Good evening, everyone, and welcome to the Monday, August the 11th work session of the Joplin City Council.

We have three items on the agenda tonight.

We'll start with city manager and his proposed fiscal year 2026 proposed budget.

Good evening, Mayor and Council.

The purpose of tonight's uh presentation is to introduce the proposed budget for next year.

I want to provide this summary to you so that you can start thinking about uh the different aspects of the budget and priorities that you may have.

Uh so we don't need any action on it tonight, and everything that we are uh discussing here tonight will get uh discussed in even greater detail during our budget work sessions, which are scheduled for uh I believe it's the third week of September starting on the 22nd.

We do a budget work session um Monday, Tuesday, and Wednesday.

Each department director will come before you and explain uh the ins and outs of their budget, it'll be a great time for you to ask questions about different operations or different uh priorities.

But uh even before that on the 18th uh next week will be a budget public hearing.

So that's an opportunity for the citizens to come forward and and talk about uh their uh their budget ideas, and so we'll do a public hearing next week as well.

So uh with that, I'll kind of just uh quickly go through some of this stuff.

Control here.

I won't read all this stuff to you, but um I think uh you know, lay out here what is a budget, and uh this is something we take seriously uh in that it's a policy document, financial plan, and operations guide and communications device.

Ultimately, this is one of those big documents that we approve each year that really directs the thing, the activities that our organization does on an annual basis.

So uh I I put a big emphasis on the operations guides part, and you'll we'll get more into uh the the council's uh goals here in a little bit, but uh we want to uh make it clear with the uh dollars that have been budgeted what we plan to do uh for the upcoming year.

Those are called key initiatives, and so uh each department director will come before you and talk about their key initiatives.

Uh before we go too much further, though, I really want to thank management team for their work on the budget.

This was a really difficult budget year.

Uh at one point I believe we had requests uh that were five million dollars over our revenues, and so that was uh uh a really challenging uh hurdle for us to overcome.

Uh you know, I think there's a lot of commentary on city budgets that it doesn't look like there's anything that's cut in the and city governments never reduce, they only grow or you know uh statements like that.

But we had five we had expenditures requested from the departments uh five million dollars in excess of our revenues, and so for us to bring forward a balanced budget, which this is, it meant reducing our requests and have to really thank the management team for their work.

They came together, uh they talked about uh priorities and needs, um, and I think this is a budget that they'll stand behind.

I like this process this year, you know, in years past.

Unfortunately, Leslie's uh had to bear the the uh the uh blame for why uh budgets uh were cut or reduced, but I feel like this year we had more of a team approach, and I really like how each director was able to work with the management team as a group to really uh take advantage of the opportunities that exist.

So I uh thank them for that.

Uh so we get into the benefits of annual budget process, you know most of this.

Uh you know, it for us it's really a time to think of what's been accomplished, what are those things that we've achieved, and what do we want to uh continue doing in the future?

So uh there's an element of this of kind of taking stock, looking at the scoreboard, and then thinking to yourself uh what is it that we want to get done for the next year.

Uh okay, so kind of getting into some of the difficulty uh with the financial story of 2025.

Uh the key point here is that we're we're in uncertain financial times.

Uh this year our revenue, as you've seen from the sales tax reports, uh, you know, it's it's not been growing as quickly as it has in the past.

Uh you know, we're seeing uh signs of pullback.

I think uh Leslie said in the key categories of restaurant and home improvement and uh auto sales, and so I think there's there's a changing economy that's happening while we're trying to put together this budget, and it's something that we need to keep top of mind uh as we plan for the future.

Uh one of the things that this uncertainty, one of the one of the I think the the things that's important to keep in mind is when we're in uncertain uh conditions, it makes it even more so that we don't take financial risks.

So you know, we're an organization that has to continue to provide uh services into the future, and uh trying to stretch or trying to uh do more can really jeopardize uh those services into the future.

So the more risk or the more uncertainty that we see uh the more conservative we need to be as a in response.

So I've uh I've kind of already talked about the uh economic outlook.

Uh you know, uncertain.

We're budgeting uh no increase in sales tax for the upcoming fiscal year.

As you know, we're primarily sales tax driven, so that should be a big indicator about some of the challenges that we feel are ahead of us.

I've already talked about uh when we're in these uncertain times, that really means being more conservative in our revenue and expenditure assumptions.

One of the things we try to do when we put together the budget is uh estimate the amount of revenue that we'll have for the upcoming year.

And when I use the word conservative, uh I mean being realistic, uh basically budgeting for the revenue that we think we can absolutely count on.

We're not assuming a 10% increase in sales tax, we're conservative.

Uh you know, we think we can do better than uh flat sales tax, but we're being conservative so that we're not taking risks.

Expenditure assumptions when we're talking about being conservative with expenditure assumptions, it really means having uh great estimates, great quotes, uh knowing the size and scope of projects and being able to plan for those projects so that we're not consuming uh budget resources that could be spent elsewhere.

So we've really uh you know the term gets overuse sharpened the pencil, but we've really tried to put forward uh both conservative revenue estimates and conservative expenditure assumptions.

Uh so as we go into the total budget, uh the proposed budget is uh nearly 191 million dollars.

This is a 22 million dollar uh reduction from last year.

Last year I believe we were at uh 213 million dollars, and you can see some of the reasons for the uh decreased level of expenditure.

Uh obviously we've uh uh with the grant revenue and the ARPA projects, you know, that was kind of a one-time uh uh shot in the arm.

Uh we don't expect to get uh that kind of grant revenue again in the future.

Our projects are progressing nicely.

If I had to just uh guess, I would say we're probably about 50% of the way through our expenditure for ARPA grants, and then last year we had some significant uh capital outlay uh purchases, uh mostly for vehicles, uh, but with those uh being fully funded, we don't see have the need uh as great a need for capital outlay this year.

Um so in reality, our budget is uh nearly 22 million dollars less than what was proposed last year.

Uh this uh chart here is probably one of the most important ones uh for me as city manager.

It's one that I hope you keep top of mind.

Uh this graph kind of projects into the future our financial condition.

Uh responsible uh budgeting includes forecasting the impact of and uh impact of decisions on the city's financial condition.