e e e e e e e e e e e e e e e e e e e e e e e e e e okay it's time to get started I'll call the special called meeting of the loton city council to order please stand for the invocation by Pastor Bob weager and remain standing for the pledge of legance Pastor let's pray father we come before you thanking you for this day and for this opportunity we have to come together to conduct the business of our city we ask once again for your wisdom in your direction as we uh look at the business before us thank you for your many blessings in Jesus name amen amen I pledge of aliance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty Justice for All okay thank you Pastor and please call the role henkins Harris here Chapman Gil yes Hampton weager here Williams present Warren okay and a quum is established business item number one receive a presentation and consider accepting the financial statements and audit report on the city of lton for fiscal year ended June 30 2022 as presented by foris LL P Kristen good afternoon good afternoon oh just push the button that says on um so this is Cynthia Burns she's from forest and she's going to be uh briefing you on our audit yes yeah so um very happy to be here and um be able to present the results of your audit um shout out to Kristen and her team because um they have worked very hard to make sure that we got all the information we needed to be able to complete the audit um and it's continuing to work you know with um new software implementations a lot of times and we've seen this in um a number of our clients where um Bank reconciliations are a problem especially with cities just because of the complexity and so um I know this is um late on the timing but uh I I believe they have figured out the um issues there and are working to get everything completed and we have um a team scheduled to get started based on that estimate estimation to get the next year done and and get y'all caught up um on your report this year um you received uh an unmodified opinion which is the best opinion you can get we have also completed all the work that is required for um the internal control opinion and there are no material weaknesses or significant deficiencies that we um found in the city's internal controls um so you know the the team is um working hard to make sure that they're um segregating duties and that everything is working the way it should you ready for questions I am okay just just to cut to the chase for the citizens um what is your message is your message that other than the time issue and I'm not minimizing the time issue but other than the time issue of completion um is everything being done lawfully and the way it's supposed to be yes um that unmodified opinion that's the best opinion you can get so there were no issues there on the numbers um you know all of the entries that were recorded from the system um and the work that Kristen does was done by your outside accountant um with Crawford's so we did not recommend any adjustments to these financial statements once they were given to us um and uh as I said earlier um in our internal control testing we did not um find any that would rise to the level of a material weakness or significant deficiency that would need to be reported in writing okay council do you have any questions okay let's see what are we doing are we accepting this or consider accepting so if there are no questions do I have a motion to accept motion to accept and a second discussion or debate okay no seeing no discussion uh call for a roll call vote Harris yes Chapman yes Gil yes Hampton yes weager yes Williams yes Warren yes henkins yes finally motion carries will we be posting this online this will be Post online um who who does that and when's it going to be online for everybody to look at online in a few minutes do you have it I will get it okay uh I didn't get that can you say it in the microphone so we will post it I'll have um the admin assistant over in finance send it to Caitlyn so she can get it posted soon yes in a few days right well hopefully by the end of the day end of the day I like that even better okay thank you very much brings up item number two consider the FY 2025 city of Lon proposed operating preliminary budget and budget book presentation and take appropriate action if necessary to include making amendments to the preliminary budget to be incorporated in the final budget and budget book presentation that Council considers Kristen okay so today we're going to be talking revenues let me see if I can work this oh look at me so we've already had some revisions to the budget book that you were given um back on April 1st first thing we did um we evaluated some of the revenues that were uh numbers that were in there notice CIP was pretty generous probably a little too generous so we ended up lowering that by uh 4.7 million um it was originally 37 million it's going to be more around 32 million um we also had a house bill that passed recently um that kind of changed how we receive money for landlines and the cellular fee that um e911 gets so we had to reduce um what e911 fund is going to get but we're not losing out on any money it's just all going to go to the cellular fee now so that was a wash basically but it did increase One Fund and decrease another um we also reduced revenue for the Rolling Stock by 209,000 this was an accounting error that we caught and we had recorded the revenue twice we only got it once so we had to reduce that and then we increased revenue for the lot and Water Authority which is where all the utility payments go to um by 2.7 million and that's for the Republic contract negotiations any questions on the revision so far the water revenue is on page four the top of the right hand column correct and you're increasing that 27741 167 yes and what was the reason for that increase uh the Republic contract that was recently negotiated oh okay yes all right thank you MH any other questions okay so this slide corresponds with page one of your budget book you can see we've got several categories of funds first one being General funds um First Column there is the 23 what we actually received that fiscal year uh the second column is what we project will receive for those funds in this fiscal year the one we're currently in and then the final column or the third column excuse me is what we expect or what we budgeted to receive in next fiscal year the budget we're talking about here and overall for General funds we're looking at an 11% increase from fiscal year 23 to fiscal year 25 it is down slightly from fiscal year 24 we'll get into that in the next few slides um Enterprise has steadily increased uh 13.7 or 0 7% excuse me um our Capital Improvement funds you'll see a big jump from fiscal year 23 to 24 that relates to that $30 million loan that was recently approved um as of right now there are no no plans to go out for our loan we do have a call next week to kind of discuss that so that may change but I'll keep you updated on that um our special Revenue funds this includes drainage maintenance cdbg grants so these can vary depending on uh what kind of activi is going on within those funds but overall from fiscal year 23 to 25 looking at about a 10% increase there our internal service funds so that's it health insurance and workers comp looking at a 105% increase there and then our other funds include uh Debt Service laa um license and permits fringe benefits and our Employee Retirement um looking at a 16% increase there and I'm going to go into more detail this is just kind of an overview at this point so this chart is just a brief history of revenues over the last five years you'll see that green line that's the general fund kind of drops off there in fiscal year 23 while that yellow line which is other Revenue um Rises that same year this is because of the CIP um sales tax we were recording it in general fund and then doing a transfer to the CIP fund which is other Revenue um now we just record it straight to the CIP fund so we eliminated that transfer so that's why you see general fund go down and other Revenue go up other than that um they've remained pretty steady general fund and loton Water Authority have other revenu is going to be all over the place just depending on grants and things like that what we've got going on there so this is just general fund revenues so we have multiple categories here uh you'll see taxes is first um from fiscal year 23 to fiscal year 25 looking at just under a 10% increase fines and forfeitures is slightly down um I do have a call in to try to figure out out what this if this is we're not riding tickets or people are choosing to sit out Their fines um but I didn't get a response before this meeting um license and permits you'll see that's up they just recently implemented new software and that's part of it um so I didn't really uh include a huge increase from 24 to 25 kind of want to see if that Trend continues or if it levels out um parks and wreck uh saw a big decrease this is because of the schoolhouse llew we're not depositing that money in general fund anymore it's going to a special Revenue fund so that's the reason for that um grants um again this is one of those if we get it we get it if we don't we don't uh we did receive um a large uh FEMA Grant this year that 3 m or three goodness excuse me three million right there um but I don't typically like to budget uh for Grants just because we don't know if we're going to get them or not um Animal Welfare is down again that's same as the parks and wreck a lot of that money uh goes to special Revenue so that's the reason that's down and then our other revenues which I will talk about on a later slide is up 71% that is primarily um Bank interest surprisingly and we'll get into that any questions so far no okay so notable increases and decreases to our general fund revenues City sales tax from fiscal year 23 to fiscal year 25 is up about 3 million use tax is up 2 and A5 million uh the CIP sales tax at 2.125 is down again that's we record that straight to the CIP fund now franchise tax is up 360,000 license and permits is up 354,000 leases and rentals again this is Schoolhouse slooh it's down 429,000 earn interest so we switched banks a couple years ago if you'll remember and uh our new bank is pretty generous with the interest and so we're very happy with that we used to get around 12,000 a month um we'll get anywhere from 4 100 to 450,000 a month now and then the insurance proceeds the big jump here relates to that June 2023 storm that we had we're still working on um collecting all the insurance for that so I expect it to be about the same next year any questions on these numbers okay so we're going to move on to the lot and Water Authority fund revenues these are what hit your utility bill so you'll see um and we do have a CPI built in to our budget um it is 4.9% so if that is passed our water revenue from fiscal year 23 to 25 will increase 12.3% sewer will increase uh just over 8% refuges will increase 12.3% and then other it will increase uh 24% but that is mostly related to um Bank interest and late fees we which I will talk about here in a minute oh yes okay so CPI increase um it is 4.9% I looked it up a couple days ago so that First Column there is if we the revenues with the CPI would total uh just over 52 million if you vote not to uh Implement a CPI it's going to be 49 million which is a difference of 2.8 million does that include the fees that we discussed in the feem committee the other day with the um storm water drainage itre okay that would have to be separate chrisan that that CPI still comes out of the Dallas area yes it does so notable increases to the lot and Water Authority fund Revenue course water revenues um from fiscal year 23 to fiscal year 25 about 2.6 million sewer service charge $922,000 again this is if a CPI were implemented uh garbage disposal fees 1.5 million late fees took a big jump we were not implementing late fees uh for sum of 23 because of the new software and wanting you know we didn't want to charge late fees if things you know weren't being build correctly so that's the reason for the big jump there and then again earn interest that's from switching banks any questions on those numbers okay so then these slid these next few slides are just our other oh I'm sorry yeah that on the on the the the the the garbage uh does that include the gate fee in in all of that is is that fair to any that is not the gate fee that's on a different line okay thank you yes other revenues so in our other General funds we have storm water management that's up 71% they're getting a FEMA Grant that's the reason for that um emergency Reserve is up 142% that's primarily due to bank interest um there's really not a change in any other Revenue um special revenue is down so back in 23 uh we changed policy Lita was getting the medical marijuana marijuana money and we decided that the city was going to keep it so in fiscal year 23 they gave us just over a million um that they had sitting in their bank for that so that's the reason it went down um Enterprise fund you can see it's minimal increase uh sewer rehab went up 28% that's Bank interest same with landfill and then Debt Service is nothing so then our Capital Improvement funds Rolling Stock uh we have several lease purchase agreements that we're going to enter into next year are planning to so that's the reason for the big increase there those uh loan proceeds or lease purchase proceeds excuse me our streets and roadways go bonds we have a this may change um we have a call next week with Chris Gander um right now we we don't have any plans to go out for Bond but that may change after that phone call and I'll let yall know on that one our Capital Improvement projects this is where um D and D money is kept that's the Big Driver behind that increase uh 2005 ADV valorum 2012 adalum and 2012 CIP those are all increased because of Bank interest and then 2019 CIP is up uh 19.6% and some of that is Bank interest as well okay so we still have money sitting around from the 05 TW and 12 ADV valorum that's drawing interest and we have money sitting around from the 2012 CIP that's unspent and drawing interest correct and so what projects haven't been done and is that a question for another time that's a question for another time okay um I'm still trying to wrap my head around those ones okay but I will get you an answer on that thank you comment tonight I just want to make a comment so everyone will be aware we keep talking about Bank interest but we have to remember that for the past 10 years we've been in a 2 to 4% now it's 78 even %.
So while it looks really good we're getting all this interest all of a sudden it's just because of the interest rates no one loves us and so consequently that's going to be something that probably will be big changes one way or the other in the near future let's hope it goes down down but I did lower it slightly um because we are spending more money and so I don't expect us to have the cash that we have right now um and again we don't know what interest rates are going to do you're right but we did see a big jump when we switch from our original Bank to our current bank um almost immediately so they just they pay more in general so now our special Revenue funds oh uh drainage maintenance is up about 10% cdbg the drop there um their home program no longer has program income so that's the reason for the drop there and the grant fund again we we budget what we know but we we don't want to budget for something that isn't going to happen so that's the reason for the drop there U Mass Transit Authority uh there was an issue in fiscal year 23 where we weren't drawing on the loan you can see where we made up for it in fiscal year 24 that's nearly double and uh so we expect that to level off in fiscal year 25 and then the rest of them are pretty minimal you can see e911 drops off a little that's that um law that recently changed in cellular went up because of that any questions on the these like George was pointing out the mass transit and that increased to 4.
six is that because of some grants received or something or that is from yes so we weren't drawing on the Grant in fiscal year 23 there was an issue y uh we made up the grant money was still there we just weren't drawing on it yeah so we made up for it in 24 now onto our internal service funds of course it doesn't have anything health insurance expecting a slight bump there just because premiums tend to go up every year and then workers comp it not a big increase dollar-wise but it is an increase and again that's just Bank interest and then our other funds these were pretty Min minimal um laa and Municipal trust uh Court um those are Bank interest and then our general Employee Retirement we invest a lot of those funds and Investments are turning around so that's the reason for that increase there Kristen M uh I'm confused on the health insurance is that an expense not uh not a revenue it's both so we collect the premiums from the employees oh and we deposit that money into our health fund and then we will turn around and pay our uh bills and the workers comp have same thing same thing okay thanks MH any other questions on this one all right so notable increases and decreases to other revenue of course storm water had that FEMA Revenue we talked about that the miscellaneous revenue and special Revenue that's the uh medical marijuana our Federal grant for mass transit we spoke about that we weren't drawing and now we are um avalor tax is up slightly about 443,000 the lease proceeds from the Rolling Stock we spoke about that we're going to have a few lease purchases from the fire department this year um Bond proceeds again that may change after our call next week um the CIP sales tax at 2.25% is up about 5.9 million from fiscal year 23 um other Grant uh I have that is the 2019 CIP that should actually be Rolling Stock we got a reimbursement Grant back in 23 and uh but that was a one-time thing and then again our invest ments in the general employee retirement fund have um been improving so that's the reason for that increase and then this is just uh some of the bigger increases oh I'm sorry I did have a question back on slide before the last slide on okay workman's comp it doubled and you made a comment I wasn't sure what you said but what would be the reason for that more than doubling in oneyear period because our in our employee roles are even down somewhat want uh so it's Bank interest the more money that sits there the more we collect okay so it's just a little bit of Interest okay so workers comp has its own account it really didn't increase substantially I mean $1,500 but it did um increase on that same slide I see nothing under licenses and permits is that that was a fund it related to I believe it was l L deposits for utility payments it hasn't been used it's not licens and permits and no it's called that but it's not really that maybe we should redefine that yes it would take we'd have to change the resolution but we could do that okay yeah um this is just a slides uh showing you some of the increases in earn interest for a variety of funds uh emergency reserves getting about $143,000 more than what they were sewer rehab 171,000 um 2012 Capital Improvement about 170,000 I won't read the entire thing to you uh fund balance so this slide is a little premature but I do want to talk about it so overall revenues are up slightly but you can see here that our fund Balan uh continues to decline and this is the Big Driver behind this is expenses um and we'll get into those in later budget sessions I just want you to keep that in mind when we do talk about those so you can see general fund um if the budget were approved as is today from fiscal year 23 to fiscal year 25 drops almost 30% it's still a a healthy fund balance but uh it is dropping um Enterprise funds it shows a major drop and it is because of loans um we have to book the entire note even though we have we not going to pay that entire note back in one year we still have to book it that way so that's the reason for that huge in uh decrease Capital Improvement funds overall are up 10.3% our special Revenue funds are down 60% um a lot of this money was sitting there and nobody knew about it or was spending it um we were trying to make the divisions aware that hey you have money this is what you can use it for and trying to encourage them to use that instead of just relying on their operating funds um internal service funds down but it's minimal 1.65% and then our other funds is up but it's also minimal just barely under a percent any questions is there a list in our budget book of the special Revenue funds page one page one there you go easy yes unfortunately councilman none of it says streets oh no um there is in fund 4035 some money that we found um for Street not a lot um and he has been using it but uh we're trying to get him to spend some of it but it's I don't remember I want to say it was less than 10,000 it was for like sign I can't remember offand oh yes unless you want to talk about something else we're done talking about Revenue um well thank you nice and concise and all the important numbers right there thank you do we want to talk about CPI or do we want to address that at a later meeting let y'all tell you what I would like to see okay and I've got the number written down here it's going to make a $2.8 million difference but um I'm I'm really going to hope that we can at least consider another year of leaving that off now I'm going to tell you the reason two years ago we did 15% all at once MH last year we didn't do any but I don't feel like and I feel like the 15 was too much I didn't at the time but it turned out in my opinion to be too much and so I'm hoping we can avoid that again to kind of even out what we did two years ago okay now what I what I should have done before we ever got started is what I did last year and say I want to see that option presented from the get-go and I didn't do that and I apologize to you but I will be asking that as we get towards the end hoping that we can avoid that increase okay okay so that we if if we could have some information on the things that have increased as we talked about in the fee committee the other day the the uh storm drainage cost doubled correct uh last year so maybe a modified version of the CPI might be appropriate as well okay I also my thoughts are we're getting if I if I read it right 2.6 in late fees that we haven't been getting and that's 270,000 from being a wash of the CPI increase mhm and there's no as far as I'm aware there's no cost to the C City associated with those late fees other than U the discount rate so um that might be another reason that we could foro that yes still believing that as Mr Harris said we may have to add some money as we get into into this for storm water what was storm water maintenance storm water and drainage storm water maintenance may require 15% and so and so maybe I can go ahead and ask that question because we don't want to break any records on short [Laughter] meetings um and maybe this is a question for another meeting and I'm fine with that how have we always funded at storm water has it always been funded by that or was that a supplement to other budget money that was in there it has always been funded with that $125 on the water bill however they haven't done a whole lot they haven't been able to do what they should be doing with it yeah and we and I think we all know one one of the biggest complaints I get in the Summers is we're not mowing the ditches enough and and I think we all know that so um we'll be t I certainly would interested in taking a look at that so okay I don't have any other questions and so I'd entertain a motion if no one else has it second I have a motion to adjourn a second please call the role thank you Kristen great job great job Gil yes Hampton weager Williams Warren henkins Harris yes Chapman e e e e