We have a couple of things on our agenda this evening.

Uh first is our revenue expenditures forecast, and then we will make a motion to go into closed session, which will happen in one C.

I say that for my fellow council members so that you know.

Um so I'm gonna kick this over to our finance department.

I see our director and assistant director.

So Matt Lou, I think I'm hitting this to you.

Yes, good afternoon.

Um today we'll be going over uh revenues and expenditures uh for all of the city funds and the forecast for each one of those, kind of showing what these funds will look like, or we what we anticipate them to look like.

I will talk a couple of slides about the sales tax and how we did last year when we estimate basically the processes that we estimate during this time.

And that might not we have new council members, so they might not know who you are.

Sorry.

This is the chief economist deep debna.

Uh I work for the finance.

Thank you, Deep.

Um so we uh we do this process, we talk about the forecast now, and then some of this number goes to the budget, uh, particularly the sales and use tax.

So I just wanted to highlight what we did last year on the budget.

So around this time uh we uh which eventually become the budget we uh budgeted around seventy-four million total of sales and use tax together.

Uh and we end up getting around seventy-three point nine million.

So out of seventy-four million, our forecast was almost uh to the point.

We are low only by a hundred thousand, because I think this matters a lot when we come to the bigger picture.

Now I can explain this chart and go to the next slide.

So this is you can see this is actually is not the actual uh volume of the tax, it's more the changes as you see on the um Y axis is percentage.

So we it's we constantly grow, except the last year, it's uh growth and the the changes in the growth for compared to the last year in the m in in months.

So we saw a significant increase and around 2022.

We start collecting uh use tax.

That's why we went we see further sharp increase, and then you know, once we start collecting use online tax, people adjust as their adjusted, so now it's more substitute between retail shopping versus online.

So we see see a pattern now going forward now since almost five years.

And then after the COVID and everything, we saw a fall in the incre decrease in the not decrease, like not increase.

You see this fall.

Like not like basically the tax is going flat.

And based on all this kind of assumption uh we are anticipating and then we included our this current month uh tax revenue which uh which is also in lag.

So in May we got the April March sales tax actually, and then based on everything uh we found we are uh anticipating about uh uh three three percent uh increase in our total sales tax and then around uh five percent increase on the use tax, and then uh we see which will be around thirty-two point three million uh for the general fund and five point three around five point three six million for our sales tax.

So now we'll get a little bit into the general fund.

So first we wanted to sort of set it up with some history of the general funds or what our revenues look like over the past five years.

Uh and as you can see, we were at 83, 84 million basically in 2020.

Uh and that increased to 23 million in that short period of time.

So that's something that you normally don't see as something that we also saw on that curve how uh COVID sort of affected uh the revenue that we brought in just because there is more money into the system, and then also the use tax.

Um can we ask questions as we go back?

Yes, yes, please.

So you go back to the last slide, and I I got lost somewhere in the sales tax information.

I I don't know what you were saying.

Well so between the in that time period, this is this is basically what I was talking about, how you saw that curve, that increase uh in sales tax dollars year over year.

Right and then it kind of dropped off.

But this is just the increase part.

So that's from that 2020 to 2024.

So if you look at the sales tax line, you can see it move from uh 23 million dollars uh to 31 in that time period.

Okay, and now you're saying it's falling.

Uh it's flat.

Yeah.

It's more so the the year over year increase are they are not as much as they were in the past.

So you you normally won't see uh 13, 14 percent year over year increase in sales tax.

It's usually somewhere around a 2 percent, maybe 3 on the high end.

Yeah.

And actually in 20 from 24 to 25, it did decrease slightly.

And we are only expecting it to increase by about one to one and a half percent going forward after that.

Well, and I think too, on that slide earlier that was going over, while there might have been some slight increases some years, there were also declines, right?

Like that wasn't it what it was kind of leveling now as far as the percentage change.

It it was from before COVID, it was kind of on a decrease, it was increasing but decreasing, the increase was decreasing every year.

COVID hit, it it shot it up through the roof, and then we came back down.

And we kind of our projections are that we're gonna see slight increases, but not the kind of increases we saw over the last five years.

We're seeing just moderate increases of one two percent at the max is where we're expecting things to be.

And uh we back up with some in the private industry data, that that also tailing out on two parts and we do funds every best emissions based on that.

Christina, did you have your hands up?

Do you like easier microphone comments?

Oh yeah.

Um I understand that you know, COVID people were spending more purchasing online and stuff, but um I guess I'm not quite understanding if you would go to was it slide two?

When you look at August 20 or accounting 25 and accounting 17, like you do see kind of a decrease there.

And so, but you're saying you anticipate that it's going to be flat going into 26, 27, 28.

Is that what you're telling me?

We had negative, we had a negative uh increase from 24 to 25.

So I mean, or a decrease.

We had a decrease in sales tax revenue from 24 to 25.

Um it was a slight decrease, but it was sort of a decrease.

And so the the time before that that you saw that was in 19, where we had a a two percent decrease from the year before.

And so this is this is a year over-year type of change versus uh what we've actually seen come in.

Um I don't know if I think it's a good thing.

It does.

I mean, I think the percentage uh percentages on a chart definitely kind of confuses the issue.

So it's we still saw an increase in money, but not at the same time.

Right.

And I this chart we're kind of trying to show the also the volatile nature of sales tax um year to year.

Like you can't, it's not a stable uh revenue source and it's very subject to economic conditions.

So therefore you can get these crazy fluctuations, and when you're budgeting, you you don't you gotta kind of keep that in mind and and be a little conservative on how you project things going forward.

Okay, yeah, Valerie.

Yeah, I see what you're trying to display as far as the volatile nature in year over year percent change here.

Um I I think that um people are having maybe having troubles wrapping their minds around this slide.

Um I'm wondering if maybe having this slide as well as the overall growth.

Growth um next to each other, because I think we have seen both.

Yeah, that's the one.

I mean I know we've seen this over time.

Maybe having them next to each other in a presentation and one of our lead ups to this would be helpful.

Yeah, that's what we showed when we did the sales tax.

So we can bring we can bring that back when we do the sales tax.

We are swinging that back in next week.

Yeah.

Great.

Yeah.

So the expenditure history for that same time period uh we saw expenditures move from about eighty four million dollars uh to a hundred and twenty seven million and so uh we saw in twenty four that was sort of a budgeted deficit uh we we plan it was a planned spin down of funds uh because we had accumulated quite a bit of funds above our required reserve um but that trend sort of continued on as you'll see when we look at uh the next few years oh can I see a quick question Matthew when we're putting in our um here go back one please when we're putting in our oh wait no I'm sorry is it a few ahead that are the um next five years yeah okay there might only get that right now sorry we're still in the history got it oh value yeah can you just give us an idea of what our biggest growth in expenditures was in that last year?

Employees employees wages those top two lines are basically your salaries your wages and your benefits and those are where you saw the most growth.

Yeah every every other line is pretty much there's some decreases from 20 to 24 there's a few increases from 20 to 24 but for the most part they're pretty stable Jackie do we have so this just goes to fiscal year 24 do we have 25s on the I was just looking at the contractual line as well because that's seems to be a big increase.

That that fluctuation the the contractual and that transfers out to other city had a lot those fluctuate but during these times it had a lot to do with uh COVID and we had some COVID money that was being spent we had some um cares was the initial and then we had some ARPA money as well that that you see spent in those lines so they kind of drop back down as you look but contractual is one of those things that we cannot control that much that is if the prices on certain things go up, those are things we have to pay for and sometimes they fluctuate because it's a one time expense for some type of study or something we do that drops off the next year so you don't always see it going in one direction or the other can you elaborate on what that miscellaneous contractual is so any type of contractual obligation that the city has that would most of the time they're one time type of things but then sometimes they can be you got a good example.

It's not like labor it's not labor.

It's all outside sources like um I want to say like a lot of the studies are done through those sometimes software like purchases purchases are put through there like I think the flock program fell into that category.

That's correct for some of the ones though that we had um like you know we had a recent like outsourcing report those are usually within the enterprise account depending so they are not necessarily showing up in that Vera are you able to go back to the uh revenue slide and then so I know that the um contractual piece you said that that largely came from the ARPA funds and the other COVID funds where would we see that revenue on this slide or is it on here?

Revenue from other governmental units.

So that's basically your grants uh essentially is what that is.

Perfect thank you.

2022 line that's where we got the ARPA money for most of it.

Okay.

Where we see that 17 Yes.

Yeah that yeah um back on um our growth um in expenditures um with employee wages and benefits and that's absolutely um expected based on that portion of our budget that we've seen in the past are we do we have any figure to demonstrate um where those employees are which in terms of growth not in terms of size of departments but which departments saw the most growth it's it's pretty level I mean we get our our increases are done across the board and across the city so it's not like we give one group one percentage and another group another percent.

I mean, we get our our increases are done across the board and across the city.

So it's not like we give one group one percentage and another group another percent.

Is that I think she are you talking about how FTE growth is a good one?

Yes, I am talking about.

Do we hire more in some departments compared to others?

So we put out a report.

Uh I believe it was last year, maybe the year before, that basically laid out how the general fund has grown, and I believe there was 90 of about 90 some of these the new FTEs were attributed to public safety.

Yeah, I think public safety had the highest growth followed by health, but health was kind of driven more by COVID expansion.

So things moved.

Yeah.

Okay.

Yeah.

Did that report cover 2024?

Yes, I think it I think that was the last year covered.

I think one two good source to point to is the um those the um links in the city managers monthly report.

If you click on the HR one, I forgot how many years it goes back, but it shows us the percentage and growth and also the vacancies.

Like so, not just, right?

Because part of it's how many are you allowed to hire, but then how many actually do we have?

So the report in the context of this report and the one percent safety tax.

Yeah.

Um, because growth and employment is something that we are.

Yeah.

Yeah.

Yeah.

So yes, uh this report went from uh fiscal year 19 to fiscal year 24.

Uh and so it basically covered that whole time period.

Um there's full-time equivalent changes as well as uh uh salary and wages and other expenditure changes as well.

And on uh the slides we have for next Monday, we do show the FTE increases for both police and fire in that those slides.

Thanks.

Yep.

Oh, Christina.

Sorry, I do have one question, sorry.

On uh slide six, yeah.

So you were explaining the differences between the services and miscellaneous charges and the miscellaneous contractual.

Can you maybe reframe that?

Because I wasn't really like in my experience, um not with the government budget like you.

But in my experience, we have um services and contractual stuff typically go together.

And so I'm just trying to like wrap my mind around why that's different here.

It is just the way that it is broken, we break it out.

Um, see some examples.

Oh.

Contractual services is just a bigger portion uh than services and miscellaneous charges.

So uh services and miscellaneous charges are things like parts and um I believe no travel training is not in there.

But these are these are more smaller items that are bought for uh daily use within the different departments.

Contractual items are uh bigger items that we are going out to contract with uh camp, some can be RFPs, it'd be some um software, different things like that.

So these are bigger purchases than the services and miscellaneous charges.

The miscellaneous is kind of a it's a little bit of a misnomer.

It catches everything, but really it's mostly contractual services, is what you should think of that line as, like anything we contract.

So could do.

Okay.

So services and miscellaneous contractual services, and then contractual, miscellaneous contractual is contractual equipment that's different than the maintenance and equipment listed in line one, two, three, four, five.

It maintenance and equipment is like hard hard things you've purchased, like if you were to purchase uh a part for a vehicle, uh-huh.

It would go there.

Because you're not doing the work yourself, you're having someone else do the work.

Okay.

Thank you.

So here's a history of the general fund cash reserve.

Um so you see in 2020 we had uh 23 million above the cash target that kind of swore um swelled to 30 million and 21, and then by 24 we had dropped down to 14 million above the target.

Um while looking at that cash reserve target, uh it's steadily increasing, and that's mostly because our expenses are increasing.

So that uh the 20 per 20 percent reserve is based off of expenses or budgeted expenses at the beginning of the fiscal year.

Now we get a little bit into the projections.

Uh you do have 2025 on here, that's the last actual year, and then the rest are estimations or projected.

And so in 2025, we saw a large increase uh in revenue up to 144 million, but that was mostly due to the settlement we received uh from century link.

So we do not anticipate something like that moving forward.

So we had to uh basically take that money out for 25 to do the estimation for 26.

And so this is what it's currently looking like we'll bring in for fiscal year 26, about 130 million.

And so all the projections moving forward are based off of that that number.

And the settlement is showing up in that miscellaneous revenue line, correct?

That's correct.

And it was about 14 million, I believe.

14 in new money, and then it was uh uh we released around three million or so in restricted cash from that.

So our savings.

Okay.

Yeah.

So also if you notice the other local taxes was like 17 million.

So a portion of that money that was like uh paid under protest got recognized as that.

So that's why that's inflated a little bit too.

But yeah.

So like the airport or the lodging tax.

Like it's the it's the uh telecommunications tax.

So the telecommunications tax goes under other local taxes.

That's correct.

That's the normal space where it sits.

Uh for so what the what they're saying is so for the minuscellaneous revenue, that is part of the uh settlement we received.

Yeah, I got that.

And then the other local tax, they had some restricted funds where people paid it, but they paid it under protest, so we didn't use it.

And so once the suit was settled, that unrestricted funds became became the restricted funds became unrestricted.

So that's how come that amount is uh higher than normal.

But kind of also going along that line, looking at those other local taxes, um that's where we've seen a lot of the taxes that we have currently, uh a lot of our dying taxes.

So your cigarette tax, your uh cable TV tax.

A lot of those taxes are currently dying.

You say dying, that means they're decreasing.

Yes.

Okay.

That's why if you look at like the that line on 2031, it's 14.5 million, where we're thinking we're gonna have about 15.7 this year.

So we see that revenue source decreasing over time, not staying flat or actually increasing.

Isn't that where alcohol taxes go also?

We don't collect alcohol tax.

We don't.

No, sorry.

My mistake.

Okay.

Here's uh expenditures for that same time period.

And so uh because of the settlement last year, we did end up uh making a small amount over uh what we brought in, but that is not something that looks like it's gonna continue to happen.

Um right now we're on pace to spend about $137 million in the general fund, and that would bring us to a deficit of about $7 uh.7 million in fiscal year 26.

Um that that kind of perpetuates year over year after that and go ahead.

Yeah.

A good portion of that $7 million, though, if you see uh a few lines above that total expenditure is the ARPA expenses.

So we we expect to have about $10 million of ARPA expense in 26.

The cash for that has already been restricted.

So you're gonna see this on the next slide, but it doesn't have an effect on our cash above target because we have restricted that money a few years ago.

So any expenses we have on those lines will not have a net effect on our cash above target.

So you're gonna see that it's gonna look a little confusing because our cash above target is going to go up in 26, and you're like, how the can that be?

And that's why.

But after 26, that should be the end of ARPA, and we're back to just it will be the end of ARPA.

Yeah.

We're done with ARPA with ARPA.

Uh but uh so going forward uh everything kind of settles back to that normal trajectory that we were planning to be on.

I think I have a couple of questions on one to that point.

Technically we have until the end of December, which puts us into fiscal year 27.

So will we see any ARPA?

Yeah, there may be some leakage into the next.

But there could potentially be some, you're correct.

I just want to make sure that as we're getting closer to the fiscal year budget, we make sure to continue those work orders or whatever we call them going forward.

I don't want to encumber.

And then my second is what assumptions go into our increases for wages and benefits.

So we put in a basic, we just kind of tie it to what we think CPI is going to be.

So we basically put it in it in a just a little bit above it just to be safe.

So we put in a 2.5 percent increase annually for those.

So every year we increase our salary and wages by 2.5%.

Didn't we haven't we for the last few years the CPI was like three?

Yeah, it has been, but it it's projected to kind of fall below that in future years.

Okay.

We did project it to be three percent for twenty-seven, but then two and a half for the out years, I guess I should clarify that.

Okay.

Yeah, Christina.

Sorry, newbie again.

Um on the line, transfers out to other city funds.

In 25, there was uh nine million.

Well what was the difference between that nine million and then the projected uh what was it?

Uh the 5.6 million, why that went down?

Is that what you're asking?

Yeah, like why is why is it at 9 and then to 5?

Yeah.

So in 26, we kind of did a hard look at everything we were transferring out of the general fund to kind of keep the general fund as solvent as possible, because we were coming into uh the year where we felt we were gonna exceed our expenses, we're gonna exceed our revenues.

So there were several transfer lines we looked at.

One was the debt service line.

That's the money that we put aside to pay for the bonds on this building here.

We're we're taking that out of a different fund.

It's um an interest fund out of the capital projects.

And additionally, uh a lot of our VERF money in uh Jim, will you say what VERF stands for?

Yes, the vehicle equipment replacement fund.

That money came out of two sources.

Um was transportation sales tax to fund public work vehicles, and the other one was capital improvement sales tax to fund police vehicles.

So that saved the general fund a fair amount of money in 26.

That's not sustainable, as you can see in 27, we put that that starts to tick back up, but it gave us a year's worth of relief to kind of give the general fund some time to uh give us a few more years basically to get things situated correctly with the general fund.

No, I appreciate that.

Looking back at um you don't have to go back to a button side six.

Yeah, the trend was like one million, two million, and then all of a sudden twelve million, eleven million, fourteen million.

So I think that's probably good.

Thank you.

So uh here is what the reserve will look like uh currently on the on the trajectory we we are currently on.

And so if you look at twenty-six, you can see what Jim was talking about with those ARPA expenses and then your total expenses.

So it kind of those ARPA expenses kind of inflate that that uh total expenditure line.

And just I don't know, I know some of you are new, so just kind of give you an idea why we got those green and yellow lines.

So if it's green, it means the ending cash is above zero, and our cash below target is above zero.

So when it turns yellow, it means you've dipped below your cash target.

And when it turns red, it means you've run out of money.

So those are kind of your yellow, green, yellow, red kind of signals there.

Thank you.

I was wondering about that when I was going through it.

I was like, I don't know.

I do have a question.

Yeah, Christina again.

Okay.

So um FY28 to FY29.

Um available cash flow again from actually the cash above below target.

Uh nine million to um 10,000.

That's a huge difference, right?

Okay.

Can you elaborate on that?

Nine million, I'm not sure what line is.

So for the very last.

Oh, I see.

Yeah.

That's basically just your revenues outpacing your expense.

I mean your expenditures outpacing your revenues.

So you got 142 and a half uh million dollars versus 133, almost 134 million in revenue.

So that's what's this is just the escalation of those trends we were seeing.

So when we were doing our forecasting, we're assuming everything stays the same.

The growth of our revenues stay where we're projecting them and our growth of our expenses stay where they're where they're projected.

So you that deficit just keeps uh accumulating and where you get further and further deficits as you go further along.

Oh, sorry, I was just kind of like, what are we doing?

Okay.

Um I really appreciate on this slide that you pull out specifically the total expenditure less ARPA.

Um I think that might be helpful on the previous um revenue and expenditure projections as well.

Um we know this is coming up, but when we when we talk about it more, that might be helpful to see on the previous charts.

Okay.

So now we'll move into special revenue funds.

Yeah.

Okay.

So we'll kind of go through these.

Let me know if you have any questions, but I'll kind of give a quick summary of what each of these funds is and how they're looking.

So capital improvement sales tax.

So this is a special revenue fund that in the past there was a 1 percent of our general fund that went to this.

We stopped that in 2026.

So now the pretty much the sole revenue source is developmental fees.

And those usually go back in.

What's that?

Oh.

Oh, they usually go back into fund uh street projects.

Uh the funds in a fairly stable spot, sitting at cash between two and 1.7 million dollars.

So I do have a question about this, because you'll like trying to remember what did we talk about last year when we did this.

So last year our projections definitely showed growth in this fund.

Is that because we stopped doing that 1% of our So the growth?

So the 1% used to go to this fund, now it's going to the general fund.

So actually there's less revenue coming into this fund.

Okay.

Expenses or the revenues are still meeting expenses in this fund currently.

Okay.

Okay.

I appreciate that.

Yeah.

Yeah, Betsy.

This is for streets.

So developmental fees largely go to fund uh street and sidewalk projects.

So that's where that the rep the the revenues go to fund those type of projects.

Yeah, Valerie.

So we have our 1% tax that gets the CIP list within the.

I am sorry.

I am not even talking about the right fund here.

I was really this is capital improvement sales tax, not uh public improvement sales tax.

Capital improvement sales tax.

Start over again.

Yeah.

I'm going to reset.

So this is the 10-year sales tax that uh gets approved every 10 years by the voters.

It it goes to fund street projects and uh public safety infrastructure.

Uh and uh as you can see, we we're projecting the revenues to basic in 2006 you see that big $16 million expenditure.

A lot of that money was for the uh additional uh renovations of some fire stations we did and police cruisers.

So we're that kind of got that fund back to cash levels that are a little more normal for it.

And going forward the main expenses will be for those 10-year-out projects.

So when we when we have those, when we do the 10-year uh plan for the CIP, we try to level those payments or or or fund each plan, each project uh to where we have level payments, and so that's where you can kind of see those expenditures hovering around $9 million, 10 million dollars a year.

And this is where we get fire trucks or fire stations?

Fire trucks, fire stations, and new road projects largely come from this.

Okay.

Not our police vehicles.

No.

Normally not, but we did use it last year for that.

Okay.

Okay, parks and rec.

So this parks and rec uh the three main revenue sources for parks and rec are park sales tax, uh, fees and service charges, and then a transfer from the general fund that usually ranges around five million dollars.

We just try to keep this fund basically uh cat revenues meeting expenditures, so we don't want to keep a lot of excess cash in this fund because it is subsidized by the general fund.

However, you can see by twenty-eight, they run negative cash.

So two things are probably gonna have to happen.

We're gonna have to see continued increases to their fees, and plus probably more subsid subsidy from the general fund to keep this uh this fund solvent.

So we just increased for the first time their fees in a long time last year.

So is that something we could expect to potentially see in fiscal year 27?

Or I believe so.

Um getting told by our budget officer that that is correct.

You should expect to see that.

Okay.

Not the same fees.

Right.

Right.

Right.

And then looking at last year's cash reserve projection.

I mean, I know you say you try to keep it kind of just where expenditures are meeting uh the revenue.

Um it looked a lot different.

There was no red.

Why is there red now?

Um Yeah, I I think we just projected we got through the end of the year and realized that expenses were bet were higher than we were thinking.

Because it even got better.

It was yellow and then green.

Yeah.

Um, I'm Megan Montesinos.

I'm the budget officer.

Um Parks and Rec has a lot of temporary staff, and they've been hit pretty hard by minimum wage increases.

So they've had a big increase in their personnel cost the last several years.

We also have a flat five million dollar transfer that we've done from the general fund to the parks and rec fund.

Um that amount hasn't changed.

It's possible that that would need to change in the future to keep them.

Again, how long have we had that?

Uh five million, like when did it start that?

So in 2023, I think we moved them.

They used to be in the general fund, and then they had a rec services fund, and there was also the park sales tax fund, and they had their CIP separately.

Um in 23, I think we moved them into one fund.

And so since that time, we've done a five million dollar transfer from the general fund.

Thank you.

Do you really want to do your password in front of all of us?

Well, you shouldn't see my password.

You shouldn't see it anyway.

Well, it's more of watch you try to do your password.

Well, as long as we're waiting and watching you do that.

Um kind of sales tax thing, I I mean, I'm I guess I'm just lost in the whole thing.

Well, I think the thing is is right now we're looking at our reserve ones, which I think this kind of confuses when we have the reserve funds rather than just the full parks fund.

So for some of these funds, we don't have we don't carry a reserve because that's just it's it's money that there are the funds are usually either one, they're just a transfer fund, so like uh capital improvement sales tax.

We just take that money in there, and then we'd move it to capital projects.

For parks and rec, we don't keep a reserve because if you're keeping that reserve, you're basically taking money from the general fund that the general fund could be using for other things instead of uh sitting in parks and rec.

And because it's being subsidized, we don't feel it needs to have a reserve.

But if we're also saving up for those 10-year projects, that there is a separate.

Those are separate.

Those are separate.

And that's like those are funds that we are saving.

Yeah.

I kind of missed what Megan was talking because I was talking to Matthew about these slides.

So that's why we don't do that.

If I'm repeating something I'm sorry, but uh we keep all so half is say half of park sales tax funds operations, the other half funds capital projects.

All that money that goes to capital projects gets restricted.

It's not showing up in this slide whatsoever.

It's kept in a separate bucket and it's used to fund capital projects as they come up.

So this is just the operating side of your your parks and rec fund.

Yeah, Valerie.

Is that something that we could put side by side, whether it's in an attachment or a report?

Yeah, we can show you what the c cash and capital projects is.

Uh that's that'd be something we could we could do.

Yeah, that's that's something that we also show when we do our cash balances uh for uh our quarterly cash balances.

So that was in the in the report so we didn't get to go over at the last council meeting, but it'll be all Monday.

I think a lot of these things like a lot of my questions are can I see that side by side?

And I know that it lives in a million places, but it's hard to go by memory.

And it's hard it's hard to remember where I'm supposed to go find that thing when the question is in my head.

Yeah.

I think this is most of the reason that we're showing that is here and not doing a side by side because this is operating.

Right.

And so we're kind of going through all of the operating funds, all the operating cash.

Um capital improvements are while they are in a fund, that that's a totally separate bucket of uh counting and and and projects and funding.

Those are more of a reserved type of funding uh that is set aside for certain projects.

So it it doesn't run the risk of going negative because if we don't have the money there, we don't spend a project.

Right.

But when we show things going negative, people are automatically going to question the projects.

I think the one thing that they that they want to show is that we've we've been we've gone through this process, we've been adding about five million dollars a year to the park fund from the general fund.

At some point we're gonna have to increase that amount just to make sure that the park funds say solvent.

Right.

So that's part of kind of looking at when we look at the general fund, we really have to have that hard look at exactly what's occurring and where where we see ourselves going.

Right.

Right.

Yeah.

And the park fund, we we do a just like with the capital improvements, uh the capital improvement sales tax, we do that same thing with the uh parks fund sales tax where we list out all of these projects we're doing.

And so though we are beholden to the citizens to uh deliver on those projects.

And so there it's not a question of bringing money out of one of a projects to help fund this.

So I don't I don't know that that kind of sounded like where we were going with that.

I just wanted to.

I I I understand what Valerie's talking about.

She's basically like if somebody were just to look at this and they see red in parks and rack, they're not looking at cash reserve and the differences.

So it's just kind of like our next like as we communicate this that can look like it's a public-facing document, and that not everybody is watching this video right now.

Yeah.

Uh Nick, you had a question.

Well, or following it either.

Um I'm trying to remember speaking of memory, all that went into that decision to move parks and rec into their own fund and out of the general fund in that regard.

But that five million dollars was really money that had been spent historically on parks and recognition.

It wasn't something it wasn't a new expenditure, it was an ongoing expenditure that we thought.

I mean, part of it was absorbed by the general fund, but we actually did transfer about two and a half million to rec services.

That's what it was called when it was owned funds.

So even prior to this happening, there was money leave in general fund to fund the rec service side as well.

It was you.

Wasn't that part of the original park sales tax was that we could not decrease the general funding because they had their own separate taxing source?

There was a council action done years ago.

I don't know the whole details about it, that they would say they would keep a funding source for from general fund to parks and rack.

Okay.

Yeah, I I thought that was part of the actual ballot language, but it could be wrong.

Yeah.

No, it wasn't when we reviewed it, it wasn't part of the ballot language, it was just part of the ordinance.

Okay.

Which is similar to what we're talking about with public safety.

Right.

Yeah.

Yes.

Yeah.

All right.

Moving on.

Okay.

Transportation sales tax.

So this is a dedicated sales tax that goes to uh fund public works, uh, airport and transit.

Uh we had built up quite a reserve in this, and we've started to make an effort to spend that down.

As you can see, our cash goes from 12.8 million to 8.1 million.

That's kind of a planned drawdown on this.

We really built up a lot during COVID and we when we got a lot of CARES money and ARPA money.

So the fund still looks fairly healthy, and we're just kind of keeping monitoring it so that we kind of ease back into where we want our cash levels to be at.

Can you remind us what that's used for?

Yeah.

It's used mostly for public works, so for our streets and uh sidewalks divisions that operate out of the general fund.

Um it also helps fund operations of transit, operations of airport and capital projects for airport and transit as well.

And we've been drawing this down, what do you mean drawing it down again?

Uh largely capital projects.

Airport took a big chunk out of there for uh some of the things they've been doing recently.

Um we've been using it to build to kind of replace our public works fleet because our fleet in public works was aging.

So those are kind of the things we've been using it for.

Okay.

Yeah, Jack, you had a question.

The slides that were sent out to us before this meeting have different numbers on them.

So are the ones that you're using now other updated numbers?

Yeah, yeah.

Yeah, we will send these out.

We can send the updated numbers out.

But we always want to present the most current data.

Right.

When we're talking about it because a lot of this stuff moves very fast.

Thank you.

I noticed that, Jackie.

Good eyes.

No.

All the slides are slightly most of the slides had slight changes to it.

We'll do the sense tax as I was telling you, we got the information last week.

Uh the part of the sales tax, that's why.

Okay, here's the one I couldn't wait to talk about.

So public improvement fund.

This is the one that used to get a 1% uh sales tax from the general fund, and no longer gets that.

It just gets developmental fees.

The fund is in fairly healthy shape.

Uh the developmental fees usually get spent on sidewalks and uh street projects.

Are you anticipating bringing back the one percent?

We did not probably did not put that in any of our projections.

Yeah, that would not look very well in the in the general fund at this time.

That is one of the things is helping stand that up.

Christina, did you have a question?

On that last slide, you said it was used for sidewalks, and then the previous slide you also said it was used for sidewalks.

Yeah.

Why do we have that in two separate funds?

Sorry.

And the previous in the transportation, this that is one of the things that you can use the money for.

Uh so these are things that that the money can be spent on.

It doesn't mean that they are always spent on those particular things, but it can be used for sidewalks, for streets programs and things of that.

And that that's sale transportation sales tax, that's a dedicated sales tax where the public improvement developmental fees, those come from our developers, the fees we charge them.

So they're two different revenue sources.

We don't really want to mix them in the same fund either.

And one of the things we've seen with the uh transportation sales taxes we've been able to get a lot of cost share money from this from the state to do large sidewalk projects, and that's where most of those funds are coming from.

And so those are very large projects, which are more than what you would spend out of the public improvement cash.

Thank you.

Yeah, Valerie.

Yeah.

Do the developmental fees, uh the development fees um that we collect typically go for um projects that are driven by or adjacent to specific developments.

Yes.

Yeah.

So for me, that's why it's in a special fund, and that's why you have two different pots of money.

All right, convention and tourism or C V B.

So this is um a special revenue fund.

It has a dedicated uh hotel, motel, lodging tax that funds it completely.

Uh that's why it has its own cash target because it operates outside of any other subsidies.

Uh the revenue for this has continued to grow um and um it's in a pretty healthy spot overall.

Do any of these uh taxes sunset?

Yeah, one of them sunsets.

It's the one there's uh a portion of the hotel tax is for the airport terminal bonds.

It'll sunset when we reach about eleven million dollars collected.

We estimate that'll be probably in around 2033 when that will sunset.

And then will the bonds be paid off?

Yeah, we'll have enough money to pay the bonds off.

The bonds go, I think, for 20 years, but we'll have enough built up to pay off the bonds with the hotel tax at that point.

Okay, thanks.

Yeah, Nick, you had a question.

This is not it's not as much money, but the percentages are pretty significant here in terms of the cash above uh the target.

So are there any plans or thoughts about spending any of this money down?

And if so, where might that go?

Yeah, this would that that would be a question for Amy's slide.

Yeah, that's what I thought.

And you you you have a board that is made up of hotel years, and so usually if you're gonna do a large project, they would come forward and say, hey, here's something we'd like to support.

Do you have any examples?

Well uh there was a request, uh, but I I wouldn't say that's a project they they want to fund.

And so there was like a request for a convention of visitors uh coming not a commitment, a convention center, and would they use these funds in order to support that?

And that didn't move forward.

But that's the study came out of that.

The study came out of it.

Um a lot of advertisement comes out of it, so a lot of the things in order to bring people to Columbia.

And we'll get to our enterprise funds.

So just the enterprise funds are we generally try to operate them more like a a for-profit business.

That's just kind of what the designation means.

So we'll start with railroad.

So the railroad is uh kind of the one thing I kind of wanted to highlight about railroad is that it does get a subsidy from the utilities of about $500,000 a year.

And we've had to keep that in there in order for them to kind of operate uh keep their operations going forward.

Uh I believe there's also um a railroad study that's being done to kind of look at additional revenue sources for a railroad.

Aaron, you do you want to talk a little bit about that?

Aaron Keys, Utilities Department.

Yeah, uh currently the other utilities are subsidizing the railroad, but there is currently a request for expressions of interest out.

Uh and our hope that some entity can come in and maybe help us find ways to make the railroad railroad a little more profitable.

Um it is a huge economic driver for our community, but the actual income that the railroad receives, you know, it doesn't translate into direct dollars for to operate our railroad.

Um so that's what we're kind of hoping this request for expressions of interest to work on.

Yeah, Valerie.

And then Betsy.

Yeah.

I know you've answered this question for us before.

I think I recall it correctly.

But I'm going to ask you again.

Why does the subsidy for the railroad come from the other utilities?

Well, historically, the railroad was bought to uh support the electric utility because it brought brought coal in.

Uh and so the electric utility was able to fully fund the railroad, that and the other operations that it did fully funded the railroad.

Well, we no longer bring coal in.

But again, the customers that we serve up on Route B are they have typically very large utility bills, and so uh they benefit all the utilities because of their operations.

And so I think that's probably why it's been the utilities department that subsidized it.

But it would be helpful if we had other ways to help fund the railroad besides just utilities.

Yeah.

And the industrial users are often attracted by the railroad.

Yes, it's uh it's a big benefit to them.

Uh anecdotally, I've heard that uh when they go to price um transportation for whatever the materials they need.

Uh if they're talking to a trucking company, if they tell the trucking company I have access to a railroad, their price goes down immediately from that trucking company to be more competitive with the railroad.

So it is a benefit to our industrial customers for sure.

Betsy, did I answer your question?

Pretty much.

All right.

Thanks.

Thank you, Aaron.

Uh when will that when is the deadline for expressions of interest?

I knew I should have looked it up.

Oh, sorry.

I'll look it up when I sit down.

Okay, because I know you'll be back at the podium.

Right.

Okay.

All right.

Thank you.

Well, he's probably got transloads next.

So, you can just stay there if you want.

What's the errand show?

So transload.

So this is our trans this is the fund that uh operates our transload facility out on Route B, um, I believe.

And uh it's in a fairly healthy spot.

Um I think utilities is still subsidizing them a little bit.

We over the past few years we've taken we've tried to bring more of their expenses in, and we're looking to do that uh going forward uh to keep as much of their expenses within this fund as possible.

Uh in the past they were having trouble meeting their cash targets, so that's why they were being subsidized, but their um revenues have kind of increased over the last uh few years to make it so they've been more self-sufficient.

So it's mostly full and has been for a couple years, so that helps.

Okay.

So public transit.

So public transit uh they get their revenue from two largely from two sources.

Uh an FTA grant and uh um transportation sales tax match to that grant.

Um currently they have about five million dollars in cash.

Um we uh kind of we kind of see that slowly ticking down.

Um nothing to be too concerned about, but maybe three or four years from now it might need additional transportation sales tax to keep it uh above its targets.

And this funds the business.

The buses is yes.

And again, this is the cash reserve.

This is not all you know, right?

I mean, understanding this is our protection.

Any capital costs that are part of the are outside of this.

Yeah.

Their capital costs get paid for by transportation sales tax as well.

Okay.

So airport, airport again, um they get about two million dollars of operating money transferred to them from transportation sales tax.

As you can see, they've kind of built up a decent reserve over um in 26 and it stays relatively flat.

One thing we're gonna kind of look at when they need uh future projects is whether their fund can take the can subsidize those projects instead of taking that money out of transportation sales tax.

Additionally, we're our goal is hopefully to kind of tick down the amount we have to contribute to them as their revenue, their operating revenues continue to increase.

So hopefully in the future, less money from transportation sales tax will go to airport.

Yeah, making them more solvent fund.

Yeah.

Uh Nick.

And that's because they're generating more and more revenue on their own.

Yeah.

Yeah.

And that's a result of the increased whites that are coming in, the additional air airlines that are there.

Yeah.

But there are fees associated with all of those stuff.

Yes, yeah.

Okay.

Sanitary sewer.

So this is one of our utilities.

Uh it is in a fairly decent spot as far as the cash goes.

Um they have about we're thinking they're going to have about 25 million of cash.

It it's going to slowly tick down, but not at a very accelerated rate.

Uh just to kind of this is kind of the first slide to show the full utilities.

So one thing we have is next year's CIP, so that's the money that we restrict to fund capital projects that come out of the enterprise funds.

And then the debt service, that's the bond payments that we have for sewer uh that we we have uh ongoing.

So just to those are two lines that we haven't really looked at yet, but are part of this fund.

As well as a debt service ratio.

Yeah, the debt service ratio.

So that is we have to keep that above 1.1 uh 1.1 ratio.

So you can see it's safely above that for this fund.

That's a very important ratio uh when it comes to ratings.

So bond ratings, credit ratings, uh that 1.1.

It did come into play a few years ago.

Right.

When we did the electric utility, that's correct.

Yeah.

So that's one that uh SP standard and poor they watch very closely.

They they watch um electric, water and electric probably more closely than the others, but they they watch these numbers really closely.

And we'll be talking a lot more in depth about sewer and solid waste next week for the cost of service studies during our pre-council.

Yes, right.

And just looking ahead, all all of the utilities uh have a debt service ratio that's more than acceptable.

It's pretty good shape.

Yeah.

And is projected to do so.

Yeah.

That component looks good.

One thing we'll talk about sort of as we move forward with that is that it doesn't take into account your fund balance.

It only takes into account your uh revenues and expenses.

Revenues and expenditures and your ability to pay your debt for that year.

Okay, parking.

So uh parking has been in a bit of a bad spot for the last couple years.

Um they're slowly kind of digging their way out of.

We did a rate increase last year.

Well, not a rate increase, more of a rate kind of equalization that we do think is helping them, plus their enforcement of parking has seen revenues come in at a higher level.

So they've been negative cash uh and they will continue to be negative cash, but they're slowly getting themselves out of it.

However, if we go to the next slide, I can talk a little more about some other options that might be available.

So one thing that is kind of hindering parking is that there is this restricted cash account called the residential parking permits only.

It was implemented in 2018.

And what it did was that it restricted a portion of our revenues that come from our parking permits into this cash account.

The purpose of this cash account was to fund a project in East Campus to try to rectify issues over there about parking.

Betsy, you probably know more about this than I do.

But anyway, uh an attempt was made to do that, I think in 2019 by uh Walker Consulting that never really went anywhere because the two sides never can met meet on any type of compromises.

So through that whole time, we've been because it was a council action, we've been continuing to restrict cash.

So the cash that has accumulated has now been uh reached over a million dollars.

Um what we would propose is that council take an action to unrestrict that cash so that we could use it for capital projects like the if you can see on next year's CIP that $970,000, those are elevator repairs and other repairs to our garages.

That's revenue that could go right into those to fund that.

And you could see it would put our parking in a much more stable position going forward.

Betsy, do you want to speak to the neighborhood?

I think that would be an excellent plan.

Yeah.

We should bring something back that gets rid of that.

Do you want us to request it at the end of the council meeting on Monday?

We could yeah, I guess.

Yeah, just the initial theory.

I was gonna say I think what would probably be useful is if you can bring maybe a report at a at a upcoming council meeting just so we can see.

I mean, we have a lot of new council members.

And even those of us who live in the neighborhood can't remember everything that happened at the discussion.

So we can do that.

We can break it back as a report.

Okay.

Yeah.

And then with like a potential suggested action if we want to make a change.

I think Valerie.

Yeah, Valerie.

Do we have this slide?

No, this is a new one.

This is why we was converted to the other slides, because this got didn't get put in.

So I'm sorry, but I needed we wanted to talk about this, so I we wanted to put this slide in.

And we will provide these with you.

I'm glad you brought it.

It was an interesting question.

Um if we're gonna have a whole report on it.

Yeah.

We'll have the information.

Yeah.

Okay.

Next up is stormwater.

So stormwater water is another one of our utilities.

It's a smaller one.

Um it's in a pretty good spot.

I think uh they benefited from some ARPA grants, if I'm not mistaken, Aaron.

Yes, about $3.6 million in ARPA grant money from the Missouri Department of Natural Resources for three stormwater projects.

Uh and you can see that's more than the yearly expenses for operating expenses, I guess, for the utility.

So it it'll carry the utility for another another couple years without needing a rate increase.

And we would have to go to the voters for any sort of rate increase for stormwater.

Remind us the last time we went to the voters for that.

Uh so that was twenty sixteen.

I remember your presentation.

You made a siren noise at the beginning of it.

Oh, did I?

Yes.

So okay.

So 2016 we think is when we did that.

I'm trying to it was 2015, actually.

Um it was the same time as the electric bond election.

And then we did a series of uh rate increases over five years up to the point that they are now.

I think the last one was in 2020.

Okay.

Aaron, can you uh Nick and then Betsy.

Um my same question is really from the previous one I asked about.

This is a pretty healthy reserve here.

And I can imagine there are a number of stormwater projects that where that money could go.

So is there any conversation about that?

Yes.

So as you can see, this and FY26, uh, the next year CIP was about two and a half million.

And the following years we have it around two million.

It seems like there's always some small drainage project that comes up in that time where we end up coming to you with a quarterly budget amendment or something to fund some project uh that we need to fund.

So yes, I could definitely anticipate us attempting to spend a little more money.

The other the other constraint is uh resources, staff resources, right?

Uh trying to design all those storm drainage projects.

We only have one engineer fully funded with stormwater.

Um sewer does kind of subsidize stormwater a little bit by some of their engineering staff do some of the stormwater design.

But it's just, you know, having that few staff people directly related to stormwater, it's hard to get that many projects going.

So it's just kind of a balance.

But yes, I do anticipate us spending more capital funds for I get it.

And I think when we had this conversation at our last meeting about the project off fairview that we were talking about other needs in that area and in fact another one has come to my attention even today.

So that's that's why I asked that if there would be a way to move some of those things forward that we know and I know staff is talking to me already about uh having uh certain amount of money every year just to to line uh corrugated metal pipes that we know are failing uh around town and trying to do more of that every year uh or replacing those corrugated metal pipes trying to do more of that every year by we would have to contract it out because our staff can't keep up with that.

Well I'd consider thinking I'd uh recommend thinking about that actually Betsy did I answer your question?

Yes.

All right thank you so we're gonna shift over to internal service funds now.

So employee did you want to talk on this employee benefit fund this is the fund that uh basically funds our health insurance and our uh prescription medical claims and prescription drug claims um we do keep a higher reserve on this we keep a 75% reserve because of the nature of those expenses however it is a pretty healthy fund it continues to see its cash stay at a pretty relatively level level um so uh there's no really concerns with this fund at this time uh self-insurance fund this fund goes to fund our self-insurance program uh it had a pretty high cash reserve at one point and we've been trying to kind of uh whittle that down a little bit um we start to see some maybe some issues by 2031 so we might need to kind of correct a little bit but really what we're doing is just trying to uh not keep as much cash in this fund as we have currently have this is important because these are funds that are passed along from the other funds to pay for uh the self-insurance and so uh this is one of those things where we can we can keep those rates lower for a period of time but like Jim said when you get to that 2030 period we might need to look at uh increasing rates for other funds to make up for uh the cash reserve target can you talk a little bit about what the source or sources are for this oh it will be all the other funds so um I get Lisa's not here so I can pick on them.

They they pay a lot of risk management self-insurance funds.

And so some of the things we have is it goes on accidents.

So the the number of accidents someone has so just like just like your normal insurance uh we do those same type of activities uh increase and decrease rates based on those based on usage.

Yeah.

But it has to do with the level of risk according to the rolling average so if there's a fund that had a large accident one year they might pay higher what we'd call premiums or charges to this fund for a few years until that kind of fell off but that's kind of how it works.

Christina I guess I'm having a little bit of difficulty if we're above 10 million above cash target in 2026 and then down in 29 FY29 we're down to two million why would we wait until 2030 to like start resolving that.

So well what we're trying to do with these is not really show what our resolution is going to be for these things is trying to show how things would be if we stayed on the course that we're currently at.

So what we're trying to do is just show you if things stayed if we kept the same projections, this is where we would end up.

What this tells us though is that we probably need to change some do some course correction and and and uh increase the fees to the other departments to get this fund up to health.

So what we want to do is we wouldn't do anything we're not gonna sit on the sidelines until we get to like 2029 and then not do anything.

We're gonna start doing it incrementally until we get to that point so that we don't get to that hopefully we don't get to that stage where it's in a bad place.

So on some of the other ones we're showing that we did not so on some of the other slides we're showing that we didn't take action.

Yeah.

And that's why they're red or whatever.

Yeah.

And you're trying to say that.

Ideally we'd want to.

Thank you.

So I I guess actually staying on that one.

You know, you you can't necessarily guess when we're going to have a big claim, you know, something like an incident that's going to happen on this.

So you know, I know we we try to kind of even it out, but even like looking at last year's, you know, the these are a lot higher expenditure is estimated at least a million, if not two million over what we were estimating they were going to be in that.

Um, I know with our risk management plays a role, right?

In in in trying to avoid these, right, by doing the training.

What other sort of things besides just charging fees to the department do we try to do to control this?

I think that's a big part of it, but one of it is actually so if you picking on the department that's not here.

So if you have a department that has a number of vehicle accidents, and so then you know that that means you have to do intense training with that department on hey, you're having a number of vehicle accidents, you may need to make sure that all your employees are going back through some type of program to hear about that.

It's really having that understanding as you're looking at things occur to start having those conversations.

Another big thing that you look at is if there is There's a known incident that we've been made aware of that we don't take care of.

And then that's where you start seeing an insurance liability insurance liability occur.

And so it's being aware of that and having more conversations about improvements that need to be put in place.

And so it's actually taking a look at what's going on and being responsive.

I mean, the one thing that we're I think I'm really proud of with risk management is we started to add staff to actually start doing those type of things.

So we have a staff person who is actually being trained to do more and more training themselves as opposed to outsourcing our training.

Uh we're doing more proactive looks at what we're doing in order to make sure that we can keep down our costs.

And so would you adjust the fees based on the use of that department?

Yes.

That's the one that's one of the things we do.

So if we have a department that has a high number of vehicle accidents, they end up paying a higher rate for their vehicles because they're not department or division?

Because I imagine there's some, it's divisions within a department.

So some divisions within those departments, yes.

Okay.

Thank you.

Okay, fleet.

So fleet is not in a great spot.

And the biggest reason for that was their big driver for revenues is their labor charges that they charge to the other departments to work on vehicles.

They were in a a situation the past uh probably four or five years where they were extremely understaffed, where they weren't able to service as many vehicles as they needed to.

In addition to that, they're probably their labor charge was probably hadn't been adjusted for a while, and that also played a role in this.

So as you can see, that there continues to be an issue with this.

However, we kind of got a slide after this that kind of brings forth a potential solution to that.

So one thing we asked our fleet department about was what is the outside labor charges and like what they kind of came to us was that the labor charges to take a vehicle and get it serviced at, say, Joe Mockins or somewhere else is about 150 dollars an hour.

We're currently charging 100 an hour for those uh labor charges.

So what we would like to do is increase that labor charge by $10 in 2027 and an additional ten dollars in 2028 to bring it to 120 120 hours uh dollars per hour, thank you.

Uh and that I think would get this uh fund in a good spot.

I think they're down to just one vacancy in their fleet department as well, so they will be able to do more work in-house, which will help the fund out as well.

Do they also have a sort of requirement to try to go in-house first?

Yes.

Yeah.

Okay.

Yeah.

Uh Christina.

Maybe you already said this, but where is this funded out of?

So this is internal service funds.

So it gets it's it's uh it's funded by all the departments that have vehicles.

So if you have a vehicle, you take it to the fleet, they service it, they charge that uh department a fee for that for maintenance maintaining that vehicle.

So this so this solution will just pull money from those other departments and change.

That's how those numbers that we're seeing.

Yeah.

All the internal service funds operate that way.

They all basically take money from the other funds to operate themselves.

Yeah, Valerie.

I'm wondering if we have a dial from the other departments as to really how much it would change it since they were having to outsource things at 150 dollars an hour more often as they were short staffed as we are staffing up but also charging more.

I I think I to see it balanced somewhat our goal is always to be under what the outside service charges would be.

So we're never going to match it.

We would just want to get that discrepancy a little closer.

Right.

But I think that you know if if we are changing our fees, usually we expect that to negatively affect the other departments since it's a fee to the other departments.

But the other departments were previously outsourcing at at least quite a bit of that.

Right.

So what they don't have to maybe that impact to the other departments is somewhat mitigated since they're more likely to do it in-house now.

Yes you should see some offset charge for where the internal fee may go up the service may go down because they're paying less.

So that's the miscellaneous contract.

No you were you were still talking yeah go so it's like the I think that came out in miscellaneous contractual stuff where that you asked about earlier where they were having to contract things, send them out this is one of those things that will get smaller as their departmental transfers gets larger.

We would definitely hope so yes.

Same.

Okay.

I was just going to say like if we're not adding people to be able to do the services then it doesn't actually change.

Well so that's that's what's happened.

Right.

Like if they don't have enough people to do the things and then they're going to in this in this department right?

Well so what happened was before we could not hire anybody.

And so our fleets I think they were down five or six employees and so we were down by so many mechanics that departments only only choice was to outsource.

As we've now increased our ability to hire we're actually able to do more of this stuff in-house as opposed to outsourcing the networks.

So we do have a lot more people I think you said we had one vacant so that that 2022 where you saw that big increase in salaries and benefits for employees when we make those changes to our salaries we're actually saw a turn in our ability to hire and maintain people the fund that houses our IT department it's in a relatively stable place.

I mean we will keep monitoring their internal service charges to make sure they stay at a level where they have a little bit of excess cash.

So this is a fund it it used to be a fund then it went away now it's going to now it's a fund again.

It houses our utility customer service department we don't really have projections for this but our goal is basically to keep this basically cash neutral so whatever revenues they generate and then the subsidies they get from the utilities is we want that to match their expenditures so they don't really keep any excess cash because that's just money that the utilities could be using for other stuff yeah Petsy can you explain to me what the utility customer service cash reserve is what the cash reserve is like what is this what the fund is.

So the utility customer service fund it houses our utility customer service department they're the people that sit uh over there in the uh old part of the building the boon um hotel part they basically basically answer all questions that customers have they they do they they um assist with billing um and they they are now actually taking payments as well uh so the I that's that's kind of what the services they provide and this is separate from the why is it a separate fund?

Is that what you're asking yeah so we don't have any other fund to pay our cashier No it's a separate fund because there's about five different utilities that that all contribute money to it.

So when we it used to be its own fund for years then a decision was made to bring it and and divide it up into the five different utility departments.

Well that kind of made it a little less transparent on like how much it was actually costing to run that house because you had it split up between five different funds.

So for sake of transparency, we thought it would be better to bring it out, bring it into its own fund like it traditionally was, so that the costs are all kept together, and then that you can monitor how much the utilities are paying into it to run that uh service.

Thanks.

And at the same time, it moved from the utilities department into the finance department.

Yes.

Yeah, there's a few other moves.

I think it went from didn't it go from utilities to the most recent recent was from utilities and finance.

But it used to be in finance, and then it was in communications, and then it was in utilities, and then it was back to finance.

So they've moved around a little bit.

But hopefully if they move around any more, we're keeping this fund.

Yeah, the fund's not going away.

So here's uh vehicle equipment and replacement uh fund.

And so it it looks good, but we are still, especially in the general fund.

The uh all the other funds are doing pretty well uh being able to pay it forward within the VERV, but the the general fund is still sort of limping along.

We have not made it to a point where we could actually pay uh the actual payment into the vehicle equipment replacement fund.

We're basically just paying for the next year's equipment.

And so that that is not the point of this fund.

The point is to pay uh a fee in yearly, and then when you need a replacement, you're able to do that.

But because of the woes of the general fund, we have not been able to come to that.

Can you talk a little bit about how the funds how this fund is created and what actually goes into it?

Yeah.

So uh basically if you own this this is the fund that owns all of the cars within the city, basically.

And so if you have a vehicle or equipment within the city, you play uh how it's how it should work is you pay a uh lease amount or uh uh monthly fee into the VERV for that vehicle.

In return uh when it's time for you to get a new vehicle, you don't have to pay for that whole vehicle at one time because you've built up equity within the fund to pay for the new vehicle.

Christina, sorry.

So many newbie questions.

I apologize.

Um why is this different than just the fleet fund?

Fleet uh takes care of vehicles.

This is to to purchase vehicles.

Yeah, Valerie.

You may have said this.

We we started doing this fairly recently, right?

Yes.

Um I I remember voting on this, and I liked the plan um to pay into it and plan ahead for our vehicles.

How do we get on track so we're doing that?

Because it it feels to me like it's just going to cost us later.

We haven't been able to follow through with essentially the plan that we voted on.

Um later we're gonna need cars and we won't have the money saved up to purchase the cars.

It's basically what the general fund can handle.

And so um the general fund is just in a position where uh an additional three to four million dollar payment into the fund is which is basically what it would take.

Uh it cannot handle that at this moment.

And so we are still sort of playing catch-up with a lot of our vehicles because of that.

Can I ask what the point is of having this fund if we're not following the plan for the fund?

I mean, we we thought we would be able to get here, but our expenses have far uh outpaced our revenues.

Uh I mean, just like what we saw the what we saw uh when we were looking at the general fund projections, you see uh your revenues increase on a pace of uh two and a half, three percent, but your your expenditures are three, four, or five percent a year, and it it is just not something that we can keep up with.

I mean, I'm watching the same things I know that our revenues haven't kept up.

Um how do we decide which I guess which plans we're gonna follow through with and which ones we're not able to do?

Um I guess can I clarify because is it that we're not following the plan, or is it just that we don't have you know what I mean?

Because is it that we're not following the plan, or is it just that we don't have you know I mean because like like we're are we because our our um is every department that owns a vehicle paying into the fund, just maybe not as much as for the general fund, no, it's not happening in that manner because we can't.

So uh if we uh like for instance, what the the uh budget that was proposed last year, we had already proposed a deficit spending in that budget uh for to actually put this plan in place, you would have had to increase that deficit by another three to four million dollars in order to pay into it what should have been paid into it.

So that that is the reasoning.

Um do we want to do it?

Yes, we want to do it.

We just do not have the funding in the general fund to do it.

Yeah.

I I guess I'm not asking, do we want to do it or do we not want to do it, or even why haven't we done it?

I'm asking, you know, when we're making the decisions, we can't follow through with all of the things that we want.

You know, this is a future-minded thing that we used to do from departments or from general fund.

Um it I mean the choice makes sense, but I'm asking, you know, how do we decide which ones we're going to increase?

For something like this is part of our annual budget discussion.

And so when we're making our budget projections, we talk about how do we allocate funds.

And so when we look at the VERF, which is a great concept, we also look at our ability to pay into the VERF.

And so that was kind of that part of that fiscal decision.

So it's something that's lined up for us when we approve the budget.

Yes, ma'am.

Nick.

So is it fair to say that this is a result we haven't done it because revenues haven't matched where we were anticipating they would go?

Yeah.

So like a prime example.

So a prime example is last year when we bought police vehicles instead of coming out of the general fund, it came out of the capital improvement sales tax, which is not a normal place that we would pay for police vehicles.

Right.

But no, that was kind of the decision that was presented in order for us to actually do that at that expense.

Um hold on.

If anyone else anyone else besides, then I'll go circle around again to Christina and now.

All right, Christina.

Um so my follow-up question that I was gonna ask when you explained the difference between the fleet was the car uh the police vehicles, and maybe you just touched on this, sorry, but are they supposed to come out of this fund or general?

So they're supposed to come out of this fund, not the capital um funding that had occurred last year.

Or the decision that was made.

Yes.

Okay.

Valerie, did you have a follow-up?

Yeah, I'm I guess I'm coming back around to this what purpose does this fund serve and if it's still useful to have it if we're putting less than we anticipated?

I very much think it's still uh worth having because this is a plan that once you are in a good good space, you get this thing rolling.

You don't you don't have to pay out as much of those one-time expenses, those big chunks like our some of those tandem axle trucks that we buy for uh for our streets departments.

I mean, you're talking about $500,000 a pop.

And so if we can have a way, a mechanism to pay uh a little bit over time versus paying $500,000 at one time, it it's a much better, is more ideal.

And remember, this is still fairly new, so it's gonna take a while for it to get established.

But one more thing to add is that even though we're not able to fund future replacements, this is where we're housing all of our current replacements for general fund.

So if they the vehicle comes in a little bit less than what they budgeted, that money stays in this fund and we can use it to replace vehicles in the future.

It's also letting the cash that's sitting here earn interest that is in this fund dedicated to vehicles while we're waiting for those vehicles to arrive.

So there is a purpose to having everything here, even if we're not able to fund it for the future yet.

Yeah, that's good information.

Thanks.

Thank you.

Right.

Oh these next slides are gonna be water, electric and solid waste.

Uh each one of these uh we have about either two to three slides for each one showing uh how they're currently looking, how a rate increase would affect that fund, and then for water and electric, we also have slides about AMI meters.

So I guess we can go through water and then maybe go through the three slides and then you guys can ask questions after that.

So keep moving on.

And remind us we have slides on the things that we're talking about on Monday.

Is that correct?

So maybe do you want us to save our questions on solid waste or sewer or actually we don't have sewer solid we solid waste is often earlier.

You'll see solid waste at the very end, but yes, we're talking about solid waste in depth next Monday night.

Okay.

So this is just a little preview.

Thank you.

Do we have uh a closed session?

That we have to need to get done by eight?

Ideally, yes.

Okay.

Thanks.

Okay.

So here's our water uh cat reserves as they're currently projected.

So as you can see by next year, we are going to be falling below our target, and by 2030, we go negative cash.

So uh some rate increase will be needed too in order to correct that.

So this slide here is showing what uh a 10 percent revenue increase would do.

So that doesn't mean necessarily a 10 percent rate increase, it's a 10 percent revenue increase.

Uh and what that does is that puts this water uh fund on fairly stable ground, ending cash stays between 11 to 10 million dollars.

And I'll wait until you get to your third slide.

And then we'll ask questions.

Yeah, there's more.

Yeah.

But finally, uh we also are in the process of implementing advanced meter infrastructures, which um Aaron, I believe is like a 41 to 45 million dollar project.

So we have planned uh on June 8th to discuss advanced metering infrastructure with you.

Uh AMRUSCO is uh was hired through the ESCO program and AMI, and so they're gonna do a presentation about AMI.

But so we just thought we'd slide that in here to give you a little prep work that is gonna have a cost to it.

And the status of these funds right now uh does present a challenge to fund that, but but we we will have a plan to discuss that night.

Um with regard to water, uh, if you'll remember we did a cost of service last year.

Uh with that cost of service, we uh changed the rate structure and also had a 12 percent revenue increase.

And with that cost of service, they recommended to follow up with a 10 percent rate rate increase or revenue increase for fiscal year 2027.

So that's what uh finance has shown in these slides is that 10 percent that was already recommended with the cost of service last year.

Does it also show Aaron?

Because I'm looking at last year's slides.

It said for fiscal year 26, 12 percent revenue.

Again, not rate, but revenue, 10 percent revenue.

And then do the following year show the three percent that the cost of service vignette on this, yeah.

Okay.

Okay.

So just for council, and I think probably one thing that will be useful as we continue this discussion is since we have newer council members, and we weren't here when we had the cost of service study is to make sure that that's included in the packets that come to us as well.

What's included?

The cost of service study just sending the.

Oh, include the whole cost of service studies.

Just to show where the percentages come from, or even if it's just these slides that were recommended from.

Um then I'm assuming if this were to propose go forward, you'd have the same sort of communications plan for and I last year it was really helpful to show person their bill only went up like a dollar thirty-six or something because would that happen again?

Well, remember we changed the rate structure last year.

Yeah.

And so um this year I don't plan to change the rate structure, and so we'll just have to look at where that increase comes in.

Uh and what tiers it cut, you know.

I assume we'll do kind of across the board due both the customer charge and the tiers, but we we haven't discussed that for sure yet.

And has this gone to the water and advisory board?

No, we're trying to, you know, give you guys a little preview, just so you start thinking about it.

So if you have questions or specific things you want to see, you can let us know so we can bring that back in a timely manner.

We we still do have the water rate model.

So if if that's something you all wanted to see as well.

The calculator online.

Yeah, that was helpful.

Yeah.

Questions on the water projections.

No, it will keep talking.

I think if it follows last year's, we had multiple work sessions over cost of service and water rate and other rate discussions.

Okay.

Okay.

So electric um this fund, as you can see, we're projecting that.

The main driver of that has been uh power purchases.

They have been fluctuating pretty wildly.

Uh and our power cost adjustment can't capture all those changes.

So that's kind of what's driving this.

Um the next slide uh shows the a seven percent revenue increase, or is it six?

Six percent, sorry, six percent revenue increase.

This would correct it, although it looks really good.

I mean you can see the cash goes from 47 million and twenty-eight to sixty-eight.

But keep in mind that we can't really project power purchases uh very well.

We can't predict the weather.

So I would this is a pretty rosy uh prediction in my opinion.

Yeah, and so I don't know if you all remember a few years back we had that that incident where our uh the power purchase basically wiped out almost all of our cash reserve.

And so it uh those type of things we really cannot plan for or forecast.

Uh and so we can only do sort of a status quo type thing now.

So why does this show six percent when it seemed like last year we had a two point, you know, we were around like the two, two point four, and I don't remember a discussion around six.

Right.

Yeah.

Okay.

Yeah, so uh the projection uh for electric has definitely changed substantially this year versus last year.

So last year we projected our beginning cash would be about 48 million dollars, but you can see it's 37 million dollars.

Um so even though our revenue went up nine million, uh our expenses went up 15 million, and our capital expenses also went up another three million.

So ultimately, as they as they mentioned, our power purchase costs are the biggest driving factor for that.

Uh the day-ahead local marginal price, which is the hourly price that we pay for energy for all the energy that we use.

That's gone up about 13 percent.

And that's probably the biggest part of our budget is the power purchase.

And this is not unusual to Columbia.

This is all electric utilities are seeing this.

Uh all the surrounding electric utilities have had double digit rate increases uh over the past few years.

Uh we tried to keep it real minimal last year.

Uh and we we probably missed a little bit.

We should have overestimated.

Um we should do in electric.

We should probably do more uh knowing all the future expenses we have.

This is probably the biggest uh electric boom for our country since World War II.

So there's so much uh building going on, so much purchasing going on, there's a lot going on globally uh with energy prices.

So uh I expect our power purchase expenses to just continue to go up.

And so we need to be prepared for that and prepared for a really hot summer or a very cold winter.

And I apologize I interrupted.

You probably have one more slide with AMI costs on it, do you?

Yeah, yeah.

Yeah, there's even more.

Yeah.

So that's the one with the AMI.

I mean, it's still like I said, it's it looks okay with the six percent, but like Aaron said, the the power purchase stuff is gonna be really driving this.

And and the other piece I didn't they mentioned briefly, but uh we talked about the power cost adjustment factor, and that was one thing we implemented with the cost of service study that we did with electric was this power cost adjustment factor that that would help us kind of weather the good times and the bad times.

But we put a cap on it, right?

We put a 15 percent cap.

Um so that means we're not able to recover that volatility all in one year.

And so we have to recover it over multiple years.

So the amount that we had once the fiscal year turned over, there's about 10 million dollars still to recover from that power cost adjustment factor from from the volatility that occurred in the market.

So um subsequently we're capped out for the rest of this fiscal year for sure, probably.

Uh that is one thing that the water and light advisory board is recommending, and I know you guys have all received emails about this from uh constituents.

Um but the water and light advisory board was recommending raising that cap to 25 percent.

It's based on the tier one, whatever the tier one costs are.

So even though tier one went up a little bit last year, so that 15 percent went up a little bit, we're still capped.

Uh the water and light advisory board is recommending recommending uh raising the cap to 25%, which means we'll recover more of those funds uh in the fiscal year.

Because they're true expenses.

I mean they're expenses you're paying.

Right.

Yes.

They are expenses that we're paying for the power purchase.

Okay.

So solid waste.

Uh again, it's uh the cash is continuing to kind of uh decrease in this where by 2031 you can see it going negative.

So um in the next slide over, we have a five percent increase in 2027.

So that's what we're not when I say five percent revenue increase, excuse me.

Uh but that would be in 2027.

I know you'll probably hear more of this.

Aaron can speak more.

That's not the end of what they're proposing, but we didn't want to put more in to this, just we wanted to show you what that won't current this current year increase will do.

So it corrects it for a couple more years, but does not fix the problem.

And again, we'll talk about this more on Monday, right?

During the pre-council.

Yes, solid waste.

We'll talk more on Monday.

And we'll we'll try to bring some bill impacts for all the utilities uh for the end of that meeting as well.

Um so both some water and electric bill impacts with these proposals.

Okay.

A lot of information.

And I imagine we'll have we are and just for council's reminder, this is kind of the start.

This is like the second start of our budget season, right?

We kind of start priorities earlier in the year.

They do kind of like the revenue forecast, how are we doing?

And then we will start our real, besides the cost of service studies.

We'll have three budget work sessions in July.

The budget city managed proposed budget will be released, and then we have three public hearings in August and September, and usually the pre-councils are also taken up by the budget discussion.

So I think um one thing I'll just ask is that as we're kind of forecasting when these things are gonna come up when we're talking about the calendaring later this week at the retreat, those would be good things to know, right?

Like the AMI discussion is coming up, I think you said June 8th, like to have like those so we can know when to expect to have those um that information for us.

Do we have any questions for this before I motion for us to go into closed session?

And I did find out May 22nd is when the request for expression of interest for the railroad is currently set to close.

Thank you.

All right, see no questions to this.

Um I'll I'll move that the city council of the City of Columbia, Missouri, to immediately go into a closed meeting in conference room one C of City Hall to discuss legal actions, causes of action or litigation involving a public governmental body and confidential or privileged communications between a public governmental body or its representatives and its attorneys pursuant to section 610.0211 of the revised statutes of Missouri, and sealed bids and related documents until the bids are opened and sealed proposals and related documents or any documents related to a negotiated contract until a contract is executed, or all proposals are uh rejected pursuant to section 610.02112 of their five statutes of Missouri.

Can I have a second?

Second.

Second by Nick.

Um Ms.

Buffalo, yes.

Ms.

Carroll.

Yes.

Ms.

Elwood.

Yes.

Ms.

Sample.

Yes.

Mr.

Foster.

Yes.

Ms.

Hartman.

Yes.

Ms.

Peters.

Yes.

All right.

Everyone who's supposed to be in the closed meeting, go into one C now.

Thank you.