Budget Workshop 2023 Day 1 Transcript

Clockwise from top left: Mayor Cole Stanley, Assistant City Manager Laura Storrs, City Manager Jared Miller, Councilman Place 3 Tom Scherlen/Photos and graphic by Noah Dawson

The following is an automatically generated transcript of the City of Amarillo Budget Workshop held on July 25th, 2023. Please note that, as this transcript was automatically generated, it may not be 100% accurate.

Um, good morning, we're going to go ahead and call our meeting to order, we have a few announcements here from the city assistant manager, or, the city manager before we start. Alright, so for everyone. Citizens guest staff council. We've got bathrooms over here behind me. We've also got an actors out in concourse that are open. Those with atmosphere to do. So, we'll keep rolling unless you need us to stand by, for example.

We've got food coming from lunch this afternoon. And we're playing together here for about 1, 30 or so.

That's it. Yeah, thank you. So Making a little one in here with that sounds different of the window. It's still pretty good technology. Um, sometimes.

Stand behind chair, walk around whatever. Anticipating on having a very productive. Three days. Hopefully, we're not looking at that friday option. So we will be diligent and working towards our goal or making sure that we have a good work in budget that we can all get behind. Uh, before we keep going today, I'm gonna go ahead and open myself with prayer.

And then after the prayer, we'll turn loose with Study, you miss that. Big book was talking about. Probably doesn't thank you for a wonderful day and thank you for each other. And thank you for how you orchestrated everything together. We thank you to your holy spirit, just falls in this room and falls on us and brings with them and discernment to us.

Uses the opportunity to not only listen to pay attention. Here and see what you're showing us. And Direction that you have for our city. We thank you for our staff and thank you for those hard workers that are putting an hours and hours. Of preparation. And planning and design for what you want to do here in the city.

We pray that our priorities will align with rules. We pray that. Our will be your will and that you would show us the things that be not only want, but the things that you need We would ask me, you would truly bless us with the wisdom and will discernment and with knowledge as we study this to stay focused and continue taking the right steps and what's best for the entire organization of what's best for the community and what's best for the panhandle of the taxes and ultimately your kingdom will be strive to serve each and every day.

So i pray that you would bless us with energy and focus here today and just allow your whole experience to have your way here. As we work through this book in jesus. All right, with that.

All right, and slow of scores. Take this on a little adventure. All right. So thank you mayor. Thank you city council. First off, just really want to say how much we appreciate y'all's time over the next few days. This is a very large document to go through. Um this has taken months and months and months of preparation.

So i want to say first and foremost a big thank you to our budget team. So i want to introduce them real quick behind me. I have our finance inspector map posted Then we also have nicole density as the RW Finance Director. Um, that kind of behind you all here.

We have our treasure. Um, and he is recent to the position. This is Justin black stock, and then we have our, one of our budget analysts matcha here, and he is there, as he's been putting in lots of hours. Um, in a quick side note, i want to say a big thank you to Mongoly as well.

She's one of our budget analysts and i'm not sure if she is actually delivered her child, but if not, she might be delivering a child this week. Sometimes soon. So she has been working diligently honest, as well. So, um, big thank you to them also want to thank all of our department directors and their staff.

And also the assistance you're sitting manager and Deputy City manager. This takes a lot of time and effort to go through. So with that today, this morning what we're looking at is we're going to go over this powerpoint that I put in your spot. We will have another powerpoint after this, to kind of go through property taxes.

I am going to put a big disclaimer out on property taxes because we received our certified values from grad on. It was thursday evening last week, so i have run some preliminary calculations but i am waiting to get the final capital calculations back from Randall County. So i will tell you right now, what's in this book will change and so This was just a best estimate, we could come up with, with the information we had at the time.

It was actually based off estimated values because we had to file on Wednesday before we received the certified value. So, this book will continue to evolve as we get calculations in on property, taxes. And as you get feedback from you all this week, Um, i would say the the biggest thing that i'm hoping to achieve from all of this is get In questions that you all have answered to help you, all better understand how this budget is formed and what all lives inside this budget and how the various elements that fund are operations.

And then the operations that we execute here in the city, how all of that works. So we're going to have a lot of people coming in and out over the next few days. Today's going to be a lot higher level and then we're looking to probably kick off tomorrow morning.

First thing with our public safety groups. Um, and go through those. We are also then we'll kind of just go in the order of the book, but we're looking at this point tentatively planning on having parks here. First, things, Thursday morning, those are kind of, the only ones, they're bigger groups that we were kind of trying to earmark specific times, but we will take in everything in a different order.

If you all want to will kind of go at And we'll go ahead as fast food pieces, we can to get through this, but please stop me at any point if you all have questions, okay? Um, so with that But, First thing i wanted to go over with you guys at your place.

You all got a single page here. If you'll just look at into the front of your budget book, we've already changed it on line. I had a number and here that was backwards and so i had a transition. So we just swapped this out, this will change again. This tax rate is a huge estimation.

At this point, we do know that the tax rate that you all could look to a thought. Um, that is does not. Forces to go to an election, it will be lower than the current years tax rate of 40 cents and Some change. But at this point it this is all just an estimation so i'll go through that with you guys once we get into the property tax section but i wanted to explain that little that page to you all it's also been changed online.

So with that are there questions i can answer before? Get started. Otherwise we're going to just jump straight into presentations. Okay, okay. All right. So let's talk first about some highlights on this budget. Um, and if there's numbers of the community here, that would like a copy of this presentation.

If you guys will, let us know, i think we try to get one to each of you, but if you need a copy of the presentation, please let us know. Um, so here is just some highlights. Um, The way the state requires us to work through a budget is there's very specific deadlines that we have to meet in order to meet the schedule for accruing a budget in approving the property tax rate.

So we are required to file a balance budget sets according to state law. And so what we did is we worked with our departments to formulate A version of a budget that is balanced. That means the state law requirements. And then now we'll kind of go through that with you guys and then we can make changes as you all see this and then we will update this information from there.

So i know that you all have not had an opportunity to put much input into this yet, but this is basically coming from the departments from city managers office. Um, Kind of some ideas into recommendations on a budget and we will go from there. So, the first thing that we looked to address through this budget is additional resources for our public safety areas.

So big areas, we were kind of focused on with police fire animal management and welfare in our emergency communications which is our 911 group. So we were looking to enhance public safety. That was an area that we heard from. You all is a focus as we walk forward through your terms.

The next item that we We did, is we continued putting funding towards capital projects and streets. Um, i know that certain areas are not at the level needed. From a full maintenance and replacement standpoint, but we did put additional resources in this area and we will cover that as we walk through this budget.

On other things that were addressed in this budget is, as, you know, there's continuing to be rising costs in commodities materials supplies construction, also, attracting and retaining personnel, insurance, saw big increase this year, as well. And so, those items are incorporated in to this budget. We also put in a overall four percent raised and an annually buyback program for all employees and that is tied to the emerald.

Police officers association meeting confer agreement. That was entered into a few years ago. Um, and so we look to To put that four percent that is in the agreement towards all personnel at the city. And then there's an annually buyback program that is available for anyone with 10 years or service or more that we have budgeted for the organization to utilize per the police officer meets in for arrangement.

We also continue to kind of funding for our long-terming paper, our police and fire and our discretionary retention pay for our civilian employees discretionary retention. Pay is something that is approved by councils on an adjective basis. It works somewhat similar to a longevity pain. It is a small payment to our civilian employee based on your service.

Um, and so we have budgeted back in. At the same level as this current budget cycle, i think that whole the largest one is 250 dollars payment out. So with the most amount of services, it's a $250 payment. So we've done that the last few years, it's a very well received program from our employees actually of a lot of our departments take time to recognize their employees when they're distributing, those checks.

And it's a huge morale booster inside the organization. So, those are just some big high level highlights. Um, there's a lot more in here so we'll go on to the next slide and kind of look at your overall budget. This is a comparison from the current year approved budget to this snapshot of a proposed budget that we have filed with our sitting sectors.

So As you look down the list, we're going to go through, kind of what some of these items are Um, the big item you'll see down at the bottom. This is your expenditures. So on your total budget, you'll see in the current year, we were just under 491 million for our total approved budget and that's for everything the city does.

That's all of our general operations. It's all of our enterprise operations of water. Sewer airport drainage all of our grant funding. Everything is included in these numbers. Um, you'll see that as the budget is filed right now, we are looking at a total of 467 million 377 thousand and 51 dollars.

Again, this number will probably change a little bit as we get all of the final property tax calculations in and get some direction from you guys. So that is just a snapshot in time of what we're looking at. So let's start going through each one just row briefly. So your general fund operations, that is where most of your city services live that is where police and fire are at.

That's where streets are at, that's where parks are at. Um, Libraries, we've got traffic in there. Most of your city operations are done in your general fund. You'll see that we have an approved budget of just over 235 million this year and for the proposed budget we are looking at about 244.7 million and we're going to go over one details on that and kind of what makes those changes up the largest thing driving that change that increase is related to the four percent.

Raises that we have budgeted in for all personnel. The next item down is your water and sewer operating amounts again, this is an enterprise fund. It was fully funded with your fees that are associated with water and sewer. Um, so you'll see that the current year budget is 58.6 million.

And it is increasing to 69.4 million dollars. Um, we'll talk about how we are planning. We're putting to fund that a lot of the big changes in that are going to be related to Personnel changes. So, again, the raises insurance was in large, increase water, and sewer has a lot of facilities that they ensure.

And we just went through our property insurance renewal and we looked at a 35 percent increase on our premium. So it was a very large increase in there. Also, there's Additional dollars inside there for repairs and maintenance just to continue to serve our community in a good way through these operations.

We'll go through more of that. Later on this week. Capital improvement projects. Those are all of your construction projects. Um roll a thumb is its any kind of a project that has a value of 50, thousand dollars or more? Most of these are usually some sort of construction. Um, an example in the current years of food budget is as you know, we approved and do fire station, so that that lived inside this number.

So you'll see that we're actually trending down a little bit in this area. We went from 114.3 million down to 83 million dollars in this capital funding. Part of what was driving up. There's a couple of things driving that one of the big areas driving that is we did a debt issue that's for water and sewer.

And for drainage this year to do capital projects, Those, we do not have proposed in the budget for this upcoming year. So that's trending down some of your capital spending also. Um we did have dollars set up and funded through the arpa, the american recipe plan act that we're in the prior year that no longer live in the new year because those have been authorized and are being utilized at this point.

Um, The next item down is special revenue operations. That is where all of your grant dollars lives. So any of the grant funding that we get, and we'll go over those more detail later this week, that's where your community development, funding. That that's where your wig funding is at your public health funding's app.

This is also where your public improvement districts live. So your public improvement district have assessments that they've generate from the residents in their area and those dollars go right back into maintenance and any debt service that they have. And those dollars are inside this special revenue, operating line item, you'll see that we're trending down in that area as well.

From about 39.8 million down to 35.8 million, a big area bringing that down as well. Is some of the grant dollars that we have gotten over the past several years related to covin some of those have our starting to trend off. Also, some of the operating dollars from our american rescue plan.

Act are were inside this again. Those were approved in our being spent out, so that is what's trending down. Some of these numbers. Also some of our grant dollars just fluctuate year by your based on what the federal government or this or the state allocates to us. Um, at this point we're on your grants.

This what you have in your books is just our best estimate of what will receiving grant dollars, but those approvals are done as those grants are awarded and we will bring those separately throughout the fiscal year to to the council to approve or deny those grants as they come in.

So this is just a guess of what we think we're going to receive this year. These numbers will differ as we get the actual grant awards in, but we'll be brand those to you guys. Um, In council meetings before. Do you have access easily to the actuals that we spent in these categories this year?

Because this is just budget button, so this is budget to budget. Yes. So, do you have like what we actually spend the differences are budget but we don't. So we have a report that

We will get back to you guys. We have a report. Now it's actually through a portion of this year with projections. Yes. Yes. We, we will get that to you guys. Um, And that is on me because i told matt, i would work on that and i, i will get that done.

So yes, Yes. So this is basically looking at the top limit of spending to the top limit of spending, okay? As um, councilmember Simpson's mentioned we do at times trend lower. We this is what this is basically but not to exceed amounts in our budgets. If we exceed these amounts in total, then we looked to bring you all budget amendments throughout the year.

So we will get that report to you and i apologize. That one's on me completely. So we'll get you another one. That has a revised estimate number in there. Okay, so the next item down is your fleet services operations, okay? As i think we've talked each one of us, have we have a an internal service department that is our police operations.

That is where all of our vehicles and equipment. Live. They live inside one department that the department, essentially owns all of it and leases it out to the using departments. The using departments, pay two pieces into this fleet operating fund. One piece is for monthly. Maintenance and operation for the vehicles and equipments, that could be fuel.

That's oil, changes tires. Some of that kind of stuff is paid through that monthly, operating amount. And then the other side is a monthly fee or replacement of that for future replacement of that vehicle or that specific equipment. So we pull all that money together into this fleet, operating funds and they manage all of our flea equipment.

They also service all of our free equipment and our vehicles and then they are in charge of Replacing those as they come up as funding is available. As the usable life is, is used up on the people's or equipment. So on fleet, Um, you'll see that it is trending up.

It went from 12 and a half million up to just under 14 million. The big increase on that is just the continued, high fuel usage as well. Um, and There's also we've seen an increase in our auto parts. Inflationary pressures are continuing to thrive those prices up as well.

And and so there, those are two of the biggest things that are free operations, legalizes into fuel for all of our vehicles and equipment. And then also auto parts related to them. So you'll see an increase there as well. Okay, debt service. Um, you'll see in our approved budget, we have 68.3 million and we are trending down to 55.9 almost 56 million dollars.

So the large decrease in this, in our current year approved budget, there was an action done by council prior to the approval of the budget last year. And that was related to authorization for a debt, issuance related to the civic center. So because that authorization was in place, we budgeted the debt service.

Um but as you all know, we did not proceed forward with that debt issuance and so that amount for the six nerve pulled out of this year, so it is an amount going back to council members simpsons. Um, Statement, you will see the current year revised spending is going to be much lower than that 68 million that we advisable on this year.

If you have a question, So, the dead service was never. Run into whatever the additional monitor systems. That is correct. So we did not budget a capital project for it, and we also did not adjust property taxes or any other revenue source to address it. We just had it earmarked in case.

Um, we move forward that we knew we would have to make that debt service payment. So you are showing it and it's only though Yes, on the expense side, only Police council authoriz.

Get some authorized budget, hire to create our authorize the project prior to the creation. But The project is already automatically directed by council had included in budget. This is not a business prior to issue with that. Because the pleasure was done created by our petitioning out debt. We had to reflectively the budget so while it's reflected in the budget they never took place that never issued.

So now we're just underflammable. Okay, so Miss Laura. When you bring us to the actuals. Yes, actually not show. It will show a little bit more clear picture than, maybe what, what was on that desk service? That is correct? So, what i'm going to matt already has it prepared, we just didn't have it printed so i apologize.

We're bringing it right now. I think we can put it up behind the screen here and just a second and you will see Um, in that category. Um, mayor to your points. As we show 68 million. Budget. We're showing we're only going to spend about 52 million. So that is that, um, that payment not being actually executed.

So in let me just ask council because this process, it's More and more money, and you get through. And so keeping a clear. Pictures, really difficult. And then keeping things compartmentalized and separated is difficult, but it's really important that we, we don't have to go back and reteach ourselves out day, three.

What we learned on day one? So keeping you on track. No one exactly like that. We've all got a good concept here. A good comprehension of where and where will we started? So, if little things like, You know, previous budgets that don't necessarily consequence. Our decisions our confusing. Then we'll lose these.

And we'll go to hard cost totals. That way we're not teaching ourselves something that is more arbitrary and in Las Vegas decision. That doesn't really a thing. So i just want to make sure that as we're moving forward. We've got the entire council include in on what Maybe how do you learn and how do you think it was going to be the most clear and the easiest path world?

Questions about that. Where You said? Operations actually.

And if we need to get more, we give this a budget is just working. Correct? That's correct. Yeah, i would rather have worship. That is actually Instead of guilty inflationary number, but Is there so that that's a very good question especially on debt service we um, We budget in the next year for all the known principal and interest payments that we have.

So those do fluctuate a little bit from year to year. But in this number in the proposed number, we actually have two new Debt issuances. I'm looking back at math. They're very small. But they are proposed one of related to airports, and the other one is Yes, is related to some grant funding that we got to complete a very large street project.

We're going to go over those in more details. So there's two proposed that advances in there. That is pushing that number up. If you all say, we don't want to go that direction that number is going to come back down and this number will keep moving. Yes sir. In the rest of this is if luck built in on all these items.

Yeah, there's no blood builted. Will be an estimates because investments, for Boston projects, that we recommending that canceled? Do we have estimates for inflation? But there is no flow. I'm not saying i mean i'd say the word flood but what i mean is I would rather be with action.

Instead of projected will we might need

If and on this debt service that's an actual number, it is actually based on our required debt service payments coming up and then on the two additional ones that live proposing were um, and we have our financial advisors within you run estimates on what those debt service payments would be.

So those, this is an actual number, if you all decide to proceed with the two extra ones, if not that number will come down but you have to make your principal and interest payments. And so those are actual numbers inside that debt service line item. So, let me, um, Let me change your word here.

Margin or contingency. Is a good word that we use a lot. And so, What you're saying, councilman chair limit. Um, understanding your eyes. It'd be helpful for you to know if there's built-in margin or contingencies as we move forward on certain project that correct. But then if we're giving you an actual hard cost total of, you know, this is what it's going to cost us to service this amount of debt Then, you can keep that straight knowing who is the hard cause.

So i just think is a Appointed direction. Um, We as a new council are more than likely going to work best from as many existing or actual expenditures. Looking at those. To reflect back on what we're currently spending and then the proposed separated out not to get hung up, you know on maybe 2021 or 122.

It is helpful to look back all the way to like 15 16. You know what, in our what did our services increase by how many people that we serving, what's the percentage? All of that. But then you can pick those out, you know, on a as needed basis. In this lord to go back and catch insurance operating when you get down here.

Oh yeah, thank you. I apologize for sleeping over that. And the other thing, this is just a very high overview. We're going to go into the details of why these numbers have changed as we start bringing the departments in one by one. Um in certain cases some departments have proposed adding people to expand some services or to better serve the community.

I know, like our police department is one of those areas. And we will go over those details with you all. If there's things as we're going through those on a department by department basis, i think that's probably the best time. If you all say, no, you know, we we want to go back to a closer to actual spending.

We can absolutely talk through that as we get to them. This is a very high overview. I think it's hard for us to get too deep in the weeds at this point. Um, but we will be getting down into those my details as we walk forward over the next couple of days.

Okay, Good question. Yes. So this was based on that service was based on the 69 issue that. Yeah. I didn't take what. Yes. Did we absorb that 12.30 billion in a different between four protecting this year lecture? Where did that goes? Because it didn't happen. But yet it's in the budget because that just Have a number that is there.

Service. Where so that money was not, we did not have that. Like, you know, 11 12 million dollars, set aside somewhere to make that payment. We went ahead and budgeted the four years worth of payment. We knew that if we proceeded on that more than likely, it was going to be done somewhere in the middle of the fiscal year.

And so that actually would have brought that number down just slightly. We did a whole year's worth of debt service payment. We didn't know it council was going to drive us to do. More than likely, it would have come in lower than that. And what we were talking about doing is looking into additional resources that were coming in whether that might have been, you know, sales tax collections franchise fee collections and we'll go through some of that stuff that could have helped assist in some of those payments, even potentially some hotel occupancy tax collections if those were trending higher.

So we had kind of some contingency plans of areas. We were going to look at two, possibly fund that debt service if needed, but councils that we don't want to change revenues. Or that payment, we will address it if we move forward as the year progresses. So there's not Extra money.

Visit now there was some and we'll go over that too. There's there are some extra funds that we would have utilized and that was himself tax. We will talk through that as we walk through this budget. What we are looking to do is propose that those be used towards capital projects instead, they could have gone towards a debt service payment.

They could go towards capital payments, whatever council has decided, but at this point, we're proposed, we didn't do the best instruments were proposing. Those goals for some capital projects and we will go over that with you guys want detail. Correct. Yes, that is correct. Yes. So we had a 68, really?

So i guess that's what you're saying is, that's the excess to go on the same to get rid of capital first project. Yeah, so that's kind of work. Some of that came from. That's right? Not all of them existing money. Now i get it balance budget at that, so we have that money.

We were projecting to have like, yeah, it was just going to have to be Potentially utilized from other area. Harder questions on that service. And we're going to go over and get service and more detail later on. There's a whole section in your book related to it as well.

Okay. And it will show you all the exact numbers in there. Let me go backwards. I apologize if y'all go up a line to the insurance line item. I apologize. I just jumped right over that. So you'll see in our insurance account. Um, this is where, um, we we have an internal service on much like our fleet fund where we pull all of our insurance into.

So this is everything from and we'll go over it. More detail in a little bit. This is everything from our property insurance to our Our police insurance, our police, our general liability insurance. We have our workers comp inside here. We also have all of our health plan insurance, inside this insurance ii, we were anticipating spinning about 39.8 million.

Um and it came in our spinning is coming in closer to about 37.2 million dollars. Part of that is, there's a lot of uncertainty in Health claims that we pay we can look at trends. We can see how markets turning but it all comes based to we are self-insured from a health insurance standpoint.

So it all depends on whatever claims all of our members of our health, plan pull in for the year. So i will say, i am very pleased to speed that it's coming in. We're as many we're going to be lowered some years that comes in much higher than what we budget.

We try to budget more on it, on an average amount. Some years we have large planes coming through and you'll see that number going up higher sometimes even budget, but you'll see for next year, we've actually brought that in a little bit closer to what the current year's budget is there are continuing increases that we're seeing in the health care industry.

Um, pharmaceuticals as well are seeing an increase as you probably all know. Also, our property insurance came in much higher than the current year. I'm sorry, the prior year amount. So, all of those live inside that 39.4 million proposed budget for next year. Yes, we did say water and sewer.

As their own insurance coverage on their buildings and their facilities under the 69 million. Yes. So they pay their insurance under the 69 million. And they pay it to, The insurance. Operations. And the insurance operations actually pays the premium and the claims associated. So inside the 39 million is the increase of insurance costs, that you projected that's 35 percent.

Yes. And that's also reflected in 69 dead. That is correct. And the way you turn that up is through that very that second to last line item that narrow fund transfers. That's when we're looking at it as a whole, we have to back out. One of those expenses to look at the city as a whole, when we're looking at water and sewers a whole.

They are paying a total, we're estimating. They're going to pay a total of 69.4 including insurance when we look at insurance alone. To keep this council. Rolling in the right direction. Um, it might be good, it might be helpful. Before we already be able to die in the wrong direction.

If we can can do more of it, a deeper summary on the intercom transfers at the bottom of the page, sir that way, we're not getting hung up in seeing numbers that are in multiple spots of having to track those, okay? So, not stopping from what you're doing on this keeps all in within, i think, just for us if we'll give it a minute, then when we get down to the bottom of the page, we'll we'll go back through what's pulled out.

Okay. All right so i'll keep going and we'll then we'll talk through how that interfunction transfers number, kind of trues up the enemy as a whole, okay? All right, so Any questions on insurance other than what we just covered? Okay, if you'll go down two line items, Um to airport.

So you'll see airport operations are looking to come in just pretty much flat with what we budgeted for this year and then we have a proposed increase of up to about 15.7 million dollars and we will go over what the changes are associated with that. Later, as we bring in that group, one of that areas as well that they're seeing a, huge increase on is insurance, so, is that property insurance?

They they obviously have a big area that they're ensuring and so that number Went up. 35 percent as well. Drainage utility. Okay, down and drainage utility, you'll see current here, and revise estimate are about flat with budget. And then this proposed budget for this next year is pretty much black as well.

Okay? Back on information technology. So our IT department works very similar to our police department in our insurance department. They are an internal service fund. They only exist to serve the other city departments. So what we do is we buy all of our IT items out of our IT fund, Um, that's everything from our Our servers to our big software packages to all of our cyber security.

And so on, so forth, rich could give you all kinds of details if you would like, but then what they do is, they charge out to the using departments of fee, for them to have a license in certain software to utilize the server space to also be protected by our cyber security.

So it's the same way, they're paying those costs, they charge them out to the departments and then the departments are paying and a fee related to IT as well. Questions on that. Hey. Next item down is our capital improvement transfers. So this is where we're actually transferring money. Out of like our general fund operations over into a fun that we utilize to do multi multi-year projects.

This is where a big construction projects are done. So the funding is coming from various areas, like our general fund and then they are transferring money out into a capital improvement fund. To have a multi-year budget to do these construction projects. From a government accounting standpoint, government accounting is a one-year snapshot budget.

And so at the end of the year, the budget goes away and start freshing. The next year as you could. Imagine a lot of our capital projects, take more than one year to complete. So we have separate funds where we do all of our capital projects and they have a budget that stays in place until the project is completed.

Then, if there's any excess funds, they go back into be realocated. Her council's direction to other capital projects, or to be utilized for other purposes. If a project comes in over budget, then we work with our departments, to try to find either savings and other areas, or we budget for additional dollars in the future here to help complete a project.

We are continuing to see large amounts from a capital standpoint construction is continuing to stay high. Um, we've seen some fluctuations in those areas. I think we're hopefully a little more normalized than what we might have seen the last couple of years as far as the rapid growth rate, but those capital improvement transfers are coming in From various other funds to do construction projects.

Questions. You want to ask it now? Sure. Okay. Go for it. Are you done with an apartment rental transcription? Oh, that's my very last one. You want me to talk about that one in conjunction with it. Yeah. It's uh i think we're going to get those two. Okay, so the next of the very the second to last item is your inner fund transfers.

So probably the best way to describe it is if you have a business with multiple entities underneath it, if those entities do any kind of business with one another. So they're buying something from one another or they're transferring dollars for whatever reason. For one another You're showing in the standalone entity, you're showing revenue.

Coming in. And then if they're buying stocking from another and a related envy, they're showing it expense. Then the related entity is showing revenue from what was bought and then they're expensing for whatever. The item was that they sold to the first city when you come through and you consolidate you have to eliminate those inner entity transfers, movements of money purchases from one another.

So what this inner function transfer is because we have these internal service funds, we have fleet, we have 18, we have insurance, they only exist to serve the other departments. So as let's say, wait for instance, as we charges, the police department of fee for all of their black and white, okay?

For the monthly operating possibility to their back and whites. Also for, um, the replacement of their black and white in the future police department. Shows an expense. And then the fleet fund also shows an expense for all the fuel that was used all the oil change, the labor, that was done inside the flea area.

And for any purchases, they made related to those black and white cars. So now you're showing two expenses As police is paying fleet for their services, please showing revenue coming in, there's no new revenue coming from the outside. It's just internal revenue. So this inner function transfer line item eliminates that movement between the two funds.

So in police gets their funding from let's say property taxes, you have one revenue coming in there's not duplicated revenue when they transfer a payment over to the police line that would double book your revenue and we have to eliminate one side of it. When i was going through yes, the boat.

I couldn't keep up. I'm blending money here. Everybody back here, i don't have my room. You keep up working your ass. Look at me, like, but your shell came out here. And no, this is this is it looks, i mean, how do you keep up with? How do we know?

I mean, i would be like, you know, For instance, how much money did the city have today? I can pull our legendary energy like to know where we're at. How much is that there? How much we have available and then the rejected tax revenue coming in because when i'm looking at this from i was going through is police buddy here and i'm seeing where They're paying this lead to this department, this view of that department and i get to me, it's convenient, i can't get to a I come to the business side, not to get on middle side.

And if we had budget like this in bed, that i've been lack of,

Don't want to keep up with money here and I just hate to be a much stupid, but i I guess i'm not bright enough to understand this. Well, i will say, i mean governmental accounting is is a specialized area in the accounting world and it does not function exactly the way of a private business.

Has one thing i was talking with our mayor the other day about is when we look at our financial statements, we have to show it two ways. We have to show our financial statements essentially from a government standpoint. The way a government standpoint shows, it is a one-year operation.

So if we buy a car we expensive, we buy a building. We expense the entire amount. That is a requirement from generally, accepted accounting principles and the government standards associated with those. Then we have to do a conversion process, where then we basically convert all of our books over into the way of business reports.

Um financial statement. So then we take that building, we put it back on the books, as an asset and depreciate it, we take that police park, we put it back on the books as an asset and we depreciate it is very complex and and it may feel like there is a shell game or something going on.

This is absolute standard, practices of local government entities. If you go to Fort Worth, you go to dallas, you go to Oklahoma City, this is how They do their records. This is how we're required to do our record, okay? But you do have a conversion bag of gradual business plan.

Yes, we do. Did we should do that? Yes, it is in our audited financial statements and we we have those online but i can get you a copy of that as well. I know. Everybody else would as well. Yes, we for them but To me, I'd rather see a Business and important because i can see that one actually as well.

I'm looking at something here and here and here, all of the same Play. Okay, and we are not legally allowed to. Budget in the exact same weight made business budgets. We are required to budget from a governmental standpoint, where you're looking at more of a one year. Snapshot in time, we also have a long-standing practice of having internal service departments and that is common practice across all governmental entities.

It's also a way to help keep your costs down. When you're pulling everybody together into one big group, you have better buying power, you have better access to insurance options Um, and so we have created these funds. Decades and decades and decades ago um to utilize these internal services to each of our departments.

So let me jump in there and just tell you, i believe there's a way with the correct and solitude together because that's what they're having to do. I think the way in which we format that, You know, it's going to be really helpful for you to get through the budget in the next three days or it's going to be really difficult.

For you to constantly have to go back and forth. You know, from the back of the boat to the front of the book to try to do your own math. So To try to keep us five from doing five separate math problems. You know, and however we work What is the difficulty?

Breaking all these apart and showing them as standalone. Enterprises in the way, in those inner departmental transfers because i i've wanted for the last two years. You connect that 107 million. Now, you've got all that data already tracked and you're just putting it together. And your transferring out to zero out those lineups.

You don't do that. What you should have, you should have an easy. Business like math problem, where you can see? Um, Where's the deductions coming from? So my question is more in line a couple things, one do all your tackle improvement, transfers mean anything that's an ongoing construction project.

Do they all live in the 3.7 million? So those are just the transfers that are in either the current year's budget or in next year's. So it's it's just a one-year look at any type of a transfer into a capital project So i think i'm really screw this up here on trying to keep it.

You know, in this business-minded set is if we have construction projects Also, in the inner departmental transfers. So can we say the 107 doesn't have construction projects and I'm looking at matt? I don't know. Do we have

Okay. Yeah, there are some in there as well. About, what's What's the cutoff whenever you have to enter contacts for? So it's like there's going to talk about the construction. I mean, If you're paying other departments to do something, i see that. But what's Professional like that inside transport as well.

So, it was the divine. What requires is Your capital improvement transferer. Okay, great, great question. So capital improvement transfers are transfers that are going to funds like a capital project, and it's going to be more of our general funds at that time. So our general like Um, Find that has like our property tax sales tax, those things.

As far as. The inner function, password, that's more of, it's not like as much construction funds, it's more of the services that are provided back and forth. Does that? Yeah, kind of sense. Okay, so, No, i'm not clear on it. So, give me an example. Um, capital improvement trans.

So, Let's say that. We are looking to, i'm trying to come up with an example. Well, i'm trying to look at that because

Not just saying because i want to point to a face. Let us find a page in the book and maybe he can disappoint one decide to help. Yeah. And all we're trying to do is We're simply trying to get to where we're all speaking the same language, so right now we have five independent.

Um, rookies will say and we're all thinking the same the same way we're thinking, but from different experiential levels. And what's you still? So, we would even need the communicate amongst ourselves more. So, to make sure, i understand exactly where Tom's coming from, even though i'm probably understand kind of how he's looking at it, but then you guys are angry.

And so like, if we can get not that, we need to learn how to speak group for the you've got to convert everything to english. But if we can take the green alphabet, and lay it up next to the English alphabet and then we'll see what i told. That's what the name looks like.

That's what he looks like. We can still get everything reconciled at the bottom of the page. So you got an example. I do have an example. Okay. So on your capital improvement transfers and let me clarify. What is it? Because i think i missed both just a minute ago.

Your capital improvement transfers or any thing inside, one of your capital improvement funds. So this is where you're construction funds. Anything they are transferring out to another community. So the best example of that is in our Our civic center improvement area. So we have Requirements that There's a lot of and we'll go for more details on that in a second.

We have a lot of restrictions related to our multiple occupancy taxes, that is what funds are civic Center. So, the other thing, the very first thing that are are hotel, occupancy, taxes, fun, Is an outstanding debt service that is Back by those wholesale, occupancy taxes. We have two debt services associated with that.

One is the parking garage. One is the baseball park the impact. So, What we do from a general fund standpoint, we collect the hotel offensive taxes. We true up any of the subsidy related to the operation specific center and then we transfer the money over to our capital improvement fund for civic center.

Then that fund makes all the debt service payments but it has to be paid out of a debt service fund which is another complication in governmental accounting where we pull together. All of our debt service is for any of our general funding courses. General funding sources are going to be things like property tax.

It's also going to be your hotel offensive taxes. Um, there's also the assessments that we're received from two of our kids that pay for Um, debt service, that's outstanding for them. That also goes into this one area and also our golf course pays for some debt service associated with renovations out across rogers.

So those are all more general capital water and sewer pays for their own debt service in a standalone enterprise type fund drainage same thing, they pay for their own debt service and so they don't have to transfer that service pans out anywhere else. Anything other than enterprise that's a general, revenue source.

Has to be paid out of a certain area. So what we do going back to my example, We collect hotel occupancy taxes. In general fund. We true up civics interoperations and move everything over to the civic center improvement. Capital fund. Then they pay all the debt service over to our debt service fund.

That pays out all of our principal and interest payments. That's the bulk of what your 3.7 million is per next year. Coming down your inner fund transfers, that's everything from general funds. Going to construct a new street so they're transferring money out to a street construction department. That's in that hair fund transfers because it's shown as expense on the general, find fun side and revenue on the street construction sign.

So we have to eliminate that inner function transfer From a total city standpoint. Also the services that are departments. Provide each other back and forth. So fleet to pd, That has to be eliminated through those intercom transfers. So, if y'all want to take a second, i can i can take you through a couple of pages in the budget group and show you examples of the line items that make up these transfers would that help.

I feel like i'm making losing you guys, i'm sorry. Whether it's a balance. So, so we're learning how to dance here. So you we don't want to, we don't want to tell you how to teach class. Because we we don't know enough Italians like hey you need to teach us this way.

Um, because we're learning. But what we do know is that, you know, at this point, if we try to sit through three days of class, We don't understand the language and we're not going to learn a whole lot and so Um a language lesson to however you want to get us there.

I think it's going to be a big speaking point with us. Okay. In the way of all five of us are going to want to know that we can reconcile. Sleep. And so let's just take fleas as an example. If we brought in, you know, 14 million dollars, And fleet spin 14 million dollars, and you have an entity that essentially is a passive event.

And you can see over. Here's all your labor. Here's all your Equipment. Here's you know, your insurance and everything else, it's in there and then you build it out over on this other one. So all the bills that went out didn't didn't exceed any Of. Of the expenses. So, so, you don't have a profit level, where, where councilman journament is going to start thinking?

You know, i feel like we got enough money here that we're not accounting for is if So, we can only spent 12 million dollars and in revenue 14. And so, when we can get to categorically each one of those items, Again we group of all together in your your gap accounting when you say, well, all of these total 107 million Maybe we don't know where every dollar is in that 107, but we we know substantially that these departments that are the larger ones.

That are revenue sources entered, the departmentality are being netted out to zero. So Is that easy enough to be doing? Yes, i think so. And i was going to say i probably should have started off with an apology that we're probably going to go through the most complex portion of this right now.

Okay. It's going to get easier from this, okay? As we start looking at the end of individual funds, what i think might be helpful is if i show you guys exactly where in that fun. Part of this inner fund transferred list. Okay, so we'll walk by it kind of on a fun by fun basis.

So when we're looking at fleet, i'm going to show you all the revenue on their hunting on to say, hey that number is part of that elimination that we go through. And then when we get to, let's say police department because i've been using that example, when when we look at their budget and i say, i show you where they're playing the police department.

I'm gonna say, hey, there's part of that number in, that inner fund transfer, okay? So, all we walking through example, for you guys and we have, absolutely, i mean, we can get you the, the, basically the leach sheet that totaled into this 107 million. They can want, if you want to, i don't know that.

That is most the most productive use of our time in this setting, but we can get you guys that detail. And then if y'all want to look at it and if you have questions, we can sit down. Separately. Possibly, what does that sound good? Yeah, you know, whatever. I think with like Tradition.

Yes, money and money. Yeah, yes, simple. Right. Super easy. I think when here, i think if you just show one example of It's my end. And it's money out but we're taking a couple steps in between that's the same money in the same and that is all equals out.

It's just we have to do it this way. That is correct. And i think that's a very good example. What this snapshot shows you is the total amount of all money. Spent outside the city. It does not account for any of the money that inside the city, right? Because That's not really money spent, right?

So that, that is a great way to put it. I think that elimination piece is where we're trying to get to. This is truly the money going out the door, i guess you would say, outside of the enemy. So, where we budgeted 490 last year, we're looking to be closer to about 505 million this year.

Next year, we're dropping down about 467, so i think that's a good way to say, so you just broken into two different, uh, plus yes. So, the money outside of the city spent yes money inside of the city organizations. Yeah. So let's run, two budgets, and let's recognize both, okay.

Um, that way we don't get hung up on trying to work off before 67 will change and other things will be factored in. But we would like to reconcile the 107 that we can see that we spent 107 and we took in 107 and we have zero remaining and then all of our moneys that are done outside of the city are projections and here's where we can focus on.

Is this money? Well, spent, or is this money? That's novels. Okay, perfect. So what we will do is all walking through some examples that we go off at 15 to get printed off that look installation. Okay, and then we'll kind of refer back to that page. We have a reconciliation so you can see both sides of it.

Um, in a total standpoint and then i'll show you how the numbers can use into that if that sounds good.

Yeah. And i don't let this will be around example, but let's say richest department ight is buying a piece of software. We're paying for that use themselves. His department is listing that as an expense, then it goes to the police department that they will wind up paying for that their owing rich that lent exactly, right?

So if we did not reconcile, the interplex transfers, we will be double expensing that exactly, in other words, because we would be What this day, which would begin accurate. If we're not spending that amount of money, we're not paying for the software twice because that's a base department instead of purchasing it directly from microsoft.

The way we're handling it is ridges, overseeing, the purchasing of that to make sure we get the right tight or then, it's going to work for everybody. We're buying him fall off instead of individually and then then it's just a it's a like to say an interphobic transfer. But if we did not add that to that and that's artificial saying we're spending.

600 thousand dollars. That is correct? Correct. It's just one day. Okay. Yeah lesson, you've got it. So that was fantastic. Did you guys follow what he said? Did that make more sense? I apologize. I try to make sure that i'm speaking away. Everybody can understand that. It's like in the business world.

Sometimes you do have a shared services center or if it's a third party. Yes. Sometimes it's your own company regular. Bulking everything together to be able to get a better price on it. Exactly. But they can't work to be inaccurate if you don't, you would be counting for the expense twice otherwise and actually just so you don't like it was the same way.

The same. Especially for large. Okay. You're already. I think we're saying at the right way and um, I think the only thing that's a little different than maybe previous budgets is we're going to want to spend some time. On seeing that enter departmental transfer amount and and studying through that as well.

And then once we get a good grasp on that, i think it's back to a typical budget session like you're used. Perfect. Yeah, we can do that. So they're working through getting some copies print so we can kind of walk through some of that. Um so do you are you good with us maybe setting that to decide for a couple of minutes until we get some poppies over here?

And then we'll keep going this presentation or go off good with that. Yes, ma'am. Okay, one of our issues greatly english is In this budget, we're dealing with 30 plus Will be billion dollar businesses all do different things. But also all the encounted for in one budget. Whereas most private sector of business people have One of a single business unit doing the single thing.

And it is much more simple to understand that business. Than it is understand. In hope. A conglomeration of. You know, multiple multi-million dollar businesses with thousands of employees. So, i think, i think that's where the complexity and the confusion comes in From a different transverse standpoint, it is. Account.

Okay, so No, third thing. You are appreciate that. All right, so we were, we're gonna provide a little bit more detailed to you guys. Um, so we can kind of show you how those numbers are feeding in. I i'm a little nervous about jumping around this budget too much because i think it's going to get even more confusing.

But i'll tell you when we get to talking about capital. Um, This that three million 724 thousand dollar member in your cattle improvement transfers um is going to tie back page 827 in your budget book and we will go over that. Okay. And so, but i don't, i don't i mean, unless i want to deep back, write this second, we're all start pointing that stuff out as we go along, i'm afraid, we're going to just jumble a whole lot together if we go too deep into this right now, but i can walk you through how it all flows in, as we're walking through kind of front from a fun fact on basis, does that seem reasonable Wonderful.

Okay. All right, so Net money. Budgeted to go to be spent outside of our enemy. For next year is a 467 million that number was closer to 490 in this year and is turning to be a little bit higher about 505 million this year and we'll talk through why those numbers have changed.

Um, from an actual spinning standpoint. On kind of a fun by fund basis and a department by department faces, as we go through, okay? All right, is everybody's brain curtain already. All right. If you want to flip to the next slide, Let's talk about revenue for a second. This slide here this is on five, four in your PowerPoint.

Um, This is talking about some again proposed. We changes that we have built into this file legend. In these are seven to change based on health Direction. This is just a recommendation coming from our department. Um, the first one there, and i'm going to just briefly talk about these.

We will go into more detail on each one of these as we walk through the department budgets. But this is just kind of for the overview big before. The first. Changes that will have looking at is related to your solid waste area. We're looking to adjust rates in the collection side from a residential and a commercial standpoint.

Um, the the first piece that we're looking at is a five percent. Cpi adjustment that we have built into a lot of our areas within our budget. As we continue to see inflationary costs go up. We are looking to address our keys. So we don't get too far behind from what from a cost recovery standpoint.

Solid waste is meant to be whole posture recovery. So as their budget's trending up from an expense side we are also looking to trend up on the revenue side. The five percent is or more inflationary focuses and then on top of the residential piece, there's a another 9.53 percent increase and that is for a dedicated dumpster replacement program, we do have allen in their room, but we're going to bring Allen back of later on in the budget review.

Um, Cycle so we can go through solid waste and look at what that would look like. On those two areas, what that generates from the residential side, it's about 2.4 million and from the commercial side is 321 million. There's also spot in our book. I'll go through that with you guys here in just a few minutes where you can see what that actually does.

To the great that are citizens, are customers are paying. Okay, based on these proposed increases, the we'll walk through that here in a second. Um the next side is on solid waste disposal, that's out of the landfill. We're looking at a five percent increase there. Also related to a CPI increase.

Um we do try to trend those revenues with CPIs. CPIs, been a little all over the place in the last year. Um and the recommendation from us is coming in closer to the five percent, which is actually been lower than what CPI has been at certain points during the last year.

Um, environmental health has various speed changes that will go into detail with you guys later. Um, and it is looking to produce about 881 thousand in revenue for that department. Parks and recreation has several changes. Golf has some increases. I think there's a two dollar green pea increase in an along with some other changes in there, that will go over with you guys.

That's anticipated to produce about 160 thousand dollars. Tennis center has some feet changes that looks that it will produce about an additional 15 thousand dollars. The zoo has also proposed some additional fee changes to bring in another hundred thousand to that operation and then our athletics area. For parks has a new changes in their few structures that looks to bring in about 11,200.

Our city marshall area has some fee changes that they're looking um to put in for certain services, they're trying to stay up with cost or coding. Um, those three changes are coming in at about 112 thousand. Water and sewer. We have a proposed, five percent increase on ratings. Also related to CPI, and that is anticipated to bring four million 899 thousand fit drainage.

Also has a proposed five percent increase that would bring in an additional 361 thousand. Also related to a CPI adjustment. So that's just a quick snapshot. We're going to talk about these in great details as we go through the budget. Okay. Question about that, it's not. Let's go to next page.

All right, let's we're going to talk all things revenue for a little bit. Let's talk about sales tax. As i think all of you are aware sales tax is the biggest revenue source for the general fund and so it is larger than the property tax franchise keys, all of our user charges.

It is the number one revenue source, or our general fund. So a couple of things on this slide first in the top right, one to have this information available for you guys. The total rate is someone buys something in Amarillo and pay sales tax on it. It is 8.25 percent of that 6.25 goes to the state, right?

Um The interviews have to submit the full sales tax to the state that they can quarter. And then the state two months, later pays back to the city, a total of two percent of that. The city keeps one and a half and then 0.5 percent goes to AEDC. Okay, so this is the break of of the total sales tax, right?

The local portion of the sales tax, but taxed by state law cannot extend 2 percent. And as you can see, we are maxed out on them, okay? On the left hand side, we just bought it would be helpful for you guys to see a trend in our sales tax.

Going back, 10 years you'll see it's a significant change from 10 years ago. There is actually about a 22 million dollar increase that we've seen in sales tax over that 10-year period. Then a compounded annual growth rate is about four percent. So year over year you kind of smooth it out.

We're closer to four percent. You'll see each year the change in those percentages from one year to the next. So um we're last fiscal year we brought in just about 74 and a half million dollars. Okay, questions on that. Yes, go ahead. In the past has the ABC right ever been negotiated, since they've been back out to those, they've had an absent.

Um, no, that was voted in by citizens. I'm looking back at Kevin back in the well, picking another thing. Okay, so it was voting in by the citizens at that rate at that time, and it has launched and to change the rate of important. But Other questions on this slide.

What it does. Would you protect the sales tax at for this next year? 75. You see me? Right up. So next time no, this is perfect. So next slide here. All right, so this is kind of looking at current your collections and then kind of what we're projecting on into next year.

And i apologize, i know this. We'll make your head hurt looking all at all, these numbers but let's just walk through what this is our as y'all are aware our business. When your runs from october to september each year, So the first two columns, on this page are actuals from our 2122 fiscal year, and our current year.

So that was last physical year. And then what we've actually collected in the current fiscal year up through the month of july, so we have already received ourselves tax collections for july for this month. But as a reminder that is associated with the cells from two months ago, okay?

So there's a two-month lack on what comes back to the city. So you can see the monthly trend from the first, two, columns prior to your actual versus current. Your actuals, the third column, there is your increase or decrease and your in the amount each month you will see up until june of this year.

We saw continuous growth from for our same month prior year to same month per year. And um, Kevin always has a great job of stating this, but i think it was 36 minus of continued growth and sales tax collections, telling him jude. And then june went down just slightly by one and a half percent and then july came up by about 1.6 percent.

So you will see that we have seen some large gross year over year, and it's starting to to come into a much more narrow margin. So what we have actually collected rue july were up about 2.7 million from last year, which is about four and a half percent. Now, if you will go to, it's almost that middle column where?

It says, the 22 23 budget. Do you all see that? Those are the monthly amounts that we budgeted for sales tax. When we were going through the budget process this time last year. So what we budgeted if you come down to the very bottom of that column, Um, you'll see down towards the bottom.

Do you see the 68 million dollar number? The 68 million dollars is what was approved in the current year budget. You'll see that in the kind of bottom middle of the page there. That's what was approved in the current year number. Now, i know you're all looking at me going why in the world would do budget?

So look Well, last year at this standpoint, remember, back in a year ago we were in the middle of many. Um, Break increases from the feds. They still have more to come. There was also a little bit slowing down nationally from the housing market. Um, also, we were hearing a lot of whispers about recession So what we did is we went back and looked at more of our trends before covet after covid.

We just saw sales taxages spike through the room. So we went back in normalized, it more and we came up with a 68 million dollar budget. We were also wanting to make sure that we had a conservative estimate because our approved expense budget is built off, how much revenue we find in.

So we also wanted to be careful if we couldn't achieve a higher sales tax number, we didn't want to build in a lot of ongoing expenses associated with that. What then happens is, if you don't need those collection estimates, You have to start making some decisions those decisions might look like Possibly delaying capital projects.

Um, looking at certain areas, not feeling certain positions because you only have a certain amount of money coming in, so you can't overspend the amount of money that you're bringing in. So, Yes, looking back at that point. 68 million was very conservative if you walk over a couple of columns.

So you look at the second to last column. Where it says revised 2223. That's now what we're estimated? We think this will probably come in an app. Um, if you look at the bottom there, you will see. We're looking at about 75.9 million dollar, which is a significant amount over what we budgeted.

So our budget versus our projection is about 7.9 million. Those dollars are what we're utilizing now to bring as a recommendations to utilize in capital projects in upcoming budget. So those are one-time dollars that we are going to recognize and the current year that can fund one-time project in next year.

So we'll go through those as we start going through capital projects. Um, So, the revised budget is based on actual collections and then the last two months we have budget our, our flat budget projections. And if there's also extended budget, if you actually do, if you apply, the average, increase over the country.

So the part about being a little leery about that is, you'll see year over year where it four and a half percent increase. But the last two months of collections, we've been a lot closer to The same amount of blood to the park. Okay, so what we have built in the budget is that 75.9 million dollar number.

Bottom left. Is in that blue box is what we're proposing, sales, tax to be for next year, 73 and a half million dollars. And yes, i recognize that is below what we're anticipating with what this year, but as we're seeing numbers trend a little bit down. We are certainly wanting to give a conservative estimate of what we made achieve next year.

Kids spending trends, do flatten or potentially increased by that is not what our, you know. We have no crystal ball to see what's coming in the future, but that is what we are saying, is a conservative estimate to build our spending off of exterior, is the seventh grade. Questions on that.

Yes this is your start. Like i said, margin that you face that offer when you go to set that Change. Every Um, we so it used to be i think i was fucking morning with you all before it used to be almost an exact science participating. Now Trends have been.

A lot harder to track. And so, that actually is higher than normalized trends prior to open. This is actually increasing those for more normalized terms that we're seeing after coven. So, it's kind of a bind look at both sides of it because i, i don't know that, we'll go back to anything that we solve prior to code, but we may get closer to a a more annual growth year over year what we saw prior to code than what we think that makes sense.

Okay, because there is still i mean the price of everything that's gone up, right? And so sales tax obviously is going up as the price of everything goes up but i don't know that we're going to see that same huge increase in the price of everything as we walk into next year and so we've left it and at times those, um, as the price of everything goes up.

It can bring. As budget to give time, i guess we would say spend any questions to get tired. Questions on that. But we're going to dig deeper into this later as now the time, too. I think this is a great time to talk about sales tax. If you would like, okay, Uh, well appreciate the realism.

So you're when you're you're forecasting, that sales tax will be down 3.8 percent next year. Is that correct? So, that's a pretty, i mean, when you look at the trend and as everybody, we only had one year to client of sales tax in the last 10 days, they were being realistic on that.

What do we hear? Other communities as to what they're trying to be went with what they expect their trend to be. Is that Are we wearing other communities with our friends, or their taxes, or their different than what we said? Well, it's It's a little challenging at times to fully compare ourselves to other parts of the state other parts of the state started seeing declined even in last year, in salesman.

We were one of the only communities that saw continued upward positive trend over the same time. Period. Um, most communities saw multiple months of increases Even over the last 12 months. So, Across the state. Um, they're seeing trends, downward flattening trends and some downward trends on sales tax collections.

And so this ours is actually Um, I, i would say a more A higher projection of what collections could be as compared to what some of the other cities across the state are farcy. And it kind of varies from community to community. Some communities are highly reliant on health hacks and some, it is, it's more of a, a letter, revenue stream coming in, which can also affect how their budgeting Across the So not in exact answer to your question.

That kind of a big picture considering your question. Does that help? We performed better than most cities mistake and we've been a lot more stable throughout the very unstable last example years, Um, Velocities took a lot harder than we did to start the code. For most students really almost awesome in state.

You look at the trend on sales tax growth on page 5. You'll see 21 was 12.8. 20. 22 was a 10.3, we're currently at 4.5 for this year and we have months trending, like the last handful of months have. We're going to end the year around three to change about this.

All right. So we'll probably end here around bring some chain sales tax growth year. Uh, non-budget just actual The trend is going down pretty aggressive. The growth trends going down pretty resident. We could budget flat or we could do. We've done, which is, is look at that and see him and project decline in sales tax.

The, the concern of the words now. Concern, is it if we don't. About reflect that possible decline or that likely decline. Uh, will be Planning to spend money. That might not feel that we might not realize. Uh, i think it's very safe to say that we've probably shouldn't budget any higher than flat.

In other words, not projected growth for next year. Um, but that's just, you know, So okay. To follow up. What dirt is fading and to make sure that we're all on the same page with With what we budget from a revenue collection standpoint that builds into what we propose to spend, a lot of times that will come through at ongoing spending so whether that's, Additional positions additional digital services, whatever that may look like.

If we budget conservatively. And we recognize more revenue in the year that funding goes directly towards cash that you can use in capital projects in future years which could Keep you all from needing to do. I engaged, let's say to fund an important capital project that's coming up. This is how the city was able to improve cash funding of a new fire station.

Um, in the current years proposed budget because we had budgeted conserving conservatively from sales tax. We achieved a lot higher number and our council authorized this part prior year to use that. Captured additional revenue to pay for capital projects, one of them being fully funded fire station so it's not You're looking at two things here.

Um, part of it is Your risk tolerance. Um, and i will say i'm just naturally going to have probably a little bit less risk tolerance because i am an accountant and so i want to make sure we're being is a little bit conservative but And again, that's why we built a budget around actually a decrease in sales tax, but we've got operations in and built at the current service levels with that lower amount.

If we do get more revenue, we'll bring it back to you guys. Next budget cycle for capital, If you guys decide you want to you want us to bring this number up, we can do that and then we can talk about where that money will go inside the approved budget.

But we'll also need to make sure that we talk about. If you don't achieve that what is what we're going to have to pull back on. That reasonable. And they're really, we're looking at with the particular right now that just compared to this year's actual that's a three million dollar reduction spending that we would have to account for me too.

But 738 right. 75 75 miles. Uh, two to three million dollars. Yes, and it's not um, What was built in the current year spending? Um, was the 68 million? So that additional almost eight million dollars is what we're bringing back to funds and capital parts. Also. We'll talk about it right now.

Part of what is being absorbed through that increase is in the current year budget. City council approved. Um, funding 15, new firefighters to fund to, i'm sorry to um that new fire station. Um, we had anticipated bringing them on for only a third of the year. And to have some grant money to cover them.

Um, instead. The the fire chief worked with our city manager on, they kicked off a new academy on january 1st, which is about Forces away into our visible here and said, hey, is there a way we could go ahead and bring on these 15 firefighters and our city manager said, yes, let's do it.

Let's get them trained up because it takes time. If you don't train them through the academy and outward, they're on the street productive. And so we had to absorb that additional amount this year sales tax government. And for this next year, we were either going to have to look at an increase in a property tax rate to pay.

Then for that additional, those additional 15 firefighters Um but instead sales tax is covering the cost of those 15 additional firefighters and this year as well. Is an extent. Then the extra amount of beyond that is what we are bringing back to you guys for powerful. Unless you got him.

So, let's make sure we're making a good picture here, and you're getting the full picture. Because what we're talking about is kind of an either or and i want you to understand it. Sometimes it's not either, sometimes it's not worse, sometimes it's both sometimes it's none. There's lots of options here on the table.

So right now you're being presented with. Um, costs are going to go up. You got a lot. Everything's going up. Five 10 percent. However, We think sales tax. They're going to come down even though sales taxes are directly topped to cost. So so you didn't pinch below in the middle.

Um, so it cost you go up too much, then you do see a reduction in your economic activity And so with that, you would also see a decline in service. So, we don't need five people working at the shop. If we only have one customer coming in every hour.

So now we run into two. And so as we walk forward, it's important. We paint a full picture here. You're not being asked to gamble on every position that you have to over the next 12 months from october, one of the september 30th and never be able to pull back nor to make an adjustment.

What should be an asked to do is to Park this boat right in the middle of what the most likely outcome is. And so, what we've got here is, we've got That conservative outlook on sales tax that is tied to the economic activity. And we also have economic activity with increases based on the fact that costs have gone up cost of living and has gone up and we're anticipating more and more growth.

Those two don't necessarily reconcile together. The other thing that we're saying is is anytime we have sales, tax left over. We put it into CIP, we over the last two years, that's not what we've done. We funded if we funded other projects that could come into the CIP during that current year with a CEO or revenue bond or whatever we chose to do.

So, Don't assume that if we're conservative. When we save sales tax money, that it's immediately going to direct staff to put it into your CIP projects, it doesn't necessarily work that way we have the prioritize, those CIP projects and bring them in and then we also have to be a little bit reactive and Issues that come up that we didn't have if you're in year, five or belong forward.

So it's just important that we, we understand. Um, We don't necessarily have to take seven million dollars right now and pushing them to CIP. We can take two million out of this. Pull it over a year and project a lower budget and still work off 75 million voltage that stays black that's highly likely to stay flat over this next year.

Um, go ahead. We know what a look at here is. I would oh, maybe auctionable actually broke. Instead of what? The reason why you look at what our age and the number of golfing to town. If we don't grow. It's something weighed up. Because we've created a job. We're creating the industry.

We're creating the people coming in. And i don't know why we would fall back. It's really just looking at trains, but we it's really just looking at sales tax rate trends. We were 12%, a couple years ago, we were 10% last year were four percent did well, we'll end up around three percent this year Uh, so the growth rate is declining at a pretty aggressive rate.

Uh, you know, so if council won certain is a philosophical Discussion here. The way, the city has historically done. And i mean, for decades Is to get a conservative. Rejection of sales tax. Using it. The city does that way? You make sure that you don't overspend your sales tax revenues with ongoing busted potential by personnel.

If you do have a sales tax declined in a situation like that, you have to cut people my projects. Um, The so i can start to sales tax estimate from philosophical standpoint, allows you to not budget in the current year. With current revenues. For capital projects, instead, you're using residual revenues from the previous year to fund one-time projects.

Um, that allows you to continue having that conservative Approach would save your people. Put your projects as a as a function of sales tax growth over the previous year. And allows you to do capital projects and personnel. But the philosophy if you wanted to try laser after it, projects sales taxes, you could put more money into personnel and ongoing expenditures than we would serve a sales tax projection challenge.

Is that if you do have that decline, That unforeseen decline you're cutting personnel, not projects. Wouldn't you look at from a standpoint? We are all leaders. We're going to deliver a viewpoint where we see and we're always growing. Or Amarillo stack, if we don't get Increase. We're projecting to citizens.

That we're not going to grow, we don't expect to run. And is that a bad? I think one of them is based on reality, one's based on what we want to the image, we want to portray. Well, what is reality? Reality is the chance that we're seeing we have to reflect those as much.

That's all i'm saying. Well, Nothing with looking on myself to all mom cells grow on superior people that direct the impacts this. That's actually having a, you know, engine compressed people a little bit to it but online sales as time goes on, we're getting more and more sales tax returns on online sales, not 100% entered and you flesh out a little more.

That's that's really the main category. We're still seeing television increases is not store, retailers work, capturing that now. Yes. As well. And as long as change, we're starting to capture a higher percentage of those. Non-resident, water sales. That's where sales tax revenue. Next page we show up cable TV 5% or we're not catching, the game is streaming and we're part of lawsuit to try and capture that.

But it is unique. We do capture. Like if you're buying a video game or a TV show apples, some of those we can click on that. So, it's about we're not getting franchise side or we can sell side.

It would be safe to say that although no one likes to experience and relationships. That our sales tax revenue is things about because the equation. Oh, absolutely. Absolutely. Especially even these numbers this year. Could be a little bit artificially inflated for when they make a benefit as an inflation in price on them.

Absolutely. So if you look at the last couple of months year over year, it's not even accounting for the full amount of inflation. We've seen year over year, which is also a trend at times, that it could be a little bit pulling back on some of that consumers spending.

I think that's a very good point where if you go back further in here, go back to like october it was exceeding. What inflation was? You're over here and so that showed us growth in spending where as we walked forward in the physical year and got closer to this time point, you're seeing that we used a little bit and so it the last couple months hasn't even shown what inflation.

So, we bought the same thing last year, bought it this year. It's not necessarily even showing that old increase for that inflationary adjustment, so, which could show a trend in simple, guidance of study. And again, that's Part of what the federal government was trying to do, was, was trying to Um, adjust interest rates and Inflation's shot up.

And they're as they're trying to work with the economic factors, it has an effect on consumer spending especially as with price of everything goes up. Revenue sources. So whether that's, you know, a fixed income or your salary, whatever, if it's not keeping pace with inflationary costs, sometimes that cause consumers to pull back on spending so is it fair to say that if our sales tax revenue does not outpatient inflation and we can assume sales are available.

Yes i think that's a fair statement. Yeah so this instance it's held down Because we're not. The last couple of months are now. Yes. So, our zach tag software, that gives us all our confidential data also puts in inflation, doing some examples, so i concurred myth of July Show it inflation in back of a half a percent.

So we actually gained 37 thousand dollars because of it. And if you go to june, when we saw the one half percent define, we saw 3.8% declined of inflation related back. So we actually went out inflation, we were lost 301 thousand so we performed better because So project that over 12 months, It varies.

Awesome on. So May we saw 64 thousand in April event, to 127 thousand, march 113 thousand. So so there was it, they're inverse. So i mean, it's an inverted curve. So Maybe probably, well it would be highly unprobable that you would have lower cost. And lower. Expenses, i guess we're going to expenditures.

So, ask costs, come down. Inflation comes down here and see people spend. Right now, what you're saying is is We're projecting for cost to come down because That's the trend that we're seeing. We're also projecting for expenditures to come down. As as we see people pull back That would, that would be a recession that so we're not growing that point where we're receiving, which is not Amarillo and i i grant you that in the nation.

You know, california is a great example. I think that's a recession state. I don't think texas is. So i think that if you take that yield care and you say, look If we do see these corrections in the market, we are going to see Some expenditures come up. And so, i think we would be fairly conservative that a flat.

Projection. Um, i think we're being highly conservative because budget below that, which i don't mind But i do want to keep it topical on the table that yeah we're talking about personnel changes but we're also talking about CIP and other things that are affected through this and you're being presented with a budget that is going to need additional cost revenues attitude for you to balance it.

And this is one cost readily that we're willing to take off the table, kind of up front to need one. So i just want to keep that in mind as we moved. Is an interesting foundation in the sales taxes and sales taxes. We received in 2017-55 day and we're up over 7 over 29.

Above that. And it's, i mean, that's like a 35 or 40 percent increase. Over the last, you know, six years. While we're populations grow less than one percent, a year here in murillo. So With a lot of extra money you put into the system and i know we had trillions pumped into the economy.

But at the same time, as a lot of Disability. So It is interesting to try and rationalize. How are we recovering 40 percent more than we did? Six or seven years ago. And how sustainable? Because obviously was very sustain. It doesn't work to be on down anytime soon well but what economically changed is really to justify that much position itself.

I think if you take the 200 thousand population, Tipping point is a pretty good strategy that most people can come to. Um you grew, let's say 30 thousand people in your community. Now we can say well we only grew at one one and a half percent well inside the city limits perhaps outside of the city limits between emerald Lloyd bushland.

Um canyon, you know, north south east west, i mean, we've had 30 thousand people to our community and on that 30 thousand Person community had on. It's the backbone of that a small business. So every business park is full of lawn care and tree training, different enterprises and so i think that's what you see.

And amarillo, as we get up over, that 200,000 The population point. And then i don't know that anybody would say emerald is projecting to lose population. I think we're all fixing to talk about how do we accommodate for the sewer of the water and the growth that's coming. So, This in and of itself is just highly conservative.

And i think we want to make sure we're all behind it when we budget moving forward for the rest of it because you're going to make decisions based off of this 73 million dollars. So mayor, if i can add to that. I think all really good points. And again, i wish that we had A crystal ball that we can see exactly what it's going to happen over this next year.

But what i'm hearing from the discussion is that maybe we can keep in our back pocket potentially. And an additional 2.4 million. That would bring us up with what anticipated current. Your collections are us the difference. Um, there, that if there are certain things that this council wants to address, we could talk through what that might look like.

If we, if we brought sales tax up to cover, that one thing that i will say is there's a lot more security I guess you could say a lot. Let me say this did not like there's a lot like risk if you were to take that 2.4 million and potentially put it in some sort of a capital project that is a one-time spending rather than ongoing which things.

There's more flexibility in potentially covering it in one year and then not building it in a future year, then building it in as ongoing. It's harder to adjust ongoing from one year to the next. Does that make sense? So i i thought this 2.4 your mark that let's just talk about as we walk through the budget because that sound okay.

Yeah, basically, we're going to capture this year. If we get that that is only where we have you're getting in here with this god. It's weather here. Yeah, it's whether you all decide you how you want to spend it right now, assuming you will get it or you want to wait, make sure you get it and then decide how you personal space projections up right now.

Would potentially reduce the amount of money that will for apple projects in 125, right. That's true, too. Yeah, yeah. The more. I'm sorry, the less the less conservative we are on our revenues projections. The tire is wheezes. That the cash that's available from one year to the next to fund cash funding capital projects.

Okay? So then we have to start talking about additional tools To fund capital projects than just cash money. But it's so like my favorite brought up in the past few years. We haven't used that for capital projects. Yes, i can't say, you haven't used it, but you chose them, you know, in the previous administration but fund this through different tools.

So, Park sliding is a great example. We have the cash to pay for parks lighting. It was roughly six million dollars. Um, we funded almost nine million dollars, three different opportunities, which some of that was Marco thoughts. That was like 30 million or so. So rather than reaching over and taking six million out of sales tax and payments so that you didn't have an additional Dead increase and tax rate increase.

Um, We left that money in the CIP project. Uh fun and then we funded 9 million dollars in a box. Um, The the hardship in that is is now we have six million dollars that can go to streets and You know, curtain, gutter infrastructure and and we chose not to do that.

We bought a bill And so, Those are the stresses that are on the system of your growing, your organization. Uh, and we use terms like we say, well, it's a one-time expensive. There's no such things at one time. Extent, anytime you spend money in business, you are growing something that you have to maintain.

Um and and so, when we say well let's go put a, you know, Nice sliding in or let's go. Update, is mean all of that has an ongoing email with it. And so not that we don't want to say like, hey traditionally we talked to these things as one time expenses because they're not labor of personnel.

They're doing a good job, status doing a good job of You know, helping us to understand the consequences of our actions when you add personal. But anytime you're spending money, you have You know, maintenance and operations moving forward. All i'm saying in this discussion is, we're paying to do the picture here.

Making sure you guys are keeping track. As you're going, we have lots of options moving forward. This one, i'll just recommend, put down as a possibility of additional revenue source of 2.4 million dollars. We're going to look really hard to find 240 thousand. And, and then we're going to walk out of here doing the best we can.

And so day one, you will forget something. Thank you, cheat sheet. You put it down and then we'll, we'll come back to. I mean, in our capital approval project, we have a list of rocks. You take a one off of that. You're just, Or whatever reason.

The percentage tax sale, tax locally versus How much of that sale tax revenue coming from outside of our residence?

Appreciate that. I mean, it's our largest source of it. That camping out on it a little bit to talk about it, and You know, i don't know what the, you know.

Copy that. We have a little benefit of that that our sales tax. I think, when we Through the ADC, we also headed to happen to the city. Tax at the time. Yes. And that was to give us property tax relief. Okay? I got to do a property tax rollback, which is something else that contributes to our lower tax revenue actually.

But i'm already doing i mean you know, we're working and then we just sales taxes matter. What's going to occur in the future and it will Absolutely. And i think that's also why it's Um, We have to talk about it kind of philosophically because it is our number one, revenue source so it really is the backbone of our budget.

So we want to make sure that we're all comfortable with. How we proceed in that projection for the budget books? Okay, so well, i'm going to, i got the 2.4 set aside and we'll keep bringing that back up, so that sounds good. Yes, man. All right, and we can always go back to these slides or anything as um, as as needed as we kind of walk through this.

So let's go to the next. A major revenue source. So we're talking about gross receipts business tax. These you will also hear us refer to these as a franchise fee. Okay. These are set by um, state law on what we can charge and we have agreements in place with these utilities.

Um, or use of city right away? So, our electric Franchise fee is five percent gas, is also five percent. Telephone utilities is on a per line charge and then cable TV is at five percent now, you'll see an asterisk down there below the telephone and the cable TV area.

Back in the 2019 legislative sessions state law changed death stated that companies that offer both of those services. Um, only had to pay the greater of the, either the cable, or the telephone telephone franchise fee. So we have seen those teams because where they were trying to pay both before.

Now, they're on the page one. So you do see a lot of bundles services now from these utilities. And so we have seen it downward trend um trim over the years in those areas. And in the last one um, is city owned utility, so water is through. We also charge our water and sewer fun for use of the right away and it's based on a per account, so each one of we charge on a per customer basis.

So, Questions about that. That's just kind of defining what these are. So now um, if you want to look at current year, Current, you're actually, i'm gonna Foot forward to the next slide first. If you'll go to slide nine, this shows you history over the past 10 years. So you will see some large growth and electric and gas also in water and sewer.

And then you're seeing downward trends as we talked about earlier in that telecommunications and cable area, that is related to that state law change. Um, in 2019. So, a couple of quick things that i want to mention especially about electric and gas. So as um, Great change. There is also a fuel factor that is included in the rate that the utility the electric utility company and the gas you to natural gas utility company, charged their users.

There's a fuel factor, so We saw a downward trend in the price of fuel. You look at the 2019 Um, 2020 year, you can see it pretty easily on the electric side. You see a downward trend, a lot of that was related to gas prices had gone down. So mid-year that the Exhale energy actually reduced the fuel factor so it created a lesser amount that was being charged out to, um, people with utility bills, which also translates into less money coming to the city as a franchise because it's five percent.

So then as people went back up, you'll see that it trended back up and it's continuing on an upward trend. Um, they also put through rate cases to increase um, their race that they charge their uses systems have only involved. On behalf of our citizens, in some of those rate cases to keep it at Of a reasonable level.

Um, but you can see, there's a, there's two trends, especially in gas, and electrics electricity. Of the weather does have an impact. So we have a very mild winter. We may not see quite as much coming through in the natural gas franchise fees if we have I don't even want to stay a while this summer.

I mean every once in a while we have a mile of summer this is not turning out to be one, but if there was a mile of summer and people are not using air conditioning it as much as a big driver. A lot of times on those electric bills sometimes we'll see a little bit of a blip in that franchise week.

So here's ten, we're 10-year trends and then the total dollar changes and then the compounded annual growth rate over that in your trend. So with that, let me go back a slide. Dividing. So, slide a is showing what we're seeing in the current year. So, you'll see in the first column is our annual budget amount that was approved.

This current year, then the second column, there is your budget, through the month of june. We're still working through collecting everything in july. Then you'll see your actuals through the month. And you can see electricity is coming in a little higher than the trended budget through june, same with gas water and sewer are just almost even.

But right on as well. Telecommunications is up just a little bit and cable is sliding behind. We lower that cable budget, almost every year. And it's still comes in an or actual seem to still come in lower. So, what you'll see there is To workers, i'm sorry. They're variance through the month.

How much of the budget has been collected up to this point? Um, and i apologize. I don't have what our proposed amounts are on here. Um and so we will get that to you guys. I'm actually i can walk you through real quick. Give me just a second. Um, On.

Okay. For next year. So the the first column there is our annual budget. Um, or next year. Actually, for the current year are revised estimate is looking to come in closer to about 12.4 million. So we have brought next year's budget up to about 12.9 million. All right. In natural gas, we think it's going to come in almost flat with budget are I'm sorry, just a little up from budget at about four and a half million.

I'm sorry, 4.3 million. So actually right in line with budget and we've got next year's budget for natural gas. Just just likely at 4.5 million. So about 100 thousand over current here. Um and then water and sewer are looking to come in right in line with budget for the current year.

And next year, we've got them up, just a little bit based on the rate, increase that we're proposing for water and sewer. Um, and then cable. Um, is is training to come in closer to Um, About. 784 thousand this year. So we've got it budgeted around 750 thousand for next year and i'll get you guys an updated slide with these on it.

Um, and if If y'all are curious, if you turn to page, Two in your budget book. I'll walk, i'll show you exactly where these numbers are going to take two. So it's right. A bit early part of your book, right behind the summary path. Go to page two behind the summary tab.

Are y'all there? Um, if you go down to the one, two four section. Do you see where it says, groceries business taxes. Grafina. Okay, perfect. There's those the electric utility dash, utility water, sewer telecommunications and cable TV. And it shows you two years of actual current, your budget revives estimate for this year in next year, projected budget.

So that is what i'm just gone over the week back. Yeah. Ambulance services is not something that other cities. Expect as a Some cities do have that as a responsible, we do not have that as a revenue circuit board, we have a contract system place with our local ambulance services.

There was a mid-coding of 37 dollars, you look like into a line art in there and are here that now that line out of forever live on this budget report. So please just, yeah. Agency? That is correct. Contract is that? Because we have that actually listed as a revenue source in our fire department because they are part of that, what they're paying in is to cover the cost of a position inside the fire civilian area to actually track the performance related to that permit, okay?

So we will talk about that when we get to fire and also backward without this Are there questions about these franchisees?

But these similar to sales tax that this is a realistic class optimistic scenarios. I mean, is there wiggle room in here? Like you say, hey there's potentially 2.4 million potentially on the table for sales taxes. We needed is there because i'm looking at the, the trend here, where we saw that 10 percent 13 percent and i think we're forecasting the budget, because so is that another area that has Potential.

So it's not allowed to do that. We buy, we can talk about it. So, but part of it, too, is based on what the weather warms up. Being also both atmos and XLI. We have proposed recent going in all the pins on where that evens out from a rate standpoint.

Also um, We saw some spikes in fuel prices, the last couple of years and it's kind of somewhat normalized at the amount. And so, unless fuel prices spiked up a lot from where they're at right now that could have heavily drive those numbers up. Otherwise, they may come in closer to What was in the last year?

So, I don't. I i wouldn't think you would have something we're actually projecting increases in these areas and not even leaving a flat with her in your collections in most cases. So i think these we almost They're not our largest revenue source, but we do not survive off of a liver die off of these numbers.

If they come in just slightly flat or down a little bit. And so we do push a little bit of the envelope on these. And as you said, i think we have four person increasing, but it may have come in right around three percent increase on it. We can't make.

Some educated adjustments based on what we know about gas rate, electric rate cases And they always resulting increased rates, which do result in increase revenues to the city for franchisees. But part of it too is um, So we did have a little bit cooler of a late spring but it you're now hitting 100 plus degree weather over and over and over.

Um and so part of that is going to affect but the other context for those things. And on on an electric side. Um, there is a lot of electricity used when rain events are going on or pumps that are running in certain things like that. So that also can affect the use of electricity, you'll see that inside your water and sewer, but when we get there as well, so the flood also did have some impact on the amounts that we're seeing from an electric.

But if you go, so if i read this term right on page 9, Over over the last decade, it's average about 2.6 percent. For years that correct. Yes.

Other questions on this. If not, let's go on your next revenue, source, hotel occupancy, taxes. And we've got an expert in the room that will bring up to give us inside if, um, if we need to. But we've got hash and Smith with the CVV, and i know she loves me calling her out, but we'll bring her up if we need to here a minute.

But let's let's talk about hotel occupancy taxes for just a little bit. So, on this page, on the on the upper right, hand side is outlines Um, what someone saying in a local hotel would say related to hotel options and taxes? The total of 15 percent, six percent of that do the state.

Seven percent comes back to the city and two percent goes to the Amarillo Potter events venue district. Um, that was created back in 1997 by voters. Um, there were two projects, there were approved and a two percent hotel. Occupancy tax was improved by voters to fund those two projects.

Part of it, the north end of the civic center and the other part is the Emerald National Center out of the tri-state fairgrounds, so that hotel occupancy. Tax is restricted to only be used in those areas. It is utilized by a separate inmate. It's a, it's a related kid and he's going to the city, it's a component unit.

But the emerald pottery that's venue district has a separate board. Um, that Approves their budget and then brings it to you all for final approval. You all also have the ability to appoint half of the members of that board in Potter County appoints. The other app Potter County also has to improve the budget for the city district.

So, we'll talk a little bit more about that. Um, when we bring Their budget to you, all, that'll be at some point in september before we bring that board, so that two percent does not come to the city and any way, shape, or form. It's in the venue district and then the venue district case that service for the two projects that were approved, there's also a an operating content, a management contract, that's paid to the city for, um, part of the Civic Center is 398 thousand and then they also pay a management contract to the tri-state.

Fair group For management of emerald and national center. And that's i believe around half a million dollars. So um, but beyond that they can do repairs and improvements if either the two locations. So you will actually see that when we start talking about capitals, there is a project proposed to be done here at the civic center that we are proposing, is, will be funded by the venue, district hotel occupancy tax and not by the city.

So we'll talk about that when we get there. Um, then the bottom part, just kind of talks about the state restrictions related to hotel occupancy taxes. It's dedicated revenue source. It is only allowed to be used to promote tourism within the city. So it's very restricted on what they used is what the city currently uses their hotel occupancy taxes for is to pay and where we kind of went down.

Make a little bit earlier to pick debt service for the parking garage and debt service for the impact. Um, those are only funded out of hotel occupancy taxes and then revenue coming from the parking garage and revenue coming from the least from the baseball team. That's the only way the debt service is being paid in those areas.

There's no property taxes, paid for any of that debt service. Um so the hotel occupancy tax goes to pay for debt service on those two facilities. Then we have a contract with cbv, to do the tourism promotion in city in in the city. And so part of the hotel, occupancy tax goes to them.

Um, part of it goes to make up the net loss in operations at the civic center. So that's the subsidy of specific center, whatever they could not recoup through their own revenue sources. The hotel occupancy tax goes to cover the difference, And then any remaining amounts, go into a capital fund or repairs maintenance and improvements here at the citizens Questions on that.

If you look at this graph, we've got a 10-year. Tender chart here, you'll see we've grown about 3.9 million silver to tenure period, which is about six percent annually. You will see a 1920 covid had a lot harder, hit on our hotel, occupancy taxes. Um, then most other revenue sources.

So it was down about 25 percent and you guys i'm sure are all aware of the impact that that had on the hotel industry. Locally, we did come back, very strong, because, in the next year, we saw 57 percent growth. Okay? We saw another strong year that's past year.

And then when we go the next slide, And then we walked into this year. So this year, we Um, what we did is we took up to this point last fiscal year via actual amounts we collected. Then we trended that out through the remainder of the year. And then we grew that number by about two percent.

They come up with the current here budget. That is. What is in. That middle column there of the 2223 seconds. You'll see was just Um, a little over 10 million dollars. And so, If you'll go to the far left, you'll see last year's actual collection versus the second column which is the current year actual collection and then the third column, has your increased increase in your percentage change.

So you'll see that we were up, then we went down, they were flat and down, down down, down up up and down. So we have it's been pretty volatile this year. Um, i think obviously, you can look the month, it's very wearing their as february, which would have been for changing where these days Um, again, we don't have any exact pinpoint on that other than across the board.

The hotel just saw last cells. In the month of january as compares to the fire year. Um, i do know, one of our local hoteliers is on our menu district board and he spoke about that trend and said, we were seeing the exact same thing that they were seeing nationally.

So we were not experiencing anything different, i guess than what was going to see nationally. So what that means now is that you come down to kind of the middle of the page, Our actions are actually down about 355 thousand below. Even what we collected last year, which put us about three.

I'm sorry, 530 thousand below budget. So this was definitely not a trend, we're anticipating. And i'm not even sure that it's a trend that we're going to continue seeing because it's been it's been jumping around quite a bit. So what We did. We use actuals through the end of this year.

For our revised protection for, i'm sorry. Actual screw july for our revising projection and then we decrease august and september by five percent because that was about the decrease, we were seeing overall. So decrease it, about five percent from what we saw last year. And that's our revised estimate number that we came up with that brings us actually, About laugh with last year's actually and brings us about 530 thousand below.

What our budget are approved. Budget was So then we walked it forward to next year. And what we use next year is we use our actuals From this year. And then we use one. We use our actuals from this year and then we used we decreased the ladder part of this year and then grew it by two percent for next year.

So we are at A proposed budget of just under 9.3. This next year. So, it is Slightly below what we actually collected this year. It is a potentially slightly below what we might collect this year. But i will tell you that some of the trends that we have seen, Um certainly i know give me a little bit of pause about building this budgeted amount to high.

I want to make sure that we bought this at a conservative level enters any chance. Um, That we see some of these downward trends on into next year. You're over here.

Again, this revenue is very restricted. It cannot be used on any city services other than tourism efforts so those specific center debt service on an impact in the parking garage. It goes to cbv to do the tourism efforts for the city. And then any other capital improvements here at the civic Center.

Questions on this. Oh and there was one big difference. We now have three death instruments is backed by hotel offensive taxes. The last one was she said this past year There was a requirement of major league, baseball has an additional requirements for the baseball field. Um, every Every MLB associated.

Um, Facility across the nation. Had to go back through a certain scoring criteria and some facilities, almost have to be completely redone. Ours had about, i believe it was somewhere between four and five billion dollars in improvements that had to be done to it. And so, our priority, council, authorized a debt issuance to do those improvements.

Those will start as soon as this season this baseball season ends. Um, and so the debt, i'm sorry that the bond proceeds are sitting there designs underway and that construction project will start this fall. Um, so there's those three dead issuances to associated with emphat and one with the fun project, that these dollars go to pay for it.

Questions on that. Yes, sir, please. On, on the debt issuances. Yes. Okay. So there's three outstanding debt issuances that are actually hotel occupancy, tax revenue, bonds, Um so there is a very limited property tax pledge on it, but they are fully funded by hotel occupancy taxes or revenues from the parking garage or the impact.

So the parking garage was built back in. We issued debt in 2016, To, to construct the parking garage and so our hotel occupancy taxes. Fund the debt service, the principal and integers on that plus some funding from our local government corp and they receive the operating income from the parking garage.

So there's an amount that they pay the city to help with the debt service on the parking garage. Question. Yeah, yeah. They just So, our local government paying According to bed on that. Yeah. And the hotel tax complain part of the dead on that. Yes. Why don't we sell the thing?

And that would, Yes everyone. Our local government corp has our board and in our mayor is on that board. And they have been looking at all sorts of options. And so, i think there will always be continuing discussions in that area. Okay, great. Great question. Okay. Then there's two other outstanding.

Debt instruments is one, was in 2018 and it was to construct the impact, the baseball field. Okay? That debt is funded for hotel optimacy council and part of it is paying for by the least income that the city received from the baseball team to To operate in that facility.

Then last year, there was another, a third deadishment that was done to do some improvements over at the baseball field. And that was to meet major late baseball requirements. So, to be an affiliated to have a stadium that has an affiliated team in there, you have to meet certain MLB standards.

Otherwise they will not let you have an affiliated team in that facility. And so Um, the baseball team worked with the city on. Coming up with some auctions to do that and there was a third debt instruments, done this past year and our hotel occupancy taxes are paying for that debishments along with some of the least impact from the baseball team.

Claire's bed. Okay? All right, perfect. So what we can talk about that again some more later if needed. Yes, how much of our hot taxes used instead of all? So it Normally ranges from one and a half to two million. I will say this next year, it's actually gone up.

We are estimating, it may be closer to two and a half million, the largest increase that we're seeing there again. Starting and it's hard to turn to say, this is parking insurance. They took a big hit this year on the insurance related to this facility.

About gasping property, which we are. Property insurance is one of the We're also seeing the production. Remember shows. That's not piling onto the whole students here, conversations more about This is not, yeah, they bring a lot because they have a

Activity going on here. Because that will help reduce the substitute that we can have generic marketing. So we're understanding Insurance coverage, pay by the landlord. And then their release payment is helping an offset that in terms of it. They provide their own insurance on it. We have some limited insurance on it, but on the civic center.

They're seeing a huge impact because they are part of these cities here. And as i'm into that, when i'm suffering question, So, that was a big hit. Um, Um, utilities are continuing to trend higher as we're seeing And then also we budget. Again, we budget conservatively, you'll see this throughout the city's budget.

We budget as at full authorized strength, okay? So as if every position has is filled the entire year So, We would love to achieve that actually. We probably have some departments that do achieve that, but there are several groups that don't achieve that. And so sometimes those spending the amounts come in slightly lower.

So right now, as i mentioned, i think we're closer to about 2.3 2.5 million subsidy for next year for the civic center. I do anticipate that how many in lower when it all kind of humans out for work. Question first impressions on personal options and taxes. So one of the things so when we look at the the so the the dead issuance is a fixed cost.

I mean we know what that's going to be a teacher and we're about to add on additional cost to that one. We're seeing contacts. It's going to cost more to subsidized specific center, so that's going to push less money to Repair. Yeah, i guess tvb is probably yes or the decrease in there?

Yeah absolutely they they got to decrease their budget and they also greed to pay a portion of the debt service. They already pay a portion out of their funding on the debt service for the impact. And for this second edition as they increase the amount to help pay for that as well.

Yes, so everybody is seeing a squeeze and you are correct. We have less money available to doing time, improvements or repairs periodic Center. However, we do have a project that is highly needed. Um, in the proposed budget, but we are proposing with that funding come from the venue. District's portion of the hotel offices impact instead of the city.

Because there's not enough cover. So the double edged sword is our high tax and decreasing. We would like board the increase but unfortunately we've got to decrease the funding for the cbv. Whose job it is to help. Bring about exactly? Yeah. Oh cash. You can talk us it's um it is not an ideal situation because you're right.

I mean they are our voice out trying to promote tourism to give people here to get those hotels safe up. Caption anything you want to come on? There's a microphone right there. It's going to see. I don't have a bond but

So, our numbers We don't even use the word trend in office in the last couple of years. We see things, repeat every so often but nothing is really repeated enough for us to get comfortable within any kind of trends. So one thing that we do keep in mind though is we know very hard during covet in 2020.

We were covered faster than almost any market. You can find in the United States 2021 was our biggest year ever as far as not only revenues but actual visitors in market. So it was huge. Whenever you really look at our reporting and our numbers as far as visitation goes, we've helped So we've not really seen a huge decrease in any of the visitors coming in, to market, the hotels, have done their best to hold a good great entirety, which helps with the collections Um, but we have like in january, we did lose a couple of bigger conventions that would have brought in so what we've worked to replace that so it's just that the market has changed a lot.

And there's a lot more focus on leisure, but as far as visitors in town, they're here. Um we're really trying to figure out a better way of tracking, what months. They're coming through the markets online, they're coming through is changing Um, in the rates, dip with that uncertainty. So we're losing revenue here and there because the hotels are uncertain, they see a place where they're used to be being very busy.

All the sudden not being busy and then places where we're a little bit softer normally And they're not recovering the rate there because they didn't expect it when it hit, if that makes sense. So it really is kind of evening itself out. This gear has been rough to watch the numbers watch way up and down but we're adjusting in real time to make sure like from our office standpoint that we don't end the year in debt.

So we're backing expenses out as we speak. To make sure that that we stay good in healthy because we had a couple of years that we're very growth there. So, the way the city, Has an agreement with cvb, which is what captures referring to is. So the year that covet hit When we were setting the budget for that year, we had no idea there was going to be a pandemic that here and how and what it was going to do to the whole world.

And so we had set and agreed upon amount with CBD that you're to pay them for their tourism efforts. When actual collections came in much lower than we anticipated that rolls forward to the next year. So basically, there's a true of so they really, um, We set an amount based on what we're budgeting hotel, occupancy taxes to come in and then we screw it up with them in the in a future year.

In collections go up, that's more money. That goes to them for tourism efforts, in collections go down which happen, obviously, in covet. Um, we drastically, squeeze their budget, the next couple of years, which again does not help because there are voice out there trying to get people into the community to come here, to have conventions, here to have leisure activities here in the statement's hotels.

So that's just the way the arrangement is set up. Questions. Okay, let's go to the next item. Let's talk about utility cells. This is the first glance at what we're kind of looking at from a utilities cell standpoint. Um, so the first area is related to solid waste. Now these are the items that are on a water bill that our customers received, they they have.

Unfortunately, it goes to solve waste. They have a portion because the water and a portion that goes to sewer and then a portion, it goes to drainage The first section up, there is your angel budget for your residential, your commercial, and your landfill operations for solid waste. You've got your budget through the month.

Your actual, through the month of june, and then your variance is through the month. And you'll see that residential commercial or coming in bright in line with budget. Um, landfill is trailing just slightly. 596 thousand from what we had anticipated this year. As you come down the list, um, you'll see that There's water and sewer.

Um, you'll see the impact of what happens in a year when there's flooding going on. And also, it's a milder weather. Now we're hoping to make up some headway in the last part of this fiscal year. What's really tricky about water is the highest months of water usage? Are unknown when we start setting a budget for the next year?

So we are in our highest collection months right now. And as you can imagine um, 100 degree weather does crop some Um, watering a lot of our water usage in our higher months are related to irrigation Um, and one thing that we do, see now i don't i'm hopeful that will come in closer to budget but i'm anticipating we may come in slightly below what we had to have had anticipated to share for water cells and the bulk of that was from the early of rainfalls the consistent rainfalls for a couple of months that we normally do not see.

And so, I am. I'm a anticipating that it will, we will make up some headway as we see the rest of the july sells come in. The august and the september itself because those were actually usually our hottest months in the year and usually our driest months. Water cells are highly related to how much rainfall we have and the temperatures that we're seeing because the extreme heat does start burning up some of those grasp and vegetation surfaces and so we do a time to see more irrigation having on so that's why you're seeing your water.

Variance down about 10 percent through june. And again, june, you were still seen Bloody so think back to june we were still seeing flooding going on. I think i could be looking at somebody that's had a better memory to tell about the middle of june. I think we were still seeing obsessive blood going on.

Um, i'm sure none of y'all forgotten about that yet at this point. So especially our main group Um, sewer you'll see is coming in almost completely flat with budget. We're actually down just slightly. It is less affected by rainfall and temperatures than the water cells. Um, Then drainage you'll see that we budgeted about 7.4 million.

We are trending just slightly higher than what we anticipated through the month of june, about three percent higher which is about 1608 thousand dollars. We will talk about what those budgeted amounts are in next year as we get into those individual funds and you'll be able to see that comparison.

And as i mentioned, you'll remember back to one of those first slides, we do have some proposed rate increases in the solid waste area, the water area, the sewer area, and the during area five percent on each, and then some additional mounts on the residential Collection area on solid waste for the dedicated dumpster replacement program and we'll talk more about those as we get to those budgets.

Plus their question on this one, Okay. So this is a slide that has kind of historically lived in budget for a while now. Um so i went ahead and left it in here. Golf was something that our higher council had made some Pretty significant changes to and so we track it very closely.

There was a directive from our prior council to Um get closer to full cost recovery not full cost recovery but to decrease the subsidy to our golf operations. So i wanted to show just a trend you're going back to 2017 you'll see the the amount that was subsidized for golf operations was much higher at 1.6 million up to 1.9 million.

Then there were some major changes made from the expense side and from a revenue standpoint and i wanted to show the far right here. Um, the last three columns there, you'll see we were, we were anticipating about 860 thousand would be the best subsidy from general revenues this year?

Um, we think that's going to come in closer to, about 634 thousand. Then we do have that about 770 thousand for this next year, another big thing that they're seeing is their insurance costs have gone up quite a bit, their utilities our certainly staying high as well, but there are some proposed be adjustments in there to help.

Keep that subsidy, you'll see, it's been hovering around about 85 percent The last couple years and so that's how it's in your proposed. But if this group wants to go a different direction, we can certainly talk about that when we get to golf operations. Just, this was just a quick snapshot.

All right, so let's look at general fund revenue as a whole. So general fund again is where the bulk of your city services live. It is where all your public statements had all your traffic. Is there your streets? Are there your parks? Are there your libraries are there? Um civic centers inside of there, most of your government services, you're building safety groups in there, environmental health, They live inside your general fund.

These are the revenue sources that we collect to fund those areas. As you saw over the last few slides, we talked about some of the biggest ones. Okay, so you'll see on this pie chart down at the lower left side. Sales tax is the biggest portion of funding to your general fund at about 32 percent.

Across from that, upper right hand corner is your property taxes. Your property taxes are anticipated to bring in about 22 percent of your revenue to your general fund this year. Then as you come down to the bottom, right, you'll see that gross receipt businesses at 10 percent, that's your franchise fees that we already went over one of your other major revenue sources.

Then if you go directly across from that upper left hand side, they're solid waste. At about 12.9 percent. We talked a little bit about those pieces. Well, that's, um, the other biggest revenue source inside your general fund, the rest of these, Um are very important items that fund your general fund.

We'll talk about a lot of them owns. Our reality talked about hotel occupancy taxes. If you go kind of to the far right hand side in the middle, there are about 3.6 percent of your general fund. Um, the other things are Based on interstate mandates. State requirements cost of services recovery.

Um, interest income is a little bit bigger than a ministerial sliver this year, because interest rates are up to slightly According to slightly, they're they're up a lot higher than they've been the last few years. Um, finds import creatures are the amounts that are gone that go through your municipal court that is directly related to the amount of citations that are written.

But also what state mandates are in place, a lot of those that are in place, require Um, the courts to allow. Either community, service efforts, or payment plan arrangements. And so, we have seen a downward trend that might report picture area over the past several years. Um, city fees on the Left side there.

We'll talk about those kind of individually as we go through the departments. Those are your fees that are collected like, from building safety or through environmental health or, um, At time i'll be here. Um like in your parks and recreation those are more of your direct users. Like they're coming in to get a specific service from the city.

That's um what's in a lot of that here. Um, any questions point on this? This is just kind of just kind of an overall quick summary. Okay, so let's talk on slide 15 about what's funding your general fund and how it's changed. So in the current year's approved budget, we had 217.4 million dollars in approved.

Revenue coming in through the budget. So, we have grown that side about 13.8 million dollars to a total proposed revenue for general fund of 231.2 million dollars and that number will change when we get the final property tax collections. All. I'll go over that with y'all board later, but when we get the final property tax calculations, all be able to tell you what options, you have from a revenue standpoint related to property taxes.

I have a conservative estimate in there or what i think it's conservative. So we'll wait to see how that number plays out over the next couple of days. I'll have that point. Okay, so how do we get there? Where did that 13.8 million come from? So, the first one is sales tax.

We have grown that budget by five.6 million, and we have another 2.4 in our side pocket to talk about later. Solid waste fees. As i mentioned, we have proposed rate increases in there, which would bring in a total of about 2.6 million more. We also have a growth factor in our solid waste area of about one percent per year, just really to customer growth Interest income 2.6 million dollars.

I almost feel like it was negative in certain years so it wasn't negative but it was a very small number in a lot of the priors. We actually are seeing some good revenue coming in from that now. Um, you're a franchise means, we're seeing growth. What we're proposing is about 2.4 million dollars.

That we're seeing over to current here approved budget. And then there's some miscellaneous other ones that will talk about as we go through. That have some changes that we will discuss environmental health, has some changes building safety has some changes. And so we had a group those together as other, but we'll talk about those and we start looking at their individual budgets.

Question on that. Okay. All right, let's talk about debt for a second. So as you know, the city has outstanding death that has been authorized by prior city councils. This is a snapshot of the debt that we had outstanding. At the very beginning of this fiscal year. There's been some principal and interest payment since then, but this is just the snapshot and time.

This has back to your audited financial statements. This is the number. We like to report a lot on So, you'll see your total debt that's outstanding is 528.9 million dollars. You'll see on the bottom left. Almost, well, it's actually more than half of your revenue. I'm sorry of your outstanding debt is paid for by water and sewer revenue.

Okay, so we have water and sewer revenue, bonds of 265 and a half million. And then if you go up the chart to up to the upper left, do you see where it says crimoire 25.6 million? Criminal is the canadian river municipal water authority, and we are a member of that.

And we do have a portion of debt that they have issued that we are responsible in pain right now. That is about just a little over 25 million dollars. So those two pieces that criminal and the water and sewer revenue bonds are fully supported and paid for by your water and sewer revenue.

Okay, so the next biggest one is the green section and that is your property tax. Supported debt that debt is paid for by property taxes, and we'll talk more about that. And i even have a list breaking down what dentists of that's paying for, and what those debt issuances were.

So, we'll go over that just a second, but that's about 136 million dollars is backed by property taxes and pay for by property taxes. You go to the orange section in the bottom of the right hand corner. You'll see the hot tax supported debt. Those are the dead issues since we just talk it out, parking garage.

Imp have impact improvements. Okay. So there's three deck issuances on the hotel tax supporting debt. Those are paid for by hotel auctions and taxes and then the revenue sources generated by those two facilities. Okay, if you go right above the hot tax support is that you'll see the special assessments and other debt.

Of 18.9 million. The bulk of that is related to certificates of obligation that have been issued off behalf of either. The colonies pit or the greenways pit, those are agreements that were put in place decades ago, that has improvements were made in those areas. By the developers over time is assessments could support it.

The death. I'm sorry. The city issued dead on behalf of those kids public improvement districts. To pay the developer back for those improvements. So we have outstanding debt instruments. And we'll go over those here in a little bit. We have those listed. Those are fully funded by those neighborhoods.

They have a separate assessment in colonies in a separate assessment in greenways to fund the debt associated with those two neighborhoods. So that's paid there. We also have, we issued some debt for the tax increment, reinvestment zone. Number one, several years ago, the amount that tears number one collect is, they collecting cheer pay the city for the debt associated with that issuance.

And then there was also a debt, issuance done. Several years ago to paper improvements out have Ross Rogers. Golf course the green bees. Out there that are collected a portion of that goes to pay the outcome, the outstanding debt service. For fact, that instruments that did those improvements in golf course.

So And then let's see here. Sorry let's go up to the top. Do you see the red pies flies says drainage revenue. Those were debt issuances specifically to address capital projects for drainage improvements and they are funded completely out of your drainage revenues. And then that last little tiny sliver at the top, is your sweet services.

That was a recent dead issuance that we did in order to. Rebuild and rebuild some fuel islands that were way past their useful life, and in need of replacement out of our service center and those are being recouped through the internal charges. They, they charge out to all of our departments.

Questions. A few, yes. We couldn't keep looking for another 20, 30 minutes and take a break. And then launches, what 12 or 15s iraq. Okay. Yeah, so we're just stretch our legs quickly here and run to the restroom. Um, y'all good with that. If we do that, after we have a short discussion on debt, Okay.

Excluding my special assessments. What are the debt capabilities without a rate? Change of each kid name? So, let's take water into a revenues, with what water and sewer revenues. Without a rate change. Do we have the capability of issuing in debt? Um, We would have to cut back on operating expenses if we were to issue that.

So as the budget is set right now, They're not capability. We do have annual cash, funded capital built in. To the rates and that targets, right around, 10 million dollars and nine 10 million dollars. Um, in theory, you could cut back on some of that cash funded capital in, do a debt issuance.

Instead, it was just squeeze some of that cached ability to be happy, okay? So that's yes, there was a cash fundamentals. Now nine to ten million, nine target. We set the nine to have a decade ago, he'd be in the same. Realm of inflation are targeted. During that 15 cats.

Okay, what would Just for our education, what would one million? Of cash allow for the debt, which do you have a simple? You know, how to calculate?

I'd say. Give or take around about 100. I'm sorry. One million cash. Yeah. What would one million annual in debt service bring you in borrowing capabilities?

Let me double check with my smarter team back here so we can do about let's say We can do three million for about 250 thousand dollars. Continue 12 for every million number. Yeah. Okay, so one billion cash would equal 12 million in debt service have been probably a big rule of thumb right now, okay?

That's a 20-year issuance. Yes. That is correct. We have different issuances that are rolling off. Um, and so You may have those outlined when we get into each department. Um, You gave an overall dead reduction. And i wanted to go into that a little bit more. Um, so you can break down that.

And before we jump into that, what would You know, to strange have the same Somewhat cash reserve. They have a smaller amount they have about two million each year in cash flowing capital two millions. Okay, so there's there's a little bit of room but not anywhere close to what you wanted to actually water and sewers 10 million.

Yes, We'll call cash funded capital. And then, can you list the other ones for drainage drainage is they have two million dollars in annual cashmen is happening? CFP.

Acronyms. Your property tax has has, no that's only done. We only collect property taxes based on wasn't issue your special assessments and other Um, We would do anything on that. So yeah hot you have no you have no room hot as max it's maxed it as long as you want to continue subsidizing civic center operations and pay for tourism efforts.

Yes it's max. And flea is also maxed as well. We'll be talking more about that later.

Everybody. Okay. Does that help? Yeah she can be explained it. Yeah, reduction. I can't find it in my summary but you went from Cow wasn't like 68 million down to 56 million or something like that. Yes. Okay, so again the biggest piece of that was that that i think it was 11 to 12 million dollar payment that we were looking to expend to do the civics in our project that went off the table.

So let me refer you in your books. If you go to your big books, go to your towards the very end where it says Um, Debt services to the third to last tab, or it has depth service. Go to that town real quick and let's just move over there and look at them.

We have a compensated absences fund that i'm just going to very briefly touch on. We, um, pay all of The amount that are due, when people terminate with the city, there's certain amounts of annual leave sick, leave, and calm time that has paid out for our personal policies and all of that runs through our compensated absences fund.

We can go in a deep dive on that if you'll want to. But you might want to hold on that for a second. And then turn the page. Go to page, 819. 8 19 in our outstanding debt issuances. Okay.

On our outstanding debt issuances. You will see. The top section there is our property tax supported debt. You'll think the date we as you'll see all the issuments you'll see the date, we issue the debt. The original amount of debt that we issues followed by the amount of principles that is outstanding.

As of October 1st of 2023, which will be the start of this coming budget want to look at. Then you'll see the amount of principles and interests that do in this next budgeted here. And then, the total amount. So that 136 million. If you look at that middle column that outstanding october 1st, 2023 number Is 136.8 million.

Mid-type right there, to that piece on on this. Here's all the components that they get up. From golf here. Um the vast majority of them other than the tax notes. If you go down the tax notes that a section those are all seven years or less. A tax note by definition is seven years old or less the rest of them i think.

Most of them are. Yes. Thank you. Um so if you go down the list some of that very we can go down to the hotel office income tax section. I think those are closer to 25 to 30 years that Most of your ones are 20-year issuances. And then, okay, so this page shows five.

That issuments, Um and who paid for it pop sections, that property tax. Next then section is your special assessment. So you'll see where it says, three ways, kid colonies, hit golf course, tears. One, Greenway's colonies calling freeway jumping down again. Take 19. No, not Okay, everybody's there. Perfect. So that's paying for those that will move.

One of those is with solid waste keys. We did a vegetables this past year and we have increased the solid waste fees and it's just developed cell 10 out of the landfill, Allen's shaking his head guest and that is either under construction or about to start construction right now.

Or paying that in, its not paid by property tax. Then you've got the section for your hotel, occupancy taxes. The series 16 is The parking garage and then that series 18 and 23 or both. It has And you go down the lift and underwater and sewer supported dentist juices.

You turn the page. You have more water and sewer days expenses. Down below that you have your loss up now on page, 8.20 in the book. For those of the audience we don't, we may have extra books, but if you happen to have a computer, if you go to the city's website, our proposed budget is listed out there.

And you can follow along on the pages as well on page 820 The top part there is water and sewer damages followed by our promo statements that were named forth below. That is drainage Revenue barn. Then we have, as i mentioned earlier, we have a proposed edition for airport, we'll talk more about later and we have it in here as an estimated amount.

And then, the very last one, is your complete services. Supported debt service that we just talked about for those people islands. So that and snapshot of all, this is outstanding debt. That help you for what questions does that now? Create, no, i think it's a good overall selling. So like, Just to pick on the drainage because it's a fairly simple enterprise.

We've borrowed 27 million since we instituted that If i'm seeing that correct, we have 27 billion fill out, we actually have. Yeah, that's what's updating as a discard of this question. So the tone was About 35 million dollars, okay? And so, If we were to look at that one entity and you say, you know, we want to spend a million dollars more per year.

Out of that bond in debt service, we'd be able to borrow 12 million dollars. And then, That fund. What is the time that service angle? So that services to a very last home and not all of us because there is a there's a whole punched in here so it's kind of over a couple of the numbers but that's important.

2.2 2.3 million is their annual vector departments roughly nine million dollars growth.

Um, so there were about the product 9, millions of death. Okay, keeping us on track if we're looking at 20 million dollars use Uh, in our drainage. You know, flying issues that were We're looking at the potential in that if you cut service, right? So if we're, we're spending a million dollars a year in sweeping the streets.

And we said, hey we want to spend 500 thousand a year in street sweeping and going moral. Something that's fuel. It's something that can be done. Operation or the existing capital, and put that to the main difference. Yes, come in to go back to Drainage revenue, we're saying we have roughly two million

So roughly 24 million dollars worth of borrowing power. It shows to do that. Without affecting the maintenance and operations. One, one component of your cash capital is the units that cover the pump failures. So there's a component of the probably don't want, you know, we need that put that back in the operations or so, i was suggest that you would go into detail of discussion about how much of the two million we look at realistically because we would have a unexpected convention that they get accomplished.

So, back to the piece of it, that i wouldn't look at on that perspective, but the remaining of it is where you go through the prioritized list of projects or And can't find the board that fundamentally get part of them. But as an example in the drainage speaking increase, was that, that is that proposed drainage fee.

Increase to covering debt issuance or is that all doesn't cover maintenance. We have a five percent in this one, for that was inflation from the top. Okay. And that was, that was maintain that to million dollar. Compatible level. Yes, that is correct. Um, So, Slide number 17. Change your book as well on paint 8 19, it ties back to this but these are all of our property taxes.

Debt instruments. And, Um so i understand the bar graph is maybe a little bit tricky to match the colors up, but you can kind of correlate Um, what we have issued debt or in the past and what is gone to funds. So, The folk of the projects that you'll see on the list in the bulk of what's on, the on the bar graph, there is related to the 2016 voter for the launch for proposition 1, which was first street.

And for probably just two, which was related to public safety. All of the amounts, authorized by the public, have been issued the debt's already been issued, and those are on your outstanding list and they're part of anger, turning six million dollars that your property taxes are supporting. You'll also see through the list that we have a, i guess, our oldest is a CO issue for the grand street bridge back in 2010.

That was a wonderful thing that we're actually giving an interest rate based from the IRS related to it. So that's when the very favorable debt issumen. Um, then in 2017 is when we started the clock one in front two dead issuances. There was also a refunding because interest rates were going down, we refunded, and an outstanding CEO bond from 2007, that did multiple projects for police fire public, health, streets, and parks.

Then if you go up to the middle of the list, we did a radio project back in 2017 and that was related to some changes in the I don't think a couple times the wavelengths associated with what our radio system had to operate on. I'm sorry, i'm not the right person to talk about details on that, but it was a required project that we had to do.

So we did a small debt issuance on that which is laughing at me but it's okay. He can tell you the details if needed. Um, then in 2020 council, authorized, ACO to replace Thompson pool Um, then in 2022 there was a co-issuance to do the athletic field, lighting project that the mayor spoke about just a minute ago.

And then we have three outstanding tax notes, one was for 2020 and that was purchased the properties on johnson street. Of the one. There were two and 2022 one was to do. Um, half of the motivations over the news city hall and the other one was to fund a new enterprise resource planning sophomore, which in layman's terms is our financial software.

So there was a small debt issuance on that. So, this is what Is making up the annual principle and interest payments that the property tax rate is supporting and the details on each one of those issuances is on that page, 819 in your book. So Just to expand that little further.

Much like a line credit in your business when you pay it down, you have the ability to borrow it back. And you're used to running. A certain amount of You know, interest payments on that line of credit, you know, in your general overhead fun, Then you kind of know what this is, how much i can i can borrow and pay back and borrow and take back.

So on this one every time, the sitting's issued dead and they said, well, we need to have a percent take for that. Um, after so many years When that debt rolls off within that half, a cent should have been freed up to to increase borrowing power to, to kill and borrow again.

What i'm looking at though is i owe 530 million dollars in total debt. Now, i know you're breaking that out, you know, with some entities that pay for their But up here, you show 137 million tax supported debt. But it only goes back to 2017. So, when i was hopeful for it's, you know, here in 2023 How it's decent dead issuances in '03.05.07, you know, we're hey, let's pay that million dollars off and let's free up this half of penny.

That now that half a thing could go and borrow, you know, 10 million dollars or whatever. So that we stay within our, our given overhead budget. Can you explain, like, did we as a city never borrow money before 2017? Or do we not have any that we didn't refund, you know, what, what have we done?

And Uh, low interest rates is probably some of that, right? Yes, that's that's a great question. So there's a couple of factors at play here. I would take historically, we have cash funded our capital in the city of Amarillo. There have been, there are some employee knows better than i do.

Some really old old water and sewer that issuances that were done to do some major projects that are enrolled off. And then the ones that we have outstanding are the more recent ones that we're still paying on from a property? Tax standpoint we didn't do. Hardly anything that instruments is 2007 was the the latest i'm sorry.

The earliest one, the oldest one that we did that got refunded in 2017. Um and so that one is actually rolling off the books in 237. So it was a 20 year decision that still will pay off in 2027 but we are in 2023. That is the next Property, tax supported debtagement that role off the book and i think to

Yes, that's correct. I'm sorry. And then, yes, we do have a task note. That's rolling off in 2027, and so we don't Have. Oh no. Let me correct. That we have three. We have another twenties. We have three dead issuances rolling off. In 2027, you have your that bottom one, that g03 2017.

Refunding bond is rolling off. You have your tax notes. Serious 2020 goes for the Johnson Street property rolling off and then you have your tax note 2022 for your sitting hall, Renovations that are rolling off the 2027. So there will be portions of the tax rate that are breed of that here Which councils at that time.

Could issue new debts. That that same buying power that same amount of tax rate could find new projects. Unfortunately, we haven't done yet issuances long enough, and consistently enough in the city's history that, that is rheumatoid, that his council has the ability to look at. So, as we move forward, The concept in business.

Cash is king. Let's go out. Let's pay cash for everything. So we we own the fleet of trust. We have a good year, we go buy all that trust and pay tax. Um, not necessarily the best usage for a business entity. Now, i have your personal home. I would, i would think that's good, you know, it's an appreciating asset, you don't worry about losing that asset so on and so forth.

But if you get a five-year lease on your trucks and business where you have to buy those new trucks, every five years, Then it's honestly probably better. If you could release those trucks over five years, never own that asset and keep your cash for at least. Keep your payment.

At less than one that cash would have would have cost you. Um, so that's a concept that we don't necessarily have. Uh, worked into our budget. There are opportunities in the budget to look at certain things, but because the timing doesn't necessarily all add up or we have so many different departments.

Historically, i think what we try to find is we just try to find cash and go and pay for the different things like CIP projects. Different issuances. But then we are working within a borrowed budget power. And then i think as we look like this is helpful to know that a million dollars cash in any of these funds may bring up a 12 million dollar debtions That's just one thought.

But then if you had a million dollar, He had a million dollar cash, if you could make him payments, Cannot equate to a 12 million dollar project or a 15 million dollars, complete service or 20 million dollars, you know, equipment lease that you could do in an entire department.

So as we looked forward, just keeping your mind open to those kinds of concepts versus just looking at how much important. Yes, and mayor. I think those are the Donald points to bring up because it is a tool that i think council needs to be aware of is available.

Um, also that to a question that you had was the low interest rates, we saw over the last several years, obviously heard council to utilize that tool more often because it is so cheap borrow money at that point in time. Um, also just know any outstanding issues as we have if they are eligible to be called to be refunded.

Anytime interest rates are in a favorable position. We look at refinancing those, we leave the time period, the same, but we we refinance it to bring down that interest rate to say our taxpayers or water and sugar customers are our greatest customers money. So we did a lot of refunding back kind of around um you know the like 2017 to 2020.

We did a lot of refundings. Um, that you'll see in your outstanding debt issuances, the other item to put in the back of your mind. Is that one of the Well, two things, a lot of the communities across the state. Especially, if you look at some of the bigger communities, that growth, the communities that have been growing for years.

They have done year after year, after year, after year of debt issuances for decades. So every year they have a decision that's rolling off, so they can issue a new round of death layout, ever affecting poverty, tax payers Um, rate pairs, all of that. Again, we don't have that opportunity yet but there will be opportunities for the future accounts.

The other item is one of the arguments related to doing debt. Issuances is The people that are using these assets once the projects completed, the people that are actually using the assets are in one paying forth. When you're saving up cash sometimes reflecting money on people that may not be around to use the asset.

Anyways it's just a common thought processes about it. So there will be in the late 2020s or the early 2030s, that issuances blowing off property tax, ones water and sewer ones, a few opportunities that will be out there. Yes. Yeah. So like whenever we do have access right by the news Do we ever look at time to pay that bet off early?

Like these words that you know like looking at some of these outstanding. The only 568 now, Yes. So in a lot of times, If we certainly could look at some of that right now, the interest rates on this outstanding debt is so low and favorable that your money is worth more, Um, keeping it.

Either invested or constructing something right now than actually paying off yet because the rates are that we fight. We, we issued the jet and And refinance that. So we're in very favorable interest rates in your opinions. So it's something that could be discussed, it is not been a cost benefit to the city or to taxpayers to do that.

Is a great question, though. Other questions. Okay. If not, that's i think the end of death and we, um, oh i'm sorry, let me take one more slide and then i'll be we can take a break. Um just wanted to put this out there. Um we might like to track kind of what the portion of our outstanding debt is related to our total budget.

We did back this off for the civic center. Debt payment in the current year we trend right around 11 percent of our total budget. Um, is what we're spending in debt. Anyways, do something that we we kind of track to see if that's ever spiking up any euro for drastically.

Brought me out. The. Um, it's in my property tax by um, Do.

9 10 to about 85 15.

It's on their website.

Problem and see that competitive. Yes, inside. I know. So we're good. We're gonna, we're going to get up, take a break, stretch your leg, using the restroom come back in, and let go get a skill one again, you know, pretty quickly, round five minutes here. And when lunch comes in, i would recommend us just trying to work through one since we've got an executive council.

Um, so we can talk in english. All right, let's take five minute break.

All right. Um, thanks for the quick break. Um, i hope everybody either grab some caffeine or like stretch their legs, you know, wide awake for the rest of this. I know it's a lot of numbers to cover. So we will pick right back up in our slideship presentation on slide 19.

So this is actually kind of starting to look at this spending side of the budget. We're we're actually almost finished with this presentation. We're going to utilize the back part of this presentation over the next several days. So as we bring departments in we're going to have some flights up here so y'all can see a 10-year trend of spending in their areas and some of that information.

So um i'm going to just quickly go through a couple of last items on this presentation. Then we're going to jump in the budget book for a minute and then we're going to talk all things properties house. I'm going to Well, we'll talk, we'll talk through how we're going to do, property taxes, because we're going to talk today about it and then i will have to bring it back to you guys buying thursday at the latest once i get the final calculation of Randall County and i, i just certainly apologize on that, but it's a timing is always tricky on this on when those numbers come in.

So slide, 19, we're looking at what is a proposed in spending for the 20 to 24 budget for our general fund? Over on the far right hand side. You will see public safety. Um, a public safety. The vast majority of that is made up of police and fire. It also has our animal management and welfare group that has our emergency management group.

It has our 911 call center group all inside that area. Um tells on that here in a little bit, so that makes up just over 45 percent of your general fund budget. So let's come around. So the next one at the very bottom you'll see administration is about four percent of your budget.

We've got some support services at five percent of your budget. Everybody's favorite general fund transfers. That will talk through a lot of that is going to fund capital projects. Um, at 10 percent, almost 11 percent of your budget. Leisure services. That's where your parks and recreation. The third probably the bulk of that.

You also have your Scientific spinner and your library group inside there. And then the next one around is transportation. That is where streets is that? That's also where transit is in that group, keep coming around up at the top there, you see solid wastes about eight percent of your budget.

The next event is development services and that's just number five, percent of your budget. And there is a tiny sliver for health and human services at less than or right out 0.1 percent of your budget. So we're going to kind of talk about these in detail. This is just the big picture of kind of.

I think the biggest takeaway is public safety. Certainly is the lion's share of the general fund budget. So, let's talk about how our budget has changed from the current year to next year. Um, so the current year approved budget for the general fund is 239.3 million dollars. We have increased that we're proposing to increase that by five and a half million.

To 244.8 million dollars. So that comes in. It's actually in, in the grand scheme of budget, that is not a huge increase and the bulk of that or actually, all of that increase is associated with personal changes that we're proposing. Um, the personnel changes that we're proposing. Um, is We'll talk about a little bit of it.

Um, we'll talk it more detail later but the biggest piece of that is an overall four percent raised for all employees. And that's tied back to the APOA. Meeting conferred agreement with the police officers association. Um and this is the third of a four-year agreement in your three outlines of four percent increase.

Um, so we have that proposed for all employees inside the general funds and the rest of the city, but of the general fund. Um, the increases are 5.8 million for the four percent increase. Also one week of annually buyback for any employee that has over 10 years of service.

That is also tied into that. Police officer says nation meeting confer agreement. We also have the To structure retention pay and holiday, voucher programs inside that increased as well. And we'll talk more about that as we go forward. So let's look at a trend of the general fund. This is a 10-year history.

As i mentioned, as we look at each individual group, we're going to bring their information up but this is the general fund as a whole. So we have grown About 71 million dollars in a 10-year period. Um, the tenure compounded annual growth rate is Just slightly under four percent.

So, back in 14 15, our budget was at 173 million and what's proposed for this next year is the 244.8 million dollars. So, Right. Here is a more detailed trend by each group. Remember that pie graph that was up? This is breaking that down and what the trend has looked like.

So, again, public safeties about half of the budget in total so that they're that top bar. The rest of it, i know this is a little bit busy for you. You can kind of study it a little bit more in detail, but it kind of shows the tenure of trend across each of the groups.

So now let's talk for a second about capital. This is your first. Look at some of our proposed capital that we have built into this budget. We will go in more detail later and i think i saw Kyle senior John in here, nobody's so kyle is all things capital.

Um, we will be bringing him, it will be the Kyle's major John's show later on this week and he's gonna go with you guys about capital. He's also going to walk you through the list of what we are, recommending as the proposed capital projects. He's also going to talk with you about some of the things that did not make it into that list.

Why they didn't make it and then kind of let you guys just kind of look at some of that as well. This is a 10-year trend Of our general construction fund, our general construction fund is made up of the bulk of what your general fund operations are. So this is where your public safety projects are living for the most part.

Your most of your street projects are living in here. We do have a separate fund that has some separate street funding in it. Um, this is where your All of your facility improvements are in here. This is where that radio project that we talked about earlier on that. We did a dish before it was in here.

So this is the trend over the past several years. So we started out 10 years ago at about 11.7 million in in funding for capital. We had a spine in the 15 16 year, and if i remember correctly, i believe that was the year. We did the radio project.

So there was a debt issuance that allowed us to do a lot more capital in that year than we normally do. Then you can see we have very low years of capital funding, i always talked with the mayor about this, the last couple of years. I said, um, you know, we haven't seen it normal capital year since the war covet, a normal capital year for us looked anywhere around one to two million dollars.

You'll see that in that 16 17 year up to the 1920 year, that was the more average because again, the capital we were paying for each year and we continued to do is cash funded. So what we're doing is capturing these savings or any excess collections of revenue from the priority here, and then pulling it forward as cash funded capital.

So we have some very low years of cash, pundit capital. You will see in the proposed budget, we do have a 9.2 million dollars that were proposing for capital projects. The both of that that cash is coming from those, a lot of that coming from that excess sales, tax collection that we recognize.

So we're funding some of that. Some of that is actually proposed to be a Um, like a grant match project and we'll go through all of those details. So the city pays a piece in a grant piece, question point. Yeah, back on spot numbers. What was the significant increase from 2021 to 20 to 23?

So i get 20 30, but what is that? So, a lot of that, there were several things that were driving that one of them was, um, we saw or i'm sorry, we had the five percent raises for personnel added in. We also did significant changes in some of our harder to recruit retain physicians.

There was a lot of funding that was put in towards CDL positions. And some of those specialized trade positions to get us closer to market, we also added in 15 new firefighters in that year which was a big significant jump on that.

I'd have to look back. That's fine. So you're saying bangling's. Personnel, it. Yeah or salaries. Yes, some of it was, um, the inflationary cost that we were seeing on fuel and utilities and insurance and some of those things as well. And Overall supplies for, like, repairs and maintenance. Some of that kind of stuff as well.

Yes, there are a lot of factors, i think that we're actually going into it as well. Yes. Yes, and i will, yes. Um, and i can get you more some, a better breakdown, like five million because we do if you go back to this one, We we do this like every single year and so i'll go pull the last couple of years.

If you want to copy of it, you can see. Those categories were really well, a lot of them. Yeah.

Also. Yeah, so the Historically, the city has not been able to do more than about two percent raises for employees annually. And um, starting in 2122 is when the beginning of that meeting, confer agreement with police, officers went into place. And so the first year was a three percent, the second there was a five percent and then we're proposing to do the four percent for this texture as well.

Okay, not the capital. Um, again, we're going to go in more details on this, but we're looking at about 9 million dollars in general capital, Um, for this next year the biggest piece of that Indian woman. How and i will walk you through that when we look at capital, there's a big piece in there for fire.

Um fire was the lucky recipient was they were diligently on this. They got support of. I'm looking at Andrew here, there it was some grant fighting from the federal government that came through bonnie, jackson's recommendation, right? Um and it is for a airport. Aircraft fire training, facility. Um, it is one and fire.

I don't know that i see them in here but they have to send people off out of the area and pay for those costs to get our firefighters training at outside periods. Yeah, i love it. Listening them down with love it and so there is enough need for it.

Hearing amarillo, that they and they submitted a grant application through Ronnie jackson's office. Um and he your marketed as as a good project to recommend funding for and it was allocated to our fire department. So the bulk of that is actually grant funding that's coming in, we're looking that, i believe it was about a 3.8 million dollar project and the city's piece of it would be about it would be a 10 percent match.

So we're looking at bathroom and thousands on that. So I'm just going off the top of my head, so maybe after slightly. But that's the whole that's the biggest piece of our capital for next year and we're actually receiving it through granting. But again, we'll talk in more details and gets capital.

Okay. So, um On our capital and our general fund capital. This is what our general funds um paying for these capital projects or helping pay for in these capital projects. So, on this, um, we have Um a big piece on street improvements. We have i'm looking at college two big projects out there that are also looking to receive federal grant dollars on.

And we have been awarded these grant projects and the city needs to make up the match piece of it. Kyle, can you quickly off the top of your head? Tell me those two projects. 24th street.

The 24th street bridge overpass, which is Effectively funded by The federal. Railroad transit. Um, and that's basically a great separation of overpass on the 24th street North 24th where those trains repetitively are staging across that that roadway there. Um, and so that's about an eight million dollar. Eight and a half million dollar grant fund from the federal government and then the second award was for the 10th street.

Streets gate and effectively road diet for 10th Street and the barrio neighborhood. That's that's two consecutive year. Received a grant for that. A portion of that project last year and we receiving an additional graduation about portland for about that project this year. Those are the two big projects that grand projects.

So as um, So, these funding sources are phenomenal. It's so great to get federal funding and to do some of these big projects. The city would either have to do a large debt issuance or take years of saving to address these areas. Um, but what were you put in the budget is the city's portion of the match on those and we'll talk about the details on that as we go forward.

But that's the bulk of the street funding that 181.1 million. There's also funding just for the annual street Um, improvements that program that our streets does. Um, down below, you'll see that 4.7 million. Um, that's fire. Biggest piece of that is what i just went over with you guys.

Is that aircraft fire aircraft training, facility out. That's also federal grant, i think. Um, and then the rest of it, you can kind of see, we've got a few departments again. The heaviest focus in, this was streets and public safety. Um and so we'll go over the details of what these proposed projects look like and how they are proposed to be funded as it's a capital program.

So this is just kind of the first quick. Look at that. So now um switching gears just a little bit is like talking about future budget priorities. So, i think we'll talk about things that, um, Is no secret to any of you all. I know you all have heard a lot.

I know council members Sterling has learned a lot about this through our PCP committee and everything as well, but we do need to continue addressing funding related to the maintenance of a lot of amazing to these structure infrastructure. One of those biggest areas is our streets. It's something that we're going to have to continue addressing but it's also our large sewer facilities.

Um, it's also our drainage facilities and then all other facilities. Again i think as the mayor mentioned we talk about one time purchases but there's always either an ongoing or replacement cost on down the road. And so these are things that we are going to have to continue addressing in future budgets because our infrastructure does continue to age and we haven't always been able to keep up with the replacement at the appropriate end of lifetime.

And so we just need to continue to be aware of that as we walk forward through budget processes. Um, also we just need to be um, aware that our communities growing. That's that's not a bad thing at all and that high areas are growing, which is putting more growth inside our commuting two.

And just we need to always just be aware of the needs for planning for expansion of city services, as we do continue to grow. And then again um, you know, something that we saw a hard hit on out of covet. I think we come a long way on this, but there's still Additional things that we need to do and we need to be aware of going forward.

Is that, you know, we are one of the largest employers here in the city of amarillo. We have a big workforce that the only way it will providing services is through having people on staff. And so we need to continue to be aware. Of what is needed to recurve and retain, especially in that public, safety area that i know needs to continue to grow as our city grows.

But all city personnel as our city services. Continue to understand. Can you get it? We have come a long way. We saw a few years of extreme staffing. Shortages Um, we have our HR director in the room and he was Talking about some stats that we have come home long way in our staffing efforts in our retention efforts.

We're in a much better spot. We are not fully sat by any way, shape, or form. I think we're hovering somewhere around the upper 80s, to lower 90. Percentage range on our staffing at this point in time, which is significantly. Better than what we've seen in the last couple years, which is also the stacking shortages at times have created excess funds that we can put into capital, but again, it's still puts a strain on the organization.

Trying to maintain this inner service levels, which ordered shorter amounts of staffing. So it's just something to be aware of Um, there will also be pressures to continue to address recruitment and retainment as the labor market just continues to be competitive in this area. We all are aware that we have extremely low unemployment and we do have a lot of new businesses of scheduled to come in.

And so it's something just to be aware of things happen as well. So not gonna go here yet. Public safety. We're going to start first things tomorrow morning. Um, what i want to do now is mayor's good is well, two things. So this is a really good stopping point.

If we want to grab a lunch or we can go through and start going through a little bit of the budget book, and then do lunch, um, whatever you would like hanger, Sandwich and then we'll just work as we need. 15 minutes to get started and then jump in.

To are we going to go to 137 so our executive session starts it? Yeah. I think that should give her a raise that was. Yeah. So Yeah, let's uh Start back up at 12. We'll grab lunch real quick.

Fun fact is 1.0. The apples were 139.10. So it does illustrate products five plus times. With our tax collector.

Okay. Weird gonna start now in your big budget, books. That i know that's helpful, while you're eating. But if you wanted to kind of fall along, i'm going to talk about some Which are areas kind of first walking through this. So In your book, under your transmittal, and transmittal letters, have that very first half.

There's a good letter that kind of gives a big picture summary of the proposed, but so i would like to try to break that on your own. If you haven't already and if you will turn into the summary tab and go to page one, we're going to start kind of talking with a form here.

What we do as we work through the budget. Is we prepare a basically a cash flow of what we feel is um, in what will be spend out? Um, and then we do start working at our reserves that are on hand. And so what we have is on a fun basis, our page one here is your general fund.

So it's and sorry, we are not up on the screen anymore. We are just now living in the books. So those of you that are in the audience, if you have a laptop, there are proposed. Budget is on emeralda.gov. We're starting on page one or If we may have one extra budget book that if y'all want to share, we can do that as well.

So this is our general fund operations, each, one of our funds, we look at it on a, we look at a three. At from three different angles. The first one, the first column there is your original budget. You're approved budget for the current year. So for fiscal year 2023, Then we drop in what we think.

The revised estimate is for years. So that is the revised. Um, questions from revenue center point in a revised Cindy. We have actual through a good portion of the year and then it's projection through the rest of the fiscal year based on trends. Um, then The third column on these cash.

Flows is the proposed budget that's been filed. For the upcoming 23, 24 years. So again your general funds where the bulk of your operations live, all your public safety transportation. You've got your leisure services that we went over your administration services. Followed wastes in there. They're all inside this fund here.

So up at the very top of paint one, We always. Do a calculation of our available funds. So if you have a question, i think maybe council member since it. I i can't i think we're we had some discussion about this in detailing. The way we get to our available funds is we take all of our assets on hand, so it would be our cached, our event investments, in any of our receivables, the things that we are playing turn into cash really soon.

Um we take that then we back out any of the liabilities that the third liabilities, that we know we're going to spending. Um we back those out and then we back out any kind of other commitment with could be a construction project that's already even approved. For it could be an encumbered purchase.

So an encumbrance is just Of purchasing already been approved for spending and their, some sort of a contract or order that's in place. We just haven't received it yet, so we haven't actually changed the money, but it's already in covered. We take, so we're taking our passion investments, any of our assets that are about teachers converted to cash to back out our liabilities, we back out, any submissions or conferences and that creates our available funds, that's what we're saying are available.

To either meet or minimum reserves or available to be reallocated through a budget process for future spending from council. So, In the current years budget at the very top on that first column. We anticipated starting the current year, so october 1st of 20.2, We anticipate. We're going to start the year with 72 and a half million dollars.

When we finished our audit for this last fiscal year, we became we actually came out with 77 almost 77.3 million dollars. So, we started the year off ahead of where we thought part of that was related to cells. Past part was related to under spending on some budgets So, As you come down the first section, there are a revenues.

We have operating revenues and then we have grant revenues that we're receiving in the channel funds. So you can see where we we budgeted we were going to be and where we think we're going to end up in the current year in the second column So total revenues. We had anticipated.

We're getting to accept 17 million. We think they're going to come in closer to 229 million this year. The biggest piece of that again is going to be sales tax. Okay. Then we talk about available sources. So we take, if they don't go funds, the add our revenues coming in.

And we say now, this is what available to spend. So we come down, our senators are big He's, there's that first one under expenditures. It says, operating budget requests. We have 217 million dollars in operating budget requests in the current year's approved budget. We think of that, we're going to spend closer to two about 215 million dollars in that second call now.

Then as we go down, we have a small amount of nominal capital. What nominal capital is that's if we bought like a trucker car so it's something greater than 5 thousand dollars less than about 60 thousand dollars. So, it might be a species took equipment. A small piece of equipment stuff like that.

Then we have transfers to granite and two projects. So this is where your transfers start coming in. We have various transfers that we can utilize. We do have some grant funds that we transferred general fund dollars to and a lot of cases, there's a match requirements. So the grant will pay a proportion of Whatever we're doing.

And the city has to pay a map associated with that. So this is where we abundited to meet those match requirements. Um so the next one down we have a step grant which is a police grant that has a match piece. We have our home investment partnership that some of our community development money, Um, the city only gets the federal dollars, if we pay a match associated with it, Then as you come down in the middle of the page here, you'll see we have a street improvement line.

We have a budget of two million 337 thousand and we anticipate spending all of that. That goes to fun are annual street projects whether that's like an overlay project or a specific truth project. That's an annual funding that we do for streets. The next item down is our civic center improvement fund.

What that is? That's all of our hotel occupancy, tax dollars. That we collect within a piece of it stays in the general fund to trim up the substance of the civic center that we talk about a piece of it is pain to CBD to do our tourism efforts and this is all the remaining amounts of it.

This remaining amount then gets transferred over to our civic center improvement funds. To pay debt service. On the impact, in the parking garage, or Once that's complete, once the paper all that to do any kind of improvement that the civics going to. So that's our transfers on i'm sorry our civic center improvement signs so we were at 3 point, we thought we were going to be around 3.9.

Million is coming in slightly lower because our hotel occupancy taxes. If you talked about or trending a little lower, So, we think it's going to be closer to 3.7 But as we'll talk about my sugar in a second, Then we have this liability for compensated absences. I talked very briefly about that we fund as separate pool of funds that anytime someone is terminated service, whether that's a retirement of or a voluntary separation or in voluntary separations, if they need our employment policies when they are, we have to pay out some sort of annual need sick, leave or cost time.

We pay it out of this pool fund of dollars. So anytime we say out like, a firefighter, that retires, Fire. We have a much higher accrual that they can carry from one year to the next than our civilians. But, Anytime civilian or public safety is, is separate service any payments out related to that comes out of this separate.

But yes, question, you know, the balance on that phone.

So, If you go back a decade, maybe even A decade and a half to two decades. The city was quite a few seconds. So the city had some very good years where there were some excess reserves that they decided to set up this project but first excess reserved into it.

So for many many years, the city invested those dollars made interest off of it and out all of that. Instead of, for instance, if Let's say the police department had 15 retirement to one year and each one of those retirements has annually. We pay out sickly, we pay out Instead of that, coming out of turning some budget which can be a lip can be very ball at tile from your year.

Based on humans that bring service it was, it came out of this compensated, absence of fun. It was a great way to kind of smooth out budgeting in the general function. Then about Five years ago. Ugly depleted, those funds. They were fully deputed. We did not very many years, we added to it and many many years after 2010.

We did not add to it. Those friends got foreign. So now we find it on an annual basis at about 1.2 million, 1.3 million dollars the city, puts some changes into their lead payout policies back in 2007. That only relates to civilians and it greatly lowers. The amount of cool that you're get civilians can carry from one year next.

And then to paid out in the future, please, inspire still have those higher approval as a tire, payout amount if you want details on it. They're a great narrative inside our financial statement opportunity that the clip on it. This gives you some more details. So, yes, bounce is zero.

When you think about it, if your higher level ranking employees, foreign personnel, retire out those are larger payouts to based on, you know what the salary, requirements questions on that. Okay, okay. The benefit of doing that. Why do we why do we accommodate for that? You're complicated for unusually correct?

Yet. So one of the reasons we do that is it's a it's a common benefit that governments offer employees. It's one of the benefits in the benefit overall benefit package with the city has that are certain requirements. Every car director's not here anymore, he'll be back a little bit but section 145 that outlines what is done for police foreign police and fire personnel.

There are certain requirements and so historically the city has either masked those same lead payout requirements or Come close to them. They have back in 2007, in the city council decided to address it with reduced the civilians payout but less than born personnel. At the same thing, they section 143 requires us to keep it there.

Um, and so, it's just part of the overall benefit package knowing that in a lot of cases, the city cannot compete as closely with Um, private industry or other areas of the market. And so a lot of times benefits are that substitute for the lower source salary does that answer the question, okay?

It is part of it. Actually, i thought

And i continue all the copy of this.

Well, i think my office called my head, i will send you those but um it is Matthew was famous, but Um, over, i'm sorry. Okay.

Okay, please and fire can accumulate up to 65 days of annual, leave Um, and then Civilians hired. After 2007 can accumulate up to 30 days of any Um, then Recent fire and civilian tires prior to october 1st, 2007 can accumulate up to 90 days of sick leave Which they would also be paid out upon a separation if they had that one.

Um, and then

Oh, civilians hired after 2007 can accumulation to 60 days of And then i believe the comp times are kept at 120 hours for police and fired. If that is a good point and particularly to be through payout, you have to stay a total of 10 years. Otherwise it. There's a lot of caveat but i can still don't that wording on that specifically that you can kind of person with reference.

So that's your compensated absence. It's fun. Um, the next item down on, on page one. There is IT. So, One of those inner fun transfers that we eliminate, that is where your general fund. I'm sorry. This is just um, some of we have a couple of dedicated employees that are in our IT department that are fully funded out of our general funds, i'm thinking off to talk my head wanted police, i think of what is Okay.

In the abc is proposing to have one as well so we would have like public safety, IT professional that's fully funded out of the general fund and that's What that is? That might not even pay for Um, next item down please services. You see there was no budget on that that, we transferred about 45 thousand out.

So what we do a lot of times is we budget for it. There's a vehicle that's purchased with budget inside of department and then if it's transferred out to sleep actually makes people purchase of it. Okay. So that's just some of that money movement there. General construction fund. Here's where we transferred money to do these big capital projects in the current year.

We had just under 14 million. Budgeted, that was sending down some of those excess sales tax collections. We had collected from even the year before and a little bit that we had already recognized. When this budget was formed in last year, That number is just slightly greater at 14.4 million in the reason for that is, we had a department that had ongoing, um, Maintenance, for some software budgeted in their apartment, it's still being implemented.

So they are putting it towards implementation services in a construction fund instead of doing the monthly. I'm sorry, like an annual maintenance cost so associated with them. Okay, debt service. This 175, the condo stands out here a little bit. There's one 75 is the portion of the impeth leak that we receive from the ball team but then we transfer out to civic center to pay the debt service.

Um, through the hotel occupancy tax ball. That's the portion of the least agreement in the current year that's going to work together 175.

Because they had another 175 that is going towards. The new debt issuments so there's i think three kids 350 now. 350ish or 350. All, i'll look at the exact number a second 350. This now going from, that impound lease towards the upcoming debt from the tip has and the rest of that is the debt service associated with The landfill cell t.

Construction project that underway right now that we did that is important and solid is that we're collecting to pay for that. So for transferring solid-based, these outstandated experts

I think it's 47. I think it's going to success.

It means impact onion.

And we are no longer putting onions back to you for future.

Yep. So they, um, Sorry, i took a second to say goodbye. Um, the least agreement is a double of 400 thousand a year. And of that, the original average temp. 175 would go for the First step instruments on the impact. Hot bonds to 225 range of capitals, which the mayor was speaking about now setting sense, money aside, to address any maintenance improvements.

As they came along. So that's how the 400 was the last few years. When mlb hit them up on these changes that had to make them. And we knew this capital account for the pay for that much. It was going to take more, we renegotiated with them. And so now what we're looking at is, um, It'll be a total of 350 thousand out of 400,000, going to go to debt service and then 50 thousand a year will go into that capitalism.

And the amine architectural engineering, the design piece of that project was fully funded in cash out of that capital reserve. For the contract. With the Gilmore group i guess is that we have to contact with. They're continuing to play the time. Correct. We're just having with that many. We just have to be We are paying for it out of the existing revenue with their payments.

We will be the best way position with most time for a replacement seats or to do some other capital project out there necessary during the time we want. What is the time on the race? 25 years ago and and it says that at 20 years, we have to begin a plan to Remodeled.

The entire episode, we started Yeah, i think it's actually we have to start planning. I think what he's pulling it up. I think we start planning maybe 15. It's somewhere. But, You're talking with them about this, it's time to issue the debt. When the debt expires usually existing that capacity to do the renovation facility, it is when the debt is cold and we can refinances.

You know, we started negotiations january 235.

You gotta executive 5.40. Is that right?

Will be gamer, 15, 20, 30.

We can. Certainly get you all a copy of that agreements. Don't want to read it. Okay. All right, so back to page one. Um, Next line. Item down is court security. So we have a, we'll talk a little bit more about the community before Christmas. In the state allows us to collect support security fees.

Um on the tickets for the find that they are processing over municipal court is a state set amount and so we take that money very restrictive on what we can use that on. And so it has to be used for security purposes um you know, municipal court area. So we keep it in a separate fund to make sure that we don't combing glitter, use it for something that's not bother you use.

For in that fund, we pay for some security features at our municipal court that mainly what it's paying for, is our Bayless that are utilized by our municipal court that scene As we talk frequently earlier as buying, the orchesters have gone down significantly over the past of five to ten years.

So has that court security. So the city is transferring dollars into that court. Security fund to make up the difference on what we're paying from a security standpoint to run our municipal court services. So that would maybe be related to the cost of like available. And we'll look at that fun separately later on.

Um, And then port technology, the next line down, same thing, the state would allows us to collect a fee to help with keep the technology arminess to support up to. Current standards. And so we have a software system that we utilize over there to do all the collections, all the processing of On all of the it's processes.

I'm someone here. I'm looking over at me as victorian medley. Kitchen ran out operation for years but a process is all like this citations that come in and then to settlement of those whatever direction that goes, whether it goes on to a judge where someone's paying out their income and whatever else.

Still remember our software. We do allow we have Still service online and over phone system, that's all run through that software as well. That thing for that, software is paid for out of this core technology. But again, it's restricting can only be used for that. Again, it is slightly more than what we're expecting these days.

So the city is transferring money to make up the difference on that maintenance fee, annually on that software. And both of those fees just for your reference are maxed out the course of what state law. Allow those to collect. Okay, so down there, you will see, um, Our total expenditures.

Current year budget. We were projecting. We were going to spend about 239.3 million next year. We're i'm sorry revised this year. We think that's going to be closer to 237. Um, 0.6 million dollars. So we were anticipating, we were going to end the year with about 50 million 50.7 million available funds and we think we're going to have in that stronger than that closer to about 69 million in available funds.

So, um, Then if you walk over to the right hand side of the page, this is it's the same category, but it's it's what we are proposing to collect and spin in both of those areas. So, we are now expecting that 69 million to be, what we start next year with, which is october 12 2023, the start of the fiscal year for this proposed budget.

Um, so we would start at 69.1 million. Um, we are anticipating bringing in revenues of 227.1 million grand income of 4.1 million. We would have been several total available resources of 300 million, 3300 million, 250 thousand. The budget requests that are built inside of your proposed, i didn't come to 229.4 million dollars.

We have some nominal capital in there, budgeted at 726, thousand to get. We're going to Washington details, all this stuff as we go inside each other, this is the big picture. Then we have several transfers. Budgeted in here, the one different one that we'll see. So we have the same grant funds that we're looking to find then you'll just followed ways to movement.

Do you all see that line arm and it's coming in at one million 590 thousand? Earlier, solid wasted proposing a

Two time and dedicated done from replacement program. That was generate this one million 590 thousand dollars. And so we are going to transfer this with capital of fun to keep those dollars restricted so they will only be used for that. Dedicated dumpster replacement program again that preserves a dollar so they don't get Utilize for some other purpose or they don't get Reallocating back into the overall, general sensitivity.

It is to Um, increase our users rate in order to make sure we can see that program. Sustainable going forward. And oursel has a great information for you later on that, we'll talk more. But that's a new program, that's why that line items showing up as a new item.

Um, three different. We are. Um, we're budgeting to put two and a half million dollars into our street improvement fund. That's to help with some of the annual streams, overlay or program but also to help with the grant matching dollars needed For those two big projects that we talked about that we're getting the federal funding sellers.

The temperature is one in the 24th street one and we'll talk more about those. But this is where general fund is going to take money and put it over these constructions, like these projects as are matched to these grant projects. Um, the next one down, is civic Center improvement where we touched on that.

You can see that number coming down part of its hot taxes coming down. Part of it is the civics interceptibility is getting bigger. Okay, so those are the two things there.

Black and then, you know, construction fund About 4.9 billion dollars. That was what we went over on that slide earlier, that's the general funds. Funding into capital projects. And we go through the That fire project that matching dollars for the one out of the airport. Um, there's some other public safety and traffic projects and there that will go over later on that.

That's the general fund piece. Pushing that over to plan that Then debt service. We can talk about that ignorance tips. Again that's least money for hot bonds and the solid waste money going forward. The landfillment cell in that issues. And then there's report security report, technology pieces. So total expenditures are looking to come in, but what we're composing with this point before you all over here, as 244.8 million dollars.

So what that would leave us at the end of the year, is 55.5 million dollars. So what we are anticipating are three month operating reserve to be in again, that is our from the financial policies to hold the freedown operating reserves. We're anticipating, we need just over 55.5 million dollars.

So if we are about, we're actually about 52,000 below like we're in balance with our financial policy. So we just kind of just calculation for you all, you're going to see this on each of the funds. Okay, we're going to walk through the calculation on the reserves and then show you where we ended up with some of those companies.

Questions on general funds. Okay, if you turn the next page, All right, so here's what we're going to start getting into total spending. I'm sorry total revenue and total spending five line items in the entire general plan. So when you get down to let's Go to page. Seven page, seven, start your miniatures, and you see salaries and wages, that is the total number for every salary.

That lives inside the gentleman. Salary or wage. That can be an hourly range as well. Okay, so it's the entire general fund across the board throughout these various categories, okay? Um, if you keep turning the pages, Go to kick 13.

We also have some reports, we're going to hand out to you guys that adds in some columns in here with more variants analysis from year to year. Like you're over here. So we're going to hand those out. On page 13. This is your Bending by department, looking at two years of actual per your budget, current your revised budget and proposed budget for next year.

So it's a good easy quick. Snapshot thing to not And you'll have to forgive us. I hope you all either have reading glasses or a magnifying glass. Once you get this report it's a little bit small but it's a lot of information to squeeze into one space. So,

So, what this is doing is this is looking On a department by department basis. We're taking two years of actual at the variance, between those two years then we're taking that actual compared to current year. Budget and also current your revised. And then we're taking, um, Matt is it revised to pledge?

It.

So the far right column and i think, i'm sorry, councilman for Simpson. I think this was something you and i had talked about very, very far, right calls is going to be your persistent variance between your proposed budget and our replies spending. We think we're going to do by the parts this year, okay?

So this is just the way you can kind of look for and look at a big picture and see the changes we've had over the years. Um, and we were plot more about it as we get into each of the department. So if you not forget that, Okay, so 13 is the same information without the variances in there.

Um, If you'll turn to page one question, Mayor, did you turn in a budget with a 53.9% increase there on the Marion Council? I just wondered. Let's go to that. I have to do some chopping there. I don't know. Pretty much increase there. It's uh let's go to that one and then also exclude Somewhere in there within the 60 thousand dollars in food, Yeah, so we we have some some changes That we're going to want to go through and understand more.

We will do that at the dive in department by department, because we do have one. In the mayor's budget that we have been hit up by one of our Um, our entities that we work with, for increased funding on that area of pandra and i can talk through that the chamber of commerce, the city, pays and annual Membership due into Nintendo commerce.

They hit us up for increased support of looking at energy, you have it on top of your head it was for a special program. So you guys we're jumping forward. I was going to get to that. You remember what the program was? Thank you, Andrew's. Gonna get that and that it's in there.

It's a supplemental requests. So you guys to analyze it if you would again if you'll want to do it. Great if you don't want to do it it comes out okay. Great question though, because you guys will help, i'm so sorry. So we we can take that opportunity just kind of go through here real quick.

And summarize before we go any further. We haven't had an opportunity to ask for a certain budget. In indirectly. Um, Here for us to hold staff, you know, two and an account of saying, hey, you brought us The same budget that you would have brought previous council. Um, because a lot of these wheels are already turned.

However, We have already done some governance and ends work and some pillars and some visioning. That, you know, i wouldn't tell you a totally reflected in this year. So, As we go through these. The question can be asked like, well how come we left this budget the same Knowing we we wanted to pull back in this one department.

They're knowing that we wanted to add to this other department. Um, More importantly is what is staffed expectations moving forward? And how we communicate these changes. Once we get into these fly out of details, So, A couple of things. Um this is certainly. I think we could say a learning view for all of us.

We have a new group in a new mayor in that is very seniored as being a councilmember but, you know, new role as a as a mayor Um, and so And then along with that, um, we did have a runoff election. So we had a couple of members of our council jointists very recently.

We have been working on this budget since February, so it's been, it takes months, and months, and months and months of preparation, pool is information together and so we did have a council recruit where you all put together. Some visioning, we have adjusted, a few things in the budget for that.

A lot of the budget was already well in the world, but We have filed a proposed budget from, i would say the recommended from a stacking standpoint. With now, the opportunity for you all to start laying in on changes, you want to make it's very challenging to meet one by one and try to get changes because We need directions as as a whole body, of course.

And we haven't had you all as a whole body for very long either. I'm sorry, i'm on my phone. So again, we hope that you will all give us a little grace as we walk through this budget, because this is just a version of a budget. You all have the ability you, you guys make the decisions, you're the one that approved this.

But it's so now we are saying here's what we bought a place and most cases if meeting current service level midst. Some recommended changes. Those recommended changes. We're going to talk about all of that separately as we go through this time. But if you own, you have a different correction, you want us to go.

We can certainly do that and we can talk to what that will look like inside this budget. I just think we're going to have to do it, kind of on a department type department basis that you can all give each other a little braces. We walk through that. I think it's important for staff to to dummy for us.

It's council. We see that you guys been working on this. February, or even before that. And and you can't just 180 turn and go a different direction. However, because departments have brought in requests That put council in a position where We either need to give you a percentage and say, hey i need to reduce this by this much.

Please go tell me how You can do this for. We have to say, hey, i'd like to reduce this service or I'd like to use this item. And so, It'll be really important relationally that staff understands that we're in a compromise position because we can't not ask these questions and we can't ask these questions in a provideo.

It is very difficult for us to ask any of these questions about accounting across events. And and it's not done in that manner, but it's, it's open upon us that we have to because what we would have liked is we would have liked a little bit more time. To say, hey, our strategic vision here for library doesn't really include a lot of education.

Can you guys go and bring out? Say budget that doesn't reflect education initiatives that are elaborate. So if that budget comes back it 3.5 instead 4.5, then we have the opportunity of saying great child. Thank you so much. You're really moving and helping us feel that way. What we have to face, the fact of is If that is something we're looking at now, we we do have library coming in, and we're going to need to go on the island and we just ask that staff understanding, we're not trying to put anybody in the heart position.

We understand that y'all are trying to put us in our position. But that's the facts that we've got time. This budget again looking around six weeks. And in order to get this thing balanced where we can all get behind it, we're going to have to have some of those hard discussions.

And we will hope that those are all good discussions as we would forward to reprioritize some of these moments in the best areas. That that sounds great and we will We're, we're looking. At this opportunity at the time to learn from you all but to also let you guys know kind of some historical where we've been down certain you know paths and things and and to kind of walk out through what certain changes might look like.

So, i think, absolutely. We can be very productive on this. I think i've talked to each one of you individually about this. And so i'm going to talk about this now for a second. First off, we have beyond tight deadlines. If we have any idea, we are going to take a property tax rate to an election.

I do not have a final number of debt. And that is at the mercy of state law and we state laws, Um the appraisal districts are not even required to turn in certified values until the 25th, you will get your water. Today's the 25th. So we have tight deadlines because if any governing body was to cover, i'm sorry i want to take a property tax rate above the three and a half percent increase when operation standpoint has to go to an election that has to be called by August 21st this year, okay?

Which quick turn around. There's also notices that have to be public in the newspaper on the city's website. You have to hold public hearings. We have to do two readings. So that's, that's One version of, if we do not have a budget built for that, at this point in time, If not, if this group has no intention to go that direction, we have more time, which then we can walk through the next few days and say, hey, can you bring us a whole different idea on library?

We want to see this. And this and not that. What we can do is, we can go back to the drawing board. We can work on some numbers and we can even do another round of budget review. Later on, you would have until September 30th to get final approvals done.

I counters, 35 will look at those layers but i think i've talked to people of you individually a little bit about that. So if we have some sort of a consensus on a direction, we can go, it may Give us a different idea of how the next few days would go.

I think it'd be good to take a minute. And just let each council member. Give your comfort level. Moving on, september 30th basis, knowing that we would Um, taking the public and foremost. Going away. I would prefer to see was more worried about tax increase at this time. Coward Road, take this time.

Feeling more dive. If you want them, not Take a whole amount of time to open this budget. And then i will carry that further. Because the budget we're going to come up with 9-6 weeks. Is not going to be a good budget. I will tell you that i would like to going into october one of his coming year.

That we would take each department. On a monthly basis. And deep dive into each of the world's budget for the next year. And i would think by the end of the year, We can have a great budget. For 20 25, but I think, what will More or less end up doing it.

Kind of one of the working budget for this year. That we can live with. Really go in. Can do it, you I mean that's fine.

We want to. Yeah, i think we owe to the public to With those policies vision that we did, i think that we have an opportunity to to cast that I know by taking over the whole time and seeing and been working them. Realistically my opinion. Trying to prove budget this fast with only having Not too much long, you know, on I think we had opportunity to really use council vision that with the suppublican citizens that wanting To move forward versus trying to fast track something and i don't have any intention.

I mean, And i wanted to have anything with as far as calm voter approval tax collection. I mean, i have no intentions to do that. Especially based off the members of Whatever today. Video of my game was ran on a platform of raising taxes for sure. Um, but i agree with As well, i think we look at this.

We And adjustments. We need to make take these doctor after year. You can write the to see where we are. I think that it just produces to the voter that they put the rock people in place to say, hey we're going to take a look. To be more well-educated.

Before we do, make a decision of wants versus needs, what companies? There was work with

I would brianna i don't, i think we got our own due diligence to do to see where we are. And we're going to achieve Um to you know, to go to Vaseline. I think going forward. Now looking into herself. Yes, my question would be. Is you're looking at this at a high level knowing and we have here on a first sheet, how much are our property tax will increase.

So it's a very very representative. It'll be different than that. Yeah, it's going to be a revenue increase property, tax revenue, increase and significant property tax rate increase, right? Right. And then to do the to do the The catch up retirement? Yes. How about, how much what's the testament on what?

That's all, what kind of investment? So, um, I'm been working with TMRS on that quite a bit lately. There's three options, um, on the cola, what the city used to have in place was a 70% cola prior to 2011. Um, there's a 30 percent of 50 percent, and a 70 percent option, And early estimates of what we're looking at on the 30 percent with the new legislative change for the general fund portion alone would be around three million dollars.

To do the 50 percent, it would be between about four and a half to five million dollars in the 70 percent would be somewhere around. About seven million dollars. Imagine the annual.

So,

We could choose to take some time. Of course, we still need to go through as many departments as we can. But we key in, on a couple of bigger departments that we, we need to Prioritize, you know, we can also key in on fees so that staff at least have walking out of this budget workshop session this week.

And agreement on fee increases because if we say well let's only Increase, blood sp2, allows us and still reduce the rate. They can project that and then we could give ourselves time. Found some material in the walkthrough, you know, department by department. But in the sea increased structure, Um, It would be nice if staff had a direction from us this week, knowing what they needed to do there.

Or if we can't get on board with that, that we, we need to restructure those items as well. And what we're looking at overall budget. Um, I would definitely be willing to Take the, the increase that's allowable within SV2. Um, still lower the tax rate. Um, look at certain fees.

I'm not saying that i agree with all the fee increases as proposed. Um but then i would like to come back within a couple weeks at staff can do it that quickly. With some direction, on some things that we still. Picked out and you know, each one of you guys may have three, four, five departments that you were looking into.

You said how i really want to key in and study on this one with with mr stores. And so in those, i would like to be able to To bring those back within the next couple weeks somewhere in august. And then give ourselves an opportunity first in september, even though one more round.

And get as much work done between now and september 30, it was possible. And then knowing that we will continue that process on a monthly basis of looking ahead on each department. Evaluation moving forward. With the also getting like 10 departments. Over the next year, there would be large, it would be consequential to our level.

So, Golf is great temple. And, you know, we have some high rated Very nice golf courses. That are public and we're subsidizing it a third what it was either going into great correction. I don't think we're going to spend 30 minutes. Looking at that one and coming to to you know an understanding i think that some of the other ones you can take several weeks and really asking questions and ping pong of all that money.

So that all being said, does that give staff a consensus? Yeah. Not in the direction. Yeah, that does. Um i think this is a good time for me to pass this out since i'm hearing a consensus. Now i'm just going to throw away my other one because it is and i'm realistic time for him.

Anyway. Um, this is a proposed calendar to meet all of the state required deadlines related to improving tax rate and a budget. So i think within what you were saying there, we may have to do a little bit of when they have to be a little bit flexible, but we can call special meetings.

Um but at this point in time what we are looking to do the first action that would be needed, some helpful would be as early as August 15 so set a max property tax rate. It's just a lot to experience that it needed the rate you're going to improve and not to what i would recommend because you're not going to go to an election, you would have proven it the other room tax rate, right?

It's common that the highest you can do anyway. So that's it would be an easy action. Take the first, the next thing we would be doing with the public hearing on the budget on september 12th. Okay, so we have to have a budget ready to go. Buy September 12th.

So i think we could meet your deadlines there that he was talking about. So, our actions would be on the 12th. Um and on the 19th and then we had a food budget. We're always a little bit very getting it through right at the end of september in case something ever goes wrong.

You don't have any time to correctly if you don't get it done properly before september 30th, you automatically go back to the prayers budget. And so we wouldn't want to do any people that So i'm gonna they're going to pass this out so you guys can see. This is all dictated by state law.

I am going to bore y'all. Tell y'all are silly. And we talk property taxes because it's all driven by state law. We're going to go over notices, we'll do that later. But this calendar is built off of what they lost required. You guys to do requires us to do, Because property taxes are something that affect our citizens as property, right holders, safe, have a ride to know about what their property taxes are.

So, these are all things into things. So mayor. If that sounds good, this can be kind of the direction we go. I know. Um, our city's secretary stephanie has already checked on the 19th. I believe with you all to make sure we have forum because that's when we look to the final approval of the property tax rate in the budget, Where if you buy a sort of push it another week or two i would say.

The week is the most. We could. It's just, we're going to have to call special meetings. We were trying to align as much of it as we could to what meetings you guys already have on the books for the next couple of months. But we can do special meetings also to do more workshops in between like this.

Yeah, i would tell you that i would feel comfortable with your september. 19 not pushing you up to say that. 27 or whatever. Okay. 26. So, i think we could set out on the course of this. Knowing that we're going to work some special move, you know, meetings yet.

Um, to really give me into a couple of those departments are in waiting. Absolutely, we can do that. Okay, that's helps that also is going to give our directors An idea of a kind of what the next couple of days of going to look like. So i really do appreciate you'll have that discussion so early on in this session.

Um, one of the thing i wanted to talk about since we're on this subject about the budget formation. We have we've done this for the last several years to do and i think i may have talked to each one of you individually about this, but i wanted to just go over how we feel about budgets and again which we can then take and change if you guys direct.

But how we got here is we take our current approved budget. And we say these are our current service levels. So what we do with our department is we give them that same budget as the starting point for their next year's budget. That's those face budget. In their base budget if there is going to change to insurance, if there's been a change to utility costs, if there's going to change to fuel, there's going to change for IT services from our IT department.

Please services those things. We change those and modifying up or down as needed inside the face budget. Then departments take their base budget. They can make changes within their total based budget as they see fit. So let's say they say, you know, we have a travel in the last several years because travel was annoying to think a couple of years now, you know what?

You're going to save some money on some office supplies. We need to do some traveling to get some training. We're going to shift some money in it because we through our process that we have in place, we allow them to make any of those changes. If they want to do something of other beyond african.

Um, change the reclasses of personnel, so their case differently. Add in new prosper equipment, for new services that providing we call those supplemental requests. As we start walking through department budgets, i that's how these budgets are formed. They started with this year's budget, it's minor changes bring inflationary or, you know, changes related to six costs.

And then anything above and beyond, we have a separate list that we're going to give you guys to look at, as we walk department by department. And they're going to say, okay? For i'm just i've been picking up the police all days, so i'll have to apologize that like, please budget, you'll see here's their base button.

Now, they're also asking for us medicinal positions and here, and why? And they're asking for smoker pound dollars. And here's why, and they're asking for, i'm making this up. So i don't remember what all they had, and i'm off the top of my head and they're going to walk you through their logic behind why we are asking for these things.

Great time for you guys to ask questions, can We will tell you because we have met as a city management team and make recommendations, we couldn't afford all of the asks that the departments put in, but you're going to see all you're going to see the ones that we're recommending go in and you're going to see.

Those are the ones inside. The one they asked for that. We're like can either can't afford it or not use time or this isn't the direction where we want to go. You'll also see those that those are not in this budget book what we're going to show it all to you and then you guys can ask questions and you can say yes like that.

No, we don't like that. We want to change it all. I mean, whatever that's your opportunity to do. Period, what they needed toward us. Say yes. They have an opportunity to go back and look at your budget. And they might want to make some I think, i don't know.

Was an opportunity. I know where we're coming. And they know we're not going to go to the citizens and ask more taxes. So they may look at your brain saying, well, we may not need this. With timeline we got they've got what five weeks. Change itself. They want to change and we haven't proposed.

We were questionable. We weren't, we weren't requested voted for the tax relationship. They know from what we did say, we're not approved with everything here. I mean, so they got an opportunity to go back and look at yourself. And determinate they want. One thing we're going to need to get in order to guide those decisions to sniper when It's going to be very useful for us to make those changes.

Let me, let me see if i can add to that because i think there's a good direction there. So you kind of in the form of baseline economics, you know, where we give ourselves a baseline and we say, hey, this is the basics that we've got to have to provide police protections.

You know, to provide mother to provide experience whatever. Um what what you said. Mr. Stores are very helpful. You know, what was a supplemental? Requestingly becomes a baseline. Economics built-in budget this year. And so what we would be greatly helping departments were able to take their time to come back and i know you may not have the time to come and do it tomorrow or thursday, but to come back over the next month and be able to say, look, here's my bass line request.

And anything that you do below this, it's going to severely damage. Strongly, which is how compromise our ability to provide quality services to do x y z. These are the things that we currently have built in our, our budget. But these were supplemental requests but these are not based on requests.

Here's the value you can do in this program. Here's the value from doing that program and and it, if leads directors can come in and say, hey, i think all of these are a great value to our community, then we can hear that and we can move forward with it.

And the supplemental request of, here's the additional things that i could do if you gave me another million dollars. That's really where we want to be able to look at because you may have a department that everything they've asked for, plus what they would want. We're in favor of you may have a department, it's not asking for anything but existing programs.

Don't don't value the same as some of our competing funds. And so is it is it a good direction city manager to to see if we can start these conversations going? Um, knowing that we would have directors Is there anything? These are our programs and these are the things that aren't baseline, but we see a great value in them and be able to put value on this cost of many of those across two million dollars and so on.

So,

Potentially, it seems. Pretty open-ended. You want us to make proposed serviceable reductions in certain apartments without being guided by directed by council. And that doesn't look good. I'm just trying to wrap a head around. What? That's a loaded 50 caliber? Yeah. Out of the way about. So so what i'm not saying is You and staff will get together and tell the directors to cut their budgets across the board 10%.

No, no, i'm not supposed to none. What i am saying is every department, and every director, and every person that comes into is meeting needs to know. That we we extremely value their expertise and their knowledge and their department. And we need to hear from them as to why they need the money that they've got built into this budget.

For us to not know where the money goes. Other than personnel. Or what is personal do? Well, how many personality do you have more? You know, what are your hours of operation? How can we help you run your department more efficiently? When you're looking for directors, and, and leaders that were bringing in innovative ways to utilize the money that they have to help our community even better.

And we hope we have directions to come in and say, hey, i need that 500 thousand dollars. If i had this old computer, if I change this over here, We want additions. And i know i'm speaking for the entire council when i say this because we understand our situation is, we don't have enough revenues to get to all of our problems when we live in streets, when we look at police and fire.

So if we don't have this cooperative effort, then what we're forced to do is we're forced to evaluate without any experience and without any education, what we perceive to be non-needed items and we're asking you guys to come in and say these are needed items. You know, lawyers picking on the police department.

I'm picking on the library So with our library, you know, it's going to be really good to have a librarian come in in a director, come in and say, here's the outcomes that we're getting by doing these programs. And if these outcomes are there, then we want it back.

But if we look the back over five years and we said, hey, we And we're still doing these programs but we have no metric to really point to you and show you how this half a million dollars implemented into the city, or with rich as another example. Can technology and can some of the innovation that we're doing take over some of the other things that we're just going to be on.

So we truly want to put in the work to do this the right way. We do this the right way by going to a baseline not going back to a previous admins, generalized budget that we don't know anything about and this is where i talked earlier, it's going to take some patience on stack.

To work with us and know that we're coming at. This will be a right angle. We want to be able to hear you and we want to give you the time to condense us and to Persuade everybody. Okay, this is where this money is is being utilized. And here's why we need to keep it.

And and so is that a reduction in service? Yes, sir it will there will be some level of reduction service across the board somewhere. Were, we're not going to move forward into stateless. People services exactly the same. Without evaluating any of them. And let's just assume that we don't have a dollar that we're not spending well.

And let's move forward how much more money can we spend? We will not do that, and i don't think i have a council member that will tell me this. So knowing that i think is very helpful in working towards the goal of how we help every director and every department get all of the funds that they need to do their job to their best ability.

Within the prioritization of Needs and wants. That's all right. I think we'll run actually. Doing, you actually empowering All the directors. Solution. And not going to tell them. How to do their job. I know.

Environment. But i want them. To come up with. Come up with their recommendations. Act. What they say, what they're going to do without being Overseeing myself here. You know, i'm just I know you don't have any input and that's good. And leave input, but i think we need to direct them.

We're paying them to do that job. And they need to come up with the ways to do job. And we need to reward you when they do move better. In some form or fact there we can do it, but we need to Tree our employee. Like private industry. They give them the power to do the job.

I, i remember saying, a lot of times i would tell a guy when you do the job while staying behind a hundred percent. But if you make bad season, may go in my office and have a private number system. I'm never good department. But i just would like to see.

What they can do. What they really want, because Everybody, i know. For past experience more money. With more money, doesn't solve the problem. A lot of time in different system. A different way of management. A different way of direction. The problem i always looked at problems, not as executive thing, i look at the problem away to become positive.

If i can answer the question to what the model means, we're going to turn it into a pond. Matches my people.

Oh, i think we said An angry with everything that's dead, one thing and thanks for putting this together, just, i just think it is less as opposed to this other. You can with a percentage changes on there. You really could have got to get idea, okay? Who's google budget who's undergraded from a budgeting?

What specifically have one clicking down at a blueprint? Let me have you just say to think about is Uh like really the day that we print the 2020 budget. The day after. Not to say that it's meaningless but it's a snapshot, it's not. One thing you might want to think about is you can, this is policeman who's out here.

I'm not. No right? That makes it sure what budget versus budget is. As i am what our estimate forecast is because here's the person, i think if we figure it out, how to manage it for the 16 dollars. This year, even though the magic was they million dollars, you can figure out how to manage with six or six and a half.

Instead of saying, well, we're planning budget, they may. So, i would just, you know, i think that's one of the things that That i can kind of encourage you to look at is just, i mean, i understand you're very good really way the actuals and all the actual spent to do that service each year is really, that's more meaningful comparison to be able to tell us where we are going in as for the next question.

And then also, we don't have it today but you know, we don't have to do this today and i don't know whether but any other some areas over here that are overrated, some never seen. They significantly over about when they do. We have time going through these? I just like still a little bit about.

Why are we overload? But there are opportunities for us and ensure that we're managing but just work back. Yeah. Um what other things not? Have about another. Page for all that has a staple innocent sideways one, it's another look at very similar information by Department of the major categories to think we were trying to have some different ways for you guys to look at it from you know like 50 thousand foot level so you can kind of see if there's areas that we want to focus on question or as we'll walk you through.

So these are the big categories which in those cases are personal personnel services which is going to be the biggest spending category. Um, and so

Anyway. So and then contractual services a lot of times in your contractual area that is where we're doing a lot of like a workaround maintenance of our professional services that we contract for supplies. Could be just ongoing supplies but also more utilities and fuel live inside your supplies area.

And then your other charges have things like, Your? Um, i'm sorry, i was insurance, the biggest driver inside your other chart's category on this list. So This is perfect to be used together. Sorry. This is kind of looking at the whole department. Spend, this is looking at now, the one step deeper into the department.

And the major categories of their spend. Um to see how we're streaming year over year. And and i want to thank council member Simpson because he brought these recommendations forward and felt like this would be new. So i hope this means kind of what we talked about. We talked about putting some of this stuff inside the budget book and again We we do a lot of implemented, some new software or this last year, and so I was with her something that we need to get a book produced.

And so we got it done and then we have it separate reports that we, we may look at putting some of this into the whole budget. What really court. One other thing i wanted to talk about, The inside your budget book. We have departments budget by programs as well.

Leads do not, it's not an exact science by any means because i'll just be very bright. Our financial software is extremely old and out of date. We worked the numbers were right. I have no problem with the numbers but you can only look at it from a certain angle, you can't take it and say okay here's my major category to spend but now i want to know by programs.

So the police department offers us very, you know, lots of different programs inside the total police department. Where we're going that we're implementing new pineapple software, we should have the roll out within the next couple of years. Um, we will be able to get precise numbers by programs, which is kind of what i'm hearing from you all.

We have told our departments for the last couple of years to budget by programs. So as you start flipping through this book, you're going to see what we refer to as them narrative. There's one per department. So if you just put to the first half hauler safety Page 131 starts the beginning of this narrative.

Then as you walk you go through to the next page 132 it talks about police's mission, their goals, and inject objectives and then the programs in their department. I think for at least that's what i mean. You won't talk about is we want to know more about. What are we providing what services are you providing?

Those are the programs inside here. That i think as the departments come in they're going to be talking a lot about these, but it's good for you guys to have a reference to maybe know that. This is also inside your budget book. If you want to go back.

Is the program that each one of our department to providing out to the citizen and then an estimated budget to run each one of those programs. So i just wanted to make that kind of link into back to the budget book, so you guys knew that there's some more information in there and that might help some of the budget discussions.

As y'all are walking through. We'll go through these kind of budget narratives in these programs as we're looking at the departments as well. I don't want failed a lot for consultants. Yes, we have a Number of that. Negative plan on. No, the work that i did review that i noticed with me about three weeks to get, you know, four weeks to get to the number is also because, um, we have very one conventional software at this point and um, we have a professional wine item but it's not just consulting services.

There's a lot of other things that are going in there as well. Even at times, there's some contract labor that were temporary labor. That were Contracting with universal and staffing. So we had to go in and kind of dig deep into those numbers and pick things apart. Some of those importance also don't cost live inside of a capital project so we have to All those out separately.

So, What we pulled together for, you was our best number at a snapshot time over the past couple of years, but you're not going to be able at this point in time. We've worked towards that in the next couple years. Once we get software in place to get a number like that in here.

I'm one of the good. I feel very confident in our state. There are staff could do a lot of these the excelled without having. Who hire outside consoles or Do 9 percent of working verified? Well, i'm confident in the city staff. Instead of hiring consultant, a lot of time to come down, Believe this now is path.

IOx with published out. Person. We should each time we we have a consultant to be considered shopping. A little usually come in front of So it will bring in one tip, please, because we don't have anything to the bandwidth to be able to do it or the experience to do it.

If we can do the work, we try to do work. And in every situation that Um, you know, i can't say that that we can do everything with consulting towards the reason we're asking because the either more, you know, more expensive, to higher, someone to do it, that can do it or it's just not someone that available to hire to do it.

But that's, that's kind of what we try to use like, guidance and talk when you use it. Well, Five years ago.

We need to get down.

I don't want to slaughter some videos to come in there. That link you can hire a local engineering. Came out being aware.

Competition.

Schedule today. This lower. We've got you know let's say 20 minutes of working time here. One other topics. Who are you trying to get through today? Um, or do we want to continue with more of a strategic conversation? Move forward? If we want to regroup, I think. I, i don't want to cycle any questions at all, but i was able to get during the summary tab in your books which We're going to talk more.

Can you talk about these as well? But if y'all will give me the opportunity, i think we can walk quickly through. This is the 50 thousand foot level view, okay? And we will talk more about these going forwards. If y'all will jump forward with me to page, 15. Page 15 in your on your summary section on your book.

Um, Is where we start by fun. Talking about any feed changes that were proposing. I'm not going to go into detail on this. We'll talk about these as we go through the department that i wanted. You all to know, these are outline in here, think of good one to look at is teaching at the top.

This is a solid waste piece that we're preparing paste it even at the top like for instance, on the increases. On a one family resident. The current fee is 21.20 to provoke. Post P would be 24.28 so that would be three dollars and eight cents of an increase per month.

Are y'all following me on that? Okay, so we i wanted you to have these because we want to make sure to keep everything we talk about in context. As we're talking about feed changes, because feed change and solid waste looks a lot different than a fee, change in water, and sewer looks a lot different than a fee change and drainage.

Okay. So there's pages in here that outlines all of these new will refer back and forth to these pages. If you'll turn to pick 25, On page 25, we have a cash flow or um, Recap of our water and sewer fun. It works exactly like the general funds up at the top of available funds.

We planned on starting the current year budget at 47.3 million. We actually started closer to 57.4 million before. You can talk a little bit more about that, but we started pulling back on certain authorized capital projects or Delaying them, for strategic region, reasons to bring back to this budget process.

Instead, there were higher priorities that were coming through the pipeline. And so, we wanted to bring that back to you guys. And so, that is why that number is much higher than what we anticipate. We did not do all the capital projects that we had planned on in last budget years.

We'll talk more about that later. Do you want to do two seconds? And we put a lot into it but it's going to take a lot more behavior mode and some of the existing projects were not in the high priority as what we're understanding on. So all we didn't because teammates have strategic decisions like last fiscal year that they wanted to just waste onto capital spending on the project because it was bigger things we needed to spend the money on.

And so that is why we had more money to start this year than what we had a plan on. You'll see our operating in because we already talked about that earlier. Um, our water and sewer revenues are coming in slightly lower than anticipated this year. Um we did do a debt insurance this year for 46 and a half million dollars to fund some water rides and some other water sewer capital projects.

Um as you come down on the offering side, um we are on track to spend more for and from an operation standpoint than what we budgeted. I think some of that is the That contract labor that we are utilizing to do some of the i'm looking at hoi, the work that loses department.

Does that will contracting out. Now, we're hiring out for a caps of. We are utilizing some outside resources. So we'll talk through more details on that. Um, Capital were we're looking to spend about 59.2 million dollars in capital this year, there's your debt service payments. We had a new issuance that came on this year, but we didn't have to make as much of a debt service payment as the anticipated.

So, we went from 27.5 million in principal damage, 22.2 million, different school, and enters the eight and a half million. We're actually going to pay out about six and a half million. So our total signatures are coming in slightly below. Budget is 152 million versus 153.9 million. Leaving our available funds.

We thought we were going to end in this year about 40 million and available funds, it's looking like we may have closed with a 50 million in available funds which then goes up to the top right of the next column. That would be the number one to start next year.

With the budget going to looking out. We do have a rate increase in here. A five percent proposed that would produce about 113 and a half million dollars in operating revenue. We are not planning on doing any debt issuances where, at least we're not, unless you all, direct these differently, what's built-in and does not have one.

So, that would bring your total revenues to 113 and a half million dollars. Operating expenses are a budgeted at 68.9 million dollars and we're going to go through details on this is just that high level look. Capital is budgeted at 50, 55 thousand dollars, that's the lower level capital.

Capital projects are budgeted at 33 million dollars. A lot of that is what Floyd and his team work through freeing up this past year. The projects that that may not get done this year because if they need to be reprioritized into this next year, You know earlier we mentioned, we had about 10 million annually, the funds in waters who are cattle.

The number here is 33 million, that is not what we have annual that is spending down capital that we chose not to spend last year because we've got some big projects coming forward and we'll talk about those in. So that number usually gets closer to about 10 million without a debtorrent.

Debt service payments between our criminal outstanding debt and our water's new revenue debt. Will be just under 22 million of principal nine million interests total expenditures of 133.3 billion. That would make us indexter with 30 million 30.5 million dollars in available funds. As we work down you'll see a three-month offering reserve is 17.355 million.

We try to keep about one year of cash flowing capital on hand for reserves as well which is nine million, that would be a requirement of 26.35 million. So we're right in line with what our preserve requirement would be for our financial policy. Felt falling. Question. You say, preserve.

Is that policy set by the city or the state, or it's that it's set by our seat council. That these are policies that have been in place per day, they're following. Um, best practice standards as well against. So, yes, they are bicy council but they could be checked. It could be yes.

Okay. Questions on this. Same thing behind it was a linear. My line item view at the entire water and sewer fun. If you go to pick 33 you will see what a proposed rate increase with due to, to each of the average monthly bills. Um water pump is 33 somewhere home page 38.

If you move on to page 35, you have the overall look at our airport fund. How much airport? Same thing started the year we had planned on starting this year with 9.2 million. We actually started the year with 11.2 million dollars. Um, they were planning on receiving about 13 and a half 13.6 million dollars in operating income.

Those operating income numbers are coming in higher than anticipated at about 14.9 million. Grant income is expected to come down from what the anticipated at 5.3, to be closer to 4.3. They can talk to you about that. In detail, there was an AID, grant funding projects that were not able to be for grant by the two.

We'll talk about those later. So, um, your revenues came in still above what was anticipated at 19.2 million versus 18.9 On expenditures, those of you that are online too, sorry, we're on page, 35, you're operating expenditures. We had an approved budget of 15.5 million dollars. We think they're going to spend closer to about 14.2 million capital is going to say right in line with budget at 6.3 million for total of senators.

Anticipated to come in at 20.5 million versus 21.9 million. So that was leave us in a better spot with available funding end of year at 9.9 million instead of 6.2 million dollars. About 9.9. Then goes up to the very top of the third column. That would be where we anticipate starting this next budget here with 9.9 million in airport, reserves available funds.

They're operating income is anticipated or is proposed to come in just slightly under 16 million. They do have a proposed. Okay. Okay, operating in kind of a 16 million dollars. We are proposing. Avonne debt issue. That's a three million dollars and that's to it dress, a hanger to do some improvements and repairs at a hanger that we have a tenant in.

We'll talk through more of that as we get to the airport button, that would bring in bond proceeds. If three million dollars We anticipate getting About 5.3 million in grant income, bringing our total available resources to 34.2 million dollars. Um, budget right now, it's proposed at operating expenditures. Again, let's depreciation of 15.7 million capital spending, is proposed at 11.9 million.

Um then we would have debt service payments from school and interest. If we did this set issues about 30 thousand in preschool and 226 in interest in the first year that was ring. Total expenditures to 27.8 million leaving available funds at the end of the year of just under 6.4 million and down below.

You'll see again your reserved calculation three months offering reserve of 3.9 million one year, funded cash paying capital of about two million. Bringing your target reserve to 5.9 million, which is right in line with what we need a year. The next couple of pages are a line item by line items view of airports.

And then, if you kind of pay 43, we start on dreams or you won't follow me because i'm just going to keep moving the target, okay? Don't stop me. Okay, page, 43 is a high level. Look at three and utility We planned on starting the beginning of this year with 5.9 million dollars.

We actually came in a little lower than anticipated closer to 4.7 million dollars. Our operating income though, was anticipated at seven and a half million and it's going to come in closer to about 8.8 million, which will help make up some of that gap. We did do a dead issues for five million dollars this year.

So, total available resources is coming in right in line with budget then on our operating expenses, we're looking to spend right online with budget at about 3.9 million. Um been about 8.8 million in capital, principal debt service payments are just under one and a half million and interest payments are 785 million.

Bring our total spin right in line with budget of 15 million 15.1 million that would leave our available funds slightly better than anticipated at 3.4. Four million. Which then you carry out to the beginning of next year. Top right hand corner. That's where we would anticipate starting this next proposed budget here.

Um, again, this one has a five percent rate increase proposed that would bring in a total of nine million dollars just under 9.1 million dollars and operating income this next year. And on the expenses we are looking to leave expenses. Pretty flat with current year just so right around 3.9 million.

Capital spin would be about 3.2 million dollars. Principal payments of one million, 425 debt, service payments of 845 thousand bringing. Um your total expenditures to just under 9.4 million, that would leave available funds at the end of the year. Past 3.1 million down below. You'll see your minimum reserve calculation.

Three months, operating reserve of just another million dollars, capital reserve, and two million dollars. Um, so we would need two million 977 thousand in reserve and we came in just like slightly over that by about 60 thousand dollars. Okay, next couple of pages from the line iron by line art of a mouth.

Four drainage. And then on page 48 is what a commercial and a small residential user with the added increased related to a five percent increase. Okay, on page, 49. Is our fleet services fund. Again, this is just an insert kernel, service fund that gestures are internal departments. Um, you will see that we start, we anticipated starting the year with about 7.7 million, we came in below that a lot of that was driven by Hi fuel prices.

Um, increase cost of auto parts, and the replacement cost of everything from vehicles, to equipment to drugs, everything has just doctrum the room so that available beginning fund is, is hurting a little bit came in at 4.9 million instead of a 7.7 million. Operating income. We're looking to come in slightly higher this year than anticipated.

We anticipated 19.89. We think we're going to come in closer to 21.3 million So on the expense side we budgeted 12 and a half million dollars. It looks like we're going to spend closer to a little over 14 million 14.1 million. Capital with budgeted at seven were planning to spend night and we had anticipated death, service payments related to their outstanding debt issues of 176 offensive 1.4 interest that came in higher than that at 470 thousand on principal and fifty thousand.

Part of that as well. Is when we're first looking at indicating as you debt to pay for some new fuel islands, to replace the cool islands in our service center that all of our Google's equipment utilized. When we have done our original subjections, we are planning auditioning to CEO which is over like 20-year periods.

This was done through a tax note, which has a seven-year-old payoff so we have a higher debt service payment but it's going to pay off. The walk faster. That is something that if this council wanted to do something different and with we could always refunded and make it a longer that issuance.

But now this thing will be paid off quickly, but that's why the debt service is up higher. Couple of spinachers are coming in closer to 21.7 million versus the 19.8 million leading available funds as just under 4.5 million instead of the 7.6 million. That four and a half million that goes up to the top of a right hand side of the neck page to start the next year.

Operating incoming, we did have an increase in here to our departments. Um, and we're looking to bring in about 21 and a half million dollars. Um, operating expenses less depreciation, we're hoping to stay a little bit under 14 million Um with that, we can only afford about five million on replacement.

This upcoming year, we have our debt service. Payment, that 475 is 147. For total expenditures of 19.6 million dollars. That would leave us with available funds as just under six and a half million dollars and you'll see down below our three-month offering reserve and a capital reserve three million which is a very low capital reserve but we're still under that hitting that.

So we'll have to continue working on fleet. One thing that will be we are looking at over this next year is some other options instead of full fully cash, replacing everything looking at potentially some Least options. We do list some of our extremely large equipment like out at our landfill.

But there are options to potentially look at leasing more effective vehicles like small car, or pickups and that kind of stuff. There's different. Tools you could utilize, we need to do it deeper, dive on analyzing some of that to see if we can get a better outcome in this fun.

This one has really taken ahead over the years because the price of everything has gone up. So so drastically and we haven't kept paced in what we've been charging back to the departments. Questions on point. The next couple of pages are the need helpline, items for point, and then on page 55 as your IT fund, A prayer who already thought or so, we're hitting one 30.

Anybody in council feel like, Wooden grasp. This after she's taking you through it a couple times. So, he remaining month. That give you a good understanding how it happens. Calculating everything. And then all the description that's behind me, the importance of familiarize yourself with. Make sure you got good understanding If i couldn't even could i have, I don't know that, i don't want to do IT.

I'm sorry because iT is very straightforward. It is just i think you guys all understand what is involved with iT but if you guys If y'all would go with me to pay to 61, i might just talk through our insurance specs just really weird. 31. I'm sorry. 61 is our risk management fund.

This is where all of our high level interns, is that, this is where our property insurance lives. This is where our workers cost insurance live. We're self-insured in these areas, so all the claims that we pay and related to, those areas comes out of this fund. So, this one works kind of like an insurance company where it is processing claims and collecting revenues in from the using department, to cover the cost of those claims.

We do have insurance policies that are in place like, our property insurance. A lot of times those having extremely high deductible so we are more self-insured for kind of, dang it out claims, the big claims. One of them that we process this year was that will do center. We had a Wine buff water line bust and we did have a claim on that.

So it only covers the really large, it's time to claims that all lives inside this fun this fun took a big hit a couple of years ago related to workers comp there was some state watches Um, associated with what was covered under workers comp, they stated that even going back retroactively backed into the early part of 2020.

Oh, please and firefighters that. That contracted covid-19, it was considered to be a work related. Um illness and so it always covered under workers' comp. Unfortunately, we did lose three of our police officers, two covet. And those come with significant payouts, related to workers comp, that all had to be accounted for it through this fund.

We did have some excess policies that i think touched a little bit of it, but the bulk of it was being is being paid without of this fun because of that and i apologize. I really don't want to sound insensitive on any of this. I just wanted to walk up through the reality from my financial support.

This fun was in really bad to take last year. It was well below its reserved where that becomes an issue if we run into property damage. A one-time. Larger intern policies, won't touch it. This, fantastic pay for it. We ever had something catastrophic happen. We have to have reserves on hand to pay out those claims.

We do an average claims experience but again, there are anomals that come forward from time to time, and that's what these reserve or meant to pay. We have almost deleted. All the reserve funds, over the past couple of years, council did authorize us, i believe it was last year to do a one-time transfer out of some excess cash that we had.

In our general fund to help build these reserves back up. I do want to show, we were a good state now on this fun, but it can take one event to to pretty much wipe out all of this. So this fun has taken has been through a lot over the past couple of years.

I just wanted to kind of let y'all know what all was involved on that. We're probably not going to crazy detail line, unless you want to that's big picture where our insurance Okay. Um, if you will then turn and the mayor, i'll be done after them. Um, If you.

Go to page 65. Page 65 is your health insurance fund. So your risk management, sign is all your insurance and workers comp except for your health insurance. We offer health insurance to our city employees, and their family members and They pay a portion and we pay it worth. It pays a portion.

On those it all lives inside this employee insurance fund. So there's employee insurance fund, is that it's a self-funded health insurance plan. We utilize a network through Aetna as we were perfecting to utilize um the pricing amounts for services. Of the points. So we utilize their network and they do process claims for us but we pay them.

So we we don't buy insurance. We hold all the money inside our funds and then we pay off the claims as they come in. This is another fun that i believe it was in 2015, it had negative reserves. And so, this has gone through an evolution. We have worked diligently to try to manage making sure we're getting good network coverage.

Um, that we have good favorable contracts in place. We do have a contract with one of our local hospitals, with northwest right now. Negative explosive race. It helps keep some of our claim experience down. Now, what we have seen the last couple of years actually since covet, we have seen lower claims that we have in recent years.

So we had a slight health insurance increase this year. We are not proposing one next year, you will see as you walk through, i'm underneath world. The numbers, the bottom one, we need about six million in reserves and we have more than that actually a lot more than this.

But, Um, i've had explained to me on on health insurance. They, they talk about you go through these five-year cycles. You have a higher a low year, in three normal years but yet you never know where you're at. And, and i'm looking at dawn. I don't even know if that's like the reality and all insurance.

That i've had that explain on the health insurance side. As i mentioned, we've had we have been able to have really good claim experience the last couple years. I think during covet we didn't see as many people utilizing insurance because a lot of people elective things you couldn't even do anyways for a while.

So we've seen some low experience but we are in anticipating those claims numbers are just going to climb higher and higher and higher. And so at this point we're just thankful that we're not looking at any time, an increase. But we know those reserves are going to continue to be eaten down over the next couple of years.

So next year we may be talking about something a little bit different and so we do um come to your point. We do have a health care consultant that we work with to help us on this side because we do not have anybody in-house? That is truly a health care.

Professional. That knows that, like a health insurance professional. That is a very specialized area. Um, the more i learn The more i realize i don't know about healthier and so we do utilize a consultant. I'm looking at this, i want to say maybe about 35 thousand years that we pay on that.

They have this great work and helping us manage this function. So yeah. It rainbow with modern community. We practice mode? Yes. Both counties. In their boats, back to going back to budget. In our little thing, i've talked with a lot. I went to a i go to fun things.

I went to a truth in taxation, um training class about properties aren't the other day. And so i talked to a lot of the government enemies financial professionals and everybody was like, housing, what's your health insurance? Ours is going up. 30 percent ours is about 15 percent. Ours is going up, 20% and i was like, don't ask me because we've had increases like that in prior to years and so i'm holding my bread.

I almost feel like it may be too good to be true but i guarantee either the chance to buy next year, we may be having a little conversation but Tom, thank you for sharing that has actually. I did talk to clutter and random. Well, thank you. There's a lot of great people.

Um, our HR director and his team are the ones that really manage these funds, and they do a fantastic job. So, with that mayor, I'll pass it back to you and i hope Everybody understand what we have. A good day. Yeah, we appreciate the the quick summary there. We know we took some time.

To go through some overall but hopefully for staff. It's good in the end. Um anybody have any other business we need to take care of before we in there? What it would, what is on the agenda schedule for tomorrow? Yes, we're going to start an apartment reviews unless you all.

I thought a whole presentation. And a whole packet of items that. We need to go over related to property tax. But here's what my hesitation, this is very important. These are estimates, i'm kind of bragging my feet because i'm no, i'm going to get the final calculations within the next day or two.

We can do this tomorrow or if y'all want me to wait a little bit to see if Randall County gets me. The file calculations, we can do it one time when i have final numbers. It's up to you guys. Yeah, of course, contractor feet. She just doesn't want to give you preliminary numbers.

It's just gonna change. I don't want to hear what here the first time. So what then it'll look like is what we're planning to do. Is we will start tomorrow morning 8? Am we will bring in your public safety. Departments what we'll do is start going through your books.

So the very first tab after the summary one that we did the public safety. So up, first, i think it's police. So we'll start with our police department. And what we'll do is we're going to just kind of go through their budget. Let you guys ask questions like them kind of tell you, Um, you know what they, what purposes they provide, what ideas they have, where they've come some of those things and we'll just start going to department by department.

We only see things that we kind of have earmarked is, i would say, can you first thing tomorrow? And then we're looking to do parts. First thing on thursday, morning. Other than that, we're probably just go in the order of the book. If we get up to the park section tomorrow, we'll just skip over and come back to the first day of center of the page.

Sure. Hey, we had to post a notice of form because there was some boards that were wanting some advisor boards that are wanting to come in and time for their studies. Discussions that you guys have until they understand kind of where their direction is maybe so important. Any of the questions?

81, not in favor of the tournament.