May 28, 2024 City Council Special Session

[00:00:02]

WE'RE GOING TO GET THIS MEETING STARTED AT 9:03.

[1. CALL TO ORDER]

THAT BRINGS US TO ITEM TWO.

CITIZENS APPEARANCE.

EACH PERSON IN ATTENDANCE WHO DESIRES TO SPEAK TO THE CITY COUNCIL ON AN ITEM NOT POSTED ON THE AGENDA, SHALL SPEAK DURING THIS SECTION.

A SPEAKER CARD MUST BE FILLED OUT AND TURNED IN TO THE CITY SECRETARY PRIOR TO ADDRESSING THE CITY COUNCIL.

EACH SPEAKER IS ALLOWED THREE MINUTES.

EACH PERSON IN ATTENDANCE WHO DESIRES TO SPEAK TO THE CITY COUNCIL ON AN ITEM POSTED ON THE AGENDA SHALL SPEAK WHEN THE ITEM IS CALLED FORWARD FOR CONSIDERATION.

I DO NOT HAVE ANY SPEAKER CARDS.

IS THERE ANYONE IN THE AUDIENCE WHO WOULD LIKE TO SPEAK? I DON'T SEE ANYBODY.

ALL RIGHT, I SEE NONE.

THAT BRINGS US TO ITEM THREE REPORTS AND PRESENTATIONS.

[3.A. Receive a report, hold a discussion, and provide staff direction regarding the budget calendar, tax rate, capital improvement program, and 5-year forecast for the General Fund, Water and Wastewater Fund, 4A Fund, 4B Fund (In combination with Golf and Park Performance Funds), and TIF2 Fund (Tax Increment Financing). (Staff Contact: Harlan Jefferson, Deputy City Manager)]

HARLAN GOOD MORNING.

MAYOR COUNCIL. BEFORE HARLAN GET STARTED, I JUST HAVE A COUPLE OF OPENING COMMENTS.

AND FIRST IS THANK YOU FOR GIVING US A DAY OF YOUR TIME TO GO THROUGH THIS.

IT'S GREATLY, GREATLY APPRECIATED.

I KNOW IT'S HOPEFULLY NOT TOO LONG OF A DAY, BUT WE UNDERSTAND IT'S A COMMITMENT FROM YOU GUYS AND WE APPRECIATE IT.

THE SECOND THING THAT I JUST WANT TO START OUT BY SAYING IS, PLEASE REMEMBER THIS IS A PRELIMINARY LOOK AT OUR BUDGET AND THESE NUMBERS WILL CHANGE AS WE GO THROUGH THE PROCESS.

SOME WILL CHANGE BASED ON THE FEEDBACK WE RECEIVE FROM YOU TODAY.

AS WE FURTHER FORECAST OUR SALES TAX OR OUR PROPERTY TAX REVENUES.

IT WILL ALSO CHANGE WHAT WE CAN DO HERE AS WELL.

SO I JUST WANT TO PREFACE EVERYTHING THAT WE TALK ABOUT TODAY, THAT AS WE COME BACK AND WE GO THROUGH AND WE SHOW THESE FINANCIAL FORECASTS OVER AND OVER AGAIN, JUST BE REMINDED THAT THEY WILL CHANGE SLIGHTLY BASED ON EVERY DISCUSSION WE HAVE.

AND WITH THAT, HARLAN, I'M GONNA TURN IT OVER TO YOU.

OKAY. THANK YOU VERY MUCH.

I ALSO WANT TO THANK THE COUNCIL FOR FOR THEIR TIME TODAY AS WELL.

AND GLAD TO SEE EVERYBODY ARRIVED HERE SAFELY TODAY.

WE'RE GOING TO TALK ABOUT STORM SIRENS BRIEFLY IN THE PRESENTATION, BUT I JUST WANT TO MENTION I NEVER REALIZED HOW LOUD THOSE THINGS WERE UNTIL I DROVE UP ON ONE THIS MORNING.

AND THE CLOSER YOU GET, THE LOUDER THEY ARE AND MAKES YOU THINK A TORNADO IS GETTING LOUDER.

SO ANYWAY, SO THOSE THINGS ARE VERY EFFECTIVE.

MOST CASES.

I WANT TO LET THE COUNCIL KNOW.

I DO HAVE GOOD NEWS FOR YOU TODAY.

FIRST OF ALL IN SPITE OF OUR BEST EFFORTS, WE WERE NOT ABLE TO PUT 100 SLIDES INTO THE DECK, THE SLIDE DECK TODAY.

SO WE FELL SHORT OF THAT.

FORTUNATELY BUT THE OTHER GOOD NEWS IS THAT AS TOMMY SAID, THIS IS EARLY IN THE PROCESS.

IT'S A HIGH LEVEL OVERVIEW OF THE BUDGET AS WELL AS THE CIP.

SO WE HAVE AMPLE TIME TO CONTINUE TO TAKE A DEEPER DIVE INTO BUDGET THROUGHOUT THE SUMMER.

AS YOU APPROACH THE THE DATE IN SEPTEMBER WHEN YOU'RE GOING TO CONSIDER ADOPTING THE BUDGET.

SO THERE'S TIME TO FOLLOW UP, PROVIDE MORE CLARIFICATION AND SO FORTH.

SO SO IF YOU HAVE QUESTIONS THAT WE AS WE GO, PLEASE ASK US.

BUT JUST BE MINDFUL THAT WE HAVE A LOT MORE TIME LEFT IN THE PROCESS.

AND THE THIRD GOOD NEWS I HAVE FOR YOU IS THAT I'M NOT THE ONLY PRESENTER TODAY.

SO WE'RE GOING TO BE BLESSED TO HEAR FROM OUR PUBLIC WORKS DIRECTOR, ERIC THOMPSON.

HE'S GOING TO TALK ABOUT THE CAPITAL IMPROVEMENT PROGRAM FOR THE CIP, FOR THE GENERAL FUND, AS WELL AS THE UTILITY FUND.

ALLISON SMITH IS GOING TO TALK ABOUT THE FIVE YEAR CIP FOR FORBI AS WELL.

AND THEN WE HAVE JAN BASHAM HERE AS WELL AS BACK UP.

SO SHE'S ABLE TO MAKE IT IN AND VISIT WITH US, AND THEN WE'RE GOING TO HAVE A DAN JACKSON WITH WILL DAN FINANCIAL SERVICES PRESENT THE RATE STUDY MODEL THAT HE PREPARED? DAN AND WILL DAN IS A NATIONAL FIRM.

AND WILL DAN IS PROBABLY THE PREDOMINANT RATE SETTING FIRM IN TEXAS.

THEY COVER ONE END TO THE NEXT.

SO DAN HAS OVER THREE DECADES OF EXPERIENCE SETTING RATES.

SO WE'RE HEAR FROM HIM WHEN WE GET TO THE PORTION OF THE PRESENTATION ON THE WATER AND WASTEWATER FUND.

THIS SLIDE WALKS THROUGH THE ACTUAL AGENDA FOR TODAY, WHERE WE'RE GOING TO COVER WE'RE GOING TO BEGIN BY GOING THROUGH THE BUDGET CALENDAR. NEXT WE'LL TALK ABOUT RATE THE TAX RATE STRATEGY THAT WE DISCUSSED WITH THE FINANCE COMMITTEE.

WE'LL TALK ABOUT THE DEBT SERVICE CAPACITY AS WELL.

WE HAVE THAT DISCUSSION WITH THE COUNCIL BACK IN DECEMBER, AND WE CONTINUED THAT DISCUSSION WITH THE FINANCE COMMITTEE.

THEN ERIC THOMPSON IS GOING TO TALK ABOUT REGIONAL CAPITAL PROJECTS.

[00:05:04]

THE ONLY EXCEPTION IS GOING TO BE THE WATER AND WASTEWATER FUND.

IN THAT CASE, WE HAVE DAN PRESENT HIS UTILITY RATE STUDY BETWEEN THOSE TWO COMPONENTS OF THE OF THE PRESENTATION.

THIS SLIDE IS A THE FIRST PAGE OF THE BUDGET CALENDAR.

AND AS YOU CAN SEE FOR THE COUNCIL, WE HAVE IT STARTING WITH TODAY'S PRESENTATION, THE SPECIAL CALLED MEETING.

AND WE'LL COVER OUR MAJOR FUNDS TODAY.

AND IN TERMS OF THE CIP, AS I MENTIONED IN THE FIVE YEAR FORECAST IN TERMS OF THE COMMUNITY BUDGET CALENDAR, WE SENT OUT A CALENDAR TO THE RESIDENTS AND, EXCUSE ME, A SURVEY TO THE RESIDENTS.

AND THEY THEY HAVE BETWEEN MAY 1ST AND THE END OF MAY TO COMPLETE THAT AND PROVIDE US COMMENTS.

MAYOR PRO TEM.

HAD ASKED THE QUESTION. I THINK THE LAST COUNCIL MEMBER ABOUT A KIND OF GETTING RESIDENTS FEEDBACK REGARDING THE LEVEL OF SERVICE VERSUS THE TAX RATE OR FEES THEY PAY.

AND THIS SURVEY DOES ASK THAT QUESTION.

IT ENDS WITH THAT QUESTION.

SO WE'LL BE ABLE TO PROVIDE YOU WITH SOME FEEDBACK FROM THE RESIDENTS.

ON JUNE 17TH, WE'RE CONTINUING THE BUDGET DISCUSSION AT THE REGULAR TOWN COUNCIL MEETING.

AND AT THAT TIME WE'RE GOING TO DISCUSS THE HOTEL MOTEL TAX FUND, HEALTH FUND, THE EQUIPMENT SERVICES FUND, AS WELL AS EQUIPMENT REPLACEMENT FUND, IT AND AND MANY OTHER FUNDS.

SO WE'LL GO THROUGH THE LITANY OF OTHER FUNDS THAT WE'RE HAVING AND TALK ABOUT THEIR FIVE YEAR FORECAST AS WELL.

ON JUNE 22ND IS GOING TO BE THE NEXT TIME WE GET TOGETHER AT A REGULAR TOWN COUNCIL MEETING.

AND WE'RE GOING TO DISCUSS THE GENERAL FUND BUDGET, THE CIP, AND THE DEBT SERVICE THAT SUPPORTS THAT CIP.

AND THEN WE'LL TALK ABOUT THE SUPPLEMENTAL PACKAGES THAT THE MANAGER PLANS TO PROPOSE IN THE DRAFT BUDGET ON ON JUNE 25TH IS THE DATE THAT THE STATE LAW REQUIRES THE APPRAISAL DISTRICT TO PROVIDE US WITH THE CERTIFIED TAX ROLL SO THAT THAT DATE WILL HAVE AN ESTIMATE OF WHAT OUR PRIMARY TAX REVENUE IS GOING TO BE FOR THE NEXT YEAR, OR, LET'S SAY, THE FINAL ESTIMATE THAT WE'RE GOING TO USE FOR THE BUDGET PROCESS ON JUNE 5TH, THE PROPOSED BUDGET WOULD BE FILED WITH THE COUNCIL AND CITY SECRETARY'S OFFICE.

WE ALSO SUBMIT TO THE COUNCIL THE ASSESSOR'S TAX ASSESSORS NO NEW REVENUE TAX RATE AS WELL AS VOTER APPROVAL TAX RATE ON THAT DATE ON JUNE.

EXCUSE ME. IT'S AUGUST 5TH, AUGUST 7TH THE FINANCE COMMITTEE MEET, AND WE'RE GOING TO REVIEW THE PROPOSED BUDGET WITH FINANCE COMMITTEE AND RECEIVE THEIR FEEDBACK.

AND THEN WE'LL HAVE A SPECIAL CALL MEETING ON AUGUST THE 12TH, IN WHICH WE'RE GOING TO REVIEW THE PROPOSED BUDGET WITH THE FULL COUNCIL.

ON THE 16TH, THE FINANCE DEPARTMENT STAFF IS GOING TO VERIFY SOME INFORMATION.

WITH AND PLACE AND EXCUSE ME, WITH THE APPRAISAL DISTRICTS.

THEN ON THE 22ND IS WHEN WE'RE GOING TO PUBLISH NOTICE OF THE PUBLIC HEARINGS, WHICH WILL OCCUR ON SEPTEMBER 3RD.

AND THE BUDGET TAX RATE AND SO FORTH ARE GOING TO BE CONSIDERED FOR ADOPTION ON THE NINTH, AS WELL AS THE HOME TAX, EXCUSE ME, HOMESTEAD RESOLUTION SUPPORTING THOSE, AND THEY WILL POST THE BUDGET INFORMATION ON THE ON THE 9TH OF SEPTEMBER.

HARLAN, DO YOU MIND BRIEFLY SPEAKING TO THE RESOLUTION THAT WILL APPEAR BEFORE THE COUNCIL ON THE 17TH ABOUT THE VOTER APPROVAL RATE? YES. YEAH. THANK YOU.

YEAH. THE ON THE 17TH, IT'LL BE A COUPLE OF RESOLUTIONS.

ONE OF THEM IS THE VOTER APPROVAL RATE.

THE RIGHT NOW, IF YOU EXCEED THE VOTER APPROVAL RATE, YOU'RE REQUIRED TO ACCELERATE YOUR BUDGET CALENDAR AND ACTUALLY ADOPT THE TAX RATE PRIOR TO ACTUALLY GETTING A CERTIFIED ROWE FROM THE APPRAISAL DISTRICT.

SO YOU KIND OF SET THE TAX RATE BLIND TO A CERTAIN DEGREE BASED ON AN ESTIMATE.

HOWEVER, IF THE COUNCIL DOESN'T CONSIDER A RESOLUTION AND MAKE AN INFORMED DECISION TO TO GO OVER THE VOTER APPROVED TAX RATE TO COME UNDER THE VOTER APPROVAL TAX RATE, THEN YOU BASICALLY WILL BE MAKING THE DECISION THAT YOU'RE GOING TO BE YOU'RE GOING TO BE UNDER THE TAX UNDER THE VOTER APPROVAL TAX RATE, IF YOU DON'T MAKE A DECISION NOT TO GO OVER IT.

SO WE WANT TO HAVE A CHANCE TO RECOVER IF YOU BY THE TIME WE TALK AGAIN ON JULY 22ND.

SO IT'S THE CITY'S PRACTICE TO ASK THE COUNCIL, BY RESOLUTION, WHETHER OR NOT YOU WANT TO GO OVER THE VOTER APPROVAL TAX RATE PRIOR TO KIND OF A DROP DEAD DATE.

SO YOU HAVE AN OPPORTUNITY TO, TO TO WEIGH IN.

NOW, I SHOULD MENTION PRIOR TO SENATE BILL TWO THAT WAS APPROVED ON BACK IN 2019.

[00:10:09]

NOW, UNDER SENATE BILL TWO, IF YOU GO OVER THE VOTER APPROVAL TAX RATE, WHICH IS 3.5% OF THE ONEMM TAX RATE, THEN IT'S AUTOMATIC ELECTION. AND IT OCCURRED IN NOVEMBER OF THIS YEAR.

SO SO AGAIN, IT'S OUR PRACTICE TO ASK THE COUNCIL IF YOU WANT TO SET A TAX RATE ABOVE THE VOTER APPROVAL TAX RATE.

WE'LL DO THAT IN A FORMAL RESOLUTION.

SO THE WHOLE COUNCIL WILL WEIGH IN.

BUT I BELIEVE THE FEEDBACK WE RECEIVED FROM THE FINANCE COMMITTEE WAS THAT THERE WAS NOT AN INTEREST IN GOING OVER THE VOTER APPROVAL TAX RATE.

SO IF THERE IS TO THE CONTRARY, TO LET US KNOW AND WE'LL TAKE APPROPRIATE STEPS.

ALL THE INFORMATION THAT YOU SEE TODAY PRESENTED WILL ASSUME THAT WE'RE GOING TO BE UNDER THE VOTER APPROVAL TAX RATE.

SO JUST FOR CLARITY, AT 3.5 OR BELOW, BUT FOR THE PROJECTIONS WE'RE AT 3.5.

SO WE'RE AT THAT MAXIMUM VALUE BUT NOT ABOVE IT.

MENTION THE TAX RATE.

WHEN WE MET WITH THE COUNCIL AT THE RETREAT, WE HAD A DISCUSSION ABOUT THE TAX RATE AND INTEREST OF LEAVING IT LEVEL FOR THE NEXT FISCAL YEAR. AND THAT WAS IMPORTANT BECAUSE OF NOW THIS SLIDE, YOU CAN SEE THAT FOR GOING BACK TO 2015, THE CITY HAS REDUCED ITS TAX RATE BY OVER $0.10.

AND IT WENT UP IN 2015 TO $0.74 PER $100 VALUATION.

STAYED THERE A COUPLE OF YEARS, AND THEN IT STARTED A GRADUAL DECLINE.

THE SENATE BILL I MENTIONED, SENATE BILL TWO.

IT WAS APPROVED IN IN 2019 WENT INTO EFFECT.

AND THEN YOU COULD SEE THE PACE OF THE DECREASE PICKED UP IMMEDIATELY.

THE TAX RATE WAS DROPPED BY A PENNY AND A HALF.

AND IT CONTINUED ON.

AND I DON'T KNOW WHY THE TAX RATE DROPPED.

I CAN ONLY MAKE ASSUMPTIONS.

BUT CLEARLY AFTER THE SENATE BILL TWO, THE PACE OF IT PICKED UP.

SO SO THE QUESTION IS IF THE COUNCIL IS INTERESTED IN CONTINUING THAT PACE OR, OR LEAVING IT LEVEL.

SO THIS PRESENTATION HAS SOME STRATEGIES ON LEAVING IT LEVELS.

WHAT WE WALKED THROUGH WITH THE FINANCE COMMITTEE.

SO THE FIRST QUESTION IS HOW DO WE COMPARE TO OUR SURVEY COMMUNITIES.

AND WE'VE UPDATED THESE TO THE CURRENT RATES.

EVERYONE APPROVED THESE COMMUNITIES APPROVED THIS YEAR.

AND YOU CAN SEE WE'RE PRETTY MUCH IN THE CENTER.

WE HAVE FIVE COMMUNITIES HIGHER THAN US AND AND SIX THAT HAVE TAX RATE LOWER THAN US.

SO WE HAVE A COMPETITIVE TAX RATE CURRENTLY.

MENTIONED A CHANGE IN THE TAX LAW FROM 2019 AND THEY CHANGED TERMINOLOGIES.

THEY USE A NO NEW REVENUE TAX RATE.

NOW PREVIOUSLY IT WAS THE EFFECTIVE TAX RATE.

AND IT WAS DESIGNED TO COMPARE THE AMOUNT OF REVENUE PRODUCED, PRODUCE A TAX RATE THAT WAS PROVIDE THE SAME AMOUNT OF REVENUE IN THE PREVIOUS YEAR AND THE CURRENT YEAR, THE WAY IT WORKS. SO IT'S EXPRESSED IN TERMS OF $100 PER TAXABLE VALUE.

AND THE CALCULATION IS YOU TAKE LAST YEAR'S LEVY, WHICH IS THE REVENUE, AND THEN YOU SUBTRACT ANY LOST PROPERTY PROPERTY LEVY.

AND THAT CAN OCCUR IF SOME PROPERTY IS DIS ANNEXED.

AND THEN YOU DIVIDE IT BY THE CURRENT TOTAL VALUE AND YOU SUBTRACT OUT ANY NEW PROPERTY.

SO IF YOU BOUGHT PROPERTY ON BOARD THIS YEAR THAT DIDN'T EXIST THE PREVIOUS YEAR, THEY SUBTRACT ON BOTH ENDS TO TRY TO COME UP WITH A NUMBER THAT'S CONSISTENT.

AND THAT PRODUCES THE NO NEW REVENUE TAX RATE.

AND IT'S ONLY USED FOR COMPARISON PURPOSES TO SAY THIS TAX RATE PRODUCES THE SAME AMOUNT OF REVENUE IN BOTH YEARS.

NOW THE TERM THAT'S REALLY IMPORTANT IS THE VOTER APPROVAL TAX RATE.

AND AGAIN, IT'S EXPRESSED IN TERMS OF DOLLARS PER $100 OF TAXABLE VALUE.

AND YOU GET THERE BY TAKING THE ONEMM PORTION OF THE NO NEW REVENUE TAX RATE.

AND YOU MULTIPLY IT BY 1.035.

SO THAT'S THE 3%.

YOU GET THE INCREASE ON THE ONEMM SIDE, YOU AUTOMATICALLY GET THE ADD IN YOUR CURRENT DEBT SERVICE TAX RATE.

NO MATTER WHAT THE NUMBER IS, YOU CAN INCREASE IT.

IT'S NO LIMITATIONS ON IT.

PLUS YOU ADD IN AN UNUSED INCREMENT.

A RATE TO COME UP WITH THE VOTER APPROVAL TAX RATE.

AND THE WAY TO UNUSED INCREMENT WORKS.

YOU GENERATE IT BECAUSE IN A YEAR IN WHICH YOU YOU APPROVE A TAX RATE THAT'S BELOW THE THE VOTER APPROVAL TAX RATE, THEN THAT DIFFERENCE YOU GET TO ACCESS WITHIN A THREE YEAR PERIOD TO INCREASE THE VOTER APPROVAL TAX RATE IN SUBSEQUENT YEARS.

[00:15:04]

SO IT RAISES THE LIMIT, THE THRESHOLD THAT YOU GET TO ACCESS.

SO SO NOW I'LL WALK THROUGH REALLY THE FIRST STRATEGY TO LEAVING YOUR TAX RATE SAME.

AND IT'S REALLY ONE THAT YOU'VE BEEN USING FOR THE LAST THREE YEARS.

AND IT'S THE USE OF THE HOMESTEAD EXEMPTION.

SO IN FISCAL YEAR 2122, THE BUDGET PROCESS, THE CITY COUNCIL APPROVED A $0.01 RESIDENTIAL HOMESTEAD EXEMPTION. AND THAT WENT INTO EFFECT THE FOLLOWING FISCAL YEAR 2223.

THEN THE NEXT YEAR, IN FISCAL YEAR 2223 THREE, YOU INCREASE THE HOMESTEAD EXEMPTION TO $0.02.

AND THAT WENT INTO EFFECT.

FISCAL YEAR 2324.

AND THEN THIS PAST SEPTEMBER, YOU APPROVED ANOTHER $0.01 INCREASE.

SO WE HAVE A TOTAL HOMESTEAD EXEMPTION OF $0.03.

AND THAT'S GOING TO BE EFFECTIVE.

REALLY FISCAL YEAR 2425.

SO. BECAUSE YOU INCREASE THE HOMESTEAD EXEMPTION, YOU LOWER THE TAXABLE VALUE AND THEREBY LOWERING OR INCREASING RATHER THE VOTER APPROVAL TAX RATE. SO YOU KIND OF BUFFERED YOURSELF.

WE CURRENTLY HAVE A STRATEGY TO INCREASE THE HOMESTEAD EXEMPTION 1% A YEAR, UP TO 5%.

SO WE RECOMMEND CONTINUING THAT STRATEGY.

AND IT PROVIDES RELIEF TO RESIDENTS.

BUT AT THE SAME TIME, WE BUFFER OURSELVES FROM THE VOTER APPROVAL TAX RATE.

AND THE HOMESTEAD EXEMPTION ONLY APPLIES TO TO RESIDENTS IN WHICH INDIVIDUALS ARE LISTED AS THEIR PRIMARY RESIDENCE.

IF IT'S INCOME PRODUCING PROPERTY, COMMERCIAL OR INDUSTRIAL, IT DOESN'T GET TO BENEFIT FROM THIS.

NOW THE OTHER STRATEGY IS THE USE OF THE UNUSED INCREMENT THAT I DESCRIBED A MOMENT AGO.

CURRENTLY, WE HAVE AVAILABLE TO US A LITTLE BIT OVER A PENNY IN HALF FROM 2021, A LITTLE OVER HALF A SENSE FROM A 2022, AND WE DIDN'T EARN ANY FOR 2023.

YOU SET THE TAX RATE RIGHT AT THE VOTER APPROVAL TAX RATE.

SO YOU HAVE OVER YOU HAVE OVER A $0.02 AVAILABLE TO YOU TO USE.

NOW, WHEN YOU SET THE CURRENT YEAR'S BUDGET THIS PAST SUMMER, THE THE UNUSED INCREMENT WAS ALMOST $0.04.

IT WAS 3.99.

SO 1.8 CENTS ROLLED OFF OF THE UNUSED INCREMENT.

SO WE'VE LOST THAT FOREVER.

SO IF YOU DON'T USE THE VOTER APPROVAL TAX RATE THIS YEAR, THE THE 2021 NUMBER IS GOING TO DROP OFF.

SO IT'S BASICALLY NOW NEVER TO ACCESS THOSE FUNDS.

AND YOU DON'T HAVE TO USE THEM ALL AT ONE YEAR.

HOPEFULLY WE COULD ONLY USE A PORTION OF IT.

BUT WHATEVER YOU USE THE 2021 IS GOING TO ROLL OFF.

SO AND THEN YOU'RE JUST GOING TO HAVE THE 2022 NUMBER REMAINING TO ACCESS.

SO THIS IS A LIST OF THE OPTIONS TO KEEP THE TAX RATE THE SAME.

FIRST THE USE USE THE HOMESTEAD EXEMPTION.

NEXT UNUSED INCREMENT.

AND THE THIRD ONE IS TO TO SHIFT THE TAX RATE FROM ONEMM TO THE INS, I THINK COUNCIL MEMBER, AT LEAST COUNCIL MEMBER RUSSELL MENTIONED THIS IDEA, MAYBE OTHERS AS WELL.

AND THE IDEA IS IF THE VOTER APPROVED TAX RATE FORCE IS YOUR YOUR ONEMM TAX RATE DOWN, LET'S SAY IT'S $0.01, THEN YOU COULD TRANSFER THAT $0.01 OVER TO THE INS TAX RATE, INCREASE IT $0.01 AND KEEP THE TAX RATE LEVEL.

SO RIGHT NOW $0.01 ON THE TAX RATE GENERATE A LITTLE BIT OVER A HALF $1 MILLION, HALF $1 MILLION CAN SUPPORT APPROXIMATELY $6.5 MILLION IN, IN DEBT.

SO YOU COULD INCREASE YOUR DEBT CAPACITY BY MAKING THAT SHIFT IS THE WAY IT WOULD WORK.

SO AT THIS POINT, I JUST WANT TO PAUSE THE PRESENTATION AND ASK THE COUNCIL FOR DIRECTION ON, ON ON THESE THREE ITEMS. AND I THINK WHAT I'LL SAY HERE IS, IS THAT JUST FROM A STAFF RECOMMENDATION STANDPOINT, RIGHT.

WE WOULD RECOMMEND THAT YOU CONTINUE TO GROW THE HOMESTEAD UP TO THE 5%.

THAT'S STAFF RECOMMENDATION.

WITH REGARDS TO THE UNUSED INCREMENT RATE, MY RECOMMENDATION TO YOU WOULD BE AT MINIMUM TO USE THE 2021 NUMBER THAT'S GOING TO FALL OFF.

WE'RE VERY LIMITED AS TO HOW YOU CAN GROW THE NO SIDE.

AND SO IT MINIMUM TO DO THAT.

AND THEN DEPENDING ON ONCE WE GET THE ACTUAL CERTIFIED VALUES IN JUNE AND WE KNOW HOW MUCH THE TAX RATE WILL ACTUALLY DROP, WHAT THE APPETITE FOR THE COUNCIL

[00:20:09]

SO I THINK FOR ME, THE QUESTION IS, IS THE HOPE TO KEEP THE TAX RATE FLAT, OR DO YOU WANT TO SEE SOME REDUCTION IN THE TAX RATE? I THINK THAT'S THE GENERAL FEEDBACK WE NEED TODAY.

AND HARLAN, IF FEEL FREE TO CHIME IN.

YEAH, YOU'RE RIGHT ON POINT.

WE WE DON'T NEED TO DECREASE OUR REVENUE.

WE NEED TO LEAVE OUR OUR TAX RATE WHERE IT'S AT RIGHT NOW, I BELIEVE I DON'T THINK WE NEED TO DROP THE RATE RIGHT NOW.

ANYBODY ELSE? I THINK IT'S ABOUT THE VALUE THAT WE'RE GIVING CITIZENS FOR WHAT THEY'RE PAYING.

AND AS LONG AS WE CAN, THERE'S A LOT TO BE DONE AND A LOT THAT THE CITIZENS ARE REQUESTING THAT WE DO.

AND IF WE CAN SHOW WE'RE GIVING YOU WHAT YOU'RE ASKING FOR, FOR THE AMOUNT THAT YOU'RE PAYING, IT JUST GOES BACK TO THE TRANSPARENCY OF WE NEED A LOT ACCOMPLISHED AS A COMMUNITY.

WE'RE GROWING AND MAINTENANCE IS SIGNIFICANTLY RISING, AND WE DON'T NEED TO FALL ANY FURTHER BEHIND IN MAINTENANCE.

AND AND NOT JUST ROADS, BUT INFRASTRUCTURE ACROSS THE BOARD.

AND AS TOMMY SAID, I THINK IT'S IMPORTANT TO RECOGNIZE THERE'S ONLY SO MUCH OPPORTUNITY TO GROW OUR MO, WHICH IS OUR DAY TO DAY, HOW WE TURN ON THE LIGHTS, PAY FOR PEOPLE, AND WE NEED TO BE COGNIZANT OF AS WE CONTINUE TO GROW.

ALL OF THOSE AREAS NEED TO GROW, TOO.

AND SO I THINK IT'S I THINK WE HAVE, I THINK, A GOAL OF A NUMBER OF COUNCIL PEOPLE SERVING NOW AND PREVIOUS AND SERVED RECENTLY WAS TO GET IT UNDER THAT $0.70.

AND I THINK THAT THAT WAS QUITE AN ACCOMPLISHMENT.

BUT NOW WE HAVE TO PROVE WHAT WE'RE DOING WITH YOUR FUNDS THAT WE'RE COLLECTING.

YOU'RE GETTING BANG FOR YOUR BUCK FOR THE WHOLE LANDSCAPE HAS CHANGED FOR US TO, YOU KNOW, WE HAD TO GIVE RAISES TO OUR, OUR FIREFIGHTERS AND POLICE JUST TO KEEP THEM. I MEAN, THAT WAS A BATTLE BETWEEN TOWNS TO, TO KEEP YOUR PEOPLE.

SO EVERYTHING THAT'S GOING ON IS JUSTIFIABLE.

VERY MUCH BUSINESS IS GOING THROUGH THE SAME THING.

SO ANYBODY ELSE? YOU, HARLAN, I THINK LOSING THAT 2020 11.

$0.05 WOULD BE IRRESPONSIBLE.

I THINK WE DEFINITELY NEED TO MANAGE WITH THAT.

AND AS FAR AS THE HOMESTEAD, I'M GOOD WITH GOING UP TO $0.05, 5% OVER THE FIVE YEAR PERIOD.

AND SHIFTING THE TAX RATE FROM ONEMM TO AS WE TALKED ABOUT THAT LAST YEAR, IT WAS AN OPTION.

LAST YEAR WE DIDN'T DO IT.

BUT THE 500,000, LIKE YOU SAID, IS 6.5 MILLION BONDED OUT.

AND I THINK THAT'S AN OPTION WE NEED TO LEAVE ON THE TABLE.

OKAY. ALL RIGHT, I THANK YOU.

I'M SORRY. I WAS ONLY GOING TO SAY THAT THE CLOSER WE GET TO HAVING IN PLACE AN EFFECTIVE ASSET MANAGEMENT PLAN AND ASSESSING THE COSTS THAT ARE GOING TO BE ATTACHED TO IT, WE KNOW THE NUMBERS ARE GOING TO PUSH US UPWARD, AND WE'RE ALREADY LOOKING FOR NEW SOURCES OF FUNDS TO JUST TO KEEP OUR HEADS ABOVE WATER AND MAINTAINING OUR INFRASTRUCTURE AND BUILDINGS.

SO I THINK IT WOULD BE IRRESPONSIBLE TO TRY TO TAKE THE TAX RATE DOWN.

I WOULD SUPPORT KEEPING IT WHERE IT IS.

I THINK THAT ARGUMENT WOULD BE COUNTERINTUITIVE IF YOU'RE SAYING WE'RE LOOKING FOR NEW REVENUE SOURCES AND POTENTIALLY INTRODUCING THESE, BUT WE'RE GOING TO SIMULTANEOUSLY LOWER YOUR TAX RATE. I THINK IN SOME WAYS THAT'S KIND OF HOW WE GOT HERE.

WE WERE TRYING TO ACCOMPLISH A LOT BY DECREASING OUR REVENUE SOURCE.

AND NOW WE'RE IN THE CONUNDRUM THAT WE ARE OF LIKE, OKAY, SOMETHING'S GOT TO GIVE.

YOUR EXPENSES CAN'T CONTINUE TO OUTPACE YOUR REVENUE.

IT JUST DOESN'T.

THAT'S NOT POSSIBLE.

WELL, IN TO THAT END, AND I DON'T WANT TO STEAL HARLAN'S THUNDER, BUT AS HE GOES THROUGH THE GENERAL FUND FORECAST, WE'LL WE'LL TOUCH BRIEFLY ON.

I'VE ASKED THE DEPARTMENTS THIS YEAR FOR NEXT YEAR'S BUDGET AND THIS YEAR TO MAKE UP TO MAKE REDUCTIONS IN THEIR BUDGET FORECAST.

I FEEL VERY COMFORTABLE IN SAYING THAT THESE ARE NON-OPERATIONAL REDUCTIONS.

I THINK THAT THESE ARE AREAS THAT WILL NOT NECESSARILY IMPACT OPERATIONS, BUT WHERE WE CAN REDUCE.

AND SO THEY'RE NOT INSIGNIFICANT.

AND WHEN YOU LOOK AT THAT OVER A BASE EXPENDITURE OVER THE FIVE YEAR HORIZON, I THINK THAT WE'VE MADE NECESSARY ADJUSTMENTS.

BUT EVEN WITH MAKING THOSE, AS WE LOOK ACROSS THE FIVE YEAR HORIZON, WE'RE STILL, YOU KNOW, RIGHT AT THAT 20, 21% FUND BALANCE.

SO IT WILL BE DIFFICULT TO KEEP UP WITH INFLATIONARY COSTS FOR MAINTENANCE WITHOUT LOOKING AT MAXIMIZING TAX WHERE YOU CAN AND POTENTIALLY OTHER REVENUE SOURCES.

I'M SORRY I DIDN'T WEIGH IN ON HOMESTEAD EXEMPTION, BUT I BELIEVE WE COMMITTED THAT TO OUR CITIZENS.

AND SO THEREFORE WE SHOULD SEE IT THROUGH.

AND ADDING THE ADDITIONAL 1% THIS YEAR, JUST, YOU KNOW, THAT'S WHAT WE SAID WE WOULD DO.

[00:25:03]

ALL RIGHT. THANK YOU VERY MUCH FOR THE FEEDBACK AND DIRECTION.

SO YOU SEE, ON YOUR SEPTEMBER AGENDA, AS THE CALENDAR INDICATED, A RESOLUTION FOR THE HOMESTEAD EXEMPTION TO GO UP ANOTHER $0.01 AND WE'RE REVISIT THE UNUSED INCREMENT ONCE WE HAVE THE EFFECTIVE TAX RATE, OR, EXCUSE ME, THE VOTER APPROVAL TAX RATE AND CALCULATED THAT SHOULD OCCUR LATE JULY.

SO THEN WE'LL BE ABLE TO DETERMINE IF WE NEED TO USE THE INCREMENT, HOW MUCH WE NEED TO USE.

SO WE'LL PICK THAT CONVERSATION UP THEN.

AND IF THE TAX RATE REMAINS LEVEL THEN WE'LL REVISIT NUMBER THREE IN FUTURE YEARS OF SHIFTING A TAX RATE, THAT STRATEGY, ONE OTHER ITEM WE DISCUSSED WITH THE FINANCE COMMITTEE AND THAT WAS CASH FUNDING CAPITAL PROJECTS.

AND I'M GOING TO DISCUSS THAT IN A FEW MORE SLIDES.

A NEXT, I WANT TO REVISIT THE DEBT SERVICE CAPACITY DISCUSSION THAT WE HAD WITH THE COUNCIL AND ALL PARTICIPATE IN DISCUSSION BACK IN DECEMBER.

AND AS I MENTIONED EARLIER, WE HAD DISCUSSION WITH THE FINANCE COMMITTEE.

WE MET IN DECEMBER WHERE WE TALKED PERCENT ANNUAL GROWTH PROJECTION ON ASSESSED PROPERTY VALUES THROUGHOUT THE WHOLE REALLY 20 YEAR HORIZON OF DEBT.

WE DISCUSSED USING A ROADWAY IMPACT FEE FUNDS TO CASH FUND PROJECTS AS WE COLLECTED.

WE WOULD USE THAT TO PAY ON CASH FOR CAPITAL PROJECTS.

WE DISCUSSED THE REFUNDING OPPORTUNITY LOOKING AT LOOKING AT EXISTING DEBT FROM 20 2014.

THE DEBT HAD TO EXIST FOR AT LEAST TEN YEARS BEFORE IT WAS ELIGIBLE FOR REFINANCING.

SO WE IDENTIFIED AN OPPORTUNITY THAT COULD FIT WITHIN OUR FINANCIAL POLICY THAT WE'RE GOING TO PURSUE.

AND WE CONTINUE TO CHECK TO MAKE SURE IT'S STILL VIABLE.

AND AND IT IS.

SO WE'RE GOING TO PURSUE THAT.

AND THEN WE TALKED ABOUT THE DEBT SERVICE FUND REQUIREMENTS AND SPECIFICALLY THE BALANCE IN IT, AND USING A PORTION OF THAT BALANCE TO PAY FOR CAPITAL PROJECTS AS WELL.

TO ADDRESS THE MAIN ASSUMPTION THAT 3% GROWTH IT SHOWED THE COUNCIL THIS TEN YEAR PERIOD IN WHICH OUR ASSESSED VALUATION HAS GROWN. AND YOU CAN SEE THE AVERAGE GROWTH OF OUR ASSESSED VALUATION IS 8.6.

9%. WE TOOK OUT THE HIGHS AND THE LOWS, THE THE OUTLIERS.

AND WE STILL CAME UP WITH 8.71%.

HIS AVERAGE GROWTH.

SO WE WENT BACK ANOTHER TEN YEARS AND LOOKED AT SACHSE VALUE GROWTH OVER A 20 YEAR PERIOD.

AND WE STILL CAME BACK WITH 8.32%, AND WE TOOK OUT THE HIGHS AND LOWS AGAIN AND CAME UP WITH 8.5 4%.

NOW, THE ONLY THING THAT OTHER THING THAT STANDS OUT IS YOU CAN SEE THE MORE RECENT YEARS THE GROWTH PACE HAS HAS SLOWED SEVEN A LITTLE OVER 7% FOR A NUMBER OF YEARS AND 5.35.

LAST YEAR OR FOR THE CURRENT FISCAL YEAR.

SO SO THEN WE THIS IS WHAT, THE WHERE WE LEFT OFF WITH THE CONVERSATION? WE HAD DEBT CAPACITY OF $8.9 MILLION FOR FISCAL YEAR 24 THROUGH 28.

THE COUNCIL HAS GIVEN US DIRECTION TO ADD IN TO THE DEBT OR PAY FOR A 1.2 MILLION FOR THE GAS LINE RELOCATION AT THE POLICE STATION EXPANSION, ANOTHER 700,000 FOR THE SALLY PORT.

AND THEN YOU GAVE US DIRECTION TO MOVE FORWARD.

AND WE, YOU KNOW, CONTRACTUALLY OBLIGATED TO PURCHASE PUBLIC SAFETY RADIOS FOR 1.5 MILLION AND THEN 550,000 THAT YOU APPROVED THE CONTRACT FOR, FOR HIDDEN CREEK GARDENS TRAFFIC SIGNAL.

SO THAT REDUCED THE CAPACITY TO 4.9 MILLION, AGAIN, ALL BASED ON THE THREE POINT.

EXCUSE ME, 3% ANNUAL GROWTH RATE.

AND THIS IS A SLIDE WE PRESENTED TO THE FINANCE COMMITTEE BACK IN DECEMBER WHEN WE TALKED ABOUT IT, WE SAY THE FIRST YEAR THAT 3% IS GOING TO CHANGE AS SOON AS WE GET THE PRELIMINARY ASSESSED VALUATION NUMBER.

SO WE MET WITH THE FINANCE COMMITTEE ON MAY 8TH.

SO WE WANT TO SHOW THEM WHAT THE WHAT THAT NUMBER COULD LOOK LIKE CHANGING.

SO WE USED A GROWTH ASSUMPTION OF 7.5%.

AND WE LEFT THE MEETING SAYING HEY, THIS NUMBER COULD VERY LIKELY COME BACK DOWN, BUT WE DIDN'T WANT TO MOVE UP FROM 3% TO A HIGHER NUMBER WITHIN, YOU KNOW, A COUPLE OF WEEKS.

SO THE THE 7.5% GROWTH NEXT FISCAL YEAR, THEN 5.5% THE NEXT FOUR YEARS, AND THEN 3% GROWTH 15 YEARS BEYOND THAT.

[00:30:04]

ON THE ASSUMPTIONS. YEAH. AND AGAIN, I DON'T WANT TO STEAL HARLAN'S THUNDER HERE.

IS THAT YOU KNOW, IT'S WE DON'T WANT TO BE TOO CONSERVATIVE WITH NUMBERS, AND WE DON'T WANT TO BE OVERLY AGGRESSIVE WITH NUMBERS AS WELL.

AND SO THERE WAS A HEALTHY DIALOG AT THE FINANCE COMMITTEE ABOUT WHAT IS APPROPRIATE BASED ON OUR HISTORICAL GROWTH TRENDS.

AND WHAT IS IT, YOU KNOW, LOOKING AT OVER 20 YEARS.

AND I THINK THAT'S WHERE HARLAN IS HEADING.

YES, SIR.

SO SO WE SO THAT THOSE ASSUMPTIONS COME UP WITH $36 MILLION IN ADDITIONAL CAPACITY.

AND THEN WE STARTED SUBTRACTING THOSE ITEMS I MENTIONED EARLIER.

FIRST AND BEFORE WE STARTED SUBTRACTING THEM OF COURSE, WE ADDED IN THE 5.5 MILLION FROM THE FUND BALANCE FROM THE DEBT SERVICE FUND.

THE TWO NEW ITEMS WE ADDED WAS A 2.6, 2.6 MILLION FOR THE TWO FIRE ENGINES AND THEN 350,000 FOR EIGHT STORM SIRENS. SO THAT UNDER THIS SCENARIO, THAT WOULD PRODUCE REMAINING DEBT CAPACITY OF $34 MILLION.

SO THE FINANCE COMMITTEE WAS SUPPORTIVE OF OF REALLY THE ADDING THE TWO FIRE ENGINES AND, AND THE EIGHT STORM SIRENS.

AND THAT WENT ALONG WITH CASH FUNDING, CAPITAL PROJECTS.

AND THEY WERE SUPPORTIVE OF ADJUSTING THE ASSUMPTIONS AS WELL.

NOT NECESSARILY 7.5, BUT KNOWING THAT WE'RE GOING TO QUICKLY MOVE TO WHATEVER THE DIRECTION THE, THE, THE PRELIMINARY TAXABLE VALUE INDICATED, THE NUMBERS SHOULD BE BASED ON THAT UPDATED PROJECTION, BUT THEY WERE SUPPORTIVE OF THE 5.5 GROWTH AND THEN 3% AFTER THAT.

AND THE 3% FOR 15 YEARS ACKNOWLEDGED THAT WE'RE GOING TO GO THROUGH PERIODS OF RECESSIONS.

WE'RE GOING TO GO THROUGH PERIODS OF BOOM.

SO WE CAN'T PICK WHEN THOSE ARE GOING TO HAPPEN, BUT WE'LL PICK A CONSERVATIVE NUMBER SO WE CAN WE CAN ADJUST ACCORDINGLY.

SO NOW THIS IS THE UPDATED CAPACITY NUMBER.

WE DID GET THE PRELIMINARY TAXABLE VALUES.

AND BASED ON THE CHANGE FROM PRELIMINARY TO CERTIFIED, WE FEEL COMFORTABLE WITH THE 6% GROWTH FOR THIS YEAR.

AND WE THINK IT'LL MOVE UP AS PEOPLE GO THROUGH THE APPEAL PROCESS AND PROTEST THE VALUES AND SO FORTH.

AND AS THAT PLAYS OUT, NORMALLY THEY START WITH A CONSERVATIVE NUMBER AND IT JUST KIND OF GROWS UP UNTIL IT'S CERTIFIED.

SO WE THINK WE'RE AT A PLACE WHERE THE NUMBER OF GROWTH FROM HERE, I THINK WE STILL HAVE THE 5.5 FOR THE NEXT FOUR YEARS AND 3% FOR 15 YEARS BEYOND THAT.

NOW, THIS NUMBER DROPPED SHARPLY.

IN ADDITION TO MOVING FROM 7.5% DOWN TO 6%, THAT WASN'T AS BIG OF A CHANGE.

THE BIGGEST CHANGE OCCURRED BECAUSE WHEN WE WERE WORKING WITH OUR FINANCIAL ADVISORS TO PUT THIS TOGETHER, SHE USED A STARTING NUMBER OF ALL SETS.

VALUATION WAS DIFFERENT THAN THE ONE THAT IT REALLY SHOULD BE USED.

SO WE WERE HAVING THIS DISCUSSION WITH HER FOR A NUMBER OF WEEKS AND I CAN BACK UP.

AND SHOW YOU THE NUMBER.

SO YOU CAN SEE.

FOR 2023, WE USE A $5.7 BILLION FOR ASSESSED VALUATION, AND THAT'S THE NUMBER SHE USED IN CALCULATING OUR CAPACITY. WELL ASSESSED VALUATION IS DIFFERENT FROM TAXABLE VALUATION.

TAXABLE IS WHAT YOU ACTUALLY APPLY THE TAX RATE TO.

SO IN HER NUMBER SHE GOT HERE BECAUSE SHE USED THE ASSESSED VALUATION MINUS THE TIFF WHICH ARE TWO SEPARATE ENTITIES.

AND MONIES ARE USED FOR TWO SEPARATE THINGS.

AND IT CAME UP TO 5.7 MILLION.

BUT YOU HAVE TO CONTINUE ON TO GET THE TAXABLE VALUE BY ADDING IN VALUE UNDER PROTEST.

AND THEN YOU SUBTRACT OUT VALUE ABOVE YOUR CEILING.

YOU KNOW, BY STATE LAW, RESIDENTIAL PROPERTY CAN'T.

THE VALUE ON IT CAN'T INCREASE MORE THAN 10%.

EVERYTHING ABOVE THAT IS ABOVE THE CEILING.

AND BURLESON CASE, YOU HAVE OVER $900 MILLION ABOVE THAT CEILING, RIGHT? SO ONCE YOU SUBTRACT, ONCE YOU ADD IN THE VALUE ON THE PROTEST AND SUBTRACT THAT 900 MILLION, THAT MEANT THERE WAS A THERE WAS A $600 MILLION DEDUCTION THAT NEEDED TO COME OFF THE THE $5.7 MILLION.

SO THE TAXABLE NUMBER, TAXABLE VALUE IS $5,000,000,144 MILLION.

AND WHEN YOU DO THAT, THAT'S WHAT GOT US REALLY BACK TO THE 17.9 MILLION.

SO I WANT TO WALK THROUGH THAT BECAUSE WE ONLY A FEW WEEKS AGO TALKED TO THE FINANCE COMMITTEE ABOUT THIS.

AND, AND THEY'RE PROBABLY EXPERIENCING WHIPLASH OR WAIT A MINUTE.

THE NUMBER MOVED QUITE A BIT.

SO YES.

YEAH. AND I THINK YOU KNOW, WHILE WE MET WITH THE FINANCE COMMITTEE, THIS IS THE FIRST TIME THE COUNCIL HAS SEEN DIFFERENT NUMBERS.

[00:35:02]

I THINK A FEW THINGS ARE AT PLAY HERE IS THAT WE DO HAVE A VERY STRONG GROWING ECONOMY, RIGHT? SO I THINK FOR THE FIRST FEW YEARS, THE CITY MANAGER'S OFFICE IS COMFORTABLE WITH RECOMMENDING SOMETHING BEYOND THE 3% GROWTH.

I THINK THE OTHER THING TOO, IS THAT YOU KNOW, MOST ASSUREDLY THE RATE WILL LIKELY REDUCE.

AND IF THE COUNCIL IS COMFORTABLE WITH A STRATEGY OF SHIFTING OVER A PERCENTAGE OF THAT REDUCTION TO THE INS SIDE TO KEEP UP WITH THE CAPITAL PLAN, I'M REALLY NOT NECESSARILY CONCERNED WITH THE CAPITAL PLAN THAT WE'RE GOING TO PRESENT TODAY.

WHAT I WOULD TELL YOU IS, IS THAT EVERY YEAR WE'RE GOING TO HAVE TO GO BACK AND REEVALUATE, RIGHT.

THE ASSUMPTIONS WILL CHANGE.

WE'LL HAVE PROJECT SCOPE CHANGES, WE WILL HAVE INFLATIONARY NUMBER CHANGES.

AND SO WE TRY TO BE VERY TRANSPARENT WITH HOW THE CIP HAS CHANGED BASED ON SOME OF THESE THINGS.

AND WE'LL CONTINUE TO DO THAT WITH RED LINES OF THIS IS WHAT IT WAS, THIS IS WHAT IT'S GOING TO.

AND HERE'S OUR NEW FIFTH YEAR.

THAT WOULD BE AN EXERCISE WE ALWAYS HAVE TO DO.

AND, AND SO REALLY, YOU KNOW, THINK OF THE FUTURE YEARS IS, IS JUST THAT, A FORECAST.

WHAT WE REALLY NEED TO DIAL IN IS ON WHAT WE'RE COMFORTABLE WITH WITH THIS YEAR AS WE'RE SETTING THE BUDGET.

HARLAN, I DON'T KNOW IF YOU HAVE ANYTHING TO ADD TO THAT.

YEAH, I WOULD JUST SAY ONE OF THE REASONS WE FEEL COMFORTABLE IN THE SHORT TERM TWO IS THE SILLY NUMBER.

I MENTIONED, THE 900 MILLION ABOVE THE CEILING THAT EVEN IF VALUES REMAIN LEVEL, THEN WE'RE STILL GOING TO GET AN INCREASE BECAUSE OF THAT 10 MILLION ACCESSING THAT.

SO VALUES EVEN IF YOUR HOME DOESN'T INCREASE IN VALUE, WE WE'RE GOING TO GET ANOTHER 10% INCREASE IN TAXABLE VALUE BECAUSE OF IT'S SITTING THERE.

SO WE KNOW THERE'S BUILT UP VALUE THAT WE CAN ACCESS OVER TIME.

AND THEN WE KNOW THAT IT'S STILL A HOUSING SHORTAGE.

PEOPLE STILL MOVING TO THE METROPLEX TEXAS AS WELL.

SO AND WE THINK AS RATES START TO COME DOWN, THE WHOLE ECONOMY IS GOING TO START SHIFTING AND HOUSING START MOVING AND SO FORTH.

SO SO WE FEEL REALLY COMFORTABLE WITH SHORT TERM.

AND IT'S THE LONG TERM, WE THINK WE SHOULD STAY AT THE 3% BEYOND.

BEYOND FIVE YEARS.

I'M SORRY. I DIDN'T MEAN TO INTERRUPT.

ONE OF THE THINGS THAT MAKES ME COMFORTABLE ABOUT THIS IS YOU BEING HERE.

BUT ALSO, WE HAVE GOT A PHENOMENAL FINANCE COMMITTEE THAT I LEAN ON THESE GUYS A LOT.

SO THIS GIVES ME COMFORT IN THE DIRECTION WE'RE GOING.

SO I APPRECIATE THAT.

YEAH. THANK YOU. MAYOR.

AND I SHOULD MENTION TOO, THAT THE ONE OF THE OTHER BACKSTOPS WE HAVE IS THAT IF IF THINGS DO BEGIN TO CHANGE AND I SHOULD TELL YOU VALUES IN TERMS OF TAXABLE VALUES CHANGE VERY SLOWLY, NOT LIKE SALES TAX BECAUSE IT'S APPRAISED JANUARY 1ST OF EACH YEAR.

A RECESSION COULD HAPPEN APRIL 15TH, BUT EVERYONE IS GOING TO BE TAXED ON THE VALUE OF THE PROPERTY JANUARY 1ST.

SO IT'S LIKE AN EIGHT. IT COULD BE AN 18 TO 24 MONTH LAG BEFORE YOU FILL IT ON YOUR TAX RATE.

SECONDLY THE NATURAL RESPONSE WOULD BE TO ADJUST YOUR CIP SO YOU HAVE TIME TO ADJUST THAT AS WELL.

SO YOU'LL SEE MAJOR CHANGES COMING IN YOUR TAX RATE, YOU KNOW, 18 TO 24 MONTHS IN ADVANCE.

AND WE HAVE OPPORTUNITY TO MAKE ADJUSTMENTS.

BUT WE'RE PROPOSING THE JUST ADJUSTED ASSUMPTIONS SO WE CAN MAKE SURE WE HAVE MORE REALISTIC NUMBERS AND WE'RE NOT MAKING DRASTIC CHANGES UNNECESSARILY.

BUT IF YOU GUYS WANT TO GIVE US ANY MORE TAX, ANY MORE DIRECTION REGARDING THE VALUES OR THE ASSUMPTIONS, WE'D BE HAPPY TO TAKE THOSE AND AND ADJUST ACCORDINGLY.

IS THERE ANY BENCHMARKS THAT WE NEED TO WATCH FOR IN CASE THERE'S SOMETHING GOING WRONG? OR. I MEAN, IN OTHER WORDS, WE DO OUR BUDGET AND EVERYTHING, BUT WE'RE WATCHING ON THE FLY.

IS THERE ANY BENCHMARKS WE NEED TO WATCH? YEAH, NORMALLY WHAT WE'RE WATCHING IS THE PACE IN WHICH WE'RE ISSUING BUILDING PERMITS.

WE'RE LOOKING AT THE VALUE OF RESIDENTIAL OR REALLY PROPERTY IN GENERAL THROUGHOUT THE COMMUNITY AND, AND HOW THAT'S CHANGING, THAT'S GOING TO GIVE US OUR FIRST LOOK LONG BEFORE THE APPRAISAL DISTRICT PUTS A VALUE ON, ON SOMEONE'S PROPERTY.

AND I THINK THE OTHER BIG INDICATOR TO WATCH IS THE TAX, THE MORTGAGE RATE OR WHAT THE FEDERAL.

OBSERVED. I'VE SEEN YEARS WHERE YOU'RE, YOU KNOW, YOU'RE EXPECTING AND REALLY ON A PACE TO HAVE YOUR RECORD SETTING BUILDING PERMIT YEAR AND THE FEDERAL RESERVE RAISED RATES, AND ALL OF A SUDDEN YOU COULD SEE IT JUST MODERATE.

I MEAN, IN, IN THE SAME MONTH.

IT'S AMAZING.

AND I SUSPECT IT TO GO THE OTHER WAY AS WELL WHEN RATES ARE STARTED GOING DOWN.

SO I THINK MONITORING THE GENERAL ECONOMY OVERALL IS PROBABLY THE BENCHMARKS AND THINGS THAT WE'D BE WATCHING TO TO DETERMINE WHAT CAN AFFECT OUR

[00:40:08]

SO BEFORE WE PROCEED, JUST IS THE COUNCIL COMFORTABLE WITH US PROCEEDING WITH THE 6% AND THEN 5.5 OVER THE REMAINING FOUR YEARS AND 3% THEREAFTER, KNOWING THAT AS WE GET NEW INFORMATION OR MORE INFORMATION, WE CAN CHANGE THOSE ASSUMPTIONS.

OKAY. ANYBODY? WE'RE GOOD WITH IT.

ALL RIGHT. THAT'S HOW WE'LL PROCEED WITH ASSUMPTIONS FOR THE CAPITAL PLAN.

AND I HAVE A COUPLE OF MORE SLIDES BEFORE I TURN IT OVER TO ERIC.

STARTING WITH CASH FUNDING CAPITAL PROJECTS.

SO THIS IS IMPORTANT BECAUSE AS I MENTIONED EARLIER, THE VOTER APPROVAL TAX RATE.

ISN'T IMPACTED BY THE DEBT SERVICE TAX RATE COMPONENT.

SO YOU CAN RAISE IT AND THE VOTER APPROVED TAX RATE WON'T ADJUST BECAUSE OF THAT.

SO IT MEANS YOU HAVE A LOT MORE FREEDOM AND FLEXIBILITY ON THIS, THIS NUMBER ON THIS SIDE OF THE EQUATION.

SO WE CURRENTLY ASSUME WHEN WE PUT TOGETHER A FIVE YEAR FORECAST, THAT WE'RE GOING TO ELIMINATE THE CASH FUNDING AND CAPITAL PROJECTS.

AND MOVE TOWARD PURSUING OTHER REVENUE SOURCES.

AS A RESULT OF THAT, WE DID DISCUSS THIS STRATEGY WITH THE FINANCE COMMITTEE, AND THEY RECOMMENDED MOVING FORWARD WITH IT.

A COUPLE OF PROJECTS THAT WOULD BE IMPACTED IMMEDIATELY.

FIRST IS THE TWO FIRE ENGINES.

LAST MAY, THE CITY COUNCIL AUTHORIZED THE ORDERING OF TWO FIRE ENGINES.

THEY'RE SCHEDULED TO ARRIVE.

DURING THE SUMMER OF 2025.

SO WE HAVE ABOUT A LITTLE BIT OVER A YEAR BEFORE THEY ARRIVE.

SO WHAT WE'RE TRYING TO DO IS IDENTIFY.

AND WE'VE BEEN TRYING TO IDENTIFY FUNDING SOURCE FOR THOSE CAPITAL PROJECTS, AND WE'VE BEEN LOOKING AT OTHER FUNDS AND SO FORTH.

AND AND THEN IT OCCURRED TO US THAT A GOOD WAY TO FUND THESE PROJECTS IS TO ISSUE DEBT FOR THEM.

AND WE DON'T NECESSARILY HAVE TO ISSUE 20 YEAR DEBT.

WE COULD ISSUE DEBT AND STRUCTURE THE PREMIUM TO FRONT END THE PREMIUMS TO PAY IT OFF AT SOME, YOU KNOW, EARLIER TIME PERIOD, SUCH AS FIVE YEARS.

SO WE TALKED ABOUT USING THE 5.5 MILLION IN THE DEBT SERVICE FUND, FOR EXAMPLE, YOU COULD, YOU KNOW, DO A CASH DEFEASANCE AND TURN RIGHT AROUND AND PAY THAT, USE THAT 5.5 MILLION TO PAY OFF THE TWO FIRE ENGINES AND EQUIPMENT THAT GO ALONG WITH THOSE ENGINES AS WELL.

AND THEN WE HAVE ON THE LIST THE STORM SIRENS.

I MENTIONED WHEN YOU HAD YOUR THE THE LOBBYISTS FOCUSED ADVOCACY PRESENT TO YOU.

A COUPLE OF WEEKS AGO, THEY MENTIONED THAT THERE WAS A BILL OUT THERE, ACTUALLY, A LAW THAT ALLOWED COMMUNITIES UNDER UNDER 30,000 POPULATION TO ACTUALLY PAY FOR FIRE ENGINES OUT OF THE O&M TAX RATE AND NOT BE NEGATIVELY IMPACTED BY THE VOTER APPROVAL TAX RATE. SO BEFORE THEY LEFT, I SAID, HEY, WHAT IS THAT BILL? IS IT HOW DOES IT APPLY TO US? BECAUSE WE'RE LOOKING AT SO IT'S LET'S YOU KNOW, THE LEGISLATURE DOES REALIZE THOSE LARGE CAPITAL PROJECTS ARE A BURDEN FOR CITIES TO FUND AND FINANCE.

SO THAT BILL KIND OF FITS INTO OUR STRATEGY OF OF HOW WE'RE FUNDING THESE PROJECTS.

SO NOW THE OTHER PROJECT THAT'S LISTED ON HERE IS ONE THAT YOU'VE BEEN WORKING ON, THE CITY HALL RENOVATION.

YOU KNOW, THE LAW DOES NOT ALLOW US TO ISSUE CODES FOR THOSE.

THAT'S WHY IT'S ON OUR LIST FOR CASH FUNDING, CAPITAL PROJECTS.

SO WE'VE LOOKED FOR OTHER FUNDING SOURCES ROYALTY FUNDS OF 800,000.

THAT HAS A LARGE BALANCE IN THAT FUND IS ONE OF THOSE THAT WE IDENTIFIED.

SO IT'S IT'S IN THE FIVE YEAR FORECAST.

SO IT REDUCES THE CASH FUNDING OUT OF THE GENERAL FUND DOWN TO 600,000.

IS IS WHAT WE'RE PROPOSING WHEN WE GET TO THAT THAT LINE.

SO THE FINANCE COMMITTEE WAS SUPPORTIVE OF THE STRATEGY FOR THE TWO FIRE ENGINES.

I MENTIONED THE EIGHT STORM SIRENS, AS WELL AS THE USE OF THE ROYALTY FUNDS TO REDUCE THE AMOUNT OF CASH FUNDING FOR THE CITY HALL RENOVATION.

OKAY, SO JUST TO RECAP, WHAT YOU'RE TELLING US IS MOVING AWAY FROM CASH FUNDING, AND THAT WAS ONE OF THE OPTIONS THAT WE WERE LOOKING AT FOR THE FIRE ENGINES AND THE STORM SIRENS, AM I CORRECT? I AM COMPLETELY IN SUPPORT OF MOVING AWAY FROM CASH FUNDING, I MEAN, TO.

ECHO A PREVIOUS COUNCIL MEMBER, CASSIUS KING.

AND I THINK WHEN YOU GET THOSE UNEXPECTED DIPS OR THINGS THAT ARE DUE, LIKE THE MAYOR WAS SAYING, THOSE BENCHMARKS THAT YOU KNOW, YOU'RE LOOKING FOR CASH IS IMPORTANT TO HAVE ON HAND.

WE DON'T WANT TO BE IRRESPONSIBLE AND HOLDING ON TO CASH BECAUSE CITIZENS ARE THEN SAYING, WELL, THEN WHY AM I PAYING TOWARD THIS IF YOU'RE JUST GOING TO SIT IT ASIDE?

[00:45:04]

AND NOW THERE IS AN ELEMENT THAT WE DO NEED TO KEEP.

BUT I'M LOOKING FORWARD TO SEEING THOSE NUMBERS.

BUT I TRUST THAT THAT WAS A GOOD DISCUSSION IN THE FINANCE COMMITTEE.

SO I COMPLETELY SUPPORT OF THAT.

BUT WHAT YOU'RE SAYING FOR THESE ENGINES IS LOOKING AT DEBT THEN, BUT NOT 20 YEAR BECAUSE SOME OF THESE I MEAN, THAT'S BEYOND THEIR LIE.

I MEAN, IT'S ABOUT 15 YEARS THAT WE START LOOKING AT REPLACING THEM.

CORRECT. SO I DON'T WANT TO CONTINUE PAYING FOR AN ENGINE THAT WE ARE NOT EXACTLY PUTTING TO WORK ON THE FRONT LINES ANYMORE.

YEAH, I AGREE 100%.

THAT PROBABLY A GOOD TIME FRAME TO REPLACE THE ENGINES AROUND 15 YEARS.

SO MAINTENANCE COSTS SEEM TO, YOU KNOW, SKYROCKET BEYOND THAT TIME PERIOD.

SO YOU DON'T WANT TO HAVE DEBT ON THE BOOKS THAT YOU'RE PAYING FOR BEYOND THE LIFE OF AN ASSET.

BUT IN ADDITION TO THAT, YOU KNOW, YOU DON'T WANT TO PAY, YOU KNOW, ALMOST TWICE THE AMOUNT FOR THE ENGINES, EITHER WITH INCREASED INTEREST COSTS.

SO THAT'S WHY I'M REALLY RESERVED TO SAY, OKAY, YOU COULD ISSUE DEBT FOR THEM, BUT THAT DOESN'T MEAN IT'S LONG TERM DEBT.

YOU KNOW YOU TALK TO OUR FINANCIAL ADVISORS, THEY SAY YOU COULD, YOU KNOW, TURN AROUND WITH THE CASH DEFEASANCE AND PAY IT OFF WITHIN ONE YEAR, YOU KNOW, BUT I'M JUST OPENING UP AND SAY, HEY, IF COUNCIL IS INTERESTED IN PURSUING THAT, THEN WE'LL CONTINUE THE CONVERSATION AND SAY, WHAT TIME? WHAT'S THE APPROPRIATE TIME PERIOD TO PAY THAT OFF? BUT WE'RE FORTUNATE IN TERMS OF DEBT TO SAY, HEY, WE ACTUALLY DO HAVE FUNDS IN A DIFFERENT IN A DIFFERENT FUND OF THE GENERAL FUND TO PAY IT OFF WITHOUT IT TRULY BEING DEBT THE WAY WE WOULD TRADITIONALLY DO IT.

SO SO IT'S NOT NOT NECESSARILY A HURTING US TO DO IT.

IT'S JUST A MECHANISM TO ACCESS THE FUNDS.

AND I SHOULD MENTION FOR THE NEWEST COUNCIL MEMBER THAT WE CAN'T ACCESS THOSE FUNDS IN THE DEBT SERVICE FUND BECAUSE.

BUT IN ANY OTHER WAY OTHER THAN PAYING OFF PRINCIPAL AND INTEREST.

SO THAT'S WHY IT'S IT FEELS LIKE IT'S A LITTLE BIT OF ROUNDABOUT.

WE CAN'T JUST SAY, HEY, LET'S CUT A CHECK OUT OF THAT FUND FOR THOSE THE WAY THE DEBT COVENANTS IN THE BOND ORDINANCE ARE WRITTEN, I ALSO WANT TO STATE THAT THE CASH ISN'T SITTING THERE.

WE'RE INVESTING THAT MONEY IN GROWING IT AS IT'S IN THE ACCOUNT.

YES, THAT'S TRUE.

WE ARE. AND WHEN WE GET TO THE FORECAST AND IT'S PROBABLY NOT ENOUGH DETAIL FOR THE COUNCIL, BUT YOU CAN SEE THAT OUR INTEREST INCOME HAS INCREASED SHARPLY THIS YEAR.

SO THE FUNDS ARE WORKING AND WE'VE WE'VE HAD A LOT OF SUCCESS OVER THE LAST YEAR MAKING INVESTMENTS.

SO I THINK HERE THE SPECIFIC FEEDBACK WE'RE LOOKING FOR IS JUST THAT YOU'RE OKAY WITH THE ISSUANCE OF DEBT FOR THESE ASSETS.

AND THEN PARTICULARLY WITH THE WE'VE KIND OF HAD SOME OF THOSE CONVERSATIONS ABOUT SHIFTING AWAY FROM CASH FUNDING OF CAPITAL, BUT UTILIZING THE $800,000 AND THE ROYALTIES TO OFFSET THE COST IN THE GENERAL FUND FOR CITY HALL.

RIGHT. I WAS GOING TO SAY, SO WE'VE GOT 5.5 MILLION IN EXCESS DEBT SERVICE FUND THAT WE CAN.

IT'S ALMOST LIKE CASH, BUT I WOULD SAY FIND PROJECTS THAT WE COULD ISSUE BONDS FOR AND BUT VERY, VERY SHORT TERM ONE YEAR BONDS AND USE THE FIVE AND A HALF FOR THAT AND THEN ANYTHING.

THAT NEEDS TO BE LONGER THAN A ONE YEAR BOND.

JUST DON'T.

USE THAT USE THE, YOU KNOW, THE NORMAL BOND PROCESS FOR THAT.

SO IT'S ALMOST LIKE CASH BUT NOT REALLY UNDERSTOOD HOW OUR RATES ON BONDS GOING RIGHT NOW.

WHEN WE DO THE FORECAST, I THINK WE'VE BEEN FORECASTING ANYWHERE FROM 4.5 UP TO 5%.

OKAY. THAT'S GOOD. EVERYBODY ON BOARD.

WE'RE GOOD. YOU GOT IT.

ALL RIGHT. THANK YOU VERY MUCH.

I'LL TURN IT OVER TO ERIC AT THIS POINT.

THANKS, HARLAN, AND GOOD MORNING, MAYOR AND COUNCIL.

IT'S A LITTLE BIT OF A SWITCH.

I USUALLY GET TO STAND HERE AND ASK YOU TO APPROVE SPENDING MONEY.

AND NOW WE'RE JUST GOING TO TALK ABOUT A LOT MORE MONEY.

SO NOT NOT COMMITTING A CONTRACT TODAY, BUT TALKING ABOUT TENS OF MILLIONS THAT KIND OF MAKE THE CITY GO AND SUPPORT ALL THE GROWTH. SO THANKFUL FOR THE OPPORTUNITY TO TO TRY TO HELP IN THIS CONVERSATION.

SO I WANTED TO START WITH A LITTLE BIT OF A BROADER BROADER LOOK AT CAPITAL.

AND REALLY, THIS IS AN OPPORTUNITY TO TO SAY THANK YOU TO YOU FOR YOUR LEADERSHIP AND YOUR RELATIONSHIPS WITHIN THE REGION, BECAUSE ALL THE THINGS THAT

[00:50:06]

SO I WANT TO TAKE JUST A SECOND TO THANK YOU FOR THAT AND LET YOU KNOW FOR SURE PUBLICLY THAT WE APPRECIATE THAT.

THIS MAP IS JUST NINE PROJECTS, BUT IT'S OVER $1 BILLION THAT WILL BE INVESTED OVER THE NEXT DECADE OR SO.

THESE ARE ALL PROJECTS IN THE PIPELINE, YOU KNOW, RANGING FROM THE THE BIG WIDENING OF I-35 THROUGH TOWN AT OVER 400 MILLION TO 1.

THAT'S PROBABLY A LITTLE MORE NEAR AND DEAR TO MOST RESIDENTS.

HEART. NUMBER FIVE, THEY'RE THE 174 WIDENING WILSHIRE.

YOU KNOW, THE CITY IS FUNDING THE DESIGN OF THAT.

SO BUT THERE'S ABOUT $30 MILLION IN CONSTRUCTION THAT'S BEING FUNDED FROM OTHER SOURCES.

AND AGAIN, IN LARGE PART DUE TO YOUR RELATIONSHIPS WITH COUNCIL OF GOVERNMENTS AND TECH STOCKS AND AND OTHERS THAT HELP US GET THIS FUNDING TO GET IMPORTANT PROJECTS MOVING FORWARD.

SO I APPRECIATE THAT.

NOW, IF I COULD SLIDE ON TO THE GENERAL GOVERNMENT CAPITAL PROGRAM, WE'LL TALK IN KIND OF TWO BROAD SECTIONS, GENERAL GOVERNMENT BEING THE FIRST.

AND THEN WATER SEWER WILL FOLLOW AFTER.

AND I'LL APOLOGIZE IN EARLY BECAUSE WE HAVE A TON OF PROJECTS, A TON OF NUMBERS.

SOMETIMES IT'S A REAL CHALLENGE TO GET ALL OF THEM TO FIT.

ON A FEW SLIDES.

I WAS REALLY NOT PUSHING FOR THE 100 SLIDE PRESENTATION, BUT BUT WE CAME CLOSE.

BUT WE'LL USE THE SAME FORMAT FOR GENERAL GOVERNMENT NOW.

AND THEN IN A FEW MINUTES, WE'LL USE THE SAME FOR WATER SEWER BOND FUNDED PROJECTS.

YOU'LL NOTE THE TOP HALF ROUGHLY OF THIS TABLE IS THE 2022 GENERAL OBLIGATION BOND PROGRAM.

SO ALL OF THOSE PROJECTS ARE LISTED ALONG WITH THEIR ANNUAL ALLOCATIONS OF FUNDING.

SO OVERALL FOR THE FIVE YEAR PROGRAM.

INCLUDED IN THE CURRENT YEAR'S BUDGET AND THEN, AS AMENDED BY COUNCIL THROUGH MARCH OF THIS YEAR.

IT'S A TOTAL OF $106 MILLION FIVE YEAR PROGRAM, WITH ANNUAL ALLOCATIONS THAT RANGE FROM A LITTLE OVER 6 MILLION TO ABOUT 36 MILLION ANNUALLY.

THE NEXT SLIDE A LOT MESSIER, BUT HERE WE'RE BASICALLY REDLINING THAT ADOPTED FIVE YEAR PROGRAM TRYING TO HIGHLIGHT THINGS THAT ARE CHANGING.

SO IF THE NUMBER OR TEXT IS RED, IT'S BECAUSE WE'RE REVISING IT.

AND THEN THE GREEN WOULD REPRESENT WHAT THE NEW VALUE MIGHT BE.

IN SOME CASES THAT VALUE IS JUST MOVED FROM ONE YEAR TO ANOTHER.

SO IT'S A CHANGE.

WE'RE SHOWING THAT IN GREEN.

AND THERE ARE A FEW ITEMS SHOWN IN BLUE THAT REPRESENT OTHER FUNDING SOURCES THAT ARE NOT GENERAL GOVERNMENT FUNDED, NAMELY WATER, SEWER BONDS ON A COUPLE PROJECTS AND THEN IMPACT FEES ON ANOTHER PROJECT.

IN SOME CASES ALL THE CHANGES ARE REALLY THE RESULT OF ONE OF A FEW OR A COMBINATION OF A FEW ITEMS. IN SOME CASES, WE'VE GOT CONSTRUCTION COST INCREASES.

SO THE ANNUAL BUDGET DEVELOPMENT PROCESS IS ALWAYS A GREAT TIME FOR US TO UPDATE OUR NUMBERS TO MAKE SURE THAT WE'RE COVERED.

AND IF THAT MEANS WE NEED TO SHIFT SOME THINGS AROUND WE'LL DEFINITELY RECOMMEND THAT.

IN SOME CASES, WE HAVE MODIFIED PROJECT SCOPES.

THE SECOND ENTRY ON THIS TABLE, KIND OF.

JUMPS OUT AS AN EXAMPLE OF THAT.

THE BOND PROGRAM INCLUDED REBUILDING SOME NEIGHBORHOOD STREETS.

THERE'S A LONG LIST OF THOSE STREETS AND IT.

THE FUNDING PLAN OF THE BOND PROGRAM INCLUDED ROUGHLY 750,000 OVER A NUMBER OF YEARS.

WE HAVE A COUPLE OF YEARS LEFT TO GO, BUT WE ALREADY FROM GOING BACK AND LOOKING AT OUR NUMBERS, WE KNOW THAT WE WON'T HAVE SUFFICIENT FUNDING TO REBUILD ALL OF THE STREETS THAT WERE INCLUDED IN THAT BOND PROPOSITION.

SO HERE WE'RE SHOWING SOME ADDITIONAL FUNDING, ABOUT 3.6 MILLION TO COMPLETE THOSE PROJECTS.

WE ALSO, IN SOME CASES, SHIFT TIMING JUST BASED ON THE CURRENT SCHEDULE.

SO IF THE DESIGN OF A PROJECT IS NOT PROCEEDING AS QUICKLY AS WE'D LIKE, THEN IT MAKES SENSE THAT WE WOULD SHIFT THE TIMING OF THE OF THE FUNDING SO THAT WE WOULDN'T PREMATURELY, YOU KNOW, HAVE FUN, HAVE FUNDS PLANNED TO BE ISSUED AS DEBT TO PAY INTEREST ON.

[00:55:03]

SO ONE OR MORE OF THOSE THINGS.

CAUSE ALL OF THE THE RED AND GREEN TEXT ON THE SLIDE HERE.

ERIC, BEFORE YOU PROCEED, THERE'S THERE'S A COUPLE OF PROJECTS SPECIFICALLY, I WOULD LIKE TO POINT OUT TO THE COUNCIL.

SO ALSBURY PHASE THREE, THAT'S STILL A PROJECT THAT WE INTEND TO DESIGN, BUT YOU'LL SEE THAT LATER PROJECTED IN 4K RATHER THAN GENERAL FUND.

I KNOW THERE'S BEEN LOTS OF DISCUSSION AT BOTH INED COMMITTEE, AS WELL AS THE FULL COUNCIL ASSOCIATED WITH HULIN FOR LANE EXPANSION.

THIS CURRENT CIP ASSUMES CONSTRUCTION OF THE FOUR LANES.

SO WHEN YOU SEE THE DOLLAR AMOUNT THERE, I WANT TO BE CLEAR THAT THAT'S AN ASSUMPTION.

I DON'T THINK WE EVER GOT FULL, CLEAR DIRECTION FOR THE FULL COUNCIL ON WHERE YOU GUYS WANTED TO BE.

SO I WANT YOU TO KNOW SOME OF THE CAPACITY HAS BEEN TAKEN UP BY THE ADDITION OF THIS PROJECT.

AND THEN I THINK WE'VE SHIFTED OUT HIDDEN VISTA OUTSIDE OF THE FIVE YEAR HORIZON.

AND THEN THERE WAS $808,000 THAT WAS PROPOSED TO BE ADDITIONAL CASH FOR PAVEMENT REHABILITATION THAT WE'VE REMOVED BASED ON PRIOR DISCUSSION ABOUT CASH FUNDING OF CAPITAL PROJECTS. YOU KNOW, TOMMY, WHEN THERE'S A GEO BOND ELECTION, HOW MANY YEARS? REMIND ME, HOW MANY YEARS DO WE HAVE TO BOND OUT THAT FUND? THERE'S NOT A HARD AND SET RULE ON THAT, BUT THERE YOU KNOW, THERE'S A CONTRACT WITH THE VOTERS ABOUT WHAT WE SAY IN TERMS OF HOW LONG A PROJECT IS GOING TO TAKE.

I REMEMBER IT BEING IN THE DOCUMENTATION.

CORRECT. SO WE WANT TO MOVE AS QUICKLY AS POSSIBLE ON THAT.

BUT AS ERIC HAS POINTED OUT TO WITH NEIGHBORHOOD STREET REBUILDS, AS WE SEE INCREASE IN COST ESCALATION, WE'RE GOING WE KNOW THAT WE'RE GOING TO NEED ADDITIONAL DOLLARS TO SEE THAT CONTRACT WITH THE VOTERS THROUGH BEYOND WHAT THE GEO'S ACCOUNTED FOR, AND WE'LL MAKE SURE WE GET FIRE STATION FOUR WITHIN THAT TIME LIMIT. UNDERSTOOD.

AND SO WHEN YOU SEE THAT THERE SOME OF THAT IS THE ASSUMPTION ABOUT HOW LONG IT'S GOING TO TAKE TO DESIGN THAT BUILDING.

CORRECT? I THINK THE OTHER THING, TOO, IS THAT WHEN WE GET TO THE FIVE YEAR FORECAST I KNOW THAT WE'RE GOING TO NEED 12 TO 18 FIREFIGHTERS TO HOUSE THAT FACILITY RIGHT NOW.

YOU KNOW, IN THE OUT YEARS, YOU SEE, WE'RE RIGHT AROUND 20 TO 21% FUND BALANCE.

THAT'S GOING TO SHIFT AND CHANGE BASED ON SEVERAL THINGS.

ONE TIMING OF CHISHOLM SUMMIT.

RIGHT. WE SHIFT SOME OF THOSE ASSUMPTIONS OUT BASED ON THE TIMING OF WHEN WE THINK WE'RE GOING TO SEE SOME OF THE ROOFTOPS COME THERE.

WE OUR MUTUAL AID PARTNERSHIPS ARE IMPROVING.

AND I THINK THAT I FEEL CONFIDENT THAT WE'LL HAVE GOOD MUTUAL AID PARTNERS TO HELP US SERVICE THAT AREA WITH REASONABLE RESPONSE TIME UNTIL SUCH TIME THAT WE CAN CONSTRUCT THAT.

COUNCIL MEMBER. SCOTT NOTHING IS MORE NEAR AND DEAR TO MY HEART THAN OBVIOUSLY PUBLIC SAFETY FOR OUR COMMUNITY.

I THINK AS WE GO THROUGH THIS FIVE YEAR FORECAST AND AS WE GO THROUGH YEAR BY YEAR, THE TIMING ON THAT STATION WILL CHANGE BASED ON WHEN WE START SEEING ROOFTOPS. WHAT'S THE IMPACT FOR CRAFT MASTERS? AND WHAT THAT ULTIMATELY MAY BE IS ASSUMPTIONS ABOUT WHAT WE CAN AND CAN'T FUND BASED ON THE NUMBER OF FIREFIGHTERS WE HAVE TO HAVE AS A RESULT WILL BE IMPACTFUL.

ANOTHER THING THAT NOT NECESSARILY IS SHOWN IN THE FORECAST IS TIMING OF FORTH AMBULANCE.

RIGHT. I THINK THAT'S GOING TO BE A MATTER OF IF AND NOT WHEN.

RIGHT NOW THE DATA IS JUST TOO YOUNG FOR ME TO START REALLY FORECASTING WHEN WE THINK WE'RE GOING TO NEED THAT.

BUT YOU'VE HIT THE NAIL ON THE HEAD.

THAT'S GOING TO BE NOT ONLY A BIG CAPITAL EXPENDITURE, BUT IT'S GOING TO BE A VERY SIGNIFICANT OPERATIONAL EXPENDITURE TOO.

THANK YOU. TOMMY. YES, SIR.

SO THE SLIDE 28 SHOWS YOU KIND OF A CLEAN VERSION OF THE THE LAST SLIDE.

PLUS IT ADDS THE FIFTH YEAR FY 29 TO THE TABLE.

I CALL THIS THE PRELIMINARY FIVE YEAR GENERAL GOVERNMENT CIP FOR FY REALLY 25 TO 29.

BUT IT SHOWS 24.

JUST FOR CONTEXT.

SO YOU'LL NOTE THAT CONSTRUCTION OF THAT WAS AS WAS JUST MENTIONED, FIRE STATION FOUR IS A IS THE ONLY PROJECT IN FY 29.

IT'S THE ONLY PROJECT THAT WAS IS AT THIS POINT BEING ADDED TO THE FIVE YEAR PROGRAM.

AND IT WAS REALLY A SHIFT OUT FROM I THINK 28 TO 29.

THAT RESULTS IN AN OVERALL $121.5 MILLION FIVE YEAR.

WELL. 100 AND, WELL, JUST UNDER ABOUT $101 MILLION BECAUSE WE'VE GOT FY 24 SHOWN AS WELL.

BUT THE NEW FIVE YEAR PERIOD WOULD BE 25 THROUGH 29.

[01:00:02]

YOU'LL YOU'LL NOTE AT THE BOTTOM OF THE TABLE A COUPLE OF THE ITEMS THAT WERE JUST REVIEWED.

A LITTLE EARLIER THIS MORNING, THE TWO FIRE ENGINES AT 2.6 MILLION IN FY 25 AND THE EIGHT STORM SIRENS AT 350,000.

YOU ALSO HAD PUBLIC SAFETY RADIOS ADDED.

EARLIER THIS YEAR THAT AND COUNCIL'S APPROVED THAT EXPENDITURE.

SO IN ALL, INCLUDING THE PROJECTS THAT CITY MANAGER JUST HIGHLIGHTED AS BEING A REVISED SCHEDULE WISE, THE ALSBURY, THE THE HEEL AND ETC.

WE'RE LOOKING AT 121.5 MILLION OVER THE NEXT OVER FY 24 THROUGH FY 29.

AND AS CITY MANAGER MENTIONED, IT'S ALSO, I THINK, IMPORTANT TO NOTE THAT THE FIRST YEAR OF THE FIVE YEAR PROGRAM IS REALLY THAT'S THE ONE THAT WE'RE MOST CONFIDENT ABOUT BECAUSE IT'S WE'RE RIGHT THERE.

WE'RE ABOUT TO DO THAT WORK NEXT YEAR.

YEARS FOUR THROUGH OUR YEARS TWO THROUGH FIVE ARE REALLY PLANNING YEARS.

THIS IS, YOU KNOW, BASED ON THE BEST DATA WE HAVE NOW, THIS IS WHERE WE THINK THOSE THINGS ARE.

THE FIRE STATION FOUR IS A GREAT EXAMPLE OF THAT.

CHISHOLM SUMMIT REALLY TAKES OFF SOONER THAN IS CURRENTLY ANTICIPATED.

I WOULD ANTICIPATE IN NEXT YEAR'S BUDGET CYCLE OR BEFORE IF NECESSARY.

BUT NEXT YEAR'S BUDGET CYCLE, WE WOULD TALK ABOUT WHERE'S THE BEST PLACE FOR THAT PROJECT TO BE? IN SOME CASES WE'VE MOVED THINGS AGAIN TO COINCIDE WITH HOW MUCH CAPACITY WE HAVE IN A GIVEN YEAR.

AND YOU'LL SEE THAT LIKELY MORE ON THE WATER SEWER SIDE IN JUST THE.

JUST A MINUTE.

DON'T WE? DO WE KNOW HOW MUCH DEBT FALLS OFF DURING THAT PERIOD? I DON'T. OFF THE TOP OF MY HEAD, HARLAN, I DON'T I DON'T KNOW IF YOU WE CAN PROVIDE THAT.

SO WHAT WE'LL DO IS THAT WHEN WE COME BACK ON THE 17TH ONE OF OUR ENTRY SLIDES CAN SIMPLY BE THAT UNLESS YOU PREFER IT.

AN EMAIL TO YOU GUYS BEFORE THAT TIME.

OKAY, SO 121 MILLION.

THAT'S NOT THAT.

WE'VE GOT FIVE AND A HALF THAT WE'RE GOING TO DO SHORT TERM BONDS ON.

SO THAT WOULD COME OFF BASICALLY BECAUSE THEY'LL BE CANCELED OUT AND THEN BUT I'D LIKE YEAH, I'D LIKE TO SEE SURE, SURE.

THE REST OF US LIKE TO SEE HOW MUCH DEBT IS ACTUALLY FALLING OFF DURING THAT SIX YEAR PERIOD.

WE CAN DO THAT AS WE GO THROUGH THE DEBT SERVICE FUNDS.

WE'LL PROVIDE IT. THANK YOU.

I WOULD SAY NOT TO SPEAK FOR HARLAN ON THIS.

WHEN WE LOOK AT OUR DEBT CAPACITY AND THINGS LIKE THAT, THAT'S INCLUDED IN THERE.

SO OUR ABILITY TO ADD MORE DEBT AND STUFF LIKE THAT, AND WE'LL GET TO IN THE NEXT SLIDES OF WHAT DEBT CAPACITY WE HAVE WHEN MARTY AND WHEN THEY LOOK AT THAT.

SO AS WE MOVE THROUGH THE CYCLE, IT'S NOT JUST WHAT INCREASE IN REVENUES DO, BUT IT'S ALSO THE DEBT FALLING OFF.

SO THAT FLUCTUATES THE CAPACITY.

YEAH. WHEN WE RESPOND, WE CAN SHOW YOU THE THE SCHEDULE THAT WE RECEIVE FROM THE FINANCIAL ADVISORS.

SO WHEN SHE'S ADDING NEW DEBT ON YOU'LL SEE THE EXISTING DEBT SERVICE OR PRINCIPAL ON DEBT DROPPING AS WELL OVER THE YEARS.

SO WE WE CAN JUST SUBTRACT THE DIFFERENCE.

SO WHAT SHE DOES, SHE GOES OUT AND LOOKS OVER THE FIVE YEAR HORIZON, TAKING THOSE ADDITIONAL DEBT PLUS THE REDUCTION IN PRINCIPAL AND SAY HERE'S HOW MUCH YOU CAN INCREASE.

SO SHE GIVES US A TOTAL NUMBER LIKE 135 MILLION.

AND THEN WE SUBTRACT ERIC'S NUMBERS OFF OF THAT TO SEE WHAT OUR, OUR ADDITIONAL CAPACITY IS.

I MEAN, THAT'S ESSENTIALLY WHY SOME OF THESE NUMBERS DON'T GET TO GROW.

LIKE COACH WAS LEANING IN AND ASKING, WELL, WHY CAN'T WE ADD LOOKING SPECIFICALLY AT THE NEIGHBORHOOD STREET REBUILDS? BUT THAT 3.3 THAT'S COMING ON IN 2028? IT'S MY UNDERSTANDING, LIKE YOU'RE SAYING, THAT AS WE PAY OFF DEBT, IT'S INCREASING THE ABILITY TO ADD MORE.

SO WE CAN'T NECESSARILY WE DON'T HAVE THE ABILITY TO MOVE UP THAT 3 MILLION IF THE MONEY IS NOT THERE.

RIGHT. YEAH, THAT'S A GOOD POINT.

AND THAT'S WHY IF YOU'RE DOING IT RIGHT, YOU WOULD HAVE LEVEL DEBT SERVICE, A LEVEL PRINCIPAL PAYMENT.

SO THERE'S CONSTANTLY DROPPING OFF.

YOU KNOW SOMETIME A ORGANIZATIONS COULD BACK IN PRINCIPAL PAYMENTS PAY INTEREST ONLY AND AND PUSH THE PRINCIPAL TO THE BACK.

AND WHEN THAT HAPPENS THEN YOU'RE SURPRISED WHEN YOU GET THERE AND SAY, WAIT A MINUTE, WE DON'T HAVE ANY MORE CAPACITY.

IT WILL SPENT YEARS EARLIER IF YOU USE THAT APPROACH.

SO SO WE ATTEMPT TO USE A LEVEL APPROACH WHERE OVER TIME YOU CONSISTENTLY DROP IN.

SO, SO WE'LL PUT SOMETHING TOGETHER SHOWING HOW HOW THAT WORKS.

SO YOU CAN SEE HOW THIS IS CONSTANTLY DROPPING AS WE MAKE PRINCIPAL PAYMENTS EVERY YEAR.

[01:05:10]

THERE'S BEEN A NUMBER OF ISSUES THAT HAVE COME UP THAT ARE ALL WORTHY PROJECTS, BUT IT'S KIND OF BE A MATTER OF PRIORITY.

AND, YOU KNOW, WHICH ONES DO YOU THE COUNCIL FEEL MORE MORE SUPPORTIVE OF RIGHT NOW OR AT WHAT POINT? SO I WON'T, YOU KNOW, READ THE LIST.

BUT YOU KNOW, THERE ARE A COUPLE OF PROJECTS DOWN HERE IN OLD TOWN.

THE FIRST ONE I WILL MENTION DEALS WITH ADDRESSING AN ADA ISSUE THAT WAS CREATED WHEN WE BURIED POWER LINES HERE AT THE AT THE PLAZA AND LS AND BUILDING.

AND THEN THERE IS A PRESENTATION TO COUNCIL BACK, I THINK, IN OCTOBER THAT DEALT WITH ADDITIONAL STREET LIGHTING IMPROVEMENTS DOWN HERE.

THOSE ARE ACTUALLY TWO PROJECTS THAT MIGHT ACTUALLY BE TIF FUNDED.

WE CAN TALK ABOUT A LITTLE LATER IN THE IN THE MORNING OR AFTERNOON WITH WHEN WE GET TO THE TIF SECTION.

I'LL SKIP OVER THAT NEXT ONE.

QUIET ZONE YOU HEARD A LOT ABOUT A FEW MONTHS AGO.

BUT THAT WAS ONE THAT WE WERE, AS I UNDERSTOOD, WE WERE, TO BRING THAT BACK AS PART OF THE BUDGET PROCESS TO SEE WHERE IT FITS IN WITH EVERYTHING ELSE.

SO THAT'S A LITTLE OVER $1 MILLION.

WE'VE HAD A LOT OF DISCUSSION.

MAYOR PRO TEM STEPPED OUT, BUT WE'VE HAD A LOT OF DISCUSSION ABOUT ASSET MANAGEMENT AND STREET CONDITIONS AND THE INVESTMENT REQUIRED TO GET OUR STREETS TO WHERE, WHERE THE RESIDENTS WANT THEM TO BE AND WHERE WE WOULD LIKE THEM TO BE.

SO WE'VE TALKED CONCEPTUALLY ABOUT, YOU KNOW, ROUGHLY A $5 MILLION INVESTMENT IN STREETS EVERY YEAR.

YOU KNOW, IT'S EASY TO SAY THAN IT IS TO PAY FOR.

BUT WE PUT THAT ON THE LIST AS AS.

ANOTHER PROJECT FOR YOUR CONSIDERATION.

WE HEAR OFTEN ABOUT THE CONDITIONS OF AYLESBURY FROM RENFRO DOWN TO SUMMER.

CREST AND.

RENFRO BETWEEN OLD TOWN OUT TO AYLESBURY AND HIDDEN CREEK PARKWAY.

SO THERE ARE A TON OF STREETS THAT NEED SIGNIFICANT DOLLARS TO ACTUALLY MAKE IMPROVEMENTS TO THEM.

EACH OF THOSE THAT I JUST MENTIONED ARE EASILY IN EXCESS OF $1 MILLION EACH.

SO, YOU KNOW, 5 MILLION ANNUALLY PROBABLY DOESN'T GO AS FAR AS AS WE'D LIKE TO THINK IT MIGHT GO.

WE'VE WHEN YOU'RE DEALING WITH CONCRETE STREETS AND MULTI-LANE CONCRETE STREETS AT THAT IT GETS PRETTY QUICK, PRETTY EXPENSIVE PRETTY QUICKLY.

YOU CAN DO ROUGHLY ABOUT A MILE.

AND, AND THAT'S GOING TO BE OVER $1 MILLION.

CONCRETE IS NOT GETTING ANY CHEAPER.

TO MAKE SURE WE'VE GOT THE RIGHT SUBGRADE BELOW IT AND THE RIGHT REINFORCEMENT.

IT COSTS FUTURE FIRE STATION FIVE LAND BANKING.

THIS WOULD BE DOWN THE I 35 CORRIDOR.

YOU KNOW, LAND IS NOT IT'S NOT BECOMING ANY MORE PLENTIFUL.

SO THIS LINE ITEM IS BASICALLY TO AT SOME POINT IDENTIFY FUNDING TO, TO BE ABLE TO POSITION THE CITY TO ACQUIRE PROPERTY THAT WOULD ULTIMATELY BE USED FOR FIRE STATION FIVE AT SOME POINT FURTHER DOWN THE ROAD.

AND SINCE I MENTIONED THE REST, I'LL GO AHEAD AND TALK.

WHERE? HILL GREEN RIDGE.

YOU KNOW, THAT WAS A PROJECT THAT WE SHIFTED OUT.

IT'S SIX MONTHS AGO, ROUGHLY, AS WE WERE INCREASING THE BUDGET FOR THE POLICE EXPANSION PROJECT.

SO THAT BUDGET WENT FROM 30 AT THAT TIME, 36.4 MILLION TO 42 MILLION.

MOVING WICKER HILL, GREEN RIDGE OUT IN THE CAPITAL PROGRAM WAS PART OF THE STRATEGY TO MAKE THAT HAPPEN.

YOU'RE PROBABLY ALL AWARE THAT THE JOSHUA ISD HAD VOTER APPROVAL OF THEIR BOND EARLIER THIS MONTH.

SO CHANCES ARE THE SCHOOL THAT THAT'S IMPACTED BY THIS PROJECT MAY BECOME A REALITY SOONER THAN LATER.

SO AT SOME POINT, WE PROBABLY WANT TO BRING THAT BACK INTO THE PROGRAM.

THERE ARE DOLLAR AMOUNTS ASSOCIATED WITH EACH OF THESE ITEMS. BUT I WOULD REMIND YOU THAT THE ACTUAL COST WILL VARY A LITTLE BIT BASED ON WHEN IT IS.

SO IF WE WERE GOING TO PUT ANY OF THESE PROJECTS IN FY 25, THEN IT'S CLOSER TO THIS NUMBER.

IF THEY'RE GOING TO BE MORE LIKE THE FOURTH OR FIFTH YEAR OUT, THERE'S SOME INFLATION TO ADD TO IT.

SO THE NUMBERS WOULD INCREASE OBVIOUSLY TO CORRESPOND AT THIS POINT, WE THINK THERE'S ROUGHLY ABOUT 8.3 MILLION IN ADDITIONAL CAPACITY.

[01:10:02]

I MAY HAVE STEPPED OUT AND MISSED A POINT THAT YOU MIGHT HAVE EXPLAINED ALREADY, BUT ON THE PAVEMENT REHABILITATION ITEM THERE FOR $5 MILLION, THAT SAYS ANNUALLY, ANNUALLY YOU'RE GOING TO SPEND $5 MILLION A YEAR.

WE COULD SPEND $25 MILLION.

OKAY. WELL, I'M SEEING EXAMPLES NOW.

OKAY. I THOUGHT YOU MEANT ON THESE SPECIFIC AREAS OF I WAS SKIPPING OVER THE WORD EXAMPLES.

SO, YES, MAYOR PRO TEM, WHERE THAT'S COMING FROM IS THAT WHEN WE BRIEFLY TALKED ABOUT ASSET MANAGEMENT, THE I BELIEVE THE INITIAL MODEL ESSENTIALLY INDICATED THAT IF WE SPENT $5 MILLION ANNUALLY FOR THE NEXT TEN YEARS, IT WOULD ADDRESS THOSE STREETS THAT WE'RE AT A 40 GRADE 40 OR BELOW.

AND THAT'S ESSENTIALLY WHERE THAT NUMBER IS COMING FROM.

GOT IT. THANKS.

SO ANY OTHER QUESTIONS? COMMENT. AT THIS POINT AND I KNOW THAT 5 MILLION A YEAR IS SOUNDS A LOT, BUT WE SAW THE SURVEY OF THE CITY AND WHAT THEY WANT.

CONGESTION AND ROADS AT YOUR NUMBER ONE PRIORITY.

I'VE BEEN HERE A YEAR.

TOMMY'S REALLY TIRED OF ME TELLING HIM THERE'S A POTHOLE IN THIS PLACE AND POTHOLE IN THIS PLACE, AND THAT'S ALL WE DO IS PUT BAND-AIDS ON THINGS.

PEOPLE WANT TO SEE THE ROADS DONE.

THEY DON'T WHERE THEY DON'T, THEY DON'T CARE.

ONE A YEAR WOULD BE FINE.

I JUST THAT'S WHAT THEY WANT.

THAT'S WHAT THEY TOLD US THEY WANT.

THAT'S THEIR NUMBER ONE PRIORITY.

WE NEED TO PUT THE MONEY IN IT.

I KNOW WE DIDN'T PUT ENOUGH IN BOND FOR IT, BUT WE GOT A CHANCE.

WE NEED TO WE NEED TO TAKE CARE OF THINGS.

THAT SHOULD BE YOUR NUMBER ONE PRIORITY.

JUST A COMMENT.

THANKS. WE APPRECIATE THAT.

DURING OUR RETREAT EARLIER THIS YEAR, THE COUNCIL'S DIRECTION, AFTER CONSIDERABLE EVALUATION, WAS TO FOCUS ON INFRASTRUCTURE AND ROADS, AND YOU ALL HAVE DONE A GOOD JOB OF COMING UP WITH THE ROADS, THINGS THAT NEED TO BE EVALUATED.

AND WITH THE ASSET EVALUATION COMING UP PRETTY SOON, WE ARE GOING TO NEED THE MONEY AND THE COUNCIL NEEDS TO BACK UP WHAT THEY SAID.

SO I'M GOOD FOR THE ADDITIONAL PAYMENT, REHAB AND ALSO THE QUIET ZONE AT DOBSON.

WE PROMISED THE CITIZENS THAT FOR 13 YEARS.

SO I FEEL COMFORTABLE WE CAN WORK THAT IN SOMEWHERE.

ALSO, YOU KNOW, AS FAR AS THE WICKER HILL EXPANSION, I MEAN, REALLY THAT THING JUST NEEDS DESIGN AND RIGHT OF WAY.

AND THEN YOU COULD SIT ON IT AND WAIT TILL THE SCHOOL GETS BUILT AND THINGS GO BEFORE WE I MEAN, WHAT DELAYS ROADS MOSTLY IS THE DESIGN AND AND THINGS GETTING READY TO GO.

MAYOR DO YOU WANT TO SPEAK TO THAT ONE? YEAH. THE RIGHT OF WAY.

THAT'S GOING TO BE THE BIGGEST CHALLENGE ON THAT ONE.

OKAY. AND I AGREE WITH COUNCIL MEMBER SCOTT.

YOU KNOW ON THE ON THE REHAB.

WE NEED TO BACK THAT UP BECAUSE THAT'S WHAT WE TALKED ABOUT IN THE RETREAT.

BUT AS FAR AS PRIORITY I KNOW IT'S GOING TO TAKE SOME TIME.

WE'VE GOT ALSBURY AND RENFROE, BUT I'D HATE FOR THAT TO EAT UP ALL THE MONEY.

I'M THINKING MORE OF JUST THE RESIDENTIAL STREETS IN WHERE EVERYBODY LIVES.

THE POTHOLE IN FRONT OF MRS. SMITH'S HOUSE THAT HASN'T GOTTEN FIXED IN A FEW YEARS BECAUSE WE'RE ADDRESSING OTHER BIG STREETS.

SO I DON'T KNOW HOW WE WANT TO PRIORITIZE THESE THINGS.

WELL, AND I THINK ERIC'S PROBABLY GOING TO SPEAK TO THIS PROBABLY BETTER THAN I CAN.

BUT I THINK WHAT OUR DISCUSSIONS HAVE BEEN IS THAT WE HOPE AT SOME POINT WE CAN BE SOMEWHAT AGNOSTIC TO THIS, BECAUSE THE ASSET MANAGEMENT PROGRAM SHOULD TELL US WHERE IT'S GOING TO BE BEST MONEY SPENT.

WE PUT THESE NAMES ON THERE SOLELY BECAUSE WE KNOW THEY'RE IMPORTANT PROJECTS FOR THE COUNCIL.

BUT ERIC, DO YOU WANT TO ADD TO THAT? NO, I TOMMY, IS EXACTLY CORRECT.

I THINK A COUPLE THINGS.

THE POTHOLE IN FRONT OF MRS. SMITH'S HOUSE IS KIND OF A DIFFERENT THING BECAUSE THAT'S O&M COSTS, RIGHT? I MEAN, SO THAT'S THAT'S WHEN WE TALK ABOUT INCREASING THE OPERATIONAL DOLLARS.

PREVIOUSLY WE TALKED ABOUT STREET MAINTENANCE FEES AND THOSE TYPES OF THINGS, INCREASING THAT CAPACITY.

WHEN YOU HAVE A CONCRETE ROAD AND YOU HAVE A POTHOLE, RIGHT, IT'S YOU REMOVE THAT ONE PANEL AND YOU PULL IT AND REPLACE IT.

THAT'S NOT A CAPITAL EXPENSE.

THAT'S AN OPERATIONAL EXPENSE.

OR WE'RE DOING AN ASPHALT PATCH.

RIGHT. WE'RE PULLING THAT OUT AND DOING AN ASPHALT PATCH.

I THINK THAT REALLY TIES TO THE STREET MAINTENANCE FEE AND INCREASING THE O&M DOLLARS THAT WE'VE TALKED ABOUT RECENTLY.

BUT FROM A CAPITAL STANDPOINT, I THINK THE BIG PICTURE IS AS WE GET ASSET MANAGEMENT FULLY IN FRONT OF ALL OF YOU, THE INTENT IS WE'RE GOING TO COME BACK WITH A PAVEMENT MANAGEMENT PLAN THAT LITERALLY SAYS, THIS IS HOW MUCH WE SHOULD BE SPENDING ON OPERATION AND MAINTENANCE FOR JUST THE ROADS HERE AND THERE THAT'S DOING CRACK CEILING, THAT'S MIL AND OVERLAYS, THAT'S PANEL REPLACEMENT HERE AND THERE.

AND THEN YOU'VE ALREADY SEEN THE HIGH LEVEL, WHICH IS $5 MILLION ANNUALLY IN FOR CAPITAL RECONSTRUCTION.

AND SO WE PUT THOSE STREETS ON THERE BECAUSE THEY'VE BEEN BROUGHT KIND OF TO THE FOREFRONT.

AND I THINK WE ALL KNOW THAT THOSE STREETS NEED TO BE BE BE DONE.

BUT I THINK THE PAVEMENT MANAGEMENT PLAN WILL COME BACK AND SAY BASED ON OPTIMIZATION OF THE DOLLARS, RIGHT.

[01:15:04]

RIGHT. SOME OF THAT, THE SCORING MECHANISM IS TIED TO THE THOROUGHFARE CLASSIFICATION.

HOW MANY PEOPLE DRIVE ON IT.

SO IF WE REBUILD THIS ROAD, IT'S GOING TO HAVE THE BIGGEST IMPACT OVERALL FOR OUR RESIDENTS AS WELL AS OVERALL IMPACT TO THE TO THE PCI OF THE ENTIRE CITY.

SO THAT THAT'S ALL TIED TO THAT.

I THINK HEARING COUNCIL SAY THAT THEY'RE WANTING TO USE THAT MONEY TOWARDS THAT GIVES US THE OPPORTUNITY TO SAY, OKAY, HERE YOU CAN PLUG 5 MILLION INTO OUR INTO THE MODEL.

THIS IS WHERE WE THINK WE SHOULD SPEND, YOU KNOW, SPEND THE MONEY BASED ON THE ROADS THAT ARE IN THE WORST CONDITION AND MORE PEOPLE DRIVE ON THEM.

SO THOSE TYPE OF THINGS, I THINK JUST THE FEEDBACK WE'RE GETTING IS GREAT.

IT'S EXACTLY WHAT WE NEED, OBVIOUSLY, BASED ON, YOU KNOW, THE $8.3 MILLION IN ADDITIONAL CAPACITY THAT WE HAVE, WE CAN'T SPEND $5 MILLION ANNUALLY BECAUSE WE JUST DON'T HAVE IT. WHAT I WOULD PROPOSE.

THAT WE DO IS THAT FOR NOW, UNTIL SUCH TIME AS WE HAVE BETTER INFORMATION ABOUT WHAT THE TAX RATE MAY BE AND WHERE WE MIGHT BE ABLE TO SHIFT ADDITIONAL FUNDING TO THE INS RATE, IS THAT WE DO $1 MILLION IN ADDITIONAL PAVEMENT ANNUALLY IN ADDITION TO THE QUIET ZONE.

I DO THINK MY RECOMMENDATION TO YOU WOULD BE TO LEAVE SOME OF THAT CAPACITY FOR INFLATIONARY COSTS OR ANYTHING ELSE THAT MAY ARISE.

THAT'S SIMPLY MY FEEDBACK.

BUT I GOT ONE THING WE NEED TO KIND OF NOT GOING TO BE VERY POPULAR IS THE FACT THAT WE'VE GOT A LOT OF ROADS OUT THERE THAT WERE STRIP ANNEXED IN THE COUNTY THAT WE'RE RESPONSIBLE FOR, THAT ARE GETTING IN REALLY, REALLY BAD SHAPE.

I DON'T HAVE AN ANSWER, BUT IT HAS TO BE ADDRESSED.

SO I KNOW ERIC, ERIC'S DEALING WITH THAT ON A MORE REGULAR BASIS THAN I AM.

I WOULD SAY A COUPLE THINGS.

AS PART OF THE PAVEMENT MANAGEMENT PLAN, WE CAN INCLUDE STRIP ANNEXATION ROADS IN IT.

AND SO WE CAN INCLUDE IT IN THE PLAN.

AND SO AS IT RUNS THE OPTIMIZATION MODEL, IT'S GOING TO SAY, YOU KNOW, THIS ROAD SHOULD BE DONE, THIS ROAD SHOULD BE DONE.

SO WE WE HAVE TO WEIGH IT AGAINST THE ROADS WITHIN THE CITY AS WELL AS STRIP ANNEXATION.

SO WE'VE GOT TO TREAT EVERYBODY EQUALLY.

THEY ARE IT'S STRIP ANNEXATION.

IT'S IN THE CITY LIMITS.

SO WE HAVE TO MAINTAIN THEM.

BUT WE CAN PUT THEM IN AS WE RUN THE MODEL.

IF WE KEEP THOSE ROADS IN IT, IT'LL SPIT OUT AND SAY WHEN WE SHOULD DO EACH ROAD.

AND IF WE SHOULD BE DOING CAPITAL WORK ON IT, OR IF WE SHOULD BE DOING MAINTENANCE.

BUT THAT'S SOMETHING I THINK I'VE TALKED WITH, WITH DAN ABOUT AND WE'VE TALKED AT THE INDY COMMITTEE A LOT ABOUT IS WHERE DO THEY RANK COMPARED TO THE ROADS WITHIN THE CITY, AND HOW DO WE SPEND THE DOLLARS THAT WE HAVE? WE DO NEED TO MAINTAIN THEM.

WE'RE RESPONSIBLE FOR THEM.

BUT HOW DOES THAT WEIGH UP AGAINST THE ROADS, HIDDEN CREEK PARKWAY, ELLSBURY, RENFROE VERSUS THOSE ROADS.

SO WE DO WE DO HEAR IT.

AND WE UNDERSTAND THAT WE NEED TO MAINTAIN THEM.

OUR STAFF'S BEEN OUT THERE DOING MAINTENANCE ON THEM.

AND SO WE'VE BEEN PATCHING THEM, KEEPING THEM AS BEST WE CAN.

BUT WE HAVE TO WEIGH THEM WITH THE FUNDING THAT WE HAVE, WE HAVE TO WEIGH THEM AGAINST THE OTHER ROADS.

AND SO HOPEFULLY THE THE PLAN WILL SHOW WHERE THEY RANK COMPARED TO THE OTHERS.

AND IT'S NOT WE'RE IGNORING THEM, BUT THESE ROADS ARE IN WORSE CONDITION AND THEY THEY TAKE PRIORITY.

DO WE NEED TO HAVE A DISCUSSION ABOUT WHETHER ONCE WE GET THEM UP TO SPEED, BECAUSE WE CAN'T TURN THEM BACK TO THE COUNTY THE WAY THEY ARE, BUT DO WE NEED TO HAVE A DISCUSSION ON WHAT ROADS WE NEED TO KEEP SO THAT WE CAN SPEAK TO THAT? WE'VE BEEN WORKING ON THAT, SIR. I THINK WE'RE EXPLORING MANY OPTIONS WITH OPTIONS FOR THE STRIP ANNEXATION.

I WOULD BE SPEAKING PREMATURELY TO SAY WHETHER OR NOT THE COUNTY WOULD BE WILLING TO POTENTIALLY TAKE OVER MAINTENANCE OF THOSE ROADS, BUT I THINK IT'S A DIALOG THAT WE'RE HOPING TO HAVE.

WE'RE RUNNING SOME ADDITIONAL ANALYSIS TO DETERMINE, YOU KNOW, HOW MUCH WOULD IT COST? WHAT'S THEIR EXPECTATION TO BRING THOSE ROADS BACK UP TO SOME TYPE OF STANDARD FOR THEM TO POTENTIALLY ACCEPT THEM? I DO THINK THAT THIS LIKELY BE A DISCUSSION THAT WOULD HAPPEN AT INDY, BUT I DON'T KNOW.

THE TIMING WILL BE SUCH THAT IT WILL BE MARRIED TO THE BUDGET PROCESS PER SE.

OKAY. IS THERE? IN TERMS OF THE PROPOSED CIP, I KNOW THAT THERE WERE PROJECTS THAT THAT SHIFTED OR, YOU KNOW, HULON IS IN THERE NOW AT THE FULL FOUR LANES.

IS THE COUNCIL COMFORTABLE WITH THE PROPOSED CIP THAT WE HAVE SHOWN? EVERYBODY ON BOARD.

I'M. WE GOT ONE.

ARE YOU SHAKING? YOU NEED MORE.

YOU NEED MORE DISCUSSION.

WE'RE GOOD THEN, I THINK.

AND I'M THE NEWBIE HERE, SO, YOU KNOW BUT HEARING THAT IT'S BEEN A TOPIC OF DISCUSSION FOR A WHILE, WE NEED TO JUST GET SOME OF THESE THINGS DONE. AND BECAUSE IT JUST STARTS LOOKING REDUNDANT, AND THEN THOSE OF US THAT COME IN WITH NEW THOUGHTS YOU KNOW I'VE MENTIONED

[01:20:02]

UNDERSTOOD. AND AND THAT'S WHAT I'M GOING TO COME BACK TO THIS.

IF THERE'S PROJECTS OF TIMING THAT YOU GUYS WOULD LIKE TO SEE DIFFERENT, IF THERE'S PROJECTS NOT ON THIS LIST THAT YOU WOULD PREFER BEYOND WHAT IS LISTED HERE, OR IF YOU WANT TO PUSH SOME PROJECTS OUT, WE WANT TO MAKE SURE THAT WE'RE WE'RE IN LOCK STEP WITH THE COUNCIL IN TERMS OF TIMING.

AND, YOU KNOW, WITH THESE BEING CONSTRUCTION PROJECTS, THEY DO THEY DO TAKE MANY, MANY MONTHS.

AND I KNOW THAT THERE'S FATIGUE WITH THAT.

WE WANT TO MOVE AS QUICKLY AS POSSIBLE TO GET THEM DONE, BUT WE WANT TO DO THEM THE RIGHT WAY TOO.

SO BUT BEYOND OTHER FEEDBACK ON ANYTHING THAT YOU GUYS WOULD LIKE TO SEE SHIFT IN ANY WAY, BECAUSE WE WANT TO MAKE SURE THAT WE ARE IN THE SAME PAGE ON THE FIVE YEAR PLAN.

SO THE 8.3 IS BASED ON PRELIMINARY NUMBERS AND THIS CORRECT? IT'S ASSUMING THE FUNDING OF THIS FIVE YEAR CIP PLUS THE NUMBERS IN 24 AND ADDITIONAL 8.3 MILLION.

CORRECT. OKAY.

YEAH. AND I KNOW THE CALCULATION.

SORRY, SORRY. GO AHEAD TO WEIGH THE PROJECTS ON LIKE ON SLIDE 29 TO WEIGH THOSE PROJECTS AND OTHERS.

WE HAVE 8.3 AVAILABLE.

CORRECT. AND SO BASED ON THE PRELIMINARY FEEDBACK THAT I'VE RECEIVED, HOW I PROPOSE TO DO THAT WOULD BE 1 MILLION ADDITIONAL PAVEMENT EACH YEAR PLUS THE QUIET ZONE RIGHT NOW.

SO THERE'D BE 6 MILLION OF THE AVAILABLE 8.3.

SO, ARE WE ON BOARD? THEY GOT DIRECTION. THAT DIRECTION.

CUSTOMERS. I'M GOOD WITH THE PRELIMINARY AND I THINK, AGAIN, WE MAY COME BACK AND HAVE MORE CAPACITY.

WE CAN HAVE MORE DISCUSSIONS, I THINK, FROM A ANOTHER THING TOO IS, YOU KNOW, IT'S NOT LOST ON US THAT, YOU KNOW, EVERY YEAR PROJECTS CHANGE IN TERMS OF TIMING OR COST. AND THERE'S SO MANY PROJECTS THAT IT CAN BE VERY IT CAN BE VERY CONFUSING.

AND SO WE WANT TO MAKE SURE THAT WE'RE BEING CLEAR FROM A FORMAT STANDPOINT THAT THE COUNCIL COMFORTABLE WITH HOW WE'RE PRESENTING CHANGES.

AND, ERIC, IF YOU GO BACK TO SLIDE 27, WHERE WE'RE TRYING TO SHOW STRIKE THRUS AND WHAT'S NEW AND WHAT'S SHIFTED, IS THE COUNCIL COMFORTABLE WITH THIS? DO WE FEEL LIKE THIS IS TRANSPARENT ENOUGH FOR THE PUBLIC IN TERMS OF HOW THINGS ARE MOVING? I THINK I APPRECIATE, YOU KNOW, THEN THE CONDENSED CLEARED VERSION ON SLIDE 28.

THE BIGGEST THING IS WE NEED TO MAKE SURE THAT SIMILAR TO WHAT COUNCILMEMBER BECKER SAID OF PARTICULARLY WITH THAT BOND PACKAGE, WE PASSED THIS, WE SAID, THIS IS WHAT WE WERE GOING TO DO TO THE CITIZENS, AND THEY WANT TO SEE.

AND I THINK WHEN IT COMES TO FUTURE DEBT, FUTURE PROJECTS, UNTIL WE CAN SHOW LIKE AS WE CAN SHOW, HEY, WE WE SAID WE WERE GOING TO DO THIS. WE MADE PROGRESS ON IT.

NOW WE'VE WE'VE CONFIRMED THAT TO THE CITIZENS.

WE CAN MOVE FORWARD WITH NEW YOU KNOW, IT'S A TRUST AND IN TRANSPARENCY THING.

BUT SOMETHING ELSE YOU KNOW WE'RE YOU'VE MENTIONED THE 1 MILLION A YEAR FOR ANNUAL REHAB.

I THINK THAT THAT'S IMPERATIVE.

WE HAVE TO MOVE MORE ON THOSE THOSE REHAB PROJECTS.

BUT ALSO WE HAVE THE ADA SIDEWALK.

I MEAN, THAT'S NOT I DON'T BELIEVE THAT.

THAT'S ONE THAT WE CAN LIKE.

IT'S NOT NEGOTIABLE.

YEAH. THAT'S THE WORD I WAS LOOKING FOR.

I THINK THAT ANYTHING DEALING WITH ACCESSIBILITY, THOSE HAVE TO TAKE PRIORITY.

AND IN PARTICULAR, IT'S ONE WE DIDN'T, YOU KNOW, ONE THAT CAME IN LINE WITH SOMETHING ELSE THAT WE NEEDED FIXING.

AND SO IT'S A IT'S A CAUSE AND EFFECT.

WE DID WE MADE AN IMPROVEMENT.

AND THEREFORE THIS ISSUE AROSE THAT WE DIDN'T ANTICIPATE, BUT WE ABSOLUTELY NEED TO ADDRESS IT.

AND WE'LL WE GET TO THAT.

WE'LL GET TO THE TIFF.

I THINK THE TIFF, THE THE TIFF FIVE YEAR PLAN IS, IS THE LAST THING WE'LL COVER.

AND BOTH THE FIRST TWO PROJECTS, ABOUT HALF $1 MILLION IN PROJECTS ARE BOTH WITHIN THE TIFF, AND THEY'LL BE SOMETHING WE'LL LOOK TO ALL OF YOU FOR DIRECTION ON IS IF YOU WANT THE TIFF TO ABSORB THAT, WE CAN ISSUE DEBT FOR THAT.

IT'S $40,000 A YEAR IN DEBT PAYMENT TO DO THOSE TWO PROJECTS.

SO WE BELIEVE IT'S SOMETHING PROBABLY THE TIFF CAN ABSORB OVER A PERIOD OF TIME.

BUT WE'LL, WE'LL WE WANT TO HEAR YOUR FEEDBACK WHEN WE GET TO THE TIFF.

BUT WE DO. AGAIN, WE AGREE THAT THOSE ARE PROJECTS THAT THAT SHOULD BE FUNDED THERE.

AGAIN, IT'S AN ADA THING AND A SAFETY THING FOR OLD TOWN.

SO WE THINK WE AGREE THAT THOSE SHOULD BE FUNDED, AND WE THINK THERE'S AN OPTION TO DO THOSE PROJECTS AS WELL.

AND WE'LL GET TO THAT AT THE TIP.

[01:25:03]

WHY DON'T WE GO AHEAD AND GET READY FOR A BREAK? WE'RE GOING TO TAKE A TEN MINUTE BREAK.

LET'S BE BACK IN HERE AT 1040.

YOU WANT TO HANG ON? SEE IF WE'LL DO SLIDE 31 AND THEN TAKE A BREAK.

OKAY. WE'RE GOING TO GRAB ONE MORE SLIDE AND THEN WE'LL GO FROM THERE.

THAT'S OKAY. BACK TO THE WIZARD.

THANK YOU, MAYOR.

IT'S THE IDEAL POSITION TO BE IN.

BE BETWEEN YOU AND THE BREAK.

THIS IS THE FIRST FIVE YEAR FORECAST WE'RE GOING TO DISCUSS COVERING THE GENERAL FUND.

I WANT TO START BY MENTIONING. WHY DO WE PUT THESE TOGETHER? BASICALLY WE'RE TRYING TO IDENTIFY ANY STRUCTURAL IMBALANCE IN THE BUDGET.

SO IF SOMETHING'S STRUCTURALLY IMBALANCED, SHORT TERM, IT MULTIPLIES OVER A FIVE YEAR PERIOD AND YOU SEE IT BEGAN TO TO MOVE IN A DIRECTION THAT YOU'RE NOT, NOT INTERESTED IN.

AND YOU CAN TAKE CORRECTIVE ACTION.

AND AS SOON AS YOU TAKE THOSE CORRECTIVE ACTIONS, THE QUICKER IT'LL FIX THINGS.

AND IT IT FIXED THE MULTIPLICATION OR COMPOUNDING OF THE PROBLEM.

THE OTHER REASON WE DO IT BECAUSE WE AGGREGATE FISCAL DISCIPLINE AS WELL.

SO IT TAKES A LOT OF FISCAL DISCIPLINE TO REALLY TO LIMIT COSTS OR CONTROL COSTS KNOWING THAT YOU'RE GOING TO HAVE A NEGATIVE REPERCUSSION LONG TERM.

SO NOW WE REALLY DON'T DO THEM.

THE REASON WE DON'T DO THEM, WE DON'T DO THEM TO TO HIT THE NUMBER ON THE HEAD THE MOST, THE MOST CONFIDENT THING I FEEL IN THESE NUMBERS IS THAT WE WON'T HIT THEM ON THE HEAD.

YOU KNOW, THERE ARE A LOT OF THINGS THAT JUST OUTSIDE OF OUR CONTROL, THE ECONOMY WARS WITH THE FED DOES WITH INTEREST RATES.

SO WE KNOW WE'RE NOT GOING TO HIT THEM PRECISELY AS AS THE MANAGER MENTIONED AT THE START OF OUR DISCUSSION TODAY.

SO WE DON'T ZERO IN ON THEM TOO MUCH.

BUT WE USE A SOUND ASSUMPTIONS, AND WE KNOW THAT THEY CAN QUICKLY IDENTIFY PROBLEMS. AND WE DID FIND SOME STRUCTURAL IMBALANCE IN THIS FUND AND TIF TWO.

SO WE TOOK MORE AGGRESSIVE ACTIONS.

AND I'LL TALK ABOUT THOSE IN A MINUTE.

SO SOME OF THE THINGS THAT WE REALLY HAD TO WALK THROUGH ONCE WE IDENTIFIED SOME STRUCTURAL IMBALANCES, WAS THAT WE REALLY HAD TO LOOK AT THE CASH FUNDING AND CAPITAL PROJECTS WE TALKED ABOUT EARLIER.

SO WE REDUCED THE 1.4 MILLION DOWN TO 600,000.

WE ALSO HAD IT CONTRIBUTIONS IN OUR NUMBERS, $1 MILLION THIS YEAR AND 800,000 FOR EACH OF THE NEXT COUPLE OF YEARS.

AND THOSE WERE TARGETED TO FUND THE NEW CAD SYSTEM.

SO WE WORKED WITH OUR CHIEF INFORMATION OFFICER, REALLY TO TO DETERMINE HOW MUCH WAS ALREADY FUNDED FOR CAD, HOW MUCH IS REMAINING, AND WE CAN MAKE SOME ADJUSTMENTS THERE.

SO WE FOUND THAT WE WERE IN REALLY GOOD SHAPE, AND WE COULD USE SOME ARPA FUNDING AS WELL TO, TO BACKFILL REALLY THE REMAINING BALANCE OF ARPA.

SO WE REALLY DIDN'T HAVE TO CASH FUND THE OTHER TRANSFER OVER TO THE IT FUND THAT WE THOUGHT WE HAD TO DEAL WITH.

WE EVALUATED SALARY SAVINGS FOR VACANT POSITIONS TO ADJUST WHERE NECESSARY.

AND THEN WE ASKED DEPARTMENTS TO MAKE SOME OPERATIONAL CUTS, AS WELL AS A 7.5% THIS YEAR AND 3% COLLECTIVELY FOR NEXT FISCAL YEAR. AND WE ASKED THEM TO LOOK AT THINGS THAT DIDN'T IMPACT SERVICE OR DELIVERY.

AND THEN WE ALSO SCRUTINIZED THE INCENTIVES OF THE CURRENT YEAR ANY COMPANIES THAT DID MEET THEIR INCENTIVES, GOALS THAT WARRANT US TO HIT THE TRIGGERS AND, AND MAKE INCENTIVE PAYMENTS.

WE WE SCRUBBED THAT LIST SO WE WERE ABLE TO REDUCE 250,000 OFF OF THIS YEAR'S NUMBERS.

WHEN WE PUT THE PROJECTION TOGETHER, WE USE THE 6% FOR ON THE ON THE PROPERTY TAX NUMBER, 6% GROWTH IN TAXABLE VALUE FOR THE CURRENT YEAR AND THE 5.5 THE NEXT FOUR YEARS THAT WE TALKED ABOUT ON SALES TAX TRADITIONALLY THE CITY FORECASTED 3% GROWTH.

AND FOR THE CURRENT YEAR, WE DIALED THAT BACK TO 1.5%.

SO THAT THAT HURT US.

IT WENT IN THE WRONG DIRECTION.

AND THAT'S BECAUSE OF THE SALES TAX GROWTH IS TRENDING CURRENTLY.

AT THE AT AT THE 5.5% RANGE RIGHT NOW.

SO AND IT COULD BE SOME OF THE IMPACT OF LOVE SACK.

NOT THAT WE STARTED THE REPAYMENT YET.

BUT WE'RE NOT ACKNOWLEDGING OR RECEIVING THE CURRENT SALES TAX ONCE WE REPORTED THAT TO THE CONTROLLERS.

[01:30:01]

BUT WE ADJUSTED THE TREND THIS YEAR, AND IN FUTURE YEARS WE RESUMED THE 3%.

SO THAT'S PROBABLY THE MOST QUESTIONABLE NUMBER THAT WE HAVE THAT WE STILL HAVE TO MONITOR AND SEE WHEN WE GET BACK ON TRACK FOR THAT.

OR WE MAY NEED TO MAKE A FUTURE ADJUSTMENTS AS WE CONTINUE TO REFINE THE FIVE YEAR FORECAST.

WHEN IT COMES TO SALARIES.

WE TALKED ABOUT THE DEPARTMENT CUTS.

ONE OF THE GOALS THAT THE AT THE CITY MANAGER HAD WAS NOT TO ADVERSELY AFFECT SERVICE DELIVERY, BUT WITH THAT NOT ADVERSELY AFFECT SALARIES, POSITIONS AND SO FORTH.

SO WE WE CONTINUE TO BUDGET FOR 5%, EXCUSE ME, 3% INCREASE IN SALARIES, BUT A 5% INCREASE ON BENEFITS BECAUSE HEALTH INSURANCE TEND TO OUTPACE THE THE INFLATIONARY INCREASES ON SALARIES.

WE ALSO HAVE A 5% FOR UTILITIES AS WELL AS CLAIMS AND INSURANCE.

SO EVERYTHING ELSE IS GENERALLY AT 3%.

AND SOME SUPPLIES AND OTHER SMALLER LINE ITEMS ARE AT 2% IS A BASE.

WHEN YOU LOOK AT THE THE ACTUAL REVENUE GROWTH, YOU SEE IT CONSISTENTLY GROWING.

THE TOTAL REVENUE OVER THE FIVE YEAR HORIZON, AS WELL AS BASE EXPENSES.

THE THINGS THAT STAND OUT IS THE THE, ITS INTELLIGENT TRAFFIC SIGNALS.

SO WE DID PUT THAT IN.

IT'LL BE A SUPPLEMENTAL REQUEST, BUT WE KNOW IT'S A HIGH PRIORITY FOR THE COUNCIL.

SO THAT'S ADDED TO THE FIVE YEAR FORECAST.

THE INCENTIVES WAS IS STILL SPELLED OUT AS WELL.

SO WE KNOW WHAT THE CONTRACTUAL OBLIGATIONS WE HAVE.

SO WE'VE ADDED THOSE IN AS WELL.

YOU CAN SEE THE ELIMINATION OF CASH FUNDING OTHER THAN THE 600,000 THE SOLICIT THERE.

AND THEN YOU SEE THE CHANGE IN FUND BALANCE, AND THIS IS WHERE YOU KIND OF CAN TRACK SOME OF THE STRUCTURAL IMBALANCES WHERE WHERE WE THE CONCERN IS YOU DON'T WANT REOCCURRING EXPENSES TO EXCEED REOCCURRING REVENUE.

AND IT'S OKAY TO REALLY DRAW DOWN YOUR FUND BALANCE, BUT THE IDEAL WAY TO DO IT IS WITH ONE TIME COST.

SO ONCE THAT GOES AWAY, YOU, YOU RESUME REALLY PROPER BALANCE OF REVENUE, RECURRING REVENUE VERSUS EXPENSES.

SO YOU TRACK THAT OUT AND YOU'LL SEE WE BUDGETED $4.2 MILLION REDUCTION IN FUND BALANCE.

WE'RE EXPECTED TO COME IN A LITTLE BIT OVER $3 MILLION WITH THE CHANGES WE'VE MADE.

NEXT FISCAL YEAR, IT WOULD BE BETTER TO DROP DOWN BELOW HALF $1 MILLION, BUT IT KIND OF GRADUALLY INCREASE AS WE INCUR SOME OF THE, SOME OF THE ONE TIME ITEMS THAT'S LISTED OUT THERE SPELLED OUT.

AND IT DROPS IN FISCAL YEAR 28 TO 366,000 REDUCTION.

AND THEN WE GET INTO A POSITIVE NUMBER.

NOW AGAIN, THIS IS EARLY ON HIGH LEVEL.

AND WE CONTINUE TO SCRUB OUT NUMBERS AND LOOK FOR OPPORTUNITIES TO MAKE ADJUSTMENTS.

THIS IS REALLY JUST A STARTING POINT.

OUR PRIMARY GOAL FOR THIS MEETING AND THIS FIVE YEAR FORECAST WAS TO MAKE SURE THAT WE WERE WITHIN YOUR FUND BALANCE REQUIREMENT OF 20%. THAT WAS A RED FLAG FOR US IF WE BREACHED THAT NUMBER.

SO THAT WAS THE FIRST ONE.

THE SECOND ONE IS GOING TO BE TO CONTINUE TO INCREASE THE STRUCTURAL BALANCE BETWEEN REOCCURRING REVENUE AND EXPENSES.

AND SO WE'RE CONTINUE TO LOOK FOR OPPORTUNITIES TO, TO, TO CORRECT THAT AND IMPROVE ON THOSE ITEMS. SO I'LL BE HAPPY TO RESPOND TO ANY QUESTIONS YOU MAY HAVE.

ANYBODY. WELL, FIRST OF ALL, I'D LIKE TO SAY LAST YEAR WHEN I LOOKED AT THE GENERAL FUND AS A MAJOR FUND, IT WAS IT WAS GOING IN THE WRONG DIRECTION.

IT WAS KIND OF ALL OVER THE PLACE, AND I WAS CONCERNED ABOUT IT.

ALONG WITH YOU MENTIONED THE TIFF, THE TIFF ALSO, AND YOU DID A GOOD JOB ON THE TIFF CORRECTING IT.

SO IT'S GOING UP TO THE RIGHT NOW.

SENIOR LEADERSHIP, LEADERSHIP AND STAFF HAS DONE AN EXCELLENT JOB.

I'M VERY PROUD OF YOU. WHAT YOU PRESENTED US HERE WITH THE NET CHANGE IN BALANCE, STARTING OUT AT 3.4 MILLION OVER A SEVEN YEAR PERIOD, IT'S GONE TO A POSITIVE TWO 284,000.

THE ENDING FUND BALANCE IS ADEQUATE.

ENOUGH. YOU MANAGED IT SO THAT IF ALEX ED BRINGS US ANY INCENTIVE PACKAGES OVER THE NEXT FIVE YEARS, WE'LL HAVE THE AVAILABLE CAPACITY TO FUND THOSE AND YOUR FUND BALANCE PERCENTAGE TO EXPENDITURES.

OF COURSE, BY THE I BELIEVE, BY THE FINANCE POLICY IS REQUIRED TO BE BETWEEN 20 AND 25% 73 DAYS TO 90 DAYS.

AND IT STARTED OUT LAST YEAR AT 33%.

AND YOU'RE BRINGING IT DOWN THE YEAR AFTER NEXT OR YEAR AFTER THIS 1 TO 24%, WHICH GETS IT WITHIN THE FINANCE POLICY REQUIREMENTS.

AND FOR THE NEXT FIVE YEARS AFTER THAT, YOU KEEP IT BETWEEN 20 AND 25% BASED ON THE AVERAGE TAX GROSS AND SALES TAX GROWTH.

I'M VERY IMPRESSED WITH IT.

[01:35:01]

AND THANK YOU FOR DOING A GOOD JOB.

THANK YOU, THANK YOU.

NO, SIR. LET'S TAKE A BREAK.

LET'S BE BACK HERE AT 1050, IF Y'ALL WOULD, PLEASE.

MAYOR. COUNCIL, IF YOU'RE READY TO BEGIN, I'LL TURN IT OVER TO ERIC TO START WITH WATER AND WASTEWATER.

SO WATER AND WASTEWATER.

WE'RE GOING TO TALK ABOUT IN SIMILAR FORMAT THAT WE WENT OVER THE GENERAL GOVERNMENT PROJECTS.

THIS NEXT SESSION SECTION THESE PROJECTS ARE ALL FUNDED BY WATER AND SEWER BONDS.

AS OPPOSED TO THE GENERAL GOVERNMENT PROJECTS.

SO ON SLIDE 33 HERE.

THIS IS THE CURRENT WATER AND SEWER FUNDED CIP FOR FY 24 THROUGH FY 28.

I THINK IT'S HAD WELL, AS ADOPTED WITH THE CURRENT ANNUAL BUDGET.

I DON'T THINK WE'VE HAD ANY AMENDMENTS BY COUNCIL ON THIS SIDE OF THINGS.

SO YOU'LL SEE THAT OVER THE FIVE YEAR PERIOD, IT'S ABOUT $87.5 MILLION IN PROJECTS WITH ANNUAL ALLOCATIONS THAT RANGE BETWEEN 7 MILLION AND 27 MILLION EACH YEAR.

IDEALLY, AND WE'VE HAD A LITTLE BIT OF DISCUSSION ABOUT THIS EARLIER, BUT IDEALLY AND FROM A RATE MODELING STANDPOINT THAT YOU'LL HEAR MORE ABOUT LATER.

WE'D LIKE THIS TO BE MORE FLAT OR STABLE NUMBERS ANNUALLY.

AND YOU'LL I'LL TALK A LITTLE BIT MORE IN A FEW MINUTES, ABOUT THREE, THREE PROJECTS THAT REALLY KIND OF MAKE THAT MORE CHALLENGING FOR US OVER THE NEXT COUPLE OF YEARS.

BUT IDEALLY, AGAIN, WE WOULD HAVE A TIGHTER RANGE OF THE ANNUAL CAPITAL PROGRAM.

AND MINIMIZE THE PEAKS.

MOVING ON TO THE RED LINE VERSION.

SAME FORMAT AS BEFORE.

RED MEANS THAT SOMETHING CHANGED AND GREEN IS THE THE NEW VALUE, OR IN SOME CASES, THE NEW YEAR OF THE OF THE FUNDING. WITH ALL THE CHANGES AND BASED ON UPDATED SCHEDULES, UPDATED CONSTRUCTION ESTIMATES, ETC.

THERE'S AN OVERALL NET INCREASE OF 2.7 MILLION OVER THE ORIGINALLY ADOPTED WATER SEWER BOND CAPITAL PROGRAM.

OVER THE FY 24 THROUGH FY 28 TIME FRAME.

SIGNIFICANT ADJUSTMENTS.

WE'LL PICK ON A COUPLE.

SO THE VERY FIRST LINE, WATER LINE REHABILITATION.

AND I WILL MENTION THAT THE TOP PART OF THE TABLE IS ALL WATER FUNDED PROJECTS OR WATER FUNDED WATER PROJECTS.

THEN THE BOTTOM SECTION, THEY'RE ALL SEWER PROJECTS.

SO THE VERY FIRST LINE, THE WATER LINE REHABILITATION THAT WAS PREVIOUSLY INTENDED TO BE $2 MILLION ANNUALLY THAT WE WOULD USE TO REHAB, REPLACE OLDER WATER LINES.

COUNCIL ACTUALLY JUST APPROVED THE CONTRACT FOR WATER AND SEWER LINE REHABILITATION AT YOUR LAST MEETING.

THAT WAS IN PART SPENDING SOME OF THESE FUNDS FOR FY 24.

GOING FORWARD, IN ORDER TO STAY WITHIN THE BOUNDS OF THE ROUGHLY $138 MILLION, FIVE YEAR PROGRAM THAT WENT INTO THE RATE MODEL THAT YOU'LL HEAR ABOUT IN A MINUTE.

WE'VE REDUCED WE'VE SHIFTED SOME OF THAT FUNDING.

SO IN FY 25, WE'VE GOT A PRETTY BIG SLUG OF WATER SEWER REHAB COMING ALREADY FROM CURRENT FUNDS.

SO THE RED LINE PROGRAM ELIMINATES THE FUNDING IN FY 25 AND THEN RESUMES IN FY 26 WITH SOME DESIGN MONEY IN AN ODD YEAR OR AN EVEN YEAR, FOLLOWED BY CONSTRUCTION FUNDING IN THE ODD YEAR.

AND THAT ALLOWS US TO NOT TEAR UP THE WHOLE CITY AT ONE TIME, BUT IT ALSO ALLOWS US TO KIND OF ALIGN STAFF CAPACITY AND RESOURCES WITH SOME OF THE OTHER PROJECTS THAT WE HAVE ON OUR ON OUR PLATE.

THE BIG DOLLAR AMOUNT CHANGE WOULD BE THE INDUSTRIAL PUMP STATION PROJECT.

YOU'VE HEARD ABOUT THAT A COUPLE OF TIMES IN THE LAST SIX MONTHS.

SO WE'VE TALKED ABOUT HOW THE SCOPE HAS REVISED SOMEWHAT.

WE'VE ADDED A 2 MILLION GALLON STORAGE TANK TO THE PROJECT MORE PUMPING CAPACITY.

SO INSTEAD OF BEING A, YOU KNOW, $10 MILLION PROJECT, IT'S MORE LIKE A $17 MILLION PROJECT.

WE'VE UPDATED THE TIMING SLIGHTLY.

THAT PROJECT SHOULD FINISH DESIGN LATE OR MID OF MID OF 25 AND BE READY FOR CONSTRUCTION.

[01:40:06]

I'LL SKIP DOWN A LITTLE BIT MORE INTO THE WATER SEWER.

WELL, STOP AT HULIN, THE 16 INCH WATER LINE THAT'S GOING TO BE DONE IN CONJUNCTION WITH THE HULIN STREET WIDENING.

IT HAD FUNDING FOR THE WATER PORTION OF IT IN FY 25.

THAT WAS THE EARLIER SCHEDULE.

WE NOW ANTICIPATE THAT SCHEDULE IS REALLY FY 26 FOR CONSTRUCTION.

SO WE'RE MOVING THAT FUNDING OUT AT IT INCREASES VERY SLIGHTLY TO MOVE OUT.

BUT BASED ON THE STATUS OF THE DESIGN, THAT'S THE MORE REALISTIC SCHEDULE.

NOW I'LL SKIP DOWN TO THE SEWER SIDE OF THINGS.

AND AGAIN, SEWER REHAB, THE FIRST LINE, SIMILAR TO THE WATER REHAB THAT I TALKED ABOUT A MINUTE AGO.

WE'RE GOING TO SKIP FY 25 BECAUSE WE'VE GOT A SIGNIFICANT A FAIR AMOUNT OF FUNDING FOR THE NEXT WATER SEWER CONTRACT, YOU JUST AGAIN APPROVED ONE LAST WEEK.

AND YOU'LL YOU'LL HAVE ANOTHER ONE TO APPROVE HERE LATER THIS, THIS CALENDAR YEAR WITH EXISTING FUNDING THAT WE ALREADY HAVE TRUNK RELIEF IS REALLY THE BIG ONE ON THE SEWER SIDE.

PROJECT WENT FROM ROUGHLY 14 MILLION TO ABOUT 20.

AND THE TIMING AGAIN, WE'RE PUSHING BACK THE DATE A LITTLE BIT, PUSHING THAT INTO FY 26 BASED ON HOW THE DESIGN IS FARING SO FAR.

AND THIS IS THE MAIN SEWER TRUNK LINE THAT KIND OF STARTS AT WELL ENDS AT THE SOUTHERN OAKS GOLF COURSE AND CONTINUES ALL THE WAY DOWN TO OLD TOWN BASICALLY. SO IT'S GOT MAJOR CROSSINGS OF I 35 AND RENFRO THAT THERE'S A TON OF TXDOT COORDINATION AND REQUIREMENTS TO GO THROUGH THERE.

FOR PART OF THE WAY, IT WILL PARALLEL AN EXISTING LINE, BUT IN SOME AREAS WE'LL NEED A NEW EASEMENTS FOR THAT LINE TO TO BE INSTALLED.

THERE'S ALSO AN ADDITIONAL METERING STATION.

YOU MIGHT RECALL THAT THIS IS WHERE ALL OF BURLESON'S SEWER MAKES ITS WAY BACK TO FORT WORTH FOR TREATMENT.

SO WE WANT TO MAKE SURE THAT WE'VE GOT ADEQUATE AND ACCURATE METERS SO THAT WE'RE PAYING.

YOU KNOW WHAT? WE WHAT WE REALLY OWE THEM FOR THE FOR THE TREATMENT.

YEAH. SO THAT'S A BIG DOLLAR AMOUNT.

ALSO, I SKIPPED OVER THE OFFSITE WATER SUPPLY FROM FORT WORTH.

THAT'S ANOTHER HUGE PROJECT.

THIS IS THE NEW WATER MAIN THAT BRINGS ADDITIONAL WATER SUPPLY FROM FORT WORTH DOWN I-35 TO THE INDUSTRIAL PUMP STATION, WHICH IS WHY THOSE TWO PROJECTS ARE KIND OF IN SYNC.

WE WANT TO GET OUR PUMP STATION EXPANSION FINISHED SO THAT WHEN FORT WORTH'S PROJECT, THE WATER MAIN IS READY TO DELIVER, WE'VE GOT THE CAPACITY TO TO TAKE WHAT WE'RE SUPPOSED TO BUT ALL THOSE BIG PROJECTS KIND OF HIT IN THE SAME COUPLE YEAR PERIOD.

SO WE'VE GOT, IN THIS CASE, HUGE PEAKS, WELL, RELATIVELY HUGE PEAKS AND FOYE 25 AND FR 26, YOU KNOW, SO WE GO FROM WE'RE GOING TO WE ANTICIPATE ISSUING ABOUT NINE, JUST UNDER 10 MILLION IN DEBT AND WATER SEWER BONDS AND FY 24 CURRENT YEAR.

BUT THAT JUMPS TO ABOUT 21.6 NEXT YEAR.

AND THEN IT REALLY JUMPS TO 45.3 THE FOLLOWING YEAR.

AND THAT'S LARGELY DRIVEN BY THOSE THREE PROJECTS THE TRUNK RELIEF CONSTRUCTION, THE OFFSITE SUPPLY FROM FORT WORTH AND THE INDUSTRIAL PUMP STATION.

BUT THEN AFTER THAT WE GET TO A MORE STABLE ANNUAL ALLOCATION.

SO OVERALL, FOR FY 24 TO FY 28, THIS CAPITAL PROGRAM INCREASES BY 2.6 MILLION OVER WHAT YOU APPROVED AS PART OF THE CURRENT YEAR BUDGET.

SO I MENTIONED A COUPLE OF RELATIVELY SIGNIFICANT INCREASES IN PROJECTS.

BUT THEN WE ALSO MADE MODIFICATIONS TO THE REHAB LINE ITEMS TO KIND OF HELP BALANCE SOME OF THAT OUT.

THE NEXT SLIDE HERE GIVES YOU THE CLEAN VERSION.

SO FOR THE NEW FIVE YEAR PERIOD, FY 25 THROUGH 29, IT'S ABOUT $127.8 MILLION CAPITAL PROGRAM.

IF YOU INCLUDE THE 9.9 MILLION THAT WILL WE ANTICIPATE ISSUING IN FY 24, THAT CORRESPONDS TO THE 138 MILLION THAT THOSE OF YOU AT A COMMITTEE WHO'VE HEARD ABOUT SOME OF THIS MIGHT, MIGHT RECALL.

[01:45:03]

SO AGAIN, FROM A RATE MODELING STANDPOINT, THAT'S REALLY WHAT YOU WANT A NICE FLAT, RELATIVELY FLAT CURVE, NOT BIG PEAKS THAT THAT WREAK HAVOC ON YOUR RATES THAT YOUR RESIDENTS PAY.

THAT'S REALLY THE WATER SEWER IN A NUTSHELL.

I'D BE HAPPY TO TAKE ANY QUESTIONS.

MAYOR COUNCIL.

MAYBE BEFORE YOU ASK QUESTIONS, I WOULD SAY THAT WE PRESENTED THE RATE STUDY ANALYSIS TO THE FINANCE COMMITTEE.

WE PRESENTED A VARIATION OF THREE DIFFERENT CIP PLANS FROM A ESSENTIALLY STRIPPED DOWN PLAN OF ABOUT $59 MILLION, ALL THE WAY UP TO TO THE 138. SO WE'RE PRESENTING TODAY A PLAN BASED ON THE FEEDBACK FROM THE FINANCE COMMITTEE, WHICH WAS THE LARGEST OF THE THREE PLANS.

THERE WERE RATE ASSUMPTIONS OF WHAT IT WOULD TAKE TO FUND THAT PLAN.

THAT WILL GO THROUGH WHEN MR. JACKSON COMES UP TO GO THROUGH HIS PRESENTATION, AND THEN WE CAN SPEAK MORE SPECIFICALLY ABOUT RATES AT THAT TIME IF YOU HAVE QUESTIONS AS WELL.

BUT. IS THERE ANYBODY? WE'RE GOOD. WELL.

THANK YOU. IN THAT CASE, I'LL TURN IT OVER TO MR. DAN JACKSON FROM WILLDAN, WHO WILL WALK YOU THROUGH THE WATER.

SEWER CAPITAL RATE STUDY.

WE'LL HAVE TO WRITE.

GREAT UP. THAT'LL WORK.

THANK YOU. MAYOR. MEMBERS OF THE COUNCIL.

MY NAME IS DAN JACKSON, VICE PRESIDENT OF WILLDAN.

WE WERE THE FIRM THAT WAS ENGAGED BY THE CITY TO DO A LONG TERM WATER AND WASTEWATER RATE PLAN COVERING THIS YEAR AND THEN A FORECAST PERIOD OVER THE NEXT FIVE YEARS. THIS IS A GOOD TIME TO BE TALKING ABOUT THIS RATE PLAN, BECAUSE AS WE TALK ABOUT CAPITAL IMPROVEMENTS, OBVIOUSLY, ONE OF THE KEY QUESTIONS ANYBODY IS GOING TO HAVE IS WHAT IMPACT IS THIS GOING TO BE ON OUR CUSTOMERS, ON OUR RATEPAYERS? CAPITAL IMPROVEMENT PLANS TEND TO HAVE THE BIGGEST SINGLE IMPACT ON A LONG TERM RATE PLAN.

AND THEY IMPACT RATE PLANS IN THREE WAYS.

HOW MUCH DO YOU HAVE TO SPEND? WHEN DO YOU HAVE TO SPEND IT AND HOW DO YOU FINANCE IT? THE DECISIONS YOU MAKE ON EACH OF THOSE THREE FACTORS ARE GOING TO ULTIMATELY AFFECT WHAT YOUR RATES ARE GOING TO BE.

NOW, OF COURSE, YOU TRY TO RUN YOUR WATER AND WASTEWATER OPERATION LIKE A BUSINESS.

AND LIKE ANY BUSINESS, YOU'RE GOING TO HAVE CERTAIN COSTS GO UP ON AN ANNUAL BASIS.

SO IT'S REASONABLE TO EXPECT THAT OVER A LONG PERIOD OF TIME, YOUR WATER AND SEWER RATES ARE GOING TO GO UP.

BUT THE KEY QUESTION IS GOING TO BE HOW MUCH ARE THEY GOING TO GO UP, AND HOW MUCH OF THAT IS GOING TO BE IMPACTED BY CAPITAL PLANS? AS HARLAN INDICATED, I I'VE BEEN DOING I'VE BEEN IN THIS BUSINESS FOR ALMOST 40 YEARS NOW, AND I'VE DONE A LOT OF RATE STUDIES FOR OVER 100 CLIENTS HERE IN THE STATE OF TEXAS ALONE. AND I DO SOME WORK FOR RATE FOR CLIENTS THAT HAVE INCREDIBLY LOW RATES, BUT THEY HAVE REALLY LOW RATES BECAUSE THEY DON'T SPEND ANY MONEY ON THEIR ANY CAPITAL MONEY ON THEIR WATER AND WASTEWATER SYSTEM.

SO WHILE THEIR RATES MIGHT BE LOW, THEY'RE BASICALLY ROLLING THE DICE BECAUSE THEIR, THE QUALITY OF SERVICE IS DECLINING.

THEY RUN THE RISK OF CATASTROPHIC FAILURES.

CITY OF BURLESON HAS TAKEN A VERY AGGRESSIVE APPROACH TOWARDS ENSURING THAT THE QUALITY OF SERVICES AT A HIGHEST LEVEL POSSIBLE, BUT THE TRADE OFF MEANS THAT THERE'S GOING TO BE SOME INVESTMENT ON THE PART OF THE RATEPAYERS IN ORDER TO ENSURE THAT THAT IS GOING TO BE THE CASE.

NOW I'VE GOT I'M GOING TO HOPEFULLY GO THROUGH THIS PRESENTATION VERY QUICKLY BECAUSE I KNOW YOU'VE GOT A LOT ON YOUR PLATE TODAY, BUT I WANT TO START WITH A LITTLE BIT OF BACKGROUND INFORMATION.

CITY LAST DID A RATE ADJUSTMENT LAST OCTOBER.

IT DID A 3% ACROSS THE BOARD RATE ADJUSTMENT.

FOR THE LONGEST TIME, THE CITY HAS PURSUED A POLICY WHERE IT IS MINIMIZED ITS RATE ADJUSTMENTS DUE TO MIXING IT IN WITH GRADUAL DRAWDOWNS IN ITS FUND BALANCE. THAT'S VERY GOOD FINANCIAL POLICY.

YOU BUILD UP FUND BALANCES OVER A PERIOD OF TIME, AND THEN YOU USE THOSE FUND BALANCE TO SUPPORT YOUR RATES WHEN IT IS NECESSARY.

THAT'S WHAT YOU'VE BEEN DOING.

NOW, AS GOOD A POLICY AS THAT HAS BEEN, THERE HAVE BEEN A COMBINATION OF SEVERAL FACTORS THAT ARE GOING TO NEED TO LEAD TO THE NEED FOR FUTURE RATE ADJUSTMENTS. FIRST OF ALL, AS I SAID EARLIER, YOUR OPERATING COSTS ARE GOING UP.

THAT'S NO SURPRISE.

COST OF EVERYTHING GOES UP BY 3 TO 4% A YEAR, SO IT'S REASONABLE TO EXPECT THAT OPERATING COSTS ARE GOING TO GO UP OVER A PERIOD OF TIME.

SECONDLY, YOU GET ALL YOUR WATER AND WASTEWATER SERVICE FROM FORT WORTH.

FORT WORTH IS YOUR SUPPLIER WHEN GUESS WHAT? WHEN THEY RAISE YOUR RATES, YOU HAVE TO PASS THOSE COSTS THROUGH TO YOUR CUSTOMERS.

[01:50:01]

AND YOU HAVE TO PASS THOSE THROUGH.

AND THEN, OF COURSE, YOU'VE GOT THE CAPITAL PLAN ITSELF.

SO THIS CHART RIGHT HERE IS JUST A SUMMARY OF WHAT YOUR CURRENT RATE STRUCTURE IS FOR WATER CUSTOMERS.

THEY PAY FOR WATER SERVICE ON A MONTHLY BASIS IN TWO WAYS.

THEY PAY A MINIMUM CHARGE, AND THEN THEY PAY A VOLUMETRIC RATE FOR EVERY 1000 GALLONS.

THE VAST MAJORITY OF YOUR CUSTOMERS ARE HAVE A THREE QUARTER INCH METER, AND THEY PAY A $16 A MONTH WATER MINIMUM CHARGE.

THEY THEN PAY A VOLUMETRIC RATE BASED ON WHAT IS KNOWN AS AN INVERTED BLOCK.

THE MORE YOU USE, THE MORE YOU PAY.

THE INTENTION IS TO ENCOURAGE WATER CONSERVATION BY HAVING WATER AVAILABLE, BUT PROVIDING A FINANCIAL FINANCIAL DISINCENTIVE FOR INCREASING LEVELS OF WATER USE.

ON THE WASTEWATER SIDE, YOU ALSO PAY A MINIMUM CHARGE, AND THEN YOU PAY A VOLUMETRIC RATE BASED ON A WINTER AVERAGE.

SO WHAT DOES THIS MEAN IN TERMS OF WHAT PEOPLE PAY? ONE OF THE KEY QUESTIONS RATEPAYERS, COUNCILS ALL EVERYBODY WANTS TO KNOW IS WHAT DO PEOPLE PAY FOR WATER SERVICE AND HOW DOES IT COMPARE TO WHAT OTHER PEOPLE ARE PAYING? WELL, THIS CHART INTENDS TO ANSWER THAT QUESTION.

THE AVERAGE RESIDENTIAL RATEPAYER HERE IN THE CITY OF BURLESON USES SOMEWHERE BETWEEN 7 TO 8, MAYBE AS MUCH AS 9000 GALLONS A MONTH.

SO WE TOOK A MONTHLY RESIDENTIAL COMPARISON AT 10,000 GALLONS OF WATER AND 5000 GALLONS OF WASTEWATER.

THAT'S A VERY TYPICAL USAGE LEVEL FOR A RESIDENTIAL CUSTOMER HERE IN BURLESON, THAT CUSTOMER PAYS $112.16 A MONTH FOR THAT SERVICE.

THIS CHART COMPARES WHAT PEOPLE IN BURLESON PAY TO OTHER NEIGHBORING COMMUNITIES.

AS YOU CAN SEE, YOUR RATES ARE RIGHT ABOUT WHERE YOU WOULD EXPECT THEM TO BE.

YOU'RE HIGHER THAN SOME, YOU'RE LOWER THAN OTHERS.

YOU'RE ABOUT $4 BELOW THE STATE AVERAGE.

SO AS YOU CAN SEE, YOU KNOW YOUR RATES ARE RIGHT IN LINE WITH WHAT OTHER CITIES ARE CHARGING.

WE LOOKED AT THIS TWO WAYS.

ONE IS TO TAKE A LOOK AT YOUR IMMEDIATE NEIGHBORS HERE.

CITIES LIKE, YOU KNOW, COPPELL AND GRAND PRAIRIE AND HURST AND CLEBURNE.

THEN WE DID ANOTHER CHART THAT SHOWED SPECIFIC FORT WORTH CUSTOMERS.

AND AS YOU CAN SEE, THIS CHART SAYS BASICALLY THE SAME THING FOR ALL CUSTOMERS OF FORT WORTH.

YOU'RE RIGHT ABOUT IN THE MIDDLE OF THE PACK, HIGHER THAN SOME, LOWER THAN OTHERS.

THE KEY TAKEAWAY FROM BOTH OF THESE CHARTS IS THAT YOUR RATES ARE CERTAINLY NOT OUT OF PROPORTION WITH WHAT PEOPLE PAY FOR WATER AND SEWER SERVICE HERE IN THE NORTH TEXAS AREA. OKAY, JUST A LITTLE BIT OF BRIEF BACKGROUND.

YOU'VE GOT ABOUT 16,000 WATER CUSTOMERS AND ABOUT 17,000 WASTEWATER CUSTOMERS, TO NO GREAT SURPRISE.

THE VAST MAJORITY OF THEM ARE RESIDENTIAL, BUT YOU HAVE A FAIRLY ROBUST COMMERCIAL COMMUNITY.

ALSO, WHENEVER YOU DO A LONG TERM FINANCIAL PLAN, ONE OF THE KEY FACTORS IN THAT IS GOING TO BE WHAT IS THE EXPECTATIONS OF FUTURE GROWTH.

NOW KEEP THIS IN MIND. YOU KNOW, FINANCIAL FORECASTS ARE NOT GUARANTEES.

THEY'RE PREDICTIONS BASED ON A SERIES OF REASONABLE ASSUMPTIONS.

AND ONE OF THE KEY ASSUMPTIONS IS HOW MUCH ARE YOU GOING TO GROW OVER THE NEXT SEVERAL YEARS? THIS CHART INDICATES THAT WE'RE PROJECTING THAT THE CITY IS GOING TO GROW BY ABOUT 200, MAYBE 215 NEW WATER ACCOUNTS EVERY YEAR.

YOU'VE GOT ABOUT 16,000 ACCOUNTS RIGHT NOW.

YOU'VE GROWN FROM ABOUT 14,004 YEARS AGO.

AND WE'RE PROJECTING THAT YOU'RE GOING TO HIT ABOUT 18,000 CUSTOMERS TEN YEARS FROM NOW.

AND LOOK, WELL-MANAGED GROWTH IS VERY BENEFICIAL FOR A WATER UTILITY BECAUSE EVERY NEW ACCOUNT IS A NEW MONTHLY CHARGE.

IT'S A NEW VOLUMETRIC CHARGE.

WATER IS A CLASSIC BULK COMMODITY.

THE MORE YOU SELL, THE LESS IT COSTS TO PRODUCE IT FOR EVERY CUSTOMER.

YOUR WATER USAGE IS ALSO INCREASED FAIRLY RAPIDLY IN, IN, IN MOST RECENT YEARS, AND WE'RE EXPECTING SOME FAIRLY STEADY GROWTH OVER THE NEXT TEN YEARS.

IT'S ALWAYS A LITTLE DIFFICULT TO TO FORECAST WATER CONSUMPTION BECAUSE THAT'S BASED ON THE WEATHER.

YOU KNOW, IF IT'S GOING TO BE A WETTER THAN NORMAL YEAR, THEN WATER CONSUMPTION WILL BE DOWN.

IF IT'S A HOTTER THAN NORMAL YEAR, WATER CONSUMPTION WILL BE UP.

SO ALL YOU HAVE TO DO IS TELL ME WHAT THE WEATHER IS GOING TO BE LIKE NEXT YEAR.

AND I CAN TELL YOU EXACTLY HOW MUCH WATER YOU'RE GOING TO SELL.

SO IN THE MEANTIME, WE'RE JUST PROJECT NORMAL LEVELS OF WATER USAGE.

OKAY. LET'S TALK A LITTLE JUST A LITTLE BIT ABOUT YOUR FINANCES.

AS I SAID EARLIER, OUR LONG TERM FORECAST ASSUMES THAT MOST OF YOUR OPERATING AND PERSONNEL COSTS ARE GOING TO GO UP 3 TO 4% A YEAR.

CERTAIN OF YOUR COSTS, LIKE CHEMICALS, HEALTH INSURANCE, THAT KIND OF THING ARE PROBABLY GOING TO GO UP A LITTLE BIT HIGHER RATES.

AND OUR RATE MODEL TAKES THAT INTO CONSIDERATION.

BUT THE BIGGEST IMPACTS ON THE RATE PLAN ARE ONE FORT WORTH CHARGES AND TWO, HOW YOU FUND YOUR CAPITAL IMPROVEMENTS.

SO LET'S TAKE A LOOK AT FORT WORTH FIRST.

THIS CHART RIGHT HERE SHOWS FORT WORTH'S HISTORICAL WATER RATES AND HISTORICAL WASTEWATER RATES.

[01:55:05]

WHAT'S INTERESTING ABOUT FORT WORTH'S RATES IS THAT THEY TEND TO KIND OF BOUNCE UP AND DOWN A LITTLE BIT YEAR OVER YEAR.

BUT THE TREND, OF COURSE, HAS BEEN UP.

IN 2006, FORT WORTH'S WATER RATE WAS $1.36 PER 1000 GALLONS.

AND NOW IT'S 232.

AND WE'RE PROJECTING IT'S GOING TO HIT $3.31 BY 2033.

WHILE IT'S KIND OF BOUNCED UP AND DOWN IN RECENT YEARS, THE AVERAGE HAS BEEN ABOUT 4% INCREASES OVER THE LAST 15 YEARS.

AND SO WE'RE PROJECTING THAT'S GOING TO CONTINUE BASICALLY SAME THING.

TRUE ON THE WASTEWATER SIDE.

WASTEWATER RATE WAS $1.15 AND 2015 AND NOW IT'S $1.85.

BUT BUT ONCE AGAIN, AS YOU CAN SEE, IT'S KIND OF GONE UP AND DOWN A LITTLE BIT.

BUT THE GENERAL TREND HAS BEEN UP, AND IT'S REASONABLE TO ASSUME THAT IT'S GOING TO CONTINUE TO GO UP AND IN SUBSEQUENT YEARS.

ERIC ALSO ALREADY SHOWED YOU THIS CHART.

THE $128 MILLION IN WATER AND WASTEWATER CAPITAL IMPROVEMENT NEEDS OVER THE NEXT FIVE YEARS.

AS ERIC INDICATED, SIGNIFICANT AMOUNT OF THAT IS GOING TO BE IN THE NEXT 2 TO 3 YEARS.

AND THAT, OF COURSE, IMPACTS THE PLAN BECAUSE, ONCE AGAIN, HOW MUCH YOU FUND WHEN YOU FUND IT AND HOW YOU FINANCE IT, AND A LOT OF THE FUNDING IS GOING TO BE NEEDED IN THE NEXT COUPLE OF YEARS.

NOW, ONE OF THE BENEFITS YOU HAVE, AND IN DEVELOPING A LONG TERM FINANCIAL PLAN IS THAT, YOU KNOW, THESE CAPITAL IMPROVEMENTS ARE COMING.

YOU KNOW, YOU NEED TO FINANCE THEM SO YOU CAN STRUCTURE A FINANCING PLAN THAT WILL MINIMIZE THE IMPACT ON YOUR RATEPAYERS.

AND ONE OF THE WAY YOU'RE DOING, WAYS YOU'RE ABLE TO DO THIS IS BY ISSUING REIMBURSEMENT RESOLUTIONS IN THE YEAR OF THE CAPITAL IMPROVEMENT PLAN, FOLLOWED BY THE ACTUAL ISSUANCE OF THE DEBT IN THE SECOND YEAR, AND THEN THE DEBT PAYMENTS START IN THE THIRD YEAR.

SO WHILE YOU HAVE AS MUCH AS $76 MILLION OF OBLIGATIONS IN THE NEXT TWO YEARS, YOU'RE ACTUALLY NOT GOING TO START MAKING PAYMENTS ON THAT UNTIL YEARS THREE, FOUR AND FIVE.

SINCE, YOU KNOW, THIS IS COMING YEARS IN ADVANCE, YOU CAN START GRADUALLY ADJUSTING YOUR RATES UPWARDS TO FUND THESE CAPITAL IMPROVEMENTS, AND THAT MINIMIZES THE IMPACT ON RATEPAYERS.

SO AS YOU CAN SEE, THIS CHART RIGHT HERE SHOWS $138 MILLION IN DEBT OVER THE NEXT SIX YEARS, WITH THE LION'S SHARE OF IT BETWEEN 25 AND 2025 AND 2027.

BUT THE KEY FACTOR THE PRINCIPAL AND INTEREST PAYMENTS AREN'T GOING TO REALLY KICK IN UNTIL 2027 2028.

SO. THIS VERY COLORFUL CHART RIGHT HERE SHOWS YOUR FORECAST.

WATER AND WASTE WATER COST OF SERVICE OVER THE NEXT TEN YEARS.

RIGHT NOW, IT'S COSTING YOU A LITTLE BIT LESS THAN $30 MILLION A YEAR TO RUN YOUR WATER AND SEWER SYSTEM.

WE'RE PROJECTING THAT THAT AMOUNTS AMOUNT IS GOING TO REACH ALMOST $50 MILLION BY 2033.

THE BIGGEST IMPACT AS YOU CAN SEE, IS THE PURPLE PART OF THE BAR CHART, WHICH IS YOUR DEBT SERVICE.

AS YOU CAN SEE, IT STARTS TO INCREASE PRETTY RAPIDLY AFTER 2027.

THE BLUE PORTION, WHICH IS THE BOTTOM PORTION IS YOUR OPERATING COSTS.

IS YOUR FORT WORTH COSTS? I MEAN, AND THEN THE RED PORTION IS YOUR OPERATING COSTS.

SO ANOTHER IMPORTANT TAKEAWAY FROM THIS CHART IS THAT MOST OF THE REASONS FOR YOUR COST INCREASES ARE COMPLETELY OUT OF YOUR CONTROL.

FORT WORTH AND THE DEBT AND THE CAPITAL IMPROVEMENT PLAN.

AND SO THOSE ARE DRIVING THE NEED FOR THE LONG TERM RATE PLAN.

SO IN MY FINAL TWO CHARTS, I'LL JUST CUT TO THE CHASE AND SHOW YOU THE RATE PLAN THAT WE'RE PROJECTING.

THIS RIGHT HERE SHOWS YOUR CURRENT RATE PLAN.

AND THEN OUR RECOMMENDED RATE THAT YOU PUT INTO PLACE IN OCTOBER OF 2024.

THAT'S THE BEGINNING OF YOUR NEXT FISCAL YEAR.

SO AS YOU CAN SEE, WE RECOMMEND INCREASING THE MONTHLY MINIMUM CHARGE BY ABOUT $1.40 ON THE WATER SIDE AND ABOUT $1.20 ON THE WASTEWATER SIDE WITH VOLUMETRIC INCREASES ON EACH OF THE VOLUME LEVELS ON THE WATER SIDE AND THE SEWER SIDE.

NOW, THAT'S NOT THE ONLY INCREASE THAT'S GOING TO BE NEEDED.

WHILE WE'RE NOT RECOMMENDING ANY FURTHER INCREASES IN 2025 THROUGH 2028, WE'RE CLEARLY PROJECTING THAT THERE IS GOING TO BE THE NEED FOR FUTURE RATE ADJUSTMENTS IN EACH OF THE NEXT FOUR YEARS IN ORDER TO FUND THAT CAPITAL IMPROVEMENT PLAN.

SO I'LL SHOW YOU MY FINAL CHART, WHICH IS PROBABLY THE MOST IMPORTANT CHART IN THE ENTIRE PRESENTATION.

AND THAT IS WHAT IS THE IMPACT OF THIS RATE PLAN ON MONTHLY BILLS.

REMEMBER, AS I SAID, THE AVERAGE RATEPAYER USES SOMEWHERE BETWEEN SEVEN TO 8 TO 9000 GALLONS OF WATER AND SEWER SERVICE A MONTH.

SO IF YOU LOOK AT THAT 10,000 GALLON LINE, YOU SEE THAT THAT FAMILY THAT USES 10,000 GALLONS OF WATER AND 5000 GALLONS OF WASTEWATER RIGHT NOW PAYS $112.16. UNDER THIS PLAN, THEIR MONTHLY BILL WOULD GO UP BY 7.7%.

[02:00:04]

IT WOULD GO UP BY SIMILAR 7% MARGINS IN EACH OF THE NEXT FOUR YEARS.

AFTER THAT, THAT'S ABOUT A SEVEN.

THAT'S ABOUT AN $8 A MONTH INCREASE IN A MONTHLY BILL.

OBVIOUSLY, IF YOU USE A LITTLE LESS WATER THAN THAT, YOU PAY A LITTLE BIT LESS.

IF YOU USE MORE WATER THAN THAT, YOU PAY A LITTLE BIT MORE THAN THAT.

BUT THE VAST MAJORITY OF YOUR RATEPAYERS ARE GOING TO SEE ABOUT 7 TO 8% ANNUAL ADJUSTMENTS OVER EACH OF THE NEXT FIVE YEARS.

NOW IT'S NOT.

OBVIOUSLY, IT'S NEVER EASY TO ASK PEOPLE TO PAY MORE FOR ANYTHING.

NOBODY WANTS TO PAY MORE FOR ANYTHING AT ANY TIME, FOR ANY REASON.

BUT ONE THING TO KEEP IN MIND IN WATER AND WASTEWATER UTILITIES IS THAT WHAT YOU'RE ASKING RATEPAYERS TO CONTRIBUTE IS GOING TO GO DIRECTLY INTO THE STREETS AND ALLEYWAYS OF THE CITY OF BURLESON.

THIS IS A THIS RATE PLAN WILL ENABLE THE FUNDING OF $138 MILLION OF INVESTMENT INTO THE FUTURE OF THE CITY.

THESE ARE ASSETS THAT YOU WILL BE USING.

YOUR CHILDREN WILL BE USING, YOUR GRANDCHILDREN WILL BE USING, AND MAYBE EVEN YOUR GREAT GRANDCHILDREN IF THEY STAY HERE, OF COURSE, WILL BE USING.

SO WHILE IT'S NEVER EASY TO ASK PEOPLE TO PAY MORE, WHAT THEY ARE GETTING IN RETURN IS A HIGH QUALITY WATER SYSTEM THAT WILL CONTINUE TO PROVIDE A SUPERIOR LEVEL OF WATER SERVICE FOR THE RESIDENTS OF THE CITY.

THAT IS OUR PROPOSAL GOING FORWARD.

WE'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE AT THIS TIME.

ANYONE. MAYOR COUNCIL.

I THINK WHAT I WOULD SAY HERE IS, IS SIMPLY THE FEEDBACK WE'RE LOOKING FOR YOU ON IS IS THERE ANYTHING IN THE CAPITAL PLAN THAT YOU WOULD RECOMMEND TO SHIFT OR CHANGE? IS THERE A RATE AT WHICH YOU WOULD LIKE TO SEE INCREASES AT OR BELOW? IS THE PROPOSED PLAN TOLERABLE? WE UNDERSTAND THAT THESE THESE ARE FEES AND THESE THESE IMPACT THE RESIDENTS.

WHAT WHAT I WOULD TELL YOU IS SIMPLY THIS IS THAT WHERE WE CAN ADJUST IS IN THE CAPITAL PLAN.

YOU KNOW, WE PURCHASE OUR WATER FROM FORT WORTH.

AND IF MR. JACKSON'S FORECASTING THOSE INCREASES TO BE 4 TO 5% ANNUALLY AND OUR OPERATIONAL COSTS BETWEEN, YOU KNOW, CHEMICALS OR PERSONNEL OR ANYTHING ELSE INCREASE BETWEEN 3 AND 4. I WOULD BE THAT WOULD BE DISINGENUOUS IF I TOLD YOU THAT I THINK THAT WE COULD FUND A FIVE YEAR PLAN WITHOUT A RATE INCREASE.

SO I UNDERSTAND THAT THAT WE'RE TALKING ABOUT KEEPING THE TAX RATE LEVEL.

WE'RE TALKING ABOUT, YOU KNOW, POTENTIALLY STREET MAINTENANCE FEES OR OTHER THINGS.

NOW WE'RE TALKING ABOUT WATER AND WASTEWATER.

WE WANT TO BE COMPLETELY TRANSPARENT ABOUT WHAT WE THINK THOSE RATE INCREASES WOULD BE, AND HOW MUCH IT COSTS TO FUND THIS PLAN.

SO WHAT THAT SAID, WE WANT TO ANSWER ANY QUESTIONS YOU HAVE.

AND, HARLAN, IT MIGHT BE A GOOD OPPORTUNITY TO MAYBE GO AHEAD AND SHOW THE FIVE YEAR FORECAST AS WELL.

DO WE HAVE A BASIS TO PREDICT FORT WORTH'S INCREASED RATES THAT WE ANTICIPATE BASED ON INFORMATION THAT FORT WORTH HAS PROVIDED US, OR ARE WE JUST SORT OF GOING UNDER THE ASPECT OR THE ASSUMPTION THAT EVERYTHING IS JUST GOING TO GO UP? DO WE HAVE ACCESS TO THERE? SURELY THEY'RE PROJECTING THEIR COSTS AND EXPENSES AND REVENUES AND SO FORTH, JUST LIKE WE ARE.

SO ARE WE LOOKING AT THEIR NUMBERS? ARE WE LOOKING AT OUR BEST GUESS AS TO WHAT THEIR NUMBERS MIGHT BE? SHORT ANSWER IS YES.

AS A WHOLESALE CUSTOMER TO FORT WORTH, WE PARTICIPATE ON THEIR WHOLESALE CUSTOMER ADVISORY COMMITTEE.

AND I'M ACTUALLY ON A SUBCOMMITTEE THAT DEALS STRICTLY WITH THEIR RATES.

ACTUALLY, JUST LAST WEEK, WE HAD KIND OF OUR FIRST LOOK AT WHAT THEY THINK THEIR RATES MIGHT BE FOR NEXT YEAR.

BUT IT'S AN ANNUAL PROCESS WITH THE PREVIOUS YEAR'S ACTUAL EXPENSES REALLY KIND OF DRIVING WHAT THE WHAT THE UPDATED NUMBERS WILL BE SO LIKELY IN THE AUGUST TIME FRAME.

IT'S NOT GOOD FOR OUR SCHEDULE, BUT IT'S FORT WORTH IS ON A SIMILAR SCHEDULE.

THEY'LL ADOPT RATES FOR FY 25.

WE'LL GET THOSE VERY LATE IN OUR BUDGET PROCESS.

BUT BASED ON THE VERY EARLY DOCUMENTS THAT WE SAW LAST WEEK IT'S FAIRLY IN LINE WITH WHAT YOU'VE SEEN HERE, A LITTLE BIT LESS OF AN INCREASE THAN THAN THAT AVERAGE OF WHAT WAS THAT, A 15 YEAR AVERAGE.

4 TO 5%. YEAH, NOT THAT MUCH.

BUT YOU MIGHT ALSO RECALL WE'VE GOT THIS FOREVER CHEMICALS ISSUE GOING ON, SO THAT WILL ACTUALLY DRIVE SOME NEW CAPITAL PROJECTS AND COSTS THAT FORT WORTH I ANTICIPATE HEARING MORE ABOUT IN ANOTHER MEETING NEXT MONTH.

LATE NEXT MONTH.

WHAT'S SOME POTENTIAL COSTS AND TIMING MIGHT BE ON THAT, BUT AT LEAST FOR NEXT YEAR, IT LOOKS LIKE WE WON'T HAVE THE QUITE 3 TO 4% INCREASE THAT WE'VE SEEN ON AVERAGE THE LAST

[02:05:03]

THANKS. I TAKE YOUR QUESTION TO MEAN NOT ONLY NEXT FISCAL YEAR, BUT THROUGHOUT OUR FIVE YEAR PLANNING HORIZON.

AND I'VE WORKED WITH OTHER WHOLESALE WATER PROVIDERS AND THEY THEY TRADITIONALLY FORECAST OUT BECAUSE THEY'RE DOING THE SAME THING WE'RE DOING, JUST PLANNING FOR ONE OPERATING BUDGET, BUT THEY HAVE A FIVE YEAR OR MULTI YEAR CAPITAL PROGRAM MUCH LONGER THAN FIVE.

SO THEY DO GIVE US MORE OF A HEAD UP HEADS UP.

SO DAN PROBABLY HAS MORE EXPERIENCE WITH SOME WHOLESALERS IN PARTICULAR FORT WORTH.

YEAH. HARLAN'S RIGHT.

MANY WHOLESALE CUSTOMERS DO PROVIDE 5 TO 10 YEAR PLANS.

FORT WORTH DOES.

AND DALLAS DON'T REALLY LIKE TO TIE THEMSELVES DOWN WITH FORECASTS.

SO THEY GENERALLY ONLY DO THE RATE ONE YEAR IN ADVANCE.

BUT IT HAS BEEN FAIRLY CONSISTENT OVER THE LAST SEVERAL YEARS.

WE KNOW THE COSTS ARE GOING UP.

LOOK, THEY'RE FACING THE SAME CHALLENGES.

YOU ALL ARE. YOU KNOW, THEIR OPERATING COSTS ARE GOING UP, THEIR PERSONNEL COSTS ARE GOING UP.

THEY'RE LOOKING AT CAPITAL IMPROVEMENT PLANS.

SO IT'S REASONABLE TO ASSUME THAT IT'S GOING TO GO UP BY BY THAT MEASURE.

IT WOULD BE GREAT IF, IF THEY COULD DO SOMETHING LIKE WHAT NORTH TEXAS MUNICIPAL WATER DISTRICT DOES AND GIVES US A TEN YEAR PLAN EVERY YEAR.

BUT THEN AGAIN, NORTH TEXAS ALWAYS REVISES THEIR TEN YEAR PLAN AND THEY ALWAYS REVISE IT UPWARD.

BY THE WAY YOU KNOW THAT THAT'S BUT BUT, YOU KNOW, BUT WE'RE PRETTY CONFIDENT THAT A 4 TO 5% BENCHMARK IS A REASONABLE ESTIMATE.

ANYBODY ELSE.

AND TO ME THIS IS BEING PROACTIVE.

WE DON'T WANT TO GET CAUGHT FLAT FOOTED AGAIN.

AND WE KNOW THAT IT'S GIVEN THAT THEY'RE GOING TO GO UP AND WE'RE KIND OF DON'T HAVE A WHOLE LOT OF CHOICES.

SO WE JUST MANAGE AS BEST WE CAN.

SO IS THERE ANY OTHER INPUT ON THIS? WELL, I THINK THOUGH THAT ANTICIPATING THAT WE'RE GOING TO RAISE WATER RATES 50% OVER THE NEXT FOUR YEARS AND SEWER RATES 30% OVER THE NEXT FOUR YEARS, WE NEED TO START DISCUSSING THIS PUBLICLY AND GETTING PEOPLE'S EXPECTATIONS.

DID THEY LOOK AT THEIR WATER BILLS FOUR YEARS FROM NOW AND THINK, GOOD LORD, FOUR YEARS AGO WAS HALF THAT? WELL, YEAH, IT WAS ACTUALLY.

BUT IT'S I GUESS I'M SAYING WE NEED TO PROBABLY CUSHION THE IMPACT BY, YOU KNOW, STARTING TO, TO PUT OUT IN OUR SOCIAL MEDIA AND OTHER INFORMATIONAL SOURCES THAT WE ANTICIPATE RATE CHANGES COMING.

SOFTEN THE BLOW A LITTLE BIT.

MAYBE. BUT THIS IS I AGREE, THIS IS THIS IS GOING TO BE HURT HURTFUL TO A LOT OF PEOPLE.

YOU KNOW, AND I REALIZE YOUR WATER IS NOT THE BIGGEST SINGLE ITEM ON YOUR BUDGET, BUT IT'S PRETTY DARN BIG.

AND I GUESS THE THING ABOUT ON ON ANY OF OUR UTILITIES, IT'S A, YOU KNOW, A MAINTENANCE COVERED NUMBER COMES ALONG.

WE HAD THE MAINTENANCE NUMBER AND ALL THIS, BUT THEN WE HAVE THE CATASTROPHIC STUFF WHERE LIKE IN THE WEATHER WHERE EVERYTHING GOT REALLY DRIED UP.

WE LOST A LOT OF MOISTURE UNDERNEATH SOME OF OUR LINES.

AND THEN WHEN IT WATER BUILT UP, IT FROZE.

WE'RE OUT THERE FIXING THE LINES.

SO I MEAN, WE JUST NEED KIND OF A BACK UP PLAN ON SOME STUFF.

AND I THINK IT'S BUT COMMUNICATION.

I THINK THE CITIZENS APPRECIATE THE FACT THAT WE'RE TELLING THEM WHAT'S COMING.

YEAH, I THINK WE HAVE TO I AGREE 100%.

NOT THAT I DON'T SEE A WHOLE LOT OF DISCRETION ON OUR PART AS TO WHAT WE CAN OR CAN'T DO WITH OUR OWN BUDGETS OVER THE UPCOMING FEW YEARS, AT THE RISK OF BEING GOOD STEWARDS OF OUR OF OUR INFRASTRUCTURE, WE JUST HAVE THESE EXPENSES WE NEED TO MAKE.

BUT THE LION'S SHARE OF THE CHANGES AND RATES ARE ALL COMING OUT OF FORT WORTH, AND THERE'S REALLY NOT A WHOLE LOT WE CAN DO ABOUT IT.

WE WE PARTICIPATE BY PAYING THE RATES, AND WE ALSO PARTICIPATE BY FUNDING FORT WORTH'S CAPITAL EXPANSIONS.

TWICE NOW, SINCE I'VE BEEN ON COUNCIL, THAT WE'VE BEEN ASKED TO TAKE BIG BITES OF INCREASED CAPACITY THAT THEY'RE GOING TO HAVE TO BUILD THAT THEY HAVEN'T EVEN BUILT YET.

YOU KNOW, WE'RE FUNDING IT AND FINANCING IT FOR THEM IN ADVANCE.

SO THAT'S ALL PART OF OUR POSITION WHERE WE WERE IN THE, IN THE FOOD CHAIN, AS FAR AS IT WERE, WITH, WITH WATER AND SEWER.

THERE'S NOT MANY WAYS OUT OF THAT SITUATION EITHER.

I MEAN, IT JUST IS WHAT IT IS.

WELL, I KNOW WE'RE WE'RE GOING TO LOOK AT SOME ALTERNATIVE, YES, METHODS OF SUPPLY COMING UP.

BUT I EVEN IF SOME OF THOSE PAN OUT TO BE SOMETHING, IT'S NOT GOING TO DO A WHOLE LOT TO THIS.

AND, YOU KNOW, ANYTIME THERE'S A BIG PRODUCTION OF ANYTHING GOING ON LIKE FORT WORTH PRODUCING WATER AND TREATING SEWAGE ON SUCH A GRAND SCALE, FOR US TO COME UP WITH A SMALLER SCALE ALTERNATIVE AND BE LESS EXPENSIVE IS HIGHLY UNLIKELY.

IT MIGHT BE AN ALTERNATE SOURCE, BUT IT'S NOT GOING TO BE AN ALTERNATE SOURCE.

IT'S GOING TO SAVE US A SIGNIFICANT AMOUNT OF MONEY.

SO EVEN IF WE HAVE AN ALTERNATE SOURCE, IT'S GOING TO HAVE THEIR EXPENSES AND DEMANDS ON US ALSO.

[02:10:03]

YES. ANYBODY ELSE? ARE WE ALL ON THE SAME PAGE ON THIS? I THINK WHAT HAS BEEN SAID IS THERE'S NOT A LOT OF ROOM AS FAR AS WHAT WE HAVE TO MAKE THESE INFRASTRUCTURE INVESTMENTS.

IT'S NOT SOMETHING THAT WE CAN PUSH OFF FOR LONG.

AND IT IN ORDER TO CONTINUE THE SERVICE THAT WE HAVE.

YOU KNOW, I THINK IT'S ALWAYS INTERESTING WHEN MAYOR YOURSELF, DAN, WE'VE TALKED TO WHEN WE'RE TALKING TO THE ELEMENTARY STUDENTS AND WE TALK ABOUT ALL THE SERVICES THAT WE PROVIDE, AND THEY GET A BIG KICK WHEN WE PULL OUT A ROLL OF TOILET PAPER.

AND, YOU KNOW, WE SAY, LIKE, YOU WANT YOUR TOILET TO FLUSH.

THAT'S JUST AN EXPECTATION THAT THAT'S GOING TO BE THAT THAT'S JUST GOING TO HAPPEN.

OR WHEN YOU GO TO BRUSH YOUR TEETH IN THE MORNING, THE FLOW OF THE WATER IS GOING TO BE OF A CERTAIN PRESSURE LEVEL AND THE SHOWER THAT YOU TAKE AND THAT KIND OF STUFF.

AND WE ARE ACTUALLY SURROUNDED BY SERVICES THAT ARE NOT EVEN REMOTELY CLOSE TO WHAT WE PROVIDE.

WE'VE TALKED ABOUT BETHANY BECAUSE THEY NEIGHBOR, OUR CCN AND THOSE THERE ARE SOME RESIDENTS JUST DOWN THE ROAD FROM US THAT DON'T EVEN KNOW WHEN THEY TURN THEIR SINKS ON, IF THE PRESSURE WILL BE THERE AT ALL.

AND AND SO IT'S IMPORTANT THAT AS WE GROW, THIS IS JUST DEMANDS LIKE WE ARE EXPECTED TO PROVIDE WATER AND WASTEWATER.

BUT AS IS MENTIONED, WE REALLY HAVE TO MAKE AN EDUCATIONAL PUSH ON THE FRONT END.

THIS IS COMING AND IT'S BEST, YOU KNOW, THIS IS A GREAT CHART ON SLIDE 55 OF YOU KNOW THE IMPACT TO RESIDENTS MONTHLY.

BUT THIS IS JUST THE WATER WASTEWATER PIECE.

WE'VE ALSO TALKED ABOUT A COUPLE OF OTHER FEES POTENTIALLY.

AND SO I THINK WE NEED TO BE VERY AS FORTHCOMING AS WE POSSIBLY CAN BE.

ON HOW IS THIS GOING TO IMPACT OUR DAY TO DAY BILLS AS RESIDENTS, YOU KNOW, WHAT ARE YOU GOING TO SEE AND HOW IS THAT GOING TO HIT YOUR BOTTOM DOLLAR? BECAUSE THIS IS JUST ONE OF MANY UTILITIES THAT YOU NEED TO LIVE EVERY DAY AND YOU EXPECT EVERY DAY, BUT IT'S GOING TO IT COSTS.

AND SO AS MUCH AS WE CAN PROVIDE EDUCATION ABOUT HOW THIS IMPACTS YOU.

AND THEN THE RFP FOR THE BULK FOR TRASH COLLECTION AND THINGS.

WHEN CAN WE ANTICIPATE THAT? BECAUSE THAT GOES ON THIS BILL.

CORRECT? CORRECT.

IF YOU WERE GOING TO CHARGE A STORMWATER FEE OR STREET MAINTENANCE FEE, IT WOULD BE ALL ATTACHED, LIKELY THROUGH YOUR YOUR WATER BILL.

WE'RE IN THE PROPOSAL GATHERING PHASE RIGHT NOW.

I THINK IT'S NOT GOING TO BE SUCH THAT WE'LL REQUIRE A FORMAL RFP, AND I DON'T ANTICIPATE THAT DOLLAR AMOUNT WILL BE SUCH THAT WILL REQUIRE COUNCIL ACTION.

SO IT'LL BE ONE THAT HOPEFULLY I CAN PROVE ADMINISTRATIVELY.

WE'LL KEEP YOU POSTED.

RIGHT NOW I DON'T HAVE ANYTHING IN HAND BUT THE PROCESS OF WONDERING OUR TIMELINE.

WE'LL HAVE THOSE IN PLENTY OF ADVANCE BEFORE PASSING, YOU KNOW, SET FEE AND RATE INCREASES.

WHAT I WOULD SAY IS THIS IS THAT I THINK THAT WE WILL HAVE YOUR A STREET MAINTENANCE FEE AND A STORMWATER FEE ANALYSIS COMPLETED BEFORE AN RFP PROCESS IS COMPLETED WITH OR AT LEAST BEFORE YOU WOULD GO LIVE WITH A PUBLIC ART COLLECTION.

BUT THAT'S WHAT WE'RE TRYING TO KEEP THOSE CONVERSATIONS HAND IN HAND, IF POSSIBLE, OF A REDUCTION HERE FOR A POTENTIAL INCREASE HERE.

YEAH. I HAVE TO SAY THAT, YOU KNOW, IT WOULD BE A WASH AND ULTIMATELY BE A POLICY DECISION FOR YOU GUYS, BUT WE'RE TRYING TO BE MINDFUL OF WAYS TO REDUCE CURRENT EXPENDITURES, TO OFFSET SOME THINGS THAT WE'RE TRYING TO DO.

I THINK THE OTHER THING, TOO, WE ALWAYS TRY TO LOOK FOR WHAT WE CAN DO BETTER.

RIGHT. AND THE COUNCIL'S ALREADY POINTED THIS OUT.

I THINK MANAGING RESIDENTS EXPECTATIONS, I THINK WILL BE A BIG COMPONENT OF THIS.

OF COURSE, WE DON'T WANT TO GET IN FRONT OF THE COUNCIL ON WHERE YOU GUYS ARE GOING TO BE COMFORTABLE AT FROM A RATE PERSPECTIVE, BUT ERIC THOMPSON'S ALREADY POINTED OUT, IF YOU LOOK AT OUR DEBT ISSUANCE PLAN MOVING FORWARD, WE'RE TRYING TO GET TO A CONSISTENT DOLLAR AMOUNT.

RIGHT. SO YOU DON'T HAVE THESE UP AND DOWN SWINGS.

I THINK THE OTHER THING TOO, AND NOT KNOCKING ON ANYTHING THAT'S BEEN DONE PREVIOUSLY, BUT THE COUNCIL WASN'T RECOMMENDED TO LOOK AT FEE INCREASES.

SO THERE'S A PERIOD OF TIME WHERE YOU HAD COSTS THAT WERE INCREASING, BUT YOUR REVENUE WAS NOT.

AND, YOU KNOW, IF I'M SPEAKING FROM ONE RESIDENT, BUT I WOULD PREFER TO SEE AN EVEN INCREASE ON MY BILL AS OPPOSED TO, YOU KNOW, NO INCREASE AND THEN LARGER INCREASES.

SO TRYING TO BE CONSISTENT IN WHAT WE THINK WILL BE REALISTICALLY REQUIRED TO RUN AND MANAGE OUR SYSTEM WILL BE SOMETHING THAT THIS MANAGEMENT TEAM STRIVES TO DO.

JUST TO ADD ON THAT WITH TO TOMMY.

SO I THINK FOR THIS FISCAL YEAR AND TOM, CORRECT ME IF I'M WRONG WE'LL BE LOOKING TO ADJUST THE WATER RATES, YOU KNOW, BASED ON SOME ADJUSTMENT.

RIGHT? BASED ON THE MODEL YOU HAD WE'VE ALREADY PRESENTED KIND OF THE STORMWATER FEE.

THIS SOLID WASTE FEE WILL BE ADJUSTING THE SOLID WASTE FEE TO TRUE PASSTHROUGHS PLUS ADDING THE DOLLAR FOR THE ADMINISTRATIVE FEE TO MOVE LITTER

[02:15:06]

OVER. SO THOSE WILL BE THINGS THAT YOU'LL PROBABLY SEE THIS YEAR.

AND COUNCIL MEMBER SCOTT ASKED.

KIND OF SEE WHAT ALL THESE LINED UP.

AND SO WE'LL WORK ON PUTTING THAT TOGETHER.

WHAT THE TRUE IMPACTS TO THE RESIDENTS ARE BETWEEN ONCE WE KNOW WHAT THE TAX RATE ADJUSTMENT LOOKS LIKE RIGHT.

PLUS THESE OTHER FEE ADJUSTMENTS, BUT TIMING WISE WITH STORMWATER FEE AND STREET MAINTENANCE FEE, ONCE WE GET THE CONSULTANT ON BOARD, WE LOOK AT RFP FOR SOLID WASTE, THOSE TYPES OF THINGS, THOSE WON'T BE IMPACTED UNTIL NEXT FISCAL YEAR.

WE'LL BE HAVING THAT DISCUSSION DURING THIS NEXT FISCAL YEAR AND THEN TALKING ABOUT IT WHEN WE LOOK AT NEXT YEAR'S BUDGET, IF THAT MAKES SENSE.

I'M LOOKING. SINCE I KNOW YOU JUST GOT TO THE SLIDE, YOU HADN'T REALLY TALKED ABOUT IT, BUT SINCE WE'RE KIND OF THERE.

IT'S THE FUND BALANCE PERCENTAGE IS WHAT'S WHAT'S OUR POLICY ON THIS? IS IT 20%? IT'S IT'S A WORKING CAPITAL NUMBER I BELIEVE IT'S 73 DAYS IS WHAT THAT IS.

SO THAT THAT EXCEEDS THAT I DON'T WANT TO STEAL HARLAN'S THUNDER BECAUSE I THINK THAT'S WHERE HE'S GOING WITH.

SO. YES.

YEAH. THANK YOU. TOMMY.

YEAH. I JUST FIRST POINT OUT THIS ISN'T ONE OF THE FUNDS THAT HAS AN IMBALANCE.

THIS IS A HEALTHY FUND.

YOU CAN SEE STEADY INCREASES IN REVENUE WATER REVENUE AS WELL AS SEWER REVENUE.

CURRENT YEAR, WE ANTICIPATE, YOU KNOW, THE POP FROM INTEREST INCOME TO CONTINUE, AND THEN IT MODERATES AFTER THAT.

ONE OF THE THINGS I WANT TO POINT OUT IS THE OPERATING EXPENSE.

YOU CAN SEE IT INCREASES FROM OUR BUDGET TO TO THE YEAR END, ABOUT $1 MILLION.

WE THINK DAN IS RIGHT IN HIS FORECAST.

AND THE IMPACT THAT'S DRIVING IT IS, YOU KNOW, THE WATER AND WASTEWATER CHARGES, THE FORT WORTH.

WHEN YOU LOOK AT OUR MONTHLY FINANCIAL REPORTS THAT WE PRODUCE.

AND I MENTIONED THIS TO THE FINANCE COMMITTEE, YOU SEE THAT WE'RE WAY AHEAD IN TERMS OF PERCENT OF EXPENDITURE FOR WATER PURCHASES AS WASTEWATER SERVICES AS WELL.

SO WE WE KNOW LAST YEAR WE HAD A PROBLEM WITH THEM BILLING US.

WE HAD TO GET THEM TO START SENDING CORRECTED BILLS.

AND THIS YEAR I THINK THAT'S SOMETHING WITH THE CALCULATIONS.

SO SO WE WE DO EXPECT, YOU KNOW, THE NUMBERS TO BE MORE CONSISTENT WITH WHAT DAN IS FORECASTING.

WE JUST HAVE TO CONTINUE TO WORK WITH THEM TO FIGURE OUT WHY OR SOMETHING WITH OUR METERS OR THEIR METERS AND AND GET THAT ADDRESS ON THE DEBT SERVICE SIDE, I'LL MENTION DAN HAD A SLIDE ON THIS, BUT IT IS A NOVEL CONCEPT TO TO AWARD A PROJECT ONE YEAR USE REIMBURSEMENT RESOLUTION AND NOT SIMPLY DELAY IT, YOU KNOW, SIX MONTHS, BUT WAIT TILL THE NEXT FISCAL YEAR TO DO THAT.

AND THEN FINALLY, YOUR YOUR PRINCIPAL AND INTEREST PAYMENTS START THE YEAR AFTER THAT.

AND THE REASON FOR THAT IS YOU GUYS POINTED OUT EARLIER, IT'S A LONG LEAD TIME TO DESIGN A PROJECT, ACQUIRE THE RIGHT OF WAY, GET UTILITIES RELOCATED AND ALL THAT.

SO IF YOU ISSUE THAT DEBT RIGHT WHEN YOU HAVE IT ON YOUR BOOKS, YOU'RE AWARDED A LOT OF TIMES YOU CAN HAVE THE MONEY SITTING IN THE BANK, EVEN THOUGH YOU'RE EARNING INTEREST ON IT. YOU'RE GOING TO MAKE DEBT SERVICE PAYMENTS.

SO TO TRY TO MINIMIZE THE IMPACT ON THE RATES, WE IMPLEMENTED THIS THIS IDEA OF DELAYING THOSE.

SO THAT SHOULD PROVIDE SOME TYPE OF RELIEF.

I MENTIONED THIS ISN'T ONE OF THOSE FUNDS AND THIS IMBALANCE, YOU CAN SEE THE CHANGE IN FUND BALANCE.

LAST YEAR WENT UP.

WE BUDGETED THE 281,000 DECREASE THIS YEAR.

AND THE FORECAST FROM DAN IS THAT WE'LL DRAW DOWN FUND BALANCE BY 490,000.

BUT THAT'S ABSORBING THE, YOU KNOW, ALMOST $1 MILLION INCREASE IN IN THOSE OPERATING COSTS DRIVEN BY FORT WORTH.

SO SO WE'RE DOING REALLY WELL THERE.

AND AFTER THAT YOU CAN START SEEING BUILDING.

SO THAT BRINGS US TO THE FUND BALANCE NUMBER.

SO YOU CAN YOU'LL SEE IN FISCAL YEAR 25 WE ADD 800,000 TO IT, 1.8 IN FISCAL YEAR 26, 1.6 YEAR AFTER THAT.

AND THEN IT KIND OF MODERATES DOWN.

SO THAT'S SOME OF THE DIRECTION WE NEED TO HAVE WITH THE COUNCIL.

WE'RE WE SAYS FUND BALANCE.

BUT IT'S WORKING CAPITAL.

SO IT SHOULD AND COULD BE OTHER WHERE WE KNOW THERE'S OTHER THINGS.

AND AND THAT OTHER THAN SIMPLY CASH SITTING THERE AVAILABLE.

BUT YOUR POLICY CALLS FOR THE 20%.

AND COUNCIL MEMBER SCOTT MENTIONED EARLIER THERE KIND OF RANGE OF, YOU KNOW, 73 DAYS OF 90.

SO THAT'S 20% TO 25 IS IS THE RANGE THAT WE SHOOT FOR.

SO IF THE COUNCIL IS INTERESTED IN MOVING THAT NUMBER DOWN, WE CAN CONTINUE THAT DISCUSSION.

AS WE MENTIONED, THIS IS A HIGH LEVEL DISCUSSION.

I WILL NOT NECESSARILY SPEAKING FOR DAN, A LOT OF TIMES WHAT RATE CONSULTANTS COME IN AND THEY'RE CONSERVATIVE BECAUSE THEY KNOW IN TEXAS AT LEAST A LOT OF THE OLDER GUYS, MUCH OLDER THAN MYSELF IN THE WATER BUSINESS, WILL TELL YOU THAT IN TEXAS, DROUGHTS ARE INTERRUPTED BY FLOODS AND FLOODS ARE ABATED BY

[02:20:01]

SO YOUR REVENUE COULD DROP OFF.

SO THAT'S WHY THERE'S THAT EXTRA CUSHION I SUSPECT, THAT'S BUILT IN THERE.

AGAIN, I DON'T WANT TO SPEAK FOR DAN, BUT SO BUT FROM OUR PERSPECTIVE AGAIN, THIS IS HIGH LEVEL.

WE JUST WANT YOU TO KNOW THE FUND IS HEALTHY, EVEN THOUGH IT WILL REQUIRE RATE INCREASES.

BUT, YOU KNOW, WE WE WOULD CONTINUE TO SCRUB THE NUMBERS AS WE GO THROUGH THE SUMMER TO SEE IF THERE'S OPPORTUNITIES TO, TO TO GET AS CLOSE AS POSSIBLE, STILL MEET DAN'S COMFORT LEVEL, BUT ALSO MEET THE TOWN'S INTEREST IN MAKING SURE WE HAVE AS MINIMAL RATE INCREASES AS POSSIBLE.

DOES THAT ADDRESS YOUR QUESTION ABOUT THE FUND BALANCE? SO 20.

CENT WOULD BE 73 DAYS.

IS THAT SO? WE'VE GOT 150 DAYS.

YES, WE HAVE A SURPLUS.

AND I THINK WHAT HARLAN IS SAYING IS, IS THAT YOU KNOW, DRIER YEARS OR WETTER YEARS ARE GOING TO HAVE AN IMPACT ON THIS.

IT'S HARD TO FORECAST THE WEATHER.

AS DAN STATED. I THINK WE WANT TO SHOW YOU THIS IS WHAT WE THINK MIGHT BE THE UPPER TIER OF WHERE WE THINK WE'RE GOING TO BE.

AS WE GO THROUGH AND CONTINUE TO REFINE THIS, WE'LL LOOK AT WAYS OF POTENTIALLY TRYING TO BRING THAT RATE DOWN.

THIS IS JUST KIND OF A GENERAL CHECK WITH THE COUNCIL OF IF THIS IS WHERE IT WAS GOING TO BE, IS THERE A COMFORT LEVEL? I THINK THERE'S SOME OPTIONS OF THINGS THAT WE CAN LOOK AT TO HELP DRAW THAT DOWN, WHETHER THAT'S CASH FUNDING, A COUPLE OF PROJECTS.

THERE'S ALSO, I THINK IN THE PROPRIETARY EQUIPMENT REPLACEMENT FUND, THERE'S PROBABLY A LOWER BALANCE THERE THAT NEEDS TO BE THERE COULD BE SOME SHIFTS THERE THAT WE MAKE.

AND SO WE HAVEN'T FULLY FLESHED THOSE OUT.

BUT I THINK THE HEART OF YOUR QUESTION IS THE CONCERN OF RATE INCREASES WHEN WE'RE EXCEEDING OUR RANGE OF WHERE WE SHOULD BE FROM A FUND BALANCE PERSPECTIVE.

YES. AND, YOU KNOW, I KNOW WE BUY IT FROM FORT WORTH AND REALLY WE SHOULD PASS THE COST INCREASES THROUGH.

BUT, YOU KNOW, I LOOK AT THIS AND I SEE WE DID A 3% INCREASE AND WE WERE HALF A MILLION SHORT.

AND WE GO TO 7.4 AND WE'RE 800,000.

I'D RATHER I'D LIKE TO KEEP THAT NUMBER AS CLOSE TO ZERO AS POSSIBLE.

YOU ALWAYS WANT TO BE IN THE BLACK A LITTLE BIT, MAKE A LITTLE BIT OF MONEY AND NOT HAVE YEARS OF NEGATIVE BALANCES.

BUT THEN WE WOULDN'T HAVE TO GO UP AS MUCH SINCE WE'RE GOING TO BE ADDING, LOOKING AT, ADDING ALL THESE OTHER FEES, WE COULD HELP ABSORB SOME OF THAT STUFF.

UNDERSTOOD. I THINK WHAT WE CAN DO IS THAT'S HELPFUL FEEDBACK.

SO WE'LL GO BACK AND WORK WITH MR. JACKSON AND WE'LL TAKE A LOOK AT THAT.

I THINK WHAT WE'LL STRIVE FOR IS, YOU KNOW, WHERE CAN WE REASONABLY BE FROM A RATE.

AND THEN ALSO CONSISTENCY IN SAID RATE IS WHAT I HEAR IS IMPORTANT FOR YOU GUYS.

ANYBODY ELSE. I DO WANT TO CIRCLE BACK, THOUGH.

JUST WITH THE OVERALL FIVE YEAR PLAN, THERE'S A COMFORT LEVEL WITH THE THE PROJECTS THAT WE'RE RECOMMENDING AND TO PROCEED WITH THAT.

CORRECT. OKAY.

THANK YOU FOR THE FEEDBACK.

I WOULD HOPE WE'RE GOING TO TAKE A BREAK HERE FOR COUNCIL TO GET YOUR FOOD.

AND ANYBODY ELSE THAT WAS SUPPOSED TO LET'S GET BACK HERE IN ABOUT 1150.

WE'RE GOING TO HAVE LUNCH WHILE WE WORK.

[02:34:00]

[02:34:08]

GOOD. I GUESS IT'S STILL MORNING.

YOU GOT NINE MORE MINUTES OF MORNING.

GOOD MORNING COUNCIL.

LIKE WE'VE DONE WITH THE OTHER FUNDS.

WANT TO GO THROUGH REAL QUICK.

THE CAPITAL PLAN FOR, FOR A THE, THE TOP TABLE OF THIS WAS THE ADOPTED BUDGET FOR FY 24.

INCLUDED $20 MILLION FOR AN INDUSTRIAL PARK.

$10 MILLION FOR LAKEWOOD DRIVE $10 MILLION TOWARDS THE CONSTRUCTION OF ALSBURY BOULEVARD.

6.5 MILLION FOR RETENTION POND.

AND THEN THE HOOPER BUSINESS PARK SEWER, WHICH COUNCIL SAW JUST A FEW WEEKS AGO.

BELOW IS THE RED LINE VERSION.

AFTER DISCUSSIONS WITH COUNCIL, WE'VE REMOVED SOME INDUSTRIAL PARK FUNDING AND REMOVED IT FROM THE FORECAST.

[02:35:02]

WE HAVE ADDED PART OF THE DESIGN.

AS TOMMY MENTIONED EARLIER, WHEN WE LOOKED AT THE GENERAL FUND, THERE WERE SOME DESIGN COSTS AND RIGHT OF WAY ACQUISITION FOR ALSBURY BOULEVARD.

WE'VE ADDED IT TO THE FORAY IN 25 AND LOOKED AT AND SHIFTED OUT CONSTRUCTION OF ALSBURY BOULEVARD TO 26.

THIS IS THE SECTION BETWEEN FUTURE LAKEWOOD AND HULEN.

AGAIN, THE RETENTION POND IN THE HOOVER BUSINESS PARK SEWER THAT WILL THAT WILL BE FALLING OFF IN FY 24.

AND THEN WE HAVE ABOUT $10 MILLION FOR LAKEWOOD DRIVE EXTENSION.

THIS IS THAT SECTION WHICH MAKES THE PERMANENT CONNECTION FROM LAKEWOOD TO 1902 AT 10 MILLION.

AND THEN WE HAVE $10 MILLION IN FY 27 FOR A FUTURE PROJECT.

AS YOU CAN SEE, THIS IS THE UPDATED CAPITAL PLAN AS BEING RECOMMENDED FOR FY 25 THROUGH 29 WHICH IS A REDUCTION FROM PREVIOUS THE PREVIOUS 49.5 DOWN TO 33.9 FOR THE NEXT FIVE YEARS.

THAT FUTURE PROJECT IS JUST A PLACEHOLDER FOR US.

WE'VE HAD DISCUSSIONS ABOUT DIFFERENT PROJECTS THAT MAY BE COMING UP WITHIN THE CITY.

WE'RE JUST HOLDING THAT $10 MILLION FOR, DEPENDING ON WHAT PROJECT COMES FORWARD.

THE NICE THING ABOUT THIS FUND BALANCE AT HARLAN WILL SHOW HERE IN A LITTLE BIT IS WE DO HAVE THE FLEXIBILITY TO TAKE ON PROJECTS AS THEY COME FORWARD.

AS WE OFTEN KNOW DEVELOPERS AND DIFFERENT PROJECTS WILL COME UP.

AND SO THIS FUND BALANCE WILL GIVE US THE LEVERAGE TO BE ABLE TO, YOU KNOW, DO THOSE PROJECTS AS THEY COME UP.

SO ANY QUESTIONS WITH REGARDS TO THE FUNDING FOR THE CAPITAL PLAN FOR, FOR, FOR A OVER THE NEXT FIVE YEAR TIME FRAME? ANYBODY. I DON'T THINK Y'ALL WANT TO TALK WITH YOUR MOUTH FULL.

PROBLEM? I'LL LET HARLAN TELL YOU THE FUND BALANCE.

OKAY. THANK YOU.

ERIC. SO IN THIS CASE AGAIN, THE FUND IS IMPACTED BY THE SALES TAX REVENUES.

SO THIS YEAR, WE'RE FORECASTING THE CURRENT YEAR REVENUE TO COME IN AT 1.5% INSTEAD OF THE 3% THAT WAS BUDGETED.

SO IT FALLS OFF THE PACE FROM FROM THE PROPOSED BUDGET AND ADOPTED BUDGET.

THE INTEREST INCOME THAT WAS COMING IN STRONG.

SO IT'S GOING TO HELP HELP OFFSET SOME OF THAT.

I POINT OUT, UNDER OTHER REVENUE, WE REDUCE THE REVENUE FROM THE SALE OF PROPERTY TO CRAFT MASTERS.

BECAUSE OF THE, THE PACE IN WHICH THEY'RE COMING FORWARD.

SO WE MOVE THAT TO NEXT FISCAL YEAR.

SO YOU'LL SEE THE 2.7 MILLION.

IN OTHER REVENUE DECREASE DOWN TO 390,000.

AND IT'S MOVED OVER TO THE THE FISCAL YEAR 25.

LIKEWISE, UNDER INCENTIVES, YOU SEE THE DROP ALSO FROM 4.4 MILLION TO 992,000.

THAT'S THE INCENTIVES PAYING THE CRAFT MASTERS TO BECAUSE IT'S DELAYED AND IT'S MOVED TO NEXT FISCAL YEAR.

SO THOSE ARE SOME OF THE ADJUSTMENTS THAT WE'RE MAKING BECAUSE OF THE PROJECT OF THE DEBT SERVICE FUND IS PROJECTED BASED ON THE EXISTING DEBT, PLUS THE PROJECTS THAT ERIC JUST WENT THROUGH.

SO THAT EXPLAINS THOSE ADJUSTMENTS THERE.

AND THEN YOU SEE THE CHANGE IN FUND BALANCE AS WELL.

SO THIS IS A FUND IN WHICH REVENUE CONSISTENTLY INCREASE OR EXCEEDS EXPENDITURE NEXT FISCAL YEAR.

YOU SEE IT OVER A LITTLE BIT OVER HALF $1 MILLION.

IT'S GOING THE OTHER WAY. AND THEN IT REBOUNDS.

ALMOST. WELL ACTUALLY IMMEDIATELY.

THE FUND BALANCE AS A PERCENT OF EXPENDITURE LAST YEAR ENDED 152%.

IT ADJUSTS BECAUSE IT INCENTIVES DOWNWARD AND IT STARTS REBUILDING AGAIN.

BACK OVER 100% AND A COUPLE OF YEARS.

SO WITH THAT, I'D BE HAPPY TO RESPOND TO ANY QUESTIONS YOU MIGHT HAVE.

HARLAN, DO YOU MIND BRIEFLY SPEAKING TO THE EMPLOYEE SHIFT WE DID FROM THE TIF TO THE FOYER AS WELL? YEAH. I THANK YOU FOR REMINDING.

REMINDING ME OF THAT.

YEAH. ONE OF THE THINGS WE DID TO IMPROVE THE TIF FUND FINANCIAL POSITION IS MOVE THE ECONOMIC DEVELOPMENT COORDINATOR POSITION FROM THE TIF TWO FUND OVER TO THE FOYER FUND.

SO WE DID THAT IMMEDIATELY THIS FISCAL YEAR.

SO IT WOULD BE THERE FOR NEXT FISCAL YEAR AND BEYOND.

SO THAT WAS A PART OF THE STRATEGY TO IMPROVE THEIR THE STRUCTURE OF THAT, THAT FUND SO THAT IT'S REOCCURRING REVENUES EXCEEDED RECURRENT EXPENDITURES.

SO WHEN WE TALK ABOUT DUTIES AND RESPONSIBILITY, THEY ALMOST SEEM TO APPLY WHETHER IT WAS A FOR A OR A FOR B FOR THE ECONOMIC DEVELOPMENT COORDINATOR.

SO FROM FROM THIS FISCAL YEAR GOING FORWARD, ALL THREE ECONOMIC DEVELOPMENT POSITIONS WILL BE PAID FOR AND FUNDED OUT OF THE FOURIER FUND.

[02:40:09]

ALL RIGHT. THANK YOU. ALL RIGHT.

SO ALEX IS GOING TO CARRY US FORWARD THROUGH FOUR B AND PARKS.

OKAY, SO A LITTLE BIT OF BACKGROUND ABOUT FORBY PARKS AND RECREATION.

OUR PLAN ENCOMPASSES A BLEND OF MAINTENANCE, REFURBISHMENT AND NEW CONSTRUCTION.

WE'VE PRIORITIZED OUR PLAN BASED ON THE 2019 PARKS MASTER PLAN, AS WELL AS FEEDBACK FROM THE COMMUNITY AND INTERNALLY IDENTIFYING SYSTEMS THAT ARE FAILING.

SINCE THE INCEPTION OF THE CIP IN 2019, THE DEPARTMENT HAS COMPLETED OVER 38 PROJECTS.

THESE PROJECTS ARE SIX PLAYGROUNDS, CONSTRUCTION OF A SPLASH PAD, DOG PARK AND ANNEX MAINTENANCE FACILITY, EXPANSION OF THREE PARKING LOTS, ADDITION OF TRAILS AND SIDEWALKS, GOLF COURSE UPGRADES, AND NUMEROUS REPAIRS TO EXISTING COMPONENTS OF THE SYSTEM TO MAKE THEM MORE INCLUSIVE FOR THE COMMUNITY. SO THIS IS THE CURRENT CIP FOR YEARS 24 THROUGH 28.

THIS IS THE ONE THAT WAS APPROVED IN APRIL.

JUST A HIGH LEVEL.

SO WE START WITH PARKS, PARKS, REFURBISHMENTS.

THEN WE GET INTO THE SPORTS FIELDS, TRAILS, PARKING AND INFRASTRUCTURE SIGNAGE AND THEN NEW CONSTRUCTION.

WE'VE GOT THE BRICK PROJECTS LISTED NEXT.

AND THEN GOLF AND ADMINISTRATION.

FOR OUR PROPOSED CIP YEARS 25 THROUGH 29.

YOU'LL SEE HERE ALL OF THE GREEN NUMBERS ARE THE CHANGES.

MAJORITY NUMBERS DID CHANGE DUE TO INFLATION.

AND WE'LL BREAK OUT ALL OF THESE PROJECTS IN THE NEXT FEW SLIDES.

BUT I DID WANT TO BRING YOUR ATTENTION TO A COUPLE OF THINGS.

WE ALSO ADDED THE 5% CONTINGENCY PREVIOUSLY IN OUR FIVE YEAR THAT WAS A LINE AT THE BOTTOM, BUT WE'VE ADDED IT INTO EACH INDIVIDUAL PROJECT HERE AS WELL AS FIVE PROJECTS THAT HAVE MOVED.

SO THE FIRST ONE IS THE CHISHOLM HALL FIELD TURF.

WE HAD THAT ONE SPLIT IN YEARS 26 AND 28.

WE'VE CONSOLIDATED THAT PROJECT TO ALL BE IN FISCAL YEAR 25.

ADULT SOFTBALL FIELDS.

THAT ONE WAS IN 26.

WE HAVE PUSHED IT OUT TO 27.

THE PARK MONUMENT SIGNS.

WE COMPLETELY SCRAPPED THAT ONE FROM FISCAL YEAR 25.

WE BELIEVE THE FUNDS THIS YEAR WILL COVER US FOR ALL OF THOSE PROJECTS THAT WE HAD SLOTTED FOR FISCAL YEAR 25.

THE NEXT ONE IS THE REPLACEMENT OF THE BRICK ROOF.

THAT ONE WAS ORIGINALLY IN FISCAL YEAR 27.

WE HAVE PUSHED IT OUT TO 29.

BUT IF WE FIND THAT THE ROOF NEEDS TO BE REPLACED BEFORE THEN, WE WOULD BRING THAT FORWARD AT THAT TIME.

THIS IS JUST THE TOTAL OF THOSE PROJECTS.

SO IN 25 YOU CAN SEE 4.7 MILLION.

THE TOTAL FOR ALL FIVE YEARS IS 14.8.

ALISON, DO YOU MIND GOING BACK ONE PREVIOUS SLIDE AND JUST TOUCHING ON VILLAGE CREEK AS WELL? OH, YEAH. YEAH, I MISS VILLAGE CREEK.

SORRY ABOUT THAT. SO VILLAGE CREEK WE HAD PLANNED FOR FISCAL YEAR 25.

WE DID PUSH THAT ONE OUTSIDE OF OUR FIVE YEAR PLAN.

WE PLAN TO REVISIT THAT ONE AFTER THE IMPROVEMENTS ARE DONE.

MADE ON 174.

SO GETTING INTO THE DETAILS OF PLAYGROUND AND PARK REFURBISHMENTS ALL OF OUR PLAYGROUNDS HAVE BEEN BUDGETED NOW TO ADD SHADE, POUR IN PLACE, SURFACING AND INCLUSIVE FEATURES.

THE PARKS TEAM CONTINUES TO RESEARCH INCLUSIVE FUTURE OPTIONS FOR OUR UPCOMING PROJECTS, SO THESE ITEMS HAVE INCREASED THE BUDGET TO ALL OF OUR OUR PARK REFURBISHMENTS IN 25.

WE PLAN TO ADDRESS CENTENNIAL PARK IN 26, ADD A RESTROOM AT MISTLETOE HILL IN 27, ADD A PLAYGROUND TO BAILEY LAKE AND REPLACE MISTLETOE HILL PLAYGROUND AND SHADE STRUCTURE.

THEN IN 28, REPLACING BARTLETT AND HEBERLY PLAYGROUNDS AND ADDING A RESTROOM TO CLAUDIA'S PLAYGROUND IN 29 REPLACING THE PLAYGROUND AT CHISHOLM

[02:45:01]

FOR OUR SPORTS FIELDS.

IN 2023, WE STARTED THE INFIELD TURF PROJECT WITH ARABIAN.

IT'S THE LARGEST FIELD THIS YEAR.

WE ARE DOING SEVEN ADDITIONAL IN FIELDS.

THOSE ARE CLYDESDALE, SHIRE, PAINT, APPALOOSA, ROAN, PACIFIC, YOU KNOW, AND QUARTER.

WHEN WE WERE BIDDING THAT PROJECT FOR THIS YEAR, WE FOUND THAT THERE IS SUBSTANTIAL COST SAVINGS IN DOING MULTIPLE FIELDS AT ONE TIME.

SO THIS IS WHY WE'RE PROPOSING DOING THE REMAINDER OF THE FIELDS IN FISCAL YEAR 25.

THOSE FIELDS ARE BUCKSKIN, MORGAN, HIGHLAND, DARTMOOR, WELSH, HACKNEY AND PALOMINO.

AND THEN IN 2027, WE HAVE THE ADULT SOFTBALL FIELDS FOR REFURBISHMENT OR RELOCATION.

FOR OUR TRAILS, PARKING AND INFRASTRUCTURE.

THIS YEAR WE'VE BEEN WORKING TO COMPLETE THE OAK VALLEY TRAIL TO INCLUDE THE TRAIL CONNECTION BETWEEN HIDDEN CREEK PARKWAY AND A TRAILHEAD AT SCOTT STREET.

SO FOR OUR TRAILS IN 2029, WE'D LIKE TO REPAIR THE BAILEY LAKE LOW WATER CROSSING.

AND THEN 2030.

AS I SPOKE TO YOU EARLIER, IS VILLAGE CREEK TRAIL THAT'S ACTUALLY PUSHED OUT PAST 2029 WITHIN OUR FIVE YEAR, BUT WE ANTICIPATE THE IMPROVEMENTS AT 174 BEING COMPLETED.

THIS TRAIL WILL RUN FROM CHISHOLM HALL PARK TO HILLSIDE DRIVE.

VILLAGE CREEK TRAIL DOES COME WITH POST-CONSTRUCTION MAINTENANCE COST OF $27,048 ANNUALLY, AND WE WOULD BUDGET FOR FOR THAT MAINTENANCE COST AT THE TIME.

MAINTENANCE IS SCHEDULED TO BEGIN.

SHANNON CREEK PARK HAS BEEN IN DESIGN SINCE 2021.

WE DO SEE THAT DESIGN IS NEARING COMPLETION, SO WE ANTICIPATE THAT CONSTRUCTION STARTING THIS FALL 2024, WHICH IS FISCAL YEAR 25. SHANNON CREEK IS GOING TO CONSIST OF NATURAL AND PAVED TRAILS, A POND WITH FISHING, BOARDWALK, DRAINAGE IMPROVEMENTS, NATURAL AREAS, LANDSCAPE SCREENING BETWEEN RESIDENTS AND THE PARK.

IT ALSO NEEDS SOME GRADING IMPROVEMENTS WITH THIS PHASE TO ACCOMMODATE ANY FUTURE IMPROVEMENTS.

SHANNON CREEK DOES COME WITH POST CONSTRUCTION MAINTENANCE COSTS, OR O&M OF 79,972 ANNUALLY, AND WE'LL BUDGET FOR THOSE MAINTENANCE COSTS AT THE TIME THAT IT'S SCHEDULED.

OUR COMMUNITY PARK IS CURRENTLY IN THE PUBLIC ENGAGEMENT PHASE.

THIS WAS A PARK THAT WAS IDENTIFIED AS A NEED IN OUR 2019 PARKS MASTER PLAN.

WE DON'T HAVE MUCH INFORMATION WHEN IT COMES TO THE SCOPE AND BUDGET AND DESIGN.

BUT THE DESIGN IS SLOTTED FOR 2027 CONSTRUCTION, POST MAINTENANCE.

ALL OF THAT IS TO BE DETERMINED, AND WE WILL BRING THAT FORWARD.

AS WE KNOW.

THE BRICK IS NEXT AND IT WAS BUILT IN 2010.

WE'VE BEEN WORKING THROUGH MAINTENANCE AND FACILITY REPAIRS SINCE 2022.

THIS YEAR, 2024 AND 2025 WILL BE COMPLETING A COMPLETE OVERHAUL OF THE HVAC SYSTEM, HVAC SYSTEM, AS WELL AS INDOOR POOL DEHUMIDIFICATION REPLACING SAND FILTER AND REPLASTERING.

WE'LL ALSO BE REMODELING THE LOBBY, POOL, PARTY ROOMS, AND THE FAMILY CHANGING ROOMS. IN 2026, WE'RE PROPOSING THE ADDITION OF A DRY SAUNA.

THIS IS THE NUMBER ONE REQUEST FROM OUR MEMBERS AND HAS BEEN FOR SEVERAL YEARS.

AND THEN IN 27, REPLACING THE ENTRY MONUMENT SIGN.

AND THEN IN 29, THIS IS WHERE WE'VE MOVED THE ROOF OUT.

BUT LIKE I SAID, IF WE IDENTIFY THAT THE ROOF NEEDS TO BE REPLACED BEFORE 29, WE'LL BRING THAT FORWARD.

AND THEN LASTLY THE HIDDEN CREEK GOLF COURSE.

THE GOLF COURSE HAS UNDERGONE MANY UPDATES SINCE 2020.

FROM REMODELING THE CLUBHOUSE, REPLACING BUNKERS, TURF IRRIGATION AND WITH THE LATEST UPDATE BEING THE NEW GOLF CARTS.

THE GOLF COURSE HAS SHOWN RECORD BREAKING REVENUE FOR THREE YEARS RUNNING.

SO IN 2026, WE ARE PROPOSING THE ADDITION OF A WELL, THIS IS TO ASSIST IN SEASONS OF DROUGHT.

[02:50:05]

AND THEN IN 2028, ADDITIONAL RANGE IMPROVEMENTS.

ANY QUESTIONS? ALLISON GOING BACK TO THE FIELD SCHEDULE FOR THE TURF.

I'M NOT FAMILIAR. I KNOW THESE ARE NAMED, BUT I'M NOT FAMILIAR.

ARE WE DOING A, LIKE, A MIX UP BETWEEN SOFTBALL AND BASEBALL SO THAT WE CAN CONTINUE PLAY FOR BOTH? WE'RE NOT DOING A MIX.

A LOT OF THE ONES DONE BEING DONE LIKE THIS YEAR, ARE GOING TO BE OUR SOFTBALL.

SO THE ONES THAT WE HAVE SLOTTED FOR FISCAL YEAR 25 ARE OUR 6 TO 8 YEAR OLDS, BASEBALL FIELDS.

AND THEN ONE OF OUR 9 TO 11 YEAR OLD FIELDS AND THEN A 12 YEAR OLD FIELD.

THE MORE WE'RE VARIED AS FAR AS AGES.

YEAH. AND SO REALLY, AS THE CONSTRUCTION IS GOING ON, THE WHOLE PARK IS CLOSED.

SO BUT I JUST WANTED TO LIKE HAVING TURF FIELDS PROLONGS PLAY.

IT'S BEEN SUCH, SUCH POSITIVE FEEDBACK ABOUT, YOU KNOW, PROLONGING THEIR SEASON, GETTING GAMES LESS RESCHEDULING AND THAT KIND OF STUFF THAT I'VE HEARD NOTHING BUT POSITIVE FEEDBACK. I THINK IT'S BEEN A REALLY WISE INVESTMENT ON OUR PART, BUT I JUST KIND OF WANTED TO KNOW WHAT OUR I KNOW THE NAMES ARE HERE, LIKE I SAID, BUT I DIDN'T KNOW WHAT THE MIX UP WAS AS FAR AS WHAT TYPES IF IF IT WAS AGES OR OR FIELDS.

BUT I'M GLAD THAT THIS YEAR WE'RE FOCUSING ON SOFTBALL.

OKAY. YES.

ANYBODY ELSE ON THE ON THE GOLF COURSE, ON THE PONDS.

I MEAN, MAY LOOK AT ERIC ON THIS, BUT.

WHEN THEY REDO THE POND SO THAT THE WATER MAY BE ON 16, WOULD FLOW INTO THE POND INSTEAD OF SITTING AND MAKING A LAKE.

I CAN'T SPEAK FOR JAMES SINCE HE'S NOT HERE, BUT I BELIEVE THE RENOVATION OF ALL THOSE PONDS ARE GOING TO.

WE'RE GOING TO BE TRYING TO ADDRESS A LOT OF THE DRAINAGE CONCERNS, AND SO THAT'LL BE INCLUDED IN THAT PROJECT.

OKAY. GOOD. ALL RIGHT.

I'M GLAD YOU'RE REPLACING THE FENCE FOR THE GOLF COURSE.

I KNOW THAT'S BEEN A PROBLEM.

TRYING TO KEEP IT REPAIRED ALL THE TIME.

GETTING ONE? YEAH, THAT'S GOING TO LOOK REALLY NICE.

ANOTHER QUESTION I HAVE IS JUST FOR MY PERSONAL UNDERSTANDING IS ON THE CIP, EACH ITEM HERE THAT'S GONE FROM RED TO GREEN BASED ON INFLATION. WHEN WE PLACE THESE PROJECTS A YEAR OUT, TWO YEARS OUT, THREE YEARS OUT, AREN'T THEY ALREADY ADJUSTED FOR INFLATION? YES, SIR. SO CORRECT.

AND SOME OF THESE NUMBERS CHANGED TOO, BECAUSE IF YOU RECALL, THERE WAS A CONTINGENCY LINE IN THE OLD CIP.

SO THAT'S BEEN SHIFTED AND BASICALLY PUT INTO THOSE PROJECTS AS CONTINGENCY.

BUT THERE'S ALSO AN INFLATIONARY NUMBER AS WELL.

OKAY. AND FOR THE PLAYGROUNDS WE ALSO ADDED THE THE SHADE, THE POUR IN PLACE, THE INCLUSIVE FEATURES.

SO WE WANTED TO MAKE SURE THAT WAS ENCOMPASSED IN ALL OF THOSE.

NOT ALL JUST INFLATION.

IT'S FOR THE PRODUCTS OKAY.

THAT'S WHAT I NEEDED TO UNDERSTAND.

THANK YOU. ANYBODY ELSE.

I'M VERY APPRECIATIVE THAT WE ARE STANDARDIZING THOSE.

SO AT A MINIMUM ALL OF OUR PLAYGROUNDS CAN BE ACCESSIBLE BY EVERYONE.

I MEAN THAT'S JUST I MEAN THAT'S NOT ASKING MUCH FROM OUR CITIZENS OF ALL AGES, ALL ABILITIES TO SAY YOU CAN AT LEAST ACCESS THEM.

AND THERE WILL BE SOME ELEMENT OF PLAY FOR EVERYONE AT EVERY PARK.

I'M VERY APPRECIATIVE OF THAT.

AND OF COURSE, SHADE IN TEXAS, SHADE IS IMPORTANT.

ONE THING ELSE THAT I WOULD ADD TO I KNOW LAST YEAR WHEN WE TALKED ABOUT CIP AND JUST, YOU KNOW, DISCUSSIONS OF MAKING SURE THAT WE WERE INCORPORATING OPERATIONAL COSTS ASSOCIATED WITH THE PROJECTS INCLUDED IN THE CIP, WERE YOU NOT HAVING PROJECTS THAT WE'RE FUNDING ON THE CAPITAL SIDE, BUT THEN NOT REFLECTED ON THE NO SIDE? SO AS YOU GO THROUGH AND YOU LOOK AT ALL THE PROJECTS THAT WE'VE PROPOSED TODAY, NOT JUST IN PARKS, BUT JUST ACROSS ALL OF THE CIP, IT INCLUDES ANY OPERATIONAL COSTS THAT WE WOULD DEEM NECESSARY TO FUND THOSE.

ANYBODY ELSE? THANK YOU. ALLISON. ALL RIGHT.

THANK YOU. AND IT BRINGS US TO THE PPF.

SO TO PREPARE THE FIVE YEAR FORECAST FOR THE FOUR B FUND, WE NEEDED TO REALLY LOOK AT THE DIFFERENT COMPONENTS FOR THE PPF AND WALK THROUGH THOSE ITEMS. SO. SO THE MAJOR GOAL WAS TRYING TO IDENTIFY HOW SELF-SUPPORTING THEY ARE AND HOW MUCH OF A TRANSFER THEY WOULD NEED FROM THE PPF.

STARTING WITH THE BRIC, AS YOU KNOW RATES WERE ADJUSTED THIS YEAR.

[02:55:01]

UNDER SELF SUSTAINING PERCENT OF PRE-PANDEMIC, WE WERE AT 76%.

OF COURSE, WE HAD TO DROP AND KIND OF WORKED OUR WAY BACK TO THE LOW 50% UP TO 55 IS IS WHERE WE'RE SCHEDULED TO BE FOR NEXT FISCAL YEAR. ON.

BEG YOUR PARDON? I SAID THANK YOU FOR THAT.

YES, SIR. CREDIT GOES TO ALLISON AND JEN.

OKAY. THEN THE ATHLETIC FIELDS ARE.

I THINK ON OUR NUMBERS WE'RE ACTUALLY GOING TO TAKE A LITTLE BIT MORE OF A HIT THAN WE EXPECTED FOR THE CURRENT YEAR BECAUSE OF THE CONSTRUCTION OF ARTIFICIAL TURFS.

IS THAT RIGHT THEN WE HAVE ON HERE.

BUT AGAIN OUR PEAK WAS PRE-PANDEMIC.

WE DID BOUNCE BACK IN FISCAL YEAR 22 ACTUALS.

AND AND WE'RE MOVING AGAIN IN A BETTER DIRECTION.

RUSSELL. YES, I WOULD HOPE ONCE WE GET THE REMAINING FIELDS DONE IN 25 THAT WE COULD MARKET, TRY TO GET SOME TOURNAMENTS AND THINGS TO HELP UP THAT REVENUE.

YEAH. AND WE'RE WE'VE ALSO HAD SOME CONVERSATIONS AROUND AN A, A POSITION THAT WOULD SPECIFICALLY BE FOCUSED ON THE RECRUITMENT OF THESE.

I MEAN, THAT IT'S A LOT TO MAINTAIN, TO RECRUIT, TO FOLLOW UP WITH.

SO WHERE DO THOSE DISCUSSIONS LIE AND WHERE WOULD THAT FALL INTO THIS PROCESS? I THINK IN IN JUNE, SECOND MEETING IN JUNE, WE'RE ACTUALLY GOING TO HAVE A CONVERSATION AROUND THE FIELDS AND OPTIONS FOR INCREASED UTILIZATION.

THAT WOULD BE THINGS THAT WE CAN DO IN-HOUSE AND MAYBE BEYOND WHETHER THAT INVOLVES A THIRD PARTY OR WHAT DOES THAT LOOK LIKE? SO AGAIN, THOSE MAY BE OR MAY NOT BE THINGS NECESSARILY TIED DIRECTLY TO THE BUDGET PROCESS.

BUT STRATEGICALLY, AS WE'RE LOOKING OVER THE NEXT FIVE YEARS, WHAT DOES THAT DO FOR REVENUE PROJECTIONS? I THINK THAT'S WHERE WE'D HAVE THE BIGGEST IMPACT.

RUSSELL FORUMS. YOU SEE THE SAME TREND THAT PEAKED PRIOR TO THE PANDEMIC, BUT IT'S BEEN KNOWN AS A TREND OF RECOVERING.

AND THEN WE HAVE A SLIDE SHOWING ALL OF THEM TOGETHER OVER OUR PPF OPERATIONS.

SO SO COLLECTIVELY WE'RE AT 61% SELF-SUSTAINING PRIOR TO PANDEMIC.

SO NOW IT'S KIND OF LOW 40S RANGE COLLECTIVELY.

SO THIS SHOWS THE ACTUAL TRANSFER OF FUNDS INTO THE PPF FROM THE FOUR A FUNDS.

SO YOU CAN SEE WHERE WE ESTIMATE 2024 BEING AT 3.1 MILLION.

AND THEN YOU SEE A STEADY INCREASE FROM THERE.

IT MATCHES UP WITH THE EXPENDITURE SIDE AS, AS WELL IN THE GOLF FUND, YOU NOTICE THE SUBSIDY DROPS.

OF COURSE, WE ADJUSTED FEES IN THIS AREA AS WELL.

SO THEY'LL DROP FROM THE CURRENT YEAR'S ESTIMATE FOR NEXT FISCAL YEAR AND AND STARTS THE REBOUND AND IT'D GET BACK TO THE LEVEL WHERE IT ANTICIPATES IN 2024.

THE GOOD NEWS IS THAT THEY HAVE AN OUTSTANDING DEBT THAT'S GOING TO BE PAID OFF IN FISCAL YEAR 2025 OF THE LAST PAYMENTS, $382,000. SO THEY'RE SELF-SUSTAINING.

PORTION IS GOING TO INCREASE FROM THE 66% NEXT YEAR UP TO THE LOW 70S, MID 70 RANGE BY THE END OF THE FIVE YEAR PERIOD.

SO IT BRINGS US TO FOUR B OPERATING FUNDS.

YOU CAN AGAIN, ONE OF THE MAJOR ASSUMPTIONS IS THE FOR THE CURRENT FISCAL YEAR SALES TAX BEING AT 1.5%.

SO THERE ARE SALES TAX REALLY IS FORECAST TO BE A LITTLE BIT UNDER BUDGET.

THE OTHER REVENUE TENDS TO TO REBOUND THIS CURRENT YEAR AS WELL.

WE SHOW THE DEBT SCHEDULE BASED ON THE CIP THAT YOU THE CURRENT EXISTING DEBT SERVICE AND THE CFP THAT YOU THAT WAS PRESENTED BY ALLISON.

THE INCENTIVES THAT YOU HAVE LISTED, YOU SEE THE BUDGET THE YEAR END ESTIMATE BEING HIGHER THAN BUDGET, AND THAT'S BECAUSE OF INCENTIVES FOR HINES.

AND ALLEYCATS WAS HIGHER THAN WHAT WAS IN THE ACTUAL PROPOSED BUDGET.

THEN A CHANGE IN FUND BALANCE.

AGAIN, CONSISTENTLY WE'RE USING FUND BALANCE.

SO YOU SEE THE THE NUMBER DROPPING FROM THE CURRENT YEAR'S BUDGET OF 61% BY THE END OF THE FORECAST, DOWN TO 31% OF EXPENDITURES.

[03:00:02]

ANYONE. OH, THANK YOU, MAYOR.

NEXT, I HAVE A COUPLE OF SLIDES ON THE TIFF TWO.

REALLY? IT'S NOT ONE ON THE ON THE CAPITOL.

I ONLY HAD ONE PROJECT, AND IT WAS IDENTIFIED IN THE GENERAL FUND SLIDES THAT ERIC PRESENTED.

THE PROPERTY TAXES IS THE MAIN SOURCE OF REVENUE.

OF COURSE. THEIR THEIR GROWTH PROJECTION FROM THE PRELIMINARY WAS A LITTLE BIT DIFFERENT FROM THE GENERAL FUND.

IT WAS AROUND 10%.

HOWEVER YOU CAN GET A WHEN IT COMES TO BUSINESSES, YOU CAN GET A HIGHER RATE OF A PROTEST SO THAT REVENUE COULD MORE THAN LIKELY COULD BE CHALLENGED MORE SO THAN JUST RESIDENTIAL PROPERTY OVERALL.

AS A PERCENT AS WE MENTIONED EARLIER WITH FOR A WE DID TRANSFER THE ECONOMIC DEVELOPMENT COORDINATOR.

SO THAT HELPED CORRECT THE FUND OR AT LEAST CORRECT THE IMBALANCE IN THE FUND.

WE HAD IN TERMS IF YOU LOOK AT OPERATING REVENUE DROP FROM 674,000 BUDGETED TO 146,000.

THAT WAS BECAUSE OF THE WARRANT PARKING LOT, EXCUSE NOT WARRANT, BUT THE THE PARKING LOT ON ELLISON THAT WAS ORIGINALLY ACQUIRED ABOUT $490,000.

WE USED FUND BALANCE TO DO THAT.

SO IT DREW DOWN THE FUND BUT ACTUALLY DEBT WAS WAS ISSUED.

AND ONCE WE IDENTIFIED THAT WE WERE DOING A JOURNAL ENTRY TO REDUCE THE EXPENDITURE.

SO THAT'S THE REASON THAT DROPPED AT THE SAME TIME, THE DEBT SERVICE IS GOING TO INCREASE TO TO START MAKING DEBT SERVICE PAYMENTS.

WE DID HAVE THE ELLISON EAST ELLISON MOBILITY PROJECT IN HERE AS WELL, TO BE FUNDED.

THAT'S BEEN MOVED OUT OF THE FIVE YEAR HORIZON.

SO THAT WAS THE OTHER MAJOR CHANGE THAT THAT ELIMINATED DEBT SERVICE PAYMENTS IN THE FUTURE UNTIL WE CAN MAKE OTHER ADJUSTMENTS TO ACCOMMODATE THAT PROJECT.

SO THAT ALLOWED US TO HAVE THE FUND BALANCE BOUNCE BACK UP.

AND AS WE CONTINUE TO GO THROUGH THE BUDGET PROCESS, WE CAN LOOK AT AT ALTERNATIVES.

I'D BE HAPPY TO RESPOND TO ANY QUESTIONS YOU MIGHT HAVE.

ABOUT THAT MOBILITY PROJECT.

I MEAN, DEFINITELY IT'S ABOUT CONNECTIVITY AND AND WHILE GEOGRAPHICALLY WE KNOW OR BY MAP BY LINES, WE KNOW OLD TOWN EXTENDS BEYOND THE RAILROAD TRACKS.

BUT I THINK SOME OF WE'RE IN ORDER FOR BUSINESS TO THRIVE ON BOTH SIDES, WE NEED THE MOBILITY.

WE NEED THE CONNECTIVITY.

SO I'M WONDERING HOW WILL WE FUND SOMETHING LIKE THAT? BECAUSE IT'S A PRETTY SUBSTANTIAL PROJECT, RIGHT? YEAH. ERIC, I'M GOING OFF OF MEMORY, BUT THE CONSTRUCTION WAS OVER $3 MILLION FOR THAT PROJECT, CORRECT? I THINK CLOSER TO FOUR.

I THINK IT WAS 3.9.

SO FOUR.

RIGHT. YEAH. IT'S ABOUT $4 MILLION TO CONSTRUCT.

SO WITH DESIGN, YOU KNOW, BEING, YOU KNOW, HALF $1 MILLION I THINK FOR ABOUT HALF $1 MILLION IN DESIGN WORK.

AND THEN FOR 2 MILLION, $4 MILLION IN CONSTRUCTION BEING ABLE TO ABSORB IT.

AND THEN THE TWO PROJECTS THAT WERE ON THE THE PREVIOUS SLIDES THAT ERIC SHOWED HAD ABOUT HALF $1 MILLION FOR THE ADA RAMP.

AND THE LIGHTING COULD ALSO FALL IN HERE.

SO I THINK THERE'S JUST PRIORITIZATION OF WHERE YOU WOULD WANT TO DO THEM AND HOW IT WOULD DRAW DOWN THE BALANCE.

I THINK THE REALITY IS, IS THAT WE WE REMOVED THIS IN MY DIRECTION FROM THE TIF, BECAUSE I JUST DON'T THINK THAT THE TIF CAN OPERATIONALLY FUND IT.

AND SO THAT KIND OF FALLS INTO THE ADDITIONAL PROJECTS FROM CONSIDERATION STANDPOINT.

AND WE, YOU KNOW, WE DIDN'T SHOW IT THERE EARLIER IN THE PRESENTATION SOLELY BECAUSE WE DIDN'T WANT TO HAVE WE WANT TO HAVE THAT CONVERSATION IN CONJUNCTION WITH THE TIF.

ULTIMATELY, I THINK WE'RE THE BEST PLACE TO FUND IT WOULD BE FROM JUST THE GENERAL CAPITAL.

IT'S JUST HOW MUCH CAPACITY DO WE HAVE? AND ARE THERE OTHER PROJECTS THAT THAT THAT WOULD TAKE PRECEDENT OVER? AND AS ALWAYS, WE'LL ACTIVELY APPLY FOR GRANTS FOR PEDESTRIAN PROJECTS AND THAT VERY WELL MIGHT BE A VALID WAY OF FUNDING THE PROJECT AS WELL.

ANYBODY? SO SORRY, MAYOR, IF I MAY, THIS IS THAT CONCLUDES THE PRESENTATION FOR TODAY.

I KNOW WE COVERED A LOT.

I THINK WE WERE ABLE TO GET THROUGH IT IN RELATIVELY SHORT ORDER, GIVING, YOU KNOW, THAT 84 SLIDES THAT WE HAVE.

BUT WE'LL TAKE ANY GENERAL FEEDBACK FROM YOU AT THIS TIME.

OF COURSE, WE STILL HAVE SOME OF THE SMALLER FUNDS TO PRESENT.

[03:05:02]

WE'VE KIND OF ALREADY AT A HIGH LEVEL TALKED ABOUT THIS, BUT, YOU KNOW, FOR THE GENERAL FUND LIKELY I'LL HAVE VERY FEW RECOMMENDATIONS WITH THE LARGEST BEING THE BTS, WHICH WE'VE ALREADY FACTORED IN.

WE MAY HAVE SOME OTHER RECOMMENDATIONS FOR YOU OUTSIDE OF THE OTHER FUNDS, BE IT FOR A, FOR B BUT ON THE GENERAL FUND SIDE, I DO ANTICIPATE IN THIS YEAR WILL BE A VERY LIGHT YEAR WITH BTS BEING THE VAST MAJORITY OF WHAT I WOULD RECOMMEND.

SO YOU'VE KIND OF SEEN THE SCHEDULE MOVING FORWARD.

WE'VE GOT SOME FEEDBACK ON INFORMATION THAT YOU GUYS WOULD LIKE TO SEE PARTICULARLY FOR ALL THE CAPITAL FUNDS AS WE'RE ISSUING DEBT, WHAT'S THE DEBT FALLING OFF? SO YOU GUYS CAN TRACK WITH THAT? SO WE CAN ABSOLUTELY PROVIDE YOU THAT.

BUT WE WELCOME ANY GENERAL FEEDBACK OR ANYTHING THAT YOU'D LIKE TO SEE THAT YOU'VE NOT.

SO THIS FORECAST DID ACCOUNT FOR THE TWO.

NO. SO THE ADA IMPROVEMENT AND THE WHAT WAS THE OTHER AD THE LINING LIGHTING.

SO I THINK THAT WE CAN ABSORB THAT IN THE TIFF.

SO LIKELY WHEN WE COME BACK AND MAKE SOME ADDITIONAL RECOMMENDATIONS TO YOU BASED ON THE FEEDBACK AND THE DESIRE TO DO THAT, THAT'S LIKELY WHERE WE WOULD PROGRAM THAT IN.

WE NEED TO, OF COURSE, RERUN OUR DEBT SERVICE AND WHAT THE FUND BALANCE LOOKS LIKE AND THE TIMING OF THAT.

BUT OFF THE CUFF, I WOULD THINK THAT WE WOULD LIKELY BE ABLE TO PAY FOR IT FROM HERE.

OKAY. IS THERE ANYTHING ELSE WE NEED TO TALK ABOUT, GUYS? AND I WANT TO SAY ONE THING.

I APPRECIATE THE STAFF TODAY, BUT I ALSO WANT TO THANK THE FINANCE COMMITTEE.

Y'ALL DONE A GREAT JOB.

IT'S BEEN A LOT. I KNOW Y'ALL SPEND A LOT OF TIME ON THIS.

SO THANK YOU ALL VERY MUCH ON IT.

IS THERE ANY OTHER COMMENTS? THEN I'LL ACCEPT A MOTION TO ADJOURN.

OKAY. GOT A MOTION BY ADAM, A SECOND BY DAN.

WE'RE OUT OF HERE AT 1224.

THANK YOU ALL.

* This transcript was compiled from uncorrected Closed Captioning.