* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:18] GOOD MORNING EVERYONE, AND WELCOME TO OUR FIRST BUDGET WORKSHOP. I'M SALLY ALCORN, CHAIR OF THE BUDGET AND FISCAL AFFAIRS COMMITTEE. I'D LIKE TO WELCOME MY VICE CHAIR, MARIO CASTILLO, VICE MAYOR PROAM, AMY PECK, STAFF FROM COUNCIL MEMBER MARTINEZ'S OFFICE, STAFF FROM COUNCIL MEMBER CAYMAN'S OFFICE COUNCIL MEMBER JULIAN RAMIREZ, AND DIRECTOR DEBOSKY. GREAT TO SEE YOU. AND COUNCIL MEMBER LETITIA PLUMMER. THANKS FOR, AGAIN, FOR ALL YOUR HARD WORK AND ALL THE HARD WORK OF THE, OF THE TEAM. AND, UH, GLAD YOU'RE UP FIRST AND TELLING EVERYBODY THAT MY STAFF WITH NOT CITY MONEY BOUGHT ALL THESE SNACKS IN THE BACK. SO ANYBODY WHO'S HUNGRY, ANY NUMBER CRUNCHERS OUT THERE THAT ARE HUNGRY, THAT COME BACK HERE AND GET A SNACK, THEY'RE, YOU'RE WELCOME TO IT. UM, AND WELCOME MAYOR PRO TEM MARTHA CASTEX TATUM, AND WE WILL GET STARTED WITH THE FINANCE DEPARTMENT'S FY 26 BUDGET. OH, THE MONITORS ARE NOT UP BECAUSE THERE'S A HTVS WORKING ON IT. WE HAVE PRINTED COPIES, MUCH TO MY CHAGRIN. UM, BUT THANK YOU TODAY NECESSARY. SO WE WILL GET STARTED. I APOLOGIZE TO ANYONE FROM THE PUBLIC WHO'S HERE. WE CAN RUN A COPY UP TO THE FRONT IF YOU'D LIKE TO SEE IT. AND IT, IT, IT'S ONLINE TOO. IT'S ONLINE ON THE BFA WEBSITE. OKAY, MELISSA, WITH THAT, GO AHEAD. OKAY, THANK YOU. GOOD MORNING. UM, AND I KNOW, UH, YOU RECOGNIZE THE NUMBER CRUNCHERS THAT, UH, LIKE SNACKS. SO A LOT OF THEM ARE HERE IN THE AUDIENCE. WE'VE EATEN A LOT OF SNACKS OVER THE LAST COUPLE WEEKS AND MONTHS. UM, SO I DID WANNA ACKNOWLEDGE MY TEAM. UM, OF COURSE, THEY ARE THE TEAM THAT'S RESPONSIBLE FOR PUTTING TOGETHER THE LARGE BOOK FOR THE CITYWIDE BUDGET THAT I PRESENTED ON LAST WEEK. UM, BUT TODAY WE'RE TALKING ABOUT THE FINANCE DEPARTMENT BUDGET SPECIFICALLY. SO NOT JUST THE TEAM THAT PUTS TOGETHER THE BUDGET, BUT THE REST OF THE TEAM THAT, UM, COVERS ALL THE AREAS OF THE, OF THE FINANCE DEPARTMENT, FINANCIAL REPORTING, TREASURY, CAPITAL MANAGEMENT, PROCUREMENT, UM, OFFICE OF A, UM, CITY COUNCIL, UM, DIRECTOR'S OFFICE. SO WE HAVE A LOT OF, UM, DIFFERENT TEAMS INSIDE THE FINANCE DEPARTMENT THAT, UM, MAKE EVERYTHING WORK EVERY DAY. SO THANK YOU TO THEM. UM, MANY OF THEM ARE HERE AND A LOT ARE, ARE BACK AT THE OFFICE WORKING. UM, THANK YOU. REAL QUICK, I WANNA ACKNOWLEDGE COUNCIL MEMBER TWILA CARD AND COUNCIL MEMBER FRED FLICKINGER ARE HERE AS WELL. ALRIGHT, UM, SO SLIDE TWO GOES OVER THE AGENDA FOR THE SLIDES TODAY. UM, MOVING TO SLIDE THREE, STRATEGIC ALIGNMENT. SO, UM, THIS SLIDE GOES OVER, UM, THE DIFFERENT PROGRAMS, UH, THAT ARE INSIDE THE FINANCE DEPARTMENT AND HOW THOSE PROGRAMS ALIGN TO THE STRATEGIC PRIORITIES OF THE MAYOR. UM, SO AS YOU REMEMBER FROM THE OUTCOME-BASED BUDGETING, WE HAVE FOUR STRATEGIC PRIORITIES. UM, PUBLIC SAFETY INFRASTRUCTURE, GOVERNMENT THAT WORKS AND QUALITY OF LIFE. SO THE MAJORITY OF THE PROGRAMS IN THE FINANCE DEPARTMENT ARE ALIGNED TO THE GOVERNMENT THAT WORKS. UM, PROGRAM OR PRIORITY, SORRY, UM, WITH TWO OF THEM, UM, ALIGNED TO THE INFRASTRUCTURE, UM, PRIORITY. AND THOSE TWO ARE THE DISASTER COST RECOVERY MANAGEMENT GROUP AND THE ENERGY MANAGEMENT GROUP. SO, ON SLIDE FOUR, UM, FIRST WE'RE GONNA TALK ABOUT THE DEPARTMENT BUDGET REDUCTIONS THAT THE FINANCE DEPARTMENT TOOK. UM, WE'RE CALLING THEM PLANS TO ELIMINATE THE GAP OR PEGS BECAUSE WE DON'T HAVE ENOUGH ACRONYMS. WE WANTED TO CREATE ANOTHER ONE, UM, . SO IN THE GENERAL FUND, UM, THESE LIST, THE DIFFERENT PROGRAMS THAT TOOK REDUCTIONS AS PART OF OUR, UM, REDUCTION INITIATIVE. UH, THE PERFORMANCE IMPROVEMENT GROUP, UM, UH, WE REDUCED THE BUDGET AND AN AMOUNT EQUIVALENT TO 0.3, UM, VACANT POSITIONS, WHICH HAS A PERSONNEL COST SAVINGS OF $33,000. UM, THIS REDUCTION, UH, IS, UM, IT'S NOT A LOSS OF A VACANT POSITION. RATHER, IT'S A DELAY IN HIRING A VACANT POSITION FOR A FEW PAY PERIODS THROUGH THE YEAR TO REALIZE SOME SAVINGS. UM, IN THE NEXT PROGRAM, THE CAPITAL PROJECTS AND DEBT MANAGEMENT PROGRAM, THIS IS A REDUCTION OF ONE, UM, UNFILLED POSITION, A VACANT POSITION, A SAVINGS OF 113,000, UM, TREASURY CAPITAL MANAGEMENT SERVICES, $18,000. THIS IS A REDUCTION DUE TO, UM, SAVINGS. WE'RE ELIMINATING, UM, ONE OF OUR, UM, CONSULTING CONTRACTS. SO $18,000 SAVINGS FROM THAT IN THE FINANCIAL PLANNING AND BUDGETARY SERVICES. THIS IS TWO VACANT, UM, POSITIONS THAT WE'RE NO LONGER, UM, GOING TO FILL, UM, IN THE AUDIT SERVICES LINE 265,000. UM, THIS IS RELATED TO A, UM, WE'RE NOW DOING A PROPER ALLOCATION [00:05:01] OF THE CHARGEBACK COSTS FOR OUR EXTERNAL AUDIT CONTRACT TO THE OTHER FUNDS, UM, THAT ARE PART OF THE AUDIT CONTRACT. SO IT'S GONNA RESULT IN SAVINGS OF 265,000 FOR THE GENERAL FUND, UM, AND CITYWIDE PROCUREMENT AND CONTRACT MANAGEMENT. UM, $279,000. UM, IT'S THREE VACANT FTES. UM, AND I BELIEVE, UM, ALSO IN THIS COST, MAKING SURE I'M LOOKING AT THE RIGHT LINE ITEM. I'M SORRY. YEAH, THIS IS FOR THREE FTES. UM, IN ADDITION, WHAT YOU DON'T SEE ON THIS SLIDE ARE ADDITIONAL REVENUES THAT WE'RE GONNA BE BRINGING INTO THE GENERAL FUND RELATED TO THE PROCUREMENT AND CONTRACT MANAGEMENT. YOU'LL SEE THAT ON A LATER SLIDE. THIS JUST GOES OVER THE, UM, EXPENDITURE REDUCTIONS. BUT ONE OTHER INITIATIVE, AND WE TALKED ABOUT IT WHEN WE TALKED ABOUT THE ERNST AND YOUNG REPORT, IS, UM, INCREASING THE REBATES THAT WE GET ON SOME OF OUR, UM, CONTRACTS. SO THERE'S ABOUT $1.2 MILLION OF ADDITIONAL REVENUE IN THE BUDGET THAT YOU'LL SEE ON A DIFFERENT SLIDE, UM, TO INCREASE P CARD REBATE DUE TO THE IMPLEMENTATION OF THE NEW MARKETPLACE. AS WELL AS, UM, UH, RULING OUT A VIRTUAL PAYMENT CARD OPTION THAT'S GONNA RESULT IN ADDITIONAL REBATES. AND THEN WE'RE ALSO, I KNOW WE MENTIONED IT, UM, LEAD AGENCY FEES. SO, UM, THIS IS ONE THING THAT, UM, JED WAS HIGHLIGHTING WHEN WE WERE TALKING ABOUT THE ERNST AND YOUNG, THAT IF WE BECOME A LEAD AGENCY ON A CO-OP FOR A CONTRACT THAT WE PROCURE, AND THEN WE PUT THAT CONTRACT ON THE CO-OP, WE GET A REVENUE FOR THAT FROM THE CO-OP. SO THAT'S SOMETHING NEW THAT WE STARTED IN FISCAL YEAR 25. UM, WE COMPLETED THE FIRST ONE AND WE HAVE SIX MORE IN THE QUEUE. SO AGAIN, THAT'S NOT INCLUDED IN THESE COSTS ON THIS SLIDE, BUT IT IS PART OF OUR REVENUES THAT WE'RE, UM, PLANNING TO BRING IN, IN THE BUDGET. SO MOVING ON TO SLIDE FIVE, UM, THIS IS THE CENTRAL SERVICE REVOLVING FUND. UM, SO THE, LET ME BACK UP A LITTLE BIT. THE FINANCE DEPARTMENT HAS GENERAL FUND POSITIONS AND CENTRAL SERVICE REVOLVING FUND POSITIONS. CENTRAL SERVICE REVOLVING FUND, UM, POSITIONS ARE INDIVIDUALS THAT ARE, UM, WORKING IN THE FINANCE DEPARTMENT, BUT WORK SPECIFICALLY TIED TO ANOTHER DEPARTMENT. SO, FOR EXAMPLE, WHEN WE CONSOLIDATED FIRE IT AND FLEET FINANCE SEVERAL YEARS AGO, THEIR BUDGETED IN A REVOLVING FUND AND THEIR COSTS ARE REVOLVED BACK TO THE HITS, UM, UH, HITS BUDGET, UH, FLEET BUDGET AND FIRE BUDGET. SO THAT'S KIND OF THE CONCEPT OF THE REVOLVING FUND. AND THEN THOSE COSTS ARE IN TURN, REVOLVE BACK TO WHATEVER, LIKE, YOU KNOW, HITS PROVIDE SERVICES CITYWIDE, SO IT GETS REVOLVED BACK TO OTHER DEPARTMENTS IN THAT WAY. UM, SO OF COURSE WE'RE LOOKING AT SAVINGS IN GENERAL FUND, BUT WE'RE ALL ALSO LOOKING AT OTHER FUNDS. SO THAT'S WHY WE'RE TALKING ABOUT THE CENTRAL SERVICE REVOLVING FUND. AND THE RULE OF THUMB WAS CENTRAL SERVICE REVOLVING FUND. SINCE THOSE COSTS DO GET ALLOCATED BACK TO OTHER FUNDS, DEPENDING ON THE AREA, ABOUT ROUGHLY ABOUT 70% OF CENTRAL SERVICE REVOLVING, REVOLVING FUND COSTS IS SAVINGS TO THE GENERAL FUND. UM, SO IT'S, YOU KNOW, IT'S NOT SOMETHING WE CAN JUST ONLY FOCUS ON GENERAL FUND AND NOT LOOK, NOT LOOK AT REVOLVING FUNDS. SO I THINK YOU'LL HEAR, HEAR THAT AS A RECURRING THEME WITH SEVERAL OF THE OTHER DEPARTMENTS. UM, SO FOR CENTRAL SERVICE REVOLVING FUND, UH, THE CITYWIDE PROCUREMENT AND CONTRACT MANAGEMENT GROUP, UM, WE'RE ELIMINATING ONE VACANT FTE, UM, IT'S A PROCUREMENT SPECIALIST. AND THEN IN THE FINANCIAL MANAGEMENT SERVICES FOR FIRE AND FOR ENERGY ELIMINATION OF ONE VACANT FTE IN EACH OF THOSE AREAS, UM, THOSE ARE BOTH FINANCIAL ANALYST THREES AND THEN ELIMINATION OF ONE VACANT FTE, UM, IN CITYWIDE ACCOUNTS PAYABLE. SO ON SLIDE SIX, UM, THIS IS A SNAPSHOT OF THE INDIVIDUALS IN THE FINANCE DEPARTMENT THAT ACCEPTED THE RETIREMENT OFFER AS OF APRIL 20TH. SO FOR PURPOSES OF THE PROPOSED BUDGET, WE TOOK A SNAPSHOT OF, UM, INDIVIDUALS THAT HAD INDICATED THEY WERE GOING TO ACCEPT THE OFFER AS OF APRIL 20TH, AND REFLECTED THOSE REDUCTIONS IN THE PROPOSED BUDGET. SO FOR THE FINANCE DEPARTMENT, THAT WAS FOUR INDIVIDUALS, UM, WHICH WAS ABOUT A 10% ACCEPTANCE RATE AT THAT POINT. AND THE VALUE OF THE REDUCTION THAT WE TOOK TO OUR BUDGET WAS 452,000 ASSOCIATED WITH THOSE INDIVIDUALS. AND THAT'S IN ADDITION TO THE REDUCTIONS AND, UH, WHAT WE TALKED ABOUT ON THE PREVIOUS TWO SLIDES ON SLIDE SEVEN. UM, SO I KNOW WE'VE TALKED ABOUT, UM, RE REORGANIZATION, UM, FOR DIFFERENT, UH, AREAS CITYWIDE, UM, IN FINANCE, IN IT, IN HR. SO THAT'S HAPPENING, UM, YOU KNOW, CITYWIDE FOR THOSE DIFFERENT AREAS. SO WITH THE PROPOSED DEPARTMENT RESTRUCTURE FOR THE FINANCE DEPARTMENT, THIS SLIDE IS STILL A VERY MUCH A WORK IN PROGRESS FOR US AS WE WORK THROUGH THE CONSOLIDATION [00:10:01] OF THE DIFFERENT, UM, FINANCE FUNCTIONS THROUGHOUT THE CITY, WHICH YOU WILL SEE A LOT OF THOSE POSITIONS, UM, CONSOLIDATED IN THE FINANCE DEPARTMENT BUDGET. UH, WE STILL ARE WORKING ON THE ORG STRUCTURE OF HOW THAT IS GOING TO WORK. AND, UH, WE KNOW THAT WE NEED TO IMPROVE OUR SPAN OF CONTROL BASED ON THE ERNST AND YOUNG STUDY. THEIR GOAL, UM, FOR OUR DEPARTMENT IS, UH, BETWEEN SIX TO EIGHT, UH, INDIVIDUALS REPORTING TO EACH SUPERVISOR. OUR CURRENT STATE RIGHT NOW IS ABOUT 3.61 BASED ON THE ERNST AND YOUNG DATA THAT THEY PULLED THAT SNAPSHOT AT THAT POINT IN TIME. SO WE KNOW WE, AS WE LOOK AT THE CONSOLIDATION AND HOW THOSE INDIVIDUALS ARE GONNA FIT IN THE FINANCE DEPARTMENT, UH, WE KNOW THAT WE NEED TO, UH, COMPLETE OUR REORGANIZATION PLAN TO IMPROVE THAT SPAN OF CONTROL. AND THEN, UM, AGAIN, ON THE PERCENT OF MANAGERS AND SUPERVISORS WITH LESS THAN FOUR DIRECT REPORTS, UM, BASED ON THE ERNST AND YOUNG STUDY, IT SHOWED ABOUT 46% OF THE FINANCE DEPARTMENT MANAGERS AND SUPERVISORS HAD LESS THAN FOUR DIRECT REPORTS. SO OUR GOAL IS TO BRING THAT DOWN TO AROUND 15% AS WE LOOK AT THE REORG. AS FAR AS THE LAYERS OF MANAGEMENT, UM, OUR CURRENT STATE IS THERE ABOUT SEVEN LAYERS, UM, FROM THE TOP OF THE ORGANIZATION TO THE ANALYST LEVEL POSITION. AND OUR GOAL IS TO REDUCE THAT BY AT LEAST ONE LAYER, UH, WHICH IS THE GOAL THAT, UM, YOU KNOW, ERNST AND YOUNG LAID OUT IN THEIR, UH, CITYWIDE EFFICIENCY STUDY REPORT. SO THAT'S VERY MUCH A WORK IN PROGRESS. UM, WE ARE GONNA BE PROPOSING SOME NEW JOB CLASSIFICATIONS ASSOCIATED WITH THAT. UM, I KNOW ONE THING WE TALKED ABOUT WITH ERNST AND YOUNG IS, YOU KNOW, PROVIDING CLEAR PATHWAYS CAREER PATHWAYS FOR INDIVIDUALS, UM, SO THAT THEY CAN CONTINUE TO GROW AND SEE GROWTH WITHOUT NECESSARILY GOING INTO A MANAGERIAL POSITION. SO WE ARE GONNA BE WORKING WITH THE HR DEPARTMENT TO DISCUSS SOME NEW JOB CLASSIFICATIONS TO GROW ON THE JOB FAMILIES THAT WE ALREADY HAVE. SO, FOR EXAMPLE, YOU SEE FINANCIAL ANALYST FIVE, RIGHT NOW THE FINANCIAL ANALYST FAMILY ONLY GOES UP TO FOUR FINANCIAL ANALYST, 1, 2, 3, 4. SO WE'RE PROPOSING TO, IN THAT JOB FAMILY HAVE SOME MORE ROOM FOR GROWTH AND CAREER PROGRESSION ON SLIDE EIGHT EXPENDITURES BY FUND. SO, UM, I KNOW WE TALKED A LOT ABOUT CENTRAL SERVICE REVOLVING FUND AND GENERAL FUND. SO, UH, BETWEEN THE TWO FUNDS IN THE FINANCE DEPARTMENT, BASED ON THE FY 26 PROPOSED BUDGET, IT'S ABOUT 50 50 SPLIT BETWEEN THE GENERAL FUND AND CENTRAL SERVICE REVOLVING FUND. AS YOU CAN SEE, THE CENTRAL SERVICE REVOLVING FUND HAS GROWN SIGNIFICANTLY COMPARED TO THE FY 25 BUDGET, AN INCREASE OF 185%. THIS IS DUE TO THE CONSOLIDATION OF THE FINANCE FUNCTIONS, UH, THROUGHOUT THE, THROUGHOUT THE CITY. SO IT'S PRIMARILY, UM, DRIVEN BY THE CONSOLIDATION OF THE HPD, UM, BUDGET AND FINANCE GROUP. UH, THEY'RE NOW GONNA BE THEIR OWN COST CENTER INSIDE THE FINANCE DEPARTMENT. UM, THAT'S ABOUT 50 POSITIONS, UM, IN THAT AREA. UH, THIS ALSO INCLUDES THE INFORMAL PROCUREMENT CONSOLIDATION THAT WAS ALREADY COMPLETED, UM, UM, EFFECTIVE APRIL 1ST. UH, THOSE INDIVIDUALS ARE PART OF THAT CHANGE. UM, YOU ALSO SEE THE HPW CONSTRUCTION PROCUREMENT GROUP, UM, IS COMING OVER TO THE SPD DIVISION. THAT'S ABOUT 26 POSITIONS. AND THEN, UM, ACROSS OTHER DEPARTMENTS, UM, INCLUDING GENERAL SERVICES, SOLID WASTE, LIBRARY PLANNING, OBOE. AND THEN, UH, MAYOR'S OFFICE BUDGET IS A CONSOLIDATION OF ABOUT 28 POSITIONS. SO THAT'S WHAT'S DRIVING THAT 185% INCREASE FROM THE PRIOR YEAR. AND SO, ALTHOUGH THIS LOOKS LIKE AN INCREASE TO THE FINANCE BUDGET, YOU SEE, UM, IT'S AN INCREASE IN THE REVOLVING FUND BUDGET. THOSE COSTS ARE STILL GOING TO BE CAPTURED IN THE DEPARTMENTS THAT THE INDIVIDUALS CAME FROM BECAUSE THEY'RE REVOLVED BACK. SO IT'S NOT A NET INCREASE ANYWHERE. UM, IT'S JUST A REBUDGETING BASICALLY OF WHERE THE COST IS GOING TO SHOW UP EVENTUALLY. AND THERE ARE THESE, THESE NUMBER OF POSITIONS I MENTIONED DO INCLUDE VACANCIES. SO THE GOAL IS THROUGHOUT THE YEAR AS WE WORK THROUGH THE TRANSITION AND THE CONSOLIDATION IS TO DETERMINE WHICH OF THE VACANCIES WE MIGHT BE ABLE TO GIVE UP BECAUSE OF THE EFFICIENCIES THAT WE'RE GONNA HAVE WITH THE CROSS TRAINING, WITH THE STAFF, UH, AND THE EMPLOYEES. AND SO I DO EXPECT THAT WHEN YOU SEE THE FY 27 PROPOSED BUDGET, UM, WE'LL, WE'RE HOPING THAT WE'LL BE ABLE TO SHOW THAT SAVINGS, UM, ONCE WE FULLY GO THROUGH THE CONSOLIDATION TRANSITION. SO ON SLIDE NINE, UM, EXPENDITURES BY FUND, UM, THIS JUST, UH, SHOWS YOU IN A GRAPHICAL FORMAT THE INFORMATION THAT WE DISCUSSED ON THE PREVIOUS SLIDE. UM, AND YOU SEE THE, THE BLUE BAR IS THE GENERAL FUND, AND THAT'S ABOUT FLAT COMPARED TO THE PRIOR YEAR. UM, AND THE GRAY BAR OBVIOUSLY INDICATES THE INCREASE, UM, PRIMARILY DUE TO THE CONSOLIDATION. NOW, I DID WANNA MENTION THAT EVEN THE BLUE BAR SAY RELATIVELY FLAT, IT DID, IT IS GOING DOWN FROM FY 25 TO 26. AND I [00:15:01] KNOW THAT THAT'S A RECURRING THEME. YOU'RE GONNA HEAR FROM THE DEPARTMENTS THAT THE GENERAL FUND PROPOSED BUDGET IS ACTUALLY A DECREASE FROM THE FY 25. SO ALTHOUGH WE MENTIONED ALL THOSE REDUCTIONS, UM, ON SLIDES FOUR AND FIVE, SOME OF THAT IS PARTIALLY OFFSET BY SOME INCREASES. UM, THE HOPE CONTRACTUAL INCREASE. SO WHEN, EVEN WHEN YOU, UH, LOOK AT THOSE INCREASES LIKE HOPE CONTRACTUAL INCREASE AND OFFSET BY THE SAVINGS INITIATIVES WE HAVE, WE'RE STILL A NET DECREASE FROM 25 TO 26 FOR THE PROPOSED BUDGET. ON SLIDE 10, PERSONNEL VERSUS NON-PERSONNEL, THE FINANCE DEPARTMENT IS LARGELY PERSONNEL COSTS. UH, YOU SEE IN THE GENERAL FUND WHERE ABOUT 78% OF OUR GENERAL FUND COST IS PERSONNEL, UH, WITH THE REMAINING IN, UM, SERVICES. SO THAT WOULD INCLUDE SOME OF OUR EXTERNAL CONTRACTS. WE HAVE, LIKE OUR EXTERNAL AUDIT CONTRACT, UM, AND OTHER, UH, CONTRACTS THAT WE HAVE IN PLACE. AND THE CENTRAL SERVICE REVOLVING FUND, UM, WE'RE ABOUT 94% PERSONNEL. I DID WANNA TOUCH ON THE RESTRICTED ACCOUNTS SINCE YOU SEE THAT LINE ITEM THERE. RESTRICTED ACCOUNTS DO MAKE UP, UM, A PORTION OF OUR BUDGET RESTRICTED ACCOUNT JUST MEANS, UM, BASICALLY AN ALLOCATION THAT DEPARTMENTS GET IN THEIR BUDGET. UH, THAT INCLUDES THINGS LIKE INTER FUND VOICE APPLICATION, UH, VOICE COSTS, INTER FUND APPLICATION COSTS, INTER FUND DATA, INTER FUND HR, AND INTER INTERFUND KRONO SERVICES. SO THESE ARE THE SUPPORT SERVICES THAT HITS AND HR PROVIDE TO EVERY SINGLE DEPARTMENT. SO YOU'RE GONNA SEE THIS RECURRING IN EVERY DEPARTMENT BUDGET WORKSHOP, UH, THAT THOSE COSTS ARE INCLUDED IN EACH DEPARTMENT BUDGET. MOVING ON TO SLIDE 11 EXPENDITURES BY BY PROGRAM. UM, SO THIS BREAKS DOWN THE, UM, BY PROGRAM, THE FY 25, UH, FY 24 ACTUALS FY 25, AND THEN COMPARED TO FY 26 PROPOSED. WE'LL GET INTO MUCH MORE DETAIL ON EACH OF THESE AREAS. ON EACH OF THE SLIDES, THERE'S A SLIDE FOR EVERY PROGRAM. SO, UM, I THINK I'LL JUST MAYBE HIGHLIGHT THE, THE LARGE INCREASE, THE FINANCIAL MANAGEMENT SERVICES, THE 350 50 6% INCREASE. THIS IS THE PROGRAM THAT THE CONSOLIDATIONS ARE SHOWING UP IN, SO THAT'S THE DRIVER OF THAT LARGE INCREASE. AND THEN WE CAN FOCUS, UH, WE CAN GET INTO THE DETAILS ON EACH OTHER, UH, PROGRAM AS WE GO THROUGH THE NEXT FEW SLIDES. SO MOVING ON TO SLIDE 12, ACCOUNTING AND FINANCIAL REPORTING. THIS IS OUR, UM, OUR FIRST PROGRAM THAT'S SUMMARIZED ON SLIDE 11. UM, THIS PROGRAM, YOU SEE THE PROGRAM JUST ORIENT YOU TO THE FORMAT. YOU SEE THE PROGRAM DESCRIPTION IN THE UPPER LEFT CORNER OF THE SLIDE IN THE MIDDLE OF THE TOP. THIS IS GOING TO HIGHLIGHT WHERE WE HAVE SIGNIFICANT BUDGET ITEMS. SO THIS IS WHAT WE'RE, WE'LL TALK ABOUT EACH OF THOSE SAVINGS INITIATIVES THAT I MENTIONED ON SLIDES FOUR AND FIVE. THIS IS, UH, THIS IS BASICALLY A REPEAT OF THAT INFORMATION ALIGNING TO WHATEVER PROGRAM THE SAVINGS, UH, IS ASSOCIATED TO. AND THEN ON THE UPPER RIGHT BOX, YOU'LL SEE THE BREAKDOWN OF THE FY 26 PROPOSED BUDGET BROKEN DOWN BY FUND, WHETHER IT'S GENERAL FUND OR CENTRAL SERVICE REVOLVING FUND. AND THEN IN THE BOTTOM OF THE SLIDE, YOU SEE THE PERFORMANCE MEASURES, UM, ASSOCIATED WITH EACH PROGRAM. SO FOR THE PERFORMANCE MEASURES, AS I MENTIONED IN THE FIVE YEAR FORECAST, THESE ARE VERY MUCH A WORK IN PROGRESS. UM, EACH DEPARTMENT IS, UM, BEGINNING TO WORK WITH ERNST AND YOUNG ON THE DEEP DIVE INTO THEIR PERFORMANCE MEASURES. SO THESE ARE WHAT THEY ARE AS OF THE PROPOSED BUDGET, BUT DEFINITELY EXPECT THAT THEY'LL BE UPDATED AS THEY'RE REVIEWED BY EACH DEPARTMENT DIRECTOR. AND OUR PLAN IS GOING TO BE TO, UM, OF COURSE, WE, WE, UH, REPORT ON THEM ON OUR WEBSITE, ON OUR OPEN FINANCE WEBSITE. EVERY QUARTER THERE'S AN UPDATE. SO WE'LL PROVIDE UPDATES THERE AS WELL AS DISCUSS IT AT OUR, UM, QUARTERLY MONTHLY FINANCIAL MEETING, UH, OF BFA. UM, SO FOCUSING ON THIS ONE, ACCOUNTING AND FINANCIAL REPORTING, UM, THIS IS THE AREA THAT WE SEE THE SAVINGS. UM, THE SAVINGS IS TWOFOLD FOR EXTERNAL AUDIT CONTRACT. ONE PIECE OF IT IS NEGOTIATING ACTUALLY A, A LOWER OVERALL COST FOR THE CONTRACT. UM, AS WE MOVED TO A NEW, UM, AUDITOR BASED ON AN RFP THAT WAS DONE LAST, WELL, THIS FISCAL, SORRY, I'VE ALREADY MOVED ON TO FISCAL YEAR 26. IT WAS IN, UH, FY 25. UM, SO THAT SAVINGS IS COMPRISED OF A LOWER OVERALL COST OF THE CONTRACT, UM, BASED ON THE NEGOTIATION OF THE TEAM, UM, TO REDUCE THOSE COSTS DOWN, AS WELL AS THE, UH, PROPER REALLOCATION OF COSTS TO, UM, OTHER FUNDS THAT ARE PART OF THE AUDIT. SO THAT'S A SAVINGS OF 694,000 TOGETHER WHEN YOU INCLUDE THOSE TWO PIECES. UM, AND YOU SEE THE PERFORMANCE MEASURES FOR EACH AREA HERE. THIS AREA ALSO, UM, ACCOUNTS FOR THE ACCOUNTS RECEIVABLE, WHICH IS WHERE OUR, UH, COLLECTION FOR EMS IS. UM, OTHER COLLECTIONS FOR OTHER VENDOR MANAGED REVENUES. UH, THIS IS THE AREA THAT ACCOUNTS PAYABLE IS IN. SO WE AIM TO, UH, TRY TO KEEP OUR COST PER INVOICE OF, UH, PROCESSING INVOICES AS LOW AS WE CAN. UM, AND THIS IS ONE WHERE WE DO HAVE A PROJECT IN THE [00:20:01] CIP. SO IN FUTURE YEARS, WE HAVE AN ELECTRONIC INVOICING, CIP PROJECT PLANNED WHERE WE'RE HOPING TO BE ABLE TO AUTOMATE AND STREAMLINE TO REDUCE OUR AVERAGE COST PER INVOICE. UM, AND THAT WOULD BE PART OF THIS PROGRAM. UM, SO MOVING ON TO SLIDE 13. THIS IS THE ADMINISTRATIVE SERVICES PROGRAM FOR THE FINANCE DEPARTMENT. UM, SO NOT ALL AREAS, YOU'LL SEE THERE'S A BLANK IN THE SIGNIFICANT BUDGET ITEMS. NOT ALL AREAS EITHER HAD A BUDGET REDUCTION OR HAD A SIGNIFICANT BUDGETARY CHANGE. SO IN THAT CASE, THAT'S WHERE YOU WOULD SEE, UH, YOU KNOW, A BLANK SHOWING UP IN THAT AREA OF THE SLIDE. SO IN THIS PROGRAM, THERE WASN'T MUCH CHANGE ASIDE FROM THE HOPE CONTRACTUAL INCREASE. SO NOTHING MAJOR TO HIGHLIGHT IN THIS PROGRAM. THIS IS THE AREA THAT SUPPORTS THE, THE OVERALL FINANCE DEPARTMENT. UM, THEY ASSIST WITH, UM, PRO, UM, SETTING UP RECEIVABLES, UH, RECORDING DEPARTMENT OVERALL BUDGET, AND PROVIDING LEADERSHIP AND EXECUTIVE SUPPORT FOR THE REST OF THE DEPARTMENT. UM, SO YOU SEE THEIR, THEIR MEASURES ARE MORE ASSOCIATED BASED ON TOTAL EXPENDITURE AND TOTAL REVENUE. ON SIDE 14, THE CAPITAL PROJECT AND DEBT MANAGEMENT, THIS IS THE TEAM THAT, UH, PUTS TOGETHER THE CAPITAL IMPROVEMENT PLAN EVERY YEAR. UH, THEY ALSO REVIEW ALL RCAS BEFORE THEY COME TO COUNCIL ASSOCIATED WITH CAPITAL PROJECTS AND POST THOSE BUDGETS AND SAP, UH, THEY WORK WITH THE DEPARTMENTS TO, UM, REVIEW THOSE REQUESTS AND MAKE SURE EVERYTHING IS IN ALIGNMENT WITH THE PLAN. THEY MAINTAIN ASSET ASSET MODELS, UM, AND THEY USE THOSE ASSET REPLACEMENT MODELS TO HELP FORMULATE THE PROPOSAL OF THE CIP. UM, AND THEN THIS IS ALSO THE GROUP THAT DOES THE DEBT ISSUANCE, THE BOND ISSUANCE TO FINANCE THE CAPITAL PROJECTS. SO IN THIS AREA, UM, AS I MENTIONED, THERE'S UM, UH, ELIMINATION OF A VACANCY, UM, IN THIS AREA THAT HAD NOT BEEN FILLED SAVINGS OF ABOUT $113,000. ON SLIDE 15, THE CITYWIDE PROCUREMENT AND CONTRACT MANAGEMENT GROUP, UM, IN THIS AREA, THERE IS, UM, THE, UM, THE SIGNIFICANT BUDGET ITEM FOR THIS AREA IS THE, UH, CONSOLIDATION OF THE PUBLIC WORKS CONSTRUCTION PROCUREMENT TEAM. UM, AND ALSO THIS IS WHERE THE DEPARTMENT SAVINGS INITIATIVES, UM, THERE WERE A FEW, UH, VACANCY, THREE VACANCIES ELIMINATED AS WELL. THIS IS THE AREA THAT'S FOCUSED ON THAT, UH, REVENUE THAT I MENTIONED FOR THE REBATES AND FOR THE LEAD AGENCY ITEMS. THIS IS ALSO THE TEAM THAT IS GOING TO BE TASKED WITH IMPLEMENTING CATEGORY MANAGEMENT, WHICH IS A MAJOR, UM, COST SAVINGS ITEM THAT'S PROPOSED IN THE BUDGET. UH, THIS IS WHERE, UH, WE'LL BE WORKING WITH OUR PARTNERS AT ERNST AND YOUNG THROUGH THE, UM, ENGAGEMENT WITH THEM TO FOCUS FIRST ON WHERE WE CAN GET THE MOST BANG FOR OUR BUCK, PARTICULARLY ON THE GENERAL FUND SIDE, TO RENEGOTIATE THOSE CONTRACTS, TO BRING THOSE COSTS DOWN AND TO REALIZE THAT SAVINGS, UM, UH, FOR THE, FOR THE BUDGET. AND THIS IS GONNA BE THE FIRST YEAR THAT WE'RE REALLY ROLLING THIS OUT, BUT IT'S GOING TO BE AN ONGOING EFFORT. SO, UH, THE TEAM THAT'S GOING TO BE IMPLEMENTING THAT IS INSIDE THIS PROGRAM. ON SLIDE 16, DID DISASTER COST RECOVERY MANAGEMENT GROUP. UM, WE DID, I KNOW WE DON'T HAVE A SIGNIFICANT BUDGET HIGHLIGHT ON HERE, UM, BUT I DID WANNA POINT OUT THAT, UH, I KNOW I MENTIONED OUR FOUR, UM, INDIVIDUALS THAT WE LOST THROUGH THE VOLUNTARY RETIREMENT PLAN. WE DID LOSE ONE INDIVIDUAL TO THE RETIREMENT PLAN IN THIS GROUP. HE WAS A VERY SEASONED INDIVIDUAL THAT HAD A LOT OF SUBJECT MATTER EXPERTISE, KNOWLEDGE ABOUT DISASTER COST RECOVERY, UM, AND WAS VERY INSTRUMENTAL IN MAKING SURE THAT WE'RE GETTING THAT REVENUE BACK, UM, FROM THE FEDERAL AND STATE GOVERNMENT ON DISASTER COST RECOVERY. UH, SO THAT IS DEFINITELY, UM, IN FINANCE'S MIND A CRITICAL POSITION. SO THAT'S SOMETHING THAT WE'RE GONNA BE LOOKING TO, UH, TO REFILL THAT POSITION. WE HAVE TO WORK WITH THE ADMINISTRATION ON THAT FOR THOSE LIMITED, UM, EXCEPTIONS. BUT THIS IS A KEY AREA FOR US. IT DOES HELP US RECOVER, UH, A LOT OF THE COSTS, UH, THAT WE HAVE WITH DISASTERS. SO WHEN WE TALK ABOUT THOSE, UH, DEBRIS, INVOICES THAT WE HAD WITH THE BARREL AND DERECHO, AND GETTING THE, THE EXTRA 25% FROM THE STATE TO COVER THE LOCAL SHARE, THIS IS THE GROUP THAT IS WORKING, UH, VERY CLOSELY WITH THE STATE TO ENSURE THAT WE'RE GETTING THOSE REVENUES IN, BOOKING THEM APPROPRIATELY. UM, AND, UH, OF COURSE, IT'S A LOT OF REPORTING AS WELL TO MAKE SURE WE'RE COMPLIANT WITH, UH, FEMA AND STATE GUIDELINES. SO ON SLIDE 17, THE ENERGY MANAGEMENT, UH, PROGRAM, THIS IS THE AREA. IT'S A, IT'S A SMALL GROUP, BUT THEY HAVE DEFINITELY A LOT GOING ON. THIS IS THE GROUP THAT MANAGES OUR ELECTRICITY CONTRACT FOR THE CITY. UH, THEY ALSO MANAGE OUR, UM, NATURAL GAS CONTRACT, UM, AS WELL. AND THEY LOOK AT THE, UH, FUEL AS WELL. UM, SO IN THIS AREA, WE DID HAVE A, A VACANCY, UM, ELIMINATION FOR VACANT POSITION THAT NOT HAD, HAD NOT BEEN FILLED. [00:25:01] UM, SO WE REALIZED SAVINGS THERE. UH, WE DO HAVE A LOT GOING ON WITH OUR ELECTRICITY CONTRACT, WHICH WE'LL BE GIVING YOU ALL AN UPDATE ON, UM, IN THE VERY, IN THE VERY NEAR TERM, THAT CONTRACT IS ENDING AT THE END OF JUNE. AND SO WE ARE, UM, GONNA BE MOVING FORWARD WITH, UM, UM, EXTENDING THAT. SO THAT'S SOMETHING THAT THIS TEAM HAS SPENT A LOT OF TIME AND ENERGY ON THIS YEAR. AND THAT HAS A CITYWIDE, YOU KNOW, THAT AFFECTS EVERY SINGLE DEPARTMENT FOR THE ELECTRICITY COST. UM, SO THAT'S WHAT THAT AREA HANDLES ON SLIDE 18, THE FINANCIAL MANAGEMENT SERVICES, UH, THIS IS THE AREA THAT INCLUDES THE, UM, CONSOLIDATION. THIS IS THE PROGRAM THAT INCLUDES THE CONSOLIDATION OF THOSE INDIVIDUALS THAT WORK ON A FINANCE FUNCTION THROUGHOUT THE CITY. UM, SO YOU SEE THEM LISTED IN THE SIGNIFICANT BUDGET ITEMS. WE DID, UH, REDUCE, UM, ONE VACANT, UM, POSITION THAT WAS ALREADY IN THE FINANCE DEPARTMENT AS PART OF OUR REDUCTIONS. UM, BUT WITH THE CONSOLIDATION, THERE ARE STILL VACANT POSITIONS THAT WE DID CONSOLIDATE THAT. AS I MENTIONED, WE'RE GONNA WORK TO EVALUATE, UH, WHETHER THOSE NEED TO BE FILLED OR WHETHER THEY CAN BE, UH, UM, YOU KNOW, REDUCED FOR SAVINGS IN THE FUTURE. ON SLIDE 19, FINANCIAL PLANNING AND BUDGETARY SERVICES, UH, THIS IS THE GROUP THAT PUTS TOGETHER THE, UM, 600 PAGE BUDGET BOOK THAT YOU SEE IN FRONT OF YOU. UM, THEY WORK WITH ALL OF THE OTHER CITY DEPARTMENTS, UM, TO, UH, RECEIVE THEIR BUDGET REQUESTS. THEY'RE THE ONES THAT PERFORM THE PROJECTIONS FOR THE MONTHLY FINANCIAL REPORTS THAT I PRESENT TO BUDGET AND FISCAL AFFAIRS. UH, THEY ALSO REVIEW ALL OUR CAS THAT PERTAIN TO THE OPERATING BUDGET ON A WEEKLY BASIS. UM, AND SO THEY ARE VERY BUSY THROUGHOUT THE YEAR, UM, AND YOU SEE A LOT OF THEIR, THEIR WORK PRODUCT EVERY MONTH WHEN I PRESENT TO YOU. UM, SO IN THIS AREA, WE ARE REDUCING, UM, TWO VACANT, UM, POSITIONS, UH, TO REALIZE SAVINGS ON SLIDE 20. THIS IS THE GRANTS MANAGEMENT PROGRAM. UM, THIS IS ANOTHER VERY IMPORTANT PROGRAM FOR THE CITY WHERE WE, UH, SEEK TO MAKE SURE THAT WE'RE COMPLYING WITH, UH, REGULATIONS. UM, THEY DO THE SINGLE AUDIT, WHICH IS THE FEDERAL AUDIT FOR ALL GRANTS. UH, THEY ALSO, UM, YOU SEE THEIR PERFORMANCE MEASURES. UM, ONE OF OUR GOALS IS TO MAKE SURE WE HAVE ZERO AUDIT FINDINGS WITH WHICH THEY'VE BEEN ABLE TO ACCOMPLISH FOR THE LAST SEVERAL YEARS, SEVERAL YEARS. AND THAT WILL CONTINUE TO BE OUR GOAL, OF COURSE. UH, SO THEY WORK WITH ALL OTHER CITY DEPARTMENTS TO ENSURE THAT WE'RE COMPLYING WITH ALL OF THE REPORTING REQUIREMENTS AND REGULATIONS, AND THEY, UH, THEY ASSIST CITYWIDE IN THAT AREA. ON SLIDE 21, UH, THE PERFORMANCE IMPROVEMENT PROGRAM. UM, SO THIS AREA, THIS IS JESSE BOUNDS GROUP. THEY WORK, UH, WITH DIFFERENT DEPARTMENTS TO IDENTIFY AND IMPLEMENT INNOVATIVE SOLUTIONS. SO THEY, THIS TEAM WAS INSTRUMENTAL, INSTRUMENTAL IN THE ERNST AND YOUNG, UM, CITYWIDE EFFICIENCY STUDY. UM, THEY ALSO TAKE ON OTHER SPECIAL PROJECTS TO ASSIST OTHER DEPARTMENTS WHEN, UH, DEPARTMENTS NEED HELP LOOKING FOR EFFICIENCIES. THIS GROUP IS ALSO GOING TO BE, UH, HELPING US TO, UM, STREAMLINE THE, UM, FINANCE CONSOLIDATION EFFORTS AS WE GO THROUGH THE, THROUGH THE YEAR. UH, THIS GROUP HELPED ABOUT, UM, JUST OVER 10 YEARS AGO WHEN WE DID THE ACCOUNTS PAYABLE CONSOLIDATION FOR SEVERAL DEPARTMENTS. SO THEY'RE EXPERIENCED IN THAT AREA, AND THEY'LL BE ASSISTING WITH THAT INITIATIVE. UM, AND THIS IS THE ONE WHERE THE AREA WE'RE GOING TO BE DELAYING, UM, BACKFILLING, ONE VACANCY BY A FEW PAY PERIODS TO, TO IDENTIFY SOME SAVINGS ON SLIDE 22. UM, THIS IS THE TREASURY, UH, PROGRAM. THIS IS THE AREA THAT DOES THE PROJECTIONS FOR THE PROPERTY TAX AND SALES TAX REVENUES, MIXED BEVERAGE REVENUES. UM, THEY CALCULATE THE PROPERTY TAX RATE AND COMPLIANCE WITH PROPOSITION ONE AND THE STATE CAP REQUIREMENTS. UM, AND THEY ALSO REVIEW AND ANALYZE ALL STATE LEGISLATIVE BILLS THAT PERTAIN TO, UH, ANY OF THE REVENUES FOR THE CITY. SO THEY'RE VERY BUSY THIS TIME OF YEAR WITH THE LEGISLATIVE SESSION. UM, AND JUST TO, YOU KNOW, POINT OUT, THESE ARE THE TWO, THE GENERAL FUND, UH, REVENUE SOURCES, PROPERTY TAX AND SALES TAXES, THE MAJORITY OF GENERAL FUND REVENUE. SO THIS IS THE GROUP. IT'S, IT'S A SMALL GROUP, BUT THEY'RE RESPONSIBLE FOR, UH, PROJECTING, SETTING THE RATE AND COLLECTING AND BOOKING ALL THOSE REVENUES. OKAY. UM, MOVING ON TO SLIDE 23, SO THAT WE COVERED THE EXPENDITURES BUDGET FOR THE FINANCE DEPARTMENT. WE'RE GONNA MOVE ON TO THE REVENUES NOW ON SLIDE 23. UM, AS I MENTIONED, THE PROPERTY TAX REVENUE, UM, THIS IS THE MAJORITY OF THIS IS THE LARGEST, UH, UH, FUNDING SOURCE FOR THE GENERAL FUND. UM, BASED ON THE FY 26 PROPOSED BUDGET, UH, WE'RE PROPOSING A $79 MILLION INCREASE IN PROPERTY TAX. AND THIS CALCULATION IS DONE BASED ON THE PROP ONE CALCULATION, BASED ON WHAT WE KNOW SO FAR ABOUT THE INFLATION. AS I MENTIONED IN THE FIVE YEAR FORECAST, WE'LL BE GETTING THE, UM, [00:30:01] POPULATION NUMBER FROM THE CENSUS BUREAU LATER THIS MONTH. AND AT THAT POINT IN TIME, WE'LL BE PUTTING A, AS WE DO EVERY YEAR BETWEEN THE PROPOSED BUDGET AND THE ADOPTED, WE MAKE A CHANGE TO THE PROP ONE CALCULATION ONCE WE KNOW THAT INFORMATION. SO IT WILL, UH, MOST LIKELY CHANGE VERY SLIGHTLY. UM, FOR SALES TAX, UM, SALES TAX, THIS REVENUE IS BOOKED INTO THE GENERAL FUND, UM, IN THE FINANCE DEPARTMENT COST CENTER. AND WHAT WE'RE PROPOSING IN THE BUDGET, AGAIN, I'M RECAPPING WHAT WE TALKED ABOUT LAST WEEK, IS A 1% INCREASE COMPARED TO FY 25 ESTIMATES. SO SLIDE 24, UM, PUTS OUR REVENUES INTO A GRAPHICAL FORMAT. UH, THE MAJORITY OF THE REVENUES FOR THE GENERAL FUND, UH, THE MAJORITY OF THE REVENUES IN THE FINANCE DEPARTMENT ARE IN THE GENERAL FUND, ABOUT 2.4 BILLION. AND THIS IS, UM, PRIMARILY PROPERTY TAX AND SALES TAX. UM, THE GRAY BAR YOU SEE AT THE TOP IS CENTRAL SERVICE REVOLVING FUND. THIS IS THE REVENUE THAT EXACTLY MATCHES THE COST OF THE EXPENDITURES AND THE REVOLVING FUND. SO SLIDE 25, REVENUE BY FUND. UM, GENERAL FUND REVENUE, ALTHOUGH WE'RE TALKING ABOUT, UM, UH, PROPERTY TAX, SALES TAX, UM, AS PART OF THE GENERAL FUND REVENUE, THAT'S THE, UH, THE MAJORITY OF IT. UM, THE PERCENT CHANGE IN THE GENERAL FUND, IT'S NOT, NOT A VERY LARGE PERCENT CHANGE, A 4% INCREASE. THE CENTRAL SERVICE REVOLVING FUND, THAT 185% INCREASE. YOU SEE, AGAIN, THAT'S ASSOCIATED WITH THE CONSOLIDATION OF THE INDIVIDUALS COMING FROM THE OTHER DEPARTMENTS INTO THE FINANCE DEPARTMENT ON SLIDE 26, REVENUE BY PROGRAM. SO, UM, THIS BREAKS OUT FOR EACH OF THE PROGRAMS THAT WE WENT OVER, THE EXPENDITURES FOR, THE REVENUES ASSOCIATED WITH THOSE AREAS. I'LL JUST HIT SOME OF THE HIGHLIGHTS OF SOME OF THE LARGER PERCENT CHANGES FOR THE ACCOUNTING AND FINANCIAL REPORTING. UM, THAT REVENUE IS A 23% INCREASE. THIS IS PRIMARILY RELATED TO WHAT I MENTIONED ABOUT THE ALLOCATION OF THE COST FOR THE EXTERNAL AUDIT CONTRACT, UM, GOING TO THE CITYWIDE PROCUREMENT AND CONTRACT MANAGEMENT, A 209% INCREASE. THIS IS RELATED TO THOSE INCREASED REBATES THAT I MENTIONED, AND THE LEAD AGENCY REVENUES, UM, FOR THOSE, UH, CONTRACTS THAT WE PROCURE. AND THEN PUT ONTO THE CO-OPS, UH, FOR THE FINANCIAL MANAGEMENT SERVICES AREA, A 490% INCREASE. THIS IS ASSOCIATED WITH THE CONSOLIDATION AND THE REVOLVING FUND. UM, THE, THE CENTRAL SERVICE REVOLVING FUND CHARGEBACK FOR THE CONSOLIDATION IN GRANTS MANAGEMENT, YOU SEE A SLIGHT DECREASE. THIS IS DUE TO, UH, IT'S A VERY SMALL, IT'S A $7,000 DECREASE, UH, IN REVENUE DUE TO CDBG CHARGEBACK ESTIMATE. UM, THAT CONCLUDES MY PRESENTATION. THANK YOU, DIRECTOR. GREAT PRESENTATION, UH, QUESTIONS. VICE MAYOR, I MEAN, VICE CHAIR MARIO CASTILLO. THANK YOU, CHAIR. THANK YOU, DIRECTOR. UM, FANTASTIC JOB ON THE PRESENTATION. THE INFORMATION WAS VERY CLEAR AND LAID OUT IN A, IN A WAY THAT WAS EASY TO UNDERSTAND. I APPRECIATED THE FACT THAT YOU HIGHLIGHTED THE IMPACTS THE RETIREMENTS HAD ON THE DEPARTMENT AND THE ERNST AND YOUNG STUDY GOALS AND HOW Y'ALL ARE, UH, MEASURING UP AGAINST THEM WITH, UM, RESPECT TO THE AUDITORS IN THE FINANCE DEPARTMENT. I SAW THEM REFERENCED ON THE GRANT, UH, SLIDE. IS THAT THE ONLY, UH, ROLE THE AUDITORS ARE PLAYING IN THE FINANCE DEPARTMENT RELATED TO GRANTS? SO WE ALSO, NO. SO I WOULD SAY THE MAJORITY OF OUR AUDIT ACTIVITY OCCURS IN THE PROGRAM ON SLIDE 12, THE ACCOUNTING AND FINANCIAL REPORTING. SO THIS IS THE PROGRAM THAT OUR EXTERNAL AUDIT CONTRACT WOULD BE ASSOCIATED WITH. SO THAT'S THE, UM, THE EXTERNAL AUDITORS THAT, OF COURSE, THE CONTROLLER'S OFFICE IS PREPARING THE FINANCIAL STATEMENTS FOR THE ACT FOR EVERY YEAR. UM, BUT OUR EXTERNAL AUDITOR THEN REVIEWS THOSE FINANCIAL STATEMENTS. SO THAT WOULD BE PART OF THE, UM, THE ACCOUNTING AND FINANCIAL REPORTING FUNCTION. DO, UH, DO THEY FOLLOW LIKE AN AUDIT PLAN? I KNOW THAT THE CONTROLLER'S OFFICE HAS AN AUDIT PLAN, THEIR AUDIT'S WORK DUE. DOES THAT ALSO HAPPEN IN FINANCE? I THINK ON THE CONTROLLER'S OFFICE, THEIR AUDIT PLAN IS ASSOCIATED WITH PERFORMANCE AUDITS. UM, THIS IS RELATED TO A FINANCIAL AUDITS. GOT IT. THANK YOU. THANK YOU. COUNCIL MEMBER RAMIREZ. THANK YOU MADAM CHAIR AND THANK YOU DIRECTOR FOR YOUR PRESENTATION. I'M ALWAYS IMPRESSED WITH THE FIRM GRASP OF THE MATERIAL YOU HAVE. AND SO VERY IMPRESSIVE PRESENTATION. I'M GLAD YOU TALKED ABOUT, UM, SPAN OF CONTROL AND DIRECT REPORTS AND ALL THAT. I WAS GONNA ASK YOU ABOUT THAT, BUT YOU, YOU COVERED IT AND YOU COVERED IT WELL. UM, I'LL BE INTERESTED TO SEE GOING FORWARD THE PROGRESS THAT, THAT YOU ALL ARE MAKING IN FINANCE. YOU MENTIONED THAT Y'ALL ARE CONSOLIDATING, UH, FINANCE OPERATIONS UNDER, UNDER THE, YOUR UMBRELLA. AND, UM, A BIG COMPONENT OF THAT IS GONNA BE HPDS FINANCE GROUP. UM, HAVE YOU ALL LOOKED AT THEIR, UM, NUMBER OF SUPERVISORS AND DIRECT [00:35:01] REPORTS AND ALL THAT AND YES. WHAT, WHAT DID YOU, WHAT DID YOU SEE THERE? YES, SO, UM, I HAVE HAD MANY MEETINGS WITH, UM, CHIEF HARDEN AND ALSO, UM, DEPUTY DIRECTOR RHONDA SMITH. UM, AND LOOKING AT THE SPAN OF CONTROL AND HOW THEIR ORGANIZATION IS SET UP, AND THEY'RE, UH, WE CERTAINLY HAVE A PROPOSAL OF HOW TO IMPROVE THEIR SPAN OF CONTROL. UM, THEY DEFINITELY HAD, UM, SIMILAR TO OTHER DEPARTMENTS, UM, FEWER THAN THREE DIRECT REPORTS FOR MANAGERS AND SUPERVISORS. UM, AND SO THAT IS GOING TO BE, UM, UH, PART OF THE CONSOLIDATION EFFORTS, UH, IMPLEMENTING THE RECOMMENDED, UH, IMPROVEMENTS TO SPAN OF CONTROL. OKAY. AND, UM, IN THIS CON CONSOLIDATION PROCESS, ARE THEY GONNA REMAIN WHERE THEY ARE? ARE THEY GOING TO PHYSICALLY MOVE TO, UH, YOUR LOCATION? MM-HMM . SO, UH, SIX 11 WALKER IS A LITTLE BIT SPACE LIMITED. SO AS I MENTIONED, IT'S ABOUT 50 POSITIONS. SO THEY'RE NOT GOING TO BE MOVING TO SIX 11 WALKER AT THIS POINT IN TIME. UH, THEY'RE GOING TO BE STAYING AT 1200 TRAVIS. BUT, UH, REPORTING TO THE FINANCE DEPARTMENT. SO WE HAVE, UM, A DIFFERENT SORT OF, UM, PHYSICAL LOCATION, UH, FOR DIFFERENT DEPARTMENTS THAT WE'VE CONSOLIDATED. FOR EXAMPLE, WITH THE FIRE DEPARTMENT, UH, THEY HAVE, UM, INDIVIDUALS THAT SIT AT 500 JEFFERSON WITH THE CHIEF, SO THAT, UM, EVEN THOUGH THEY REPORT TO THE FINANCE DEPARTMENT SO THAT THEY'RE AVAILABLE TO THE CHIEF, GIVE THE MONTHLY FINANCIAL REPORTS TO THE CHIEF WEEKLY SIT-IN MEETINGS WITH THE LEADERSHIP AT HFD SO THAT THEY CAN BE INVOLVED WITH THE BUDGET, EVEN THOUGH THEY REPORT TO THE FINANCE DEPARTMENT. SO, UM, FOR EXAMPLE, UM, YOU KNOW, THEY, UH, THE, THE PERSON THAT SITS WITH THE CHIEF JOINS ALL THE FINANCE DEPARTMENT EXECUTIVE TEAM MEETING CALLS, UM, PROVIDES INFORMATION THAT WE USE TO UPDATE THE MAYOR ON A WEEKLY BASIS. SO EVEN THOUGH THEY'RE PHYSICALLY LOCATED AT 500 JEFFERSON, THEY'RE STILL PART OF OUR, UH, FINANCE, YOU KNOW, TEAM MEETINGS, UM, AND IN OUR REPORTING STRUCTURE AS WELL. SO I THINK I SEE THAT SAME APPROACH, UM, IS SOMETHING THAT WILL WORK FOR HPD AS WELL. GREAT. ALRIGHT. LET ME ASK YOU ABOUT, UH, PROCUREMENT AND CONTRACT MANAGEMENT. SLIDE 15. UM, IN SPECIFICALLY LOOKING AT, UH, AVERAGE DAYS TO COMPLETE INVITATION TO BID, AND THEN BELOW THAT, UH, DAYS TO COMPLETE FORMAL REQUESTS, IT, IT SEEMS LIKE WE FELL SHORT OF OUR TARGETS THERE. UM, DO YOU, DO YOU THINK, WHAT IS THE ISSUE THERE? DO YOU THINK THEY LACK ENOUGH PERSONNEL TO MEET THESE TARGET DEADLINES? I MAY ASK, UM, JED TO HELP ME ANSWER THIS QUESTION, AND I THINK MAYBE HE CAN ALSO FOCUS ON SOME OF THE, UM, TECHNOLOGY TOOLS THAT WE'RE GONNA BE IMPLEMENTING TO ASSIST US AS WELL. YES, I, I SUBMITTED SOME QUESTIONS IN WRITING ALONG THOSE LINES TOO. I THINK ON THAT PERFORMANCE PAGE, IT LOOKS LIKE WE WERE KIND OF UPPING OUR GO OUR TARGET IN ONE AREA AND THEN FALLING SHORT IN THAT BOTTOM OF THE RFPS AND RFIS AND ALL THAT. SO IF YOU COULD ADDRESS THAT JUDGE. YEP. YEP. SO THE, THE NUMBER ONE THING THAT WE'RE LOOKING AT THAT'S GOING TO HELP US IS, IS THE NUMBER OF VOLUME OF PROJECTS. SO WHEN WE LOOK AT, UM, PROCUREMENTS THAT WE PUT OUT ABOUT 60 ON A MONTHLY BASIS, WHEN WE COMPARE THAT TO OTHER MAJOR CITIES, THAT'S SIGNIFICANTLY HIGHER. I THINK IT'S 38 IS THE NEXT ONE. SO WE'RE, WE'RE DOING SIGNIFICANT HIGHER VOLUMES. AND PART OF THAT IS THE PRECISE REASON THAT THE EY STUDY FOUND THAT WE HAVE MULTIPLE CONTRACTS OF THE SAME THING. SO WE ARE VERY TRANSACTIONAL IN, UM, MEETING THE NEEDS OF THE DEPARTMENTS WHERE NOW WE'RE SITTING BACK AND PULLING BACK TO BE MORE STRATEGIC. AND SO THE GOAL HERE IS REALLY TWO-PRONGED. ONE, IT'S THE, THE TOOLS WE'RE PUTTING IN PLACE IN TERMS OF AUTOMATION, UH, IN TERMS OF LOOKING AT THAT PROCESS AND, AND IDENTIFYING WHERE WE HAVE THE BIGGEST, UM, TIME CONSUMPTION IN THAT PROCESS. AND THEN IT'S REDUCING THE VOLUME. THAT'S GONNA BE OUR BIGGEST BANG WHERE WE'RE GONNA DRIVE THAT NUMBER DOWN TO WHAT OUR GOAL RANGE SHOULD BE, IS BY REDUCING THAT VOLUME OF PROJECTS COMING IN BY LAYERING 'EM ON TOP OF EACH OTHER. SO INSTEAD OF DOING SIX SEPARATE LANGUAGE SERVICE CONTRACTS, WE DO ONE. AND SO THAT'S A SIGNIFICANT REDUCTION FOR US. AND, AND I'M, I'M GLAD YOU BROUGHT THAT UP, JED. AND, AND I NOTICE FROM TIME TO TIME THAT INSTEAD OF REBIDDING OR PUTTING AN A CONTRACT OUT FOR BID, AGAIN, WE WILL SIMPLY RENEW AND RENEW AND RENEW. AND I SUPPOSE THAT'S RELATED TO THIS ISSUE AS WELL. YES. SO THERE, THERE'S TWO PARTS TO THAT. IF, IF WE CAN KEEP THE AGGRESSIVE PRICING ON A CONTRACT THAT WE DID FIVE YEARS AGO, WE'LL RENEW THAT IF, IF THE VENDOR WILL KEEP THAT PRICING. SO THAT'S STILL AN OPTION WE'LL LOOK AT. BUT ANOTHER BIG PIECE OF THAT IS BECAUSE OF THE TIME IT TAKES TO PROCURE THAT, WE NOW HAVE TO EXTEND THAT CONTRACT WHILE WE FINISH THE PROCESS. AND WHEN WE LOOK AT THAT RFP PROCESS, REALLY ONE OF THE BIGGEST TIME CONSUMPTIONS IS THE EVALUATION, BRINGING IN EVALUATORS TO, UM, READ THROUGH THE MATERIALS AND PROVIDE THAT, UH, RECOMMENDATION. SO WE ARE AGAIN, LOOKING AT TOOLS TO [00:40:01] AUTOMATE SOME OF THAT PROCESS, BUT ALSO LOOKING AT, UM, WAYS THAT WE CAN JUST MANAGE THAT PROCESS A LITTLE BIT BETTER NOW THAT WE'VE IDENTIFIED THE TIME THAT IT'S TAKING, YOU KNOW, WHERE THE BIG COMPONENTS, THAT'S WHERE OUR FOCUS IS NOW ON TRYING TO DRIVE THE PROCESS FOR CHANGE MANAGEMENT TO SAY, LET'S, LET'S, UH, COMMIT ALL EVALUATORS UP FRONT ON THE TIME. LET'S PUT THE SCHEDULE UP FRONT AND NOT TIME AS YOU GO, BECAUSE CALENDARS ARE, ARE SOMETIMES A CHALLENGE, UH, TO MONITOR, SO. UNDERSTOOD. THANK YOU. THANK, THANK YOU. COUNCIL MEMBER FLICKINGER. THANK YOU. THANK YOU FOR THE PRESENTATION. UM, CENTRAL SERVICE REVOLVING FUND, YOU SHOW A SIGNIFICANT INCREASE THERE ALWAYS HAVING CORRESPONDING OFFSETS IN THE INDIVIDUAL DEPARTMENTS WHERE THESE EMPLOYEES ARE CURRENTLY AT. SO WITH CENTRAL SERVICE REVOLVING FUND IN TERMS OF OFFSETS, UM, BASICALLY IN THE GENERAL FUND, YOU WON'T SEE THE DEPARTMENT'S BUDGET GO DOWN BY VERY MUCH BECAUSE THOSE INDIVIDUALS ARE GONNA BE MOVING FROM A PERSONNEL LINE TO A, A CHARGE BACK LINE, BASICALLY. SO THE GENERAL FUND IS GOING TO STAY RELATIVELY STABLE FOR THOSE INDIVIDUALS BECAUSE WE CONSOLIDATE VACANT POSITIONS AS WE DETERMINE WHICH VACANT POSITIONS WE MAY OR MAY NOT NEED, THEN YOU WOULD SEE THOSE COSTS GO DOWN THROUGHOUT THE FISCAL YEAR. IN THE REVOLVING FUND, YOU HAVE TO, WHENEVER YOU LOOK AT, WHEN WE TALK ABOUT THE $7 BILLION CITY BUDGET, WE SPECIFICALLY EXCLUDE THE REVOLVING FUND. 'CAUSE IF YOU INCLUDED ALL THE OTHER FUNDS AND THE REVOLVING FUND, YOU WOULD BE DOUBLE COUNTING THOSE COSTS. I'M NOT SURE IF I ANSWERED YOUR QUESTION. OKAY. BASICALLY, WE'RE NOT DOUBLE COUNTING, UM, THE COST OF THOSE INDIVIDUALS WE'RE BUDGETING FOR THEM IN THE FINANCE DEPARTMENT. THAT'S WHERE THEIR HEADCOUNT IS GONNA SHOW UP. BUT YOU SEE, UM, AND WE DO IT THAT WAY BECAUSE IF YOU WANNA UNDERSTAND THE FULL COST OF RUNNING AN HPD OPERATION, YOU WANNA SEE WHAT DOES IT, WHAT DOES IT COST TO DO THE IT SERVICES, WHAT DOES IT COST TO DO THE HR, THE FINANCE? SO THAT'S WHERE YOU'LL SEE IT. YOU'LL JUST SEE IT IN A NON-PERSONNEL LINE. SO THAT'S WHY WE IMPLEMENT THE REVOLVING FUND. OKAY. UM, THE COLLECTION RATE FOR EMS, WE WERE ALMOST 25% BETTER THAN 24 AND SIGNIFICANTLY BETTER THAN 25. ANYTHING THAT'S ATTRIBUTED TO, UM, SO ON THE, IS THIS, I JUST NEED SOME CLARIFICATION FROM THE TEAM. IF THIS IS BASED ON THE DOLLAR AMOUNT COLLECTED OR THE PERCENT OF, UM, PERCENT OF INVOICES WE'VE COLLECTED ON, I CAN TELL YOU THAT REVENUE FUND REVENUE ON EMS IS IMPROVED GREATLY IN 25. AND, UH, COMPARED TO THE PREVIOUS YEAR, WELL, SINCE OUR AMBULANCE RATES HAVEN'T CHANGED, I WOULD THINK DOLLAR OR PERCENTAGE SHOULD BE ABOUT THE SAME. SHOULD WE, THERE'S A SENATE BILL, UM, IN PLACE THAT ALLOWS US TO BE ABLE TO COLLECT MORE, UM, FROM PRIVATE INSURERS. UM, THAT, THAT BILL IS WHERE YOU SEE IN THE MONTHLY FINANCIAL REPORT WHERE WE RECENTLY RENT WENT UP BY, I THINK IT WAS AROUND $19 MILLION ON AMBULANCE REVENUE COMPARED TO WHAT WE HAD IN THE BUDGET, HAS ALLOWED US TO COLLECT MORE. UM, I'M NOT SURE IF THAT'S A COMPONENT OF THIS OR IF THIS IS JUST BASED ON THE NUMBER OF COLLECTIONS. YES, THAT'S, THAT'S CORRECT. OKAY. OKAY. THANK YOU. THANK YOU. UM, ALSO KIND OF ON THE REVERSE, COST PER INVOICE WAS UP SIGNIFICANTLY MM-HMM . YEAR OVER YEAR. ANY EXPLANATION FOR THAT? SO THIS IS, I'M GONNA LET KAREN EXPLAIN WHY IT WENT UP, BUT, UM, WHILE SHE'S COMING, THIS IS ONE WHERE I MENTIONED IN THE CIP IN A FUTURE PROJECT, WE WANT TO IMPLEMENT AN ELECTRONIC INVOICING SYSTEM SO THAT WE CAN BE MORE EFFICIENT IN, UM, PROCESSING THOSE INVOICES TO BRING THE COST PER INVOICE DOWN. BUT WE ARE CURRENT, THIS INCLUDES VACANCIES MM-HMM . AND THIS IS, WE ARE FULLY STAFFED RIGHT NOW. OKAY. AND THIS INCLUDES THE HOPE INCREASES. OKAY. SO THE, THANK YOU. SO THE REASON FOR THE INCREASE FROM 25 TO 26 IS THE 3.5%, UM, HOPE INCREASE, CONTRACTUAL INCREASE. SO OUR PERSONNEL COSTS ARE INCREASING IN ALIGNMENT WITH THOSE CONTRACTUAL RATES, BUT IT WAS A $7 INCREASE ON A $38 BASIS. THAT'S A WHOLE LOT MORE THAN MM-HMM . SO IN FY 24, WE DID HAVE, UM, QUITE A FEW VACANCIES THAT WERE NOT FILLED. UM, IN FY 25, WE FILLED A LOT MORE VACANCIES. SO THE DIFFERENCE BETWEEN THE 24 AND THE 25 IS WE HAVE, UM, HIGHER PERSONNEL COSTS ASSOCIATED WITH THAT PROGRAM ARE THE INCREASED NUMBER OF PEOPLE, OR THEY, DID THEY INCREASE [00:45:01] THE NUMBER OF INVOICES THEY PROCESSED? OR WE MIGHT HAVE TO GET BACK TO YOU ON THAT. OKAY. THANK YOU. APPRECIATE. SO IN GENERAL, THE WAY THE COST PER INVOICE COMPOSITION WORKS IS BASICALLY MOSTLY PERSONNEL. LIKE DIRECTORS MENTIONED FOR THE LAST COUPLE OF YEARS, WE HAVE HAD HOPE INCREASES. SO THAT INCREASE THE COST WHILE THE FTES DID NOT INCREASE, INCREASE, ACTUALLY, LIKE SHE MAY HAVE PRESENTED EARLIER, ONE FDE FOR F 5 26 IS GOING DOWN. SO THAT'S ONE REASON. THEN MORE TRANSACTIONS OR MORE INVOICES WOULD, OR LESS INVOICES OR CONSOLIDATION INVOICES WOULD ALSO HAVE AN IMPACT ON THE COST PER TRANSACTIONAL COST PER INVOICE. SO THAT'S A COMBINATION OF THOSE FACTORS AS RESULTED IN A LITTLE INCREASE, BUT NOT A SIGNIFICANTLY. AND THE OTHER ASPECT I WANNA MENTION IS, LIKE THE DIRECTOR MENTIONED EARLIER IN THE BEGINNING, IF WE MOVE TOWARDS DOWN THE ROAD, THE ELECTRONIC INVOICING, THEN WE COULD HAVE EVEN MORE EFFICIENCIES IN THE INVOICE PROCESSING AREA AND MAYBE EVEN REDUCE MORE FTS UN UNDERSTOOD. BUT THAT OBVIOUSLY DIDN'T IMPACT THE INCREASE FROM 24 TO 25. SO, SO WE STARTED WITH A SMALLER GROUP OF, UH, UH, DEPARTMENTS THAT WE WERE PROCESSING INVOICING OR THE AP FUNCTION, AND NOW WE HAVE GONE TO MORE DEPARTMENTS, AND SOME MORE DEPARTMENTS HAVE MORE COSTS RELATED TO THE PERSONNEL. THAT'S WHAT THE RESULT IS. SO THE, THE OTHER AREA THAT WE WANNA FOCUS ON THROUGH THE FINANCE CONSOLIDATION, THERE ARE THE DEPARTMENTS, SOME OF THE DEPARTMENTS THAT WE'RE CONSOLIDATING ARE DOING THEIR OWN, UH, INVOICE PROCESSING. SO, UH, WE'RE HOPING THAT WITH THE CONSOLIDATION, WE'RE GONNA BE ABLE TO, UM, YOU KNOW, BRING THOSE INDIVIDUALS IN, UM, HAVE THEM MORE FULLY TRAINED, UM, HELP THEM BE ABLE TO PROCESS THOSE INVOICES MORE QUICKLY, UM, TO REDUCE THE AMOUNT THAT WE'RE PAYING COST OF INVOICE. I KNOW THAT'S NOT REFLECTED IN THESE FIGURES, BUT THAT'S ONE OF THE ITEMS THAT WE'RE GONNA BE IMPLEMENTING GOING FORWARD. OKAY. AND THAT, AND THAT'S BECAUSE OF THE, RIGHT NOW THEY'RE SITTING IN A SEPARATE CENTRAL SERVICE FORM, UH, CALL CENTER. THAT'S WHY WE DON'T HAVE THAT YET. THANK YOU. COUNCIL MEMBER PLUMMER. THANK YOU. THANK YOU CHAIR, AND THANK YOU FOR YOUR PRESENTATION AND JUST THE EXAMPLE THAT YOU'RE SETTING FOR ALL, ALL THE OTHER DEPARTMENTS. I REALLY DO APPRECIATE, UM, HOW DETAILED ALL OF THIS IS. THANK YOU. UM, TWO QUESTIONS. I GUESS ONE WOULD BE FOR JED. UM, WE TALKED ABOUT THE TIME CONSUMPTION NECESSARY WHEN YOU'RE DOING YOUR BIDDING. I ALSO THINK THAT MORE OF A PROACTIVE PURCHASE, HOW ARE WE, HOW ARE WE LOOKING AT PROACTIVE PURCHASES VERSUS MORE EMERGENCY PURCHASES? I FIND THAT WHEN WE'RE DOING EMERGENCIES, WE'RE HAVING TO GET IT IN HERE. WE'RE, YOU KNOW, WE, WE KNOW HURRICANE SEASON'S COMING, FOR EXAMPLE. RIGHT? HOW DO WE PREPARE A BIT BETTER SO WE'RE NOT PAYING TOP DOLLAR FOR THINGS THAT WE KNOW WE'RE GONNA NEED ULTIMATELY. YEP. YEP. SO A COUPLE THINGS ON THAT. ONE IS WE'RE LOOKING AT THE PAST, UH, COUPLE YEARS OF, OF WHERE THOSE EPO EXPENDITURES HAVE COME FROM, AND THEN WORKING WITH THE DEPARTMENTS TO MAKE SURE CONTRACTS ARE IN PLACE, WHETHER THEY'RE PRE-POSITION CONTRACTS THAT WE ONLY NEED IN AN EMERGENCY, OR WHETHER IT'S BROADENING OUT OUR OPTIONS FOR, YOU KNOW, MULTIPLE. UM, THIS IS WHERE THE BALANCE, WE DON'T WANNA HAVE MULTIPLE CONTRACTS FOR EVERYTHING, BUT THERE MAY BE SOME THINGS IDENTIFIED AS WE LOOK AT THAT PAST, UH, EPO PURCHASING AND SAYING, IF THIS VENDOR CAN'T DELIVER BECAUSE THEY WERE IMPACTED BY THE STORM, WE DO NEED TO HAVE A SECONDARY, UH, VENDOR LINED UP. RIGHT? SO THIS IS WHERE THAT BALANCE COMES BETWEEN, WE DO WANT TO HAVE THE PRIMARY VENDOR, SO WE GET THE VOLUME DISCOUNTS IN A NORMAL YEAR, BUT WE NEED TO HAVE THIS NEGOTIATED CONTRACT READY IN A PRE-POSITIONED, UH, MANNER SO THAT WE CAN ACTIVATE IT WHEN A DISASTER COMES. OKAY. AND THEN, AND SPEAKING OF VOLUME PURCHASES, UH, IS, IS IT TRUE THAT I'M JUST GONNA, I'M JUST GONNA USE A GRAINGER, FOR EXAMPLE. UM, WE GET A VOLUME DISCOUNT ON CERTAIN PRODUCTS, BUT IT'S NOT VOLUME ON EVERYTHING. IS, IS IT VOLUME ACROSS THE BOARD? IS IT VOLUME DISCOUNT ACROSS ON EVERY SINGLE ITEM THAT WE'RE PURCHASING FROM THEM? SO TYPICALLY UNDER THE REBATE STRUCTURE THAT WE'RE NOW, UH, ADDING TO PART OF OUR NEGOTIATIONS, IT WOULD BE ACROSS THE BOARD. SO IF WE MEET LIKE THE, THE STAPLES CONTRACT THAT WE JUST BROUGHT, THE MAXIMUM AMOUNT OF REBATE THAT I CAN GET IS 6%. OKAY. AND THOSE, THERE'S CERTAIN THRESHOLDS THAT WE GET. SO AS WE COMBINE, UH, CONTRACTS TOGETHER, IT ALLOWS THAT TO GO UP. OKAY. GOT IT. AND THEN ARE WE, UM, ANY OF THIS PROCUREMENT? ARE WE, WHAT, WHAT NEW SYSTEM ARE WE USING NOW FOR PROCUREMENT SYSTEM? WE'RE NOT USING, UM, ARIBA ANYMORE. WE DO, SO ARIBA IS ALL OF OUR, OUR BACKGROUND PIECE. OKAY. UH, AND OUR, OUR INVOICING AND OUR SUPPLIER REGISTRATION, BUT WE HAVE, UH, THE PUBLIC FACING, WHICH IS, UH, CALLED BEACON BID BEACON BID. OKAY. THAT'S WHAT YOU SEE WHEN YOU'RE ON OUR WEBSITE. UH, THERE'S SOME, UH, YOU KNOW, SOME FUNCTIONALITY, UH, THINGS THAT [00:50:01] WE MOVED TO THAT ONE BECAUSE IT WAS BETTER FOR OUR VENDOR COMMUNITY, HEARING SOME OF THE FEEDBACK FROM THEM. BUT, BUT ARIBA IS OUR, OUR TOOL THAT ALLOWS US TO MANAGE IN THE BACKGROUND THAT TOUCHES TO SAP. SO IT'S A, IT'S A COMBINATION OKAY. OF BOTH SYSTEMS WORKING TOGETHER. GOTCHA. PERFECT. PERFECT. PERFECT. OKAY. THANK YOU SO MUCH. ABSOLUTELY. I APPRECIATE IT. THEN THE OTHER QUESTION, UM, DIRECTOR WOULD BE ABOUT THE EMS, UM, I DO UNDERSTAND THAT WE WERE ABLE, WE WERE ABLE TO GO TO THE STATE AND GET HIGHER, UH, REIMBURSEMENT ON THE PRIVATE SIDE, BUT I ALSO UNDERSTAND THAT THERE'S SO MANY YEARS THAT GO BY WHEN WE CAN ACTUALLY CHALLENGE THE MEDICARE, MEDICAID, UM, REIMBURSEMENT. WHERE ARE WE WITH THAT? SO I KNOW ONE THING, UM, INCREASE REIMBURSEMENT RATHER MM-HMM . SO I KNOW ONE THING THAT EVEN WHEN WE LOOK AT OUR OWN COST OF SERVICE STUDY, OUR, OUR FEE STUDY THAT WE DO ANNUALLY BECAUSE OF THE STATE LEGISLATION THAT PASSED A COUPLE SESSIONS AGO, WE'RE NOT ABLE TO REFRESH OUR OWN COST OF SERVICE STUDY UNTIL SEPTEMBER. MM-HMM . UNTIL SEPTEMBER. UM, BASED ON THE, THE WAY THE LAW'S CURRENTLY WORDED. PERFECT. SO SEPTEMBER, SO WE'LL GO BACK IN SEPTEMBER AND WE'LL REEVALUATE WHAT THAT REIMBURSEMENT LOOKS LIKE ON THE MEDICARE MEDICAID UN, UNLESS THERE'S ANOTHER LAW CHANGE WITH THE BILL. THERE IS A PENDING BILL IN THE LEGISLATURE. OKAY. YEAH. THAT COULD AFFECT THAT. AND THAT'S NOT ONLY FOR PRIVATE INSURANCE, IT'S FOR MEDICARE, MEDICAID AS WELL. IT'S FOR, IT'S FOR BOTH. MM-HMM . OKAY. THANK YOU FOR ALL. OKAY. PERFECT. THANK YOU. OH, AND THEN WHAT, I'M SORRY, CHAIR, GO AHEAD. AND THEN, AND THEN WHO MANAGES REIMBURSEMENT? WHO, WHO MANAGES THE, THE FINANCIAL PART OF IT? SO IS THAT IN THE DEPARTMENT OR IS THAT IN FINANCE? SO WE WORK COLLECTIONS. YEAH, WE WORK VERY GOOD. THE FINANCE DEPARTMENT HANDLES FINANCE FOR THE FIRE DEPARTMENT. OKAY. BUT WE WORK VERY CLOSELY WITH FIRE ON IT. SO WE HAVE A, UH, WE, WE HAVE A CONTRACT THAT'S IN THE FINANCE DEPARTMENT THAT HANDLES THAT COLLECTION. SO THE FINANCE DEPARTMENT REALLY TAKES THE LEAD. GOT IT. OKAY. THANK YOU SO MUCH. THANK YOU. I NEGLECTED TO ACKNOWLEDGE COUNCIL MEMBER MARTINEZ JOINED US SOME TIME AGO. COUNCIL MEMBER CARTER. THANK YOU, CHAIR. I JUST WANTED TO SAY THANK YOU FOR YOUR PRESENTATION AND, AND EXCITING GOOD NEWS. IT, IT LOOKS LIKE, LIKE REAL BUSINESS NOW, SO IT'S REALLY GREAT. AND ALSO TOO, UH, YOU KNOW, I KNOW A LOT OF WORK HAS GONE INTO EVERYTHING AND, AND GETTING THIS BUDGET, UH, PINNED DOWN. BUT, UH, JUST WANNA SHOUT OUT TO JED. WE SPENT A FEW, PROBABLY 45 MINUTES A COUPLE WEEKS AGO ON THE PROCUREMENT SYSTEM AND, YOU KNOW, LOOKING AT THE STAPLES AND HOW CAN YOU BUY A, YOU KNOW, A REAM OF PAPER OVER HERE AND OVER HERE IT'S CHEAPER AND ALL THAT. I WOULD ENCOURAGE ANY OF YOU TO ASK THOSE QUESTIONS TO JED BECAUSE IT'S, THEY'VE DISCOVERED A WHOLE NEW BUCKET OF FOUND MONEY AND IT'S, IT'S REALLY EXCITING TO SEE. AND I HOPE THAT IS CONTAGIOUS ACROSS THE CITY. SO THANK YOU FOR ALL YOUR WORK. THANK YOU. COUNCIL MEMBER RAMIREZ. THANK YOU, MADAM CHAIR. UH, DIRECTOR, COUPLE QUESTIONS ABOUT ENERGY MANAGEMENT. MM-HMM . I NOTICED YOU HAVE TWO FTES MM-HMM . DEALING WITH THAT. AND THE, THE NUMBERS ARE, CAN ACTUALLY BE FOUND IN THE GENERAL SERVICES, UH, PORTION OF THE BIG, BIG BUDGET BOOK. BUT IT LOOKS LIKE, UH, WE'LL BE SPENDING $38 MILLION MORE, UH, THIS COMING YEAR BECAUSE ELECTRICITY COSTS ARE HIGHER, EVEN THOUGH NATURAL GAS PRICES ARE LOWER BY 56%. MM-HMM . IS THERE ANY WAY THAT WE CAN SAVE SOME OF THAT MONEY BY CONVERTING, UH, FROM USING ELECTRICITY TO NATURAL GAS? SO, YOU'RE RIGHT, WHEN YOU SAY NATURAL GAS IS LOWER, WHEN WE'RE WORK, WHEN WE'RE, AS WE'RE GOING THROUGH AND LOOKING AT THE PRICING FOR THE ELECTRICITY FOR NEXT YEAR, IT CERTAINLY IS RELATED TO THE PRICE OF NATURAL GAS. UM, WE SEE WHEN NATURAL GAS PRICES DECREASE, THE ELECTRICITY RATES DECREASE. UM, IN TERMS OF, CAN, CAN YOU HELP ME UNDERSTAND YOUR QUESTION A LITTLE BIT MORE ABOUT CONVERTING FROM ELECTRICITY TO NATURAL GAS? WELL, IS, IS THERE A WAY TO USE MORE NATURAL GAS FOR POWER AND LESS ELECTRICITY? BECAUSE ACCORDING TO THE BIG BOOK HERE, IT SAYS THE ELECTRICITY BUDGET IS 33% HIGHER DUE TO INCREASED ELECTRICITY COST, AND YET THE, THE NATURAL GAS BUDGET IS 56% LOWER DUE TO LOWER NATURAL GAS COSTS. SO CAN WE TAKE ADVANTAGE OF THAT PRICE DIFFERENTIAL AND USE MORE NATURAL GAS AND LESS ELECTRICITY? I'M DEFINITELY NOT A BUILDING SYSTEMS EXPERT, BUT I FEEL LIKE THAT MIGHT BE, I MEAN, WE CAN CERTAINLY TALK TO GENERAL SERVICES ABOUT THAT. THAT MIGHT BE SOMETHING THAT MIGHT REQUIRE, UH, UPFRONT, UM, INVESTMENT IN INFRASTRUCTURE CHANGES TO HOW OUR BUILDINGS CONSUME ENERGY, UH, TO BE ABLE TO REALIZE SAVINGS ON THE, ON THE OTHER END. BUT, UM, IT'S DEFINITELY SOMETHING I COULD, I COULD TALK TO GENERAL [00:55:01] SERVICES ABOUT. WONDERFUL. THANK YOU. THANK YOU. COUNCIL MEMBER FLICKINGER, TO KIND OF FOLLOW UP ON THE INVOICE PROCESSING, TIMELY PAYMENT DISCOUNTS, ANY IDEA OF WHAT PERCENTAGE OF THE INVOICES WE RECEIVED THAT DISCOUNT? YEAH. OKAY. I THINK WE'RE GONNA HAVE TO FOLLOW UP WITH YOU ON THE SPECIFICS OF THE YEAH. OKAY. WE HAVE, THERE'S LATE PAYMENT FEES AND THEN THERE'S TIMELY PAYMENT DISCOUNTS. SO THERE'S KIND OF TWO, TWO PIECES I THINK TO THAT. OKAY. AND WHEN YOU DO FOLLOW UP, IF YOU COULD GIVE ME KIND OF THE YEAR OVER YEAR THAT ON HOW WE ARE WITH THAT AS WELL. MM-HMM . MM-HMM . UM, THE RECENT, UM, I GUESS VOLUNTARY BUYOUTS THAT WE'VE HAD, DO WE HAVE ANY IDEA OF WHAT THE EXIT PAY IS SPECIFICALLY TO VACATION AND SICK DAYS THAT WE'RE PAYING OUT CITYWIDE? YEAH. UM, SO, UH, WHEN WE BROUGHT THE GENERAL APPROPRIATIONS ITEM TO COUNCIL A COUPLE WEEKS AGO, UH, IN THE GENERAL FUND, UM, HOLD ON. I HAVE THAT IN MY BOOK IF I REMEMBER CORRECTLY. WE HAD THE BIG NUMBERS TO WHAT THAT WAS, WAS, I DON'T REMEMBER SEEING THAT. YEAH. IT WAS ABOUT, IT WAS ABOUT $11 MILLION THAT INCLUDED THE THREE MONTH INCENTIVE AND THE TERMINATION PAY COMPONENT. IT WAS PARTIALLY OFFSET, ABOUT HALF OF IT WAS OFFSET WITH VACANCY SAVINGS THAT THE DEPARTMENTS HAD. UH, BUT I WOULD HAVE TO, I, I DON'T HAVE THE BREAKDOWN BETWEEN THE INCENTIVE PAYMENT AND THE TERMINATION PAY HANDY, SO I WOULD HAVE TO FOLLOW UP WITH THAT, BUT IT'S $11 MILLION FOR THE GENERAL FUND. YEAH. AND I REMEMBER SEEING THE TOTAL. YEAH. BUT IF I COULD GET THE SICK DAY AND VACATION, I'D LOVE TO SEE THAT AT SOME POINT IN TIME. MM-HMM . AND, OH, THE AMBULANCE FEES, IT WAS MY UNDERSTANDING THAT THE MEDICARE REIMBURSEMENTS WERE DRIVEN LARGELY BY WHAT WAS CONSIDERED, UM, USUAL AND CUSTOMARY. IS THAT CORRECT? CAN YOU REPEAT THE QUESTION ABOUT THE USUAL AND CUSTOMARY THAT THE MEDICARE REIMBURSEMENT RATES WERE DRIVEN BY WHAT WAS CONSIDERED USUAL AND CUSTOMARY FOR OUR AREA. I CAN YOU, I KNOW WE'RE GONNA, UM, COMPILE A LOT OF THESE QUESTIONS IN WRITING. WOULD YOU MIND INCLUDING THAT ONE ON THE LIST? I WANNA MAKE SURE THAT WE'RE WE CLEARLY ANSWERING YOUR QUESTIONS? THE POINT IS, I BELIEVE FOR OUR REGION THAT THEY LOOK AT, WE ARE PRETTY MUCH THE DRIVER OF WHAT IS USUAL AND CUSTOMARY. UM, THEREFORE, AS OUR RATES INCREASE, USUAL CUSTOMARY INCREASES AS WELL FOR OUR REGION. SO IF, IF WE'RE NOT COLLECTING WHAT IT'S ACTUALLY OUR ACTUAL COSTS ARE, IF WE MIRRORED THAT, WE'D ACTUALLY NOT ONLY GET MORE FOR THAT, BUT ACTUALLY GET MORE FROM THE REIMBURSEMENT AS WELL. WELL, AND THAT'S ONE THING THAT I KNOW WE'RE LOOKING AT WHEN WE WERE TALKING WITH COUNCIL MEMBER PLUMMER ABOUT WHEN CAN WE REVISIT, UH, LOOKING AT OUR FEE STUDY AND OUR RATES WITH THE CONTRACTUAL INCREASES WITH THE FIRE CONTRACT, WHEN CAN WE START TO BUILD THOSE COSTS INTO OUR FEE? UM, SO IS THAT THE, WELL, ESSENTIALLY THAT WE NEED TO MAKE SURE THAT WE ARE CHARGING WHAT OUR COSTS ARE. MM-HMM . MM-HMM . AND THAT WILL ALSO DRIVE AN INCREASE IN REIMBURSEMENTS FROM THE FEDERAL GOVERNMENT. AND, AND THE WAY I UNDERSTAND IT, BASED ON THE WAY THE STATE LAW IS, UM, RELATED TO THE, WHEN WE CAN UPDATE THOSE FEES, AS OF NOW, WE CAN'T UPDATE THEM UNTIL SEPTEMBER. SO, UM, AND PENDING LEGISLATIVE CHANGE. SO, UM, YEAH, IT'S, IT'S DEFINITELY SOMETHING WE'RE LOOKING AT. THANK YOU. THANK YOU. THANK YOU, DIRECTOR. AND, AND I'LL REMIND MY COLLEAGUES THAT YOU CAN SUBMIT QUESTIONS, YOU KNOW, IF YOU DON'T GET THE FULL ANSWER, WE'RE TAKING, WE'RE TAKING COPIOUS NOTES HERE, BUT IF YOU DON'T GET THE FULL ANSWER, IF YOU NEED MORE DETAILS, UM, PLEASE SUBMIT 'EM VIA SHAREPOINT. I SUBMITTED SOME QUESTIONS LAST NIGHT ON SHAREPOINT FOR THE FINANCE DEPARTMENT. IT'S A GREAT WAY TO GET A REALLY THOROUGH ANSWER BACK, BUT I ALSO UNDERSTAND THE, THE NEED TO ASK IN PUBLIC AS WELL. UM, I DID SUBMIT SOME QUESTIONS, SO I WON'T BELABOR IT, BUT I DID WANNA JUST CHECK WITH YOU, UM, DIRECTOR ON, IN THE MANAGEMENT SAVINGS DUE TO THE CONTRACT PROCUREMENT, THAT EY EFFORT THAT WE'RE DOING. MM-HMM . MM-HMM . IS THAT REFLECTED IN THE GENERAL GOVERNMENT, UH, SECTION, THE MANAGEMENT SAVINGS, 17 MILLION? YES. OKAY, GREAT. OKAY. UM, ANY PUBLIC SPEAKERS, UM, FOR THE FINANCE DIRECTOR, ANY, ANYBODY ONLINE? ANYBODY WANNA TALK TO ALYSSA BASKET? GONZALES. OH, VALERIE GONZALEZ. SHE'S NOT ONLINE, BUT SHE SIGNED UP, BUT NOT ONLINE. IT DOESN'T LOOK LIKE, SO ANYBODY ELSE? [01:00:02] OKAY. FIRST ONE IN THE BOOKS. GUYS, THANK YOU VERY MUCH. OH MY GOSH. OH MY GOODNESS. GRACIOUS . OH MY GOSH, YOU GUYS ARE EMBARRASSING ME. I HEARD THE MAYOR SAY IT WITH MY VERY OWN EARS. MELISSA DEBOSKY, THE BEST FINANCE DIRECTOR IN AMERICA, . YOU GUYS ARE HILARIOUS. HOLD ON, I'M GONNA TAKE A PICTURE FOR MY INSTAGRAM. HOLD ON. I'M UNWELL THAT SO. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.