Regular monthly meeting of the Finance Debt and Budget Oversight Committee will come to order and the clerk will call the roll.

Saranto here.

Driscoll?

Here.

Gaddis?

Yeah.

Hobbs.

Jones.

Here.

Martinez.

Five present.

Excellent.

Thank you very much.

Good afternoon, everyone on this warm sunny day.

And also Megan Robeson, uh, director of public services here.

So uh director, uh go right ahead.

Our first item on the agenda is the progress report on the collection of delinquent bills for DPU.

Um good afternoon.

Uh thank you, Councilman, for inviting me to the the committee to present.

Um so since July of twenty twenty-five, we have had a little over twenty seven hundred people um enroll um in a uh payment plan to to pay past due bills.

Um counting the people who were already enrolled, we are currently at four thousand eight hundred and some change plans of eight hundred and fifty so plans.

Ninety percent of those plans that people are on, they are on track with payment, meaning they're not, you know, slipping on either their current bill or their past due bill.

Um since May of twenty-five, and this is through the end of the year, my date is only good through the end of last year.

Um we've collected ten point five seven million, and we still have six point two million that we expect to collect coming from the current payment plans.

And in that collection, we had um just under twenty-seven hundred people who paid um one time for their their past due balance.

That means they paid a hundred percent of what they owed.

Correct.

They paid in full, yes.

And how many directors did you just say were pending where you expected to collect?

Well, we still there there are still forty-eight hundred and fifty or so um active accounts, and we expect about six point two million to continue to come in from those specific accounts and collections.

Um we have um done 142 work orders we sent out for turnoff.

And as you know, this was commercial.

Um we hit a lot of the very large balances last year that that we discussed at previous committees.

Um of the 142, um 54 or 38 percent of those people um paid when we went to uh once they got the the notice for disconnection.

Um seventy-nine people we actually performed disconnection on.

Again, this is commercial businesses.

And some of these admittedly, I don't think we're currently operable when we we disconnected.

And thus probably why they were not paying.

Um of those seventy-nine we disconnected, thirty-two got reconnected, so about 40 percent, and 47 are accounts that never paid and we closed those accounts.

They didn't reach out or make payment.

Um they're not getting um services now then.

Correct, they're not getting services now.

Um we have right now nine pending um disconnections.

And that's uh that's out for work order um that we're we're doing again.

Those are commercial industrial.

And we are heading into uh uh very soon to be able to where we're gonna start going at higher end balances for residential.

Um we have got um some discussions we have to have to finalize the program and then we'll be able to start doing those turnoffs.

But um there's been a lot of hard work by you know my team and working with um you know Deputy Mayor Arnold to get us to where we can you know handle this program, we've got a good plan and you know people are gonna have plenty of opportunity to um get on a payment plan with us before we would would turn anyone off.

So are the um are all of the uh ones where they were uh threatened with turnoff, are those all commercial accounts or those were all commercial at this point.

We have sent notices um to the people who are residential that are in the dollar threshold and up, and they are aware that they are subject to disconnection, but they have not received a disconnection hanger.

That's the step we have not yet taken.

And so um, you know, once we I think we have a a finalized plan and and we're we're making sure we like that, and then we're going to to move forward with that and we can share that as as counsel pleases.

When do you estimate that they'll get a hangar on their door saying that they'll be disconnected on such and such a date?

So I would like to say that sometime by the end of February or March, we would be in to full swing being able to go to residential.

There are just a couple more behind the scenes pieces we have to make sure we have in place so that we can properly manage it and make sure that not only are we we getting to those disconnections or hangers, but that we're able to you know serve those customers who are trying to you know come current with us.

Okay.

All right.

The um commercial industrial accounts that did not respond where they were cut off, um were there were they large balances?

Um yeah, for for commercial and industrial, it was anything right now over 4,000 we went with.

So there were larger balances.

Most of the very large balances um that were over, let's say um 100,000 or 50,000, they all by and large they all paid.

Um I believe I don't have the data on exactly what what accounts closed, but a lot of times what we found was it's a defunct business that was no longer operating, you know, we'd have empty storefront and and a bill that had not been paid.

So that I I believe that really speaks for the volume of closed accounts, but I don't have exact figures for what the condition of those businesses were, but they are currently out of service.

So you're you're saying the vast majority of those that did not respond and been cut off are closed businesses, not operational.

I I believe so, yes.

All right.

Okay.

All right.

Uh councilman and vice chair Driscoll.

Thank you, Chair Soranti.

So uh what are the reasons that I asked the DPU budget hearing to see revenue was for this topic.

Uh I'm curious.

Do we project in in the DPU budget?

Do we project the six whatever you say the six or so million that you plan to collect?

Is that projected in the budget and is it included in the rate structure for future years?

So yes, yes, it is.

Um so we we traditionally we're approaching 97% collectability rate, which will also which I think compared to larger cities, um, I think's pretty good.

Um I'd like to see us back there.

We're at about 95 and a half percent right now for collectibility.

In our um current rates, we have projected about a three percent non-collectible and in our revenue.

So that's in there, and we actually in our budget go into our accounts, and I'm not sure the exact accounting term for it, but we have an account set up that is meant to offset that revenue in the budget.

So we we do account for that loss in both the um in both the the budget and in our our rates.

And then I'm not asking if you account for the loss.

I'm asking if you account for collections of delinquent.

So we I guess we don't we we we account for full revenue.

So essentially when we project the revenue, um that revenue that we we project has been based upon, you know, assuming a certain non-collectible, right?

And then as we collect revenue throughout the year, that revenue is what we bill, and then you know, cash receipts is is different.

So we kind of watch the cash receipts versus the revenue that we've billed and we look to see how closely that build revenue comes to the cash receipts.

And that that's that's kind of how we kind of compare back to what we assume when we we come up with our our revenue model and our budget.

So is it is worked into that that six million or whatever is worked into.

Yes, it is.

And and I and and I know on the water side, you know, as we had went um into the regional water and came up with rates.

It's been I think five years now.

You know, we had a seven year rate plan, rate structure with the outside communities to bring them all to one wholesale rate and you know, and started to change the rates in Toledo, they end in uh twenty twenty-eight and we're starting to do our new rate model.

And when we do that new rate model, you know, we'll be incorporating the assumptions that that we have now.

But to date, we have landed within about a percent to a percent and a half of what the rate model projected, and it's always been conservative in our favor.

So um, you know, we have uh I will say through you know previously Warren Henry and and through you know Robert Kasiski who manages our finances uh in DPU right now, we have we have stayed very well within that rate model and and we track that tight.

Yeah, I I guess I just trying to get at like what do we if this is like money that we weren't counting on, what do we you know what happens to it, but it sounds like it is accounted for in some way.

It it's accounted for, so it's not like you know, it's not like we found 20 bucks in our pocket.

We already we're accounting for it.

So the uh the six and a half million or whatever that you expect to collect this year, is that all commercial then?

Um no no.

Most of that is um is uh residential.

It is residential.

Okay, let me see.

It is sixty-nine commercial in that number, so roughly seventy commercial.

And now I don't know if that all collects this year, because you know the plans are right now we're kind of we're allowing 18 months on a residential and 12 months on a commercial.

So some of it mo I mean we're gonna collect a good amount of it this year, but it just kind of depends on when their payment plan expires.

Okay.

And then when you say commercial, do you mean like are any multifamily rental units included in that, or is that strictly on the residential side?

They are considered commercial.

I don't know if any of those are included in these in these 70.

Okay.

Um I could look and and see if you wanted that by referral or yeah, I uh I I think we will ask for referral on that because I I guess the concern there is that um somebody's water could be turned off and it's not their fault.

You know, it could be that the the landlord isn't paying the bill.

Yep, and and I will say in the plan that we're working on for our you know, our full roll out of of the turnoffs, we are accounting for process for multi-unit.

Um that that's one of the things there, you know, it's we're being very deliberate about that.

Okay, thank you very much thank you, Vice Chair.

Uh councilperson Gaddis.

Thank you.

And thank you for your hard work.

Uh when you said there are sixty nine commercial businesses that are on the payment plan list.

Does that include industrial in that definition?

It would, yes.

Is there a way by referral we get a list of all sixty-nine?

Uh just the names of them.

Okay, we can do that.

And zip code would be helpful.

We can do that, yes.

I appreciate that.

And then um when I look, uh I I love to compare um two one-one data to our data.

And um, they have that I don't I don't know if we if you guys utilize their data as well.

They have a utilities for when people call in looking for help for utilities.

And um do you share information with them so as uh people are calling for help and they reach out to 211 in the Toledo area, they can give them you know links to our payment plans, links to the help that we have.

Um I will have to do that by referral.

I'm not sure if we do.

I know that um Commissioner Geronimo um has a pretty significant um plan for outreach, and I know that our outreach coordinate coordinator um Cynthia Wilkes, you know, she she works to connect people to resources when they call in.

Um but whether they do two one one specific, I will we'll have to look at that.

Okay.

I appreciate that.

Yeah, it looks like last year there were uh in Lucas County, and that you know, I know there's other uh uh other cities in there, but they had about a thousand requests.

So even if a portion of that's us, that's a portion of people that maybe are desperate and don't know to reach out to the city.

So I think that that might be really important.

Okay.

With that, thank you.

Thank you, Chair.

Thank you, Councilperson.

Uh next is uh councilwoman Jones.

Thank you, Chair.

Um, my question is regarding the um delinquent businesses.

So do you often do like a uh cross-reference to maybe a business?

Well, I don't know if it's like a business registry or uh a list of businesses that have closed, so that will tie to when you would have to cut off the water or just to avoid you're not gonna get the the money back, so it's you know, kind of like wasting resources if you don't have that list to ref refer to.

So is that something in place?

Um that that is not in place.

Typically, you know, every everything is run through the SAP system for us.

So when we know we have a different level, so level 10 is when somebody is past due and they get a reminder, and you know, at level um 30, they get a notice, hey, you're past due and you're subject to shut off.

Level 40 is a turn off.

So we we run through that way, but usually we don't have any software system that cross-references that or people who who look at that.

Um it's all automated in our system.

Um but you know, once we do have them at the 40 where they're they're gonna be disconnected and we're we're gonna do a hanger, um, we go look at each business individually and check when they made their last payment.

Uh, we check to make sure they didn't get current between the time that you know we said, hey, you are subject to disconnection, and we're gonna send an actual work order out to turn them off.

Um it's something we could look at.

I just I don't know how or where we'd exactly have to be able to fit that in the process.

But you know, usually we find out a business is vacant or they're gonna be closing because they've either a called us and done a turn off so they don't accumulate more bill, or in in the case of I think some of these people were just didn't pay their bill and they vacated and um now we're struggling to collect.

Yeah, those are the the businesses I'm talking about.

Um like I don't know if it's something that is in existence, but I think that would be helpful um at least you know, as soon as they get a delinquency notice, you know, just check on whatever list, maybe the chamber has something.

I don't I don't know, some registry of business just to check to see if they're even in existence, and then as they keep either ignoring or you're not getting any, you know, any response, then that should send up some red flags like, oh, maybe we should check out this physical spot because you know some people leave and don't notify you.

So I think that will help um also in terms of just the funding so we don't keep running water to a place that's not even using it, thus trying to chase them down.

And we actually, and again, this is this is some of the benefits of the new system that as it's come online and we're starting to be able to reallocate resources because of some of the benefits of of efficiency in areas in in meter shop and so forth.

We're starting to look at processes, for example.

We get a report that says there's zero consumption.

So if your house normally does four CCF a month and we know, we know, we know, and all of a sudden there's a zero consumption.

We look at that.

And that you know, so there we're looking at processes for how we get more efficient with checking those out.

Um there are some things we can do in the office over the network, and then there are sometimes it requires a truck roll to send someone out to say, hey, is this vacant?

What's going on?

Is there something broken?

So we do have some resources that way too that um you know, as we go through the next year or two, you know, we want to start using the bells and whistles of our system.

You know, I'm really happy with the the efficiency of getting actual reads and being able to get bills out now.

But now we're now we're getting down to trying to be a more proactive utility and and go the direction you're talking about.

Okay, perfect.

Well, thank you very much.

Thank you, Chair.

Thank you, uh Dr.

Jones.

Um I have a couple follow-up questions.

So I want to make sure we got this right.

About 10 million uh 525,000 has been collected.

Uh 10.57.

10.57.

Okay, great.

All right.

And then uh was that your expectation looking at today from the 66 million that was originally owed.

Are you do you feel that that we that you met the expectation or is that low or is it high?

Um I think given I I think it's been high given the fact that we have not yet went into full turnoffs for residential.

Um we got good response from the companies that are active uh to pay us last year on on the commercial industrial side.

Um and there were certainly spikes in in times where people were enrolling in our payment plans um, you know, when when the media would hit and say, hey, the city is turning off.

Um I think to have 4,000 plans, I mean that's you're you're talking um somewhere about three percent of our customer base is on a plan right now or a little more.

So I I think for the way we have have rolled the program out, we've gotten a very good result.

Um and I I hope that as we continue to build out our efforts to collect, I'm hoping that you know we're gonna see even more improvement.

But for for what we've done, I think it's been a good result.

Okay.

All right.

And then with how much do you have any idea how much you might collect during this year, 2026?

Is it too early to tell?

I mean, I I would expect that we would probably still remain in that you know 10 million range.

Um, you know, uh this data was only from May to the end of last year, so there's four months missing, but we also collected on a large large industrial balances that kicked that up.

So, you know, I I would project that it's it's possible to still collect around 10 million, and some of that will depend on how many people are one-time payers paying off their balance, or you know, how many of them go to an 18-month payment plan.

Okay.

So maybe an additional ten million on top of the 10 uh well I think well, I mean, I I think grand total will come to maybe 20-ish million, but I think we'll collect maybe in total about 10 million of the past due.

And how how if you know, how does that stack up against other Ohio cities, Cincinnati, Columbus, Dayton as an example?

You know, that that's something we can research.

Um I don't have their collectibility rates.

Um I you know, I I talked to a guy from from Detroit area, and again, he you know, he said he worked at you know, he was a guy who worked in the finance area, but I don't know how accurate this is.

I thought they were somewhere around you know 40 percent non-collectible.

So in certain cities, it it just varies.

But we we could research that and see if we can get collectability rates from some of our peers here in Ohio.

I'm asking that because there was a Toledo Blade article a few months ago that basically said Toledo had the highest amount of unpaid water bills, DPU bills compared to Cincinnati, Columbus.

I don't have the article in front of me, but as I recall, we were we were leading the state in uncollected.

Yeah, I remember I remember that article, and one of the things that we're gonna we're gonna do to to look at that.

So right near, I would say it was probably around um 2014, 2015, um Department of Public Utilities adopted a write-off policy, and using our write-off policy and then the um you know the the debt schedule for collectability that comes from the Department of Finance, we use those to determine you know how much is is gonna be uncollectible and how much is due to us past due.

Um so one of the things we're setting up is so you know, RAF Tell us, um they they're an advisor and they uh for you know utilities and they have done our uh water or our sewer model and they're doing our water model as far as rates.

And then we have PFM, and I think most of you are familiar with Bethany Pugh who's come and presented.

Um between those two entities and our finance section, um, we're looking this year to put together um a different look at what we should be doing for a um write-off plan.

And so I th we think five years based on talking to them is too long.

So for example, maybe Cincinnati has a two-year write-off plan for for their um past due balances.

And so comparatively, they may if they were at the same five years as us, they may have ballooned past us.

We just don't know.

So some of some of how we look at our write-off policy um does affect us, but that's something we know that we want to be up to current and with the way utilities are are handling this today.

The other piece of that, even if we were to go from a five-year plan, let's say to a three-year or two-year write-off plan.

But essentially, because of the way we would have to offset those past due balances, it would probably take a couple years to transition into, let's say, a three or a two-year look.

You just wouldn't go from five to three in, you know, in in an instant.

But we are looking at that, and I think we'll probably have to, when we reach out for collectibility, see what their policies are too, because it would make a difference in comparing an apple to an apple.

Yeah, I I think it would serve as well if in your communications with other cities or size or larger, uh, seeing what they have done in their efforts to collect undelinquencies.

And you know, maybe maybe someone has a better idea.

Probably not, but I don't think it hurts to ask.

Yeah, well, and I I think one thing I I I kind of want to give us some credit for here in Toledo, you know, we've worked a lot on affordability, and the other piece of that is as part of that is our ability to give payment plans.

And it's my understanding that Columbus doesn't even do payment plan.

Um so you know, it's that's one of the things I think, you know, recognizing you know some of the needs of our customers and the community, you know, we try and be lenient with with getting people into plans, you know, as opposed to one-time collections and so forth.

So sometimes that slows the rate that we can collect, but it's afford it's more affordable, and our customers are able to you know true up with the city.

Right.

Thank you very much.

Uh Councilman Martinez.

Uh thank you, Mr.

Chair.

Just a quick question.

So I want to make sure I understand.

So the outstanding debt that we were showing is a culmination of how many years?

It's a five-year period.

Five years.

So that's $60 million over a five-year period.

Uh yes.

Okay.

And then so now we're looking at readjusting that to a shorter period potentially.

So you have a write-off policy, right?

Yes.

That's probably more in line with other municipalities.

And then we have payment plan.

Correct.

And then so I guess my last question is it seems like we're going in the right direction in terms of bringing ourselves in line to what modern municipalities are doing right now.

Um so on that bad debt, um, instead of writing off, do we have like a workout plan or maybe a percentage of payoff?

We do so there are times when when you get your water disconnected and you know, people can come do settlements with us.

We we work through that.

There's a process.

So you do have settlement plans.

We do have settlement.

That's what I was trying to allude to.

We have settlements.

Um at the same time, just because it's went past the five years, doesn't mean we haven't sent it to debt collection.

And you know, we're we're looking uh we're you know, we've been talking to law about looking at you know how we might be able to improve debt collections.

Um one of the things right now is our debt collections don't go against somebody's credit score.

And so the question is can that go against the credit score?

Should we put it against the credit score?

So there's some questions out there right now.

I mean, as you know, it's pretty easy with modern technology to see who's calling, and you're you're gonna just hit end when um you know if there's nobody impacting credit score, so it you know it can uh it can make it a little harder on the collection side.

But we we still go after collections even after five years.

Gotcha.

So then of that bad debt, do you have like a breakdown of residential versus industrial business?

Like what what does that look like?

Is it like 50-50?

Is it 25% residential, 75% business, 75% residential, 25% business?

So ballpark we have to do.

We don't we know.

But that that is that's not something we generally um have in our standard report.

Um I could look into seeing you know how well that could be created.

Um, you know, we I might be able to get us at least in an idea of a ballpark without it being exact.

I just I don't know the complexity of going into the system and trying to figure all that out.

But we could certainly get an idea of that that would be super helpful, just so we kind of can at least identify where some of the pinch points are for collections.

You know, it's one thing to go after a resident and you can turn off the water because they don't really have any other place to go.

It's another to go after a business who may be in a separate LLC or maybe you know flip their properties or whatever, because the water runs with the land, not the current owner, correct, or or the user, so to speak.

Um and I'd be curious in terms of what type of workout plans are available for landowners who had bad tenants that never paid that are now under, because at the end of the day, the landlord is still stuck with this bill that may or not be able to pay.

Now you have a dead property that they can't reactivate because they have an outstanding water bill that they can't get turned on.

So I I know these get a little bit into the weeds and complex, but we should really start thinking about uh, especially around our industrial and business areas, how do we reactivate these sites?

I don't know if it's a forgiveness or hey, let's restart Mr.

Landowner, you want to get this business back up and running, or you want to get someone in your space.

How do we have that conversation with the owners to be able to help them get their space occupied and not hold them accountable for bad actors that they may have rented to.

Now, don't get me wrong, there's probably some bad actors just not paying the water bill.

Not and we we shouldn't um uh disregard that, but I I think if we're looking at from a business standpoint to be a little bit more business friendly and not create uh dead properties, we we should try to have some sort of strategy about how do we help landowners and even multifamily tenants who may be victims of abuse of from their tenants because of retribution or what have you.

Um as a landlord, I've seen some crazy things with water because that's the way they can get back at the landlord for being evicted or what have you.

So and vice versa.

I mean, it goes two ways.

So I just want to make sure that we're being conscientious.

Um not punitive, but having accountability, but to a certain degree.

It's so for for us we do talk about that.

I can't say that we have come up with great solutions, and I think that's probably industry-wide.

Um as the utility, it's very hard for us, even when there's you know an agreement between landlord and tenant agreement and so forth to get into like who's who's at fault, things like that.

So we we know it goes both ways.

We know it's it's not always a tenant, it's not always a landlord.

Um, but we do we do look at that, try and consider it.

I you know, and and it is it is in our thinking when when we're talking about residential or or apartment units.

Um we we are we are aware of it, and then I think I think you probably know there's some legislation that state, I don't know where it's ended up, but last year it was circulating a lot around to you know address some of this, which would have impact our ability to collect, but um we're still waiting to see what happens with some of that.

At the state level?

Yes.

Oh, yeah, yeah, yeah, yeah.

Got it.

Okay.

All right, thank you.

Thank you.

Thank you, Councilman.

Um, I I just want to follow up.

So in your judgment, with collections being what they are, and perhaps 20 million will be collected uh by the end of this year, what effect will that have on sewer rates?

Um it really won't affect sewer rates because you know, everything that we collect, we've already considered revenue.

Um so, you know, again, we build in when when we look at our our rate model, we say there's a certain percent that we don't expect to collect.

Um, and and that's part of making sure you know we we still can collect enough revenue knowing that we're not gonna get 100 percent of of that revenue.

But once we book that as revenue on you know in the accounting system, you know, that there is you know that that actual collected revenue or uh billed revenue, you know, we've already accounted for the money that comes short.

So if if we booked um, you know 20 million in revenue in the first quarter, and we collected 18 million of that in actual cash receipts, um you know, it's still considered that we met the revenue projection.

And um, so when we find when we collect money that was uncollectible or or didn't get paid on time or whatever, and we go get back past due money, we've already accounted for it.

So it doesn't really give us any extra cash boost.

So you know, for us it's trying to get collections in line with what our you know collectability rate we assumed in the rate model is.

You know, you know, we want to get those cash receipts as close to um you know revenue per revenue build as we possibly can.

And you know, like I said, right now we predict about three percent.

So we're trying to kick that up, you know, another percent percent and a half at a minimum, so that way we're within what we're projecting, and you know, if we're not able to do that the next time we go for rates, we might have to say, well, we're gonna have to consider four percent on collectible.

And then, you know, our our team would work with RAF Tell us to put that in that rate model and say, well, what does that mean to the rate?

Is it mean instead of going up three, it goes up 3.2 or 3.1.

You know, that that would depend on the factors in the model.

Okay.

I mean, as you know, and we've had numerous discussions on this, we still have many customers that are very upset about the elimination of winter averaging on their sewer bill.

And clearly um during the winter months, we haven't had many complaints, but you know what's gonna happen once spring arrives and people are watering their lawns and filling their pools.

Uh and I can tell you that people continually uh have mentioned to me that they're hopeful something can be done.

Um I've asked the law department uh for an opinion probably two months ago uh regarding the legality of having uh the city pay for a um separate meter, separate irrigation system going in, like people watering their lawns and filling their pools.

Uh I haven't gotten that answer back yet.

Apparently it's a very complex issue that's taking probably about two months, at least two months I asked for this in writing.

I've had discussions with the law director, and I'm I'm as many of you know, I am an e eternal optimist.

So I'm at hopefully, hopefully uh a miracle will occur and we'll get an opinion from the law department as to whether we can pay for the installation of that type of system and then charge customers each month over a twelve month period.

Columbia Gas uh ha has offered this uh I know Toledo Edison is offered that on post lamps.

So I'm hopeful that we'll get an answer from the law department.

Um because we need to address this, and that may be somewhat of a solution to to good people that are paying their bills.

Ninety-five and a half percent of our customers are paying their bills on time, and I think we we owe it to the to these folks to get an answer so they can plan accordingly.

Um most recently I had a a doctor's office on Sylvania Avenue contact me because again, they only have a automatic sprinkler system in the front yard of their office.

Um that's it.

They don't have in the back is a parking lot.

And you know, the other thing that we're hearing is, you know, um when we water or when we fill the pool, the water is not going in the sewer.

Why are we being charged extra for sewers?

Uh and then of course the other concern I'm getting from people is that uh outside of the city of Toledo, people um are still enjoying the uh winter averaging rates.

Uh Sylvania, Ottawa Hills and so forth, Maumee.

Um but citizens of Toledo who by the way built the system, built the water plant, invested lots of money in those facilities that we have so that we can be compliant with the EPA.

You know, they're saying, hey, you know, how about cutting us some slack?

So I just bring that up as a reminder.

Uh I uh am eternally optimistic that someday I'll get an opinion from the law department, but I know it's been at least two months.

Okay, now I'll uh I'll I'll make sure I uh relay your comments to the law.

Thank you.

Uh thank you very much.

Any other questions from members of council?

Okay.

Um we appreciate your time here today, uh, director and director, thank you very much.

Thank you.

Okay.

Thank you.

Next we'll hear from the finance department.

Good afternoon.

Thank you.

Good afternoon, Chairman Sarantu, Vice Chairman Driscoll, uh, members of the committee.

Um Melanie Campbell here today with um the team to present our uh December uh finance reports.

Uh joining me at the table, we have Commissioner Tom Buckley, Commissioner John Zavisha, and Commissioner Natalie Bronoff from purchasing.

Um before we dig dig into the December reports, I just want to start by saying that although we're reporting on December for us, um the year is hardly closed.

We're going through our year-end processes right now, which includes um collections on income tax that will happen um through the end of February, as well as um accruals, um invoices are processed against 2025, um, and then we have actuarial adjustments.

So I say that to say that as we're looking at numbers here today, they will change as those processes occur.

Um and we head into the audit later this year.

Um but we're happy today to give you an update on where we're at.

And with that, I will turn it over to Commissioner Zavisha for an update on income tax.

Good afternoon, Commissioner.

For the month of December, uh withholding was down just shy of a million dollars.

But like I'd mentioned last month, um, this is some year, you know, some months you have five Fridays, some months you have four and stuff.

So the strength of November then is offset by December.

So I really look at those numbers to sort of take November and December together, combine those two months, we're up about 2.3 million or seven percent.

Um so that does now uh push us to just over three point one percent uh for the year in the withholding category or five point four million.

So um took us a little bit more the second half of the year to get these numbers going, but we're uh definitely where we want the withholding number to be.

Uh business net profits for the month up 275,000, just shy of 10 percent.

Um just a uh reminder on that one business not profits, your fourth quarter estimate payment is made December 15th, so this is a sort of an important month for us.

Um, but our Ohio opt-in payments won't come in until the 13th period.

Um so in this category, although we're up four million or fifteen percent, we do already know in the 13th period um the numbers will be down.

We've we had a very successful 2023, 2024 um where we got some strong payments from the opt-in program in the 13th period.

We already know these aren't coming in this year.

Um some of them we just simply saw earlier in the year.

As you can see, there were three different months where our collections were up over a million dollars um for that individual month.

So although business net profits shows currently as a positive number, it will actually end the year in a negative number.

Um in the individual category, those estimate payments weren't due till January 15th, so we'll see those numbers in the 13th period.

Um, but we were up 153,000 for the month, um, putting us up 5.8 million for the year.

So on a year-to-year basis, 24 to 25, we actually show currently being up 10.1 million or 4.8 percent.

Um I'm gonna continue on to page three then because um on this page you can better see where um the 13th period number actuals for 23 and 24, 28 million, 30 million.

This year we were only projecting about 21.

Um we'll probably come in close to that.

We're hoping to stay within one percent of this 238 number that was the budget.

Um so we'll keep an eye on that.

Projected um refunds was six million.

We're currently at four point eight.

Same thing, we should come pretty close to that six million dollar once our thirteenth period um calculations are done, which obviously run from January 1st till February 28th.

And I am open for any questions on these two pages.

Any questions from members of council?

Okay.

Next.

I'll move on to page four of the report, um, which is an update on general fund revenues.

Um you'll see overall uh collections are at 95.2 percent of the total.

Um as you look through the report, um, Commissioner Zavisha noted we'll still be collecting income taxes through the end of February and expect that number to move closer to the budget estimate as we close out the year.

Uh property taxes and licenses and permits, um, we've met our budget estimate on property taxes for licenses and permits.

We're at 93 percent.

I don't expect that as we close out the year we'll see much movement um in final revenues in that category.

Um as you look at intergovernmental though, um, we do have uh one casino quarterly payment that will still come in.

Um we expect we'll see that in February.

Um and with that last quarter's payment, we should be um hopefully right on, if not maybe a little ahead of budget there.

Um in the category of charges for services.

Um overall we're at 95 percent, as we've seen um throughout the year that the revenues in the EMS and the BLS category have overall helped our charges for services uh totals.

Um we do have um some quarterly payments that will come in with the cable franchise fees though there in that category.

Um investment earnings at 5.8 million.

We've actually exceeded that budget estimate at this point in the year.

And then fines and forfeitures at 97 percent.

Um again, I don't expect we'll see much movement in that category, so we're right right around that 2.8 million that we had projected.

Um in the other revenue category, uh, we've touched on this, I think, in previous uh finance committees.

Um we did have some settlement proceeds that came in related to uh PFAS litigation, and that's what's driving that uh revenue um collection uh through December.

And then lastly, you'll see um and the transfers, um 24 million has been transferred in from CIP.

Um and then the other transfers come in from the TOLA and ARPA, um, which are just at about that 5.5, 5.6 million dollar budget estimate.

Be happy to take any questions.

Uh councilwoman uh Gaddis.

Thank you.

Um where uh it says licenses and permits for group B.

We've we brought in a lot more than we uh accounted for.

It's up six points.

Is there a reason why it's higher than what you guys projected?

Um the category of group B are building electrical license renewals.

So we'd have to check with um building inspection and see if there's just more people that have gotten those licenses, um, or if timing-wise, people have renewed them earlier this year than they have in prior years, they're due around the end of the year, I believe.

Okay.

Is there um and I can I'll do this by way of referral, but can we get a list of what each permit license fees, group A and B, what falls under those categories?

Yes, we can send that.

Okay, thank you.

Thank you, Chair.

Thank you, Councilperson.

Um Councilman Martinez.

Thank you, Mr.

Chair.

Just a quick question on other fees charges.

Uh $3.8 million, and we're at 3.1.

What exactly is that?

There is a year-end entry that we'll do related to a cost allocation that's charged to the road improvement fund for the cost of collection that tax does.

And so that's something that'll be completed at year end.

It's budgeted at about 400,000.

Great.

Thank you for the clarification.

Thank you, Councilman.

Um just a follow-up on the uh EMS and BLS transport.

Uh do you expect additional revenue to be coming in that would it be that would apply to 2025?

Um I would have to double check if there is any, I think it would be minimal.

Okay.

Yeah.

I'm just, you know, because again, we took over ALS for the county, and I'm just wondering if those numbers uh are reflecting that.

But what you're saying essentially they do reflect that.

Okay, thank you.

Uh councilman and vice chair Briscoe.

Thank you, Chair.

So, Director Campbell, at what point in the year do we do the the transfer in front of the budget stabilization fund?

We we actually don't make an entry into the system.

It's as we close out the year and the audits finalized.

It's really, you know, how did the final revenues look compared to the final expenditures?

And then as we report it in our uh financial statements, you'll see that use of fund balance.

Okay.

And so it's projected as best you know, to be about what we thought it would be.

Yes.

Which is like around 23.

Um closer to like 30 plus million.

Oh, in the 25th, yeah, that's right.

In the 24 budget.

Yeah, okay.

Or in the 25 budget.

Excuse me.

Okay, thank you.

Okay.

All right.

Speaking of audit, uh, how many findings did we have uh in last year's audit?

The audit was completed.

There was one finding.

One finding, right.

Uh which is very good.

Yes, and it is posted on the city's website as well, though.

It was not a major finding.

It was uh essentially an accounting issue and it was considered more of a minor issue.

Am I correct on that?

Yes, some um entries that we had to make after we filed um our basic financial statements with Hinkle, but before our final um ACFAR was presented.

Yes.

Great.

Okay.

Thank you.

Uh proceed to the next item.

Thank you.

Um moving on to the expenditure pages on five and six, um, you'll see the general fund breakdown by category and by cost center.

Um overall um at 96.6 percent of the budget.

Um you'll see you know positive variances overall in labor as well as in services and supplies.

Um we saw positive variances in the non-labour categories through most of the year.

Um and as we close out the year, I expect we will have some savings overall um compared to budget in those categories.

Um they will be impacted though, you know, by our final accruals, close out of internal service funds.

So we will see some change within those numbers.

Um the labor side um the biggest piece we continue to watch as we finalize everything this year is the health care costs.

Um you'll see overall um employment tax and medical.

We did amend the budget, it's running slightly under, but we will have um final actuarial adjustments and closeouts um that could impact that medical number.

Okay.

Um is there a specific uh attribution to the increase in police overtime?

It went over budget.

Combination of two things.

The first would be um the retro that happened once their contracts were finalized, which would have covered 24 and then 25, um, as well as some special events that would have happened during 2025.

Okay, great.

Thank you.

All right.

The next page is a breakdown by cost center.

Um you'll see again, like we've um seen throughout the year, several areas where we have trended under budget.

Um facility operations area is ahead of budget.

That's chargebacks that happen for work done on community centers and at the health department.

Um so that one did exceed um the budget estimate, although we will have you know final reconciliation and close out of all of those um costs.

Although we will have, you know, final reconciliation and close out of all of those costs.

So we we could see some change in that number as we close out the year.

Okay.

Pages seven and eight uh summarize the all funds.

Um and again, we will see movement in these numbers.

There's several areas well but we'll be making year-end debt entries as well as transfers for debt and other um charges that happen throughout the year.

Okay.

I don't think we've heard anything on that.

Do you know anything about that?

I will have to double check on that one.

Yes, I'm aware of the application, but I cannot recall if it was received or not.

Okay.

That would be from the State of Ohio.

So that would be great news if we could we could get that.

That would save us a considerable amount of money.

Okay, is there anything else you want to present?

Um I just wanted to mention that um we submitted the um CIP report, um, which shows all the projects through the end of December as well as the ARPA update that we typically give um from when the program started through the end of December.

Um the report reflects on the ARPA side.

There's 13 million uh remaining to spend by the deadline of 1231-26.

Um we did include an update.

We asked each department to provide an update on their spending plan just to make sure that they're on track to spend all those dollars by the end of that time frame that was in the back of the report.

Um and we just also want to mention that um we have our quarterly ARPA report due, which will be submitted at the end of this month.

That's a requirement for um U.S.

Treasury as part of the ARPA guidelines.

And be happy to take any questions.

Regarding the uh issue that uh several council members have discussed and asked about the interest that we earned on the ARPA monies.

Um my understanding is it's a that it's approximately 176,000 uh and that that would that was deposited into the general fund.

Am I correct on that?

We we've earned when we built the budget for 2026.

Um we had done a calculation of interest at that point projected that could be used for the general fund.

It was about a million dollars.

So we did program that into the 2026 budget to be transferred in and support general fund operations.

Um since that time, making that budget estimate back in October, um, we took a look at how year-end um looked for interest earnings in ARPA, and there was an additional approximately 176,000 that um could be programmed in to transfer it to the general.

I should have made that clear, but I'm glad you clarified that.

Okay, and so that 176 million goes into the general fund, and then um we go from there.

Um it could be right now.

We've only in the budget proposed a million.

At the time we were doing the budget, it was about a million.

Because as you and I have spoken, we have uh several council amendments where um uh it has been stated that they'd like to get that out of the extra interest that we earned 176,000 dollars.

So I just bring that up to clarify that.

Okay.

Okay, great.

Uh Vice Chair Driscoll.

Thank you, Chair.

On that note, uh in our in the budget, though, we show that we're putting it into the general fund, the ARPA interest, correct?

The investment earnings.

We do, a million dollars.

So I don't I mean, I don't think the amendments can necessarily say that there's spending from the ARPA investment if that money is essentially already obligated.

Is that correct?

I mean, really, we're taking from the range.

That million dollars would be obligated.

The additional hundred and I just looked at my estimate.

It's 172,000.

Okay.

Umce we did the budget estimate, that number has gone up by roughly 172,000.

So that would be a big amount that's not programmed.

That's not obligated, but I think the amendments that use that as the source are well over 172,000.

I don't know if you've seen the list, but um I just you know, from an accounting standpoint, it's coming out of the ready day fund at the end of the day.

Um I appreciate this report, and I know that it wasn't um you don't know what I'm holding up.

Uh this is the this is the ARPA expenditure update.

Uh I appreciate this report.

Thanks for getting it in time.

Some of these I just think are insufficient answers, and I I think we'll probably need to dig down a little further um in terms of referral here.

We just there's an LED, uh, there's a street lighting thing on the current agenda.

And we've got $8,000.

It says the product remaining amount is currently being programmed for final expenditure.

I know you think that about all of these things, but this isn't really an explanation.

And this again, this is not your fault because it's not the finance departments, but uh we need a little further explanation than oh, yes, we're going to spend the money, which you know obviously you think you're gonna spend all this money down.

Um so I just have a few questions about some of those.

I think I'm just gonna um it's tricky because that uh it's not necessarily your responsibility, the finance department's responsibility to respond to these referrals.

But um yeah, I f I found some of these I would encourage everybody on council to take a look at these, but I found some of them to be pretty insufficient in terms of the detail.

Uh this is that at the end of the uh this the ARPA summary.

Normally we just get this one pager from finance department, but at yeah.

But I I had submitted a referral just to get a detailed explanation of how we were going to spend the rest of the ARPA dollars.

And some of these well, they lack they lack sufficient detail in my opinion, but um that's not really your that's not like I said, it's not the finance department's responsibility, but we do need an answer on some of these.

Um that I think we don't, you know, I don't I don't know.

So like the medical debt forgiveness is an example.

You said we have the final invoice.

Is that invoice for 147,000 or 147,779 dollars?

Yes, it would expend for that one I can answer councilman Dr.

It would expend the entire balance.

Got it.

Okay, so there's just a few examples like that that I think there's still a little work to do on this, but I appreciate what you've compiled so far.

Thank you.

Okay.

Um, I would just add to that uh our city auditor, Mr.

Ravalski, um did do uh some research on if there were any uh unspent ARPA dollars for various projects.

If there was $50,000 uh from the YMCA project, for example, Wayman Palmer project.

And the research that the auditor found was essentially that why don't you explain it?

Sure.

Um so I was looking at the I believe the Department of Treasury, State and Local Fiscal Fiscal Recovery Fund Facts and Questions, and then that it goes over guidance on what could be reallocated if those funds weren't spent, or if a project you know weren't spent, maybe it came in under budget, or um, for whatever reason they couldn't be spent for that project, or if for whatever reason the original purpose uh was found to not be aligned with those uh ARPA guidelines, but it looks like to me at least that the funds would need to be spent, they could be reallocated towards something that was obligated as of the obligation date.

So um I'm sure you know you guys are aware as you're going forward, but that that's a good source of guidance.

Okay.

Thank you for that explanation.

Uh council person guess.

Thank you.

Um and thank you for the report.

I I would like to uh bring forth um to present to chair that as an oversight committee, perhaps we could host um the categories, the people that were in charge of the um of these programs, if we could host a special meeting or have it in our monthly meetings to uh be able to ask questions.

Um councilwoman Dr.

Jones and I were invited to a meeting this month with representative capture um about the the um ECDI um Erie Street Market that we put half a million dollars for.

And and I think the complex nature of this is ECDI was defunded, then uh SIFT was defunded, and when we built these projects, we built these projects uh with the SMART goals and the amplification.

So, how are we taking uh for example the Airy Street Market?

We put half a million in.

Uh representative Capture was able to put 1.1 million dollars in.

And she had a meeting with us saying, hey, this money has to be spent in three weeks.

And we were unaware of um ECDI not being funded.

And so the implications of some of this ARPA funding and the tie-ins with other opportunities.

I think as the countdown is coming and things are changing with the new administration at the federal level.

So I'm just presenting that I idea to uh this committee that perhaps we could um invite and then have detailed five minute presentations or whatever.

Um thank you, Chair.

No, I thank you, Councilperson.

I think that's a great idea.

And why don't uh Dr.

Jones and you and I get together and make sure that we've got the individuals that need to be here, and uh also if the uh finance uh director can also be here for that to answer any other questions.

I think it'd be great to have a progress report and to see exactly what was done and uh if there were any issues that came up that we need to be aware of uh and also the successes.

So I'm absolutely in agreement.

So let's talk about it.

We'll schedule something in the next in the next month.

No reason we can't.

Okay.

Thank you very much for that suggestion of Dr.

Jones and uh Councilperson Gaddis.

All right.

Uh Councilman Driscoll, Vice Chair.

Thanks again, uh Chair.

Yeah, I think SIF the money allocated for CIF probably the most obvious example because in this explanation we've been given from the administration says uh the department remains confident that an eligible project will be identified.

So uh so maybe that's good, maybe it's not, but I would recommend very you know the ARPA plan initially was a collaborative process between council and the administration.

The amendment that we did two almost two years ago, a year and a half ago, was a collaborative process between the council and administration.

If we don't know what this money is going to be spent on, and six or seven or eight months from now, the administration comes to the council with a plan that we don't agree with, we could be very well at risk of losing the dollars.

And I think you know, if there is any money to be reallocated, insofar as we can, according to the guidelines that um that our auditor has briefed us on.

You know, we we should again this is not a finance department thing necessarily, but we should we should engage in another round of a collaborative process between council and the administration if it if we do have to reallocate any of this money.

Thank you.

Thank you, Vice Chair.

Uh anything else?

Um just one item to mention because I've been in a couple conversations on the one you mentioned specifically, Councilman Driscoll with the law department, and in that case, a lot of the conversation has surrounded um that it's been obligated and the obligation needs to stay the same for something in that original attent of small business assistance and food.

Um we've had those conversations, and but I will share your feedback as well with Director Salvorst.

Nothing further from finance.

Nothing further, okay.

Uh uh uh Commissioner, the stacks unit uh proceeding according to plan at this point.

Yes.

Um like I mentioned in earlier meetings, um, our projected budget for them was six million this year, and they ended December at 6.2 million.

Okay, great.

Second strongest year in 25 years of the program.

Okay.

All right.

Any other questions from members?

Uh is there anyone in the audience who care to address the finance committee while the finance department is here?

Seeing none, we'll proceed to the city auditors report.

Thank you very much.

Good afternoon, John Ravalsky, City Auditor.

I'll provide a quick monthly update.

I've been working on investments reviews, which uh that'll that's in progress and should be released shortly.

Also, the grass cutting audit is underway, and I'm reviewing support provided by the administration.

I've also been assisting council with various budget questions and advising there.

Uh let me know if you have any questions.

Thank you.

Okay, any questions for the auditor?

Seeing none.

Uh is there any other business before the committee?

Seeing no other business, we stand adjourned.