[1:59] Mhm.

[2:17] » Good evening. Welcome to the April 2026 New Canaan Budget Committee meeting.

[2:22] We will go ahead and get started. The first portion of our meeting is devoted

[2:27] to public comment. Is there any public comment now?

[2:30] This is the only portion of the meeting where the public may comment.

[2:36] Seeing none, we'll move on. Alderwoman Malone Marshall.

[2:40] Present. Alderman O'Brien. Here. Alderman Osinga. Present. Alderman

[2:44] Marczak. >> Present.

[2:46] Alderman Navares. Alderman Johnson. Here. Alderman Jones.

[2:51] » Present. We do have a quorum. Thank you. We do not have presentations or old

[2:55] business, but a few [clears throat] items under new business.

[2:58] The first is consideration of the minutes meeting minutes from the

[3:02] February and March meetings of the Budget Committee.

[3:06] Those were in the packet there. Is there any

[3:09] questions or changes regarding the minutes?

[3:15] If not, is there a motion to approve the February and March meeting minutes? I'll

[3:19] make a motion to approve the minutes for February and March.

[3:22] » Is there a second? Second. Second. Any discussion?

[3:26] All in favor say aye. Aye. Any opposed? Okay.

[3:30] Next under new business, we have presentation of our fiscal year 2025

[3:35] audit. Dale Garrett and Amy Eshelman are here.

[3:39] Comptroller Rogers, I'll turn it over to you and you can direct the conversation

[3:42] here. Thank you. So, we did pass out the audits.

[3:48] We did pass out the audit books. And I am going to turn the floor over to

[3:54] Dale and Amy and let them go through. Okay.

[3:59] And if you have questions, I will try to field them.

[4:04] Thank you. Um, check out the booklet in front of you.

[4:08] I'm going to do an overview of the booklet. Um,

[4:11] the binder has several sections. The first section

[4:15] is the city introduction. It includes officers, officials, and an

[4:18] organizational chart of the city.

[4:22] Following that section, we have the auditor's report.

[4:26] Uh, we have issued an unmodified or a clean opinion for the year ended April

[4:29] 30, 2025. The next section is the management

[4:33] discussion and analysis, the MD&A we refer to.

[4:37] It's prepared by the city's comptroller's office and I would

[4:40] encourage you to read that. It goes through a narrative of the financial

[4:44] history of the year and a little bit of forward-looking, uh,

[4:48] opinions as well, which I mean, they're good reading material.

[4:52] Following the MD&A is the basic financial statements, which I'll be

[4:55] discussing shortly. And after that section is required

[5:00] supplementary information, which includes budget actual comparisons for

[5:04] the major funds and also the pension information related

[5:07] to IMRF, OPEB, and police and fire.

[5:12] Then we have the combining schedules for the non-major funds and other

[5:16] supplementary schedules after that. And after the financial section, there's

[5:21] the statistical section. It's unaudited, but it's it's a it's a a

[5:25] statistical selection of compiled information from the city's

[5:30] comptroller's office from various sources, which gives some historical

[5:33] data on a variety of subjects

[5:37] of concern to the city. So, I'll direct you to page 16 and 18 to

[5:43] start with. It's at the very beginning the financial

[5:48] statements. That section is the net position of the

[5:52] in statement of activities of the city.

[5:56] It's reported on the full accrual basis of accounting, which includes capital

[5:59] assets, includes long-term debt,

[6:03] and deferred inflows and outflows pertaining to IMRF,

[6:07] OPEB, which is um

[6:10] post post employment benefits, and the police and fire pensions.

[6:15] Pages 17 and 18 contain a statement of activities.

[6:21] If you look at the bottom line, there's a about five lines up, there's

[6:25] changes in net position.

[6:29] Under governmental activities, you had an increase of $12,300,000,

[6:35] which is about 3.4 million more than the prior year.

[6:38] An increase. Uh major contributing factors there

[6:41] would be expenditures were down overall from the previous year by about $3.8

[6:46] million, while revenues stayed pretty consistent with the prior year.

[6:52] Page 19

[6:56] is a balance sheet for governmental funds.

[6:59] These are prepared on the modified accrual basis, which is focused more on

[7:02] the current financial resources. It does not include items such as

[7:06] capital assets, long-term debt, and liabilities.

[7:11] General fund column, if you look at the general fund column,

[7:15] second line from the bottom, overall fund balance increased by about

[7:19] 1.2 million, and the fund balance is sitting there at 25 million 25.3

[7:24] million, approximately. The if there's about three factors

[7:28] there, the unassigned balance of the of the uh

[7:33] general fund was $14.5 million. It decreased by about

[7:38] 1.5 million from the prior year. Prepaid expenses are the primary factor

[7:43] in the non-spendable portion. Those would be expenses paid

[7:46] in the previous fiscal year for the current fiscal year.

[7:49] So, of course, those are not available for for uh

[7:52] current use. Those increased slightly from the prior

[7:56] year. The amount committed to pension debt

[7:59] liability also increased. On page 21,

[8:04] you have the statement of revenues, expenditures, and changes in fund

[8:08] balance for the governmental funds. About the fifth line from the bottom is

[8:13] also the net change in fund balance.

[8:18] The general fund decreased by about 2.8 million from the prior year.

[8:24] It's still increase of 1.2 million.

[8:29] Overall expenditures increased increased and was mostly for

[8:33] retirement. General expenses also increased slightly

[8:36] and there's more details further back in the report, which will break down

[8:40] and that's on pages 113 through 114. Again, if you go to the back to those

[8:45] detail schedules, if you want to drill down a little deeper on

[8:48] what up made up those uh those expenditures.

[8:52] Overall revenues increased from the prior year.

[8:55] Uh areas of increase were income tax, sales

[8:58] tax, property tax, and ambulance fees. And again, there's more details further

[9:04] back in the financials and that would be on page 112.

[9:09] And also, we less money was transferred from the general fund during the fiscal

[9:13] year than to other funds

[9:15] during the year.

[9:19] Okay. ESU is also Let's see. On pages 23 through 24,

[9:27] ESU is considered a business type activity.

[9:30] Um unrestricted net position increased by

[9:33] about 3.2 million dollars. Uh part of the factors there were

[9:38] liabilities decreased down by paying down principal on bonds and also paying

[9:42] down the Elmira EPA loan. There was an increase in investment in

[9:46] the with Karma as well. The investment in Karma went up by about 2.1 million

[9:51] dollars. And lastly, on page 105,

[9:56] in the statement of revenues, expenses, and changes in net position of

[10:01] proprietary funds. Again, that was

[10:05] And it focuses on the Environmental Services Utility Fund.

[10:09] Yes, you had an increase of 5.5 million dollars, which is about 1.1

[10:14] million dollars less than it was in the previous year.

[10:18] Factors there were operating revenues increased by about a million dollars.

[10:22] Well, sewer utility and solid waste public works increased their

[10:25] expenditures by about 1.8 million dollars.

[10:28] Uh, depreciation of fixed assets also increased.

[10:32] And the net operating items such uh, income and expenses remained fairly

[10:36] consistent. Again, this is a pretty helicopter

[10:41] view of the financials. Um,

[10:44] I said I encourage you to read the MD&A and also the footnotes if you want to

[10:48] get a little more detail about not just the numbers, but some of the

[10:52] what what makes up uh, the important factors in the financial statements for

[10:56] the past fiscal year.

[11:01] And we're always open for comments or questions, even

[11:05] subsequent to this meeting if needed.

[11:09] Thank you, Paula. Thank you.

[11:12] It was kind of a rough year, but we got >> Yeah, we got through it.

[11:15] » [laughter]

[11:18] » And that was kind of our fault for taking some of your people away from

[11:21] you. It's okay.

[11:27] Was there information in here, Dale, about the pensions, like an update on

[11:31] where those are? Uh let's see here.

[11:37] Look at the table of contents.

[11:53] Uh pages

[11:56] 102, I believe. Let me go there.

[12:04] I got to memorize 107 pages. That's >> Yeah.

[12:10] This shows a 10-year history of the uh

[12:15] various pension funds. You have IMRF, which of course you have no control

[12:19] over. Um but then you have 102 and 103 is the uh

[12:24] changes in net pension liabilities for police pension fund.

[12:29] And then the following page has details on the firefighters pension fund. Yeah,

[12:34] okay. And then if you turn to the page 14 in

[12:38] the MDA, um the top of that starts with long-term

[12:43] debt. Um and it gives a nice summary of the

[12:48] bond funding and how much we were able to decrease uh liability.

[12:55] For example, oops, excuse me. Mike? I'm on

[12:59] Mr. Brennan's um For example, the police pension.

[13:03] In 2024, your net pension liability was almost $53 million.

[13:09] That would be the second column on page 102.

[13:13] The net pension liability dropped to 13 million

[13:16] the following fiscal year. So, that was quite a

[13:19] decrease

[13:22] due to due to the bonds. And it's due to fund the uh pension

[13:25] plans. Uh what is I'm not following that deal.

[13:29] » So, page page 102 he's on. If you go to that second column that says that's

[13:34] police pension fund 2024. Yes. And if you go down you can see that the

[13:38] net pension liability was almost 53 million. It's 52.895

[13:43] there about over what 3/4 of the way down on the page. Okay. On that line

[13:47] that says employers net pension liability. And because of the decision

[13:51] that you all made to go ahead and and go out with that second tranche that

[13:55] drastically changed then from that 52 million dollar almost 53 million dollar

[14:00] liability down to that 13. almost 5 million dollar which is a drastic

[14:04] difference because of the switch out of the debt basically, right? So, Wow. now

[14:08] the pension debt isn't the same. We have more bond debt, right? But we know that

[14:12] the trade-off gave gave millions of dollars of savings over

[14:17] the course of time with going ahead and letting the stock market take over and

[14:22] get some gains there and also make sure that you know that we are fully funded

[14:28] so we just have different schedules and such to

[14:30] amortize everything over time. You know on those on 104 you had the

[14:34] same effect on the firefighters pension fund.

[14:40] So, in essence if you had a chart if you looked at these numbers cuz it's 10

[14:43] years back and if you look at these and you can see that you know back I'm going

[14:47] to go back to 16 here. So, we're at 50 50.5 million dollars, okay? So, it went

[14:52] down a a little bit in 17 which is really low but then of course it it just

[14:56] kept going up and up and up. So, it goes from 56 million, 66 million, 80 million,

[15:01] 92 million was our height. Then we did some of the bonding brought it down to

[15:05] 65, had some wins in the marketplace and such went down to 48, went back up a

[15:11] little bit to 52 and then that second tranche came through and dropped that

[15:14] liability down to 13 million. So, you can you can

[15:19] somebody who didn't even know what we did could look at this and not even know

[15:23] they would say, "Well, something happened in these two years that changed

[15:26] the debt." It's It's that obvious. Yeah, I mean, it's just It's just a few

[15:30] million among friends, right? Uh but but it's very obvious. I mean, if we graph

[15:34] this, it would be super obvious as to what we did and that it's working

[15:37] because you can see that that liability is drastically different.

[15:41] So, you could see where we just couldn't keep up. Right. We were We were drowning

[15:46] would be the right word. So, as of the end of last fiscal year,

[15:50] we were 80 for the police 86.09% funded.

[15:55] Correct. >> Yeah. Yeah. And I think sometimes as for

[15:58] your constituents and when, you know, these decisions and questions come up in

[16:01] conversations, I think sometimes those percentages are just the easiest thing

[16:04] to understand, right? Like everyone understands what 86% means and things of

[16:09] that sort. You know, millions get kind of lost, I think, in in translation when

[16:13] you're talking about, you know, different size of forces, you know, it's

[16:17] a lot of money. But when you say, "Well, now we are as of the end of April of

[16:20] '25, we were 86.09% funded in the police pension fund and

[16:26] whatever it is in fire then." I didn't flip the page, but fire was 86.16. So,

[16:31] those are very strong numbers and very strong proof of the decisions that were

[16:34] made.

[16:39] Then on the next page is 106 and 107. That's got the returns

[16:44] from the firefighters pension and police pension funds. Those are not any longer

[16:48] invested locally. Is that correct? That is correct. Yes, both are now with

[16:53] the downstate pension funds fully. Um fire went first a couple years ago,

[16:59] and then police followed. But all money's are downstate. They each

[17:02] have some some minor dollars locally um just to make sure that they can make

[17:07] their payrolls and things with pensions and make their bills,

[17:10] um which is basically what everybody else is doing too so that they can keep

[17:13] as much in the marketplace as possible and take advantage of these gains when

[17:17] they're there. >> [clears throat]

[17:20] » Page 28, what am I what am I seeing?

[17:24] The assets and everything with 151 million for both firefighters and

[17:32] police officers pension investment fund. 166 for the

[17:39] Right, so that's that's exactly what we were just talking about. That that

[17:41] investment held in Illinois. Yeah, that's the downstate pension funds.

[17:44] Exactly. One's for police and one's for fire. Mhm. That's 151 million is that

[17:48] for both? Together. Mhm. And then the cash and short-term investments is some

[17:51] of the cash that they have in their local accounts

[17:55] as of April 30th of 2025. Okay. All right. Thank you.

[18:00] And I'm certainly not trying to take over the comptroller here, but since I

[18:03] do sit on the police pension board, I have a little bit more insight into this

[18:07] um with that, you know, current appointment.

[18:11] The The difference in the returns there is pretty interesting between the two

[18:15] funds. The last 2 years, police was close to 10.

[18:19] Fire was closer to 2% return. Is that

[18:24] Obviously, they they make different investments or is

[18:27] that due to the size that they have or That's a great question. They definitely

[18:31] are completely separate. So, the managers that do police are not the ones

[18:35] who do fire. We have completely different contacts and everything. I get

[18:38] completely separate emails on those on those matters, for sure.

[18:44] I I think I think some of it has to do too with

[18:48] um dollars too a little bit, you know, and and the investments that they make,

[18:53] but I don't have a lot of those details. Truly, when the money went downstate as

[18:57] much to many people's chagrin, the control is gone. We we have no no

[19:03] control. We get the reports, you know, um overall though, it is proving at this

[19:07] point in time to be to be beneficial. And we're going to just keep hoping that

[19:11] that's exactly what happens. Obviously, we have a lot more dollars working for

[19:15] us now in the market than we did before and you know, because of the two bond

[19:19] issues. You know, so if market goes up, you know, 8% in a year, we've got

[19:23] millions upon millions of more dollars that went up 8% that year. So,

[19:27] but both both funds are doing well and doing what they're supposed to do.

[19:31] Um, we

[19:33] It took me years to believe in this, but the math is working for the funds that

[19:37] are doing it. It is a switch out of liabilities, of course, like we just

[19:40] talked about, but there is a lot of cost advantage to switching out that

[19:44] liability. And we're and we can see it now in

[19:47] paper.

[19:51] Okay. Does anyone else have questions?

[19:57] Thank you, Comptroller Rogers, for leading the charge on this process and

[20:01] Mayor and City Manager as well. >> Can I say something, Chairman? I just

[20:05] wanted to thank Paula and her staff for everything that they did with the audit.

[20:09] Um, it's it's not easy to do your first

[20:12] audit. I remember my first audit here and it's not easy.

[20:15] It's a lot. I don't care how much you studied or did before and how good you

[20:19] are, which Paula is all those things, but it's it's a lot and um, just very

[20:23] appreciative of all the efforts that went not only from our audit firm, but

[20:26] from our internal staff and that we have this product and that we're ready to go

[20:30] and we've got some really good systems in place and looking forward to the

[20:34] future. Uh, challenges will come. I think this is the beginning of more

[20:38] challenges to cash shrinkage, but we will get there and we'll figure it out

[20:43] and we'll continue to run the city as we need to.

[20:46] I echo those comments as well. Thank you, Comptroller Rogers and your team

[20:50] and the Mayor, City Manager, our auditors. Thank you for your help, the

[20:54] committee members. Uh, this is one of the the foundations

[20:58] of our city every year having this and it's good news. Um, so thanks everyone

[21:02] for making that possible. Alderman Osinga. Mike, I do have a question.

[21:06] Um, on page 106 107 it's showing police pension fund last 10

[21:12] years. Uh,

[21:14] net investment expense and on police side for 2025 is 9.68%

[21:22] and on fire side is 1.48%. What would be the

[21:29] That's exactly what kind of the question was before. I have not studied the

[21:34] statements that perfectly. To be honest, I don't know if the auditors have

[21:37] anything to the partners I should say because I've

[21:40] never [laughter] had two partners or I should say the partners. Well, we'd have

[21:43] to drill down to the detail but uh, a lot of these numbers I think

[21:48] there's a lot of work in the moment. Mhm.

[21:50] They write a lot of these figures. They do a lot of the accounting for this.

[21:53] Right. But the the numbers not only then are done by, you know, these these um,

[21:58] the investments at the state and we get those statements, you know, on a monthly

[22:01] basis. But then they have their at the state level they have their own

[22:05] actuaries that do work on that and we have our own actuaries that we pay

[22:10] because we want to make sure that we are doing what we need to be doing. So, I'm

[22:14] not nervous that something's wrong. I just don't know the why and that's

[22:17] something I'm going to dig into for you. But it's it is very interesting. I

[22:20] thought it was closer than that. Um, I really did until we just looked at it

[22:24] right now. So, definitely do some digging on that.

[22:27] » [clears throat] >> Okay, thank you. You're welcome.

[22:31] You can trust the state with the money. They do good.

[22:33] » [laughter]

[22:37] » All right. Well, thank you Dale and Amy. Thank you very much. Everyone here from

[22:40] as well. Thank you. All right. We'll move on. Our next

[22:44] agenda item is the review of the regular March financial statements. Comptroller

[22:50] Rogers, would you take us through those, please? Thank you.

[22:54] So, you have the statements in front of you. I apologize. My goal is still to

[22:59] get these statements in your hands before our meetings.

[23:03] Um and I think this year we're on track to be able to do that with the

[23:08] additional help that I've got in my department now.

[23:12] Um so, I was looking at the revenues, which start on page one of the revenue

[23:19] expense report, um right after the minutes.

[23:24] And a few things stood out to me in the area of the taxes, the corporate

[23:30] replacement taxes, and we had talked about that before, is significantly less

[23:35] than what we expected it to be when we budgeted. We budgeted quite a bit lower

[23:40] than we had the year before, but it ended up being even less than what we

[23:44] were expecting. Now, part of that is because the state

[23:48] has changed how the local use tax and part of those corporate replacement

[23:54] taxes are going through. So, a little bit of what we lost, we did

[24:00] pick up in the state income tax. If you notice, that's 105%

[24:05] right now. Um but it's not enough of an offset.

[24:10] There's still about $400,000 that we end up being short to this

[24:14] point. Now,

[24:17] the only thing with that is we really won't know until July when we've got our

[24:22] final accruals in there what this year ends up shaking out because there is the

[24:27] timing difference. Right now, you're looking at revenues as they were

[24:31] collected. When we get ready to close the year, then we'll have um May, June,

[24:37] and July because the state is that far in their payments, far behind in their

[24:42] payments. So, there may be some differences in there, but I don't expect

[24:48] corporate or local use to make a rebound this year, I guess is why I'm saying all

[24:54] of that. We will pick up some in the income tax area, but I expect both of

[25:00] those to be lower for next year.

[25:05] Um, licenses, that whole section down there is still

[25:10] way under what we budgeted because the liquor licenses, which is a large

[25:15] portion of it, is going to be collected this month. So, we won't really have

[25:21] good figures on this until end of year. Uh, it's small dollars. I'm not too

[25:27] worried about it even if it is under, it's not going to hamstring us.

[25:31] Uh, franchise fees, I changed the name on this account to say franchise fees.

[25:37] We had it saying cable TV there, but I'm looking at it, the lion's share of that

[25:43] was actually coming from Aqua. Um, it was franchise fees for Aqua is

[25:49] the largest part of that component, and they were up this year. They went up by

[25:56] about 11%. So, Aqua drove that a little higher, but

[26:02] as we had discussed before, DirecTV and Comcast both are down, and I don't

[26:08] expect that they're going to come back up either. It's just the way of the

[26:12] world now. There aren't as many people um, utilizing DirecTV and Comcast as

[26:19] there were before. So, DirecTV was down 17%

[26:25] over 17% for the year, and Comcast was down over 11%.

[26:33] If you flip up to the next page, um, all three of these sections, grants,

[26:41] service charges, and fines are all over budget. Um, we had discussed we picked

[26:48] up that grant. Um, we had put in a $50,000 place marker thinking we might

[26:54] pick up something in grants. But then we got the $300,000

[26:58] related to Riverwalk on the grant funding that we didn't know at the time

[27:04] we closed up budget was going to be coming our way.

[27:07] So that's going to end the year well over what the budget was.

[27:11] Service charges are really running right along where I'd expect them to be.

[27:17] And fines fines and liens on that next page, the

[27:22] top of the next page, have rebounded. Um, we finally got the code department

[27:27] back up to staff so that they can be out there doing the inspections.

[27:32] So those fees have gone up higher. Um, and we're doing a good job, I think,

[27:37] of staying on track and trying to collect them.

[27:42] Interest and other, uh, on page three.

[27:47] So the interest section there, I overestimated on our budget. We just end

[27:53] up falling a little short there. Um, and then we're got a and hotel tax.

[28:00] I was afraid when I saw the hotel tax that maybe we were behind on payments.

[28:05] We are not. Uh, the biggest hotel in Kankakee has

[28:09] dropped in half. Um,

[28:13] two years ago they were four times higher than what they are now. And I

[28:17] don't think anybody's shocked by that. Uh, and then the other two hotels we

[28:22] have are small enough it wouldn't have made a dent, but they've gone down as

[28:25] well.

[28:29] As far as expenditures, um, the expenditures really are pretty

[28:34] much all the departments running at or under budget. There's only a couple of

[28:40] outliers. Um, we've talked about this before, but one

[28:45] of the places that we've been hit hard and we put in the budget this year, we

[28:50] put in a contingency of $200,000 for ECDA for economic development

[28:57] because we weren't sure they were still in the audit process what was going to

[29:02] shake out. Well, what we feared worst is what shook out. There are expenditures

[29:08] that they're no longer going to cover. We're going to have to be on the hook

[29:11] for paying their rental and their lease um and much of their administrative

[29:16] costs that before they were covering, the city's going to have to find a way

[29:21] to absorb those. Um

[29:25] So, overall, if we look at salaries and this you won't find on the individual

[29:30] pages. I've been working on a summary that I will start distributing with next

[29:36] year's financials. I wanted to make sure the bugs were out of it first. It's

[29:40] similar to what I give ESU. So, salary, wages, and overtime, we

[29:46] budgeted $16.2 million. Um our year-to-date amount is only at

[29:53] 13.8 which is only 84.7%.

[29:58] So, we are significantly under budget. Um not that we'll necessarily stay there

[30:05] with all the cleanup that's still going on with the storm. We still have monies

[30:10] that's going to be coming out um which we may or may not have reimbursement for

[30:16] somewhere down the line. Um insurance and pension

[30:22] those expenditures uh were pretty well along with budget

[30:27] except that our pension contributions end up being

[30:31] slightly higher than what we expected. Um and that really is just a learning

[30:37] curve on my part to figure out how much we're going to be putting into pension

[30:41] [clears throat] based on what's left over after we pick

[30:45] up the amount that goes through tax levy.

[30:48] So, we were sitting at 102% there. Training and travel is well under

[30:54] budget. It's only at 58%. Um supplies and equipment, they're under

[31:01] budget at 56%. Um contracts and services are at 87.8%,

[31:10] which is still a good place to be at this time of year under budget-wise.

[31:16] Uh the only other one was the all other. Uh it was sitting at 85%.

[31:22] Repairs and maintenance were down this year. Uh we had quite a few things that

[31:27] went wrong last year that we had to fix. Uh but this year we stayed right in line

[31:32] in budget and we're actually coming in quite a bit under.

[31:36] So, the total expenditures, if we flip up now to that page

[31:42] 12,

[31:45] we're sitting at 87 and 1/2 and we're 92% of the way through the

[31:51] budget year. So, again, we're in really good shape um

[31:57] for being through March.

[32:02] Yes. In regard to the uh hotel tax, um the trend seems to be, you know, going

[32:07] to the Airbnbs and you know, that that type of rental, which isn't really

[32:11] necessarily a bad thing with the exception of the loss of revenue. Um I

[32:15] know it's been discussed um you know, in far as collecting the taxes on these

[32:20] when they go through, you know, Airbnb. Um

[32:24] is there any follow-up on where >> Dawn is working on that. She is

[32:28] diligently working on that. Part of the problem is getting our arms around where

[32:33] these Airbnbs are. Um we actually were doing some research

[32:38] Mhm. like a booking agent would do to try and pinpoint where in the city they

[32:43] are. Um, we've got to get some compliance on how they register so we

[32:49] can know how much money is out there. I know there was a conversation where um,

[32:53] you know, they booked online and they were collecting tax. So if that's the

[32:57] case, I mean, you know, should we not be looking at at the companies and going,

[33:01] okay, you guys are collecting it, where's the revenue? The companies are

[33:04] supposed to collect tax, but it's my understanding the city has to

[33:09] tell them where those monies are supposed to be coming from.

[33:14] So it's a little of he said, she said and the reason we don't have it is we

[33:19] aren't speaking the same language. But that is something Don is working on

[33:23] to track down where they are um, to send code out to tell them they're not in

[33:29] compliance if they're not recording the revenues and giving us a percentage.

[33:35] Um, it's probably going to be a year or two for we get our arms completely

[33:39] around it. And I don't think it's going to be

[33:42] enough to make up for the hotel tax. Mhm.

[33:48] I was just going to say too that I have a feel Are you going to speak about the

[33:51] changeover? Is that what you're going to speak about? Okay. I'll let you talk

[33:54] about that. The The other thing is is that this is a very common theme across

[33:57] many municipalities right now. Uh, the whole Airbnb and collection cost.

[34:01] There's a thread probably on my city manager

[34:04] um, like thread from the from the group that I'm in with city managers. There's

[34:09] probably one about this every six to eight weeks that somebody

[34:12] says again, so how are you doing this? And everyone's kind of struggling with

[34:16] it. So I think people will start to get their arms around it more, which we're

[34:19] doing our best now as Paula said and um, hopefully that'll come together and then

[34:24] mayor's going to feed in with you as far as

[34:27] Yeah, as as controller mentioned, the um, the hotel south of town down on

[34:32] Riverstone Parkway is down significantly. At one point, um, and not

[34:36] that far long ago, probably less than 12 months ago or even 18 months ago,

[34:41] that was the number three hotel in all of Kankakee County for revenue

[34:45] collection. Um, when they lost the Hilton Garden

[34:48] Flagship and became Wyndham, they have not, um, you can see the new signages

[34:54] and all, but just a banner at this point or some things that I think that has

[34:57] dramatically affected their business. Um,

[35:01] and so, and we have been having conversations with them and emails back

[35:05] and forth, myself, uh, Director Brewer Watson, City Manager Korboul, about, um,

[35:11] they're supposed to be doing a significant renovation on that hotel

[35:14] starting this summer. They right now own a hotel in New Orleans that is just

[35:18] finishing up a $7 million renovation there and their next project is this one

[35:22] where they're going to come in and they expect to spend easily

[35:26] a million plus, but closer probably to $2 million in renovations to the hotel.

[35:31] I'm hoping that when they do that, that will help bring everything back cuz

[35:34] Wyndham isn't a horrible brand name. Um, they're all in municipalities and stuff,

[35:39] but where they're at right now, they're kind of in a limbo of having the

[35:43] upgrades that need to be done. So, um, but we are in conversations with

[35:47] them about what that means and we're supposed to have a meeting here shortly

[35:50] with them. And they did have a significant bump in

[35:55] the revenues that we picked up during the time frame of Regatta. Yes.

[35:59] Um, but then this month was the lowest I've ever seen it. Mhm.

[36:05] And, um, I heard uh, um, Mayor was talking about how we

[36:09] were going to Yeah, yes. I heard how we were going to

[36:12] I was just listening to how we were going to pay for,

[36:16] um, you know, the overtime and all that. I

[36:18] didn't really hear it. I mean, you say we're going to handle it, you know, the

[36:21] overtime and how where is it going to come from, you know, I know The overtime

[36:24] for? For the, um, storm and everything

[36:27] because apparently not I don't believe anything going to be

[36:29] coming anything going to be coming from the state or federal

[36:33] » is the storm. We're going to talk about that probably at city council. Uh we'll

[36:36] have we can talk a little bit about tonight. It's It's as good as any time

[36:39] to talk about it. Um the city is going to face some significant expenses from

[36:45] this storm. And what I mean we're we're no different

[36:48] than anybody else with their homes. So we have um just give you a quick

[36:53] update and I'm I have city manager correct me if I'm wrong cuz she's been

[36:56] working on this diligently along with uh David Guzman. Um

[37:01] we have had all of our vehicles inspected. I believe it was roughly 78

[37:05] vehicles that have been affected. And then we hired our own assessment of

[37:11] all the roofs along with the insurance which just out in the last 2 weeks

[37:14] inspecting all of our properties. Not just roofs, things like HVAC equipment

[37:18] on top, uh aluminum wrappings, things of that.

[37:21] Basically every roof in the city of Kankakee is going to need to be replaced

[37:25] including the new ones we just recently did. Like we just did one at the hydro

[37:28] plant. We just did one at the depot 2 or 3 years ago. They're all going to be

[37:31] needed. The key is going to be just like

[37:33] everybody else is facing, they're going to depreciate probably some of those

[37:36] roofs. Right. >> Meaning hydro plant and depot are

[37:40] probably going to going to get fixed because they're fairly new.

[37:43] But we might have a fire station that hasn't had a new roof replaced in

[37:48] 25 plus years. They're going to depreciate that value out, things like

[37:51] that. Um we are probably going to face just like everybody else a shortfall of

[37:56] whatever the insurance claim is and we're going to have to figure that out

[37:59] moving forward. Okay, that's what I was asking. So we're we're in hardship just

[38:03] as much as the residents are. We're just in a bigger number hardship. I don't

[38:07] know what our final claim number will be.

[38:10] Um I'm sure it'll be well north of seven figures.

[38:14] But I don't expect that we will when we go to replace everything and all that, I

[38:18] think there's going to be a gap. And we're going to have to make up that

[38:21] gap and that's going to be a part of the budget going forward next year that we

[38:24] had some gaps already going into this year. Um and talking with comptroller

[38:29] this morning and city manager and past um we're expecting significant um

[38:35] gap coming into the first draft of the budget and part of that uh comptroller

[38:39] you want to talk about is just the cost of expenses and everything are

[38:43] up roughly about 26% you said? Yeah. So, in order to make sure I'm moving the

[38:49] cash, not moving too much of it at one time when the bills come through, I've

[38:53] been tracking the bills to make sure I'm moving money into general fund out of

[38:58] Illinois funds where it earns income. So, I've been tracking very closely and

[39:05] we've been running steadily ticking up and ticking up on the dollar value of

[39:11] those bills that are coming through. We were like 26% higher this last bill

[39:17] time than we have been on the averages um since I've been tracking it since

[39:24] September 24. So, so things like it could be as much as

[39:29] repairs on vehicles are just more costly this now cuz the rates have gone up,

[39:33] they're no longer charged I'm picking a number $85 an hour it's now $95 an hour.

[39:38] The cost of a paperclip, the paper, to whatever it is, just

[39:42] everything is much more costly now. Um almost as you're seeing almost a quarter

[39:46] almost 1/4 of a expense there. So, with figuring that out, we've got

[39:53] uh collective bargaining agreements that we have obligations to. Mhm. Insurance

[39:57] and everything else is going up. I'm we're a little nervous about what is

[40:01] going to be the insurance come this December for

[40:05] property and casualty because if you think the insurance companies are going

[40:09] to raise the area. >> [clears throat]

[40:11] » I'm sure they will with this dramatic storm and we're facing the same thing.

[40:14] So, back to your question about overtime and everything,

[40:17] um we're going to we'll to play it out, but we have no choice. We've got um

[40:22] our our team is working hard. They're doing what they're supposed to be doing,

[40:26] putting in extra long hours and everything to make sure that the

[40:28] citizens are taken care of and that's the cost of business running the city

[40:32] because that's what we have to do, but it is going to affect us. This storm

[40:35] we're not escaping the damage from this storm either, whether it's physically or

[40:39] financially. Okay, thank you mayor. Very thorough.

[40:42] Very thorough. Thank you, city manager. Comptroller, thank you.

[40:52] Does anybody have any questions?

[41:04] Okay. Thank you, Comptroller Rogers. And under updates, we have an ARPA

[41:10] update and the note regarding the budget for next year.

[41:15] Can we turn Can I go back just real quick? That last page is you got cash

[41:18] balances. Because I'm going to let Comptroller

[41:22] talk about that, but I think what she's going to point out to you is it's

[41:25] pretty strong. And I go back to a lot of times people

[41:29] will say, "Why are we sitting on this cash? Why shouldn't we get

[41:33] it's for instances like the unpredictable.

[41:35] We're going to need this cash on hand because of the storm

[41:38] to take care of the city and we don't have ARPA. ARPA's ending.

[41:42] We don't have other things. So, I'll let her go through cash, but this is exactly

[41:46] why >> [snorts]

[41:48] » we try we're we're proud of our leaders in the expense team. As you saw, revenue

[41:53] is really strong. Expenses is down again consistently over the years because we

[41:57] prepare for things of the unknown, whether it's a sinkhole in the street or

[42:01] unfortunately a storm that happens once every 50 years

[42:04] in our community. We're going to need these dollars

[42:08] whatever that gap is. Yes, we end up we're we were sitting at

[42:13] 45 million at the end of February. We're sitting at 44 at the end of March.

[42:19] Um we are in a good strong position. Uh but you'll notice it was general funds

[42:26] that were at that time of year now until the tax [clears throat] money start

[42:31] rolling in. We have to play it close to the vest to make sure that we're putting

[42:36] the money in to fund. The one thing I was very pleased with when I tracked the

[42:42] payroll since September of 2024, it's less than 8% that it's gone up. And we

[42:49] have increased positions. We've brought fire up to full staff. We've brought

[42:54] police up to full staff. >> As a way We've added staffing in other

[42:58] areas around the city including the comptroller's office.

[43:02] Um and we've had modest increases. So I was really happy with the fact that

[43:08] payroll hasn't had that skyrocket to it. Um but we really we really don't have a

[43:14] lot of control over the supply costs and how they're going up.

[43:18] Um but yes, we are still in a very good position. 25 million sitting there in

[43:24] Illinois funds where we're making the highest percentage of interest is a good

[43:30] thing to have. As the mayor says, we've got that money set aside for a rainy

[43:34] day.

[43:38] Um and then ARPA

[43:42] The only thing really to discuss >> [clears throat]

[43:45] » perspective there, we're down to 1.1 million

[43:50] um as far as what's left outstanding. The allocations are we're just running

[43:56] down the clock trying to get it all used before December.

[44:04] We of course have another are ARPA report that's due here in the next few

[44:07] weeks for the first quarter. Um obviously we're you know we're we're

[44:11] dwindling it all down so there's a lot less to report upon. No new projects to

[44:15] create so as I reported in the past it goes fairly quickly now. About we in our

[44:19] meeting this morning the three of us we spoke about the fact that we do need to

[44:23] start you know being very intentional about making sure that those allocations

[44:26] that are still out there are utilized the way that was intended by this very

[44:30] city council.

[44:40] » [clears throat] >> Do you have questions about ARPA?

[44:45] If none will anything about the budget or do we cover that already?

[44:49] » [snorts] >> Um

[44:51] we talked this morning about budget. We have so many other big pieces that are

[44:55] still missing. I [clears throat] am starting to meet with the individual

[44:58] department heads. I met first with fire. He's gotten most of his numbers to me.

[45:06] Uh our goal is to me individually meet with the departments and come back with

[45:12] numbers for the mayor so that we can start digging in because we are sort of

[45:17] fearful that this year is not going to be a year that we're trying to figure

[45:21] out how to spend the leftovers. It's going to be a year where we're trying to

[45:25] figure out how to trim down and make the um expenditure smaller.

[45:35] Any questions about budget? And um Chairman

[45:39] you want to speak about what will be on the city council agenda for Monday night

[45:42] with the resolutions Paul? Oh yes, we do have two resolutions that will be passed

[45:48] Monday night um to continue our spending until we have passed the budget. It's

[45:55] something that we do every year. It just has to be done before the end of our

[45:59] month.

[46:02] Thank you. Any questions about budget or anything else?

[46:07] Sure, I just want to say uh man I think uh thank you for that information

[46:11] because I don't all of us are dealing with houses, you know, we all got so

[46:15] many different things going on. We never really thought about as the city got the

[46:18] same thing what we call depreciation on the roofs and all of the cars and all.

[46:23] Is there do we have anything that we have a deductible to me or anything like

[46:28] that? You know, when you got a car, you have to pay so much on a house. Do we

[46:32] have the same type of situation with our insurance within the city? You know, if

[46:36] the cars are bad, they're going to get thrown away. Do we do the same thing

[46:41] within the city? We do. We do have to Just bigger deductibles. Mhm. Okay, so

[46:46] we do have a deductible. We have >> have deductibles. You know, the

[46:49] unfortunate thing is we we can't partake in the

[46:52] SBA program or just going to give information out.

[46:55] » Right. Uh it's good for property owners, it's good for rentals, it's good for

[46:59] businesses, and it's good for nonprofits.

[47:01] The one thing they left out was government. So, we're on our own.

[47:05] Um but again, we'll be able to handle it and we'll figure it out. But the answer

[47:08] to your question is yes, we have some cars that'll be totaled out. Uh we'll

[47:12] figure out what we're going to do with that. I know there's things I'll give an

[47:14] example. I believe there's a truck in DPW that is totaled out. Doesn't mean

[47:19] we're not going to get money for it, but we can still potentially keep that

[47:23] truck. One >> those ones that's great for maybe you

[47:26] splash paint all over or whatever happened. But it just won't have

[47:29] comprehensive of a collision coverage if you have it. It'll still have liability.

[47:33] Right. >> But if it was to get further damage, we

[47:35] wouldn't be able to make a claim on it. Um I'm working with Chief Kidwell today.

[47:39] We'll have to work with fire, but there's certain vehicles that um

[47:43] he's going to work through what we got to do there, but we expect that yes,

[47:46] there'll be some vehicles that'll be totaled out. We'll have to buy some new

[47:48] ones. Um

[47:50] But again, we'll get insurance money for that. We'll we'll have to play that all

[47:54] out. There's a long long road ahead here for just as much as as much as the

[47:57] residents. Right. Um and if you think about the number of roofs

[48:01] that we have, we have four fire stations, public safety building,

[48:04] administration building, code department, sewer department, Willow,

[48:09] hydro plant, depot, I could keep going on with some others, DPW. It's going to

[48:15] take us a while. You know, it it we could be a year from

[48:18] now before we get all the roofs fixed and replaced and everything. And then we

[48:21] haven't even got into things like HVAC equipment

[48:25] » Mhm. other stuff like that. So, um It's It's a huge It's a huge puzzle as you

[48:30] can as you can imagine cuz you all are dealing with it so much on your on your

[48:33] own properties and then from [clears throat] your constituents. The

[48:37] The thing that we did decide is we are running this pretty centrally through uh

[48:40] the mayor's office. Obviously, insurance matters are usually clerk matters, but

[48:45] this is so operational at this point working with all the department heads,

[48:49] making sure that we have everything that's listed. Um we just decided that

[48:52] we do need like a centralized location for that so that we have one person

[48:56] basically speaking to adjusters and things like that. And David um has been

[49:00] instrumental in in that coordination along with all of our department heads

[49:03] who've been excellent reporting everything that they're supposed to let

[49:06] us know about um on top of their regular duties. So, it's it's kind of been a a

[49:10] side gig for everybody lately just worrying about the storm, right? And we

[49:14] want to get those resources out to not only our residents, but we have to take

[49:17] care of ourselves too eventually, you know, we we patched up what was

[49:20] important first, but now we have to make sure we make the long-term investments

[49:23] to protect our buildings. About time

[49:26] » Not us. About time we get some work out of Dave.

[49:29] » [laughter] >> He works so hard. I know he does. And

[49:33] that's my guy. Oh, man. [laughter]

[49:37] Thank you.

[49:40] Okay. Any other questions or comments?

[49:45] If not, is there a motion to adjourn? I'll move. Motion is there a second?

[49:49] Second. All in favor say I. Opposed? Okay, thanks everyone.

City of Kankakee - Budget Committee Livestream

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