1
00:01:59,760 --> 00:02:01,920
Mhm.

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00:03:54,760 --> 00:03:56,920
» Mhm.

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00:07:44,760 --> 00:07:46,919
» Mhm.

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00:09:39,760 --> 00:09:41,920
» Mhm.

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00:11:34,760 --> 00:11:36,920
» Mhm.

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» Um
So, the budget budget at a glance, I

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think that's the second slide down
there. Total revenue all funds just over

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00:12:00,120 --> 00:12:08,680
9 million. Total expenditures all funds
is just about 8.9 million. Total net

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00:12:05,880 --> 00:12:11,280
position across all funds is $108,000
that we're adding.

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00:12:10,000 --> 00:12:14,760
Um you could slice and dice that
different ways. General fund, water and

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sewer, we'll kind of get into those
those details there. Uh Carly Allen

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00:12:16,760 --> 00:12:24,200
mentioned the the combined tax rate
72.24

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00:12:19,880 --> 00:12:29,360
cents up from 63. Uh the reason why that
went up is because your taxable values

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decreased significantly. So, looking at
the uh truth and taxation worksheet,

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00:12:32,040 --> 00:12:37,960
which is in here
last year's taxable values were 588

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00:12:36,880 --> 00:12:43,160
million.
Uh and this year's taxable values were

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00:12:39,680 --> 00:12:48,040
about 518 million. So, you lost about 11
to 12%. Just on the taxable values,

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00:12:46,560 --> 00:12:52,000
which is, you know, when the taxable
values come down, your tax rate goes up

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00:12:50,440 --> 00:12:55,120
cuz it's no new revenue to the city,
right? So, your revenue's got to remain

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the same. So, that's the only way the
math could work.

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00:12:56,400 --> 00:13:01,240
Um
So, that's kind of the reason why yes,

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00:12:59,920 --> 00:13:05,640
the tax rate's higher, but like Carly
said, it's it's $5 more on average per

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00:13:03,880 --> 00:13:07,440
household. It's really not that much of
a change.

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00:13:07,319 --> 00:13:10,160
» [snorts]
>> Um

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00:13:08,839 --> 00:13:13,839
Debt service, which I'll get into,
$142,000

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00:13:12,160 --> 00:13:17,440
this year upcoming, and then the total
FTEs are 36.

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00:13:20,000 --> 00:13:25,480
All right, we go to uh next slide here.
It's just kind of a bar chart on or bar

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00:13:24,400 --> 00:13:29,680
graph on the revenue versus
expenditures. Uh you can see the general

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00:13:27,600 --> 00:13:32,520
fund is the largest operating fund that
we have.

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00:13:30,840 --> 00:13:37,240
Um it's more than half of of what water
and sewer is and then the marina fund

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00:13:34,440 --> 00:13:40,880
and the capital fund.
We're good?

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00:13:38,520 --> 00:13:40,880
Okay.

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00:13:41,120 --> 00:13:46,440
So,
uh general fund, the largest part of

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that revenue is is the property tax. Um
I know we don't have a huge sales tax

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base here in this city. Um so, it's just
all all bedrooms, all property tax

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00:13:53,160 --> 00:13:57,960
really that's paying for the majority of
the budget

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00:13:55,920 --> 00:14:01,040
uh itself. So, that's that's what makes
up a lot of the revenue.

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00:14:07,240 --> 00:14:12,640
It's good. It's good. Sounds good.
Uh

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00:14:10,680 --> 00:14:17,640
next slide over there um is this the
property tax rate which we talked about.

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00:14:14,640 --> 00:14:22,640
So, yes essentially 12% 13% up on the
rate 12% down on the on the taxable

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00:14:20,520 --> 00:14:25,200
values. Kind of math makes sense. It's
just

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00:14:23,600 --> 00:14:28,800
the way it kind of looks is you look
like you're raising the tax rate a whole

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00:14:26,400 --> 00:14:32,480
lot but it's really really not
um depending on what size the house is.

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00:14:33,160 --> 00:14:38,000
Uh I did want to like highlight the
attention. Yes, we don't have our audits

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00:14:36,560 --> 00:14:41,400
done. Yes, we cannot go to the voter
approval rate but you could see right

46
00:14:39,440 --> 00:14:47,080
down here the voter approval rate would
have been 75 cents or so. So, you would

47
00:14:44,600 --> 00:14:51,200
have about 3 cents to play with
um

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00:14:47,720 --> 00:14:53,320
to hit that voter approval rate and
I don't know. I don't see the de minimis

49
00:14:52,520 --> 00:14:56,920
on here. I can't remember if the de
minimis was

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00:14:55,360 --> 00:15:00,600
you know, what whatever that tax rate is
but it's half a million dollars more uh

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00:14:59,080 --> 00:15:04,440
to the city if you go to the de minimis
rate. So, those are options we're going

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00:15:02,720 --> 00:15:08,040
to hope to have
uh not necessarily implement but options

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00:15:06,280 --> 00:15:10,839
hope to have in the future when we get
these audits caught up.

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All right.

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00:15:14,600 --> 00:15:21,640
Next slide is debt service uh and fund
balances. So,

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the debt service uh I kind of wanted to
touch on. We got that one bond, the 2021

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00:15:24,680 --> 00:15:29,400
CO.
Um

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00:15:26,560 --> 00:15:34,200
the tax rate's only a couple cents that
makes up the the INS.

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00:15:32,040 --> 00:15:38,960
So, as we move to get the audits done,
you're going to have a lot of

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00:15:36,040 --> 00:15:42,880
flexibility or capacity down the line to
actually maybe issue debt without

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00:15:41,000 --> 00:15:45,760
affecting the tax rate a whole lot, or
there's going to be real transparency on

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00:15:44,440 --> 00:15:49,120
how we
go forward if we want to issue debt.

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00:15:48,200 --> 00:15:53,080
Um
So, I don't know

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00:15:50,960 --> 00:15:55,920
what the general feel of council is here
cuz I haven't really been here long

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00:15:54,080 --> 00:15:59,200
enough about issuing debt.
Um what I will say is I've been I've

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00:15:57,600 --> 00:16:03,320
been to a few councils that are heavily
against issuing debt. And I've kind of

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00:16:01,480 --> 00:16:07,080
told them like,
"Hey, the property owners now are paying

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00:16:05,680 --> 00:16:11,720
the taxes for the benefit they're
receiving. If you're going to continue

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00:16:09,040 --> 00:16:16,600
to save cash, your property owners now
are paying for somebody else to receive

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00:16:14,080 --> 00:16:20,360
the benefit. So, debt is essentially not
a terrible thing as long as you control

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00:16:18,200 --> 00:16:24,240
the tax rate. Um but that's just kind of
one way I put it. And hopefully, we're

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going to have a little flexibility into
the next year on that INS tax rate.

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00:16:28,560 --> 00:16:35,720
Uh you can see the fund balances over
there. General fund, 1.16 million. And

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00:16:33,040 --> 00:16:39,920
the INS INS fund's about 38,000.
Uh like Carly said, general fund's still

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healthy, but obviously working towards
the target there to get it higher.

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Um
and I I think really with the revenues

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00:16:44,720 --> 00:16:51,600
and the expenses, I really think it
could be a cop pushed pretty pretty

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00:16:47,280 --> 00:16:51,600
quickly. So, and managed.

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00:16:53,120 --> 00:16:59,760
Uh into a little more detail, uh the
general fund overview.

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00:16:56,600 --> 00:17:04,560
Uh 5.1 million in revenue, 5.1 million
expenses, about 24,000 positive. Really

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00:17:02,560 --> 00:17:07,880
tight, but I think uh you know, the
departments and everything working

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00:17:06,040 --> 00:17:11,520
together is really kind of manageable to
get this thing to a balanced budget. Um

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00:17:10,079 --> 00:17:14,319
I know on our side, we feel pretty good
about it.

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00:17:12,600 --> 00:17:17,640
Uh and I I I hope you guys, as you go
through the details, you'll feel good

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00:17:15,800 --> 00:17:21,480
about it, too.
So, it's balanced not really spending

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00:17:19,720 --> 00:17:25,120
more than we're taking in
and we feel pretty good about the

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00:17:22,600 --> 00:17:25,120
general fund.

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00:17:25,560 --> 00:17:30,632
A little more detail on the next slide.
Uh

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00:17:28,640 --> 00:17:32,560
by department
>> [snorts]

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00:17:30,800 --> 00:17:36,560
» So, you'll notice administrative
services is the largest department that

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00:17:34,520 --> 00:17:40,360
we're spending our money on. It's kind
of a little bit skewed this year cuz I

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00:17:38,400 --> 00:17:45,480
will tell you in the past you have
separated out city manager, finance,

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00:17:42,920 --> 00:17:49,400
city secretary, HR into all these
different departments.

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00:17:47,240 --> 00:17:53,520
This year we combined them all into one
administrative services department. So,

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00:17:52,080 --> 00:17:56,680
while it looks like it's the largest
piece of the puzzle and it is,

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00:17:55,480 --> 00:18:00,320
it might not have looked that way in the
past to you

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because it was all separated out.
Um

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00:18:01,200 --> 00:18:07,320
and then your police and fire are next
in line and public works. So,

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00:18:05,960 --> 00:18:10,120
it's kind of
just kind of wanted to touch base on on

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00:18:08,960 --> 00:18:13,600
how we're going to try and combine
things and and

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00:18:12,280 --> 00:18:17,160
be a little more streamlined that way
instead of having to separate every

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00:18:15,320 --> 00:18:20,467
detail out between every person
essentially.

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00:18:18,447 --> 00:18:20,467
» [snorts]

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00:18:20,480 --> 00:18:28,440
» Uh next slide is proposed staffing. I
know we went we had 35 FTE last year.

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00:18:25,000 --> 00:18:30,800
We're going to add one this year for 36.
So,

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00:18:29,720 --> 00:18:34,167
I think that is in administrative
services, correct?

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00:18:33,120 --> 00:18:37,440
So,
>> [snorts]

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00:18:35,600 --> 00:18:40,920
» and I think last year public safety was
all kind of shared and mixed in and

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00:18:39,680 --> 00:18:44,880
trying to break that out as best as
possible between PD and fire department.

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All right.
Next slide [clears throat]

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is the enterprise and the other funds.
So, you'll notice the water and sewer

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fund pretty balanced. I know we didn't
do anything with rates this year.

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Correct Correct me if I'm wrong, but I
know I talked to Karen a little bit

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00:19:02,120 --> 00:19:07,360
before I came. Nothing with rates that
we're changing.

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00:19:05,680 --> 00:19:10,640
Uh the marina fund does have a big
capital project

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00:19:08,880 --> 00:19:15,000
budgeted this year.
Um however, I they're sufficient I don't

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think I know there's sufficient fund
balance and cash in that fund to pay for

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that. So, we're drawing down the fund
balance in the Marina fund to do the

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00:19:20,720 --> 00:19:24,840
capital projects necessary uh in that
fund.

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00:19:23,948 --> 00:19:28,720
» [snorts]
>> We also have another capital improvement

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00:19:26,680 --> 00:19:31,640
fund uh which can be used for various
things that we're going to transfer

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00:19:30,080 --> 00:19:35,000
$456,000
into.

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00:19:32,680 --> 00:19:38,400
Um, and whether or not we come back with
amendments throughout the year to spend

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00:19:36,640 --> 00:19:42,400
that money, uh there's going to be money
set aside for capital projects in the

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future.
We also have some internal service funds

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00:19:44,120 --> 00:19:50,160
for technology and fleet.
Um, they kind of handle that.

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00:19:49,240 --> 00:19:54,080
Wastewater [clears throat] fund's not
really much, but $76,000.

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00:19:52,480 --> 00:19:57,760
We have $100,000 budgeted in the
drainage fund for projects.

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00:19:56,440 --> 00:20:02,593
Um,
and then your other little funds, hotel

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00:19:59,280 --> 00:20:06,200
occupancy and consolidated court. So,
>> [cough]

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00:20:03,360 --> 00:20:09,880
» all in all, the the biggest driver of of
maybe bringing down the surplus more

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00:20:07,840 --> 00:20:15,000
than we're adding to it are the capital
projects for drainage and the capital

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00:20:11,840 --> 00:20:15,000
projects in the Marina fund.

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00:20:15,840 --> 00:20:21,400
So,
next slide is the transfers. Uh we try

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00:20:19,080 --> 00:20:25,200
to be real transparent with how we're
moving money between funds and

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00:20:23,120 --> 00:20:29,680
appropriately funding things.
Um, so water's paying a franchise fee to

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00:20:27,960 --> 00:20:33,840
the general fund.
Uh Marina's paying a franchise fee and

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00:20:31,320 --> 00:20:38,320
an admin reimbursement. So, we try to
really break those out and uh

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let everybody know real transparent how
much money's moving between funds.

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00:20:40,800 --> 00:20:45,000
So,
uh real common to have the franchise fee

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00:20:43,520 --> 00:20:47,600
for the water. If somebody else did the
water and not the city did the water,

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00:20:46,440 --> 00:20:53,680
they would be paying you a franchise
fee. So, it's real common to actually

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00:20:49,720 --> 00:20:53,680
have have a franchise fee come over.

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00:20:53,880 --> 00:20:59,560
Transfers out of the general fund, like
I said, we're going to the capital

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00:20:57,000 --> 00:21:02,720
improvement projects 456,000.
And then the technology and fleet, we

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00:21:01,080 --> 00:21:08,280
transfer money to those internal service
funds to fund those services that they

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00:21:05,200 --> 00:21:08,280
provide to the city.

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00:21:11,280 --> 00:21:17,320
All right.
Uh next slide is the capital improvement

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00:21:15,000 --> 00:21:21,040
plan. Uh I know Carley said she's been
here 51 days. I think we're going to

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00:21:18,800 --> 00:21:24,120
start digging into this as we as we go
on.

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00:21:22,200 --> 00:21:26,840
But put together something at least
something that's in the air, something

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00:21:25,600 --> 00:21:30,560
that's here
uh that we can maybe have a little road

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00:21:28,200 --> 00:21:34,040
map. But I know as we get into this
we're really going to start to dig into

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00:21:31,840 --> 00:21:37,760
what needs to be done on the 5-year
horizon, how we're going to fund those

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00:21:35,520 --> 00:21:42,000
things. Uh it's important to have a plan
as you go down the line, right? Whether

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00:21:39,520 --> 00:21:45,560
it's issuing debt, getting grants.
Um there's so many so many things when

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00:21:43,920 --> 00:21:49,400
you have a plan in place
uh and a 5-year plan is is really

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00:21:46,920 --> 00:21:51,840
essential to to do that.
So.

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00:21:52,560 --> 00:21:57,600
And then really, you know, Carley
touched on the adoption timelines and

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00:21:55,560 --> 00:22:02,040
next steps. Um September 8th is really
the big day, right? You're going to

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00:21:58,960 --> 00:22:06,120
adopt the tax rate, adopt the budget. Um
and really in between then and now, if

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00:22:04,560 --> 00:22:09,760
you have questions on the line item
details and stuff like that,

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00:22:08,440 --> 00:22:13,280
more than happy to send them to Carley.
We're more than happy to answer anything

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00:22:11,560 --> 00:22:15,440
and dig into details.
Um

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00:22:13,840 --> 00:22:19,040
you know, this is kind of a
kind of an open forum, right? Dig into

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00:22:16,760 --> 00:22:23,520
your budget, ask questions. Um
happy to happy to answer them.

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00:22:21,040 --> 00:22:23,520
So.

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00:22:26,200 --> 00:22:32,520
That is kind of the overview
presentation. Do we have any questions

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00:22:30,080 --> 00:22:32,520
on that?

170
00:22:35,520 --> 00:22:42,720
» I have a question of
it's probably obvious but it escapes me.

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00:22:40,760 --> 00:22:49,000
The marina fund
it looks like there's twice as much

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00:22:45,440 --> 00:22:52,920
expense for the capital requirements as
the money available.

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Am I reading that wrong?
>> I had the same question.

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» Which which which number?
>> Marina fund.

175
00:22:57,240 --> 00:23:01,600
» The marina fund. That's the question
that I asked Karen earlier and she

176
00:22:59,920 --> 00:23:05,280
provided me with an answer. So the
marina Fund, yes, it looks like that

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00:23:03,800 --> 00:23:09,040
because we're actually having to do
those refloats. And that is not covered

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00:23:07,760 --> 00:23:12,600
with revenues from this year, it's
covered with revenues from last year.

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So, it looks in this budget like it's
more expenses than revenues, but it's

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» The money is there.
>> The money is there in the reserve fund

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00:23:18,720 --> 00:23:23,440
for the marina. It's in the fund. And it
actually leaves a healthy over a million

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00:23:22,000 --> 00:23:27,600
dollar balance in there as well. It
allows us to continue the marina

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00:23:24,920 --> 00:23:31,320
operations if we do those refloats
by October 28th, then the Army Corps of

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00:23:30,000 --> 00:23:32,600
Engineers
is satisfied.

185
00:23:31,960 --> 00:23:36,120
» Makes them happy.
>> It does. Yes, sir.

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00:23:33,680 --> 00:23:36,120
» Very good.

187
00:23:44,600 --> 00:23:49,400
What have you got? Now's your chance.
>> Yeah.

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00:23:47,880 --> 00:23:53,600
We're here. I'll I'll I know it was a
lot probably to take in on the

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00:23:50,480 --> 00:23:57,120
presentation. So,
that's why usually we're like, "Hey, you

190
00:23:55,520 --> 00:23:59,280
got any questions afterwards, let us
know. We'll

191
00:23:58,560 --> 00:24:03,600
we'll be happy to
>> one to the manager. Um what's the

192
00:24:01,720 --> 00:24:07,320
additional full-time position we're
contemplating?

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00:24:04,920 --> 00:24:11,600
» The The position is actually a It's a
partial reallocation of uh

194
00:24:10,000 --> 00:24:14,480
a three
I don't know how to describe her. It was

195
00:24:12,960 --> 00:24:20,200
a woman named Ms. Tolman, and she had
three positions: HR, CFO, and Assistant

196
00:24:18,280 --> 00:24:23,560
City Manager. We're allocating one of
those positions to a Planning and

197
00:24:21,800 --> 00:24:29,000
Economic Development. So, they'll be
over city plans, permits, plats, plan

198
00:24:26,520 --> 00:24:33,320
reviews, working with Sit Cog, and also
working with our EDC, and uh all of our

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00:24:31,560 --> 00:24:36,720
city plans, like our strategic plan,
capital improvement plan, comprehensive

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00:24:35,120 --> 00:24:38,320
plan, and work plan.
>> Thank you, ma'am.

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00:24:37,360 --> 00:24:39,880
» You're welcome.
>> So, if

202
00:24:39,400 --> 00:24:44,000
she's gone, and [clears throat] we're
hiring the city planner, how does that

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00:24:41,560 --> 00:24:47,320
make for one new position? Wouldn't that
just be a replacement of

204
00:24:45,120 --> 00:24:52,680
» No, Mary had three positions, so it's
it's it's a lesser paid position.

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00:24:49,720 --> 00:24:52,680
» Okay. Okay.

206
00:24:55,400 --> 00:25:02,600
» Really, the money still works cuz we're
not as expensive as a full full-time

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00:25:01,680 --> 00:25:04,840
FTE, so
>> Yeah. Yeah.

208
00:25:03,320 --> 00:25:07,320
» That's kind of how the money hopefully
will work.

209
00:25:09,240 --> 00:25:15,960
» Can I just say I wanted to be a positive
person for a moment? This is the easiest

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00:25:13,920 --> 00:25:19,080
budget we've ever had in 3 years to look
at and actually

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00:25:17,160 --> 00:25:23,600
decide for. So, thank you.
>> Okay.

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00:25:19,720 --> 00:25:23,600
» This process is a breath of fresh air.

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00:25:25,040 --> 00:25:33,680
» So, I I just um I think I understand
this, but I'd like to confirm on the

214
00:25:29,920 --> 00:25:37,480
slide on general fund by department. Um
administrative services is is definitely

215
00:25:36,280 --> 00:25:43,520
the largest portion [clears throat] of
that. So, in the past um

216
00:25:40,640 --> 00:25:48,680
some of the city manager, city secretary
salaries went into those other funds.

217
00:25:46,360 --> 00:25:54,240
So, will the this is just showing all of
their salaries and then we'll be pulling

218
00:25:50,640 --> 00:25:58,920
out some to pay the other funds for the
city secretary and city manager's

219
00:25:56,160 --> 00:26:02,040
positions and jobs uh working in that
area.

220
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» So, are you are you saying typically if
there's like an EDC or an enterprise

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fund that a city manager or an admin
staff member

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00:26:06,800 --> 00:26:10,080
services
>> Right.

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00:26:08,000 --> 00:26:13,040
» that fund will have a contribution into
the city general fund.

224
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» and that's what I was asking. Yes, and
that's what's So, it's it's said it

225
00:26:15,880 --> 00:26:21,440
looks a little different this year, but
it's really the very same thing. It's

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how it's set up, so you can see it.
>> So, they have streamlined it to where

227
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administrative services is basically
everyone else that's not the PD, Marina,

228
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and fire and public works. So, it it is
much more streamlined for ease of

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reference.
>> Okay.

230
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And I know there were a few like
specific line items. I know we increased

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legal, one of them, right?
Um so, that's in the administrative um

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00:26:47,560 --> 00:26:53,120
There was audit fees broken out uh cuz
is probably going to have to pay for two

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audits next year.
Right? The 25 and 26 to get that done.

234
00:26:56,200 --> 00:27:01,800
So, there were some costs that added up
in that administrative department that

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maybe, you know, were a little different
than than the prior year, but

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um overall, apples to apples, line by
line, I mean,

237
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you know, your postage, your telephone,
your cell phone, that stuff stays

238
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relatively the same.

239
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» Okay.

240
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» Anything else, council?
>> So, will we see all those line items or

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will we not?
Is that what this is?

242
00:27:28,400 --> 00:27:35,360
» Yes, ma'am. You have a full budget in
your packet. So, it's in It's in this.

243
00:27:33,920 --> 00:27:37,880
» So, after the slides?
>> Yes. You have the full budget.

244
00:27:37,320 --> 00:27:42,520
» Okay.
>> And this is

245
00:27:39,160 --> 00:27:44,960
» I see it. I see it.
That Did that That didn't get sent to us

246
00:27:44,680 --> 00:27:46,720
in the
>> It did, yes, ma'am.

247
00:27:45,600 --> 00:27:48,520
» Oh, it did. Okay. I did.
>> Yes.

248
00:27:47,000 --> 00:27:52,560
» I missed it.
>> It's all your line items and um

249
00:27:50,440 --> 00:27:54,440
» Okay. Very good.
>> It's the good stuff.

250
00:27:53,480 --> 00:27:57,560
» It's all the details.
>> the good stuff right there.

251
00:27:55,760 --> 00:28:00,760
» Okay.
Oh, yes, they

252
00:27:58,960 --> 00:28:03,960
» I did I did want to touch on like the
truth and taxation worksheet, though.

253
00:28:03,000 --> 00:28:07,480
Um
you know,

254
00:28:06,000 --> 00:28:12,200
I'm just thankful y'all don't have any
any TURs or anything like that um

255
00:28:10,640 --> 00:28:16,360
because it becomes real muddy and real
complicated real fast. Um so, yours is

256
00:28:14,720 --> 00:28:19,520
pretty cut and dry.
Um

257
00:28:17,200 --> 00:28:24,000
and but I don't see like any
you know, do we have over 65 stuff?

258
00:28:22,200 --> 00:28:27,240
Do we have exemptions and stuff like
that? So,

259
00:28:25,360 --> 00:28:31,560
as we come back to the table next year,
I think those are also things that

260
00:28:29,600 --> 00:28:35,800
need to be talked about and addressed
going forward with property tax. Um cuz

261
00:28:33,880 --> 00:28:38,880
there are some things you can't do
uh as far as that.

262
00:28:39,720 --> 00:28:46,920
» Do we have to be up on our audits before
we can do some of those things?

263
00:28:45,040 --> 00:28:51,600
» Um as far as like giving exemptions,
probably not, but raising the tax rate,

264
00:28:49,240 --> 00:28:51,600
yes.

265
00:28:52,240 --> 00:28:55,920
» I thought there were sources of money
um

266
00:28:55,520 --> 00:29:01,000
» Yes, sir.
>> to cover exemptions.

267
00:28:58,640 --> 00:29:04,840
» There are some sources of money you can
apply for to to cover He's talking about

268
00:29:03,400 --> 00:29:06,720
when we lose money to the military
exemption and things like that.

269
00:29:06,200 --> 00:29:09,640
» Oh, yes.
>> Morgan's Point Resort does not qualify

270
00:29:08,400 --> 00:29:13,000
yet, but we are looking into that
legally.

271
00:29:10,840 --> 00:29:16,800
» Thank you.
>> That is a good point because we went

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00:29:14,440 --> 00:29:21,920
through that Yes, down the road, so
Um, yeah.

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We'll be working on that.

274
00:29:28,120 --> 00:29:34,200
And I didn't know like while I'm here if
there's any specific line items in the

275
00:29:31,320 --> 00:29:38,080
past that have, you know,
brought concern or anything, I'd be

276
00:29:35,720 --> 00:29:40,160
happy to look at them. Um, I didn't, you
know,

277
00:29:39,080 --> 00:29:44,520
obviously don't know what's happened in
the past here too much, but um, any line

278
00:29:42,880 --> 00:29:48,880
items or any hot points that are talked
about, be happy to

279
00:29:45,840 --> 00:29:48,880
try and work through those, so.

280
00:29:49,680 --> 00:29:55,760
» And I'd like to thank Doug and and Karen
again. Um, we have worked around the

281
00:29:53,440 --> 00:30:00,880
clock on this to make it as simple as we
could and my instruction was to make it

282
00:29:57,920 --> 00:30:05,280
very elementary. It was It seemed very,
very confusing and complicated the last

283
00:30:02,960 --> 00:30:08,560
couple years. Um, looking back at those,
it was very hard for even us to

284
00:30:06,600 --> 00:30:13,840
understand and unravel. So, our goal is
transparency first and foremost. Um, and

285
00:30:12,440 --> 00:30:17,920
making it readable to the average
citizen, not just those that sit on the

286
00:30:15,440 --> 00:30:21,760
dais, not just staff, but to everyone.
And so, after tonight, um, the full

287
00:30:20,120 --> 00:30:25,960
budget, the full proposed budget that
council is looking at tonight, will be

288
00:30:23,840 --> 00:30:29,120
available through the city secretary's
office. Um,

289
00:30:27,520 --> 00:30:32,920
so, and that's every line item and
that's every every detail in the most

290
00:30:31,320 --> 00:30:36,600
readable form we could do. So, thanks to
again to Doug and Karen for helping me

291
00:30:34,920 --> 00:30:38,640
make that so elementary for us this
year.

292
00:30:37,080 --> 00:30:44,000
» Excellent.
Now, this I I like how we can easily

293
00:30:41,640 --> 00:30:47,600
compare the last several years, you
know, and that's really good.

294
00:30:48,280 --> 00:30:54,040
» Yeah, this is the
third or fourth one that we've had. What

295
00:30:52,400 --> 00:30:56,080
is How many years for us now?
>> I don't know. I

296
00:30:54,800 --> 00:31:00,360
» It's like our third or fourth, and this
one I can actually understand without

297
00:30:58,440 --> 00:31:03,880
having to try to decipher and pull out
an abacus and

298
00:31:02,000 --> 00:31:08,960
so I do appreciate that. I'll echo what
Council has said. Thank you very much.

299
00:31:07,360 --> 00:31:10,880
» I'll also touch on the directors and
chiefs.

300
00:31:10,080 --> 00:31:15,400
Uh
we were able to give them broken out

301
00:31:13,120 --> 00:31:19,000
spreadsheets to give input to us to
input into this larger budget, and they

302
00:31:17,560 --> 00:31:22,600
did a great job. Some of them for the
first time seeing it. Uh from what I

303
00:31:21,200 --> 00:31:25,360
understand, they didn't have access to
do that before.

304
00:31:24,040 --> 00:31:28,720
Um and they didn't have visibility on
what they were providing. It was usually

305
00:31:26,920 --> 00:31:33,280
just a meeting or, you know, kind of
cloaked in in a lot of secrecy, maybe.

306
00:31:32,280 --> 00:31:37,280
Um
but they they really worked with their

307
00:31:35,040 --> 00:31:41,000
staff and their departmental needs, and
they got us what they needed um to

308
00:31:39,240 --> 00:31:44,320
continue operations and to take care of
their staff and to make sure Morgan's

309
00:31:42,240 --> 00:31:47,160
Point is served, especially the chiefs,
uh both police and fire and their staff.

310
00:31:46,480 --> 00:31:51,320
Um
they're they're really made sure that

311
00:31:48,400 --> 00:31:53,760
our safety is uh a top priority, and we
were able to cover all of their

312
00:31:52,400 --> 00:31:57,560
operational needs without cutting
anything, and also increase retention

313
00:31:56,120 --> 00:32:00,880
and recruitment for them so that they
can continue

314
00:31:58,920 --> 00:32:05,760
uh to prioritize staffing for coverage
of our our town. So, really thank you a

315
00:32:02,960 --> 00:32:09,040
lot to the chiefs and directors as well.
>> Yeah, I know that's something we're

316
00:32:06,760 --> 00:32:14,080
working towards as well for for the
department heads is to actually provide

317
00:32:11,000 --> 00:32:17,600
them monthly snapshots of what they've
spent, what their budget is.

318
00:32:15,960 --> 00:32:21,080
Um we're trying to work on a forecast.
I'm not going to promise anything yet,

319
00:32:19,640 --> 00:32:23,840
where you can actually see going down
the next 12 months, you know, where

320
00:32:22,720 --> 00:32:27,480
you're going to be.
Um but at least you could see what's

321
00:32:25,600 --> 00:32:30,560
been what's been charged, what's gone
into each account, and what's going

322
00:32:29,120 --> 00:32:33,920
there. So,
that's something we're working towards.

323
00:32:32,240 --> 00:32:36,760
» That's a great point, Doug. I will say
that I was shocked when I got here.

324
00:32:35,120 --> 00:32:40,480
Every single director on staff at
Morgan's Point Resort said that they did

325
00:32:38,680 --> 00:32:44,840
not know where their budget was and that
they had to ask someone specific where

326
00:32:43,240 --> 00:32:48,560
their budget was or if they had money to
buy things as simple as bottled water

327
00:32:46,720 --> 00:32:53,920
for their staff um where they had to
file a requisition to do so. I I don't

328
00:32:51,320 --> 00:32:58,160
know if any of that firsthand, but I I
trust that all the directors weren't uh

329
00:32:55,880 --> 00:33:02,880
embellishing too much and so that just
knowing that we needed to clean that

330
00:32:59,800 --> 00:33:07,320
process up and make it easy for them to
read, have monthly updates and awareness

331
00:33:05,320 --> 00:33:12,320
of where their budget is, their staffing
and operations and expenditures are. And

332
00:33:09,560 --> 00:33:15,280
also, and I'm going to second Doug here,
I'm not going to promise the moon too

333
00:33:13,600 --> 00:33:18,400
quickly cuz we're we are working around
the clock to get this done in record

334
00:33:16,760 --> 00:33:21,880
time, but eventually when we're caught
up, the city manager's office will be

335
00:33:20,480 --> 00:33:25,880
working with Doug and Karen and we'll
put out a monthly budget update. Um and

336
00:33:24,320 --> 00:33:30,600
I'll present those to council. Those
will be publicly on the website. Um

337
00:33:28,800 --> 00:33:34,920
So, these are things that are common in
the cities that we're used to working

338
00:33:32,080 --> 00:33:38,600
for and with uh that I I was really
really important to me to bring that

339
00:33:36,160 --> 00:33:41,960
here. So, that kind of transparency for
our citizens on our website as well as

340
00:33:40,640 --> 00:33:45,280
for our council. So, we're working hard
to get get that uh something we can

341
00:33:43,720 --> 00:33:50,440
manage here.
>> I have a question also about um I I know

342
00:33:48,240 --> 00:33:55,320
we've complained a lot about FundView in
the last couple years, rightfully so I

343
00:33:52,960 --> 00:33:58,480
think. Are is this budget done on
FundView?

344
00:33:57,240 --> 00:34:02,080
» Uh
I will say this.

345
00:34:00,320 --> 00:34:05,680
Doug and Karen have worked with FundView
for as many years as it existed. They

346
00:34:04,200 --> 00:34:09,919
have no problem with it because they're
experts. They have been able to walk us

347
00:34:07,920 --> 00:34:12,360
through getting this done. Um this
budget was actually done on their

348
00:34:11,040 --> 00:34:16,480
software.
Uh we do still have FundView currently,

349
00:34:14,600 --> 00:34:21,600
but we are changing back to Incode and
that has been budgeted. It simply

350
00:34:18,600 --> 00:34:25,200
doesn't work for our city and our staff
cannot figure it out. I have met with

351
00:34:23,240 --> 00:34:28,560
the wonderful staff at FundView many
times now

352
00:34:26,720 --> 00:34:31,000
and they're very helpful.
Um

353
00:34:29,120 --> 00:34:35,040
and you know, it's just an operational
challenge for them. They don't have the

354
00:34:32,960 --> 00:34:38,919
software built out to what we're needing
to make it operational and work for our

355
00:34:36,960 --> 00:34:42,679
small city and our staff right now. We
may grow into that and their staff has

356
00:34:41,240 --> 00:34:46,600
been wonderful and helpful, but it
doesn't fit. So, we are budgeting to

357
00:34:44,679 --> 00:34:50,720
change back and we do have that to in
the works probably to come to council in

358
00:34:48,280 --> 00:34:53,320
September for for their decision.
>> Thanks.

359
00:34:51,560 --> 00:34:58,280
» And just so you're aware, I mean, we
have, you know, we do

360
00:34:55,440 --> 00:35:03,160
20 or so clients on FundView, 20 or so
clients on Incode, and whether it'll be

361
00:35:00,160 --> 00:35:05,480
nine or 10, so we got experience with
all different kinds of

362
00:35:04,800 --> 00:35:08,469
» It's wonderful.
>> Yeah. All different kinds of software,

363
00:35:07,200 --> 00:35:11,400
so
>> [snorts]

364
00:35:09,440 --> 00:35:16,520
» no really problem either way.
>> A topic for another time probably, but

365
00:35:14,600 --> 00:35:19,480
transitioning back from FundView to
Incode, will we have some of those same

366
00:35:18,440 --> 00:35:23,200
hiccups?
>> We will not. No one can explain why

367
00:35:21,120 --> 00:35:27,440
those hiccups happened, so no. No one
has heard of those before and working

368
00:35:24,880 --> 00:35:31,000
with Doug, Wanda at FundView, and Robin
and their team at Incode, um everybody

369
00:35:29,520 --> 00:35:33,880
knows each other, everybody works well,
and can switch back and forth with ease.

370
00:35:32,680 --> 00:35:37,200
We'll make sure that the records
transition appropriately with all of our

371
00:35:35,520 --> 00:35:39,480
teams.
>> Hey.

372
00:35:44,880 --> 00:35:47,960
» Council, anything else?

373
00:35:49,680 --> 00:35:54,600
» Well, from here, I will let Doug
introduce Lewis Breedlove, who is with

374
00:35:53,040 --> 00:35:57,960
Brooks and Watson, who is our auditor,
and if if everyone will join me to

375
00:35:56,200 --> 00:36:00,720
welcome him walking up to the podium
with a big round of applause for him and

376
00:35:59,760 --> 00:36:04,560
Doug.
Thank you for completing [applause] the

377
00:36:02,000 --> 00:36:06,160
2024 audit in record time.
>> How about a round?

378
00:36:05,200 --> 00:36:10,840
» All right.
>> I apologize. I was a little late. There

379
00:36:07,520 --> 00:36:10,840
was a traffic jam

380
00:36:19,800 --> 00:36:22,520
» Thank you, sir.

381
00:36:28,520 --> 00:36:34,640
» I think I sent a PowerPoint
presentation.

382
00:36:31,560 --> 00:36:34,640
I don't know if that's available.

383
00:36:38,240 --> 00:36:44,960
Was there Was that PowerPoint available?
I can also have it printed out, so we

384
00:36:43,000 --> 00:36:47,480
can just go through utilizing that if
that's

385
00:36:48,840 --> 00:36:53,440
Okay.
Great. Well,

386
00:36:52,120 --> 00:36:57,880
while we're getting that set up, and
I'll just quickly I I know I've met many

387
00:36:56,120 --> 00:37:00,480
of you.
You know, we

388
00:37:01,040 --> 00:37:08,600
For the 2024 audit, we did experience
delays yet again, unfortunately,

389
00:37:06,960 --> 00:37:13,160
but we're happy to be able to finally
get everything needed to be able to

390
00:37:10,760 --> 00:37:17,000
wrap up this 2024 test work, get
everything uh

391
00:37:14,840 --> 00:37:20,120
prepared for the report, and have the
the letters that come with it ready to

392
00:37:19,000 --> 00:37:24,520
go.
Uh so, those that just

393
00:37:22,000 --> 00:37:28,440
got wrapped up this past week.
And so, we're eager to jump right into

394
00:37:26,320 --> 00:37:33,880
25, and I know you guys have been kind
of knee-deep in budget and and that all

395
00:37:31,560 --> 00:37:36,200
that goes with budget, and so I think as
soon as that

396
00:37:35,200 --> 00:37:40,280
I think we're getting ready to step
right into wrapping up the next audit,

397
00:37:38,000 --> 00:37:45,000
so we can get the city finally caught up
to where you should be. So, I know

398
00:37:42,280 --> 00:37:47,920
that's been long awaited and and eager
for you all. Um

399
00:37:46,920 --> 00:37:52,720
but
I do I have good news. We did have a

400
00:37:49,680 --> 00:37:56,240
clean report issued this year for 2024.
So, I will utilize a PowerPoint

401
00:37:54,840 --> 00:38:00,600
presentation to go over the results of
the audit. So, in just inside the front

402
00:37:58,600 --> 00:38:04,760
cover of that report, there's a printed
out PowerPoint presentation, as well as

403
00:38:03,000 --> 00:38:07,960
two letters that are required to to be
issued with the report.

404
00:38:09,160 --> 00:38:16,520
And
we can do and then I can wait for that

405
00:38:13,800 --> 00:38:23,040
PowerPoint if you guys want, or I can
we can thumb through the

406
00:38:18,440 --> 00:38:23,040
the the printed out version of it. Um

407
00:38:27,360 --> 00:38:31,880
I know I'd like everybody else to be
able to see it, too, but uh um

408
00:38:30,880 --> 00:38:36,480
this one, I'll just go ahead and get
started on the just on that first second

409
00:38:34,480 --> 00:38:41,160
page there. Uh um
overview of the audit process. So, this

410
00:38:38,440 --> 00:38:43,960
page two of that handout. Um just kind
of get the ball rolling on that

411
00:38:42,400 --> 00:38:47,360
presentation. So, we do perform the
audit in accordance with generally

412
00:38:45,160 --> 00:38:50,720
accepted auditing standards. And so,
those standards require us to do a

413
00:38:49,120 --> 00:38:56,320
number of phases. So, the first phase
being the the assessment phase. So, um

414
00:38:53,920 --> 00:39:01,280
even if we've done previous year audit,
we always have to reassess where the

415
00:38:58,400 --> 00:39:04,640
city stands that year. Uh so, we we do a
number of process walk-throughs,

416
00:39:03,080 --> 00:39:07,680
questionnaires that are completed over
each department. Really anywhere where

417
00:39:06,320 --> 00:39:10,880
money's coming in and going out, we're
looking to see what are the controls

418
00:39:08,960 --> 00:39:14,000
that are in place, what kind of
uh recommendations we may be able to

419
00:39:12,360 --> 00:39:18,920
make. Um
And we're also looking at any any risks

420
00:39:16,440 --> 00:39:23,080
associated with with those areas, which
brings us to the risk-based approach of

421
00:39:20,520 --> 00:39:25,600
that of that uh assessment phase. So,
every line item within the financial

422
00:39:24,440 --> 00:39:30,280
statements has a different risk
associated with it. Uh and that can vary

423
00:39:28,280 --> 00:39:34,880
year to year, um just depending on
what's going on within the city and the

424
00:39:32,120 --> 00:39:38,080
financials. Um and that drives what type
of procedures we perform throughout the

425
00:39:36,560 --> 00:39:41,800
audit, what level of detail we perform
those procedures to make sure that we're

426
00:39:39,800 --> 00:39:46,520
comfortable with the material accuracy
uh when it's all said and done.

427
00:39:43,880 --> 00:39:50,400
Uh we we also have what we call that the
fieldwork phase. So, there's that kind

428
00:39:48,560 --> 00:39:53,840
of includes two components. There's a
compliance fieldwork aspect of it. So,

429
00:39:52,760 --> 00:39:57,680
we're uh
we're looking at bid requirements. Uh if

430
00:39:56,480 --> 00:40:02,480
there were any grants, making sure that
the city's following grant requirements.

431
00:39:59,920 --> 00:40:05,240
Uh public fund investment act. We would
review all the city council meeting

432
00:40:04,040 --> 00:40:08,440
minutes. So, if you all may have
approved something that has a compliance

433
00:40:06,840 --> 00:40:13,520
component to it, we would look at that
as well and ensure that uh the city is

434
00:40:11,040 --> 00:40:17,640
meeting those those requirement uh punch
points there. And then we do do actual

435
00:40:16,400 --> 00:40:23,000
what a lot of people call that field
work phase over the year end financial.

436
00:40:20,320 --> 00:40:25,960
So, we're performing cut off procedures.
So, we're testing activity around year

437
00:40:25,040 --> 00:40:29,360
end to make sure that all the
appropriate information has been

438
00:40:27,560 --> 00:40:33,120
properly included in the year under
audit or excluded if inappropriately

439
00:40:31,880 --> 00:40:36,360
included.
We're confirming with third party

440
00:40:34,400 --> 00:40:40,280
wherever possible. So,
comptroller, we're looking at the

441
00:40:38,680 --> 00:40:44,560
assessor collector,
banks, anyone that we can possibly

442
00:40:42,280 --> 00:40:49,880
confirm with outside of the city to get
a third party source to verify the data,

443
00:40:47,080 --> 00:40:52,280
we we do that. Um and then we're also as
we're tying out that balance sheet and

444
00:40:51,080 --> 00:40:55,320
making sure that those are materially
accurate, we're also testing those

445
00:40:53,640 --> 00:40:59,760
revenues and expenses to make sure that
those are right, uh appropriately coded,

446
00:40:58,160 --> 00:41:04,880
and appropriately and materially
reflected within the financials.

447
00:41:02,840 --> 00:41:07,440
Uh then we move into the conclusion and
reporting phase, that last phase of the

448
00:41:06,400 --> 00:41:11,120
audit. So, it goes through multiple
layers of review to ensure that no

449
00:41:09,240 --> 00:41:15,640
additional testing procedures are needed
within the audit as well as all

450
00:41:13,520 --> 00:41:19,920
standards are met within the report. Uh
and so the report that we have for you

451
00:41:17,600 --> 00:41:23,520
has been reviewed, all disclosures that
are required and the way that those are

452
00:41:21,360 --> 00:41:29,120
should be communicated
by generally accepted auditing or

453
00:41:24,920 --> 00:41:29,120
accounting standards are met.

454
00:41:30,360 --> 00:41:37,960
Uh thank thanks so much. Uh
Awesome.

455
00:41:35,520 --> 00:41:41,960
Yes, perfect. Thanks so much. So, yes,
last three there. Appreciate it. Sorry

456
00:41:39,800 --> 00:41:45,600
about that.
Uh so, this is the components of the

457
00:41:43,800 --> 00:41:50,280
audit report. Um
Oh, the next next slide. Okay, yeah.

458
00:41:48,520 --> 00:41:53,000
Um so, the components within the report,
this is from front to back. It first

459
00:41:52,000 --> 00:41:56,480
starts with the auditor's opinion
letter. That's our opinion over the

460
00:41:54,520 --> 00:42:00,280
financials, followed by the management's
discussion and analysis. So, that's also

461
00:41:58,360 --> 00:42:03,960
often referred to as the MD&A. It's
going to give you some year-to-year

462
00:42:01,200 --> 00:42:07,640
comparison. It punches on a lot of the
key areas within the financials or

463
00:42:05,400 --> 00:42:11,960
material areas of the financials. So, it
touches on budget activity,

464
00:42:09,880 --> 00:42:14,600
capital, debt related activity, and then
highlights any major changes year over

465
00:42:13,600 --> 00:42:18,440
year
Um um in that portion of the audit

466
00:42:16,080 --> 00:42:21,200
report. Behind that is your basic
financial statements. So, that's going

467
00:42:19,640 --> 00:42:25,520
to include your government-wide full
accrual statements uh as well as your

468
00:42:23,280 --> 00:42:28,240
fund level statements behind that. Uh
and then the notes to the financial

469
00:42:26,720 --> 00:42:31,840
statements. And so, those notes are
going to give you a lot of detail as it

470
00:42:30,360 --> 00:42:35,600
pertains to those financials. Often
times when you're looking at those

471
00:42:33,280 --> 00:42:38,960
statements, uh you're often wondering
what those numbers actually mean. And

472
00:42:37,680 --> 00:42:43,080
so, those notes are helpful in
identifying maybe a breakdown of what

473
00:42:41,040 --> 00:42:46,720
those numbers consist of or just giving
language to how those numbers are

474
00:42:44,520 --> 00:42:49,080
arrived at. Um
behind that you're required

475
00:42:47,840 --> 00:42:52,400
supplementary information. So, that's
going to have your budget to actual for

476
00:42:50,360 --> 00:42:56,680
your general fund for the year. Um and
then uh follow that following that is

477
00:42:54,120 --> 00:42:59,640
your TMRS related uh disclosure
material.

478
00:42:57,840 --> 00:43:02,560
Um as it relates to that first item, the
auditor's opinion, there are four

479
00:43:01,320 --> 00:43:06,160
possible opinion types that we as
auditors are able to issue. Uh there's

480
00:43:04,640 --> 00:43:10,880
an unmodified opinion, a qualified
opinion, a disclaimed opinion, or an

481
00:43:08,320 --> 00:43:14,000
adverse opinion. Uh and you did receive
an unmodified opinion for 2024. That's

482
00:43:13,240 --> 00:43:16,960
uh
often referred to as a clean opinion.

483
00:43:15,840 --> 00:43:19,960
It's the highest level of assurance that
we as auditors are able to provide what

484
00:43:18,520 --> 00:43:25,280
we hope to provide. And so, we're happy
to to say that we did issue a clean uh

485
00:43:22,520 --> 00:43:29,320
unmodified opinion for 2024.
So, that's good.

486
00:43:32,080 --> 00:43:36,480
Uh
next page, financial highlights, just

487
00:43:34,360 --> 00:43:41,000
real quick, covering some of the the
activity year over year. So, this is

488
00:43:37,960 --> 00:43:47,480
just uh hitting on uh the 2024 versus
2023 change in fund balance. Uh so, 2024

489
00:43:45,520 --> 00:43:51,240
uh had a overall decrease in fund
balance of 693,000 for your general

490
00:43:49,760 --> 00:43:53,800
fund. Uh
which was uh

491
00:43:52,640 --> 00:43:57,000
pretty much in line with what was
budgeted. Uh it was intended to draw

492
00:43:55,720 --> 00:44:00,320
down that fund balance. The fund balance
had grown quite a bit in the city.

493
00:43:58,480 --> 00:44:04,840
Wanted to utilize that fund balance for
2024. So, that's uh I've got a budget to

494
00:44:03,000 --> 00:44:09,480
actual in here in just a second that
we'll see and you'll see that's in line

495
00:44:06,320 --> 00:44:14,520
with with uh what would be expected.
Your debt service fund, small change

496
00:44:11,600 --> 00:44:19,160
there of 7,000 increase in fund balance.
Uh and then your non-major funds, which

497
00:44:16,400 --> 00:44:23,920
uh is a consolidation of any fund that
does not meet the requirements to be be

498
00:44:21,360 --> 00:44:27,800
presented as a major fund. So, uh those
would be They're all broken out in the

499
00:44:25,520 --> 00:44:32,200
back for for review. Uh but those are
represented as one major grouping on the

500
00:44:30,480 --> 00:44:36,600
front of the non-major funds and had an
overall decrease of 367,000.

501
00:44:34,880 --> 00:44:41,320
And those are just utilizing those
restricted or special purpose funds as

502
00:44:39,160 --> 00:44:45,880
intended. Uh so, in line with the
expectations there, no no concerns for

503
00:44:43,480 --> 00:44:49,880
that drawdown.
Uh next,

504
00:44:47,960 --> 00:44:52,720
as it relates to your budget to actual
for the year. So, this is just a

505
00:44:51,320 --> 00:44:57,640
summarized version of your budget to
actual uh that the So, from right to

506
00:44:55,760 --> 00:45:00,640
left, you've got your variance comparing
your actuals for the year, which is that

507
00:44:59,000 --> 00:45:05,360
center column, and then what was
budgeted after all any amendments in

508
00:45:02,560 --> 00:45:09,560
that far left column. And so, uh that
first line there is your overall revenue

509
00:45:07,240 --> 00:45:16,120
for the general fund had a positive
variance. Uh so, more being received

510
00:45:12,240 --> 00:45:20,720
than anticipated by 262,000.
Uh so, uh then following that, the total

511
00:45:18,680 --> 00:45:24,560
expenditure line, which is where we
generally are mostly concerned with. And

512
00:45:23,240 --> 00:45:29,200
in that far right there, you'll see
there's a positive variance there of

513
00:45:26,000 --> 00:45:33,160
86,000. So, 86,000 below budget for
2024.

514
00:45:30,680 --> 00:45:37,320
Uh and then uh your other sources and
uses line, uh nothing was budgeted for

515
00:45:35,560 --> 00:45:41,240
that. There's Primarily, that's going to
consist of transfer-related activity.

516
00:45:39,800 --> 00:45:46,480
Um and so, we had a positive variance
there of 25,000 uh for the year. So, net

517
00:45:44,440 --> 00:45:52,120
total positive budget variance of
374,000 for 2024. Uh so, that was in

518
00:45:49,800 --> 00:45:57,000
good shape. Uh behind Below that is just
a a highlight of your unrestricted

519
00:45:55,080 --> 00:46:00,400
portion of your general fund. So, we
always want to look to see uh that

520
00:45:58,680 --> 00:46:04,160
number helps to determine the health of
the fund balance for for the city. So,

521
00:46:02,560 --> 00:46:08,160
that what this number does
uh is this is anything that has not been

522
00:46:06,640 --> 00:46:11,800
restricted within the general fund, and
we want to compare that to

523
00:46:10,320 --> 00:46:15,760
your operating expenses for the general
fund. Uh this gives us a

524
00:46:14,280 --> 00:46:21,000
a little bit of an indicator or a metric
to evaluate whether or not there's

525
00:46:18,760 --> 00:46:26,720
much funds remaining to be able to help
in that upcoming year. Um so, we

526
00:46:24,360 --> 00:46:32,960
GFOA has a recommendation of a minimum
of 2 months in reserves or 60 days or

527
00:46:29,680 --> 00:46:37,600
60%. Uh we did generally recommend a
goal of 25 to 50% as a good

528
00:46:36,200 --> 00:46:41,760
target range. Every city is a little
different, so that number varies quite a

529
00:46:39,120 --> 00:46:46,640
bit from city to city. Um and so, for
2023, y'all were at 59% when you

530
00:46:44,760 --> 00:46:50,280
compared your unassigned fund balance to
your your expenses for the general fund.

531
00:46:49,160 --> 00:46:54,800
Uh
with what I mentioned earlier, the 2024

532
00:46:53,160 --> 00:46:58,680
the city planning on drawing down on
that fund balance, we would expect that

533
00:46:56,360 --> 00:47:02,760
number to come down. So, the unassigned
fund balance was at 33%, which is still

534
00:47:01,200 --> 00:47:07,160
in a good position
for 2024. I know we're

535
00:47:05,080 --> 00:47:10,560
in 2026 and getting ready to move on to
2027, so

536
00:47:08,840 --> 00:47:14,240
uh but this is a look looking back at
2024, this is a healthy position to be

537
00:47:12,680 --> 00:47:18,400
in and
for 20 at the end of 2024.

538
00:47:16,880 --> 00:47:23,880
Uh next,
uh proprietary funds. Uh so, page 60,

539
00:47:22,360 --> 00:47:28,440
this is highlighting your your
proprietary funds or or your business

540
00:47:25,680 --> 00:47:31,800
type funds. Uh so, we will evaluate
these a little differently than we do

541
00:47:29,600 --> 00:47:35,760
your governmental funds as we do expect
these to be able to operate on their own

542
00:47:34,040 --> 00:47:39,040
and be self-sustaining. So, that's the
first thing we look at is to see whether

543
00:47:37,120 --> 00:47:45,280
or not there is any net operating income
or a loss. Um in 2024, the water fund

544
00:47:42,600 --> 00:47:50,600
had a positive income of 230,000,
wastewater was at 29,000, and then the

545
00:47:47,760 --> 00:47:53,440
marina had a loss of 63,000.
Uh this was the year where there was a

546
00:47:52,040 --> 00:47:57,160
lot of damage that occurred to the
marina, and so it was shut down for a

547
00:47:55,320 --> 00:48:01,400
while, so that I believe would be the
primary reason for this. I think in

548
00:47:59,160 --> 00:48:03,680
years past it's it's not been the case,
so

549
00:48:02,480 --> 00:48:09,280
um and I haven't looked to see how you
guys are doing in in '25 or '26, so uh

550
00:48:06,400 --> 00:48:13,040
but in 2024 it was a loss, which based
on what was going on at that time made

551
00:48:11,000 --> 00:48:17,560
sense uh that there would be a loss
there.

552
00:48:14,480 --> 00:48:21,840
Uh after all uh really un uh
non-operating activity, uh so any kind

553
00:48:20,120 --> 00:48:24,920
of transfers any other non-operating
activity there is the overall change in

554
00:48:23,520 --> 00:48:28,600
net position. So there were some
transfers in into the water fund uh that

555
00:48:27,360 --> 00:48:33,280
brought that overall change in net
position up to 963,000.

556
00:48:31,320 --> 00:48:37,920
Wastewater was up a little bit more uh
than the 29,000 up to 93,000, and then

557
00:48:36,160 --> 00:48:41,960
the marina was pretty much the same,
63,000 uh loss there.

558
00:48:40,520 --> 00:48:45,800
Uh and then I included that cash flow
just so you can see the overall cash

559
00:48:43,280 --> 00:48:50,120
flow cuz this does operate at a full
accrual basis, so um some of these

560
00:48:48,160 --> 00:48:54,480
changes are based on accruals and and
non-cash activity.

561
00:48:52,000 --> 00:48:59,600
Uh so that uh just as a from a cash flow
standpoint, water had positive uh

562
00:48:57,200 --> 00:49:05,520
increase in cash of 1 million, uh
wastewater up 43,000, and then marina

563
00:49:02,200 --> 00:49:05,520
was down 19,000.

564
00:49:06,760 --> 00:49:12,080
All right.
And then next, the communication letter,

565
00:49:10,240 --> 00:49:15,480
so this is referring to the two other
letters that were inside the front cover

566
00:49:13,640 --> 00:49:19,120
of your report, so there's two letters
that are required to go with each audit.

567
00:49:17,360 --> 00:49:23,400
The first item being the communication
with those charged with governance.

568
00:49:20,960 --> 00:49:27,280
Uh and so this is that first letter with
that would be there.

569
00:49:25,120 --> 00:49:30,120
Uh should be the thicker of the two,
um and that includes a lot of required

570
00:49:28,960 --> 00:49:33,360
communication as it pertains to the
audit, so it goes over our

571
00:49:31,600 --> 00:49:36,800
responsibility uh as the auditors over
the audit, management's responsibility

572
00:49:34,840 --> 00:49:40,120
pertaining to the audit. Um it has a
couple of uh

573
00:49:38,160 --> 00:49:43,800
key factors I always like to point out.
Uh so one, the audit was conducted in

574
00:49:42,360 --> 00:49:47,760
compliance with all ethics requirements
regarding independence.

575
00:49:45,360 --> 00:49:51,520
Two, uh we didn't encounter any diff- uh
difficulties related to the availability

576
00:49:49,600 --> 00:49:56,040
of some support timeline.
Uh um but ultimately, we didn't have any

577
00:49:54,360 --> 00:49:58,800
difficulties encountered with management
beyond that.

578
00:49:57,400 --> 00:50:02,520
And then three, there were no
uncorrected misstatements identified.

579
00:50:00,680 --> 00:50:06,360
So, there in the back of that, there are
there's an exhibit with the audit

580
00:50:04,120 --> 00:50:09,760
adjustments that were needed for 2024,
which have already been entered into the

581
00:50:08,360 --> 00:50:13,760
system
and accepted by management.

582
00:50:12,400 --> 00:50:17,000
And then the second letter is
communication regarding internal

583
00:50:15,200 --> 00:50:22,400
controls. So, this is where we would
highlight any items that we saw that

584
00:50:19,760 --> 00:50:25,160
uh needed some improvement or any
recommendations that we may have

585
00:50:23,600 --> 00:50:29,240
identified.
In that one,

586
00:50:26,800 --> 00:50:33,240
there were a few items there, some of
which were related to just some of the

587
00:50:31,560 --> 00:50:36,160
necessary accruals needed for the year,
which are just that's a standard

588
00:50:34,760 --> 00:50:40,640
communication. But then there's a couple
other items that were highlighted as it

589
00:50:38,360 --> 00:50:44,320
pertains to some recommendations over
some processes,

590
00:50:42,200 --> 00:50:47,840
um most of which I believe have been
discussed and a lot of

591
00:50:46,240 --> 00:50:52,000
changes have already been made made in
the process since 2024,

592
00:50:50,480 --> 00:50:56,640
but happy to discuss any of those with
you all as well.

593
00:50:54,960 --> 00:50:59,040
So, I'll open up to any questions you
may have.

594
00:50:59,880 --> 00:51:06,480
» Thank you. That's
very encouraging presentation.

595
00:51:03,520 --> 00:51:08,680
I have a question on a different issue.
>> Okay.

596
00:51:06,960 --> 00:51:13,880
» With respect
to enterprise fund transfers to the

597
00:51:11,960 --> 00:51:17,440
general ledger.
Um it could be a marina, it could be

598
00:51:15,920 --> 00:51:22,440
some business,
whatever we had could develop in the

599
00:51:19,240 --> 00:51:29,640
community that might be profitable.
Can you tell us how we can legally

600
00:51:25,480 --> 00:51:34,600
assist the general fund with profits?
I did some work I looked it up and it

601
00:51:33,160 --> 00:51:39,120
sounds like
any profits

602
00:51:36,360 --> 00:51:43,160
that we can make in an enterprise fund
can be transferred so long as it doesn't

603
00:51:41,600 --> 00:51:46,120
drive up
uh

604
00:51:43,880 --> 00:51:48,640
the rate that the resident pays.
>> Yeah.

605
00:51:47,000 --> 00:51:52,320
Yeah, so as long as there aren't
restrictions

606
00:51:50,200 --> 00:51:56,520
to the the revenue or like the funds
that were received, then yes,

607
00:51:54,480 --> 00:52:00,080
technically you're correct and I I we do
see

608
00:51:57,640 --> 00:52:04,360
uh cities do that from time to time.
Uh whenever sometimes it's due to a hard

609
00:52:02,080 --> 00:52:07,840
time, sometimes it's that utility fund
ends up propping up the general fund.

610
00:52:05,640 --> 00:52:10,880
Ideally, it would they would stay in
their own lane and they're

611
00:52:08,880 --> 00:52:14,240
self-sustaining operating in that those
funds received in the utility fund would

612
00:52:12,240 --> 00:52:17,920
be able to be used to
improve infrastructure. Um a lot You

613
00:52:16,560 --> 00:52:23,040
know, that stuff isn't cheap, so having
that available is great. Um however, we

614
00:52:20,360 --> 00:52:25,920
do see often times uh where
um to their

615
00:52:24,800 --> 00:52:30,240
maybe there's a project that's going on
that has some water infrastructure

616
00:52:27,360 --> 00:52:35,280
portion to it and non uh utility
functions to that project and they'll

617
00:52:32,480 --> 00:52:38,680
contribute to it um or
uh they'll, you know, they're they're

618
00:52:36,720 --> 00:52:41,040
very normal is that any administrative
costs that can be thought of the general

619
00:52:39,880 --> 00:52:46,360
fund can
essentially charge the utility fund for

620
00:52:43,280 --> 00:52:50,880
the admin costs. But, uh I think what
you're Yeah, just profit I mean, there's

621
00:52:48,880 --> 00:52:55,280
technically nothing
that I'm aware of that would uh prevent

622
00:52:53,080 --> 00:52:57,480
you from doing that. I'd see it happen.
Um

623
00:52:56,320 --> 00:53:03,640
uh
I would encourage uh that it not be a

624
00:53:01,200 --> 00:53:06,920
regularly uh uh
a regular thing to uh to monitor that

625
00:53:05,920 --> 00:53:09,960
and assess
on a recurring basis whether or not

626
00:53:08,560 --> 00:53:14,360
that's something that you would want to
do regularly, but I do understand that

627
00:53:12,000 --> 00:53:17,440
it's it's uh it's available to the city
and is

628
00:53:15,160 --> 00:53:21,840
» a There was a speaker at the Sit Cog
meeting recently

629
00:53:19,400 --> 00:53:26,920
and he said something to the effect that
it can be done

630
00:53:24,040 --> 00:53:30,760
uh but he recommends a letter from the
auditors

631
00:53:28,400 --> 00:53:33,960
and I was wondering what that was like.
And also um

632
00:53:34,120 --> 00:53:40,840
I read that if
there is a bond issue related to that

633
00:53:39,000 --> 00:53:45,760
enterprise entity
>> Mhm. the bond uh issue must

634
00:53:44,200 --> 00:53:50,680
describe it.
Must be in that bond.

635
00:53:47,600 --> 00:53:54,720
» Yeah, so it's very normal I where a bond
that's issued the language of it is

636
00:53:53,360 --> 00:54:00,440
it's not usually
explicitly detailed in what it's for but

637
00:53:57,360 --> 00:54:05,920
it will often indicate that
utility funds can be used or

638
00:54:03,440 --> 00:54:11,120
the governmental side can be used. So
the makeup of how those bonds are paid

639
00:54:08,880 --> 00:54:15,400
can sometimes change over time where it
may be as initially starts as a 50/50

640
00:54:13,160 --> 00:54:18,760
but then they say hey you know what
this says we can use utility funds let's

641
00:54:17,160 --> 00:54:22,360
just use utility funds. So that's I've
seen that happen too where they'll

642
00:54:20,600 --> 00:54:26,200
they'll kind of change how much each
fund Typically they kind of stay within

643
00:54:24,800 --> 00:54:28,440
like hey this percent this percent and
that's how much we're going to pay

644
00:54:27,040 --> 00:54:30,760
towards the bond.
Or

645
00:54:29,720 --> 00:54:35,280
um
they'll you know just do a big chunk

646
00:54:33,720 --> 00:54:38,720
out of the utility fund to help. I've
seen that happen too. There's nothing

647
00:54:36,680 --> 00:54:44,000
that's as long as it says in the bond
document that it's a permitted source

648
00:54:41,560 --> 00:54:49,000
then it technically can be used.
>> Have you ever in your experience given a

649
00:54:46,480 --> 00:54:52,400
letter to support transfer of profits
into the general fund?

650
00:54:50,080 --> 00:54:56,720
» No and I don't know that we would. I'd
have to talk internally. Um I so him

651
00:54:55,200 --> 00:55:02,000
saying that I'm curious what what
exactly he'd be referring to. Um as far

652
00:54:59,480 --> 00:55:05,040
as like options I think we could like
come up with that but you know it's

653
00:55:03,640 --> 00:55:09,760
always up to management. As an auditor
we have to

654
00:55:06,760 --> 00:55:13,520
be as careful as we can about um
uh we don't want to make it seem it seem

655
00:55:11,520 --> 00:55:19,120
as though we are telling management what
to do. Um so so we we essentially are

656
00:55:17,760 --> 00:55:22,880
always going to report on what we've
seen already or we can lay out here are

657
00:55:21,400 --> 00:55:26,200
some things that we see and some options
that we see. Um

658
00:55:24,520 --> 00:55:29,360
but ultimately leave it up to to
management you know the the council to

659
00:55:28,200 --> 00:55:30,560
make the decision.
>> Thank you.

660
00:55:30,080 --> 00:55:33,960
» Yes sir.
>> Yes sir.

661
00:55:31,280 --> 00:55:36,320
» jump in real quick on
>> Yeah.

662
00:55:34,920 --> 00:55:40,400
Yeah sorry.
So forward looking on that, um

663
00:55:39,040 --> 00:55:46,280
whether it be profits or whether it be
transfers, I know in the legislature

664
00:55:42,720 --> 00:55:51,520
right now they're discussing um removing
or limiting this the city's ability to

665
00:55:49,040 --> 00:55:54,960
transfer from utility funds over to the
general fund. Uh so, that is something

666
00:55:53,720 --> 00:55:58,280
that they are
that is at uh you can go to TML and look

667
00:55:56,960 --> 00:56:00,280
it up, and there there's about four
things that the legislature's

668
00:55:59,400 --> 00:56:05,480
discussing.
>> to something like our marina?

669
00:56:03,000 --> 00:56:05,480
» That would.

670
00:56:06,120 --> 00:56:11,520
So.
>> And by limiting

671
00:56:09,400 --> 00:56:14,120
you expect there to be some language
saying

672
00:56:12,680 --> 00:56:17,280
when and how you might be able to
transfer

673
00:56:15,360 --> 00:56:20,640
but more strict.
>> I would expect there to be yes, not a

674
00:56:19,080 --> 00:56:25,960
direct cut off. I would expect there to
be some sort of mechanism to be able to

675
00:56:24,480 --> 00:56:29,800
uh cuz you it's, you know, a lot of
these cities that I work on, some of

676
00:56:27,480 --> 00:56:32,480
they rely on those transfers
>> Exactly.

677
00:56:30,320 --> 00:56:35,760
» to operate, and that would be
that would be a detriment to a lot of

678
00:56:33,840 --> 00:56:39,320
these communities uh without proper
planning. So, um

679
00:56:38,000 --> 00:56:43,160
you know, I know that's that's being
discussed. Uh luckily here, I don't

680
00:56:41,320 --> 00:56:45,880
think we really have we don't rely on
that to fund the general fund.

681
00:56:45,080 --> 00:56:49,080
» Yet.
>> Or could we have to? I mean, we don't

682
00:56:47,680 --> 00:56:51,840
have to.
>> Yet.

683
00:56:50,120 --> 00:56:54,554
» So, but just wanted to throw that out
there.

684
00:56:53,200 --> 00:56:56,574
Thank you.
>> [laughter]

685
00:57:02,760 --> 00:57:06,880
» Any other questions?
Councilor Meeks?

686
00:57:05,040 --> 00:57:09,440
» Uh anything else? Any additional
questions?

687
00:57:10,720 --> 00:57:15,560
» I have one additional question.
>> Yes, ma'am.

688
00:57:13,080 --> 00:57:20,760
» What is your estimate, um I know you've
been working around the clock with Todd

689
00:57:18,040 --> 00:57:24,480
on the 2025 audit, just so that they can
hear what I know y'all have been mad

690
00:57:22,600 --> 00:57:29,240
working magic on.
>> Well, I think uh we don't have a

691
00:57:26,520 --> 00:57:31,640
explicit timeline for this. Uh I think
and I don't want to speak for Todd. I

692
00:57:30,240 --> 00:57:36,120
think right, they're getting they're
they're prepping the 2025 numbers so

693
00:57:33,680 --> 00:57:39,320
that we can I think maybe the budget was
kind of

694
00:57:37,320 --> 00:57:44,520
main thing right now and then but we're
getting ready to get the 2025 numbers so

695
00:57:41,200 --> 00:57:47,960
we can start that process. Um I I know
all entries have already been made in

696
00:57:45,920 --> 00:57:52,320
the system for 2024.
Um I believe I I don't want to misspeak

697
00:57:50,280 --> 00:57:56,160
if bank recs
nearly there or is good.

698
00:57:54,520 --> 00:58:01,680
» Capital assets rolled forward.
>> Yeah, so a lot of things have already

699
00:57:57,480 --> 00:58:07,200
been done for 2025 which uh which I know
was a struggle for 2024. So, that's uh

700
00:58:04,880 --> 00:58:10,640
exciting uh for 2025.
Um so

701
00:58:08,400 --> 00:58:15,120
um you know, I think I gave
uh

702
00:58:12,000 --> 00:58:19,280
an estimate for 2024 that unfortunately
did didn't get met

703
00:58:17,000 --> 00:58:22,480
um due to unforeseen issues. So,
uh I'm always hesitant to give a uh you

704
00:58:21,160 --> 00:58:26,400
know, but I think you know, if we're
able to get the numbers in the next week

705
00:58:25,480 --> 00:58:28,520
or two, I don't know.
>> Next week or two?

706
00:58:26,960 --> 00:58:31,200
» Yeah, next week or [clears throat] two.
Um

707
00:58:29,520 --> 00:58:35,240
we should have it be able to have it
substantially completed

708
00:58:33,160 --> 00:58:39,040
within the month of September and then
so then my goal would be able to

709
00:58:36,560 --> 00:58:43,040
hopefully be able to to at least have a
draft in October if not present it in

710
00:58:41,080 --> 00:58:47,200
October. Um
I think that's a very reasonable

711
00:58:44,640 --> 00:58:53,600
timeline assuming there's no surprise
issues that come up which have happened.

712
00:58:50,120 --> 00:58:57,880
So, uh so I think most That would be the
most optimistic timeline would be able

713
00:58:55,560 --> 00:59:01,280
to have it
all audit work completed within

714
00:58:59,160 --> 00:59:06,640
September be able to issue in October.
Um and then so potentially November if

715
00:59:03,520 --> 00:59:13,760
it's on the longer end. Uh
So, and then and then which is for for

716
00:59:09,800 --> 00:59:18,120
2026, that is fine cuz then we're
you know, November is usually the

717
00:59:15,440 --> 00:59:21,520
earliest we start for 2026 audits. So,
and I and also I mean I would have to

718
00:59:19,440 --> 00:59:25,400
talk with uh Zach Tax to Doug and their
team and and figure out what that looks

719
00:59:23,080 --> 00:59:28,440
like for them on on that side but
I I

720
00:59:26,040 --> 00:59:32,040
we should be able to be in line to get
in a normal schedule rhythm for 2026,

721
00:59:30,840 --> 00:59:35,720
so.
>> Thank you. Yes, so I just wanted him to

722
00:59:33,800 --> 00:59:39,280
confirm that is that's my my the end of
the year. He might they might have it

723
00:59:37,080 --> 00:59:41,720
done faster, but um but yeah, that
should get us back in line with where we

724
00:59:40,920 --> 00:59:45,320
need to be.
>> We'll go with end of the year. Just so

725
00:59:43,000 --> 00:59:49,240
» Yeah, and and when he says a lot of the
things for 2025 has already been done,

726
00:59:47,520 --> 00:59:54,840
when I started, they were not done. It
wasn't even touched. And so really Doug

727
00:59:52,040 --> 00:59:58,400
got in there and has been the one to get
anything done on 2025 that's been done

728
00:59:56,680 --> 01:00:01,480
and that's record time cuz I started 51
business days ago and he came on way

729
00:59:59,880 --> 01:00:04,760
after that. So
um so thank you again yeah for for both

730
01:00:03,440 --> 01:00:06,800
of you for making that a reality to get
us back on track with audits. We're

731
01:00:06,080 --> 01:00:09,920
excited.
>> Yeah, absolutely.

732
01:00:08,560 --> 01:00:11,480
» Going to be the best Christmas ever.
>> Yeah.

733
01:00:11,056 --> 01:00:16,520
» [laughter]
>> We'll put a bow on it this year, so.

734
01:00:15,080 --> 01:00:20,440
» Okay, gentlemen, again, we uh we
appreciate you both um being here. Thank

735
01:00:18,600 --> 01:00:24,320
you very much uh for your presentations.
Keep council up to date and uh

736
01:00:22,800 --> 01:00:26,720
showing us where we're at. Uh ladies and
gentlemen, for the workshop, that's all

737
01:00:25,560 --> 01:00:31,000
we have on the agenda, so I'm going to
go ahead and adjourn us at 16:58.

738
01:00:29,520 --> 01:00:35,000
Um we've got a little bit of a time now
before uh

739
01:00:32,560 --> 01:00:39,960
the regular session convenes, so
um

740
01:00:36,360 --> 01:00:39,960
Yeah. Uh Madam Secretary,