This year that's gonna be here as far as council goes.

So we'll go ahead and get started since it's five o'clock.

Welcome to the city council conference for Tuesday, April 28th, 2026.

We have one item on the agenda, which is a discussion regarding the proposed uh FYE 2027 City of Norman budget, general fund and special revenue funds.

So we have staff here to lead us in the discussion.

Mayor uh Ice Clint Mercer, sir.

I'm the finance director here.

So I have with me Kim Kaufman, who's the assistant finance director, chief accountant.

So it's our pleasure tonight to bring you the uh city manager's proposed budget uh for 2027, fiscal year 2027 that with the general fund and special revenue funds focused on tonight.

So kind of to get us started, I kind of want to cover what is a budget.

Um budget's a comprehensive policy document.

Uh it's a financial plan to carry out policy decisions, it reflects the values for priority that propriety priority, a strategic vision of the city.

Uh, it's an operational guide that holds departments accountable, and it's a viable communications tool that transparently illustrates how evaluable resources are allocated in support of council's goals.

So, with that, the concept of that public communication, the legal requirement for a budget, it could honestly be done in a one-page resolution, which would be uh council's authorization to spend.

And um the budget in total, we're talking about 302 million dollars, and we recognize it would be very difficult to convince anybody to just go ahead and sign a one-pager that says go ahead and spend 302 million without the ability to demonstrate where that 302 million goes.

So the format we follow has been recognized by the government finance officers association.

We have received dozens upon dozens of awards for excellence in budgetary presentation.

So we do go above and beyond in terms of what we present to you and the public in terms of detail, and of course, we work mightily to be as transparent as any governmental entity in the state of Oklahoma, but that's what this reflects.

It's gonna feel like a good good document.

Yeah, exactly.

That's about 302 million feels like we'll do that.

Okay, this is kind of a uh slide that uh I liken it to uh if you go to the mall, and there's the little kiosk.

I tell you you are here, but this is the uh the budget calendar, and we are at uh the item in red, uh, which is the general and special revenue funds.

We've got upcoming uh next week.

We'll have a uh well, tonight we'll have a public budget hearing, and then next week we'll cover the capital funds, and then uh and then two weeks after that we'll cover the enterprise funds.

We'll have another uh budget hearing May 26th, and then uh there's an option to have another council session uh study session June 2nd, and then uh the final adoption will come June 9th.

So, and then we'll start the fiscal year July 1.

The budget document documents that you have, the way they're prepared, uh it's kind of the summary to detail format.

So you guys uh I'm sure you've had time maybe maybe not to prove through, but uh the uh there's some so some good good sections in here.

Uh I particularly like the uh community profile section.

You can go through and kind of compare to some of our peers, um, see where we stand on different categories.

Uh there's some statistical parts as well.

Um that's that's the document itself.

Um this next slide shows kind of the functions.

Uh the city and where they live.

Like, for example, you know, legals on the general fund, police is in the general fund, um, room tax as its own special revenue fund, um, enterprise funds, water, sewer, um, sanitation.

We have capital project funds for different purposes, Norman Forward Fund, um, debt service fund.

So that's kind of a pictorial of where they live, and this is also in your budget book.

So financial policies.

Uh, this the city is required to adopt a budget by city charter.

Uh, we also follow the municipal budget act, and um we have to uh the requirements are listed out here, but uh um has to be uh uh 30 days prior to the beginning of each fiscal year.

The chief executive officer shall present a proposed budget to the governing body for consideration.

And then we have to have a balanced budget, which we'll go into more detail as to what that actually means a little bit later.

The adopted budget must be transmitted to state auditor and inspector within 30 days after the beginning of the fiscal year, and then the adopted budget must be available to the public in print or electronically, which ours is on our website.

So just some other factors here.

So each time each year when you adopt the budget, you're readopting these financial policies.

Council approves projected revenues and allocated expenditures within the adopted budget.

So that's a little bit different than when items come to you through the year.

When you adopt this budget, you're adopting those funds up front.

And then you make adjustments as you go along through the year.

Back to the balance budget requirement.

The uh the balancing part of it is we must have a positive fund balance at the end of the year.

So it's okay to spend more in expenses than revenues as long as you have a fund balance.

And you'll see tonight that we're actually the other direction.

In years past few years, we've actually spent down into fund balance, but tonight's budget will be a positive figure.

So for the general fund.

Um we uh uh we have a we have what we call our fund summaries in here, which are our uh pro forma looking statements.

So we're looking out projecting five years to kind of see if things hold, this is where we'll let it up.

So uh important part of it.

The uh we also have operating capital and debt reserve policies, uh levelized utility rate five years, uh utility room tax transfers to the general fund and compliance with the municipal budget act.

And if you guys have any questions, just jump in at any time.

So one of those policies is is the reserve policy, and uh it was adopted back in 2011 and then amended in 2019.

Um what it what it basically set out is that um we have a in the general fund, we have a three percent uh operating reserve in the fund balance.

In addition, we we uh appropriate a one percent reserve that's uh also included.

So it's really two parts in the general fund, three and and one's four.

And what that means uh for that one percent general fund emergency reserve, you appropriate it, meaning you give us authorization in the event of an emergency, we have access to one percent to begin immediate response to the emergency.

Um had a big giant ice storm about five, six years ago.

Uh the initial response we had to start bringing in contractors to clear about 500,000 cubic yards of material, and the one percent emergency reserve is where we were able to start paying contractors immediately.

Uh, so we didn't have to wait two weeks for the next council meeting and do a budget uh appropriation to put us in a position to respond.

So fortunately, we don't have to touch that very darn often.

Usually, when we do, you are all well aware of the emergency that uh was at hand that caused that action to be taken.

So with adoption, you have accounted for the ability to respond immediately to such emergencies.

Good point.

Um we also maintain what's called a rainy day fund, and um, it has a minimum of four percent of the general fund expenditures properly well that carried in it with the target of five percent and a maximum of seven percent.

Um so overall the uh reserve level is eight to ten percent, depending with when you combine the two funds, the general fund and the rainy day fund, if that makes sense.

Um on the flip side to get the money out of the rainy day fund, um there's uh some triggers here that have to be met before you can take the money out.

Uh the projected fund balance of the general fund must fall below one percent, and uh there has to be a federally or state declared disaster in Cleveland County after uh emergency reserve spent or a one-time major replacement uh is required.

So uh if for FY27, we are projected to meet the minimum level by 226,000, but are below the targeted level.

And for fiscal year 27, the uh 1% emergency reserve that's already appropriate is just over a million dollars, just to give you some compensates there.

That's what Bruce got a basic question on terms.

When you say general fund operational reserve and general fund, there's multiple ways to think about that three percent.

So that your projected budget, hey, I'm gonna spend 302 million, or my general fund, yeah.

I'm gonna spend this amount this year, therefore I have to have three percent up front in that reserve, or it's you know, three percent of my revenue flow that comes in every one month.

I've got to have that in reserve.

It's the expense, it's the budgeted expense.

Okay, yeah.

We take out the the capital uh outlay amount because it's funded by the uh capital projects fund, but it's the rest one percent of that.

Okay, and when we say operational reserve, you know, emergency reserve, and then we say ready fund.

Are they segregated?

Are they they are separate funds in our accounting system?

Okay, yeah.

Um previous finance director always had kind of an overriding theme, so I thought I would continue with that.

Um, and my overriding theme this year was preserve fund balance.

So we were given a mandate by the city manager that uh we cannot go below zero this year on our uh revenues minus expenses per you know.

So and this is this pie chart just shows um uh all of the uh the revenues from all the funds combined.

The uh um uh the uh the largest is the general uh general sales tax at 33 percent.

Uh the second are fees and charges at 24 percent, and then the third is other taxes at 13 percent, and uh uh in the total there's 301 million.

Uh this represents a five percent decrease from the prior year budget, and it's primarily due primarily due to bond proceeds and other revenue.

And again, this is all funds combined.

Uh this is the all funds expenditures combined, and it's 302 million.

Um, the largest is public safety at 23 percent.

The second is the strategic report support at 16 percent, and the third is capital improvements at 15 percent.

And this represents this is important, this represents a 0.5 percent increase from the prior year budget, primarily uh to interferen transfers.

So we've really tried to keep the expenses held down this year.

So uh this pie chart shows the uh uh revenues for the general fund.

Um the largest obviously is uh sales and use taxes.

Um the internal uh service charges at 8%, and third is the franchise fees at 7%.

We collect franchise fees from OEC, OGE, ONG, Cox Cable.

Anyone else on that list?

I think that's about it.

So we come from funds.

Oh, uh different kind of fee.

Uh they do uh pay an administrative overhead fee to the general fund.

So sewer water and solid waste, similar logic.

Yes, um, there's a sewer line down the middle of your street, your street is owned and maintained by the general fund, and when our utilities department's got to go cut up a public street, they need access to that public right away.

So very similar in ideology, just a different bucket of money coming and ATT.

Oh, and ATD.

Thank you.

So this represents a six percent uh increase from the prior year budget, uh, mainly from cost allocation charges and sales and uses taxes.

Um just wanted to throw out a reminder that um Oklahoma is the only state in the union that um does not allow property taxes for cities to use property taxes for operating purposes.

So that's unique.

And and just so uh we're all on the same page in terms of the philosophy used for the revenue estimates on that big piece of the pie sales and use tax.

We've been talking about sales tax flat as of our most recent sales tax check, and and and Kim will correct me.

We we are up today about 1.77% ahead of last year.

So that's up a little, uh, relatively flat.

One of the big numbers that lifts us up to 1.77% was a 13% increase in December sales activity, reflected in the February sales tax check.

Now, um internally our discussion was what was different in December of 25 that is anticipated to happen again.

Well, we think a bunch of that big spike in December was a playoff game that wasn't scheduled.

It didn't happen the year before, so it happens this December, the number goes up.

In order for us to continue that revenue estimate in the next fiscal year, we would have to be really comfortable.

We're gonna get another home playoff game.

Not betting on that one, so we're trying to hang on to a little more conservative approach.

Um, the revenue estimate on the sales tax side, we assume it's gonna grow one percent next year over this year.

Use tax, we anticipate a four percent revenue growth in the use tax, which sounds like a lot, but use tax is a relatively small number in total.

So 4% of a little number, 1% of the big number that gets us to the revenue projection on the sales tax side.

You'll see use tax is what you pay when Amazon delivers the stuff to your door.

Okay, um, so that's revenues.

This is the general funds uh expenditures for 27, and they total about uh 112 million, and um largest there is police 27 percent, second is public works at 20 percent, and third is fire at 19%.

So this this represents about a 1% increase from the prior year budget.

Um, and a lot of that is a subsidy that we had to pay or we're gonna have to pay to the to the insurance fund.

And this is a pictorial of what uh Daryl's talking about as far as the flattening of the sales tax uh for the last 10 years, and you can kind of see we had a had some good years uh through uh you know 2020 through 2022, and then it's flattened out uh ever since then.

We're still maintaining those record numbers for the black.

This is just a pictorial of the uh single family construction.

Uh the number of units are in yellow, and uh the blue line is the value.

So you can kind of see the um uh we've been going down as far as uh uh both the units and the values, but um the values have kind of come up some in 2025.

So a lot of times this is an indication of what the economies kind of do with.

So um, and our banking community may give us some indication that if mortgage rates were to move down a percent, how big an increase that may reflect in new home starts, etc.

Okay, this is a pictorial that shows the population uh as compared to the number of employees, and uh you can also see there that that's um uh the number of employees is remained pretty flat.

So councilman curve.

Is the number of employees remaining flat because of the budget, or is it because we're not adding more spots to excellent question?

Um council must act to add positions.

Um in our budget conversations for the last few fiscal years, talking about that flat sales tax picture.

Um we've only added a couple of bodies, and the bodies we've added uh have been utility related, so not funded by sales tax or the general fund, but if we add a solid waste route, we'll hire a driver, buy a new truck, add a route.

Uh, we also received some opioid abatement settlement money, and we hired two bodies that are funded out of the opioid settlement money, not the general fund.

So um last time we asked all the departments, okay, how many additional employees do we need?

Council commissioned a public safety study a few years ago.

It said we needed 40 more firefighters and 15 more cops yesterday.

And the only reason we have not acted upon it is we just don't have the revenue to uh make sure we're not bouncing payroll.

So the demand for more service is there.

The revenue is just not there to support it.

And I'll add to that that our uh our personnel uh account for about 70% of our expenses.

So when we're in a period of holding uh due to the flat sales tax, what we really need to control is our business biggest expense, which is our employees.

So that's our our largest operating expense, and that's that's the the biggest thing we can do to try to control expenses.

This is uh this is more information on personnel changes, it's like five-year history.

Um the uh the general fund, um we're at we uh a big portion of the 2027 change is uh we we moved seven utility customer service positions to the water fund.

They were already being paid for by the water fund, so uh it really didn't affect costs too much.

Um, but then you can see the uh the the other additions are all down in the uh in the enterprise funds, so that are not dependent on sales tax.

So just one so they were interappartment transfers of funds, correct.

So it really didn't improve our health conditions or relates to the general fund.

No, it was it was more just a logistics thing.

Okay, just made sense.

Had to do a lot with um the old way of reading meters, and we're in the new phase of updating and replacing all of our water meters with smart meter technology that send the data uh directly to the billing system.

So the job that was previously held uh walking with a computer in hand reading meters, those bodies are now able to respond to other utility emergencies and service connections and disconnections and maintenance in our water uh system that previously had to get taken care of by fewer bodies, so but yeah, we really didn't have a fiscal impact on the general fund at all.

Um so this so now we're down into the general fund, and uh this is uh um this is kind of what Daryl had covered.

Um this is our assumptions for the 2027 budget.

Uh we uh uh as Daryl said we we we budgeted in a modest one percent growth to the to the sales taxes.

Uh we we did a four percent fees tax, three percent for the fines and forfeitures, and then a three percent growth on the franchise fees.

Well, we've discussed.

We do check with our neighboring agencies, especially in the metro, and just say what do you guys accounting on for a revenue projection on sales tax, and we heard anything from zero to two percent growth was pretty common in the Oklahoma City Metro.

So we're right in there with our neighbors.

The uh we also uh got um some money from uh or planning to get some money from the uh um payment that the um OTA is making to the water fund for some wells that will generate about a uh 48,000 uh franchise fee per se to the general fund.

So that helps some.

Um we also get money from the room tax fund, the 4% administrative charge that comes in.

And then uh also for this year, we got uh um we got a uh grant from the federal highway administration that um allows us to charge uh 15% indirect cost.

So we've we've planned for that over the next three years, so that helped on the expense side.

Um we uh we budgeted uh conservatively, we included no merits or no COLAs.

Um the uh on the five-year projections.

If you look from the out years, the assumptions we've got there are five percent for salary and benefits, uh one percent for supplies and services, and two percent for internal service charges.

Um we also include a uh eight hundred thousand dollar um turnover savings figure, so it's like a negative expense because a lot of times we uh on the salary of benefits if someone retires or we have turnover, we have savings generally from that.

So we factor that in kind of as a as a buffer.

So uh and then as I mentioned earlier, we are gonna have to uh pay about a two million dollar subsidy to the risk management fund that's included.

So not all of that's coming from the general fund.

I think 1.5 million is from the general fund.

But customer.

So on the employee turnover savings, so these people are retiring out their uh their higher step.

Is that correct?

And so you're gonna buy step reduction by retirement that you're gonna fill those slots, but it's one lower step.

Right.

So it's gonna be a daisy chain down when everyone's gonna be filling lower step.

Exactly.

Okay, exactly.

Yeah, yeah.

And uh we we generally as a policy like to hold positions open to for a while to try to recoup that payout that the retirees have.

We've had some big ones this year.

Um, but uh um yes, you're exactly right.

And then we you know, as they feel their lower, lower salary.

So which brings me back to that question a few weeks ago regarding increased risk associated with people retiring based upon some type of to retire 227 instead of 226.

So you're gonna have a brain dream.

Yeah, and potentially, you know, when there's uh news of changes in pension benefits, and right now police and fire participate in pension systems, the rest of the employees participate in a 501 or 400 401 5 uh 457 uh deferred compensation plan with a city match.

When there was news stories about up, this benefit may change.

Yeah, you do get people that hold off a little bit longer and wait for that bump in benefit uh when they decide to go.

Uh we do see also some changes in in retirement strategies based on uncertainty.

When your retirement is in the hands of your 401k and you think there's risk in the market, you may just stick around a little bit longer uh to get past that that you know, a war might cause uh uh a downward force on you know the the Dow Jones industrial average and hurt your pension, so you might want to hang around a little while longer.

That environment is is relatively there's always the next fear factor that's gonna harm your 401k or your 457.

So it's hard to time the market, and we tell people when the time comes and you know it's your time.

Don't if you try to time the market, you'll never ever retire.

So uh Clint, the insurance fund.

So that a subsidy of a million and a half, so the total cost total of it is two million dollars.

Yes.

Yeah.

500,000 is all that we've budgeted for it.

And we've four times over the budgeted amount is a well that was at a point in time, it's accumulated over the year.

So but the we're projecting it to be about the amount that we budgeted in the last June was half a million dollars.

Oh no, the yeah, what we budget for healthcare is 13 million, 13 million a year, 14 million, it's a big number.

Um we have nine hundred.

Yes, correct.

It's like 13 million.

So we have we have 900 employees uh plus dependents, uh spouses, children.

Uh we probably have 2400 lives in total um in Washington, DC.

That's just healthcare.

Workers' compar and we uh or real property, yeah, all that.

Healthcare that includes workers' comp.

Workers comp is actually a separate account that we track.

Um then this is $13 million a year in just health care for the employees, and then there's workers' comp fund and then also property uh general ability.

Insurance on things that we own that get damaged.

So we are self-insured, meaning um we have a third-party administrator uh through Blue Cross and Blue Shield of Oklahoma.

When an employee or a spouse or a dependent go to the doctor, Blue Cross Blue Shield looks at the bill and make sure they're charging us at the negotiated rate that Blue Cross Blue Shield of Oklahoma is negotiated with all their doctors, um, and that it was actually our patient that received that service, they pay the bill on our behalf, and we rate them a check every month.

When we have prescription utilization, uh we make sure we're paying the right amount for that prescription as previously negotiated, the city pays.

It is important for us to check our self-insured model against the marketplace every other year or so to say would it be more cost effective if we just went and bought an insurance plan from Blue Cross Blue Shield?

And uh going through that scenario with uh our broker, which is a group called Gallagher, and they're nationwide.

We asked Gallagher, is it more cost effective for us to remain self-insured in the current environment?

And they said at a minimum you're saving three million dollars a year, paying your own bills and managing that account.

If you were to go out and buy a self-insured or a fully insured plan for Blue Cross Blue Shield, it costs you three million dollars more to start the conversation.

So, where in the pie chart would that be reflected the cost of to the city for insurance, it's actually in the fund summary of fund 43.

We'll be able to highlight that for you.

There you go.

See if she knows age exactly what page is already on it.

And uh this is actually a conversation some of our elected officials had with our uh federal delegation in the pie chart though under expenditures were oh um it's is high would it be in the pot is it in on the expenditure, yeah.

Um all funds expense.

It's gonna be uh in the it should be with the department uh where the employees have the it's spread throughout the piece correct, right?

It's time to each person selling it's a pretty large amount it's okay.

Yeah, uh councilmer gangs are and then just for clarity or whatever this subsidy new thing we did here in finance committee not too long ago about how our prescription rates have just gotten out of control and everything like that for families and everything like that, and this is a lot of the makeup for that, correct?

For that season to fill it in.

And it's it is not um enough to say let's just pay more.

It requires when you're self-insured to actively manage the plan.

We have um reconstituted uh uh health insurance committee made up of two members from each of our three bargaining units and two members that represent the unrepresented employees to talk about what premiums the employees pay into the fund, what deductibles the employees pay out of pocket before benefits kick in.

Uh we're having conversations with other public entities in Norman who are also self-insured and asking what plan changes are you guys making, and we will be making similar plan changes to try to hedge off the increase in primarily prescription drug coverage first and foremost.

So it's an active process with participation and buy-in from all of our bargaining units.

We're in it together, and what they recognize is um the 1.5 million dollar general fund employer contribution into healthcare.

Ladies and gentlemen, if we're spending it that way, it is not available for a merit increase or a cost of living increase.

This is how big a bucket of money you have.

And you can either spend it on your health insurance premiums, or we can bring those premiums down by good management, and then you've got money available to put a cost of living increase on the salary schedule for everyone.

So it's a conscious that we talked about in Washington as being a major thing for municipal government and finances, insurance and health care costs.

Our small businesses in Norman have indicated um up to 27% increases in their premiums for buying shelf plans uh for insurance for their employees, and we haven't seen increases that big in a while.

That was a big joke.

Conserving.

Yeah, the other part of that were also prescriptions.

Yes, sure.

Is there a percentage that has gone up?

Um actually our going to the doctor and go into surgery, those costs have actually come down while the cost of pharmaceuticals has gone up.

And you can say, well, from a quality of life perspective, is it better to take a pill or have surgery?

Well, at a point, uh it may be better to take the pill, but uh the cost of the pills keep going up.

Uh, we're learning a lot about prescription drugs.

One of the things that we think has had an impact on it when you turn on the TV and there's a television commercial about hey, ask your doctor about our wonderful pill, it'll cure all your ailments.

Well, people go to the doctor and say, hey, how can I get me some of that?

And sometimes doctors write prescriptions, and next thing you know, these are brand new drugs with that are still patent protected.

So, you know, you're paying sixteen hundred dollars a month for something that five years from now will cost 140 dollars a month.

So it's just the current environment.

But our our our other public agencies making similar changes, dealing with the exact same reality.

Oh, so does that mean generics are staying pretty stable?

They have been um in in right now, we have our top 10 pharmaceuticals.

They're the same top 10 that OU health recipients utilize.

They're the same top 10 that Norman Regional Healthcare employees utilize.

So we're very uniform in terms of uh what the pharmaceutical environment looks like, and most of them are still very new drugs to the marketplace, meaning yeah, no generic available yet.

We did hear the president indicating that he had negotiated some pharmaceutical pricing so that these uh drugs identified would be the same price in the United States that they are in Europe in you know, the Middle East and South America, and of course, we jumped right on the phone and said, Okay, how do we get access to those new prescription drug costs?

And we were told those prices are only available for Medicare and Medicaid, not available to the rest of you yet.

So uh those things are on our news feeds, and we monitor that daily.

Right.

Yeah.

Okay.

Uh moving on from the general fund.

This is the public safety sales tax fund.

Uh again, this was uh this is a half cent uh tax that was enacted in uh 2008.

We added 71 uh police and fire personnel uh vehicles, two new fire stations.

Uh it was permanently extended in 2014.

Uh added 19 more personnel, uh, and um uh and slated to do critical capital needs.

Uh that was the radio system, the ECOC uh fire apparatus replacement program and reconstruction relocation of station number five.

Um the uh uh all of the obligations have been met.

Um, and the ECOC is complete.

The face fire station number five is the only remaining obligation still out there, and uh we recently um signed an agreement to uh uh do some design and look at locations and stuff for that.

So um the uh the debt that we issued uh in 2015, I believe, was for uh to pay for the radio system and the ECOC that will be paid off in fiscal year 2027.

Do you know how much uh that payment last pay is it a last payment?

Well, we've actually netted the payment.

It was I think it's about 2.2, and uh we have unspent proceeds of about a million four.

So in your budget document, it's it's a net number.

So 908 for 27, but paid off in this budget document, and then that's what allows us to finance the new fire station five.

Correct.

That's one decision you could make, yeah.

Yeah, okay, exactly.

So um Councilmer Kirby.

So 2008 is when that was passed, and has fire station number five in it, and then you were talking about the first version was the fire station five was included in the 2014.

So do we have any additional revenue planned for the because I know we need like a fire station number 10?

I know we're like four fire stations short of which three of them are in ward five.

Um, I know we're adding a whole lot of stop signs out in ward five, which is gonna slow down the response time.

Um when you look at the little fire map, ward five is the one pretty high risk right now because of the lack of fire fire people we have and um trucks being short drivers.

What is it gonna take in the mere future to speed up some of these fire?

Uh I mean, because for an ambulance to get out there, you're looking at an hour, you know.

I mean, fire is normally the first people on scene.

So like are we looking at waiting another 12 years to see another fire station in Ward 5?

And at that same time, you know, we're building all these houses.

So what are we gonna do to make sure that everything we're constructing has the proper amount of firemen?

So um fire stations in that conversation.

Obviously, when we relocate the existing station five, which is in a real old building, uh, to a new place, we're able to move the fire equipment and the bodies.

So all we're talking about is the capital for the building to add the additional fire stations in ward five.

To add the additional fire stations in Ward 5, we're gonna say $7, $8 million worth of capital, and you have a capital budget every year, and council could say in the upcoming capital budgets, you guys build fire station first thing, top of the list.

Whatever else doesn't get funded, these are priorities council is allowed to set.

The real issue comes in when I have to hire 15 bodies to man that station.

That's a million five in brand new expense every year forever.

And that's the challenge.

That is coming from only one of two sources general fund sales tax or public safety sales tax.

And when that flattens out and the cost of the bodies go up, we felt very comfortable back in 2008 and 2014 that sales tax it's it's what's available to us.

That's the vehicle we should use to expand our public safety portfolio.

And boy, when that sales tax flattens out on us like that, it cripples our ability to staff additional fire stations.

I can build a new fire station, we just don't have the revenue to put the 15 bodies in it and a two million dollar truck.

I understand that, and that's why I'm kind of trying to get around that.

We have a situation right now where we need like what, 12 firemen.

I mean, we have two trucks that ain't even being fully operational if a driver's out and a truck can't be drove because we lack a driver.

So I'm trying to figure out I mean, besides just building the station, is what do we have to do to get to the 12 or the 15 physician currently staffed to where we know we have safe that's the city and the buildings and the residents are being properly protected by their first responders.

I mean, because our firemen, they're studs, they do a great job, but we have to make sure they have everything they need or they'll burn out and retire on us.

So typically, and I think police would would it's probably close.

We'll get seven, eight, nine vacant positions to initiate the next academy class to get back to full staffing.

Um, and that's kind of the usual roller coaster with the expense involved in running an academy.

Fire department, police department function very similarly in that respect.

You don't run an academy when you only got two vacancies.

We may look for laterals and steal officers or firefighters from other neighborhoods if they've already been trained and they're able to just do field training and go to work.

Uh typically, yeah, we'll get 9, 10, 11 vacancies and fire chief.

I know you got an academy uh anticipated, and you've got a list of some uh recruits that we've already taken through an academy, and it's just a matter of getting them hired up.

But council adds positions when you feel you're you've got the revenue stream to support it.

And that's uh I think back then in 2008, the council then was faced with the same situation was revenue wasn't general fund revenue wasn't growing enough where they could hire more police and fire, so they came up with this additional sales tax and got voters to approve it to hire more police and fire.

Um but now we're back to that same situation where we did it.

We hired all those people and have almost completed every obligation except for station five.

Uh but now we're how I keep telling other elected officials that too in other cities that I feel pretty confident that we get voters in Norman to approve funding to build fire stations, but how do we get the funding for the bodies either increasing the public safety sales tax potentially if voters would approve that, or just being aggressive about trying to get existing one to increase its revenue somehow?

And and honestly, it's it's a conversation that's happened coast to coast over time.

Uh there are 900 full-time positions.

And if council said all we're gonna do is public safety, no more park maintenance, no more street maintenance, that's absolutely a poker hand.

Council can play.

Just it's a quality of life balance, and it it we look at it kind of on an annual basis.

What would you like to do differently in this budget from the current fiscal year?

And if you say, well, how many how many parks maintenance employees do we let go vacant in order to hire one firefighter?

And there's not a right or a wrong answer, it's where are you comfortable?

Where do you believe your constituents are comfortable in that quality of life balancing act?

Council McGrath.

Who was gonna say we're also in the middle of some studies and planning on a PSS T3 question and developing another votes?

So we recognize that when the apparatus was identified in that PSS T2 question, we were paying about a half a million dollars for a fire engine and about a million dollars for a ladder truck.

And the prices on both of those pieces have doubled.

And it definitely going up at a much greater rate than sales tax has grown.

And honestly, because of fire management, we have achieved the best ISO rating available.

Nobody in Oklahoma has a better ISO rating than Norman.

How long can we hang on to that?

We're going to fight like heck to hang on to it as long as we can.

But yeah, you can feel the forces working against us in terms of uh big cost increases coming at us and flat revenue.

It's a challenge.

It's a full-time job to manage, absolutely.

But we don't necessarily run on like a parallel budget.

We actually prioritize always council's priority.

And the PSST, maybe more often than not, needs subsidy from the general fund to cover its obligations.

And we're hoping those days will come to a uh a quick end as we get that about a million five in debt service every yeah, it'll it'll won't be an expense, the budget after this.

So we'll give you a little bit of breathing room.

Okay.

Oh uh it's a tough decision.

So about uh risk analysis and how to be a risk and what do you want to cover?

And it gets down to the discretionary funds that are available in the general fund that are not currently tagged for personnel.

Right.

And replacement as they'll set replacement of the uh fire equipment we have with their you know two million dollars, well, that's most of our allocation, you know.

What are we gonna do uh trucks for planning or you know, or public works, so yeah, comp cars, yeah, cop cars.

So come on sales tax.

Yeah, please don't buy anything outside of our next work this uh next we have the room tax fund, and uh uh it's currently at 8%, but uh the voters passed vote on April 7th, that increased it to 10%.

We added uh uh overnight stays and recreational vehicles, and this becomes effective July 1st.

So the uh um on the expense side, uh as a result of this vote, we've now got the percentages back to this was these these were the percentages before the last rate increase, but uh four percent for administrative fees, uh 50% to the Norman Convention and Visitor Bureau, 25% to Norman Arts Council, and 25% to the uh Parks Department.

So how that'll really help us going forward our skinny capital budget uh with a new revenue stream earmarked by the voters for parks maintenance parks facilities investment.

It will reduce the competitiveness for these capital dollars by having a separate revenue stream just for the park's capital needs.

So that'll make it a little bit easier for us to handle the next fire truck or swab of police cars.

So appreciate Mr.

Olson's that was all Mr.

Olson's good job idea, and and uh he he he carried the water on that, so that's off.

So that's the room tax fund.

Uh next is the uh young family athletic center, uh the WIFAC.

And uh it it's uh the resources uh the revenues generated from a hundred and twenty-two thousand square foot uh facility, top notch uh facility with two pools and gymnasium, which began operating in 2024.

Um it employs five full-time employees and 25 part-time employees.

Um Norman Regional has a physical therapy uh facility in the building.

The uh retail space is understanding is open now, so operational.

The uh, and then the city took over the operations of the concession stand uh area in the fall of 2025.

So uh included uh a 25% increase in the revenue projections for the Wi Fac this next year.

Um that leap uh to take over uh operations of the concessions area, not that big a stretch.

Uh we do similar services at the Westwood Golf Course, and uh the lady that manages that program was able to just bring the Wi Fat concessions under her umbrella, and she has a great uh deal of expertise in it.

So we think we'll be very successful running that portion of the operation internally.

Next is the seizures and restitution fund.

Uh, this is uh money uh that comes solely from the federal and state property seizures program.

Um we uh uh we do not budget for um revenue in the in the current year because we don't know what we're gonna get.

So really we're spending the prior year, and um we we had a balance of about 1.1 million.

We used um 800, or we're going to use it 27, 831,000 um to buy some uh police vehicles, uh software for records management, and uh pivot community intervention services working.

Can you um explain pivot community intervention services and what that covers?

Yeah, I can um so pivot is effectively it's a it's an organization part organization that works with um juvenile.

So when we have a juvenile who um is in our custody um status within something that's not violent, right?

So if they're harming people, then they they go to big boy and middle jail in a bad way.

But when the minor we can't get a hold of a parent to take custody of them rather than us babysit them until we find a parent take custody of them, they will take them to them, and then not only do they take custody of them and provide that transition back to their parent or guardian, whoever it is, they actually are a direct input into services for them uh whatever that is um specific to their needs, so they're a huge help.

We had one here in town, the Jewel Intervention Center of our Robinson for many many years that went away, and in that gap of a few years when we did not have that, it was a huge impact not only to um our operations, um, and especially usually those are tend to be at night when we're busy and need resources out there, but it's a huge impact for the kiddos um and ensuring that them and their guardians and their families have that resource um so huge partner with for us.

So they're gonna connect it to social services through this program.

Yeah, for them and their and their guardians obviously goes hand in hand a lot of times that they need that help.

So a lot of those are um true and things uh not necessarily true and some curve views because of that one.

We don't have somebody who is uh responsible for them or being responsible to get us.

We had one this week.

Um we don't use that for our all of them.

A lot of them we try to get their parents we had one at the music festivals we can was 13 um extremely impaired.

Um and we had a handful of these.

Um we're gonna find a guardian to come get them if at all possible.

We did we spent almost an hour, but I don't mean to get them help.

If we couldn't, then we'd have to go to that route and then get them into services.

So thank you for the explanation.

And this is the second year we're paying for the service out of seizure fund.

Next is a public transportation fund.

Um, this accounts for the resources uh used uh to maintain and operate the city's public transportation system.

It employs eight full-time employees, about 52% of the of the revenues come from the uh dedicated sales tax.

What two five percent uh sales and use tax, and then about 45% of it's from FDA grants, and then the rest comes from uh parking fees, miscellaneous fees, and other grants.

To be able to operate the public transit system as we do, and we provide those updates at the uh community transportation and planning committee meetings.

Um there was real uncertainty when we inherited the public transit system from OU as to what kind of impact that would have on the general fund, and when we're able to add to fund balance in the public transportation fund, it it helps us keep the fleet current uh without competing for those limited capital resources.

Uh it also provides over time the opportunity for council to expand services.

So really happy to see uh the revenues exceed expenditures by uh about six hundred thousand dollars, and I'm sure our transit buses cost about a million bucks a piece, is my guess, Taylor.

You know, it's about 800,000.

So mission critical that we've got revenue in excess of expenses.

I was just I was gonna kind of ask about the bus part of it if then is this like including after buying the bus that we need to replace and everything like that, or is that also still need to come out?

Uh the one that was involved in an accident that we've been talking about, it's funded through this fiscal year.

Um to council for that.

All right, perfect.

Um we are looking at uh one more that's out of its useful life and actually was evolved in an accident, unfortunately.

So we're looking at that for next fiscal year.

But we're really good on the vehicle front.

We got a lot of federal grants the last five or six years, and we're very close to being done for a while.

I'll just I'll just make sure I thought it was in this this year, but I'll just make sure I just wanted to point out the eight full-time employees are city employees, but we have 30, 35 uh embark employees that work on our behalf through that contract.

Um, and then we also have our via Norman on demand uh contract that they have probably about a 20 or 15 part-time employees that do that Norman on demand service.

So that the VA is not budgeted for it in fiscal 20 cents.

Yeah, gotcha.

Which is uh another discussion though about uh it's been a pilot program, it's in the third going on fourth year, I think.

And then um we probably need to go ahead and account for that in the transit budget as a whole, and assume until council gives direction to not quit or not fund it anymore.

Um and then the at least from my perspective, the goal with transit fund is to for it to be self-sustaining and trying to make it live within the budget that our transit tax and the federal funds can afford.

And so it's a good way to justify its existence in my opinion, is it not requiring additional funding to operate.

Uh next up is the Westwood Park Fund.

Um the uh it accounts for the West Coast All of Course, the Tennessee Center and the Aquatic Center.

Uh it has nine full-time employees and one part-time employee.

Uh we increase the 2027 revenue projections by four percent.

And uh we expect that the uh revenues will exceed expenditures by about 263,000.

Uh the other special revenue funds we've got are the uh uh the uh clean fund and uh uh we also have the uh uh CDPG uh grant fund that you guys have heard quite a bit about.

Um the uh we have the art in places and public places fund where citizens can donate uh when they pay their water bill, uh and that goes to the normal Norman Arts Council.

Uh we have a special grants fund, and that's really the the other bucket for the non uh FUD-related grants.

Uh the uh opioid grant that general mentions in there, um police has a lot of grants, um uh public works has got a few grants, so uh that's where things accounted for there.

Uh then last but not least, we have the park land and development fund, and uh that's uh that's where if a developer builds uh an addition, they uh they're mandated to either pay a fee and loot or uh build a private park and or uh donate land to us, deed it over to us for us for up for a park.

So and then this is circles back uh to the to the calendar, budget calendar.

Um tonight will be the first public hearing, and then uh again next week, the fifth, we uh bring you the capital budget at a study session.

Uh then two weeks after that we'll do the enterprise funds.

Uh then we'll have uh the second public budget hearing, and if if we need an additional uh study session, we can do that uh June 3rd, and then June 9th would be adoption of the budget.

So there's any questions.

Any questions, comments, uh council members?

So if if uh sales tax uh somehow increases uh substantial amount of projected, then you can go back and revisit certain items and you know, and I'm sure you have a priority recommendation if that happens.

Your priorities we can bring you some recommendations and what would what what would be required um is just a budget amendment to appropriate the windfall in sales tax revenue, give us permission to spend, and then which line items you would like us to increase through which those expenditures would take place.

Absolutely, boy, are we optimistic that that's what we get to do?

That would be fantastic.

Um typically we get a pretty comfortable feeling where we are when we get that January sales tax check, it'll tell us we think we're on track or we need to take some corrective action.

Uh and that gives us about six months worth of runway to to adjust to control expenditures.

Typically, how we go about if the revenue is not happening the way we need it to happen, um, when a general fund of vacancy presents itself, uh we will slow play backfilling that position, unless it's in the world of public safety dispatch, those individuals are difficult to find.

And if we have a vacancy in a dispatch position, even when the general fund is tight, we're gonna hire that dispatcher because the one thing that is never going to be acceptable is to be put on hold when you dial 911.

I think that would just reflect epic failure on our part to not staff that particular service all the time.

And then, like we said, when it comes to police and fire, it when they hit the number of vacancies that warrant the initiation of the next academy class, then we go about filling, you know, fill we'll fill them 10 at a time, 12 at a time, 14 at a time, depending on what those vacancies are.

So that's just the normal cycle of police and fire turnover and academy classes and new hours.

We go through rankings where capital deeds are all ranked, and then uh everybody meets with the city manager to comb through the budgets and so forth.

So there's been a uh a large undertaking to get to this.

We get uh recommendations from our fleet uh superintendent uh to say here's uh uh a list of vehicles that are now becoming more expensive to maintain than the value of the vehicle itself.

So he'll rank 50 pieces of equipment in order of what they see from the shop's perspective as needing to be replaced.

And then when it comes to uh requests for uh staying current in our computer equipment, Mr.

Tim Powers and his team, uh we are on a cycle where about every six years, every desktop computer will be renewed.

And what we found is if your desktops getting older than that, it probably doesn't have enough horsepower to drive the next operating system upgrade.

It also becomes a little more susceptible for naughty people to find a way to get in it.

So we stay in a routine where all desktops get replaced every six years.

Um requests come in for, and and it's primarily a public safety uh process for personal protective equipment.

We know that police officers wear bulletproof vests and they come with a warranty of X number of years.

And when the warranty is up, it's time to replace those vests.

Uh, a lot of times they'll get surplused in smaller agencies, or sometimes they get bundled up and sent to a sister city that doesn't have body armor and old body armor is better than no body armor.

Uh, when it comes to replacing fire hoses, uh the fire department keeps the inventory of how many hoses are not passing the test anymore for a pressure test.

Uh SCBA's self-contained breathing apparatus when it's time for those to get renewed and replaced, those are always at the top of the list.

Turnouts, um, and there's different regulations kind of evolving currently about the life of turnouts, how you wash them, how you store them, and it's to address potentially carcinogenic materials that collect on that gear when you're in and out of burning buildings with all kinds of strange uh flammable products clinging to you.

So we're trying to stay current on all those personal protective investments.

Uh, we think that's the least we can do is is keep everybody current in that personal protective environment.

Anything else from anyone?

Okay.

All right, thank you, staff.

Uh forward to the continued budget discussion.

And yeah, shop this meeting.