In accordance with section 841412 of the Nebraska revised statutes, a current copy of the opening meetings act is available for you and is posted on the walls to take roll, please.

Mayor Klaus here.

Bush cutter absent learning Nicola absent more.

Okay, uh, thank you.

Regular agenda item three is conduct a public hearing on the City of Kearney budget for the 2024-2025 fiscal year.

Good afternoon, Kayla James, Director of Finance.

Um section 13 506 of the Nebraska revised statutes, the city council is required to conduct a public hearing on the city of Carney proposed budget for 2425 fiscal year.

So we're here tonight to do just that.

So as always, throughout the presentation, um, feel free to ask questions.

Um we've been through a lot of this already once, but a couple of things have changed.

So we will talk about planned expenditures, revenues, and fund balances, but we'll take a deeper dive on these other areas.

Proposed expenditures by fund is what we're gonna start with, and comparing the budget for fiscal 24 to fiscal 25 for the general fund, personal services went up 1,487,000 or 7%.

Supplies and materials went up about $662,000 or 5.3%, and planned capital outlay, the expenditures will go down $690,000 or 33%, and there is no debt service in the general fund.

So total general fund expenditures are going to go up by 1,459,000 or 4.1%.

In the other funds, um the total expenditures that are planned are going to decrease by 28 million dollars or 23.2 percent, and that's that's basically because um we're gonna have 23 million dollars of expense for the sportsplex.

Most of those expenditures are in fiscal 24, and then also there's three million dollars of uh police take home vehicle program expenses in 24 that we will not have in 25.

So that 26 million dollars right there explains most of the decrease in the other funds.

Um as a total for all funds, the total expenditures are gonna go down 27 million that 27 million two hundred and four thousand dollars or 17.1 percent as a total.

So just um to kind of give you a an idea of the breakdown of total expenditures between operating, which is your personal services, supplies, materials, and contractual services, and your capital in debt, your operating expenses of 80 million dollars represent about 60 percent, 61 percent of the total and capital and debt 52 million represents about 40 percent.

So 6040 split is kind of where that usually falls.

Any questions about planned expenditures?

60 was what per for the operating operating operating and capital and debt was 40 percent uh 40.

Um on the next page are some highlights for personal services, and before we get into any of this, this is kind of a fun little fact.

Um for 2425, there is 36 million dollars worth of personal or salaries and benefits.

So out of the total expenditures of 132 million that we just had on the prior slide, payroll and benefits represents about 27 percent of the total budget, which is a little lower than I thought than I expected.

But um, so we are planning a three percent pay plan adjustment or COLA.

Um, this will cost the governmental funds about 517,000 dollars, and the proprietary funds about 215,000.

So the total increase is 732,000.

As far as the number of employees, um in fiscal 24, we have 346 employees budgeted during the year of 2324.

We added 8.67, and we're proposing for 2425 another eight positions, so that gives us a total of 363 full and part-time positions in our budget.

And there's some detail um down below of the 24 mid-year additions and reductions.

So basically, if you look here, that's that's 13 positions that we added, but we also reduced or reclassified 4.3.

So the the net of that is 8.67, and then same thing for 25.

Um we are adding eight there, and then reducing 0.67 reclassification.

So and then this little increase in employee and employer health and dental premiums, we have budgeted a 10% increase for the city and for employees for health care expenditures.

We had a meeting after the budget was kind of set, we had a meeting with our consultants, and they informed us, helped us determine that the 10% increase is probably not going to be enough to cover our projected claims of 5.2 million, and the increase in the health insurance premiums, which is about the increase was about 340,000.

So right now we have in the budget 10%, but we are not quite final on that.

We may go up to 15%.

We have a few strategies that we're still working with to try to reduce that.

We just got it was a double whammy of high claims, high dollar claims, and increased premiums, and you know the fund balance that we carried forward just wasn't.

Well, uh, to break even, they told us it would be 36%.

And that's crazy.

So obviously we can't do that.

The city can't afford that, our employees can't afford that.

We'll play around with 15, and we have some other things that we might be able to do, but it it as Wendell had said, we've been here before.

Um, this has happened before.

It'll might take us a couple years to pull out of it, but we will pull out of it.

Um, we unfortunately we have a few employees, family members and and employees that have some high high claims, and so but the good news is they're all still here.

So we will deal with that.

But but for timing purposes, the 10% is what is in the budget right now.

But based on what we're doing tonight, the you know, is there anything we should be doing tonight in anticipation of addressing that given the timing of what we're doing?

We so great question.

Um and I'll overlay that a little bit.

You know, we obviously know we came through one legislative session that ended up where it ended up, but that doesn't go away necessarily within a 12-month period.

So you know, do you hurt yourself and your ability to respond to future difficult problems by over constraining yourself right now?

Yes.

The short answer.

Um so why wouldn't we be taking a more aggressive approach on a short-term basis to dealing with what we know is likely to be?

I mean, I feel like a little bit, and I don't, I mean, no, I mean this in a positive way given what our consultants had um proposed for us now and haven't kind of briefly considered that.

Do we need to in the short term be a little more aggressive with what we budget now for health care expenses, knowing what a critical aspect that is for the operation of our city and our staff?