Aug 05, 2025 City Council Special Meeting

>> BECAUSE I KNOW YOU'RE PROBABLY FIX TO GO TO THE NEXT PAGE.

INTERFUND TRANSFERS, DO YOU HAVE THOSE BROKEN OUT?

>> YES, SIR. I DO.

>> OKAY. THAT'S GREAT. THAT'LL REALLY HELP US.

WE CAN SEE THE VALUE OF WHAT WE'RE CHARGING LEGAL TO ALL ENTITIES, SAY, GENERAL FUND OR WHATEVER, IS THAT RIGHT?

>> YES, AND LEGAL IS NOT ONE.

THOSE ARE COLLECTED IN ANOTHER WAY, BUT I'LL SHOW YOU WHERE THAT'S AT AS WELL.

BUT, YES, I HAVE A SEPARATE HANDOUT THAT I CAN PROVIDE TO YOU ALL LATER ON THAT WALKS YOU THROUGH HOW ALL OF THOSE INTERFUND TRANSFERS WORK.

>> THEN I'M SURE YOU HAVE THIS AS WELL, BUT JUST TO MAKE SURE WE'RE ALL HEADING IN THE RIGHT DIRECTION.

WE HAVE OUR M&O SIDE, WE HAVE OUR I&S SIDE.

A LOT OF WHAT WE'RE DOING RIGHT HERE IN THIS SUMMARY IS WE'RE BEGINNING TO MOVE SOME OF OUR M&O FUNDING THAT WE'VE COUNTED ON M&O IN THAT TAX RATE OVER TO THE I&S SIDE, CORRECT?

>> YES, THERE ARE CERTAIN PIECES OF IT, YES.

WHERE HISTORICALLY, LIKE THE FIRE DEPARTMENT WAS PAYING CASH FROM THE O&M SIDE OF THE TAX RATE.

NOW WE'RE ISSUING DEBT TO FUND THE REPLACEMENT OF THE FIRE APPARATUS, SO IT'S SWITCHING OVER TO THE DEBT SIDE.

>> I'M SURE LATER IN THE WEEK, YOU CAN SHOW THE AMOUNTS THAT ARE BEING MOVED TO THE I&S VERSUS THE AMOUNTS THAT WE HAD.

THEY DON'T NECESSARILY EQUAL.

WE MAY HAVE HAD A DIFFERENT AMOUNT, SO IT COULD GET CONFUSING IF WE HAD TWO MILLION THAT WE WERE BUDGETING, BUT NOW WE'RE SPENDING 10 MILLION.

WE WANT TO SHOW NOT ONLY THE FULL 10 MILLION OVER ON THE I&S SIDE, BUT WE WANT TO SHOW THE NET OF THE EIGHT MILLION DIFFERENCE, CORRECT?

>> YES, I CAN WALK YOU THROUGH THAT AS WE GO THROUGH OUR PROPERTY TAX PRESENTATION.

>> SO WHEN WE GET THROUGH ALL THAT, WILL YOU HAVE ALL THAT BROKEN DOWN, AND IS THAT SOMETHING THAT'S ITEMIZED CATEGORICALLY?

>> I CAN CERTAINLY WORK ON PROVIDING THAT FOR YOU.

I DO NOT HAVE IT BROKEN DOWN THAT WAY AT THIS MOMENT, BUT I CAN GET THAT. I CAN WORK ON THAT FOR YOU.

>> I THINK IT WOULD BE REALLY HELPFUL FOR US TO IDENTIFY EXISTING M&O RATE AND WHAT WAS THERE WHEN WE PULL THAT OUT, OR IF WE CHOOSE TO LEAVE IT.

THEN ALSO, I THINK, IN THE WAY IN WHICH WE WOULD BE ABLE TO VOTE ON A TAX INCREASE WITHIN OUR 3.5%? SB 2, I KNOW THAT'S YOUR FAVORITE SB OF ALL TIME, UNTIL MAYBE SB 9.

WITH SB 9, IF THAT DOES GO THROUGH, DOES THAT COME ON SEPTEMBER 1? WOULD THAT BE SOMETHING WE WOULD FOLLOW IN THIS CURRENT YEAR BUDGET?

>> NO, I THINK THAT WILL PROBABLY TAKE EFFECT THE FOLLOWING FISCAL YEAR.

>> WE SHOULD GO AHEAD AND PLAN ON EVEN IF THAT PASSES, WE WOULDN'T BE RESTRICTED TO 2.5, WE WOULD STILL BE RESTRICTED TO 3.5.

>> THAT'S MY UNDERSTANDING. WE'LL DOUBLE-CHECK THAT, THOUGH.

>> THAT WOULD BE MY UNDERSTANDING AS WELL, SOME ENTITIES HAVE ALREADY APPROVED THEIR TAX RATES FOR THE YEAR, I DON'T KNOW HOW THEY WOULD RETRO.

>> THAT'S GREAT. THE 3.5 IS REALLY ON THE M&O SIDE.

THE I&S, I THINK, STILL HAS SOME SCRUTINY ON WHAT WE CAN BOND VERSUS WHAT WOULD BE CALLED BONDABLE.

BUT HOWEVER YOU BREAK THAT DOWN, THE WAY YOU CATEGORIZE THAT'S GOING TO HELP OUR COMMUNITY TO UNDERSTAND MAYBE WHAT WE CAN APPROVE VERSUS WHAT THEY WOULD NEED TO APPROVE.

THEN, IN THE OVERALL GROSS OF THE BUDGET GOING UP, I KNOW I SAW ONE NEWS ARTICLE ALREADY THAT SAID, WELL, WE OR $70 MILLION OVER BUDGET, WE'RE NOT $70 MILLION OVER BUDGET.

WE ACTUALLY ARE REDUCING OUR GENERAL FUND, WHICH IS OUR TAX RATE BUDGET.

WHEN WE SPEND CAPEX MONIES, WHEN WE PUT MONEY INTO CAPITAL, THAT'S WHAT WE WANT TO DO.

IF WE CAN SPEND $100 MILLION IN THE BUDGET THIS YEAR THAT WE DIDN'T SPEND LAST YEAR, THAT'S A GOOD THING.

JUST BEING ABLE TO DRAW THAT OUT FROM THE I&S AND THE M&O SIDE AS YOU WALK THIS FURTHER.

THEN I WOULD ASK COUNSEL, IF YOU'RE NOT AS FAMILIAR WITH M&O, I&S AS YOU'D LIKE TO BE RIGHT NOW, WE CAN SLOW DOWN A LITTLE BIT.

OTHERWISE, I THINK THE SUMMARY IS GREAT, AND WE JUST WANT TO LET YOU KEEP GOING.

>> YES, AND I HAVE A SEPARATE PROPERTY TAX PRESENTATION.

I'LL BE GOING OVER WITH YOU ALL TO GO OVER THE O&M AND THE I&S SIDE HERE IN A LITTLE BIT.

>> GREAT. THANK YOU, MATT.

>> OKAY. SO AS YOU CAN SEE, THE TOTALS AT THE BOTTOM OF THIS PAGE, SO WE WERE APPROXIMATELY 499.3 MILLION IN THE CURRENT YEAR, AND OUR PROPOSED BUDGET IS CURRENTLY SET AT $569.6 MILLION.

AS A REMINDER, YES,

[00:25:02]

THAT IS A FAIRLY SIGNIFICANT INCREASE, BUT OVER HALF OF THAT IS GRANT-FUNDED DOLLARS.

IS NOT IMPACTING THE LOCAL TAX RATE OR COMING OUT OF LOCAL SALES TAX DOLLARS OR FEES.

WE'LL GO OVER MORE OF THAT HERE SOON.

THE NEXT ONE HERE IS WE'RE LOOKING AT SOME OF OUR PROPOSED FEE CHANGES.

AGAIN, THIS IS VERY HIGH LEVEL, WE'LL BE GOING IN MORE DETAILS.

ON OUR SOLID WASTE, RESIDENTIAL, AND COMMERCIAL COLLECTION, WE DO HAVE PROPOSED 7% INCREASES, AND YOU CAN SEE THE REVENUE THAT THAT GENERATES.

WE ARE LOOKING TO FUND A DANGEROUS STRUCTURE REMOVAL PROGRAM WITH THIS INCREASE.

WE'LL HAVE MORE INFORMATION FOR YOU GUYS ON THAT AS WELL.

THEN WE ALSO HAVE SOME ADDITIONAL CAPITAL NEEDS THAT OUR SOLID WASTE GROUP WOULD LIKE TO ADDRESS THROUGH THIS RATE INCREASE.

YOU'LL SEE THERE THAT COMES IN A LITTLE LESS THAN $2 MILLION IN TOTAL REVENUE TO THE GENERAL FUND.

ON ENVIRONMENTAL HEALTH, WE DO HAVE CPI INCREASES GOING IN THAT ARE APPROVED THROUGH THE ORDINANCE THAT'S IN PLACE FOR ENVIRONMENTAL HEALTH.

THEN WE ALSO HAVE A NEW PROPOSED FEE TO HELP COVER OUR VECTOR PROGRAM AT A MINIMAL MONTHLY AMOUNT THAT COULD BE INCLUDED ON OUR UTILITY BILLS.

WE'LL HAVE MORE INFORMATION ON THAT WHEN WE GET TO ENVIRONMENTAL HEALTH.

ON GOLF, WE HAVE SOME SMALL INCREASES THERE.

WE TRY TO INCREASE GREEN FEES ONE YEAR, AND THEN GOLF CART FEES AND SOME OF THOSE OTHER ITEMS IN OTHER YEARS, AND PASSES IN OTHER YEARS.

THIS IS A YEAR THAT WE ARE LOOKING TO DO SOME INCREASES TO KEEP UP WITH THOSE STANDARDIZED RATES ON OUR GOLF COURSES.

OUR SWIMMING POOLS HAS SOME VERY MINOR ADJUSTMENTS, AND OUR WARFORD CENTER HAS SOME MINOR ADJUSTMENTS.

THEN WE HAVE A PROPOSED 5% INCREASE TO OUR WATER AND SEWER RATES, AND THEN YOU CAN SEE THE REVENUE THAT IT PRODUCES.

IT COMES IN CLOSE TO $5 MILLION.

WHAT WE'RE PROPOSING TO DO IN THE CURRENT YEAR IS TO TAKE THAT INCREASE AND USE THAT TOWARDS ONE-TIME CAPITAL IMPROVEMENT PROJECTS AND THEN HOLD THE RATE FOR NEXT YEAR TO EITHER DO ADDITIONAL CAPITAL PROJECTS OR POTENTIALLY TO USE TO START FUNDING DEBT ISSUANCES TOWARDS OUR WASTEWATER TREATMENT FACILITY.

WE'VE GOT SOME OPTIONS THAT WE'RE PROPOSING FOR YOU ALL THERE.

BUT PLANNING TO JUST CAPTURE THOSE ONE-TIME DOLLARS IN THE CURRENT YEAR TO DO SOME MUCH-NEEDED PROJECTS.

THEN WE'VE GOT OUR STREET MAINTENANCE FEE, AND WE'LL HAVE, AS I MENTIONED, A WHOLE PART OF A MORNING DEDICATED TO WHAT THAT COULD LOOK LIKE IF WE PULL THAT STREET MAINTENANCE, AND WE PROTECT THOSE DOLLARS IN AN ENTERPRISE FUND AND HAVE ITS OWN SEPARATE REVENUE SOURCE.

WHAT WE'RE LOOKING AT RIGHT NOW IS ABOUT A $15 MILLION REVENUE SOURCE COMING IN ON THAT.

THOSE ARE YOUR BIG PROPOSED FEE CHANGES.

LET'S QUICKLY GO THROUGH YOUR OTHER MAJOR REVENUES.

JUST REAL QUICK, THIS IS A 10-YEAR HISTORY OF OUR SALES TAX.

YOU CAN SEE TREMENDOUS GROWTH IN SALES TAX COMING OUT OF COVID, AND WE HAVE STEADIED AND MORE NORMALIZED AND FLATTENED A LITTLE BIT IN THE PAST COUPLE OF YEARS.

ON THE NEXT SLIDE, THIS HAS OUR CURRENT YEAR COLLECTIONS.

OUR CURRENT YEAR BUDGET IS 78 MILLION.

WE FEEL LIKE WE'RE GOING TO COME IN A LITTLE BIT CLOSER, JUST A LITTLE UNDER $80 MILLION, AND WE HAVE BUILT INTO YOUR BUDGET FOR NEXT YEAR A SALES TAX BUDGET OF $81,170,000, AND WE FEEL LIKE THAT WOULD BE SUSTAINABLE BASED ON THE SLOWED-DOWN GROWTH WE'VE SEEN IN THOSE SALES TAX COLLECTIONS.

AS A REMINDER, YOU ALSO HAVE SALES TAX REBATES THAT THEY'LL BE IN THEIR FIRST FULL YEAR THIS NEXT YEAR, AND SO WE HAVE INCLUDED THAT IN YOUR BUDGET AS WELL.

IT'S JUST A LITTLE UNDER $500,000 THAT'S BEING REBATED BACK FOR SALES TAX DOLLARS.

OUR NEXT LARGE REVENUE SOURCE IS OUR GROSS RECEIPTS, BUSINESS TAX.

WE TALK ABOUT THESE MORE AS FRANCHISE FEES.

THIS IS WHAT WE CHARGE UTILITIES FOR BEING IN THE CITY'S RIGHT-OF-WAY.

WE TRY TO KEEP IT FAIR.

WE CHARGE ALL THE OUTSIDE UTILITIES AND OUR CITY-OWNED INTERNAL UTILITIES.

OUR ELECTRIC UTILITY HAS A 5% FEE, OUR GAS UTILITY HAS THE SAME 5% FEE.

OUR TELEPHONE UTILITY HAS A PARALLEL CHARGE, AND CABLE TV IS 5%.

HOWEVER, BACK IN 2019, THE STATE LAW CHANGED WHERE FOR BUNDLED OPTIONS OF CABLE AND TELEPHONE, THEY GET TO PAY THE LESSER OF THE TWO AND NOT BOTH.

WE HAVE CONTINUED TO SEE THAT REVENUE SOURCE GO DOWN, RELATED TO THE TELEPHONE AND FRANCHISE FEES.

THEN, ON THE CITY UTILITIES,

[00:30:01]

WE HAVE HISTORICALLY HAD WATER AND SEWER, AND THAT IS BASED ON A PER-ACCOUNT CHARGE, AND IN THE CURRENT YEAR, COUNSEL APPROVED TO GO AHEAD AND PUT A FRANCHISE FEE IN PLACE FOR OUR DRAINAGE UTILITY.

THE DRAINAGE ONE IS BASED ON 5% OF REVENUES.

IF WE LOOK AT OUR HISTORY RELATED TO FRANCHISE FEES, I'M SORRY. YES. GO AHEAD.

>> GOT TO MAKE SURE I SPEAK INTO THE MICROPHONE.

>> ON THE GROSS RECEIPTS ON THE ELECTRICAL GAS, TELEPHONE, AND OUTSIDE ENTITIES, ARE WE CONTRACTUALLY BOUND TO THESE RATES? IS THERE ANY MECHANISM FOR RELIEF OR AN INCREASE?

>> THAT'S A GREAT QUESTION.

THESE ARE ALL AT THE MAXIMUM AMOUNT THAT STATE LAW ALLOWS.

[OVERLAPPING] IT'S ALL WRITTEN IN STATE LAW. YES, SIR.

>> ON CABLE TV, ARE WE DOING AND AGAIN, I THINK YOU ALREADY TOLD ME THIS, BUT WE CAN'T DO ANYTHING WITH STREAMING.

>> OF TOP OF YOUR HEAD. I DO THINK THERE WAS SOME STREAMING SERVICES INCLUDED IN CABLE, BUT DID THEY PULL OUT? DO YOU REMEMBER OFF THE TOP OF YOUR HEAD?

>> THAT ONE'S HAD A FEW DIFFERENT LEGAL BILLS PASSED AS WELL.

>> SORRY.

>> REMEMBER AT THE TOP OF HIS HEAD.

>> YEAH, THERE WAS A PROVISION THAT WAS PASSED THIS PAST SESSION THAT CHANGED HOW STREAMING SERVICES ARE CHARGED.

I CAN GET YOU A BETTER DETAIL OF WHAT THAT IS BECAUSE THERE WERE SOME THAT WERE LEFT IN.

BUT I COULD PROVIDE THAT FOR YOU.

>> THANK YOU, BRIAN.

>> WILL PUT THAT LIST TO FOLLOW. [OVERLAPPING]

>> I'M JUST CURIOUS IF THERE'S ANY RELIEF OR WE CAN LEVERAGE ON, SO MUCH IS GOING TO STREAMING NOW, AND IT'S GOING TO CONTINUE TO ERODE TELEPHONE UTILITY AND CABLE TV, THEN THERE SHOULD BE SOME RELIEF.

>> WE'LL LOOK AT THAT, BUT MY UNDERSTANDING IS WE'RE MAXED OUT, WE'RE GETTING THE MAX THAT WE CAN ON ALL OF THESE AT THIS POINT, BUT WE'LL GET YOU A LITTLE BIT MORE DETAILS ON THAT.

>> WE CAN CLARIFY THAT THAT'D BE GREAT. THANK YOU.

>> SURE, OF COURSE. MAYOR, DID YOU HAVE A QUESTION TO OR NO? LET'S LOOK AT THE HISTORY OF THESE.

ELECTRIC AND GAS, I DO WANT TO MAKE SURE THAT YOU ALL REALIZE AS THEIR RATES CHANGE, THAT AFFECTS HOW MUCH IS BEING PAID TO US IN A FRANCHISE FEE.

ALSO, THE WEATHER HIGHLY AFFECTS HOW MUCH OF A FRANCHISE FEE WE'RE GETTING.

IN THE MORE MILD YEARS, WE DON'T SEE AS STRONG A NUMBERS COMING IN ON THE ELECTRICITY FRANCHISE FEE.

IN MORE MILD WINTERS, WE DON'T SEE AS MUCH COMING IN ON GAS.

ON THE YEARS THAT FUEL PRICES ARE THROUGH THE ROOF.

THERE IS A FUEL FACTOR IN ELECTRIC AND GAS RATES.

AS THAT FUEL CHARGE GOES UP, WE SEE MORE FRANCHISE FEE REVENUE COME IN.

AS THAT FUEL FACTOR OR FUEL PRICES AS A WHOLE COME DOWN OR STABILIZE, WE CAN SEE THAT ACTUALLY AFFECT SOME OF OUR COLLECTIONS ON THE FRANCHISE FEES AS WELL.

AS YOU LOOK ACROSS THESE, THIS IS A 10-YEAR TREND ON THESE, AND YOU'LL SEE WE'VE HAD GOOD GROWTH OVER THE YEARS.

WATER AND SEWER OBVIOUSLY HAVE SEEN THE LARGEST AMOUNT OF GROWTH OVER THE YEARS.

BUT THEN, OVER ON THE TELECOM AND CABLE, YOU'LL SEE THE DECREASE THAT WE'VE EXPERIENCED OVER THE 10-YEAR PERIOD.

ELECTRIC AND GAS HAVE GONE UP AND THEN DOWN AND THEN BACK UP.

YOU'LL SEE SOME FLUCTUATIONS THROUGH YOUR ELECTRIC AND GAS FRANCHISE FEES.

WE HAVE PUT A CONSERVATIVE ESTIMATE IN FOR THIS NEXT YEAR RELATED TO ALL OF THESE FRANCHISE FEES.

THAT'S ON THIS NEXT SLIDE HERE.

YOU CAN SEE HOW OUR COLLECTIONS HAVE BEEN DOING THROUGH JUNE 2025, AND PROBABLY NO SURPRISE.

I THINK THIS WEEK MAY BE THE FIRST WEEK WE'RE GOING TO HIT 100, AND THAT'S VERY RARE.

FOR AMARILLO, OUR ELECTRICITY FRANCHISE FEES HAVE BEEN TRENDING BEHIND A LITTLE BIT.

WE'RE NOT SURPRISED ON THAT.

I DON'T KNOW THAT THIS IS A NORMAL SUMMER.

WE ARE TRAILING A LITTLE BIT BEHIND, BUT WE HAVE NORMALIZED THAT FOR OUR PROPOSED BUDGET FOR THIS NEXT YEAR.

YOU CAN SEE DOWN AT THE BOTTOM, THE CURRENT YEAR BUDGET AND THE PROPOSED BUDGET FOR EACH OF THOSE VARIOUS CATEGORIES OF FRANCHISE FEES.

>> I'M SORRY, I HAVE ONE MORE QUESTION.

SO THERE'S A DIRECT CORRELATION ON GAS AND ELECTRIC DEPENDING ON THE MCF PRICE OR THE KILOWATT PRICE.

THAT'S THE CORRELATION. [OVERLAPPING]

>> YES. THAT IS CORRECT.

BASED ON THEIR SALES, SO AS THEY'RE GOING THROUGH RATE CASES AND THEIR RATES ARE GOING UP, COUNCIL DOES HAVE A PROCESS INVOLVED WITH THAT.

BUT AS THOSE RATES DO GO UP, WE SEE MORE REVENUES COMING IN RELATED TO THAT.

YES. BUT THEN THE WEATHER STILL HIGHLY AFFECTS IT AS WELL.

>> UNDERSTAND. THANK YOU.

>> GOOD QUESTIONS. LET'S LOOK AT OUR NEXT MAJOR REVENUE SOURCE, AND THIS IS YOUR HOTEL OCCUPANCY TAX.

THIS IS THE TAX FOR ANYONE WHO STAYS AT A LOCAL HOTEL.

ON THE RIGHT THERE, YOU'LL SEE HOW IT'S BROKEN DOWN.

THERE'S A TOTAL OF 15%. THE STATE GETS 6%.

HERE AT THE CITY, WE GET 7%, AND THE VENUE DISTRICT ALSO COLLECTS AN ADDITIONAL 2%.

FOR THE TOTAL OF 15%, AND YOU'LL SEE THE 10 YEAR TREND THERE AS WELL.

[00:35:03]

DO WANT TO NOTE THE LAST COUPLE OF YEARS, WE'VE SEEN A LITTLE BIT OF I WOULD SAY MORE PULLING BACK OR NORMALIZING ON THE AVERAGE DAILY RATES THAT WENT UP SO SIGNIFICANTLY AFTER COVID.

WE SAW A LOT OF HOTEL STAYS HERE LOCALLY, SO THE HOTELS OBVIOUSLY ADJUSTED THEIR RATES, AND THIS IS BEEN NORMALIZING IN THE PAST COUPLE OF YEARS.

CURRENT YEAR, THOUGH, I'M GOING TO GO AHEAD AND GO THE NEXT SLIDE.

CURRENT YEAR, AND QUESTION ON THIS.

THESE ARE THE MAXIMUM RATES THAT WE CAN CHARGE ON HOTEL OCCUPANCY TAXES.

WE HAVE LOOKED FOR MULTIPLE WAYS TO DO THIS, BUT THIS IS THE MAX THAT THE CITY CAN CHARGE ON HOTEL OCCUPANCY TAX AT THIS POINT.

ON OUR CURRENT YEAR COLLECTIONS, YOU'LL SEE WE'RE ACTUALLY TRENDING A LITTLE BIT ABOVE BUDGET, SO THAT'S BEEN WONDERFUL, AND SO WE ANTICIPATE ENDING THE YEAR, MAYBE A LITTLE BELOW 3% ABOVE BUDGET, WHICH IS GREAT.

WE HAVE BROUGHT THE BUDGET IN FOR NEXT YEAR, OUR PROPOSED BUDGET AT NINE MILLION FIVE HUNDRED NINETY SEVEN THOUSAND.

WE'RE REALLY PLEASED THAT THESE NUMBERS, I THINK, HAVE HOPEFULLY HIT A MORE STABLE RATE, AND WE'RE GOING TO SEE SLIGHT GROWTH GOING FORWARD.

AS A REMINDER, WE DO REBATE BACK THE CONVENTION HOTEL, DOWNTOWN, WE REBATE BACK THEIR HOTEL OCCUPANCY TAXES, AND THAT RUNS A LITTLE UNDER A MILLION DOLLARS ANNUALLY.

>> [INAUDIBLE].

>> NO, THIS IS THE GROSS COLLECTIONS, AND THEN SO IT WOULD BE LESS ABOUT MILLION DOLLARS.

UTILITY SELLS.

AT THE TOP. WE'RE LOOKING AT OUR SOLID WASTE UTILITY SALES, SO YOU HAVE YOUR RESIDENTIAL COLLECTIONS, AND YOU'LL SEE THAT THEY'RE TRAILING JUST A LITTLE BIT UNDER BUDGET, ALMOST FLAT WITH BUDGET FOR THE YEAR.

COMMERCIALS UP JUST A LITTLE BIT, OR ACTUALLY ALMOST 10% THROUGH THE MONTH OF JUNE FROM WHAT WE ANTICIPATED, AND THEN LANDFILL IS ALSO STRONG.

I WOULD IMAGINE WITH SOME OF THE STORMS THAT WE'VE HAD THIS YEAR, I KNOW THERE'S BEEN SOME HAIL INCIDENTS.

ANYTIME WE HAVE WEATHER EVENTS, WE DO SEE AN INFLUX IN THE LANDFILL WHICH CAN DRIVE THOSE REVENUES UP.

THEN DOWN BELOW, YOU'LL SEE WATER AND SEWER, AND THIS IS THE TOUGH ONE THIS YEAR.

WE ARE SO THANKFUL FOR ALL OF THE RAIN THAT WE HAVE RECEIVED THIS YEAR.

HOWEVER, IT IS DRASTICALLY REDUCING OUR WATER AND SEWER REVENUES AT THIS POINT IN TIME.

YOU'LL SEE OVERALL, WE'RE ABOUT ALMOST FOUR MILLION BEHIND THROUGH THE MONTH OF JUNE, WHICH IS ABOUT 5.5%.

NOW, HITTING 100 THIS WEEK AND JUST DEPENDING ON WHAT THE REST OF THE SUMMER DOES, AUGUST AND SEPTEMBER CAN BE SOME OF OUR HIGHER MONTHS OF WATER SALES, BUT WE'LL JUST SEE AT THIS POINT.

IF THE RAIN CONTINUES, WE WILL BE COMING IN UNDER BUDGET ON OUR WATER REVENUES, AND WE HAVE FACTORED THAT INTO YOUR BUDGET, AND WE'LL LOOK AT THAT MORE AS WE LOOK AT THAT BUDGET AS A WHOLE.

>> MS. STORES, SO I'M JUST TAKING A FEW NOTES, AND I SEE WE'RE DOING A GOOD JOB OF SHOWING THE '25, '26 BUDGET AMOUNTS.

DO YOU HAVE THIS LISTED ALREADY SOMEWHERE WHERE THE REVENUE AMOUNTS ARE BROKEN DOWN? I'M JUST WRITING DOWN.

>> PARDON YOUR QUESTION.

>> SALES TAX, YOU'RE PROJECTING AT 81 MILLION.

PROPERTY TAX WAS AT 75?

>> I'M JUST WRITING ALL THESE DOWN AS I GO.

I SEE ON THE BUDGET SIDE, HERE'S WHAT OUR BUDGET IS FOR '25, '26.

>> WHAT I'D LIKE TO SEE IS THE REVENUE SIDE.

DO YOU HAVE IT LISTED LIKE THAT IN THE BUDGET SOMEWHERE?

>> YES. THAT WOULD ALL BE IN YOUR BUDGET.

IF YOU LOOK STARTING ON PAGE, LET ME GET TO THE RIGHT PAGE HERE.

IF YOU START ON PAGE 5 IN THE BUDGET, THAT STARTS LISTING ALL OF YOUR GENERAL FUND REVENUES, AND THEN AS YOU GO FURTHER BACK, IT'S REVENUES AND THEN EXPENSES, AND THEN YOU'LL GET INTO YOUR WATER AND SEWER FUND.

IT'LL HAVE REVENUES AND EXPENSES, AND ALL OF THOSE ARE LISTED THERE, AND IT HAS A VARIANCE BETWEEN CURRENT YEAR BUDGET AND PROPOSED NEXT YEAR'S BUDGET.

>> DO YOU HAVE IT SUMMARIZED LIKE YOU DO ON THE FRONT PAGE SHEET FOR THE BUDGET?

>> NO, SIR.

>> IS THAT SOMETHING THAT YOU WOULD LIKE US TO WORK ON.

>> COUNCIL, WOULD THAT HELP YOU GUYS AND JUST KNOWING, BEING ABLE TO ADEQUATELY SPEAK TO OTHER PEOPLE, WE EXPECT TO MAKE A REVENUE 75 MILLION IN PROPERTY TAX, 81 MILLION IN SALES TAX BECAUSE YOU'LL GET LOST IN ALL OF THESE PAGES OF TRENDS AND NUMBERS, SO IF WE HAD A HANDOUT, IT MIGHT BE HELPFUL.

>> YES, IT'S BENEFICIAL.

>> ONCE THE BUDGET IS FINALIZED, WE WOULD BE PRODUCING FOR YOU ALL A HANDOUT FOR YOUR TALKING POINTS WITH THE REVENUE EXPENSES CAPITAL, WE'LL BE PRODUCING THAT FOR YOU AS PART OF THE FINAL PRODUCT.

>> GREAT. JUST THE WAY MY MIND WORKS.

I'M JUST HITTING THE HIGHLIGHTS, SO PROPERTY TAX 75 MILLION.

>> PROPERTY TAX IS AT 81 MILLION FOR NEXT YEAR.

>> PROPERTY TAX IS 81 MILLION. I'M SORRY.

>> YES, 81 MILLION FOR NEXT YEAR. [OVERLAPPING].

>> SALES TAX 81 AS WELL?

>> NO. I'M SORRY.

[00:40:02]

I SAID THAT WRONG. YOU'RE EXACTLY RIGHT, MAYOR.

SORRY. SALES TAX IS 81 MILLION, AND THEN PROPERTY TAX, I'LL HAVE TO GET TO, THAT'S ON THE NEXT SLIDE WE HAVEN'T COVERED THAT YET.

>> THE FRANCHISE FEES WE COVERED, THOSE ARE 22.6 MILLION PROJECTED.

THE UTILITY FEES, IS THERE A UTILITY FEE CHARGED THAT WE NEED TO WRITE DOWN PLUS THE SOLID WASTE WATER AND SEWER, SO THE FRANCHISE FEE IS THAT FEE.

THERE'S NOT A SEPARATE FEE OUTSIDE OF THAT.

>> ASK THAT AGAIN. I DON'T THINK I'M FOLLOWING YOU.

>> I'M ASKING IN REVENUES.

EXCEL PAYS A FEE IN ORDER TO DO BUSINESS IN THE CITY.

THAT'S CALLED THEIR FRANCHISE.

>> IS THERE AN ADDITIONAL FEE ON TOP OF THAT IN ANY WAY THAT'S CONSIDERED A UTILITY FEE?

>> THAT'S PASSED ALONG TO THE OUTSIDE UTILITY COMPANIES?

>> PASSED ALONG TO US. SOMETHING THAT COMES IN IN THE FORM OF REVENUE.

>> NO. THEY JUST PAY FRANCHISE FEES.

>> THEY ALSO PAY SALES TAXES, SO THEY'RE FACTORED INTO THE SALES TAX.

>> IN PROPERTY TAXES.

>> PROPERTY TAX.

>> NORMAL TAX.

>> WHERE I'M PROBABLY JUST GETTING A LITTLE CONFUSED IS WHERE WE'RE GETTING THE 5% FEE FROM OUR DRAINAGE UTILITY.

THAT'S OUR ABILITY TO CHARGE THE DRAINAGE UTILITY A FEE IN LIEU OF TAX, RIGHT?

>> NO, THAT IS A FRANCHISE FEE, SO IT'S FOR THEM BEING IN THE CITY'S RIGHT AWAY.

THOSE STORM SEWERS AND STUFF ARE IN THE CITY'S RIGHT AWAY, AND SO WE'RE CHARGING THEM FOR USE FOR BEING PART OF OUR RIGHT AWAY, JUST LIKE ELECTRIC LINES RUN THROUGH OUR RIGHT AWAY AND GAS LINES AND ALL OF THOSE AS WELL.

>> VERY HELPFUL. I THINK I'M CAUGHT UP.

I'LL GET BACK OUT OF YOUR WAY AND LET YOU KEEP DRIVING, AND THEN IT WOULD BE HELPFUL.

I THINK IF WE JUST CATEGORICALLY LIST ALL THESE IN THE BUDGET FOR YOUR EXPECTED REVENUES.

>> ONE QUICK QUESTION ON THE WATER.

WE'RE DOWN, AND THAT IS A BLESSING, IS THERE ANY WAY TO THROTTLE BACK COST OF THE PLANTS IF WE KNOW WE'RE GOING INTO AN ANOMALY, OR IS IT A STATIC COST? THAT'S JUST A HIGH LEVEL QUESTION.

IF WE'RE EXPECTING FOR EASY MATH, 100 MILLION GALLONS, AND WE ONLY BURN 85 MILLION, IS THERE ANY WAY TO THROTTLE BACK THE PLANT COSTS TO HELP OFFSET THAT OPERATING? WHAT WE YOU EXPECTING?

>> AS YOU SAID, THERE ARE STATIC COSTS AND VARIABLE COSTS.

OBVIOUSLY, THE VARIABLE COSTS DO GO DOWN BECAUSE WE'RE ALSO HAVING TO CHLORINATE LESS WATER AS WE'RE TREATING IT, BUT THE STATIC COSTS, PERSONNEL, EQUIPMENT, PUMPS, THOSE THINGS, THOSE DON'T CHANGE, WHETHER WE SELL A GALLON OR 10 MILLION GALLONS.

THERE ARE STATIC COSTS THAT DO NOT CHANGE WHEN IT COMES TO WEATHER OR NOT, BUT THERE ARE VARIABLE COSTS THAT DO THROTTLE DOWN BECAUSE WE'RE SELLING LESS WATER, WE HAVE TO TREAT LESS WATER.

>> THEN JUST THE OPERATION OF THE PLANT, THE ELECTRICITY, AND ALL THOSE WILL BE THE VARIABLE COSTS?

>> A BIG PART OF OUR COST IS JUST MAINTENANCE, AND SO REPAIRS, BROKEN LINES, SO ALIGN TO REPLACE IT COSTS THE SAME, WHETHER WE HAVE GOOD YEARS OR BAD YEARS IN REVENUE, SO THOSE CHANGES DON'T CAUSE THEM CHANGE. OKAY.

>> WHERE YOU'LL SEE US ACCOUNTING FOR THAT IS WHEN WE GET INTO LOOKING AT NEXT YEAR'S BUDGET WE HAVE HAD TO PULL BACK ON SOME OF THE CASH FUNDED CAPITAL THAT WE CAN AFFORD IN OUR WATER AND SEWER FUND BECAUSE WE ARE NOT HITTING THOSE REVENUE TARGETS.

THAT IS WHERE WE NORMALLY TRY TO OVERCOME ANY SHORTFALLS IN REVENUE FROM ONE YEAR TO THE NEXT, OR IF WE HAVE A DROUGHT YEAR AND WE HAVE EXCESS REVENUES COMING IN, YOU WILL SEE US REQUESTING THAT COUNCIL PUT THAT INTO CAPITAL PROJECTS FOR THE NEXT YEAR TO HELP SPIN DOWN THOSE EXCESS REVENUES.

THAT'S NORMALLY HOW WE ACCOUNT FOR THAT.

WE'LL TALK A LITTLE BIT MORE ABOUT THIS AS WE GO THROUGH THE CASH FLOWS, BUT KEEP IN MIND THAT EACH ONE OF THESE FUNDS HAS A 90 DAY OPERATING RESERVE, ALONG WITH ONE YEAR OF ANTICIPATED CASH FUNDED CAPITAL THAT WE ALSO HAVE AS A BUFFER AS WE'RE WORKING THROUGH EACH OF THESE YEARS IN CASE WE GOT INTO SOME SORT OF AN EMERGENCY SITUATION.

YOU WILL SEE THIS EFFECT FROM THE RAINFALL AFFECTING NEXT YEAR'S CASH FUNDED CAPITAL.

>> WE KNOW THAT WE HAVE SOME TRENDS METEOROLOGICALLY.

WE KNOW WE HAVE TRENDS WITH ENERGY CONSUMPTION, PRICE OF CRUDE NATURAL GAS, THINGS LIKE THAT.

DO WE USE ANY PREDICTIVE ANALYTICS TO HELP US FORECAST OUT THREE YEARS?

>> WE DO, WE PUT TOGETHER A FIVE YEAR FORECAST EVERY TIME WE'RE WORKING WITH STANDARD AND POLICIES AS WE'RE GOING THROUGH OUR RATING CALLS AND ALL OF THAT, AND WE DO THOSE EVERY YEAR AS WE'RE ISSUING DEBT, BUT AS FAR AS REVENUE PROJECTIONS, AND WE TALK TO THEM A LOT ABOUT THIS, THAT IT IS SO HIGHLY CONTINGENT ON WHAT'S GOING ON WITH BOTH THE TEMPERATURES AND THE PRECIPITATION IN THE AREA.

WHAT WE NORMALLY DO IS WE TRY TO FIND WHAT IS AS CLOSE TO A NORMAL YEAR HERE IN THE CITY OF AMARILLO AS FAR AS PRECIPITATION AND TEMPERATURES ARE CONCERNED.

[00:45:03]

WE TAKE THAT YEAR AND THOSE AMOUNTS THAT WERE COLLECTED, AND WE WALK THOSE FORWARD WITH ANY RATE INCREASES THAT HAVE BEEN APPROVED IN YEARS BETWEEN THAT YEAR AND THE YEAR THAT WE'RE BUDGETING FOR TO TRY TO COME UP WITH A NORMALIZED REVENUE PROJECTION, BECAUSE IN A THREE YEAR PERIOD, WE CAN HAVE ONE OF THE WETTEST YEARS IN HISTORY AND ONE OF THE DRIEST YEARS IN HISTORY, AND MAYBE SOMEWHERE IN BETWEEN, AND SO IT JUST FLUCTUATES SO MUCH FROM ONE YEAR TO THE NEXT.

WE TRY TO COME UP WITH WHAT IS CONSIDERED NORMAL HERE IN AMARILLO.

THAT IS HOW WE BUDGET.

BUT AGAIN, THIS IS CERTAINLY THE YEAR WE'RE IN RIGHT NOW IS NOT A NORMAL YEAR.

WE HAVEN'T HIT 100 YET, AND WE'VE GOTTEN SIGNIFICANTLY MORE RAINFALL THAN WE NORMALLY DO DURING THE SUMMER MONTHS.

>> THANKS. IF WE LOOK AT NEXT YEAR, LET'S LOOK AT WHAT OUR PROJECTIONS ARE.

ON THE RESIDENTIAL AND COMMERCIAL SOLID WASTE COLLECTION FEES, YOU'LL SEE GROWTH IN BOTH OF THOSE.

AS I MENTIONED, WE HAVE 7% RATE INCREASES INCLUDED IN THOSE REVENUE CATEGORIES, AND THAT'S TO COVER A NEW DANGEROUS STRUCTURE REMOVAL PROGRAM AND SOME NEEDED CAPITAL PROJECTS THERE AT SOLID WASTE.

LANDFILL, IT JUST HAS A CPI INCREASE INCLUDED IN THAT, SO IT'S VERY MINIMAL THERE AT 3%.

YOU'LL SEE THE TOTAL AMOUNT THERE FOR SOLID WASTE. EXCUSE ME.

THEN ON YOUR WATER AND SEWER CELLS, YOU'LL SEE THAT WE HAVE INCLUDED A 5% RATE INCREASE.

AGAIN, COUNCIL MEMBER PRESCOTT, THAT WAS TRYING TO GO BACK TO A NORMAL YEAR, GROW IT GOING FORWARD, AND THEN ADD THE 5% RATE INCREASE ON TOP OF IT TO COME TO THESE NEW PROJECTIONS FOR NEXT YEAR OF THE 74.5 MILLION AND THE $33.2 MILLION.

THEN DOWN BELOW ON DRAINAGE.

WE DID A SIGNIFICANT RATE INCREASE A COUPLE OF YEARS AGO, AND SO WE'RE REALLY SEEING THOSE RATES NORMALIZE.

DRAINAGE DOES NOT HAVE ANY KIND OF A RATE INCREASE INCLUDED ON IT.

YOU'LL SEE WE'RE ACTUALLY HAVE IT DOWN JUST SLIGHTLY ABOUT FLAT WITH WHAT THE CURRENT YEAR BUDGET IS.

LET'S SWITCH GEARS JUST A LITTLE BIT AND TALK ABOUT GOLF OPERATIONS.

THIS IS ONE THAT'S HISTORICALLY BEEN OF INTEREST TO COUNCILS.

WE HAVE SEEN SOME HUGE CHANGES.

IF YOU GO BACK TO THE 2019, 2020 ACTUALS, THE GENERAL FUND WAS SUBSIDIZING THE GOLF OPERATIONS BY ABOUT 1.5 MILLION.

PRIOR TO THAT, IT WAS CLOSER TO TWO MILLION DOLLARS.

AS YOU WALK FORWARD, COUNCILS HAVE CONTINUED TO SUPPORT THE OPERATIONS OUT THERE TO INCREASE RATES AND TO STREAMLINE OPERATIONS TO GET IT DOWN TO WHERE WE ARE ANTICIPATING ABOUT A $289,000 SUBSIDY FOR NEXT YEAR, SO THEY HAVE MADE HUGE PROGRESS IN TRYING TO BE AS EFFICIENT IN THOSE OPERATIONS AS POSSIBLE.

AGAIN, WITH THE PROPOSED FEES IN GOLF, THIS WILL HELP CONTINUE TO SUPPORT THOSE REVENUES GOING FORWARD AND HAVE LESS IMPACT ON YOUR GENERAL FUND.

IF WE LOOK AT GENERAL FUND REVENUE AS A WHOLE, THIS GRAPH IS REALLY JUST TO SHOW THE VARIOUS COMPONENTS, BUT THE BIG PIECES WE'LL TALK ABOUT IS, AS YOU CAN SEE, YOUR SALES TAX IS THE LARGEST REVENUE SOURCE IN YOUR GENERAL FUND AT A LITTLE OVER 30%.

YOU PROPERTY TAX IS YOUR SECOND LARGEST AT 22%.

IN A LOT OF CITIES, PROPERTY TAX IS THEIR NUMBER ONE REVENUE SOURCE, AND THAT IS SOMETHING THAT COUNCILS HAVE A LITTLE BIT MORE CONTROL OVER, NOT A LOT, BUT A LITTLE BIT MORE CONTROL OVER THAN SALES TAX.

HERE IN AMARILLO, WE'RE HIGHLY DEPENDENT ON OUR SALES TAX DOLLARS, WHICH EB AND FLOW WITH HOW THE ECONOMY IS DOING.

YOU'LL SEE THE OTHER VARIOUS COMPONENTS, YOUR SOLID WASTE REVENUES ARE ONE OF YOUR BIGGER ONES AS WELL, YOUR FRANCHISE FEES, WHICH ARE CALLED GROSS RECEIPT BUSINESS TAXES THERE.

THAT IS ALSO ONE OF YOUR LARGER REVENUE SOURCES.

ON YOUR GENERAL FUND REVENUE CHANGES.

IN THE CURRENT YEAR, WE HAVE AN APPROVED REVENUE BUDGET OF $260.9 MILLION.

WE ARE PROPOSING TO INCLUDE AN ADDITIONAL NINE MILLION DOLLARS IN REVENUE TO GET US TO $269.9 MILLION DOLLARS TO SUPPORT THE GENERAL FUND.

YOU'LL SEE THESE ARE YOUR LARGE COMPONENTS HERE.

MAYOR, THIS IS PROBABLY WHAT YOU WERE ASKING EARLIER, BUT THIS IS JUST A LOOK AT THE GENERAL FUND.

PROPERTY TAXES ARE ANTICIPATED TO GO UP ABOUT 3.8 MILLION DOLLAR, THAT IS ONLY ON THE O&M SIDE.

THAT'S FOR OPERATIONS AND MAINTENANCE.

WE'LL TALK ABOUT THE INS SIDE HERE IN A LITTLE BIT.

ON SALES TAX, THIS IS YOUR NET NUMBER.

[00:50:01]

IT'S NET OF REBATES.

IT'S ANTICIPATED TO GO UP ABOUT 2.7 MILLION.

WE HAVE TWO MILLION DOLLARS IN ADDITIONAL REVENUE FOR SOLID WASTE.

THAT'S RELATED TO THE 7% RATE INCREASE.

BUILDING PERMITS ARE CONTINUING TO GO STRONG AS OUR ECONOMY AND WE CONTINUE HAVING GROWTH IN THE COMMUNITY.

BUILDING PERMITS WERE ANTICIPATING ARE GOING TO BE UP AROUND ABOUT A MILLION DOLLARS.

INTEREST INCOME. IT'S NORMALIZING A LITTLE BIT MORE.

WE'RE NOT SEEING AS BIG OF GROWTH.

INTEREST RATES HAVE ACTUALLY PULLED BACK A LITTLE BIT THIS YEAR, BUT INTEREST INCOME IS STILL COMING IN STRONG.

YOUR FRANCHISE FEES AGAIN CAME IN ABOUT FLAT WITH THE CURRENT YEAR BUDGET.

I DID WANT TO MENTION, WE'LL TALK MORE ABOUT THIS.

THE FEDERAL TRANSIT ADMINISTRATION GRANT DOLLARS THAT WE RECEIVE.

WE ARE NOW CONSIDERED A LARGER COMMUNITY.

THERE'S A TECHNICAL TERM FOR THAT, BUT I CAN'T REMEMBER WHAT IT IS, AND WE DO NOT GET AS MUCH FTA FUNDING FOR OUR TRANSIT OPERATIONS AS WE USED TO.

WE KNEW THIS WAS COMING.

AS WE HIT THE 200,000 MARK, WE KNEW THAT WE WERE NOT GOING TO GET AS MUCH GRANT FUNDING.

THIS NEXT YEAR, WE'RE ANTICIPATING THAT GRANT REVENUE IS GOING TO GO DOWN ABOUT $1.4 MILLION.

THEN WE HAVE OTHER JUST MISCELLANEOUS CHANGES THROUGHOUT OUR REVENUES THAT ARE OUTLINED IN YOUR BOOK OF ABOUT 400,000, AND SO THAT EQUALS YOUR FULL NINE MILLION DOLLARS CHANGE IN YOUR BUDGET.

>> LET'S SWITCH GEARS FOR JUST A QUICK SECOND AND TALK ABOUT DEBT SERVICE FUNDING.

THIS IS A LOOK AT YOUR ENTIRE OUTSTANDING DEBT IN YOUR CITY OPERATIONS AT $554.6 MILLION.

YOUR BIGGEST PIECES, AS YOU CAN SEE ON THE LEFT SIDE THERE, ARE RELATED TO WATER AND SEWER.

THEY HAVE $248.4 MILLION IN OUTSTANDING DEBT CURRENTLY.

YOU WILL ALSO SEE CRMWA, WHICH IS RIGHT BY THERE OF ABOUT $14.2 MILLION.

ALL OF THAT IS SUPPORTED BY YOUR WATER AND SEWER REVENUES.

UP ON THE TOP RIGHT, YOU'LL SEE YOUR PROPERTY-TAX-SUPPORTED DEBT OF $154.2 MILLION.

I DID, REAL QUICK, WANT TO PAUSE Y'ALL FOR JUST A SECOND.

IF YOU GO TO YOUR BOOKS AND GO TO THE TAB TOWARDS THE BACK.

LET'S SEE. IT IS THE LAST TAB, I BELIEVE.

IT'S YOUR DEBT SERVICE TAB.

IT'S ON PAGE 657.

IF YOU'LL TURN THOUGH TO PAGE 660 AND 661 IN YOUR BUDGET BOOKS, THIS IS ALL OF THE OUTSTANDING DEBT FOR THE CITY OF AMARILLO, ALONG WITH THE PROPOSED DEBT ISSUANCES FOR THIS UPCOMING YEAR.

AS OF OCTOBER 1ST, AND I APOLOGIZE, I HAVE A WRONG DATE ON THERE.

IT'S OCTOBER 1, 2025.

WE HAVE A TOTAL OF THE $554.5 MILLION OUTSTANDING.

YOU'LL SEE UP AT THE TOP THERE, THIS IS WHERE IT OUTLINES ALL OF YOUR PROPERTY-TAX-SUPPORTED DEBT AND DOWN BELOW THAT, YOU'LL SEE YOUR DEBT THAT'S SUPPORTED BY OTHER AREAS.

THAT'S GOING TO BE YOUR DEBT SUPPORTED BY PIDS AND YOUR DEBT SUPPORTED BY THE GOLF COURSE.

THERE'S SOME THAT'S SUPPORTED BY OUR TAX INCREMENT REINVESTMENT ZONE NUMBER 1, AND THERE'S ALSO SOME DEBT SUPPORTED BY SOLID WASTE.

THEN DOWN BELOW THAT IS THE DEBT SUPPORTED BY YOUR HOTEL OCCUPANCY TAXES.

THE NEXT MAJOR SECTION THERE, YES, SIR.

>> TO CLARIFY, THE 554 INCLUDES THE PROPOSED ISSUANCES THAT YOU'D LIKE TO BORROW?

>> NO, SIR. IT DOES NOT INCLUDE THE PROPOSED ISSUANCES.

THIS IS THE AMOUNT OF DEBT THAT WE WILL HAVE OUTSTANDING AT OCTOBER 1, 2025.

>> JUST TO RECONCILE THAT, LIKE IF YOU GO OVER TO SEWER AND WATER, IT'LL SAY, LIKE SERIES 2025 ESTIMATED?

>> THERE'S SIX MILLION OUT THERE, SO I THOUGHT, OKAY, WELL, ESTIMATED, THAT'S THEM PROPOSING IT IN '25, '26.

YOU'RE ESTIMATING THAT WHY? IT'S ALREADY ISSUED?

>> NO, THAT'S AN ISSUANCE THAT WAS APPROVED IN THE CURRENT YEAR, BUT WE HAVE NOT ISSUED THE DEBT YET.

IT IS FOR A WATER LINE IN NORTHWEST AMARILLO THAT WE ARE STILL WORKING TO SECURE SOME OF THE EASEMENTS, I BELIEVE, RELATED TO IT.

WE HAVE NOT ISSUED THAT DEBT YET, BUT WE STILL PLAN TO, AND THE RATE INCREASE TO SUPPORT THAT IS ALREADY IN PLACE.

>> FIVE FIFTY FOUR, EVERYTHING THAT YOU EITHER HAVE ISSUED OR PLAN TO IN THE CURRENT BUDGET?

>> NO. IT IS ONLY WHAT WE HAVE ISSUED TO DATE.

>> THE 554 DOES NOT INCLUDE THE SIX MILLION?

>> BUT IT IS LISTED IN THIS, SO SOMEWHERE IN THERE, EXCEL DEDUCTED IT, RIGHT?

>> IF YOU LOOK AT THE ROW WHERE IT HAS THE ESTIMATED,

[00:55:02]

THE SIX MILLION IS NOT INCLUDED IN THE COLUMN THAT SAYS OUTSTANDING AS OF OCTOBER 1ST.

IT SAYS 2024, BUT IT SHOULD BE 2025.

>> GOT YOU. YOU JUST DIDN'T PULL IT OVER TO THE OUTSTANDING?

>> THAT'S CORRECT BECAUSE IT'S NOT OUTSTANDING YET. YES, SIR.

>> FLEET SERVICES, SAME WAY?

>> HADN'T BEEN ISSUED YET, BUT WILL BE?

>> YES, THAT'S CORRECT.

>> THEN WHAT WOULD THE TOTAL BE IF THIS WAS APPROVED AS IS? AS YOU'VE PROPOSED IT, WHAT'S THE TOTAL ADDITIONAL DEBT ISSUANCE?

>> WE HAVE A $4.7 MILLION DEBT ISSUANCE THAT WE ARE PROPOSING TO FUND THE NEXT ROUND OF FIRE APPARATUS.

WE ALSO HAVE TWO PIDS INTERESTED IN ISSUING DEBT FOR A TOTAL OF $2 MILLION.

YOU'LL SEE THAT THERE IS COLONIES AND PINNACLE PIDS.

THEN AS YOU GO DOWN THE PAGE, YOU WILL SEE THAT SERIES 2025 ESTIMATED OF $6 MILLION FOR WATER AND SEWER THAT WAS APPROVED IN THE CURRENT YEAR BUT HAS NOT BEEN ISSUED YET.

THEN AS YOU GO TO PAGE 661, YOU WILL SEE THE $7.5 MILLION PROPOSED FOR FLEET SERVICES, AND THAT WOULD BRING YOU UP TO ABOUT $574.8 MILLION.

ASSUMING THOSE ARE APPROVED.

>> 612.7 AND 7.5, 18 MILLION ROUGHLY?

>> THEN YOU'VE GOT THE TWO MILLION FOR THE PIDS.

OH, I'M SORRY, AND THERE'S A STREET ISSUANCE.

>> WHAT'S THE STREET ISSUANCE?

>> THE STREET ISSUANCE IS 28, HANG ON.

SORRY, IT'S UP TOWARDS THE TOP.

IT'S 28,170,000.

>> TWENTY EIGHT MILLION?

>> IF YOU ADD THAT ON TOP OF IT.

>> WAS THAT 36 MILLION?

>> YOU WOULD BE AT 602.9 MILLION.

>> WHAT'S YOUR TOTAL AGAIN, MA'AM?

>> I'M SHOWING 602.9, BUT I'LL HAVE TO ADD IT UP AGAIN.

>> I'M MISSING SOMETHING THERE.

FIRE EQUIPMENT, 4.7, PIDS, TWO MILLION, WATER AND SEWER, SIX MILLION, FLEET, 7.5 MILLION, STREET, 28 MILLION. DID I MISS ONE?

>> I'M SORRY. LET ME RUN MY NUMBERS AGAIN.

AGAIN, THIS IS ONLY IF COUNCIL APPROVES IT THIS WAY.

THAT'S WHY WE DO NOT INCLUDE THOSE IN THERE BECAUSE THEY ARE NOT OUTSTANDING YET.

>> WHILE WE'RE DOING THAT REAL QUICK, SP 9 WOULD BE EFFECTIVE JANUARY 1ST, IF APPROVED.

THAT WOULD BE THE 3.5-2.5%.

BRIAN, WOULD YOU WANT TO DO REAL QUICK UPDATE ON SP 924 REGARDING STREAMING SERVICES?

>> YES. WHAT I WAS MENTIONING, THE STREAMING SERVICES, THERE WERE SEVERAL DEFINITIONS THAT WERE CHANGED.

ONE OF THOSE HAD TO DO WITH EXCLUDING STREAMING SERVICES FROM VIDEO PROGRAMMING UNDER THE PUBLIC UTILITIES CODE CHAPTER 66.

THUS, GOING FORWARD FROM SEPTEMBER 1ST OF 2025, CITIES IN THE STATE OF TEXAS CANNOT GAIN ANY FRANCHISE FEES FROM THOSE SERVICES.

GOING FORWARD, THAT WILL NEGATIVELY IMPACT YOUR FRANCHISE FEE NUMBER. DOES THAT MAKE SENSE?

>> WHAT ARE THE ONES THAT ARE GOING TO BE IMPACTED? WHAT FEES?

>> WHAT DID YOU SAY AGAIN? I'M SORRY?

>> WHAT FEES ARE IMPACTED WITH THIS NEW BILL?

>> ANY STREAMING SERVICE.

IN OTHER WORDS, YOU HAVE A STATUTE THAT SAYS VIDEO PROGRAMMING.

WHAT THEY'VE DONE IS THEY'VE EXCLUDED STREAMING SERVICES FROM THAT DEFINITION.

THUS, THE TYPICAL 5% FRANCHISE FEE THAT A CITY COULD COLLECT IS NOT AVAILABLE FOR STREAMING SERVICES ANYMORE.

>> DOES THAT MAKE SENSE?

>> I SHOW THAT WE HAVE PROPOSED 48.4, SO IT'S 48,370,000 IN NEW DEBT.

WE HAVE 554,560,201 OUTSTANDING FOR A NEW TOTAL OF 602,930,201.

>> THEN BOND COUNCIL, DID THEY WEIGH IN ON CURRENT MOODY AND S&P RATINGS AND WHAT WE'VE BORROWED? DOES THIS KEEP US AT AAA RATING OR WOULD WE FORECAST A NORMAL CHANGE?

>> THERE'S A LOT MORE THAT GOES INTO IT THAN THAT AND WHAT OUR FINANCIAL ADVISORS HAVE RECOMMENDED IS THAT WE ISSUE DEBT ACCORDING TO OUR NEEDS AND DON'T NECESSARILY LET THE RATE DICTATE WHAT DEBT WE NEED TO ISSUE.

I WOULD NOT ANTICIPATE THIS COULD POTENTIALLY DROP US FROM A AAA RATING, POTENTIALLY, BUT THERE'S OTHER FACTORS THAT HAVE A BIGGER PRESSURE ON OUR AAA RATING LIKE THE MEDIAN AND AVERAGE INCOME HERE IN AMARILLO HAS

[01:00:01]

A MUCH HIGHER IMPACT ON IT THAT IS COMPLETELY OUT OF OUR CONTROL.

>> EVERY DEBT ISSUANCE, WE HAVE A RATING CALL, AND SO THEY TREAT EACH DEBT CASE BY CASE BY CASE.

IT'S HARD TO FORECAST WHAT THIS ONE WOULD DO VERSUS THE NEXT ONE.

AS MS. STORES SAID, THEY LOOK AT THE ECONOMY, WHERE WE'RE AT, WHERE OUR CURRENT BUDGET IS. THAT'S A CASE BY CASE.

IT'S HARD TO SAY WHAT THIS WILL DO TO AAA VERSUS AA.

WE'LL HAVE TO DO THAT. WE WON'T KNOW THAT UNTIL WE ACTUALLY ISSUE THE DEBT.

>> WELL, I THINK THAT'S GREAT, AND I DEFINITELY AGREE WITH YOU GUYS.

DON'T LET THE TAIL WAG THE DOG.

THANK YOU FOR TAKING TIME, GO BACK THROUGH THAT.

>> YEAH, I'VE GOT ONE QUICK QUESTION.

>> QUESTIONS, COUNCIL?

ON PAGE 660 AND 661, IS THERE ANY WAY THAT WE CAN PUT IN THE INTEREST RATE FOR THE DEBT?

>> YES, ABSOLUTELY.

WE HAVE THOSE LISTED ON OTHER SCHEDULES, BUT YES, WE COULD WORK ON ADDING A COLUMN FOR EACH. [OVERLAPPING]

>> AND MATURITY DATE. IF WE PUT JUST THE INTEREST RATE AND MATURITY DATE, AND THAT BLENDS INTO MY QUESTION.

>> ARE WE BOUND ON THE RETIREMENT SCHEDULES OF THESE? CAN WE PAY OFF HIGHER INTEREST DEBT FIRST BEFORE WE PAY OFF THE LOWER INTEREST DEBT SO WE DON'T INCUR AS MUCH AT THE 8.6 THAT WE'RE SEEING ON INTEREST? CAN WE WORK THAT DOWN IN ANY WAY?

>> ALMOST EVERY DEBT ISSUANCE THAT WE HAVE, NOT ALL, BUT MOST HAVE A CALL ASPECT TO THEM, WHERE YOU CAN LOOK AT REFINANCING AFTER USUALLY ABOUT A 10-YEAR PERIOD.

WE ALWAYS DO THAT.

WE ALWAYS LOOK TO SEE IF A TIME PERIOD COMES UP WHERE INTEREST RATES ARE FAVORABLE FOR US TO REFINANCE.

NOW, WE ONLY REFINANCE AND CAPTURE THE SAVINGS, WE DO NOT EXTEND THE MATURITY DATES.

WE LEAVE THE MATURITY DATES AS IS, AND WE REFINANCE AND CAPTURE THE INTEREST SAVINGS.

>> IF WE CAN REFINANCE AND GET A LOWER RATE, THAT'S INCREDIBLE, BUT IF WE CAN PAY OFF THE HIGHER INTEREST EARLY AND SAVE OUR INTEREST FEES, CAN WE DO THAT?

>> CURRENTLY, WE HAVE FAVORABLE INTEREST RATES ON ALL OF OUR DEBT ISSUANCES.

THEY ARE ALL LISTED OUT IN OUR AUDITED FINANCIAL STATEMENTS, AND WE CAN CERTAINLY GET THOSE FOR YOU.

WE REFINANCED EVERYTHING DURING COVID AND GOT INTEREST RATES DOWN.

ACTUALLY, WE HAVE A 0% INTEREST RATE ON ONE OF OUR DEBT ISSUANCES.

>> FANTASTIC. GOOD JOB.

>> THAT'S TEXAS WATER DEVELOPMENT BOARD.

BUT ABOUT THE HIGHEST WE HAVE SEEN IS MAYBE AROUND 4.5%, SO WE HAVE VERY FAVORABLE INTEREST RATES.

OUR FINANCIAL ADVISORS DO NOT RECOMMEND PAYING OFF EARLY NECESSARILY, BUT LOOKING FOR THOSE KEY OPPORTUNITIES TO REFINANCE, TO BRING THOSE INTEREST RATES DOWN INSTEAD.

I'D HAVE TO GET MORE INFORMATION.

I DON'T KNOW THAT THERE WOULD BE A FAVORABLE SITUATION AT THIS POINT IN TIME FOR US TO PAY OFF ANYTHING EARLY.

>> WE'RE CONTRACTUALLY BOUND TO EACH SERIES OF NOTES, AND SO EACH ONE IS A DIFFERENT SERIES OF NOTES.

WE WOULD HAVE TO CONSOLIDATE OR REFINANCE SEVERAL NOTES IN ORDER TO PAY SOME OFF EARLY.

YOU CAN'T JUST FOCUS ALL YOUR MONEY ON ONE NOTE AND NOT THE OTHER ONES BECAUSE YOU ARE CONTRACTUALLY BOUND TO PAY THOSE NOTE HOLDERS AND THE OTHER BONDS FOR THE TIMELINE.

THEY WON'T WAIT UNTIL OTHER NOTES PAID OFF. DOES THAT MAKE SENSE?

>> IT DOES. I WOULD JUST, NOT TODAY, BUT I'D SURE LIKE A FOLLOW UP QUESTION, WHY THE FINANCIAL FOLKS ARE TELLING US NOT TO PAY A 4.5% DEBT IF WE CAN.

I DON'T KNOW WHAT THAT STRATEGY IS, UNLESS WE'RE GETTING A RETURN OF 9-12% ON OUR INVESTMENTS, WHICH I DON'T BELIEVE WE ARE BECAUSE WE'RE BOUND TO A CERTAIN LEVEL.

BUT I WOULD JUST LIKE TO HAVE A FOLLOW UP CONVERSATION.

>> YES, WE CAN HAVE A FOLLOW UP CONVERSATION ON THAT.

>> WE CAN ALSO GET YOU A SEPARATE SHEET THAT SHOWS THE MATURITIES AND THE RATE SCHEDULES AS WELL.

>> NOW, COUNCILMAN PRESCOTT, DON'T APOLOGIZE.

THOSE ARE GREAT QUESTIONS.

I THINK THE AVERAGE IS A 4.7% RETURN ON THOSE DEBTS RIGHT NOW IS WHAT WE AVERAGE BASED ON THE LAST SCHEDULE THAT I SAW, IS THAT CORRECT, MS. LOR?

>> ON OUR OUTSTANDING DEBT?

>> YEAH. LIKE, WHAT OUR PORTFOLIO WAS EARNING WAS 4.7, I THINK, TOTAL.

>> THAT'S ON OUR INVESTMENTS, BUT ON THE DEBT WE'RE PAYING, I'D HAVE TO LOOK BECAUSE WE HAVE, LIKE FOR INSTANCE, ON OUR DEBT FOR CITY HALL, WE HAVE A 2% INTEREST RATE.

>> BUT I THINK WHAT COUNCILMAN PRESCOTT WAS GETTING AT IS UNLESS YOU'RE ROI-ING 9-10%, IT DOESN'T MAKE SENSE TO NOT PAY AT ALL.

>> THAT'S WHY I WANT THAT.

>> YES, ABSOLUTELY. I DON'T KNOW THAT WE HAVE GIVEN OUR OPERATING BUDGET THE ABILITY TO PAY CERTAIN DEBTS OFF EARLY ANYWAYS.

>> THAT WAS IT. JUST, IF WE'RE AT 4.5 AND WE'RE NOT MAKING AT LEAST NINE, THEN IT DOESN'T MAKE SENSE.

I WOULD JUST LIKE TO KNOW WHAT THEIR STRATEGY AND THEIR THOUGHT PROCESS IS.

>> YES. I DON'T WANT TO SPEAK FOR THEM.

THEY ENCOURAGE US TO REFINANCE WHEN AVAILABLE AND I'M NOT EVEN SURE THAT WE CAN PAY OFF CERTAIN OF OUR DEBT.

>> WE CAN HAVE THESE CONVERSATIONS LATER.

I KNOW WE HAVE A HUGE PIECE OF DATA TO GET THROUGH. THANK YOU.

>> NO, THANK YOU. APPRECIATE IT, MS. STORES.

THANK YOU FOR TAKING A MINUTE TO GO BACK THROUGH THERE.

ON THE DEBT, NOT NECESSARILY ASKING FOR OTHER QUESTIONS, BUT I THINK WE'VE GOT A PRETTY GOOD UNDERSTANDING OF IT.

WAS THERE ANYTHING ELSE YOU WANTED TO GO OVER ON THESE PAGES?

>> NO. IF WE WILL GO TO THE NEXT SLIDE, THIS IS JUST OUTLINING WHAT SOME OF THE PROPERTY TAX DEBT HAS BEEN USED FOR.

[01:05:07]

YOU'LL SEE THE BULK OF THEM WERE RELATED TO THE VOTER-APPROVED BONDS BACK IN 2016 FOR STREET PROJECTS AND FOR PUBLIC SAFETY PROJECTS.

THEN WE HAVE STARTED SOME DEBT ISSUANCES IN THE CURRENT YEAR FOR FIRE EQUIPMENT, AND WE'VE ALSO DONE SOME PARKS PROJECTS.

THIS LIST JUST OUTLINES THE VARIOUS PROJECTS SUPPORTED BY YOUR PROPERTY TAX DOLLARS OF 154.2 MILLION.

HERE'S OUR ANNUAL DEBT SERVICE.

WE ARE LOOKING TO BE AT ABOUT 65.4 MILLION VERSUS OUR 59.4 MILLION IN THE CURRENT YEAR.

IF YOU LOOK AT OUR ANNUAL BUDGET, WE'RE AT ABOUT 9%.

WE'VE BEEN COVERING AROUND 9% OF OUR TOTAL BUDGET.

LET'S NOW LOOK AT GENERAL FUND EXPENDITURES.

ON THIS, THIS SLIDE JUST LOOKS AT THE MAIN CATEGORIES OF YOUR GENERAL FUND BY THE VARIOUS SECTORS OF YOUR BUDGET.

THE BIG TAKEAWAY ON THIS ONE IS PUBLIC SAFETY IS RIGHT AT 50% OF YOUR GENERAL FUND BUDGET.

THEN YOU CAN SEE ALL THE VARIOUS OTHER AREAS THAT IT IS SUPPORTING, AND WE'LL BE GOING INTO DETAILS RELATED TO THAT AS WE WALK FORWARD.

LOOK AT YOUR GENERAL FUND CHANGE FROM THE CURRENT YEAR TO NEXT YEAR.

CURRENT YEAR APPROVED BUDGET FOR GENERAL FUND WAS $277.7 MILLION.

IT'S BEEN REDUCED BY ABOUT 6.2 MILLION FOR NEXT YEAR'S BUDGET OF $271.5 MILLION.

HERE'S THE LARGER CATEGORIES THAT HAVE AFFECTED THAT CHANGE.

WE DO HAVE A PAY STUDY INCLUDED FOR $2.2 MILLION.

WE HAVE RAISES FOR EMPLOYEES IN THE GENERAL FUND, AND THAT'S FIRE, POLICE, AND CIVILIANS, OF 8.6 MILLION.

WE DO HAVE THE TMRS COLA OF 70% AT 2.1 MILLION.

WE HAVE THE REDUCTION OF STREET MAINTENANCE OPERATIONS OF 15 MILLION.

WE HAVE A REDUCTION TO ONE TIME CIP OF 1.1 MILLION, AND THEN WE HAVE THE REDUCTION OF THE COUNCIL ONE-TIME WORKING BUDGET OF THREE MILLION, AND THAT'S COMING UP TO ABOUT, THERE'S A LOT OF OTHER CHANGES IN IT, BUT THOSE ARE PROBABLY THE MORE SIGNIFICANT ONES THAT ARE RUNNING THROUGH YOUR GENERAL FUND BUDGET.

>> MS. STORES, SORRY TO PAUSE THERE AGAIN, EXPLAIN TO US THE THREE MILLION WORKING BUDGET THAT IT WAS ONE-TIME MONIES THAT WAS IN THE PREVIOUS YEAR'S BUDGET.

WHY IS THAT A REDUCTION ON THIS YEAR'S BUDGET, NOT JUST A CARRYOVER?

>> BECAUSE WE DON'T HAVE THAT ONE-TIME FUNDING AGAIN FOR THIS NEXT YEAR.

IT WAS ESSENTIALLY RESERVES THAT WE WERE SPENDING DOWN LAST YEAR.

>> IT GETS SWEPT INTO THE RESERVE.

IT DOESN'T GET SWEPT INTO THE BUDGET.

IS THAT A GOOD WAY TO EXPLAIN IT?

>> WE SPENT DOWN ONE-TIME RESERVES LAST YEAR.

WE DON'T HAVE THOSE SAME ONE-TIME RESERVES TO SPEND DOWN THIS YEAR BECAUSE THEY WERE ALREADY SPENT LAST YEAR.

>> PART OF OUR BUDGET THIS YEAR IS GIVEN THE SIGNIFICANT HISTORIC RAISES TO POLICE AND FIRE LAST YEAR, WE'RE HAVING TO REESTABLISH OUR 90-DAY RESERVE.

THIS YEAR, WE'RE HAVING TO RAISE THAT, OUR RESERVE NUMBER, BECAUSE THE NEEDED 90-DAY RESERVE FIGURE HAS GONE UP BECAUSE OF THAT.

>> YES. THEN THERE'S ALSO AN ADJUSTMENT THAT WE'LL GO OVER ON IT AS WELL.

YES. IT WAS ONE-TIME MONEY IN THE CURRENT YEAR, SO YOU DON'T HAVE THAT ONE-TIME MONEY TO SPEND AGAIN IN THE NEXT YEAR.

>> AGREED IN THE WAY OF, LIKE, IF WE HAD SPENT THE $3 MILLION, BUT WE DIDN'T SPEND THE THREE MILLION? WE SPENT THE REOCCURRING BUDGET? WE HAD SIX MILLION IN COUNCIL'S WORKING BUDGET, THREE MILLION ROUGHLY OF RATE-BASED BUDGETS.

WE SPENT ALL THAT, STREETS AND EVERYTHING ELSE.

>> YES. I THINK THERE WERE ALSO SOMEONE TIME DOLLARS.

I'D HAVE TO PULL UP THAT SPREADSHEET. I CAN.

>> WE HAD AROUND 2 MILLION THE ONE TIME BILL JUST APPROVE FOR ADDITIONAL STREET.

>> WE DID PAY DOWN THE 3 MILLION.

WE SPENT THE 3 MILLION.

>> IT WAS ON THE LAST.

>> THAT WAS THE ISSUANCE OF 2 MILLION.

THEN WHAT WAS THE OTHER MILLION DOLLAR? I CAN'T REMEMBER. THAT'S OKAY.

FOLLOW UP QUESTION, PAY STUDY, 2.2 MILLION.

I DIDN'T GO EXHAUSTIVELY THROUGH THE BUDGET, BUT I DID SPEND THREE DAYS ON IT SINCE WE GOT IT SATURDAY.

THE PAY STUDY, I GUESS, I'M NOT CLEAR, IS IT IN HERE?

>> YES. IT'S FACTORED IN.

WELL THE PAY STUDY ITSELF.

>> THE STUDY ITSELF. IT JUST SAYS IMPLEMENTATION OF THE PAY STUDY.

WHAT I'M LOOKING FORWARD IS LIKE THE STUDY, DOES IT IDENTIFY POSITIONS? DOES IT SHOW LIKE A WELDER IS MAKING $18 AN HOUR AND HE NEEDS TO MAKE 40, AND DOES IT GIVE YOU PERCENTAGES? HOW DID THAT COME TO YOU?

>> YES, SO WE DO HAVE A DOCUMENT THAT HAS, I THINK,

[01:10:03]

AN EXECUTIVE SUMMARY THAT WE COULD PROVIDE TO COUNSEL, IF YOU WOULD LIKE SOME OF THE DETAILS RELATED TO THE PAY STUDY.

BUT YES, IT LOOKED AT A LOT OF THE POSITIONS IN OUR CIVILIAN AREAS, BUT ALSO WE DID A STUDY ON POLICE AND FIRE AS WELL.

THEN IT PROPOSED NEW MINIMUMS THAT THOSE POSITIONS SHOULD BE PAID AT.

WHAT WE ARE RECOMMENDING IS IMPLEMENTING GETTING ANY EMPLOYEE THAT IS BELOW THAT MINIMUM AMOUNT UP TO THE NEW MINIMUM.

>> DOES THE PAY STUDY EXCLUDE THE RAISES FOR THE EMPLOYEES? MEANING, YOU IDENTIFY AN EMPLOYEE THAT'S GOING TO GET A 10% PAY INCREASE BECAUSE OF THE PAY STUDY.

YOU IMPLEMENT THAT TO THAT POSITION, WHICH ACCUMULATES TO 2.2 MILLION, THEN DID YOU GO FULLY ACROSS THE BOARD TO GET THE 8.6 AND THAT INCREASE THEN GOES TO THAT EMPLOYEE?

>> YES. BECAUSE OUR PAY STUDY WAS DONE ON CURRENT ANALYSIS OF OTHER CITIES, COMPARABLE CITIES AND CURRENT INDUSTRY, PRIVATE INDUSTRY.

IF WE DON'T DO SOME A CALL FOR THOSE EMPLOYEES, THAT WILL IF WE ADJUST THEM UP TO MINIMUMS, THEY WILL BE BEHIND START.

>> YOU'RE LOOKING AT IT LIKE IT'S IN THE REARS, YOU'RE LOOKING AT IT LIKE, WELL, IT'S CURRENT, BUT WE WANT TO PROJECT FOR NEXT YEAR.

>> YOU WOULD HAVE TO FACTOR THAT POSITION AS AN EXAMPLE, POSITION A NEEDS A 10% PAY INCREASE.

LET'S SAY THEY GO FROM I DON'T KNOW, 20-$22.

BUT THEN THERE'S AN ADDITIONAL TWO AND TWO OFFERED TO THAT EMPLOYEE AS WELL.

>> BECAUSE THE PAY STUDY, IT'S USING THIS YEAR'S DATA.

IF WE WERE TO JUST EMP IT ON ITS OWN, YOU WOULD BE BEHIND OCTOBER 1 AUTOMATICALLY.

OUR PROPOSAL HERE IS TO GET THE EMPLOYEES HERE BELOW THEIR MEN UP TO THE MEN, BUT THEN GIVE THEM THE CALL PLUS THE CHANCE AT A 2% MERIT.

THAT WAY, THEY'RE NOT AUTOMATICALLY BEHIND THE COMPETITION, OCTOBER 1.

WE HAVE A CHANCE TO KEEP UP GOING FORWARD.

THAT'S HOW USUALMENT PAY STUDIES.

>> DON'T TAKE THIS AS A NEGATIVE BECAUSE IT'LL COME ACROSS THAT WAY, BUT NOT INTENDED TO I MEAN, OUR GOAL IS TO BALANCE A BUDGET.

BE AS EFFICIENT WITH THE BUDGET AS WE CAN AND PAY OUR EMPLOYEES VERY WELL BECAUSE WELL PAID EMPLOYEES PRODUCE HAPPY CUSTOMERS AND DO GOOD WORK.

HOWEVER, THE PAY STUDY WAS SOMETHING THAT WE THOUGHT YOU WERE GOING OUT TO GET AND WOULD COME TO US, AND I DON'T KNOW THAT THAT IS NECESSARILY THE INTENTION.

WE'RE NOT LOOKING FOR AN EXECUTIVE SUMMARY.

I THINK WE WANT THE STUDY.

THEN WE WOULD WANT TO BE ABLE TO WORK WITH YOU ON THAT OF WELL, THESE ARE LABOR POSITIONS THAT DON'T LOCALLY IMPACT THIS.

WE'RE NOT AS PROTECTIVE VERSUS JUST A BROAD BRUSH.

WE TOOK THE PAY STUDY AND IMPLEMENTED HIS PAY STUDY.

DATA, OBVIOUSLY, CAN CHANGE WHETHER I WANT TO LOOK AT NEIGHBORING CITIES AND SISTER CITIES OR IF I JUST WANT TO PICK TEN WITHIN THE STATE OF TEXAS.

I JUST DON'T KNOW HOW THAT STUDY CAME TO YOU.

IS THERE AN INTENTION MAYBE IN THE NEXT MONTH TO BRING THAT STUDY TO COUNSEL AND LET US REVIEW IT?

>> THERE WAS NOT BECAUSE THAT WAS NOT RELAYED TO ME AS A REQUEST.

HOWEVER, WE'D BE HAPPY TO SHARE WITH YOU THE STUDY.

I DO FEEL THIS IS AN OBLIGATION OF THE CITY MANAGER PLACE ON ME TO IMPLEMENT THAT STUDY TO MAKE RECOMMENDATIONS, BUT WE'D BE HAPPY TO SEND YOU THAT STUDY IF YOU LIKE.

BUT WE'VE TAKEN THE STUDY, AND WE'VE TAKEN THE RECOMMENDATIONS AND INPUT IT IN YOUR BUDGET.

BUT IF YOU'D LIKE TO REVIEW IT, AND AGAIN, OVER THE MONTH OF AUGUST, MAKE RECOMMENDATIONS TO THE BUDGET BASED OFF CHANGES, I'D LIKE TO SEE TO THAT, WE CAN CERTAINLY TAKE THOSE.

>> YES, SIR. I THINK DEFINITELY THE ANALOGY OF PULLING A LEVER AND PUSHING ANOTHER ONE.

I THINK WE AS A BODY, DEFINITELY FEEL LIKE YOU CAN MAKE A CHANGE BASED ON A STUDY AND NOT SEE THAT OUTCOME OR THE CONSEQUENCE OF THAT OUTCOME UNTIL IT'S TOO LATE.

WE'D WANT TO FORECAST AS MANY OF THOSE.

DO WE SHIFT SOMETHING AS SOMEBODY OVERPAID OR UNDERPAID AS A BROAD BRUSH VERSUS LOCAL. [OVERLAPPING]

>> I WOULD HIGHLY RECOMMEND THAT YOU DO NOT GET INVOLVED IN INDIVIDUAL BOB SALLY SUE RAISES.

I WOULD RECOMMEND YOU NOT DO THAT.

WITH THE PAY STUDY IS MUCH MORE COMPLICATED THAN THAT.

BUT HOWEVER, I'LL SEND YOU THE STUDY, YOU'D BE HAVE TO LOOK AT THAT AND SEE IF YOU'D LIKE TO BRING IT BACK FOR A DISCUSSION, WE CAN DO THAT.

>> WE AND I'LL DEFER TO MY COUNCILMAN HERE IN A MINUTE.

WE WOULD NOT GET INTO AN INDIVIDUAL EVER.

WE WOULD LIKE TO SEE POSITION AND INCREASE.

LIKE, IF YOU HAVE AN EXISTING INCREASE OF, WHO KNOWS 20%.

WHAT'S THE HIGH? WHAT'S THE LOW? WHAT'S THE AVERAGE?

>> BECAUSE THE STUDY, IT LOOKS AT BY PERSON.

BECAUSE YOU CAN HAVE 20 EMPLOYEES IN THE SAME PAY RANGE.

BUT IF IF A PERSON IS ALREADY PAID WITHIN THE RANGE, THEY DON'T MOVE, WE LOOK AT THE PEOPLE WHO ARE BELOW THE RANGE.

THAT DOES GET DOWN TO THE INDIVIDUAL PEOPLE, THE BOB TO SALLY TO SUE.

IF BOB IS ALREADY WITHIN RANGE, BOB DOESN'T CHANGE OTHER THAN THE 2% PLUS 2%.

[01:15:02]

BUT IF SALLY IS BELOW THE RANGE, SHE MOVES UP TO THE MINIMUM.

THIS STUDY DOES LOOK AT IT FROM A PERSON BY PERSON BY PERSON STANDPOINT.

>> COUNCILMAN TIPPS.

>> MAYBE THERE'S A MISCOMMUNICATION BECAUSE YOU AND I MET AND I ASKED, WHAT WE'RE GOING TO HAVE THE PAY STUDY BEFORE BUDGET? THE ANSWER WAS YES, WE'D HAVE THAT DATA BACK.

I'D HOPED THAT WE COULD SEE IT TO MAYOR'S POINT SO THAT WE COULD TALK ABOUT THAT.

AGAIN, RUN THE ORGANIZATION. I GET THAT.

BUT I THOUGHT IT WOULD BE GOOD INFORMATION FOR US TO HAVE BEFORE WE WENT INTO BUDGET.

AS YOU KNOW, WHERE I SAT WITH THE WHOLE MERIT THING, AND I STILL WANT TO DISCUSS THIS TWO AND TWO.

BOB MAY BE ON THE PAY ROLLS FOR A LOT LESS THAN WHAT'S AVERAGE.

I'M OKAY IF BOB LEAVES IF HE'S A BAD EMPLOYEE.

THAT MAY BE A MESSAGE SENT OF, LISTEN, WE'VE GOT SALLY OVER HERE, WHO'S AN EXEMPLARY EMPLOYEE.

SHE IS GETTING PAID A LOT MORE.

I'M SORRY, BUT THAT'S JUST THE WAY THE WORLD WORKS.

YOU MAY BE VERY UNDERPAID FOR YOUR AVERAGE POSITION, BUT YOU MAY BE A VERY UNDERPERFORMING EMPLOYEE.

I MEAN, I'M SORRY, BUT THAT'S THAT TO ME IS GOOD WORK.

I MEAN, THAT'S JUST THE WAY WE DON'T WANT TO KEEP MEDIOCRE EMPLOYEES, AND I'M NOT SAYING WE HAVE A BUNCH. I'M NOT SAYING THAT.

BUT THAT'S THE WAY IT WORKS IN THE REAL WORLD IS, THE ONES THAT ARE UNDERPERFORMING AND INSTEAD OF FIRING PEOPLE, SOMETIMES THEY JUST CHOOSE TO LEAVE, WHICH IS REALLY BETTER FOR THE ORGANIZATION.

WE DON'T HAVE TO FIRE. NOT THAT I'M OPPOSED TO FIRING, IF THEY'RE UNDERPERFORMING EMPLOYEE.

TO SAY THAT, HEY, WE BROUGHT EVERYBODY UP TO A LEVEL OF WHATEVER'S AVERAGE OR WHATEVER THE PAY STUDY SAID, I DON'T KNOW THAT THAT'S GREAT.

I DON'T KNOW THAT THAT'S THE RIGHT MOVE OF NOW ALL WE'RE DOING IS WE'RE REWARDING THOSE MEDIOCRE EMPLOYEES AND AVERAGING OUT THOSE HIGHER PERFORMING EMPLOYEES.

THAT'S EXACTLY OPPOSITE OF WHAT WE WANT TO DO.

WE WANT TO ATTRACT A HIGHER PERFORMING EMPLOYEE, AND MAYBE BE ABLE TO PAY THEM HIGHER.

MAYBE THERE'S A BIGGER DISCREPANCY.

>> BEFORE WE GO BACK HERE, I THINK THE CONCERN OF PULLING THAT LEVER IS IS, DID WE DISENFRANCHISE, DISINCENTIVIZE GOOD QUALITY EMPLOYEES THAT NOW ARE LEAVING BECAUSE, THEY DIDN'T GET THE PAY INCREASE, AND THEY OUTWORK SALLY EVERY DAY.

THAT'S OUR CONCERN HERE, I THINK OF JUST IMPLEMENTING THIS IN THE BUDGET.

>> I MISUNDERSTOOD, COUNSELOR.

I THOUGHT YOU WERE ASKING ME, WILL WE HAVE THE STUDY COMPLETED BY THEN? THAT'S WHY I SAID, YES.

I DIDN'T UNDERSTAND YOU TO SAY THAT YOU WOULD HAVE IT PRESENTED TO THE COUNCIL BEFORE THE BUDGET. I APOLOGIZE FOR THAT.

>> IT WAS A MISCOMMUNICATION.

>> I MISUNDERSTOOD WHAT YOU MEANT THERE. I APOLOGIZE.

BUT NO, WITH THIS, WE DO HAVE A VERY RIGOROUS HR PROGRAM.

IF EMPLOYEES ARE UNDERPERFORMING, THEY ARE PUT ON PIPS, THEY ARE EVALUATED, AND THEY EVENTUALLY LET GO IF THEY UNDERPERFORM.

THAT PROCESS IS BEING ADDRESSED IN OUR NATURAL PROCEDURES.

THIS HERE IS JUST LOOKING AT WHAT IS THE FOR POSITION? WHAT IS THE MINIMUM PAY BASE OFF AVERAGES? IT'S A BASED OFF THE MARKET LOCALLY AND ABROAD.

BUT WE DID NOT LOOK AT IT AT A STANDPOINT OF, IS SALLY UNDERPERFORMING? WE DIDN'T LOOK AT THAT STANDPOINT.

THAT WAS BEYOND THE SCOPE OF THE PAY STUDY.

THAT'S SOMETHING THAT WE WOULD TAKE CARE OF THROUGH OUR NORMAL HR PROCESSES.

>> I UNDERSTAND THAT. BUT I WOULD SAY, INSTEAD OF MAYOR SAYING THIS BROAD BRUSH OF JUST BRINGING EVERYBODY UP, DO WE TALK TO THE DEPARTMENT HEADS AND SAY, I SALLY UNDERPERFORMING? SHE IS, I MEAN SHE'S PRETTY ROUGH.

WE'VE WRITTEN HER UP THREE TIMES.

WELL, WE HADN'T FIRED HER YET, BUT WHY WOULD WE GIVE HER A RAISE? I MEAN, I JUST DON'T THINK THAT'S BEING A GOOD STEWARD OF OUR PAY.

MAYBE THAT'S TOO TEDIOUS.

BUT IN THE BUSINESS WORLD, THAT'S JUST THE WAY IT WORKS.

>> I GUESS IN THE IDEA OF A PAY STUDY, I KNOW IT IS A RAID, BUT AT THE SAME TIME, IT'S MEANT TO GET YOU TO WHAT IS ACTUALLY A FAIR WAGE.

>> FOR A GOOD EMPLOYEE.

>> IF THEY'RE A BAD EMPLOYEE, THEY'RE NOT GOING TO STAY LONG ANYWAYS, BECAUSE IF DEPARTMENTS ARE GOING THEIR JOBS, THEY WOULD BE REMOVING THEM. THAT DOES HAPPEN.

I GIVE ORIENTATIONS EVERY TWO WEEKS, AND I HAVE CONSTANTLY 30-40 IN THE ROOM ALL THE TIME.

WE'RE CONSTANTLY CYCLING THROUGH EMPLOYEES, EITHER THEY LEAVE ON THEIR OWN OR WE HELP THEM LEAVE.

THERE IS A VERY RIGOROUS PROCESS TO HELPING BAD EMPLOYEES LEAVE.

NOW THERE'S A DIFFERENCE BETWEEN A BAD EMPLOYEE AND A STANDARD EMPLOYEE.

EMPLOYEE WHO'S DOING THE JOB DESCRIPTION.

THIS STUDY HERE IS SAY, IF YOU'RE DOING THE JOB DESCRIPTION, IF YOU'RE DOING WHAT THEY'RE SUPPOSED TO DO, I'M NOT TALKING ABOUT EXCEEDING THE JOB DESCRIPTION.

I'M SEEING IF YOU'RE DOING THE JOB YOU'RE SUPPOSED TO DO, THEN YOU SHOULD BE GETTING WHAT THIS JOB IS WORTH.

AGAIN, IF YOU'RE A BAD EMPLOYEE, THERE'S GOING TO BE A PIP, THERE'S GOING TO BE THOSE ISSUES, YOU WON'T STAY MUCH LONGER, BUT THE PAY STUDY THERE IS TO GET EMPLOYEES DOING THE JOB THE RIGHT PAY.

NOW, IF IF THEY GO BEYOND THE JOB, THAT'S FOR THE 2% MERIT, AND WE DO HAVE OPPORTUNITY IN OUR BUDGET TO ALSO GIVE BEYOND THAT IF WE HAVE AVAILABLE FUNDS.

THERE ARE WAYS OF REWARDING EMPLOYEES WHO DO GOOD WORK.

THERE ARE MECHANISMS TO REMOVE EMPLOYEES WHO ARE NOT DOING GOOD WORK.

>> ARE WE LOCKED INTO THE 2% COURT? IS THAT SOMETHING MANDATORY THAT WE HAVE TO DO?

>> NO, THAT'S PROPOSED IN THE BUDGET, BUT YOU CAN DO 1,3, 0.5.

>> WE GOT TO DO A 1% COLA, I GUESS, AND BUMP THREE TO MERIT. I MEAN.

>> CORRECT. YES. THAT'S AN OPTION, YES.

[01:20:03]

WE AGAIN, THIS IS JUST A PROPOSAL TWO AND TWO.

NOW REMEMBER, FIRE AND POLICE, THEY DON'T HAVE MERIT.

THERE'S THIS STRAIGHT OUT ADJUSTMENT FOR BEING HERE.

WE PROPOSE FIVE FOR POLICE AND 4% FOR FIRE.

THEY HAVE UNDER CIVIL SERVICE, THEY DON'T HAVE MERIT OPTIONS.

>> IN THE BUSINESS WORLD, AND I JUST SEE THAT WHEN PEOPLE ARE PERFORMING THE SAME JOB AND WITH THE COLA AND THOSE THINGS THAT THEY'RE COMING UP EQUALLY AS THE EXEMPLAR EMPLOY, IT REALLY FORCES THAT REALLY GOOD PERSON TO GO OUT LOOKING SOMEWHERE ELSE.

NOW MY OPINION IS WE'D WANT TO MAYBE CHANGE THAT OR AND RETAIN THOSE PEOPLE BY BEING HAVING THE ABILITY TO GIVE THEM THAT WHEN THE AVERAGE EMPLOYEES JUST GETTING A 2% BUMP.

IT KEEPS THAT THERE'S NOT A LOT OF DELTA THERE BETWEEN THE REALLY HIGH PERFORMING INDIVIDUAL AND THE AVERAGE PERFORMING INDIVIDUAL.

>> NOW, IF I COULD GIVE MY EMPLOYEES GREATER RAISES FOR PERFORMANCE, I'D BE ASKING FOR A 10% MERIT IF I COULD, AND I HAVE A BUDGET TO PROPOSE, I HAVE A BUDGET TO KEEP WITHIN.

THE BEST WE COULD DO IS TOTAL FOUR IN ORDER TO BALANCE OUR OVERALL BUDGET.

>> UNLESS SALLY ONLY GETS A 1% BECAUSE THAT'S WHAT COLA IS, AND THAT FREES UP THREE THAT I COULD HAVE GIVEN.

>> SURE.

>> NOW THAT THREE CAN ROLL OVER TO BOB OVER HERE, SO HE DIDN'T GET A FOUR. HE GOT SIX.

I MEAN, BECAUSE THE BUDGET IS THE BUDGET, IT'S JUST IT'S NOT LIKE IF WE DON'T SPEND IT, WE DON'T GET TO CAPTURE IT. WE GET TO CAPTURE IT.

I MEAN, FOR LOOKING AT FOUR FOR EVERYBODY, POSSIBILITY, WE GET TO CAPTURE THAT, BUT MAYBE THE UNDERPERFORMING EMPLOYEE DOESN'T GET THAT RIGHT.

>> I RECOMMEND THAT COUNCIL CONSIDER THIS DISCUSSION HERE FROM NEXT WEEK.

AGAIN, WE BUDGETED TWO AND TWO, BUT AGAIN, IF THE COUNCIL WISHES TO MAKE A CHANGE TO ONE AND THREE, THREE AND ONE, CUT IT DOWN TO TOTAL TWO, WE CAN SAY DISCUSS THAT NEXT WEEK DURING OUR BUDGET CHANGES.

COUNCILOR PRESCOTT, YOU HAD A QUESTION?

>> I DO. I DO HAVE A QUESTION.

BY ALL MEANS, IF WE WANT TO SEE THE STUDY, WE NEED TO GET THE STUDY.

BUT I DO NOT OR MAYBE I AM UNEDUCATED ON WHAT THE RESPONSIBILITY OF THIS GROUP OF INDIVIDUALS UP HERE IS.

I BELIEVE THAT IT IS YOUR RESPONSIBILITY TO BRING THE RAISES TO US.

I BELIEVE IT IS YOUR RESPONSIBILITY AND YOUR TEAM'S RESPONSIBILITY TO ENSURE THAT THE CITY OF AMARILLO IS GETTING THE BEST FOLKS, AND YOU'RE MOVING OUT THE UNDERPERFORMERS.

AM I WRONG ON THAT OR IS THAT OUR RESPONSIBILITY?

>> NOT YOUR RESPONSIBILITY, BUT I THINK IT IS OUR RESPONSIBILITY TO DEVELOP THE POLICY SO THAT THEY CAN FOLLOW.

IT IS OUR RESPONSIBILITY TO SAY, HEY, I DON'T KNOW IF I LOVE THE TWO AND TWO.

I DON'T KNOW THAT I LOVE BRINGING THE UNDERPERFORMING EMPLOYEE UP TO AVERAGE POSITION.

I TRUST GRAYSON TO DO THAT JOB, BUT I ALSO FEEL LIKE THAT WE OWE A DUTY TO INPUT THAT TO BRING ALL OF OUR EXPERTISE.

>> IS THAT ON AN ASSUMPTION, THOUGH, THAT AT THE POINT, ARE WE ASSUMING THAT WE'RE NOT DOING THAT? WE SHOULD BE ALWAYS STRIVING FOR THE BEST TEAM POSSIBLE.

>> ONE HUNDRED PERCENT. BUT IF WE HAVE SOMEONE THAT'S UNDERPAID, I AGREE AND THAT'S WHAT I SAID, WELL, MAYBE THE DEPARTMENT HEADS NEED TO GET INVOLVED TO SAY, HEY, LISTEN, I DON'T KNOW THAT A BIG BUMP FOR THIS PERSON IS IN THE BEST INTEREST OF THE ORGANIZATION.

>> BUT IS THAT NOT ALREADY PRE-ESTABLISHED?

>> IT IS.

>>I MEAN, YOU ARE ALWAYS LOOKING FOR IMPROVEMENT.

I THINK EVERYONE OUT THERE IS LOOKING FOR IMPROVEMENT.

JUST AS WE WOULD DO IN OUR BUSINESSES, WE HAVE TO FOLLOW THE CHAIN OF COMMAND.

I AGREE WITH WHAT YOU'RE SAYING, BUT THAT'S WHAT WE DO, BUT WHY IS THIS GROUP GETTING INVOLVED IN THAT?

>> I MEAN, I JUST THINK IT'S POLICY TO LOOK AT BECAUSE I DON'T KNOW.

I MEAN, I DON'T KNOW.

>> I WOULD SAY MY RECOMMENDATION AS YOUR MANAGER IS, IT'D BE POLICY TO GUIDE ME TOWARDS TWO AND TWO, THREE, AND ONE, ONE AND TWO.

I WOULD RECOMMEND NOT DIVING INTO THE DETAILS OF THE PAY STUDY.

THAT'S IMPLEMENTATION OF THE CITY MANAGER.

THE POLICY WAS GRAYSON DO A PAY STUDY.

IMPLEMENTATION IS THE ROLE THAT I THINK YOU'VE SET ME IN PLACE FOR.

>> I THINK THAT ONE THING I WOULD DISAGREE ON THAT IS IF THERE'S ALL OF A SUDDEN A DISCREPANCY OF 27% ACROSS THE BOARD FOR ACCOUNTANTS OR IT FOLKS OR WHATEVER.

WE KNOW WE HAVE HEADWINDS COMING WITH FIRM AND THINGS LIKE THAT.

WE HAVE TO BE PROACTIVE AND RETAIN THOSE EMPLOYEES OR WE'RE GOING TO LOSE THEM.

THEN WE'RE GOING TO BE REALLY IN A DIFFICULT STRATEGIC POSITION.

>> SURE. YES.

>> BUT AT THE END OF THE DAY, I WOULD BE STUNNED SITTING HERE THINKING THAT WE DON'T HAVE THE TRUST IN THESE GUYS.

TO MAKE SURE WE HAVE THE RIGHT TEAM.

I THINK THAT'S A WASTE OF OUR TIME, BUT I DO THINK THE POLICY SHOULD BE DELIVERED.

>> I WOULD SAY, TOO, TO YOUR POINT THERE ABOUT THE COMING, WHETHER IT'S FIRM OR SO FORTH, AND THE PAY STUDY DIDN'T TRY TO ADDRESS THE FORECAST IN THE FUTURE.

THE PAY STUDY IS TRYING TO ADDRESS THE CURRENT LOOKING BACKWARDS.

NO, I MEAN, THAT'S AN ADDITIONAL CONVERSATION, GETTING BACK TOWARDS, DO WE NEED TO ADD EVEN MORE TO THE PAY STUDY OR EVEN MORE TO THAT BASED OFF OF HEADWINDS WE SEE COMING? NOW, I DID NOT FORECAST THAT IN THIS PROCESS HERE.

WE JUST LOOKED AT WHAT IS THE CURRENT COMPARABLES TO GET US TO A FAIR WAGE BASED OFF COMPARABLES.

BUT NO, WE'D BE HAPPY TO LOOK AT HEADWINDS AND GO EVEN BEYOND THAT.

[01:25:01]

>> WELL, AND AT THE POINT THAT YOU HAVE MASSIVE LOSS IN ANY DEPARTMENT AND THE DEPARTMENT START FAILING, THAT'S YOUR RESPONSIBILITY?

>> AT THAT MOMENT, WE WOULD IDENTIFY THE WEAKNESSES, BUT LET US GIVE YOU THE POWER TO CONTINUE TO BUILD THE TEAMS. THAT'S MY THOUGHTS. ONE PERSON.

>> COUNSELMAN.

>> COUNSEL.

>> WELL, I WOULD SAY THE PAY STUDY AND WHAT WE'RE TALKING ABOUT IS NOT NECESSARILY ABOUT BOB.

WE'RE TALKING ABOUT TWO SEPARATE ISSUES HERE, I THINK.

WE'RE TALKING ABOUT JOB PERFORMANCE. I UNDERSTAND THAT.

WE'RE ALSO TALKING ABOUT GETTING SALARIES IN LINE.

I GUESS IF WE DO GIVE BOB A RAISE, AND BOB'S GOT A PROBLEM, BUT NONETHELESS, THAT MONEY IS SET ASIDE FOR BOB'S REPLACEMENT SO THAT WE'RE COMPETITIVE WITH IT.

I SEE THIS AS MORE JUST GETTING ALIGNMENT.

I THINK IT'S UP TO THE STAFF TO DETERMINE HOW TO IMPLEMENT IT.

I DON'T KNOW, IT JUST SEEMS WITH 2,400 EMPLOYEES.

I DON'T KNOW HOW MANY SALARIES ARE GOING TO CHANGE.

WE'RE NOT GOING TO GIVE HIM IT, BUT WE'VE GOT TO REMEMBER TO PUT IT BACK IN WHEN THAT PERSON COMES BACK IN, I THINK GETTING EVERYBODY UP, I DO THINK WE'RE GETTING A LITTLE BIT TOO DEEP IN THE WEEDS HERE, BUT I SEE IT REALLY IS, THIS IS JUST TO GET SALARIES IN LINE SO THEY CAN BE COMPETITIVE.

THE MERIT PART OF IT IS A WHOLE SEPARATE ISSUE, AND I AGREE.

WHATEVER WE WANT TO DO TO MERIT THAT, BUT I THINK THIS IS JUST THE PAY STUDY AND WHAT THEY'RE DOING IS TO GET THIS IN LINE.

WE CAN BE COMPETITIVE AND PAY A FAIR WAGE.

PEOPLE WANT TO COME WORK HERE AND WE RETAIN THEM.

>> THANK YOU, COUNSELMAN. IT'S PROBABLY THE SAME COMMENT.

WE'RE NOT LOOKING AT PERFORMANCE.

WE'RE LOOKING AT POSITIONS AND GETTING THOSE POSITIONS AT A FAIR?

>> WAGE.

>> CORRECT. THE PAY STUDY DOES NOT LOOK AT PERFORMANCE.

THE PAY STUDY LOOKS AT, WHAT IS THAT JOB DESCRIPTION WORTH IN THE MARKET?

>> BUT THEN ONCE YOU IMPLEMENT THAT, WE'RE ALSO LOOKING AT INCLUDING A TWO PLUS TWO.

>> CORRECT. THAT WOULD BE ON TOP OF THAT.

THOSE EMPLOYEES WHO HAVE MERITED IT WOULD MERIT, WHETHER IT'S 0.5, 1, 1.52, WHATEVER HE SPLIT THAT OUT AS.

I WANT TO MAKE SURE THAT'S CLEAR TOO.

YOU GIVE US AN EXTRA 2% MERIT RAISE.

WE DO DIVIDE THAT UP AND SO DISCUSS AN EMPLOYEE IS A GREAT EMPLOYEE OR A SLIGHTLY GREAT EMPLOYEE.

THEY DON'T GET ALL TWO.

IT'S LAST YEAR, WE DID LIKE, WAS IT? 1.5, 1, 1.5, 2, SOMETHING LIKE THAT.

EMPLOYEES BASED OFF THEIR PERFORMANCE GOT GREATER MERIT RAISES THAN OTHER EMPLOYEES DID.

THEN WITH THAT, WE ALSO HAD SOME SAVINGS AND I WAS VERY PROUD.

THIS IS MY FIRST TIME SEEING THE STAFF DO THIS, BUT VERY FEW EMPLOYEES GOT 2%.

IT'S VERY MUCH A BELL CURVE.

WITH THE SAVINGS FROM THAT, AGAIN, WE BUDGETED THE FULL 2% MERIT, WE WERE ABLE TO GIVE THE EXCEPTIONAL EMPLOYEES A HIGHER THAN 2% BECAUSE WE REALLY WANT TO RETAIN THEM.

THOSE ALL STARS, THE ONES THAT ARE JUST KICK AND BUTT.

WE GAVE THEM A GREATER THAN 2% BECAUSE WE HAVE THE BUDGET THERE BECAUSE WE WANT TO KEEP THOSE EXCEPTIONAL EMPLOYEES.

THOSE WHO WEREN'T EXCEPTIONAL, THOSE WHO WEREN'T GOOD.

THEY GOT A 2% COAL, AND THAT'S ALL.

>> HERE WOULD BE THE FORECAST.

>> I DEFINITELY AGREE WITH YOU, COUNCILMAN PRESCOTT.

UNDERSTANDING THE RESPONSIBILITIES ON THIS SIDE OF THE DICE, VERY IMPORTANT IN STRATEGY AND POLICY, AND THEN ALSO LEAVING THE STAFF IN THE POSITION OF STAFF SO THAT THEY CAN DO THEIR JOB.

BUT RIGHT NOW WE HAVE PERHAPS A SCHIZOPHRENIC POLICY IF WE IMPLEMENT BOTH.

I WOULD WANT TO MAKE SURE THAT WE DON'T DO THAT TO OURSELVES.

AN EXAMPLE WOULD BE A POSITIONAL INCREASE OF 10% WITH A 2% COLA, AND THEY DIDN'T GET A 2% MERIT.

YOU'VE NOW GIVEN AND LET'S TERM IT A LOW PERFORMING EMPLOYEE, A 12% INCREASE.

I BELIEVE THE NEGATIVE TO THAT IS THERE'S AN EMPLOYEE RIDING IN THE TRUCK WITH THEM OR WORKING NEXT TO THEM THAT GOT A 2% AND SAY, A 1%, AND THEY ARE DISENFRANCHISED IF THERE'S ALL SORTS OF THINGS IN TENURE AND LONGEVITY AND EVERYTHING ELSE THAT GOES INTO THAT.

IN THE WAY THAT WE DO HAVE A CLA AND A MERIT, DO WE HAVE THE METRICS ON HOW MUCH OVER THE LAST YEAR OF THE MERIT WAS GIVEN OUT LIKE THE AVERAGES? WE LOOK AT THAT AND SAY, WE AVERAGED 1.2% MERITS ACROSS THE BOARD, OR WE GAVE IT ALL OUT, WHICH I THINK IT'S GOOD IF WE ARE NOT GIVING, WELL, THEY GAVE US 2%.

WE JUST GAVE IT TO EVERYBODY.

I THINK IT'S GREAT IF WE ACTUALLY ARE MEASURING THAT.

>> MULTIPLE THINGS YOU COVERED THERE.

FIRST OFF, YES, IN THAT LAST PART THERE, YES, WE CAN GET THE NUMBERS FOR THAT BACKING UP, WHERE YOU SAID EARLIER.

AGAIN, IF I HAVE A LOW PERFORMING EMPLOYEE, THEN I WOULD EXPECT MY DEPARTMENTS AND HR TO BE ADDRESSING THAT.

I'M LOOKING AT A REGULAR BASED EMPLOYEES DOING THE JOB THAT THEY ARE ASSIGNED TO DO.

NOW, THERE'S THAT THEN YOU HAVE HIGH PERFORMERS.

REGULAR BASS EMPLOYEE MAY NOT GET THE MERIT RAISES FROM THERE.

THE PAY STUDY IS JUST GETTING THE JOB DESCRIPTION, THE REGULAR BASE TO WHAT'S MARKET.

[01:30:02]

AGAIN, WE DIDN'T FACTOR IN WHEN WE DID THE PAY STUD, WE DIDN'T GO IN AND FIGURE OUT WHO IS UNDERPERFORMING BECAUSE THAT HR SHOULD BE TAKING CARE OF THAT EMPLOYEE SHOULDN'T BE THERE ANY LONGER.

THIS IS JUST WHAT IS THAT JOB DESCRIPTION WORTH IN THE MARKET.

NOW, WITH THAT, WE HAD TO TAKE IT TO A STEP BEYOND THAT TO WHERE I HAVE EMPLOYEES IN THAT RANGES WHO ARE AT DIFFERENT LEVELS.

ONE EMPLOYEE GOT A LITTLE HIGHER ADJUSTMENT THAN THE OTHER ONE DID BECAUSE THEY WERE FURTHER BELOW THE MINIMUM.

IF I HAVE FIVE EMPLOYEES BELOW THE MINIMUM, AND EACH ONE IS A DOLLAR LESS THAN THE OTHER ONE, WELL, THEN THE HIGHER ONE GOT A DOLLAR INCREASE, THE LOWER ONE GOT FIVE DOLLARS INCREASE.

IT'S NOT A MEASURE OF WHETHER THE EMPLOYEE IS NECESSARILY A GOOD EMPLOYEE.

IT'S MORE OF GETTING THEM TO THAT MINIMUM THERE.

IT'S A VERY COMPLICATED PROCESS.

TO YOUR MIDDLE POINT THERE, WE LOOK AT COMPRESSION AS WELL BECAUSE THAT'S AN ISSUE, AND THAT'S HARD TO ADDRESS BECAUSE SOMETIMES YOU MAY END UP GOING BEYOND YOUR MAX.

YOU HAVE TO BE CAREFUL WITH THAT.

I DEALT WITH THIS MY LAST TWO TOWNS.

EVERY POSITION DOES HAVE A MAX EVENTUALLY.

IF YOU TRY TO MAINTAIN A COMPRESSION BY MOVING A ONE EQUALLY, YOU COULD PUSH SOME BEYOND THE MAX, AND YOU COULD ALSO DOUBLE YOUR BUDGET.

>> MAYBE YOU COULD GIVE US A LITTLE BIT MORE ABOUT THE PAY STUDY, AND DID IT COME BACK AND DID WE LOOK AND COMPARE TO STAFFING? WHERE YOU ARE UNDERPAYING, FOR YOUR GIVEN MARKET, YOU SHOULD BE SHORT EMPLOYEES.

YOU SHOULD HAVE HIGH TURNOVER.

DID YOU SEE THAT IN THE PAY STUDY?

>> SAY THAT AGAIN. I'M SORRY.

>> WELL, DID YOU SEE IN THE PAY STUDY ANYTHING THAT WAS A COMPARABLE TO OUR ORGANIZATION? WHERE WE ARE UNDERPAYING LOCALLY, YOU WOULD SEE HIGHER TURNOVER, AND YOU WOULD SEE OPEN POSITIONS.

LET'S TAKE CDL TRUCK DRIVER, FOR EXAMPLE.

THAT WAS AN ISSUE HERE. WE WERE PAYING MAYBE EVEN LESS THAN $18 AN HOUR.

WE NEEDED TO BE PAYING 22, 25 AN HOUR TO KEEP THAT EMPLOYEE AND SO WE DIDN'T HAVE TRUCK DRIVERS, AND WE COULD SEE THAT.

WHAT DID YOU COMPARE THE PAY STUDY TO ORGANIZATIONALLY?

>> THERE ARE SOME INTERNAL COMPARISONS DONE.

I'D HAVE TO GET WITH HR TO ANSWER THAT QUESTION MORE CAREFULLY BECAUSE ONE OF THE THINGS WITH THIS IS THAT YOU DON'T COMPARE LIBRARIANS TO TRUCK DRIVERS.

YOU DON'T COMPARE OFFICERS TO STREET WORKERS.

I KNOW WHILE SOME EMPLOYEES THAT LOOK AT THEIR PEER ACROSS THE CUBICLE, THEY'RE DOING TWO DIFFERENT JOBS.

WE TRY TO COMPARE JOB DESCRIPTION TO JOB DESCRIPTIONS.

THAT'S WHY WE LOOK AT THE WHATEVER CITIES WE USE, AND WE ALSO LOOK AT LOCALLY.

I DON'T NECESSARILY LOOK AT LUBBOCK WHEN IT COMES TO CDL DRIVERS.

I LOOK AT WHAT IS THE LOCAL MARKET DOING.

AGAIN, I MAY MISUNDERSTAND YOUR QUESTION, BUT I DON'T COMPARE THE CDLS VERSUS UTILITY OPERATORS VERSUS THE MANAGERS.

>> LET ME RESTATE BECAUSE IF THAT'S WHAT YOU'RE TAKING AWAY, I THINK I AM MISCOMMUNICATING.

I AGREE WITH YOU, IT DOESN'T PAY THE SAME TO BE A POLICE OFFICER AS IT DOES.

>> FIRE FIGHT OR SOMETHING OF THAT, YEAH.

>> WELL, OR A DIFFERENT POSITION, RIGHT? IF YOU ARE IN THE ICE DEPARTMENT AND YOU'RE MOVING ICE AROUND ALL DAY, THAT DOESN'T PAY THE SAME AS BEING A POLICE OFFICER.

NOT TRYING TO COMPARE DIFFERENT DEPARTMENTS.

WHAT I'M ASKING FOR IS THIS PAY STUDY THAT YOU HAVE NOW IMPLEMENTED OR ARE PROPOSING TO IMPLEMENT 2.2 MILLION IN IT AND COULD HAVE A NEGATIVE EFFECT.

WE'RE TRYING TO FORECAST, WOULD IT HAVE ANY NEGATIVE EFFECTS IF WE JUST BLANKET IT IN? I THINK MY ISSUE IS IS LIKE, I HADN'T SEEN THE PAY STUDY, SO I DON'T KNOW THE CONFIDENCE IN IT.

WHAT I'M ASKING FOR IS ADDITIONAL EDUCATION MAYBE IT'S A REALLY GOOD PAY STUDY.

MAYBE IT DID SOME COMPARABLES.

MAYBE IT SHOWS, HEY, IN THESE TYPE OF DEPARTMENTS, THESE POSITIONS, YOU'RE CHRONICALLY UNDERSTAFFED, AND THE REASON BEING IS YOU'RE PAYING 10% BELOW MARKET, THOSE WOULD BE THE THINGS THAT I WOULD HOPE WE GOT FROM THE CONSULTANTS.

IF WE COULD GET SOME OF THAT, PLUS, IF WE COULD GET HIGHS AND LOWS, THE GREATEST INCREASE IS 30%, THE LEAST INCREASE IS 3%, WHATEVER THAT IS, HOW MANY OF THOSE ARE GOING OUT? WITH CAUTION, I WOULD SAY, LIKE, ARE WE GOING TO DISENFRANCHISE ANY OF OUR CURRENT EMPLOYEES IF WE MAKE THESE BIG BUMPS? DIRECTIONALLY, ARE THESE DIRECTORS ABLE TO CONTROL THAT? BECAUSE THEY KNOW THEIR TEAM BETTER THAN ANYONE.

>> AGAIN, THE PAY STUDY IS NOT MERIT BASED, AND SO THE DIRECTORS WILL NOT BE DIVING UP THE RAISES AMONG THEIR EMPLOYEES THERE.

BUT SECONDLY, YES, IN MY EXPERIENCE HAVING DONE THREE OF THESE NOW.

THERE WILL BE NEGATIVE. YOU HAVE EMPLOYEE WHO'S UPSET THEY DIDN'T GET AS MUCH OF A RAISE AS EMPLOYEE Y.

THAT IS UNAVOIDABLE BECAUSE EVERY EMPLOYEE IS AT A DIFFERENT STAGE IN THE RANGE.

YOU'RE GOING TO HAVE WINNERS AND GREATER WINNERS.

BUT AS YOU KNOW WITH PEOPLE, THEY WANT TO BE THE GREATEST WINNER.

THIS IS WHY I ADVISE THE COUNSEL NOT TO DIVE INTO THOSE DETAILS.

THIS IS WHAT YOU HAVE ME FOR.

I WILL TAKE THOSE ARROWS.

I'LL BE THE BAD GUY BECAUSE I'M THE ONE TO HELP WITH MY STAFF,

[01:35:01]

MANAGE THOSE ADJUSTMENTS THERE BECAUSE YOU WILL HAVE A NEVER ENDING LIST OF REQUESTS FROM STAFF ABOUT I WANT MORE OR I THINK YOU DIDN'T COMPARE ME AGAINST THE RIGHT CITY, OR I'M ACTUALLY DOING THIS, THAT JOB SECTION DOESN'T COMPARE.

THAT DOES NEVER END.

YOU HAVE TO MAKE SOME SWEEPING OVERARCHING DECISIONS ON PAY STUDIES.

OTHERWISE, YOU'LL BE DOING BETWEEN NOW AND FOREVER.

>> LET ME GIVE A FINAL REMARK HERE, AND THEN WE'LL STILL CONTINUE ITS IMPORTANT CONVERSATION BECAUSE IT GOES TO THE STRATEGY, AND IT'S A BUSINESS STRATEGY.

I FEEL LIKE PREVIOUS COUNSEL IMPLEMENTED A BUSINESS STRATEGY THAT'S NOT TYPICALLY SEEN A COLA WITH A MERIT.

I THINK WE SEE IT A LOT THAT WAY, THAT WE WANT TO INCENTIVIZE GOOD HARD WORKERS.

WE WANT TO PAY THEM MORE.

I DON'T KNOW THAT THE PAY STUDY WHEN IT WAS PROPOSED TO ME AND I WAS IN FAVOR OF, HEY, LET'S GO GET A PAY STUDY.

I THOUGHT WE WERE GOING TO GET COMPARABLES.

WE WERE GOING TO IDENTIFY MARKET THINGS SO WE COULD SEE INTERNALLY WHERE WE NEEDED TO GO.

I DIDN'T UNDERSTAND THAT IT WOULD BE IMPLEMENTED ON A BLANKET APPROACH, AND I THINK IT CONTRADICTS THE MERIT APPROACH.

I THINK RIGHT NOW WE HAVE A VERY STRONG BUSINESS SENSE IN HOW WE WANT TO TRY TO TREAT THESE EMPLOYEES IN A PERFORMANCE BASED ATMOSPHERE AS MUCH AS POSSIBLE IN BUREAUCRACY.

BUT THEN I THINK THIS GOES AGAINST THAT.

I'M NOT SURE THAT THE IMPLEMENTATION OF THE PAY STUDY WAS WHAT I EXPECTED.

I THOUGHT THE PAY STUDY WOULD JUST BE A RECOMMENDATION AND THAT YOU WOULD BE ABLE TO FORECAST THAT IN KIND OF BLOCKS OF WHAT DEPARTMENTS WE WERE CHRONICALLY UNDERSTAFFED AND THAT WE NEEDED TO LOOK AT.

>> A COUPLE OF POINTS ON THIS.

>> COUNCILMAN.

THE CITY HAS NOTHING WITHOUT EMPLOYEES.

>> NOTHING. WE JUST HAVE A BUNCH OF TRUCKS, WE HAVE A BUNCH OF FACILITIES.

WE HAVE NOTHING UNLESS WE'RE TAKING CARE OF STAFF.

THAT'S YOU GUYS' RESPONSIBILITY.

YOU HAVE TO TAKE CARE AND CONTINUE THE OPERATIONAL CONTINUITY OF THIS.

CAN YOU CLARIFY, MR. MAYER ON SCHIZOPHRENIC? I KNOW THAT'S A BIG WORD.

>> I JUST THINK IT COMPLEX.

I THINK IT'S HAND IN HAND WITH KIND OF IT CONTRADICTS THE STRATEGY THAT I THINK WE HAVE IN PLACE WITH MERIT.

WHAT I'M HEARING COUNCILMAN TIPPS SAY IS, WE MIGHT EVEN WANT TO CONSIDER A 1% COLA AND A 3% MERIT, OR A 4% MERIT, LIKE, WE WANT TO DRIVE THE PERFORMANCE BASE AS MUCH AS POSSIBLE.

IT CONTRADICTS, IT DOESN'T PARALLEL.

I THINK WHERE WE WERE COMING FROM.

AS A BODY, DO WE WANT TO MOVE AWAY FROM MERIT BASE? DO WE HAVE A DIFFERENT PHILOSOPHY OF RISING TIDE RAISES ALL SHIPS? LET'S JUST BLANKET IT.

OR ARE WE IMPLEMENTING A MERIT BASE THAT ALSO JUST GOES WITH A A BLANKET APPROACH?

>> I THINK WHAT WE'RE DOING IS WE'RE DOING A ONE TIME EXERCISE TO GET SALARIES IN LINE.

I DON'T THINK IT HAS ANYTHING TO DO WITH MERIT.

WE STILL HAVE A MERIT BASED SYSTEM.

I THINK WE'VE GOT APPLES OVER HERE AND ORANGES OVER HERE.

AGAIN, I KNOW WHEN WE GET TO THE ICE DEPARTMENT, MAYBE WE NEED TO PUT IT IN THE PARKING LOT, COME BACK AND READDRESS IT AT SOME POINT BECAUSE WE'RE REALLY SPENDING, WE'RE NOT EVEN HALFWAY THROUGH THE PRESENTATION, BUT I THINK THE MERIT, I THINK WE ARE DOING MERIT.

WE INSTITUTED THAT LAST YEAR.

I THINK WHAT WE'RE DOING HERE IS WE'RE LOOKING AT OPPORTUNITIES TO MAKE SURE OUR SALARIES IN LINE HAS NOTHING TO DO WITH THE EMPLOYEE.

IT'S THAT POSITION TO BE ABLE TO DO THAT AND SET THAT MONEY ASIDE.

WHEN WE'RE READY TO HIRE, WE'VE ALREADY ESTABLISHED THAT LEVEL.

>> WELL, I GUESS TO CLARIFY. MAYBE THIS WAS MISUNDERSTANDING AS WELL.

YOU'RE SETTING AN ACCOUNTING 1, ACCOUNTING 2, ACCOUNTING 3, LIKE, THAT'S WHERE THEY COME IN, THAT'S WHERE THEY ARE.

BUT I THINK WHAT WAS CONFUSING IS WHEN YOU SAID, WE'VE GOT BOB, SALLY, AND WHOMEVER.

IT'S LIKE YOU ASKED US, DON'T GET INVOLVED IN THESE INDIVIDUAL, LIKE, I DON'T THINK ANYBODY UP HERE WANTED TO.

BUT I GUESS YOU MADE IT SOUND LIKE IT WAS INDIVIDUAL, WHICH I KNOW THEY DID LOOK AT THE INDIVIDUAL.

BUT WHAT YOU'RE SAYING, I GUESS, WITH THE PAY STUDY IS TO SET STANDARD OF AN ACCOUNTING 1, AND ACCOUNTING 2, AND ACCOUNTING 3.

THIS IS WHERE WE NEED TO BE WITH THESE PEOPLE WITH THIS MUCH EXPERIENCE.

DON'T TAKE THIS WRONG.

WE'RE NOT LOOKING AT THE INDIVIDUAL, BUT YOU SAID WE WERE LOOKING AT THE INDIVIDUAL.

I THINK THAT THAT'S WHERE I GOT KIND OF LIKE, I LOVE THAT.

>> NO, IN A PAY STUDY, YOU'RE LOOKING AT POSITIONS, BUT AGAIN, THE IMPLEMENTATION IS BY LOOKING AT INDIVIDUALS.

BECAUSE LIKE I SAID BEFORE, EVERY INDIVIDUAL IS AT A DIFFERENT POINT IN TIME IN THAT RANGE AND SO THAT'S WHY YOUR 2.2 MILLION IS A COMBINATION, YOUR CULMINATION OF WHAT IT DOES TO BOBBY AND SALLY, AND SUE, WHO ARE BELOW MEN.

BECAUSE THEY'RE AT DIFFERENT STAGES IN THE RANGE TO GET TO MEN.

STUDY LOOKS AT AN ACCOUNTANT 1.

DOESN'T LOOK AT BOB, BUT THEN WE HAVE TO LOOK AT, ACCOUNTANT 1 CONSISTS OF BOB, SALLY, SUE, AND JIMMY.

WE HAD TO THEN ADJUST THOSE FOUR.

WELL, JIMMY'S ARE ABOVE THE MEN, SO HE'S GOOD.

THE OTHER THREE ARE BELOW THAT, SO WE HAVE TO SEE HOW FAR BELOW THAT.

[01:40:03]

>> YOU'RE SAYING THE IMPLEMENTATION, WE START LOOKING AT THE INDIVIDUAL.

BUT AGAIN, THE PAY STUDY WAS THE PAY STUDY, IT HAD NOTHING TO DO WITH THE INDIVIDUAL?

>> TO POINT, THAT PAY STUDY IS SETTING THE MINIMUMS THAT WE'RE GOING TO PAY FOR ALL OF OUR POSITIONS.

THE NEXT PERSON THAT WE HIRE INTO THAT POSITION WILL BE PAID AT THAT.

IF WE ALREADY HAVE PEOPLE IN THAT POSITION, THEY NEED TO ALREADY BE PAID AT THAT.

I THINK GRAYSON'S POINT, IF THOSE EXISTING EMPLOYEES ARE NOT ALREADY PAID AT WHAT WE'RE GOING TO HIRE THE NEXT PERSON IN AT, WE NEED TO GET THEM UP TO THAT.

>> I WAS TRYING TO ADDRESS WHEN I WAS TALKING ABOUT INDIVIDUALS, WE WERE TALKING ABOUT WHETHER WE LOOKED AT MERIT OR WHETHER UNDERPERFORMING OR OVERFORMING.

THAT'S WHY YOU THEN DIVE INTO INDIVIDUALS AT THAT POINT.

IF WE'RE LOOKING AT THE PAY STUDY IN TERMS OF WHETHER THEY'RE UNDERPERFORMING, THAT THEN REQUIRES YOU TO DIVE INTO BOB, SALLY, AND SUE ON THAT STANDPOINT.

THAT'S WHY THE STUDY DIDN'T DO THAT.

THAT'S WHAT I WAS TRYING TO SAY THERE WITH THAT.

>> I WASN'T DONE A MINUTE AGO.

I THINK IT'S A GROSS INJUSTICE FOR THE FIVE OF US TO BE SITTING HERE.

DIVING IN SO DEEP INTO THESE INDIVIDUALS THAT WE DON'T EVEN KNOW WHAT THEIR WORK RECORD IS, WHAT THEIR REPORTS, HOW THEIR REVIEWS HAVE BEEN DONE.

IT'S A GROSS INJUSTICE AT THIS LEVEL FOR US TO BE DIVING THIS DEEP INTO IT, AND THESE INDIVIDUALS.

>> BUT WE'RE NOT. THAT'S WHAT I'M SAYING IS NOT WHAT I'M ASKING IS HOW IS THIS IMPLEMENTED? I'M NOT DIVING DEEP. I DON'T WANT TO LOOK AT ANYBODY'S PERSONNEL RECORD.

I DON'T WANT TO LOOK HOW MANY TIMES ARE WRITTEN UP.

I DON'T WANT TO DO THAT. IF YOU'RE HEARING THAT [OVERLAPPING]

>> I DID HEAR THAT EARLIER.

>> THAT'S NOT IT AT ALL.

>> THAT'S NOT IT AT ALL, BUT I DO WANT TO LOOK AT THE POLICY OF HOW WE'RE DOING IT.

I THINK CLARIFICATION OF THIS HELPS, BUT WHEN I HEAR ABOUT THESE INDIVIDUALS, IT MADE ME THINK A LITTLE BIT DIFFERENT OF THIS PAY STUDY, AND I GET IT THAT WE'RE SETTING THESE MINIMUM WHEN WE HIRE SOMEONE ON AS AN ACCOUNTING 1, OR A WELDER 1.

THIS IS THE MINIMUM THAT YOU'RE GOING TO GET PAID, AND IT JUST SO HAPPENS, WE HAVE PEOPLE THAT MAY BE BEING PAID BELOW THAT, BUT THAT'S BELOW WHAT MARKET SHOULD BE.

I'M NOT LOOKING TO GO DELVING INTO THIS.

I DON'T THINK ANYBODY UP HERE WANTS TO DO THAT.

>> I THINK IT'S OUT OF OUR BILL HOUSE. AGREE WITH THAT.

>> I'D WANTS TO DO THAT.

>> I'M JUST THINKING THAT THIS PAY STUDY IS GOING TO IDENTIFY THE POSITIONS THAT ARE UNDERPAID THROUGHOUT THE CITY?

>> EXCLUDING POLICE AND FIRE.

>> THEY'RE ON THEIR OWN.

>> THEY ARE NOT INCLUDED IN THIS $2.2 MILLION, BUT WE DID LOOK AT THEM THROUGH THE PAY STUDY AS WELL.

THAT IS HOW WE CAME UP WITH THE RECOMMENDATION OF 5% FOR POLICE AND 4% FOR FIRE TO GET THEM MORE ALIGNED WITH COMPARABLE CITIES IN THEIR VARIOUS RANKS.

>> HAVE ANY IDEA HOW MANY POSITIONS WE'RE TALKING ABOUT WITHIN THE CITY? OUTSIDE OF THE POLICE AND FIRE, THAT GIVES US ABOUT 1,800 EMPLOYEES.

HOW MANY ARE UNDERPAID?

>> I CAN WORK ON GETTING THOSE STATS FOR YOU.

I APOLOGIZE I DON'T HAVE THEM ON HAND.

>> I'VE SEEN THE NUMBER. WE HAVE TO GIVE THAT BACK TO YOU.

THE NICE THING IS THIS STUDY CAME BACK FAR BETTER THAN I THOUGHT IT WAS GOING TO AND SO WE HAD ANECDOTAL INFORMATION.

AGAIN, IF YOU TALK TO BOB SALLY AND SUE, THEY'RE ALL GOING TO SAY THEY'RE UNDERPAID.

ANECDOTALLY, YOU THINK WE'RE WAY BEHIND.

THANKFULLY, THE STUDY SHOWED, NO, YOU'RE NOT.

WE WERE BEHIND IN SOME POSITIONS BUT OTHERS WE WERE GOOD.

THIS NUMBER I THOUGHT IS MORE CLOSE TO SIX MILLION IS WHAT I THOUGHT BUT THANKFULLY, IT WAS NOWHERE NEAR THAT.

>> AS A REMINDER, THIS NUMBER INCLUDES BENEFITS AS WELL.

IT'S NOT JUST SALARY ADJUSTMENTS.

WE ALSO HAVE TO OBVIOUSLY PAY THE BENEFITS ASSOCIATED.

>> THAT'S A GOOD POINT THERE, YES.

BECAUSE AGAIN, IF YOU RAISE THE PAY, YOU HAVE TO ALSO BUDGET FOR THE SOCIAL SECURITY AND ALL THOSE THINGS.

>> I THINK IT GOES BACK TO THE MAYOR'S ORIGINAL REQUEST THAT GETTING TO SEE WHAT RESULT WAS WOULD PROBABLY BE.

>> THAT WAS MY MISUNDERSTANDING.

I WASN'T AWARE IF I MISSED IT, I APOLOGIZE, BUT WE WILL GET YOU THE COPY OF THE INFORMATION TO YOU ALL.

WE'LL SEND IT YOU ALL IN YOUR EMAIL.

>> JUST ONE CLARIFYING POINT.

THANK YOU FOR CLARIFYING WHAT YOUR INTENT WAS COUNCILMAN REMEMBER.

2.3 PERCENT WAS THE STANDARD IN AMARILLO LAST YEAR FOR RACES, SO WE LOOK AT MULTIPLE COMPANIES.

IN MY COMPANY WE LOOK AT EVERYONE AND WHAT THE MARKET BEARS BECAUSE I DON'T WANT TO LOSE ANYONE IN MY OWN PERSONAL COMPANY.

2.3 PERCENT WAS THE STANDARD IN AMARILLO LAST YEAR AND THAT IS ALL THE MAJOR EMPLOYERS, JUST TO SEE WHAT THAT WAS.

IF WE ARE NOT KEEPING UP WITH THAT, WE'RE CONSTANTLY GOING TO HAVE EROSION OF CRITICAL FOLKS AND THAT'S JUST JUST AN OBSERVATION.

>> I WOULD AGREE AND THAT'S GOOD INFORMATION AND I THINK, BUT AGAIN, WE CAN GET INTO THE WEEDS OF THIS, BUT POLICY IS, I'M NOT GIVEN MY POOR PERFORMING EMPLOYEE A 2%? NO. BECAUSE IT'S AVERAGE, I'M NOT GIVING EVERYBODY THAT BECAUSE JUST LIKE IN YOUR ORGANIZATION, THERE MIGHT BE SOME THAT YOU PROBABLY DON'T WANT TO STICK AROUND AND YOU CAN HANDLE

[01:45:03]

THAT THROUGH PERFORMANCE REVIEWS AND THOSE THINGS, BUT SOMETIMES YOU SEND A MESSAGE OF NOT INCREASING AND THEY GET THE MESSAGE, MAYBE THEY GO ON THEIR OWN.

DOES THAT MAKE SENSE? I AGREE WITH YOU, SO THAT'S GOOD INFORMATION WITH THE 2.3%, AND I AGREE WE'VE GOT TO KEEP PACE, BUT I DON'T ALWAYS BELIEVE THAT EVERYBODY DESERVES THAT. IS I GUESS WHAT I'M SAYING? WE MAY DIFFER ON THE POLICY, AND THAT'S OKAY BECAUSE I WANT TO RETAIN THE GOOD ONES, AS DOES EVERYONE ELSE.

I THINK EVERYBODY CERTAINLY GRAYSON WANTS TO HAVE A GREAT PERFORMING.

>> GET RID OF GET RID OF THE BAD FRUIT BY ALL MEANS AND IT SHOULDN'T COME DOWN TO A RAISE.

THEY SHOULD BE GONE REGARDLESS OF WHAT THE RAISE IS GOING TO BE.

>> AGREE. AGAIN, THIS HAS BEEN GREAT DISCUSSION, AND I WOULD ENCOURAGE THAT WE MIGHT GET BACK ON TRACK WHETHER WE HAVE A LOT TO COVER.

AGAIN, THIS HAS BEEN A GOOD THING.

YOU'LL HAVE AT LEAST A WEEK TO THINK ABOUT THE SCUTCH ACES MORE BECAUSE WE WILL HAVE A FOLLOW UP NEXT WEEK, AND I'M SURE WE CAN TALK ABOUT ONE VERSUS THREE, THREE VERSUS ONE, FIVE FOR PLEASE, FOUR FOR FIRE, AND WE CAN GET BACK ON TRACK WITH THAT.

>> I APPRECIATE THE CONVERSATION.

I'LL HIGHLIGHT THE FACT THAT THIS IS GOOD CHECKS AND BALANCES.

I DON'T EVER WANT TO BE IN A POSITION WHERE YOU GUYS WOULD FEEL LIKE US QUESTIONING SOMETHING WOULD BE WANTING TO GET INTO THE PERSONNEL ISSUE.

WE WANT TO RUN THE CHECKS AND BALANCES AND LET YOU CONTINUE TO MAKE THE RECOMMENDATIONS AND THEN AT THE END OF ALL THIS, WE'LL AGREE.

RIGHT NOW, WE CAN AGREE THAT LUNCH IS HERE. YES, MA'AM.

>> IF I COULD GO THROUGH TWO MORE SLIDES, WE'RE AT A REALLY GOOD STOPPING POINT, AND THEN MAYBE WE COULD BREAK AND ALSO WOULD ASK IF POSSIBLE, IF COUNCIL IS UP TO IT EITHER A VERY SHORT LUNCH OR IF Y'ALL COULD EAT AND I COULD CONTINUE PRESENTING, THAT WOULD BE GREAT BECAUSE WE HAVE A LOT OF GROUND TO COVER.

>> COUNCIL, Y'ALL GOOD TO COME BACK OUT HERE AND SIT DOWN AND EAT.

STAFF ARE YOU ALL GOOD?

>> AS LONG AS THE CAMERA IS NOT FOCUSING, BUT ALSO IT IS TIME FOR US EATING.

>> KRISTEN'S GOT YOU COVERED.

SHE WON'T CATCH ANY OF US EATING.

>> MS. STORES, THANK YOU FOR YOUR PATIENCE THROUGH THAT DISCUSSION.

IF YOU'LL GET US TO A GOOD STOPPING POINT, THEN WE'LL GO.

>> JUST A COUPLE MORE QUICK SLIDES, AND THEN WE WILL BREAK, AND THEN WHAT WE CAN DO IS PICK UP ON PROPERTY TAXES WHILE YOU GUYS ARE EATING.

THAT'LL BE GOOD TO GRAB SOME CAFFEINE WHILE YOU'RE EATING.

THIS SLIDE HERE IS JUST QUICKLY LOOKING AT THE TREND OF OUR GENERAL FUND EXPENDITURES OVER A 10 YEAR TIME PERIOD.

WE'VE GROWN FROM ABOUT 176 MILLION TO $271 MILLION.

THE COMPOUNDED ANNUAL GROWTH RATE IS ABOUT 5% EACH YEAR.

THIS BREAKS IT DOWN BY CATEGORIES.

IT'S HARD TO FOLLOW THE COLORS THERE, BUT IT'S JUST BREAKING IT DOWN BY THE DIFFERENT SECTORS.

YOU CAN FOLLOW THE PUBLIC SAFETY ONE, THAT TOP LINE A LITTLE EASIER JUST BECAUSE IT'S THE LARGEST COMPONENT OF OUR BUDGET IN THE GENERAL FUND.

THEN WE WILL COME BACK TO THIS SLIDE ONCE WE LOOK AT CAPITAL IN MORE DETAIL, BUT THIS IS JUST A SLIDE IN HERE TALKING A LITTLE BIT ABOUT THE 10 YEAR HISTORY ON OUR CAPITAL IMPROVEMENT PROGRAM THROUGH OUR GENERAL CONSTRUCTION FUND.

YOU CAN SEE WE HAVE MADE SOME GREAT HEADWAY.

I THINK IT IS THE MORAL OF THE STORY ON THIS SLIDE HERE THAT WE HAVE BEEN ABLE TO SECURE MUCH MORE CAPITAL FUNDING THROUGH OUR GENERAL FUND OPERATIONS, WHETHER THAT WAS THROUGH ONE TIME SAVINGS AND RESERVES OR IF IT WAS FROM DEBT ISSUANCES.

>> I'M SORRY. I'VE GOT A QUESTION.

IS THE CAGE AND YOU'RE GIVING ME THE LOOK. I CAN SEE IT. I KNOW THE LOOK.

>> NO. I'M SORRY. I WAS JUST TRYING TO LISTEN.

>> TEN YEAR COMPOUNDED ANNUAL GROWTH RATE OF 0.01% ON THE GENERAL FUND EXPENDITURE.

IS THAT IN LINE WITH, ARE WE AT LEAST GETTING A 5.01% ON A 10 YEAR ON OUR INVESTMENTS?

>> ON OUR INVESTMENTS? NO, DEFINITELY NOT, BECAUSE PRIOR TO COVID, WE WERE GETTING LESS THAN 1% ON INVESTMENTS.

>> LAURI, CAN JUST A POINT ON YOU GO BACK TO THE LAST SLIDE?

>> THIS ONE HERE? YES, SIR.

>> THE 24.6 ON STREETS.

WAS THAT THE PROP $1 THAT WE SPENT? IS THAT THE REASON FOR THE LARGE OF INCREASE?

>> IN THE 24, 25?

>> THAT WAS THE DEBT ISSUANCES WE WERE LOOKING AT DOING FOR STREETS FOR THIS YEAR.

THAT WAS THE START OF DOING ANNUAL DEBT SERVICE FUNDING FOR THOSE STREET.

FOR RECONSTRUCTION AND I'M GOING TO SAY THE WRONG WORD, SO DONNY, CORRECT ME, BUT NOT SEAL COATING, BUT THE SUMMER.

>> CHIP SEAL.

>> CAPES. THANK YOU.

>> CAPES.

>> YES. THIS PRIOR COUNCIL PUT SOME BIG EFFORTS TOWARDS GOING AHEAD AND ADDRESSING STREETS.

THAT'S WHAT THAT WAS RELATED TO.

THE REST OF THOSE AND THOSE OTHER YEARS WERE THE PROP ONE DOLLARS.

YES, SIR. GOOD QUESTION.

THEN THIS LAST ONE RIGHT HERE IS JUST SHOWING THE VARIOUS AREAS THAT WE'RE LOOKING TO SPEND OUR CAPITAL DOLLARS ON IN THE GENERAL FUND FOR THIS YEAR.

[01:50:02]

WE WILL GO OVER THIS IN MORE DETAIL.

I THINK IT'S YET TOMORROW AT SOME POINT WE HAVE THAT SCHEDULED IN.

THEN JUST AS ALWAYS, WE HAVE LOTS OF PRIORITIES.

WE ONLY HAVE SO MUCH FUNDING AND CAN STRETCH IT SO FAR, BUT WE DO CONTINUE TO SEE AGING INFRASTRUCTURE.

OBVIOUSLY, OUR WASTEWATER PLANTS ARE GOING TO BE SOMETHING WE'RE GOING TO HAVE TO CONTINUE WORKING TO ADDRESS OVER THE NEXT SEVERAL YEARS.

ALL OF OUR CITY FACILITIES, OUR STREETS.

BUT WE HAVE BUILT A GOOD START ON A LOT OF THAT FOR THIS YEAR, FOLLOWING WHAT HAS BEEN DONE IN THE PAST COUPLE OF BUDGETS.

OBVIOUSLY, OUR COMMUNITY CONTINUES TO EXPAND, SO WE NEED TO BE AWARE OF THAT.

THEN, AGAIN, I THINK IT'S BEEN PER THIS LAST DISCUSSION, PERSONNEL IS A BIG PART OF THE CITY'S BUDGET, AND SO WE'VE GOT TO MAKE SURE THAT WE'RE ADDRESSING OUR STAFFING NEEDS FOR RECRUITMENT AND RETAINMENT.

A LOT OF THAT IS BUILT INTO OUR BUDGET AS WELL.

WITH THAT, I'M GOING TO STOP BECAUSE THIS ACTUALLY ENDS THIS PART OF THIS PRESENTATION UNTIL WE START BRINGING THE ACTUAL DEPARTMENT BUDGETS UP.

IF EVERYONE WANTS TO TAKE A BREAK, GRAB LUNCH, WE'LL START ON PROPERTY TAXES HERE IN MAYBE 15 MINUTES.

MAYOR, I'LL LET YOU DECIDE ON THAT.

WHAT DO YOU THINK IS REASONABLE?

>> I SAY WE PLAN ON BEING BACK IN HERE, SAY 15 MINUTES THAT WILL GIVE US TIME TO CATCH UP ON A FEW OTHER THINGS, AND THEN NOT NECESSARILY DONE WITH LUNCH.

YOU GUYS PLAN ON EATING AND STAFF, TAKE YOUR TIME, BUT IF YOU'LL KEEP DRIVING, WE'LL TRY TO KEEP UP TODAY.

>> SOUNDS GREAT. THANK YOU.

>> THANK YOU. BE RIGHT BACK.

AT OF HOUSE, I DID MAKE A STATEMENT, SO WE'RE THREE TIMES FURTHER ALONG IN THE PRESENTATION THAN I THOUGHT WE WOULD BE, SO WE'RE RIGHT ON SCHEDULE.

MRS. STORES, I REALLY APPRECIATE YOU CUTTING YOUR LUNCH SHORT, AND WE'RE GOING TO LET YOU DRIVE HERE WHILE WE CONTINUE TO EAT.

IF YOU WANT TO TAKE OFF RUNNING, WE'LL AT LEAST STAY QUIET THROUGH THE REST OF LUNCH.

>> NO, YOU ALL ARE FINE.

I WANT TO SWITCH GEARS A LITTLE BIT NOW AND TALK ABOUT OUR PROPOSED PROPERTY TAXES.

THERE'S A COUPLE OF ITEMS THAT WE'RE GOING TO COVER.

AS YOU KNOW, PROPERTY TAXES ARE HEAVILY DICTATED BY STATE LAW AND SO THERE'S A LOT OF ASPECTS RELATED TO THAT I WANTED TO COVER WITH YOU ALL.

I'M NOT GOING TO GO INTO A WHOLE LOT OF DETAIL ON THESE FIRST FEW SLIDES.

I KNOW WE COVERED THIS DURING OUR ON-BOARDING SESSION, AND THOSE OF YOU THAT HAVE BEEN ON COUNCIL PREVIOUSLY HAVE HEARD A LOT OF THIS BEFORE, BUT I'VE GOT SOME GOOD INFORMATION IN THIS PRESENTATION THAT OUTLINES THAT A PROPERTY TAX IS IN AD VALOREM, AND IT'S BASED ON THE PROPERTY VALUES AS A REMINDER, PRAD, POTTER-RANDALL APPRAISAL DISTRICT, AN INDEPENDENT ENTITY FROM THE CITY OF AMARILLO IS THE ONE THAT SETS THOSE VALUES EACH YEAR.

WE RECEIVE THOSE AROUND JULY.

THEY HAVE TO GET THEM TO US BY JULY 25TH EACH YEAR, AND THERE'S CERTAIN HOMESTEAD EXEMPTIONS THAT ONLY APPLY TO THE SCHOOL DISTRICT TAXES, HOWEVER, HOW IT RELATES TO US AT THE CITY LEVEL IS THAT A TAXABLE VALUE CANNOT GROW MORE THAN 10% YEAR OVER YEAR.

IF THE PRAD VALUES COME IN AS A 30% INCREASE, THEY WILL GET 10% OF THAT THIS YEAR, 10% NEXT YEAR, AND SO ON AND SO FORTH, UNTIL THEY GET THAT FULLY CAPTURED.

THE INTERESTING THING ABOUT THIS YEAR IS, AS I TALKED WITH PRAD, THEY SAID, "WE'RE SEEING THE END OF THOSE HIGHER INCREASES WE HAD SEEN COMING OUT OF COVID, AND SO WE HAD SEEN SOME TREMENDOUS TAXABLE VALUE GROWTH, APPRAISED VALUE GROWTH OVER THE LAST COUPLE OF YEARS.

THAT HAS DEFINITELY STARTED NORMALIZING AND COMING DOWN TO A MORE NORMAL LEVEL, WHICH IS AROUND 3%." ALSO, WANTED TO REMIND ALL WE DO HAVE FOR THOSE THAT ARE OVER 65 OR HAVE A QUALIFIED DISABILITY, THEY DO HAVE FROZEN TAXES.

WE'LL HAVE A LITTLE BIT, AND THAT IS ON THE CITY'S PORTION OF THE TAX BILL.

TEXAS LAW, AS I MENTIONED, DOES DICTATE HOW THE PROPERTY TAX RATE SETTING GOES, AND IT DOES TELL US HOW WE HAVE TO INFORM OUR CITIZENS AND THOSE PROPERTY HOLDERS ABOUT THEIR PROPERTY TAXES.

THERE ARE SEVERAL STEPS THAT WE WILL GO THROUGH AS WE WALK THROUGH THE BUDGET APPROVALS.

THE VERY FIRST ONE ACTUALLY WILL HAPPEN THIS COMING TUESDAY, SO A WEEK FROM TODAY AT THE NEXT COUNCIL MEETING, WE WILL HAVE AN ITEM FOR YOU GUYS TO APPROVE THE NOT TO EXCEED PROPERTY TAX RATE.

I'LL TALK ABOUT THAT HERE IN JUST A MINUTE, BUT YOU'LL HAVE TWO MORE READINGS RELATED TO YOUR PROPERTY TAXES BUT THIS ONE THAT WE'RE DOING ON TUESDAY IS THAT'LL BE THE HIGHEST RATE YOU CAN GO FORWARD WITH.

YOU CAN CHOOSE ONE AT THAT RATE OR LOWER AS WE WORK THROUGH THE APPROVALS AHEAD OF SEPTEMBER 30TH.

AS ALSO A REMINDER,

[01:55:03]

THE MAYOR MENTIONED THIS EARLIER, SB2, IT'S SENATE BILL 2 WAS EFFECTIVE IN 11 OF 2020.

IT HAD A LOT OF CHANGES TO HOW OUR PROPERTY TAX CALCULATIONS GO.

THE BIGGEST THINGS THOUGH, IS THAT A COUNCIL OR A GOVERNING BODY CAN APPROVE UP TO A 3% ADDITIONAL INCREASE IN REVENUES FROM THE OPERATION AND MAINTENANCE SIDE OF THE TAX RATE.

OTHERWISE, IT AUTOMATICALLY GOES TO AN ELECTION.

PRIOR TO 2020, THAT WAS AN 8% AMOUNT.

COUNCIL HAS HAD THE ABILITY TO GO UP TO 8%, AND IF THEY WENT OVER 8%, CITIZENS WOULD HAVE TO PETITION TO GO TO AN ELECTION TO APPROVE THAT TAX RATE.

JUST SOME CHANGES AND LOTS OF WORDING CHANGES THAT CAME OUT OF SENATE BILL 2.

LET'S SEE HERE. I'M GOING TO SKIP OVER THAT ONE.

LET'S JUST TALK NOW A LITTLE BIT ABOUT THE ELEMENTS OF A PROPERTY TAX RATE.

THIS IS PROBABLY A REMINDER FOR MOST OF YOU, BUT MAYBE NEW FOR SOME THAT ARE LISTENING.

OUR PROPERTY TAX RATE IS MADE UP OF TWO PIECES, THE OPERATING AND MAINTENANCE SIDE OF THE RATE.

THAT GOES TOWARDS FUNDING OUR GENERAL FUND OR PARTS OF OUR GENERAL FUND OPERATIONS.

THEN ALSO THERE IS AN INTEREST IN SINKING COMPONENT, AND THAT IS PAYMENTS FOR OUTSTANDING DEBT THAT IS SUPPORTED FOR GENERAL GOVERNMENT IMPROVEMENTS.

THOSE TWO PIECES TOGETHER MAKE UP THE TOTAL TAX RATE.

SENATE BILL 2 HAS US CALCULATE A NO NEW REVENUE RATE.

WHAT A NO NEW REVENUE RATE IS, IT'S ESSENTIALLY THE TAX RATE THE CITY WOULD HAVE IF THEY COLLECTED THE EXACT SAME REVENUE IN THE UPCOMING YEAR THAT THEY DID ON THE CURRENT YEAR ON THE EXACT SAME PROPERTIES.

OUR PROPERTY TAX CALCULATIONS, AND FOR THOSE OF YOU THAT HAVE BEEN ON COUNCIL BEFORE, I KNOW YOU'VE HEARD ME TALK ABOUT THIS.

THOSE OF YOU THAT HAVEN'T, WE DO HAVE A CALCULATION THAT IS CHANGED, WELL, UPDATED A LOT OF TIMES BY THE STATE COMPTROLLER EACH YEAR, AND IT IS A 10 PAGE DOCUMENT THAT THEY HAVE US GO THROUGH TO CALCULATE OUR PROPERTY TAX RATES.

THE STATE COMPTROLLER, ACCORDING TO STATE LAW, TELLS US HOW WE DO THAT.

WE CALCULATE THAT HERE AT THE CITY FOLLOWING THAT FORM, BUT WE ACTUALLY CONTRACT WITH RANDALL COUNTY TO BE OUR ASSESSOR AND COLLECTOR, AND SO THEY DO THE OFFICIAL PROPERTY TAX CALCULATIONS.

I DO HAVE THEIR WORKSHEET.

IT IS JUST ESTIMATED THEY HAVEN'T CERTIFIED IT YET, BUT DO NOT ANTICIPATE ANY CHANGES, AND WE CALCULATED ALL THESE RATES IN HOUSE AND OUR RATES MATCH THEIR RATES, SO FEEL LIKE THESE ARE GOOD AND THAT'S WHAT'S IN THESE PRESENTATIONS.

OUR NO NEW REVENUE TAX RATE FOR THIS UPCOMING YEAR IS 37.3556.

IT'S A LITTLE OVER $0.37, AND THAT IS ACTUALLY ABOUT ALMOST $0.06 LOWER THAN WHAT OUR PROPOSED TAX RATE IS OF 43.070.

>> AGAIN, IF WE WERE TO TAKE THAT 37 CENT TAX RATE, THAT WOULD PRODUCE ABOUT THE SAME REVENUE THAT WE GOT IN THIS CURRENT YEAR FROM THE SAME PROPERTIES.

AS THOSE APPRAISED VALUES ARE MOVING ON THE SAME PROPERTIES, WE WOULD NATURALLY GET MORE PROPERTY TAX RATE FROM THEM.

THIS IS HOW THE NO-NEW-REVENUE TAX RATE WORKS IN CONJUNCTION WITH THE APPRAISED VALUES.

AS YOUR APPRAISED VALUES GO UP, YOU NEED LESS OF A TAX RATE TO COLLECT THE SAME AMOUNT OF REVENUE.

IF YOUR APPRAISED VALUES HAPPEN TO GO DOWN, YOU NEED A HIGHER TAX RATE IN ORDER TO COLLECT THE SAME REVENUE, SO IT'S A SEESAW EFFECT THERE.

WE ALSO HAVE TO CALCULATE A VOTER-APPROVAL TAX RATE.

YOU MAY HEAR US REFER TO IT AS A VATR.

THE VOTER-APPROVAL TAX RATE IS THE OPERATING AND WHEN THE OPERATING AND MAINTENANCE PART OF THE CALCULATION IS CAPPED AT THAT 3.5% INCREASE PLUS ANY UNUSED INCREMENT FROM THE PAST THREE YEARS, AND THEN THE DEBT SERVICE PORTION OF THE TAX RATE CAN FLUCTUATE UP OR DOWN AS NEEDED BASED ON OUTSTANDING PROPERTY TAX SUPPORTED DEBT.

THOSE TWO CALCULATIONS TOGETHER COME UP WITH YOUR TOTAL VOTER-APPROVAL TAX RATE.

IF THE CITY COUNCIL WAS TO APPROVE A TAX RATE OVER THAT, IT WOULD AUTOMATICALLY GO TO AN ELECTION IN NOVEMBER FOR THE CITIZENS TO WEIGH IN WHETHER THEY WANT TO PAY THE HIGHER TAX RATE OR GO BACK TO THE VOTER-APPROVAL TAX RATE.

THE LAST DAY TO CALL AN ELECTION FOR NOVEMBER IS AUGUST 16, AND WE DO NOT HAVE COUNCIL MEETINGS SET FOR YOU GUYS TO APPROVE ANYTHING ABOVE THIS VOTER-APPROVAL TAX RATE.

THIS WOULD BE THE HIGH END THAT WE'D BE TALKING ABOUT IN THIS NUMBER.

>> FOR THOSE WATCHING AND THIS IS A GOOD REFRESHER FOR US.

THE VOTER-APPROVAL TAX RATE IS A PRETTY LONG FORMULA THAT YOU HAVE TO RUN?

[02:00:03]

>> CAN YOU EXPLAIN IF SOMEBODY JUST LOOKED AT THAT AND SAID, THE NO-NEW-REVENUE RATE IS 0.373, AND THE VOTER-APPROVAL TAX RATE IS 0.430.

THAT'S 5 CENTS ADDITIONAL COST, WHICH WOULD BE 13%, LET'S SAY, INCREASE.

CAN YOU RECONCILE THOSE TWO TOGETHER OF HOW WE'RE WORKING WITHIN OUR 3.5% INCREASE?

>> YES. AGAIN, IT'S JUST A 3.5% INCREASE ON THE OPERATING AND MAINTENANCE SIDE.

WE ALSO HAD A PORTION OF AN UNUSED INCREMENT FROM TWO YEARS AGO THAT WE WERE ABLE TO CAPTURE IN OUR VOTER APPROVAL TAX RATE AGAIN THIS YEAR AS WELL.

THOSE COMPONENTS TOGETHER IS WHAT GOES INTO THE VOTER-APPROVAL TAX RATE.

AGAIN, YOU CAN'T JUST DO A SIMPLE 3.5% VARIANCE BETWEEN THE TWO YEARS TO COME UP WITH THE TAX RATE.

AS I MENTIONED, IT'S A TEN-PAGE CALCULATION.

IT TAKES INTO ACCOUNT ANNEX PROPERTIES, DEX PROPERTIES, THINGS THAT HAVE CHANGED FROM SPECIAL A USES.

THERE'S A LOT OF VARIOUS CALCULATIONS THAT COME INTO THIS.

IT JUST IT'S CAPPED AT 3.5%, HOWEVER, THERE'S A LOT MORE THAT GOES INTO THE CALCULATION OF IT.

THE VOTER-APPROVAL TAX RATE, AS MENTIONED, IS WHAT STATE LAW, THE HIGHEST RATE THAT STATE LAW ALLOWS THIS BODY TO CONSIDER WITHOUT GOING TO AN ELECTION.

>> I ENCOURAGE THE TRUTH AND TAXATION FORM IS ACTUALLY ON THE STATE CONTRAS WEBSITE, AND SO I'VE HAD THESE QUESTIONS OVER THE YEARS.

I WOULD ENCOURAGE EVERYONE TO ACTUALLY, THOSE WHO ARE LISTENING TO GO AND LOOK AT THAT FORM.

IT'S A VERY COMPLICATED.

I USED TO DO THAT CALCULATION IN PARIS.

IT'S VERY COMPLEX.

IT'S NOT AS SIMPLE AS 40*1.035.

AS YOU SAID, THERE'S OVER 80 DIFFERENT STEPS IN THE PROCESS TO GET TO THAT.

IT'S ON THE STATE CONTENT WEBSITE UNDER TRUTH AND TAXATION FORM.

>> WE WILL ALSO POST OUR CERTIFIED FINAL ONE AS SOON AS WE GET IT FROM RANDALL COUNTY AND WITH ALL OF OUR NUMBERS DROPPED IN AS WELL.

IT'LL POSTED ON OUR WEBSITE.

>> THAT'S VERY HELPFUL, AND I'M DEFINITELY GOING TO BEAT THE DEAD HORSE BECAUSE I GET A LOT OF THE SAME LOOK, I RAN THE NUMBERS.

IT'S NOT 3.5%. YOU DIDN'T THIS, YOU DIDN'T THAT.

WHAT YOU'RE SAYING TO THIS BODY IS THIS BODY IS NOW TO CONSIDER A POTENTIAL TAX RATE UP TO THE 0.3430.

THAT PER YEAR TEN PAGE CALCULATION, WHICH FACTORS EVERYTHING PER STATE LAW, INCLUDING THE INS AND THE O&M OR THE M&O SIDE, THIS COUNSEL COULD ISSUE DEBT THAT'S GOING TO BE SERVICED WITHIN THAT 0.43 CALCULATION, CORRECT?

>> THE 0.43 CALCULATION ONLY ACCOUNTS FOR DEBT THAT'S ALREADY OUTSTANDING ON THE INS SIDE OF THE RATE.

>> HOW DO YOU RECONCILE LIKE THE ADDITIONAL DEBT SERVICE THAT WE'RE PROPOSING IN THE BUDGET BECAUSE THAT HAS TO COME WITHIN THE 0.43 RATE.

>> WE WOULD RECOMMEND NOT ISSUING THAT NEW DEBT UNTIL ABOUT HALF WELL, AFTER FEBRUARY 15, IN THE NEW FISCAL YEAR, THE FIRST DEBT SERVICE PAYMENT WOULD ACTUALLY OCCUR IN THE FOLLOWING FISCAL YEAR, THE 26/27 FISCAL YEAR, AND IT WOULD BE BUILT INTO NEXT YEAR'S PROPERTY TAX RATE, NOT IN THE CURRENT YEAR'S PROPERTY TAX RATE.

I DO HAVE A SLIDE THAT WALKS YOU THROUGH THE BETWEEN THE CURRENT YEAR TAX RATE AND NEXT YEAR'S TAX RATE ON BOTH THE O&M AND THE INS THAT MIGHT HELP ANSWER SOME OF THESE QUESTIONS.

>> I THINK IT PROBABLY WILL, AND WE'LL GET THERE NEXT OR LATER, BUT THIS CURRENT PROPOSED BUDGET INCLUDES EXPENDITURES THAT CONSIDER THE ADDITIONAL DEBT THAT YOU HAVE MENTIONED BUT NOT CALCULATED IN THE 554.

THAT WOULD WORK WITHIN THE 0.430 RATE.

>> IT'S NOT INCLUDED IN THE 0.43070 RATE.

IT WOULD BE ADDED INTO THE NEXT YEAR'S RATE, WHICH WOULD BE THE 2026 PROPERTY TAX RATE.

BECAUSE WE WOULD NOT PAY THE DEBT UNTIL THE 26/27 FISCAL YEAR.

>> I'M NOT SPLITTING HAIRS.

I'M REALLY MAKING A GOOD POINT LIKE THE $6 MILLION THAT WE IDENTIFIED EARLIER ON PAGE 660, I BELIEVE THAT IS CONSIDERED IN THE PREVIOUS YEAR'S TAX RATE COULD BE ISSUED AND IT WAS PLANNED ON BEING.

>> THAT WAS A WATER AND SEWER DEBT ISSUANCE, SO IT'S NOT IN THE TAXES [OVERLAPPING]

>> I GUESS THE FLEET ONE WOULD BE THE OTHER EXAMPLE RIGHT.

>> THE FIRE APPARATUS? YES, IS THE 4.7 MILLION FOR FIRE APPARATUS.

WE WOULD PROPOSE ADDING IT INTO NEXT YEAR'S PROPERTY TAX RATE.

>> YOU DON'T HAVE ANY ADDITIONAL DEBT ISSUANCES BUILT INTO THIS RATE?

[02:05:02]

>> YES. I HAVE A SLIDE THAT SHOWS YOU THAT.

NOT ADDITIONAL, BUT ONES THAT WERE ADDED IN THIS YEAR THAT YOU ALL HAVE ALREADY APPROVED THE DEBT ISSUANCES.

YES. THAT WAS THE BIGGEST INCREASE TO THE TAX RATE WAS RELATED TO THE DEBT SIDE.

>> THANK YOU, MA'AM.

>> YES. THIS JUST TALKS ABOUT HOW WE HAVE TO INFORM OUR PROPERTY OWNERS OF ANY CHANGES RELATED TO THE PROPERTY TAX RATE, AND WE MUST HOLD A PUBLIC HEARING RELATED TO IT AS WELL.

I DID WANT TO JUST QUICKLY TELL YOU THOSE DATES.

AS I MENTIONED, WE WILL HAVE COUNSEL TAKE A VOTE ON THE NOT TO EXCEED TAX RATE, WHICH WE WOULD PROPOSE WOULD BE THE VOTER-APPROVAL TAX RATE BECAUSE BY LAW, THAT'S THE HIGHEST ONE YOU CAN APPROVE ANYWAYS AT THIS COMING TUESDAY'S MEETING, WHICH IS AUGUST 12.

THEN THERE WILL BE TWO MORE READINGS OF THE PROPERTY TAX RATE.

THE FIRST READING WOULD BE ON SEPTEMBER 9, AND THE SECOND READING WOULD BE ON SEPTEMBER 16, AND WE WOULD RECOMMEND COUNSEL HOLD THEIR PUBLIC HEARING RELATED TO THE PROPERTY TAX RATE ON SEPTEMBER 16.

WHAT WE WILL DO IS WE'LL POST NOTICES IN THE NEWSPAPER AND ON THE CITY'S WEBSITE, AND WE WILL CERTAINLY HAVE SOCIAL MEDIA POSTS AND STUFF, PRESS RELEASES ABOUT THAT PUBLIC HEARING JUST TO INFORM OUR CITIZENS, THIS IS THE TIME TO COME OUT AND SPEAK ON THE PROPERTY TAX RATE TO HAVE YOUR VOICE HEARD.

STATE LAW REQUIRES US TO DO ONE PUBLIC HEARING, AND THAT WE HAVE THAT SET FOR SEPTEMBER 16.

I JUST WANTED TO DO A QUICK REMINDER OF HOW THE PROPERTY TAX BILL IS FOR OUR CITIZENS.

CITIZENS GET ONE PROPERTY TAX BILL.

CITY OF AMARILLO IS ONLY ONE PIECE OF THAT.

WHAT I HAVE FOR YOU IS TWO DIFFERENT EXAMPLES OF WHAT THESE PROPERTY TAX BILL MAKEUPS CAN LOOK LIKE.

NOW, WE DON'T KNOW WHAT ALL THE TAXING ENTITIES ARE GOING TO APPROVE FOR THIS UPCOMING YEAR.

WHAT I'VE DONE IS, I'VE DONE THEIR CURRENT YEAR, SO THERE 2025 TAX RATES WITH THE CITY'S PROPOSED 2026 TAX RATE, JUST TO SHOW YOU AN EXAMPLE.

WE DO HAVE TWO COUNTIES. THERE'S THE CITY OF AMARILLO.

WE HAVE TWO COUNTIES, AND WE HAVE FIVE SCHOOL DISTRICTS AND TWO WATER DISTRICTS, AND THEN THE COMMUNITY COLLEGE.

THE BILLS HAVE A VERY DIFFERENT MAKEUP DEPENDING ON WHERE YOU LIVE IN AMARILLO.

HOWEVER, THE PROPORTIONS TO THOSE TAX BILLS ARE VERY SIMILAR, NO MATTER WHERE YOU LIVE.

THIS ONE IS AN AMARILLO/ISD/ RANDALL COUNTY SAMPLE PROPERTY TAX BILL.

WHAT THIS SHOWS IS THAT THE CITY OF AMARILLO MAKES UP APPROXIMATELY 22% OF THAT TOTAL PROPERTY TAX BILL.

IN THIS SITUATION, AISD, WHICH WOULD BE VERY SIMILAR FOR ANY OF THE OTHER SCHOOL DISTRICTS IS AT ABOUT 46% OF THE PROPERTY TAX BILL.

AMARILLO COLLEGE IS A LITTLE OVER 20%, AND RANDALL COUNTY IS ALSO JUST SLIGHTLY OVER 20%.

THEN THE WATER DISTRICTS ARE USUALLY LESS THAN 1% OF THE PROPERTY TAX BILL.

IT'S ONE BILL. CITY GETS ABOUT 22% IN THIS SCENARIO.

WITH AMARILLO ISD AND POTTER COUNTY, THE MAKEUP IS JUST SLIGHTLY DIFFERENT.

AMARILLO ISD WOULD GET ABOUT 42% OF THE BILL.

THE CITY WOULD BE CLOSER TO 20%.

POTTER COUNTY HAS A LITTLE BIT HIGHER TAX RATE THAN RANDALL COUNTY.

THIS MAKEUP OF A BILL, THE COUNTY GETS ABOUT 28% OF THE TAXES THAT ARE PAID.

AC GETS 10%, AND THEN AGAIN, THE WATER DISTRICTS ARE AT LESS THAN 1%.

I DO THINK THIS IS IMPORTANT.

I KNOW I'VE TALKED TO A LOT OF CITIZENS THAT THINK WHEN THEY PAY THEIR PROPERTY TAX BILL, EVERY DOLLAR COMES TO THE CITY, AND THIS IS JUST A REMINDER OF OUR PORTION OF WHAT THAT OVERALL TAX BILL IS.

AS YOU ALL KNOW, WE DON'T HAVE ANY INFLUENCE OVER THE OTHER TAXING ENTITIES.

THEY ARE ALL GOING THROUGH THEIR PROCESSES RIGHT NOW SETTING THEIR TAX RATES, AND THEN WE ALL TOGETHER MAKE UP THE PROPERTY TAX BILLS THAT WILL GO OUT THIS FALL.

HERE'S A HISTORY OF THE CITY OF AMARILLO'S PROPERTY TAX RATE GOING BACK OVER ABOUT A TEN YEAR PERIOD.

IF YOU LOOK, WE WERE DOWN IN 17/18, WE WERE AT A LITTLE OVER 36 CENTS THAT CLIMBED TO AS HIGH AS 44 CENTS AS WE WERE ISSUING THE DEBT RELATED TO THE 2016 VOTER-APPROVED BONDS FOR STREETS AND PUBLIC SAFETY.

AND THEN BECAUSE WE STARTED SEEING SUCH RAPID GROWTH IN THE APPRAISED VALUES OF OUR LOCAL PROPERTIES, WE HAVE HAD TO PULL OUR PROPERTY TAX RATE BACK THE LAST SEVERAL YEARS.

AS THOSE APPRAISED VALUES HAVE COME IN HIGHER, WE'VE HAD TO DECREASE THE TAX RATE TO STAY WITHIN THE STATE COMPLIANCE OF APPROXIMATELY 3.5% GROWTH ON THE OPERATION SIDE OF THE TAX RATE.

YOU WILL SEE THAT FOR THIS NEXT YEAR, IT IS PROPOSING TO GO UP, STILL UNDER THE HIGHEST POINT WE'VE BEEN OVER THOSE LAST TEN YEARS, BUT UP OVERALL FROM WHAT WE'VE SEEN THE LAST COUPLE OF YEARS.

[02:10:05]

LET'S NOW LOOK AT THE COMPONENTS OF IT.

THIS IS OVER THE 10-YEAR PERIOD, LOOKING AT THE DIFFERENCE BETWEEN THE O&M SIDE OF THE RATE AND THE INS SIDE OF THE RATE.

WE ARE LOOKING THIS NEXT YEAR TO HAVE A LITTLE OVER 33 CENTS GOING TO THE OPERATIONS AND MAINTENANCE AND JUST UNDER 10 CENTS GOING TO THE INTEREST AND SINKING SIDE OF THE PROPERTY TAX RATE.

YOU'LL SEE HOW THAT'S VARIED A LITTLE BIT OVER THE PAST SEVERAL YEARS, BUT IT STAYED PRETTY CONSISTENT GOING BACK TO ABOUT 2021/2022, AND THAT AGAIN, IS WHEN THOSE FULL DEBT ISSUANCES WERE COMING ON RELATED TO THE 2016 VOTER-APPROVED BONDS FOR PUBLIC SAFETY AND STREETS.

IF YOU LOOK AT THIS FROM A PERCENTAGE BREAKDOWN, YOU'LL SEE THAT WE WERE AS LOW BACK IN 16/17, ABOUT 93% OF THE TAX RATE WAS GOING TOWARDS OPERATIONS AND MAINTENANCE, AND A LITTLE LESS THAN 7% WAS GOING TOWARDS DEBT.

THAT HAS GROWN OVER THE YEARS, AND FOR THIS NEXT YEAR, WE'RE LOOKING AT ABOUT 77% TOWARDS OPERATING AND MAINTENANCE COSTS AND ABOUT 23% GOING TOWARDS DEBT SERVICE.

NOW LET'S LOOK AT THE DIFFERENCE BETWEEN THE CURRENT YEAR APPROVED TAX RATE AND THEN THE VOTER-APPROVAL PROPOSED TAX RATE FOR 25/26.

THIS SHOWS THE BREAKDOWN IN THE COMPONENTS BETWEEN OPERATING AND MAINTENANCE AND INTEREST IN SINKING.

LAST YEAR, WE HAD JUST UNDER A 32 CENT OPERATING AND MAINTENANCE RATE.

THIS YEAR, WE'RE LOOKING TO HAVE A LITTLE OVER 33 CENTS, WHICH WOULD PRODUCE ABOUT $3.8 MILLION.

AGAIN, THAT'S GOING TOWARDS THINGS LIKE THE 5% RAISES FOR POLICE, 4% RAISES FOR ALL OTHER EMPLOYEES IN IMPLEMENTATION OF A PAY STUDY.

ON THE INTEREST AND SINKING SIDE, WE WENT FROM JUST UNDER 7 CENTS TO NOW JUST UNDER 10 CENTS.

THAT'S GOING TO PRODUCE ABOUT $5.4 MILLION MORE IN PROPERTY TAXES, AND THAT IS GOING TOWARDS NEW DEBT ISSUANCES THAT WERE APPROVED THE CURRENT YEAR FOR FIRE APPARATUS, FOR STREET FUNDING AND FOR PARKS PROJECTS. YES, SIR.

>> ON THE SLIDE THAT WE'RE GOING TO GET HERE LATER, THAT'S 5.4 MILLION ADDITIONAL FUNDING, CORRECT?

>> WHAT IS THE TOTAL DEBT SERVICE CAPABILITY WITH THAT 5.4 MILLION? IS THAT ON THE FUTURE SLIDE?

>> ACTUALLY, THIS IS A GREAT POINT.

IF MAYBE YOU'RE STILL THERE IN YOUR BOOKS.

IF YOU'LL GO BACK TO THAT DEBT SERVICE PAGE ON PAGE 660 AND 661.

ON PAGE 660 UP AT THE TOP, IF YOU WILL LOOK IN THAT VERY TOP SECTION, YOU'LL SEE THAT FIRST SUMMARY OF IT SAYS, TOTAL PROPERTY TAX SUPPORTED DEBT SERVICE.

YOU'LL SEE OVER TO THE FAR RIGHT, IT'S SUPPORTING $18.3 MILLION IN DEBT SERVICE.

IS EVERYBODY THERE ON THAT PAGE? THAT'S PRINCIPAL INTEREST IN A LITTLE BIT OF PAYING AGENCY FEES.

THAT IS ABOUT 5.4 MILLION MORE THAN WHAT WE PAID LAST YEAR, SO LET ME WALK YOU THROUGH THAT.

THE FIRST ONE IS THAT SECOND TO LAST?

>> GO TO PAGE 660.

>> OH, I'M SORRY. SHOULD HAVE GIVE ME A MORE TIME.

IS EVERYBODY THERE? PAGE 660?

>>WE HAD A COUPLE OF NEW DEBT ISSUANCES THIS YEAR.

IF YOU LOOK THERE TOWARDS THE BOTTOM, YOU'LL SEE THE PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS.

WE HAVE JUST UNDER THREE MILLION DOLLARS IN ADDITIONAL DEBT SERVICE FOR THAT FOR THIS UPCOMING YEAR.

THAT IS NEW, THAT IS RELATED TO THE FIRE APPARATUS THAT COUNCIL APPROVED EARLIER THIS YEAR.

OF THAT 5.4 MILLION, ALMOST THREE MILLION OF IT IS GOING TOWARDS THE FIRE APPARATUS.

THE OTHER PIECES ARE RELATED TO, IF YOU GO UP TO THE SECOND SECTION UP AT THE TOP WHERE IT SAYS COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION.

GO DOWN TO SERIES 2025 AND SERIES 2025A.

YOU'LL SEE OVER AT THE FAR RIGHT, THOSE ARE BOTH NEW DEBT ISSUANCES THAT WERE DONE THIS YEAR.

THE FIRST ONE, THE DEBT SERVICE NEXT YEAR WILL BE A LITTLE UNDER $1.1 MILLION, AND THAT IS GOING TO SUPPORT THE PARKS PROJECTS.

THEN ON THE SERIES 2025A, THE DEBT SERVICE IS $1.4 MILLION, AND THAT IS GOING TO FUND STREET PROJECTS.

[02:15:01]

THOSE WERE BOTH APPROVED BY COUNCIL IN THE CURRENT YEAR.

>> WHAT'S THE TOTAL IN MILLIONS? DO YOU HAVE IT IF YOU COMBINE THOSE?

>> ALL THREE OF THOSE?

>> I GUESS 5.4 MILLION.

>> WELL, SO WHAT I'M FOLLOWING IS 18.3 MILLION, ON TOTAL PROPERTY TAX SUPPORTED DEBT SERVICE.

THAT'S YOUR EXPENDITURE OUTGOING 18.3?

>> YOU'RE SHOWING AN INCREASE OF 5.4. NO, YOU'RE NOT.

>> 5.4 MILLION IS THE INCREASE.

>> WELL, THAT'S JUST INTEREST.

>> NO, THAT'S PRINCIPAL AND INTEREST.

THAT'S THE TOTAL DEBT SERVICE.

>> THAT 18.3, IS THE TOTAL?

>> THEN THE OTHER LINE ITEM IS 1.2 MILLION.

THAT'S THE 2026 THAT'S YOUR PARKS, 657, WHICH WAS POSSIBLE STREETS? WHERE WAS THE OTHER STREETS?

>> THE DEBT ISSUANCE OF 11.6 MILLION WAS FOR PARKS, AND THEN THE 11.2 MILLION WAS FOR STREETS.

>> WHERE IS THAT? I'M NOT SEEING.

>> UNDER THE COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION.

SECTION, IF YOU GO DOWN TO SERIES 2025 AND SERIES 2025A.

>> YOU TAKE THE 38 AND THE 75, YOU'RE ADDING THOSE TOGETHER?

>> THERE'S 11 MILLION THERE PLUS THERE IS 18 MILLION OVER HERE?

>> NO. THE 18.3 MILLION IS JUST THE DEBT SERVICE PAYMENTS.

OVER ON THE LEFT, THE 11 MILLION WAS THE TOTAL PROCEEDS THAT WE RECEIVED.

THAT'S THE TOTAL DEBT THAT WAS ISSUED.

WE'RE PAYING IT OFF OVER I THINK THE PARKS PROJECTS, THEY VARIED FROM, 15-25 YEARS.

THE STREETS, I THINK WE HAD THEM AT 10 YEARS, I BELIEVE.

THEN THE FIRE APPARATUS WE HAVE ON A 13 YEAR LIFE CYCLE.

>> MY FAULT, I SHOULD HAVE TAKEN THE 4.7 OVER ON PAGE 660, ADDED THAT TO THE 38 AND THE 7.5.

WHAT'S YOUR TOTAL? BECAUSE I THINK I'M GOING TO GET CONFUSED.

WHAT ARE YOU ANTICIPATING THE TOTAL INCREASE DEBT IS, AND THEN THE INCREASED AMOUNT TO PAY THAT. WHAT I WAS.

>> OH, I SEE.

>> WHAT I THOUGHT WAS IS, IF YOU WERE INCREASING 5.4 MILLION.

IN RATE PAY DEBT SERVICE. THAT'S ONGOING.

WE'RE FINANCING THESE PROJECTS FOR SAY 7-10 YEARS.

I WAS HOPING THAT WOULD BE $50 MILLION OR $60 MILLION WORTH OF BUYING POWER.

>> YES. IT IS 27.5 MILLION.

THE REASON FOR THAT WAS BECAUSE COUNCIL REQUESTED THAT WE GIVE THEM VARIOUS OPTIONS FOR HOW WE STRUCTURED THE DEBT SERVICE PAYMENTS RELATED TO THE FIRE APPARATUS.

WE DO HAVE SOME DEBT ROLLING OFF IN THE NEXT COUPLE OF YEARS, AND THE COUNCIL REQUESTED AND APPROVED FOR US TO TAKE BASICALLY THE BIGGEST PIECE TO GET THE TAX RATE UP TO THE MAXIMUM POINT WE NEEDED IN THE UPCOMING YEARS DEBT SERVICE PAYMENT, AND THEN THE REST OF IT COULD BE PAID BY OUTSTANDING DEBT.

IT WAS ALL BASED ON THE OPTION THAT COUNCIL WANTED TO STRUCTURE THE DEBT FOR THE FIRE APPARATUS AROUND?

>> THE ADDITIONAL 5.4 MILLION IN THIS CURRENT BUDGET, IS COVERING $27.5 MILLION WORTH OF THE DEBT? YES. BUT IS THERE ANY ADDITIONAL DEBT THAT CAN BE COVERED BY THAT SAME 5.4 MILLION, THERE IS, RIGHT?

>> NO.

>> I THINK THAT'S WHERE I'M LOST BECAUSE WE HEAVY LOADED IT ON THE FRONT END IN THIS 10 YEAR PLAN OR MAYBE IT WAS A SEVEN YEAR PLAN.

>> IT'S 13 YEAR PLAN.

WE'RE PAYING ON THE FRONT END SO WE CAN KEEP IT CONSISTENT AS WE GO THROUGH IT.

BUT THE 5.4 ISN'T, BECAUSE OF THE STRUCTURE OF THE FINANCE WITH, IT'S NOT A LEASING COMPANY, BUT A FINANCING COMPANY?

>> YES. IT WAS WITH THE MANUFACTURER.

WHAT THEY'RE DOING IS THEY'RE ALLOWING US TO SELL THE APPARATUS BACK TO HIM AND BASICALLY IN THE 13TH YEAR.

THEN THEY WILL MAKE THE FINAL DEBT SERVICE PAYMENT FOR US.

WHAT YOU'RE GOING TO SEE IS ON THE FIRE APPARATUS, THE NEXT YEAR.

WHEN WE'RE SITTING HERE NEXT SUMMER, YOU'RE GOING TO SEE THAT DEBT SERVICE PAYMENT BEING MUCH LOWER.

THAT'S HOW THAT ONE IS STRUCTURED.

WE'RE TAKING THE HIGHEST PART OF THAT PAYMENT IS UPFRONT ON THIS.

>> YES. AGAIN, A LOT OF OUR DEBT ISSUANCES AT THE CITY RANGED ANYWHERE FROM 20-30 YEARS.

THESE WERE A LOT SHORTER TERM DEBT ISSUANCES BECAUSE THEY HAVE TO MATCH THE LIFE CYCLE OF THE ASSET THAT THEY'RE SUPPORTING.

THE FIRE APPARATUS IS A 13 YEAR ON SOME OF THE PARKS PROJECTS.

SOME WERE FOR LIGHTS THAT HAD A 15 YEAR WARRANTY, SOME OUT OF 25, SO IT DEPENDS SOMEWHERE PARKING LOT, I THINK WE HAD THOSE AT 20 OR 25 YEARS.

BUT THEN ON THE STREET PROJECTS, IT WAS A SHORTER TERM ISSUANCE BECAUSE IT WAS TO FUND,

[02:20:03]

WHAT WAS CALLED THE SUMMER MAINTENANCE PROGRAM, WHICH DOES THE OVERLAY AND THEY'RE STILL CODING.

>> OVERLAY MICRO-SURFACE, THINGS LIKE THAT. IT HAVE A 10 YEAR LIFE.

>> IT'S A 10 YEAR LIFE.

YOU HAVE BIGGER DEBT SERVICE PAYMENTS ON THEN, WHAT WE SOMETIMES ARE USED TO, BECAUSE NORMALLY WE HAVE LONGER MATURITY PERIODS.

OTHER QUESTIONS ON THIS.

AT THE BOTTOM OF THIS SLIDE, I DID WANT TO COVER A COUPLE OF THINGS HERE.

THIS TAX RATE WOULD PRODUCE ABOUT A FOUR DOLLAR PER MONTH INCREASE ON $100,000 HOME.

IF YOUR HOUSE WAS 100,000 LAST YEAR AND IS 100,000 THIS NEXT YEAR, IT WOULD BE ABOUT A FOUR DOLLAR PER MONTH INCREASE.

ONE THING TO KEEP IN MIND IS THAT SOME IN OUR COMMUNITY DID NOT SEE INCREASES IN THEIR APPRAISED VALUES.

SOME ACTUALLY SAW DECREASES AND THEN SOME SAW INCREASES.

IT WAS A LITTLE BIT MIXED ACROSS OUR COMMUNITY FROM MY UNDERSTANDING.

IN THE YEAR THAT WE'RE LOOKING AT, WHERE OVER THE LAST COUPLE OF YEARS, EVERYONE WAS SEEING INCREASES, PRETTY MUCH.

EVERYONE ACROSS THE BOARD, ESPECIALLY I'M MAINLY TALKING ON THE RESIDENTIAL SIDE.

COMMERCIAL VALUES ARE ALL, IT'S A LITTLE BIT DIFFERENT DEPENDING ON WHAT TYPE OF PROPERTY IT IS.

BUT THIS IS THE FIRST YEAR WE'VE SEEN IN A WHILE WHERE SOME DID NOT SEE INCREASES, SOME SAW DECREASES, AND A LOT STILL DID SEE INCREASES.

OVERALL, OUR APPRAISED VALUES WENT UP ABOUT THREE PERCENT.

THAT'S RESIDENTIAL AND COMMERCIAL.

I HAVE ANOTHER SLIDE THAT I'LL SHOW YOU A LITTLE BIT MORE ON THAT.

ON THE AVERAGE HOME VALUE, IT DID GO UP SLIGHTLY FROM LAST YEAR TO THIS YEAR.

WHAT THAT DOES IS BECAUSE THE APPRAISED VALUE WENT UP FROM ABOUT 216,000, THIS IS POTTER AND RANDALL COUNTY.

RANDALL COUNTY HAS HIGHER AVERAGE APPRAISED VALUES THAN POTTER DOES.

BUT THEN IF YOU AVERAGE THEM ALL TOGETHER FOR THE CITY OF AMARILLO, LAST YEAR, THE AVERAGE RESIDENTS HOMESTEAD TAXABLE VALUE WAS 216,000.

THIS YEAR, NOW UPCOMING YEAR, IT'S UP TO 226.

SO THEY SAW ABOUT A $10,000 INCREASE.

WITH THAT INCREASE PLUS OUR PROPERTY TAX RATE CHANGE.

ON AN AVERAGE HOME, THEY WOULD SEE ABOUT AN $11 PER MONTH INCREASE RELATED TO THIS TAX RATE.

LET'S TALK ABOUT CERTIFIED VALUES.

AGAIN, I'VE ALREADY TOUCHED ON THIS, BUT YOU CAN SEE OUR TAXABLE VALUES WENT UP FROM 19, ALMOST $20 BILLION TO $20.7 BILLION.

WE DO HAVE OUR TAX INCREMENT FINANCING CAPTURED VALUES THAT WENT UP 224 MILLION TO 269 MILLION.

THEN WE DO HAVE THOSE THAT HAVE A TAX FREEZE OR A TAX LIMIT APPLIED TO THEM.

THE VALUES WENT FROM 3.4 MILLION TO 3.7 MILLION.

THAT PRODUCES TAXABLE VALUES OF 16.3 MILLION LAST YEAR TO 16.7 MILLION IN THE NEW YEAR.

AGAIN, LIKE I SAID, THAT'S ABOUT A THREE PERCENT INCREASE.

OUR TAXABLE VALUES ON NEW PROPERTIES WERE 335.8 MILLION LAST YEAR, AND THEY'RE ABOUT 289 MILLION IN THIS NEW YEAR.

AGAIN, THERE'S THAT AVERAGE RESIDENTS HOMESTEAD TAXABLE VALUE GOING FROM 216 LAST YEAR TO 226 IN THE NEW YEAR.

LET'S TALK QUICKLY ABOUT FROZEN TAXES.

AGAIN, IF A CITIZEN IS 65 OR OLDER OR THEY HAVE A QUALIFIED DISABILITY.

THEIR TAXES ARE FROZEN RELATED TO THE CITY OF AMARILLO PORTION.

WHAT WE DO EACH YEAR IS WE CALCULATE THE PORTION OF THE LEVY THAT IS LOST, AND THAT'S JUST IT'S JUST OVER, I'M SORRY, $6.9 MILLION, AND THAT TRANSLATES TO A LITTLE OVER $0.04 ON OUR TAX RATE THAT WE CANNOT CAPTURE BECAUSE THOSE PROPERTIES ARE SUBJECT TO FROZEN TAXES.

THIS CHART IS VERY BUSY AND IT'S VERY SMALL.

IT'S MAINLY JUST TO SHOW A TREND.

BACK IN 2008, CITIZENS VOTED TO HAVE THE FROZEN TAX EXEMPTION RELATED TO THE CITY'S RATE.

YOU CAN SEE BACK THEN, IT WAS 0.6 PENNIES ON OUR TAX RATE, AND NOW WE'RE AT ABOUT FOUR PENNIES ON OUR TAX RATE THAT IS LOST RELATED TO FROZEN TAXES.

THE DOLLAR VALUES HAVE RANGED FROM 590,000 UP TO ALMOST SEVEN MILLION DOLLARS.

THAT'S JUST AS VALUES HAVE GONE UP AND AS OUR COMMUNITY IS CONTINUING TO CAPTURE THOSE FROZEN TAX RATES.

ON THESE SLIDES, WHAT WE NORMALLY DO, JUST A PULSE CHECK OF HOW WE COMPARE TO SIMILAR SIZED CITIES.

[02:25:03]

WE LOOK AT EIGHT LARGER CITIES IN TEXAS AND EIGHT SMALLER CITIES IN TEXAS BASED ON POPULATION, AND WE LOOK AT THEIR TAX RATES AND TRY TO SEE WHERE OUR TAX RATE IS.

YOU'LL SEE ON THIS GRAPH, WE SHOW EMERALD RIGHT IN THE MIDDLE BECAUSE THIS ONE IS SORTED BY POPULATION.

TO THE LEFT, ARE THE EIGHT LARGER CITIES THAN US, AND TO THE RIGHT, ARE THE EIGHT SMALLER CITIES THAN US.

AS YOU LOOK AT THAT, YOU'LL SEE A GREEN LINE THAT GOES ACROSS THAT SHOWS THAT THE AVERAGE TAX RATE ACROSS THESE CITIES IS A LITTLE OVER $0.55, AND OUR PROPOSED RATE IS THE 0.43070.

ALSO, PLEASE KEEP IN MIND THAT WE DON'T KNOW WHAT THESE CITIES ARE GOING TO APPROVE FOR THEIR TAX RATE YET.

EVERY CITY'S GOING THROUGH THESE EXERCISES RIGHT NOW TRYING TO DETERMINE THEIR PROPERTY TAX RATES.

WE PUT IN THE 2024 TAX RATES FOR ALL THESE OTHER COMMUNITIES, AND WE PUT IN OUR PROPOSED 2025 TAX RATES.

JUST FOR YOUR AWARENESS, IF YOU TAKE THE SAME GRAPH AND YOU SORT IT BY PROPERTY TAX RATE, YOU CAN SEE THAT WE MAKE OUR WAY OVER TO THE RIGHT HAND SIDE OF THE PAGE AT OUR 0.43070 VOTER APPROVAL TAX RATE, THAT PUTS US JUST SLIGHTLY AHEAD OF FRISCO, PLANO, AND MCKINNEY.

I'M SURE YOU ALL ARE AWARE OF THE MAKEUPS OF THOSE COMMUNITIES.

THERE'S ANOTHER SLIDE THAT I WANTED TO SHOW YOU ALL.

THIS IS NOT NECESSARILY, I'M NOT GOING TO SAY THIS IS NECESSARILY A BEST PRACTICES CALCULATION, BUT IT IS SOMETHING INTERESTING TO LOOK AT.

THIS CALCULATION HERE TAKES THE TAX REVENUE PER CAPITA IN COMMUNITIES.

WHAT IT'S ESSENTIALLY DOING IS IT'S TAKING THE TAXABLE VALUES IN EACH OF THESE COMMUNITIES.

THESE WOULD HAVE BEEN THEIR 2024 TAXABLE VALUES TIMES THEIR 2024 TAX RATES DIVIDED BY THEIR POPULATION.

THIS WOULD BE OUR CITY OF AMARILLO 2025 TAXABLE VALUE TIMES OUR 2025 TAX RATE DIVIDED BY POPULATION.

ESSENTIALLY, IT'S TRYING TO GIVE YOU SOMEWHAT OF AN APPLES TO APPLES COMPARISON BETWEEN THESE COMMUNITIES BECAUSE WE ALL HAVE A LOT OF DIFFERENT MAKEUPS BETWEEN RESIDENTIAL, COMMERCIAL.

SOME OF THESE COMMUNITIES HAVE A LOT HIGHER APPRAISED VALUES THAN WE DO.

AS I MENTIONED ON THE SLIDE BEFORE, THIS ONE, IF YOU LOOK BACK AT THIS, FRISCO HAS A LOWER TAX RATE THAN US.

BUT THEN IF YOU GO LOOK AT THE PER CAPITA, THEY HAVE THE HIGHEST PER CAPITA TAX REVENUE, AND THAT'S JUST BECAUSE THEY HAVE SUCH LARGE TAXABLE VALUES IN THEIR COMMUNITY.

THAT'S ALL THIS SLIDE IS TRYING TO SHOW.

IT SHOWS THAT PER CAPITA, THE CITY OF EMERALD HAS ABOUT $441, THE AVERAGE ACROSS ALL THESE COMMUNITIES IS ABOUT $622.

DO YOU HAVE A QUESTION?

>> NO, I GUESS MY OBSERVATION IS, THESE, BECAUSE WE ALL HEAR ABOUT THE COMPARISONS IN OUR PROPERTY TAX, BUT REALLY AT THIS POINT, WE'RE LOCKED IN WHERE WE ARE.

NOW WITH THIS 3.5 AND POTENTIALLY 2.5% CAP, THIS IS NOT GOING TO CHANGE, UNLESS WE GO TO THE VOTERS AND ASK FOR IT.

THE THING I SEE OUT OF THIS AND TELL ME IF I'M WRONG, BUT LOOKING TO THE FUTURE, PROPERTY TAX IS NOT OUR FUTURE.

WE'RE CAPPED ON ALSO GROSS BUSINESS FRANCHISE FEE, IT'S NOT OUR FUTURE.

UNLESS THERE'S GROWTH, AND I SAY THAT ONLY JUST TO SAY, ANYTHING THAT WE NEED TO BE LOOKING AT DOING TO ENCOURAGE SALES TAX, I JUST THINK IS THE FOCUS THAT WE'VE GOT TO BE GROWING ON IN A COMMUNITY, BECAUSE THAT'S THE ONLY WAY WE'RE GOING TO BE ABLE TO INCREASE FUNDING OF OUR GOVERNMENT.

IT'S NOT GOING TO PAY FOR THESE OPERATIONS, OR WE'RE GOING TO HAVE TO CHARGE ADDITIONAL FEES.

I'M GUESSING THOSE ARE REALLY OUR ONLY TWO OPTIONS TO PROVIDE THESE SERVICES THAT THE STATE LEGISLATURE DECIDES TO CAP OUR ANNUAL INCREASE AT 2.5%.

>> YES, THAT IS CORRECT.

NOW, I DO THINK THAT AND I THINK THIS COUNCIL AND THE PRIOR COUNCIL SAW THAT THERE'S NOT AS MUCH ROOM.

THE STATE IS CERTAINLY RESTRICTING WHAT CAN BE CONTROLLED THROUGH PROPERTY TAXES.

HOWEVER, YOU CAN GET PROJECTS DONE BY ISSUING DEBT AND PUTTING IT ON THE INS PART OF THE TAX RATE.

NOW, THERE HAS BEEN LOTS OF PROPOSED LEGISLATION RELATED TO THAT AS WELL, BUT AT THIS POINT IN TIME, THAT IS ALSO A TOOL THAT COUNCILS HAVE AVAILABLE TO THEM IN ORDER TO KEEP TRYING TO PUT PROPER FUNDING OUT INTO THE COMMUNITY, CAN'T GO TOWARDS OPERATIONS, BUT CAN GO TO HELP SOME OF THESE IMPORTANT PROJECTS LIKE STREETS AND PUBLIC SAFETY EQUIPMENT FUNDING, SOME OF THOSE THINGS THAT WE HAVE CERTAINLY FALLEN BEHIND ON BY TRYING TO CASH FUND THOSE OVER THE YEARS.

>> I WOULD SAY, COUNCILMAN, I AGREE WITH YOU,

[02:30:01]

THE PROPERTY TAXES ISN'T THE WAY FORWARD.

YOU CAN SEE THE STATE CONTINUING TO ENGAGE IN CONVERSATIONS ABOUT POTENTIAL ABOLISHMENT OF PROPERTY TAXES AND REVENUES, AND LOOKING AT A STATE SALES TAX, OR A CONSUMER TAX.

WE HERE IN THE CITY OF AMARILLO WOULDN'T BE ABLE TO GET OUR PARTNERS TO ALL COME TOGETHER.

WE'RE HELD WITH PROPERTY TAXES IS MOVING FORWARD, BUT YOU'RE RIGHT IN THESE COMPARATIVE CHARTS, WHY THEY MAY BE HELPFUL TO LOOK OVERALL, THEY DON'T REFERENCE COMMUNITY COLLEGES THAT ARE BUILT INTO A TAX RATE THAT WE PAY FOR, BECAUSE WE GET A GREAT VALUE OUT OF IT THAT MAYBE THEY DON'T HAVE TO PAY FOR.

THEY ALSO DON'T REFERENCE HOW MUCH WE DO WITH SO LITTLE.

WE HAVE ZERO OVERLAP FROM ANY OTHER NEIGHBORING CITIES, AND WE REALLY NUCLEUS THE ENTIRE PANHANDLE OF TEXAS FOR ALL 26 COUNTIES.

WE DO FAR MORE WITH LESS THAN ANYBODY ELSE ACROSS THE STATE, I WOULD SAY.

IF YOU WERE THE MAYOR OF A DFW CITY, WITHIN A MILE OR TWO, YOU MAY HAVE TWO OR THREE ADDITIONAL FIRE BUDGETS THAT ARE ASSISTING YOU IN SOMETHING THAT YOU MAY NEED, SO YOUR COVERAGE, AND YOUR RESPONSE TIMES, EVERYTHING LIKE THAT'S TOTALLY DIFFERENT.

I THINK IT'S A GOOD EXAMPLE, BUT THEN, I ALSO THINK IT SHOWS HOW HARD WE ARE WORKING ON A BUDGET THAT ULTIMATELY DOESN'T HAVE A GOOD LONG-TERM OUTCOME.

WE ARE GOING TO CONTINUE TO SEE CONSTRUCTION COSTS RISE, LABOR COSTS GO UP, AND WE'RE GOING TO CONTINUE TO SEE THE STATE REGULATE THE ABILITY TO CHARGE, RIGHT? COUNCILMAN PRESCOTT, IN YOUR BUSINESS, YOU DO A FINE JOB, BUT YOU ALSO CHARGE QUITE A BIT, RIGHT? I PAY FOR IT, BUT I GET GOOD CUSTOMER SERVICE.

IF YOU WANTED TO DO A BAD JOB, YOU COULD ALWAYS CHARGE ME LESS, BUT YOU'VE LEARNED THAT LESSON HERE ON THE GOVERNMENTAL SIDE.

WE'RE GOING TO CONTINUE TO TRY TO IMPROVE QUALITY SERVICES, AND AT THE SAME TIME, WATCH THE PERCENTAGE DECREASE OVER TIME OF OUR ABILITY TO PAY FOR THOSE SERVICES WITHOUT HAVING TO PAY OUT OF POCKET.

I THINK IT GOES TO OUR DEBT ISSUANCES OF BEING THE WAY THAT WE ARE CONTINUING TO HAVE TO SEE THE TREND.

THANK YOU FOR THE CHARTS.

JUST A REMARK, BUT WE'RE CRUISING RIGHT ALONG UNLESS WE HAVE ANY OTHER COMMENT. THANK YOU.

>> THAT CONCLUDES OUR PROPERTY TAX PRESENTATION, BUT WE HAVE A LOT MORE TO COVER.

I DID WANT TO JUST QUICKLY GO OVER THE PROPERTY TAX NOTICE THAT IS INCLUDED IN YOUR PROPOSED BUDGET BOOK.

IT IS POSTED ON THE CITY'S WEBSITE AS A SEPARATE NOTICE AND IN THE FRONT OF THE BUDGET BOOK.

IF YOU'LL TURN TO THE VERY FIRST PAGE, THERE'S KIND OF A COVER PAGE IN YOUR BUDGET BOOK.

TURN TO THE PAGE RIGHT BEHIND IT.

THIS IS OUR TEXAS LOCAL GOVERNMENT CODE SECTION 102.005 NOTICE.

IT STATES WHAT PROPERTY TAX WE HAVE BUILT OUR BUDGET UPON.

THEN IT'S GOT SOME NUMBERS IN THERE.

I JUST WANT TO QUICKLY GO OVER THAT, JUST IN CASE YOU ALL GET QUESTIONS FROM CITIZENS.

I CERTAINLY WANT TO PUT THIS OUT THERE, AND I HOPE YOU ALL REALIZE THIS.

IF YOU ALL EVER GET A QUESTION FROM A CITIZEN, ESPECIALLY ABOUT THESE NOTICES, OR ANYTHING FINANCIALLY RELATED.

IF YOU'RE NOT SURE, PLEASE SHARE MY PHONE NUMBER WITH THEM OR MY EMAIL ADDRESS, AND I'D BE MORE THAN HAPPY TO WALK THEM THROUGH HOW THESE WORK.

THESE CALCULATIONS AND THESE NOTICES ARE ALL GIVEN TO US BY STATE LAW.

WE DO NOT HAVE THE ABILITY TO CHANGE THESE NOTICES.

I WANTED TO WALK YOU THROUGH HOW THIS SPECIFIC NOTICE WENT.

THANK YOU, STEPHANIE, FOR PULLING THAT UP.

WHAT IT SAYS IS THAT THIS BUDGET IS GOING TO PRODUCE MORE PROPERTY TAXES BY 8.475975, SO $8,475,975, OR 11.77%.

OF THAT AMOUNT, $1,245,224 IS COMING FROM NEW PROPERTIES.

I THINK THE FIRST THING TO NOTE IS THAT'S A WIN.

WE GOT $1.2 MILLION OFF OF NEW PROPERTIES.

THAT GROWTH IN OUR COMMUNITY IS A GREAT THING BECAUSE WE GET TO START CAPTURING THAT THROUGH OUR PROPERTY TAXES.

I THINK, TO COUNCILMEMBER SIMPSON'S POINT, ALSO, THAT SHOULD MEAN MORE SALES TAX DOLLARS, HOPEFULLY, IN OUR COMMUNITY.

THERE'S KIND OF A TWO-FOLD ON THAT ONE.

WHAT THIS NUMBER DOES IS IT CALCULATES WHAT WE ANTICIPATE TO COLLECT IN ALL OF OUR PROPERTY TAXES IN THE CURRENT YEAR, THE BUDGET THAT WE'RE WORKING THROUGH, OH, I'M SORRY, THE 24/25 YEAR, THAT ACTUAL YEAR WE'RE IN RIGHT NOW, VERSUS OUR PROPOSED TAX RATE, HOW MUCH TAXES THAT WOULD BRING.

THAT IS THE O&M SIDE AND THE INS SIDE.

THEN YOU JUST DO THE SIMPLE VARIANCE CALCULATION THERE TO COME TO 11.77%.

I JUST WANTED TO GO OVER THAT JUST REAL BRIEFLY WITH YOU ALL.

[02:35:03]

THE NEXT THING IS, AND I THINK GRAYSON ALREADY WENT THROUGH SOME HIGHLIGHTS OF THIS, BUT RIGHT AFTER THAT PAGE IN YOUR BUDGET BOOK, THERE'S A TRANSMITTAL LETTER THAT GIVES SOME OVERVIEW RELATED TO THE BUDGET AS A WHOLE.

I THINK THAT'S A REALLY GOOD PLACE FOR YOU GUYS TO LOOK AT, OR TO REFER TO GET SOME OF THE HIGHLIGHTS OF THE OVERALL BUDGET.

WHAT I WANTED TO GO TO NEXT AND GO THROUGH QUICKLY BEFORE WE START ON DEPARTMENT BUDGETS IS, I THINK, IF YOU'LL TURN IN YOUR PAGE, I WANT TO START GOING THROUGH CASHFLOWS REAL QUICK.

IF YOU'LL TURN IN YOUR BOOK TO PAGE 4, IT'S RIGHT BEHIND THE SUMMARY TAB.

THANK YOU, STEPHANIE. LET'S START WITH OUR GENERAL FUND.

ON OUR GENERAL FUND, WE HAVE A TWO-YEAR COMPARISON HERE.

WHAT THIS SHOWS IS THE CURRENT YEAR'S ORIGINAL BUDGET, AND THEN OUR PROPOSED BUDGET FOR THIS NEXT YEAR.

AT THE VERY TOP, WE START WITH OUR AVAILABLE FUNDS OR OUR BEGINNING-OF-THE-YEAR ESTIMATES FROM OUR RESERVES.

AGAIN, BOTH OF THESE NUMBERS ARE JUST ESTIMATES.

IT'S HOW MUCH FUNDING? I'M SORRY. QUESTION?

>> NO, YOU'RE GOOD. JUST A QUESTION.

I KNOW WE'VE HAD THIS LAST BUDGET.

>> WHY DO WE LOOK AT, WE'RE IN 24/25, I KNOW WE'VE GOT A LITTLE BIT LEFT. NOT MUCH.

>> WHY DON'T WE LOOK AT ACTUALS VERSUS BUDGET?

>> FOR 24/25?

>> WE ARE NOT ALL THE WAY DONE WITH OUR BUDGET YET, AND I'LL CERTAINLY LET GRAYSON WEIGH IN IF HE WANTS TO ON THIS.

IT'S JUST AN ESTIMATE AT THIS POINT IN TIME.

WE DON'T KNOW EXACTLY HOW WE'LL FINISH OUT THE YEAR, AND FELT THIS WAS A BETTER COMPARISON TO JUST LOOK FROM BUDGET TO BUDGET.

>> [LAUGHTER] WHAT SHE SAID.

>> THAT'S THE HARD PART. AGAIN, EVERY TIME I'VE DONE BUDGETS MYSELF, IT'S STRICTLY A GUESS, AND SO I WOULD HIGHLY CAUTION TRYING TO BASE YOUR NEXT YEAR'S BUDGET OFF OF THAT, BECAUSE WE STILL HAVE THREE MONTHS' WORTH OF INFORMATION COMING, AND NOW ALL DEPARTMENTS ARE EQUAL, SOME DEPARTMENTS ARE FRONT-HEAVY, SOME ARE BACK-HEAVY.

>> [LAUGHTER].

UNLESS YOU ACTUALLY DIVE INTO THE ACTUAL EXPENSES WITHIN THOSE LINES, YOU WILL GET LOST TRYING TO GET A CURVE-LINE USING YEAR-END ESTIMATES.

>> I'M NOT BEING CRITICAL. IT'S A LEGITIMATE QUESTION, AND IF WE ASKED THAT, IT'S A POINT OF IGNORANCE, ACTUALLY, BUT WE'VE DONE THIS SO MANY YEARS.

CAN WE NOT FORECAST IT? IS IT SIMILAR LIKE THE LAST THREE MONTHS? DO MOST OF THOSE THINGS TREND? I KNOW, LIKE YOU SAID, WATER.

WE COULD STOP GETTING RAIN AND WATER, ALL THE FEES GO WAY UP, BUT I DON'T KNOW.

I JUST LOOK AT WHAT WE DID LAST YEAR WITH THE BUDGET, WHICH IS GREAT, BUT I DON'T KNOW HOW CLOSE WE WERE TO THAT, OR HOW CLOSE WE'RE GOING TO COME TO THAT. IT'S JUST A QUESTION.

I'M NOT BEING CRITICAL. IT SEEMS LIKE WE COULD FORECAST THESE NEXT THREE MONTHS IN EVERYTHING.

IS IT JUST NOT? THIS IS BETTER THAN THAT.

>> WE DO INCLUDE THAT FOR OUR INTERNAL PURPOSES, BUT WE DON'T HAVE IT HERE IN THE PRESENTATION.

YES, WE DO GO THROUGH THOSE FORECASTING EXERCISES INTERNALLY, BUT WE DON'T HAVE IT HERE FOR THIS PRESENTATION PURPOSES, BUT WE USE IT HEAVILY AS WE ARE BUILDING OUR PROPOSED BUDGET, BECAUSE IF WE ARE RUNNING BEHIND IN AN AREA, WE NEED TO MAKE IT UP IN THE NEW BUDGET, OR IF WE THINK WE MAY HAVE SOME ROOM FROM THE CURRENT YEAR, MAYBE LESS, WE DIDN'T SPEND AS MUCH AS WE HAD ANTICIPATED, OR MAYBE REVENUES CAME IN A LOT BETTER THAN WE ANTICIPATED, WE CAN USE THAT AS WE START BUILDING THE NEXT YEAR'S PROPOSED BUDGET.

YES, IT IS BEING DONE.

IT IS JUST NOT IN THIS PRESENTATION.

>> I WOULD ACTUALLY ECHO WHAT HE SAID, BECAUSE I THINK NOW THAT BUDGET NUMBER IS NOW EIGHT MONTHS OLD, NINE MONTHS OLD.

THAT NUMBER REALLY DOESN'T MEAN A WHOLE LOT AT THIS POINT.

THAT WAS A NUMBER THAT WE SELECTED LAST YEAR, AND I AGREE.

I THINK IN THE FUTURE, JUST FOR THIS, IF WE COULD HAVE EIGHT PLUS FOUR, NINE PLUS THREE, BECAUSE THEN THAT GIVES YOU A BETTER IDEA OF WHAT YOUR BUDGET NUMBER IS VERSUS ACTUAL VERSUS WHAT WE THOUGHT A BUDGET WOULD BE A YEAR AGO. DOES THAT MAKE SENSE?

>> I WOULD AGREE WITH COUNCILMEMBER TIPPS, BECAUSE I THINK IT IS SOMETHING THAT WE TALKED ABOUT BEFORE, BECAUSE WE HAVE THE ACTUALS, BUT WHAT DO WE FORECAST THE ACTUALS TO BE AT THIS YEAR, BECAUSE AGAIN, LAST YEAR'S BUDGET NUMBER REALLY, IT'S STILL THERE, BUT IT DOESN'T HAVE MUCH MEANING NOW BECAUSE THAT NUMBER IS EIGHT MONTHS OLD AT THIS POINT WHEN WE DO HAVE ACTUAL NUMBERS, AND THEN FORECASTING WHERE WE FINISH.

[02:40:01]

>> I DON'T KNOW THAT WE WOULD ASK FOR YOU TO PROJECT, BUT I THINK ONE THING YOU COULD DO IS YOU COULD GO FROM PROPOSED BUDGET, OR APPROVED BUDGET IN 23/24, AND SHOW THE ACTUALS THERE, BECAUSE I KNOW WE HAVE THAT DATA.

[NOISE] IF PROPOSED BUDGET WAS 241, ACTUALS WERE 226, PRETTY SIGNIFICANT, BRINGING IT IN UNDER BUDGET.

THEN IF WE GO TO 24/25, PROPOSED BUDGET IS, I DON'T KNOW, 255 GENERAL FUND, I GUESS I'M SAYING, OVERALL, AND THROUGH THE CURRENT, JUST WHATEVER YOU'RE RUNNING UP TO CURRENT WITHOUT THE PROJECTION, WE COULD DIVIDE AND MULTIPLY THAT OUT, AND SEE WHAT THE PROJECTED WOULD BE JUST QUARTER TO QUARTER.

NOT SAYING A PROJECTION DEPARTMENTALLY, BUT JUST TO GIVE US THAT.

ALL WE'RE LOOKING FOR, I THINK, WHAT I'M HEARING COUNCIL SAY IS, AS IT PERTAINS TO THIS 264 NUMBER, OR 269 NUMBER.

HAVE WE TRENDED $10 MILLION BELOW THAT EVERY YEAR FOR THE PAST FIVE YEARS? DO WE TREND $20 MILLION BELOW THAT? WHAT ARE WE DOING? IS THAT SOMETHING THAT YOU COULD DO, JUST LOOKING BACK AT 23/24? GIVE US ACTUALS VERSUS THE APPROVED BUDGET?

>> YES, WE COULD DO THAT.

>> THEN, CAN YOU GIVE US CURRENT EXPENDITURES IN 24/25 VERSUS APPROVED BUDGET, AND JUST NET OUT THE REMAINING AMOUNT THAT WOULD GET US TO YEAR-END?

>> WE COULD PROVIDE OUR FORECASTING.

I THINK THAT WOULD BE BEST.

WE ARE IN OUR SUMMER MONTHS, AND WE HAVE SOME DEPARTMENTS THAT DON'T EVEN OPERATE MUCH UNTIL THE SUMMER MONTHS, AND SO IT CERTAINLY CAN SKEW A BUDGET PROJECTION IF YOU'RE ONLY LOOKING AT ACTUALS BASED ON, LIKE A FLAT TOTAL ANNUAL BUDGET, AND THEN ACTUALS THROUGH A CERTAIN MONTH, AND WE'RE VERY SEASONAL.

>> YES, MA'AM. SPECIFICALLY, I THINK IF WE STARTED WITH A $53 MILLION RESERVE, WE ENDED UP WITH A $74 MILLION RESERVE, WE DID A GREAT JOB IN BRINGING THE ENTITY IN $21 MILLION UNDER-BUDGET, RIGHT?

>> OKAY, SO THE FUTURE, OR THE PROPOSED BUDGET, FROM BUDGET TO BUDGET, DOESN'T ACCOUNT FOR THAT NET SAVINGS.

THAT'S BEING SWEPT OVER INTO CIP CAPEX, RIGHT? OKAY. ONE OTHER THING, REAL QUICK TO GO BACK BEFORE WE MOVE ON.

YOUR LETTER, FRONT PAGE, WHAT DID YOU CALL IT? IT'S THE STATEMENT.

>> THE TRANSMITTAL LETTER, YEAH.

>> WELL, NO, THE STATEMENT FOR THE, WE'LL RAISE-.

>> OH, THE PROPERTY TAXES?

>> YEAH, WE'LL RAISE $8.4 MILLION IN ADDITIONAL PROPERTY PLUS THE ONCOMING, AND WHATNOT?

>> OKAY. YOU HAD TALKED ABOUT BRINGING THAT WITH THE TAX RATE TO THE AUGUST 12 MEETING.

MY QUESTION WOULD BE, WE'RE FORECASTING ALREADY SOME FOLLOW-UP MEETINGS NEXT WEEK.

>> WHY WOULD WE NOT PUSH THAT TO THE 26TH, IN ORDER TO GO AHEAD AND JUST VOTE ON IT? THEN, THAT WAY, WE WOULD KNOW WHERE WE NEEDED TO BE.

I UNDERSTAND IT'S THE HIGHEST IT CAN GO, BUT IT INVITES THE CRITICISM THAT COMES ALONG WITH THAT ASSUMPTION, BECAUSE NOBODY IS PAYING ATTENTION, A VAST MAJORITY TO WHAT WE'RE DOING.

ALL THEY'RE GOING TO SEE IS THAT RATE, SO BEFORE WE GET TOTALLY DONE, HOW MUCH TIME DO I HAVE TO PUT THAT ON THE AGENDA?

>> WE HAVE TO START PUBLISHING NOTICES IN THE NEWSPAPER BY SEPTEMBER 2ND, AND THEN, I THINK THE NEWSPAPER NEEDS, I DON'T KNOW, PROBABLY FOUR TO FIVE DAYS PRIOR TO THAT.

I'D HAVE TO LOOK.

AGAIN, ALL WE'RE ASKING IS FOR YOU GUYS TO SET THE VOTER APPROVAL TAX RATE IS THE NOT TO EXCEED PROPERTY TAX RATE.

>> RIGHT, AND I UNDERSTAND, BUT I ALSO UNDERSTAND THE CONSIDERATION OF ONCE YOU SET THAT, IT'S REALLY HARD TO REVISIT CONVERSATION.

I'D LOVE TO GIVE COUNCIL AS MUCH TIME AS THEY'D LIKE TO GET COMFORTABLE WITH THAT.

PUSH THAT ITEM TO THE 26TH, KNOWING THAT WE WILL OBVIOUSLY HAVE A QUORUM, AND WE'LL GET THAT PUSHED OUT FOR YOU IN TIME TO MEET ALL THE DEADLINES.

>> WE COULD DO THAT, BUT WE MAY HAVE TO CHANGE OUR COUNCIL DATES IF WE CAN'T MEET THE POSTING FOR THE PUBLIC NOTICES.

>> I DEFINITELY WOULD KNOW WE'RE CALLING SPECIAL MEETINGS, ANYWAY, PROBABLY A SPECIAL SESSION TO DO SOME OF THIS STUFF.

GLAD TO GET THROUGH THAT SPECIAL SESSION AND THEN HAVE IT LISTED SO THAT WE COULD DO IT NEXT WEEK, JUST NOT ON TUESDAY FOR THE WEEK AFTER.

>> APPROVING IT ON TUESDAY, WE HAVE TO DO A SPECIAL MEETING ALREADY TO GET THROUGH ALL OF THE APPROVALS.

WE COULD CHANGE IT TO WHERE COUNCIL WAITS TO DO THEIR FIRST AND SECOND READINGS ON SEPTEMBER 16TH, AND THEN SEPTEMBER 23RD.

>> I LIKE THAT. COUNCIL, ARE YOU GUYS OKAY WITH THAT, BECAUSE IT'S NOT DUE TILL THE 29TH, I THINK.

>> YEAH, IT'LL BE DUE ON THE 30TH.

WE CAN DO THAT IF Y'ALL WOULD LIKE.

>> LET'S JUST GIVE US MORE TIME TO GET THROUGH IT ALL.

EVEN IN STRATEGY OF, LIKE, COLA, MERIT, THINGS LIKE THAT.

[02:45:02]

I KNOW WE'RE GOING TO PUSH HARD THROUGH THESE DEPARTMENTS, AND IF WE'RE NOT DIGGING IN, LIKE, YOU REALLY DON'T NEED US DOWN IN THE WEEDS, THEN I WOULD LOVE TO HAVE SOME TIME TO GO BACK COMPREHENSIVELY OVER EVERYTHING BEFORE WE PUT A TAX RATE OUT THERE THAT MAY, OR MAY NOT BE WHERE WE LAND.

>> WE CAN DO THAT. AGAIN, REMEMBER, THAT IS JUST A TAX RATE NOT TO EXCEED.

THAT'S THE FIRST ACTION THAT WE'LL ASK OF COUNCIL.

>> I UNDERSTAND. I WOULD JUST CONTINUE TO ADVOCATE FOR, WE'RE NOT GOING TO SPEND $1 WE DON'T HAVE TO, SO WE'RE NOT GOING TO PUT IT OUT THERE THAT WE WOULD IF WE DIDN'T KNOW WE NEEDED IT.

I UNDERSTAND IT'S A NOT TO EXCEED RATE, BUT IT'S NEVER BEEN RECIPROCAL THAT WAY FROM THE COMMUNITY.

THEY ALWAYS FEEL LIKE ONCE IT'S DONE, IT'S DONE AND IT'S OVER.

>> THAT'S THE WAY WE'VE DONE IT THE LAST TWO YEARS, ISN'T IT?

>> THAT'S THE WAY WE'VE DONE IT FOR THE LAST MANY YEARS.

>> COUNCILMAN SIMPSON, I THINK I'VE ALWAYS FELT LIKE WE'VE DONE IT EARLY, AND WE'VE ALWAYS PUSHED.

>> BUT WHAT WE'RE SAYING IS, WE HAVE TO MEET THE LETTER OF THE LAW TO SAY, WE WILL NOT EXCEED THE MATE.

WE CAN COME IN SET ANY TAX RATE WE WANT TO AFTER THAT.

>> CORRECT. YOU ARE MEETING THE LETTER OF THE LAW.

YOU HAVE PLENTY OF TIME TO SET THAT TAX RATE, SETTING IT EARLY BEFORE WE CONCLUDE DISCUSSIONS?

>> WELL, WE'RE NOT SETTING IT. WE'RE JUST SAYING IT WON'T EXCEED THIS AMOUNT.

>> CORRECT. SETTING THAT NOT TO EXCEED TAX RATE BEFORE WE CONCLUDE DISCUSSIONS ISN'T BENEFICIAL IN MY MIND.

YOU HAVE PLENTY OF TIME.

WHAT'S OUR DEADLINE?

>> WELL, JUST SO WE DON'T HAVE TO CALL 18 SPECIAL MEETINGS.

HAVE WE MOST OF THE TIME DONE THAT IN THE REGULAR MEETING TIME? I JUST DON'T UNDERSTAND. WE'VE DONE IT THE LAST TWO YEARS.

IT SEEMED TO WORK. I DON'T KNOW WHY WE'RE NECESSARILY HAVING TO CHANGE IT AT THIS POINT.

AGAIN, IT'S NOT SETTING THE TAX RATE.

WE'LL DO THAT, I GUESS, IN SEPTEMBER ONCE WE WORK THROUGH THE BUDGET.

>> WE NORMALLY HAVE ONE SPECIAL MEETING BECAUSE WE HAVE TO APPROVE DO THE FIRST AND SECOND READINGS.

I BELIEVE, IT'S WITHIN ONE WEEK OR MAYBE IT'S 10 DAYS OF EACH OTHER, ACCORDING TO STATE LAW.

SINCE WE DO MEETINGS APPROXIMATELY EVERY TWO WEEKS, WE HAVE TO ALWAYS DO A SPECIAL MEETING.

WE NORMALLY TRY TO DO IT ON THE SECOND TUESDAY AND THEN THE THIRD TUESDAY IN SEPTEMBER.

BECAUSE IF SOMETHING GOES WRONG, THAT STILL LEAVES US CAPACITY TO GET THE BUDGET APPROVED AND THE TAX RATE APPROVED, PRIOR TO SEPTEMBER 30TH.

>> LET ME SAY IT THIS WAY. MY SCHEDULE PUTS ME AT SOMEWHERE AROUND 11 OR 12 O'CLOCK ON THURSDAY, GOING OVER AGENDA WITH CITY MANAGER, SO IT CAN BE POSTED IN TIME FOR THE MEETING ON THE 12TH.

YOU'RE ASKING ME TO PUT IT ON THE MEETING FOR THE 12TH WITHOUT EVEN GETTING THROUGH THE FULL BUDGET REVIEW.

THE DEADLINE IS SEVERAL WEEKS AFTER THAT.

I WOULD LOVE TO NOT BE IN THAT POSITION, NOT HAVE IT ON THE 12TH, KNOWING THAT WE COULD HAVE IT ON THE FOLLOWING MEETINGS OR DO IT WITHIN THE FOLLOW UP MEETING THAT WE'RE PLANNING ON HAVING.

>> WELL, IF WE CAN JUST KEEP THE SPECIAL CALL MEETINGS TO A MINIMUM, THAT WOULD JUST HELP ME.

>> I CAN DEFINITELY DO THAT.

>> WELL, ALL OF US HAVE DAY JOBS.

WE'VE USED THE SAME METHOD THE LAST TWO YEARS, AND IT SEEMED TO WORK.

WE MAY HAVE DONE IT EARLIER.

I CAN'T REMEMBER, BUT ANYWAY.

>> NO, I THINK LAST YEAR, WE TOOK OUR TIME AND WE PUSHED IT ALL THE WAY UP TO THE 19TH OR 20TH, SOMEWHERE IN THERE.

I'D HAVE TO LOOK BACK. BUT THANK YOU FOR DOING THAT.

I APPRECIATE THE CONSIDERATION FOR COUNCIL, AND WE DO HAVE A COUPLE OF NEW MEMBERS THAT WE WANT TO BE CONSIDERATE OF, EVEN THOUGH THEY'RE SUPER SHARP, QUICK STUDIES.

MS. LAURA, I'LL HAND THE REINS BACK OVER TO YOU. THANK YOU.

>> GOING BACK TO PAGE 4.

THIS IS A LOOK AT THE GENERAL FUND CASH FLOWS.

AS MENTIONED, WE LOOK TO START WITH AVAILABLE FUNDS AT THE BEGINNING OF THE YEAR.

NOW, THE AVAILABLE FUNDS CALCULATION IS MADE UP OF ALL OF THE CITY'S CASH AND INVESTMENTS ON HAND, LESS OUTSTANDING SHORT TERM LIABILITIES THAT ARE DUE, LESS ANY ENCUMBRANCES AT THE END OF THE YEAR.

THEN LESS ANY ALREADY DEDICATED FUNDS FOR CAPITAL IMPROVEMENT PROJECTS.

THE GENERAL FUND DOES NOT HAVE DEDICATED FUNDS FOR CAPITAL IMPROVEMENT PROJECTS, BUT THAT DOES FLOW IN TO OUR DISCUSSION ON SOME OF THE OTHER FUNDS.

THE CURRENT YEAR'S BUDGET, WE ANTICIPATED WE WERE GOING TO START THE YEAR AT ABOUT $74.8 MILLION, AND WE ARE ANTICIPATING WE ARE GOING TO START THE NEW YEAR AT ABOUT $53.4 MILLION.

THE REASON THOSE NUMBERS HAVE CHANGED IS BECAUSE WE WERE SPENDING DOWN SOME OF THE PRIOR YEAR EXCESS RESERVES IN THE CURRENT YEAR'S BUDGET FOR SOME ONE TIME CAPITAL.

IF YOU COME DOWN THESE ROWS, YOU'LL SEE THAT WE HAVE TOTAL REVENUES IN THE CURRENT YEAR OF $260.9 MILLION AND IN THE PROPOSED BUDGET OF $269.9 MILLION.

[02:50:04]

WE WENT OVER THAT JUST A MINUTE AGO ON THAT SLIDE SHOW PRESENTATION.

THAT WOULD GIVE US AVAILABLE RESOURCES FOR THIS NEXT YEAR OF $323.3 MILLION.

THEN WE WOULD LOOK TO DEDUCT OUT ALL OF OUR OPERATING EXPENDITURES.

THE OPERATING BUDGET REQUEST IN THE CURRENT YEAR WERE $255.4 MILLION, AND THEN THEY ARE ANTICIPATED TO BE $252.4 MILLION.

AGAIN, WE WENT OVER SOME OF THE CHANGE IN THAT.

PART OF THAT WAS MOVING THE STREET MAINTENANCE OUT OF THE GENERAL FUND, BUT THEN WE ALSO ADDED IN RAISES FOR FIRE POLICE, CIVILIANS, PAY STUDY, AND A CLA ALONG WITH SOME ADDITIONAL MISCELLANEOUS ITEMS WE'LL COVER AS WE WALK THROUGH THE BUDGET.

DOWN BELOW, YOU'LL SEE THAT THERE ARE TRANSFERS TO VARIOUS GRANTS AND PROJECTS.

THE ONE OF INTEREST, I THINK, WOULD BE, WELL, A COUPLE.

IF YOU GO DOWN TO THE MIDDLE THERE, YOU'LL SEE STREET IMPROVEMENT.

IN THE CURRENT YEAR BUDGET, THERE WAS $2.5 MILLION AND YOU'LL SEE ZERO FOR NEXT YEAR.

THAT HAS BEEN MOVED OUT TO THE STREET MAINTENANCE FUND.

THAT WOULD BE FACILITATED THROUGH THE STREET MAINTENANCE FUND GOING FORWARD IN THIS PROPOSED BUDGET.

THE LINE RIGHT BELOW THAT IS YOUR CIVIC CENTER IMPROVEMENT.

THAT IS CALCULATED BASED OFF OF OUR ANTICIPATED HOTEL OCCUPANCY TAXES, LESS WHAT WE PAY CVB FOR DOING OUR TOURISM EFFORTS AND FOR OUR NET OPERATING LOSS.

AT THE CIVIC CENTER. THIS IS OUR ANTICIPATED AMOUNT THAT WOULD THEN GO TO PAY FOR DEBT SERVICE AT THE PARKING GARAGE AT THE MPEB AND FOR CAPITAL PROJECTS AT THE CIVIC CENTER.

GOING DOWN LIABILITY FOR COMPENSATED ABSENCES, ANYTIME SOMEONE RETIRES OR IS TERMINATED FROM OUR GENERAL FUND AND OUR OTHER GOVERNMENTAL FUNDS.

THEY ARE PAID FOR THEIR ANNUALLY SICK LEAVE AND COMP TIME, IF APPLICABLE OUT OF OUR COMPENSATED ABSENCES FUND, AND SO WE BUDGET ABOUT 1.25 MILLION EACH YEAR TO HELP ACCOMMODATE THE PAYOUTS OF THOSE LEAVE BALANCES.

THE NEXT LARGE LINE ITEM IS YOUR GENERAL CONSTRUCTION LINE ITEM.

YOU'LL SEE IN THE CURRENT YEAR WE HAD BUDGETED JUST UNDER $10.5 MILLION TO FUND CONSTRUCTION PROJECTS.

MOST OF THAT WAS COMING FROM ONE TIME FUNDING FROM EXCESS RESERVES IN THE PRIOR YEAR.

YOU'LL SEE OVER ON THE RIGHT THAT WE ARE ANTICIPATING TO SPEND ABOUT 9.4 MILLION THIS UPCOMING YEAR IN ONE TIME CAPITAL PROJECTS.

NOW, I DID WANT TO GO BACK UP TO REVENUES FOR JUST A SECOND, STEPHANIE, IF YOU DON'T MIND.

ON THE GROWTH BETWEEN THE BETWEEN 254-264 MILLION, I DID WANT TO LET YOU ALL KNOW THERE'S SOME ONE TIME REBALANCING OF SOME OF OUR INTERNAL SERVICE FUNDS THAT WE ARE ANTICIPATING BRINGING THOSE EXCESS RESERVES BACK TO GENERAL FUND.

THE FIRST, IT WAS, AND I'LL SHOW YOU THESE AS WE WALK THROUGH THE BUDGETS, BUT WE HAD ABOUT $6 MILLION IN EXCESS FLEET RESERVES THAT WE ARE BUDGETING TO SEND BACK TO GENERAL FUND.

WE WANTED TO BRING THEM BACK TO GENERAL FUND SO GENERAL FUND COULD USE THEM FOR WHATEVER WAS NEEDED, AND WHAT WE'RE RECOMMENDING IS CAPITAL PROJECTS.

THERE WAS ALSO A LITTLE BIT OF EXTRA RESERVES IN OUR RISK MANAGEMENT FUND OF ABOUT 1.5 MILLION.

THAT WE HAVE SHOWN AS A TRANSFER BACK INTO GENERAL FUND TO HELP FUND CAPITAL PROJECTS.

THEN FINALLY, THERE IS 1.9 MILLION THAT IS A TRANSFER FROM OUR HEALTH PLAN.

THOSE WERE EXCESS RESERVES.

>> SORRY TO INTERRUPT. CAN YOU DEFINE WHAT REBALANCE MEANS?

>> WE HAVE A MINIMUM 90-DAY RESERVE POLICY.

THEN IN OUR RISK MANAGEMENT FUND, WE TARGET $6 MILLION IN RESERVES, AND THAT'S BASED ON OUR AVERAGE CLAIMS, I BELIEVE IT'S OVER A THREE MONTH PERIOD, AND THEN OUR HEALTH PLAN, WE TARGET A $5 MILLION RESERVE.

IF WE EVER COME IN WITH MORE THAN THOSE AMOUNTS IN THOSE INTERNAL SERVICE FUNDS, THAT IS EXCESS RESERVES THAT WE CAN MOVE BACK OVER TO GENERAL FUND OR WE COULD LEAVE IN THOSE INTERNAL SERVICE FUNDS FOR FUTURE USE.

>> RISK MANAGEMENT, LET'S SAY, IT HAS A RESERVE OF $14.5 MILLION, AND YOU'RE TARGETING SIX MILLION.

WHEN YOU SAY REBALANCE, YOU PULL THE 8.5 MILLION OUT OF THAT AND YOU PUT IT OVER ONTO THE CURRENT YEAR'S BUDGET?

>> POTENTIALLY, AND I'LL SHOW YOU WHERE THAT'S HAPPENING IN THESE OTHER BUDGETS.

>> HOW DO YOU IDENTIFY WHETHER THAT'S ONGOING, LIKE RATE, REVENUE MONIES OR IT'S ONE-TIME MONIES?

>> WE WOULD ANTICIPATE IT'S ONE-TIME MONEY BASED ON WHEN WE BUILD THE NEXT YEAR'S BUDGET.

WE PLAN FOR WHAT REVENUES WE THINK WILL BE COMING IN VERSUS WHAT EXPENDITURES THEY WILL HAVE.

AS YOU CAN IMAGINE IN THOSE INSURANCE FUNDS,

[02:55:02]

CLAIMS CAN VARY FROM YEAR TO YEAR.

WE WORK WITH CONSULTANTS AND ACTUARIES TO HELP US FORECAST THOSE CLAIMS. THEN WE ALSO HAVE PREMIUMS ON CERTAIN INSURANCE POLICIES THAT WE KNOW WE ARE GOING TO SPEND.

WE MAKE SURE THAT WE HAVE SUFFICIENT AMOUNT TO COVER ALL OF OUR ANTICIPATED COST AND THAT WE MAINTAIN THOSE RESERVES, AND THEN ANYTHING ABOVE AND BEYOND THAT IS WHAT WE USE AS ONE TIME.

>> THE WAY IN WHICH YOU'RE SHOWING REVENUES TO THOSE INTERNAL DEPARTMENTS SERVICES.

AS AN EXAMPLE, IF RISK MANAGEMENT WAS REVENUING, AND I DON'T KNOW THIS IS A GOOD EXAMPLE, BUT IF THEY'RE REVENUING EIGHT MILLION A YEAR, AND THEY CAN SHOW SERVICE FOR ALL OF THEIR SERVICES, AND THEY'RE GOING TO HAVE AN EXTRA TWO MILLION LEFTOVER, AND YOU ALREADY HAVE THAT SIX MILLION IN YOUR RESERVE, RATHER THAN PUTTING THAT OVER INTO RESERVE OR PUTTING IT INTO ONE-TIME CIP, WHY WOULD THAT NOT BE ACCOUNTED SINCE IT'S AN ONGOING BILLABLE.

IT'S BASICALLY BUILT INTO THE OVERALL TAX RATE, WOULD COUNCIL HAVE THE ABILITY TO DIRECT THAT TO PAY INCREASES?

>> I WOULD NOT RECOMMEND IT BECAUSE WE MAY HAVE HAD GOOD CLAIMS EXPERIENCE IN A YEAR THAT WE MAY NOT SEE IN THE NEXT YEAR.

>> SHIFT IT TO MAYBE IT OR SOMETHING LIKE THAT, WHERE YOU'VE GOT A BILLABLE OR LEGAL.

I KNOW WE'RE NOT BILLING LEGAL OUT, BUT SOMEWHERE IN THERE, THERE'S ADDITIONAL RESERVES THAT ARE BEING, I THINK, SWEPT OVER, AND THEY'RE GOING TO CIP FOR ONE TIME USAGE.

HOW DO YOU IDENTIFY WHETHER ANY OF THOSE MONIES COULD BE CALCULATED TOWARDS OUR ANNUALIZED BUDGET TO PAY FOR PERSONNEL COSTS?

>> FOR INSTANCE, LET'S TALK ABOUT OUR RISK MANAGEMENT BUDGET.

WE BUILD THE BUDGET, AND THEN WE CALCULATE THE CHARGES BACK TO THE DEPARTMENTS.

WE DON'T EVER JUST SAY, WELL, WE'RE ALWAYS GOING TO COLLECT THIS MUCH WITH A 5% INCREASE FOR NEXT YEAR.

WE ALWAYS ARE BUILDING OUR EXPENSES AND THEN CHARGING IT BACK TO THE DEPARTMENTS.

THEN, FOR INSTANCE, ON THE IT FUND, AND WE'LL WALK THROUGH THAT IN A MINUTE.

NOW IT ACTUALLY IS NOT HITTING THEIR TARGET RESERVES RIGHT NOW, BECAUSE COSTS HAVE JUST CONTINUED TO COME IN EVEN HIGHER THAN ANTICIPATED EACH YEAR.

WE'RE TRYING TO START BUILDING BACK THEIR RESERVES.

IN OUR HEALTH PLAN, WE WOULD NOT RECOMMEND AT THIS POINT, DOING ANY KIND OF A RATE DECREASE BECAUSE HEALTH CARE COSTS ARE CONTINUING TO GO UP.

WE ARE GOING THROUGH A PROCESS RIGHT NOW, AN RFP PROCESS, BUT WE DON'T KNOW WHAT THE RESULTS OF THAT ARE GOING TO BE YET.

WE WON'T HAVE THAT BY THE TIME WE'RE FINISHED FORMING THIS BUDGET.

WE HAVE WORKED WITH OUR CONSULTANTS TO COME UP WITH A REASONABLE AMOUNT OF WHAT AVERAGE CLAIMS WILL BE FOR THIS NEXT YEAR, AND THEN BUILT ALL OF OUR OTHER COSTS IN FOR OUR HEALTH PLAN, AND THEN WE BACKED INTO WHAT NEEDS TO BE CHARGED BACK TO DEPARTMENTS.

>> UNDERSTOOD. THAT'S VERY HELPFUL.

I THINK GETTING THE AMOUNTS OF THE RESERVES THAT ACTUALIZED IN '24, '25 OR '23, '24, WHEREVER YOU CAN GO BACK AND TO BE ABLE TO SHOW LIKE FLEET HOW A RESERVE, IT, HOW TO RESERVE, RISK MANAGEMENT, HOW TO RESERVE, SHOWING THOSE TARGETS THAT WE'RE LOOKING FOR.

THEN FOR COUNCIL TO BE ABLE TO SEE WHERE THOSE MONIES ARE GOING, BECAUSE ARE YOU REPRESENTING ALL OF THE AVAILABLE FUNDS IN THIS PAGE ON PAGE 4, OR ARE THERE ADDITIONAL MONIES THAT AREN'T BEING REPRESENTED HERE THAT WE'RE KEEPING IN A RESERVE ACCOUNT?

>> THESE ARE ALL THE AVAILABLE FUNDS FOR THE GENERAL FUND.

THIS IS SHOWING BY FUND.

THIS IS JUST GENERAL FUND MONEY HERE.

AGAIN, WE'RE PROPOSING THAT THE EXCESS RESERVES FROM A COUPLE OF OTHER FUNDS COME BACK TO GENERAL FUND FOR GENERAL FUND TO USE THEM.

WE COULD HAVE PROPOSED TO LEAVE THEM THERE FOR FUTURE USE POTENTIALLY, BUT WE ARE PROPOSING TO MOVE THEM BACK OVER TO GENERAL FUND TO HELP PAY FOR GENERAL FUND.

>> THE QUESTION IS, ARE YOU PROPOSING TO PULL ALL OF THOSE MONIES BACK OVER, OR ARE THERE REMAINING MONIES THAT ARE OUT THERE?

>> ALL OF THEM.

>> YOU'RE PULLING ALL OF THOSE MONIES BACK TO GENERAL FUND THAT CAN BE, BUT THEN YOU'RE ONLY IDENTIFYING THOSE MONIES FOR ONE TIME USE?

>> YES. THAT IS CORRECT.

>> WHEREVER WE CAN SEE THAT IN THE CHART BROKEN DOWN SO WE COULD TRACK, THAT WOULD BE GREAT.

>> IF YOU WANT TO TURN TO PAGE 74, THIS IS THE CASH FLOW FOR OUR HEALTH PLAN.

ON PAGE 74 DOWN AT THE BOTTOM, YOU WILL SEE THAT WE ARE, TARGETING A RESERVE OF $6 MILLION AND WE'RE ANTICIPATING WE'RE GOING TO COME IN JUST SLIGHTLY BELOW THAT AT 7,154 BELOW TARGET RESERVES.

THE REASON FOR THAT IS IF YOU GO UP UNDER EXPENDITURES UNDER OTHER, SIX MILLION OF THAT IS RELATED TO WHAT WE ARE SENDING BACK OVER TO GENERAL FUND. WE SENT MONEY.

[03:00:04]

>> REBALANCE.

>> YES, IT'S A REBALANCE.

>> WE NETTED THE 65 REBALANCE OUT OF THAT BACK OVER TO GENERAL FUND.

>> GENERAL FUND. THAT IS CORRECT.

OTHERWISE, WHAT YOU WOULD SEE DOWN AT THE BOTTOM IS YOU WOULD HAVE 11,992,000 AVAILABLE FUNDS VERSUS A RESERVE OF SIX MILLION WITH EXCESS RESERVES OF JUST UNDER SIX MILLION.

>> DO YOU HAVE ANY CONCERNS IN WHY YOU'VE GOT IT LISTED JUST AS OTHER? WOULD IT BE MORE HELPFUL TO PUT REBALANCE TO GENERAL FUND SO WE COULD HELP TRACK THAT?

>> WE CAN SHOW IT AS A TRANSFER TO GENERAL FUND.

THAT WOULD BE FINE. YOU WOULD LIKE US TO RETITLE IT, WE CERTAINLY CAN?

>> CAUSE WE JUST READ OTHER, SO WE ASSUME THERE WOULD BE LIKE, MAYBE OTHER CLAIMS OR SOMETHING THAT HAPPENED OR IT'D BE A NEGATIVE WHEN THIS REALLY IS A POSITIVE, THIS IS A HUGE WIN FOR THE CITY.

NOT TOO MANY YEARS AGO, YOU DIDN'T EVEN HAVE 6.5 MILLION TOTAL IN CIP PROJECTS, BUT THIS IS ALL GOING TO THE CIP FOR THIS CURRENT YEAR, RIGHT?

>> THEN, IF YOU WANT TO GO BACK A COUPLE OF PAGES TO PAGE 71.

>> GREAT.

>> HEY LAURA, CAN I ASK YOU A QUICK QUESTION?

>> IN IT, YOU SAID WE HAD A DIP INTO RESERVES, BUT WE'VE GOT TO REPLENISH THOSE.

HOW DO YOU REPLENISH THOSE? WHERE DOES THAT COME FROM?

>> THE OTHER FUNDS OVER TIME.

>> JUST LIKE WHAT YOU'RE DOING.

>> IT TAKES TIME.

WHAT WE DECIDED THAT IT WOULD NOT BE BENEFICIAL TO CHARGE TO BASICALLY RAPIDLY INCREASE ALL THE CHARGES OUT TO THE DEPARTMENTS, JUST TO BUILD BACK RESERVES ONE TIME AND THEN LOWER THEM.

WE'RE JUST GOING TO STEADILY GROW THEM OVER THE NEXT COUPLE OF YEARS.

THAT'S WHERE IT NEEDS TO BE.

>> IT IS LIKE A RE-BALANCING.

>> YES. AGAIN, ON PAGE 71, AND WE CAN PULL THIS OUT TO A SEPARATE LINE ITEM 2, BUT IT'S IN THAT OPERATING EXPENDITURES IN YOUR RISK MANAGEMENT DEPARTMENT.

PART OF THAT IS A TRANSFER TO GENERAL FUND OF $1.5 MILLION.

WE COULD SEPARATE THAT OUT ONTO A SEPARATE LINE TO SHOW A TRANSFER TO GENERAL FUND, AND THAT'S WHERE THEY'RE SENDING.

RIGHT NOW, THEY'RE ABOUT 75,000 BELOW THEIR TARGET RESERVES.

THEY WOULD BE ABOUT 1.5 MILLION ABOVE TARGET RESERVES, BUT WE THOUGHT IT WOULD BE BETTER TO USE THAT MONEY OVER IN GENERAL FUND.

>> WHERE'S THE 1.5? I DON'T SEE IT ON THAT PAGE.

>> IT'S IN THE OPERATING LESS DEPRECIATION LINE.

>> HOW WOULD WE UNDERSTAND WHAT THAT IS? LOOKING BACK AFTER WE GET OUT OF HERE AND OUR BRAINS DIGEST SOME OF THIS, LOOKING BACK AND TRYING TO TAKE NOTES.

IT JUST SAYS, OPERATING LESS DEPRECIATION.

YOU'RE SAYING YOU SWEPT 1.5 OF EXCESS RESERVES OUT OF THAT AND PUT IT BACK INTO THE GENERAL FUND?

>> BUT ON THIS ONE, IT'S NOT NAMED OTHER.

ON PAGE 74, IT'S LISTED AS OTHER?

>> IS THERE A REASON WHY THEY'RE GROUPED TOGETHER?

>> WELL, IT'S JUST DIFFERENT TYPES OF FUNDS THAT WE JUST CALL DIFFERENT THINGS.

WE WILL WORK ON SEPARATING THOSE OUT AND GET YOU NEW PAGES.

>> IT WOULD BE FANTASTIC TO SEE THE TOTAL OF ALL EXCESS RESERVES THAT ARE IDENTIFIED.

THEN THE TOTAL AMOUNTS THAT ARE BEING PULLED BACK OVER TO THE GENERAL FUND, AS YOU WORK THAT OUT AS A SEPARATE WORKSHEET.

>> WE WILL WORK ON PUTTING THAT TOGETHER.

>> THANK YOU, MA'AM.

>> THEN, I THINK THE LAST ONE THAT YOU MAY WANT TO LOOK AT IS ON, LET ME FIND THE PAGE REAL QUICK.

TURN TO PAGE 60.

PAGE 60 HAS FLEET SERVICES AND $6 MILLION IN THIS BUDGET ON THAT SAME OPERATING LESS DEPRECIATION LINE, YOU'LL SEE IT WENT 17 MILLION TO 27 MILLION.

SIX MILLION OF THAT IS GOING BACK TO GENERAL FUND, FOR THEM TO USE FOR CAPITAL PURCHASE OR CAPITAL PURPOSES.

THEN THERE'S ALSO ANOTHER $2 MILLION THAT'S GOING BACK TO DRAINAGE, AND THE REASON FOR THAT IS DRAINAGE USED SOME CAPITAL DOLLARS IN THIS YEAR TO SPEED UP THE REPLACEMENT OF SOME OF THEIR VEHICLES AND EQUIPMENT BECAUSE THE FLEET HAS NOT BEEN ABLE TO KEEP UP WITH REPLACEMENT, BUT THEY'VE BEEN PAYING INTO THE FLEET FOR THOSE REPLACEMENTS.

WE FELT IT WAS RIGHT TO, BECAUSE FLEET WOUND UP WITH EXCESS RESERVES, WE WANTED TO SEND THAT 2 MILLION BACK TO DRAINAGE TO HELP MAKE DRAINAGE WHOLE FOR THE MONEY THAT THEY HAD ALREADY PAID INTO FLEET.

FOR VEHICLES AND EQUIPMENT THAT WERE PURCHASED IN THE CURRENT.

>> I'M JUST TRYING TO FOLLOW ALONG.

ON THIS PAGE, PAGE 60,

[03:05:01]

IT SAYS LESS ONE TIME EXPENDITURE, WHICH IS A RE-BALANCING OF EXCESS RESERVES BACK TO GENERAL FUND AGAIN.

>> NO, THAT'S JUST SHOWING THAT BASICALLY THEIR THREE MONTH OPERATING RESERVE WAS ESSENTIALLY OVERSTATED BECAUSE THEY WERE DOING ONE TIME RE-BALANCING THROUGH IT.

>> HERE'S A BAD QUESTION, AND I DON'T MEAN IT A BAD WAY, BUT WHY WOULD YOU GUYS FIND IT BEST TO MOVE THE 2 MILLION BACK TO DRAINAGE? WHY WOULD THAT NOT COME TO COUNCIL IN A REQUEST TO COUNSEL, WOULD YOU LIKE TO HAVE THE TWO MILLION PUT BACK IN DRAINAGE, OR WOULD YOU RATHER HAVE IT OVER HERE IN GENERAL FUND?

>> AGAIN, THE BUDGET WORKSHOPS ARE OUR RECOMMENDATIONS.

WE MADE A RECOMMENDATION.

THE CITY COUNCIL CAN REQUEST AND MAKE A CHANGE.

BUT AGAIN, THOSE FUNDS CAME FROM DRAINAGE TO FLEET.

OUR RECOMMENDATION WAS TO PUT IT BACK TO DRAINAGE.

BUT ALSO, CITY COUNCIL, YOU CAN THEN CHANGE.

THAT'S WHAT THESE WORKSHOPS ARE FOR.

>> WELL, I THINK IF YOU LOOK LAST YEAR, WE IMPLEMENTED AND IMPOSED A 5% FRANCHISE FEE TO DRAINAGE. IS THAT CORRECT? IN ORDER TO HELP FUND GENERAL FUNDS.

THE VISION AND THE GOAL WAS TO PRIORITIZE INFRASTRUCTURE, PUBLIC SAFETY, THE DRAINAGE MONIES, WE'RE GOING TO HAVE POTENTIALLY 10 YEARS TO SPEND THE MONIES THAT WE HAVE TO IMPROVE DRAINAGE.

THEN WE'RE HOPING THAT WITH ALL THAT INFRASTRUCTURE, OUR DRAINAGE UTILITY COST IS BELOW WHAT IT REVENUES WITH GROWTH WITH THE CITY.

>> IT'S NOT BECAUSE WE DIDN'T ADJUST ANY RATES FOR THOSE FRANCHISE FEES IN THE PAYMENT IN LIEU OF PROPERTY TAX FOR DRAINAGE.

WE EXTENDED OUR EXPENDITURES, BUT DID NOT INCREASE ANY REVENUES.

THEY WERE NOT HITTING THEIR TARGET RESERVES THIS.

>> BUT YOU DIDN'T PROJECT GROWTH.

I'M JUST SAYING GROWTH ON DRAINAGE FUND.

>> IT HASN'T GROWN MUCH.

>> EVERY TIME WE TAKE ON NEW PROPERTY?

>> YES, THAT IS CORRECT.

YES. BUT WE'RE NOT SEEING, WE'RE NOT CAPTURING THAT GROWTH.

>> TO SHIFT BACK, GRAYSON, YOU'RE SAYING THESE ARE RECOMMENDATIONS, AND I APPRECIATE THAT.

BUT THE COMMUNICATION PIECE COMING MY DIRECTION, HOW WOULD I KNOW THAT THIS IS A RECOMMENDATION? UNLESS WE WERE ENGAGED IN THIS LEVEL OF A DISCUSSION, WHICH I DIDN'T REALLY ANTICIPATE AT THIS POINT, BUT LESS ONE TIME EXPENDITURE HERE, RE-BALANCE THERE, DEDUCT OTHER, HOW ARE YOU COMMUNICATING RECOMMENDATIONS WHERE WE WOULD KNOW WHAT THIS IS AND WHY IT'S THERE?

>> THE ENTIRE BUDGET IS A RECOMMENDATION.

EVERYTHING YOU SEE IN HERE FOR EVERY LINE ITEM, EVERY SUPPLEMENTAL, EVERY PERSON WE ADD, EVERY COMP STUDY, EVERYTHING IS A RECOMMENDATION.

THAT'S WHAT THESE WORKSHOPS ARE FOR.

THAT'S WHAT THESE WORKSHOPS HERE WE GOT THREE DAYS OF TRYING TO WALK THROUGH THESE THINGS.

THE GOAL WAS TO RELAY THIS DURING THE WORKSHOPS.

BUT AGAIN, PART OF THE THOUGHT IS, I ASSUME THAT GIVEN THE CITY PROPOSED A DRAINAGE FUND, YOU WOULD WANT THE FUNDS BACK AND DRAINAGE.

THAT'S WHY WE PROPOSED THE MONEY BACK AND DRAINAGE TO THE GENERAL FUND BECAUSE WE KNOW WE NEED A DRAINAGE FUND BECAUSE WE HAVE DRAINAGE ISSUES.

>> FLEET REVENUED EXCESS MONIES, PRIMARILY THROUGH OR ONE COMPONENT WAS DRAINAGE?

>> NO, WHAT IT WAS IS THAT MAYBE A MISUNDERSTANDING IS THAT FLEET PAYS FOR ALL THE EQUIPMENT.

FLEET COULDN'T KEEP UP.

DRAINAGE WENT AHEAD AND BOUGHT THE EQUIPMENT, EVEN THOUGH THEY ALSO PAID FLEET TO DO THAT.

DRAINAGE DOUBLE PAID FOR THE SAME EQUIPMENT.

NOW FLEET IS REIMBURSING DRAINAGE BECAUSE DRAINAGE WENT AHEAD AND BOUGHT THE EQUIPMENT THAT FLEET COULDN'T GET TO IN TIME.

THAT'S WHY WE'RE REIMBURSING DRAINAGE BECAUSE THEY DOUBLE PAID FOR THE SAME PIECE OF EQUIPMENT.

>> THIS DOESN'T HAVE TO DO WITH THE EXCESS RESERVES.

FLEETS IDENTIFIED EXCESS RESERVES WAS HOW MUCH FOR 24 OR 25?

>> WELL, WITH THIS TWO MILLION AND THE SIX MILLION TO GENERAL FUND, THAT'S $8 MILLION.

>> IS THAT THEN THAT'S THE TOTAL AMOUNT THAT FLEET HAD IN EXCESS OF ITS RECOMMENDED RESERVE?

>> YES. THE REASON FOR THAT IS, AS WE WALK THROUGH THIS CONVERSION FROM CASH FUNDING EVERYTHING TO LEASING TO PAYING DEBT FOR OUR REPLACEMENT, WE'RE GOING TO BE GOING THROUGH A TRANSITION PERIOD WHERE DEPARTMENTS ARE STILL PAYING IN TO CASH FUND THEIR REPLACEMENTS, BUT SOME OF THEM ARE GOING TO START GOING ON LEASES.

THEY'VE ALREADY PAID SOME IN, AND SO WHAT WE'RE DOING IS STARTING TO IDENTIFY SOME OF THAT MONEY THAT'S ALREADY BEEN PAID IN AND GIVING IT BACK TO THOSE DEPARTMENTS.

GIVING IT BACK TO DRAINAGE, GIVING IT BACK TO GENERAL FUNDS.

>> BUT WE DON'T HAVE ANY WAY TO SEPARATE THE AMOUNT OF MONIES THAT'S ONGOING BUILT INTO THE TAX BASE, THE TAX RATE AS WELL OR THE FEE THAT'S BEING CHARGED TO JUSTIFY ONGOING ADDITIONAL PERSONNEL COSTS.

THAT'S REALLY WHAT I'M ASKING IF YOU'RE PULLING THE MONEY OUT AND TREATING IT ALL AS CASH, ONE TIME EXPENDITURE, HOW ARE WE IDENTIFYING THAT'S ONLY A ONE TIME USAGE,

[03:10:01]

AND IT SHOULDN'T BE FOR POLICE FIRE OR TRAFFIC AND OTHER PERSONNEL?

>> TRANSFERS ARE JUST ONE TIME THINGS.

YOU'RE NOT GUARANTEED TO HAVE THAT YEAR AFTER YEAR.

MAYBE MILLION, TWO MILLION, 6 MILLION, 400,000.

YOU CAN'T BASE AN OPERATIONAL BUDGET LIKE SALARY OFF OF A TRANSFER.

>> BUT I THINK THAT'S WHAT COUNCILMAN TIPPS WAS GETTING TO IS WE ARE EXCESS RESERVING YEAR OVER YEAR.

IF YOU LOOK BACK AND YOU SEE, WELL, FLEET BUILD A MILLION DOLLARS MORE AND SO THEIR RESERVES ARE IN EXCESS, YOU'RE SWEEPING THAT BACK OVER TO THE CIP?

>> YES. EVERY YEAR, THE GOAL IS HOPEFULLY TO HAVE EXCESS.

SOME YEARS WE MAY NOT HAVE.

THERE'S NOT A GUARANTEED, YOU'RE GOING TO HAVE X AMOUNT OF RESERVES YEAR AFTER YEAR.

IT'S GOING TO BE DIFFERENT EVERY SINGLE YEAR.

>> FLEET IN THIS NEXT YEAR IS TAKING ON AN ADDITIONAL $2 MILLION IN LEASING THAT THEY HAVEN'T DONE PREVIOUSLY.

THE BULK OF THAT'S GENERAL FUND.

THEY'RE NOT CHARGING GENERAL FUND ANY EXCESS FOR THAT, BUT GENERAL FUND IS GOING TO GET A WHOLE BUNCH OF NEW VEHICLES, AND THEY'RE GOING TO GET THEM REPLACED MORE OFTEN THROUGH THE LEASING PROGRAM WITHOUT HAVING TO ADJUST THEIR RATES AT THIS POINT.

>> I APOLOGIZE. I THOUGHT THAT WAS THE 7.5 MILLION THAT WE WERE PUTTING IN OUR DEBT SERVICE.

>> I WAS ABOUT TO STATE THAT.

TWO MILLION MORE IN LEASING AND THEN $7.5 MILLION IN HEAVY EQUIPMENT.

GENERAL FUND IS NOT GOING TO CHANGE THEIR RATES, WHAT THEY'RE PAYING INTO FLEET, BUT NOW THAT MONEY IS GOING TOWARDS A DEBT SERVICE PAYMENT INSTEAD OF TOWARDS A CASH FUNDING REPLACEMENT.

BUT EACH YEAR AS WE LOOK AT IT, THERE MAY BE A LITTLE BIT OF EXTRA CASH THAT WAS BROUGHT OVER TO FLEET THAT NOW IS FREED UP CAN GO BACK TO THE DEPARTMENTS BECAUSE THOSE ITEMS ARE NOW BEING FUNDED THROUGH LEASING OR THROUGH A DEBT SERVICE PAYMENT INSTEAD OF CASH FUNDING.

BECAUSE NORMALLY, FLEET WAS BASICALLY LIKE A SAVINGS ACCOUNT.

EVERYBODY WAS PAYING INTO FLEET, AND THEN WHEN THEIR TIME CAME UP, THEN THEY WERE TAKING MONEY OUT OF FLEET, OUT OF THE CASH SAVINGS ACCOUNT AND FLEET AND BUYING THE NEW EQUIPMENT ALL AT ONCE.

THEN EVERYBODY WOULD START PAYING FOR THEIR NEXT REPLACEMENT.

WELL, NOW IT'S DIFFERENT BECAUSE SOME DEPARTMENTS ARE STARTING, LIKE POLICE IS A GREAT EXAMPLE.

WE'RE DOING BIG PUSHES ON THE POLICE CARS.

A LOT OF THEM ARE STILL PAYING IN AS IF THEY'RE GOING TO CASH FUND, BUT A LOT OF THEM ARE STARTING TO GET CHANGED OVER TO THIS LEASING OPTION NOW.

WELL, WE DON'T KNOW EXACTLY, WE'RE STILL BUILDING.

IT'S GOING TO TAKE US I'D SAY AT LEAST 2-3 MORE YEARS TO PROBABLY GET THE WHOLE LEASING PROGRAM IN EFFECT.

OUR GOAL IS TO KEEP THE RATE STABILIZED WITHOUT GOING UP MUCH AND GET EVERYTHING CONVERTED OVER AND THEN EACH YEAR LOOK AND SEE IF THERE'S A LITTLE BIT OF EXCESS CASH.

NOW, THIS YEAR, THERE'S QUITE A BIT OF EXCESS CASH.

GET THAT BACK TO THE ORIGINAL DEPARTMENT.

THAT NUMBER WILL GET LESS AND LESS UNTIL WE GET ALL THE WAY THROUGH THE LEASING PROGRAM.

>> THANK YOU FOR THE ADDITIONAL. YES, SIR.

>> I'D LIKE TO MAKE A RECOMMENDATION.

WHEN WE HAVE THE LESS THAN ONE TIME EXPENDITURE, CLEARLY, WE CAN PRINT IN COLOR.

CAN WE PUT A RECOMMENDED IN RED TEXT AND THEN MAYBE HAVE JUST A QUICK FOOTNOTE SOMEWHERE AT THE END OF THE DOCUMENT, MAYBE IN AN APPENDIX OR SOMETHING OF FOOTNOTES THAT WE CAN JUST QUICKLY LOOK AT, WHY IS THIS HAPPENING?

>> IF YOU LOOK SO FOR INSTANCE, ON PAGE 51, IF YOU LOOK ON PAGE 52, YOU START SEEING ALL THE DETAILS OF THE ITEMS THAT MAKE UP EACH ONE OF THOSE LINE ITEMS. THE TOP THERE IS YOUR OPERATING REVENUES, WHICH CORRESPOND BACK TO YOUR OPERATING INCOME LINE ITEM ON PAGE 51, AND THEN ON PAGE 52 THERE TOWARDS THE BOTTOM OF PAGE 52, AND THEN ON AS YOU GO THROUGH PAGE 55, THOSE NUMBERS TIE BACK IN TO THAT OPERATING LINE ITEM.

THAT'S ALL THE DETAILS.

>> THAT TRANSFERS IN A 2 MILLION IS WHAT THIS IS AND WHERE DOES IT TRANSFER OUT?

>> THE TRANSFER OUT, IF YOU GO TO PAGE 55, HANG ON JUST A SECOND.

I'M SORRY, DRAINAGE. I'M LOOKING AT DRAINAGE. I WAS LOOKING AT FLEET.

DRAINAGE. THE TRANSFER IN NUMBER, YOU'LL SEE THERE IS ON PAGE 52 IN THE MIDDLE.

THERE'S THAT 2 MILLION COMING IN FROM FLEET.

THEN IF YOU GO TO FLEET, GO TO PAGE 64.

ON PAGE 64 AT THE BOTTOM, YOU'LL SEE THE 2 MILLION GOING OUT TO DRAINAGE.

THEN UP ABOVE THAT, YOU'LL SEE THE 6 MILLION GOING OUT TO GENERAL FUND.

>> IF YOU LIKE FOR US, WE CAN DEFINITELY CREATE A PAGE THAT SHOWS THE TRANSFERS IN AND OUT ON ONE PAGE. WE CAN DO THAT FOR YOU.

>> I JUST THINK A RECOMMENDATION WOULD BE ADVANTAGEOUS TO COUNSEL THAT, IT'S A RECOMMENDED, AND CLEARLY, WITH SOME FOOTNOTES, IT'S GOING TO BE SUPPORTED.

[03:15:03]

IT MAKES SENSE, BUT IT WOULD BE NICE IF WE WERE COMING UP AGAINST A WASTEWATER TREATMENT PLAN ISSUE AND THERE WAS $50 MILLION.

I'M JUST THROWING A NUMBER OUT THERE.

IT WOULD BE NICE TO KNOW THAT THERE WAS SOME VARIANCES AND COUNSEL COULD ADJUST FUNDS AS NEEDED.

>> WE CAN CREATE A SHEET THAT SHOWS THE TRANSFERS AND THEN PUT THE REASONS WHY WE'RE PROPOSING GOING FROM THIS FUND TO THAT FUND.

>> I'M JUST SPEAKING FOR A GUY THAT'S JUST SITTING UP HERE FOR A MONTH OR SO.

IT IS, WHEN WE LOOK AT THAT, IF IT'S RECOMMENDED AND THEN AVAILABLE CASH FLOW OVER AND UNDER, JUST A LITTLE MORE VISUAL WOULD PROBABLY HELP COUNSEL NAVIGATE.

>> THAT'S WHAT THESE WORKSHOPS ARE FOR.

>> THAT'S MY THOUGHTS.

WE DON'T WANT TO ASSUME WHAT INFORMATION YOU WANT TO HAVE.

PLEASE, YES, LET US KNOW WHAT INFORMATION YOU WANTS TO BRING BACK TO YOU TOMORROW, THE NEXT WEEK AND WHAT REPORTS YOU'D LIKE TO HAVE, WE CAN DO THAT.

>> I JUST THINK IF WE HAVE 10 OR 12 OR 20 OF THESE, IT WOULD REALLY BE NICE TO LOOK AT ONE PAGE AND JUST SEE IT HERE AND WE CAN JUST QUICKLY REFERENCE IT AND THEN IT MOVES THE PROCESS ALONG.

>> NO, WE CAN DO THAT.

>> TO SUMMARIZE, MAKE SURE WE'RE ALL GETTING IT DOWN, SO WE DON'T END UP ASKING YOU TO DO ANY WORK THAT WE DON'T NEED.

PAGE 4, ACTUALS.

IT SAYS '24 '25 BUDGET TO THE LEFT OF THAT WOULD BE NICE TO SEE A LINE ITEM THERE THAT SHOWS ACTUALS AND TO GO AHEAD AND RUN THOSE NEXT TO THOSE DEPARTMENTS.. FOR EXAMPLE, THIS WAS THE PAGE YOU WERE ON EARLIER BEFORE WE GOT YOU SIDETRACKED.

GENERAL CONSTRUCTION, HAD A BUDGET OF 10, 4, WHAT IF HE SPENT 15 MILLION OR WHAT IF HE SPENT 5? THEN LOOKING AT STREETS AND STUFF LIKE THAT, YOU COULD SEE THAT.

I THINK THAT'S GREAT EXPLANATION ON HOW THE 2.5 COMES OUT, AND WE CAN HIGHLIGHT THAT COMING DOWN.

BUT THEN IN ADDITION TO THE ACTUALS WOULD BE THE IDENTIFIED EXCESS RESERVES THAT ARE IN THESE OTHER COMPONENT UNITS, AND I'M JUST CALLING THEM COMPONENT UNITS, SPEAKING LIKE IT RISK, FLEET, THINGS LIKE THAT.

YOU WOULD HAVE THEIR ACTUALS, BUT THEN YOU WOULD HAVE IDENTIFIED EXCESS RESERVES, JUST LIKE WHAT YOU'VE BEEN DOING ON ALL OF THESE PAGES.

IT SAYS, STARTING BALANCE, ENDING BALANCE.

I'M GOING TO LOOK AT MY GENERAL FUND, AND I'M GOING TO ASSUME I WENT FROM 74 MILLION BACK TO SAY, 52 IS WHAT I NEED IN MY EXCESS RESERVES.

DID I HAVE A $20 MILLION SWING THERE, OR DID THAT GET EATEN UP IN ADDITIONAL EXPENDITURES? YOU FOLLOW?

>> I THINK SO.

>> THEN THE TRANSFERS IN AND OUT WOULD BE PAGE 3.

A SINGLE PAGE JUST SHOWS TRANSFER INTO DRAINAGE, 2 MILLION TRANSFER OUT FROM FLEET, TWO MILLION, AND A BRIEF SUMMARY, REIMBURSEMENT FOR EQUIPMENT PAID BY DRAINAGE, DUE TO TIMING OR WHATEVER.

THOSE THREE ITEMS. THOSE THREE ITEMS BE GREAT.

THANK YOU FOR THE DEFINITION ON RE-BALANCE, BY THE WAY.

>> YES. I DID WANT TO STATE THAT ON THE GOVERNMENTAL FUND WELL, ON THE GENERAL FUND, WE CAN PUT THE ACTUALS IN ON THE ENTERPRISE FUNDS, PROPRIETARY FUNDS.

THAT IS IT'S NOT AN APPLES TO APPLES COMPARISON BECAUSE THEY WORK JUST LIKE ANY OF YOUR BUSINESSES DO.

THEY DON'T EXPENSE.

THEIR EQUIPMENT AND VEHICLES, WE BUDGET FOR IT THAT WAY, BUT WE DON'T ACTUALLY RECORD IT THAT WAY FOR CAPITAL PROJECTS OR FOR ANY CAPITAL BECAUSE THOSE GO STRAIGHT INTO ASSETS.

WE WOULDN'T BE ABLE TO PUT IN AN ACTUALS COLUMN WITH AN APPLES TO APPLES COMPARISON.

WE COULD ON YOUR GENERAL FUND BECAUSE THIS IS GOVERNMENTAL ACCOUNTING ALL THE WAY THROUGH, BUT ON YOUR PROPRIETARY FUNDS.

PRETTY MUCH ALL OF THE OTHER FUNDS THAT THIS ONE, WE WOULDN'T BE ABLE TO PUT AN APPLES TO APPLES COMPARISON IN ON ACTUALS TO THE PRIOR YEAR?

>> COULD WE STAY HERE JUST A LITTLE LONGER AND YOU GIVE US AN EXAMPLE OF THAT.

MAYBE SO THAT THE PUBLIC HEARS IT AS TO WHY?

>> IF YOU WANT TO TURN LET'S TURN TO WATER AND SEWER ON PAGE 30, FIRST, WE HAVE NOMINAL CAPITAL IN THE CURRENT YEAR BUDGET OF 880,000.

THOSE ARE CAPITALIZED AND NOT RUNNING THROUGH EXPENSE ACCOUNTS LIKE IT'S SHOWN ON A BUDGET HERE.

I THINK WE COULD PROBABLY GET SOMETHING CLOSE ON THAT.

HOWEVER, ON YOUR CAPITAL LINE ITEM, YOUR 19.26 NUMBER, THAT IS FOR ONGOING PROJECTS THAT MAY TAKE A YEAR, THEY MAY TAKE FIVE YEARS TO DO.

THOSE FUNDS ARE JUST EARMARKED.

SOME ARE SPENT IN THE YEAR, AND SOME ARE STILL SITTING OUT THERE AT THE END OF THE YEAR TO BE USED AS THAT PROJECT REACHES COMPLETION.

I COULD CERTAINLY PUT WHAT THE BUDGETED AMOUNT IS, THE EARMARKED AMOUNT THAT IS ANTICIPATED TO BE COMPLETED,

[03:20:02]

BUT IT WOULD NOT BE A TRUE ACTUAL AMOUNT.

>> YOU'RE GOING TO RUN INTO THAT ON [OVERLAPPING] AIRPORT.

>> DRAINAGE?

>> ARE YOU GOING TO RUN INTO THAT ON INTERGOVERNMENTAL SERVICES?

>> YES. WE WOULD RUN INTO THAT ON FLEET AND IT.

I THINK WE COULD MAKE THE HEALTH PLAN WORK AND RISK MANAGEMENT PLAN, BUT FLEET, IT, WE WOULD RUN INTO IT AS WELL, BECAUSE THEY DO HAVE CAPITAL.

>> WE'LL GO BACK AND WE'LL SEE WHAT WE CAN THROW TOGETHER.

IF WE HAVE ANY ISSUES, WE'LL COME BACK AND WE'LL ILLUSTRATE THAT FOR Y'ALL WHEN WE RUN THOSE SHEETS.

>> YEAH, I WOULD JUST APPRECIATE AS MUCH.

THEN A QUESTION MARK IS FINE.

I THINK IF IT'S JUST, LOOK, THIS IS A PROJECTION, WE DON'T KNOW BECAUSE IT'S CONSTRUCTION RELATED 24 MONTH PROJECT.

WE JUST DIVIDED IN HALF, OR WHATEVER THE PHILOSOPHY WAS.

>> AS I MENTIONED, IT WOULDN'T BE A TRUE APPLES TO APPLES, BUT WE CAN WORK ON PUTTING SOMETHING TOGETHER.

AS YOU GO BACK TO PAGE 4, AS YOU COME DOWN TO TOTAL EXPENDITURES.

OUR EXPENDITURES IN THE CURRENT YEAR WAS JUST UNDER 278 MILLION IN THE BUDGET, AND WE ARE ANTICIPATING THOSE COME DOWN SLIGHTLY TO 272 MILLION.

AGAIN, THE BULK OF THAT IS US PULLING THE STREET MAINTENANCE OUT.

OUR AVAILABLE FUNDS AT THE END OF THE YEAR ARE ANTICIPATED TO BE 50.9 MILLION.

THEN WE LOOK AT OUR TOTAL EXPENDITURES LESS OUR ONE TIME EXPENSES, WHICH THE BULK OF THAT IS OUR ONE TIME CIP FUNDING TO COME TO OUR ONGOING EXPENDITURES, AND THEN WE RUN THE THREE MONTH CALCULATION TO GET THREE MONTH OPERATING RESERVE AND THEN SHOW OUR COMPARISON.

WE ARE SHOWING TO COME JUST A LITTLE BELOW ON THIS THREE MONTH RESERVE.

NOW, WE ALSO HAVE A PROPOSED CHANGE TO HOW WE ARE DOING OUR 90 DAY RESERVE CALCULATIONS ACROSS ALL FUNDS.

IN YOUR PACKETS, AND I WON'T HAVE YOU PULL THEM OUT.

IT'S MORE FOR YOUR REFERENCE.

BUT IN YOUR PACKETS, YOU'VE GOT YOUR FINANCIAL POLICY, AND WE HAVE SENT ALL OF THIS OUT TO YOU GUYS IN PRIOR E-MAILS.

BUT WE HAVE ONE ADDITIONAL RECOMMENDED CHANGE TO HOW WE CALCULATE THE RESERVE POLICY.

I WANT TO STATE THAT THIS, I THINK WAS PROMPTED BY SOME OF THE MAYOR'S QUESTIONS AND SOME OF HIS RECOMMENDATIONS.

GRAYSON AND I DISCUSSED AND FELT LIKE THIS COULD BE A REALLY GOOD CHANGE FOR OUR RESERVE CALCULATIONS.

WHAT WE'RE RECOMMENDING TO DO IS IN OUR ONGOING. LET'S LOOK AT GENERAL FUND.

IN OUR ONGOING EXPENDITURES, WE'RE PAYING FOR IT CHARGES, FLEET CHARGES, HEALTH INSURANCE, PROPERTY INSURANCE, ALL THOSE THINGS THAT ARE GOING INTO OUR INTERNAL SERVICE FUNDS.

OUR INTERNAL SERVICE FUNDS HAVE THEIR OWN RESERVES.

WHAT WE'RE RECOMMENDING TO DO IS PULL OUT THOSE INTERNAL SERVICE FUND EXPENDITURES FROM THE RESERVE CALCULATION.

BASICALLY, WHAT WE DID IS ON THE GENERAL FUND ORIGINALLY, THEIR RESERVES, I THINK WE'RE AROUND, THEIR THREE MONTH OPERATING RESERVE WAS CLOSER TO ABOUT, IT WAS 60 SOMETHING MILLION DOLLARS.

BUT WHAT WE RECOMMENDED TO DO WAS PULL OUT THE 90 DAYS THAT WAS INCLUDED IN THAT TO FUND IT CHARGES AND FLEET CHARGES AND HEALTH INSURANCE.

AS WE WALKED THROUGH THE VARIOUS ITEMS, IN THE GENERAL FUND, WE WOUND UP REDUCING RESERVE CALCULATION BY ABOUT $12 MILLION AND ABOUT 2.2 OF THAT WAS RELATED TO IT CHARGES.

4.5 MILLION WAS RELATED TO FLEET CHARGES.

OUR PROPERTY INSURANCE AND VARIOUS INSURANCE WAS ABOUT 919,0000.

OUR HEALTH INSURANCE WAS 4.6 MILLION, AND THEN OUR MY AMARILLO CHARGES WAS ABOUT 142,000.

THE THOUGHT PROCESS BEHIND THAT IS, THOSE ARE INTERNAL SERVICE FUNDS THAT HAVE THEIR OWN RESERVES.

I THINK THAT WAS A QUESTION THAT HAD BEEN ASKED TO US A FEW TIMES.

ARE YOU DOUBLE RESERVING, ESSENTIALLY, FOR YOUR INTERNAL SERVICE FUNDS? WHAT WE HAVE IN YOUR FINANCIAL POLICIES, THERE'S A PAGE SIX JUST FOR ALL TO LOOK AT LATER.

IS WE ARE RECOMMENDING THAT THE THREE MONTH RESERVE CALCULATION, IT'S THREE MONTHS OF CURRENT OPERATING BUDGET, LESS FUNDING TO INTERNAL SERVICE FUNDS, INCLUDING FLEET, IT, RISK MANAGEMENT, HEALTH PLAN, SINCE THEY HAVE THEIR OWN RESERVES.

THAT IS A CHANGE THAT WE HAVE PUT IN THIS ENTIRE PROPOSED BUDGET? WE FEEL LIKE IT WAS PROBABLY A GOOD CHANGE, ESPECIALLY AS OUR RESERVES CONTINUE TO GROW SO MUCH EACH YEAR AS OUR OPERATING BUDGET GROWS.

AS LONG AS WE'RE MAINTAINING THOSE RESERVES OUT IN THOSE INTERNAL SERVICE FUNDS,

[03:25:04]

WE FEEL LIKE IT IS SUFFICIENT TO REDUCE EACH OF THESE OTHER FUNDS RESERVES BY THE AMOUNTS THAT WOULD HAVE GONE TO THOSE INTERNAL SERVICE FUNDS.

ARE THESE THREE MONTH OF CURRENT OPERATING BUDGET, IS THAT BY STATE LAW OR IS THAT JUST BEST PRACTICES.

>> BEST PRACTICES.

>> THAT'S A GREAT QUESTION. YES. IT'S BEST PRACTICES.

WHEN YOU LOOK AT THE GFOA, WHICH IS THE GOVERNMENT FINANCE OFFICERS ASSOCIATION, SO IT'S ONE OF THE GOVERNING ASSOCIATIONS FOR GOVERNMENTAL ACCOUNTING STANDARDS ACROSS THE US AND CANADA.

THEY RECOMMEND, ACCORDING TO BEST PRACTICES, THAT GOVERNMENTS KEEP ANYWHERE FROM A 60-120 DAY OPERATING RESERVE.

WE ARE RIGHT IN THE MIDDLE, AND WE'VE BEEN RIGHT IN THE MIDDLE FOR DECADES.

WE HAVE MAINTAINED A 90 DAY OPERATING RESERVE, WHICH HAS HELPED US TREMENDOUSLY TO OBTAIN GOOD CREDIT RATING, WHICH HAS HELPED US KEEP OUR INTEREST RATES LOWER ON OUR DEBT SERVICE AS WE ISSUE DEBT EACH YEAR.

BUT IT'S ALSO HELPED US IN TIMES IF WE EVER HAVE EMERGENCIES COME UP, THAT'S WHAT THOSE RESERVES ARE FOR.

YOU CAN DIP INTO THEM, TOUCH THEM, AND THEN YOU CAN GET THE FUNDING BACK UP IN THE NEXT YEAR'S BUDGET.

YES, THAT'S A VERY GOOD QUESTION.

>> MOST OF THESE DOLLARS THAT WE'RE TALKING ABOUT BEING IN EXCESS ARE COMING FROM THE 90 DAY RESERVE. TRUE THE ACCOUNTS.

>> YES. EXACTLY.

>> LAURA, I'M GUESSING THE RESERVES ARE INVESTED?

>> YES, YOU'RE WELCOME.

>> WHAT DO WE DO WITH THE INTEREST THAT THOSE ACCRUE?

>> ALL OF THE INTEREST RELATED TO THE RESERVES GO RIGHT BACK INTO THE FUND THAT GENERATES THEM, EXCEPT FOR ANY RESERVE THAT'S SITTING OUT IN THE GENERAL CONSTRUCTION FUND, THAT WE SEND ALL THE INTEREST BACK TO THE GENERAL FUND.

>> [OVERLAPPING] I'M SORRY. GO AHEAD.

>> GO AHEAD.

>> I WAS JUST GOING TO SAY, SO ALL OF THE WE'LL SAY 50 PLUS MILLION THAT'S SITTING HERE FOR GENERAL FUND.

IT'S ALL INVESTED IN EITHER MONEY MARKETS, CDS, TREASURIES, AGENCIES, ALL THOSE THINGS, AND ALL THAT REVENUE IS COMING BACK INTO YOUR OPERATING INCOME REVENUE LINE ITEM HERE IN YOUR BUDGET.

>> THERE ARE REVENUE LINES THAT ACTUALLY SHOW THE INTEREST, GOING BACK TO FUNDS [OVERLAPPING].

>> IT'S JUST PART OF OUR REVENUE LINE.

WE DO TAKE ACCOUNT FOR THAT.

>> WE DO. THAT'S WHAT CREATES THE BULK OF OUR INTEREST EACH YEAR IS BECAUSE WE ARE MAINTAINING THOSE RESERVES YEAR IN AND YEAR OUT.

SO WE'RE INVESTING THEM AND GETTING THAT INTEREST COMING FROM US.

>> GREAT. THANK YOU.

>> QUICK CLARIFICATION QUESTION.

I THINK YOU'VE ANSWERED THIS PREVIOUSLY, BUT WE ARE RESTRICTED INTO WHAT WE CAN INVEST IN.

WE CAN'T DO ANY EQUITIES, LARGE CAP, MID CAP.

>> WE CAN'T INVEST IN ANYTHING LIKE IN THE STOCK MARKET.

IT'S BASICALLY VERY SECURE.

WE CAN DO TREASURIES, WE CAN DO CERTAIN TYPES OF BOND.

WELL, THEY HAVE TO BE COLLATERALIZED CDS.

THEY HAVE TO BE VERY SAFE SECURE INVESTMENTS THAT ARE NOT SUBJECT TO BIG SWINGS IN THE ECONOMY OR IN THE MARKET.

THE REASON FOR THAT IS WE'RE TRYING TO PRESERVE TAXPAYER DOLLARS AND NOT EVER LOSE IT BECAUSE OF LOSSES IN THE MARKET, ANYTHING LIKE THAT, BUT STATE LAW OUTLINES EXACTLY WHAT WE CAN AND CANNOT INVEST IN.

>> CAN WE USE THAT EXCESS TO PAY OFF DEBT?

>> WE CAN. NOW, I'LL HAVE MORE INFORMATION FOR YOU, BUT IT'S NOT AS SIMPLE AS PAYING OFF DEBT EARLY.

THERE'S SOME COMPLICATIONS ON THAT, AND I'LL HAVE MORE INFORMATION FOR YOU LATER.

I'VE GOT OUR FINANCIAL ADVISORS GIVING ME A WHOLE RUNDOWN OF THAT FOR YOU.

>> YEAH, I ALREADY ASKED IF WE CAN DO BITCOIN AND FOR WHATEVER REASON.

TWO YEARS AGO, WE WOULD HAVE REALLY BEEN AHEAD.

HEY, LAURA, I'M GOING TO REFER TO A PAGE THAT YOU GAVE ME A WHILE BACK.

THESE NUMBERS, NOBODY ELSE HAS THEM, BUT THEY'RE EASY TO FOLLOW ALONG, AND THEY CORRELATE WITH WHAT YOU ALREADY HAVE HERE.

THESE ARE THE MINIMUM RESERVES THAT YOU RECOMMENDED ON THESE INTERNAL SERVICES.

WHAT I'M UNDERSTANDING NOW IS, LET'S SAY WE HAD A $60 MILLION GENERAL FUND RESERVE GOAL, YOU'VE REDUCED THAT DOWN TO $52 MILLION.

YOU'RE DOING THAT AS A AMENDMENT TO THE FINANCIAL POLICY?

>> IN THE WAY YOU'RE APPLYING THAT FINANCIAL POLICY SO THAT WE DON'T RESERVE ON TOP OF OTHER RESERVES?

>> THESE INTER DEPARTMENTAL SERVICES, AS AN EXAMPLE, FLEETS MINIMUM RESERVE, THIS REPORT IS DATED 12/31/24.

SO THESE NUMBERS AREN'T ACCURATE.

BUT YOU GAVE ME ALL THE WAY BACK TO 2017.

SO THEY TREND. REALLY, THE MONEY JUST SITS THERE.

BUT WE HAD CARRIED AROUND 15.1 MILLION AS A RESERVE FOR FLEET.

[03:30:04]

NOW, I'M NOT SAYING WE DON'T WANT THAT.

WE MAY WANT A HIGH RESERVE FOR FLEET, ESPECIALLY WITH WHAT WE'RE DOING.

I WOULD HOPE THE RESERVE CAN COME DOWN BECAUSE WE'RE OUTLAYING AND TRANSFERRING A LOT OF THAT LIABILITY OUT ON LONG TERM, GOOD STRATEGIC PLANNING AND FINANCING EQUIPMENT.

BUT YOU HAD 6.7 MILLION IN THAT FLEET.

I WOULD BE IDENTIFYING ROUGHLY EIGHT MILLION DOLLARS WORTH OF FLEET THAT YOU WOULD BE PULLING BACK OVER.

CAN I TIE THAT TOGETHER TO THE TWO MILLION AND THE SIX MILLION THAT YOU WERE SHOWING ON PAGE 30 AND WHATEVER? FLEET TOOK TWO MILLION OUT OF ITS RESERVE.

PUT IT OVER AT DRAINAGE.

I'M JUST GOING TO SAY THERE'S ARE RECOMMENDATIONS. IT HADN'T BEEN DONE YET.

BUT THEN THEY ALSO PUT SIX MILLION INTO GENERAL FUND CIP?

>> THAT'S TO COME BACK TO PAGE 60 WHERE WE'RE TRYING TO TARGET A RESERVE OF ABOUT FIVE MILLION DOLLARS FOR FLEET.

>> OKAY. GREAT.

>> YOU'RE ONLY TARGETING FIVE MILLION, NOT 6.7 MILLION?

>> YEAH.

>> I'M SORRY, MAYOR, WHAT DID YOU ASK? I'M SORRY, GRAYSON WAS ASKING SOMETHING THE SAME TIME.

>> NO, I'M SORRY. GO AHEAD.

THAT'S FIVE MILLION, NOT 6.7 MILLION. THAT'S YOUR TARGET.

>> YES. ON PAGE 60.

YES, OUR TARGET RESERVE IS FIVE MILLION DOLLARS.

IF YOU'RE LOOKING AT DECEMBER 31ST NUMBERS, THAT'S IN MID YEAR, WE RE-BALANCE RESERVES AT THE END OF EACH FISCAL YEAR.

SO IT WOULD HAVE TO BE A SEPTEMBER 30TH NUMBER.

>> I HAVE THAT SEPTEMBER 30TH REPORT AS WELL.

THEY DON'T REALLY DIFFER.

AS AN EXAMPLE, LET ME GO.

I WANTED TO SEE THE LOW POINT SO WE COULD REALLY TRACK IT AND MAKE SURE THERE WASN'T, LIKE A BIG DISCREPANCY.

THE ONLY REASON I DON'T HAVE THAT TOGETHER IS BECAUSE I WROTE YOUR NUMBERS DOWN, BUT IF I GO TO 12.31, I'M SITTING ON 15.147, AND IF I GO BACK ONE MORE TO THE SEPTEMBER REPORT, 13.9.

>> AS A REMINDER, WE USED TO CASH FUND ALL OF OUR REPLACEMENTS AND FLEET, AND SO THAT WAS PART OF OUR RESERVE CALCULATION WAS OUR ANTICIPATED ONE YEAR CASH FUNDING OF REPLACEMENTS FOR FLEET, AND NOW WE'RE LEASING AND ISSUING DEBT, SO WE DON'T NEED THAT RESERVE NUMBER ALSO.

THAT'S TO INCLUDE AN ADDITIONAL ANYWHERE FROM PROBABLY 5-8 MILLION IN IT.

>> WE FREED UP EIGHT MILLION DOLLARS WORTH OF RESERVES OUT OF THE GENERAL FUND JUST IN WHAT WE WERE HOLDING IN OUR CASH THAT IS NOW GOING TO BE PUT INTO OUR OVERALL BUDGET.

>> IN GENERAL FUND, WE HAD WE HAD $12 MILLION IN RESERVES THAT ARE AMOUNTS THAT PREVIOUSLY WOULD HAVE BEEN PART OF THE RESERVE CALCULATION THAT ARE NOW RELEASED TO REMAIN IN THE CITY BUDGET.

>> WHAT'S THE TOTAL AMOUNT OF RESERVES THIS YEAR FROM 24/25 TO 25/26 BUDGET THAT YOU'RE WORKING WITH IN THE GENERAL FUND.

>> IF YOU LOOK BACK ON PAGE 4?

>> YES, MA'AM.

>> WE ARE TRYING TO BALANCE DOWN TO 52.7 MILLION, AND WE'RE COMING IN AT ABOUT 50.9 MILLION.

WE'RE JUST A LITTLE UNDER OUR RESERVE.

IN THE PRIOR YEAR. [OVERLAPPING]

>> BUT HOW MUCH MONEY ARE YOU TAKING FROM BUDGET YEAR TO BUDGET YEAR? WE WERE HAVING TO SAVE 60 MILLION OUT OF THE OVERALL WORKING BUDGET OF 264.

NOW WE'RE ONLY HAVING TO SAVE 52 MILLION OR LESS.

MAYBE IT'S 52, WHATEVER THAT IS.

THAT EIGHT MILLION DOLLARS IS NOW OVER IN CIP?

>> HOW MUCH DID WE HAVE TOTAL? THIS WOULD BE FROM MY ACTUALS THAT WE WOULD HAVE.

HOW MUCH DID WE PUT INTO CIP FROM CURRENT YEAR THAT WE'RE IN OR PROJECTED INTO PROPOSED BUDGET? JUST IN GENERAL FUND.

>> WHAT DID WE PUT INTO CAPITAL?

>> YES, MA'AM. IF YOU'RE ONLY RESERVING THE 52.

ARE YOU SUBTRACTING FROM THE 74 AVAILABLE FUNDS BEGINNING OF THE YEAR?

>> YES. THE 74 AT THE BEGINNING OF LAST YEAR, WE WERE SPENDING THAT DOWN WITH THE 10.5 MILLION THAT WAS GOING TO CAPITAL IN THE CURRENT YEAR.

COMING DOWN TO ABOUT 57 MILLION, AND THEN PART OF THAT, WE WOULD SPEND DOWN IN THAT CAPITAL AMOUNT OF THAT 9.4 MILLION THAT'S GOING IN THE CURRENT YEAR.

>> LET ME SKIP AHEAD.

IT WAS 2.7, AND IT WAS HOLDING ROUGHLY 29 OR 24 DEPENDING ON WHETHER I'M LOOKING AT DECEMBER OR SEPTEMBER, RISK MANAGEMENT CARRIED 22.9 MILLION IN RESERVES.

[03:35:04]

NOW, RISK MANAGEMENT IS CARRYING 12.

IT LOOKS LIKE WHAT ARE YOU RECOMMENDING FOR RISK MANAGEMENT? 5.5?

>> I WOULD HAVE TO LOOK AT THE PAGES YOU'RE LOOKING AT TO MAKE SURE THAT WE'RE TALKING ABOUT TRUE RESERVES OR IF YOU'RE LOOKING AT CASH AND INVESTMENTS AT THE END OF THE YEAR.

>> I'M LOOKING AT CASH CASH EQUIVALENTS AND INVESTMENTS AT THE END OF THE YEAR.

>> THAT IS DIFFERENT THAN RESERVES.

A RESERVE NUMBER ALSO HAS TO BACK OUT ANY UPCOMING LIABILITY.

FOR OUR INSURANCE FUNDS, WE HAVE INCURRED BUT NOT RECORDED CLAIMS THAT WE HAVE TO RESERVE FOR THAT IS BACKED OUT OF PART OF INTEREST AND INVESTMENTS TO COME TO A TRUE RESERVE CALCULATION.

SORRY, CASH AND INVESTMENTS IS NOT RESERVES.

THERE'S MORE TO THE CALCULATION THAN THAT.

>> NOT TO GET OFF ON THAT BECAUSE, I WANT TO STAY ON BUDGET AND WE CAN TALK FINANCES LATER.

BUT WHAT IS YOUR RECOMMENDATION FOR RISK MANAGEMENT? IS IT STILL 5.5 MILLION?

>> OUR RECOMMENDATION ON RISK MANAGEMENT IS, I BELIEVE IT'S FIVE MILLION, EVEN LET ME LOOK.

IF YOU GO TO PAGE 71, IT'S 5.5 MILLION.

>> 5.5 MILLION ON RISK MANAGEMENT.

HOW MUCH DID YOU TAKE OUT OF RISK MANAGEMENT AND PUT INTO THE GENERAL FUND? IN THE PROPOSED BUDGET?

>> ONE POINT FIVE MILLION.

>> THEN YOU DIDN'T TOUCH ANY OF THE INVESTMENTS?

>> IT HAS ITS OWN INVESTMENTS SO IT'S HOLDING ITS OWN INVESTMENTS, YOU DIDN'T TOUCH ANY OF THOSE.

>> YOU MEAN SELLING INVESTMENT, OR WHAT DO YOU MEAN?

>> WELL, I WOULD ASSUME THAT THERE'S OVERLAP THAT OUR RESERVES ARE INCLUDED IN INVESTMENTS.

>> YES, OF COURSE.

>> BECAUSE YOU'RE MANAGING THAT MONEY.

>> IF WE PLANNED ON SENDING PART OF THAT OVER TO GENERAL FUND, MAYBE THIS WILL ANSWER YOUR QUESTION, WE WOULD EITHER TAKE MONEY THAT'S SITTING MAYBE IN A MONEY MARKET ACCOUNT AND TRANSFER IT OVER TO THE GENERAL FUNDS MONEY MARKET.

ACTUALLY, IT'S ALL THE SAME MONEY MARKET ACCOUNT, IT'S JUST A BOOK ENTRY.

OR IF WE HAD A CEDAR THAT WAS COMING UP, WE MIGHT NOT RENEW IT FOR THE RISK MANAGEMENT FUND, AND INSTEAD SEND THE MONEY OVER TO GENERAL FUND AND GENERAL FUND MIGHT BUY THAT CEDAR INSTEAD OR SOMETHING LIKE THAT? THAT'S YOUR QUESTION.

>> IT SOUNDS TO ME LIKE WHAT WE'RE DOING IS WE'RE RUNNING ON TWO DIFFERENT TRACKS HERE.

YOU'VE GOT YOUR ACTUALS VERSUS YOUR REVENUES AND YOUR BUDGET, YOU'RE IDENTIFYING MONIES THAT AREN'T NEEDED TO PAY FOR THIS OR THIS, YOU'RE PULLING THOSE OUT INTO CAPEX, CIP.

BUT THEN YOU ALSO HAVE CASH EQUIVALENTS, AND INVESTMENTS THAT ARE SET ON A DIFFERENT TRACK, AND YOU'RE NOT CALCULATING THOSE INTO THESE REALLOCATIONS.

THE EIGHT MILLION THAT IS NOW SITTING IN GENERAL FUND THAT'S BEING PUT TO GENERAL FUND CAP X THAT YOU TOOK OUT OF THESE BECAUSE THEY HAVE THEIR OWN MINIMUM RESERVES.

YOU TOOK THAT OUT OF CASH, YOU DIDN'T TAKE THAT OUT OF INVESTMENTS.

>> CASH AND INVESTMENTS FROM THOSE FUNDS THAT IT CAME FROM, YES, WE WILL TAKE IT OUT OF THAT.

IF THAT'S WHAT COUNSEL APPROVES.

>> BUT IF COUNSEL APPROVES THAT, THEN YOU'RE LOOKING AS AN EXAMPLE, RISK MANAGEMENT HAS $22.9 MILLION IN CASH AND CASH EQUIVALENTS.

>> THAT WAS A SNAPSHOT IN TIME, THOUGH, AND A LOT'S CHANGED SINCE.

>> WELL, IT DID.

IT WENT TO $12.7 MILLION FROM SEPTEMBER TO DECEMBER.

IN SEPTEMBER, IT WAS $12.7 MILLION, AND IN DECEMBER, IT POPPED UP TO $22.9 MILLION, I DON'T KNOW WHY, BUT I'M JUST SAYING, THEY'RE ON TWO DIFFERENT TRACKS.

WHEN I'M ASKING YOU, IS THIS ALL THE MONEY THAT COUNSEL IS NEEDING TO WEIGH IN ON? YOU'RE SHOWING US THESE MONIES, NOT THESE MONIES?

>> THOSE MONIES ARE CONSIDERED IN THE AVAILABLE FUNDS CALCULATIONS.

BUT THOSE ARE SNAPSHOTS IN TIME, AND WE HAVE ADDITIONAL REVENUES COMING IN, EXPENDITURES GOING OUT, LIABILITIES THAT WE HAVE TO PAY THAT WALK US THROUGH TO THESE NEW POINTS IN TIME, AND THESE NUMBERS ARE TIED TO ACTUAL ENDING.

WELL, WE WORK TO TIE THEM TO ACTUAL ENDING NUMBERS FROM AN AUDITED FINANCIAL STATEMENT, AND IT INCLUDES, YES, THE SAME CASH AND INVESTMENTS.

EACH ONE OF THESE FUNDS HAS THEIR OWN BOOKS.

THEIR OWN CASH AND INVESTMENTS, THEIR OWN LIABILITIES.

>> I FOLLOW ALL OF THAT.

HOW DID YOU DECIDE WHAT IS EXCESS RESERVES?

>> BECAUSE WE TAKE THE CASH AND INVESTMENTS, WE BACK OUT LIABILITIES OR ANY OTHER REQUIRED COMMITMENTS THAT WE HAVE TO PAY OUT OF THAT, WE COME TO AN AVAILABLE RESERVE.

WE WALK THROUGH A BUDGET, WE THINK WE'RE GOING TO GET THIS MUCH REVENUE, SPEND THIS MUCH, AND WE GOT TO EQUAL.

WE STARTED WITH THIS MUCH RESERVE, WE ADDED IN REVENUE, WE SPENT EXPENDITURES, NOW WE HAVE THIS MUCH RESERVE, AND WE NEED X AMOUNT OF RESERVE, AND YOU JUST DO THE MATH BETWEEN THE TWO.

>> YOU DO THAT ON SEPTEMBER 30, AT THE END OF EACH YEAR BECAUSE THAT'LL BE YOUR BOTTOM LINE?

[03:40:02]

>> YES, BECAUSE YOU SHOULDN'T DO IT DURING THE MIDDLE OF THE YEAR BECAUSE YOU BRING IN FOR INSTANCE IN GENERAL FUND, YOU BRING YOUR PROPERTY TAXES ALL IN WITHIN A THREE MONTH PERIOD, BUT YOU HAVE TO SPEND THAT MONEY THROUGH A 12 MONTH PERIOD.

>> HERE WOULD BE THE TRUTH AND THE ACCOUNTING OF IT, LIKE IN BUSINESS, IF WE GET TO THE END OF THE YEAR, WE FINISHED ALL THE PROJECTS, WE GOT EVERYBODY PAID, WE DON'T HAVE A SINGLE BILL LEFT TO PAY FOR IT'S THE END OF OUR YEAR.

WE RUN THAT, LIKE A BOARD OF DIRECTORS, IF WE WERE GOING TO GO TALK TO THE BOARD OF DIRECTORS, WE WANT TO SOW THEM, WE'RE DOING GREAT, LET US KEEP GOING.

THESE MONIES THAT ARE REPRESENTED HERE ON THIS PAPER ARE THE MONIES THAT ARE REMAINING.

THEY'RE NOT THE MONIES THAT ARE LEFT NEEDED TO GO PAY FOR THE NEXT THREE MONTHS, BECAUSE THIS IS THE FISCAL YEAR END?

>> THESE ARE THE RESERVES.

>> BUT WHY WOULD YOU NOT PULL EXCESS RESERVE? IF I'M LOOKING AT A TOTAL HERE, RISK MANAGEMENT, AGAIN, SEPTEMBER 30, '24, $12.7 MILLION, AND YOU SAID YOU NEED 5.5 MILLION, WOULD YOU JUST SUBTRACT THAT AMOUNT OF MONEY AND THEN PULL THAT OUT?

>> WE DID THAT DURING THE LAST YEAR'S BUDGET.

WE DON'T KNOW WHAT 30TH IS AT THE END OF LAST YEAR, SO WE TAKE PART OF IT INTO THE NEXT YEAR'S BUDGET, AND THEN PART OF IT, WE WILL RUN THROUGH THIS YEAR'S BUDGET.

>> WELL, WE'RE DOING THAT IN THIS BUDGET.

WE DIDN'T DO THAT IN LAST YEAR'S BUDGET.

WE LEFT ALL THESE MONIES IN LAST YEAR'S BUDGET, PER THE FINANCIAL POLICY.

>> I'LL HAVE TO PULL UP LAST YEAR'S BUDGET TO SEE IF WE TRANSFERRED ANYTHING OUT OF RISK MANAGEMENT. LET ME LOOK.

>> COUNCILMAN, DID YOU HAVE A COMMENT OR QUESTION?

>> I JUST HAD A QUESTION. WE'RE ON AN ACCRUAL BASIS, WE'RE NOT ON A CASH BASIS?

>> YES. WE'RE ON A MODIFIED ACCRUAL BASIS FOR GENERAL FUND, AND WE'RE ON A FULL ACCRUAL BASIS FOR ALL OF OUR OTHER FUNDS. YES, SIR.

>> ALL RIGHT. THANK YOU.

I WANT TO GET BACK TO PAGE 4.

>> I'LL WRAP UP.

TO MAKE SURE I'M TRACKING WITH YOU, ALL OF THE IDENTIFIED MONIES ARE REPRESENTED ON PAGE 4 FOR GENERAL FUND?

>> OKAY. THAT'S WHAT I NEED TO KNOW.

WE'LL KEEP GOING. MAYOR, DO WE WANT TO TAKE A BREAK?

>> YEAH, IT MIGHT BE A GOOD TIME.

>> HOW ARE YOU GUYS DOING? YOU ALL READY FOR A RESTROOM BREAK? MS. STORES, I'D ASK YOU, DO YOU HAVE A BETTER PLACE TO STOP? YOU WANT TO GET TO STOPPING POINT?

>> I THINK WE CAN JUST SAY THAT THAT'S THE END OF THE GENERAL FUND.

AGAIN, WE'RE PROPOSING A FINANCIAL POLICY CHANGE IF COUNSEL IS OPEN FOR IT.

THAT'S WHAT'S BUILT INTO EVERY CASH FLOW.

WE'RE NOT HOLDING ONTO TOO MUCH RESERVE, AND WE CAN GO TO THE NEXT FUND AFTER A BREAK.

>> REAL QUICK, BY APPROVING THIS BUDGET IF WE APPROVE THE BUDGET, WE'RE ALSO ACCEPTING THAT NEW POLICY CHANGES.

>> I APPRECIATE YOU STATING THAT.

YES. THAT'S WHAT WE WOULD TAKE AS YOU ALL APPROVAL FOR THE FINANCIAL POLICY AS WELL, BECAUSE THAT'S WHAT'S INCORPORATED INTO THIS BUDGET.

PLEASE ALSO I'VE GOT A COPY OF THAT IN YOUR PACKETS THERE, AND IF YOU ALL HAVE QUESTIONS ON IT, PLEASE LET ME KNOW AND I CAN HELP ADDRESS THAT LATER.

>> I WAS GOING TO ASK IF WE NEEDED A MOTION TO APPROVE THE FINANCIAL POLICY.

>> WE WON'T TAKE ANY ACTION?

>> WE CAN'T TAKE ANY ACTION TODAY?

>> BUT I APPRECIATE THE REQUEST.

THE WAY EVERYTHING IS BEING BROUGHT TO YOU IS STILL RECOMMENDATIONS?

>> BUT WITH AN UNDERSTANDING LIKE COUNCILMAN TIPPS JUST SHOWED, YOU MAY NOT, IF HE DIDN'T ASK THAT QUESTION, I DIDN'T APPROVE A FINANCIAL POLICY, WELL, YOU MIGHT HAVE IN THE WAY IN WHICH YOU APPROVE THE OVERALL WORKING BUDGET.

WE'RE DOING A GREAT JOB OF OVERCOMUNICATING.

I KNOW WE'RE GOING A LITTLE SLOW, BUT WE CAN SPEED UP.

>> WHAT WE CAN DO IS BRING A RESOLUTION BACK ALONG WITH YOUR BUDGET APPROVAL, LIKE A RESOLUTION TO APPROVE YOUR FINANCIAL POLICY AND THAT WOULD REALLY SEAL IT UP REALLY NICELY.

I THINK THAT WOULD BE A GREAT IDEA.

>> I THINK THAT'S A GREAT IDEA.

>> WE CAN DO THAT.

>> TEN MINUTE RECESS.

>> JUST REAL QUICK. I JUST WANT TO POINT OUT THAT THIS BUDGET IS SO COMPLEX.

THIS BUDGET IS HUGE, AND TO HAVE YOU MS. STORES LEADING US AND BE ABLE TO ANSWER THE QUESTIONS, RAPID FIRE LIKE YOU DO, AND YOU KNOW EXACTLY WHERE TO GO IS PHENOMENAL.

>> THANK YOU. I APPRECIATE THAT.

>> YOU'LL FIND OUT.

SHE KNOWS THIS BUDGET LIKE THE BIBLE.

SHE CAN GET YOU TO PSALMS 101 REAL QUICK. THANK YOU.

KEEP GOING. I'M LOOKING AT MY OVERALL GOAL HERE.

GRAYSON, IF I LOOK AT THIS DEPARTMENTAL BUDGET OVERVIEW, THE ADMIN, MAYOR, CITY MANAGER, E&I, THAT MIGHT BE THE FIRST TIME I'VE GOTTEN THAT RIGHT, LEGAL AND CITY SEC.

CAN WE GET THROUGH ALL OF THOSE HIGH LEVEL?

>> I HOPE SO. YES.

>> THEN SUPPORT UP TO YOU [OVERLAPPING].

I'M SETTING A GOAL, I DIDN'T MAKE A PROMISE.

>> DID YOU SAY IT'S HARD FOR ME TO SAY OR SOMETHING?

[03:45:01]

>> SUPPORT SERVICES, SAME HIGH LEVEL?

>> THAT'S OUR GOAL, YES, AND IF WE WERE AIMING FOR FIVE HERE, WE CAN WE'LL TRY TO FLY AS FAST AS WE CAN.

>> WE STILL HAVE CASH FLOWS TO GO THROUGH SO WE'RE NOT FINISHED ON THE FUND OVERVIEW AS IN YET.

>> I THOUGHT WE WERE DONE. WE'RE NOT OUT OF FUND OVERVIEW YET?

>> YES. WE'VE DONE THE GENERAL FUND, AND WE NEED TO MOVE ON TO THE WATER AND SEWER FUND OVERVIEW REAL QUICK.

WE HAVE BRIEFLY TOUCHED ON A COUPLE OF THESE, SO THOSE WILL GO REALLY FAST, BUT IF YOU TURN TO PAGE 30, THIS IS THE WATER AND SEWER CASH FLOW, AND IT SHOWS ESTIMATED AVAILABLE FUNDS AT THE BEGINNING OF CURRENT YEAR AND THIS NEXT YEAR, AND THEN YOU WILL SEE YOUR OPERATING INCOME IN THE ORIGINAL BUDGET AND THE PROPOSED BUDGET.

I WOULD LIKE TO NOTE IN YOUR PROPOSED BUDGET, YOU HAVE AN ADDITIONAL $25 MILLION BUILT INTO YOUR WATER AND SEWER REVENUE FOR GRANT REVENUE AT THE FEDERAL LEVEL, I BELIEVE, TO SUPPORT THE FIRST STAGE OF DESIGN RELATED TO THE WASTEWATER FACILITIES.

THAT'S WHY THAT NUMBER IS UP SO MUCH, AND AGAIN, HOPEFULLY, WE'LL CONTINUE TO GET GRANT FUNDING OVER THE NEXT SEVERAL YEARS TO HELP WITH THE WASTEWATER FACILITY, BUT THAT'S WHY THAT NUMBER JUMPED UP SO MUCH.

>> I GOT A QUICK QUERRY, IS THAT STATE DOLLARS FROM FAIRLY, OR IT'S NOT JACKSON'S MONEY?

>> FAIRLY WAS $20 MILLION, ANDREW, IS THAT CORRECT? THEN THE FIVE, I THINK IT'S MORE LIKE THREE MEN, I THINK FROM FEDERAL, BUT THERE'S ADDITIONAL MONEY FROM CONGRESS AND JACKSON'S JUST SECURED FOR US.

IT MAY HAVE DROPPED FROM FIVE TO THE ONE MILLION RANGE.

>> BUT AGAIN, WE'LL GET WHAT WE GET, WHETHER IT'S 25 OR 22, WE'LL GET WHAT WE SPENT WHAT WE GET.

>> I WAS VERIFYING, I DIDN'T REALIZE WE HAD FEDERAL MONIES.

>> I MAY HAVE MISSTATED, I DON'T KNOW IF IT'S FEDERAL MONEY.

>> THE 20 WAS FROM FAIRLY, BUT WE NEVER GOT ANY MONEY YET FROM JACKSON?

>> NOT YET, NO. IT SHOULD STILL BE COMING.

>> I KNOW THERE WAS A LOT OF COMMUNICATION EARLY ON THAT WE HAD A LOT OF MONEY COME FROM JACKSON'S OFFICE FOR WASTEWATER, AND THAT HAS NOT OCCURRED.

>> CORRECT. THEY'RE STILL WORKING THROUGH THE PROCESS.

>> QUICK CLARIFICATION.

HOUSE REPRESENTATIVE FAIRLY.

> YES. FROM CAROLINE FAIRY.

>> YES. THANK YOU. COUNCILMAN, DO YOU HAVE SOMETHING?

>> NO, SIR.

>> ALL RIGHT. KEEP GOING.

WE WILL TAKE IT.

>> DOWN UNDER YOUR EXPENDITURES, YOU WILL SEE YOUR OPERATING EXPENDITURES ARE REMAINING RELATIVELY FLAT FOR THE YEAR, ACTUALLY DECREASING JUST A LITTLE BIT AS WE WERE NORMALIZING SOME OPERATIONS, AND AS THE 311 OR THE MY AMARILLO OPERATIONS CAME OUT OF OUR UTILITY BILLING DEPARTMENT, WHICH WAS HOUSING OUR WATER AND SEWER FUND.

IT IS NOW GOING INTO ITS OWN INTERNAL SERVICE FUND, AND CHARGING ITS SERVICES BACK TO THE USING DEPARTMENTS.

NOW, WATER AND SEWER IS GETTING A LARGE CHARGE RELATED TO THAT, BUT IT DID ACTUALLY DECREASE WATER AND SEWERS OVERALL OPERATING EXPENDITURES JUST SLIGHTLY.

ON YOUR CAPITAL, YOU'LL SEE CURRENT YEAR, WE HAD ABOUT $19.2 MILLION, AND WE ARE BUDGETING $36 MILLION.

OF THAT $25 MILLION WAS FOR THAT WASTEWATER DESIGN OR THE START OF IT THAT I JUST SPOKE OF, AND IF WE ONLY GET $21 MILLION, THEN WE'LL ONLY HAVE $21 MILLION IN CAPITAL EXPENDITURES.

THAT NUMBER WILL FLUCTUATE BASED ON THAT GRANT MONEY.

THEN WE ALSO HAVE SIX MILLION DOLLARS IN CASH FUNDED CAPITAL, AND FIVE MILLION DOLLARS IN CASH FUNDED CAPITAL COMING FROM A 5% RATE INCREASE.

AGAIN, WE ARE RECOMMENDING THE RATE INCREASE.

WE CAPTURE THOSE ONE TIME DOLLARS WITH THE RATE INCREASE TO DO SOME CASH FUNDED CAPITAL THIS YEAR, AND THEN KEEP THE RATE INCREASE AVAILABLE FOR NEXT YEAR IN CASE WE NEED TO USE IT FOR MORE CAPITAL OR FOR THE START OF DEBT ISSUANCES ASSOCIATED WITH THE WASTEWATER FACILITIES.

>> QUESTION?

>> WHY DO WE BRING ANYTHING INTO THE BUDGET OR HAVE IT AS ACTUAL CASH IF WE DON'T KNOW WHAT THE EXACT DOLLAR IS?

>> IT'S JUST AN ESTIMATE.

>> OKAY. THOUGH WHEN WE APPROVE IT, IS IT COMING IN AS ACTUAL OR IS IT STILL AN ESTIMATE?

>> ARE YOU SAYING ON THE GRANT SIDE?

>> YES, MA'AM. AVAILABLE FUNDS END OF YEAR, IF IT'S $24,466,910, BUT WE DON'T HAVE THOSE DOLLARS YET, HOW CAN WE QUANTIFY THAT?

>> WELL, WE'RE JUST ESTIMATING IS IF WE DO RECEIVE THE FULL $25 MILLION AND THEN EXPEND THE FULL $25 MILLION, THEN WE'LL HAVE ABOUT THAT $24 MILLION, BUT IF WE ONLY GET $21 MILLION, WE'LL ONLY EXPEND $21 MILLION.

THOSE TWO ARE GOING TO STAY WHETHER THEY GO UP OR DOWN, THEY'RE GOING TO STAY IN LINE WITH EACH OTHER.

>> WE BUDGET, WE DO TRY TO FORECAST WHAT WE SPEND IN GRANTS.

[03:50:02]

YOU COULD PUT ZERO, BUT THEN YOUR BUDGET IS GOING TO LOOK LIKE YOU WAY OVER SPENT, WE TRY TO GIVE THE CITIZENS A REASONABLE EXPECTATION OF HOW MUCH WE'RE GOING TO SPEND IN GRANTS.

NOW, IT'LL END UP BEING WHAT IT'S GOING TO BE, BUT WE JUST DO THE BEST WE CAN TO PREPARE A BUDGET NUMBER OFF WHAT WE KNOW.

>> I KNOW WE HAD THE PROPOSED BUDGET HAS RATE INCREASES FOR WATER AND SEWER, FOR COMMERCIAL AND RESIDENTIAL? I KNOW WE'RE LOOKING AT A RATE STUDY TO PAY FOR THE WASTEWATER TREATMENT PLANT.

WILL THERE BE THE POSSIBILITY OF ANOTHER RATE INCREASE THAT WOULD COME INSIDE THIS BUDGET? WHEN DO WE BELIEVE THAT WE'LL START HAVING RATE INCREASES RELATED TO THE WASTEWATER TREATMENT PLANT?

>> IT'S A GOOD QUESTION. I WOULD FORESEE A STRONG CHANCE THAT WE WILL BE LOOKING AT ADDITIONAL RATE INCREASES LATER IN THE FISCAL YEAR.

BUT AGAIN, ONCE WE GET THE STUDY BACK, WE'LL KNOW BECAUSE PART OF IT IS WE NEED TO START FIGURING OUT HOW DO WE START PHASING OUR WAY INTO THOSE RATES.

DO YOU WAIT UNTIL LATER OR DO YOU START STAIR STEPPING IN NOW TO GET PEOPLE ACCLIMATED? BECAUSE EVENTUALLY WHEN YOU TAKE YOUR DEBT, YOU GOT TO MAKE PAYMENTS.

DEPENDING WHAT THE RATE STUDY COMES BACK AS, WE MAY WANT TO START EARLIER TO GET OURSELVES ACCLIMATED TO THE POINT WHERE WE ACTUALLY COMPARE OUR DEBT IN 2, 03, 4 YEARS, WHATEVER IT'S GOING TO BE.

NOW, THERE'S A CHANCE WE MAY HAVE ANOTHER RATE INCREASE BROUGHT TO YOU BASED ON THE RATE STUDY IN THIS NEXT FISCAL YEAR.

>> BUT THAT MONEY WOULD STRICTLY BE HELD BACK STRICTLY FOR THE PROJECT, AND STRICTLY TO SUPPORT ISSUANCE OF DEBT?

>> YES, IT'S A LITTLE MORE COMPLICATED THAN THAT.

IT DEPENDS ON HOW MUCH YOU'RE TAKING OUT, BUT KNOW THAT YOU CAN EITHER SET IT ALL ASIDE AS YOU'RE GETTING IT, OR YOU START USING IT FOR ONE TIME CAPITAL TO GET YOURSELF READY.

AGAIN, IT DEPENDS ON HOW FAR OUT YOUR DEBT IS GOING TO BE.

YOU DON'T WANT TO SIT ON A LOT OF RESERVES SITTING THERE.

BUT AT THE SAME TIME, YOU WANT TO GET PEOPLE ACCLIMATED TO WHAT THE RATE'S GOING TO BE.

I'M [OVERLAPPING]

>> WELL, I AGREE WITH THAT. I THINK WE'RE GOING TO HAVE TO SEE RATE INCREASES TO SUPPLEMENT WHEREVER WE FALL SHORT ON ANY OTHER TYPE OF FUNDING.

>> WE'LL KNOW MORE ONCE WE GET THE RATE STATED BACK, BECAUSE I DON'T KNOW IF WE'RE LOOKING AT 5%, 20%, 50% INCREASE.

I DON'T KNOW YET, SO WE'LL HAVE TO START MAKING DECISIONS THEN ON WHEN DO WE START IT, AND THEN WHAT DO USE THE MONEY FOR IN THE MEANTIME IF NOT SETTING IT ASIDE.

>> WE'RE PLANNING TO AT LEAST USE THIS RATE INCREASE AS POTENTIALLY A STEP INTO RATE INCREASES.

INSTEAD OF DOING A MASSIVE ONE AT ONCE, MAYBE STAIR STEP INTO IT.

BUT THERE'S A LOT OF CAPITAL PROJECTS THAT WE NEED TO DO IN THE MEANTIME, SO THAT WOULD GIVE US SOME ONE TIME FUNDING [OVERLAPPING] YOU GOT A FEW OF THESE.

>> SORRY, LAURA, ONE OF OUR THINGS WE'RE ALREADY THINKING FORWARD TO IS ALL THE THINGS WE'RE GOING TO HAVE TO DO AT HOLLYWOOD AND RIVER ROAD TO KEEP THOSE ALIVE WHILE WE'RE GOING.

THAT'S PART OF THE EQUATION, TOO, AND PART OF THE REASON WE NEED THAT CAPITAL.

>> DOWN BELOW THAT CAPITAL LINE IS YOUR DEBT SERVICE PAYMENTS.

YOU HAVE PRINCIPAL AND INTEREST PAYMENTS, AND THEY ARE SET AT 23.1 MILLION FOR NEXT YEAR FOR YOUR PRINCIPAL PAYMENTS AND 8.5 MILLION IN INTEREST FOR THIS NEXT YEAR'S PRINCIPAL PAYMENTS.

THAT'S FOR OUTSTANDING DEBT AND THE SIX MILLION THAT WAS APPROVED IN THE CURRENT YEAR, ANTICIPATING THAT WE WILL GET THAT ISSUED IN THIS NEXT YEAR.

TOTAL EXPENDITURES ARE LOOKING TO GO FROM JUST UNDER 128 MILLION UP TO 142 MILLION, LEAVING YOUR AVAILABLE FUNDS AT THE END OF THE YEAR AT APPROXIMATELY $24.4 MILLION.

YOU'LL SEE BELOW, WE HAVE TO RESERVE A CERTAIN AMOUNT FOR SICK AND ANNUAL LEAVE, AND WE HAVE LEGAL RESERVES THAT WE HAVE TO COMPLY WITH FOR SOME OF OUR DEBT COVENANTS ASSOCIATED WITH OUR TDB DEBT ISSUANCES.

ONCE WE ADJUST THOSE OUT, WE'RE AT JUST UNDER $19.5 MILLION, AND THEN WE DO OUR RESERVE CALCULATION.

WE SHOULD BE CLOSER TO ABOUT 21.1 MILLION, BUT WE'RE CLOSE.

WE'RE JUST SLIGHTLY UNDER THAT AT ABOUT $1.6 MILLION.

QUESTION ON WATER AND SEWER?

>> QUICK QUESTION. CAN YOU RUN ACTUALS NEXT TO THIS ONE AS WELL?

>> THEY WOULD NOT BE AN APPLES TO APPLES ACTUAL, BUT I CAN PUT SOMETHING TOGETHER.

>> THIS IS ONE OF THE ONES LIKE WE SAID, WE'LL RUN SOME ACTUALS FOR ALL THE DIFFERENT FUNDS.

AGAIN, THERE MAY BE SOME DISCREPANCIES.

WE'LL HAVE TO JUST HIGHLIGHT TO YOU ALL WHEN WE PRODUCE THOSE.

>> THE ACTUALS ON THIS NO WAY TO SEPARATE, I GUESS, LARGE CAPEX PROJECTS VERSUS TYPICAL OVERHEAD, TYPICAL COST OF DOING BUSINESS?

>> YEAH, WE CAN DO THAT. THAT'S HOW THIS BUDGET IS BUILT.

YOU'RE OPERATING IS YOUR COST OF DOING BUSINESS AND YOUR CAPITAL IS YOUR CIP.

>> COUNSEL, WOULD IT BE HELPFUL FOR YOU GUYS IF YOU JUST SAW THE NUMBERS THAT THEY DO HAVE, AND SHE JUST LEAVES OFF THE ONES THAT SHE WOULD HAVE TO GUESTIMATE? LIKE OPERATING LESS DEPRECIATION, SHE WOULD BE ABLE TO HIT THAT ONE, SO WE WOULD KNOW THAT'S HOW MUCH WE SPEND.

>> WELL, AND AGAIN, THEY'LL ALL BE GUESSTIMATES.

[03:55:01]

IF YOU'RE LOOKING AT YEAR IN ESTIMATES FOR THIS YEAR, IT'LL ALL BE A GUESS.

>> OH, NO, I WAS JUST GOING TO GO [BACKGROUND] '24, '25.

WHAT WE WOULD SEE IS WE'D SEE '24, '25 ACTUALS TO THE LEFT, THEN WE'D SEE BUDGET TO THE LEFT OF THAT.

THEN WE'D SEE OUR '25, '26 PROPOSED BUDGET.

>> YOU MEAN '23, '24, '24, '25 THE YEAR WE'RE IN RIGHT NOW THAT WOULD BE THE GUESTIMATE.

>> YEAH. I GUESS IT WAS 23, 24, WE WERE GOING TO RUN ACTUALS.

DID WE HAVE '23, '24 ON THE OTHER PAGE? WE DIDN'T. DID WE?

>> NO.

>> WE'RE JUST GOING TO SHOW PREVIOUSLY.

>> IF YOU LOOK ON PAGE 31, YOU SEE THREE YEARS WORTH OF ACTUALS VERSUS CURRENT YEAR BUDGET VERSUS NEXT YEAR'S BUDGET.

ALL YOUR ACTUALS ARE RIGHT THERE LINE BY LINE.

THAT ALL OF THESE ARE YOUR TRUE APPLES TO APPLES COMPARISON ON EVERYTHING.

>> THE MADISON WATER FOR ME.

>> YEAH, WE'LL JUST LEAVE IT LIKE IT IS IF YOU'VE GOT IT ON THE BACKUP.

>> IT'S MAYBE MORE DETAIL THAT'S NOT AS CONSOLIDATED OF A LOOK, BUT ALL YOUR ACTUALS ARE RIGHT HERE SO YOU CAN GO LINE BY LINE AND SEE THE THREE YEAR TREND OF ACTUALS VERSUS CURRENT YEAR BUDGET AND PROPOSED BUDGET.

THAT'S ON EVERY FUND, EVERY LINE ITEM IN THE ENTIRE BUDGET.

IF YOU'LL TURN TO PAGE 41, WE'LL LOOK AT AIRPORT.

ON PAGE 41, WE ANTICIPATED STARTING THE CURRENT YEAR BUDGET AT ABOUT 4.3 MILLION VERSUS THIS NEXT YEAR, WE'RE ANTICIPATING THEY'RE GOING TO HAVE A LITTLE BIT OF EXCESS RESERVES.

THEY'RE GOING TO COME IN CLOSER TO ABOUT 8.9 MILLION.

THEIR OPERATING INCOME IS GOING TO STAY RELATIVELY FLAT WITH A TINY BIT OF GROWTH FROM 16.9 MILLION TO 17 MILLION, AND THEIR GRANT INCOME IS GOING TO PULL BACK JUST A LITTLE BIT, AND THAT'S BASED ON HOW MANY CAPITAL PROJECTS THEY'RE PROPOSING.

THE WAY OUR AIRPORT WORKS IS FAA, SO FEDERAL AVIATION ADMINISTRATION ACCEPTABLE PROJECTS ARE FUNDED AT A 5% MATCH FROM THE AIRPORT AND A 95% GRANT MATCH FROM THE FAA, WHICH IS A WONDERFUL DEAL.

BASED ON HOW MUCH FAA PROJECTS THEY PROPOSE EACH YEAR, THAT IS WHAT IS MAKING THIS GRANT INCOME LINE FLUCTUATE.

WE'RE ANTICIPATING ABOUT 4.5 MILLION COMING IN FROM THE FAA.

OUR TOTAL REVENUES ARE JUST PULLING BACK SLIGHTLY BECAUSE OF THAT GRANT INCOME.

ON OUR EXPENDITURES, THEIR OPERATING EXPENDITURES HAVE GROWN JUST A LITTLE BIT.

I THINK THEY HAVE MAYBE ONE NEW POSITION IN AND JUST SOME GROWTH IN OPERATING COSTS TO RUN THE FACILITY.

THEIR CAPITAL IS GOING TO BE RIGHT ABOUT THE SAME AS THE PRIOR YEAR, SO MORE OF IT IS FOR NON FAA FUNDED PROJECTS.

THEY'RE DOING MORE PROJECTS IN THIS NEXT YEAR, AND I BELIEVE, PART OF IT'S MAYBE SOME PARKING IMPROVEMENTS, AND THE FAA WON'T TOUCH ANY OF THAT.

THEY'RE LOOKING TO SPEND ABOUT 7.7 MILLION IN CAPITAL PROJECTS.

ON THEIR PRINCIPAL AND INTEREST PAYMENTS THEY HAVE ONE OUTSTANDING DEBT RELATED TO THOSE HANGAR IMPROVEMENTS THAT WE'RE STILL WAITING TO WORK ON.

PRINCIPAL PAYMENTS ARE 95,000 INTEREST PAYMENTS ARE 160,000.

TOTAL EXPENDITURES HAVE GROWN FROM 23.5 MILLION TO 24.4 MILLION, LEAVING AVAILABLE FUNDS AT THE END OF THIS NEXT YEAR OF APPROXIMATELY SIX MILLION DOLLARS.

THERE'S A SMALL AMOUNT NEEDED FOR SICK LEAVE AND ANNUAL LEAVE PAYOUT OF 475, ADJUSTING US DOWN TO 5.5 MILLION, AND THEN WE DO OUR THREE MONTHS IN ONE YEAR CAPITAL OPERATING RESERVES, AND THEY NEED ABOUT 5.6, SO WE ARE RIGHT ON TARGET WITH THIS BUDGET THAT'S PROPOSED.

QUESTIONS ON AIRPORT?

>> HOW MANY FTES DO WE HAVE?

>> IN AIRPORT?

>> YEAH.

>> IS THAT JUST OFF THE CUFF, BECAUSE SICK LEAVE AND ANNUAL LEAVE LESS RESERVES AT 475.

>> WE'RE REQUIRED TO BOOK A LIABILITY ASSOCIATED WITH OUR UPCOMING.

WE HAVE A SHORT TERM LIABILITY FOR OUR ANTICIPATED PAYOUT OF SICK AND ANNUAL LEAVE AND COMP TIME FOR ANY TERMINATIONS THAT ARE OCCURRING IN A ONE YEAR PERIOD, AND THEN WE HAVE A LONG TERM LIABILITY FOR EVERYBODY THAT'S ON IT.

FOR AIRPORT, I'LL HAVE TO FLIP BACK TO THEIR SECTION.

>> WE'RE NOT TAKING CARE OF TSA.

>> NO TSA IS THEIR FEDERAL EMPLOYEES.

THAT'S A GOOD QUESTION, YEAH.

>> WE'RE NOT TAKING CARE OF GATE STAFF OR ANYTHING THAT'S ALL HANDLED BY THE [OVERLAPPING]

>> WE HAVE 75 EMPLOYEES IT LOOKS LIKE.

NO. ALL OF THE TSA STUFF IS ALL FEDERAL EMPLOYEES.

>> IN THE PARKING, THAT'S A SEPARATE CONTRACT AND THAT'S THEIR EMPLOYEES.

>> WE HAVE 75 FTES OUT THERE?

>> THEN LET'S TURN TO THE NEXT CASH FLOW.

[04:00:01]

GO TO PAGE 51, DRAINAGE UTILITY.

WE ALREADY BRIEFLY SPOKE ABOUT THIS.

AVAILABLE FUNDS YOU'LL SEE THAT WE'RE ANTICIPATING WE'RE GOING TO BE BEHIND ON OUR AVAILABLE FUNDS THIS YEAR, AND PART OF THAT WAS WE HAD EARMARKED MORE FOR CAPITAL PROJECTS THAN WHAT WE HAD AVAILABLE.

THE DEPARTMENT IS WORKING THROUGH RELEASING SOME OF THOSE CAPITAL PROJECTS THAT CAN BE DONE AT A LATER POINT IN TIME TO HELP US GET CAUGHT BACK UP ON AVAILABLE FUNDS.

THEIR REVENUE IS LOOKING TO GROW JUST SLIGHTLY FROM 12.4 MILLION UP TO 14 MILLION.

THEN THEIR OPERATING EXPENSES.

THE MAIN CHANGE IN THEIR OPERATING EXPENSES, AND I SPOKE ABOUT THIS EARLIER, THEY DON'T HAVE ANY CAPITAL PLAN FOR THIS NEXT YEAR, BUT THEY ACTUALLY DO, BUT WE'VE MOVED IT INTO THEIR OPERATING ACCOUNTS BECAUSE THEY'RE NOT REALLY CONSTRUCTING LIKE A CONSTRUCTION PROJECT OR BUYING ANYTHING CAPITAL RELATED, THEY'RE DOING BASIC CURB AND GUTTER AND JUST MINOR DRAINAGE REPAIRS WITH THAT MONEY.

WE MOVED IT OUT OF THEIR CAPITAL BUDGET UP INTO THEIR OPERATING BUDGET.

THAT WILL ENSURE THAT THEY HAVE IT IN THEIR OPERATIONS YEAR OVER YEAR GOING FORWARD.

THEY DO HAVE PRINCIPAL AND INTEREST FOR OUTSTANDING DEBT OF 1.6 MILLION FOR PRINCIPAL AND 2.4 ON INTEREST.

TOTAL EXPENDITURES ARE 9.7 MILLION LEAVING AVAILABLE FUNDS AT ABOUT 1.8 FOR THIS NEXT YEAR.

THEY NEED TO BE CLOSER TO ABOUT WELL, AFTER WE BACK OUT SICK AND ANNUAL LEAVE RESERVES, THEY'RE 1.72, AND THEY NEED TO BE CLOSER TO 1.79.

WE'RE ANTICIPATING THEY'LL BE A LITTLE BIT BEHIND.

AS A REMINDER, ON THEIR REVENUE, THE BIG GROWTH IN THEIR REVENUE WAS THAT TWO MILLION DOLLARS COMING IN FROM FLEET FOR EQUIPMENT THAT THEY PURCHASED.

HONESTLY, WE COULD HAVE POTENTIALLY DONE IT IN THIS YEAR TO GET THEIR AVAILABLE FUNDS IN BETTER SHAPE, BUT WE WANTED TO BRING IT THROUGH THIS BUDGET PROCESS FOR YOU ALL TO LOOK AT, AND SO WE'LL JUST PUT IT INTO THIS NEXT YEAR'S BUDGET.

BUT WE'LL SEPARATE OUT THAT TRANSFERS LINE ITEM FOR THIS GOING FORWARD.

NOW LET'S TURN TO PAGE 56, AND WE'RE GOING TO JUST LOOK AT THIS CASH FLOW AND TALK MORE ABOUT THIS LATER.

THIS WOULD BE A NEW ENTERPRISE FUND, THE STREET ASSESSMENT FUND, AND WE'RE ANTICIPATING BRINGING IN I'M SORRY, STREET MAINTENANCE FUND.

WE WOULD LOOK AT FEES OF ABOUT $15 MILLION AND THEN ABOUT 13,000 COMING IN FROM SOME MISCELLANEOUS ITEMS. WE WOULD THEN HAVE OPERATING EXPENDITURES LESS DEPRECIATION OF ABOUT 14.5 MILLION, AND THEN SOME CAPITAL PURCHASES OF ABOUT 484,000.

THAT WOULD LEAVE US WITH ENDING RESERVES OF 50,000.

THEY WOULD NOT BE ABLE TO MEET A THREE MONTH OPERATING RESERVE, BUT WHAT WE WOULD PROPOSE IS THAT WE WOULD START BUILDING THAT THREE MONTH OPERATING RESERVE OVER MAYBE A 3-5 YEAR PERIOD.

INSTEAD OF DOING A HUGE INCREASE OR A HUGE FEE ALL AT ONCE TO BUILD IN THE REVENUE WE NEED PLUS RESERVES, WE WOULD PROPOSE INCREMENTALLY BUILDING THAT RESERVE OVER A FEW YEARS.

WE WILL TALK A LOT MORE ABOUT THIS FUND THURSDAY.

THEN IF YOU'LL TURN TO PAGE 60, WE ALREADY TALKED ABOUT FLEET QUITE A BIT.

I THINK BOTTOM LINE IS AS A REMINDER, SIX MILLION'S GOING IN TO GENERAL FUND, TWO MILLION'S GOING TO DRAINAGE.

THEY'RE GOING TO ISSUE WHAT'S BILLED TO $7.5 MILLION DEBT ISSUANCE FOR HEAVY EQUIPMENT REPLACEMENT.

THEN THEY'RE GOING TO HAVE ABOUT 1.5 MILLION THAT THEY'RE GOING TO BUY ON MISCELLANEOUS VEHICLE AND EQUIPMENT REPLACEMENT.

THEN THEY'RE ALSO LOOKING TO DO ABOUT TWO MILLION DOLLARS MORE ALMOST DOUBLING WHAT WE'RE DOING IN OUR LEASE PROGRAM AT THIS POINT INTO THIS NEXT YEAR TAKING ANOTHER BIG CHUNK OUT OF THE FLEET PUTTING IT INTO A LEASING PROGRAM, AND THAT WOULD GET THEM RIGHT AT ABOUT THEIR TARGET RESERVES.

THE NEXT ONE LET'S GO TO IS PAGE 66, AND THIS IS YOUR IT FUND, AND IT, WE SPOKE ABOUT THIS A LITTLE BIT.

YOU'LL SEE THE RESERVES WERE ABOUT 2.2 MILLION, AND THIS YEAR WE'RE THEY'RE GOING TO BE A LITTLE LESS THAN A MILLION DOLLARS.

COSTS HAVE CONTINUED TO BE VERY HIGH, ESPECIALLY ON OUR SOFTWARE, ALL OF OUR EQUIPMENT, IN OUR IT FUND.

YOU'LL SEE THEIR OPERATING INCOME IS AT 9.6 MILLION IN THE CURRENT YEAR.

WE HAVE A 25% INCREASE PROPOSED GOING OUT TO ALL THE DEPARTMENTS TO BRING THEIR REVENUE UP TO 11.8 MILLION.

THAT IS JUST TO COVER THE COST OF ONE OF THE BIG SOFTWARES THAT THEY'VE TAKEN ON IS OUR NEW WORKDAY SOFTWARE,

[04:05:02]

WHICH IS OUR FINANCIAL SOFTWARE THAT ALL DEPARTMENTS USE.

BUT THEN THEY ALSO HAVE IN A FEW NEW POSITIONS TO HELP WITH INCREASED IT SECURITY EFFORTS, AND THEN THERE IS BUILT IN ADDITIONAL COSTS FOR PRETTY MUCH ALL SOFTWARES GOING UP AT THIS POINT.

I KNOW RICH WILL HAVE A LOT MORE DETAILS ON THAT LATER, BUT WE ARE PASSING THAT BACK TO THE USING DEPARTMENTS.

THEY WOULD HAVE A LITTLE BIT OF CAPITAL THAT THEY SPENT OF 275 BRINGING THEIR AVAILABLE FUNDS AT THE END OF THE YEAR TO AROUND 800,000.

WE ARE GOING TO HAVE TO KEEP WORKING ON THE IT FUND OVER THE NEXT FEW YEARS TO BUILD BACK RESERVES.

WE ARE GOING TO HAVE TO HAVE BIGGER INCREASES, I THINK GOING FORWARD JUST TO STAY AHEAD OF THESE BUILT IN COST EACH YEAR FROM THE SOFTWARE STANDPOINT BECAUSE THEY'RE NOT NEGOTIABLE.

WE HAVE TO DO THEM. IF WE DON'T BUDGET PROPERLY ENOUGH, THEN WE WIND UP EATING UP SOME OF THEIR RESERVES, AND THEN WE HAVE TO WORK AT BUILDING THEM BACK.

WE'LL BE DOING A LOT OF THAT OVER THE NEXT FEW YEARS, BUT I THINK THIS IS A GOOD BUDGET TO BUILD US TO START MOVING IN THE RIGHT DIRECTION.

>> MS. LAURA, ON SEVERAL OF THESE, CAN WE REVISIT THESE ON THURSDAY TO RECONCILE OUT WHAT THEIR IDENTIFIED INVESTMENTS ARE? BECAUSE IF WE'RE LOOKING AT THIS, WE DON'T HAVE A RESERVE FOR IT, BUT WE DO HAVE INVESTMENTS.

HOWEVER WE WANT TO RECONCILE THAT?

>> THEY DO HAVE A RESERVE.

AT THE END OF THE YEAR, THEY'D HAVE A RESERVE OF 794,000 [OVERLAPPING] CASH IN INVESTMENTS.

>> I DON'T KNOW IF THIS IS THE CORRECT TERM, BUT THEY HAVE OWNERSHIP OF THEIR CASH, CASH EQUIVALENTS, AND THEIR INVESTMENTS THAT EXCEED THAT.

THEY'RE NOT REPRESENTED AT THE BEGINNING OF THE YEAR OR AT THE END OF THE YEAR, BUT THEY'RE REPRESENTED IN THEIR PORTFOLIO, AS I CALL IT.

>> YES, AND THAT 794 IS ALL MADE UP OF CASH AND INVESTMENTS.

>> LIKE THURSDAY, CAN WE COME BACK TO IT? [OVERLAPPING] BECAUSE YOU'RE LOOKING AT 24, 25, I'M LOOKING AT SEPTEMBER 30 OF 24, THAT WOULD WORK.

>> WELL, THIS IS TWO YEARS OUT FROM THAT.

THESE ARE ESTIMATES OF WHERE WE'RE GOING TO BE TWO YEARS FROM THAT POINT IN TIME YOU'RE LOOKING AT.

>> BUT IT WOULD BE REPRESENTED CORRECTLY ON THE 24, 25 BUDGET.

>> WELL, THAT BUDGET IS STILL AN ESTIMATE.

>> MAYBE IF WE SET ASIDE A LITTLE BIT OF TIME ON THURSDAY TO GO THROUGH THAT.

BECAUSE I WOULD WANT TO MAKE SURE THAT COUNSEL IS VERY COMFORTABLE IN KNOWING WHAT THEIR RESERVE IS IN DIFFERENCE FROM WHAT WE WOULD CALL INVESTMENTS.

IS THAT HOW WE WOULD SAY IT OR YOU WOULD SAY THEY'RE ALL THE SAME?

>> THEY'RE ALL IN CASH OR INVESTMENTS.

YES. ALL RESERVES ARE EITHER IN CASH OR INVESTMENTS.

>> ALL RIGHT. THANK YOU.

>> IF YOU'LL TURN THEN TO PAGE 74, WE'VE ALREADY TALKED A LITTLE BIT ABOUT THIS ONE AS WELL. I'M SORRY.

GO BACK TO PAGE 71 ON RISK MANAGEMENT.

WE'VE ALREADY TALKED ABOUT THIS ONE, SOME AVAILABLE FUNDS AT THE BEGINNING OF THE YEAR, ESTIMATED AT THE CURRENT YEAR.

WE ESTIMATED TO START AT ABOUT 8.5 MILLION.

WE'RE ESTIMATING TO BE AT ABOUT 5.5 MILLION NEXT YEAR TO START THE YEAR.

OPERATING INCOME IS PRETTY MUCH FLAT FROM ONE YEAR TO THE NEXT, AND THEN YOUR EXPENDITURES HAVE ACTUALLY GONE DOWN JUST A LITTLE BIT, AND WE WILL SEPARATE OUT THAT 1.5 MILLION THAT RISK MANAGEMENT WOULD BE TRANSFERRING TO GENERAL FUND PROPOSED FOR THIS NEXT YEAR, SO YOU CAN SEE THAT IT'S INCLUDED IN THE 11.6.

THEY ARE JUST RIGHT AT THEIR TARGETED RESERVE OF 5.5 MILLION DOLLAR.

NOW, TURN TO PAGE 74.

WE'VE ALSO TALKED ABOUT THIS ONE A LITTLE.

THIS IS YOUR HEALTH PLAN.

ANTICIPATED TO START THE CURRENT YEAR'S BUDGET AT ABOUT 10.5 MILLION.

WE ANTICIPATE THEY'LL START THIS NEXT YEAR'S BUDGET ABOUT 7.9 MILLION.

YOU'LL WALK THROUGH ALL THE REVENUES THERE.

WE'VE GOT EMPLOYER CONTRIBUTIONS, EMPLOYEE CONTRIBUTIONS, WE DO NOT HAVE INCREASES ON THE EMPLOYEE OR THE EMPLOYER SIDE FOR HEALTH INSURANCE THIS YEAR.

SOME OTHER VARIOUS REVENUES FOR TOTAL REVENUES GOING FROM 31.6 MILLION UP TO 33.9 MILLION.

THE BIG ONE YOU'RE GOING TO SEE A JUMP IN IS YOUR DRUG REBATE REVENUE.

THAT WAS THE CONTRACT WITH MAXER THAT WAS RENEGOTIATED THAT WENT INTO EFFECT, I BELIEVE IT WAS NOVEMBER 1ST OF 2024, AND SO WE HAD ALREADY SET THE BUDGET AT THAT POINT.

WE ANTICIPATE THE 24/25 DRUG REBATE REVENUE

[04:10:02]

TO COME IN HIGHER THAN WHAT THAT BUDGET IS SITTING THERE.

BUT YOU'LL SEE THE PROPOSED AMOUNT FOR NEXT YEAR.

THEN DOWN UNDER YOUR EXPENDITURES, YOUR MEDICAL AND DENTAL CLAIMS ARE LOOKING TO COME IN PRETTY FLAT, POSSIBLY UP JUST A LITTLE BIT.

YOU'LL AS A REMINDER, THAT TRANSFER TO GENERAL FUND OF 1.9 MILLION IS DOWN IN THAT 1.9 IS DOWN IN THE OTHER, SO WE CAN SEPARATE THAT OUT INTO A SEPARATE LINE ITEM IF NEEDED.

THEN YOU HAVE YOUR TOTAL EXPENDITURES OF STAYING RELATIVELY FLAT FROM 35.6 MILLION TO 35.8 MILLION WITH AVAILABLE FUNDS AT THE END OF THIS NEXT YEAR ANTICIPATED AT JUST UNDER SIX MILLION WITH THE RESERVE AT SIX MILLION, SO THAT PUTS US RIGHT ON TARGET.

NEXT, LET'S LOOK AT THE MY AMARILLO FUND.

THIS IS ON PAGE 78, AS A REMINDER ONCE AGAIN.

YOU'RE GOING TO HEAR ME REPEAT A LOT OF THINGS OVER AND OVER.

HOPEFULLY, IT STARTS CLICKING AS WE GO THROUGH THESE, BUT WE'VE ALREADY TALKED A LITTLE BIT ABOUT MY AMARILLO.

THIS IS OUR 311 OPERATION.

IT'S BASICALLY OUR CALL CENTER.

WHEN PEOPLE CALL INTO THE CITY TO ASK QUESTIONS, THEY GO TO THIS GROUP.

THIS GROUP HAS HISTORICALLY BEEN IN THE UTILITY BILLING DEPARTMENT, AND SO WAS FULLY FUNDED THROUGH THE WATER AND SEWER FUND.

WELL, BLESS YOU.

IT IS REALLY SUPPORTING A LOT OF VARIOUS DEPARTMENTS THIS YEAR.

AS IT'S GROWING, AND SO WE PULLED IT OUT INTO AN INTERNAL SERVICE FUND, AND IT IS CHARGING ITS SERVICES BACK TO THE USING DEPARTMENTS.

NOW, WATER AND SEWER IS STILL GETTING THE LION'S SHARE OF THIS BECAUSE STILL THE BULK OF THE CALLS THAT COME IN AND THE CUSTOMERS THAT COME IN ARE RELATED TO UTILITY BILLS, TO OUR WATER BILLS.

THE BULK OF IT IS STILL GOING BACK TO THE WATER AND SEWER FUND, BUT THERE'S PIECES GOING TO THE GENERAL FUND NOW BECAUSE THEY'RE STILL FACILITATING SEVERAL OTHER DEPARTMENTS.

IT IS A BETTER PRACTICE TO HAVE THIS AS AN INTERNAL SERVICE FUND CHARGING ITS SERVICES BACK OUT TO DEPARTMENTS.

>> RECOMMENDATION. EVERYTHING'S STILL JUST IN THE TALKS.

BECAUSE FIRST, I'VE HEARD OF CREATING A NEW INTERNAL SERVICE FUND, BILLING IT TO ANYBODY ELSE.

RIGHT NOW, ALL OF THE COSTS ARE CURRENTLY COVERED UNDER UTILITY BILLING.

>> SEPARATE WATER AND SEWER.

>> WATER AND SEWER PAYS ALL THE COSTS, BUT OTHER DEPARTMENTS ARE USING THAT BUT NOT PAYING FOR IT.

SO OUR RECOMMENDATION HERE IS TO CREATE A FUND AND EVERY DEPARTMENT THAT USES A CERTAIN SOLID WASTE, STREETS, ALL THE DEPARTMENTS WILL END UP COVERING THEIR RATIO SHARE OF THE CALLS WE GET VIA A FORMULA.

>> BUT THEN THE 311 ASPECT, ALL OF THE AUTOMATION, THAT'S ALREADY TAKEN CARE OF.

EMMA, EVERYTHING ELSE, IT'S LIKE THAT'S ALL COVERED.

>> THAT'S ALL INCLUDED IN THIS FUND.

THAT'S WHERE EVERYTHING'S GOING TO LIVE IS INSIDE THIS FUND GOING FORWARD, YES.

>> CURRENTLY, IT'S FUNDED THROUGH IT LIKE ANY OTHER PIECE OF SOFTWARE AND THEN IT'S DIVIDED OUT JUST LIKE IT WOULD BE THROUGH THIS FUND.

IT WOULD JUST RESIDE IN THAT FUND INSTEAD OF IT.

>> UTILITY BILLING HAS A DEDUCT THAT CORRELATES TO THIS?

>> IT'S NOT A ONE FOR ONE BECAUSE THEY HAVE REQUESTED SOME ADDITIONAL PERSONNEL TO BE INCLUDED IN THIS BUDGET FOR NEXT YEAR AS THEY GROW, THEY'RE HOPING TO TAKE ON MORE OF THE PUBLIC SAFETY, NON EMERGENCY CALLS IN THIS NEXT YEAR.

THAT WOULD CREATE MORE OF A CHARGE BACK TO GENERAL FUND THAN TO WATER AND SEWER FUND.

>> COUNSEL WILL BE EXPECTED TO HAVE A CONVERSATION OVER, DO YOU WANT TO CREATE AN INTERNAL SERVICE FUND OR WOULD YOU RATHER KEEP IT HOUSED WITHIN THE DEPARTMENT, AND THEN CURRENT BUDGET ENTERTAINS EITHER OPTION, CORRECT?

>> THE CURRENT BUDGET, AS IT'S WRITTEN, SHOWS IT BEING A SEPARATE FUND, AND THEN ALL THE DEPARTMENTS PAYING INTO THAT.

THE QUESTION, I THINK THE COUNSEL HAVE TO GUIDE US ON IS, DO WE KEEP IT AS A SEPARATE FUND WITH ALL DEPARTMENTS PAYING INTO IT OR DO YOU LEAVE IT IN WATER AND SEWER, AND WATER AND SEWER PAYS 100% OF IT?

>> WE FELT AS IT'S STARTING TO SUPPORT MORE DEPARTMENTS, AND AS OUR RATE PAYERS AND WATER AND SEWER ARE GOING TO HAVE A LOT TO SUPPORT WITH THE UPCOMING WASTE WATER TREATMENT PLANTS, THAT THIS WAS AN APPROPRIATE TIME TO GO AHEAD AND PULL IT OUT AND TO START TRULY DIVVYING UP THE CHARGES TO THE ACTUAL USING DEPARTMENTS.

>> COUNSELMAN.

>> YEAH, I JUST THINK IT MAKES SENSE TO DIVVY IT UP, I MEAN, AND DISPERSE THOSE ACCORDING TO THE DEPARTMENT DEPENDING ON THE USAGE.

I THINK THAT JUST MAKES SENSE AND NOT OVERWHELM YOUR WATER AND SEWER WITH ALL OF IT.

>> YEAH, AND I THINK IF IT'S NOT A ONE TO ONE, ARE WE CLOSE? IS IT A ONE TO 0.9?

>> I'D HAVE TO RUN THE NUMBERS, YES.

I'D HAVE TO LOOK BACK AT THOSE, BUT WE CAN GET THAT FOR YOU.

>> I THINK THE PUBLIC IS JUST SEEING, HEY, YOU JUST ADDED A WHOLE DEPARTMENT.

[04:15:02]

>> IT'S BEEN THERE. WE'VE HAD THIS DEPARTMENT FOR A LONG TIME.

IT'S HOUSED IN UTILITY BILLING.

BUT AGAIN, IT'S LIKE FLEETS UNDER PUBLIC WORKS.

PUBLIC WORKS IS A GENERAL FUND, BUT FLEETS IS HIS OWN FUND.

THIS ONE IS UNDER UTILITY BILLING, BUT IT'S HIS OWN FUND BECAUSE ALL DEPARTMENTS PAY INTO IT.

THAT'S A PROPOSAL FOR NEXT YEAR.

>> MIGHT BE HELPFUL TO SEE THE REVENUES ON THIS.

PROJECTED REVENUES OF WHO'S GOING TO PAY WHAT AND HOW MUCH WILL THEY REVENUE PER DEPARTMENT.

THEN AN EXPENDITURE ON THOSE DEPARTMENTS, BUT THEN ALSO, WE'D BE ABLE TO CALCULATE, WILL THIS DEPARTMENT NO LONGER NEEDS THESE FOUR EMPLOYEES OR FIVE EMPLOYEES, WHATEVER.

IF WE'RE OFFSETTING SOME BUDGETS, I THINK IT MAKES IT EASIER FOR US TO SAY, WE'RE JUST GOING TO CLASSIFY IT OUTSIDE OF ITS OWN SO WE CAN DIFFERENTIATE.

MY HESITATION IS JUST ALLOWING THE PUBLIC TO CONSTRUE OR CONCEIVE THAT THIS IS A NEW DEPARTMENT THAT'S BEING CREATED, AND WE'RE HAVING TO COME UP WITH AN ADDITIONAL 2.1 MILLION IN THE BUDGET.

>> SURE.

AGAIN, WHEN WE DO OUR FINAL MESSAGING TO THE CITIZENS, WE'LL ARTICULATE THAT TO THE CITIZENS.

THIS IS NOT A BRAND NEW DEPARTMENT.

THESE AREN'T 50 EMPLOYEES I JUST HIRED, THESE ARE EXISTING EMPLOYEES.

WE'RE JUST DOING A BETTER JOB OF TRANSPARENTLY SHOWING HOW THIS THING WORKS.

BECAUSE RIGHT NOW, YOU'D HAVE TO DIG IN THE WATER AND SEWER TO FIND THIS.

THIS IS NOW ITS OWN UPFRONT FUND.

>> DO YOU HAVE HOUSING FOR THEM? DO THEY STAY WHERE THEY'RE CURRENTLY LOCATED?

>> SO YOU DON'T HAVE ANY FACILITY COSTS.

IT'S JUST OPERATION AND MAINTENANCE COST?

>> YES. AT THIS POINT IN TIME.

>> THEY'RE LOCATED HERE IN CITY HALL.

>> DO WE FORESEE NEEDING TO CREATE A WHOLE WING AND GO DO FINISH OUTS OR ANYTHING LIKE THAT IN ANY OF OUR BUDGET COSTS?

>> NO, WHEN JERRY WAS DESIGNING THIS BUILDING, HE WAS ACCOUNTING FOR SPACE AND GROWTH FOR OUR 311 DEPARTMENT, SO IT'S ALREADY BEEN BUILT OUT.

BECAUSE IT DIDN'T MATTER TO HIM WHETHER IT WAS IN THE WATER AND SEWER FUND OR IT WAS IN ITS OWN FUND.

HE KNEW WE WERE GROWING THAT AND THAT WE NEEDED SPACE TO ACCOMMODATE.

>> RICH CAN SPEAK TO THIS NOW, AGAIN, 311 ONLY SERVICES A NUMBER OF DEPARTMENTS.

OUR GOAL IS TO CONTINUE TO ADD ON MORE DEPARTMENTS, AND SO IN TIME, THERE WOULD BE A NEED FOR ADDITIONAL STAFF.

BUT AGAIN, WELL, THERE'S TEN OR SO DEPARTMENTS THAT THEY CURRENTLY SERVICE RIGHT NOW, THE BIGGIES, I THINK.

>> CORRECT. ADDING AS WE GO, THEY'VE BEEN ADDING THEM SLOWLY SO THAT WE CAN MAKE SURE THAT WE'RE GETTING THE RIGHT ANSWERS OUT TO THE PUBLIC.

WE TRAIN STAFF AND SLOWLY ADD DEPARTMENTS AS THE SERVICES GROW.

REALLY, EMMA'S JUST AN EXTENSION OF THAT.

SHE'S A MY AMARILLO AGENT.

WE ALSO CALL IT MY AMARILLO JUST AS A SIDE NOTE.

WE DON'T CALL IT 311 BECAUSE MANY OF THE TELECOM PROVIDERS HAVE QUIT PROVIDING THAT AS A SERVICE.

IF YOU'RE NOT ON THE RIGHT CELL PROVIDER, YOU CAN'T DIAL 311 AND ACTUALLY GET TO THE CITY, SO WE'VE REBRANDED.

NOW, SO PREVIOUSLY, THESE EMPLOYEES WORKED IN?

>> UTILITY BILLING.

>> UTILITY BILLING, WHO WILL THEY REPORT TO NOW?

>> THAT ISN'T CHANGING. IT'S STILL REPORTING TO JENNIFER GONZALEZ? IT'S JENNIFER GONZALEZ, WHICH IS UNDER LAURA'S UMBRELLA.

THAT PART IS NOT CHANGING. AGAIN, ALL WERE SHOWING IS THE FINANCIAL WHERE WE REFLECTED IN THE BUDGET.

>> OKAY. THANKS.

>> I WILL SAY AT THIS POINT, BECAUSE I THINK TO THE MAYOR'S QUESTION, WE HAVE NOT SEEN THAT IT HAS BEEN ABLE TO ELIMINATE ANY DEPARTMENTS IN OTHER DEPARTMENTS AT THIS POINT IN TIME, BUT IT HAS KEPT DEPARTMENTS FROM HAVING TO ADD STAFF AND OUR BIG ONE THAT WE'RE HOPING FOR IS AS WE OFFLOAD SOME OF THE CALL VOLUME FROM OUR AECC, OUR 911 OPERATIONS, THAT THESE POSITIONS IN OUR MY AMARILLO ARE LOWER PAID POSITIONS THAN THE 911 OPERATORS.

WHAT WE'RE HOPING IT WILL DO IS AT A POINT IN TIME, IT WILL EITHER ALLOW THEM TO NOT NEED QUITE AS MANY OF EMPLOYEES, BUT MORE LIKELY IT MIGHT START HELP WITH THE OVERTIME COSTS THAT THEY HAVE.

THEY HISTORICALLY HAVE NOT BEEN ABLE TO FILL ALL THEIR POSITIONS, AND IT HAS REALLY CAUSED THEIR OVERTIME TO GO UP.

WE'RE HOPING THAT AS WE OFFLOAD MORE OF THE CALL VOLUME INTO THE MY AMARILLO AREA, THAT IT WILL HELP ON SOME OF THE GENERAL FUND COSTS FOR ALL THIS OVERTIME IN THE AECC DEPARTMENT.

IT TAKES TIME.

IT'S STILL RELATIVELY NEW, BUT WE DO ANTICIPATE SOME GOOD CHANGES COMING TO ALL THE DEPARTMENTS THAT ARE ONBOARDED INTO MY AMARILLO OVER THE NEXT COUPLE OF YEARS.

BUT WE'LL GET YOU A BREAKDOWN ON THOSE REVENUES.

>> THEN, I WANTED TO STOP THERE ON THE CASH FLOWS BECAUSE ON PAGE 81, WE START WITH THE SPECIAL REVENUE CASH FLOWS, AND I AM PLANNING TO DO THOSE VERY QUICKLY TO COVER ALL OF OUR SPECIAL REVENUE FUNDS.

WE'RE NOT GOING TO GO INTO ANY MAJOR DETAILS ON OUR SPECIAL REVENUE FUNDS UNLESS COUNSEL HAS AN AREA THEY WANT TO LOOK INTO, BUT WE'LL TRY TO DO THAT TOMORROW AND GO QUICKLY THROUGH FROM PAGE

[04:20:03]

81 THROUGH THE END OF THIS CASH FLOW TO COVER ALL OUR SPECIAL REVENUE FUNDS.

SPECIAL REVENUE FUNDS ARE FUNDED EITHER WITH GRANT DOLLARS, SOME SORT OF OUTSIDE PARTICIPATION LIKE PID ASSESSMENTS.

THOSE ALL RUN THROUGH OUR GRANT FUNDS, AND SO MOST OF THESE BUDGETS ARE TRULY ESTIMATES.

WE WON'T KNOW WHAT THEIR BUDGET IS GOING TO BE UNTIL THE GRANTING AGENCY AWARDS THE BUDGET.

THOSE AWARDS COME TO CITY COUNCIL FOR YOUR APPROVAL.

WE FORM THE BEST ESTIMATE WE CAN FOR OUR CITY BUDGET PURPOSES, BUT THEN THOSE ACTUAL BUDGET APPROVALS COME AS THOSE GRANT AWARDS COME THROUGH THROUGHOUT THE FISCAL YEAR TO CITY COUNCIL.

I'LL STOP WITH THAT, AND THEN WE CAN NOW MOVE OVER TO THE ADMINISTRATION AREA AND START LOOKING AT SOME OF THE DEPARTMENT BUDGETS, AND I'M GOING TO GO VERY HIGH LEVEL ON THESE.

IF I'M SKIPPING OVER SOMETHING, IF YOU GUYS COULD LET ME KNOW.

I CAN STOP FOR JUST A SECOND.

BUT IF YOU WANT TO START OVER ON PAGE 179, WE'LL START WITH YOUR BUDGET, WITH MAYOR AND COUNCIL BUDGET.

THIS IS A SMALLER BUDGET.

ONE THING I DID WANT TO SAY, IF YOU GO TO PAGE 180, I WANTED TO EXPLAIN THAT WE ARE USING OUR BUDGET SOFTWARE TO PRODUCE OUR BOOK NOW.

WE HAD A SEPARATE SOFTWARE LAST YEAR, AND NOW WE'RE USING THE SAME BUDGET SOFTWARE TO PRODUCE THIS BOOK AS WELL.

WHICH IS WONDERFUL.

IT'S A LOT LESS TIME CONSUMING AND EVERYTHING TIES PERFECTLY, THE PROBLEM WITH IT IS WE ARE KIND OF STUCK WITH HOW THEIR REPORTS ARE DESIGNED.

THE WAY THEIR REPORTS WORK, ON PAGE 180, YOU'RE GOING TO SEE THE TOTAL FOR THE WHOLE REPORT AT THE TOP OF THE REPORT INSTEAD OF AT THE BOTTOM OF THE REPORT.

WE'RE NORMALLY USED TO SEEING REVENUE LISTED, THEN A TOTAL, THEN EXPENDITURES LISTED, AND THEN A TOTAL, AND THEN A NET TOTAL.

IT'S A LITTLE BIT OPPOSITE OF THAT, THE WAY THAT THESE REPORTS TRUE PRINT OUT.

I JUST WANTED ALL TO BE AWARE BECAUSE THAT'S HOW IT IS THROUGHOUT THE ENTIRE BOOK.

IF YOU LOOK ON PAGE 180 AT THE TOP THERE, YOU'RE GOING TO SEE YOUR MAYOR AND COUNCIL BUDGET, AND YOU'RE GOING TO SEE THAT WE HAVE A VERY FLAT BUDGET.

IT WAS JUST UNDER 140,000 FOR THE YEAR, AND IT'S GOING TO BE RIGHT AT 140,000 FOR NEXT YEAR.

NOT MUCH RUNS THROUGH THE CITY COUNCIL BUDGET.

I KNOW YOU WILL GET HUGE SALARIES FOR YOUR ROLES, BUT BASICALLY YOUR VOLUNTEER PAYMENTS COME OUT OF THIS DEPARTMENT, AND THERE'S NOT A WHOLE LOT ELSE THAT RUNS THROUGH IT.

NO CHANGES REALLY ON THE CITY COUNCIL BUDGET.

IF YOU'LL TURNED IN TO PAGE 183, LET'S LOOK AT THE CITY MANAGER BUDGET.

IN YOUR CITY MANAGER BUDGET, YOU WILL SEE A FEW CHANGES FROM THE PERSONNEL STANDPOINT.

THE REASON FOR THAT IS WE'VE HAD SOME CHANGES MID YEAR RELATED TO IT.

WE NOW HAVE THE CITY MANAGER, DEPUTY CITY MANAGER, AND TWO ASSISTANT CITY MANAGERS.

WE HAVE A CFO AND A SPECIAL ADVISOR.

THOSE ARE A LITTLE BIT DIFFERENT THAN THEY WERE THIS LAST YEAR.

THEN AS A REMINDER, IN THE CURRENT YEAR'S BUDGET, THERE WAS A NEW INTELLIGENCE LIAISON OFFICER THAT WE GOT FILLED THIS YEAR, AND THAT IS IN THIS DEPARTMENT.

WE DO HAVE A COUPLE OF ITEMS THAT WERE ADDED IN THIS YEAR TO HELP SUPPORT THAT INTELLIGENCE LIAISON OFFICER POSITION.

I KEEP SAYING OFFICER, I'M SORRY.

HE'S NOT AN OFFICER. MAYBE HE IS.

ANYWAYS, THE INTELLIGENT LIAISON POSITION, I'LL JUST SAY.

THERE WERE SOME ADDITIONAL SOFTWARE COMPONENTS THAT WERE NEEDED TO SUPPORT THAT POSITION, SO THOSE HAVE BEEN ADDED INTO THE BUDGET.

I DID WANT TO BRING YOUR ATTENTION TO PAGE 185 TOWARDS THE TOP.

YOU'LL SEE A DEBT SERVICE LINE ITEM AND A BOND INTEREST PAYMENT, AND YOU'LL SAY, WHY IS CITY MANAGER DEPARTMENT PAYING BOND INTEREST? WE'RE NOT.

THAT IS WHERE WE HAVE EARMARKED THE LEASE PAYMENT TO THE GUYON SANDERS RESOURCE CENTER FOR THE DAY CENTER PURCHASE THAT WE ARE MAKING OVER A TEN YEAR PERIOD AS THAT DAY CENTER THAT IS RELATED TO TRANSFORMATION PARK GETS BUILT OUT.

NOW, WE ARE NOT PLANNING TO SPEND THAT IN THIS NEXT BUDGET BECAUSE MOST LIKELY THAT BUILDING WILL NOT BE FINISHED, BUT WE WANTED TO LEAVE THE FUNDS EARMARKED IN THERE.

I DID WANT TO LET YOU ALL KNOW THAT TRANSFORMATION PARK HAS A BUDGET REQUEST FOR YOU THIS YEAR.

I THINK IT WAS AROUND $190,000, AND IT'S RELATED TO SECURITY ITEMS. MARK ZIMMERMAN WILL BE PRESENTING THAT, BUT I WANTED YOU ALL TO KNOW THAT THIS FUNDING HERE, THIS 421,000, COULD BE USED IF

[04:25:02]

YOU ALL DECIDED THAT YOU WANTED TO SUPPORT SOMETHING LIKE THAT.

THERE IS THIS FUNDING HERE.

OTHERWISE, THIS MONEY WILL REMAIN EARMARKED FOR THAT FUTURE LEASE PAYMENT.

PART OF THIS WILL GO TO START PAYING SOME OF THE UTILITY BILLS OVER AT TRANSFORMATION PARK THAT IS PART OF THE MOU THAT WE HAVE WITH TRANSFORMATION PARK.

>> QUICK QUESTION, THE 421 WAS SCHEDULED TO COME OUT AT COMMUNITY DEVELOPMENT'S BUDGET?

>> NO, IT WAS COMING OUT OF GENERAL FUNDS BUDGET.

>> OKAY. IT WAS GOING TO BE A GENERAL FUND EXPENDITURE, BUT WE DID NOT FUND THAT THROUGH COMMUNITY DEVELOPMENT, KNOWING THAT THE GENERAL FUND WOULD NEED TO COMPENSATE THAT? IS THERE A REASON TO HAVE IT IN CITY MANAGER'S BUDGET VERSUS COMMUNITY DEVELOPMENT?

>> WE WOULD HAVE TO DO A TRANSFER OUT OF GENERAL FUND INTO COMMUNITY DEVELOPMENT AND THEN HAVE A LINE ITEM IN COMMUNITY DEVELOPMENT DEPARTMENT TO DO IT.

WE COULD DO THAT, IF YOU WOULD LIKE.

>> YOU WOULD STILL SHOW AN EXPENSE IN GENERAL FUNDS?

>> STILL BE A GENERAL FUND EXPENDITURE.

WE UNDERSTOOD THAT, I THINK.

I DON'T THINK AND COUNSEL, YOU GUYS JUMP IN.

I JUST DON'T THINK WE HAD ANTICIPATED ALLOCATING IT THROUGH CITY MANAGER OFFICE.

LONG TERM, WHAT'S STAFF'S RECOMMENDATION AND WHY? PUT IT IN THE CITY MANAGER BUDGET?

>> IT'S PROCESS ELIMINATION.

GENERAL FUND, OF COURSE, YOU HAVE PARKS, YOU HAVE POLICE AND SO EVENTUALLY YOU ELIMINATE THOSE THAT DO NOT FIT.

THIS IS WHERE WE ENDED UP AT IS, IT'S NOT CITY SECRETARY, IT'S NOT POLICE, IT'S NOT LIBRARY.

YOU COME DOWN TO EITHER CITY COUNCIL OR CITY MANAGER.

WE PICK CITY MANAGER. THERE COULD BE SOME OTHER OPTIONS, WE PUT IT UNDER.

I MEAN, YOU'RE GOING TO SHOW AN EXPENSE SOMEWHERE BECAUSE EVEN IF YOU TRANSFER IT OUT, SHOWS AN EXPENSE SOMEWHERE, WE JUST PUT IT HERE BECAUSE OF PROCESS ELIMINATION.

>> YEAH AND MY ONLY THOUGHT IS JUST THAT IT'S A BETTER EXPENDITURE OUT OF COMMUNITY DEVELOPMENT, FOR I GUESS, THE SCRUTINY OF IT BECAUSE THAT IS WHERE EMPLOYEES ARE BEING HOUSED IN THAT AREA.

WE'RE UTILIZING THAT BUILDING FOR OFFICE SPACE.

I THINK THE WAY WE SAW THAT WAS, LIKE, THIS IS FREEING UP SIMS BUILDING SPACE FOR THEM AND IT'LL OVERHEAD IN THAT.

I THINK THE COUNCIL, DID YOU GUYS UNDERSTAND CORRECTLY THAT THE 420 WAS GOING TO BE COVERED OUT OF GENERAL FUND? IF WE START THERE.

THEN WOULD YOU LIKE TO SEE IT COME OUT OF COMMUNITY DEVELOPMENT SINCE IT'S GOING TO BE THEIR OFFICE OR WOULD YOU RATHER SEE IT COME OUT OF CITY MANAGER?

>> WE COULD CERTAINLY MOVE IT TO THE GENERAL FUND TRANSFER DEPARTMENT AND OUT OF THIS.

SHOW IT AS A TRANSFER TO COMMUNITY DEVELOPMENT, AND THEN COMMUNITY DEVELOPMENT COULD HAVE A LINE ITEM TO PAY IT DIRECTLY OVER TO GS.

>> YES, I THINK THAT WOULD GET TO WHAT YOU'RE LOOKING TO DO.

I MEAN, THE MONEY'S GOING TO COME FROM THE GENERAL FUND, BUT WE COULD PUT, LIKE YOU SAID, THE TRANSFER EXPENSE LINE, INSTEAD OF THE CITY MANAGER LINE.

THEN COMMUNITY DEVELOPMENT SHOWS GOING OUT FROM THERE.

>> YEAH, BECAUSE ESSENTIALLY WHAT WE'D BE SAYING LONG TERM AND I WOULD JUST THINK ABOUT IT FOR LIKE THE FUTURE MAYOR OR SOMEBODY SITTING HERE TRYING TO EXPLAIN THE CITY MANAGER'S BUDGET IS PAYING FOR THE OFFICES FOR COMMUNITY DEVELOPMENT IN THE GUY AND SAUNDERS RESOURCE CENTER.

LIKE, IT'S A HARD EXPLANATION, I THINK IF YOU DIDN'T LIVE THROUGH IT.

>> THAT'S A GOOD CHANGE WE CAN MAKE.

>> SO DOWN BELOW THAT ON PAGE 185, YOU'LL SEE THE TOURISM AND ECONOMIC DEVELOPMENT DEPARTMENT.

>> YEAH. IT MAKES SENSE.

WHAT THAT IS IS A CATCH-ALL FOR SOME OF OUR TOURISM AND ECONOMIC DEVELOPMENT ACTIONS THAT WE DO THROUGH THE GENERAL FUNDS.

YOU'LL SEE THERE AS YOU COME DOWN TO THAT LINE 63,500.

YOU WILL SEE A LINE ITEM FOR CENTER CITY AND THIS IS A CONTRACTUAL AMOUNT THAT THE CITY OF AMARILLO HAS BEEN FUNDING TOWARDS CENTER CITY EFFORTS.

I SPOKE WITH BETH DUKE AND SHE HAS REQUESTED A SMALL INCREASE FOR THIS NEXT YEAR.

THE CURRENT YEAR'S BUDGET WAS 120,750 AND SHE HAS REQUESTED AN INCREASE UP TO 126,788.

SHE WILL BE BRINGING THAT TO A PUBLIC MEETING, BUT WE WENT AHEAD AND EARMARKED IT IN THE BUDGET HERE FOR CITY COUNCIL.

THE ONE BELOW THAT IS THE NEIGHBORHOOD PLAN FUNDS.

COUNCIL HAS BEEN FUNDING THOSE VARIOUS NEIGHBORHOOD PLAN FUNDS TO THE TUNE OF ABOUT 240,000, AND THEY'VE BEEN USING THOSE TO DO A LOT OF IMPROVEMENTS IN THOSE NEIGHBORHOOD EMPOWERMENT ZONES AND HAVE BEEN DOING SOME MATCHING DOLLARS AND SOME VARIOUS THINGS WITH THOSE.

DOWN BELOW, YOU'LL SEE THE CONVENTION AND VISITORS BUREAU AND THEN YOUR CIVIC CENTER ACTIVITY FUND.

THESE DOLLAR AMOUNTS ARE WHEN WE COLLECT OUR HOTEL OCCUPANCY TAX, WE TAKE HALF OF IT AND PUT IT TOWARDS CVB AND THIS ACTIVITY FUND TO HELP PROMOTE TOURISM IN AMARILLO.

ESSENTIALLY, WE'RE PAYING THEM TO DO OUR TOURISM EFFORTS HERE IN AMARILLO.

NOW, THEY PAY THAT,

[04:30:01]

BUT THEY ALSO HELP CONTRIBUTE TO THE TUNE OF $1.1 MILLION TO THE DEBT SERVICE TO PAY FOR THE BASEBALL PARK AND ALSO FOR THE PARKING GARAGE.

THAT'S WHAT THESE PAYMENTS ARE HERE AND SO THOSE JUST FLUCTUATE BASED ON HOW MUCH HOTEL OCCUPANCY TAX WE ANTICIPATE EACH YEAR.

THE NEXT ONE IS YOUR ENGAGEMENT IN INNOVATION DEPARTMENT.

IF YOU WILL TURN TO PAGE 193, YOU'LL SEE THAT THERE'S ONLY BEEN A SLIGHT INCREASE TO YOUR ENGAGEMENT IN INNOVATION DEPARTMENT.

WHAT THAT IS WE HAVE PROPOSED PUTTING A NEW PUBLIC SAFETY SOCIAL MEDIA MANAGER IN THERE TO REALLY TRY TO COORDINATE THE COMMUNICATION AND THE ENGAGEMENT EFFORTS BETWEEN BOTH OUR POLICE AND OUR FIRE DEPARTMENT, ALL OUR PUBLIC SAFETY DEPARTMENTS, ALONG WITH OEI.

SO IT'S REALLY JUST TO HELP STANDARDIZE AND UNITE OUR MESSAGE OUT TO THE COMMUNITY ABOUT ALL EFFORTS ACROSS THE COMMUNITY.

THAT IS THE BIGGEST CHANGE THAT WE ARE SEEING HERE IN YOUR OFFICE OF INNOVATION AND ENGAGEMENT.

EVERYTHING ELSE IS PRETTY MUCH FLAT.

>> POLICE HAD REQUESTED THIS POSITION HERE, BUT WE FELT IT'D BE BEST TO PUT IT UNDER THE OEI DEPARTMENT SO WE CAN DO BETTER COORDINATION BETWEEN OEI AND POLICE AND FIRE, BUT ALSO TO GIVE FIRE POSITIONS WITH FIRE DEPARTMENT AS WELL.

>> EMERGENCY MANAGEMENT ALSO REQUESTED A POSITION, SO THAT WAS ANOTHER REASON WE TRIED TO DO A COMBINED FOCUS POSITION.

>> I THINK WE MAY STRUGGLE JUST A LITTLE BIT ON, LIKE, OFFICER BYRD IS A REALLY GOOD JOB OVER AT THE POLICE DEPARTMENT.

WE FEEL LIKE THAT POSITIONS ALREADY TAKEN CARE OF.

I MEAN, IT'S JUSTICE, RIGHT?

>> IT'LL SUPPLEMENT WHAT BYRD TAKES CARE OF NOW, AND ESPECIALLY THE SOCIAL MEDIA PIECE, SO SHE CAN FOCUS MORE ON THE FRONT FACING ENGAGEMENT AND WORKING WITH THE PRESS VERSUS HAVING TO DO STATUS UPDATES ON FACEBOOK.

>> WE DON'T FEEL LIKE THOSE EXISTING POSITIONS ARE ADEQUATELY COVERING EVERYTHING THAT THEY'RE TRYING TO DO.

>> AND SO YOU'RE ADDING A POSITION IN E AND I?

>> E AND I TO DO A FOCUS FOR ALL PUBLIC SAFETY DEPARTMENTS.

INSTEAD OF HAVING ONE IN BED AND PD, ONE IN BED IN OEM, ONE IN BED AND FIRE, THEY'LL ALL BE ABLE TO UTILIZE THIS POSITION.

>> OKAY. YOU'RE KEEPING ALL THE POSITIONS THAT YOU HAVE CURRENTLY?

>> AECC DOESN'T HAVE A POSITION?

>> NO. BUT THIS COULD SUPPORT A AECC AS WELL.

>> YES. IT'S ALLOWING A CIVILIAN TO DO A ROLE THAT MAYBE FREES UP HIRING ANOTHER SWORN POSITION TO FILL THAT ROLE.

>> OKAY. AS WE KEEP GOING, WE'LL MOVE TO THE CITY SECRETARY DEPARTMENT AND IF YOU TURN TO PAGE 204, YOU'RE GOING TO SEE THAT WE HAVE AN EXTREMELY FLAT BUDGET FOR THE YEAR.

NO MAJOR CHANGES AT ALL AS A REMINDER.

THIS IS WHERE WE BUDGET FOR OUR ELECTION EXPENSES.

DEPENDING ON WHICH YEAR WE'RE IN, WE COULD HAVE ONE ELECTION, NO ELECTIONS OR TWO ELECTIONS, [NOISE] OR POTENTIALLY MORE IF WE DO HAVE A RUNOFF TYPE SITUATION.

THOSE EXPENDITURES COME OUT OF YOUR CITY SECRETARY DEPARTMENT.

IF YOU'LL TURN NEXT, LET'S START ON THE SUPPORT SERVICES AREA.

WE'RE GOING TO GET YOU ALL OUT BY FIVE.

IF WE'LL TURN TO PAGE LET'S SEE HERE.

LET ME TURN A LITTLE BIT FURTHER.

LET'S GO TO PAGE 212.

WE'RE GOING TO LOOK REAL QUICK HERE AT YOUR CUSTODIAL SERVICES DEPARTMENT.

ON YOUR CUSTODIAL SERVICES.

WE HAVE A LET'S SEE HERE.

WE HAVE A COUPLE OF NEW POSITIONS.

WE ARE REQUESTING.

WE HAVE BUILT IN A COUPLE OF ADDITIONAL CUSTODIANS.

AS WE HAVE THIS NEW FACILITY THAT'S OPENED, THAT HAS MORE SQUARE FOOTAGE.

I KNOW THAT JERRY AND HIS TEAM HAVE BEEN STRETCHING OUR CUSTODIANS VERY FAR AND THEY HAD ALREADY BEEN COVERING MORE SQUARE FOOTAGE THAN THEY COULD HANDLE.

THIS IS JUST TRYING TO GET THE WORKLOAD TO A PROPER LEVEL BY ADDING IN THESE TWO POSITIONS.

OTHER THAN THAT, THERE'S NOT MUCH CHANGE THAT HAS BEEN GOING THROUGH OUR CUSTODIAL DEPARTMENT.

THAT IS A VERY MIGHTY TEAM THAT HANDLES A LOT OF SQUARE FOOTAGE.

IF YOU'LL TURN NOW, SORRY, DON'T TURN, BUT GO TO THE NEXT PAGE, PAGE 213, IN THE MIDDLE THERE, YOU'RE GOING TO SEE YOUR FACILITIES DEPARTMENT.

AS WE LOOK AT OUR FACILITIES DEPARTMENT, THERE HASN'T BEEN A WHOLE LOT OF CHANGE IN THEIR AREA.

THEY DO HAVE SOME ADDITIONAL MONIES THAT WERE PUT IN TO HELP DO SOME LEASING OF, WELL, HALF-TON FOUR BY FOUR PICKUPS.

[04:35:03]

I THINK THERE WAS A COUPLE OF THOSE THAT WERE ADDED IN.

MY UNDERSTANDING IS THEY'RE SHARING SOME OF THOSE VEHICLES AND SO WE ARE NOT GETTING EFFICIENT USE OUT OF OUR EMPLOYEES.

YES, SIR. OH, I'M SORRY.

WE'RE ON PAGE 213, GOING INTO PAGE 214 AND 215.

YES. THANK YOU FOR STOPPING ME ANYTIME.

THEY'RE GOING TO LEASE THESE PICKUPS.

EMPLOYEES DON'T HAVE TO DOUBLE UP IN A VEHICLE, SO THEY CAN ACTUALLY GET OUT TO JOB SITES AND TO OUR FACILITIES MORE EFFICIENTLY TO MAKE SURE WE'RE USING OUR PERSONNEL PROPERLY.

IF YOU KEEP GOING, WE WILL TURN TO OUR FINANCE AREA.

AS WE LOOK AT FINANCE, THERE'S BEEN A LITTLE BIT OF CHANGE AND IT GOES ON, AND OF COURSE, I DON'T HAVE IT LISTED IN HERE.

WE HAVE BROKEN OUT OUR INTERNAL AUDITOR FUNCTION OUTSIDE OF OUR FINANCE DEPARTMENT.

OUR INTERNAL AUDIT TEAM HAD HISTORICALLY THE DEPARTMENT WAS INSIDE OF OUR FINANCE DEPARTMENT.

WE HAVE SPLIT THAT OUT.

IF YOU SEE SOME DECREASES IN SOME LINES, THAT IS US MOVING THOSE EMPLOYEES OUT INTO ITS OWN AREA IN A NEW DEPARTMENT FOR INTERNAL AUDIT.

THE OTHER CHANGE ON FINANCE THAT YOU'RE GOING TO SEE.

LET ME STOP FOR JUST A SECOND.

IF YOU LOOK ON PAGE 222, THIS IS WHERE YOU'RE GOING TO SEE THE BULK OF YOUR GENERAL FUND REVENUES ON PAGE 222 AND 223.

YOUR PROPERTY TAXES ARE IN HERE, YOUR SALES TAX ARE IN HERE, YOUR FRANCHISE FEES ARE IN HERE, YOUR INTEREST IS IN HERE, YOUR HOTEL OCCUPANCY TAXES ARE IN HERE.

BULK OF YOUR GENERAL FUND REVENUES ARE INSIDE YOUR FINANCE DEPARTMENT.

THESE ARE TWO REALLY GOOD PAGES, PAGE 222, 223.

IF YOU WANT TO EARMARK THOSE FOR REFERENCE BACK ON SOME GENERAL FUND REVENUES AND SOME TRENDS, THOSE THINGS, THESE ARE GREAT PAGES TO REFER BACK TO.

AS YOU GO INTO THE EXPENDITURE SIDE, WE DO HAVE A REQUEST THAT IS IN FOR A NEW POSITION, AND IT'S JUST AN ADMINISTRATIVE ASSISTANT POSITION, AND IT'S TO HELP FACILITATE OUR PUBLIC IMPROVEMENT DISTRICTS.

WE CONTINUE TO GROW OUR PUBLIC IMPROVEMENT DISTRICTS, AND THEY CONTINUE TO BECOME MORE AND MORE COMPLEX.

WE ACTUALLY HAVE PINNACLES LOOKING TO DO THEIR VERY FIRST DEBT ISSUANCE.

VINEYARDS IS ACTUALLY TALKING ABOUT DOING THEIR VERY FIRST DEBT ISSUANCE, AND THEY'RE DOING MORE MEETINGS, AND THINGS ARE GETTING A LITTLE BIT MORE COMPLICATED.

RIGHT NOW, WE HAVE ONE DEDICATED POSITION TO FACILITATE WITH PIDS.

IT LIVES INSIDE YOUR FINANCE DEPARTMENT.

WE CHARGE IT BACK TO THE PIDS.

THIS NEW POSITION THAT WE PROPOSE PUTTING IN WILL GET CHARGED BACK TO THE PIDS.

I WANTED TO JUST STATE THAT THERE.

THERE'S ABOUT A TWO-YEAR LAG ON US CHARGING THAT BACK.

IT'S ALL DONE THROUGH OUR INDIRECT COST PLAN.

BUT BY ADDING THIS POSITION, WE'RE GOING TO MAKE THE PIDS MORE EFFICIENT.

WE'RE GOING TO MAKE OUR EXISTING EMPLOYEE MORE EFFECTIVE AND MORE SUCCESSFUL AND WE WILL WORK TO RECAPTURE THOSE DOLLARS BACK FROM THE PIDS IN THE FUTURE.

WE WILL PROPORTIONATELY CHARGE THAT POSITION OUT TO THOSE USING PIDS.

IF YOU TURN TO OR IF YOU'RE MAYBE ALREADY THERE, PAGE 225 AT THE BOTTOM AND THEN STARTING ON PAGE 226, THIS IS THIS NEW INTERNAL AUDITOR DEPARTMENT.

THIS IS WHERE YOUR INTERNAL AUDITOR STAFF TEAM LIVES NOW.

THERE IS NO CHANGES, EXCEPT FOR WE HAVE REQUESTED ONE ADDITIONAL INTERNAL AUDITOR.

THAT WE PLAN TO PAY FOR BY REDUCING SOME OF OUR PROFESSIONAL FEES THAT WE'RE PAYING TO OUR THIRD-PARTY ADMINISTRATOR, THAT DOES OUR HOTEL OCCUPANCY TAX COLLECTIONS.

THEY ARE CURRENTLY DOING AUDITS FOR US.

WE ARE REQUESTING TO ADD IN ANOTHER INTERNAL AUDITOR TO THIS TEAM AND THEN WITHIN THE NEXT COUPLE OF YEARS, WE PLAN TO BACK OFF ON WHAT WE'RE PAYING OUR THIRD-PARTY ADMINISTRATOR.

THAT POSITION WILL PAY FOR ITSELF WITHIN THE NEXT COUPLE OF YEARS.

THEY FEEL THEY CAN DO A MORE EFFICIENT JOB IN-HOUSE, AND THEY ACTUALLY DO A LOT OF THE WORK WITH THE THIRD-PARTY ADMINISTRATOR AND SO WE THINK IT WOULD BE A MUCH MORE EFFICIENT AND PROBABLY A CHEAPER WAY FOR US TO DO IT BY KEEPING IT IN-HOUSE.

>> OUR DEPARTMENTS ALREADY BEGIN THAT PROCESS.

THEY'VE ALREADY STARTED TO TAKE OVER MORE AND MORE OF THE HOTEL AUDITS.

WE'RE PHASING THEM OUT WHILE PHASING OUR PEOPLE IN.

THE PROCESS HAS STARTED.

>> YES. IF YOU WILL TURN TO PAGE 230, WE CAN LOOK AT THE PURCHASING DEPARTMENT.

OUR PURCHASING DEPARTMENT, THERE REALLY HAS NOT BEEN ANY MAJOR CHANGES.

[04:40:06]

ACTUALLY, THIS DEPARTMENT HAS DONE A GREAT JOB OF BECOMING A LITTLE BIT MORE EFFICIENT WITH USING OUR NEW WORKDAY SOFTWARE.

THEY ACTUALLY WERE ABLE TO RE-PURPOSE A POSITION AND PASS IT ALONG TO ANOTHER DEPARTMENT THAT NEEDED IT MORE.

ACTUALLY IS THE FINANCE DEPARTMENT THAT NEEDED IT MORE.

THEY HAVE DONE A PHENOMENAL JOB OF BECOMING MORE AND MORE EFFICIENT WITH DOING MORE WITH LESS. WE'LL JUST SAY THAT.

ANOTHER CHANGE THAT YOU'RE GOING TO SEE AS WE WALK FORWARD.

IT'S ACTUALLY STARTING ON THE NEXT PAGE, PAGE 233, ANOTHER EFFICIENT CHANGE THAT THEY DID.

WE USED TO HAVE A CENTRAL STORES.

THAT STARTS ON THE TOP OF PAGE 235, THAT WAS UNDER THE DIRECTION OF OUR PURCHASING DEPARTMENT.

THEY HAVE LOOKED AT IT AND WORKED VERY CLOSELY WITH OUR INTERNAL AUDIT TEAM AND DETERMINED THAT, REALLY, IT WAS NO LONGER EFFICIENT FOR THE CITY TO MAINTAIN A CENTRAL STORE, A WAREHOUSE.

THE BULK OF WHAT WE HAD IN OUR WAREHOUSE WAS TRULY JUST INVENTORY FOR OUR WATER AND SEWER TEAM.

THEY HAD A BUNCH OF FITTINGS AND PIPES AND METERS AND THOSE TYPE THINGS THAT WERE REALLY VERY SPECIFIC TO THE WATER AND SEWER OPERATIONS.

INSTEAD OF DOING A BUNCH OF MISCELLANEOUS THINGS, THEY FELT IT WAS MORE EFFICIENT TO WORK WITH THE DEPARTMENTS TO PURCHASE WHAT THEY NEEDED, WHEN THEY NEEDED, NOT KEEP IT IN INVENTORY AND THEN TO TRANSITION A COUPLE OF THE STAFF FROM THE CENTRAL STORES DEPARTMENT OVER TO OUR WATER AND SEWER FUND TO HELP THEM MAINTAIN THEIR INVENTORY.

WE ACTUALLY DISSOLVED OUR CENTRAL STORES DEPARTMENT AND IF YOU WILL LOOK ON PAGE 235 AND 236, YOU WILL SEE ZEROS GOING THROUGH IN THAT BUDGET.

REALLY PROUD OF THAT TEAM FOR FINDING A MORE EFFICIENT WAY TO DO IT AND TO ACTUALLY CUT BACK ON SOME OF THE COSTS TO THE GENERAL FUND.

NOW, AS I MENTIONED, A COUPLE OF THOSE POSITIONS WERE TRANSFERRED OVER TO WATER AND SEWER AND THEY'RE STILL UTILIZING THOSE.

>> THEN AS WE TURN TO PAGE 238, WE'RE GOING TO PARK HERE FOR JUST A COUPLE OF MINUTES.

THIS ONE, WE'RE GOING TO GO A LITTLE BIT SLOWER THROUGH JUST BECAUSE THERE'S A LOT IN HERE.

THIS IS YOUR GENERAL FUND TRANSFER DEPARTMENT.

WE JUST TALKED ABOUT MAKING A CHANGE TO THIS DEPARTMENT.

WE TALKED ABOUT MOVING THAT DSRC LEASE PAYMENT OVER TO THIS DEPARTMENT.

WHAT YOU WILL SEE IS A CHANGE TO A LINE ITEM THAT WILL SHOW A TRANSFER OUT TO COMMUNITY DEVELOPMENT FOR THAT 421,000.

THAT WILL BE ADDED INTO THIS AREA.

BUT AS WE WALK THROUGH THE REVENUES, THIS IS WHERE WE'VE TALKED ABOUT A LOT OF THIS IN OUR CASH FLOWS.

IF YOU LOOK UP ON PAGE 238, YOU WILL SEE A TRANSFER IN FROM DRAINAGE OF LAST YEAR WAS 1.3.

THAT'S WHERE WE WERE LOOKING TO BRING IN INTEREST EARNINGS.

I DON'T KNOW ACTUALLY THAT WE'VE TOUCHED ON THIS YET.

LET ME PAUSE HERE FOR A SECOND.

IN THE CURRENT YEAR'S BUDGET, COUNCIL REQUESTED THAT WE TAKE ALL OF THE UNRESTRICTED INTEREST EARNINGS OUT OF WATER AND SEWER AND DRAINAGE AND TRANSFER THEM TO GENERAL FUND.

THOSE INTEREST EARNINGS ARE ACTUALLY GOING DOWN A LITTLE BIT EACH YEAR, JUST BECAUSE OF INTEREST RATES ARE COMING DOWN A LITTLE BIT.

BUT ALSO, OUR DRAINAGE FUND IS JUST BARELY MEETING MINIMUM RESERVES, AND OUR WATER AND SEWER FUND IS ABOUT TO ENCOUNTER SOME MAJOR EXPENDITURES GOING FORWARD RELATED TO THE WASTEWATER TREATMENT FACILITIES.

WORKING WITH OUR CITY MANAGER, WE HAVE PROPOSED NOT TRANSFERRING ANY OF THE UNRESTRICTED INTEREST FROM DRAINAGE OR FROM WATER AND SEWER INTO THE GENERAL FUND.

THAT IS HOW THIS BUDGET IS BUILT, AND SO YOU WILL SEE ON THOSE LINE ITEMS, IT WAS 1.3 LAST YEAR FROM DRAINAGE AND 2.8 LAST YEAR FROM WATER AND SEWER, YOU'LL SEE ZEROS ON THAT FOR THIS YEAR.

THEN AS YOU LOOK ON PAGE 238, YOU'RE GOING TO SEE A $6 MILLION AMOUNT.

THAT'S THAT TRANSFER IN FROM GARAGE THAT WE SPOKE ABOUT DURING THE CASH FLOWS.

THIS IS WHERE YOU SEE THAT NUMBER ACTUALLY COMING THROUGH THE DEPARTMENT.

AS YOU GO ON DOWN, YOU'LL SEE SOME MONEY COMING IN FROM THE GENERAL CONSTRUCTION FUND.

THAT IS INTEREST EARNINGS COMING IN FROM THAT FUND.

THE REASON FOR THAT IS GENERAL FUND FUNDS THESE CAPITAL PROJECTS.

AS THOSE CAPITAL PROJECTS ARE WAITING TO BE COMPLETED, THEY'RE EARNING INTEREST, SO WE HAVE ALL THAT INTEREST COME BACK TO THE GENERAL FUND BECAUSE THAT'S WHERE IT ORIGINALLY CAME FROM.

AS YOU GO DOWN, YOU'RE GOING TO SEE A TRANSFER IN FROM THE RISK MANAGEMENT DEPARTMENT OF 1.5 MILLION.

WE TALKED ABOUT THAT EARLIER ON THE CASH FLOWS.

[04:45:02]

THEN THAT LAST NUMBER THAT'S SHOWING THERE IS THE TRANSFER IN FROM EMPLOYEE INSURANCE, THAT'S YOUR HEALTH PLAN.

THAT'S THAT 1.9 MILLION THAT WE TALKED ABOUT ON THE CASH FLOWS AT THE BOTTOM OF PAGE 238.

AS YOU GO OVER TO PAGE 239, AS YOU WALK DOWN TO THAT ACCOUNT, 41500 PFP, WHAT THAT LINE ITEM IS.

THIS IS WHERE WE BUDGET FOR ALL THE RAISES PAY STUDY AND THE TMRS COLA IS PUT INTO THIS LINE ITEM.

THE REASON FOR THAT IS AS WE BUILD A PROPOSED BUDGET, AND WE START WORKING WITH COUNCIL AND GETTING YOUR FEEDBACK ON, HOW DO YOU WANT TO DO THIS? WE BUILT IT AT A 5% FOR POLICE, A 4% FOR FIRE, A TWO AND TWO FOR CIVILIANS, AND THEN A PAY STUDY AND A TMRS COLA.

IF YOU ALL THROUGH THIS BUDGET PROCESS, DECIDES YOU WANT TO MAKE CHANGES TO THAT, WE CAN EASILY FACILITATE THOSE CHANGES IN THIS ONE SPOT FOR THE WHOLE FUND.

THEN WHEN IT COMES TIME, ONCE YOU ALL APPROVE THE BUDGET, BEFORE WE LOAD IT INTO OUR FINANCIAL SOFTWARE, WE SPREAD THOSE RAISES ACROSS EVERY DEPARTMENT, SO THEY HAVE IT THAT WAY.

IT'S JUST A BUDGETING TOOL THAT WE USE SO YOU CAN REALLY EASILY SEE THE IMPACT OF WHEN WE'RE BUDGETING FOR RAISES OR SOME BIG PERSONNEL CHANGES.

>> FOR CLARITY FOR THAT, JUST SO YOU UNDERSTAND, AS YOU LOOK AT YOUR DEPARTMENTS, THE SALARY LINES AND SO FORTH, DEPENDING ON WHETHER WE DO TWO AND TWO, ONE AND THREE, FIVE AND FIVE, WHATEVER YOU DECIDE TO DO, YOUR POLICE, YOUR FIRE, YOUR PARKS, THOSE WILL CHANGE BASED ON THE DECISIONS YOU MAKE.

WE PUT IT HERE BECAUSE THIS IS A MUCH FASTER WAY DURING WORKSHOPS TO MAKE CHANGES.

INSTEAD OF TRYING TO GO BACK AND ADJUST ALL THE SALARY LINES, ALL THE TMRS LINE, THE SOCIAL SECURITY LINES, THIS IS A MUCH MORE EFFICIENT WAY SO WE CAN RESPOND QUICKER DURING THESE WORKSHOPS.

BUT THEN AGAIN, ONCE YOU DECIDE, YOU DECIDE 1, 3, 02, 2, WHATEVER IT IS, THEN IT'LL SPREAD OUT ACROSS ALL THE BUDGETS, AND SO YOUR FINAL BUDGETS ARE GOING TO LOOK DIFFERENT THAN THIS, ASSUMING YOU EVEN IMPROVED THIS AS IT IS.

>> THOSE BIG ITEMS THAT WE WENT OVER EARLIER, THOSE BIG ASSUMPTIONS THAT WE HAD GONE OVER EARLIER, THE PAY STUDY OF 2.2 MILLION, THE CIVILIAN COLA/MERIT RAISES OF 2.5 MILLION, THE POLICE RAISES OF 2.3 MILLION, AND THE FIRE RAISES OF 1.6 MILLION ALONG WITH THE TMRS 70% COLA OF 2.1 MILLION.

ALL OF THOSE ARE INCLUDED IN THAT 41500 ACCOUNT.

WE ALSO HAVE I THINK IT'S ABOUT 600,000 IN FOR THE ANNUALLY BUYBACK PROGRAM THAT IS INCLUDED IN, I THINK BOTH MEET AND CONFER AGREEMENTS, AND SO WE'VE GOT THE DOLLARS IN THAT ACCOUNT FOR THAT AS WELL.

WE ALSO HAVE THE DISCRETIONARY RETENTION PAY PAYMENTS THAT IF COUNCIL APPROVES IT, WOULD GO OUT TO CIVILIANS.

I THINK IT'S THE FRIDAY BEFORE THANKSGIVING AND SO IT'S BASED ON LENGTH OF SERVICE.

THERE'S A SMALL CHECK THAT'S PAID OUT TO EACH CIVILIAN EMPLOYEE BECAUSE POLICE AND FIRE GET LONGEVITY PAY.

THIS IS A SMALL AMOUNT THAT IF COUNCIL APPROVES WOULD GO OUT TO CIVILIANS.

WE'VE GOT THAT IN, AND THEN WE ALSO HAVE 50,000 IN THERE FOR HOLIDAY VOUCHERS, WHICH IS ANOTHER THING THAT'S DONE THAT.

I THINK THAT FRIDAY BEFORE THANKSGIVING, IT GOES OUT TO ALL EMPLOYEES.

THEY GET A $25 GIFT CERTIFICATE USUALLY TO UNITED SUPERMARKETS TO MAYBE HELP PAY FOR PART OF THE HOLIDAY MEAL.

THAT'S SOMETHING THAT'S INCLUDED ALSO IN THAT LINE ITEM, THE 41500 LINE ITEM.

AS YOU COME DOWN, YOU'LL SEE THE IT CHARGES OF 8.3 MILLION.

YOU'LL SEE IT WENT FROM 6.6 MILLION UP TO 8.3 MILLION, A LARGE INCREASE.

WE WERE TALKING ABOUT THE BIG INCREASE THAT IT WAS NEEDING TO TRULY HELP SUPPORT THE SECURITY EFFORTS AND THE SOFTWARE.

THE BULK OF GENERAL FUNDS PIECE COMES THROUGH THIS DEPARTMENT.

RIGHT THERE IS PART OF YOUR 311 OR MY AMARILLO FUNDING OUT OF YOUR GENERAL FUND OF 207,000.

IT'S SITTING RIGHT THERE IN THIS DEPARTMENT AS WELL.

AS YOU COME ON DOWN, IF YOU GO TO THAT 9201, OR YOU'LL FOLLOWING ME ON THESE ACCOUNTS? IT FUNDS YOUR PUBLIC HEALTH WOMEN'S CLINIC.

THE BULK OF THAT IS YOUR PUBLIC HEALTH WOMEN'S CLINIC FUNDING OF JUST UNDER $1.4 MILLION.

[04:50:07]

THAT IS RUNNING THROUGH THAT LINE ITEM RIGHT THERE, AND IT'S BEEN GREAT BECAUSE I KNOW CASEY HAS BEEN ABLE TO SECURE SOME ADDITIONAL GRANTS, AND IT'S ALWAYS A HUGE WIN FOR GRANTING AGENCIES WHEN THEY SEE THE LOCAL GOVERNMENT SUPPORTING THOSE EFFORTS AS WELL.

YOUR WOMEN'S CLINIC FUNDING IS COMING THROUGH THAT LINE ITEM.

AS YOU KEEP GOING DOWN, GO DOWN TO YOUR HOME INVESTMENTS OF 319,000, THAT IS A MATCH THAT WE PUT IN.

MOST OF THESE SMALL GRANT AMOUNTS ARE MATCHES THAT WE PUT IN TO GET GRANT DOLLARS.

WE HAVE TO PUT A SMALL MATCH IN TO PARTICIPATE ON THAT.

AS YOU GO DOWN TO 92040, THAT'S YOUR SOLID WASTE IMPROVEMENT TRANSFER.

THERE HAVE BEEN TWO RATE INCREASES.

ONE IS THE 7% RATE INCREASE THAT WE HAVE INCLUDED.

PART OF IT IS IN THIS TRANSFER.

PART OF THE 7% RATE INCREASE FOR SOLID WASTE COLLECTION IS IN THIS TRANSFER, AND THEN WE HAD A RATE INCREASE LAST YEAR OF 1.5 MILLION THAT WAS TO SUPPORT A DUMPSTER REPLACEMENT PROGRAM.

THAT IS AN ANNUAL AMOUNT THAT WE PUT THOSE OVER IN THE SOLID WASTE IMPROVEMENT FUND TO MAKE SURE WE KEEP FUNDING THE REPLACEMENT OF DUMPSTERS TO THE TUNE OF 1.5 MILLION EACH YEAR.

DONNIE, YOU MAY KNOW OFF THE TOP OF YOUR HEAD BETTER THAN I DO, BUT THERE ARE SOME LANDFILL ENGINEERING SERVICES THAT THEY'RE LOOKING TO PAY FOR THIS YEAR, A LITTLE BIT OF EXTRA MONEY TO DUMPSTER REPLACEMENT.

THEN ALL OF THE EQUIPMENT THAT THEY ARE GOING TO NEED TO DO THE NEW DANGEROUS STRUCTURE REMOVAL PROGRAM IS IN THIS $3 MILLION AMOUNT AS WELL.

I WANT TO SAY THAT WAS ABOUT 585,000. I'M LOOKING AT ALAN.

HE PROBABLY KNOWS OFF THE TOP OF HIS HEAD TOO THAT WAS GOING TO FUND THAT EQUIPMENT FOR THAT NEW CREW.

THE CREW IS ACTUALLY GOING TO LIVE IN SOLID WASTE DEPARTMENT.

PART OF THE CITY MARSHALL IS GOING TO HELP FACILITATE THAT CREW AND HELP, I GUESS, THEM FIGURE OUT WHERE THEY NEED TO BE WORKING AND HELP WITH THEIR WORK ORDERS, AND THEN THE EQUIPMENT FOR THAT PROGRAM IS RIGHT HERE IN THIS $3 MILLION AMOUNT.

>> THAT WAS ALL CORRECT. THAT 600,000 FOR EQUIPMENT, TWO PERSONNEL IN SOLID WASTE, ONE PERSONNEL IN MARSHAL'S OFFICE.

>> PERFECT.

>> IS IT 92040?

>> YES, SIR. 92040. PLEASE KEEP IN MIND THAT FULL DOLLAR AMOUNT IS SUPPORTED BY YOUR SOLID WASTE FEES, SO THAT'S NOT PROPERTY TAX OR SALES TAX SUPPORTED.

AS YOU COME DOWN, THE NEXT LINE ITEM THERE, YOU'LL SEE A ZERO NEXT TO THAT 92045.

THAT'S THE ONE THAT CAME OUT OF GENERAL FUND ALONG WITH ALL OF OUR STREET DEPARTMENT AND IS NOW GOING TO LIVE IN THE NEW ENTERPRISE FUND, HOW WE HAVE IT PROPOSED AS A NEW STREET MAINTENANCE ENTERPRISE FUND.

I JUST WANT TO MAKE SURE I'M POINTING OUT THE PIECES THAT CAME OUT OF GENERAL FUND THAT WILL BE GOING OVER THERE OR THAT WE HAVE BUILT THAT WAY.

WE'LL TALK MORE ABOUT THAT ON THURSDAY.

THEN IN THAT ACCOUNT, 92060.

>> WHEN IT GOES TO VARIANCE INFINITY, WHAT DOES THAT MEAN? WHAT DOES THAT MONEY ACCOUNT?

>> I JUST CAN'T CALCULATE IT PROPERLY BECAUSE EITHER THE ZERO IS IN THE NUMERATOR OR THE DENOMINATOR, SO IT'S GOING TO GIVE YOU ESSENTIALLY AN ERROR, OTHERWISE.

>> DIVIDED BY ZERO.

>> WE'LL LEAVE IT TO THE MATHEMATICIAN, I DON'T KNOW HOW TO EXPLAIN THAT.

ON THE CIVIC CENTER IMPROVEMENT FUND, THAT 92060, DO YOU ALL REMEMBER EARLIER WHEN WE WERE ON THE CITY MANAGER'S PAGE? YOU SAW THE DOLLAR AMOUNT THAT WE WERE PAYING TO CVB.

DO YOU REMEMBER ME POINTING THAT OUT? THIS IS THE OTHER PIECE OF IT, SO WE COLLECT HOTEL OCCUPANCY TAXES.

HALF OF IT GOES TO CVB TO DO TOURISM, THE OTHER HALF GOES THROUGH HERE.

PART OF IT HAS HELPED SUPPORT THE NET OPERATING LOSS FOR CIVIC CENTER, PART OF IT THEN GOES TO PAY THE OUTSTANDING DEBT SERVICE ON THE PARKING GARAGE AND ON THE MPEF, AND THEN THE REST GOES TO THE CIVIC CENTER IMPROVEMENT FUND SO THEY CAN DO CAPITAL PROJECTS OVER AT THE CIVIC CENTER.

WE HAVE ABOUT 1.2.

WELL, IT'S NOT ALL FROM THIS TRANSFER, SOME OF IT'S FROM THE FUND.

CIVIC CENTER IS GOING TO BE ABLE TO ACTUALLY GET SOME PROJECTS DONE THIS YEAR.

I SAY THAT THEIR FUNDING HAS BEEN A LITTLE TIGHT THE LAST COUPLE OF YEARS, BUT WE'RE SEEING THEM WITH THEIR NET OPERATING LOSS HAS GOTTEN ON BETTER TRACK, AND SO WE ARE ABLE TO PUT MORE MONEY TOWARDS THE CAPITAL IMPROVEMENTS.

THEY HAVE IN THE BUDGET, I THINK IT'S AROUND $2.2 MILLION FOR CAPITAL IMPROVEMENTS OVER AT THE CIVIC CENTER.

WE'LL GO OVER THAT MORE TOMORROW, BUT PART OF IT IS COMING FROM THE VENUE DISTRICTS HOT TAX THAT THEY'RE FUNDING.

I THINK THEY'RE FUNDING 900,000 AND THEN THE REST IS COMING FROM THE CITY OF AMARILLO HOT TAX.

NO SALES TAX OR PROPERTY TAX DOLLARS TOUCH ANY OF THAT, IT'S ALL OUT OF HOTEL OCCUPANCY TAXES.

AS YOU COME DOWN, WE ALREADY TALKED ABOUT

[04:55:02]

LIABILITY FOR COMPENSATED ABSENCES ON THE CASH FLOWS.

IF YOU KEEP GOING DOWN, THE NEXT BIG NUMBER IS THAT 92130, THAT'S YOUR GENERAL CONSTRUCTION NUMBER.

WE ALSO TALKED ABOUT THAT ON THE CASH FLOWS.

THAT'S OUR ONE-TIME FUNDING OVER TO DO CAPITAL PROJECTS FUNDED BY GENERAL FUND DOLLARS.

THERE'S A SMALL AMOUNT OF IT, IT'S JUST UNDER $1 MILLION THAT IS ONGOING TO FUND PARKS E&I, SO IT'S BASICALLY MISCELLANEOUS PARKS PROJECTS.

THEY PUT QUITE A BIT OF THEIR FUNDING TOWARDS DEBT SERVICE THIS YEAR, BUT THE REST OF IT, IT'S JUST UNDER A MILLION DOLLARS.

THERE WAS A TAX INCREASE THAT WAS DONE MAYBE FOUR YEARS AGO TO HELP SUPPORT ONGOING PARKS PROJECTS, AND ABOUT 922,000 OR SO OF THAT IS RELATED JUST TO PARKS.

>> E&I, WHAT IS IT?

>> EXTENSIONS AND IMPROVEMENTS.

IT'S JUST MISCELLANEOUS.

SOMETIMES THEY'RE SMALLER PROJECTS THAT ARE REALLY JUST IDENTIFIED AS WE GO THROUGH THE YEAR, AND THEN THEY'RE BROUGHT TO COUNCIL FOR APPROVAL IF YOU GUYS WANT TO MOVE FORWARD ON THEM.

I COULD PROBABLY GIVE YOU ALL EXAMPLES, BUT IT COULD BE EVERYTHING FROM, THEY NEED TO DO A PLAYGROUND TO THEY HAVE SIDEWALK REPAIRS THAT NEED TO BE DONE AROUND THE PARKS.

I KNOW THEY DID SOME MASSIVE TREE TRIMMING PROJECTS. I'M LOOKING AT DONNIE.

THE BIG, BIG PROJECTS, WE DO USUALLY THROUGH DEBT ISSUANCES, BUT THEY DO SOME IMPROVEMENTS SOMETIMES AT THE ZOO WITH THOSE AT THE SWIMMING POOLS.

IF WE HAVE SOME MAJOR REPAIRS THAT NEED TO BE DONE AT THE SWIMMING POOLS OR SOMETHING LIKE THAT, IT CAN COME OUT OF THAT FUNDING AS WELL.

>> YOU'RE WELCOME. LET'S SEE.

WE'RE ALMOST DONE, AND THIS IS PROBABLY ONE OF THE BIGGER DEPARTMENTS IN THE GENERAL FUND.

AS YOU TURN THE PAGE, YOU'LL SEE A TRANSFER TO DEBT SERVICE NUMBER OF 450,800.

WHAT THAT IS MADE UP OF, THERE IS A PORTION OF IT THAT IS GOING TO PAY SOME OF THE MPEF DEBT SERVICE.

NO, I'M SORRY. I HAD THAT WRONG, THAT'S IN A DIFFERENT FUND, DIFFERENT DEPARTMENT.

WE'LL COVER THAT SOON.

THIS IS RELATED TO SOLID WASTE.

WE DID A DEBT ISSUANCE BACK IN, I BELIEVE 2023, AND WE DID A CORRESPONDING RATE INCREASE.

THIS WAS TO DO THE NEXT PHASE, THE NEXT CELL, AND I DON'T REMEMBER WHICH CELL IT WAS OUT AT THE LANDFILL FOR CONTINUED GROWTH OUT AT THE LANDFILL.

THAT PROJECT HAS ALREADY BEEN COMPLETED, BUT THIS IS THE ANNUAL DEBT SERVICE THAT WE'RE PAYING ON THAT, BUT IT'S ALL SUPPORTED BY SOLID WASTE FEES.

THEN THE LAST TWO THERE ARE JUST MATCHING DOLLARS THAT SUPPORT OUR COURT SECURITY FUND AND OUR COURT TECHNOLOGY FUND.

WE HAVE STATE COLLECTED FEES THROUGH OUR MUNICIPAL COURT THAT HELP WITH THE TECHNOLOGY OVER THERE AND THE SECURITY OVER THERE.

ALL THE BAIL LIFTS ARE IN THE COURT SECURITY FUND, BUT THEY DON'T HAVE ENOUGH FROM THE FEES TO FULLY COVER THE COST, AND SO THESE ARE THE AMOUNTS THAT THE GENERAL FUND KICKS IN TO HELP WITH THOSE AREAS AS WELL.

NEXT ITEM. IS EVERYBODY GOOD? ANYBODY NEED A BREAK?

>> NO.

>> WE'VE GOT CIVIC CENTER HERE, SO I'M GOING TO SKIP AROUND JUST A TINY BIT IF YOU GUYS ARE OKAY WITH THAT.

WELL, I SAY THAT, LET'S DO IT FIRST BECAUSE I'VE GOT IT HERE, AS WELL. ARE YOU GOOD? IN CASE QUESTIONS. [BACKGROUND] IT, IF YOU'LL BEAR WITH ME JUST A SECOND, LET ME FIND THE PAGE REAL QUICK.

I THINK IT'S BACK A COUPLE.

WE'VE ALREADY TALKED ABOUT IT FROM THEIR CASH FLOW STANDPOINT, BUT WANT TO WALK ALL THROUGH ACTUALLY THEIR DEPARTMENT BUDGET, IF I CAN FIND IT IN JUST A SECOND.

PAGE 252.

THE BIG TAKEAWAY IN IT THIS YEAR IS GROWING SOFTWARE COSTS.

EVERYTHING IS CONTINUING TO GET MORE AND MORE EXPENSIVE.

HOWEVER, THEY ALSO HAVE SOME CONTINUED EFFORTS THAT THEY'RE LOOKING TO ADDRESS THROUGH SECURITY, AND I'M GOING TO LOOK REAL QUICK IF YOU'LL BEAR WITH ME.

THEY HAVE A COUPLE OF NEW POSITIONS THAT THEY'RE LOOKING AT, SOME SECURITY ANALYSTS AND IT SUPPORT SPECIALIST.

THESE ARE, I BELIEVE, LISTED ON PAGE 265 DOWN AT THE BOTTOM, YOU'LL SEE THE NEW POSITIONS, THEY'RE LOOKING AT. IT'S ABOUT 257,000.

[05:00:01]

>> THEY'RE LOOKING TO ADD AN IT SUPPORT SPECIALIST, A GIS ANALYST, AND TWO SECURITY ANALYSTS.

THAT IS PART OF THE INCREASE THAT WE'RE SPREADING BACK TO THE USING DEPARTMENTS.

THEN THE BULK OF THEIR INCREASES IN THEIR OVERALL BUDGETS IS RELATED TO GROWING SOFTWARE COSTS AND IF THEY HAVE CERTAIN EQUIPMENT COSTS ASSOCIATED WITH THEIR SERVICES AS WELL.

AS I MENTIONED, WE ARE WORKING TO TRY TO BUILD THEIR RESERVES BACK.

WE BROUGHT THEM DOWN PRETTY LOW, BUT WE'RE GOING TO WORK TO BUILD THEM BACK OVER THE NEXT COUPLE OF YEARS INSTEAD OF DOING EVEN MORE THAN A 25% INCREASE BACK TO DEPARTMENTS TO TRY TO BUILD BACK RESERVES ALL IN ONE YEAR, WE'RE GOING TO TRY TO BUILD THEM BACK OVER PROBABLY ABOUT THE NEXT THREE YEARS OR SO.

THAT'S JUST SOMETHING TO KEEP IN THE BACK OF YOUR MIND AS WE WALK FORWARD THROUGH THE NEXT COUPLE OF YEARS OF BUDGETS AS WELL.

WE'RE GOING TO BE WORKING HARD TO BUILD BACK THOSE IT RESERVES.

>> JUST FOR YOUR INFORMATION, THOSE RESERVES WERE DWINDLED LARGELY BECAUSE OF INCREASING SOFTWARE COSTS.

THIS IS AT LEAST THE THIRD YEAR WE'VE SEEN.

OUR AVERAGE INCREASE IS 38% THIS YEAR FOR HARDWARE AND SOFTWARE.

IT'S BEEN OVER 30 FOR AT LEAST THREE YEARS, AND WE JUST CLEARLY COULDN'T PASS THAT COST ALL THROUGH TO THE USING DEPARTMENTS.

>> THEY DO HAVE A CAPITAL PROJECT, AND WE'LL TALK A LITTLE BIT MORE ABOUT IT, BUT IT MAY BE A GOOD TIME FOR YOU ALL.

THERE'S 275,000 IN FOR A CAPITAL PROJECT FOR IT, AND IT IS FOR A MOTOROLA WAVE REPLACEMENT.

YOU ALL WANT TO JUST QUICKLY SAY SOMETHING ABOUT THAT?

>> THE MOTOROLA WAVE IS THE TECHNOLOGY THAT ALLOWS PUBLIC SAFETY TO ACCESS THE RADIO SYSTEM ON THEIR MOBILE DEVICES.

THAT WILL EXTEND OUR ABILITIES.

>> I'M LOOKING TO SEE WHO IS IN THE ROOM HERE.

LET'S GO TO HR AND RISK MANAGEMENT AND HEALTH PLAN.

WE'VE ALREADY TALKED ACTUALLY QUITE A BIT ABOUT THESE, SO I THINK WE CAN MOVE THROUGH THESE PRETTY QUICKLY.

IF YOU'LL TURN, LET ME GET PAST IT REAL QUICK.

IF YOU STARTING ON PAGE 266, BUT LET'S TURN OVER TO PAGE 268.

HR DEPARTMENT HAS JUST STAYED FLAT OVERALL FOR THEIR BUDGET.

THERE'S BEEN SOME CHANGES AND SOME DECREASES BETWEEN CERTAIN LINE ITEMS, BUT OVERALL THEIR DEPARTMENT IS COMPLETELY FLAT FOR THE YEAR.

NO MAJOR CHANGES TO DISCUSS RELATED TO THAT.

THEY MOVE A LOT OF PEOPLE THROUGH THIS ORGANIZATION, FACILITATE A LOT OF TESTING, A LOT OF SCREENINGS, A LOT OF ON-BOARDING AND EXITING THROUGH THE ORGANIZATION.

I JUST REAL QUICKLY WANT TO STATE, I THINK THIS PAST YEAR, WE'VE BEEN ABLE TO MAINTAIN ANYWHERE FROM AN 88 TO PROBABLY A 92% FILL RATE ACROSS THE CITY.

THAT HAS BEEN EXCELLENT.

WE HAVE MADE HUGE PROGRESS.

SINCE COVID, WE WERE PROBABLY DOWN, I WOULD EVEN SAY PROBABLY IN THE UPPER 70S FOR A WHILE.

WE HOVER, DEPENDING ON THE TIME OF YEAR, PROBABLY BETWEEN 88-92% FILLED ON OUR 2,500 POSITIONS THAT WE HAVE ACROSS THE CITY.

LOTS OF WORK DONE WITH A PRETTY SMALL TEAM THERE.

THEN IF YOU TURN TO YOUR RISK MANAGEMENT FUND, THERE'S A LOT OF AREAS THAT ARE COVERED IN YOUR RISK MANAGEMENT FUND.

IT'S EVERYTHING FROM YOUR UNEMPLOYMENT.

WE'RE SELF INSURED ON ALL OF THIS AS WELL.

UNEMPLOYMENT, WORKERS COMP, WE HAVE OUR PROPERTY INSURANCE, WE HAVE OUR GENERAL LIABILITY RUNNING THROUGH IT, WE HAVE OUR MEDICAL MALPRACTICE LIABILITY RUNNING THROUGH IT.

WE HAVE OUR IT SECURITY WHAT IS IT CALLED? CYBERSECURITY. CYBERSECURITY POLICY RUNS THROUGH THIS AS WELL.

ALONG WITH OUR POLICE OR LAW ENFORCEMENT LIABILITY POLICIES, THEY ALL RUN THROUGH THIS.

I APOLOGIZE. I CAN'T REMEMBER IF EVERYONE WAS ON COUNSEL YET WHEN WE DID THAT APPROVAL OR NOT.

BUT WE BROUGHT ALL OF OUR BIG INSURANCE RENEWALS.

WE DO HAVE LARGE SCALE INSURANCE FOR PROPERTY INSURANCE, BUT FOR THE MOST PART, UP TO, I THINK IT'S A $250,000 DEDUCTIBLE ON EVERYTHING EXCEPT FOR WIND AND HILL, WE PAY IT OUT OF POCKET.

THEN ON WIND AND HILL, IT'S LIKE 5% OF THE VALUE OF THE PROPERTY PER OCCURRENCE PER PROPERTY.

WE'RE ALMOST FULLY SELF INSURED UNLESS IT'S CATASTROPHIC ON WIND AND HILL.

[05:05:01]

I'M LOOKING AT THE INSURANCE AGENT AND HE'S GOING TO.

THAT ALL RUNS THROUGH THIS FUND.

THE WAY THE RISK MANAGEMENT FUND WORKS, WE GO THROUGH AN ANALYSIS OF CLAIMS. WE LOOK AT A 20-YEAR HISTORY OF CLAIMS, AND WE LOOK AT THE HIGH AND THE LOW.

WHAT WE NORMALLY TAKE IS THE AVERAGE OF THE 20-YEAR CLAIM PLUS ONE STANDARD DEVIATION, AND WE USE THAT FOR OUR PROJECTION IN THE UPCOMING YEAR.

WE ALSO HAVE ACTUARIAL ANALYSIS THAT ARE DONE ON OUR LIABILITIES RELATED TO OUR SELF INSURANCE.

WE DO THOSE EVERY OTHER YEAR.

THEN WE DO HAVE SOME OF THESE LARGE SCALE INSURANCE POLICIES, SO WE HAVE PREMIUMS THAT WE'RE PAYING OUT OF THIS FUND AS WELL.

WE TAKE THE COST OF ALL OF THAT AND THEN WE START ALLOCATING IT OUT TO THE USER DEPARTMENT.

FOR INSTANCE, ON THE LAW ENFORCEMENT LIABILITY POLICY, THAT ONLY GETS CHARGED OUT TO POLICE, CITY MARSHAL, AND OUR AIRPORT, POLICE OFFICER GROUP.

THEN, THINGS LIKE CYBERSECURITY, THAT GOES TO EVERYBODY.

WELL, I SAY THAT, NO, WE CHARGE IT TO IT, AND THEN IT CHARGES IT OUT TO EVERYBODY.

UNEMPLOYMENT. THAT'S BASED ON WE COLLECT THAT THROUGH PAYROLL.

EACH PAY PERIOD, WE COLLECT THAT.

OUR PROPERTY INSURANCE.

WE LOOK AT THE INSURABLE VALUE OF EACH OF OUR PROPERTIES AND WHICH DEPARTMENTS ARE USING THOSE PROPERTIES, AND THEN WE ALLOCATE THE ANTICIPATED CLAIMS AND PREMIUMS OUT TO THE USER DEPARTMENTS.

THAT'S HOW THIS FUND WORKS.

IF YOU'LL REMEMBER BACK ON YOUR CASH FLOW, RISK MANAGEMENT HAD A LITTLE BIT OF EXCESS THAT THEY WERE GOING TO BE ABLE TO TRANSFER OUT TO THE GENERAL FUND, AND I THINK IT WAS ABOUT 1.5 MILLION, SO THEY ARE IN LINE.

WE ACTUALLY HAD A SLIGHT DECREASE ON OUR PROPERTY INSURANCE PREMIUMS THIS YEAR, WHICH WE'RE NOT HOLDING OUR BREATH THAT THAT'LL HAPPEN EVER AGAIN IN THE FUTURE, BUT WE WERE VERY FORTUNATE IT DID THIS YEAR, INSURANCE BROKER WORKED VERY HARD ON THAT.

WE ARE ANTICIPATING A LITTLE BIT OF EXCESS RESERVES, AND SO WE'RE PLANNING TO SEND THAT BACK TO THE GENERAL FUND.

BUT WE WILL LOOK AT THAT ON A YEAR-BY-YEAR BASIS.

ONE OTHER THING I WANTED TO MENTION, INSIDE YOUR RISK MANAGEMENT FUND, WE DO HAVE A SAFETY TEAM.

THEY ARE IN OUR WORKERS' COMP AREA.

THEY WORK WITH DEPARTMENTS TO TRY TO MAKE SURE TRAINING IS DONE PROPERLY.

THEY ANALYZE ANY ACCIDENT THAT'S HAPPENED AND TRY TO GIVE CONSULTATION ON WHAT COULD HAVE BEEN DONE DIFFERENTLY.

DO WE NEED BETTER TRAINING, BETTER EQUIPMENT, BETTER PP&E, THOSE TYPE OF THINGS.

THEY'RE CONSTANTLY TRYING TO KEEP OUR WORKERS' COMP CLAIMS DOWN.

WE HAVE A REALLY SAFETY TEAM THAT LIVES INSIDE THIS RISK MANAGEMENT FUND THAT WE ALSO CHARGE OUT TO THE USING DEPARTMENTS AND THAT'S HOW THEY GET THEIR REVENUE TO COVER THIS.

QUESTIONS ON RISK MANAGEMENT?

>> HEY, LAURA, THAT WORK SAFETY TRAINING.

>> WINS ARE LIKE A 65% INCREASE IN THE NUMBER OF PEOPLE THEY ARE GOING TO TRAIN THIS YEAR VERSUS LAST YEAR.

>> 273. >> THANK YOU.

>> IT'S PERFORMANCE MEASURES INDICATORS IS 23 24, WAS 285 THIS NEXT YEAR, 445 THAT'S A HUGE JUMP.

>> YOU WILL SPEAK TO THAT GREAT. GO AHEAD.

>> I'M GOING TO SPEAK TO THAT. WE'VE ACTUALLY STRUGGLED JUST LIKE EVERYONE ELSE TO RETAIN EMPLOYEES IN OUR SAFETY AREA.

WE'VE TYPICALLY BEEN WORKING WITH THE 50% DOWN IN OUR SAFETY CREW, SO WE WERE JUST ANTICIPATING HAVING A FULLER SAFETY TEAM, SO WE'D BE ABLE TO DO MORE ON SITE WITH THE DEPARTMENTS.

>> SAKON MAN. THAT'S ROUGH METRICS FOR THEM IF IT'S STAYING THE SAME.

>> THANKS, MITCH.

>> I'VE GOT A QUICK QUESTION. DO NOT ALL EMPLOYEES GET PRE-SCREEN DRUG AND ALCOHOL TESTING.

WE HAVE DRUG AND ALCOHOL TESTING? IS THAT JUST ON CDL DRIVERS AT 415 OR IS THAT?

>> YES. WE DO HAVE OUR NEW HIRE DRUG AND ALCOHOL PROGRAM, AND THEN WE HAVE OUR ACTIVE DRUG AND ALCOHOL PROGRAM FOR OUR CDL EMPLOYEES.

>> THEY'RE THE ONLY ONES THAT GET TESTED?

>> THERE ARE OTHER SELECT GROUPS THAT ARE TESTED BASED ON REGULATORY STANDARDS FOR EACH INDIVIDUAL INDUSTRY.

BUT THAT'S THE PRIMARY. THAT'S THE BIG BULK OF THE GROUP.

>> IS THERE A SIGNIFICANT DIFFERENCE IN COST OF INSURANCE IF WE TESTED EVERYONE?

>> I WOULD HAVE TO RESEARCH THAT.

I'M NOT FAMILIAR WITH ANY CORRELATION BETWEEN INSURANCE COVERAGE AND DRUG TESTING.

>> IF YOU'LL TURN NOW TO PAGE 280, THIS IS OUR BENEFITS ADMINISTRATION DEPARTMENT.

IT ACTUALLY RESIDES IN OUR GENERAL FUND.

IT'S A FAIRLY SMALL GROUP, BUT THEY HELP ADMINISTER ALL OF OUR BENEFITS.

THAT'S EVERYTHING FROM HEALTH INSURANCE, LIFE INSURANCE,

[05:10:01]

VISION INSURANCE, DENTAL INSURANCE, TMRS, RETIREMENT PROGRAMS. THEY HELP WITH OUR LEAVE, LIKE FMLA, THOSE TYPE THINGS, AS WELL.

THIS GROUP, IT'S A SMALL GROUP OF THREE PEOPLE THAT LIVE INSIDE OF OUR GENERAL FUND, AND THEY DO A LOT OF WORK TO HELP ADMINISTER BENEFITS ACROSS ALL CITY EMPLOYEES.

IF YOU LOOK ON PAGE 284, YOU'RE GOING TO SEE HARDLY ANY CHANGES IN THAT TOP SECTION.

IT'S A VERY FLAT BUDGET FOR THE YEAR FOR OUR BENEFITS ADMINISTRATION.

AS YOU GO DOWN THE PAGE, IT STARTS INTO OUR HEALTH PLAN.

OUR HEALTH PLAN IS ACTUALLY IN A SEPARATE FUND.

WE WENT OVER THAT EARLIER.

THAT'S A SEPARATE FUND, AS I MENTIONED BEFORE, WE ARE NOT ANTICIPATING HAVING ANY INCREASES NEEDED FOR PREMIUMS PAID BY EMPLOYEES OR EMPLOYER INTO THE HEALTH PLAN.

WE ARE SELF INSURED, BUT WE HAVE A THIRD PARTY ADMINISTRATOR.

WE ARE CURRENTLY USING ETNA AS OUR THIRD PARTY ADMINISTRATOR AND WE ALSO HAVE A CUSTOM NETWORK THAT IS BUILT THROUGH ETNA, AND OUR PHARMACY PROVIDER IS MAXER.

WE ARE UNDERGOING A REQUEST FOR PROPOSALS RIGHT NOW AND GOT REALLY GOOD RESPONSE AND ARE CLOSE TO COMPLETION ON THAT, AND WE WILL BE BRINGING SOMETHING, I BELIEVE IT'S IN LATE AUGUST EARLY SEPTEMBER, A RECOMMENDATION TO COUNCIL.

THOSE CONTRACTS FOR HEALTH INSURANCE, WELL, IT'S EVERYTHING FROM HEALTH INSURANCE, PHARMACY, LIFE INSURANCE, VISION INSURANCE, DENTAL INSURANCE, LONG-TERM DISABILITY, ALL THOSE ITEMS WILL BE COMING TO COUNCIL TO CONSIDER EITHER LATE AUGUST EARLY SEPTEMBER FOR A 1126 IMPLEMENTATION.

WHAT WE HAVE BUILT THIS HEALTH PLAN BUDGET OFF OF IS WHAT WE'RE SEEING FROM A CLAIM STANDPOINT AT THIS POINT IN TIME.

MY HOPE IS THAT THIS IS MAYBE WHAT WE'VE BUILT AS A WORST CASE SCENARIO.

BUT WE DON'T KNOW UNTIL WE SELECT WHICH GROUPS WE'RE GOING TO GO TO AND GET THOSE CONTRACTS FULLY NEGOTIATED AND BRING THAT TO CITY COUNCIL.

WE HAVE OUR BEST ESTIMATE OF WHAT WE THINK HEALTH CLAIMS MAY COME IN AT, PHARMACY CLAIMS MAY COME IN AT, OUR ADMINISTRATIVE COSTS, AND EVERYTHING ELSE ASSOCIATED WITH THAT.

THAT IS WHAT WE HAVE BUILT INTO OUR BUDGET AT THIS POINT.

AS I MENTIONED, WE'VE HAD SOME FAVORABLE CLAIM EXPERIENCE OVER THE LAST FEW YEARS, SO WE HAVE NOT HAD TO DO AN INCREASE ON OUR HEALTH INSURANCE PREMIUMS FOR AT LEAST THE LAST THREE YEARS.

WE HAVE ALSO BEEN ABLE TO RECAPTURE ABOUT $6 MILLION IN SAVINGS IN THIS FUND THAT WE TALKED ABOUT EARLIER, WE'RE GOING TO SEND BACK TO GENERAL FUND.

NOW, I'M HESITANT ON LOWERING RATES TO ANY OF THE DEPARTMENTS BECAUSE WE'RE GOING THROUGH THIS BIG RFP PROCESS.

WE'VE BUILT A CONSERVATIVE BUDGET, BUT WE ARE HOPEFUL THAT IT COULD COME IN MORE FAVORABLE THAN WHAT WE'RE LOOKING OUT AND THEN THIS TIME NEXT YEAR, MAYBE WE HAVE A DIFFERENT CONVERSATION.

BUT HEALTHCARE COSTS, AS YOU ALL KNOW, AND I WILL ESPECIALLY SAY PHARMACY COSTS, CONTINUE TO JUST RISE AND RISE YEAR OVER YEAR.

WE HAVE SEEN A TREND IN OUR CLAIMS GOING UP.

I DID WANT TO POINT OUT THAT LINE ITEM SPECIFICALLY.

IF YOU LOOK ON PAGE 285, HANG ON.

I MAY HAVE THE WRONG PAGE. I'M SORRY.

GO TO PAGE 286 AT THE VERY TOP.

THAT VERY TOP LINE ITEM, YOU'LL SEE YOUR MEDICAL INSURANCE CLAIMS. THAT'S MEDICAL AND PHARMACY, ALL COMBINED IN ONE.

THOSE ARE THE CLAIMS WE'RE PAYING OUT.

YOU'LL SEE OUR ACTUALS FROM 21, 22 AS THEY GROW.

THEN WE HAD ACTUALS GO UP A LITTLE BIT THIS PAST YEAR.

WE'RE COMING IN A LITTLE UNDER BUDGET IN THE CURRENT YEAR AND SO WE FEEL LIKE KEEPING OUR BUDGET FLAT IS PROBABLY GOING TO BE CONSERVATIVE FOR THIS NEXT YEAR.

BECAUSE WE'VE HAD SOME GOOD CLAIMS EXPERIENCE THE LAST FEW YEARS, AS I MENTIONED, WE'LL BE ABLE TO SEND SOME OF THAT EXCESS RESERVE BACK TO GENERAL FUND SO THEY CAN PUT IT TO WORK IN CAPITAL EXPENDITURES.

YOU CAN SEE THAT DOWN ON PAGE 286, AND I SAID 6 MILLION.

I'M SORRY, I'M GETTING NUMBERS CROSSED IN MY MIND.

IT'S 1.9 MILLION GOING FROM HEALTH PLAN.

IF YOU LOOK ON PAGE 286, GO DOWN ABOUT SEVEN LINES, YOU'LL SEE THAT 1.9 MILLION GOING BACK TO GENERAL FUND.

WE WERE ALSO ABLE TO SEND 2.5 MILLION BACK TO GENERAL FUND LAST YEAR.

THAT'S BEEN A WIN IN BOTH THOSE YEARS.

AGAIN, HESITANT TO REDUCE RATES AT THIS POINT,

[05:15:01]

JUST NOT KNOWING EXACTLY WHAT WE'RE GOING TO HAVE FOR THIS NEW SERIES OF CONTRACTS, BUT HOPEFULLY WE'LL HAVE A DIFFERENT DISCUSSION MAYBE NEXT YEAR.

>> I KNOW PART OF THE PBM AND I KNOW WHEN WE GET THAT RETURNED AND WE DECIDE ON A CONTRACT, WE CAN PLUG THESE NUMBERS IN, AND WE'RE FORECASTING FOR SURE, SO THEN WE COULD SEE SOME ACTUALS, CORRECT?

>> YES. ABSOLUTELY. ALSO, TO YOUR POINT, YOU MADE ME THINK OF SOMETHING.

IF YOU GO TO PAGE 285, AND I POINTED THIS OUT ON THE CASH FLOW, BUT I WANT TO SHOW YOU ON PAGE 285.

IF YOU LOOK AT THE SECOND BIG SET OF NUMBERS DOWN, IT'S THAT 34890 DRUG REBATE REVENUE.

THAT IS DUE TO THE RENEGOTIATION OF THAT CONTRACT THIS PAST YEAR.

IT HAD BEEN TRENDING UNDER $2 MILLION.

WE ANTICIPATED THIS YEAR IT WAS GOING TO BE AT 2.2 MILLION.

IT WILL COME IN HIGHER THAN THAT THIS YEAR BECAUSE WE HAD ALREADY SET BUDGET BEFORE WE RENEGOTIATED THE CONTRACT.

YOU'LL SEE WE'RE ANTICIPATING IN THIS NEXT YEAR, WE SHOULD BE ABLE TO GET CLOSE TO $4 MILLION. I THINK THAT NUMBER.

I CAN'T REMEMBER OFF THE TOP OF MY HEAD, ANDREW MIGHT.

I RAN THE MEMBERS FORM. I CAN'T REMEMBER.

IT WAS SOMEWHERE BETWEEN THREE AND FOUR MILLION.

WE THINK WE'LL GET THIS YEAR. THAT'S GOOD.

>> GOOD. I KNOW ONE OF THE BIG EXPENSES ON OUR HEALTH CARE PLAN I THINK IT WAS THE ETNA DEAL, BUT WITH THE RETIREES AND THEIR DEPENDENTS THAT LIVED OUTSIDE AMARILLO, THAT THAT WAS EXTREMELY EXPENSIVE TO US.

THAT'S SOMETHING WE'RE GOING TO LOOK AT UNDER THIS NEW CONTRACT.

>> WE CAN WORK WITH OUR CONSULTANTS ON BRAINSTORMING, WHAT SOME OF THAT LOOKS LIKE.

THAT'S ANOTHER THING THAT WE CONTINUE TO DO EACH YEAR IS THERE A BETTER WAY TO STRUCTURE SOME OF OUR PLANS AND HOW WE'RE COVERING THINGS? A COUPLE OF YEARS AGO, WE ACTUALLY HISTORICALLY ONLY HAD ONE HEALTH PLAN.

WE SPLIT IT A COUPLE OF YEARS AGO FOR THE FIRST TIME INTO TWO PLANS.

WE BASICALLY HAVE A HIGH DEDUCTIBLE PLAN AND WE HAVE A CO PAY PLAN.

THOSE ARE THINGS WE'RE GOING TO CONTINUE WORKING WITH OUR HEALTHCARE CONSULTANT ON, TO YOUR POINT.

WE'LL BE BRAINSTORMING IF THERE'S SOME CHANGES THAT NEED TO COME ALONG AS WE IMPLEMENT SOME OF THESE NEW CONTRACTS. YES.

>> YES. OF COURSE. ANY OTHER QUESTIONS ON BENEFITS OR EMPLOYEE INSURANCE? IF NOT, I WOULD LIKE TO GO BACK TO FLEET.

ARE WE READY TO TALK ABOUT FLEET? BECAUSE I INADVERTENTLY SKIPPED OVER FLEET.

LET'S GO BACK.

LET ME FIND THAT PAGE REAL QUICK.

I'M WATCHING THE TIME. WE'RE TRYING TO WRAP UP AT 4:30, MAYOR.

DID THAT SOUND REASONABLE TO YOU OR?

>> YES, MUM, WE'RE SHOOTING FOR THAT.

>> WE CAN DO THAT. LET'S GO BACK TO FLEET, AND IF SOMEBODY FINDS A PAGE BEFORE ME, LET ME KNOW. PAGE 44?

>> I WAS LIKE, NO, WE PUT IT IN THE WRONG SPOT.

GO TO PAGE 244.

ON PAGE 244, WE HAVE OUR FLEET DEPARTMENT.

WE HAVE ALREADY AGAIN, TALKED ABOUT THIS.

I TOLD YOU, ONCE WE GET GOING ON THESE DEPARTMENTS, A LOT OF THIS IS GOING TO GO A LOT FASTER BECAUSE WE COVERED SO MUCH DURING THE CASH FLOWS.

IF YOU'LL REMEMBER BACK ON OUR FLEET DEPARTMENT, WE'RE GOING THROUGH THIS BIG TRANSITION THAT WE JUST STARTED ESSENTIALLY THIS YEAR, AND THAT WAS DUE TO THIS COUNCIL REALLY BEING OPEN TO US EXPLORING SOME NEW WAYS OF MAINTAINING OUR FLEET, AND THAT IS THROUGH LEASING.

THAT IS ALSO THROUGH DEBT ISSUANCES AND THEN SOME OUTRIGHT CASH PURCHASES.

IN THIS BUDGET, WE HAVE AN ADDITIONAL $2 MILLION BUILT IN FOR THE NEXT BIG ROUND OF VEHICLES GOING INTO THE LEASING PROGRAM.

THAT IS GOING TO BE A HUGE WIN.

I DON'T KNOW THAT THEY MAY BE ABLE TO SPEAK TO THE BREAKDOWN, BUT I GUARANTEE A LOT OF THOSE ARE COMING FROM THE GENERAL FUND.

>> WE CAN SPEAK TO IT.

>> YES. PLEASE DO.

>> LAST YEAR, YOU KNOW, WE PROPOSED 177 VEHICLES TO BE LEASED, AND WE WERE ABLE TO START ON THAT PROCESS, SO FAR WE RECEIVED 137 OF THOSE UNITS THEY'VE BEEN DELIVERED.

WE'RE ALSO ABLE TO PURCHASE SOME NEW MOTORCYCLES THAT WENT BEFORE YOU AS WELL FOR THE POLICE DEPARTMENT.

WE REALLY DON'T HAVE THAT MUCH THAT'S LEFT OUT OF THE 177, ACTUALLY IT WAS 171, IF YOU TAKE THOSE SIX OUT FOR THE MOTORCYCLES.

THIS YEAR, WE'RE LOOKING AT DOING MUCH THE SAME WHERE WE'LL BE LEASING 130 MORE VEHICLES.

IT'S GOING TO PUT US MORE IN LINE WITH WHERE WE WANTED TO BE.

WE KNEW THAT ABOUT YEAR 3 OF THIS LEASING PROGRAM IS WHERE WE WOULD START TO SEE A BIG DIFFERENCE, NOT ONLY IN MAINTENANCE COSTS, BUT ALSO BEING ABLE TO CATCH UP WITH OUR FLEET BECAUSE WE WERE FAR BEHIND.

WE HAD SOME VEHICLES THAT WERE 10 YEARS OLD,

[05:20:01]

11 YEARS OLD THAT WE LOOKED AT REPLACING.

WE FEEL LIKE WE'RE IN A REALLY GOOD POSITION WITH THAT, AND WE'RE THANKFUL FOR THE OPPORTUNITY TO BE ABLE TO DO IT.

IT SEEMS LIKE OUR STAFF HAS REALLY ENJOYED HAVING THE NEW VEHICLES.

I'LL SAY THIS FOR THE NEW COUNCIL MEMBERS THAT ARE HERE.

I THINK THE EXISTING ONES HEARD THIS FROM LAST YEAR NOW, WE SET UP MEETINGS LAST YEAR, AND AGAIN, THIS YEAR, WHERE WE TALKED ABOUT OUR FLEET.

WE TALKED ABOUT THE RIGHT SIZING OF THAT FLEET.

ARE THESE VEHICLES ACTUALLY WORKING FOR YOU? DO YOU NEED SOMETHING DIFFERENT? THE EXPECTATION WE HAD WAS THAT EVERYBODY WOULD ALWAYS WANT SOMETHING BIGGER AND BETTER AND MORE TOOLBOXES AND ALL THIS.

INSTEAD, WE GOT JUST THE OPPOSITE OF THAT.

OUR STAFF WAS VERY FRUGAL, SAID, NO, WE CAN DOWNSIZE THIS FROM A FULL SIZE PICKUP TO FORD MAVERICK OR TO A SMALLER SEDAN, THINGS LIKE THAT, IN WHAT WE CALL OUR OUR UTILITY FLEET, THAT'S OUR PICKUP, SEDANS, THINGS LIKE THAT.

WE REALLY SAW STAFF WORKING WITH US VERY WELL IN THAT, NOT ONLY LAST YEAR, BUT THIS YEAR AS WELL, ENOUGH THAT D&M LEASING WAS STILL IMPRESSED AGAIN THIS YEAR WITH THE AMOUNT OF RESPONSIBILITY THAT THE STAFF HAD TOWARD LOOKING AT THOSE COSTS INSTEAD OF GETTING THE MORE EXPENSIVE VEHICLES, GETTING SOMETHING THAT WAS MORE PRACTICAL FOR THEM TO USE.

WE'RE HAPPY WITH THAT. WE'RE ALSO GOING TO BE ABLE TO THIS YEAR IN THE BUDGET THAT'S PROPOSED, PURCHASE 67 PIECES OF HEAVY EQUIPMENT AS WELL.

THAT'S GOING TO PUT US BACK ON TRACK AS WELL.

AGAIN, WE THINK YEAR THREE IS WHEN WE'RE GOING TO START TO SEE THE DIFFERENCE IN THAT, BUT WE'RE RIGHT ON PACE WITH WHERE WE WERE HEADED WITH ALL THAT PROGRAM.

>> DONNIE SPOKE OR TOUCHED A LITTLE BIT ON THIS, SO WE'VE GOT THE LEASING PROGRAM, CONTINUING TO MOVE FORWARD, BIG WIN FROM THAT STANDPOINT. DID YOU TOUCH ON THAT? HAVE YOU MENTIONED ANYTHING ABOUT WE'VE GOTTEN SO MANY POSITIVE COMMENTS ABOUT PEOPLE THAT HAVE GOTTEN VEHICLES THROUGH THE LEASE PROGRAM, AND I THINK IT'S A HUGE MORALE BOOSTER.

DO YOU WANT TO SHARE JUST PROBABLY ON THAT.

>> WE COULD PROBABLY TELL YOU A LOT OF INDIVIDUAL STORIES, BUT WE KNEW GOING IN THAT IT WOULD BE A MORALE BOOSTER.

WHEN YOU'RE DRIVING A VEHICLE, IS 11 YEARS OLD, THAT THE DOOR WON'T SHUT ALL THE WAY, AND THE WINDOW DOESN'T WORK AND [LAUGHTER] ALL THOSE THINGS.

JUST TO HAVE THAT WAS ALMOST AS GOOD AS GETTING A SMALL RAISE.

THERE'S PRIDE IN IT. THEY'RE KEEPING THEM CLEAN.

THEY'RE TAKING CARE OF THEM, AND THAT'S GENERALLY WHAT HAPPENS WHEN YOU SEE THEM IN NEW VEHICLES.

WE'VE HAD TIME AND TIME AGAIN WHERE EMPLOYEES HAVE BEEN EXCITED TO KNOW THAT THEY HAD THEIR VEHICLES.

IN FACT, EVEN FOR ME, WHEN I SEE ONE DRIVING DOWN THE ROAD THAT I KNEW IS ONE OF OUR NEW LEASE VEHICLES OR A DIFFERENT TYPE OF VEHICLE THAT WE'RE USING NOW THAT'S MORE EFFICIENT, MAKES ME PRETTY PROUD TO SEE THAT.

THANK YOU FOR BRINGING THAT UP, LAURA BECAUSE WE'VE HAD A LOT OF COMMENTS FROM STAFF, AND I THINK IT HAS INCREASED THE MORALE.

THANKS, DONNY. I THINK ALONG THOSE SAME LINES, JUST REALLY WANT COUNSEL TO KNOW HOW MUCH THE ORGANIZATION APPRECIATES THE EFFORTS THAT HAVE GONE INTO GETTING OUR FLEET REPLACEMENTS BACK ON TRACK THROUGH LEASING THROUGH DEBT ISSUANCES AND CONTINUING SOME CASH FUNDING AS WELL.

WE SAID AN ADDITIONAL TWO MILLION IS GOING TO BE GOING TOWARDS THE LEASING PROGRAM.

ALONG WITH THAT, WE HAVE AN ADDITIONAL 7.5 MILLION THAT WE'RE PROPOSING.

I'M SORRY. DO YOU HAVE A QUESTION FOR US, SIR?

>> I DO GO AHEAD AND FINISH ON THAT.

>> I WAS GOING TO SAY WE HAVE PROPOSED AN ADDITIONAL 7.5 MILLION FOR A DEBT ISSUANCE TO SUPPORT THE NEXT ROUND OF REPLACEMENT OF THE HEAVY EQUIPMENT, AND DONNIE TOUCHED ON THAT.

I THINK UNLESS YOU'VE GOT OTHER QUESTIONS ON IT, BUT I WAS GOING TO TELL YOU THAT COMES OUT TO BE YOU GET $7.5 MILLION WORTH OF HEAVY EQUIPMENT, AND WE WOULD BE SPENDING ABOUT 1.2 MILLION ANNUALLY ON DEBT SERVICE FOR THAT.

I BELIEVE WE SET THOSE LIFE CYCLES UP AT 10 YEARS ON THOSE, IF I REMEMBER CORRECT.

>> IT'S HAS BEEN A LITTLE DIFFERENT.

SOME OF SEVEN, SOME WITH 10.

>> MAYBE THEY WERE ALL SEVEN. YOU'RE RIGHT.

WE SET ON THE DEBT ISSUANCE, WE'RE TRYING TO DO A SEVEN YEAR ON THOSE WEEKS.

>> THOSE ARE OTHER TRASH TRUCKS AND THINGS LIKE THAT.

>> YES. THEY WERE OUT A LITTLE BIT FASTER BECAUSE THEY GET A LOT OF MILES ON THEM.

WE'RE REALLY HOPING IN A FEW YEARS, WE'RE GOING TO SEE SOME OTHER ASPECTS START ROLLING INTO THIS BUDGET THAT I DON'T KNOW THAT WE'RE SEEING QUITE YET, BUT THINGS LIKE AUTO PARTS, AND MAYBE EVEN SOME TIRES AND SOME VARIOUS THINGS AS WE'RE GETTING OUR FLEET FROM BEING SO OLD AND OUTDATED AND GETTING THINGS REPLACED ON A PROPER TIME SCALE.

WE'RE HOPING THAT WE ARE OVER TIME GOING TO START SEEING SOME OF THOSE REPAIR COSTS, NOT MAINTENANCE.

WE'LL KEEP DOING MAINTENANCE, BUT THE BREAKDOWNS, THE DOWNTIME WHEN THE TRASH TRUCKS ARE BACKED UP, I DON'T KNOW HOW TO WORK OVERTIME BECAUSE WE HAVE TRASH TRUCKS THAT ARE DO.

>> EVEN THE OPERATIONAL COSTS, WE KNOW ARE GOING TO BE LESS.

IT'S JUST GOING TO TAKE A LITTLE TIME TO SEE THAT BECAUSE WE HAVE SUCH A LARGE FLEET.

THERE'S OVER 1,000 UNITS IN THERE, SO 177, ANOTHER 130, I THINK WE'RE GOING TO START TO SEE SOME EFFICIENCIES AS WELL.

[05:25:02]

>> THEN BEYOND THE 7.5 MILLION DEBT ISSUANCE, THERE'S ABOUT MILLION AND A HALF INCLUDED IN THIS BUDGET TO JUST OUTRIGHT CASH PURCHASE SOME MISCELLANEOUS, I WOULD SAY MORE PROBABLY EQUIPMENT THAN VEHICLES.

I DON'T KNOW IF YOU HAVE A COUPLE EXAMPLES.

MAYBE I DON'T KNOW IF THERE WERE LIKE FORKLIFTS.

>> SPECIALTY EQUIPMENT, BOS, OR A FORKLIFT OR SOME THINGS LIKE THAT THAT WERE UP FOR REPLACEMENT THEY KEEP AN ENTIRE LIST IN THE FLEET DEPARTMENT.

JASON JUP IS NOT HERE TODAY, BUT HE'S OUR SUPERINTENDENT OVER FLEET, AND HE JUST DOES A FANTASTIC JOB.

HE KNOWS THAT BUDGET INSIDE AND OUT.

HE KNOWS THE FLEET INSIDE AND OUT.

HE'S A CERTIFIED MASTER MECHANIC HIMSELF AND RUNS A REALLY GOOD SHOP OUT THERE, SO WE'RE REALLY PROUD OF WHAT HE'S DONE WITH ALL OF THAT.

HE LOOKS AT ALL OF THAT, JUST SO HIS PROCESS, AND WORKING WITH MR. HARDER AS WELL THROUGHOUT THIS YEAR, LOOKING AT WE KNEW WE DIDN'T HAVE ENOUGH MONEY TO REPLACE THE ENTIRE LIST OF FLEET ITEMS THAT NEED TO BE REPLACED, BUT ACTUALLY TAKING THAT SAYING, WHAT IS THE WORST OF THE WORST, WHAT NEEDS TO BE SHIFTED, WHAT NEEDS TO BE MOVED AROUND TO BE REPLACED THIS YEAR, AND HE'S DONE A PHENOMENAL JOB OF THAT.

>> THEN ONE OTHER CHANGE TO THIS BUDGET IS WE ARE LOOKING TO ADD AN ADMINISTRATIVE TECHNICIAN POSITION, BECAUSE WE'RE DOING ALL OF THE LEASING, THERE'S A LOT OF PAPERWORK AND FACILITATION EFFORTS ON ORDERING VEHICLES, GETTING THEM IN, GETTING THEM ISSUED OUT, AND SO THEY HAVE SEEN THAT THERE'S NEED TO MAYBE ADD ONE POSITION.

IT'S A LOWER LEVEL POSITION, BUT TO HELP REALLY FACILITATE THOSE EFFORTS.

SO JASON, AS THE DIRECTOR AND HIS ASSISTANT, ARE NOT SPENDING AS MUCH OF THEIR TIME, THEY CAN STAY ON THE HIGHER LEVEL STUFF AND THEY CAN HAVE SOMEONE TO HELP FACILITATE A LOT OF PAPER.

>> YOU HAVE AN ADMIN THAT'S THERE NOW THAT'S TAKEN CARE OF REQUISITIONS AND PURCHASES AND ORDERS, THINGS LIKE THAT.

THIS ONE WILL BE STRICTLY DEDICATED TO HANDLING THE LEASING SIDE AND ASSISTING FROM TIME TO TIME ON THE REQUISITION SIDE AS WELL.

BUT WE GET ENOUGH PAPERWORK IN OUR OFFICE WITH THE LEASING THAT WE HAVE TO SIGN AND WE HAVE TO LOOK THROUGH THAT IT'S QUITE A LOAD.

>> THEN, MAYOR, DID YOU HAVE A QUESTION OR DID YOU WANT ME TO FINISH ONE?

>> NO, GO AHEAD.

>> I DO HAVE A QUESTION.

>> GO AHEAD.

>> I ASK IT. WE ON 52O5O AUTO PARTS?

>> THE 36.6% INCREASE FROM 2.8 TO 4.5? IS THERE SOMETHING THAT WE KNOW THAT'S GOING TO HAPPEN?

>> IF YOU'LL LOOK BACK AT THE PRIOR YEARS AT OUR ACTUAL SPENDING, WE HAVE BEEN SEVERELY UNDER BUDGETING THAT ACCOUNT EACH YEAR, SO THEY'RE TRYING TO RIGHT SIZE PART OF THEIR BUDGET.

YES. THEN LOOK AT THE LINE DOWN BELOW IT.

>> DID THAT MILLION MOVE UP WITH THAT?

>> YES. IT MOVED UP.

>> WE MOVES A INTO?

>> ALL INTO PARTS. WE LUMP IT ALL.

WE USED TO TRACK THOSE SEPARATELY HISTORICALLY, BUT WE DON'T ANYMORE.

IT'S ALL ONE AND THE SAME.

>> I'M INTERESTED IN THE DEDUCTION IN 5212 TIRES AND TUBES, 4480,000 VERSUS THE 6.7.

THEY'RE QUITE A BIT MORE.

>> DONNY.

>> DID YOU HAVE SOMETHING ON THAT? TELL ME WHICH ACCOUNT WERE YOU LOOKING AT AGAIN?

>> IT WAS TIRES AND TUBES AND OTHER 502-12-02.

WE RAN 677-670.

>> IT SEEMS LOW TOO.

>> IT SEEMS LOW. THEN ONE LAST QUESTION ON 5180 OR ENERGY, 53,000.

WE'VE GOT 4.4. DO WE HEDGE OUR FUEL?

>> NO, WE DO NOT. WE'VE LOOKED AT THAT IN THE PAST, BUT WE DO NOT CURRENTLY.

>> DID THAT MAKE SENSE?

>> NOT THE VOLUME WAS TOO LOW.

>> WE BOUND ON VOLUME IN VOLUME.

WE DON'T HEDGE, BUT WE DO BUY IN BOLT PURCHASES, SO WE LOCK IT IN FOR A PERIOD OF TIME.

I DON'T KNOW HOW OFTEN THEY'RE ORDERING FUEL.

>> I DON'T KNOW HOW OFTEN IT IS EITHER, BUT BUYING DIRECTLY FROM THE RACK SAVES US QUITE A BIT OF MONEY.

WE'VE ANALYZED THAT YEAR AFTER YEAR, AND IT'S ALWAYS THE BEST WAY TO GO.

>> WE GET OUR OWN TRANSPORT STRAIGHT TO THE RACK AND BRINGING IT IN?

>> YES. WE'RE GETTING THE SPOT PRICE THEN?

>> ARE WE GOING TO THEM? LAURA JUST NORTH OF TOWN?

>> I WOULD HAVE TO GO BACK AND LOOK AT THE ACTUAL NUMBERS, BUT WHAT WE'VE LOOKED AT BEFORE AND ANALYZE IS, WHAT WOULD IF WE CONTRACTED WITH SOMEONE TO GET A DISCOUNT CARD, WE GET $0.10 A GALLON, $0.15 A GALLON, IT DOESN'T EVEN COME CLOSE.

>> IF YOU GO WE'RE GETTING BETTER AT THE RACK, CORRECT?

>> THEY'RE BIDDING THAT OUT.

I DON'T THINK ANNUALLY, BUT THEY DO BID THAT OUT.

WE'RE GOING THROUGH A COMPETITIVE PROCESS OF SOME SORT, I CAN'T REMEMBER.

I THINK IT'S A STRAIGHT BID, BUT WE'RE ENSURING WE'RE GETTING THE BEST PRICES WE GO FORWARD ON. YES, TOO.

>> WE'RE RUNNING OUR OWN TRANSPORTS UP THERE TO GET IT OR WHEREVER WE GO?

>> MY ANSWER TO THAT IS GOING TO BE YES, BUT I WOULD HAVE TO GO BACK AND GET YOU A FIRM ANSWER ON EXACTLY HOW THAT WORKS.

>> GOOD QUESTIONS, THOUGH.

>>> THANK YOU.

>> DO YOU HAVE QUESTIONS? YES.

[05:30:01]

>> DEPRECIATION, IF YOU LOOK AT 76,000 THAT LINE ITEM?

>> THREE POINT SIX NINE THREE.

HOW DOES THAT FACTOR IN? I UNDERSTAND YOU MAY HAVE A LINE ITEM YOU COULD GIVE DEPRECIATION, BUT WHAT ARE YOU COMMUNICATING THERE ON THAT OVERALL BUDGET?

>> WHEN YOU GO BACK TO THE CASH FLOW, YOU'LL SEE A LINE ITEM THAT SAYS OPERATING EXPENDITURES LESS DEPRECIATION.

SINCE DEPRECIATION IS TRULY NOT A CASH ITEM, WE BACK IT OUT WHEN WE'RE GOING THROUGH OUR CASH FLOWS, BUT WE DO TRY TO ANTICIPATE HOW MUCH WE'RE GOING TO HAVE IN DEPRECIATION ONE YEAR UNDER THE OTHER.

>> IT MAY BE GOOD FOR YOU TO TRACK IT.

WHERE DOES IT GOING BACK HERE TO 61110?

>> WHERE IS IT IN THIS BREAKDOWN? WHERE'S IT BEEN TAKEN OUT? WHERE DID YOU BACK THAT OUT?

>> LET ME SHOW YOU, IF YOU GO I'M GOING TO HAVE YOU FLIP TO A DIFFERENT PAGE, BUT BEAR WITH ME A SECOND.

LET ME GO FIND THE CASH FLOW BECAUSE YOU CAN SEE IT BETTER.

>> I FOLLOW YOU ON THE CASH FLOW.

I'M JUST SAYING IS WE'RE LOOKING AT THIS BUDGET.

>> YES. IF YOU TAKE THE TOTAL EXPENDITURES ON THESE PAGES BACK ON PAGE 247 MINUS DEPRECIATION, YOU'LL COME UP WITH THIS NUMBER HERE ON THE CASH FLOW. WE'RE BACKING IT OUT THERE.

WHAT>> PAGE ARE YOU ON RIGHT THERE?

>> STEPH, WHAT PAGE IS ON?

>> TWO FORTY SEVEN.

>> NO, THIS GUY BEHIND YOU.

>> SIXTY.

>> SIXTY?

>> YOU SHOW THE DEPRECIATION, BUT THEN YOU DON'T PULL IT OVER?

>> EXACTLY.

>> THIS BUDGET ITSELF IS UPSIDE DOWN 3.6 MILLION?

>> YES, BUT IT'S NOT WHEN YOU TAKE OUT THAT.

YES. THAT'S A GREAT QUESTION.

ANOTHER ITEM YOU'RE GOING TO SEE, MAYBE NOT ON THIS BUDGET, BUT YOU'LL HEAVILY SEE IT OVER IN IT.

THERE'S THIS THING THERE'S A LINE ITEM CALLED AMORTIZATION OF SOFTWARE LEASE OR SOMETHING LIKE THAT.

NOW, IT'S A NEW ACCOUNTING PRONOUNCEMENT THAT WE HAVE TO DO.

THAT WE'RE GOING TO SEE IT SHOWING UP IN OUR FINANCIALS, BUT IT'S A NON CASH ITEM.

BUT IT'S A NEW WAY THAT WE HAVE TO ACCOUNT.

WE BASICALLY HAVE TO SET THESE SOFTWARE AGREEMENTS UP FOR THE TERM OF THE AGREEMENT WE'RE IN.

WE SET IT UP AS AN ASSET, AND THEN WE AMORTIZE IT OVER THE LIFE OF THE ASSET, EVEN THOUGH WE'RE PAYING AN ANNUAL SUBSCRIPTION COST TO THIS SOFTWARE.

IT'S A NEW GOVERNMENTAL ACCOUNTING STANDARD.

TO THAT POINT, IT'S JUST LIKE DEPRECIATION.

WE BACK IT OUT WHEN WE START TRYING TO BALANCE FROM A CASH FLOW BECAUSE IT'S NOT CASH ACTUALLY EXPENDED OUT OF THE CITY.

IT'S JUST SOMETHING THAT WE TRACK ESSENTIALLY TO SEE THE VALUE OF OUR ASSETS.

>> JUST TO MAKE SURE I'M TRACKING YOUR EXPENDITURES ARE TOTALING 18,654,000?

>> TOTAL REVENUES ARE TOTALING 12,437,000.

>> HANG ON.

>> I'M ON PAGE 244, JUST LOOKING AT THOSE TWO NET ITEMS.

>> HANG ON JUST A SECOND, MAYER. 244. SAY THAT AGAIN, YOU'RE LOOKING AT.

>> REVENUE TOTAL, IS IT 12.4 MILLION?

>> YOU TAKE THE LET'S SEE.

YOUR REVENUE IS 12.4, BUT THEN YOU HAVE YOUR OTHER ONE, WHICH IS ON PAGE 247.

THERE'S ANOTHER 10.9 MILLION THERE.

>> SHOW ME THAT LINE ITEM IF YOU WANT.

>> GO TO PAGE 247 UNDER 61120.

YOU'VE GOT TO LOOK PICK UP THE REVENUE LINE ITEM THERE.

THERE'S TWO DEPARTMENTS INSIDE FLEET.

>> YOU'RE LOOKING AT 124+108?

>> TWENTY THREE THREE. WHICH TIES BACK TO PAGE 60.

>> TWENTY THREE TWO?

NOW, WE DON'T HAVE THE BOND PROCEEDS LISTED HERE IN THE BACK.

THOSE ARE JUST INCLUDED ON THE CASH FLOW.

>> BOND PROCEEDS?

>> THERE IS A FUND REPORT ON PAGE 61 THAT ACTUALLY ADDS THOSE TWO DEPARTMENTS TOGETHER TO THE FUND, SO YOU SEE THAT TOTAL REVENUE ON PAGE 61. THANK YOU, STEPH.

>> THAT PAGE 61 IS YOUR 233?

>> THEN DO YOU SHOW THAT DEPRECIATION OVER HERE BACKED OUT AS WELL ON PAGE 61?

>> YES. THEN ALSO YOUR PRINCIPAL PAYMENTS ON YOUR DEBT ARE NOT INCLUDED IN YOUR FUND STATEMENTS RIGHT THERE ON PAGE 61 AND 62, AND THE REASON FOR THAT IS THEY DON'T HIT AN EXPENSE ACCOUNT.

THEY ACTUALLY GO TO REDUCE A LIABILITY BECAUSE YOU HAVE OUTSTANDING LIABILITY ON YOUR DEBT, AND EACH OF YOUR PRINCIPAL PAYMENTS GOES TO BUY DOWN THAT LINE.

>> THAT EXPLAINS THE SHORTFALL OF 11.2 ON PAGE 65?

[05:35:04]

>> WOULD THAT BE CORRECT? THOSE ARE YOUR BOND PROCEEDS THAT ARE OFFSETTING THAT?

>> LET'S SEE HERE.

LET ME LOOK QUICK. WELL, PART OF THAT WOULD BE A SPENDING DOWN EXCESS RESERVES.

>> THAT'S THE 8 MILLION.

>> YES. THAT'S WHY YOU'RE UPSIDE DOWN, BUT YOU'RE NOT GOING TO BE ONGOING UPSIDE DOWN.

>> THE SIX AND THE TWO.

THIS YEAR, WE'RE UPSIDE DOWN BECAUSE WE'RE SAYING, HEY, LET'S REBALANCE RESERVES AND PUSH SOME OF THOSE OVER INTO GENERAL FUND INTO DRAINAGE. YES.

>> WELL, SO I'M GOING TO SAY IT'S BECAUSE WE'VE WORKED REALLY HARD AND IT'S 4:30, ALMOST, BUT I CAN'T FOLLOW THAT VERY WELL.

>> WE'RE BOUNCING US LEFT, RIGHT AND SIDEWAYS HERE, AND I'M LOOKING AT 11.2 UPSIDE DOWN, BUT THEN YOU'RE PULLING THAT IN FROM BOND PROCEEDS AND A FEW OTHER FUNDING MECHANISMS. IS THERE ANOTHER PLACE THAT MORE EASILY ACCOUNTS FOR, LIKE, FLEET SERVICE, BECAUSE FLEET SERVICES IS PRETTY HARD TO TRACK RIGHT NOW.

>> PAGE 60 IS YOUR SUMMARY OF EVERYTHING.

YOU'LL SEE THAT YOUR REVENUES ARE ONLY ANTICIPATED TO BE AT 30.8 MILLION, BUT YOU'RE PLANNING ON SPENDING $40 MILLION, SO YOU'RE UPSIDE DOWN RIGHT THERE.

BUT THE REASON FOR THAT IS BECAUSE UP AT THE TOP OF PAGE 60, YOU HAD ALMOST $14,000,000 IN RESERVES AT THE START OF THE YEAR, AND WE ONLY NEED ABOUT 5 MILLION.

WE'RE GOING TO START SPENDING THAT MONEY DOWN BY PUSHING IT OVER TO THOSE OTHER FUNDS.

WE'RE GOING TO HAVE A NET OPERATING LOSS FOR THE YEAR.

BUT WE'RE DOING THAT ON PURPOSE BECAUSE WE'RE REBALANCING RESERVES AND SENDING IT OVER TO OTHER FUNDS THAT COULD USE IT MORE EFFICIENTLY.

>> COUNCILMAN PRESCOTT, I WANT TO CLARIFY SOMETHING A MINUTE AGO THAT YOU ASKED.

WERE YOU ASKING IF WE HAVE OUR OWN FUEL TRUCKS?

>> I'M ASKING IF WE HAVE TRANSPORTS TO GO.

>> NO. WE DO NOT. WE HAVE IT TRANSPORTED WITH FUEL TRUCKS.

I THINK I'M JUST MISUNDERSTOOD.

>> WE'RE NOT GOING TO THE RACKS OURSELVES?

>> NO, NOT OURSELVES.

>> I WANTED TO CLARIFY THAT.

>> WHAT IS THE INTENT OF THE FLEET ORG? WHAT I WOULD CALL AN ORG IN MY BUSINESS, THE FLEET SERVICES FUND, IS IT REVENUE GENERATION OR JUST TO COVER COST?

>> IT IS TO CONSOLIDATE SOMETHING THAT IS UTILIZED ACROSS THE ENTIRE CITY INTO ONE AREA THAT'S HELPING TO MANAGE IT.

INSTEAD OF PARKS, BUYING AND DOING THEIR OWN LEASES AND EQUIPMENT AND EVERYTHING ELSE.

THEN WATER AND SEWER DOING THEIR OWN THING, AND POLICE DOING THEIR OWN THING.

WE BRING IT ALL INTO ONE AREA SO WE CAN HAVE BIGGER BUYING POWER.

IT CAN BE BETTER MANAGED HOLISTICALLY ACROSS THE ORGANIZATION, WE CAN MAKE MORE STRATEGIC DECISIONS ACROSS THE ORGANIZATION INSTEAD OF IT BEING SILOED INTO EACH DEPARTMENT.

>> I'M SORRY, GO AHEAD.

>> NO. WELL, I WAS GOING TO SAY, AND THEN ONE OTHER THING AND I'M SO SORRY.

HISTORICALLY, TOO, THE DEPARTMENTS PAID INTO THE FUND, AND THEN THEY SAVE THE FUNDS UP TO HELP REPLACE THEM IN THE FUTURE.

WE'RE TAKING A DIFFERENT APPROACH ON THAT NOW BECAUSE WE'RE FACILITATING MORE LEASES, MORE DEBT ISSUANCES.

BUT THE OTHER THING THAT THIS DEPARTMENT DOES IS THEY HELP THEM STAY ON TOP OF THEIR MAINTENANCE.

THEY ACTUALLY HAVE A MECHANIC SHOP, AND WE HAVE MECHANICS OUT THERE, SO EVERY, NOT EVERY, BUT MOST OF OUR FLEET GOES IN AND HAS THEIR OIL CHANGED, THEIR TIRES ROTATED AND CHANGED, AND MOST SERVICES NEEDED ON THOSE VEHICLES COME INTO OUR FLEET OPERATIONS.

WE USED TO CALL IT OUR GARAGE.

THAT'S WHAT IT IS. IT'S THE MUNICIPAL GARAGE.

IT PROVIDES ALL THOSE SERVICES, BUT THEN IT ALSO ALLOWS US TO TAKE MORE OF A STRATEGIC HOLISTIC VIEW AT EVERYTHING THE CITY IS DOING FROM THE FLEET STANDPOINT.

AND PROBABLY WAY MORE THAN YOU WANT TO KNOW.

BUT WE HAVE HISTORICALLY HAD DEPARTMENTS THAT HAVE SAID, HEY, CAN I JUST SPEND SOME OF MY DEPARTMENT MONEY AND GET A DEPARTMENT OWNED VEHICLE? I DON'T WANT TO BE IN THE FLEET.

I DON'T WANT TO PAY CHARGES INTO THE FLEET SO THEY CAN MAINTAIN MY VEHICLE AND REPLACE MY VEHICLE.

I JUST WANT TO DO IT MYSELF.

WE DID QUITE A BIT OF IT, AND IT DIDN'T WORK OUT WELL FOR US.

DONNIE AND HIS TEAM HAVE WORKED VERY CLOSELY TO GET A HANDLE ON THAT AND STEP AWAY FROM THAT PRACTICE AND REALLY PUSH ALL DEPARTMENTS TO PUT EVERYTHING IN THE FLEET.

NOW, FIRE DOES HAVE ITS OWN GARAGE, THEY MAINTAIN THEIR OWN.

BUT FIRE APPARATUS IS VERY SPECIALIZED, RIGHT?

>> RIGHT.

>> THEN TRANSIT HAS THEIR OWN GARAGE, BECAUSE OUR TRANSIT BUSES ARE VERY SPECIALIZED AND THEY GET GRANT MONEY FOR IT.

AIRPORT DOES A LITTLE BIT, BUT PRETTY MUCH EVERYTHING ELSE.

POLICE DOES A LITTLE.

>> IT'S WITH FLEET PERSONNEL, THOUGH.

>> THIS IS REALLY TO MAKE US MORE EFFICIENT AS A WHOLE ORGANIZATION INSTEAD OF OVERSPENDING DOING ONE OFF ALL OVER AGAIN.

>> YEAH.

[05:40:01]

>> THEY'RE PROFESSIONALS AT ORDERING EQUIPMENT, TAKING CARE OF EQUIPMENT, WHERE THE DEPARTMENTS MAYBE NOT SO MUCH.

>> JUST GOING BACK ONE MORE TIME, IF YOU GET A FORD RANGER OR SOMETHING LIKE THAT, ARE WE COSTING OUT THE UNIT? VERY EASY, MATH.

LET'S SAY IT'S $20,000 TRUCK.

I KNOW TRUCKS AT $20,000, AND WE KNOW WE'RE GOING TO HAVE $6,000 IN OIL CHANGES AND MISCELLANEOUS, WE'RE AT 26, AND LET'S SAY WE HAVE $4,000 IN FUEL.

THAT PUTS $30,000 FOR THE YEAR.

DO WE HAVE A COST RECOVERY OR AN INTER-DEPARTMENT TRANSFER RATE SO WE DRIVE THAT TRUCK IN?

>> IT INCLUDES EVERYTHING.

>> EVERYTHING?

>> YEP.

>> WE KNOW EXACTLY WHAT THAT IS, AND SO THAT'S WHAT WE'RE GETTING BACK OUT OF THAT GROUP.

DOES THAT MAKE SENSE? WELL, WHOEVER IT'S ASSIGNED TO, IS THAT HOW WE GET THE COST?

>> THE RENTAL PAYMENT THAT'S GOING BACK TO FLEET?

>> YES, YOU CALL IT A RENTAL PAYMENT? THAT'S GOING BACK TO FLEET. THAT'S THE INTER DEPARTMENT TRANSFERS.

>> IT COVERS ALL THE MAINTENANCE, COVERS FUEL COSTS.

IT HAS ALL OF THAT BUILT INTO IT.

>> THEY PAY TWO RATES.

IT'S REALLY ONE RATE, BUT THERE'S TWO SIDES TO THE RATE.

ONE IS FOR OPERATIONS AND MAINTENANCE, AND FUEL.

BECAUSE FLEET HOLDS ALL THE FUEL, AND THEN THE DEPARTMENTS USE THE FUEL FROM THAT FLEET ORDERS.

THEN THE SECOND PIECE IS FOR EITHER THE LEASE PAYMENT, THE DEBT SERVICE PAYMENT FOR THE VEHICLE WHEN IT WAS PURCHASED OR THE CASH PURCHASE OR FUNDING TOWARDS THE NEXT CASH PURCHASE OF IT.

THERE'S REPLACEMENT, AND THERE'S OPERATIONS THAT MAKE UP THE RATE THAT EACH DEPARTMENT PAYS INTO FLEET.

>> HOW DO WE FEEL ON OUR FUEL COST CONTROL? DO WE FEEL STRONG ON OUR COST OF FUEL? I WOULD SAY, FRAUD.

DO WE FEEL GOOD THAT WE HAVE THAT UNDER CONTROL?

>> ON OUR FUEL?

AS I SAID, WE ANALYZE THAT EVERY YEAR, AND I THINK THE SYSTEM THAT WE USE NOW IS A SYSTEM THAT WE'VE BEEN USING IT FOREVER.

>> YES. I THINK SO.

>> WELL, AND WE'VE ADDED MORE SECURITY MEASURES OVER THE YEARS.

WE'VE ADDED ADDITIONAL CAMERAS THAT ARE MONITORED AND SOME OTHER MECHANISMS THAT ARE ENSURING THAT WE DON'T HAVE AN EMPLOYEE THAT'S PULLING UP THEIR PERSONAL VEHICLE, USING THE FUEL PUMPS ALONG WITH THEIR WORK VEHICLE, ANY OF THAT KIND OF STUFF.

YES, WE HAVE AND WE'VE HAD OUR INTERNAL AUDIT TEAM HELP WITH SOME OF THOSE MECHANISMS AS WELL.

BECAUSE, YES, THAT CAN CERTAINLY BE A PROBLEM.

IT WAS ALSO SOMETHING WE HAD TO CONSIDER AS WE WERE LOOKING AT EVEN THE CARD PROGRAMS BECAUSE THERE'S SOME POTENTIAL FOR SOME ABUSE WHEN YOU GIVE AN EMPLOYEE A CARD AND SAY, THIS IS FOR YOUR ONLY WORK RELATED PURCHASES.

WE HAVE A WAY WITH OUR OWN FUEL PUMPS THAT WE CAN MONITOR THOSE PRETTY CLOSELY JUST TO MAKE SURE.

>> IT'S PRETTY DIFFICULT TO DO SOMETHING OUTSIDE OF THE REALM OF THE CARD, THE MILEAGE ON THE VEHICLE, ALL THOSE THINGS THEY HAVE TO MATCH UP.

>> WE DO WATCH THE MILEAGE VERSUS?

>> ABSOLUTELY.

>> WE'RE NOT TAKING FUEL OUT OF THE TAPE.

I JUST KNOW THAT'S A VERY EASY SPOT.

>> IT'S PART OF WHAT THE ADMIN GROUP DOES AT FLEET AS WELL, IS KEEPING UP WITH THE MILEAGE ON THE VEHICLES, TRACKING THOSE PAYMENTS EACH MONTH OF HOW MUCH FUEL THEY'VE ACTUALLY CONSUMED VERSUS THE MILEAGE.

I'VE BEEN HERE FOR EIGHT YEARS, AND I THINK WE'VE ONLY FOUND ONE ANOMALY THAT CAME UP WHERE WE WERE QUESTIONING MILEAGE VERSUS FUEL.

>> IF THERE'S NO MORE QUESTIONS, MAYOR, IF THERE'S ANY WAY, I ACCIDENTALLY SKIPPED A DEPARTMENT, AND I KNOW BRIAN IS VERY UPSET THAT I SKIPPED LEGAL.

I WAS WONDERING, THIS SHOULD ONLY TAKE A COUPLE OF MINUTES, IF WE COULD TURN TO PAGE 199.

BRIAN THOUGHT HE WAS GOING TO GET OUT OF BUDGET REVIEW THIS YEAR.

>> HE WAS CLOSE.

>> HE WAS VERY CLOSE.

>> ARE YOU GOOD WITH BRINGING BACK MY AMARILLO CIVIC CENTER LIBRARY FOR TOMORROW?

>> YES, THAT WOULD BE GREAT. WE'LL START TOMORROW WITH IT.

>> WE START A LITTLE EARLIER, COUNSEL, SO WE'LL GET THROUGH THOSE, AND THEN WE'LL ALSO MAKE IT THROUGH THE FULL SCHEDULE TOMORROW. WE WOULD ANTICIPATE.

>> WE'LL BE ON TIME. WHAT WAS THAT PAGE AGAIN?

>> GO TO PAGE 199.

I WILL SAY ON LEGAL WE REALLY HAVE A VERY FLAT BUDGET IN HERE.

THE ONE ITEM THAT I JUST WANT TO MAKE SURE COUNSEL IS AWARE IS WE DO PAY OUTSIDE LEGAL SERVICES THROUGH OUR LEGAL DEPARTMENT.

THERE ARE SPECIALIZED MATTERS.

A GOOD ONE THAT BRIAN AND I WERE TALKING ABOUT RECENTLY WAS, WE PAID OUTSIDE LEGAL COUNSEL TO HELP US WITH OUR MUD DOCUMENT FORMATION.

THAT IS A VERY SPECIALIZED AREA, AND WE SOUGHT THE SERVICES OF LEGAL ADVISORS THAT SPECIALIZE IN THE FORMATIONS OR I GUESS, WORKING WITH ENTITIES TO ALLOW THE FORMATION OF MUDS.

THAT HAS BEEN SOMETHING THAT WE DO.

[05:45:02]

WE ALSO JUST HAVE SPECIALIZED CLAIMS THAT COME IN AT TIMES, AND WE DO HAVE TO PAY SOME OUTSIDE LEGAL COSTS AT TIMES.

IF YOU GO TO PAGE 200, IN THE MIDDLE OF THE PAGE, IF YOU LOOK AT THE 62,000 ACCOUNT PROFESSIONAL ACCOUNT, THAT'S WHERE WE'RE PAYING THOSE OUTSIDE LEGAL SERVICES.

YOU'LL SEE THE LAST COUPLE OF YEARS IT'S BEEN A LITTLE BIT HIGHER BUT WE ALSO HAVE BEEN VERY FORTUNATE TO HIRE OR TO FILL SOME OF OUR ATTORNEY'S POSITIONS HERE RECENTLY.

I BELIEVE THE LEGAL DEPARTMENT IS ALMOST FULL, MAYBE ONE VACANCY.

WE'RE HOPING THAT YOU'RE GOING TO CONTINUE TO SEE THAT OUTSIDE LEGAL COSTS GO DOWN UNLESS IT'S A VERY SPECIALIZED TYPE CASE.

THE CITY ATTORNEY BUDGET IS REMAINING VERY FLAT FOR THE CURRENT YEAR.

>> QUICKLY ON THAT ONE.

THE 500 AND THE 500 OVER THERE ON PROFESSIONAL?

>> I KNOW YOU DON'T HAVE ACTUALS IN 24, BUT WE WERE EXPECTING A PRETTY GOOD DECREASE IN THAT.

WE WENT FROM 898 DOWN TO DID WE SPEND A COUPLE HUNDRED THOUSAND DOLLAR 250? DO WE DO WE KNOW? DO WE FEEL LIKE THAT 500 IS MORE THAN ENOUGH?

>> I'LL PUT THAT ON MY LIST TO CIRCLE BACK WITH YOU GUYS ON.

>> I KNOW WE PLUGGED, HYDE KELLY IN THERE, BUT REALLY, WHAT WE'RE SAYING RIGHT HERE IN THIS BUDGET IS, WE HAVE $500,000 FOR OUTSIDE SERVICES, NOT A NEED TO HAVE A SET ASIDE CONTRACTUAL AMOUNT FOR ANY ONE ENTITY.

>> CORRECT. YES. WE USE A LOT OF DIFFERENT ENTITIES FROM CURTIS BIGBY TO JULIA GANAWAY, TO MICK MCCAMEY.

IT DEPENDS ON THE NEED.

AND SO THIS IS NOT EARMARKED FOR ANY PARTICULAR FIRM IS AVAILABLE TO OUR LEGAL TEAM AND CITY MANAGEMENT TO UTILIZE SPECIAL TASK ORIENTED SERVICES.

>> REAL GOOD. I WOULD JUST ADD TO THAT, THAT TYPICALLY, IN THE YEARS THAT I'VE BEEN WITH THE CITY ATTORNEY'S OFFICE, CLAIMS COME IN, LITIGATION HAPPENS.

IT'S NOT SOMETHING YOU CAN PREDICT.

IF I COULD PREDICT IT, I'D DO SOMETHING ELSE.

THAT'S WHY THAT NUMBER IS INDEFINITE.

YOU NEVER REALLY KNOW WHAT IT'S GOING TO BE.

THAT GIVES YOU SOME CONTEXT TO IT.

GEORGE, HYDE WAS IN THIS?

>> WELL, NO. DID YOU ALLOCATE HYDE KELLY OVER TO THE MAYOR AND COUNCIL'S BUDGET?

>> NO. IT CAME OUT OF THIS DEPARTMENT BUDGET HERE.

>> IT DID?

>> WHAT'S YOUR TOTAL? DO YOU HAVE IT? IF NOT, NO BIG DEAL.

>> I DON'T HAVE IT HANDY RIGHT NOW, BUT I CAN BRING IT BACK TOMORROW.

>> NO, I THINK THAT'S REAL GOOD, AND SO YOU'VE GOT THAT THERE, AS FAR AS ANY TYPE OF CLAIMS, WE DON'T PAY THOSE OUT OF THIS BUDGET? SETTLEMENT OR?

>> WE HAVE DONE A COUPLE OF SETTLEMENTS OUT OF THIS BUDGET, YES. HISTORICALLY.

>> BUT YOU HAVE ANOTHER FUND FOR THAT?

>> IT DEPENDS ON WHAT KIND OF CLAIM WE'RE TALKING ABOUT.

IF IT'S PROPERTY DAMAGE OR OR SOMETHING THAT IS COVERED THROUGH OUR RISK FUND, WE NORMALLY SETTLE THOSE CLAIMS THROUGH THAT AREA.

IF IT'S POTENTIALLY, I'M JUST THINKING OUT LOUD, MAYBE AN EMPLOYMENT TYPE CLAIM THAT WE HAVE TO SETTLE ON, IT COULD POTENTIALLY COME OUT OF HERE OR OUT OF SOME DEPARTMENTAL BUDGET, YES.

>> REAL GOOD.

>> WITH THAT, I THINK WE'RE AT A GOOD STOPPING POINT.

>> CAN I ASK ONE QUESTION JUST ABOUT THE BUDGET?

>> YES, I'M SORRY.

>> I'M MAKING DON WAIT. JUST HOLD ON DON.

YOUR WINE WILL BE THERE WHEN YOU GET THERE.

DOES WORKDAY PUT ALL THESE PARENTHESES IN HERE OR DID WE DO THAT? IT'S DRIVING ME NUTS. I'VE LOOKED AT BUDGETS FOR 30 YEARS.