Apartments and crunching through that number and arranging all the pieces together to present to you what we have today.

Government financial structure or fund accounting is really unique.

It's a repeat.

I repeat this every year, but I think it's important to review basically Huntsville structure.

Every government is a little bit unique in the way that they stack up their funds in the way they do that.

But it's not like a business, and it's not like any other kind of individual structure that you would see.

So basically, city and counties assess and collect taxes and charge fees that provide through that they provide the services to the citizens.

Both laws locally, state, and national govern how much we can collect and how we spend those resources.

As you can see on the screen, the city works through a framework of funds.

Each fund is comprised of revenues, expenditures, assets, liabilities, and fund balance.

It is all contained within each fund, what happens.

This helps us track, manage, and account and report on varying sources of revenue and expenditures, ensuring they are regulated in accordance with the laws.

You can't dip out of some buckets and put them in others.

That's why we build the funds the way we do.

The City of Untsville has right around 50 funds, each unique in nature.

We've changed a few, there's been a few significant changes since I started here.

One of them is taking the enterprise fund of the, well, taking the sanitary, the sorry sanitation out of the general fund and moving it to an enterprise fund.

This has helped us understand the relationship between garbage charges and the coverage of the services provided.

The second is the deletion of a debt services fund.

You'll see that last line up there is kind of missing a segment.

In simplest terms, it means that the principals and interest that we borrowed are now associated with their appropriate revenue streams.

It helps us to better account for how those those borrowings are associated with different revenue streams.

Over the next few slides, I'm going to walk you through some of these funds.

Obviously, I'm not going to touch all 50.

The general fund is usually the largest of any city, and it is with the City of Huntsville.

All that is listed on the screen is part of the general fund.

Revenue service revenue sources and the departments.

The total budget is $343 million, and this is where a majority of the activities occurs.

Besides the general fund housing all of these sources and uses, the city is self-insured and therefore budgets and maintains a health insurance fund.

Around $40 million in premiums and charges are maintained or managed through this fund each year.

On an even smaller level, though, is the events and donations funds, which is maintained to orderly receive and disperse dedicated donations received throughout the city each year.

CAFE, JAS in the Park, and the like are examples of programs that are financially managed through this fund.

Special revenue funds are used to account for specific revenue sources that are restricted or committed by law to spending in a specific purpose.

Advalorum taxes or property taxes are levied under certain laws.

In each of these different boxes that I'm going to put up there, the number at the bottom represents the number of funds that I'm talking about in general.

The city has determined in the best interest to provide certain portions of sales tax to the operations of Huntsville City Schools.

14.7 percent of 3.5 pennies goes in sales and use tax goes to the Huntsville City Schools for operations.

This year it is budgeted at $36.5 million.

The lodging tax funds accounts for lodging taxes collected in the city.

By local law, they are allocated to certain spending on tourism, sporting, and entertainment venues.

We are down to two of which are in current operation.

We have gas tax funds, which are restricted for road, bridge repair, and maintenance, and it can it can be used for street lighting.

There are certain federal and state funds that are collected that can only be spent on public safety corrections andor court funds.

And grant funds obviously are used for for different grant specific purposes and laid out in their in their agreements.

We also have capital projects funds.

The city had designated a portion of funding to invest in capital projects for the 1990 capital projects, that it is 18 percent of 3.5 pennies, and for the 2014, it's 1 percent of 4.5 of the 4.4.5.

Road construction and maintenance and recreation facility construction, fleet purchases and the like are accounted for in these funds.

They also pay for principal and interest of the borrowings.

Water pollution control, sanitary and sanitation or garbage services accounted and managed in for in in enterprise funds.

Fiduciary funds or get there.

The retiree trust fund for health benefits.

These assets are not our own.

They are retained in a custodial relationship with the city.

Before I get into the budget numbers, I want to set the stage as I always do with a few economic drivers that are current indicators that affect the financial position of the city.

I'm not going to read this slide or get into this.

You can refer to this a little later if you want to.

Basically, our economy right now, we're in a place of kind of kind of stagnant.

We're not there the markets are doing really well, but inflation is also rising, the job growth is weakening, consumer confidence remains low, but in the end, we are also the reserve just cut interest rate funds.

So that should open up some markets and give a boost to spending.

So we're kind of a little bit in a wait and see.

Continuing resolutions ends on September 30th, and so that's looming a little bit as we are heavy into the defense sector of our of our economy here.

So again, we're just kind of we're kind of looking and waiting to see.

But right now we're kind of in a steady eddy position as we move through as we look towards what we're doing for FY26.

And you will see that play out in the as I present the different forecast over the year.

So the general fund revenue sources, we're going to look at quite a few of these as we go through.

This pie is a general fund relationships kind of.

I present this to show the relationship sales and use tax as well as is right at 50% of our total for our general fund.

Property taxes, pilot, SSUT, and licenses all play a big part into those revenue streams.

And um and then we're going to move into more some more selected ones as well, just to give you of what happens in some other funds, just to kind of give you a uh overview, a broad brush of what we deal with here in the city.

So sales and use tax, this is very familiar to you.

Um we are at 92 percent of the way through our current year budget.

So um so we actually gained a little bit in August.

We are 2.6 percent over last year for the month of August, which is July sales.

Um to date we have collected about 288 million dollars, and this represents the whole 4.5 percent, but we're about 0.38 percent decrease under uh the prior year as far as just those sales.

I kind of scooted that box, that kind of lighter shaded box there at the bottom, so you could see last year at this time when I presented the budget, that was what it looked like.

We had collected to date about 289 million.

So in respective, that's where we're missing, um, we're down a little bit at 92 percent.

And at 92 percent of the budget, when we um when we reduce the revised budget, we are on budget right there at 91.9 percent, but we are still under that original budget, so I think our revised numbers were good as we move throughout the rest of the year for fiscal year 25.

26.

So at 26, you can see those those stacks are right there on each other.

We are predicting it to be very flat.

So um so you can see the different segments of that as we um have divvyed all of that out for the general fund, the schools, and the capital projects funds there to your right.

And um, and we project the forecast for for the year end for 26.

I'm cautiously hopeful that I will be back here at mid-year to tell you that we've got a little bit up and we need to adjust those budgets.

And so very helpful in that respect, always.

So I've had a lot of questions about SSUT, and across the board indeed, this week is kind of my board week.

I meet with the with the lodging tax recruitment funds and um and also I meet with uh the VBC this week.

And so had a lot of questions come up, um, even had a citizen kind of randomly asked me about SSUT.

So I want to dive into a little bit and talk a little bit about what it is and what it's not for the next couple of slides relative to what sales and use tax is.

So simplified sellers use or SSUT revenue is um is proposed.

I want to first talk a little bit about what it what is proposed at for this year.

For this year, it's at 20.7 million is what we have projected, makes up approximately only 6.2 percent.

Remember, sales and use tax makes up um 50 percent of the general fund.

So this is at 6.2 percent.

And obviously the line to the right just shows the percentage of online sales transactions compared to a whole, that's a national percentage, and um, and so it is going up over time.

Obviously, as people and businesses move to conduct their business more online, that slice will get a little larger, and the general fund and um has and will depend on that revenue to come.

I'm gonna back up just a couple of slides just to give you a perspective.

So here the SSUT, that light green is the portion of general fund that makes up SSUT for us, and obviously that's compared to that larger slice of sales and use tax that we usually combine together there in the dark green and what do you call that?

Teal uh blue right there.

So getting down into a little bit more of the numbers, this is very complex.

So follow with me here.

So our sales and use tax, if you had a hundred dollars purchased in the city of Huntsville, the state would get four dollars.

If it was purchased in Madison County, Madison County would get 50 cents.

If it was purchased in Limestone County, they would get $2.

And the city would remain at $4.50.

That's a hundred dollar purchase to in the city of Huntsville.

For SSUT, $100 that is purchased online, the state would still get $4.

The county would get $1.60, which is divided into counties by population.

There are 67 counties.

And 60% of that or $2.40 would be divided to cities by population.

Running out the math, and the state is not, does not show exactly how the math runs.

They just here's the formula, and so you kind of crunch from there.

Um given the running out the math, the city receives of that same transaction eight cents.

County, Madison County would have received six cents, and Limestone County receives one cent for that same calculation.

You can see there is a large differential.

Here we get to crunching larger questions because we're that hundred dollar purchase could be purchased here in the city of Huntsville.

It could be purchased down in Andalusia or Montgomery or anywhere else in the state.

So the pie is a lot larger slice when you're looking at SSUT as a whole.

We still, if that hundred dollar transaction, no matter where it is in the state, we get approximately eight cents of it.

So the pie is larger.

However, when you look at um how, and that is divided by population, but when you look at the population relative to the state versus the numbers of transactions that would happen in the cities, um, so your larger cities are going to have commercial and industrial transactions that happen in the cities.

So relative to that, more transactions happen in the cities and the and in the larger cities as opposed to the smaller cities and and towns.

Given the funding formula, we also start, I will say we also start with a lower portion, you know, um we're collecting 8%, whereas, which is divided up, whereas we if the transaction happens here in Funtsville, it's 4.5% that we're starting with.

Given the funding formulas, all of the different scenarios that I have seen point to a large loss incurred at the city.

And even the county levels have some losses as well if they have higher sales and use tax rates in their city.

So I could I could go on from there.

There's a lot of theories and thoughts around SSUT and where we should go and what we should do, but that is the basics of what we look at when we look at sales tax sales at simplified sellers use tax.

Oops, I went too far.

Advalorm.

Property or advalorm taxes are levied under various provisions of the Constitution and statutes of Alabama.

Many property or advalorm taxes may be used only for the purposes of which they were levied.

Of the total collected by the city, 6.5 mills are allocated for general purposes that re that pushed to the general fund, 6.5 are restricted for the Huntsville City Schools, 6.5 are dedicated for capital projects, and a portion is collected for the infrastructure makeup for the TIFS.

You'll notice I highlighted some things in yellow.

So we are going down in our property taxes.

While we are growing in property taxes, the average from 2020 to 2024 property taxes, when you take away the TIFFs, have grown on average by about 11 percent.

This year it is complicated though by the closure of those three TIFFs because we added all together to show this slide.

So when we close those three TIFFs, they are the majority of that money will go back to Huntsville City schools, and some will extend back to the city.

So we've got a little rise in ours from the closures, but um, but a lot of that goes away to the school system, which benefits us as well.

We receive advalorum taxes from Madison, Limestone, Morgan, and now Marshall counties, albeit the latter two are very small.

Um, but we receive abstracts from all of those to complete complete our projections.

I do want to talk, oh, I did want to mention that the law passed in 24 for the Alabama legislative session will be in effect this year.

You know, it did not affect us last year, but it will be in effect this year.

It limits residential properties and commercial properties to 7 percent.

However, it really doesn't affect the calculations here because we are below that threshold in the increases that we're gonna have right around between four and five percent on overall.

Yes.

Certainly.

I wonder if you could kind of go over what you just said.

I didn't just be quite registered.

We've got all the growth going on, we've got new developments that are taking place.

And the TIFFs that are coming off the uh books, they are uh reduced our overall, despite all the all the other growth we've got in the city.

Yep.

So I'm fixing to put the words up.

No, yo, you're good, you're good.

No, that that is yes and no.

So let me let me cut, let me let me address that in the next couple of slides because I decided to actually pull in from the TIFF presentation that was back in, I think I did it in July this year.

Um that TIFF presentation has the clo we I talk about the closure of those three TIFFs.

So I'm just I just pulled those three slides in real quick and I'm gonna run through those and I'll give you some numbers, okay.

So TIF two is getting closed this year.

This is the one down on South Parkway it or further south, it's it's the uh it's the old mall, parkway, Parkway City Mall, and um and it has Whole Foods and stuff like that that were that was around that that was part of that development as it was created in 2000.

It financed um, you know, schools and various other things.

The closure of the TIFF will pay off the remaining warrants.

Remember when we created TIFF, we not only take the Advalorum taxes that would be appropriated to the city to pay that infrastructure that is built in there, we also the schools related taxes are also pulled in to pay for that TIFF until that TIF is finished.

Once that TIFF is done, the Advilorum taxes have increased over time, and all of that goes back into the tax rolls into its related place.

So while the TIFF improvements, when we were accounting for them in as part of the Advilarum taxes ballooned, that money will go back to the schools.

Some of it goes to us, and some of it will go to the county.

So if TIF two had closed last year, Madison County was received about 500,000.

Huntsville City Schools would have received a little over a million, and the City of Huntsville would have received a little over 500,000 or 600,000 dollars.

So if that TIFF had been closed last year.

So you are correct.

We're actually increasing across the city by between four and five percent across the board for our advalorum taxes.

But because we're taking this big chunk and sending it back to the schools and the county and its appropriate places, we're going to reduce our avalorum taxes overall.

So that's TIF 2.

TIF 4 is the downtown, the one downtown.

So it was established in 2006.

It paid off the remaining warrants of 17 million.

And um and last year, TIFF 4 produced about a little over 2 million for Madison County.

For Huntsville City Schools, it is a little over $4 million.

And for the City of Huntsville, a little over $2.

Again, that two, that little over two will come back to the rolls, but we're but all of the rest of that will go to their appropriate places this next year.

And TIFF six is hard.

TIF 6 is complicated.

I'm going to say that a lot.

So just expect that.

But TIF 6, because TIF 6 and TIF 7 actually overlaid one another when it was created.

A lot of the property that is in TIF 6 will actually go to TIF 7 now.

So hopefully that will let TIF 7 pay off faster as a related, but it's we are working as we speak with Limestone County to make sure that all of those properties are moving in the right direction and that we get that apportioned out to those appropriate entities, whether they are going back onto the tax roll or moving into TIF 7.

But last year this TIFF collected a little over $8 million, and so there will be a portion of that that goes back to the school system.

Lodging tax.

Anything else on Advil Arm?

Yes, ma'am.

Do you have a a number, a solid number of how much is going to the school system this year from the TIFFs that have paid off?

So I don't.

We're working on that.

When I talked with the Madison County, they said this is this is kind of difficult because number one, there's growth at those at those places anyways.

And what they do when they create a TIF is they basically parcel by parcel, they will take it and they will move the distribution of that TIFF, not anything else around that in their software, the distribution to the appropriate places to back to the city to the TIFF.

But when they they just basically take that off and it automatically flows through the rest of their system.

So it would be looking up every parcel that would have been in the TIFF and seeing the growth and seeing how much would go to the school system.

So the best way to affect that is to say this is how much they would have received had it been closed last year.

And you can assume that it's grown a little bit.

So you do have that number.

I have that number for Madison County.

I do not for limestone because of the complexity of the overlay of the TIFF.

We are working to close those funds because there is a little bit that's left in each fund as we have paid off the debt.

You know, we make this collection each year and we have to keep it until we can pay off everything, until we can pay off the final payments of the debt.

And so there's a little bit left over that will go back.

As soon as we close those funds, and we're working towards doing that before the end of the month, obviously we want to do that before the end of the year, then then we will stack up and we will provide that to y'all and and we will make sure that the schools have have knowledge of that and everybody I think we will definitely do a yay.

Would it be possible to get an estimate?

Um I have an estimate for Matt for Madison and then county and that county actually an estimate for Limestone just to give us a total impact.

Even if if all you can give us is the Madison County one.

I will try to get those numbers as we close them, we should get closer numbers.

But yes, we will try to.

Any other questions right now?

Lodging tax.

So lodging tax remains closely watched by staff.

It is a smaller portion of our total revenue picture.

And just like sales and use tax collections have fluctuated throughout the year, the black bold line shows.

It's a little, there's a little anomaly two years ago in August that popped way up.

We're actually comparing against the orange line there, not the blue that goes or TL, whatever you want to call it, that goes way up.

So we are actually for the month of August, 4.9 percent above the here, and we are 6.6 ahead of the prior year overall in this fund and over budget by 94 percent with 92 percent of the year elapsed.

So we are doing well.

Um the revenue numbers moving forward.

Um these numbers are missing.

The dollar room surcharge and the liquor tax revenue used for appropriation.

In forecasting for 26 again, we took a conservative approach to it's mainly flat.

We have a little tiny bit of increase.

But um while sales and use taxes are still kind of on the fence, I do believe this stream was set up to outperform the budgets.

Um don't forget that by local ordinance, the above allocations for lodging taxes budgets are made, and we set aside this sets aside about 75 percent of the total funding to various groups and entities.

The remaining of liquor tax and dollar surcharge are allocated towards various other organizations out of this fund.

I do want to make a note here because the VBC capital is listed at $4.3 million, but $4.1 million of that actually goes to their debt service that they have acquired throughout the year.

That is the way we have this fund set up, is that the lodging taxes pay for the debt service.

So we've taken down, there's been a number of projects and activities at the Von Bronze Center, and so and that eats away at that capital number.

So I just want to let y'all know that.

Top revenue sources.

We've talked a lot about this.

Um this chart lies on page eight of your budget book and starts the section of a revenue.

There is a lot in there that is much more than I can speak on here today.

So if you want to read through that section, it's it's really good in your section in that section of the book.

Excluding grants, these seven sources make up right at 90 percent of all the revenue received in the city.

Um so if you want to look at that and and peruse that, that is also in your budget book.

Other revenue sources.

So I just want to quickly hit the highlights of some other revenue sources for our permits.

Um we will talk more a little more in detail on the next slides as it bears a little more conversation, but it we have it going up just a little bit.

Um, but uh but it will continue, it has continued to get smaller each year.

We'll talk some more about that.

Pilot revenue.

This revenue streams comes through agreements with Huntsville Utilities with continued expansion of both the services and the city population.

This revenue stream continues to grow a little each and every year.

The total FY26 budget is at 34.9 million.

Licenses are lagging indicator.

Um of the economy and the majority is based on prior year's revenue.

So we have it budgeted at a little less than the prior year for calendar year 25.

Based on the trends, we kind of expect this to be basically flat, um, maybe a little less.

It's proposed at 30, um, right at 30 million dollars.

Gasoline taxes.

So I've got the distribution um pulled up there in the in the right upper right-hand corner.

Many of these are Alabama statewide gas taxes that are distributed, distributed to us in various um calculations and forms.

And so this is for our gas taxes.

All are assessed at the state levels.

They can pay, remember, for roads and bridges and similar types expenditures.

Um the revenue really rises and falls based on fuel prices, which affect the consumption.

They the trends have them hovering in the last few years with little or no growth.

Um so this year we basically have flatlined them across the board.

A majority of this is spent on road resurfacing for the city.

Um, however, we do dedicate a portion to street lighting, but I am afraid that the cost for street lighting has outstripped the revenue source that we have it tied to.

So the general fund budgets transfer and the amount of about $2.6 million to support this revenue stream.

Or this expenditure, sorry.

Interest and investment income has come to play a very important role for us in this budget and the next in 25 and 26.

So it it will, and you see that I've bumped it up.

So it was at about $5 million for the general fund, and it will be a lot more this year at $11 million because we have decided that with the general fund, we are going to pull in some of the other investments that we have in investment income streams that we have in the city for FY26.

So it will be pulled from some of the capital projects funds, et cetera.

The capital projects funds do not budget for interest, so it does not affect the projects that are ongoing.

And so they will talk to their projects, but it's not something we ever depend on for other funds.

So we we feel pretty comfortable with the way that we have it budgeted right now.

So permit fee revenue.

So permit fees have been a little bit on a wild ride of the last few years.

This is a new section of slides for me.

I normally don't get into fund balance that much, but the mayor mentioned it earlier.

So we are utilizing a portion of fund balance.

You see this, and I can't remember what page it's on, but um the use in the use of our revenues.

As the mayor said, it is a part of, um it basically represents the amount that we should have made, and I'm putting that in little tiny quotes of revenue over expenditures for the general fund in the last year.

And so we have um we have I have done some work with those and projected those to year end, and we should come out good.

The departments were challenged earlier on in the year when we revised our budgets to hold on on and try not to spend as much in their own budgets, and they have accomplished that.

And then also some other revenue streams besides sales and use tax has done better than expected, and so that has produced an income this year.

We hope that we will not have to use that 7.8.

As typical in the past, we usually come over revenue by the way we budget and we come in under expenditure.

So as we move throughout the year, um we hope that that doesn't even have to be used through our year.

But I want to talk for just a minute about what fund balance is and is not.

So um so basically I refer back to this slide because we're made up of a lot of different funds.

The general fund, which is the fund that we're talking about, supports a lot of different funds and backstops any of these funds should they have issues or problems because we budget them all the way down.

They also have a lot of transfers that come out of the general fund to support various other funds.

Local matches for our CDBG grants and for the public, our FTA grants come out of the general fund.

The um Orion Amphitheater is supported out of this fund as well as the 2014 Capital Projects Fund.

That street lighting subsidy that I mentioned earlier that goes into the gas tax funds, and then our retirement health care, our retiree health care and health trust is um is pretty large.

And again, if there's any savings in that to be had, we will definitely utilize that, and that will reduce this transfer that comes out of the general fund.

Um, but this is what has been established for this year, and that's part of what makes up that need to utilize that that fund balance.

Um I want you to hear me when I say I feel comfortable with this.

I actually recommended this in this budget.

Um we are we are financially stable and strong and have healthy reserves, which really plays a huge part in us having a triple A.

Um, but we have been building that, and that those are established partially just for years like this when there is uncertainty funded and we need to still maintain and continue the balance between our expenditures.

So we will watch this closely as we move forward, but that is basically what's happening with that $7.8 million right there in fund balance unassigned that we've got we've got there.

Any questions about that?

I'm sorry?

Is this information?

That information is in your book, that page is in your book.

It's in a little bit longer form.

I kind of condensed it to get it all on one page.

But um, but yes, it is in your book.

So now I'm gonna turn it over to to Whitney, um, our grants uh grants manager.

I just want to remind you to remember that the life of grants goes well beyond the current fiscal year.

We look forward and we utilize grants um, I think to uh to uh to a great measure, but um, but that it lives well beyond us.

And so part of our mission is to look beyond the budget into the future and um and make sure that we navigate all of the management of grants properly.

Many of these grants come back around in five um in five years or so, and people say, what did we do with that money?

How do we spend that money?

And so we need to be sure that we can reproduce that.

And so that is part of the management of grants and grant revenues and expenditures and making sure that they are appropriate for the time.

So good afternoon, Whitney Gentry Grants Manager.

Um I want to just take a minute to talk about the the landscape of grants looking forward into 2026 and beyond.

Um the City of Huntsville, it remains flexible and adaptive to changes that happen at the federal level.

This year has had a lot of opportunity to kind of show that flexibility and to show how adaptive we can be when navigating some of the new challenges that have popped up.

So we maintain the constant search for new opportunities to align the vision of you all, the leaders to the needs of our citizens.

And I do just want to say you know, all kudos to the talented and experienced grant writers and project managers.

Um I, you know, get to talk, get it, stand up here and talk about it, but they're the ones that kind of make it happen.

So here's a little bit of a grant snapshot for where we are for 2026.

Um the dark blue is the award amount, the kind of teal color is the City of Huntsville match.

And then the other chart shows our current infrastructure grants, our RAISE grant, our safe streets and roads for all grant, and then our HUD CNI Choice Neighborhoods grant.

So now I want to get into the a little bit into the other side of spending of spending on that side.

So we're gonna go through the general fund departmental spending.

This pie is very busy, but it represents all the departments contained in the general fund.

Uh full cost to the general fund for departments is that uh 300 is 314 million for the departmental spending, and this includes a 2% cost of living raise.

I just want to point out the police and I don't know, the gold and rest fire and rescue and gray, and then also landscape management down there in the green.

Those three are are kind of our heavy on our employment.

Um they have the largest employees base of our general fund department.

This graphic is located on page 20 of your book, and um and you can see to the left there is all of the alignment of all the different spending amounts for the funds.

The vast majority of this is personnel in general fund as most of our fleet and capital spending happens in our capital projects funds.

So I want to get into personnel and authorized strength.

So for FY26.

Um we are asking the council to authorize personnel is a total of 3,338, which includes both part-time and full-time staff.

This is an increase of 47 positions from our current state.

And all these graphics are in your book that I'm gonna go through are in your book on page starting on page 25.

So for authorized strength, there's some larger increases.

Um police funding is being increased by 10.

Um there is five new sworn officers and five civilian positions, three of which are located in the NAMAC.

Um during this year, we added 18 new positions.

Um I just want to point that out that um 11 of which were part-time SOR officers during the year.

So that was that happened.

Um then we have parks and rec, 31 new positions.

This includes both part-time and full-time.

This is mainly for the three new recreation centers that are scheduled to open in FY26.

So in general services, they added various positions to their staff, but this year they're adding an HVAC and a plumber.

And then in the past, they have added they had had additions to their aquatic center and a special service employee.

No.

These are these are mainly supervisory positions and things like that within the department.

The legal added five last year, but I wanted to bring this out because you'll you go down the list and go, five positions.

They actually added five, but they deleted five.

The deletion happened kind of across the lines, and so as we as we move through the year through year end, and so those do not get on here, but there's been kind of add delete situation there.

So they were trying to get some administrative positions situated, and so that was the easiest thing to do.

I know I have done that in my department as well to add delete positions in order to make sure that your staff is correct.

Authorized strength.

So I want to talk for just a minute about vacant positions.

While we have proposed full-time and part-time positions of three of a little over three thousand, we have about one-fifth of these positions are listed as vacant.

So any company or entity will have well-experienced turnover, and Huntsville obviously is no exception to that.

We consider this as we budget for personnel so that we don't over-budget our personnel.

We know we ask departments which positions they're going to fill.

So we and we load new and vacant positions at or around half to account for the recruitment time that it takes to get somebody new in.

The city is self-insured.

This means that we cover all medical costs for our covered employees and their beneficiaries over the cost of premiums.

Co-pays up to $250,000 per individual each year.

FY25 to date, we cover $0,007 individuals.

The projected cost or premiums are set through a stuff through a study of our claims history and trends across business and current information through Blood Cross and Blue Shield.

The forecast study notes that the cost will rise by approximately 10% in total, or $4.2 million this next year.

FY26 budget includes the rise in cost.

And although the city bears the majority of the cost, we are asking our city, our employees to increase their premiums by approximately 7%.

Per policy, the active employees are provided this at 15 percent of the premium.

Right now, they are at 13 percent of the premium with the with our latest ads in there.

Retirees are at 60 percent of the cost of premiums, but they are right now at 48 percent.

Um the City of Huntsville bears all the remaining cost.

Um the city pays all medical bills, less the co-pays and deductibles for all participants.

In this, the health care cost by funding type.

So this just shows you graphically where we are with the city.

So um so our our active health active employee health care cost is uh is a little over six million.

Our retiree health care cost totaling a little under 3 million, and the City of Huntsville bears the remaining cost at a little over 37 million.

Wanted to pull this up to show a comparison of COLA.

You're like, again, a 2 percent raise, but I get 7 percent increase on my premium.

How in the world does that equate?

So this helps.

The average pay for the city employees around $69,000 annually.

A 2% increase equals about 1,380.

So if you had a family and you paid PPO, which is the PPO plans are generally where everybody most employees are.

But if you had a family, you pay an additional $8.4 or $8.40 per pay period for the increase, that 7% increase.

Over 26 pay periods, it's at $218, which means the debt increase in your pay over the year is at $1,162.

And I guess also in that it doesn't include step raises.

So in that figure.

That's correct.

That's correct.

Active health care employees, active health care benefits.

So this is for active health care and retirees.

The city pays a lot of different things for health, behavioral health, health and wellness, retirement, life insurance, and that's on an average annual salary.

You know, it fluctuates around, we chose 72,000 here.

So that's so benefits paid by the city is amounts to about 31%.

In addition, the benefits that are included in that salary are holiday pay at 72 hours, floating holidays, annual leave, and sick leave.

And in addition, there is workers' comp, bereavement leave, jury duty, military leave, et cetera.

And please note that all clinic operational costs are covered by the city as well.

So pensions, it's a history of contribution rates.

So this is for our pensions for our RSA that we have.87% this year.

And for tier two, it's at 15%, an increase of 1% this past year.

And just because we know beginning in fiscal year 2027, that's going to increase for tier one and tier two at those at those amounts.

You can see where we were actually going down a little bit, 2017 through 21, but now we're in an increase because of the health the health cost overall are increasing.

I'm sorry, excuse me.

The cost overall to provide our pension plan is increasing.

The history of contribution dollars.

So it increased this year.

The City of Huntsville contributions per employee increased by $608 to $9,000, almost $10,000, and up last year, which increased about a little over $950.

We experienced the largest increase this past year, and um, but we currently currently sits at nine at $9,000.

A little over $9,000.

So I'm going to turn it back over to Whitney and let her talk about outside agencies.

Hello again, Whitney Gentry Grants Manager.

This section is a little bit more, I don't want to say fun, but kind of.

These are our outside agencies that we do.

I just want to briefly remind you about the process and the timeline for appropriations.

It literally does take an entire year to do this.

Agencies were sent their applications by April of this year.

They were returned to me by May.

July, the appropriations review committee met to review and make their recommendations.

In August, the mayor considered the recommendations and the notes from the ARC.

Here we are in September, presenting it to you all for where approval.

And then in March of 2026, the agencies that are chosen will receive their six-month utilization report.

Then it starts all over again.

So on page 29 of the actual budget book, you will see this.

This is a chart that should look pretty familiar, but I do want to point out a couple of things that are new this year.

First being these kind of denoting tick marks down here.

They are showing a couple different things.

First being free or reduced cost of leasing facilities, utilities that may be paid for by the city, and then the little kind of arrow caret mark shows if they receive other funds from the city.

So then when you get into the actual appropriation section that starts around page 66, you will see that at the bottom there it has been denoted here.

So for example, the Madison County Senior Center, they have received free and reduced lease spaces, and then the years are denoted there.

And then here's another example, the legacy center, they have received council improvement funds, and it shows there, and so that's how we are counting for different sources of funding from the city.

Another element that's new this year is we have divided the agencies by categories.

And so here are some of the examples.

This is back on that page 29.

You can see some of the examples here.

And here is a pie chart that shows all the different categories and their relationship to each other.

And these are the appropriations that do want to note are out of the general fund agency appropriations.

How that is defined is that these agencies, their funding is not part of a contract or an agreement.

Basically, they submit an application every year.

And we have categorized them into their category by the type of service that their project is providing.

So then when you get into the actual appropriations section of the book, which again is around page 66, you're gonna see this sort of cover page.

I just want to run through it really quickly because there's a lot of really good information in it.

Um I know sometimes it's kind of easy to kind of ignore all this, but there's some really good information, and it has a lot of it will answer a lot of questions that may come up.

So first it shows shows you the funding source, which is the general fund agency appropriations, and then it shows aging services as the category.

So down here it's gonna give you a little bit of a definition how we are defining aging aging services for our purpose of these appropriations.

It has a list of the agencies inside that category with the amount that is proposed.

This is hearkening back to the pie chart to show that it's 12% of the overall pie for that.

And this chart at the bottom is showing if we had utilized this categorizing system in the past from fiscal 23 forward, this shows you what it would have been.

And then with my section, but the appropriation section in particular, anything that is gray is really kind of what is up for the is part of the mayor's proposal.

So the fiscal 2026 is the proposal amount.

So then each individual agency that is chosen for the proposed has the following information.

This should look a little familiar to last year, but there are some kind of things I want to note that are different.

First, of course, is the logo, the mission as defined by the agency itself, the goal for the funding, again, as defined by the agency, not by us, and the expected outcome of the funding again decided by the agency.

So here is the category, aging services, it has the leadership of the agency, and again the funding source.

Down here, this graphic is familiar from last year.

It shows the percentage of the clients that are City of Huntsville residents, and this is the percentage of the agency's budget that this appropriation amount represents.

So the gray area is the agency's overall budget.

What is being proposed would be 9% of their budget.

And then down here it's a general fund, and of course, what's in gray is proposed.

So all agencies will have this page.

It has a lot of great information on there.

If you just take time to kind of read through it, a lot of your kind of things that come up might be answered.

So the next section of appropriations is what we're calling the general fund, intergovernmental and contract section.

So let's talk about what this is defined as.

These are outside agencies that are operating under a contract with the city of Huntsville, or they are a separate governmental body operating a service that the city has committed to help fund.

So of the agencies in this section, the public library is the only agency to submit an application every year and whose funding will vary from year to year.

So that's why in this section, the only actual agency page that you will see is the public library because again, their funding changes changes year to year.

So here's the cover page for this section, just has one agency in it.

It does denote that the library's funding is representing 49% of this entire category.

And so then the last section is our lodging and liquor agencies.

These are defined by agencies whose funding is awarded by ordinance either through a predetermined percentage of taxes collected or through an annual application.

And so these are the agencies who submit an application and whose funding is proposed here.

And so again, has a list of agencies.

These agencies represent 23% of the overall lodging and liquor section.

And then at the bottom it shows kind of the historical of that as well.

So just a quick snapshot of these expenditures for the general fund agency appropriation of the overall total, it is 13% of the appropriations.

The general fund intergovernmental contracts is 39 percent, and the lodging and liquor is the 48 percent.

So are there any questions that I can answer right now about this?

Why does the library have to apply and why do their funding numbers change?

Because we are we are not currently under an active contract of the library for total funding amounts.

So they come to us every year with their needs, and we take their application to consideration just like another agency.

I'm just wondering historically where did that come from?

Why doesn't the chamber have to any of the other agencies?

What makes the library different?

Because the funding amount is not set by ordinance, and it's also not set by any sort of predetermined amount.

We're not in an active contract with them.

And I understand that.

Why do we not have an ordinance?

Whereas with the others we do.

They're one of ours, their board, we appoint the board uh and and work with the board.

Well, I what I'm suggesting is we should have an ordinance asset an agreement, maybe a funding agreement with them.

I guess I didn't realize we didn't have one.

No.

Generally the library comes to us with the amount of expenditures that they predict that they will need per year and what they have secured from other funding sources, other municipalities, whatever, and the delta is generally what we provide for them.

Okay.

Thank you.

Anything else?

All right, thank you.

Okay, now we're going to get into enterprise funds.

This is the final section here.

So just the financial structure, just a reminder that for enterprise funds we have two major funds.

Um the larger funds that are budgeted and managed by the city.

They are specifically the sewer collection and treatment and the trash pickup, which includes both household waste and bulky trash at our residential areas.

We account for these in proprietary funds because the charges for services can be isolated and associated with specific cost of providing that service to our residents.

The fee is intended to cover the whole cost of providing the service.

We'll talk about sanitation first and then get into WPC or our sewer services.

So sanitations is managed by our public works department and it's servicing all residential households in the city.

As you can see from the chart above, personnel in blue and the landfill charges that are in red make up the bulk of the operational cost of this service.

So pointing out a few things on this page, the charges for services is uh we are growing steady at about 2 percent, but revenues are higher due to a rate increase, which is which went into effect 1.1 of 2020 of 25.

This alleviated the use of local taxes out of the general fund for FY26, and that was very helpful to our general fund.

And service charges are forecasted to be a little over 20 million.

But it creates a very small deficit.

This should be absorbed through the year.

That's our expectation.

Um again, this just lifted last year's burden.

Um, and so you can see that that changed from 4.2 to um to zero this year.

I do want to remind you that while we did eliminate um the general fund transfer into this, we st it remains that our capital is funded out of the 1990 capital projects funds.

And so every year that is still in effect.

And so hopefully, as we we raise revenue in this over the next few years that was approved by council, we can alleviate that as well.

And the fund will be self-contained.

Water treatment control facilities.

This is kind of a fund chart that shows the amount of treatment capacity at each of our six plants operated by the water pollution control department.

The largest of the plants are Spring Branch and Western Area, for which we recently incurred debt to expand the treatment facility at the Western area.

Construction for major repairs, the expansion of fleets plants and system collection systems, along with the personnel in blue, capitals in orange, make up the majority of the expenses to treat and collect wastewater in the city.

For this year, the charges for services are growing steady each year at around 2 percent.

Um this year.

It is estimated to be about fifty-three million.

Um that includes the rate increase that go into effect this year.

And um all operational expenses are forecasted to be about forty-nine million.

And there was and the result in a net income.

However, um that line's a little out of alignment.

Um however, the fund has incurred debt obligation and future capital expenditures on which the funding um will be accumulated and spent as we move throughout the next few years.

Um at the end.

Do you have any questions before we move on to the Capital Project's funds?

Just to clarify, there was it looked like almost a twelve million dollar decrease in revenues for Advil Oram, and that was because of the TIFFs closing.

That's correct.

And the TIFF money going back to the schools.

Correct.

So we could I think it was eleven something.

So is that that the estimate of how much we'll be going to the schools?

Not exactly.

I know you're trying to get that number.

I promise you, I will we will come up with that number in the next in the next little bit.

It may not be today, but we will get that number back to you.

If we could have it before the meeting next week when we approve the budget, that would be a good thing.

Absolutely.

That'll be great.

Thank you, Ms.

Smith.

Um we're gonna take a five minute recess and we'll be back in three twelve.

Mr.

President, we might might just mention for everybody out there you got two more presentations coming the two thousand uh the nineteen ninety Capital Plan and the two thousand fourteen capital plan.

Um those would be the last last two from our side.

Sounds good.

Thank you.