[00:00:10] COMMISSIONERS COURT SPECIAL AGENDA FOR THURSDAY, JUNE 25TH, 2026 AT 9 A.M.. LET THE RECORD SHOW IT IS 9 A.M.. WE DO HAVE A QUORUM AND WE WILL PROCEED WITH UNDER ITEM ONE APPROVAL ON THE DISCUSS. [I.A. Discuss/Take action on Resolution 26-27 to appoint primary and alternate representatives to the Regional Transportation Council (RTC) for the upcoming two-year term. (Judge Deen)] TAKE ACTION RESOLUTION 26-27 TO APPOINT PRIMARY AND ALTERNATE REPRESENTATIVES TO THE REGIONAL TRANSPORTATION COUNCIL FOR THE UPCOMING TWO YEAR TERM. THIS I WENT TO THE WEATHERFORD COUNCIL MEETING AND THERE WAS SOME NUMBERS THAT WERE BROUGHT OUT. YOU DO HAVE A COPY OF THIS OF THE RESOLUTION OF THE LAST 24 MONTHS THERE HAS BEEN TWO THREE EXCUSED ABSENCES AND THEN ONE UNEXCUSED ABSENCES. SO BASICALLY 23 OUT OF THE 24 MONTHS I HAVE BEEN IN ATTENDANCE TO THAT. SO THE RECORD OF THE ATTENDANCE IS, IS, IS ACCEPTABLE. AND GIVEN THE TRANSPORTATION BOND, THE UPCOMING PENDING BOND. AND IN TALKING TO MIKE MORRIS, OBVIOUSLY, I THINK THE NEXT TWO YEARS, I THINK THAT THAT SEAT NEEDS TO CONTINUE TO STAY MAINTAINED BY PARKER COUNTY WITH A VERY COMPETENT COUNTY JUDGE WITH JD CLARK AS THE ALTERNATIVE AND THEN THE ALTERNATE, AND THEN AFTER THAT, THEN IT WILL ROTATE AND REVERT BACK ON A 70/30 SPLIT BETWEEN BASED ON THE POPULATIONS OF EACH. BUT I WOULD ASK FOR YOUR SUPPORT ON THIS TO CONTINUE THE PROGRESSION THAT WE'RE HAVING AND CONTINUE THE DIRECTION THAT WE'RE GOING ON OUR TRANSPORTATION. THEN I MOVE TO I MOVE TO APPROVE RESOLUTION 26-27 TO APPOINT THE REPRESENTATIVES TO THE REGIONAL TRANSPORTATION COUNCIL. OKAY. THAT MOTION ALSO INCLUDES JD CLARK AS THE ALTERNATE. YES. MOTION MADE BY COMMISSIONER WALDEN, SECONDED BY COMMISSIONER HOLT. IS THERE DISCUSSIONS. ALL IN FAVOR? THANK YOU, GENTLEMEN, FOR YOUR CONFIDENCE AND TRUST AGAIN. I THINK WE GOT A LOT OF WORK AHEAD OF US ON THAT, AND I'M COMMITTED TO EVERYTHING AND GETTING EVERY PENNY WE CAN ON THE CONTRIBUTIONS THAT WE'RE ABLE TO GET RIGHT NOW. AND I'LL CONTINUE TO KEEP YOU ALL UPDATED AS WE GO FORWARD. THANK YOU. MOVE TO ITEM B PRESENTATION APPROVAL OF 2025 ANNUAL FINANCIAL REPORT BY WEAVER AND TIDWELL. [I.B. Presentation and approval of 2025 Annual Financial Report by Weaver and Tidwell. (Brianna Fowler/ Judge Deen)] BREANNA, IF YOU WOULD. GOOD MORNING. WE ARE HERE TO PRESENT THE FISCAL YEAR 2025 FINANCIAL STATEMENT AUDIT. THE PRESENTATION WILL BE LED BY GREG PETERSON, WHO IS THE PARTNER ON THE ENGAGEMENT. HE'S GOING TO GO THROUGH THE AUDIT PROCESS THAT WAS USED TO CONDUCT THE AUDITS GO THROUGH THE RESULTS OF THE AUDIT AND THEN GO THROUGH THE FINANCIAL HIGHLIGHTS OF THE GOVERNMENTAL FUNDS. THIS WILL INCLUDE THE BUDGET AND ACTUALS FOR THE GENERAL FUND AS WELL AS LATERAL ROAD. AND THEN WE'LL OPEN UP FOR ANY QUESTIONS. BUT AGAIN, ALONG THE WAY, IF YOU HAVE ANYTHING, PLEASE ASK. SO, GREG. GOOD MORNING. GOOD MORNING. MY NAME IS GREG PETERSON. AUDIT PARTNER FOR THE FOR THE AUDIT. AND IT'S MY PLEASURE TO COME PRESENT THE RESULTS OF THE SEPTEMBER 30TH, 2025 AUDIT. AS BRIANNA MENTIONED, WE JUST HAVE A SHORT AGENDA TO GO OVER OUR AUDIT PROCESS RESULTS, HIGHLIGHTS. AND THEN OBVIOUSLY WE'LL OPEN IT UP FOR DISCUSSION. BUT IF Y'ALL HAVE ANYTHING ALONG THE WAY, JUST STOP ME AND WE CAN TALK ABOUT IT. SO OUR AUDIT WAS CONDUCTED IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS AS WELL AS GOVERNMENT AUDITING STANDARDS. BECAUSE YOU'RE A GOVERNMENTAL ORGANIZATION, YOU RECEIVE PUBLIC FUNDS. WE'RE REQUIRED TO DO THIS AUDIT UNDER GOVERNMENTAL AUDITING STANDARDS AS WELL. IT'S JUST ANOTHER LAYER OF AUDITING STANDARDS ON TOP OF GENERALLY ACCEPTED AUDITING STANDARDS, BECAUSE THE COUNTY EXPENDS OVER $1 MILLION IN IN FEDERAL AWARDS AND STATE AWARDS. WE ALSO CONDUCT A STATE AND FEDERAL SINGLE AUDIT. WE CONDUCT THOSE AUDITS UNDER THE UNIFORM GUIDANCE AND THE TEXAS GRANT MANAGEMENT STANDARDS. WE DO PERFORM A RISK BASED APPROACH AUDIT WHERE WE AT THE BEGINNING, WE PLAN THE AUDIT AND WE IDENTIFY AREAS THAT WE THINK COULD BE SUSCEPTIBLE TO RISK. AND THEN WE PERFORM PROCEDURES TO TEST THOSE AREAS TO SEE IF WE HAVE ANY FINDINGS. SOME OF THESE RISKS ARE JUST INHERENT WITHIN ALL AUDIT WITHIN ALL GOVERNMENT ORGANIZATIONS. AND THAT WOULD BE MANAGEMENT OVERRIDE OF INTERNAL CONTROLS AND REVENUE RECOGNITION. HAPPY TO SAY THAT WE DID PERFORM PROCEDURES OVER THOSE AREAS AND DID NOT IDENTIFY ANY FINDINGS IN THOSE AREAS. PART OF THE AUDIT IS THE STATEMENTS INCLUDE ESTIMATES. THE ESTIMATES THAT WE EVALUATE DURING OUR TESTING WOULD BE AN ALLOWANCE FOR DOUBTFUL ACCOUNTS FOR YOUR PROPERTY TAX RECEIVABLES, YOUR HEALTHCARE IBNR WHICH IS INCURRED BUT NOT REPORTED, AND YOUR PENSION AND OPEB LIABILITIES, WHICH WOULD BE YOUR RETIREMENT LIABILITIES. WE ALSO GO BEYOND THE NUMBERS OF JUST TESTING THE NUMBERS. [00:05:06] WE ALSO EVALUATE THE COUNTY'S INTERNAL CONTROLS OVER FINANCIAL REPORTING AND COMPLIANCE. AND WE ALSO TEST COMPLIANCE OVER THOSE MAJOR FEDERAL AND STATE PROGRAMS THAT WE'RE TESTING. SO THE WHOLE PURPOSE OF THE AUDIT IS FOR THE AUDITOR TO RENDER AN OPINION ON THE FINANCIAL STATEMENTS. WE ISSUE SEVERAL REPORTS AS PART OF THIS PROCESS. ONE OF THOSE REPORTS BEING A REPORT ON THE FINANCIAL STATEMENTS AND OUR OPINION ON THOSE FINANCIAL STATEMENTS IS UNMODIFIED. SO THAT'S ALSO KNOWN AS A CLEAN OPINION. HIGHEST LEVEL OF ASSURANCE THAT YOU CAN RECEIVE IN AN AUDIT. AS I MENTIONED, WE DO MORE THAN JUST LOOK AT THE NUMBERS. WE ALSO EVALUATE INTERNAL CONTROLS OVER FINANCIAL REPORTING. AND WE DID NOT IDENTIFY ANY MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES IN INTERNAL CONTROLS. AS ALSO MENTIONED, WE CONDUCTED A FEDERAL SINGLE AUDIT. AGAIN, OUR OBJECTIVE IS TO RENDER AN OPINION. WE ARE RENDERING AN UNMODIFIED OPINION. AGAIN THE HIGHEST LEVEL OF ASSURANCE YOU CAN RECEIVE. WE TEST BOTH COMPLIANCE AND INTERNAL CONTROLS OVER COMPLIANCE. WE DID NOT IDENTIFY ANY NONCOMPLIANCE, NOR DID WE IDENTIFY ANY MATERIAL WEAKNESSES OR SIGNIFICANT DEFICIENCIES OVER COMPLIANCE. THE COUNTY CONTINUES TO REMAIN A LOW RISK AUDITEE. YOU GET THAT DESIGNATION BECAUSE YOU HAVEN'T HAD ANY NONCOMPLIANCE OR INTERNAL CONTROL FINDINGS FOR THE PAST TWO YEARS. AND THEN THE, THE FINAL REPORT THAT WE ISSUE IS PART OF THIS AUDIT IS THE REPORT ON THE STATE SINGLE AUDIT. AGAIN, WE'RE GOING TO ISSUE AN UNMODIFIED OPINION AS PART OF THAT PROCESS. WE DID NOT IDENTIFY ANY NONCOMPLIANCE OR ANY FINDINGS OVER INTERNAL CONTROLS AS A COMMISSIONERS COURT. I MEAN THOSE THOSE ARE THE BEST WORDS YOU WANT TO HEAR. UNMODIFIED OPINIONS. NO FINDINGS AND INTERNAL CONTROLS. YOU KNOW, EFFECTIVELY THAT'S WHAT YOU WOULD CALL A VERY CLEAN AUDIT. NEXT WE'LL GO OVER SOME OF THE FINANCIAL HIGHLIGHTS. WE'VE TAKEN THIS 150 PAGE DOCUMENT. I'VE SHRUNK IT DOWN TO JUST A COUPLE OF SLIDES HERE. SO WE'LL JUST TALK VERY HIGH LEVEL. BUT YOU KNOW, IF Y'ALL HAVE ANY QUESTIONS ALONG THE WAY, JUST JUST GIVE ME A SHOUT. SO WHAT WE'RE LOOKING AT HERE IS THE TOTAL GOVERNMENTAL FUNDS FOR THE COUNTY. ON THE FAR RIGHT, YOU CAN SEE THAT YOU HAVE TOTAL ASSETS OF 209.5 MILLION. TOTAL LIABILITIES OF 26.5 MILLION. DEFERRED INFLOWS OF 1.3 MILLION. WITH AN ENDING FUND BALANCE OF 181.6 MILLION. SO FUND BALANCE WOULD EFFECTIVELY BE THE EQUITY THAT REMAINS WITHIN THOSE FUNDS. I DO WANT TO JUST POINT OUT WE'LL KIND OF TALK ABOUT SOME OF THESE SPECIFIC FUNDS HERE. SO THE GENERAL FUND IS A PRIMARY OPERATING FUND OF THE COUNTY. ALL THE OTHER FUNDS ARE KIND OF DESIGNATED FOR A SPECIAL PURPOSE. THE GENERAL FUND JUST DOES THE THE THE OVERALL OPERATIONS. TOTAL ASSETS OF $55.6 MILLION. OBVIOUSLY PLENTY OF ASSETS TO COVER YOUR CURRENT LIABILITIES OF $4.5 MILLION WITH A NET FUND BALANCE OF 49.9 MILLION. AND THEN I WANTED TO POINT OUT THE CAPITAL PROJECT ROAD FUND ENDING AT $94.6 MILLION. A LOT OF THAT IS FROM PRIOR YEARS BOND ISSUANCE. SO THAT'S UNSPENT BOND PROCEEDS FALL DOWN TO THE BOTTOM LINE AND EQUATE TO YOUR FUND BALANCE. AND THEN I WANTED TO POINT OUT THE ARPA FUNDING OF $6.5 MILLION SO THAT FUNDING IS AVAILABLE TO BE SPENT THROUGH DECEMBER OF 26. SO YOU HAVE UNTIL DECEMBER OF, OF THIS, OF THIS CALENDAR YEAR TO, TO SPEND THOSE REMAINING FUNDS BELOW THE BALANCE SHEET. WE HAVE THE, THE INCOME STATEMENT SIDE AGAIN, TO THE FAR RIGHT, TOTAL, TOTAL GOVERNMENTAL REVENUES OF 140 MILLION. TOTAL EXPENDITURES OF MINIATURES OF 138.4 MILLION. OTHER FINANCING SOURCES OF 1.8 MILLION, WITH A NET CHANGE IN FUND BALANCE OF 3.5 MILLION. AGAIN, LOOKING AT YOUR GENERAL FUND, YOU ADDED $4.8 MILLION TO FUND BALANCE FOR THE CURRENT YEAR, AND WE'LL LOOK AT THAT A LITTLE BIT CLOSER WHEN WE FLIP OVER TO THE BUDGET, TO ACTUAL SCHEDULES. YOUR LATERAL ROAD FUND ADDED $2.8 MILLION. YOUR CAPITAL PROJECT FUND HAD A DECREASE OF $5.5 MILLION IN FUND BALANCE, AS WOULD BE EXPECTED. YOU KNOW, THAT'S JUST KIND OF THE THE NATURE OF THAT FUND. YOU ISSUE BONDS, YOU USE THAT MONEY TO GO PURCHASE EQUIPMENT, DO PROJECTS. SO YOU WOULD ANTICIPATE THAT THAT MONEY GETTING SPENT AND SEEING A DECREASE IN FUND BALANCE OVER TIME AS THAT MONEY IS BEING SPENT. WHAT THIS SLIDE DOES IS IT TAKES IT LOOKS AT YOUR FUND BALANCE BY CATEGORY. SO ALL THOSE NUMBERS THAT WE SAW IN FUND BALANCE, WE JUST BRING IT OVER TO THIS NEXT SLIDE AND WE SHOW YOU THE VARIOUS CATEGORIES OF FUND BALANCE. THE ONE I WANTED TO POINT OUT HERE IS THE GENERAL FUND. YOU KNOW, WE LOOK AT FUND BALANCE CLASSIFICATIONS AND THEY GO FROM THE MOST RESTRICTED AT THE TOP TO THE, [00:10:03] TO THE LEAST RESTRICTED AT THE BOTTOM. ULTIMATELY THAT UNASSIGNED IS JUST WHAT'S AVAILABLE FOR, FOR NEXT YEAR'S OPERATIONS. SO THE GENERAL FUND HAS $48 MILLION OF UNASSIGNED FUND BALANCE, WHICH IS EFFECTIVELY AVAILABLE FOR THE NEXT YEAR'S OPERATIONS. SO THAT'S ABOUT FIVE MONTHS OF OPERATIONS THAT COULD BE USED TOWARDS THIS 26 BUDGET. YOU KNOW, MOST, MOST GOVERNMENTS, THEY'RE, THEY'RE LUCKY TO GET THREE MONTHS OF OPERATIONS ARE AT FIVE MONTHS. SO Y'ALL DO HAVE A VERY HEALTHY GENERAL FUND FUND BALANCE. WHICH IS A GREAT PLACE TO BE. YOU KNOW, WHEN YOU TRY TO ISSUE BONDS THOSE RATING AGENCIES LOOK AT THE FINANCIAL HEALTH OF YOUR ORGANIZATION. THEY LIKE TO SEE A HEALTHY GENERAL FUND FUND BALANCE. THEY LIKE TO SEE A GOOD TAX BASE. CAN I, CAN I PAUSE YOU FOR JUST A SECOND ON THAT? SO ON, ON THE ONE END OF THE SPECTRUM, LIKE YOU SAID, A HEALTHY FUND BALANCE IS A LOT BETTER THAN A TEN DAY FUND BALANCE. ON THE OTHER END OF THE SPECTRUM, THE LARGER THAT FUND BALANCE IS, THOSE ARE EFFECTIVELY CAPTURED TAX DOLLARS OUT OF CITIZENS POCKETS THAT ARE NOT BEING PRESENTLY USED. SO CLEARLY, THERE'S A TENSION THERE BETWEEN WE WANT TO HAVE A HEALTHY FUND BALANCE, BUT WE DON'T WANT TO BE SITTING ON SO MUCH THAT'S BEEN TAKEN FROM PROPERTY TAXES VIA PROPERTY TAXES THAT IS NOT CURRENTLY USED. DO YOU HAVE ANY TYPE OF RECOMMENDATION AS TO WHERE THAT SHOULD BE OR WHERE YOU SEE A A HEALTHY RANGE? BECAUSE I'VE HEARD SOMEWHERE BETWEEN 3 TO 6 MONTHS, WHICH IT SOUNDS LIKE WE'RE IN THE MIDDLE OF THAT. WE'RE AT FIVE. DO YOU HAVE ANY COMMENTS ON THAT? YES. THAT THAT'S THAT'S TYPICALLY KIND OF THE INDUSTRY STANDARD. SOMEWHERE BETWEEN 3 TO 6 MONTHS IS KIND OF INDUSTRY STANDARD FOR, FOR THAT GENERAL FUND FUND BALANCE. AND SO IF WE GET OVER SIX MONTHS, THAT'S WHEN WE'RE PROBABLY LEANING ON THE SIDE OF HEY! GETTING HEAVY? WHY ARE WE TAKING SO MUCH PROPERTY TAX IF WE'RE GOING TO HAVE OVER SIX MONTHS OF FUND BALANCE? BUT IF WE GET ON THE SHORTER SIDE OF THAT, THAT'S NOT GREAT. CORRECT. YEAH. YEAH. YOU DEFINITELY DON'T WANT TO YOU KNOW, IT'S NOT IDEAL TO GO BELOW THE THREE MONTH MARK. AND AGAIN, IF YOU'RE GOING OVER SIX MONTHS, YOU'RE KIND OF ON THE HIGHER END OF THAT RANGE. SO SOMEWHERE BETWEEN 3 AND 6 IS REALLY KIND OF THAT, THAT SWEET SPOT FOR THAT GENERAL FUND FUND BALANCE TO REMAIN. ONE MORE VERY QUICK QUESTION. I'VE HEARD A BUNCH OF TIMES ABOUT YOU DON'T WANT TO GO BELOW THREE MONTHS. DO YOU HAVE ANY EXAMPLES OR DOES ANYONE HERE ON THE COURT HAVE ANY EXAMPLES OF TIMES WHEN THAT FUND BALANCE HAS HAD TO BE USED FOR THE OPERATIONAL NEEDS OF THE COUNTY, NOT AS A ONE TIME USE, BUT, YOU KNOW, I DON'T THINK WE HAD TO DO ANYTHING DURING COVID. I WASN'T IN OFFICE DURING THAT TIME, BUT DID WE HAVE TO PULL FROM FUND BALANCE FOR COVID? WE'VE BUDGETED FROM FUND BALANCE EACH YEAR. I THINK WE NEED TO POINT OUT THAT THIS THIS REPORT IS FOR THE FISCAL YEAR ENDING 25 IN 25. AND THIS FISCAL YEAR, WE BUDGETED, I BELIEVE, 17 MILLION FROM THAT 48. YEAH, THAT'S OUR CURRENT YEAR EXPENDITURES. NOT QUITE WHAT I WAS ASKING. SO SORRY FOR NOT BEING MORE CLEAR. WHAT I'M TALKING ABOUT IS WE WANT TO HAVE AT LEAST THREE MONTHS OF FUND BALANCE IN CASE THE WORST HAPPENS, AND WE HAVE TO PULL FROM IT SOMETHING CATASTROPHIC. I'M JUST ASKING, WHAT ARE SOME EXAMPLES OF WHEN I FIRST COMMISSIONER WE DIDN'T HAVE THREE MONTHS. IT WAS PRETTY TOUGH BACK THEN, AND WE'VE BEEN TAKEN FROM FUND BALANCE NEARLY EVERY YEAR, YOU KNOW. SURE. WE TAKE FROM IT AT THE BEGINNING OF THE YEAR, BUT THEN WE END UP NOT SPENDING AS MUCH AS WE FORECASTED. SO WE ADD BACK TO IT ONCE THE BOOKS ARE CLOSED. I MEAN, IF WE LOOK AT IF WE LOOK AT THESE NUMBERS ON OUR REPORT HERE, PAGE 64. THERE'S QUITE A FEW NUMBERS ON THE RIGHT HAND COLUMN THAT ARE POSITIVE. VARIANCES SUCH AS SALES TAX WAS A MILLION BUCKS MORE THAN WE PROJECTED. INVESTMENT EARNINGS 1.1 MILLION MORE THAN PROJECTED. MISCELLANEOUS 1.5. NON-DEPARTMENTAL EXPENSES WERE 1.5 LOWER THAN WE THOUGHT. SO YES, WE'RE TAKING FROM FUND BALANCE AT THE BEGINNING OF THE YEAR, BUT THE PRIOR YEAR IS USUALLY WRAPPING UP IN A WAY THAT OFFSETS THAT TAKE TO A DEGREE. YOU'RE RIGHT. AND WE'LL GET TO THAT ON SOME SLIDES THAT ARE COMING UP WHERE AND I THINK THAT SCHEDULE IS VERY HELPFUL BECAUSE I DID, I PUT TOGETHER KIND OF HISTORICALLY OF WHAT WE BUDGET, RIGHT. AND, AND WHAT THAT FIRST COLUMN WE'LL GET TO IT WILL SHOW IS IF RIGHT, WE SPENT 100% OF WHAT WE BUDGETED, COLLECTED 100% OF REVENUE, THIS IS WHAT IT WOULD LOOK LIKE. SO AND AGAIN, I'M JUST CURIOUS, ARE THERE ARE THERE ANY EXAMPLES THAT WE'RE AWARE OF WHERE A COUNTY SAID, OH, CRUD. AND THEY HAD TO PULL FROM FUND BALANCE TO MAINTAIN THEIR OPERATIONAL ACTIVITIES THROUGHOUT THE YEAR THAT WE'RE AWARE OF. I MEAN, I'M NOT I DON'T EVEN REALLY KNOW OF A ONE OFF SITUATION. I MEAN, TYPICALLY THAT'S, THAT'S DONE, LIKE DURING THE BUDGETING PROCESS AND THE TAX RATE ADOPTION PROCESS, YOU KNOW, YOU WOULD BUDGET FOR THOSE USES OF FUND BALANCE. [00:15:01] BUT, YOU KNOW, I GUESS OTHERWISE, UNLESS YOU STARTED OFF WITH SOMETHING BELOW THREE MONTHS AND THEN YOU HAD LIKE A, A LARGE IMMINENT PROJECT THAT YOU HAD TO DO THAT HAD TO BE FUNDED IMMEDIATELY. YEAH. THEN, THEN YOU COULD BE, YOU COULD BE PULLING FROM FUND BALANCE. BUT I WOULD SAY IT'S KIND OF ATYPICAL FOR, FOR THAT TO HAPPEN WITHOUT IT BEING SOME TYPE OF THAT'S ALL I WAS PURPOSEFUL THING THROUGH THE BUDGET. I'M CERTAINLY NOT ADVOCATING FOR GOING LOWER ON THE FUND BALANCE OR ANYTHING. IT WAS MORE A CURIOSITY, I THINK, IN IN PLACES WHERE THERE MIGHT BE NATURAL DISASTERS. FOR EXAMPLE, TORNADO WHERE WE, I THINK WE ALLOCATED AN ADDITIONAL 4 MILLION ON TOP OF THE 17 OR OUT OF THE 17 PERHAPS, I DON'T KNOW WITH AN ADDITION, AN ADDITION. SO THAT WOULD BE 21. THEN OUT OF 48. HOWEVER I THINK THAT'S THE REASON THERE HAVE BEEN, THERE HAVE BEEN EXAMPLES OF COUNTIES THROUGHOUT TEXAS WHERE THEY WOULD, WOULD BE IN A SITUATION WHERE THEY HAD TO BORROW MONEY. UNTIL THE TAX PROPERTY TAX CAME TO BEGIN THEIR FISCAL YEAR. LUCKILY, WE'VE NOT BEEN IN THAT SITUATION HERE IN PARKER COUNTY BECAUSE WE'RE CONSISTENTLY GROWING WITH THOSE NUMBERS OF SALES TAX COLLECTIONS, FOR EXAMPLE, AND CONTINUE TO GROW EACH YEAR AND IN PROPERTY TAX VALUE AS WELL. AND I THINK AS COMMISSIONER CONNOLLY SAID, AS YOU KNOW, THERE WASN'T A LOT OF FUND BALANCE WHEN YOU CAME IN. AND SO I KNOW FOR, YOU KNOW, UNTIL PROPERTY TAX CAME IN IN JANUARY, WHEN YOU OPENED THE BUDGET YEAR, THERE WAS A LOT OF REQUESTS TO NOT SPEND THOSE FUNDS BECAUSE THERE WASN'T THE CASH FLOW AVAILABLE TO THEN PAY THOSE VENDORS. AND I KNOW, SAME THING JUST AS WE'RE TALKING ABOUT THE GENERAL FUND BALANCE. SAME THING WAS WITH INSURANCE ESCROW. AND SO THAT'S ALWAYS A REALLY BIG ANALYSIS THAT BECKY GOES THROUGH AND PRESENTS TO YOU ALL IS THAT FUND BALANCE HAS GROWN AS WELL, BECAUSE I THINK THAT WAS AN ISSUE. AS WELL AS WAITING FOR THOSE PAYROLL CONTRIBUTIONS TO COME IN, TO THEN BE ABLE TO PAY THOSE INSURANCE CLAIMS. AND SO KIND OF GO BACK TO COMMISSIONER WHOLE QUESTION, I DON'T KNOW, BUT I IMAGINE YOU KNOW, COUNTIES USED TO BE ABLE TO GO UP TO 8% WITHOUT HAVING TO CALL A VOTE ON INCREASING YOUR TAX RATE. AND THEN THAT DECREASED TO 3.5%. THOSE THAT WERE PROBABLY ADOPTING EVERY YEAR FOR THEIR OPERATIONS RIGHT UNDER THAT THRESHOLD. AND THEN IT WAS CAPPED TO THREE AND A HALF. I WOULD IMAGINE THAT IF THERE WERE, YOU KNOW, THINGS, A LOT OF THE BUDGET THAT THEY COULDN'T CUT OUT THAT YOU KNOW, THAT PROBABLY DID HINDER SOME OF THOSE COUNTIES FROM OPERATING. I THINK THAT WAS SOMETHING EVEN LAST YEAR IN THE LEGISLATURE WHEN THEY WERE TALKING ABOUT TAKING THAT 3.5% AND LOWERING IT, YOU KNOW, THAT THAT'S SOMETHING AS WELL AS AS WE CONTINUE, YOU KNOW, IT'S A BALANCE. BUT AS WE'RE CONTINUING TO INCREASE OUR EXPENSES, ALL OF OUR CONTRACT SERVICES. AND THEN ON THE, YOU KNOW, OTHER SIDE OF THAT IS KIND OF CAPPING OUR REVENUE GENERATION FROM PROPERTY TAXES. THAT'S SOMETHING TO KIND OF LOOK AT WHERE YOU'RE ABLE TO SUSTAIN THOSE OPERATING INCREASES WITHOUT HAVING TO RAISE THE TAX RATE BECAUSE YOU HAVE RIGHT FUND BALANCE TO COVER THAT AS WELL AS ANY SORT OF, YOU KNOW, WE PURCHASED A BUILDING AND, YOU KNOW, DIFFERENT NEEDS, CAPITAL NEEDS AS WELL AS JUST OPERATIONAL. SO I'M ASSUMING YOU'RE GOING TO GO MORE IN DEPTH ABOUT FUND BALANCE, BECAUSE I WANT AN EXPLANATION OF THE ASSIGNED VERSUS THE UNASSIGNED. SO THAT, SO THAT ANYBODY THAT'S LOOKING AT THIS PIECE OF PAPER OR LISTENING UNDERSTANDS CLEARLY THE DIFFERENCE BETWEEN THOSE GO THROUGH ONCE WE GET TO THE BUDGET VERSUS ACTUAL. IF YOU GUYS WANT KIND OF A SUMMARY OVERVIEW OF WHERE THOSE LARGEST VARIANCES ARE AS PREPARED THAT IF YOU WANT THAT. THANK YOU. JIM. I'M SORRY, I CAN'T. SOMEONE ALSO MENTIONED LIKE USING FINANCING TO COVER ANY KIND OF SHORTFALLS. THAT'S A VERY EXPENSIVE MECHANISM TO TO USE TO COVER, YOU KNOW, ANY FUND BALANCE SHORTAGE AS WELL. SO BUT YES, YOU KNOW, TO, TO GO BACK TO YOUR QUESTION ABOUT THE FUND BALANCE AND THE CATEGORIES. SO, SO NON SPENDABLE IS THE MOST RESTRICTED. SO THAT'S EQUALS YOUR PREPAIDS. SO THAT'S MONEY THAT'S ALREADY BEEN SPENT IN ADVANCE. AND THEN WE HAVE THE RESTRICTED CATEGORY. SO THESE ARE MONIES THAT ARE EXTERNALLY RESTRICTED. SO A LOT OF THAT WOULD BE LIKE YOUR, YOUR LATERAL ROAD FUNDS. THOSE MONIES CAN ONLY BE USED FOR, FOR ONE PURPOSE. AND THAT'S ESTABLISHED WHEN THE FUND WAS ESTABLISHED. SAME THING WITH YOUR CAPITAL PROJECTS. THOSE ARE UNSPENT BOND PROCEEDS. THOSE PROCEEDS ARE RESTRICTED FOR CAPITAL PURPOSES. DEBT SERVICE, YOUR OTHER GOVERNMENTAL FUNDS, THOSE ARE ALL FEDERAL AND STATE PROGRAMS. SO THOSE ARE ALL EXTERNALLY RESTRICTED FOR USE AS WELL. COMMITTED IS WHAT'S BEING DONE BY, BY THE COMMISSIONERS COURT. SO THESE ARE FUNDS THAT ARE SET ASIDE BY COMMISSIONERS COURT. AND THEN AGAIN, THE UNASSIGNED BALANCE IS THE LEAST RESTRICTED AND IS USED FOR OPERATIONS. THAT'S KIND OF THE THE DIFFERENT CATEGORIES OF RESTRICTION WHEN WE LOOK AT AT FUND BALANCE. NEXT WE'LL GO TO THE GENERAL FUND BUDGET TO ACTUAL SCHEDULE. HERE WE'RE LOOKING AT GENERAL FUND REVENUES. TOTAL REVENUES OF $83.1 MILLION. BUDGET BUDGETED REVENUES OF $78.4 MILLION. SO A POSITIVE VARIANCE OF 4.6 BILLION. [00:20:04] YOU CAN SEE THAT THE ONE OF THE BIGGEST SWINGS IS SALES TAX. SO OBVIOUSLY THAT'S JUST BASED ON CONSUMPTION. YOU KNOW, MORE THINGS THAT ARE PURCHASED, MORE SALES TAX REVENUE THAT IS GENERATED FOR THE COUNTY. INVESTMENT EARNINGS JUST INCREASED HOLDINGS BETTER, BETTER RATES. IT'S A GREAT WHEN YOUR MONEY MAKES YOU MONEY. SO THERE'S A POSITIVE SWING THERE, $1.1 MILLION AND THEN MISCELLANEOUS REVENUES OF $1.5 MILLION. A PORTION OF THAT IS ALSO INSURANCE PROCEEDS FROM FROM HAILSTORM BACK IN JUNE. NEXT IS THE EXPENDITURE SIDE OF THE GENERAL FUND. TOTAL EXPENDITURES OF $79.2 MILLION. FINAL BUDGET OF $86.9 MILLION. AGAIN A POSITIVE VARIANCE OF $7.6 MILLION. SOME OF THAT VARIANCE IS JUST DREW THROUGH CONSERVATIVE BUDGETING FOR SOME CONTINGENCIES. LOWER THAN EXPECTED CONTRACTED SERVICES, FUEL COSTS PAYROLL THAT LED TO LED TO THAT POSITIVE VARIANCE. OVERALL, WHEN WE LOOK AT YOUR, THE NET POSITIVE SWING IN THE GENERAL FUND VERSUS BUDGET WAS 13.6 MILLION. CAN YOU, CAN YOU DIAL IN JUST A LITTLE BIT ON THE DEBT SERVICE ASPECT? THAT'S THE ONE LARGE NEGATIVE VARIANCE OF 860,000. YEAH. DO YOU WANT TO TAKE THAT OR GO AHEAD. OKAY. SO YOU'LL NOTICE IN IN SOME OF THE DEPARTMENTAL ON THE SHEET YOU HAVE THE FULL ONE. YOU'LL NOTICE THERE'S SOME POSITIVE VARIANCES. MOST NOTABLY SHERIFF'S OFFICE PATROL, THE DAIT AND ELECTIONS. AND WHAT IT IS IS FOR GASB 87 AND 96, THERE ARE CERTAIN CONTRACTUAL ARRANGEMENTS WE HAVE THAT THE ACCOUNTING STANDARDS SAY THAT OUR LEASES OR THEY'RE CALLED CIVITAS, WHICH ARE SUBSCRIPTION BASED, I T AGREEMENTS. AND SO WHAT WE HAVE TO DO IS WE HAVE TO LOOK AT THE TERM OF THOSE AGREEMENTS. AND ON THE GOVERNMENT WIDE SIDE, WE ACTUALLY HAVE TO RECORD A LIABILITY AND THEN SHOW THOSE AS DEBT SERVICE PAYMENTS. AND SO OUR TRUE DEBT SERVICE PAYMENTS ON THE GENERAL FUND THAT'S PAID FROM OUR M AND O IS RELATED TO OUR MOTOROLA FINANCING ARRANGEMENT THAT WE STILL HAVE THAT WE'RE PAYING OFF. AND SO SOME OF THOSE THAT YOU'RE SEEING THAT SHOW DEBT SERVICE ARE OR ACTUALLY THOSE GATSBY 87 AND 96. AND SO WE'LL BE PROVIDING THE FULL REPORT TO YOU. AND SO THERE'S. FOOTNOTES THAT GO THROUGH THOSE THOSE ARRANGEMENTS. AND SO THAT'S WHY IT SHOWS A NEGATIVE THAT WE DIDN'T HAVE IT BUDGETED. AND IT'S BECAUSE IT'S UP IN THOSE DEPARTMENTS. AND THEN FOR FINANCIAL REPORTING PURPOSES, WE MOVE THE EXPENSES FROM THOSE CONTRACT SERVICE AND THEN PUT IT INTO THE DEBT SERVICE AND SHOW BASICALLY A PRINCIPAL AND INTEREST PAYMENT. AND THEN ON THE GOVERNMENT WIDE, WHICH GIVES YOU A LONGER TERM OR LONG TERM LIABILITIES. YOU'LL SEE IT ON THE GOVERNMENT WIDE STATEMENT FOR THOSE ARRANGEMENTS. SO IF I TRANSLATE THAT TO CRAYON FOR ME, YOU'RE BASICALLY SAYING THE LARGE POSITIVE VARIANCES IN THOSE LINE ITEMS OFFSET DELIBERATELY. SO THE LARGE NEGATIVE VARIANCE IN THE DEBT SERVICE. CORRECT. YEP. SO THE BUDGETS ARE THERE. THE EXPENDITURES ARE ON THE BOTTOM. YEAH. THEIR BUDGET IT'S JUST A IT'S A RECLASS FOR REPORTING, BUT THEY ARE. THEY ARE BUDGETED. YEAH. NEXT WE'LL LOOK AT THE LATERAL ROAD FUND. REVENUES. OH I'M SORRY. WERE THERE ANY OTHER QUESTIONS ON THE GENERAL FUND? SORRY. OKAY. THE LATERAL ROAD FUND BUDGET. ACTUAL TOTAL REVENUES OF $20.6 MILLION WITH BUDGETED REVENUES OF $19.2 MILLION. WE CAN SEE THAT AGAIN, INTEREST IS ONE OF THE BIG SWINGS HERE, AS WELL AS SOME MISCELLANEOUS REVENUE, WHICH ALSO INCLUDES SOME INSURANCE RECOVERIES AS A NET $1.4 MILLION POSITIVE SWING. LOOKING AT THE NEXT SLIDE FOR THE EXPENDITURE SIDE, THEIR ACTUAL REVENUES OF $18.4 MILLION WITH BUDGETED REVENUES OF $27 MILLION. AGAIN, WE HAVE A POSITIVE SWING HERE PRIMARILY FOR THE CAPITAL OUTLAY LINE ITEM. SO JUST BUDGETED PURCHASES AND PROJECTS THAT DIDN'T GET COMPLETION DURING THE CURRENT YEAR IS WHAT'S CAUSING CAUSING THAT VARIANCE OF $8.6 MILLION. WHEN WE LOOK AT THE BOTTOM LINE, IT'S A NET 10.6 POSITIVE SWING BETWEEN BUDGET AND ACTUAL RESULTS FOR THE LATERAL ROAD FUND. AND THAT CONCLUDES MY PRESENTATION. BUT AGAIN, HAPPY TO ANSWER ANY OTHER QUESTIONS THAT YOU HAVE. YOU KNOW, I GUESS IN SUMMARY, YOU KNOW, LOOKING AT THE AUDIT RESULTS AS I MENTIONED, YOU KNOW, [00:25:04] UNMODIFIED OPINIONS, NO FINDINGS IN INTERNAL CONTROLS. I MEAN, THOSE ARE ALL SOLID RESULTS THAT YOU WANT TO HEAR FROM YOUR AUDIT. AND BRIANNA AND HER TEAM HAVE JUST BEEN EXCELLENT TO WORK WITH. YOU KNOW, THE GREAT THING ABOUT BRAND IS I HAVE QUESTIONS. SHE'S GOT ANSWERS. SO THAT ALWAYS MAKES YOU FEEL REALLY COMFORTABLE. WHEN, WHEN THEY HAVE THE ANSWERS JUST RIGHT OFF TOP OF THEIR HEAD TO GIVE TO YOU. WE HAVE REQUESTS, THEY TURN THEM AROUND VERY TIMELY. SO I APPRECIATE YOU AND YOUR STAFF. THANK YOU VERY MUCH. THANK YOU. OKAY. DO YOU HAVE ANY QUESTIONS OR COMMENTS? JUST A COMMENT ABOUT THE SALES TAX REVENUE IN THAT THE THIS ALWAYS COMES UP BECAUSE OBVIOUSLY WE COLLECTED MORE THAN WE HAD ANTICIPATED. BUT THE REASON WE HAVE THAT SALES TAX AND THIS IS GOES BACK TO THE 1990S. THERE WAS AN ELECTION TO ADD THAT SALES TAX FOR ONE PURPOSE. AND THAT PURPOSE IS TO LOWER PROPERTY TAXES. AND THAT WAS VOTER APPROVED AND VOTER APPROVED SALES TAX FOR ONE SINGLE PURPOSE TO USE THAT REVENUE TO LOWER PROPERTY TAXES, COUNTY PROPERTY TAXES. AND WE'VE DONE THAT. WE'VE DONE THAT CONSISTENTLY. THIS COURT HISTORICALLY HAS DONE THAT THE YEAR THEY DID IT. I'VE PREPARED, IF YOU ALL WANT IT MORE KIND OF IN DEPTH OF SOME OF THE BUDGET VERSUS ACTUALS, BUT THAT'S UP TO YOU. THANKS FOR COMING TODAY. ABSOLUTELY. THANK YOU VERY MUCH. THANK Y'ALL. NICE JOB ON THE AUDIT. THANK YOU. OKAY. ANYTHING ELSE? WE HAVE TO APPROVE THIS. SO WOULD ASK FOR A MOTION. MOTION MADE BY COMMISSIONER SECOND BY COMMISSIONER HALE. ANY OTHER DISCUSSION ON THIS ITEM BEFORE WE VOTE? JUST VERY WELL DONE TO BOTH OF YOU. THANK YOU. BRIAN, I KNOW YOU DON'T WORK VERY MANY HOURS, BUT MAN, YOU MANAGED TO DO A LOT OF GOOD WORK IN THOSE FEW HOURS. I'M JOKING. FOR THE RECORD, BRIANNA WORKS WAY TOO MUCH. ANY OTHER DISCUSSION? ALL IN FAVOR? MOTION CARRIES FIVE ZERO. THANK YOU. NICE JOB. BRIANNA. THANK YOU. MOVE TO ITEM TWO ON ADJOURNMENT. MOTION TO ADJOURN. MOTION AND SECOND. ALL IN FAVOR, SAY AYE. THE RECORD SHOW THAT WILL ADJOURN AT 927. * This transcript was compiled from uncorrected Closed Captioning.