Councilmember Nixon.

Here.

Council Member Black.

Here.

Council Member Curtis.

Council Member Falcon.

Here.

Council Member Pascal.

Here.

Deputy Mayor Arnold.

Here.

Mayor Sweet.

Is it 235?

Okay.

Okay, thank you, man.

So to give us our first update on the mid-biannual budget update is our financial planning manager, George Dugdale.

And we did reverse this, those who saw the previous agenda where we versed the two topics because the budget overview kind of feeds into the CIP.

So George will be going first and I'll be followed by the second topic afterward.

Let's take away, George.

Thank you, City Manager.

Good evening, Mayor, Council members.

Okay, great.

So we have a total of 30 slides across the mid-by and the CIP update for you.

We'll try to get those through those relatively quickly so we can leave lots of time for council questions and comments.

So I have 19 slides on the mid-by budget update, and then as the city manager said, I'll hand over to Kevin Pelstring for the remainder, which is the CIP slides.

Okay.

So before I get into the content, I just want to go through exactly what we'll be covering.

So the firstly a financial overview that covers the uh changes to the general fund forecast as well as um revenue expenditures and inflationary impacts.

And then we're gonna um quickly touch on the progress we've made implementing the 2023-2024 service packages, which is a good barometer of how departments and the city overall has been doing and implementing the council's direction from that budget.

And we do have some mid-biannual adjustments, both service packages and other adjustments, and finish just with an update on the recent growth in the city's budget and the size of the the overall reserves.

So um on the financial overview, I have slides on each of these things.

Um, but I there's really three key takeaways that I think that summarize what's been happening since we began the budget in January 2023.

So general fund revenue revenues are above budget, um, but due to a re um but we would reduce by a one-time sales tax refund in 2023.

So sales taxes were were trending about five percent ahead of budget.

The Department of Revenue reached out to the city and said that in our October distribution, we there is a court-ordered settlement which returns about one and a half million dollars of sales tax, which we received in 2020.

Due to that, sales taxes will be more like budget um in 2022, which is a reminder is a zero percent growth from 23.

We anticipate revenues being above budget in 2024, with sales taxes being close to their 23 level.

For general fund expenditures, they're trending above budget at the moment, primarily due to overtime, particularly in the fire department.

Um this has been um this is particularly notable because we have fewer budgetary savings than in recent budget cycles.

This is partly due to um the work that departments have done to hire their staffing.

We have fewer vacancies when we had certainly at any point in the last few years.

Um, but also tied to the final point there, um, the impact of high inflation in 2021 and 2022 in particular has started feeding through into the price that we pay for lots of um things, particularly in our internal service funds.

And so costs for the same items have increased, and we'll see that a few times as I go through the presentation.

So a bit more of a deep dive on general farm revenues.

Um, as I mentioned, sales taxes in 2023 are anticipated to be at budget.

Um we expect them to be close to where they would have been in 2024.

We expect them to be close to where they would have been had we not had the one-time um refund.

So we think they'll end the biennium about two and a half percent ahead of budget.

Um as we discussed that the councils may retreat.

Utility taxes are ahead of budget in 2023, which we expect to continue into 2024.

This is mostly because of large rate increases um on the private utility side, which were larger than we had thought they might be, and so that's feeding through into utility taxes.

Um update from May is revenue generating regulatory license, which is the per FTE business um fee.

This is slightly below budget, but revenues in the second half of 2023 have actually been better than they were in the first half.

This is at least in part because finance and the staff in the staff in the finance department have been reaching out to large businesses who we had some renewals earlier in the year that either hadn't come through or it had come through at very much lower numbers than in previous years.

And so we've seen an uptick in those revenues as some companies have responded to those.

The final big category that I want to mention is investment interest.

This you can see in the table, we're expecting it to be about 2.6 million dollars above budget across the um across the two years, which is about 40% ahead of budget.

This is partly because we anticipated interest rates would fall further than they have, and so investment in um investment returns are still higher, and also because the cash balance in the general fund is higher than we thought it would be potentially due to timing and uh differences in the timing of payments.

On the expenditure side, um I want to spend most of the time here talking about personnel expenditures.

So as I mentioned, we're expecting personnel expenditures to actually be running ahead of budget at the end of 2024.