Common Council Finance Committee

1. 1:13Uh can you hear my pizza? All right, let's go. Call to order. Give me a minute. Motion to >> Do we have to fill out forms? I mean >> So, okay. So, we're just going to be going with the show and tell before. Um >> So, attendance is mentioned in the minutes. The meeting was open. A special guest star. >> Motion to accept the minutes. >> Special guest star. >> Okay. >> Thank you. >> Okay. >> Um Right, then. Right, then. Take it away. >> Okay. Uh it's relatively short this month, um primarily because the auditors have been relentless, uh starting in the middle of this month. So, we've been focusing primarily on that, but I did update the key numbers that we tend to look at. Uh you can see that both plumbing and building permits are are uh only at about 30% of where we were a year ago and only about 30% of budget. You know, we can't necessarily always forecast what's happening and I I don't know if, you know,
2. 2:16there's certainly some projects that don't seem to be happening as quickly as we thought they might. So, um so, that's uh looking a little light. Uh in terms of parking revenue, you can see we're pretty much right where we want to be versus budget at 50%. Um we're a little low on the parking ticket front, but making up for it um on on off-street parking, uh which is at 54%. So, those numbers looking pretty nice. Don't have much new in the next section. Um I do know that we are about to get the sales tax for the county, and I have been told that it was a strong uh quarter for sales tax. So, I'm expecting that number to be pretty nice, but I don't actually have it for today. Uh lodging tax, you can see that we're sort of right where we want to be uh through June. Uh but I will I will note that uh due to the efforts of Michelle and Peyton, uh that some portion of that is actually retroactive stuff.
3. 3:18Um so, that's going to be more like a one-time catch-up thing. So, it would be interesting to see how the rest of the year pans out in terms of whether it keeps that lower whether we just sort of We did see a pop at the end of uh 2025, um and we did see a pop obviously in the first, you know, 3 to 6 months of 2026. Um so, we'll keep an eye on that obviously each month to see uh how the rest of it looks. Uh nothing new on cannabis, nothing new on mortgage tax. Uh I'm going to look at the cannabis one relatively soon. Probably it should be roughly the same time as the sales tax contribution, but I know that um the county has been uh uh challenged in the past in getting the distribution information they need from the state in order to know how to distribute the money because unlike the sales tax, which is like a set formula, basically, the uh the adult use cannabis taxes it is actually dependent on where the dispensaries are. Um so, I think that takes a little more working.
4. 4:20Any question on any of those numbers before I go forward? Okay. Uh as I mentioned at the start of this, um the 2025 audit is currently underway. >> I have a follow-up question. Uh I think I think I'm already answered. The sales tax that has seasonal fluctuations. >> Yes. >> So, um that 400 might be perfectly normal in the if >> Yes. >> the first quarter >> Yes, and since the first quarter is always the lowest. So, it's I think I looked at it I think I looked at it last month. It's pretty much right in line with our projections. So, yeah, I I'm feeling okay about that. Um the audit is just They're They're a little bit behind on that one since like hundreds of emails asking for hundreds of pieces of data and hundreds of documents and hundreds of invoices and hundreds of copies of contracts. Well, not hundreds of copies of contracts. We don't have hundreds. But, um yeah, it's a lot. Um our goal is to uh
5. 5:23complete all three cuz we have to do our regularly one, and then we're going to have to do a uh single federal audit if we spend more than a million dollars in federal funds, um primarily on uh Heritage Bridge, but some other things as well. And then we have to do a single DOT audit, which I think the threshold for that one is either 750,000 or a million. But, um that also because of Heritage Bridge and all the chips money and SPR money um is probably going to require them to those. The federal audit deadline is this one at 9:30. So the goal is to have it completed by then. I did meet with the auditors for a time for a overall project check yesterday and they seem to think that we should be able to stay on time with that. So that will be good and then obviously that will give us you know a solid number for 25 to see how close the AFR came to it and give us some information for going into the budgeting. Excuse me, you have something I was following up Thank you.
6. 6:25Sorry. Sorry, I'm late. >> [laughter] >> And if you if you were here at the beginning, do you have any other questions? No, but if you have any questions, no worries, just ask. Thank you. Um Okay, update on the foreclosure proceedings. We did get the title searches complete. I did send a final list to the attorney. He's on vacation this week, but he's having the materials prepared to start next week. We have to file both of the list and petition for foreclosure with the county clerk. I believe that the law requires the city attorney and my office have a copy of that list at all times, so we'll make sure that happens. Um there's public and private notice requirements, so we have to publish, you know, in x amount of papers like I think twice a week for 3 weeks or something like that. And then obviously the private notice requirements which is notification by first class mail and certified mail to not just the property owner, but anyone else identified through the title search that might have an interest in the property. So that's all going to be kicking off basically next week.
7. 7:30Um We're anticipating approximately 4 months for all of that to be completed. So we're looking at probably um you know November, December. If it's December, we might have to wait till January just cuz but we'll see. The only thing aside from moving forward on the actual process, the other notes is that one of the really big ones came off the list last week, which is 448 Orange Street, which is the big church next to the library. >> Really? >> Paid paid in full in cash. >> Wow. >> So >> How was it managed? >> It was the largest one of the largest here. >> It's a religious institution. >> Yes. Um so yeah, so that was good news. It was it was >> How many big ones are still on the list? >> Oh yeah. All the other ones are still on. That's the only one that's come off in the the last >> And of the 21 remaining, how many are really low dollars? >> Say that? >> Of the remaining [clears throat] 21, how many are really low dollars? >> What's low? >> Like less than $10,000. >> I don't know off the top of my head. I
8. 8:34guess maybe six to eight of them. There's one that only owes like a few hundred dollars, but we have literally gone far beyond what we are required to to try and track this person down, even to the point of I reached out since since the mayor's aide has been a resident here all her life. I reached out to her and said, "Do you know this person? Do you know how to get a hold of them?" She tried sending them emails. She tried calling the cell phone number which she had from back in the day. So I mean, we're not getting anywhere. So I feel bad, but it's I mean, nothing we can do about it. >> Is that a person who didn't pay like one year, but has then been paying going forward? >> I would have to look at the computer. >> There's no way to see has someone been going to the address to see if he's there? >> All the mail has been sent to that address and and none of it has been replied to, so >> I know, but we because he's I was saying wait, I'm not I'm saying no, no, no. I don't know. I'm just saying like >> My sense is that the address on which he's paying his taxes is not where he
9. 9:35does. >> So a scenario is your maid and you paid what was on the bill you don't pay the late fee and then you forget about that and you pay and then you end up with this little thing that's out to see. >> We hope because and again all of the communication that we sent out have kind of been like I won't say friendly but they they're they're not even required by law. It's it's also trying to help people and give them notices. The the with the actual required private notice requirements as I mentioned it does require not just first class mail but a certified mail. Yeah, so if the certified mail doesn't make it through then Yeah. >> Okay, so that's good progress. >> So this is this is good news. Sure. >> Um Not Not I'm not sure what's going on with the sale of 98 private places. I got to check with the MD. We had a date but I don't think that we actually progressed with it. So I will
10. 10:38report back next month on that. But obviously we would like to get that off of our plate. It's not as we all know it's no longer a revenue generator. We're not allowed to keep any current surplus monies aside what costs us to you know to go through the process. So Um There's not There's not The only I guess the only other thing that is of note on this two things. One is Um if you remember there was a big brouhaha you had for some discussions about Airbnb charging the county lodging tax within the city limits. They have finally rectified that as of July 1st and we have been told that they Airbnb will take the proactive responsibility to reimburse anybody that paid that tax erroneously. So neither the county nor the city has to be involved in that which is good because I do not know how we would have figured that out. >> Yeah. totally. That's great. >> Um and then um the two policy things is thank you for putting this on the agenda. We appreciate it.
11. 11:40>> Before you run away, oh, I just saved voters. The last voters. Uh I'll share it with her. >> Yeah. >> What is all this about? >> Uh two different things. Um Oak Dale Park and Charles Williams Park. So, let's go with the latter one first. Um that's more of a a bookkeeping issue, but with some we're just trying to figure out from a legal standpoint and how to make sure it goes smoothly. I get these entities confused, but SPARK >> Yeah. >> had has a sub entity and I can't remember what the name of it is and I can't remember what it is, but but basically several years ago, they said, "We're going to put X amount of money to Charles Williams Park." They gave us up front a certain amount of money. Out of that money, only a certain amount of it was spent, so the rest of it has just been carried over year after year after year. It sounds like they're getting they're setting up some other sort of they're getting I think the CLC involved now
12. 12:41and CLC I think is going to be like working on project managing whatever they do at Charles Williams Park. So, the question is how do we get that remaining money from the city to CLC in a way that's legal and clear? >> I talked to SPARK and Oak Dale and Jeremy at SPARK. >> Well, I don't want my senses they're they're pulling out of the project potentially, but they're not asking for this money back. >> No. >> That but I you know, I'm I'm two steps removed, so >> That's That's my view. So, >> the Oak Dale thing is a different issue. The Oak Dale thing was um I've been having conversations with the people involved in that um in terms of them looking for a uh cash flow interfund loan or a loan to the project. But, uh I actually reached out to them at the end of last month from the end of last week and said basically I don't think that we can do that. They're looking for a float of about $700,000 and right now we are actually quite cash challenged. >> They're They're looking for that from
13. 13:42the city? >> Yeah. As a As a As a loan for cash flow. >> No, no, I understand. >> Yeah. And you know, between a variety of different things, we we don't have as much cash on hand as as we have in the past, which has been challenging. And part of the reason for that, I mean obviously not collecting taxes is you know, having as much outstanding tax receivable is part of the issue. But also, you know, in flush your times we were able to provide interfund loans to quite a number of capital projects. And at this point, I think we have about $1.9 million in interfund loans. About half a million of that is in the South Rock Improvement District and the rest are due to various capital projects because we need cash flow for those because almost everything is based on a reimbursable thing. So, you have to incur the expenses. It's getting very challenging to keep those in place. So, um My understanding is the Oak Dale Park one might have been delayed anyway. It's been pushed back I think for permitting,
14. 14:43so it might work out okay because the other alternative for either that project or any capital project within the city would be handling it the same way that we've done with the DRI with the 33 grid, which is these short-term borrowings so that we have enough cash so we can loan it to the capital projects. So, but yeah, and that gets that gets down to this interfund loan, so I can talk about it you know, at tonight's meeting, but basically we I know that we have a debt service annual debt service of about $167,000 due on August 1st out of the sewer fund every year. Generally not a problem. I went in to go put in the the wire transfer the EFT to to off the thing and realized that's the sewer fund only had about $177,000 in cash. So, that's a problem because there's also, you know, the payroll and hospitalization and vouchers and expenses that all also have to be paid. So, um this is a last-minute resolution which I, you know, I went through with Margaret already. Um but but honestly it's for 100 grand and it probably
15. 15:44should be more. But where we are right now with general fund cash is that we just you know, I mean we've got payroll and those funds as well. And It that's not a number that I can just track throughout the whole of the year. Uh last we looked it was 1.6 1.4 something like that. >> So, we've done a number of things and [clears throat] budget um Thank you very much for the fund balance in the last month or so. >> Mhm. >> Would it be a just a case of taking that one percentage and subtracting the new number that we've already given to the other ones? >> Sorry. Sorry cuz I have my hearing aids in and I sound like I'm talking loud. Um could we just subtract from the 1.6 the dollar amount of the budget amendments that we've done? I know it sounds simple. >> Well, I mean you can do that um but if that's not necessarily going to end up being what it is at the end of the year
16. 16:46because at the end of the year it really depends on did your revenues come in? Did you get your full expenditures That's what that's what actually impacts And it's like people talk, you know, it when people have been looking at the past budgets and talking about all of the years that we've used fund balance to balance the budget. Well, yes, we did that as a budgetary tool but up until 2024 we didn't actually use any of that fund balance because our revenues came in higher and expenditures came in lower. So, it was >> So, by the end of the year, you weren't you weren't going to come up with a number >> Okay, correct. >> So, But but I I don't think your point is it you may not be able to get to an accurate number, but I do think that your point is well taken that we should be aware of of what we are committing to that's outside and above what was originally in the initial budget because unless unless >> Well, other things happen to them expect
17. 17:48>> Exactly, going to have a debt. >> Oh, it's not a debt scenario. >> But >> fund balance will go down. >> Yes. >> So, we have to fund it, take 30,000 out of the current budget and put that into something and you have to have 30,000 more in revenue building markets that will give us a chance. Correct, to balance it. >> Correct. >> Or or save $30,000 somehow by the fall. >> So, when we we have we have a regulatory issue on the FEMA grant situation to apply for which we discussed in the past week we got a recommendation on that to apply for a grant to upgrade the elderly department in New London. And I think that's like a $30,000 commitment on our part. So, all I was asking the first year you know, it's how is this going to benefit the city revenue wise? Well, we did 15 years ago didn't we discuss that? >> Right. >> Um but everything on the search to be increased depending on the year we do. Um we cannot but I looked at candidates for some of the other things in the company
18. 18:51that the moment we are in the process and we can because it would be rejected from the five years old this thing said it was too good. So, I think too much. So, there we are. >> There we are. >> Okay. Thank you. I don't have any other questions. >> The cost of this one was already covered for this year. As you do, we pass the yellow and we just wanted to say that the final outcome is going to be taken out of there. >> Well, we don't know what they're going to do with it, but we passed it with the assumption that if everything came in as our So, I want to be clear. We didn't the council rejected it. >> Fair. >> Um if the BBA it can't be it can't be into effect uh after the council rejected it because there was insufficient time on the clock for a running process to uh force the BBA to drop in the first place.
19. 19:53>> Right. You're right. >> Is there anything else on the council agenda or the charter? I'm not sure I'm not sure how that works cuz it's never works not in the charter. Well, it says that the council can reduce the budget. It just can't increase it, but it doesn't necessarily say it's not >> The council can There's nothing in the charter that says that it has to go back to the BBA. Actually, something in charter one that is one of my number one prayer is that the budget process be modified so that there is a new voting loop that if this is an unacceptable budget, but you can't just say, "Well, this is an unacceptable budget." And then move ahead with it. There has to be some action that comes out after that which says, "Okay, we need to do work which is what most you know, it's practically what I can >> But, I guess the question is who's the we in that case? Is the we the council cuz the council's the one that's rejecting it? If So, the question is who is the we in that scenario? Because if the council's rejecting it and the
20. 20:56council has the authority to reduce the budget, is it the council that goes through with the budget? >> Well, I think we didn't even even have the amount to go through line by line and to to do that. I think that's a good point. >> Yeah. >> But I I would >> And I don't know the answer to that. >> No, I I don't know that. Uh it would be good to see more council engagement in determining the agreement is. Um but I think there has to be something where the BEA has another look. And meets with the department again and tries to because >> [clears throat] >> uh the the work is so detailed. And I think we have to consult with them. I think it needs to be sorted out to really drive that. But there are a number of things in that process that I think uh it it should it shouldn't be the case that if it is unacceptable to the legislative body, it still moves forward even after a rejection. I think that's It should be something that requires amendments to be to keep getting through the negotiation to get to the point
21. 22:00where the council would agree. >> Yeah. Well, I mean, I think that's why they have that window of time in the charter, but yeah. But if Yeah, yes, if the council does not choose to then there's really nothing >> No, this is actually >> Anyway, there's also nothing written in there which I would like to see that says the BEA has to have another look and that this is a negotiation process. There isn't something It's kind of like the old budget gets to made every single year. Finally, negotiate and negotiate to get to the point where it would pass. Um that's where we should be going is what we need to do to get the budget that the council will pass. >> Mhm. >> Which is not how it's written in the charter. >> Well, cuz it's from 1875. I mean, you had like three guys sitting in a room and they still gave us 20 days to figure it out. It's not what we need it for. It's it's changed a bit. Yeah. >> Okay, yeah. All right.
22. 23:02>> Okay, anything else on agenda? >> have nothing else. >> All right, so the freedom. I see we had an email from SM on >> Oh, yes. >> Did you Did you take care of Did Were they Were they able to get any They were asking for some a request for some >> Oh, this was from It was from the um >> He had said that you were mentioned on our next >> They applied for the money for the grant process, which is totally >> Yes, that's what I'm talking about. Thank you. Thank you. Yes, okay. So, yes, I apologize. Yes, but I I We are to discuss that at this meeting. >> Yes, that's correct. >> Yes, that's all we have on the agenda for today. Yes. >> Because I would just want My question was I see that the cap is max is 5,000. How much did they receive so far? >> Nothing. >> Oh. So, we have to >> They They didn't uh I don't know whether they they couldn't In the first application, they still haven't got the legal thing approved, so they missed the deadline this year for I mean funding for the grant They They didn't respond to the funds that have been
23. 24:03allocated in South Dakota. >> So, they can try again next year. >> Yeah, try again next year. They won't find us at this point. >> Um cuz the applicant was I mean, of course, they missed the deadline, but there is a process that they can go to if they wanted to, right? To get >> Next year for next year. >> For next year. But the event is happening next month >> Well, it's happening in August. >> August 29th or something. >> I got a couple of bookings. I got a couple of bookings. >> No, no, it's I wanted to talk about August. >> Oh, all right. Okay, there we go. >> Anything else on your agenda? >> I I No, that was it. Thank you very much, everyone, for that. >> And actually going up to the That also came up in the two cities after the meeting. I am because they applied to HBC also. And um the decision was that, you know, for now for this year um we'll I think we're going to have to make them apply the next year, but like a couple of weeks out from the event, what exactly is this funding book?
24. 25:07>> Okay, we have one question and it's time on. We'll go for 20 minutes. Start now. >> Thank you, Mr. Polo. So, the budget crisis that I I attended those meetings on November 6th, I saw Tommy Echevarria I saw that at the table and I saw it from Mr. Johnson. Our executive session, we exited the room, they voted, we came back, and they decided to end the process. That was November 6th. I reviewed the video. So, I In In terms of like if you had extended back last year, I did not know that the BEA would have would have done and actually got me the revenues, you know, in line with the expenses. So, you might want to consider in any charter the revisions like a budget a balanced budget. I don't know how long that's required, but you may want to put that in there. But, I think just reading between the lines and from
25. 26:09you know, I went to all but two of the BEA meetings last year. I look forward to attending them provided my being able to do this with my job. You know, with the numbers. Um But, my point here is uh What was that question? But, the point there is Oh, just I think there was like a a notion that they would be able to raise $500,000. And I think behind the scenes that was like a motivating idea. And they [clears throat] did do the request for proposal last year and they had taken some some bids and moved on in terms of the done warehouse. And I think that was the big thing, but without getting it into people's heads, you can't really know that. Again, I'm thinking about your balance. I'm you know aspect in the in the code charter, you know, you would you could consider, but I do not think that the BEA last year because I went back to them that they would have would have found one one. Or or would have cut more expenses. That's it boy do we get it. Sign on.
26. 27:14>> Okay, thank you. >> Thank you. >> Anything else? >> Nope. >> Any other comments? >> Nope, we're all >> All right, motion to adjourn. >> Motion to adjourn. >> Second. I'll be writing up the email.

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