay, let's go to Lake Allen Henry and again nearly 96% full. Blow that up just a little. So revenue is increasing out here because of entrance and camping fees and annual permits. I don't know who's had a chance to get out to the lake during the summer months, but it is very very well utilized. Compensation and benefits going down slightly um largely due to terminal pay that was offset um by the increase in health premiums and dental. Little bit on the vehicles for maintenance. Professional services is down. We no longer have the interlocal contract with Garza County. That was largely at their request. Schedule charges are down due to electricity and property insurance. So, fun fact, Lake Alen Henry's always been an ARCOT. Lake Alen Henry's always been an OTOT. Totally different from anything we do up here. Um, the fund level expenses are going up because of transfer to fleet. We've got several vehicles that we need to replace out there. If you come across and look at that, you've got 772,000 in revenue for the new budget. This one's on the far right hand side versus 821 prior year. And then come down, same numbers that balance out on your expenses. We are requesting one fee. This is a new fee. Um, prior year you gave us the dollars to build a dump station for RVs. We're going to have that finished here pretty quick. We need to get a nominal feedback for the use of that. So the five to 15s based on the size of the rig that's using it. Go to airport. So on the revenue side, all in for the current year, 20.3 million up to 21.2 million for the following year. The hangar rentals go up every year and in fact every lease at the airport and there are a large number of them are on a schedule that changes year-over-year. So we're not asking for something new or different. It's already in those documents. Parking revenues seem to be again going up. We're pretty pleased with that. The PFC, which is passenger facility charge, and the CFC, which is the customer facility charge, those are going up um a little bit based on the annual debt service. Uh miscellaneous revenue went down a little bit um on interest earnings, but we also spent some cash capital over the last year there. So, this is the revenue side. Go to the expense side. 18.4 up to 21.2. You've got a little bit of a change in your compensation and benefits. We're able to take maintenance and operations down. We bought a new street sweeper dedicated to the airport and some other equipment that we don't have to buy again this year. Again, you've got an increase in your debt service. And then our transfer to ARF, which is airport rescue, firefighting. We talked about it yesterday with the PAS project. So ARF is up as well as the transfer to capital being up. And we'll go into those details. Well, here starts your fund model. You see the new budget year on the left with the blue boxes. Total funding sources again 21.2. carry your department expenses down for 10.7. And then you've got your net debt service, the vehicle and equipment debt, indirect airport rescue and firefighting capital transfer of 3.672. [Music] All in your total expenses at 21251. Very bottom of the page are your reserve calculations. So we'll start the year with 24.8 million. Take away 4.2 2 million as the required reserve leaving available 20.5. So remember the airport exists and they don't show up on here but you exist in a unique environment where there are certain grants that come to the airport on a formula basis called the entitlement grants. You have some that Kelly and her team have been very successful in getting that are called discretionary grants. Largely that's when some other airport can't spend the grant money they were given. Kelly and her team is always ready to step in and say give it to us. You have two other sources in the airport. Airport has its own version of ARPA. It is not related to what we've been doing through the council. It's dedicated to the airport. They also have received funding through the BIL or the bill or the bipartisan infrastructure law, whatever we're calling it today. So, a lot more that goes to it. What you're seeing on these slides has been the earned income. So, for capital, um, pavement maintenance phase two, $200,000 in cash, ongoing project that will live forever. Property improvements phase two, um, 400,000 in cash. Improvements to the freight road, there we go. Freight road and parking improvements, 500. Perimeter road, 885,000. If you've never had a chance to take a drive around the perimeter road while you're riding with one of the airport people, you'll be shocked at how far it is around the airport. And yes, people do get in there and try to do it improperly. Um, rental car facility improvements uh at 200. I believe that's working on the roof of that structure. Moving over, we need to get in line for the next new ARF truck. 1 million cash snow removal equipment at 750 in cash. passenger boarding bridge. These will either be replaced or refurbished, likely replaced. The 675 in cash, that is your match. The 12.8 is the grants that come on it in there. Some heavy equipment replacement, some equipment and vehicle replacement, all in 17.7 million in capital, 4.8 nearly 4.9 in cash, 12.8 through the grants. Dr. Wilson, >> uh, any plan to expand parking at our airport? I mean, not within I obviously not within this year, but just longterm. I think that's the biggest complaint that I see from airport is every time people are going out there, the parking garage is full, the flat, you know, surface lot is full on longterm. We've actually had some conversations with an outside party over potentially um not garage but covers um and making that work. Expanding it um beyond the footprint that it's at to get net new spaces. We're going to have to go up and that's going to be several years out because it's the question of and we have a spot. We've reserved a footprint that you could build a new garage and then when you're done come and take the old one down or rather leave that as open, you know, shorter term parking, take the garage out, be without it for a bit of time, and then put a bigger garage up. They're all on the deck. They're not in the next probably three years. And then we still do have shelter park. Uh, and the utilization down there has gone up. Mr. Rose. >> Uh, yeah. I just had a praise for uh Kelly and her team. Um, the airport, it looks phenomenal. It's it's running, I mean, amazingly smooth. Um, it's nice to have I have uh business people come in and they and they tell me how um how great our airport is, how clean it is, um, and how well it operates. So, y'all keep up the good work. >> Thank you. Okay, fee changes. Um, and again, this is what we talked about up front. These are built in to your various leases and so forth. What you see on the right, that's the actual change per square foot per month on those carries over. There's quite a few of them. You do see on the bottom of this page, you start getting into the rental car parking. This is a charge to the rental car agencies for parking on our part of it. And then you see the landing fee changes that are proposed on the last two lines. And that'll close out airport. Okay, we're into city bus. So outlined in the blue on the right hand side you see the the proposed budget immediately to the left of it of course is the current budget total operating revenues this year 9.465 new year 9.45 45. Um, something to kind of keep in mind as grants begin to wind out over the future, not next year, but later out years as those wind down, you're going to be looking at increased transfer from the general fund. That's what city transfer is. Um, or some kind of a modification in service or a combination of both. We're not there yet, but it is coming. Um, Chris Mandrel and his team have used a lot of these dollars that came running in to tremendous advantage. They've dramatically lowered the age of the fleet. They they've done a lot of good things. They started the the micro version. Um, just know that that's going to come in and and change. So, you have the n 9.45 in your operating revenues. You come in to the next set and those are your various grants, your prior year grant carryovers, things of that nature. Total of 19.7 and then you go down to the expense line item and come out at the same number 19.69. Questions on city bus? uh on the um and I noticed this there's a going from fund to fund and and uh different things there's a lot of discrepancies or differences in the professional services and training I notice where that goes up like a couple hundred thousand uh is there any uh explanation for that on on this particular budget >> yes okay so professional services and training current year is 1.436 436 million. Next year is 1.622 million. I believe a big part of that change is the various softwares that they use mainly for dispatching the microtransit and stuff like that, but I would bet either Bill or Chris >> or Michael. Michael's here. >> I should have said nice things about Michael instead of Chris. >> No problem. Yes, he was correct on most of that. the professional and uh service and training has went up and part of that's the increase for city IT charges that we get you've seen that across everybody else the our cost went up for city IT charges the other part is from our technologies that we've put into place swiftly and spare that those kind of things and then also we had a contract for our shelter maintenance that went up about 20,000 but that's what makes up the difference there in the fresh technical thanks >> and so fun In fact, no city bus employees are city of luck employees. So you you actually have a third party that runs that. You provide a payment to them in exchange. They make all that happen. Okay. Some fee changes are proposed and some elimination of fees are proposed. So paratransit uh for $2 and then on a farther basis paratransit five and on the longest runs 10 um premium locations you see that changes or not changes but actually creating the ondemand fees and then the elimination of the four at the bottom of the page. So what Michael and Chris and team are doing, they know where the big demand is right now and it's the on demand and the paratransit and they're trying to just help us cover the cost. You'll never get there with fee boxes, but you can do what you can to offset it. You want to go to the cemetery. Okay. You do see some changes here. We have a decrease in our lot and our mausoleum sales. We are having to up the general fund transfer to help balance this budget and then pulling down a little bit on using our available reserves. So 8.93 on the revenue side, 893,000 to 1.4 million. Go over to the expense side, you see largely the same. Um, our compensation and benefits is going down a bit. Maintenance and operations is up. Mainly that is the mowing contract. Um, cemetery looks better than I think it has looked in years. When we get that irrigation project finished, it's going to be even better. Um, but because of the irrigation process pro irrigation project, you do have the debt service payment that we've not had prior. They are also replacing a couple of vehicles. So, here is your capital program. Um, the last line, that 92889, the $2 million, that's what you did a year ago. You also had previously funded perimeter fencing. Now, we're asking just for $30,000 in cash money to just keep up with the general care and feeding of a cemetery that is actually older than the city is. The cemetery was created many years before Levik existed. civic center. Okay. Overall, you're going to see a reduction here. Um, and it's really from the utilization of reserves, but 4.3 million down to 3.9 on the revenue side. Um Lisa and her team do expect events to increase, but most other sources to remain flat. They've also had a very slight decrease in interest earnings, not because of the rate, because of using their dollars. We have increased the hot transfer a bit and then no cash funded capital for the new year, but I'll show you why we're setting it up that way. So the expense summary, same thing. um compensation and benefits is just a very slight move. Maintenance and operation is largely due to it insurance, pest control, and then again we're down on the capital projects, the cash funded capital. So here's the capital budget and these are all prior year fundings and some of these we're holding them. We're just not doing them at the moment. So, the dollars remain available if needed. Um, the project that did go through was the amphitheater erosion repairs. That's coming from that parking lot going back down to where the amphitheater is. The maintenance fund uh and the equipment fund, some gets spent out of that, but we're trying to hold on to as much of it as we can as we talk about potential changes and improvements at Civic Center. We are asking for some changes here. Um the major change over to go from a various rate and I believe Lisa's here and can explain that to one half times whatever the base rent is. That's that major getting people in in their events and getting people out. Um storage closets have become hot real estate at the civic center. Yes, sir. storage closets. As you might imagine, there's a limited number of them. Therefore, they should probably not be free to outside parties. We're asking to be able to charge for the use of our storage closets. And then finally, uh the facility improvement fee. That's been a dollar a ticket since we implemented it a number of years ago. We'd like to add one one quarter or 25 cents to that. And so that facility improvement fee, where does that money go into a fund? >> Back back into revenue. >> Okay. Back into just revenue. Okay. Any questions? >> And mayor, I don't I don't mean to interrupt, but something I should have said at the start. Your civic center has no general fund or tax dollars in it, >> right? >> It stands on its own. You cover its loss through its hot revenue. And you use hot primarily also to do capital. So wellrun >> and it looks good. >> It does >> looks good. >> It's getting it's getting close to having a milestone birthday, but yeah, it looks good. >> It is. >> Okay. Metobrook and council's well aware of some pretty significant um and to this date and time very positive changes that have been made at the golf course. So, this runs through a third part through a third party. You've got only two budget years. That's all we've had under this arrangement. We're going to collect a small amount of interest um on cash on hand. Memberships, you see green fees going up. Um this course has actually set um some some records within its own network for how much it's being utilized. Um, pro shop sales, cart fees going up a little bit, range sales flat. We are making some improvements at that range. It needs it. The total revenue sources come up to 2.8 million, up from 2.6 million. And then you see down below, um, a little bit of an increase in supplies, decrease in maintenance because so much got done this year. Up on professional services and training. Same with other or other is down. and then an increase in the schedule charges that we put into the course. So a revenue budget of 2.85 compared to an expense budget of 2.79. The difference will help you build the available reserves. You had a project funded in this current year at 107,000 to make improvements out there. We're not asking to fund that again. They've got that work done. done. >> We're going to move into internal service. Mayor, I don't know when you wanted to to take our break, but >> now's a good time. All right, we'll take a 10-minute break. [Music] All right, let's move on. Okay, thank you. We'll jump now on to the internal service funds. Start with fleet. Um maybe as a quick uh reminder, internal service funds exist to provide services to other city operations. So their customers are all internal. Fleet of course is one of the largest of those. If you look on blow that up just a little bit. Um if you look at the department level expenses current year 13.9 proposed budget is 14.2. We've got a bit of an increase in benefits largely due to TMRS health and dental. The maintenance and operation increase is the vehicle maintenance which is a large part of why they're there. Capital outlay we've taken last year we purchased a large air compressor. We don't need it again so that money comes back out. Your vehicle and equipment debt is going up and that's tax notes for solid waste and love fire rescue. Remember that those departments are charged for that. So you see it in their budgets and then it comes over here. Transfer to capital is going down. We don't have as many cash capital projects this year. Oh, sorry. Questions on fleet before we go to benefit. Okay, benefits. Um, compensation is up here. This is due due to some staffing changes and reallocation of those cost. You saw the negative that's associated with the positive in the human resources budget. So from general fund back over here, same comment on benefit ben benefits. I really need some help here. Supplies increasing um due to budget for immunization supplies. The professional services increase is almost entirely um for the employee assistance program that we provide. We have had a little bit higher medical and prescription claims and then there's different credits that have come back and forth and you see the bottom line change on that. So benefits, expenditures from 46.1, your health plan, all that stuff is inside of here down to 47.1 or up to 47.1. Questions on benefits. Go to information technologies. Current budget um on expenditures by categories is 13.7. New budget is 14.8. 8 big part of that is in compensation changes and the benefits changes associated with the maintenance is your largest single line item change and that's various equipment software maintenance tax note debt is decreased that is not because that tax note debt has paid off it's because it's been moved over into the radio shop where it more appropriately belongs. So at the bottom line, current year total expenses 15 million, new budget 15.9. So as we've been in all these other budgets and we talk about scheduled charges going up going up for it, this is where that comes from. Okay, GIS and data services pretty flat on this one. Scheduled charges did go down a little bit. U benefits did go up a little bit. So bottom line total for this 938,000 in the current year with the compensation adjustment that's been proposed they would go to 955,000. Y'all have all seen a lot of their products. They're hanging on the walls up on the 11th floor. And I tell you what, if you need something from this group, they're fast and they're good. They they really a lot of power in that in that group to help us show things. Okay. Telecommunications. [Music] Um that top line or that top comment about communications maintenance going up because of the cost of the interactive voice response system that is actually a telephone software that's used by LPNL in the utility customer service office. It does ultimately get charged back to LPNL but here here you can see the expense of it. Um, we do have a decrease in capital because we were able to replace quite a bit of the background part of the phone systems. Year-over-year change is 1.718 million to 1.749 million. Okay. Radio shop. Um, slight compensation decrease. That's just due to how the staffing is laid out. There's a small benefits increase. We are not doing a transfer to the CIP for the new year. Remember though for the new year we are going to do a major radio system upgrade across the whole city. Um and then transfer to fleet. Um they are replacing a vehicle that they have. So current year 2.18 new year 1.77. Okay. Here is your investment pool. Um this is where all those interest earnings that you've been seeing are generated. We have one staff member that is largely charged to this and a piece um of another. But the benefits cost is up the compensation without the adjustment. The compensation is very flat. Supplies are down. Professional services are up and that's the charges that we get from our bank and then scheduled charges back to the famous IT department. Current year 208 nearly 209,000. New year 220,000. Print shop had a very slight decrease in compensation. That's just based on a new employee. See your benefits cost. The professional services are up slightly and that is due to our thirdparty mail service. the one-time expense that we had for our new software to allow them to charge out to other departments, that's been bought, paid for, so it goes down now. And then a slight increase um coming in from it. Bottom line number 247,000 to 253,000 warehouse. So slight compensation decrease, very slight benefits up a little bit. Our supplies increase is due to the weather gear, the PPE that we buy, and just various other things. It is time to replace their pickup truck. Our schedule charges are up for it, property insurance, and electric. Capital is going down because we had a one-time purchase that we needed to make last year, which we did. So your bottom line is 500,000 up to 56,000. So the amount of things that they inventory and provide out there on a day-to-day basis is pretty impressive. It's a really good outfit. Okay, risk management. We've got compensation decrease because of some staffing changes in shifting one of our safety specialists over to the water department. the charge for that person benefits go down accordingly. We are budgeting for a new round of property appraisal services. We have to do that every few years and that's how we go out and buy our insurance. So it also be also makes sure we are insuring for an appropriate replacement cost. Um scheduled charges down because we have transitioned into self-insured workers compensation. I think that came up yesterday and that's what you've got here. transfer of the general fund is going up slightly because of the organizational development program. It's actually in HR, but it's paid for out of here. All in though, you have a decrease from 13.4 to 12.7 million. Okay, here is the capital for your internal services. You see the public safety radio system at 6.1 million. You see that setup is a tax note. So the radio system we have today went online in 2015. So the city looked quite a bit different then. It has two primary towers on it and then a couple of smaller ones that feed back into the big ones. Doing this is going to make a multi-sight expansion. So we'll actually have new towers. We are also able to offset um some user fees from all the partner agencies that are on our network. We looked at doing this um on a three-year cash basis, basically one new tower and the related stuff each year. Really talking to it, talking to radio shop, talking to public safety. We really feel like we're better off getting this done, getting it all done at once. So, what we've got has lasted. We've just outgrown the ability for it to cover. Um vehicle replacements. Um, all of the vehicles that are being replaced under that category, the 11.5 million, those are all either new cash or existing cash that came out of the couch cushions. And then we do have a little bit coming in on some tax notes. And you see how that divides out. Special revenue. short version of special revenue are things like tiffs, um grant funded programs and items like that. They all stand alone in an individual fund and so we'll watch through them now. So within your tax increment financing zones, we'll start with the central business district. These are modeled out. So the column that's bracketed, that is your new budget year. And of course the column to the left is the current budget year. So for the central business district or the downtown tiff current year funding sources 1.75 new year 1.77 um tax collections are up very slightly and so are interest earnings. Coming on down the administrative cost, postage, board insurance, all of that. You have your debt service. You have their capital project fund. The small piece of the compensation adjustment takes you to 2.68 million on expenditures. The delta there is in that transfer to the capital project fund comes under the line in this case by 900,000. But if you walk to the right, you will see how that comes back balances out your revenues and expenditures. That same change appears on the first line of your reserves. So, this will bring 2.3 million in reserves for the current for the proposed year. You have a debt service restriction inside of it pulling it down to 1.9 that's available, but watch to the right as that walks itself back up as well. Here is your downtown TIF capital improvement program. The new money is public improvements in the amount of 1.5 1.3 million in new cash. That is not new bonds for 157,000. That's some remaining bonds from years ago. And then they wish to create a utility infrastructure grant program. So when you have um and the name has just escaped me, we have a new electrical company right over here just south of Broadway. and they were able to combine some alleys and close a street, but there had to be uh infrastructure moved. This would be a way to offset a portion of that for relevant operations. So, out of the 1.75 total in capital, roughly 1.6 of that is their cash and 157 is old bond money. Okay. Go over to the Lev Business Park. This one is structured the same way. You've got total earnings in the amount of 1.08 million. Cash funded capital 1.2 million in LITA. I believe that same number you're going to see it in the LITA budget later on today. Total expenditures of 1.2. Again, the big difference here is going to be the capital. So, they're about 141,000 under the line. that also quickly recovers as you move to the right. The very bottom line is their reserves. So 3.55 million in the new year carrying out to 8.7 on the right side. And the capital project is the East Hunter Street Extension. Uh Mr. Osborne's here. If there's any questions later, he'll be able to talk to you about that. 1.1 million in new cash, 33,000 in old money. North Overton TIF. So, same structure, the bracketed column in the middle is the proposed budget revenues of 6.6 million offset by expenses of 4.5. So, this budget's 2.1 to the good. come down the line you see that is growing growing their reserve balances. Let me comment about debt service reserve because this will also go up into your debt service annual deal. Um we have two full years left on the conference center debt out there. So that that's paying itself down. That also then frees up dollars that go into the reserves. So, if you go with me back to the very bottom line, we're estimated to have 11.5 million in that reserve account at the end of the new year, the year that this is supposed to expire or will expire is 41.5 million. Now, once the debt service is retired, it would be a fair discussion with this board about ending the tiff sooner. You can't end it while your debt serve while your debt is outstanding. But after that, you can um question about the reserve funds. What happens when a TIFF expires that has reserves? And this one's worked perfectly. It's been a textbook. They are distributed back to the taxing entities at the same ratio that their tax levy is to the total. So you've got city of Leach, Leuk County, the hospital, and the groundwater district are the four participating districts. Make sense? Okay. So, North Overton's capital program, your general public improvements for 750 and then the ongoing street upgrades and replacements at a million and a half. Again, this is all cash. I think they may only have one more year on the street upgrade program after this and they've got all that big work done. You ready for community development? Okay, this will go on for a couple of pages here. The community development program for the city does not have general fund money. Karen Murphy and her team exist off of the various grants that come into the benefit of our community. So the top one is uh the community development block grant. The budget for the current year is right at 2.2 million and then on the far right the new budget 2.215. So the CDBG block grant which for years has been the mainstay of this it's really just wiggling right there at that 2.2. Um, you have your expenditures that go underneath it. And in the fund level, those those total to 1.098 or 1.1. Then you've got your various expenditure categories coming in just slightly under the revenue on this one. Go to the next page. There are two grant programs here. You have the home investment partnership program or the home grant. This one we thought was starting to come back up. It's really not. It seems to be centered there right about $1 million. There is a bit of program income here. The reason program income has gone down over the last few years. We spent quite a bit of it and that was related to that major demolition program or project over in district 1 that y'all some of y'all were here when we did that. Um expenditures um 983,000 for affordable housing development, 10% for the administrative load on this one, balanced budget at 1.081 million. The next one is the emergency solutions grant or ESG. Um the entitlement portion of that is small. There is no more COVID funding that goes in that. So this one all goes for homeless housing and services minus a 7 and a half% for the administration thereof. The next you'll hear us sometimes use the word cap which is comprehensive energy assistance program. This is providing bill assistance for people with their essential utilities. This one also has centered up right there around 2 million and probably is going to stay. This one had ARPA money. It was not the same general money that the city had. It was unique to SEAP. That's all been worked out of it. You see where we are now. So in the middle you've got the department expenditures 131,000. So out of that $2 million Karen and her team provide all the administrative for 131,000 and provide nearly 1.87 back to people that are in need. Okay. You've got some miscellaneous other funding sources. We've got some older uh carryover money that's actually worked its way out. Move over to the right on the last section. This is the total of those various grants that are in there and getting you to 5.9 mill 5.5 million. Okay. Ready for economic development? Okay. This first one, this is the a bit of the catch all where we run everything into it and then it goes out into different sources. Um, so the compensation and the benefits, that's a portion of the two total FTEES that we have in the city's business development department. So that's Miss Brown and her team. They do a great amount of work that is covered in here. Other than that, what you're really going to see are transfers. So, come with me almost to the bottom and you see transfer to transit at $400,000. So, that's a it's not an offset. You're still paying out of the general fund, but you would be paying a little more than that. Saying this is not general fund is a little bit disingenuous. This is still all your maintenance and operations property tax money. When you hear us talking about the M levy and all that, that's what is funding the totality of this 400,000 of it goes over to transit. That has been a flat number for many, many years. And then you have the market love transfer. So current year the transfer to market love out of this source was 3505 million. We have pulled that down a little bit to 3.106 million. Collectively, you've got 3.739 in funding, 3.739 in expenditures. All in, this is a 9% reduction. So, this group took the same hit that all the other general fund departments took. It's the same funding source. >> Um, just one question or one comment on it. So the the property tax line is is empty for this year where it's carried the money before and now we put the money down in the general fund because we've we've changed how we uh transfer. >> That's correct. Mayor, um at the end of the budget, two budgets ago, now coming on two budgets ago, um the council uncoupled it from a rate. We left it where it was last year. There's really there's no change in how they're getting their monies. It's just that this is now a transfer from the general fund rather than showing up on property tax. One of the reasons we did that is internally in the past we've had to calculate three different tax rates when statutoily only two exist. So we're squaring all that up as well. There'll be more details on the uses of those funds. You've seen city bust, but you'll see more on the market lev money here in a little bit, Mr. Collins. >> And so when when market lev was initiated, um, was it based on a percentage of property tax? >> I have been told it was based on a flat number of pennies. We have not found it, but we've been told that. >> How long ago was that? >> I'm going to guess very early 2000s. Okay. But it was it it it started as a flat number of pennies per hundred. >> That is what we've been told. Yes. >> Okay. And it's evolved to the point where we don't we don't do it that way. Um do we have any projection about where that number might have been had we left those pennies alone? >> Um current year a penny is of roughly 2.4 million. >> Okay. And so if if we imagined um that that's somewhere in a document that was three pennies if I recall. And so that would put us somewhere around six 66 68. >> I'm going to cheat because I did math in public last year. >> I do not. Thank you. >> I did and I got popped. >> Yeah. >> Um three pennies at the current value would be about 7.2. >> 7. See, I don't do math in public. Uh, but about 7.2. So, so over the course of this transition, we've we've seen this number decline by approximately 50%. Is that a fair? >> It would it wouldn't be. Yeah. would have grown to that revenue. But >> when they had first initiated the transfer to city bus, that came out of whatever number of pennies were being assigned. And then when we created internally the business development group, that was part of what we worked out with with Market Leook and Lita that we were going to cover that. And then again, there's there's not a direct it's so many pennies at this point. I want to say 2012 is when the city bus transfers started somewhere right in there. Believe Mayor Robertson. >> Yes. I think that I think that that was was I think everything was left alone fairly well up until uh 2012 and then changes started to be made. So, okay, that's that's all for now. Thank you. >> Thank you. Okay, let's do gateway streets. Enlarge that a little bit. So, current year budget is 9.3 million. Gateway has two sources of revenue, a portion of the franchise fees collected by the city and then whatever interest is earned. New year budget is 9.008. That is because the franchise fees are down. You saw that in the general fund when we looked at the top lines on the revenue. That obviously affects them the same. You will also note that we've got very very slight increases from this 8.58 as we go out in the future. Again, those will get truththed out every summer because we just we don't know. Um coming down, your largest expense inside of Gateway is 7.6 million for debt service. You see how that stays flat for two more years and then begins to come down somewhat rapidly. That tax note payment was a short-term note that was taken out on a road project a couple of years ago rather than doing it as a 20-year bond. There just wasn't it's not logical to have done as small as we did on 20 years. So that's what the tax note is. You see the 500,000 that goes to increase your street maintenance for inside the loop, leaving you with a total expenditure of 9.15. And we're slightly under the line here at 139,864 expense greater than revenue. We're back up in the following year, fiscal year 27. You see that bigger number that comes in as a negative for fiscal year 28. The reason being we think that is when this fund can carry its next street project. And recall that when Gateway was originally built, number one, it was very, very innovative. It was not done anywhere else in the state that I'm aware of. In fact, I watched it jealously from afar. Gateway was built entirely as a debt service fund. Um, it really was. We've been able to come in um council several years ago changed the gateways guidance documents so that we could use some of it for street maintenance. If we were able eventually to build enough cash you could fund a project. I think it's really going to be additional maintenance inside the loop through the future as well as every few years and by every few years it seems about every five you'll be able to pick up one more street project for Gateway. No go down and look at their reserves or their fund balance. So we are slightly upside down on expense versus the revenue. You see that the fund balance today is or for next year starts at 12.1 million. The reserve requirement here I believe is 75% of annual debt service. So that's the 5.6 leaving 6.5. And then again you see how that rises out into the future. for the benefit of anybody who might be watching this and and wondering about what the gateway uh how it operates, where does the uh revenue from the gateway come from? >> Um it's portion of the franchise fees that are collected in the general fund and I don't remember the percentage right off the top of my head. Cheryl probably does. >> Percentage of franchise fees that go to Gateway. >> It's like 40%. >> What did you say? >> About 40. >> About 40%. Okay. >> We'll verify that. That may be a little low. >> All right. And most of that was used on Milwaukee. >> Milwaukee and the Marshia Sharp flyover. Yes. The flyover. All right. It's done several smaller ones, what I would call more normal streets since then, but that was what it's created to do and it did it very well. Okay. Gateway Capital, same 500,000 for street maintenance inside the loop. Cash ready to go to hotel occupancy. So, council, we ended up bringing this slide forward kind of late in the budget last year, so we put it back for this year. Um, don't intend to read it. Just know that under state law. There's two criteria you have to meet to use your hot tax money. The first one, every expense must directly enhance and promote tourism and convention and hotel industry. The second criteria, and that's the one that's got the laundry list underneath it, every expenditure of hot must clearly fit into one of those nine categories below. So last year we did make some very small changes in how you distributed the hot tax. The larger change was two years ago. These dollars used to be sent over to your partner agencies as a percentage rather than a dollar. So if they were going to get 25% of your levy, we would still give them an estimate of how many dollars that represented, but you would pay in a rears after the close of the year if the hot tax revenue was greater than you predicted. They got that proportionate benefit. The council stopped that and you now actually are building a hot tax reserve fund. So now what would have been true-up dollars goes into that rather than back to your partner agencies. At any point in the future for an eligible project, the council can allocate those dollars including back to one of the partners if that's the best way to do it. But that was a fundamental change two years ago. Last year we made some more minor changes really related kind of to the museums and such as that. So we'll walk through in detail if everybody's had a chance to read and memorize the nine part test. And just to make the point because this question comes up frequently from well not real frequently but every now and people say why can't you use that money for your general fund to help lower my >> taxes on my house because the law does not allow us to do that. It's restricted. >> It would be illegal to do that. >> Yes, it would be illegal to do that. That's the best answer for that. It has to directly do one of both of these things. All right. Thank you. >> Okay. For the fund as a whole, for the fund as a whole, you've got current year 9.7 million in projected receipts going up slightly to 10.077 077 in the following year 9.7 million basically to 10.1 million. Carry that down into your funding sources. You do see some interest earnings on top of that leaving the hot fund for the new year at $10.1 million all in. You've got compensation and benefits. That's where we've been able to assign under that nine-part test some of your city expenses, some professional services and training that supports that. And now you get into your transfers. These are what goes to your partner agencies. And we'll blow that part of it up. So we've got civic center operations and marketing 2.75. You have your convention and tourism bureau, more commonly known as visit luk 3.7. You have civic love at 596. This funds their grant program what is called visiting participatory and spectator sports or love sports alliance comes in on here at 1.205. We have a transfer to the tiff for the conference center that is North Overton 452. Buddy and Maria Elena Ali Plaza debt 86,000. That one's getting close to paying off. We have the transfer to the CIP for the civic center. You'll see that here in a little bit. In 150,000 we are able to transfer some of these dollars to your tournament ball fields. So that is the Tom Martin complex and the Burl Huffman complex. You can see we've been doing that for three years. We now are allocating a portion of this specifically to the Burl Huffman complex for the eventual turf replacement on your tournament fields. That 494,000 is not programmed to be spent this year. That is to go in a capital project and build so that when we need to replace that turf, we'll be able to do so. Then you've got visitors visitor support at 268 comes down on a bottom line 10.077 on the pie chart as a percent you can see where those dollars are going. Okay. So here's your capital Mr. Collins >> appears to have a new line item or from 2425 of compensation and benefits. What what part of our staff are we >> It's primarily in your museums. >> Museum staff. >> Mhm. >> Okay. Thank you. And it wasn't there before, >> correct? Because we just made that last year. >> And they had been paid for under what category? >> Um mainly they were coming out of the general fund. out of general fund dollars. Okay, very good. Thanks. >> But that was a legitimate use of that hot tax money for that. That was one of the changes we made. >> Yes, sir. >> Mayor, >> Mr. Rose, >> thanks, Mayor. Um, you've probably already went over this, Jared, but um transfer to civic center looks like it went down 60%. transfer to CIP. >> Transfer to CIP. >> Uhhuh. What is that? >> Well, remember the money that's in their CIP. >> Uhhuh. >> We're mainly we're holding it except for, you know, repairs that we need. So, we didn't make the same transfer this year. We're asking for a single transfer of 150,000 and that's actually to work on your future of the civic center. >> Okay. Thank you. We were able to make the change, I believe, seven years ago to entirely get the civic center off of your general fund. And this is where those come in. >> Mr. Collins, again, >> one last question. The the monies that go to Civic Lock in the grants program, that's formulaic, correct? I mean that's that's based on somewhat on revenue by formula. It the the percentage that goes to each partner is number one. It's entirely set by the council. It's not formula by by law. The formulas that are written into the hot law, if I remember them correctly, they're actually caps. They're not saying you must give X. They're saying you can't go more than X percentage. >> Okay, thank you. >> Okay, so here's your capital. Um 874 going into the ball field maintenance and improvement. Again, it's Huffman and Martin. and then setting up a CIP to accumulate um some extra dollars for your future convention center expansion discussions. If that ends up not being needed, it goes into this reserve and can get reallocated. [Music] Well, they're non- major. That just means it doesn't take a lot of time there. In other words, they all fit in a big chart. So, your non- major special revenue funds, this is the revenue side. Um, starts at the letter A, goes to W. Note that this is going to pick up all of your PIDs, public improvement districts. They're all going to be in here. Most of them are at the bottom of the page. A couple of them are scattered around their end. Um abandoned vehicle fund that is uh for the benefit of the police department. You see that it is down slightly. They're we're trying to get some true up done in that fund. We don't think it's going to hit its 2.9 this year. And this is not a revenue that's in anybody's control. It's ultimately after a vehicle ends up seized, struck, and auctioned. You pay your expenses and then whatever's left goes into this fund at the animal assistance program, one of your PIDs, cable services fund. Um, so work across on that one. That is what everybody used to call PEG which was public entertainment or public education and government. It's your TV channel. Those are funds that are have to come out really of your cable providers and yes the numbers up this year. I I'll show you why here in a moment. They're continuing to go down. So we've made one big round of improvements to the audio and the visual system. We've got a lot of the backend done. Second floor is done. New year, we're going to finish this. Get all of our stuff here to where it works the way it should be. Get a modern system in it. You have various grants that come in here. Again, most of them are not going to be within um our control. Health rebates and insurance. That's actually a revenue that comes back to us that we can generate on the back end of the health plan. Primarily, they are pharmaceutical rebates. HOT is relisted in here. You'll notice it's the same numbers prior. Um various court funds. It's just pretty much where we have all of our our catchall. I would bring you down um to north and east love neighborhood and improvement fund. That is your oil revenues, your oil royalties. Those royalties used to be split up uh and go to a couple of different places. They now all go in here. Oil prices have stayed down, so we are not budgeting as much money coming in, but this money goes nowhere other to than to those authorized programs. It's primarily districts one and two. It bleeds a little bit into three. Okay, the expense side. So the big one again being the cable services fund at 2 million. It's not going to generate 2 million. that is coming out of its reserve and coming out here so that we can set it up and spend it. Um, some of the expenses look really big. You see some 124% out of Upland Crossing. That's a self assessed group and you will actually be doing all of the PID budgets I believe at the second meeting in August. That correct? Yes. Second meeting in August. You'll see every one of those budgets. component units. Okay, I think Mr. Osborne is still here. John, if you don't mind, we'll have you come up and walk us through the next several. Good afternoon, Mayor and Council. Thanks for allowing us to be here today. Uh a as you all have heard um our uh revenue sources for our entities come directly from uh the city staff and so we appreciate the city staff and how they work with us to get us those that information in a nice timely manner. It's been good experience this year as well. So our sales tax numbers are going to be down just like y'alls are. Um we are um do we do have the love business park tiff reimbursement of 1.2 2 million that you heard about in the TIFF presentation um earlier. Um we do um have um a um in the in the past this past year we did a project that was a joint city county project um that was to help um do the street um kind of out there west of LRO for DFA Dairy Farmers of America and their facility. Um we don't have that revenue this year unless you just want to send us any additional revenue. um we would love to have it, but um that's one reason why that income was in this last year, but not in this next one. We do anticipate using um some considerable net assets in this uh upcoming year. We won't be using quite as many net assets um as we anticipated in this budget. Um but some of our projects are shifting. So where we thought we were going to get it done by uh the end of September this year, it actually has been moved to next year. And so um that's one reason why the that continues to remain high on that. From a compensation standpoint um we uh have salary adjustments budgeted at 2 and a.5% increase. Um we have um uh had to fill quite a few vacated positions over the last 6 months and um those have been at current market wages. Um we do have um anticipated um some kind of dual positions uh for one um for an early part of the year. Um but overall um we're pleased that benefits have actually gone down and a lot of that's because um we um had our level funded health insurance plan that we put in place um last year um has helped us to remain real competitive there. Um we have in our um administrative costs we have some areas where we thought we were having uh professional services uh all the time and in reality they are more of a license now as opposed to professional service. And so we've taken some items that were expenses in one and moved them to the other. But for the most part, um that uh category is up because of some additional uh licenses that we've been um gaining to help make us a lot more efficient with some of our programs. Uh for example, being able to um pull data into one file and get it to go to all the right places, including the website, so that it can be um good and accurate information and also timely. Um that's what some of those that information is on for us. Um, our office office related expenses are relatively flat. Um, our marketing and sales are relatively flat. Our business incentives are relatively flat. We do um still have some capital improvement projects um that we um are planning to do. Um we do know that plant agriculture systems um continues to um look towards the first of the next calendar year to begin construction. And so we budgeted in this year um our water line uh to be actually constructed. We've been doing the engineering process on it. Um and then also we have a lift station in force main for them um that's already been engineered that we're waiting for their construction to start before we implement. Uh as well we also um have uh have um uh as part of the reimbursement by the tiff, one of our capital expenses is the East Hunter extension that's in the business park. It's um uh just north of Verizon and Am Amazon's facilities that are on the east side of the business park. It's just a little small extension that that connects um the internal roads of the business park with MLK. And then um we are looking longterm as well about the growth of Levik and how we need to um find um not only a business park that is not near um other housing. Um that's been a huge concern for many communities including Leach to make sure that our business and industry can grow and not be right next door to a neighborhood. And so we've looked at kind of the far north area. And as we've been having conversations with city staff, it's become quickly apparent that a um water tower is going to be necessary to be up there to help with fire suppression. And so we know that that's a pretty significant cost standpoint for us. So, one of the big things that we've um planned for this upcoming year is the engineering related to that. We can't land another deal in North Levik until we actually have the water tower in place. And so, we've been very very careful about what projects we put up there in North Levik. We've got quite a few that are looking at a couple different pieces of property at the moment. And um so one uh thing that we feel we need to move forward on is at least having the engineering done on that water tower so that um we can start construction on it as soon as possible um when it's when it's time with a company kind of going in place up there questions on any of that one. Mr. Collins >> ask a couple of questions that I think I actually know the answer to. Um, Lita is funded by sales tax. >> Yes, sir. >> What is your rate? >> It's 1/8 of 1%. >> So 1/8 of 1%. Um, and the available amount of sales tax provided by the state had it been elected by the city is how much? >> Uh, I'm sorry. Say that one more time. state. Um I guess really let me just make the statement. State allowed 1/ half penny for sales tax and the city of Lach adopted 1/8. >> That's correct. The state will allow a maximum 1 half of 1% but it's also of whatever is available. And so if the city has none available, they're not allowed to to to do it beyond. >> So we couldn't add any more today if we wanted to. >> Uh no, sir. An entity would have to that currently collects sales tax um would have to give some up. I would love for the state to give up a portion of their six six and a quarter percent. That'd be fantastic. >> Let's let's work on that. So, uh I'm I'm skeptical of that. But I guess the point I want to make it at 1/8 penny, uh you operate on essentially 25% of the available funds that the state would have allowed an economic development organization to have collected. You operate on 25% of the available revenue stream that our neighbors to the north collect >> and to the south and east both u at Midland, Odessa, Amarillo, Abene, they're all at a half percent. Frisco is at a half percent. Um the the larger cities are actually they don't collect a sales tax. Um the uh it is for cities that are less than a half million in population and it is meant to help um even the playing field for uh small and rural areas to can be able to compete with the urban areas that have all the infrastructure and the personnel and the and the available buildings. Um, this is a pot of money that's specifically designed to be able to attract companies, provide skilled training, um, to be able to build infrastructure and help, um, advocate for companies to be in our area. >> Well, and so I think, you know, to commend uh, the Lita team if I could. Um, we do more with less, which is the Lach Way of course, but we do more with less than any of our neighboring cities, um, relative to our size and our sales tax collections. And when you think about landing a project like LRO or Monsanto Bay and and not having to fund uh the kind of infrastructure that um you might have had to fund or might could have funded and but still landing those projects in Love. I want to, you know, tip my hat to what you guys do, the hard work and and um skill set that you guys bring to the table when it comes to negotiating with companies who who could choose to be anywhere in the state or anywhere in the country for that matter and choose love because of the presentation that you guys make. And so I want to say thank you for that. >> Thank you, >> Dr. Wilson. Uh yeah, John, really quickly on the expense side, your uh incentive payments as you've got four million, are that is that employee incentives or business incentives? >> Business incentives. >> Okay. >> Yes, sir. Yes, ma'am. The um so on our business incentives, uh that would be any cash payments that we're doing for job creation incentives, capital investment uh uh um grants, things of that nature that go directly to those companies. >> Okay. Thank you. Any further questions? >> All right. Thank you, Mr. Moving on to Market Le. Uh again, our revenues come um directly from the city and um as you heard that there was a decrease in um the funds that were coming to market Levik and so uh we are at 3.1 million roughly. Um, we do have a utilization of new net assets and I'll talk about that project here in just a minute. Um, a lot of the net assets that we will be using are related to the ball fields um out of the Tom Martin complex. Um, compensation is um, uh, at the 2 and a half% again the same as LITA and that's true across all of the different entities. um the uh professional dues and services. We do have some subscriptions that we've allocated amongst all the three entities and that's one reason why that's up just a little bit. Our uh special projects um are uh going to be down just ever so slightly and that's partially because in the current budget year we've already paid $475,000 for um the engineering to be done at the Tom Martin complex. And so the remaining uh funds that we have for that is about 2.75 million or excuse me 2.25 million and um that would be to for the actual construction to take place. I think uh and Kobe may be in the room but I know that they're doing uh our parks and rec director which he's been fantastic to work with. Um we uh have been Park Hill is currently going through their engineering and um I can't remember the time frame on it but it seems like it was early next year January or so that maybe February that they were going to be done with the engineering. Was it a little later than that? >> It should be around November December. >> No, November December later this year that the engineering should be done. that would then um we would then start to look at what is the actual construction um and we would um be going out for bids on that um with the assistance of the city council and um then once those bids came back and we determined what the funds could be used for that's when those funds would then be transferred over to the city um to uh for the use of that project. So um that's our uh big special project that we have in um in Market Levik. Um we continue to do our grant programs for downtown and for our commercial revitalization area and um and we appreciate um the council's support over this past year. Um Jorge tells me that we um had he keeps track of all the different projects as they come through that process and we have had some that don't qualify anymore. Um, but we also have some that have qualified for more as a result of the type of impact that they've had and um, we feel like there's beginning to get in even greater momentum in the downtown area. So, we're appreciative that you all allow us to do that project to do do that grant funds. Happy to answer any questions on Market Le. >> Uh, any questions other than the Tom Martin ball fields? Any What are the other special projects? Are there any other special projects? uh the uh the that's the bulk of the special projects. We've got some other um things that we do for uh our training um and and helping with our um high demand job training um efforts that are done through Market Levik and some of our marketing efforts that are done through there. Um, I don't think I've got anything else that was Oh, it was some workforce initiatives that could that could come out of Market Levik that are utilized there for our special projects. >> Okay, Mr. Collins. >> Um, John, I believe that I understand that monies from Market Lab can be used for economic development. uh those monies can be transferred into LITA for use on a on a particular project. Um is there an example of that? >> So uh in the so I started here in 2010 and my predecessor prior to that was transferring about $3 million a year from market love to LITA to help with LITA related projects. That was kind of originally what it was designed for was to do what I call traditional economic development of jobs and capital investment and trying to encouragees encourage businesses to be here. Um he could have technically spent them out of market le for the same reason but that that was kind of the policy that they did back then. Um we uh did that up until maybe the mid 2010s uh time period and then we kind of shut that down based on the council's request to keep more funds in market lick for more community related projects. And then once we had um won the Lepro deal, we asked the city council if we could um transfer a million dollars a year for five years to help with um the our project our LRO foods project. and um the council was supportive and so we were appreciative of it. Um Jana, do you recall we have one more year of that? Two, we have two more years of that and then we're and then we're um we'll be finished with the five years. >> Okay. One of the things that I would point out about Lita and Mark Lavok is they are they're really kind of charged to be prepared to assist companies when they choose to consider love. And so while you look at projects that um may require special assistance, whatever that might be, you don't know what it is until somebody knocks on your door. Yes. And so, you know, the point I want to make with that is I think it's important that we recognize that having capital in market lobuk or in lita helps us respond to that company that chooses Luk wants to choose love. How can we assist that company? and and and and and in my experience with Lita, you know, we're not paying companies to come here. We're assisting them with the problems that they need to solve. We're not buying their business. They're choosing Labok. And and I think that can be said of Monsanto or and Bayer. It certainly can be said of LRINO. They chose to come to Labok and we helped them with to overcome some of the challenges that they had in their relocation or their new project. And so, you know, when I when we look and consider why is there money sitting here? Why are there free capital? Why are there dollars sitting in these funds? It's very important that you be able to react to whatever that project um may be. Is that is that fair? >> Yes, sir. Um that is um the a lot of the sales tax uh uh for economic development type organizations around the state have a fund balance and it's so that they can move quickly at the speed of business that they can um fund infrastructure to be put in place that they have the capital to help with any um incentive programs that are necessary and um Lita is no different and we use market le have traditionally used market le for many of those same abilities to try to be able to win deals and and get them to to come to love. um you the um when we have funds that are available, we we specifically don't just spend them for the sake of spending. We we see that long-term there is some significant capital needs um for the development of areas for business to go into and um uh many of those areas uh and many of those needs the city of Levik is not going to have the capability to assist with um uh going forward. And that kind of then falls back on our backs to try to help um in that in that case to help get those areas developed and to bring in those jobs. >> Well, and and you made the point earlier about the water treatment, not water treatment, but the the water storage facility and and you know, we we get hamstrung um if we don't have that facility in place or the funds to to build it. And I certainly when we talk to the city manager or uh others to to say we had an extra 10 or 12 million dollars to build a a water tower for a project that comes to town. It it doesn't exist. And so we put that burden on you guys. We have to allow uh some funds to be accumulated in those accounts in order to be responsive when that happens. And what we've seen uh in in the history of Lita and and Labok, it's not if that happens. It is when that happens, there will be a project that comes to Lok and and is going to need that water tower and and we're going to, you know, we're going to lean on you. So, we're going to need to allow for the accumulation of some of those dollars there and understand why and it's to be able to move at the speed of business as you mentioned earlier. Yes, sir. So, thank you very much. >> And Dr. Wilson. >> John, looking at your expense report here for Market LEC, I I know we do the 1M mill transfer over into Toledo from Market LEC, correct? >> Yes, ma'am. >> Is it somewhere on the expense? I don't see a line item for that transfer. >> The uh expenses under our grant programs. >> Well, I thought you said but that was the grants for the downtown grants. So, is the downtown grants paid out of LED or is it paid out of Market Le? >> Uh the um the grants are paid out of Market Le to Lita. Um and then um the >> I thought you said that million was our downtown grant like facade all that program right there. So is it for the transfer or for the grant program? >> Ender or business incentives and special projects. We actually have two lines that say grants. One says grants and it's a million75 that is a million dollars that goes to Lita and $75,000 that goes to the Levit Cultural Arts Foundation um to help with that project. Then we have a grants program that's for downtown and CRGP and that's 1.175 million. And then we have our within that same whole category, we also have our special projects and business incentives. So my apologies, we'll we'll we'll work on renaming that. We have two grants. One is directly to LITA and the other one is for our downtown grants um that were associated with that. >> So the down so the downtown grants for like our facade program is coming out of the special projects. That's why I'm I'm only see one grants. Am I missing a grants line? >> Special projects. Is it out of the special projects line? I just want to make sure I know which one it's coming out of. >> So the thou I'm looking at your screen now instead of my piece of paper. So that'll make us both talk on the same wavelength. So the under the grants program that is the million dollars to Lita and $75,000 to the Lev Culture Arts Foundation. Uh Stacy Keith runs that operation. She does a fantastic job under our um uh and then under the you all have listed your the special projects there um at 3 3515 but you don't I don't see am I missing it Cheryl? That's what I'm trying to Is it all accum all wrapped up into special projects or are we missing a grant line for the facade grants? I >> think what we're what we've got is um under business incentives uh oh I see what it is. So your business your incentive payments. >> What that is is a combination of two of my line items on my piece of paper and that would be the business incentives of 125,000 and then our grant programs of 1.175 million. And that's for the uh downtown and CRGP. >> Okay. So, they're under incentive payments. >> Yes, ma'am. >> Okay. I was just confused. They weren't matching up. I only saw the one grant. So, thank you for clar >> My apologies. I really should use your screen. I'm just so used to my piece of paper. So, >> thank you. >> All right. >> Other questions on Market Le? >> Are there uh any any other questions for Mr. Osborne? Well, and uh just to follow on to what Mr. Collins had said, "Yeah, you I think that other 38 pennies was the citizens voted to use that for reduction in property tax." So, it's not like we didn't capture that value in some way. We chose to use it differently, but the 18 that they get is significantly less than other cities have to work with, and they do a great job, you know, in bringing us um uh businesses uh with their work. So, >> thank you, Mayor. >> Any other questions? >> Yes, Mayor Potam. Just for the public to understand your special projects, will you let them know? I know we have the cultural arts. Is that where we have helped also like Burl Huffman? >> So, in the past, Market Levik has helped with the uh redoing of uh of Burl Huffman. We I think we finished that project in 2020. I think we started in 2019. And that's what brought those turf fields, nine acres of turf with lights and and all um out to Burl Huffman. And then um that is also the line item that we are looking to use um 2.25 million out of uh for our u assistance with um the Tom Market Complex. Yes, ma'am. >> Could we fund a water park aquatic center? Just just asking. >> So from that >> back in the Burl Huffman days, the city was asking uh they wanted to see more soccer tournaments. They wanted our locals to be able to stay here and not have to travel as much and there was a request could there be funds that are put together specifically for Burl Huffman. In this particular case, we've had a lot of conversations with parks and recck department and city staff about the the the needs for additional ball fields and um the condition of the current ball fields and there's been uh indication to us that that's been more of the priority. it. We only have so many funds and so um we're happy to separate those out and to to to shift them around. Um it will dilute the abilities to actually do any one particular project to the kind of the quality that we need to do to be able to attract the tournaments that we're trying to attract. Um but if there's a if there's a different emphasis that we need to do, um I wish we kind of voted on that earlier. We're already engineering on the on the ball fields at the moment. No, I I know that the tournaments also bring dollars. >> Yes. >> So, I know that that's important. I just what I think is also of interest to the public is they, you know, because it is also supposed to support recreational opportunities for local. So, that's why I was asking. >> Yes, ma'am. They having um as many tournaments as we can and maximizing those fields brings a lot of economic opportunity for us. Not only is it just rent to the city from a park standpoint, but probably even far greater is the fact that they eat out, they spend the night at our hotels, they shop, they they you know, many of them forget things and they want to go buy stuff or they just want to go to the movies and during their downtime. >> Thank you. >> And I might just add again just back to the 1/8 of a cent, a lot of uh help, assistance comes to uh Lita from our own staff. you know, it's not it's not a line item in our budget, so to speak, but I know our staff do work very hard with you and contribute a lot of time and effort. So, there is actually more effort that goes into it than actually just shows up in your budget when it comes to what goes into getting these uh businesses and everything. >> Absolutely. That's a great point, uh, mayor, that the city staff is invaluable, uh, to us when we're working on projects. We work very hard to not just waste their time, but often times there's questions that need to be um addressed and answered that only city staff knows the answers to. And um thankfully um not only does our city manager, but also our business development department and Briana um helps to coordinate all of those uh efforts to make sure that we we get the right people um at these meetings. It's one reason why we win the deals like Lepro. They see the joint effort that everybody has and the working together it makes a a big difference. >> All right. Thank you very much. Thank you, Mr. Oman. >> Okay. Talking through Visit Levik and um if I'm not mistaken, you have probably two slides. Visit Levik and if you slide one more for me, Joe, you also have the Lev sports authority. Um and so uh way way back when um those two were separate entities and um at some point the powers that be decided that they needed to put them underneath market le as a DBA and um from that point on or they wondered at that point would this actually work and so they've constantly funded it separately but in reality we treated it kind of all as the same and so when I'm talking about visit love most of the time I'm actually talking about all of Visit Leach and also the Levik Sports Authority. Um and then um there's sometimes when I'm only talking about the Levik Sports Authority because I'm talking to a tournament organizer that really doesn't necessarily understand the point of Visit Levik and so they at that point I'm only branding it as Lev Sports Authority. So, um, we have a combination of those two in and what our information is. Um, the the hot money, the hotel occupancy tax dollars that are come to us come to us at the, uh, or told to us at what the city has has mentioned to us and that level has remained level for a number of years. Uh, continues to remain level for us. Um, our compensation uh, merit-based salary adjustments are up to 2 and a half% like we've mentioned before. Um, we did have some professional dues and licensing. um um that we've added to it, but some professional services that have come down because of how we've reclassified some things. Um we did uh end up um giving back some rent space that we had. And when we did, it used to we split uh Gary Lawrence back in the day had had set it up to where uh Visit Levik paid for this and Lita paid for that. And in reality, now we're just taking the whole space and just splitting it down the middle. So there's just a little extra rent uh there. And then um we've got um uh probably the the biggest aspect of all the change for us amongst our sport sales and marketing and and sports servicing. We've got a a huge number of sporting events that we're anticipating this upcoming year and we're very very excited about it. U but uh the the big um um number that's in our budget this year is a tourism capital improvement project of just shy of $5 million. it is um uh related to the um Tom Martin complex. So, it's not just coming out of Market Levik. Uh it is also coming out of our tourism um dollars. And as um our city manager mentioned, there's a two-part test for those expenditures to be able to be done. And the Tom Martin complex does uh count in what those expenditures can go for in terms of improvements. It does put a little bit of onus on the city to to monitor and make sure that we continue to host tournaments that bring in hotel nights so that we get that paid back over time as a community. Um, but in the whole scheme of things, it is ends up being just shy of $5 million um for that project from Visit Le. >> Mr. Harris. >> Yes, Mr. Osborne. um myself and citizens wants to know when or are or are you ever going to attempt to develop hotels and restaurants by the airport? >> So, we work very closely with developers um for both um hotels, restaurants, could be apartments, could be even housing. Um we get a lot of uh requests from developers for just information about what's going on in the community. um we saw a huge uptick in the total number of hotels in our community from 2014 to 2019 and yet our occupancy rates didn't fall at all. So um it showed that there was a need for it and and demand for it. Around 20 I think it was around 2018 there started to be a lot of buzz around the potential for an airport hotel. I think they had a couple starts and sputters with a couple different developers um that were look that were considering um being out there by the airport and ultimately then COVID hit. And once COVID hit, it's kind of changed the tourism world just a little bit. It's taken it a little bit longer for um a lot of the hotels to be able to kind of come back um and and be at the occupancy levels that they needed to be at and also the staffing levels that they needed to be at. um our airport director we work very closely with um as when when she comes across opportunities for developments to be out there whether it's a hotel or or or we I think don't know that we've ever looked at a restaurant on the on the airport property other than inside the the building but the hotels themselves she's always quick to give us a call and so that we can come over and be a part of those those conversations um I I think that as we continue to see North Leach developed and um as we see the city continue to grow. Um, our county is expected to be at a half a million in population between um, now and60. Um, we're going to see um, more and more demands for hotels and restaurants along the interstate, including north of our community and especially around the airport. >> All right. Thank you, >> Mayor Pod. And and I know for a fact we recently met with with a someone that is actually looking at a hotel in that area and some business development on MLK. So >> Oh, good. Wonderful. And if we if if our office hasn't met with them, we happy to do so on a confidential manner. We've got a lot of statistical information that would be very helpful to developers as they as they're looking at the marketplace for what the opportunity is. And we did mention that the thing is that you know during COVID a lot there was probably a lot more energy but one thing that we found from looking at some of the paperwork it was still reflective of COVID period. So hopefully they'll make some updates and that'll be a positive for that area. >> Yes ma'am. >> Mr. Collins, you might um you might point out the limitations of economic development money and their usage that they can't be used to incentivize the development of retail restaurant spaces or or hotel spaces. >> Yeah. So, so that's one of the challenges with each of our three entities is that with LITA, I'm not allowed to actually incentivize a hotel developer or a restaurant um by state law. Um and so in visit Levik um I I um am very careful because it's so it's limited dollars to be able to um try to en encourage the developments to take place. There are some rules and regulations and we saw uh that allow for development uh to take place and we saw that with the North Overton or with the Overton in the North Overton area with the development of that meeting space that's being paid through hot um hot um taxes. But the um but the funds that come to us, we really don't use those to incentivize companies. We're doing that more to try to encourage more and more visitors because the more and more visitors we have, the more incentivized companies are to operate a business here, such as a hotel or a restaurant. Any other questions I can answer for you? I see that. Okay, >> John, we've uh I think we got two more slides for you. >> Civic love. >> So, on the love sports authority, I I really combined all of that with our conversation on the visit le side. >> Where'd they go? >> Oh, yes. Okay. Yeah. So, um, in talking with Jared, he, um, mentioned that you all like to see kind of where we stand from a, uh, employment side of things. And, um, obviously the way that we have tried to be is that given our limited number of dollars that we do have is to be as efficient with those as possible. So, we take our management team and our marketing team and we allocate those amongst all the entities. Technically I am an employee of Lita but my my salary is allocated amongst the other entities and we have other people that are an actual employee of Visit Levik and theirs uh may or may not be allocated to um other entities depending on um whe if they're in the marketing or management departments. So, um, this slide here shows you, um, going back to 2122, how many total employees our entities employ and what our vacancy rate was, uh, for, um, for all of our full-time employment. Happy to answer any questions on that. Did you did you do a presentation on civic love or is someone else going to do that? >> I think they had a slide. >> Mayor, I believe I have a slide out of order. This reserve sheet is John's last slide then we'll jump back and grab Cric. My apologies. So then um also uh at the request of the city manager, we've put together for you where we are from a cash standpoint um in each of our entities. And so you'll see Lita Market Levik and Visit Levik. And then because you all are used to seeing the CVB and Levik sports separated, um Jana has included those two separated out below. So the two uh at the very bottom if you were to add those up they equal what is in visit loving if that makes sense. So um our available cash as of 93024 is the audited number that came back for our entities. um what we anticipate our net change in excess revenues uh to take place um in this fiscal year is in your next col column our policy level reserves and then you see on the far right what the policy level is for each of our entities um and um and so one example that I would like to give here is that it's not six months of budget it is six months of operations we don't include all the capital improvement projects and um incentive payment ments and things like that into our policy level reserves because uh we feel like that that's not good use of our funds. We it's more about the operations of things. Then um you have what would be our year-end uh fiscal year 25 uh forecasted excess reserves giving us um then what uh in that next column what we plan to spend and those uh uh the change in excess reserves or use of net fund use of net assets and then um giving us what our total uh at the end of fiscal year 26 reserves would look like. uh for LITA that leaves us about um just shy of $11 million. To put that in perspective, if we had to do the water tower today, it's an $11 million project minimum. And so that one project would use the remaining um available funds that we have in excess of reserves. uh in market levik it actually takes us below our six months policy to five months in reserves. Same with visit Levik and that's because we wanted to remain intact um the the funds that were be going for the ball fields in an effort to try um we're we're hopeful those construction uh documents when they come in the bids when they come in that they come in uh lower than and anticipated so we can do that project to the to the best of our ability. But hopefully that gives you a better idea of where we stand from a financial perspective going forward. >> All right. Thank you. Any other questions? >> Thank you very much, Mr. Osborne. >> Okay, Mr. >> Thank you. >> Okay, Mayor Council, we'll jump back to Civic Le. My apologies getting those um out of order. I know we have Miss Key here and I believe possibly some of her board. Um, civic love on the left at the top you have the revenue on the right you have expense. So current year 2.034 million new year 2.085. You come down into the sources of those dollars. Um, civic center concessions select a seat operations and that's a tremendous program. certain grant special projects and then other income. And you see how that brings your total back up on the expense side, very flat on their compensations, down on benefits and supplies. Maintenance up a little bit. Other charges slightly up. Same with grants, special events. Capital outlay and reimbursements pretty flat. and then the cost of goods sold which of course contributes um to their revenue. So balanced budget at 2.084 million any questions Mr. Gosin? >> Mr. Gosin. >> No, it's me. >> Oh. Oh, you green. Okay. Mayor Bro, >> I just want to thank Civic Loc for helping us get that Fourth of July event happening because it was a lot of work in four and a half months and y'all really stepped up. So, thank you. >> Oh, that's okay. >> Any other questions? >> I'm not saying everybody wants to get out of here, but maybe everybody wants to get out of here when we have a But we do have a followup. we have something we want to follow up with here, but thank you for all this presentation. Thank you for everybody uh being here today. So, uh Mr. uh city manager, >> thank you, mayor. I'm going to run through a kind of a quick list to wrap us up some changes that have occurred um since we actually left this room yesterday. Um let me do the uh simple parts of it first. At each of your places, you have a small handout and my apologies, this also got left out yesterday. These are proposed fee changes um inside of culture and recreation. I'm not going to run through them for the moment, but please look at those uh and get with myself or the staff and we'll answer any questions you may have. Um to follow back up, Mayor Gateway is 40% of franchise fee transfers. So, we've got that. had a question yesterday about um you know, we've got street maintenance, but then we have that ongoing fighting the potholes all across town. So, you have a one-page document there at your seat that talks about the potholes. Just note that for the current year, that's year to date, and there's still two months left to go in the year. That'll tell you both by numbers and by area where we're aerial coverage of where we're doing the potholes. Um, we will be back together at your regular meeting next Tuesday, August the 12th. We can be back tomorrow if you would like. Um, but August the 12th, budget will be posted as a work session item on every council agenda from here until we get to where the budget is finally adopted. So, we have plenty of plenty of chance to keep going. Um, now, let me tell you the one that uh hit us yesterday. So, we talked about how I get a preliminary value for taxes, then I get a certified value of taxes. Those, of course, are prepared by the Le Central Appraisal District. Remember, city has no input to any of that, and that's by state law. It's a good good system. The second thing that comes to us that has to come to us um from the appraisal district and this is true no matter what city you're in the appraisal district will be different and that is a quite lengthy series of calculations that ultimately results in what we call the no new revenue rate and then the voter approval rate. So we got that yesterday um came in about 5:30. That's timely. Tim's team is doing well on it, but we have some issues with what's in that worksheet. So, I'm going to number one, I expect I hope a lot of this is going to change. I'm going to use round numbers to just kind of set where we're standing right now. The way that series of calculations works, and I think Joe's got a copy of that worksheet up here with him. I believe it's five or six pages long. that program goes in and does a mathematical calculation that what it does is it resets what your prior year levy is. So what I mean by that when the council ultimately adopts a budget you're adopting a tax rate that tax rate is applied to your values and that results in revenue. Part of it goes to maintenance and operations. Part of it goes to interest and syncing. But when you set that levy, you set a rate against a value that resulted in a dollar. Okay? Every year, long as we've been doing property taxes with this program that gives us back the numbers we used for the new year, this year, that program reset or recalculated this year's levy, not the new year's levy, this year's levy. what that did for your maintenance and operations. And this is without the value of frozen le. This is just the base before we get into anything else. It dropped last year's levy by $2 million from 83 million to 81. Then it applies all the math math and keeps going forwards. And what it means if this ends up being right, and I'll tell you what we're doing about it. it would mean that in essence the first $2 million of new revenue is just getting you to zero. So that it's a fundamental change to where we were. So what we're doing about it, um, a group of us was up here last night working on it. Mr. Radoff with the appraisal district came over early this morning and a lot of thanks to him. He sat with us for what, nearly three hours working our way through it. Um, Mr. Radloff is going to the tax attorney group, Purdue Brandon. They're going to start working on it. LCAD's never seen it happen this way. I have never seen it happen this way. I've never heard of it this way. But the short version, if you adopt a no new revenue tax rate this year, you'll have $2 million less than you did year before. You get the one and a half off a new. So, you're 500,000 in the hole. Couple of things to just keep in mind. And again, I hope we're able to get all of these to change. Values year-over-year are flat. Out of 27 billion, the change is 27 million. Now, where those values are has moved, but the actual values year-over-year, statistically, they are flat, which means all of your numbers should be flat. If values go down, your rates go up. If values go up, your rates go down. That's how it zeros everything back out. Last year when we sat here and talked about this, your no new revenue tax rate was 46.6749. [Music] As this series of calculations reset, our base levy, your new no new revenue rate is 46.1938. It's more than a half a cent lower. So that's a challenge. That number was derived because of that change to the levy. Let me give you one more. Your current rate this year where we sit is 47.012 cents. The calculated voter approval rate so this should be no new revenue dollar to dollar plus 3 and a half is 47.1053. That is a nine 100th of a penny change from where you stand today to voter approval rate. So something's going on that none of us have run into. I think it was important to let you know this is not the final answer. We're going to really kind of hope that Joe and Cheryl got called out to go meet with them today, but maybe we'll do that tomorrow. Um, just know we're working our way through it. Mr. Radloff has been right on top of it trying to help it. I will keep you informed. We do have a scheduled action on the 12th on next Tuesday. That is to propose, not to set, but to propose a maximum tax rate. So, if we have better answers before then, we'll work on it. If not, we'll be back in front of you on the 12th to do that. This is I don't know how to describe it. I've never seen anything like this. Your calculated numbers versus your worksheet numbers are usually within ten of a percent on the total and they are not. >> All right. Well, this is just the year for seeing things we haven't seen before. So, uh >> this year's insult on top of injury, I think. >> Yes. Let's just hope it's a a glitch in the system somewhere. But, uh work on it and get us back the information we need. But, I think we all know it's going to be a challenging budget year uh regardless. And we appreciate all your hard work on it. Uh so thank you again everybody for being here and we >> mayor do y'all want to come back tomorrow or do you want us to cancel? We can come back and take comments, input. We can hold that till next Tuesday. [Music] I think we should >> You don't have any Does anybody have any questions they want to follow up with tomorrow? Are you willing to wait till next Tuesday? >> Wait till Tuesday. >> Yeah, that's the only thing I have. If we don't have any new information tomorrow, I don't see why we >> So, how how about we cancel tomorrow? We leave Thursday posted. >> Okay. And then as quick as I know, yes or no, we will let y'all know whether you need to be here or not on Thursday. >> Is everybody okay with that? All right. My plans to be back on Thursday then. Thank you. >> Yep. And then my staff, we're all available for just any individual questions that you may have. Thank you. >> Okay. Heat. Heat. [Music] [Music]