This is a uh meeting of the finance committee.

I'm joined today by Councillor Hudson, Councillor Aaron Reich, Councilor Moore, Councillor Nave, Counselor Jones Rouser, and the Bonadeo group.

I'll let you gentlemen introduce yourselves and we'll get started.

We're here for an independent audit results of the uh fiscal year ending 2025.

So, Greg, take it away.

All right, thank you.

Um I'm Greg Evans from the Bonadio group with me today is Jacob Skebbell and Jack DeWare.

Um these guys did all of the heavy lifting, so they're gonna answer the tough questions.

Um I handed out a presentation, which is a summary of all of our audit reports that we issued.

Um should answer a lot of your questions.

Uh, but certainly if anything else came to mind, we can answer that too.

So we'll start out right on page four, the scope of services for the speaker directly into the mic.

Okay.

Thank you.

Sorry, better.

Um scope of services performed.

We did an audit of the financial statements.

Uh we did a single audit, which is your audit of your federal awards expended.

And we did an audit of your New York State DOT uh expenditures, and we also issued a management letter, which is just some best practices for the city's management.

So moving on to page six, um audit results, our independent auditors report.

This is where we give an opinion on your financial statements.

I always say the numbers are yours.

It's our job to give an opinion on those numbers.

Um that being said, our opinion is an unmodified opinion, meaning we believe everything was presented uh fairly in all material respects.

So highest uh level of assurance we can give you a clean opinion.

Um in terms of internal controls, we look at your internal controls, we don't give an opinion on them.

Um as part of our risk assessment, we work that in, and that's how we do our uh audit planning.

Um we did note some findings relative to internal controls, one material weakness and three significant deficiencies.

Um Jake's gonna walk you through those later in the presentation.

In terms of uh accounting presentation, uh this year we did implement GASB 101, and we'll talk about that in a little bit.

Um there were some audit adjustments, meaning we came in and proposed changes to your numbers.

Um we'll include that as part of the findings as well.

Um so the last one here difficulties encountered in performing the audit.

This is kind of a kind of an important one.

So we were delayed on certain things, in particular the CIFA, which again is your expenditure of federal awards.

The delays in in that sort of really kind of hold up the completion of the audit because that's the basis of our audit planning again for the uh the federal piece of that.

Um, and that sort of went back and forth all the way through February.

So that's why we're here a little bit later than we'd like to be.

The initial um plan was to issue this before January 31st, and we were about a month behind that.

Um so that being said, um, I will point out that the financial statements are 114 pages, which is huge, right?

There's a lot of information that we need to gather from the staff at BOA.

And this is, you know, they're doing a great job, but it's just a lot.

You know, it's a lot for the number of people they have.

Um, and we're, you know, we end up on our team, we spend about 900 hours doing the audit.

So you think about that, you think about all the things that have to go into getting this done on time.

That's why it's a challenge.

Um at this point, you know, we think about next year with uh Bureau of Accounts, they're right now down a person.

You know, I think it's important that you know we we make sure that those positions get filled down there just so we can at least maintain that January 31st timeline.

Any questions about that?

Okay.

Could you give me a little background?

This is my first year on council.

Yeah.

The Bonadio group routinely does municipal auditing.

Is that your sole business?

Um it's well, the the Bonadio group as a whole really does all types of auditing.

Um the the three gentlemen at the table here, we that's all we do.

Um, so yeah, we do a lot of uh counties, cities, towns, villages, public authorities.

So yeah, we do a lot of uh counties, cities, towns, villages, public authorities, so yeah.

And the substance, right?

School districts, too.

Sorry.

The substance of the audit mostly focuses on waste fraud and abuse.

Um no, I would say that substance of the audit is the presentation of your financial statements.

So this are the numbers.

Waste fraud and abuse is part of the audit, it's part of our risk assessment, but it's certainly not the focus of it.

And had we found any waste fraud or abuse, we would certainly be reporting that to you today.

I would assume that that would be among your findings.

Yes, that definitely would be.

Compared to other municipalities, how challenging do you find Syracuse's audit?

Um I'm gonna I'm gonna put it like as moderate.

If we go low, moderate, high, moderate, because again, you know, it's it's a big audit.

You know, like I said, it there's 114 pages of of you know, information, um, kind of diverse in terms of spending on the federal side.

Um, you know, we had ARPA, and we'll talk about the federal programs.

Obviously, a lot of funding from HUD, um, you know, which is you know, a challenge to audit, certainly.

Um, so you have a good staff here, but again, it's it's the volume of work that's required uh for an audit of this is is a challenge for both your staff and our staff.

All right, thank you.

Sure.

Okay, on page eight, we'll talk about the single audit compliance.

Um we uh again we we had a modified opinion on the home investment program, which is a repeat finding from last year.

Jake's gonna walk you through the details of that.

Um on the ARPA program, which we audited, we had an unmodified opinion there, so that went well.

Um, and then an unmodified opinion on the state DOT audit.

On page nine, again, this uh we had a significant significant deficiency related to the federal award program that Jake will talk about shortly.

Okay, and on to page 11.

These are just some of the high-level financial highlights that we like to point out.

Um again, these are these are big financial statements.

Um when we think about your financial statements, there's two types of financial statements.

There's the government-wide financial statements, which are all of the assets, all of the liabilities, both short and long term of the city.

Um looking at that, that's a bit of a challenge for most people that um aren't into the government financial statement world on a regular basis.

Um they're giant numbers, and that's really not how you budget.

Your budgets are on an annual basis, and again, these are both short-term and long term.

So when we look at that, um one of the key takeaways is we look at um the bottom line there of unrestricted deficit of a 710 million dollars, which like I say every year is relatively startling to think, oh, we have a deficit of 700 million dollars.

Well, again, this is this is long term, and when you think about what that's driven by, it's driven by retiree health, which on the governmental uh activity side is uh about a liability of 710 million.

So when you pull that out, things start to look a little bit better.

One of the key things about uh retiree health insurance is the fact that the state doesn't give you a mechanism to fund it.

So you can't set assets aside to reduce that liability.

That's why it's relatively startling at this point.

So that's that's about it for the government wide.

We'll we'll skip on to the fund financial statements.

So this is where you live on a regular basis.

The Gen Fund is the operating fund of the city.

Um of the key we'll we'll show you some charts about the history too, but some of the key things to think about for this year.

In this in the Gen Fund, you had um budgeted to use about 19 million dollars of fund balance.

Um the results were you actually um increased fund balance by 1.7 million dollars.

So that's a pretty that's a pretty big swing there.

That's the 20 million dollar budgetary surplus.

Um so again, you know, a lot of times we look at this in in typically one of the key drivers of that is is unfilled positions.

And I'm I'm just gonna uh assume, and these guys will back me up, I think that that was the probably one of the bigger drivers for this year, too.

Um I always do the the school district obviously slips into your financial statements.

That's a separate audit.

Um but it was a similar situation there, um, where they had budgeted to use 41 million and they only use 14.

So again, about a 27 million dollar budget surplus over there.

Um just real quick about water and sewer, both water and sewer funds had nice profits for the year, about 3.7 million on the water side, two million on the sewer side.

Um, in terms of some of the drivers of those um surpluses, basically on the revenue side, you had a surplus of eight million, and on the expense side, it was around 12 million.

So eight million, the revenue was mostly from ARPA.

It's tough to budget ARPA again.

That was a project that's gone on for roughly four years now.

So you had about eight million dollars there that you didn't necessarily budget for initially.

Um on the expenditure side of things, a couple of things that just jumped out on me to me were the uh DPD or DPW equipment maintenance was well below budget.

The assessment department was well below budget too.

So and again, throughout the city, you see you saw some salary savings from unfilled positions as well.

So next page, um, we always like to just show you a history of the gen fund.

Um you know, at this point, we see revenues or I'm sorry, the the unassigned fund balance there of 114 million, which is basically way higher than you've ever had before.

Um so at this point, you're sitting on almost 50 percent uh of your annual expenditures in fund balance.

So something to keep in mind as you go forward with your budget.

Um we think uh as we move on here, Gen Fund revenues and gen fund expenditures both keep climbing up.

Um, but we know as we go on to the next page, we think about one of the big drivers there has been that federal funding, that ARPA funds, which was in excess of 80 million dollars.

Um that's pretty much gone at this point.

So any of those programs that you may have supported um with ARPA dollars, you now have to replace with a different funding source.

We're not sure what's gonna happen on the federal level in terms of other federal programs.

Did I do that out loud?

Sorry.

Um sworthy.

Um, but you know, HUD in particular, you know, we're not sure how those programs, you know, are gonna end up in the future.

So the state uh was able to provide additional funding last year.

Again, the state does not get that level of federal funding that it has in the past, so we would expect that to trail off too.

So that's that's sort of the word of warning in terms of budgeting.

Um, you know, the last few years have been great, and everybody's built up a big fund balance, but now it's time to really think about what expenditures can you fund with your um current level of revenues.

Any questions about that?

Very high level numbers presentation.

So, Greg, I apologize for being late, but thank you all gentlemen for coming.

Um I feel like our fund balance is always a kind of like a tug of war, right?

You know, at one point we realized we have a historically high fund balance, and that there is potential things that we can be doing with it.

At the same time, we hear from SP, we hear from Moody's, and they tell us that part of our credit rating is because of this historically five high fund balance.

Um how do you recommend managing?

And I know that um, you know, it's the evidence in the back of the room.

We've talked about a plan for the fund balance and kind of uh you know, multi-year think through what is it, what should it be, what are we gonna use it for, how are we gonna use it?

Um, from your perspective, are we at a good level?

Are we too high?

Are we too low?

Where what do we, you know, how do we how do we balance youth sitting here telling us that it might be time to look at using it for other things coupled with the credit rating agencies saying keep on going.

Yeah, and I I think the you know what you what you said was is key there.

You have to have a plan for it.

So and I wouldn't the in my personal opinion, I that that plan shouldn't be to support ongoing programs.

I would try to fund projects and one-time expenditures with that fund balance, and then on the other side, you use your property taxes and your more steady, stable revenues to fund your ongoing programs, you know, including salaries and you know, general operations of the city.

So, you know, it sounds like I'm on the fence there, but you know, really like it's gotta be a balance.

Um, you know, use a little bit of it.

Um, you know, the state could come in and criticize the level that it's at.

Um, but just about every municipality across the state is sitting on more fund balance than they've historically had.

Um, again, due to the ARPA funding in particular.

You know, interest rates being high too have uh sort of forced up some interest income that that we've never seen at municipalities before.

That's another thing that we would expect to start tailing off.

Sales tax has been strong.

We've already seen sales tax start to go down a little bit.

So those are the things you you have to balance.

We know that some of the revenues are going away, and you have this fund balance, but you don't want to necessarily um spend it all at once.

You want us you want to spread that out probably over like a five-year plan, I think would be the best recommendation.

Um so when you dug in, are you able to easily point to the the items that became ARPA spending that we now have to sustain?

Like is that is that in one spot that you can point to easily?

Um sort of okay.

And again, so that the ours was started in 2021.

So we now have had several years of spending.

Um we can probably send you some generalizations of where at least the big dollars have gone.

There was definitely a mix on that of some of the revenue replacement funds um were used for certain salaries, um, some were more project-based.

So um it's a little across the board.

Helpful for us to probably have that in one little spot a little bit.

Thanks.

Any other questions about numbers at this point?

Okay, Jake will walk you through the audit findings for the year.

All right, so um, starting out, we'll talk about uh findings related to internal controls over financial reporting.

Um afterwards, we'll mention the federal single audit compliance side.

Um, starting off our first finding this year related to capital projects.

Um, this was considered a material weakness in the internal controls.

Uh, this was a repeat of the prior year for any of you uh around last year, it's something we've talked about of the capital projects.

Um it's a significantly manual process to track those, um, particularly on the understanding of the earning of revenue.

Um, so recognizing receivables and um releasing unearned revenue as earned.

So this year um when we did our audit procedures, we did identify misstatements that involved uh recording receivables additionally and recognizing uh earned revenue on some advances.

Next up, uh the second finding relates to grant management.

This was again brought up in the prior year.

Um, most significantly, this relates to the state DOT programs.

And what we are seeing here is a delay in claiming of expenditures.

So this is a more operational item.

And in the 2025 year, we were able to see there was about 36 million dollars of expenditures, of which only 30 million so far had been able to uh be recognized and claimed.

Um, so what we're seeing there is there's a delay in claiming process, um, and that affects the cash management overall.

A delay on our process for claim actually claiming for the reimbursement or delay in payment.

Okay.

Yeah, okay, on our side.

Yeah, by and large, chips funding is what we're doing.

Yes, yep, that's the most significant of the DOT there.

I did have a question about your response.

Do you know of a model whereby other municipalities have centralized grants management?

Because that was the recommendation.

Yep, so I that's uh commonly of the finance or BOA department to ensure that there's um oversight of the grants process, um, grants themselves.

There's the two sides of it.

There's the project management side, and then there's the financial accounting side.

Um, so the where we've seen the most success success is when ensuring there's accounting oversight and knowledge of what's happening within uh grants.

And again, your recommendation would be for us to centralize that function for the city of Syracuse.

Yeah.

I have a question.

Yes.

So the city's internal controls did not operate effectively to ensure it was retaining adequate supporting documentation in regards to claim submissions.

So how much did the city lose out in reimbursement?

So to this point, uh we haven't identified significant amounts of loss funds of failure to claim.

Um and this is something that management could probably dig up more specifically at this point.

But at what we're seeing right now is just a delay in making those claims.

Um so obviously when there is a dividend delay, there's potential in running into issues of the state denying a claim, um, but also in the meantime also losing out on having that cash available, earning interest in the bank.

And you brought this to the administration that is to correct this because we're not being reimbursements affecting our bottom line.

Yep.

Okay, thank you.

Next, we had a finding related to the procurement process.

Um, this was again brought up in the prior year.

Um, what this relates to is the overall documentation uh of the process in which uh certain cases uh it may be appropriate to waive the procurement process, and what we're looking for on the audit side is evidence of that process.

So documentation of the reasons for uh a waiver and then evidence of governance uh evaluating that.

This is another carryover.

Yep.

Next, the fourth finding related to something that arose during our audit of SURA, so the urban renewal agency, of which SURA is um considered a blended component unit, so it gets reported as a fund within the city's financial statements.

However, when we were looking at the payroll testing uh of that agency, um we ran into uh instances of uh documentation issues, particularly on the coding of employees.

So the recommendation here is to ensure that all that documentation of that new hire process is accurate and retained to ensure that the proper approval is uh in place for coding employees um to the Sura budget.

Okay, can you walk through the so these three lines that that start with the four two out of three employees?

Can you walk through those three?

Yep.

Um, so for uh this was a sample of 23 uh newly hired employees.

Um so there was instance of partial documentation in some cases uh for two, we weren't able to get that support of properly filled out new hire forms coding them um to Sura.

For eight of the same 23 sample, um it wasn't uh listed that they were to be coded to Sura.

So the documentation just referred to them as City of Syracuse employee, and then for five out of 23, um, the final pay rates um weren't included in that documentation are those mutually exclusive or there can or can there be overlap within the different categories that you have looked at?

Oh, there could be overlap, yeah.

And out of those employees, was there any find that these were actual city employees who had like a secondary third position per se?

Um so we didn't identify anything specifically like that.

Obviously, the the lack of documentation creates the opportunity for more significant errors.

Okay, um the fifth finding here, so this moves into our federal single audit, so the audit of the federal awards, um, in this case the home program.

Um in the federal awards audit, we essentially end up giving about 12 different opinions for the different compliance requirements.

So what this related to was specifically within special tests and provisions of that audit.

So in this case, we were able to test 11 of those 12 requirements without issue.

But in this one, it was a requirement under the program to monitor and conduct inspections of rental units.

The timing of the audit, we were talking to you at the end of March of that issuance happening.

So with your fiscal year, there's a three-month window there to uh take from the end of March and get it done before the 2025 fiscal year.

So our understanding on this one is that it's in process.

However, in our testing for the 2025 year end, we weren't able to uh see that process in place and test that.

Question.

How do you know what to look for?

You know, I'm sure that you all have your process that you typically go through with municipalities.

But how do you know you're capturing an accurate representation and not kind of focusing too much on one component and missing another?

Yep.

So with uh the federal award side, um, this is heavily regulated by the federal government.

They release a compliance supplement and they spell out which compliance requirements they want us to test as the external audit process.

Um so it's really driven by that, and then from there, we review what the city actually elected to use the program for to ensure we're testing um the activities that fall under the city's activities.

And the other piece of that too is we do a risk assessment on these programs too.

So if there's new requirements, that makes them more risky.

If you have a change in personnel, that makes them more risky.

So it sort of changes our focus on an annual basis too.

We're required to take kind of a holistic approach to what's going on with the program too.

Thank you.

Question about the home funding.

Um, were you able to determine that last year's was correctly followed through on?

Yeah, so this is a requirement.

Um it wasn't in place last year, and then we are required to test this program again this year, and it wasn't in place yet as of June 30th.

Okay.

And we'll be required to test it again next year to follow up on this finding.

So next year you'll be able to see whether this year was was satisfactory, etc.

But last year it wasn't in place, so this is new.

Correct.

Okay, thank you for clarifying.

Um, any questions on any of the other findings?

Okay.

Um lastly, we'll just mention some things in the GASB accounting world.

Um, I know this is what you were all really coming here today for.

The grand finale.

Yes.

Um, just a reminder, uh, GASB 101 related to compensated absences was required for the June 25 year.

So that was incorporated into your financial statements.

What that one really resulted in is it's only in your government-wide financial statement, so that long-term schedule.

And overall, it increased the liability recognized for that.

The reason being historically, uh, municipalities would recognize a liability if there was a chance of paying out earned vacation or sick time.

The standard now requires recognizing a liability uh for amounts that may be used by employees, so not actual payouts.

So that changed the method and um calculating that liability.

Um, but again, it's really only in that long-term schedule, so not impacting your general operational review.

Uh for next year, we have GASB 103 going into effect.

Um, this relates to the financial reporting model.

Uh, you'll just see some differences in uh the presentation around the financial statements, um, some different requirements in the management's discussion and analysis section.

Um, the budgetary comparison schedules will now require um showing the change from your original to final budget and report on reasons for changes and variances.

And then there'll be a little bit of a different order in your proprietary funds.

So water and sewer.

But nothing in this that will affect bottom line numbers or anything like that.

It'll just be the look and feel of the statements.

And how do you perceive the um the uh separate um management process like the uh printed or written um paid pay stubs and those type of things, like has uh yeah, certainly that's not ideal.

Uh we're we're we're still kind of behind the times on on that.

So, you know, that that upgrade hopefully will take care of all that and we'll you know have an efficient system of uh time tracking and and uh you know, and that that'll help with our GASB 101 too.

So um so yeah, I mean we're we're looking forward to that whole project, you know, being in place and operating as as designed.

I think there are a lot of people around here that are looking forward to that too.

Yeah.

Greg, can you go back for me to the surplus and just go through that again one more time for my brain?

Yeah, sure.

So I think you said we were we were plus eight million on revenue side and plus twelve million on expenditures.

Yes.

The 12 million, what's that?

Where is that made up?

Um, so I think largely it it it was um probably unfilled positions across the city.

And I think, and I was trying to last week when I was preparing, I was trying to nail down some of the specifics, but it it's really across a lot of departments where there were small pickups, let's call it small million dollars.

Um but um and again, I think um at DPW, I think equipment may maintenance was around a million of a surplus there too.

So that one kind of jumped out, and again, assessment.

Um I think that was around a million too, if I remember that correctly.

So, but beyond that, again, it was sort of spread across a lot of departments.

I mean, we can certainly assess we had a budget line in there for the reveal that didn't happen.

Right, exactly.

So about 20 million.

Uh 20 million total, yes.

I recall the council trimming the budget around 20 million, so maybe we were right.

And well, quick question for you when you talk about um competit waiver of competitive bid, when you talked about the process and not having the clear paperwork detailing why the competitive bid was waived, right?

Right, right.

Yeah, it's like you know, we we start with the premise of you know, all of these things should be competitive competitively bid, right?

Um especially for professional services.

Um you don't have to pick the lowest bidder, but you have to go out and you have to get quotes and you have to document why, you know, you know, you you only ended up with one quote.

Okay, so is that you know, company or firm or whatever the only person that can do that?

Okay, that's great.

Document it.

Um that should be something that we can see when we come back and look at the process.

Is it a particular part for uh a swimming pool?

Um if you tell me that you can only get it from this one place, I'm probably gonna be a little skeptical about something like that.

So those those are the type of those are the type of things that we look for.

Is really just kind of document, okay.

What did we do to figure out that it was a sole source provider?

And you know, specifically, you know, we called X, Y, and Z on this date, or we uh we posted this, you know, wherever to try to get those uh competitive bids.

And I do understand that some things are proprietary, right?

Like as far as like the parking meters, we know that that's been a proprietary thing forever, but there's a lot of things that we do that we just give the bid out.

We just put it out, and we don't competitively you know, get the comparison.

So because that's what I've been I've had a problem with that for years, that we don't issue competitive bids.

Right.

As far as the um grant management and delays and refunds, um were there any findings of um well significant under budgeting?

Like they because sometimes they have to come back to us and ask for extra because the original quote wasn't what it expected.

Was was that a part of the findings at uh like an extreme amounts of that?

And also um, were there any um claims where maybe something wasn't done correctly the first time and they had to go back a second time, and that's where the additional funds may have uh I I think what we found, particularly in the chips and DOT funding was it was things identified by city personnel of we don't have enough evidence gathered yet.

Uh we haven't checked all of our boxes on um the requirements prior to submission to the state to prevent that from occurring, where the state then says you asked for this amount of money, however, we can't give it to you because of these reasons.

Um so it's on the front end, but still uh a delay.

So we projects our DA for whatever reason that could be part of not being able to issue uh products yeah, so this um side of it is uh the street construction more so.

Um so the delay we're seeing is the time of payment, so after services were provided to the city and the city paid um whatever vendor for the service to uh the claim happening.

Could you walk us through page 83?

Oh, yeah, it's three in the big books.

Okay, so yeah, this is the uh the budget to actual comparison.

So that's where those numbers that we were just talking about came in.

Um so again on the expenditure side, this becomes a little bit of a challenge because of the the presentation.

Um we're required to basically put it in those activity buckets.

So those activity buckets don't necessarily line up with your budget.

So again, that you know, this particular uh schedule becomes I don't know, not that useful, let's call it.

Um but certainly we that we do drill down into those numbers to figure that out.

Um, and again, you see there on the on the uh the top line there, positive about eight million, and then you know, on the expenditure side, 11 million, and then going down to the other financing sources another million there.

So, yeah, I mean you you can see it's kind of all over the board, you know, on the revenue side.

You had some surpluses and you had some deficits, so it but in the end you came out mostly ahead, and I think a large amount of that was due to that ARPA funding.

Um, and then on the expenditure side, you see general government support, public safety, transportation, those were all in the positive.

Um looks like culture and recreation was too, but transportation would ended up on the negative side.

So, you know, there were pickups kind of all over.

I I appreciate the overview.

Would you actually mind going line by line through the reboot to the through the revenues and the expenditures?

Just in terms of the actual versus the um anticipated budget versus actual.

Yeah, um, and again, I'm not sure I have all of that detail.

I don't I don't need to know the why.

I just if you could lead us through the numbers, that'd be great.

Okay.

So starting at the top, general uh property taxes, 64 million dollars was the final budget, the actual was 59.

So a little bit short there.

Um sales and use tax, 123 million in your final budget, 121 million.

Um so again, short on that.

Um, and as I mentioned earlier, we know that sales tax is starting to back off in general.

A recession indicator, yes, absolutely.

Um other local taxes, um 4.4 million versus 4.2 million, uh about 188,000 short there.

Departmental revenues came on above budget of 1.6 million, so 13.3 million in the budget, uh almost 15 million received there.

Intergovernmental charges 162,000 um versus 611,000.

Uh your actual, so a pickup there.

Licenses and permits up significantly.

Um final budget 3.1 to 4.4, so pick up of about 1.3.

Uh fines and forfeitures down from 5.2 in your final budget uh versus uh 4.2 actual uh sale of property and compensation of loss, uh final budget of 1.7 million, only 667 came in there.

Uh use of money and property.

So again, this is your basically your investment or your interest income, about 11 million budgeted came in above that, 11.9 million.

Um this is one that I again I think will start to tail off to some degree with interest rates starting to come down.

Um, and you're very limited in terms of what you can actually invest in, obviously, mostly treasuries and money market.

Um federal and state aid, so we talked about that, and we have that chart in the back there, which will show you the history there.

Um 90 million in your final budget, actual budget was about 100 million.

Uh workers' comp settlement, so that was a kind of a one-time thing of 4.7 million.

You did not budgeted for that, so that was a nice pickup for you.

Other revenues uh about 80,000 final budget, 2000, 200,000 in your final uh actual number.

Um I'm gonna turn it over to Jake on the expenditures because my voice is starting to go on.

I appreciate you.

Um so again, the expenditures are broken out into that act general activity categories.

Um so starting with general government support, um, final budget was 59.2 million, actual was 56.8 million.

Um, so positive variance there.

Public safety budgeted 187 million, actual was about 182 million.

Um, so also under budget there.

Transportation final budget was 28.3 million, actual was 23.5 million.

Um, so under budget for that one.

Home and community services uh budget was 17.2 million, actual was 18.5 million.

Um, so that one actual was over budget.

Culture and recreation, final budget was 16.2 million, actual was 14.5 million.

Um, so favorable variants there.

Um, the principal debt payments, interest on debt, um, and the leases subidas down below.

We'll just mention those are they cancel out financial statement type item, so grossed up activity really.

So that's why uh there's no budget there.

Um, and capital outlays, which get split out for financial statement purposes of 1.2 million, um, rounds out the expenditures.

What does public safety fall under?

I mean, I'm sorry.

What's under public safety?

So the police fire.

So you have the breakup between the two of them one where they're uh not in this document.

Um that's why these buckets are it's kind of hard to dig down.

Yeah, there's a lot of departments that make up these broad activity categories.

And obviously, you you budget by department, so and that's not what we're looking at here.

And then down below the leases abidas as we mentioned, and then operating transfers in and out were uh pretty close to budget there.

Signs and forfeitures since we recently implemented the um plus signs and uh red light signs and all of that, you would this is expected to increase for this coming year.

Yeah, I would say for this coming year.

I don't think you it would have been reflected in here yet.

Yeah.

Okay.

All right.

Is all of the parks budget inside that bucket?

Yes.

All of it.

Okay.

Um information.

What was the recommendations for that?

For which zero thing.

Sorrow.

Oh.

Um, so that one really is just a process.

I I it just needs to happen.

Um, I think it just ensure the process is happening with that documentation being accurate.

Including, you know, position, pay rate, title, uh just so you can sort of tie all that back into what actually happens when the employee is paid.

Could I ask a question about our self-insurance?

Um that's page 76, I believe.

This doesn't show previous years to current years.

Do we have an anticipated increase in self-insurance?

Claims, premiums, budget item items over a period of years.

This this line keeps going up, is that correct?

Yeah, I would anticipate, you know, health care costs in particular.

We we see keep rising premiums and and things like that are definitely on the rise.

When we look at that, you know, from our perspective, we we see it most in that retiree health.

Um you have an actuary that actually goes through and prepares that report that we drop into here.

Um one of the things we have seen is the projection of those health care costs going up significantly and pushing up that retiree health in particular.

Did you baseline a percentage of increase on an annual basis?

Uh and sorry to put you on the spot for that.

Probably not, no.

No, not confidently.

Above, under 10%.

I I would ballpark that 10%.

I mean, and we've certainly we've seen years where it's been more.

Um, but I my personal opinion is uh I would say it's at least that.

Thank you.

I'm not an actuary I don't know if it's as actuarially driven as profit-driven, but I understand what you're trying to say.

We probably have the most unpredictable federal government in the history of the country, too.

So that doesn't help things, right?

Absolutely, yeah.

I mean, we're we're really not sure where some of these programs are are going to land.

Or if they go away.

By the way, that's my nicest way of putting that.

Yes.

And then I had one last question under long-term liabilities and bond payments.

Starting on page 54.

So we actually saw uh a decrease in the amount of bond liability this year or increase in the amount of revenue.

I'm sorry, I'm not really sure how to read that.

Yeah, so you basically your your payments, you know, you have a annual payment for your bonds that are outstanding were more than you the additions to the bonds payable.

So did come down a bit.

And we have a little bit of runway in terms of what we we're bonded out to 400,000.

400.

But we have a little bit of clearance between that and the ceiling, which is 600.

Oh sorry, I'm just trying to figure out when we panic and don't bond anymore.

Yeah, I don't know that we have your ceiling.

The constitutional somewhere in here is making notes, but uh but I can't find it because that's classic.

There it is.

Sorry, it's page 16.

City had 451,247 in total debt compared to 483,727 at the end of the prior year, a decrease of 32,480 or 6.7%.

And then we have a ceiling of limit of the fiscal year end was 623,424.

Down at the bottom?

Yeah, and these are all in uh thousands.

So millions of dollars.

Okay, so I don't have to add three zeros to these or you do these.

I do add three zeros to these.

Okay, good to know.

Thank you.

It's not at all confusing.

Yes.

But I understand for brevity.

And the sake of Inc.

Yes.

So yes, you do have some some debt limit available to you at this point.

And just again, I know that you're not you're not our bond counsel, but the A1 Moody's investor service rating is A1 because we are utilizing a large percentage of our debt ability, not just that it is accessible to us and we pay it, correct?

Uh in general terms, your your bond rating is uh sort of the culmination of the city's current financial condition.

So they take into can you know effect you know things like fund balance, ability to raise property taxes, even cash.

Um so there's there's a lot of factors that that go into that bond rating for sure.

Okay.

Is there another city out there that has prioritized paying off long-term debt on a faster basis than we are doing so I can't think of one, honestly.

I think you know everyone's sort of in the same boat at this point.

And it's been a few years with rates being high.

It's been a few years since uh refundings have been common to lower debt payments on that.

That's a good point.

Um potentially in the future, as rates come down, there may be opportunities again to uh do those debt refundings to save on interest.

Thank you.

Anyone else?

All right, thank you very much for coming.

Thanks for your time today.

Thank you.

Motion to adjourn.

Oh move.

Okay.