e e e e e e [Music] all right good evening and welcome to the city council study session of Tuesday April 16th 202 four one item on the agenda discussion regarding the proposed uh FYE 2025 city of Norman budget general fund discussion and special Revenue funds Mr Francisco thank you Mr Mayor good evening members of council um it is my privilege to start to introduce the fiscal year um 20124 2025 budget to you this is the city manager's proposed budget as we'll be going forward in a series of study sessions I'd first like to um thank um everyone who has given input into this process over the last several months but especially to Kim Kaufman our budget manager who has done the majority of the work to get us to this point um so she deserves all the credit absolutely and as usual she deserves all the blame or anything that you find that's wrong so as you're reading through the documents give us a call or an email if you see any typographical errors or anything like that and we'll get them corrected the budget document is um the most comprehensive document that the city puts out at least in my opinion and it is several things in one it is a financial plan which is what people think about first um and it is a plan going forward um and I would say that that is the difference between the uh budget document and the financial reports that you get at the end of the fiscal year is that the budget is a looking forward plan of what we expect to happen over the next fiscal year the the financial reports are a looking back document on what has happened um but the budget is also a policy document and all of the financial policies of the city are stated all the laws we have to comply with the restated in there it is an operations guide it talks about all of the operations of the city um we'll talk about that but everything that the city does is encapsulated in those detailed budget documents says you go forward in the device everything that is in the budget is a public document so if the public is um is requiring to to review the budget document it will be available online it will be available in print I guess I used to say it the library but I I will say it the west side or the East Side branch library uh it will be available in print or you can pick up a copy in print from our offices this is the city manager's proposed budget so think of this as the executive budget being presented to you the legislative branch as you see we have been during the budget process for many months now um we started the process with the capital budget study session uh back in November at each of the finance committee meetings that we've had monthly there have discussions of the budget and um input given to the budget document that has gotten us to this point we did the midyear budget review in January um Council gave us a uh Direction at that point you wanted to kind of stay steady state as related to the um net revenue stabilization fund or the rainy day fund you didn't want to make an additional deposit there we had another capital budget study session in February and now at this point in the process where we have prepared the city manager document it will be prepared it will be presented first in this study session tonight which you see highlighted there in blue um a second study session that will be held on May the 7th and a third study session from the Enterprise funds on May 21st uh there will be a public budget hearing at your next council meeting on April the 23rd that again is a chance for the public to give input into the public uh budget process formally there'll be a second public budget hearing on May the 28th and then Council will consider the budget for adoption on June the 11th as you're reviewing the document you can think of it is going from the most summarized to the most detailed I know most of you have heard this information before but I know that we have some newly elected council members and some members of the public who might be viewing on YouTube who are not familiar with the kind of the layout of the budget document so just think of the format being from the most summarized to the most detailed as you go from left to right as you go from page one um to page 480 if you don't read anything else I would strongly urge you to read the city manager's letter that is on pages Roman 1-4 and I would strongly urge you to concentrate on the financial summary sections that are on pages 55 through 120 there's also some very useful information on the on the community as a whole that's given in the community profile section on pages 1- n there are Benchmark comparisons that um compare Norman to cities of similar size uh and characteristics a lot of times we get questions about that and we will we will just copy those pages and refer them to you how many uh employees per capita do we have in Norman compared to Broken Arrow or Edmund um or Lawrence Kansas those sorts of things are in there uh and available for you to see the financial policies that we talked about are given on pages 34 through 54 that includes all of the policies the council reopt when you reopt the budget it also includes the verbum copy of the Oklahom Municipal budget act um and then the detail sections on every Division and Department of the city are given on pages 121 through 457 uh they're kind of given alphabetically so if what if what you're interested in is the planning department just thumb through the uh p and you'll find planning and Community Development and everything that all the divisions of the planning department will be given in their section it'll give you a mission statement for that department it'll give you an or chart for every Department in the city it's all there for you this gives you a layout of all of the city's 29 different funds that are in place and the sort of funds that they are so the general fund is the largest single fund of the city and all of the operating departments uh that are not in Enterprise funds are in the general fund so they're laid out there um in the red the special Revenue funds which again we'll be talking about both of those tonight are given in the blue there see there's a new wfac fund young family athletic uh Center fund that is a special Revenue fund the Enterprise funds of the city are established to operate like separate sub businesses of the city you should think of the city is kind of a business conglomerate um just as Google owns YouTube okay the city owns a water business and that that's two separate businesses there is a separate and distinct set of customers for the water Enterprise or the waste water Enterprise is separate from the city as a whole and the users of those Services of the Enterprises pay for the full cost of providing those Services separate and apart from the general fund they don't get any tax money that sort of thing so that is the difference between the Enterprise operations of the city and the general governmental operations of the city um there are internal service funds where for example the risk management function charges out to the Departments uh for all of the services uh that are being provided through risk management health insurance claims torque claims against the city that are being paid out that those are being charged to every Department of the city internally um through those internal service charges to pay for those uh risk management funds and those internal service funds in the third study session we will talk about the capital funds of the city the cap Capital funds of the city account for those longer lived assets of the city like buildings um or Bridges or streets those sorts of things are accounted for in the capital funds and then finally on the general Debt Service and go bond funds of the city there is a separate section of the budget document that will show you every outstanding debt issuance that the city has whether they be General obligation bonds or whether they be uh revenue bonds that are backed by the uh Norm Municipal Authority or the noral Utility Authority and again the difference being the general obligation bonds are repaid through a property tax that the voters have approved revenue bonds are backed by just the utility revenues that are pledged for the repayment of those utility revenue bonds or a sales tax revenue Bond like we have for the Norman forward bonds um just a special source of Revenue that is singularly pledged to repay those debts here are some highlights of those financial policies that you should be aware of in um the budget uh is required to be adopted by the city Charter um you have to adopt a budget um that budget has to be balanced and when we say balanced that means that each of those individual 29 or 30 funds of the city has to have a positive fund balance positive fund balance means that um you either have money in the savings account which is what I'm calling the fund balance or you have revenues projected to come in in excess of the expenditures that you're going to have in the coming fiscal year and there has been some um misunderstanding about that you can adopt a budget that spends more money than you take in in any given fiscal year as long as you have fund balance to draw on state law requires that there be a public budget hearing held at least 15 days in advance and as you know the council has directed that we have a second public budget hearing so that one that we will have at the next council meeting is in addition to the state law mandated public budget hearing once the budget has been adopted it has to be certified by the county uh excise board county excise board has gotten some publicity lately but but um they do in fact have to have to receive our budget document they um review it and say whether our assumptions are reasonable uh and they can disallow it they don't have to certify it but they have always certified that our assumptions uh in the budget are reasonable after the budget is adopted after the fiscal year has begun the budget has to be um transmitted to the state auditor to various Bond trustees and to the municipal Securities rulemaking board and that is by Covenant of all those Debt Service holders that we have the budget then by law has to be available in print and electronically and we have always met all of those requirements and we will so this year when the council adopts the budget you reopt all of those financial policies that are stated in the budget document so if you wanted to change any of those uh policies now would be the time to do it um when you adopt the budget you appropriate and again appropriation means taking money out of the fund balance and allocating it to expenditure accounts and again that is the important duty the council gives is relates to the budget um only Council only the elected body can appropriate fund balance once you have appropriated the fund balance you you've done what I call taking money out of the savings account and putting it in into the checking account you have control of the savings account and only you have control of the savings account once you appropriate money out of the savings account and put it into the checking account and the checking account is these hundreds of individual line items that money gets allocated to now that is under the purview of the city manager okay the budget document includes 5year forecasts of where we think we will be if we continue on the same uh course that we are on over the next 5 years um you have operating capital and debt Reserve policies that are restated um in the budget document the levelized utility rate policy that we uh state that over the next 5 years we make sure that we want to have um utility rates that are at least positive you have policies for transfers from the utilities um to the general fund to um account for what uh private utility would pay for to operate in the public rights way uh Chris especially likes that um uh and there is a transfer from the room tax fund to the general fund to account for the services that um the city's Administration is providing to the room tax providers the council has adopted an ordinance uh 101 11-5 which is called the net revenue stabilization fund these are the reserve policies of the city that are uh that we must comply with are being um run a foul of that ordinance so basically the net revenue stabilization or rainy day fund policy says that we must have a minimum of 3% of operating reserves in the general fund not appropriated but held in reserve we must have an appropriated 1% general fund emergency Reserve um that we hope we will not have to spend but we have to allocate money for that 1% reserve and as we've talked about um this particular year we have had to draw on that 1% Reserve to remediate the um the mold problem that we had at the Central Library unusual circumstance but that's what that emergency fund is for we must have at least a 4% Reserve in the separate net revenue stabilization fund and there are strings attached before Council can appropriate money out of that rainy day fund that stated here but there has to be a federally declared disaster or a state declared disaster before you can appropriate money out of the rainy day fund you would have had to have spent down that 1% reserve the operating Reserve would had to been drawn down below 1% before you can appropriate money out of the rainy day fund and I'm very proud to say that Council has never appropriated any money out of the rainy day fund in its uh what 12 years of existence that's much to your credit we've had a lot of emergencies in that time but we've always been able to operate them and handle them within Appropriations that we have done in the various operating funds this year we're projecting that the rainy day fund will meet its minimum Reserve levels that you see there uh you'll be about $494,000 short of the targeted 5% res Reserve but again Council directed that we kind of stay steady that we kind of Steady As She Goes as relates to the rainy day fund in this fiscal year moving then into um the budget for the coming year and that's kind of the overriding theme Steady As She Goes if you will have we talked about it we're we're not adding a whole lot of things like we did last year we're not drawing down fund balances and that sort of thing for one time Capital purchases like you Pro ly did last year but we're also not cutting a lot of things so it's a kind of an overall thing of of finishing what we started those projects we have ongoing the bond issue related projects the Norman forward projects all of those things we're going to continue with those uh but we're not adding a whole lot in so doing we have a total um budget this fiscal year of 37,4 se7 ,000 and that sounds like a lot it is a lot it's a lot to manage but for a city our size that's a a pretty lean and mean Budget a pretty small budget you see that where the money is going to are those areas that you would think where the money's coming from is sales tax is the largest piece of the pie those user fee charges to the Enterprise utilities are are 23% of the pie so forth and so on where the money is coming from is where you would expect it to be coming from where the money goes and again this is Citywide the largest areas that you are the largest areas that you would think of Public Safety um is 22% of the pie Public Works is 10% of the pie the water sewer and sanitation utilities taken together are about 27% of the pie so again it is those service levels that our residents our utility customers enjoy those Services directly that's where the money is going to you'll notice that we have $37 million coming in $297 million going out that is because we are budgeting for some revenues to come in uh from some of those General obligation bonds recorded this fiscal year in drawn down over the next two or three or four years the general fund which is the fund that we're concentrating on tonight has a total projected budget for this coming fiscal year of 108 m486 th000 and again the largest source of Revenue in the general fund is sales and use tax I know you've heard my spiel about this before but this pie would look radically different in any City in any state other than Oklahoma there is no State other than Oklahoma that property tax would not be a piece of this pie any other state in the nation you would you would see that sales and use tax piece of the pie be you know 40% 35% something like that and you would see a 30% or so slice of the pie where the general fund is funded by property tax but the Oklahoma Constitution forbids cities in Oklahom from receiving property tax for operations so we are 2third we're very largely dependent on sales tax that can be a good thing that can be a bad thing but the important thing is to understand that we are so dependent on sales tax and in Norman we're even more dependent on sales tax than most cities in Oklahoma because we have so many of our Capital funds that are also dependent on sales tax the capital fund the Norman forward fund okay um all of those are dedicated sales taxes the public safety sales tax fund are sales tax funds that make us even more dependent on sales tax than most cities in Oklahoma where the money is going to in the general fund um the police department is the largest slice of the pie and remember now this is just the general fund the public safety sales tax fund which also funds police and fire is a separate fund from what is included in this P but Police Department is about 29% the fire department is about 19% the public works department is 20% so again those Services directly to the people are the largest pieces of the pie in the general fund Anthony yes so the with the police budget 29% of 108 million is 31 million4 and then on top of that whatever the public safety sales tax yes sir and what is that number currently um we'll probably get to that I want to say 12 milon but I'll I'll number I recall 12 so the overall Police Department budget would be $43 million is that the way I understand it roughly yeah and we'll we'll get the exact number for you but worth noting always that police fire and public works you know those just three departments are 70 plus per of what we do um and the personnel which we fund so when folks ask what we're spending money on it's it's almost Mo it's mostly those three departments but in the general fund and you'll see this in the in the budget doc that's within the general fund about 80% of expenditures are for personnel it's different than that in the Enterprise funds but in the general fund about 80% of the cost of for personnel we've been giving this um sales tax picture for many years but it has been extremely extremely illustrative over the last year or two or three of of of the differences the vagaries and the variances and the crazy juer positions of our sales tax and our use tax uh over the last 3 or four years um you see that um going back to fiscal year 12 um through fiscal year 16 or so there was that kind of slow steady growth that we have expected over the last 40 years you would have seen still variances but you would have seen variances of you know up 3% up 4% flat in a really bad year it might be minus 1% in a really good year it might be plus 6% look what happened there in fiscal year 2016 we actually went down by 25% now we know what was going on in the National economy during that time it was a very bad time nationally and we were reflecting that in our um sales tax in in our local economy but then we returned to that slow growth notice one thing though look at the relationship between the blue part of this graph and the red part of this graph the difference being sales tax versus use tax and use tax which is a sales tax on Goods that are purchased outside of the state for use within Norman so we're talking about here our catalog sales and internet sales when when somebody buys something online those purchases are subject to sales tax just like if you go down to the local store and purchase goods and services at the local store the law is the same but the law is very difficult to enforce as it relates to those outof State purchases right because we don't know our individuals who go out and purchase things out of state they're being delivered to their homes in Norman but we don't know it okay some years ago there was a federal case where the state of South Dakota was very concerned about that sort of thing like we all were and they sued a major online retailer Wayfair and said look Wayfair you're selling all of this stuff um to our residents of South Dakota but you're not paying sales tax you're not collecting sales tax on those Sales South Dakota won that lawsuit and it went to the United States Supreme Court South Dakota versus Wayfair that that case was a major victory for c for cities like Norman and all over the country in collecting Ed tax because in response to that lawsuit all of those online retailers had had to start collecting use tax and remitting it to wherever they were delivering their goods and services but there's a big old loophole in the South Dakota versus Wayfair case basically Wayfair said okay if you if you sell less than 100,00 000 worth of goods in any given State then you don't have to collect and remit the sales tax in the form of use tax that big old loophole is still out there in order to close that loophole we need Federal legislation we're talking about interstate commerce right we need Federal legislation to say that all retailers have to collect and remit sales tax on their purchases for delivery within those individual states that's not happened yet it has been before Congress it actually passed the House of Representatives about four years ago there's two bills that are before the Congress one that's called the remote transactions parity act one that's called The Marketplace Fairness Act the marketplace Fairness Act passed the Senate some years ago but it never passed the house it's never been signed by the president and the Oklahoma de uh delegation always votes against it by by the way um but we need that to pass there'd be another big increase in that red part of the line if we can get those one of those legislations passed DC agenda okay but again the amount of collections of use tax has been growing you have the slow and steady increase from 2017 to about 2021 in our um sales tax but what happened in fiscal year 2021 Co calendar year 2020 yeah Co remember what happened during Co um when the uh governors of every state said you know we're closing down all the businesses and people stay home and all of that that's was devastating for our sales tax collections for about a six-month period but look what happened after that fiscal year 22 now I told you that we usually you know we experienced 3% growth 4% growth in a really good year when I was working for the City of Oklahoma City uh during the oil boom we had like a 7 and A2 8% year-over-year increase in sales tax but in Fisco year 22 we had a 20% increase year-over-year in sales tax and it was it's you know every month when I was opening up our our remittance that we get from the State Tax Commission I was oh my God that can't be right you know and I'm reporting all of that information to the council and the finance committee but it was right and there was a lot of reasons that we talked about for that big increase but look what's happened since then okay since then we have stayed flat at that level okay fiscal year 22 23 and 24 now our sales tax has been flat but it's been flat at that higher level so we're doing okay use tax continues to grow at a pretty good clip but all those things taken together we're doing okay Council just so you recognize when we saw that big jump and the number was it didn't seem real and Mr Francisco was on the phone with Corporation Commission saying you guys got to recheck your numbers got to be something wrong here and I think they must have received similar phone calls because they said we are we're rechecking and a week goes by and they call back and said nope that's right and we honestly didn't know if that would be a one time and then we drop back down to that 2021 level and it kind of became the new Norm um we're I I don't think I you know we all probably could come up with a reason why we think it is like it is where's the money coming from did we create a whole bunch of jobs in 2022 and payroll got bigger for I not sure yeah I think it's all of that and and we have monitored all of that but but yes I think payroll got better cuz as remember as we came out of Co um folks did did not immediately go back to work they were making more money unemployment than they were making at work so in order to get people to come back to work salaries had to be increased that drives inflation as relates to sales tax inflation is good if you're buying a pair of pants that cost $30 last year and the same pair of pants cost $35 this year we are collecting sales tax on $35 instead of $30 at 4 and a half or 4 and 38% we're collecting more money that's what's pushing that increase and it has stayed at that level one of the major inputs um into uh our sales tax performance is the performance of the uh building industry the construction industry this is one proxy for how things are going in the construction industry uh we're looking at the permits that we have issued um in each of these years as you see we had a big peak in 2021 uh we have declined since then um and this is where the building industry is right now uh both uh this is just looking at single family we'll see where we go from here we'll continue to monitor uh that uh the folks in the planning department Jane will continue to monitor that uh we'll see where we go but just understand that that particular input into our sales tax economy because remember if Builders are building houses that means they're buying shingles and they're buying Lumber and they're buying bricks and we collect sales or use tax on all of those purchases yes ma'am where does multifam multif family is not tracked here but but yes it is tracked uh the planning department can can show you a similar chart like this for multifam but I think they tell you that the multifam uh sector has been overbuilt for the last 3 or 4 years and has been sort of in a decline so they're slowed as well they're kind of doing that decline as well and this this graph kind of the culmination of economic conditions um inflation yeah the cost of the wood the cost of the shingles all went up so uh there are probably fewer buyers who qualify uh and at the same time interest rates are up and that reduces the number of buyers uh in the marketplace as well so uh where activity may be down Revenue may not be down to that same extent uh but there's definitely less activity going on on the Builder side and on the home buyer side here are some assumptions that are behind the numbers in your budget document um we're projecting sales tax to grow at about 2% from where we project it to be this fiscal year that is actually on the sort of optimistic side as it relate uh relates to our uh neighboring cities in Oklahoma most are at a 1% or a flat growth rate um we believe that taking together sales and use tax uh will will continue to meet those projections we projecting use tax to grow at about 4% we've been above that for the last few fiscal years our friend anchise fee revenues are projected to grow at 3% our fines and forfeitures are projected to grow at 3% from where we've been this year uh we've actually had some really good fine and forfeiture revenues in this fiscal year we did not project any room tax or water rate um increases in the current budget our license and revenue projections are projected to grow slowly from where we project them to be this year we uh do project that 5% transfer from the water and sewer utilities um to the general fund we project a 4% transfer from the room tax fund um things that we're aware of um that are happening um late in the current fiscal year that we believe will have an impact on next fiscal year it's just not quantifiable yet we're looking at activity driven uh by the young family Athletic Center and its impacts on uh University North Park retailers and restaurant tours um we just started Gathering data in March for the number of visitors and where they're coming from how long they're staying in Norman where they're going to afterwards uh Sarah uh Kaplan is assembling data what we want to do is develop metrics that will be replicatable uh in downtown on campus corner so we can also measure impacts the difference between a big 12 home game and an SEC home game those are things that we we believe will have positive impacts on our Revenue picture we don't have enough data yet to put a pin in it uh what we're also recognizing is we're getting phone calls from event uh sponsors who are telling us I can't find a hotel room in Norman and I'm coming midweek in June and all the hotel rooms are booked and I'm thinking you know we check our schedule I call Jason and is it is it because young family filled up all the hotel NOP we don't have a tournament that weekend but all of our hotel rooms are occupied and I mean those are wonderful problems to have we think you know with our hotel staying at capacity for longer periods of time those people tend not to drive far from their hotel they they walk around where the hotel is and spend money uh locally so we'll be paying attention to it once the metrics are developed we want to make a a real user friendly dashboard available to the council and the community to recognize what those opportunities look like that are coming from the Norman forward investment in the young family athletic center and how that translates to uh the sports commission uh that the uh that was approved in that U Hotel bed tax uh increase and it's an exciting time we're optimistic we just we don't have any way to really evaluate it yet but we're building it and is that the even though we rais the the amount the percentage for room tax it's we don't have any kind of curve to look at not yet yeah it'll take um several months worth of Hotel bed tax collections to really be able to change that graph yeah and we'll talk about that in some more detail when we get to the room tax but but this is just saying that we did not project a rate increase for the room tax but we do project a growth um beyond what we have historically projected because of that what we're calling the SEC effect didn't really project much of a sales tax impact unless you assume that I'm being overly optimistic at 2% but we did project a a growth in the room tax greater than we have historically experienced so we'll talk about that later on the expenditure side you see that salary and benefits um are are projected at their full cost for the full fiscal year um we assume that those employees who are due for a merit increase is about 4% uh pay raise uh those have been built in we had a two-year um labor agreement with the asme and fire Union so those costs have been built into the budget uh we did not have an agreement with the Fraternal Order police Union yet so we did not project a cost of living adjustment for fop um we did make five-year projections to determine future viability and provide a base remedial what what we're talking about there is we plug in those fiveyear growth projections that if we stay on the current uh Pace that we are on where are we going to be and we talked about this at the midyear budget review where we are going to be if we stay on the same course is not good we will continue to spend more than we take in not for one-time things but for ongoing things and that's why we are not recommending that we add a lot of ongoing costs like for personnel and the city manager's budget does not propose to do that with one exception um salary and benefit costs are projected to grow by 5% uh 1% in the maintenance and operations category 2% in internal Services we do make the uh turnover savings Assumption of $800,000 that is where again we said we budget every position at its full cost we do that with the full knowledge that some of those positions are going to become vacant during the course of the year and when those positions become vacant it's going to take a period of weeks or months to fill that position and when you fill the position and the new person who is coming into that position will probably be at a lower rate of pay than the incumbent employee that left oh but that employee that left might have had a big vacation and sickly payout so all of those things taken together that $800,000 is just roughly an educated guess on the net impact of what all those comings and goings are going to have as an impact to uh the general fund and it's a it's a pretty good educated guess yes sir so this proposed budget puts us on a path that we're not bankrupt in 5 years there um this this projected budget would put us on a path we bankrupt in about eight years but again we've taken some remedial actions already we would hope to continue to do that as we go forward what areas specifically cause causing us to overspend well the biggest thing of course is is is that 5% growth in Personnel cost remember the Personnel costs are 80% of the general fund the major Revenue source is only growing at about 2% so naturally speaking at some point revenues are going to be exceeded by expenditures if you stay on that course so over the over the course of time you have to maintain and hopefully uh arrest some of those costs because if you assume that the revenues are going to be fixed you have to maintain and arrest some of those costs but as Revenue has increased over the last few years as you mentioned we've also not only increased Staffing but increased salaries of existing staff U both of the above yes we both increased in fiscal year 22 the number of personnel and we gave some pretty hefty pay raises in that year and those things are working themselves out over time okay thank you finally there is is a general fund subsidy to the public safety sales tax fund uh and the Westwood fund to make sure that uh they will have a zero fund balance in those special Revenue funds there is no subsidy to the public transit Fund in in the coming fiscal year at least as it's projected right now uh we did not project in um that increase that council's talked about to the uh microtransit program that's not budgeted for but at least at this point we projected that be at least a break even yes that that increased just the 68,000 that we talked about for expanding on demand to that a bigger footprint that could cause a subsidy but that's not but that's not in here not in there but that 68 so right now Transit is self funded for now unless we which I think we did decide to go forward with doing that expansion so but that expansion is just the 68 roughly thousand we talked about for expanding F okay perpetually yes and Mr Francisco the if we keep the program after another pilot year I guess the uh subsidy to Public Safety sales tax primarily driven by Debt Service on the initial capital investment um that is due to um mature will pay off that debt instrument in 2027 yes and the current or the proposed subsidy to p SST out of the general fund is approximately how much in 25 FIS in the current coming year it's about 225,000 that will grow however if if I may I would say that that subsidy in fiscal year 25 is actually due to the four additional SRO officers that were added in the current fiscal year because prior to that they were actually bringing in more Revenue than they were spending and that's a wonderful situation when their sales tax grew due to those same inflationary factors that improved Norman forward Public Safety sales tax and or public transit funding formulas right um if we were thinking of expanding on demand uh we did talk about other ways to get these things paid for like if we wanted to expand over to more Norman we could ask them if they wanted to pitch in and pay for that uh I'm kind of curious can business Improvement districts pay into some something like an expansion of on demand since Target is a place where I see the on demand quite often in the evening so um Can bids do that AB absolutely and um even conversations related to the business improvement district in uh University North Park um they collect about $200,000 a year in their uh bid account and right now their primary expenditure is just maintenance uh projects at Legacy Park I think they do recognize that if um development grows north of Rock Creek that they would replicate that business improvement district uh potentially drawing another couple hundred thousand and they have um discuss the opportunity to provide um you know some kind of people moving service with some of those business improvment district dollars and I would say OU is also paying into on demand a little bit as well correct with this expansion uh it it helps them achieve a need without replicating the service for uh late night student transportation and I know that you have an agenda item I believe on the next council meeting related to that OU contract but I don't know if it's covering its costs I was just going to say for business Improvement districts I don't know that they could contribute to our overall on demand service but the ACT does contemplate shuttle service within the district itself would be different from on demand but something that could supplement it okay thank you yes sir I think Norman Regional still contributes 50,000 to just Transit right it's a it's an agreement going to Transit specifically but yeah Transit 50,000 a year so yeah there's there's definitely examples of Partnerships we have to help get a route close to somewhere that wouldn't go otherwise um and and so I had a question about the the Westwood fund though um is it so swimming complex I know it's all one but swimming complex still doing very well yeah and I Jason respond yeah I would say that the the simple fact that Westwood we've just part board disapproved uh me or the director um doing a cost increase out there uh as salaries are raised raising and materials have um cost more we have not had a increase at swimming pool nor the golf course so we were a little since 2021 so we're a little bit upside down we did change that and starting July 1st we were working or have um cost increases above about golf course and and swing pool to pay for the deficit I think we're about 70,000 upside down last year in that fund total and I me it used to be like 200 so yeah yeah but I think the previous two or three years before that we were even well okay okay um what are you raising to B the so Golf Course is uh $3 increase to the green peas and $1 increase to the uh golf carts and and the swimming pool adults is going up by $2 and we're adding 20% onto to all the uh season passes so kid kids are still class the same and S same the police department budget in answer to your previous question and the public safety sales tax fund is about 10,500 it's a total of 41.8 million out of that $279 million budget out of the you said 279 the total budget across all fund okay 29% of the general fund which was 108 correct but also 29% of the whole that's I I was just looking at the g at the general fund sales tax P when I did my calculation so this is an illustration of those of that employee count that we just talked about you see the um big growth in fiscal year 24 and 2 three um and you see the projected flat growth in fiscal year 25 and that is almost out all outside of the general fund um in the fiscal year that we are currently in um we added some positions uh related to the implementation of the young family athletic center fund you'll recall that um when we anticipated the wfac operation at first we thought we would have a third-party operator um we took over operation within the city Workforce during fiscal year 24 and so we had to bring on new staff to the city to the wfac fund and we did that during the course of the year that you see there the only other positions um in the special Revenue funds of the city that are being added in the current fiscal year are those four school resource officers that we talked about and that was by direction of council yes sir and the new wac positions though so the wfac is I don't know if you call it a revenue gener Rue it's an entity that does generate Revenue yes there is no subsidy projected to the wfac fund okay so like other Staffing areas where we may add Staffing but it's for something we don't generate any Revenue off of so it just is at Le straight out of the general so we can have these positions without it necessarily putting a Sy putting a burden on the general fund yeah there's no tax money supporting that operation perfect um so the only added position in the general fund in the special Revenue funds is that veterinary technician position that the finance committee recommended uh that got added to the city manager's budget but that is the only position that was added for projected in fiscal year 2 you see though that there were 107 positions requested um and and and the priority for those positions was discussed uh by the city manager and the management team um 53 of them were in the in the fire department um two new fire stations in particular um 32 positions in the police department obviously to fund all of those positions justify or not you know there there's good justification for all of those requests but it' be in the tens of millions of dollars to add those positions on an ongoing basis and so while there is justification for those 107 positions they were not added uh in in the in the coming year we do believe it is our uh budget managers and and Department directors responsibility to uh ring the bell and signal that um the need for more Personnel um would really help achieve the mission provide a higher level of service to our community and um it it's it's part of the budget process we we go through those requests as a team and it's but we all recognize it is most important to be able to deliver to you a balanced budget um and really with 80% of our general fund expenses being Personnel that is the control rod that keeps us balanced throughout the year the pace at which we fill vacancies helps control those expenditures over time especially you know we've got a lot of employees that work here for 40 years or 45 years plus when they retire they're you know entitled to vacation a cruel payout and and you know some sick leave uh that they've accumulated and it's just the pace at which we fill vacancies that really helps keep us in uh firm footing when it comes to books closed at the end of that fiscal year and that VTech position was a part-time position was it not I don't believe so that's just what I remembered I mean the true it was fulltime it was full-time okay yes sir so 100 so 100 new 107 new positions police fire and Public Works those three combined make up 94 is the so the rest is the other departments other department yeah there were some in parks there were some in in finance positions all that all the positions that all the other departments requested requested yes and but and you're saying we're not filling any of those that's correct proposed we're not proposing to and even if we did we don't have two new fire stations correct yeah there may be other I'm sure there's other existing parts where they're needed but same thing with 32 police or nine um Public Works um are all the Departments fully staffed to what we've approved so far as far as Staffing um we're probably down 14 in PD currently um so we've approved expositions but we're still for yeah we we I mean I would say generically and Anthony and Kim can correct me about 10% turnover um and I would say Norman I don't know how unique we are in terms of the number of very long tene employees we have but just through normal attrition and retirement and you know family lives changing and people moving um we we might have 90 to 20 vacancies a year and we'll go through the process of recruiting and bringing them on board and training them um so there's there's always that vacancy and that's that $800,000 number Anthony shows as kind of a credit to uh that uh general fund budget okay um moving on then to the public safety sales tax fund and this is one of the special Revenue funds um all of the obligated positions to be added and there was 90 in in in total have all been made now with those four additional school resource officer positions that were added during this current fiscal year so all of the Staffing additions have been made um the only critical Capital need that was mentioned in the public safety sales tax ordinance that has not been done is the Reconstruction of fire station 5 so so right now we we project we will do that when we have paid off um the debt um on the emergency communications and operations Center and the radio system uh we will build fire station 5 and relocate it back in uh more closer into town the emergency Operation Center is is about complete um I'm not sure if the chief is here and talk about the exact date uh but the dispatchers and everything will move into that facility and summer of 204 July 18th that's what we plan when the debt is paid off on most facilities in 2027 you do not have gravy don't start thinking that okay the public safety sales tax ordinance envisioned that that happening and it envisioned that revenues would be outstripped by expenditures that will be the case when that debt is paid off when that debt is paid off and all of the critical Capital needs have been met um the public safety sales tax revenue will become part of the general fund by by that ordinance 38% of the sales tax will go into the operating revenues uh in the general fund and 1/ 18% will go into the capital fund okay now I would caution you that that back when the public safety sales tax 2 ordinance passed and and we had you know 1/ 18% uh to replace police cars and fire trucks we thought was you know a really nice deal but fire trucks were costing $400,000 a year then they're costing a million dollars now and 1 18% of of of capital sales tax has not grown that much police officers were getting paid you know 70,000 then they're getting paid 990,000 now equipment everything included those lines will still not cross the general fund will still be subsidizing the public safety sales tax operations it will just be within the general fund yes sir is so if voters were to approve uh an addition to the public safety sales tax to fund building two new fire stations or a new police department or more staff positions in public safety would that trigger just continue to extend out until there's not anything else added to it at some point or that that's a wow that's an interesting question um yes the ordinance could be written such that um what is absorbed into the general fund will be in a new Public Safety sales tax fund absorbed into that fund with a public safety sales tax at a higher rate than the current one half perc um but but the part of that discussion about it would never the lines would never cross I that's speculation even back when this one was passed Public Safety sales tax 2 was passed we knew we we discussed publicly that 1 half% was not going to be enough going forward that those lines were going to cross uh we project we said well why you do 5/8 per.
Okay but at some point in the future instead of it being you know 2022 it might have been 2028 but the lines would still cross at some point so I would be very reticent to say that you could have a proposed rate that the lines would never cross as long as the rate of growth in the expenditures for those salaries for police officers and firefighters is growing faster than the revenue in the sales tax at some point in the future the lines are going to cross so I would be reticent to say that you know let's make it a full percent mhm but at some point the lines are going to cross still and and well when we did this years ago I never thought there would be any gravy either cuz I always thought well after these two fire stations are built 8 and N then we'll need to at some point build 10 and 11 and then we'll need to start replacing other ones potentially one and two and four and five six uh or police stuff never building the station is just one part of the problem if you add a station that's 15 more fire per station right and that's where the the lines cross which is $2 million per station to staff roughly or something like that um so with fire station 5 uh when the Radio Systems paid off in 2027 would we issue revenue bonds to do fire station 5 try to pay it in one yeah we have talked about that more at this point we were projected we would probably do it on a pay as you go basis but we could issue debt if you wanted to do it quicker could we issue debt now if we wanted to do it quicker or would it be better to remember that this debt is still outstanding so we have to be subordinate to that debt interest rates would be high and if voters approve some kind of bond to do fire station 5 could PSS pay it back or is there at some point or how could that work theoretically you could write an is that way you're not saying voters are paying for it twice now when you say voters approve a go are you talking about we just said we want to get it done faster than 2027 the voters could certainly authorize your Revenue to do that yes okay thanks so again this is kind of a summary of that young family athletic center U Revenue fund we've talked about um it's going great guns and I'll turn it over to to Jason and his folks to talk about that in more detail but but again it's operating about 60 hours per week which is why those Personnel are required it's not just an 8 to5 operation it's not just a Monday through Friday operation um there are third-party contractors for the Norman Regional Hospital spaces um and for the concession spaces that are also operational now and and and doing quite well um the the um the user levels have been really good and and we'll see that that will be maintained but again that is the job of that Sports commission that was that was added as related to that room tax rate increase and they're booking them in two and three and four years into the future so so that facility will continue to be well used and like leaving out anything Jason we've just been really successful uh since we've opened getting these outside tournaments uh we just completed uh about a month ago our first shoe tournament it was a puma tournament which uh there was 180 te teams in that and it was spread out between Oklahoma City and Norman with the main base being here uh we also had a there's a a Texas basketball unit that's called the circuit um they had their first tournament outside of Texas in Oklahoma uh there was over 100 teams that participated at that that was just the W fact this past weekend we had our first uh it's called mood Hoops which is associated with Nike they had uh they were a little skeptical as everybody else was coming to Oklahoma but they had 120 teams in that tournament which it's Ultra successful and we have our first uh live period tournament coming up in a month um from this weekend and that is a live tournaments where uh basically it's the only time coaches uh college coaches can come and U be in the same area as uh the participants U they are saying that we'll have anywhere between uh 200 to 400 coaches just college coaches come and watch this event and that's exclusively in Norman and that will have about um 60 teams in it and it's an Adidas uh live period shoe brained tournament so I we're we're killing we had our first volleyball tournament about two months ago and uh you know if you do the math you have uh you know you're just counting the kids on the court we have eight courts going for basketball and there's five five players 10 10 players per Court um volleyball we have 12 courts and there's at least six players per team on there we packed out uh there was not a parking spot to be found uh over there by by um Embassy Suites and I mean this just great participation right now and uh the bean stock has been there a few a few um weekends and they are um doing we're happy that we got a local coffee company in there and they're doing really really well on on this weekend tournament so uh we just opened up at April 1st for um operations and uh we're up to about 100 members so hopefully we get more on that but we projected to have somewhere around 400 when we're all said and done and our primary focus even though we're trying to keep up open as much as possible to the public our primary focus will probably be these uh rental tournaments that come in on the weekends turning now to the room tax fund that we kind of touched on this a little bit but um our revenues in this F school year have been a bit below projection and that was because we didn't have any history about what the revenues would be at this new rate uh but we are in um we are projecting about an 8% growth from that projected Revenue in the current fiscal year we're we are very optimistic about where our room tax revenues are going to go in the new SEC environment we have had anecdotal information from our hotel operators about their Advanced bookings for um football game weekends and that sort of thing where usually they have had a two-night minimum on football game weekends um they're going to have a three night minimum this coming season yes they are in fact inflating their rates on football game weekends in this coming season and it so happens that we have six home football weekends this year when we usually have had five so so we do believe that there there will be an SEC effect um I'm really looking forward to that Tennessee game I got some folks coming in for that Alabama game they did get a hotel room booked already darl um uh but but um we're optimistic about our room tax revenues in the next fisal year yes and you're just talking about how our hotel rooms are already full a lot so how do if we're already full unless we're projecting we might have more hotels go online which maybe we do but uh how do we project for more if we're already like hitting capacity without games in town again it is not every day or every weekend that the hotels are full um right now um and it is I'll just say this up front I mean they're jacking up their rates on this coming season and and again we're going to be collecting 8% on a higher rate than we had before so so whereas it might have been a you know a perent on a on $140 a night with a two night minimum now it's going to be 8% on $220 a night at a three night minimum and that's that's the that's the world that we are that's the reality and do you think the not just hotels in Norman but in this absolutely there'll be some spill over there'll be some spill over certainly the riverwi there'll be some spill over in the more a lot of folks will still stay in Bricktown so yes there would be a a spillover effect but again all what we're projecting is what will happen in more those hotels are going to raise their probably raising their rates too for that I I can't say that I've only talked to our hotels want to I want people to stay in another city because they like well it's 20 bucks cheaper to stay in this hotel and more than it is in Norman for this weekend so there's a another 84 rooms on um Conference Center Drive we hope come online this summer before uh the home football season begins um and there are proposals for additional Hotel Beds uh to be built in in UNP talked to another property owner uh on Lindsay about uh bringing back a hotel on a a former Hotel s's been vacant for a few years now but uh there's lots of conversations because I think the market does recognize the demand is there we're not currently uh meeting it locally so um all we're doing is helping Mo's economy in Oklahoma City's economy which I'd prefer not to do but that also gives us a an an entrance in that we discussed changing the room tax um ordinance that we did I can't remember what six months ago or whenever that was when we raised it to include those RVs and those kinds of spots it's it's a little money but it's something that we need to remind ourselves to do remember that here are some of the other special Revenue funds that are included for your um uh reading um the cleat fund is for law enforcment training uh and that is both in the police and the Municipal Court departments the cdbg uh budget is a separate budget process but will ultimately include into the into to the city's budget documents the seizures and restitution fund you recall that last year um we drew down quite a bit of money out of the Season restitution fund balance to supplement vehicle Replacements and that sort of thing uh we're not budgeting to do that in this fiscal year um so the season restitution fund will be where it is going forward and then as new revenues come in Council will have the discretion to appropriate those funds for whatever you may choose to do so um again we talked about the public transit fund the art in public places fund is ongoing uh and the Westwood Park fund we talked about so I won't go into any more detail unless there are questions about that yes sir yes sir just further clarifying the public transit is basically half funded by the Federal grant money and half funded by our locally voter approved sales tax that was a renewal of an existing sales tax that was used to build the jail is that accurate that's correct okay just s so and thankfully this year and I don't think the last two years maybe last year but there were two years we did have a subsidy last year because of microtransit so we've transit's been doing pretty good the last since revenue's been doing really well but been self-supporting for those that wonder about public transit and who's paying for it um you know being self-supported by a voter approved sales tax and then uh generous Federal funding from the government so Taylor's also been very successful he and his team in securing grant funding for our Fleet replacement uh when we inherited the fleet I think it was 22 buses in total and there were two decent buses and some real rough ones and I think at this point we've got a very solid reliable public transit Fleet and through a variety of Grant sources our rate payers did not have to cover the cost of most of those buses millions and grants thanks to our staff so yeah okay so that's the end of my presentation for this evening going forward um and as you are reviewing your budget documents uh feel free to give us a call or or an email uh we'll be be glad to um to respond to your questions or anything You' like to perhaps propose as an amendment to the city manager's proposed budget remember that any changes to the city manager's proposed budget that entail revenues or expenditures that entail finances has to be done by a formal amendment that Council would vote on when you adopt the budget so we'll be working with you to prepare those amendments as we go forward next council meeting there'll be the that first public budget hearing um Kim and Jacob will be presenting on the capital budget uh documents on on May the 7th Enterprise budget documents on the 21st and then that second and mandated public budget hearing on May the 28th we may or may not have another study session on June the 4th to talk about those amendments or at your discretion we might talk about them at a finance committee meeting um and then your final adoption date is set for um June the 11th and remember there are read reasons within your council meeting schedule for that date um so you can't really push it that much um you could push it perhaps a week but you can't push it that much by law you have to adopt a budget yes sir and that is by the last by midnight of the last day of June the adoption has to be seven days before the start of the fiscal year so so in 2020 when we had a budget meeting and we postponed and we came back and we had such a long meeting it was because we couldn't yes we could not postpone it anymore we had to pass a budget sir remember you delayed it a week and then you wanted to delay it again and that's when Anthony that's when these gray hairs started to so in that instance we pushed it to the absolute limit as far as the state law allows for a city to adopt a budget that's correct yeah we have to allow the um County's review and then the filing with the state U all in advance of that beginning of the fiscal year um and of course you know operationally the ability for Anthony to run an accounts payable check run or a payroll is completely dependent on an appropriation being made uh with dollars behind it to make sure the checks don't bounce so and that's why it's good that we have had input throughout this whole process going back to November I mean there should be no big surprises on June the 11th i' I've had some in my history with the council rewrote a budget on the budget adoption night and that is chop full of Errors where you know you you haven't properly costed out how much thing is going to cost and that sort of thing and Council adopts a budget and appropriates the money and it's wrong that's what we don't want to happen so please as you're reading your budget documents if you see errors or you see something that you want to add or take away let us know so we can properly cost them yes sir uh since we talked about it in finance committee and for anybody in here right now that wasn't at that meeting uh we talked a little bit about the grocery tax and the new state I don't know if you call it a state law repeal of a state law I don't know does that go into effect November 1st or July 1st I believe it's November 1st okay and you had mentioned how complicated it may be that the state portion of the grocery tax is repealed but not the local portion but that a lot of businesses that sell food may not be able to yes remember that the legislation that was passed by the state is supposed to not impact on cities um what actually happened is that the state did not pass an exemption on groceries but they rolled back the rate on groceries to zero to zero at the state level but our uh grocery sales tax will remain intact my concern is with those retailers who at the point of sale may or may not be able to make that differentiation okay and so they will make the grocery sales tax zero for all of their customers and for all all all sorts of you know municipality versus County versus State and and we won't know we won't know and that's yeah you know 60 days before the first reports are generated where we have access um Anthony and Kim and they can drill down to I mean look at it as a at an individual retailers level that's not public information to say you know gas station X sold X doll worth of of goods and services but it it would it would take time before those reports are available to us and then um you know those will be things we'll be looking at in great detail as well our counterparts um you know around the Metro everybody's kind of in anticipation of of the same possibility uh and when you boil it down to I mean how many retailers are there collecting and remitting sales tax in the city of Norman it's a lot there'll be a bunch of reports we'll be plowing through looking for zeros where we think it should say four and an eight yeah you you mentioned that OTC may not act they may not even yeah they may or may not may not even be involved in enforcing or overseeing it that we may have to that won't be their enforcement priority I'll put it that way um just just know that see I'm not worried about the Targets in the Walmarts the big ones because they have very sophisticated cash registers that are already differentiating between you know the the food stamp sales and versus because that's already tax examp um but I'm worried about darl gave this an example of the of a gas station well you know here's that Sinclair station on Main Street that 90% of their business is gas but they're also selling some you know Lunchables and stuff like that and they should be collecting sales tax on those lunchable sales and they don't have the the sophisticated cash register that's going to you know 0% here four and 4 and an eth there that's what I'm that's what I'm worried about and you mentioned that if a city like Norman if we did not collect any sales tax from groceries it would equate to millions of millions of dollars yes and we talked about how towns like noble who have a single grocery store uh that's their largest sales tax generator if they didn't collect any sales tax from it town like noble may be ins solvent you know because I think they have two convenience stores and one big grocery store and then and a donut store and a donut store so they don't have a lot of Commerce that's generating a lot of sales tax revenue so I've I know that we've talked about it and I've heard other Mayors and City officials Express concern about the state saying well it's not going to impact cities but as you mentioned it could in a lot of ways uh and now we're going to have to like be more more Vig looking into into it and so wanted to bring that up and make sure everybody knows about that situation going on and I would like to not tax groceries if we could honestly I'd like to not tax groceries or uh personal hygiene products but under our current as Anthony was saying our only state that's like this we have no choice really way I see it um in in terms of council's uh understanding of the philosophies that went into Revenue projections and our uh proposed expenditures um if if you wake up in the middle of the night with an idea or um a question about well why did you guys determine you know the the growth in you know Hotel bed tax is going to be X um we kind of start out with a series of assumptions and build a budget around those assumptions uh so you know you can change dollar amounts here and there and it's not it's that's not that big an issue if we have a big philosophical difference in what we're seeing through our windshield of council's seeing something different through your windshield holler and we'll you know go through those differences together um if there are 900 city employees all participating in a process there's it's not that any opinion is more valid or less valid than anybody else is we're all just looking at out a whole bunch of different windshields and trying to reach consensus by the time it comes to council for adoption any further questions from Council thank you sir thank you well Council we are adjourned and Kim may I get a minute of your time please