Welcome to the Monday, June 1st, Carmel Finance Utilities and Rules Committee.

We will call the meeting to order at 4 30 p.m.

The purpose of this meeting is to discuss three items that are all related, all related ordinance D 2823-26, ordinance D 2824-26, and resolution CC05182605.

We have a presentation from our CFO, Zach Jackson.

Would you like to turn it over to you, sir?

Yeah, thank you, Counselor, and members of the committee.

Actually, I think two ordinances and a resolution before the committee tonight that are all related.

In essence, we're establishing a new fund, transferring dollars from the general fund balance over to there and then appropriating it.

Since this was in your packet at the last council meeting, there was kind of an email going around with kind of some confusion as far as which fund or funds we were talking about.

There are three funds that we're proposing right now, and so I thought it would be helpful just to kind of distinguish between the three funds in this presentation, and then also talk about some of the amendments that are being contemplated, I think, for the first one.

So essentially we have three funds that are in draft form right now.

The one that is before the committee is the city assets and repairs maintenance fund.

Actually, it's the city assets repairs and maintenance fund.

And I'll come back to that in a minute.

We also have proposed a capital projects fund, and then as I circulated last year, an ERP implementation fund.

In terms of the city assets repairs and maintenance fund, you know, talking to the mayor and council president, the intent there was to uh basically avoid that situation that we had with the street department where there was uh uh damage from a driver, uh we were needing to front the dollars ourselves to do the repair before insurance reimbursed us, and that created a situation where either needed to come to city council to get that uh almost 1.1 million appropriated first or ask the street department to absorb that within their current year appropriation.

The idea here is that we would take the uh the the almost 1.1 million that we got from that last insurance reimbursement, move it over to this uh new fund so that the next time there's one of these events uh we we wouldn't need to uh ask Street Department to absorb it or come to council quickly to ask for an appropriation, but there would be dollars already appropriated that we could spend against uh on this insurance claim and then reimburse uh when we got the money back from the insurance companies.

I think there is uh agreement on on that purpose.

Uh I think the the second one here probably needs some more discussion, and that was uh providing a funding source for unforeseen repairs.

And so in this instance, we're not necessarily talking about well, we wouldn't be talking about uh damage caused by a driver or something like that, but just a oh man, those cracks weren't there yesterday.

This needs repaired type of situation.

Um there was a proposal from the council president changed the name of this fund to the uh public infrastructure and insurance recovery fund, and as uh Benjamin will probably talk about in a few moments.

Uh we did publicly notice the the appropriation here under a different name, so just need to talk through kind of what it means each situation where we we go with the city assets repairs and maintenance fund or the public infrastructure insurance recovery fund.

Um other considerations, just the the way that it was uh drafted in that email, kind of implied that maybe uh the insurance reimbursement would always be for 100% of the project cost, and that was kind of the the case with this uh we spent a million seventy-four thousand on this bridge repair.

That's what we got reimbursed.

Uh but those reimbursements don't always include uh you know, we might have to eat the deductible first.

Uh they might value something and deduct uh the depreciated cost, so we'd get uh maybe not the full replacement cost but the current value.

Uh I think in this situation with the street department, we still absorb the design cost for the work.

Um then also what we're kind of proposing here.

Um then also what we're kind of proposing here, if there was willingness to allow us to do other unforeseen repairs uh that have popped up kind of since the the budget was developed and um wouldn't be eligible for for uh insurance reimbursement, uh you know, could could we proceed with those with um you know anything over any use over 50k we would be taking to uh to BPW for getting their approval on any such contracts.

Obviously, more discussion there.

Um on the capital projects fund, this is kind of where uh I I think the chair, myself, and um council president initially weren't on the same page, I think we are now.

But the idea with this fund was more as we're going to have large uh uh projects that we need to budget for uh the repair, the replacement, and and like the the example I'm working on right now, we we know we need to repair the uh HVAC unit at station 44.

The the estimates I've seen for that so far are between a million and 1.1 million for that HVAC.

Rather than perhaps budgeting for that within the fire department so it gets blurred with their other operating costs, the idea would be a fund like this, whether it's mid-year or through the budget, that council could appropriate dollars into this fund for uh approved capital projects that would be on our on our uh capital project uh capital asset list.

Uh and then lastly, the third fund we've been talking about for a while is the ERP implementation fund.

Uh the idea there is just to keep all of those costs separate from uh the finance department's operational cost, the IT department's operational costs.

Uh I've included language in that that would have anything left in that fund on December 31st uh 2028 would come back to the general fund, but but ultimately I'll be bringing a presentation on that to council on June 15th.

Uh with that said, Mr Mr.

Chairman, I'd like to go back to the city assets repairs and maintenance fund, and if it's okay with you, kind of have Benjamin talk through uh what could be potential issues there with how we've noticed that compared to the proposed edit to the name.

Yes, sir.

Questions?

Any questions for Zach based on what he's discussed so far before Benjamin?

Okay.

Floor is yours, sir.

Mr.

Milan, cooperation council.

So the the real only issue here is um we're creating a fund, and um we notice that fund with one title um never heard of before because it's a created newly to be created fund, only for that title to change after the notice has been issued after the public hearing has taken place, which took place at the last council meeting, to then change the name of the fund to have an ordinance creating a new fund, so you'll have a notice to a fund that doesn't exist and never existed with the ordinance creating a fun a new fund and the appropriation going into that fund.

The appearance of it is very messy, number one, and it probably carries with it a very small element of risk uh to the extent that someone wanted to challenge um the procedures were not followed.

So the recommendation is even though changes may be made to this fund and allocation within this fund that the name remain the same.

Um that can be changed at a later meeting.

It's just because you have the notice for that appropriation, and it is a newly created or not existing right now fund to be created out in the abundance of coalition.

My recommendation would be to keep the name the same.

The other changes uh fag aim, uh, so long as it remains in the same kind similar kind of form and not changing it from uh an A to a C, but we're keeping it in the same vein of what the purpose for the fund was, um, they're okay.

Questions for Benjamin?

All right, so you said the risk.

All right, so what's the the risk would be somebody disputes the you know that the fund wasn't created properly because of the notice was money, yeah, right.

It's being moved and it's being appropriated.

And if the person was successful with that, what would be how would that be remedied?

I I think it would probably invalidate and it would um funds to then go back.