Aug 15, 2024 City Council Budget Work Session

SO, WE WON'T BE HERE TILL NINE.

[00:00:02]

I WAS ASKING.

BUT YES, I NOW DECLARE THAT THE PLANO CITY COUNCIL IS CONVENED IN OPEN SESSION.

[I. Call to Order]

COUNCIL MEMBER WILLIAMS. THERE HE IS.

WE HAVE A QUORUM.

AT THIS TIME, I WILL ASK IF THERE'S ANYONE THAT WOULD LIKE TO ADDRESS THE COUNCIL REGARDING THE BUDGET AND CIP.

DO WE NEED TO OPEN THE? ALL RIGHT. SEEING THERE'S NONE, I'LL CLOSE THE PUBLIC COMMENTS.

I'LL ASK CITY MANAGER ISRAELSON TO PRESENT THE OVERVIEW.

[III. Budget Work Session Overview]

I UNDERSTAND TIME IS PRECIOUS AND APPRECIATE YOUR WORK ON THE ANNUAL BUDGET FOR 22-425.

TONIGHT WE HAVE SOME PRESENTATIONS FROM A FEW OF YOUR COMMISSIONS TALKING ABOUT THE HERITAGE COMMISSION'S TALKING ABOUT THE BUFFINGTON COMMUNITY SERVICE GRANTS AND THEN THE CULTURAL ARTS COMMISSION.

AFTER THAT, KAREN AND I WILL PRESENT SOME OVERVIEWS AND SOME REPORTS BASED ON INFORMATION THAT'S BEEN REQUESTED BY THE CITY COUNCIL.

AS A GENERAL REMINDER, WE PRESENTED THE COUNCIL THE BUDGET EARLIER IN JULY AND HAD THE DISCUSSION ABOUT THE FINANCIAL CHALLENGES THE CITY IS FACING. WE HAVE BEEN DOING SOME HOMEWORK BASED UPON THE FEEDBACK THAT WE HAD EARLIER THIS WEEK ON SOME COMPENSATION MATTERS.

I'LL DISCUSS THAT AT THE END AND GIVE COUNCIL SOME OPTIONS AND ASK FOR SOME DIRECTION FROM YOU ON THAT.

BUT BEYOND THAT, WE'RE READY TO BEGIN AND GO AHEAD AND GET STARTED WITH THE COMMISSION REPORTS.

[V. Grant Funding Requests]

EXCUSE ME. DO YOU WANT TO USE THE CLICKER OR DO YOU.

OKAY. YEAH. OKAY. GOOD EVENING.

COUNCIL, I'M NANCY BALDWIN.

I'M CHAIR OF THE HERITAGE COMMISSION.

IT'S A PLEASURE TO BE HERE WITH YOU THIS EVENING.

AND THE FIRST THING I'D LIKE TO DO IS TO INTRODUCE YOU THROUGH THE SLIDE TO THE OTHER MEMBERS OF THE OF THE COMMISSION.

IF YOU ARE LOOKING LEFT TO RIGHT, THERE IS KAREN BOWEN, DEBBIE BARRIOS.

I'M SORRY, JANE WATSON, DEBBIE BARRIOS, KAREN BOWEN, MYSELF, COMMISSIONER NAYYER AL-RASOOL, COMMISSIONER HOLLAND AND COMMISSIONER KRATOCHVIL.

HOPEFULLY I GOT THAT RIGHT.

WE ARE EXCITED AND PROUD TO MENTION THAT WE'VE HAD SEVERAL ACCOMPLISHMENTS AS A COMMISSION.

THIS YEAR WE HAVE UPDATED THE 2024 PRESERVATION PLAN.

THIS INCLUDED A VERY COMPREHENSIVE RESOURCE SURVEY OF NEIGHBORHOODS, BOTH COMMERCIAL AND RESIDENTIAL, THROUGHOUT THE CITY, AND THE FOX HAGGARD HOUSE, WHICH YOU KNOW AFFECTIONATELY AS THE COLLINWOOD HOUSE, RECEIVED A 2023 HONOR AWARD FROM PRESERVATION TEXAS.

ONE OF OUR MAJOR TASKS IS TO REVIEW CERTIFICATES OF APPROPRIATENESS.

THESE ARE APPLICATIONS FOR EXTERIOR ALTERATIONS TO HERITAGE PROPERTIES, WHETHER THEY ARE RESIDENTIAL OR COMMERCIAL, AND THIS ENSURES THAT THESE PROPERTIES MEET THE CRITERIA OF A HERITAGE PROPERTY.

YOUR SLIDE TELLS YOU THAT IN 2023, THERE WERE 46 CAS ISSUED.

80% OF THOSE WERE APPROVED AT THE STAFF LEVEL AND 78% OF THOSE WERE APPROVED IN A DAY OR LESS.

THROUGHOUT THE YEAR.

OUR COMMISSION CONTINUES TO PARTICIPATE IN VARIOUS DIFFERENT EDUCATIONAL OPPORTUNITIES, BECAUSE WE BELIEVE IN THE IMPORTANCE OF MAINTAINING OUR PROFESSIONAL LEVEL UNDERSTANDING OF HERITAGE.

MANY OF THESE ARE NAPC NATIONAL ALLIANCE OF PRESERVATION COMMISSION.

SOME OF THESE ARE VIRTUAL, SOME OF THEM ARE IN PERSON.

AND IN FACT, COMMISSIONER ALE-RASOOL AND STAFF ATTENDED THE NAPC FORUM IN WEST PALM BEACH, FLORIDA A COUPLE OF WEEKS AGO.

BUT THERE ARE SEVERAL OTHERS.

THEY MIGHT BE FROM TEXAS HERITAGE GROUPS, FOR MYSELF.

I RECEIVED A CERTIFICATION AS A HERITAGE SPECIALIST FROM PRESERVATION DALLAS.

SO THERE ARE VARIOUS DIFFERENT THINGS THAT WE DO THROUGHOUT THE YEAR TO CONTINUE TO KEEP OUR PROFESSIONALISM AT A TOP LEVEL.

[00:05:11]

OUR GOAL, OF COURSE, TO IS TO PRESERVE AND PROMOTE THE CITY'S HERITAGE BY SUSTAINING AND FOSTERING AND STIMULATING LOCAL BUSINESS AND STRENGTHENING THE CULTURE AND PROSPERITY OF THE CITY.

AND THE CRITERIA INVOLVES THREE.

THERE ARE THREE CRITERIA TO PROMOTE HERITAGE TOURISM AND EDUCATION.

THAT'S 50% HERITAGE PRESERVATION, MERIT AND ADMINISTRATIVE AND FISCAL RESPONSIBILITY, AND ALL APPLICANTS NEED TO MEET THESE CRITERIA.

THIS SLIDE ILLUSTRATES FOR YOU THE TIMELINE.

THE GRANTS OPEN ONLINE.

APPLICATIONS ARE OPEN ONLINE APRIL 15TH.

A SUBSEQUENT FOLLOWING THAT IS, STAFF CONDUCTS A WORKSHOP FOR ALL THE APPLICANTS TO REVIEW, AND THE APPLICATIONS ARE DUE IN ZOOM GRANTS.

MAY 13TH.

AND THEN FOR THE NEXT 4 OR 5 WEEKS, THE COMMISSION WILL REVIEW THOSE APPLICATIONS AND SCORE THEM.

AND THEN THE SCORES IN A REPORT ARE INCLUDED IN OUR PACKET, WHICH WE REVIEW FOR OUR MEETING JUNE 25TH.

AND AT THAT MEETING, THAT'S WHERE THE APPLICANTS COME AND MAKE THEIR PRESENTATIONS TO TELL US ABOUT EXACTLY WHY THEY NEED THESE FUNDS. AND THEN THIS IS PRESENTED TO CITY COUNCIL TODAY AND THEN THAT MOVES FORWARD FROM THERE.

YOU WILL APPROVE THE BUDGETS, CONTRACTS AND THE GRANT CYCLE BEGINS OCTOBER 1ST.

IN THE PAST, WE'VE HAD MANY SUCCESSFUL OR OUR APPLICANTS HAVE HAD RECEIVED FUNDS AND VERY SUCCESSFULLY APPLIED THEM.

A COUPLE OF THEM CITY OWNED LANDMARKS HERITAGE FARMSTEAD, THE PLANO CONSERVANCY, WITH WHICH I KNOW YOU'RE BOTH FAMILIAR WITH, AND THEY HAVE RECEIVED OPERATIONS AND MAINTENANCE FUNDS.

AND THAT HAS CHANGED OVER THE YEARS.

IN THE 2009 2010 PERIOD, THERE WAS A CAP ON THESE THAT WAS SET THAT WOULD MOVE FORWARD AND NOT BE CHANGED UP UNTIL THIS YEAR, WHEN THERE WAS A CHANGE.

HERITAGE FARMSTEAD HAS RECEIVED $330,000.

THE PLANO CONSERVANCY.

$145,000 AND THAT IS REMAINS RETAINED.

GOING FORWARD, THESE WILL BE CLASSIFIED AS ADMINISTRATIVE COSTS AND ELIGIBLE EXPENSES OR SALARIES, UTILITIES, PROPERTY INSURANCE AND OTHER INDIRECT PROGRAM COSTS.

THESE ARE CAPPED AT 20% OF THE TOTAL AMOUNT OF THE FUNDED HERITAGE PROJECT, AND SO APPLICANTS GOING FORWARD CAN REQUEST THIS FUNDING.

THESE ARE SOME OF THE PROJECTS THAT HAVE BEEN FUNDED WITHIN THE 2023-2024 YEAR.

HERITAGE FARMSTEAD HOSTED SUMMER CAMPS, SPECIAL EVENTS SUCH AS LIGHTS ON THE FARM.

THEY COMPLETED THE AMY WILSON HOUSE FENCING PROJECT.

THE PLANO CONSERVANCY COMPLETED A CEMETERY.

CEMETERY RESTORATION PROJECT.

SEVERAL EXHIBITS, EVENTS, AND THEY PUBLISHED A BOOK.

PLANO PAST AND PRESENT.

TEXAS. POOLE COMPLETED THEIR UPDATING OF THEIR FURNITURE AND THEIR UMBRELLA PROJECT, AND A MARKETING PROGRAM, AND THE MASONIC LODGE CREATED THREE PLAQUES FOR INSTALLATION IN THE PLANO MASONIC SQUARE.

MOVING FORWARD, THAT BRINGS US TO THIS YEAR.

AND THIS SLIDE ILLUSTRATES FOR YOU THE REQUESTED FUNDING DOLLARS FROM EACH OF THE ORGANIZATIONS.

AND GRANDFATHERED IN ARE THE HERITAGE FARMSTEAD O&M AND THE PLANO CONSERVANCY O&M.

SO THE REQUESTED FUNDS TOTALED $1,004,276.

HERE YOU CAN SEE AN ILLUSTRATION OF FUNDS THAT WERE GRANTED VERSUS FUNDS THAT WERE REQUESTED.

[00:10:01]

BUT THIS GIVES YOU AN ILLUSTRATION OF HOW WE HAVE, IN MOST CASES, FUNDED, AGREED, RECOMMENDED FUNDING FOR ALL OF THEIR REQUESTS.

THE NEXT FIVE SLIDES THAT I'LL GO THROUGH ILLUSTRATE FOR YOU PROJECTS THAT HAVE BEEN REQUESTED BY THE APPLICANTS.

SO WITH HERITAGE FARMSTEAD MUSEUM, THAT INCLUDES MARKETING VARIOUS SPECIAL EVENTS SUCH AS THE LIVESTOCK SHOW, THE SPRING EGGSTRAVAGANZA LIGHTS ON THE FARM, MASTER PLANNING SITE IMPROVEMENTS, AND THAT REQUESTED FUNDING IS 294, AND WITH THE $330,000 IN O&M, IT COMES TO $624,000.

AND I WANTED TO BRING TO YOUR ATTENTION SOMETHING VERY EXCITING THAT WE JUST LEARNED ABOUT A COUPLE OF DAYS AGO.

WE ARE VERY EXCITED TO LET YOU KNOW THAT THE FARMSTEAD MUSEUM HAS RECEIVED THEIR REACCREDITATION WITH THE AMERICAN ALLIANCE OF MUSEUMS. THIS IS A VERY HIGH HONOR FOR MUSEUM, AND IT REFLECTS THEIR PROFESSIONAL STANDARDS, OPERATIONS, PUBLIC SERVICE, COLLECTIONS, CARE AND PLANNING, AND IT'S IMPORTANT TO NOTE THAT OF THE 33,000 MUSEUMS IN THE NATION, ONLY ABOUT 1% RECEIVE THIS ACCREDITATION, AND THE FARMSTEAD IS ONE OF 50 IN TEXAS AND ONE OF SEVEN IN THE DFW AREA.

THE PLANO CONSERVANCY HAS REQUESTED FUNDING FOR MARKETING, COMMUNICATIONS, OUTREACH, IMPROVEMENTS, VARIETY OF MUSEUM UPDATES, AND THE TOTAL AMOUNT OF FUNDS THAT THEY HAVE REQUESTED IS $248,000 APPROXIMATELY, AND WE RECOMMEND THAT AMOUNT.

THE TEXAS POOL FOUNDATION.

THIS OFFERS YOU A SUMMARY OF THE PROJECTS.

WE RECOMMEND COMPLETE FUNDING AGAIN FOR THEIR PROJECTS.

DECK PROJECT PROGRAMS AND EVENTS.

MARKETING ADMINISTRATIVE COSTS.

SO WE RECOMMEND THAT TOTAL AMOUNT.

THE NORTH TEXAS MASONIC HISTORICAL MUSEUM AND LIBRARY.

THE COMMISSION IS RECOMMENDING FUNDS FOR THE MOORE HOUSE REFRESHMENT AREA RENOVATION AND THE MOOREHOUSE SOUTH WALL REPAIR.

WE ARE NOT RECOMMENDING THE FUNDS FOR THE INDEPENDENT AUDIT, AND THERE ARE A COUPLE OF DIFFERENT REASONS FOR THIS.

THE REQUEST DID NOT MEET THE PROJECT DEFINITION ACCORDING TO THE GRANT PROGRAM AND GUIDELINES A HERITAGE COMMISSION PROJECT IS DEFINED AS EDUCATIONAL PROGRAMS, CONSTRUCTION PROJECTS THAT ARE INTENDED TO PROMOTE TOURISM AND HOSPITALITY WITHIN THE CITY.

AND YES, ADVERTISING AND MARKETING CAN FALL UNDER THAT.

BUT THIS AUDIT DOES NOT MEET THE HERITAGE PROJECT DEFINITION.

IT DOESN'T PROMOTE TOURISM OR THE HOSPITALITY INDUSTRY.

AND ALSO, IT'S IMPORTANT TO NOTE THAT AN AUDIT IS A STANDARD GRANT REQUIREMENT FOR PROJECTS WITH FUNDING REQUESTS GREATER THAN $75,000, AND THE ORGANIZATION NEEDS TO DEMONSTRATE THE FINANCIAL CAPACITY TO ADMINISTER THESE LARGER PROJECTS BY PROVIDING AN AUDIT.

SO WE HAVE REDUCED THEIR REQUEST.

WHAT WE RECOMMEND AND BECAUSE OF THE 20% CAP FOR ADMINISTRATIVE THAT HAS BEEN REDUCED ALSO, AND WE ARE RECOMMENDING $8,400.

PLANO AFRICAN AMERICAN MUSEUM.

THEY HAVE REQUESTED FUNDS FOR RAMP CONSTRUCTION AND EDUCATIONAL PROGRAMS. A MAINTENANCE PROJECT, ADMINISTRATIVE COSTS, AND WE RECOMMEND FUNDING FOR THOSE AT $37,438.

[00:15:10]

THERE IS THE SLIGHT DIFFERENCE.

AND INSTEAD OF THE $1,004,276, WE ARE RECOMMENDING 2276. NOW, BECAUSE THE AVAILABLE GRANT FUNDS ARE 1.5 AND WE ARE RECOMMENDING FROM THE FIVE APPLICANTS LESS THAN THAT, THAT LEAVES US WITH A BALANCE AND WITH THE INPUT OF STAFF.

WE ARE SUGGESTING THAT THE REMAINING BALANCE BE FOR CITY INITIATED HERITAGE PRESERVATION PROJECTS.

THE COMMISSION SUPPORTS THIS REQUEST AND THE EXCESS FUND CAN BE USED FOR THESE.

THE STAFF IS PUTTING TOGETHER A PROCESS FOR BRINGING THESE SUGGESTED PROJECTS BEFORE THE COMMISSION, AND THEN FROM THERE THEY WOULD COME TO CITY COUNCIL.

AND THAT COVERS IT.

WHAT QUESTIONS CAN I ANSWER FOR YOU? THANK YOU. VERY NICE.

ANY QUESTIONS IN THAT REGARD? THANK YOU VERY MUCH.

ALL RIGHT. THANK YOU. APPRECIATE IT.

NEXT ITEM IS A PRESENTATION OF BUFFINGTON COMMUNITY SERVICE GRANTS.

MR. SINGH.

GOOD EVENING, CITY COUNCIL.

MAYOR MUNS AND CITY EXECUTIVES.

MY NAME IS JOHNNY SINGH.

I AM THE CHAIRPERSON OF THE COMMUNITY RELATIONS COMMISSION.

IN ADDITION TO THE PUBLIC SPEAKING IMPEDIMENT I DEAL WITH, I DO HAVE A BIT OF A SINUS INFECTION THIS YEAR, SO PLEASE EXCUSE ME AND LET ME KNOW IF I NEED TO SPEAK UP FURTHER.

SO AS A COMMISSION.

AS A COMMISSION, OUR OBJECTIVE IS TO BE A HEARING BOARD, TO MAKE RECOMMENDATIONS FOR SIGNIFICANT ISSUES IMPACTING THE QUALITY OF LIFE WITHIN OUR COMMUNITY, AS DIRECTED BY CITY COUNCIL. A RECURRENT AND KEY RESPONSIBILITY IS OVERSEEING THE GRANT APPLICATION PROCESS FOR SUPPORTIVE FUNDING FOR NONPROFIT ORGANIZATIONS THAT PROVIDE COMMUNITY SERVICES WITHIN THE CITY.

CITY COUNCIL ONCE ENTRUSTED OUR COMMISSION OF NINE MEMBERS WITH THE RESPONSIBILITY OF MAKING RECOMMENDATIONS OF FUNDING, WITH CONSIDERATION OF FUNDING ELIGIBILITY REQUIREMENTS PROMULGATED BY THE CITY OF PLANO AND THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.

OUR COMMISSIONERS MEET TO REVIEW AND WRITE THE APPLICATION QUESTIONS, ESTABLISH A TIMELINE AND EVALUATION GUIDELINES, AND TO SUPPORT OUR FUNDING RECOMMENDATIONS TO CITY COUNCIL.

THIS PRESENTATION IS GEARED TOWARDS WALKING YOU THROUGH THIS ANNUAL PROCESS OVERSEEN BY OUR COMMISSION, WITH THE FINAL OUTPUT BEING THE RECOMMENDATION FUNDING THAT YOU SEE IN FRONT OF YOU, ATTACHED AS A SEPARATE MEMORANDUM ON THE FRONT END.

I ALSO WANT TO TAKE THE TIME TO THANK MY FELLOW COMMISSIONERS ON CRC, IN CONTRAST TO OUR COUNTERPARTS IN CULTURAL ARTS COMMISSION.

THE CAUSES AND ORGANIZATIONS WE ARE FUNDING INHERENTLY DO NOT HAVE A CELEBRATORY OR TANGIBLE PRODUCT TO PARTICIPATE IN AT THE END OF EACH YEAR, SUCH AS THE BALLOON FESTIVAL OR A MUSICAL CONCERT.

THE SERVICE MISSIONS IN THE COMMUNITY WE ARE TRYING TO SUPPORT TEND TO BE MORE INVISIBLE AND NEEDS DRIVEN, SO THE EFFORTS AND OUTCOME OF COMPANY ACCOMPLISHED BY OUR CRC COMMISSIONERS ALSO TEND TO BE LESS VISIBLE.

BUT WHAT IS QUANTIFIABLE IS THE NUMEROUS HOURS COMMITTED BY OUR COMMISSIONERS TO INDIVIDUALLY READ AND CONSIDER THE 32 GRANT APPLICATIONS RECEIVED THIS YEAR, AND TO HOLD THE PUBLIC HEARINGS FOR EACH OF THOSE 30 OR SO ORGANIZATIONS, SO THAT WE MAY HEAR THE NEEDS WITHIN OUR COMMUNITY AND LEARN MORE ABOUT THOSE ORGANIZATIONS.

AND WHAT I THINK IS TANGIBLE, ESPECIALLY FOR THE NONPROFIT ORGANIZATIONS, IS THE LEVEL OF ENGAGEMENT, PROFESSIONALISM AND THOUGHTFULNESS EXHIBITED BY OUR COMMISSIONERS IN REFLECTION OF THE CITY OF EXCELLENCE.

SO LASTLY, WE CAN'T DO ANY OF THIS WITHOUT THE HIGH TOUCH SUPPORT BY CURTIS AND JEANNETTE'S TEAM IN NEIGHBORHOOD SERVICES.

SO FOR THAT, I WANT TO THANK OUR FELLOW COMMISSIONERS AND OUR CITY STAFF PARTNERS.

WE UTILIZE ONE CONSOLIDATED GRANT PROCESS TO EVALUATE ALL GRANT APPLICATIONS.

[00:20:06]

THE FORM 990.

TAX RETURNS.

THE 35 QUESTIONS.

THE 35 QUESTION APPLICATION ISN'T JUST THE EVALUATION MECHANISM, BUT IT'S ALSO A LISTENING EXERCISE FOR OUR COMMISSIONERS TO DISCERN WHAT ARE THE NEEDS OUT THERE IN THE COMMUNITY, BOTH ADDRESSED AND UNADDRESSED, WHAT IS THE OUTREACH FUNNEL AND WHO IS PARTNERING WITH THESE ORGANIZATIONS? WHAT SERVICES ARE BEING DUPLICATED AND WHICH ARE THE UNSERVED NICHES? DUE DILIGENCE ITEMS, SUCH AS THE FINANCIAL STATEMENTS TELL US WHAT OTHER ADJACENT FUNDING SOURCES, BOTH PUBLIC AND PRIVATE, ARE FUNDING THE VARIOUS NEEDS WITHIN OUR COMMUNITY.

AND WHAT ARE THE UNIT ECONOMICS FOR THE SERVICE MIX BEING PROVIDED BY THE ORGANIZATIONS, AND WHO ARE THE COST EFFICIENT.

LEADERS AMONGST THE APPLICANTS SAID TO THE CONSULTANT TO THE CITY OF PLANO'S CONSOLIDATED GRANT PROCESS.

WHERE MIGHT THERE BE A FUNDING GAP THAT WE MAY BE FILL AS WITH CITY FUNDS? IT ALSO HELPS COMMISSIONERS ANSWER WHETHER THE FINANCIAL OPERATION OF AN ORGANIZATION IS SUSTAINABLE.

THE LAST THING WE WOULD WANT TO DO IS MAKE A RECOMMENDATION OF FUNDING TO CITY COUNCIL FOR ORGANIZATION THAT BECOMES INSOLVENT FOR THE FOR THE GRANT YEAR.

SO WE DON'T INTEND FOR THE REQUIREMENTS IN THIS PROCESS TO BE ONEROUS.

BUT GIVEN THE COMPETITIVE NATURE AND THE SCARCITY OF GRANT FUNDS, WE THINK EXHIBITING THESE STANDARDS OF DILIGENCE COMMUNICATE TO THE ORGANIZATIONS THAT THEY ARE BEING CONSISTENTLY AND FAIRLY EVALUATED ON.

AND IT ALSO SIGNALS TO OUR STAKEHOLDERS IN THE COMMUNITY THAT WE ARE CAREFUL STEWARDS OF THEIR TAXPAYER DOLLARS.

IN ADDITION TO THE APPLICANT APPLICATION SUBMITTAL, WE SCHEDULE A PUBLIC HEARING FOR EACH ORGANIZATION.

THIS SERVES AS ANOTHER USEFUL TOUCHPOINT IN RECEIVING INFORMATION ABOUT COMMUNITY NEEDS AND HOW ORGANIZATIONS ARE GOING ABOUT ADDRESSING THOSE NEEDS.

ORGANIZATIONS ARE EVALUATED ON OUR EIGHT POINT EVALUATION GUIDELINES, WHICH TAKES INTO CONSIDERATION THE LEVEL OF COMMUNITY NEED FOR THE PROPOSED SERVICES.

THE ORGANIZATION'S OPERATING COMPETENCIES AND FINANCIAL POSITION, AND THE REASONABILITY OF THEIR REQUESTED DOLLARS.

SO, BASED ON THE SCORING FROM THE EVALUATION GUIDELINES, THE COMMISSION OF OUR COMMISSION OF OUR NINE COMMISSIONERS THEN MAKE RECOMMENDATIONS FOR FUNDING.

WE HAVE THREE SOURCES OF FUNDING.

THAT'S A PART OF THIS CONSOLIDATED GRANT PROCESS.

IN ADDITION TO THE BUFFINGTON COMMUNITY SERVICES GRANT, WHICH IS FUNDED BY THE GENERAL FUNDS OF THE CITY OF PLANO.

WE ALSO HAVE COMMUNITY DEVELOPMENT BLOCK GRANT REFERENCED ABOVE IN THIS SLIDE IS CDBG AND HOME INVESTMENT FUND, WHICH ARE BOTH ENTITLEMENT FUNDS RECEIVED FEDERALLY FROM HUD COMPARATIVELY TO THE BCSG OR BUFFINGTON COMMUNITY SERVICES GRANT.

THE FEDERAL FUNDS COME WITH MORE USAGE RESTRICTIONS AND TEND TO BE NARROWER AND ADMINISTRATIVELY OWNERS, BUT AT ITS CORE, THE REQUIREMENT OF ALL THREE BUCKETS OF FUNDINGS.

REQUIRES THAT THEY SERVE THE CITY PLANO RESIDENTS, AND THAT THE PROGRAM.

SERVICE ADDRESSES A CORE QUALITY OF LIFE NEED, WHETHER IT BE HOUSING.

FOOD SERVICES, HEALTHCARE SUPPORT, CLOTHING, ET CETERA.

SO THE NEXT SLIDE IS.

THE BUFFINGTON COMMUNITY SERVICES GRANT FOR A QUICK HISTORY.

WE ARE.

WE'RE CURRENTLY FUNDED AT $2 PER CAPITA, WHICH IS FOR THE GRANT.

2024 GRANT YEAR COMES OUT TO $593,000.

AND I THINK HISTORICALLY BCSG HAS BEEN FUNDED AT THAT CAPACITY.

AND THEN IN ADDITION TO.

THE FUNDING ELIGIBILITY FOR BCSG, THIS IS PUBLISHED ON OUR CITY PLANNER WEBSITE.

IT'S MUCH MORE EXTENSIVE TO THAT, BUT I WOULD SAY THE TAKEAWAY IS THAT BCSG FUNDING GOES TOWARDS THE CORE NEEDS, THE CORE NEEDS OF THE CITY AND PRIMARILY OF THE RECOMMENDATION OF FUNDING WE'RE MAKING TODAY.

THE CORE NEEDS REALLY STEMS TOWARDS HOUSING TO ADDRESSING HOUSING INSECURITY.

THIS IS A TIMELINE OF OUR OF OUR GRANT PROCESS.

STARTING IN NOVEMBER OF EACH YEAR, OUR COMMISSION GETS TOGETHER AND WE EVALUATE THE APPLICATION OF THE 35 QUESTIONS.

WE REVIEW THEM. WE MAY ADD OR REVIEW THEM.

[00:25:02]

AND WE ALSO DECIDE ON WHAT ARE THE TIMELINES FOR THIS PROCESS.

AND THEN FOR JANUARY WE ALSO HOLD A TRAINING SESSION WITH THE ORGANIZATION APPLICANTS.

THIS IS NOT REQUIRED.

BUT WHEREAS IN PRIOR YEARS IT WAS.

BUT I WILL SAY BASED ON BASED ON REPORTING FORM, CITY STAFF ATTENDANCE FOR THIS NON-MANDATORY MEETING HAS BEEN 100%. AND I WAS A PARTICIPANT OF THE TRAINING SESSIONS BACK IN JANUARY AND THE TWO DAY TRAINING SESSIONS THIS YEAR. AND DURING THAT PROCESS WE WERE ABLE TO ALSO GATHER, YOU KNOW, INFORMATION, FEEDBACK FROM THE ORGANIZATIONS.

AND MARCH 1ST IS THE APPLICATION DEADLINE FOR THE ORGANIZATIONS TO SUBMIT THEIR 35 QUESTION APPLICATION.

AND FROM AND THEN IN APRIL WE SCHEDULED PUBLIC HEARINGS FOR EACH OF THOSE ORGANIZATIONS.

SO EACH OF OUR COMMISSIONERS ARE THEY READ THE APPLICATIONS, EACH ALL 35 SUBMITTED APPLICATIONS.

AND ON AVERAGE, EACH OF THESE APPLICATIONS PROBABLY TAKE ABOUT TWO HOURS OR SO.

SO IT'S QUITE AN INDIVIDUAL TIME COMMITMENT.

IN ADDITION TO THE SCHEDULED PUBLIC HEARINGS IN APRIL, AND AFTER ALL THE PUBLIC HEARINGS HAVE BEEN COMPLETED, OUR COMMISSIONERS THEN GET TO GET TOGETHER TO DELIBERATE ON THE RECOMMENDATIONS OF FUNDING.

FOR THE 2024 GRANT YEAR, WE RECEIVED A TOTAL OF 32 APPLICATIONS WITH A REQUESTED TOTAL FUNDING OF 3.7 MILLION.

OF THOSE 32 APPLICATIONS, 28 MEET THE REQUIREMENTS OF BCSG FUNDING ELIGIBILITY.

AND REALLY THE DELTA, THE DELTA IS REALLY FOR A LOT OF THOSE FOR THOSE APPLICATIONS.

THOSE ARE REQUESTS FOR HOUSING AND HOME IMPROVEMENTS, SITE IMPROVEMENTS.

SO THEY'RE NOT NECESSARILY PUBLIC SERVICE APPLICATIONS.

AND OF THOSE 28 ELIGIBLE APPLICATIONS TO BE FOR BCSG, WE ARE REQUESTING FUNDING FOR 20 OF THOSE ORGANIZATIONS.

AND AGAIN, I WANT TO EMPHASIZE THAT ALL ORGANIZATIONS REQUESTING FUNDING FOR THESE SERVICES ARE REQUIRED TO BE PROVIDED TO CITY OF PLANO RESIDENTS.

SO, AS YOU CAN ALSO SEE THAT THE TOTAL REQUESTED FUNDING FOR THOSE 28 ELIGIBLE APPLICATIONS EQUATED TO A TOTAL OF 1.7 MILLION.

AND WE FOR CSG FUNDING, WE ARE CURRENTLY ANTICIPATING BUDGETING OF ONLY $593,000.

SO IT IS QUITE A COMPETITIVE PROCESS.

AND THESE ARE JUST A MIX OF THE DIFFERENT ORGANIZATIONS WHICH WE'RE RECOMMENDING FUNDING TODAY.

THANK YOU. QUESTIONS TO THE PREVIOUS.

OF COURSE. ARE THERE ANY QUESTIONS FOR JOHNNY? GO AHEAD. I UNDERSTAND THAT YOU HAVE 32 APPLICATIONS, AND OBVIOUSLY THERE WERE ONLY-- WAS IT 28 THAT WAS APPROVED? WE HAD TOTALED 32 APPLICATIONS.

28 QUALIFY FOR BCSG FUNDING, AND WE'RE RECOMMENDING FUNDING OF 20 APPLICATIONS.

SO I GUESS MY QUESTION IS, DID YOU SEE ANY NEW APPLICATIONS IN WHICH THEY OFFER SERVICES SIMILAR TO THIS THAT APPLIED IN IN THIS YEAR OR POTENTIALLY FOR THE NEXT YEAR.

WELL, I LOVE TO TELL YOU.

COME IN FRONT OF YOU AND TELL YOU THAT WE HAD 20 NEW ORGANIZATIONS THAT APPLY FOR OUR GRANT EVERY YEAR.

BUT THE REALITY IS, IF YOU NOTICE ON ONE OF THE PRIOR SLIDES, WE HAVE BCSG FUNDING AVAILABILITY FOR THIS YEAR, $193,000. IN THE PRIOR YEAR, THE DELTA WASN'T BY MUCH.

AND AT THE START OF EACH PROCESS, WE DO COMMUNICATE TO THE ORGANIZATIONS THAT, HEY, LOOK, THESE ARE OUR TOTAL, TOTAL REQUESTS.

YOU KNOW, ONE POINT THIS YEAR, WE SAID 1.7 MILLION, AND WE ARE ALLOCATING ONLY APPROXIMATELY THAT $593,000 FIGURE.

SO WE DO IT'S NOT FOR LACK OF EFFORT OR WANT IN REQUESTING HEY, WHO WHEN WE SPEAK TO THE ORGANIZATIONS, WHO ELSE SHOULD WE.

WHO ELSE SHOULD WE BE SPEAKING WITH? WHO ELSE WOULD YOU RECOMMEND THIS APPLICATION PROCESS TO?

[00:30:02]

THEY KNOW THAT IT'S A VERY COMPETITIVE PROCESS.

AND IN ADDITION TO ASKING WHO ELSE CAN WE SPEAK TO, WE ALSO KNOW THAT [INAUDIBLE] PROVIDED TO A NEW ORGANIZATION MEANS A DOLLAR LESS FOR INCUMBENT ORGANIZATIONS.

THIS IS MY PERSONAL OPINION.

I'VE NEVER TALKED TO ANY OF THE COUNCIL MEMBERS ABOUT IT, BUT I WOULD LIKE TO SEE THAT.

I MEAN, I DON'T WANT TO SEE 20 NEW ORGANIZATIONS, BUT IF THERE'S ONE THAT IS STARTING OUT AND THEY ARE, YOU KNOW, FOR A GOOD CAUSE IN WHICH, YOU KNOW, SUPPORT YOU KNOW, THE SERVICES THAT'S REQUIRED IN PLANO, YOU KNOW, FOR EXAMPLE, THERE'S AN INCREASE IN NEED FOR MENTAL HEALTH AND THERE'S AN INCREASE IN NEED FOR JUVENILE PLACEMENT.

AND IF WE COULD JUST EVEN FOCUS OR TARGET ONE NEW ORGANIZATION, WHICH THEY, THEY PUT THEIR PRIORITY IN THIS TYPE OF SERVICES. I THINK I WOULD.

I WOULD LIKE TO SEE MORE OF THAT.

I MEAN, EVERY YEAR IF WE JUST FOCUS ON PRIORITIZING ONE NEW ORGANIZATION, AND I THINK WE WOULD BE ABLE TO AT LEAST TRY TO FOSTER THE DEVELOPMENT AND THE GROWTH OF THESE NEW ORGANIZATIONS WHO ARE REALLY TRYING TO SERVICE SOME OF THE NEW NEEDS IN PLANO. AND, YOU KNOW, I DON'T KNOW HOW IT CAN BE DONE.

I UNDERSTAND THAT THERE'S A BUDGET ISSUE, BUT THAT'S WHAT I PERSONALLY WOULD LIKE TO SEE.

THANK YOU. AND I'LL CERTAINLY TAKE THAT MESSAGING BACK TO OUR COMMISSION.

BUT JUST TO GIVE YOU A LITTLE BIT MORE COLOR IN TERMS OF OUR APPLICANTS, THOSE 28 ELIGIBLE APPLICANTS, TWO WERE NEW THIS YEAR.

AND OF THE 20 REQUESTED ORGANIZATIONS RECEIVING A RECOMMENDATION OF FUNDING, TWO WERE ALSO NEW.

FIRST TIME.

UPON YOUR APPROVAL, FIRST TIME RECEIVERS OF BCSG FUNDING.

BUT AGAIN, I YOU KNOW, ONE PATTERN THAT EMERGES AS WE SPEAK TO THESE ORGANIZATIONS IS THAT, YOU KNOW, COMMISSIONER BRADY, WHO, EX COUNCIL MEMBER BRADY DID A VERY DILIGENT, MADE A VERY DILIGENT EFFORT IN ASKING EACH OF THE ORGANIZATIONS WHEN THEY CAME TO OUR PUBLIC HEARING OF WHAT IS THE CORE NEED THAT YOU'RE SEEING WITHIN THE COMMUNITY? AND I WOULD SAY IT'S CLOSE TO 100%, THEY SAID HOUSING INSECURITY OR AFFORDABLE HOUSING.

AND IF YOU LOOK AT OUR RECOMMENDATION OF FUNDING IF YOU REALLY READ BETWEEN THE LINES, THESE ARE ALL ADDRESSING HOUSING INSECURITY.

AND HOW DO YOU RECONCILE THAT? I'M SURE YOU SEE, BOYS AND GIRLS CLUB WERE REQUESTING FUNDING FOR AFTER SCHOOL PROGRAM AS WELL BECAUSE AS HOUSING AFFORDABILITY GETS CONSTRAINED IT ALL COMES FROM THE SAME INCOME PIE, SO PEOPLE ARE LESS ABLE TO AFFORD CHILDCARE.

PEOPLE ARE LESS ABLE FOR HEALTHCARE SERVICES.

SO WHEN YOU REALLY DIVE INTO THE RECOMMENDATIONS, WE ARE FUNDAMENTALLY, FUNDAMENTALLY ADDRESSING FOR THE PREDOMINANTLY HOUSING INSECURITY WITHIN OUR COMMUNITY.

BUT I CERTAINLY HEAR YOUR FEEDBACK, AND I WILL TAKE THAT AGAIN TO OUR COMMISSION, ANTHONY.

THANK YOU, MAYOR.

THIS IS MAYBE A QUESTION FOR MARK OR KAREN, BUT FOLLOWING UP ON THE CONVERSATION THAT MAYOR PRO TEM TU AND CHAIRMAN SINGH WERE HAVING. BUT AT OUR RETREAT, WE DISCUSSED ANNUALLY ADJUSTING THE CSG AMOUNT FOR INFLATION RATHER THAN HAVING IT BASED ON POPULATION.

OBVIOUSLY, WE'RE, YOU KNOW, IN WHAT I WOULD CALL A FISCAL CRISIS, BUT, YOU KNOW A 3% ADJUSTMENT FOR INFLATION WOULD NOT BE A MAJOR LINE ITEM IN THE BUDGET.

IT WOULD BE ABOUT ON $18,000.

SO THAT WOULD BE THAT WOULD NOT REALLY HAVE AN IMPACT ON OTHER AREAS OF THE BUDGET.

SO I WAS JUST CURIOUS IF THAT'S REFLECTED IN THE BUDGET THIS YEAR OR IF THAT'S SOMETHING THAT'S NOT YET REFLECTED.

NO. COUNCILMAN THAT WILL BE ON A GOING FORWARD BASIS.

IT WASN'T IN THIS FISCAL YEAR.

I SEE, SO THAT WILL BE GOING FORWARD FOR 2526.

THAT'S IT. I SEE. WELL, THANK YOU SO MUCH FOR THAT CLARIFICATION.

THANK YOU, JOHN, I APPRECIATE IT.

THANK YOU SO MUCH.

OUR NEXT ITEM IS THE PRESENTATION OF THE CULTURAL ARTS COMMISSION DIANE GOEBEL.

ALL RIGHT.

OKAY. LET ME GET SITUATED HERE.

ALL RIGHT.

GOOD EVENING.

HONORABLE MAYOR, CITY COUNCIL AND CITY EXECUTIVES.

I'M DIANE GOEBEL, CHAIR OF THE CULTURAL ARTS COMMISSION.

AND I'M HERE ON BEHALF OF THE COMMISSION TO PRESENT OUR ARTS AND EVENTS GRANT FUNDING RECOMMENDATIONS.

FIRST, A BIT ABOUT THE COMMISSION.

HERE. YOU SEE US OUT AND ABOUT AT OUR COMMISSION MEETING AND SUPPORTING THE ARTS AND CULTURE EVENTS AROUND TOWN.

[00:35:06]

SO OUR COMMISSION IS MADE UP OF SEVEN COMMISSIONERS AND MYSELF AS CHAIR PETER WYNNE, VICE CHAIR EMILY MOORE, ELISA KLEIN, RITA COSGROVE, NICK CAGLE AND SHERRIE LEVINE.

AND NICK WILL ACTUALLY BE ROLLING OFF EARLY BECAUSE HE IS MOVING OUTSIDE OF PLANO, SO THAT CREATES AN INTERIM VACANCY FOR US.

AND THEN WE ALSO WORK CLOSELY WITH TWO AWESOME STAFF LIAISONS, KAREN DAVIS AND JENNIFER KNOX WALKER.

SO OUR ACCOMPLISHMENTS THIS YEAR, WE FOCUSED OUR ATTENTION ON IMPROVING THE GRANT APPLICATION AND PROCESSES AND COMPLETED THE WORK OF TWO SUBCOMMITTEES.

ONE OF THOSE LOOKED AT THE FEASIBILITY OF A FUNDING MAXIMUM AWARD AMOUNT, AND WE DEVELOPED AND DEVELOPED POTENTIAL SCENARIOS. AND ALTHOUGH WE TABLED ACTION ON THIS DUE TO THE ENGAGEMENT OF THE ARTS CONSULTANT, WE BELIEVE THAT THIS IS SOMETHING THAT SHOULD BE REVISITED.

THIS GROUP ALSO CLARIFIED THE ELIGIBILITY VERBIAGE IN THE GRANT MANUAL, AND INCORPORATED A MEANS FOR CAPTURING DATA ON REASONS WHY THE GRANT RECIPIENTS ARE NEEDING TO USE VENUES OUTSIDE OF PLANO.

THE OTHER SUBCOMMITTEE UPDATED THE APPLICATION QUESTIONS AND THE SCORING PROCESS.

THESE CHANGES REDUCED THE NUMBER OF QUESTIONS AND ALSO GIVE US BETTER INFORMATION FOR EVALUATING APPLICATIONS.

IN ADDITION, OUR GRANTS ADMINISTRATOR ENHANCED THE FINANCIALS IN BOTH THE APPLICATION AND QUARTERLY REPORTING, ALLOWING MUCH BETTER VISIBILITY INTO THE FUNDING USAGE.

WE ALSO ADJUSTED OUR COMMISSION CALENDAR, MOVING ALL THE GRANT ACTIVITIES FORWARD TWO MONTHS TO ALIGN WITH THE CITY BUDGET DEPARTMENT CALENDAR.

THEN WE ALSO ESTABLISHED A NEW SUBCOMMITTEE TO CONTINUE REVIEW OF AREAS FOR IMPROVEMENT WITHIN THE GRANT PROCESS.

AND FURTHER DISCUSSION WAS TABLED ON THESE ITEMS JUST PENDING DIRECTION FROM CITY COUNCIL.

OUR GOALS FOR THE COMING YEAR ARE TO PROMOTE INNOVATION, ENCOURAGE EMERGING ARTS GROUPS, WHILE ALSO SUPPORTING OUR ARE WELL-ESTABLISHED GRANT RECIPIENTS AND THEN CONTINUE TO IMPROVE THE GRANT PROCESS.

THIS HAS BEEN A YEAR WHERE WE'VE REALLY LOOKED AT OUR PRACTICES AND WE'RE ASKING, WHY ARE WE DOING THINGS THIS WAY? DOES THIS MAKE SENSE? WHAT DO WE NEED TO DO TO MAKE THINGS BETTER AND EASIER FOR THE CITY, THE COMMISSION AND THE GRANT RECIPIENTS? SO WE'LL CONTINUE TO COMMUNICATE WITH COUNCIL ON WHAT YOU ALL SEE AS APPROPRIATE ITEMS FOR US TO PURSUE.

SO NEXT, I'LL PROVIDE AN OVERVIEW OF THE ARTS AND EVENTS GRANT PROGRAMS, AND I HOPE YOU'LL ENJOY THE PHOTOS THROUGHOUT THE PRESENTATION OF OUR GRANT RECIPIENTS IN ACTION.

SO THERE ARE THREE GRANT PROGRAMS SMALL ARTS, MAJOR ARTS AND EVENTS.

SO A SMALL ARTS GRANT CAN BE UP TO $2,500.

AND THAT'S FOR SMALLER EMERGING ORGANIZATIONS THAT MAY NOT HAVE THEIR 501(C)(3) YET MAJOR ARTS AND EVENTS ARE ELIGIBLE FOR 25% OF THEIR EXPENSES, AS STATED ON THEIR 990 TAX FILING.

SMALL AND MAJOR ARTS GRANTS FIT INTO A SPECIFIED FUNDING BUDGET.

PREVIOUSLY, THAT'S BEEN $1 MILLION.

AND NOW THIS YEAR, WE'RE LOOKING AT 1.5 MILLION.

AND THEN EVENTS ARE NOT SUBJECT TO A CAP DUE TO A FUNDING BUDGET.

SO THE GRANT APPLICATION HAS TWO PARTS.

THERE'S THE WRITTEN APPLICATION THAT INCLUDES 12 SCORABLE QUESTIONS AND UPLOADED FINANCIAL AND ORGANIZATIONAL INFORMATION.

AND THEN THERE'S AN ORAL PRESENTATION TO THE COMMISSION WITH A Q&A SESSION.

THE APPLICATION QUESTIONS EVALUATE THREE KEY AREAS, 50% FOCUSES ON WHAT THE APPLICANT IS DOING TO BRING PEOPLE TO PLANO. 30% IS BASED ON THE ORGANIZATION'S OPERATIONAL INFORMATION, AND THEN 20% IS BASED ON HOW WELL THEY

[00:40:01]

THE APPLICATION HAS A MAXIMUM OF 100 POINTS.

80 POINTS ARE SCORED BY THE COMMISSIONERS, AND THEY'RE AVERAGED.

THEN 20 POINTS ARE SCORED BASED ON PERFORMANCE MILESTONES BY THE GRANTS ADMINISTRATOR, AND THEN THESE ARE ADDED TOGETHER TO ACHIEVE UP TO 100 POINTS.

SO AN ORGANIZATION OR AN APPLICANT MUST SCORE AT LEAST 70 IN ORDER TO GET FUNDED.

SO NEXT I'LL EXPLAIN THE COMMISSION'S PROCESS FOR DETERMINING OUR GRANT FUNDING RECOMMENDATIONS.

SO HISTORICALLY, THE COMMISSION HAS BEEN RESTRICTED TO RECOMMEND THAT OUR RECOMMENDATION IS BASED ENTIRELY ON A STANDARD FORMULA, WHICH I'LL EXPLAIN LATER.

DUE TO THE POTENTIAL FUNDING INCREASE THIS YEAR TO 1.5 MILLION, AND THE LEEWAY THAT YOU'VE GIVEN THE COMMISSION TO CONSIDER BROADER IDEAS AND TO VEER FROM THE STANDARD FUNDING FORMULA.

THIS YEAR'S PRESENTATION IS A BIT MORE COMPLEX THAN USUAL.

SO AS A COMMISSION, THOUGH, WE'RE VERY EXCITED ABOUT THE POTENTIAL FUNDING INCREASE AND APPRECIATE THE TRUST THAT YOU PLACED IN US TO RECOMMEND HOW THESE NEW FUNDS SHOULD BE ALLOCATED.

THE COMMISSION HELD A SPECIAL SESSION TO REVISIT OUR FUNDING RECOMMENDATION.

WE FIRST BRAINSTORMED A NUMBER OF POTENTIAL NEW INITIATIVES AND CONSIDERED WHAT IT WOULD TAKE TO EXECUTE EXECUTE THEM DURING THE NEXT FISCAL YEAR. WE ALSO DISCUSSED ALTERNATE FUNDING SCENARIOS AND LANDED ON TWO OPTIONS THAT I'LL PRESENT.

DUE TO THE SHORT TIME FRAME FOR IMPLEMENTING AND EXECUTING NEW INITIATIVES FOR THE COMING FISCAL YEAR.

WE AGREED UNANIMOUSLY AS A COMMISSION THAT THE ADDITIONAL HALF MILLION SHOULD BE AWARDED TO THE CURRENT APPLICANTS VERSUS TWO NEW INITIATIVES.

THIS, HOWEVER, WAS A GREAT OPPORTUNITY FOR THE COMMISSIONERS TO EXPRESS OUR WHAT IFS AND OUR ARTS WISH LIST, AND WE'D BE HAPPY TO DISCUSS OUR IDEAS FOR NEW INITIATIVES WITH YOU IN THE NEAR FUTURE.

SO I WANT TO GIVE YOU AN EXAMPLE OF HOW THE COMMISSION'S STANDARD FUNDING FORMULA WORKS.

SO THIS EXAMPLE IS ACTUALLY BASED ON LAST YEAR'S $1 MILLION MAJOR ARTS FUNDING BUDGET.

SO AN APPLICANT CAN REQUEST UP TO 25% OF THEIR ORGANIZATION'S RECENTLY COMPLETED FISCAL YEARS ELIGIBLE EXPENDITURES.

SO THIS ORGANIZATION, IN THE EXAMPLE, IS ELIGIBLE FOR $61,235.

THEIR APPLICATION SCORED 81.57 POINTS, OR 81.57%.

SO TO DETERMINE THEIR AWARD BY SCORE, WE TAKE THAT FUNDING REQUEST AND MULTIPLY IT BY THEIR SCORE AND WE GET $49,949. THEN THE AWARD IS REDUCED PROPORTIONATELY WITH ALL OF THE MAJOR ARTS AWARDEES TO FIT THE $1 MILLION FUNDING BUDGET.

SO THEIR ACTUAL AWARD THEN GOES DOWN TO $29,177.

ALL RIGHT. SO NOW FOR OUR FUNDING RECOMMENDATIONS.

SO THIS CHART GIVES YOU A SIX YEAR HISTORICAL FUNDING OVERVIEW.

THE BLUE REPRESENTS SMALL AND MAJOR ARTS AND THE GREEN REPRESENTS EVENTS.

AND YOU CAN SEE THAT FOR 20.

AND NOTE THAT FOR 20 2425 WE ARE RECOMMENDING THIS AMOUNT.

HOWEVER, TWO OF THE EVENTS THEY'RE FUNDING WILL ACTUALLY MOVE TO THE HERITAGE COMMISSION.

ALL RIGHT. SO AN OVERVIEW OF THIS YEAR'S APPLICANTS.

THERE WERE NO SMALL ARTS APPLICANTS.

THERE WERE TWO NEW MAJOR ARTS APPLICANTS.

AND THEN THERE WERE TWO GROUPS THAT DID NOT REAPPLY ONE SMALL AND ONE MAJOR ARTS GROUP.

SO IN SUMMARY, WE RECEIVED 21 APPLICATIONS.

AND THEN WE RECOMMEND 20 OF THEM FOR FUNDING.

ONE WILL BE DENIED BASED ON THEIR SCORE.

SO THIS SHOWS YOU A COMPARISON.

THE TOTAL GRANT APPLICANT REQUEST FOR BOTH MAJOR ARTS AND EVENTS COMPARED TO THE AWARD AMOUNTS RECOMMENDED BY THE COMMISSION BASED ON THE APPLICATION SCORE.

[00:45:02]

WHEREAS FOR EVENTS, AS YOU KNOW, THERE'S NO BUDGET CAP.

SO NOW WE'LL LOOK AT TWO POTENTIAL MAJOR ARTS FUNDING OPTIONS THAT THE COMMISSION RECOMMENDS.

ALL RIGHT. SO I KNOW THIS.

THESE NUMBERS ARE KIND OF SMALL, BUT HOPEFULLY YOU'VE GOT YOUR OWN PRINTOUT OR LAPTOP.

BUT THIS FUNDING SCENARIO IS BASED ON THE COMMISSION'S TRADITIONAL FUNDING FORMULA THAT I EXPLAINED A MOMENT AGO.

THE AWARDS ARE DISTRIBUTED PROPORTIONATELY BASED ON THE APPLICANT'S EXPENDITURES AND SCORE AND PRORATED TO FIT THE CITY'S AWARD BUDGET OF 1.5 MILLION.

SO IF I WALK THROUGH EACH COLUMN, THAT FIRST NUMERICAL COLUMN ON THE LEFT IS THE ORGANIZATION'S FUNDING REQUEST.

THE NEXT COLUMN IS THEIR OVERALL SCORE.

THEN THE THIRD NUMERICAL COLUMN IS THEIR AWARD AMOUNT BASED ON THEIR SCORE.

AND THEN FINALLY, THE COLUMN ON THE RIGHT THAT'S HIGHLIGHTED IN BLUE IS THE AWARD AMOUNT ADJUSTED TO FIT THE $1.5 MILLION FUNDING BUDGET? THEN THE SECOND OPTION THAT WE'RE BRINGING TO YOU TO CONSIDER REFLECTS OUR CONSIDERATION OF ALTERNATE FUNDING SCENARIOS AND INTRODUCES A MAXIMUM AMOUNT THAT ANY ORGANIZATION CAN RECEIVE.

WE PULLED FROM PRIOR SUBCOMMITTEE WORK TO DEVELOP THIS OPTION, AND THE CURRENT GRANT PROGRAM IS ACTUALLY DOES NOT CONSIDER AN ORGANIZATION'S SIZE OR BUDGET IN REGARD TO FUNDING REQUEST.

SO AS SOME ORGANIZATIONS HAVE GROWN SIGNIFICANTLY IN SIZE IN ANNUAL EXPENSES, THEIR ALLOWABLE FUNDING REQUEST ALSO INCREASES ALONG WITH THAT, WHICH IN TURN REDUCES THE AVAILABLE FUNDING FOR THE REMAINING SMALLER GROUPS.

SO IN THIS RECOMMENDATION, WE PROPOSE A MAXIMUM AWARD FUNDING AMOUNT OF 35% OF THE $1.5 MILLION AWARD BUCKET, OR 525, 525,000 PER ORGANIZATION.

SO IF I WALK THROUGH THESE COLUMNS VERY SIMILAR TO THE PREVIOUS SLIDE, THE FIRST COLUMN OF NUMBERS IS THE FUNDING REQUEST.

THE NEXT COLUMN IS THEIR SCORE.

THEN THE AWARD AMOUNT BY SCORE.

AND THEN THIS.

THE COLUMN ON THE RIGHT REPRESENTS THE FIRST OF ALL, ONE ORGANIZATION WAS ADJUSTED TO THE MAXIMUM OF 525 AND THEN THE REST. AND THEN THEY ARE ALL PRORATED INTO THE $1.5 MILLION BUDGET.

SO THE IMPACT IN COMPARISON TO OPTION ONE IS THAT ONE ORGANIZATION'S AWARD DECREASES WHILE ALL OTHERS INCREASE SOME OF THEM SIGNIFICANTLY.

SO HERE YOU CAN SEE A VISUAL COMPARISON OF THE TWO FUNDING OPTIONS WE JUST DISCUSSED.

AND IN OPTION TWO YOU CAN SEE THE IMPACT THAT IT MAKES ON THE SMALLER ORGANIZATIONS.

WHEN THERE IS A FUNDING MAXIMUM OR A MAXIMUM AWARD AMOUNT IN PLACE.

ALL RIGHT. SO THIS SLIDE SHOWS YOU A SIDE BY SIDE COMPARISON OF THE TWO DIFFERENT SCENARIOS I PRESENTED.

AND IT ALSO COMPARES TO THEIR 2324 AWARD AMOUNTS.

SO THE FIRST COLUMN ON THE LEFT IS THEIR AWARD AMOUNT FOR THE LAST YEAR.

THE NEXT COLUMN IS FUNDING OPTION TWO, THE ONE WITH THE 35% OR $525,000 FUNDING MAXIMUM. THE NEXT COLUMN IS THE FUNDING OPTION ONE WHERE THERE IS NO MAXIMUM AWARD AMOUNT, IT JUST FITS INTO THE CAP.

AND THEN THE NEXT TWO COLUMNS SHOW THE PERCENTAGE INCREASE OF OPTIONS TWO AND THEN OPTION ONE FROM THERE 23-24. AWARD AMOUNTS.

SO THE I THINK THE POSITIVE THING ABOUT THIS IS THAT WITH EITHER FUNDING SCENARIO THAT WE'RE PRESENTING TO YOU ALL WITH OR WITHOUT AN AWARD FUNDING MAXIMUM, THE AWARD AMOUNT INCREASES FOR ALL ORGANIZATIONS FROM THEIR 23-24 AWARD AMOUNT.

ALL RIGHT. NOW MOVING ON TO EVENTS.

[00:50:01]

THAT'S THE ONE THAT'S HIGHLIGHTED IN BLUE.

AND THEN THERE'S NO FUNDING BUDGET CAP THAT THEY NEED TO FIT INTO.

AND THEN THE FINAL COLUMN SHOWS THE PERCENTAGE CHANGE FROM 23 TO 24.

AND THEN PLANO INTERNATIONAL FESTIVAL AND ASIA FEST, ALTHOUGH THEY APPLIED FOR OUR GRANT, THEN THE CHANGE WAS MADE KIND OF MIDSTREAM TO MOVE THEM OVER TO HERITAGE COMMISSION.

SO THAT'S ABOUT 31, A LITTLE OVER $31,000 OF OUR RECOMMENDATION.

SO IN CLOSING, TO SUMMARIZE, IN LIGHT OF THE POTENTIAL HALF MILLION DOLLAR INCREASE IN ARTS FUNDING, THE COMMISSION REVIEWED BROADER OPTIONS TO INCLUDE NEW INITIATIVES TO DETERMINE OUR FUNDING ALLOCATION RECOMMENDATION. AND WE ARE BRINGING FORWARD TWO POTENTIAL FUNDING SCENARIOS FOR YOU ALL TO CONSIDER, ONE WITH AND ONE WITHOUT AN AWARD FUNDING MAXIMUM.

AND EITHER WAY, WE RECOMMEND A TOTAL OF $1.5 MILLION IN FUNDING FOR MAJOR ARTS AND $386,912 TO EVENTS APPLICANTS.

ANY QUESTIONS? ALL RIGHT. ANY QUESTIONS FOR MISS ANTHONY? YES. JUST A COMMENT, MAYOR.

AND THANK YOU SO MUCH FOR THAT GREAT PRESENTATION.

THAT WAS FANTASTIC. OH, THANKS.

I JUST WANTED TO SAY, SINCE I'M SURE WE HAVE MANY PEOPLE WATCHING AND OBVIOUSLY WE HAVE MANY IN THE ROOM, AND WE'RE TALKING TONIGHT ABOUT WHAT I'VE CHARACTERIZED AS A FISCAL CRISIS. I'M SURE MANY PEOPLE ARE WONDERING WHY WE'RE LOOKING AT A 50% INCREASE IN ANY AREA OF FUNDING, YOU KNOW, CULTURAL ARTS, HERITAGE OR ANYTHING.

SO I JUST WANTED TO CLARIFY, YOU KNOW, FOR THOSE WHO ARE WATCHING THAT THIS IS ALL FUNDED BY HOTEL OCCUPANCY TAX, AND HOTEL OCCUPANCY TAX IS A LEGALLY RESTRICTED SOURCE OF REVENUE. WE CAN'T USE IT TO PAY FOR MOST THINGS THAT WE DO AS A CITY.

WE CAN USE IT TO PAY FOR CULTURAL ARTS.

WE CAN USE IT TO PAY FOR HERITAGE.

WE CAN'T PAY ANY EMPLOYEE SALARIES OR COMPENSATION WITH IT, EXCEPT IN THE CONVENTION AND TOURISM FUND FOR VISIT PLANO.

AND, YOU KNOW, SO I JUST WANTED TO MAKE SURE THAT THAT WE'RE CLEAR ON THAT.

WHY IS THIS INCREASING WHEN WE'RE FACING CHALLENGES ELSEWHERE? BUT THANK YOU FOR THE YEAH, Y'ALL ARE DOING IT FOR THAT GREAT PRESENTATION.

SURE. ANY QUESTIONS I HAVE I HAVE A COMMENT I'M SORRY.

GO AHEAD. SO I REALLY APPRECIATE THE SUMMARY AND THE DETAILS OF HOW YOU GO THROUGH THE GRANT PROCESS.

IF I HAVE A SAY IN ANY OF THIS, I REALLY ENJOY OPTION TWO.

I THINK IT GIVES MORE OPPORTUNITIES FOR, FOR THE DEVELOPED NEW AND DEVELOPING ORGANIZATIONS TO HAVE A CHANCE IN GETTING SOME FUNDING AND TO BE PART OF PLANO.

SO YOU KNOW, THAT'S OBVIOUSLY WHERE I'M AT.

I THINK, YOU KNOW, PLANO IS ABSOLUTELY THE MOST TREMENDOUS PLACE FOR CULTURAL DEVELOPMENT.

AND I LIKE TO MAKE SURE THAT THAT CONTINUES.

SO THANK YOU VERY MUCH.

I LOVE THE APPLICATION PROCESS WHERE YOU LAID OUT SMALL, MEDIUM OR SMALL MAJOR.

WHAT WAS IT, THE SMALL OR SMALL IN MAJOR ARTS AND THEN ALSO EVENTS? YES, YES, I LOVE THAT.

THAT'S THAT WAS GREAT. THANK YOU.

YEAH. WELL GOOD. I'M GLAD THAT EXPLANATION HELPED.

AND YEAH.

SO, YOU KNOW, WE WANTED TO GIVE YOU TWO OPTIONS BECAUSE WE'VE BEEN TALKING ABOUT FUNDING MAXIMUMS. HAD KIND OF TABLED THAT.

BUT SINCE WE HAD LEEWAY TO VEER FROM OUR KIND OF OUR RESTRICTED FORMULA THAT WE TYPICALLY USE, WE THOUGHT THIS WAS A GOOD TIME TO REINTRODUCE THAT, BUT GIVE YOU THE OPTION TO DECIDE IF YOU KNOW IS THIS THE TIME TO DO IT OR DO YOU KNOW? ARE WE RUSHING IT? SO WE REALLY LOOK FORWARD TO HEARING YOUR DECISION.

I THINK I KNOW HOW COUNCILMAN COUNCILWOMAN TU WILL VOTE, BUT IT'S UP TO ALL OF YOU AND WE LOOK FORWARD TO HEARING YOUR DECISION ON THE FUNDING RECOMMENDED RECOMMENDATION IN GENERAL, AS WELL AS WHICH OPTION YOU CHOOSE.

SO THANK YOU VERY MUCH.

THANK YOU. DIANE, I DO HAVE A COUPLE OF JUST COMMENTS TO CONSIDER MOVING FORWARD.

I DO APPRECIATE THE GREAT PRESENTATION AND ALL THE HARD WORK THAT THE COMMITTEE, THE COMMISSION AND THE SUBCOMMITTEES AS WELL.

I KNOW THE SUBCOMMITTEES HAD WORKED REALLY HARD, AND I THOUGHT IT WAS GREAT THAT YOU WERE ABLE TO ALREADY HAVE THAT INFORMATION AVAILABLE TO LOOK TO.

[00:55:03]

I KNOW ONE OF THE CONCERNS IN THE PAST WAS HOW IT COULD NEGATIVELY IMPACT ORGANIZATIONS TO PUT A MAXIMUM CAP.

I KNOW WE DON'T LIKE THAT WORD, BUT MAXIMUM NUMBER IN PLACE THAT WOULD ACTUALLY REDUCE FUNDING AMOUNTS.

AND SO USING THIS TIME TO MAKE THAT RECOMMENDATION REALLY, REALLY MAKE SENSE.

I THINK THAT IT'S ALSO REALLY IMPORTANT, IT'S EXCITING TO, TO, TO SEE THE OPPORTUNITY FOR THE SMALLER GROUPS TO GET ADDITIONAL FUNDING.

BUT I THINK IT'S ALSO, IN SOME CASES REALLY SIGNIFICANT THE AMOUNT OF ADDITIONAL FUNDING, IN SOME CASES EVEN DOUBLING THE AMOUNT OF GRANT MONEY THAT THEY'VE RECEIVED IN THE PAST. AND I EXPECT THAT THE ORGANIZATIONS WILL PUT CONSIDERABLE THOUGHT INTO HOW TO BEST USE THOSE DOLLARS.

SOME SUGGESTIONS MAYBE WOULD BE CAPACITY BUILDING AND ENCOURAGING THEM TO INVEST IN INFRASTRUCTURE AND STAFF TRAINING, OTHER CAPACITY BUILDING INITIATIVES THAT WILL HELP THEM GROW SUSTAINABLY.

IMPACT MEASUREMENTS? ASKING THEM MAYBE IN THE FUTURE TO DEVELOP OR ENHANCE SYSTEMS FOR MEASURING THE IMPACT OF THEIR PROGRAMS, WHICH COULD HELP THEM DEMONSTRATE THE EFFECTIVENESS OF THEIR WORK WHEN APPLYING FOR FUTURE GRANTS.

AND SO I JUST WANTED TO KIND OF SET AN EXPECTATION, SHOULD WE GO WITH OPTION NUMBER TWO, THAT I KNOW I'LL BE VERY CURIOUS TO SEE.

WITH THAT ADDITIONAL FUNDING TO THE SMALLER ORGANIZATIONS.

HOW THOSE GRANTS RECIPIENTS ARE GOING TO SPEND THAT MONEY AND THAT THEY'LL BE PREPARED TO SHARE, SHARE WITH US NEXT YEAR HOW THOSE FUNDS WERE UTILIZED.

AND PERHAPS THAT'LL BE SOMETHING THAT COULD BE INCLUDED IN THAT PORTION OF THE SCORING PROCESS WHEN YOU'RE LOOKING AT PERFORMANCE, PAST PERFORMANCE. JUST A THOUGHT THERE, BUT I'LL BE REALLY EAGER TO HEAR ABOUT THE IMPACT AND SUCCESS STORIES THAT COME OUT OF THIS OPPORTUNITY IF THE COUNCIL DOES CHOOSE TO GO WITH THAT. I'M INCREDIBLY PROUD OF PLANO'S UNWAVERING COMMITMENT TO SUPPORTING THE ARTS IN OUR COMMUNITY.

THE ARTS ARE NOT JUST A SOURCE OF CULTURAL ENRICHMENT.

THEY'RE ALSO A VITAL DRIVER OF ECONOMIC DEVELOPMENT, CONTRIBUTING TO THE VIBRANCY AND GROWTH IN OUR CITY.

THIS YEAR, IN ADDITION TO INCREASING OUR GRANT FUNDING, WE'VE TAKEN A SIGNIFICANT STEP FORWARD BY ENGAGING CONSULTANTS TO HELP US DEVELOP A COMPREHENSIVE ARTS PLAN.

THIS PLAN WILL BE SHAPED BY THE VALUABLE FEEDBACK AND CREATIVE IDEAS FROM OUR COMMUNITY, AND I AM EXCITED TO SEE HOW WE CAN FURTHER CELEBRATE AND ELEVATE THE ARTS IN PLANO.

SO TOGETHER, WE CAN CREATE A VIBRANT CULTURAL LANDSCAPE THAT REFLECTS THE TALENT AND DIVERSITY OF OUR CITY WHILE FOSTERING ECONOMIC PROSPERITY.

AND I'M PROUD TO BE A LIAISON TO YOUR ORGANIZATION, TO THE COMMISSION, AND THANK YOU SO MUCH TO EACH ONE OF YOU AND ALL OF EACH OF YOUR ORGANIZATIONS FOR ALL OF YOUR HARD WORK.

THANK YOU. AND WE APPRECIATE THE TIME YOU'VE SPENT WITH US TO HELP US THROUGH THESE PROCESSES.

AND I GUESS TO COMMENT ON WHAT YOU SAID ABOUT YOUR CURIOUS TO SEE HOW THEIR FUNDS WILL BE USED AND THE QUARTERLY REPORTS THAT THE ORGANIZATION SUBMIT OR THE EVENTS GROUPS SUBMIT A REPORT AFTER THEIR EVENT IS COMPLETED, BUT THOSE WILL SHOW US HOW THEY USE THE FUNDS.

AND TYPICALLY, YOU KNOW, THEY DON'T NECESSARILY GET THE AMOUNT THAT THEY ASK FOR TO BEGIN WITH.

SO I CAN IMAGINE THEY ALREADY IN THEIR GRANT APPLICATION HAVE TOLD US, YOU KNOW, HOW THEY'LL BE ABLE TO USE THE INCREASE IN FUNDS.

SO YEAH, BUT WE THANK YOU FOR YOUR SUPPORT.

THANK YOU, DIANE. APPRECIATE IT.

AND THANK YOU ALL THE THREE COMMISSIONERS THAT WERE HERE TODAY THE HERITAGE COMMISSION, THE CULTURAL ARTS AND THE COMMUNITY RELATIONS.

THIS IS A GREAT EXAMPLE OF WHY WE NEED THESE COMMISSIONS TO HELP US MAKE THE DECISIONS, BECAUSE THE WORK THAT YOU'VE ALREADY DONE HELPS GIVE US THE, THE UNDERSTANDING AND THE ANSWERS TO, TO MAKE THOSE DECISIONS BASED ON THE WORK THAT YOU'VE DONE.

AND WE CAN'T TELL YOU HOW MUCH VALUE THAT IS TO US IN BEING ABLE TO MAKE THOSE DECISIONS.

SO AGAIN, THANK YOU ALL FOR WHAT YOU DO.

AND THIS IS A GREAT EXAMPLE OF WHY THE COMMISSION STANDARDS ARE SO HIGH HERE IN PLANO.

THANK YOU VERY MUCH.

YEAH. MAYOR AND COUNCIL, IF IF YOU'RE READY AND THIS IS WE HAVE TIME.

BUT COUNCIL CAN ALSO GIVE DIRECTION TONIGHT IF YOU HAVE A PREFERENCE FOR OPTION 1 OR 2, OR IF YOU'D RATHER WAIT TILL THE 26TH OR THE NINTH, WE CAN DO THAT AS WELL.

BUT IF THERE IS CONSENSUS OR COUNCIL WILLINGNESS TO, TO MOVE FORWARD, WE'RE HAPPY TO TAKE THAT DIRECTION WHENEVER YOU ARE READY.

SO OPTION TWO FOR ME.

[01:00:02]

ANYBODY WANT TO MAKE A MOTION? I'LL MAKE A MOTION. OKAY.

ALL RIGHT. SECOND, I HAVE A MOTION AND A SECOND TO DECIDE ON OPTION TWO FOR THE CULTURAL ARTS COMMISSION'S PRESENTATION.

ALL IN FAVOR, PLEASE RAISE YOUR HAND.

MOTION PASSES, 8 TO 0.

THANK YOU.

ALL RIGHT, MOVING ON TO OPERATING BUDGET.

[VI. Operating Budget]

AND WE HAVE SOME UTILITY ENTERPRISE FUNDS TO DISCUSS.

AND THEN AT THE END, I'LL WRAP UP WITH A DISCUSSION OF SOME OF THE SALARY CONSIDERATIONS THAT YOU ASKED ME TO BRING BACK.

OKAY. KAREN RHONDES-WHITLEY, BUDGET DIRECTOR.

IF YOU GUYS WOULD LIKE TO LEAVE, IF YOU DON'T MIND, I CAN SEE RUSTLING GOING ON.

IF YOU. IF YOU'D JUST BE VERY QUIET ON YOUR WAY OUT.

WE WOULD APPRECIATE IT.

THANK YOU FOR THAT GREAT CONSIDERATION. YEAH.

HE IS NOT HERE.

I CAN PINCH IT FOR WATER AND SEWER IF YOU NEED TO.

OKAY, WELL, HOLD ON.

JUST ONE. MY DATE IS A FEW DECADES OLD.

HERE, TAKE MY PHONE.

THAT'S RIGHT. THERE HE IS.

OH, YOU SCARED ME.

YOU SCARED ME. OKAY, I'M GOING TO QUICKLY RUN THROUGH SOME ASSESSED PROPERTY VALUES AND SOME TAX RATE CHARTS.

WE BEAT THIS TO DEATH.

I KNOW, BUT AT THE END OF THE DAY, YOU HAVE ASSESSED PROPERTY VALUES AT $62.2 BILLION.

YOU HAVE NEW PROPERTY COMING ONLINE OF $906.6 MILLION AND 3.9 BILLION FOR EXISTING PROPERTY VALUE.

I DID WANT TO POINT THIS OUT.

THIS IS THE TAX RATE IN THE AVERAGE HOME VALUE BETWEEN 23 AND 24.

RIGHT NOW, WE HAVE ON THE PLATE THE SAME TAX RATE OF 41.7 $0.06.

YOUR AVERAGE MARKET VALUE WENT FROM 564,000 TO 112.

ALL THE WAY TO 579,554.

NOW THAT'S A 2.7% INCREASE.

THAT'S OUR MARKET VALUE.

GO DOWN TO THE AVERAGE TAXABLE VALUE.

LAST YEAR IT WAS 373,048.

THIS YEAR IT'S 417,641.

I JUST WANTED TO POINT SOMETHING.

POINT SOMETHING OUT.

AT THE END OF THE DAY WE OFFER AT THE CITY OF PLANO.

SO MANY EXEMPTIONS.

ALL THOSE EXEMPTIONS ARE TAKEN INTO ACCOUNT WHEN YOU DO THIS.

AVERAGE TAX VALUE.

THE STATE OF TEXAS ALLOWS A CENTRAL APPRAISAL DISTRICT, SO YOU CAN GO UP 10% IF YOUR ASSESSED PROPERTY VALUE GOES UP 10%. THAT IS WHAT THEY ARE COUNTING ON OR NOT COUNTING ON.

THAT IS WHAT IS INCLUDED IN THE AVERAGE TAXABLE VALUE.

AND IT'S NOT GOING TO BE UNTIL THE AVERAGE TAXABLE VALUE REACHES THAT MARKET VALUE THAT YOU'RE NOT GOING TO SEE AN INCREASE.

THE SKY COULD FALL TOMORROW AND WE LOSE 10% ON YOUR MARKET VALUE.

THAT WOULD BRING YOUR MARKET VALUE DOWN TO $521,000.

YOUR TAXABLE VALUE WILL STILL GO UP.

I JUST WANTED TO STATE THAT I THINK PEOPLE FORGET ABOUT STATE LAW WHEN THEY LOOK AT THE AVERAGE TAXABLE VALUE.

SO THAT'S MY ONLY POINT THERE.

AND THEN AT THE END OF THE DAY RIGHT NOW WE HAVE A PROPOSED TAX RATE OF 41.7 $0.06.

THE NO NEW REVENUE RATE IS 39.72.

THE VOTER APPROVAL RATE WITHOUT THE INCREMENTS 41.25 AND THEN WITH THE INCREMENT IS 42.93.

SO I DID INCLUDE I DIDN'T KNOW IF YOU WANTED TO DO THIS NOW OR WAIT TILL THE END.

I'M HAPPY TO DO IT. OKAY.

IT'S COMING UP. ALL RIGHT.

THERE YOU GO. THANK YOU FOR INCLUDING THOSE I APPRECIATE IT.

SO I ACTUALLY HAVE PRINTOUTS, BUT THAT'S EVEN BETTER THAT WE CAN DISPLAY THIS.

AND I WANT TO PUT YOU ALL AT EASE.

THIS IS ONLY FOUR SLIDES.

SO ARE WE DOWN TO SEVEN MINUTES? THIS IS SEVEN MINUTES. YOU KNOW WHAT? THIS THIS I THINK WILL BE LESS THAN FIVE, BUT I, I WILL START BY SAYING THANK YOU TO KAREN AND DENISE AS WELL.

BECAUSE THE STAFF PROVIDED THE INFORMATION THAT BOTH POWERPOINTS HAVE BEEN BASED ON.

[01:05:02]

BUT ANYWAY THIS IS AN ADAPTED VERSION OF ONE SLIDE THAT I SHOWED THE OTHER NIGHT.

I JUST WANTED TO AGAIN SHOW EVERYONE THAT EVEN WITH THE GENERAL FUND ONLY UP 0.4%, IF WE WERE TO BE DOWN AT 440 1.2 $0.05 AND COMBINED BUDGET, NET OF NORTH TEXAS MUNICIPAL WATER DISTRICT, UP ONLY 2.3%.

WE'RE STILL LOOKING AT THE BIGGEST A 12% INCREASE IN TAXES FOR THE, YOU KNOW, QUOTE UNQUOTE AVERAGE HOMEOWNER.

THEY DON'T HAVE ANY EXEMPTION EXCEPT THE HOMESTEAD EXEMPTION.

AND THAT WOULD BE AN INCREASE OF ALMOST $200 AND IN PERCENTAGE TERMS, 12% AT 41.7 $0.06.

BUT, ANTHONY, YOU HAVE TO EXPLAIN THAT'S ALL APPRAISED VALUE CHANGE, NOT TAX RATE CHANGE.

IT'S NOT TAX RATE CHANGE, BUT IT'S ALSO NOT APPRAISED VALUE CHANGE BECAUSE AS KAREN JUST MENTIONED, THE APPRAISED VALUE ONLY WENT UP 2.7% FOR THE AVERAGE HOMEOWNER.

ONE THING THAT'S HAPPENING THERE IS, I MEAN, THERE ARE A BUNCH OF DIFFERENT THINGS HAPPENING THERE THAT CITY MANAGER ISRAELSON AND DIRECTOR RHONDES-WHITLEY CAN TALK ABOUT BETTER THAN I CAN. BUT BUT IT'S IT'S HOME.

HOME VALUES ONLY WENT UP 2.74% THIS YEAR ON THE AVERAGE HOME.

BUT THERE'S WELL, I'VE GOT THIS ON THE NEXT SLIDE.

SO AT THE BOTTOM THERE AVERAGE HOME VALUE ONLY GREW BY 2.74% YEAR OVER YEAR.

BUT AMONG OTHER THINGS CATCH UP FROM THE 10% APPRAISAL INCREASE.

CAP MEANS THAT TAXABLE VALUE ACTUALLY INCREASED MUCH MORE.

SO TO YOUR POINT, MAYOR, THERE IS INCREASE IN THERE FROM PRIOR YEARS.

INCREASE IN VALUE THAT WAS CAPPED.

BUT I THINK THERE ARE OTHER THINGS GOING ON TOO, WHERE BECAUSE OF THINGS LIKE THE SENIOR TAX FREEZE AND OTHER EXEMPTIONS, HOMEOWNERS WHO ONLY HAVE THE HOMESTEAD EXEMPTION ARE ACTUALLY PAYING A LOT MORE THAN WHAT THEIR HOME HAS GONE UP IN VALUE.

WHICH YOU KNOW IS A POLICY DECISION.

YOU KNOW THAT THAT I THINK HAS BEEN MADE IN THE PAST.

BUT ANYWAY, IF YOU ALL LOOK AT THAT COLUMN IN YELLOW, ABOUT PERCENT CHANGE, THIS IS A CHART THAT KAREN AND HER TEAM VERY NICELY PREPARED.

THE CHANGE THIS YEAR WOULD BE 12% AT 41.7 $0.06, WHICH WOULD BE THE HIGHEST OF ANY YEAR, AS YOU CAN SEE ON THAT CHART, IN THE LAST 20 YEARS, LAST YEAR AT 10.2% WOULD BE THE SECOND HIGHEST.

SO WHAT WE WOULD BE LOOKING AT AT 41.7 $0.06, JUST FOR PERSPECTIVE, WOULD BE THAT THE PAST TWO BUDGET YEARS WOULD BE THE TWO HIGHEST INCREASES IN THE AVERAGE HOMEOWNER'S PROPERTY TAX BILL IN THE PAST 20 YEARS.

THEY WOULD RANK NUMBER ONE. AND NUMBER TWO.

IF WE LOOK AT THAT CHART OVER ON THE END THAT'S THE CHART FOR THE COMPARISON.

HOW MUCH ABOVE OR BELOW INFLATION AND POPULATION GROWTH ARE WE? AND THIS YEAR WOULD STILL BE THE HIGHEST, EVEN ADJUSTED FOR THAT 8% OVER INFLATION AND POPULATION GROWTH FOR THE AVERAGE HOMEOWNER.

AND LAST YEAR, AT 5.7%, I BELIEVE WOULD BE THE THIRD HIGHEST EVEN ON THAT MEASURE IN THE LAST 20 YEARS.

SO THAT REALLY IS A CHALLENGE FOR US.

ALSO JUST TO DISCUSS VOTER APPROVAL RATE INCREMENT.

LAST YEAR'S BUDGET USED 1.1 $0.06 OF INCREMENT ABOVE THE ONE YEAR VOTER APPROVAL RATE.

AND THIS YEAR, IF WE WERE TO BE AT 41.7 $0.06, WE WOULD USE ANOTHER 0.51 CENTS OF INCREMENT.

THERE WOULD ONLY BE 1.1 $0.07 REMAINING LESS THAN THE MAXIMUM AMOUNT OF INCREMENT AVAILABLE.

AND OF COURSE, AT THE MAXIMUM AMOUNT OF INCREMENT AVAILABLE, THAT WOULD EQUATE TO HAVING BEEN AT THE MAXIMUM VOTER APPROVAL RATE EVERY YEAR, INCLUDING DURING THE PRIOR THREE YEAR LOOKBACK PERIOD.

SO ANYWAY, IF, IF WE LOOK AT THAT USING 1.7 $0.07 THAT WOULD BE MORE USED THAN WHAT'S REMAINING.

AND OF COURSE, THAT IT'S ONLY A THREE YEAR LOOK BACK PERIOD.

SO, YOU KNOW, WE HAVE 1 OR 2 YEARS THAT ARE PROBABLY PRIOR TO THAT LOOKBACK PERIOD.

SO WHERE WE WERE AT THE NO NEW REVENUE RATE.

SO I WANT TO SAY THAT, YOU KNOW, TO BE FAIR, BUT THE POINT IS JUST THAT THIS IS A DIFFICULT BUDGET FOR TAXPAYERS.

TO THE NEXT SLIDE, IT'S ALSO A DIFFICULT BUDGET FOR EMPLOYEES.

YOU KNOW, OUR EXCELLENT CITY EMPLOYEES.

I FEEL LIKE WE NEED TO, TO DO BETTER, AS WE TALKED ABOUT ON MONDAY FOR OUR EMPLOYEES.

SO ACTUALLY, WHEN I SUBMITTED THIS, THIS SLIDE SHOW, I WAS GOING TO PROPOSE DOUBLING THE DECEMBER BONUS FOR EMPLOYEES TO $2,000 WHICH WOULD REPURPOSE APPROXIMATELY $2.4 MILLION, I BELIEVE ALMOST THE ENTIRETY OF THE PROPOSED RAINY DAY FUND CONTRIBUTION FROM THE OTHER NIGHT.

AND FOR ANY EMPLOYEE MAKING LESS THAN $667.

THAT WOULD BE MORE MONEY THAN A 3% RAISE.

BUT I'LL TELL YOU, I'VE SUBSEQUENTLY GOTTEN SOME FEEDBACK THAT SALARY MAY BE PREFERABLE TO BONUS.

SO I THINK APPLYING THE SAME AMOUNT OF MONEY TO SALARY INCREASES, IF THAT'S BETTER FOR EMPLOYEES, MIGHT BE THE BETTER WAY TO GO THAN JUST USING THAT SAME AMOUNT OF MONEY FOR

[01:10:06]

TO BE CLEAR, IT SHOULD BE NOTHING THAT IMPACTS EMPLOYEE COMPENSATION.

BUT ONE THING I WOULD RECOMMEND IS THAT WE HAVE THIS POLICY NOW TO CAP THE TRANSFER TO THE ECONOMIC DEVELOPMENT INCENTIVE FUND AT $8.5 MILLION PER YEAR BECAUSE OF THE AMPLE AMOUNT OF FUNDS THAT ARE IN THE ECONOMIC DEVELOPMENT INCENTIVE FUND.

THAT'S THE WORD THAT'S USED ON PAGE 30 OF THE BUDGET.

IF YOU LOOK AT PAGE 47 OF THE BUDGET GOING BACK TWO YEARS AGO AND THREE YEARS AGO, THERE WERE TRANSFERS ABOVE THAT CAPPED AMOUNT OF 8.5 MILLION.

BEFORE WE ENACTED THE CAP, AND ONE TRANSFER WAS 900,000 AND SOME OVER ONE TRANSFER WAS 1,700,000 AND SOME OVER.

SO IF WE WERE TO RETROACTIVELY APPLY THAT CAP, BECAUSE OF COURSE, IF IT'S A GOOD POLICY NOW, YOU KNOW, IT'S A GOOD POLICY.

AND IN ALL BUDGET YEARS, IN FACT, THERE'S BEEN INFLATION.

SO 8.5 MILLION WAS WORTH MORE BACK THEN THAN IT IS NOW.

THAT WOULD GIVE US ABOUT $2.7 MILLION.

THAT WOULD BE REFUNDED TO THE GENERAL FUND FROM THE ECONOMIC DEVELOPMENT INCENTIVE FUND, WHICH WOULD ALLOW US TO COME DOWN APPROXIMATELY TO THAT 41.25 CENT RATE AND STILL HAVE THE MONEY TO EITHER DOUBLE THE DECEMBER BONUS FOR OUR EMPLOYEES OR USE THAT MONEY TOWARDS SALARY RAISES. ALSO, I'D LIKE TO SCRUB THE BUDGET AGAIN FOR ITEMS LIKE THE STUDY THAT COUNCIL MEMBER PRINCE PULLED ON MONDAY OR THE $62,000 CHICKEN COOP THAT WE DISCUSSED.

I DON'T WANT TO BUST THROUGH MY TIME TOO MUCH, BUT THERE ARE A NUMBER OF OTHER ITEMS THAT I'VE IDENTIFIED AS THINGS WE COULD AT LEAST LOOK AT.

AND I ALSO THINK WE NEED TO EVALUATE FURTHER FEE ADJUSTMENTS BECAUSE, YOU KNOW, RATHER THAN IT JUST BEING BINARY, YOU KNOW, WE HAVE TO BE NOT ABLE TO TAKE CARE OF OUR EMPLOYEES OR WE HAVE TO HAVE PROPERTY TAXES THROUGH THE ROOF.

THERE ARE OTHER SOURCES OF REVENUE THAT WE COULD LOOK AT, WHERE WE COULD MINIMIZE THE IMPACT ON PROPERTY TAXES AND TAKE CARE OF OUR EXCELLENT EMPLOYEES.

SO THAT'S MY SUGGESTION.

AND MAYOR, TO YOUR POINT, I JUST WANTED TO GO BACK TO THAT.

ABSOLUTELY. I MEAN, OVER THE YEARS, PROPERTY VALUES HAVE INCREASED SUBSTANTIALLY.

I JUST WANTED TO MAKE THAT SO SO, YOU KNOW, I JUST WANT TO, YOU KNOW, AGREE THAT YOU'RE CORRECT ABOUT THAT.

BUT THIS YEAR, YOU KNOW, THE PROPERTY VALUES FOR THE AVERAGE HOMEOWNER ARE ONLY UP 2.74%.

AND BECAUSE OF SOME POLICIES, INCLUDING THE SENIOR TAX FREEZE AND BECAUSE OF HOW ESSENTIALLY BECAUSE OF CATCHING UP FROM PREVIOUS YEARS, THE AVERAGE HOMEOWNER WITH THAT 2.74% INCREASE IN THEIR PROPERTY VALUE WOULD UNFORTUNATELY HAVE A 41.7 $0.06.

SEE A 12% INCREASE IN THEIR PROPERTY TAX BILL.

SO I JUST I WOULD PROPOSE THAT DIRECTION.

THANK YOU SO MUCH FOR PUTTING THAT IN THERE.

YEAH I HAVE A QUESTION.

SO I KNOW TIM CAN CAN I PROVIDE A FEW POINTS CLASSIFICATION.

FIRST. SO NUMBER ONE, THE CITY DOES NOT DO BONUSES AS A GOVERNMENTAL ENTITY.

BONUSES ARE NOT ALLOWED.

SO THEY ARE ONE TIME PAYMENTS.

OH, SORRY. ONE TIME DISTRIBUTIONS FOR FOR EMPLOYEES.

SO JUST MAKING SURE THAT WE ARE ON THE RECORD ABOUT THAT.

THE OTHER THING IS THE ECONOMIC DEVELOPMENT FUND THAT THE $2.7 MILLION WOULD BE A ONE TIME TRANSFER.

UNFORTUNATELY, WE HAVE A RECURRING EXPENSE THAT WE'RE DISCUSSING AS FAR AS COMPENSATION GOES.

SO WHILE IT MIGHT SOLVE IT FOR ONE YEAR, THE NEXT YEAR WE ARE GOING TO BE BACK IN THAT SAME ISSUE OF TRYING TO FIND $2.7 MILLION.

TO BE ABLE TO TO LOOK AT THAT AS FAR AS SCRUBBING THE BUDGET AND CONTINUING TO DO THAT, I ASSURE YOU WE ARE HAPPY TO GO BACK AND LOOK AT ALL THOSE ITEMS AND MAKE SURE THAT WE ARE PULLING OUT THOSE ITEMS THAT AREN'T ABSOLUTELY NECESSARY AT THIS TIME, SINCE WE'RE IN A FISCAL SITUATION.

SO I UNDERSTAND THAT COUNCIL COUNCILWOMAN RICCIARDELLI ACTUALLY PAINTS A PICTURE OF US BASICALLY PRICE GOUGING.

I THINK THAT'S WHAT WHAT I'M FEELING LIKE, HOWEVER, MY UNDERSTANDING IS AND PLEASE CORRECT ME IF I'M WRONG.

CITY MANAGER ISRAELSON OUR CITY TAX IS, COMPARATIVELY SPEAKING, WITH ALL THE OUR NEIGHBORHOODS.

OUR NEIGHBOR CITIES ARE RELATIVELY LOW.

AM I AM I CORRECT ABOUT THAT? OUR TAX RATE IS ONE OF THE LOWEST, AND WE OFFER THE MAXIMUM EXEMPTIONS THAT YOU CAN HAVE.

SO IN COMPARISON, YES.

BUT IT IT DEPENDS A LOT ON THE HOUSE AND THE VALUE.

SO THERE IS A LITTLE BIT OF VARIABILITY IN THERE.

SO I WANT TO RECOGNIZE THAT, THAT DEPENDING UPON WHAT YOU HAVE.

BUT WHAT I WOULD SAY IS WE OFFER THE MAXIMUM AMOUNT OF EXEMPTIONS INCLUDING HOMESTEAD AND SENIOR TAX FREEZE.

WE HAVE ONE OF THE LOWEST RATES IN THE AREA, AND I WOULD PUT OUR SERVICES UP AGAINST ANYBODY.

AND ALSO THE PROPERTY TAX REALLY THAT'S INCREASING IS BASED ON HOME VALUE.

AM I AM I CORRECT ABOUT THAT.

AND WE TAKE A VERY, VERY MINUSCULE AMOUNT OF MONEY FROM THE PROPERTY TAX TO FUND OUR, OUR CITY.

[01:15:04]

WE HAVE TO USE IT EFFICIENTLY IN ORDER FOR THE CITY TO RUN AS A CITY OF EXCELLENCE.

AM I CORRECT ABOUT THAT TOO? THAT'S CORRECT. OUR PORTION OF THE TAX BILL IS OBVIOUSLY QUITE A BIT LESS FROM PISD, BUT PISD ONLY HAS ONE SOURCE OF REVENUES WHERE WE HAVE SALES TAX AND OTHER OTHER FEES, BUT WE ARE BY FAR A VERY SMALL PORTION AS COMPARED TO PISD.

RIGHT. SO ONE OF THE THINGS THAT I HEARD TODAY JUST BEFORE THE MEETING IS YOU CAN'T WHAT IS IT? YOU CAN'T YOU CAN'T RUN A CADILLAC WITH THE COST OF A VOLKSWAGEN.

IS THAT WHAT? WHAT WAS IT? HOW DOES IT GO? YOU CAN'T BUY A CADILLAC.

A CADILLAC FOR THE PRICE OF A VOLKSWAGEN.

FOR THE PRICE OF VOLKSWAGEN.

SO IF WE WANT THE CITY OF PLANO EXCELLENCE, THEN WE NEED TO MAKE SURE THAT THERE IS ENOUGH MONEY TO MAKE SURE THAT WE MAINTAIN THE CITY OF EXCELLENCE.

AND THAT'S THE REASON WHY I ABSOLUTELY HESITATE WHEN WE START ASKING KAREN TO CUT US DOWN TO THE BONE, SKIN AND BONE IN ORDER TO RUN A BUSINESS.

WE ALWAYS HAVE TO HAVE A BUFFER IN ORDER TO RUN A BUSINESS.

I MEAN, THAT'S LIFE.

I MEAN, AND IF WE HAVE EXTRA MONEY, THAT'S GREAT.

BUT IF, YOU KNOW, IF WE ALWAYS CALCULATE TO THE LAST PENNY, I JUST DON'T THINK THAT'S A THAT'S A GOOD WAY OF OPERATING A MAJOR CITY LIKE OURS.

SO ANYWAY, THAT'S MY $0.02.

OH, SHELBY. YES.

THANK YOU. A COUPLE OF THINGS.

FIRST, TOYOTA'S HEADQUARTERED HERE.

SO CAN WE REPLACE CADILLAC WITH LEXUS? YEAH, THAT'S PROBABLY OKAY.

OKAY. DO WE NEED TO TAKE A VOTE ON THAT? NO, NO, I THINK WE'RE ALL IN AGREEMENT.

A COUPLE OF THINGS TO POINT OUT ABOUT THE TAXES.

WE DO HAVE ONE OF THE LOWEST TAX RATES IN THE METROPLEX, BUT THAT'S ONLY BECAUSE WE HAVE AMONGST THE HIGHEST PROPERTY VALUES.

OUR ACTUAL TAX BILL IS ABOUT THE MIDDLE OF THE ROAD BETWEEN THE LARGEST NORTH TEXAS CITIES.

BUT THE VALUE FOR THE TAX DOLLAR IS AMONGST THE VERY HIGHEST.

SO THAT'S PART OF DRIVING A LEXUS.

THE, THE THE BIGGEST THING I WANT TO POINT OUT IS I APPRECIATE YOUR CALCULATIONS, COUNCILMAN RICCIARDELLI.

BY MY CALCULATIONS, CORRECT ME IF I'M WRONG OR KAREN, EVEN IF WE ADOPTED THE NO NEW REVENUE RATE, THE AVERAGE HOMEOWNER WOULD STILL EXPERIENCE ALMOST A 6.5% PROPERTY TAX INCREASE.

AND TO BE CLEAR, THE NO NEW REVENUE RATE IS KEEPING THE AMOUNT OF PROPERTY TAXES FLAT YEAR TO YEAR ON PROPERTIES TAXED IN BOTH YEARS. NOW, WITH ONLY $900 MILLION OF NEW PROPERTY, AND I THINK ABOUT $6 BILLION OF EXISTING PROPERTY VALUE INCREASE WITH ALL OF THE ALL OF THE NUANCES TO THE PROPERTY TAX SYSTEM, NOTABLY, THAT WE'RE PLAYING CATCH UP FROM THE 10% VALUATION CAP YEAR OVER YEAR PROPERTY TAX OR I'M SHOULD I SHOULD SAY, HOMEOWNERS HOMESTEADED.

HOMEOWNERS ARE TAKING IT ON THE CHIN NO MATTER WHAT THIS YEAR, NO MATTER WHAT WE DO WITH OUR TAX RATE.

AND THOSE HOMESTEADED HOMEOWNERS REPRESENT.

I'M DOING SOME VERY QUICK MENTAL MATH HERE.

MAYBE 40% OF OUR TOTAL PROPERTY TAX BILLS, EXCLUDING COMMERCIAL AND NON HOMESTEADED SINGLE FAMILY.

SO MAYBE 40% OF OUR TOTAL PROPERTY TAX BILL THEY'RE GOING TO LIKE EVEN IF WE ADOPT THE NO NEW REVENUE RATE, THEY'RE STILL GOING TO HAVE ALMOST A 6.5% PROPERTY TAX INCREASE FOR THAT AVERAGE.

THAT HYPOTHETICAL AVERAGE.

THAT'S AN ADDITIONAL $85 A YEAR THAT THEY'RE GOING TO PAY ON THEIR CITY OF PLANO TAX BILL.

THE COMMERCIAL AND THE RENTAL PROPERTIES, MULTIFAMILY AND SINGLE FAMILY RENTAL, THEY'RE THEY'RE GOING TO TAKE IT HIGHER.

THEY'RE GETTING HIT WITH AN EVEN GREATER INCREASE.

NOT AS GREAT AN INCREASE COMPARED TO THE THE HYPOTHETICAL AVERAGE SINGLE FAMILY HOMEOWNER IN PRIOR YEARS BECAUSE THEY'RE NOT PLAYING CATCH UP.

THEY'VE BEEN TAKING IT ON THE CHIN YEAR AFTER YEAR.

THEY'RE NOT PLAYING CATCH UP TO THE SAME DEGREE, BUT THEY ARE ALSO GETTING HIT WITH A PROPERTY TAX INCREASE, EVEN IF WE ADOPT THE NO NEW REVENUE RATE, WHICH IS OSTENSIBLY NO NEW PROPERTY TAXES.

ALL OF THIS TO SAY THAT BECAUSE OF THE CONVOLUTED NATURE OF THE TEXAS PROPERTY TAX SYSTEM, THE AVERAGE HOMEOWNER IS GOING TO GET A TAX INCREASE THIS YEAR NO MATTER WHAT WE DO.

WE'RE AT THE MERCY OF THE SYSTEM AND THE CALCULATIONS.

THE THE ONLY THING WE CAN REALLY DO IS DETERMINE HOW BIG AN INCREASE IS THAT GOING TO BE, AND WHAT IS THE IMPACT GOING TO BE TO THE CITY?

[01:20:03]

THE POINT OF THAT SHORT PRESENTATION WAS NOT TO SUGGEST THAT THE CITY OF PLANO IS NOT A GOOD VALUE, OR IS PRICE GOUGING.

TO THE CONTRARY, I THINK THE CITY OF PLANO IS THE VERY BEST VALUE AROUND, AND I THINK WE HAVE THE VERY BEST CITY EMPLOYEES AROUND.

COUNCIL MEMBER WILLIAMS IS ALSO RIGHT THAT EVEN AT THE NO NEW REVENUE RATE, HOMEOWNERS ARE GOING TO GET HIT ON THE CHIN AND COMMERCIAL PROPERTY OWNERS PROBABLY WILL GET HIT EVEN HARDER.

THE POINT I WAS TRYING TO MAKE WITH THAT PRESENTATION IS NOT THAT PLANO IS A BAD VALUE, OR THAT WE'RE WE'RE DOING WRONG BY TAXPAYERS.

THE POINT WAS TO MAKE THE CASE, AS I'VE STATED, THAT THIS IS A FISCAL CRISIS THAT WE'RE IN.

WE'RE BETWEEN A ROCK AND A HARD PLACE, AND THE ROAD AHEAD DOES NOT GET ANY EASIER.

AND I MEAN, WE ARE WE'RE LOOKING AT A SITUATION WHERE AT 41.76, WE COULD HAVE A SITUATION WHERE WE'RE BEING TOLD WE DON'T HAVE THE MONEY TO DO 3% RAISES FOR STAFF, AND YET A HOMEOWNER IS GOING TO GET A BILL 12% HIGHER THAN THE PREVIOUS YEAR.

HOW CAN THAT BE? IT SEEMS IMPOSSIBLE MATHEMATICALLY, AND I KNOW THERE ARE THINGS GOING ON THERE.

YOU KNOW, THERE'S THE SENIOR TAX FREEZE.

THERE'S WHAT HAPPENED WITH THE FA AND THEIR FCS.

THERE'S CHAPTER 42 LITIGATION AND THERE ARE THERE ARE SEVERAL OTHER CAUSES OF THAT.

BUT THE POINT I WAS TRYING TO ESTABLISH IS NOT THAT WE'RE PRICE GOUGING, NOT THAT WE'RE A BAD VALUE.

I THINK WE HAVE THE BEST EMPLOYEES AROUND.

I'LL PUT THEM AGAINST ANYBODY.

AND I THINK WE'RE THE BEST VALUE AROUND.

BUT WE ARE IN A FISCAL CRISIS WHERE THE IMPACT ON TAXPAYERS IS ACCELERATING EVERY YEAR.

THAT'S WHY I MADE THE POINT ABOUT TWO YEARS IN A ROW.

AND I DON'T EXPECT THAT TREND TO STOP.

AND YET WE ARE IN A POSITION WHERE WE'RE, YOU KNOW, OUR EXCELLENT CITY MANAGEMENT HAS HAS DONE THE NUMBERS, AND IT'S STILL HARD TO GIVE OUR EMPLOYEES WHAT WE TYPICALLY GIVE THEM.

AND SO THAT IS THAT TO ME IS A FISCAL CRISIS.

AND THE POINT I WAS TRYING TO MAKE OUT OF THAT IS THAT WE HAVE TO TAKE CARE OF OUR EMPLOYEES BECAUSE WE'RE A PEOPLE ORGANIZATION.

ULTIMATELY, WE'RE A SERVICE ORGANIZATION, AND THAT'S ABOUT THE PEOPLE, AND WE HAVE TO TAKE CARE OF OUR TAXPAYERS.

AND WITHIN THOSE TWO CONSTRAINTS, I FEEL LIKE CITY MANAGER ISRAELSON HAS ALREADY TAKEN SOME PRETTY DRASTIC ACTION WITHIN THOSE TWO CONSTRAINTS TO TRY TO RIGHT THE SHIP, BUT I FEEL LIKE WE NEED TO DO EVEN MORE BECAUSE OF THE GRAVITY OF THE SITUATION.

WELL, I'LL FINISH THIS UP AND THEN WE'LL MOVE ON TO SALES TAX PROJECTIONS.

BUT THAT IS WHY DOUG AND MARK AND ALL OF US WORK SO HARD ON ECONOMIC DEVELOPMENT FOR OUR COMMERCIAL TAXPAYERS, BECAUSE THAT IS WHERE THE GROWTH IS COMING.

AND THAT ALSO PROVIDES AN OPPORTUNITY FOR SALES TAX TO CONTINUE TO GROW.

AND THOSE ARE OUR TWO OPPORTUNITIES FOR REVENUE TO TO INCREASE OVER THE NEXT FEW YEARS.

SO THAT'S REALLY AN IMPORTANT PART OF GROWING PLANO, HELPING PLANO BECOME QUALITY JOBS.

ALL THE THINGS THAT WE TALK ABOUT ALL THE TIME.

AND THESE ARE THE REASONS, BECAUSE WE NEED THAT REVENUE FOR OUR COMMERCIAL COMMUNITY AND FOR SALES TAX COMMUNITY.

SO IT'S REALLY IMPORTANT THAT WE MAKE SURE WE WE MAKE SURE OUR EXPENSES ARE AS LOW AS POSSIBLE.

BUT AT THE SAME TIME, WHEN WE TALK ABOUT REVENUES, THAT THAT'S A REALLY IMPORTANT PART OF IT AS WELL.

OKAY. AS YOU KNOW, WE ARE UNDER A SALES TAX, A SALES TAX CAP POLICY.

WE USE THE AVERAGE OF THE LAST THREE YEARS TO DO OUR PROJECTIONS BY, IF NEEDED, BACK IN 23, BECAUSE INFLATION WAS SO HIGH. CITY COUNCIL DID ALLOW US TO ADJUST BASED ON INFLATION COMING IN.

THIS YEAR WE HAVE NOT TAKEN ANY TAKEN ANY INFLATION.

WE HAVE INCLUDED JUST WHAT WE'RE GOING TO GET UNDERNEATH THE THREE YEAR AVERAGE.

SO FOR 2324 WE'RE GOING TO WE'RE PROJECTING TO COLLECT 117 MILLION, WHICH IS ABOUT 3 MILLION OVER THE 114 WE COLLECTED LAST YEAR FOR 2425.

WE ARE FOLLOWING THE SALES TAX CAP POLICY IN DOING THE AVERAGE THREE YEARS NET ANY AUDIT ADJUSTMENTS.

SO FOR NEXT YEAR WE HAVE PROJECTED $113 MILLION.

NOW SALES TAX HAS FALLEN OFF.

IT HAS STABILIZED.

YOU CAN SEE BY THIS CHART, RIGHT AFTER COVID WE HAD A SURGE IN SALES TAX 17.1 LAST YEAR.

[01:25:06]

AND FOR THIS YEAR WE'RE GOING TO COLLECT 2.7% OVER.

WE ARE VERY LUCKY.

A LOT OF THE CITIES NEAR US ARE SEEING DECLINES IN THEIR SALES TAX.

SO WE ARE VERY FORTUNATE TO HAVE JUST STABILIZED AND ARE NOT SEEING THE DECLINES YET.

WE STILL ARE RUNNING.

66% IS COLLECTED FROM OUR BUSINESS TO BUSINESS OR NON RETAIL SECTOR, SERVICE SECTOR.

AND THEN THE OTHER 34% IS COLLECTED FROM RETAIL.

THIS IS JUST A BREAKOUT ON WHAT WE COLLECT BASED ON THE DIFFERENT AREAS.

INCLUDED IN HERE ARE NUMBER ONE IS GENERAL MERCHANDISE STORES FOR 2024.

AND THEN OUR NUMBER TWO IS NON STORE RETAILERS.

AND THEN NUMBER THREE IS FOOD AND BEVERAGE.

WE ALSO HAVE IN THERE.

LET'S SEE WHAT'S THE READ.

ELECTRONICS AND APPLIANCE STORES.

SO ON THE BUSINESS TO BUSINESS OR NON RETAIL SECTOR.

IT STAYED ABOUT THE SAME FROM LAST YEAR TO THIS YEAR.

PROFESSIONAL AND OTHER SERVICES IS OUR TOP COMMERCIAL CONTENDER.

TELECOM AND INFORMATION SERVICES IS SECOND, FOLLOWED BY WHOLESALE AND RELATED.

WE DO HAVE ONE OF THE HIGHEST SALES TAX PER CAPITA IN THE STATE OF TEXAS.

WE HAVE JUMPED THIS YEAR FROM $391 COLLECTED PER CAPITA TO 398.84, AND THAT'S REALLY ALL I HAVE ON SALES TAX.

WE JUST WANTED TO MAKE YOU ALL AWARE OF WHAT WE INCLUDED.

OF COURSE, SALES TAX IS VERY VOLATILE.

YOU NEVER KNOW WHAT'S GOING TO GO ON WITH IT.

IT DEPENDS ON THE ECONOMY.

AS I'VE ALREADY MENTIONED, A LOT OF THE CITIES AROUND US HAVE SEEN A DECLINE AND WE HAVE NOT.

SO WE HAVE JUST STABILIZED.

SO AT THIS TIME WE'RE GOING TO TALK ABOUT WATER AND SEWER RATES.

COME ON UP. THIS IS THERE.

THIS ONE OVER HERE. THIS IS MATTHEW GARRETT.

WE HIRED NEW GEN STRATEGIES AND SOLUTIONS TO BRING FORTH A SOLID WASTE RATE MODEL THAT WE'RE GOING TO TALK ABOUT HERE IN A MINUTE.

WE WENT IN IN EVERY FIVE YEARS WE DO GO AND GET A NEW CONSULTANT TO PROVIDE A COST OF SERVICE AND WHAT OUR REVENUES ARE DOING.

AND SO WE BROUGHT THEM IN SINCE THEY DID OUR SOLID WASTE.

AND MATTHEW IS HERE TO PRESENT TONIGHT, AND I'M GOING TO KIND OF FOLLOW ALONG WITH HIM AND JUST INTERJECT SOME OF MY THOUGHTS.

AND HERE'S HOW YOU FORWARD RIGHT HERE.

FANTASTIC. THANK YOU MATT.

THANK YOU VERY MUCH. NOW THAT I'M AT THE RIGHT LOCATION.

GOOD EVENING, MAYOR AND COUNCIL.

A PLEASURE TO BE BACK IN FRONT OF YOU, MATTHEW GARRETT WITH NUGENT STRATEGIES AND SOLUTIONS.

AS KAREN ALLUDED TO, WE HAVE BEEN WORKING ON YOUR WATER AND WASTEWATER RATE STUDY.

IF YOU HAVEN'T ALREADY SEEN THIS PRESENTATION AND COMBED THROUGH IT, I'LL SPOIL IT AND SAY WE HAVE AN ALTERNATIVE RATE DESIGN TO DISCUSS THIS EVENING.

BUT WE'LL GET INTO SORT OF THE BIG ROCKS AS THEY WERE IN A RATE STUDY.

OR WHAT ARE YOUR EXPENSES? HOW ARE PEOPLE USING YOUR SYSTEM AND HOW ARE YOUR RATES HOLDING UP COMPARED TO YOUR FUTURE NEEDS? SO WE'LL TOUCH ON ALL THREE OF THOSE POINTS AS WE GO ON.

KUDOS TO STEVE, DOUG.

HE'S ACTUALLY THE DRIVING FORCE AROUND MOST OF THE REAL WORK THAT WAS DONE ON THIS PROJECT.

HE'S A FANTASTIC ANALYST.

HE'S A MANAGER FOR OUR FIRM.

AND SINCE HE'S NOT HERE, I'LL JUST GIVE HIM THAT SHOUT OUT.

SO, AGAIN, OBJECTIVES OF THE STUDY.

THE WATER AND WASTEWATER FUND IS A UTILITY.

SO AS AN ENTERPRISE FUND, YOU'D LIKE FOR IT TO PAY ITS OWN WAY.

YOU'D LIKE IT NOT TO BE PROPPED UP BY OTHER COSTS IN THE GENERAL FUND, JUST AS YOU HAVE GENERAL FUND TRANSFERS AND OTHER ITEMS THAT COME INTO THE GENERAL FUND FROM THIS, IT'S PAYING ITS WAY AND ITS PORTION.

YOU'LL SEE SOME OF THOSE AS THEY GO ON.

ADDITIONALLY, WE ARE FUNDING AROUND 242 MILLION.

THOSE ARE INFLATED DOLLARS AGAINST YOUR CAP.

IF YOU'VE SEEN IT, IT'S SLIGHTLY HIGHER THAN WHAT YOU'VE SEEN BECAUSE WE DO EXPECT INFLATION TO HAPPEN.

LASTLY, WE WANT TO MAKE SURE THAT WE'RE HITTING YOUR KEY PERFORMANCE INDICATORS.

SO I CAN'T COME TO YOU AND SAY HERE IS A RATE PLAN THAT WORKS IF IT MISSES THE MARK.

AND SO WE'LL TALK A LITTLE BIT ABOUT THAT.

ALL RIGHT. SO VERY GENERALLY YOUR TOTAL COST ARE PRESENTED ON SCREEN.

HERE WE HAVE THEM IN SOME BROAD CATEGORIES.

I DON'T KNOW IF YOU CAN SEE THOSE BUT YOU HAVE COMING UP DEBT SERVICE AROUND 6 MILLION.

YOUR WATER PURCHASES ARE AROUND 96 MILLION.

SEWER PURCHASES ARE JUST UNDER 60.

YOU HAVE SOME TRANSFERS AROUND 52 MILLION ON MS 25.

AND YOU HAVE NON RATE REVENUES THAT HELP OUT COVER SOME OF THOSE EXPENSES AROUND 4.9 MILLION PER YEAR.

[01:30:03]

MOST OF THAT IS DRIVEN BY YOUR WHOLESALE COST.

THOSE ARE CURRENTLY AROUND 65%.

THOSE ARE SET TO RISE TO OVER 73% BY 2029.

SOME PRETTY IMPORTANT ASSUMPTIONS MADE HERE.

WE DID TAKE INTO ACCOUNT THE MOST RECENT LETTER FROM THE DISTRICT, WHICH REVISED THE GOING RATE FOR 25 PER COUNCIL AND FOR OTHER EXPENSES, HOWEVER, WE HAD TO RELY ON APRIL FORECAST FOR THE FUTURE PERIODS BECAUSE WE DON'T HAVE A FORECAST MORE RECENT FROM THE DISTRICT.

SO IMPORTANT DISCLAIMER THOSE COSTS HOPEFULLY ARE A LITTLE LESS IN THE OUT YEARS SINCE THIS MOST RECENT ADJUSTMENT.

WAS THAT NICKEL REDUCTION, RIGHT.

SO AGAIN, JUST POINTING OUT WHOLESALE WATER AND WASTEWATER INCREASES ARE PRETTY SUBSTANTIAL AGAINST THAT 8% PER ANNUM GROWTH.

SO THE PLAN CAPITAL EXPENDITURES OF 242 MILLION.

YOU SEE THE WAY THOSE ARE BROKEN OUT, I HAVE A QUICK SUMMARY OF THOSE WHERE WE HAVE APPROXIMATELY 116 MILLION ARE FOR WATER PROJECTS AND 155 ARE FOR WASTEWATER.

THE PLAN TO FUND THAT IS ON THE NEXT SLIDE.

YOU SEE SORT OF THE BOTTOM OF THAT, YOU'LL SEE APPROXIMATELY $80 MILLION IS A PLANNED ISSUANCE IN 2025.

THAT'S A PLANNED DEBT ISSUANCE.

LET ME MENTION ABOUT THIS.

I HAD MENTIONED THIS TO Y'ALL THE OTHER NIGHT.

WE HAVE ABOUT $80 MILLION IN INTERCEPTOR PROJECTS.

WE HAVE.

WE WANT TO GO OUT AND ISSUE REVENUE BONDS.

SO INCLUDED IN HERE.

AS YOU KNOW, WE HAVE BEEN ON A PAY AS YOU GO SYSTEM SINCE 1993.

THE ONLY REASON WE EVER ISSUE DEBT IS TO COVER MAJOR, MAJOR EXPENDITURES.

THESE INTERCEPTOR PROJECTS BEFORE COVID WERE LIKE $5 MILLION.

THEY HAVE GROWN TO $20 MILLION EACH.

SO WE'VE ALREADY GOT THEM IN THE PIPELINE.

THEY'VE ALREADY STARTED THE DESIGN.

SO IT'S JUST A WAY FOR US TO AFFORD TO BE ABLE TO PAY FOR THOSE OVER THE LONG TERM.

WE HAVE INCLUDED $80 MILLION ON A 30 YEAR REVENUE BOND.

SO HE HAS THE PRINCIPAL AND PAYMENT INTEREST, ALL OF THAT INCLUDED WITHIN THIS RATE MODEL.

JUST TO CLARIFY.

OKAY. THANK YOU MATT.

ABSOLUTELY. ADDITIONALLY, YOU DO HAVE CURRENT FISCAL 25 FUNDING WHERE YOU'RE TRANSFERRING ABOUT 22 MILLION TO COVER CAPITAL THAT IS SET TO RISE TO 26 MILLION STARTING NEXT YEAR AND FOR THE NEXT FOUR YEARS FOLLOWING.

THAT'S $126 MILLION OF CASH CAPITAL FUNDING.

AND SO WHILE WE TALK ABOUT SOME DEBT FOR THE BIG NEEDS, YOU STILL HAVE A VERY SOLID PLAN FOR CASH FUNDING.

AS MUCH AS THE UTILITY CAN SUPPORT AT THE RATES YOU'RE GOING TO SEE LATER ON.

SO THE FOCUS THIS EVENING IS REALLY ON YOUR WATER RATES BECAUSE WE HAVE PROPOSED AN ALTERNATIVE DESIGN.

WE DID SHOW YOU YOUR WATER RATES.

I SAY THIS AT EVERY COUNCIL.

I LIVE IN MCKINNEY, TEXAS.

I DON'T KNOW MY WATER RATES BECAUSE I DON'T DO THEIR WATER RATES.

DESPITE THE FACT THAT I DO THIS FOR A LIVING.

SO I'M SHOWING YOU, IN CASE YOU DON'T CHECK YOUR WATER BILL AND YOUR RATE SCHEDULE, YOU DO HAVE TWO THINGS.

YOU HAVE A METER EQUIVALENCY FACTOR.

LARGER METERS PAY MORE FOR YOUR RESIDENTIAL CUSTOMERS.

THAT STARTS OVER A ONE INCH METER.

AND SO YOUR RESIDENTIAL CUSTOMERS WITH A 5/8, THREE QUARTERS OR ONE INCH ARE PAYING THE SAME BASE RATE.

LARGER METERS HAVE MORE DEMANDS ON YOUR SYSTEM, SO THEY PAY MORE IF YOU DON'T ALREADY SEE THAT ON THE SCREEN.

THAT'S WHY THOSE RATES ARE HIGHER.

THAT DOES FOLLOW INDUSTRY BEST PRACTICE RELATIVE TO CHARGES ON WATER.

ADDITIONALLY, ANOTHER BEST PRACTICE ALREADY EMPLOYED BY PLANO IS AN INCLINING BLOCK RATE STRUCTURE.

THIS DOES SERVE TO ENCOURAGE CONSERVATION AND PREVENT WASTE IN THE HIGHER BLOCKS.

THOSE BLOCKS HERE ARE 0 TO 1 WITH NO CHARGE BECAUSE IT'S INCLUDED IN THE MINIMUM.

YOU HAVE WHAT'S BEEN TERMED OR TOLD TO ME AS TERMED AS AN AFFORDABILITY RATE BLOCK FROM 1000 TO 5000 GALLONS.

THEN YOU HAVE THE SUBSEQUENT TEARS YOU SEE ON SCREEN.

ADDITIONALLY, YOU SEE COMMERCIAL AND SPRINKLER.

WE HAVE A LITTLE LESS TO SAY ABOUT THOSE TWO PARTICULAR CLASSES THIS EVENING, BUT YOU'LL SEE THEY HAVE A FIXED RATE OF 4.37 FOR COMMERCIAL FOR ALL VOLUMES.

AND ON YOUR SPRINKLERS YOU DO HAVE AN ADDITIONAL TIER ONCE THEY BREACH 20,000 GALLONS AT 873.

MAYOR AND COUNCIL, I'D JUST ADD THAT THE 1 TO 5000 WAS TARGETED YEARS AGO SO THAT SENIORS, PEOPLE ON FIXED INCOME THAT NEED TO USE A MINIMAL AMOUNT OF WATER, AND THOSE FOLKS THAT THAT TRULY WERE HAVING FINANCIAL DIFFICULTY COULD USE AN ABSOLUTE MINIMUM AMOUNT AND STILL BE ABLE TO RECEIVE SERVICE, BUT KEEP THEIR BILL AS LOW AS POSSIBLE.

SO THAT WAS A STRATEGIC DECISION BY THE COUNCIL YEARS AGO.

ALL RIGHT. HAVING SAID THAT, ANOTHER BIG PART OF OUR STUDY, WE'VE KIND OF COMBED THROUGH YOUR EXPENSES.

WE GLOSSED OVER MUCH FASTER THAN YOUR BUDGET TEAM HAD TO DO TO SHARE THAT WITH YOU.

I'M SURE THEY HAVE A LOT MORE DETAIL, BUT WE DID LOOK AT THE WAY YOUR CUSTOMERS ARE USING YOUR SYSTEM.

[01:35:04]

YOU SEE IT IN 1000 GALLON INCREMENTS ON THE HORIZONTAL AXIS.

YOU'LL SEE HOW MANY NUMBER OF BILLS.

SO FOR INSTANCE MAIER, IF YOU HAVE 12 MONTHLY BILLS, YOU'RE UP ON THIS SCREEN 12 TIMES.

YOU MAY HAVE HAD SOMETHING IN THE 20 000 GALLON RANGE.

YOU MAY ALSO HAVE MOST OF YOUR BILLS IN THE 8000 GALLON RANGE.

SO THIS IS WHERE YOU'D SEE THE DISTRIBUTION FALL FOR THE VARIOUS CUSTOMERS THROUGHOUT THE YEAR.

HAVING SAID THAT, THAT'S WHY YOU HAVE THAT ANOMALY YOU WOULD THINK OTHERWISE IN THAT LAST BLOCK, AS IT WERE, FOR OVER 50,000, 40,000 AND UP.

SO YOU DO HAVE A NUMBER OF PEOPLE THAT ACROSS THE YEAR ARE USING 40,000 GALLONS OR MORE.

DESPITE YOUR CURRENT INCLINING BLOCK RATE STRUCTURE, I WOULD POINT YOUR ATTENTION TO THE SECOND TIER AND CATEGORY, WHERE WE HAVE APPROXIMATELY 35% OF OUR BILLS THAT ARE LESS THAN THE 5000 GALLON MARK THAT IS SUBJECT.

IT'S AN IMPORTANT 30% OF YOUR VOLUMES ARE APPROXIMATELY IN THE 1 TO 5000 GALLON RANGE.

WE CALL THAT THE MEATY PART OF THE BONE.

IF YOU IMAGINE THIS WAS A DRUMSTICK, YOU'D KNOW WHY.

SO WE HAVE A LOT OF VOLUMES IN THAT PARTICULAR RANGE, AND WE'RE CHARGING AN AFFORDABILITY RATE, WHICH CURRENTLY IS ABOUT $3 LESS THAN WHAT YOU'RE PAYING FOR WHOLESALE WATER.

THAT MATH EQUATES TO APPROXIMATELY $8.8 MILLION OF FOREGONE REVENUE.

IF YOU WERE TO BE CHARGING, AT A MINIMUM, YOUR WHOLESALE COST FOR WATER BEFORE YOU ADD YOUR OWN COST TO MOVE IT AND TREAT IT AND SEND THE PEOPLE OUT TO SUPPORT THEM. AGAIN, WE DID LOOK AT THE COMMERCIAL DISTRIBUTION AS WELL.

REALLY, JUST FOR ON BALANCE TO SHARE WITH YOU.

I DON'T HAVE A LOT OF POINTS HERE OTHER THAN YOU HAVE A DIFFERENT DISTRIBUTION OF CUSTOMERS AND THEIR AVERAGE IS AROUND 50,000, WHEREAS YOUR COMMERCIAL OR YOUR RESIDENTIAL AVERAGE IS REALLY AROUND TEN.

SO CLEARLY COMMERCIAL USERS ARE MUCH HEAVIER USERS ON YOUR SYSTEM.

THAT'S NOT A SURPRISE, BUT WE DID DIG INTO THE DETAILS ON THOSE.

ADDITIONALLY, WE HAVE A VERY SEASONAL REVENUE STREAM BECAUSE WE HAVE VERY SEASONAL WATER USE, SO WE PLOTTED THE AVERAGE USAGE AGAINST EACH OF YOUR TIERS.

YOU'LL SEE THAT HERE PLOTTED BY MONTH.

WE DID A CALENDAR YEAR FOR EASE.

THAT DOESN'T MIRROR.

I'M SURE BUDGET WOULD TELL YOU WE'RE GETTING MOST OF OUR REVENUES IN THESE LAST FEW MONTHS, AS OPPOSED TO RIGHT IN THE MIDDLE, AS THIS MIGHT SUGGEST.

THAT SAID, YOU CAN SEE THE COLOR CODING.

THIS IS YOUR AVERAGE RESIDENTIAL USER ACROSS 12 MONTHS.

AND AGAIN, AS I POINTED OUT, 29.7%.

THERE IS IN THAT 1 TO 5000 GALLON RANGE.

COMMERCIAL USERS ARE MUCH MORE SIMILAR ACROSS THE MONTHS IN OUR INDUSTRY, WE'D CALL THAT THEIR THEIR PEAK IS LOWER.

THEIR PEAK TO AVERAGE USAGE AS A CLASS IS LOWER THAN YOUR RESIDENTIAL CUSTOMERS.

YOU SAW THAT THEIR LOWEST MONTH OR THEIR AVERAGE MONTH IS CONSIDERABLY LESS THAN THEIR PEAK.

HERE WE HAVE A PRETTY FLAT LINE AND WE ARE CHARGING THAT FLAT RATE.

SO THIS DOES KIND OF MAKE SENSE AS IT STANDS WHEN YOU AGGREGATE ALL OF YOUR COMMERCIAL CUSTOMERS.

ALL RIGHT. SO THE BLEAK STORY I WILL SAY IS THAT IF WE DON'T HAVE A RATE INCREASE, WE CAN'T ACHIEVE THE FINANCIAL OUTCOMES OR THE PROJECTED EXPENSES WITHOUT GOING IN THE RED. AND SO WE HAVE A FEW CHARTS HERE.

THIS IS SORT OF OUR STANDARD KEY PERFORMANCE INDICATOR DASHBOARD.

YOU'LL SEE ON THE LEFT SIDE WE PLOT YOUR REVENUES AGAINST YOUR EXPENSES WHERE THE BAR IS LOWER THAN THE RED LINE.

WE'RE NOT MAKING ENOUGH MONEY TO COVER COSTS.

THE MIDDLE CHART IS A DEBT SERVICE COVERAGE IMPAIRMENT REQUIREMENT, WHERE WE HAVE A SIMPLE ONE TIMES COVERAGE TARGET, SO WE HAVE TO HAVE ENOUGH MONEY TO PAY OUR BILLS FOR OPERATIONS.

PLUS MAKE THE NOTE ON OUR DEBTS.

YOU'LL SEE THAT WE WON'T BE ABLE TO DO THAT IF WE DON'T CHANGE RATES BY 2027.

AND SO TOO WITH DAYS WORKING CAPITAL WHERE WE HAVE A FLOOR OF 45 AND A TARGET OF 80.

YOU SEE HOW YOU FALL WITHIN THOSE RANGES.

ANY QUESTIONS ABOUT THE OUTCOME WITH CURRENT RATES? FANTASTIC. SO AGAIN WE HAVE TWO SCENARIOS TO PRESENT TO YOU.

THE FIRST IS PRETTY STRAIGHT LINE.

IT'S LET'S MAKE AN INCREASE ACROSS ALL CLASSES AND NOT REALLY DO MUCH WITH THE RESIDENTIAL CUSTOMER OTHER THAN SAY, THE COST ARE GOING UP ACROSS THE ENTIRE RATE SCHEDULE. THAT WOULD BE, WE SAY, A UNIFORM INCREASE.

IT WOULD VARY FROM YEAR ONE THROUGH YEAR FIVE, BUT IN EACH YEAR IT WOULD BE A SET INCREASE AFFECTING ALL CUSTOMER CLASSES AND RATE TYPES.

SECONDLY, WE HAVE ANOTHER SCENARIO WHERE WE LOOKED AT INCREASING THIS AFFORDABLE RATE ALL THE WAY UP TO WHAT YOU'RE CURRENTLY PAYING FOR WATER.

I WILL SAY THAT DOESN'T COVER THE LOSS AND THE OTHER COSTS THAT YOU HAVE FOR WATER THAT YOU'RE NOT BILLING.

BUT IF YOU JUST TAKE THE STATED RATE OF NORTH TEXAS, THE ASSUMPTION IS THAT FIRST BILLED BLOCK WOULD NOT BE LESS THAN WE'RE PAYING FOR THE COST OF THE GOOD WE'RE SELLING.

EXCUSE ME. TO ACCOMMODATE THAT, WE ALSO PROPOSE NO RATE CHANGE FOR THAT RESIDENTIAL CUSTOMER ON THEIR MINIMUM

[01:40:04]

WE HAVEN'T ASSUMED THAT SOMEONE WITH A 1.5IN METER AND THOSE VOLUMES WOULD NEED THE AFFORDABILITY RATE AND THAT SORT OF CONSIDERATION.

SO THOSE RESIDENTIAL CUSTOMERS WITH AN INCH AND A HALF AND TWO INCH, AS PROPOSED, WOULD ACTUALLY PAY A HIGHER MINIMUM CHARGE IN THE COMING YEAR.

OTHERWISE, WE HELD THAT FLAT RATE.

SO A LOT OF LINE CHARTS HERE.

IF YOU'LL FORGIVE THE MESSINESS.

IT DOES TELL A STORY.

SO IF YOU'LL LET ME TALK THROUGH IT.

SO WHAT YOU HAVE ARE YOU AND SEVERAL OTHER COMPARATOR CITIES WHAT WE PLOTTED ON THE DOTTED LINE IS, OF COURSE, THE COMING YEARS.

NORTH TEXAS MUNICIPAL WATER DISTRICT UNIFORM RATE OR RATE FOR WATER PER THOUSAND GALLONS.

PLANO HERE IS REPRESENTED BY THE RED LINE.

HOPEFULLY THAT HELPS IT STAND OUT.

YOU'LL SEE THAT YOU HAVE NO CHARGE FOR THE FIRST THOUSAND GALLONS.

THAT'S NOT UNCOMMON.

A LOT OF COMMUNITIES HAVE SOME VOLUME BUILT INTO THEIR MINIMUM RATE.

NOT RECOMMENDING A CHANGE TO THAT.

HOWEVER, YOUR BUILD VOLUMES FROM 1 TO 5 ARE SUBSTANTIALLY LESS THAN WHAT YOU'RE PAYING FOR.

WATER COMING IN THE DOOR.

YOU'RE THE ONLY ONE IN THE COMPARATOR SET THAT DOES THAT.

AND AGAIN, IF THIS WERE ALGEBRA, WE'D SHADE IN THAT BOX BELOW THE DOTTED LINE AND DOWN TO YOUR RED LINE.

AND THAT'S $8.8 MILLION OF REVENUE POTENTIAL.

THAT SAID, YOU DO HAVE A MINIMUM CHARGE, AND THAT MINIMUM CHARGE IS AROUND $26, SORT OF INCLUDES POTENTIALLY SOME COVERAGE FOR THAT LOSS.

I DO LIKE THE FACT THAT YOUR MINIMUM CHARGE TODAY COVERS ABOUT 33% OF YOUR TOTAL NEED.

I THINK THAT'S A GOOD POLICY.

I WOULDN'T WANT TO REDUCE THAT AND DESTABILIZE YOUR REVENUE STREAM.

BUT AGAIN, FOR COMPARISON'S SAKE, ANY QUESTIONS ON THE COMPARATORS? YEAH. AT THE END OF THE DAY, WHAT THIS IS SAYING IS YOU SEE WHERE A RED LINE IS SO FAR DOWN 5000 BELOW EVERYBODY ELSE. THEY'RE CHARGING THE THEY'RE COMPLETELY GETTING THEIR MONEY BACK ON THE AMOUNT THAT WERE BEING CHARGED FOR NORTH TEXAS MUNICIPAL WATER DISTRICT.

SO REALLY WE'RE THE ONLY ONES OFFERING THIS AFFORDABLE RATE.

AND WHEN HE'S FINISHED, THAT'S GOING TO BE THE DISCUSSION.

IF Y'ALL STILL WANT TO OFFER IT, YOU KNOW, KEEP WITH SCENARIO ONE.

OR ARE WE GOING TO GO AHEAD AND MAKE THE MOVE NOW TO GO AHEAD AND AT LEAST GET BACK THE AMOUNT THAT WE'RE BEING CHARGED.

ALL RIGHT. SO THE ACTUAL RATES AS WE WOULD PROPOSE UNDER SCENARIO ONE, YOU SEE THE INCREASE THERE GOING UP FROM 2889 TO 3130.

THE MINIMUM CHARGE IN SCENARIO TWO IS UNCHANGED FOR THESE ONE INCH AND LOWER RESIDENTIAL CUSTOMERS.

YOU SEE THAT WE WOULD INCREASE UNDER SCENARIO ONE, THAT FIRST BUILD BLOCK UP TO $0.95.

UNDER SCENARIO TWO, THAT WOULD JUMP TO 385.

AS A RESULT.

YOU SEE THAT THE INCREASES IN SCENARIO TWO ON THE SUBSEQUENT TIERS CAN BE LESS THAN THEY WOULD BE OTHERWISE IN SCENARIO ONE.

AND YOU SEE THAT THOSE INCREASES ARE ROUGHLY 8.5%, WE SAY ROUNDED FROM SCENARIO ONE TO CURRENT AND 2.25%.

IF WE WERE TO LOOK AT THE ALTERNATIVE RATE PLAN.

ANY QUESTIONS ABOUT THE SETUP, THE SCENARIO OKAY.

FAIR ENOUGH. AGAIN, JUST BECAUSE WE LIKE CHARTS WE PLOTTED IT ONE MORE TIME.

THIS DOES SHOW YOU SORT OF A BREAK EVEN PERSPECTIVE.

SO YOU'LL SEE ACTUALLY A LOW VOLUME USER USING 1000 GALLONS WOULD PAY LESS IN 2025 USING SCENARIO TWO A USER SOMEWHERE BETWEEN 1 AND 2000 GALLONS.

WE'LL SAY ROUGHLY 1.6 THOUSAND GALLONS WOULD PAY ABOUT THE SAME REGARDLESS OF YOUR DECISION.

AND THEN EVERYONE ELSE ABOVE THAT WOULD CLEARLY PAY MORE, BECAUSE WE'RE CHARGING ABOUT $3 MORE FOR THE FIRST TIER USAGE.

SO YOU CAN SEE THOSE CUT OFF POINTS AT 1005 THOUSAND PLOTTED.

OKAY. SO A SUMMARY OF THE RATE DESIGN OPTIONS.

THIS IS SPECIFIC TO THE WATER AND WASTEWATER.

FOR SCENARIO ONE YOU WOULD HAVE AN 8.5% INCREASE ACROSS THE BOARD.

SUBSEQUENT YEARS CURRENTLY SUBJECT TO CHANGE AND FUTURE COST.

EDITS WOULD BE 9% FOR THE NEXT TWO YEARS AND NINE AND A QUARTER FOR YEARS FOUR AND FIVE OF THIS PLANNING HORIZON.

IN SCENARIO TWO, WE'VE TALKED AT LENGTH ABOUT WHAT WE WOULD DO, BUT JUST TO SUMMARIZE, WE WANT THAT FIRST BLOCK ONE GOAL OF SCENARIO TWO.

IT'S NOT YOUR OBJECTIVE YET.

IT WAS JUST MINE AS I LOOKED AT YOUR RATES.

AND IT MAY NOT BE YOURS AT ALL, BUT WAS TO COVER THE COST OF YOUR WHOLESALE WATER FOR EVERY UNIT YOU SELL, WITH NO INCREASE TO THOSE RESIDENTS FOR ONE INCH AND BELOW.

OTHERWISE, ALL THE RATES ARE GOING UP SEVEN AND A QUARTER.

THEN YOU SEE, THE NEXT TWO YEARS ARE SEVEN AND THREE QUARTERS, FOLLOWED BY 8% INCREASES.

[01:45:02]

NOW THEY GIVE US EVERY YEAR THE PERCENTAGE INCREASE THAT THEY'RE PLANNING.

THEY ALWAYS CHANGE AFTER THEY ADOPT THE BUDGET.

SO ANY CHANGES WILL BE INCORPORATED IN THE RATE MODEL.

BUT EVERYTHING THE BRAND NEW RATES THAT WE RECEIVED THE OTHER DAY, JULY 31ST, ARE ALL INCLUDED IN HERE.

SO THIS ALSO WHEN WE HAD ANOTHER RATE CONSULTANT, WHAT, FIVE YEARS AGO THE SAME PERCENTAGES WERE IN THERE.

THE ONLY DIFFERENCE IS OPTION.

SCENARIO TWO IS YOU'RE GOING TO BE THE INCREASE IS GOING TO BE LESS BECAUSE YOU'RE GOING TO GET THAT REVENUE.

IF YOU TAKE THE SUBSIDIZED RATE AWAY, YOU'RE GOING TO GET THAT REVENUE IN TWO.

SO THAT'S WHY IT'S THE DIFFERENCE BETWEEN THE SEVEN AND A QUARTER VERSUS THE EIGHT AND A HALF.

BUT IT IS WHAT WE KNOW FROM THE DISTRICT TODAY OKAY.

EXCELLENT. ALL RIGHT.

SO I'VE ALREADY SHOWN YOU THE WAY THIS WORKS.

I'LL JUST TELL YOU THAT UNDER BOTH SCENARIOS THE RATES WORK AND I'LL SHOW YOU WHERE YOU LAND.

WE TRIED TO MAKE THAT LAST METRIC, THAT BEING YOUR DAYS WORKING CAPITAL NEAR THE SAME SO THAT YOU EFFECTIVELY COULD CONSIDER SCENARIO ONE AND TWO IS PUTTING YOU IN EQUAL POSITION REGARDLESS.

OTHERWISE YOUR REVENUES MEET YOUR EXPENSES, YOU MEET YOUR DEBT SERVICE COVERAGE, AND YOU HAVE AMPLE WORKING CAPITAL.

I SAY THAT WE ARE SPENDING DOWN TO 45 DAYS, SO IF WE HAD A PROPER TARGET OF 80, WE AREN'T STRIVING FOR THAT WITH THE CURRENT RATE DESIGN.

SAME THING UNDER SCENARIO TWO.

SAME OBJECTIVES ARE MET AGAIN.

WE GET CLOSE TO THAT 45 DAY THRESHOLD AT THE END OF A FIVE YEAR PLAN.

ALL ELSE EQUAL.

SO THE IMPACT TO YOUR CUSTOMERS THIS IS I KNOW, CRITICAL TO MOST COUNCIL SURELY TO YOU AS WELL.

WE WOULD ANTICIPATE THIS FIVE YEAR BILL IMPACT, AS YOU SEE ON SCREEN, GOING FROM 24 TO 25 WITH 10,000 GALLONS OF WATER AND 5000 ASSUMED AS A WINTER AVERAGE, WOULD HAVE A BILL INCREASE OF $8.62 IN THE COMING YEAR.

YOU'D SEE THAT WOULD RISE FROM 111 AND 25 TO 157 BY FISCAL YEAR 29.

ANY QUESTIONS ON COMPARISONS? I DON'T WANT TO BELABOR THEM.

FANTASTIC. SIMILAR COMPARISON.

YES, SIR. OH, YES, SIR.

YES. THANK YOU.

I WANT TO CONFIRM MY UNDERSTANDING HERE.

IF I'M READING THIS RIGHT, IT LOOKS LIKE THE LOWER VOLUME BETWEEN 1000 5000 GALLONS FOR SCENARIO ONE, IS EFFECTIVELY SUBSIDIZED BY HAS A MODERATE RATE INCREASE, SUBSIDIZED EFFECTIVELY BY THE HIGHER RATE INCREASES ON HIGHER VOLUMES.

VERSUS SCENARIO TWO, WHERE IT'S JUST PRETTY MUCH RAISED ACROSS THE BOARD.

DOES THAT SUBSIDY ACHIEVE EQUILIBRIUM AFTER FIVE YEARS, OR IS THAT JUST BAKED IN IN PERPETUITY IN SCENARIO ONE? ASSUMING I'M CORRECT ABOUT THAT, I SAW KAREN VIGOROUSLY NODDING.

OKAY. YEAH. YEAH.

IT WOULD JUST PERSIST IF WE WERE TO MAINTAIN A PERCENT INCREASE BELOW YOUR NORTH TEXAS COST OF WATER BEFORE ACCOUNTING FOR OTHER COSTS, THEN IT WOULD JUST MAINTAIN UNDER THIS PLAN THAT PERCENT INCREASE OVER TIME.

AND YOU YOU'D BE GAINING GROUND.

BUT YOUR YOUR RATE INCREASES WOULD HAVE TO BE NORTH OF NORTH TEXAS FOR SOME TIME TO ACHIEVE BALANCE.

SO UNDER SCENARIO ONE, IF I'M UNDERSTANDING RIGHT, THAT SUBSIDY WOULD BASICALLY BE LOCKED IN IN PERPETUITY.

YES, SIR. UNTIL THE NEXT COUNCIL ACTION.

ABSOLUTELY. OKAY.

IT'S AS IT IS TODAY.

THERE IS THIS INHERENT SUBSIDY, RIGHT? OR YOU COULD SAY THEIR MINIMUM CHARGE IS COVERING SOME OF THAT.

IT'S REALLY A QUESTION OF HOW YOU WOULD SPIN IT AT THAT POINT.

BUT YES SIR YOU'RE CORRECT.

SO THAT IS NOT CHANGE IN SCENARIO ONE.

IT'S ONLY AFFECTED IN SCENARIO TWO.

OKAY. IT DOES SCENARIO TWO CONTEMPLATE PHASING THAT IN, BECAUSE THE DISPARITY BETWEEN $0.95 AND 385 IS PRETTY STARK. FOR 2025 BETWEEN SCENARIOS ONE AND TWO.

BUT I DON'T ANTICIPATE THE COST OF WATER GETTING ANY CHEAPER OR BETTER IN THE NEXT COUPLE OF DECADES.

SO INSTEAD OF INSTEAD OF LOCKING THAT SUBSIDY IN UNTIL A FUTURE COUNCIL TAKES ACTION AGAIN, IS IT POSSIBLE TO JUST PHASE THAT IN OVER TIME UNTIL EQUILIBRIUM IS ACHIEVED SO THAT SUBSIDY DISAPPEARS INSTEAD OF AS WATER RATES GO UP AND UP AND UP OVER THE DECADES, THE HIGHER VOLUMES ARE EFFECTIVELY SUBSIDIZING MORE AND MORE EVERY YEAR.

ABSOLUTELY. YEAH.

SO IF WE WANTED TO INCREASE, YOU KNOW, THE NOMINAL RATE FROM THE $0.95 IN SCENARIO ONE AND SAY, PUT ANOTHER DOLLAR ON IT, WE WANT TO START BRIDGING THAT GAP WITH OUR WHOLESALE COSTS. WE COULD DO.

SO. THE REST OF YOUR INCREASES WOULD OF COURSE FALL BETWEEN SEVEN AND A QUARTER WHICH IS THE FULL TILL.

LET'S DO IT NOW.

RIP THE BAND AID OFF SCENARIO AND THE 8.5% WITHOUT DOING SO.

AND SO YOU COULD PHASE THAT IN AND I COULD CERTAINLY MODEL THAT IF THAT WAS SOMETHING YOU WANTED TO SEE IN A MULTIYEAR FASHION.

[01:50:04]

BECAUSE BECAUSE I DON'T WANT TO NECESSARILY SEE A SUBSIDY MADE PERMANENT.

BUT I DON'T WANT TO PUNCH THE LOWER VOLUME USERS IN THE FACE ALL AT ONCE THIS YEAR.

I'D LIKE TO EXPLORE PHASING THAT IN IF THE REST OF COUNCIL WANTS TO PURSUE THAT 3 OR 5 YEARS.

WHATEVER WE THINK IS BEST, I'D SAY NO MORE THAN FIVE.

BUT THAT HELPS ON THE MODELING SIDE.

SURE. I MEAN, WHATEVER IT TAKES TO GET TO TO KEEP US, YOU KNOW, IN IN THE BLACK BASICALLY.

YEAH. THAT WOULD BE, I THINK, THE FIRST PRIORITY AND EASING INTO IT FOR OUR WATER CUSTOMERS WOULD BE OKAY.

CAN I SHELBY, CAN YOU EXPLAIN TO ME SO HOW HOW DOES THE SCENARIO ONE WORKS TO THE BENEFIT OF THE RESIDENTS WHEN IT'S SUBSIDIZING PEOPLE WHO ARE USING MORE WATER? NO, IT'S SUBSIDIZING.

SCENARIO ONE IS SUBSIDIZING PEOPLE WHO USE LESS WATER.

BETWEEN 1 AND 5000 GALLONS, THEY'RE AT A MUCH LOWER RATE THAN THEY WOULD BE ABOVE THAT.

SO IT'S THE PEOPLE WHO ARE USING 5000 GALLONS AND UP WHO ARE PAYING A HIGHER RATE TO SUBSIDIZE THE PEOPLE, HAVE LOWER VOLUMES.

I SEE, I SEE WHAT YOU'RE SAYING.

YEAH. ANTHONY.

THANK YOU. MAYOR.

ONE THING THAT I DO WANT TO JUST THROW INTO THE DISCUSSION AND WE CAN DO WITH IT WHATEVER, WHATEVER EVERYONE WANTS TO DO.

BUT GIVEN THAT THE THE SUBSIDY FOR THE 1 TO 5 000 GALLON USERS CAUSES RESIDENTIAL RATES TO BE LOWER THAN COMMERCIAL RATES IN TERMS OF THE EFFECTIVE RATE PER GALLON.

I DO THINK IT MERITS MENTION THAT WE PROVIDE ECONOMIC DEVELOPMENT INCENTIVES FOR COMMERCIAL BUSINESSES, BUT NOT FOR RESIDENTS.

AND SO I THINK, AS THE MAYOR WAS ALLUDING TO A FEW MINUTES AGO, ONE OF THE REASONS THAT THE MAYOR AND AND MARK AND DOUG AND OTHERS WORK SO HARD TO, TO BRING BUSINESSES TO OUR COMMUNITY IS THAT THERE'S A BENEFIT TO RESIDENTS, AND THIS IS ONE WAY THAT RESIDENTS ARE BENEFITING FROM THAT.

OBVIOUSLY, THE RESIDENTS ARE NOT GETTING THE INCENTIVES, YOU KNOW, AS AS SOME BUSINESSES ARE.

AND SO I JUST WANTED TO THROW THAT INTO THE DISCUSSION.

SO DOES THAT MEAN THAT YOU ACTUALLY PREFER THE SCENARIO ONE RATHER THAN THE SCENARIO TWO? YEAH, I THINK I WOULD, I WOULD GO FOR SCENARIO ONE, BUT SCENARIO ONE IS FLAT ALL THE WAY ACROSS, RIGHT? IS IT? YES.

SCENARIO ONE IS THE ONE WHERE IT'S UNIFORM.

WE DON'T CHANGE THE CURRENT ALLOCATION, BUT IT'S JUST A UNIFORM INCREASE FOR ALL USERS.

THAT'S CORRECT. YES, SIR. I'LL GO BACK TO THE SCENARIOS, THE SLIDES THAT SHOW THE BILL COMPARISONS.

OH YES, MA'AM. YES.

BECAUSE CERTAINLY I GOT TO TELL YOU I WATCHED TWO DIFFERENT BUDGET MEETINGS THIS WEEK.

THE CITY OF RICHARDSON, THE CITY OF MCKINNEY, WE WERE THE LOWEST ONE ON ALL THEIRS.

THIS CHART HERE IS VERY TELLING.

THE THIS IS RIGHT NOW WHERE WE ARE CURRENTLY.

ALL THESE CITIES ARE HAVE PLANNED EXPENDITURE.

I MEAN PLANNED REVENUE INCREASES.

THEY ALL HAVE THEM BECAUSE OF NORTH TEXAS MUNICIPAL WATER DISTRICT.

THEY THEY'RE ALL THOSE CITIES.

WE'RE STILL GOING TO BE AT THE BOTTOM.

SO WHETHER OR NOT YOU'RE SUBSIDIZING OR NOT SUBSIDIZING, WE ARE JUST FLAT AT THE BOTTOM.

JUST WANTED TO POINT THAT OUT.

SO YOU'VE GOT SCENARIO NUMBER ONE IS WHAT TWO CITIES UP IN FRONT OF ROCKWALL.

I HAVEN'T TALKED TO ROCKWALL, BUT I HAVE TALKED TO OTHER OTHER CITIES.

AND SCENARIO NUMBER TWO, YOU'RE JUST RIGHT UP THERE.

WHAT WE GOT SCENARIO NUMBER TWO.

RICHARDSON AND FRISCO ALL HAVE PLANNED RATE INCREASES, ALL OF THEM.

SO MOST LIKELY THAT WILL BE DOWN TO THE ONLY OTHER THING I WOULD ADD IN.

AND I THINK MATT PROBABLY ALREADY MATTHEW HAS THIS BUILT INTO THE RATE MODEL IS DON'T FORGET COUNCIL.

IN 2028, OUR METHODOLOGY BEGINS TO CHANGE TO THE FIVE YEAR ROLLING AVERAGE.

SO WE'RE GOING TO SEE A BIT OF A SHIFT IN WATER WILL BE INCENTIVIZED TO CONSERVE EVEN MORE IN THAT CONSERVATION, ESPECIALLY SINCE WE'RE TALKING ABOUT THE PROPOSAL OF WHERE THE GALLONS ARE BEING USED.

EVEN AT THE LOW END, CONSERVATION CAN HAPPEN IN A VERY SIGNIFICANT WAY IN PRICE INDICATORS MAKE A BIG DIFFERENCE IN THAT.

SO SO WOULDN'T IT MAKE SENSE TO TO HAVE THE, THE THE DIFFERENCE BETWEEN THE, YOU KNOW, PEOPLE WHO ARE USING MORE THAN 1000 GALLONS TO PAY MORE BECAUSE THEN INCENTIVIZE THEM TO REDUCE THE USAGE.

AND THAT WOULD BE SCENARIO TWO.

RIGHT. YOU COULD YOU COULD DEFINITELY MAKE THAT ARGUMENT.

RIGHT. AND TO CLARIFY, BECAUSE THE 2028 IS A BIT CLOUDY, I AGREE THAT IT WOULD BE BENEFICIAL TO SET A POLICY NOW THAT WOULD HELP YOU HAVE A BETTER FIVE YEAR HISTORICAL COME 2028, WHICH WOULD ENCOURAGE CONSERVATION.

SCENARIO TWO DOES THAT.

HOWEVER, I DID NOT ASSUME A REDUCTION BECAUSE I DON'T KNOW HOW, AS YOU KNOW, SO MANY MULTIVARIABLE.

[01:55:06]

CITY MANAGER ISRAELSON.

THAT'S OUR ASSUMPTION BUILT INTO THE MODEL THAT WE USE.

WHAT WE GOT NOW. THAT'S FINE.

I'M JUST COUNTING ON ABBY TO WORK REALLY HARD OUT THERE IN THE COMMUNITY TO LOWER THAT BILL.

BUT OF COURSE, AS WE GO ALONG EVERY YEAR, WE'RE GOING TO BE UPDATING IT.

SO ALL THOSE, YOU KNOW, ALL THE CHANGES ARE GOING TO BE OCCURRING.

ALL THOSE WILL BE BUILT.

ALL RIGHT. SO COUNCIL DO YOU FEEL COMFORTABLE PROVIDING DIRECTION ON SCENARIO ONE VERSUS SCENARIO TWO? OR WOULD YOU RATHER WAIT TILL THE 26TH TO THINK ABOUT THIS FURTHER? AND I'M LIKE COUNCILMAN WILLIAMS HERE.

I KIND OF LIKE THE APPROACH WHERE WE PHASE IN THE SCENARIO TWO.

I CERTAINLY DON'T WANT TO HIT THOSE THAT ARE CONSERVING AND ALSO THE SENIOR CITIZENS, AS WHAT YOU MENTIONED.

BUT WE'RE BASICALLY WE'RE BASICALLY GIVING THEM WATER, IT SEEMS LIKE AND I THINK IF WE'RE ABLE TO PHASE THAT IN TO AGAIN, USING THE DRUMSTICK SCENARIO, THAT'S GOING TO HELP US GET THERE.

I KIND OF LIKE THE IDEA OF A THREE YEAR INCREASE INSTEAD OF A FIVE YEAR.

WELL, I THINK THE THREE YEAR MIGHT BE GOOD.

IF 28 IS YOUR IS YOUR DATE THAT WE'RE GOING TO SEE SOME CHANGES ANYWAY? YEAH. I THINK THREE THREE YEAR MIGHT BE BEST.

TO YOUR POINT REGARDING THE ECONOMIC DEVELOPMENT FUND AND INCENTIVES.

WE DO HAVE THAT, BUT MOST BUSINESSES DON'T.

THAT'S ON A VERY SPECIAL CASE BY CASE BASIS.

SO MOST OF OUR COMMERCIAL BUSINESSES, THAT'S KIND OF REDUNDANT COMMERCIAL BUSINESSES.

BUT MOST OF OUR BUSINESSES, THEY USE MORE THAN THE AVERAGE AMOUNT OF WATER, BUT THEY DON'T BENEFIT FROM THE ECONOMIC DEVELOPMENT, EXCEPT IN THE SAME SENSE THAT OUR RESIDENTS DO, WHICH IS GENERICALLY AND WRIT LARGE.

I THINK THAT'S A FAIR POINT.

I'M GOOD WITH THE PHASE IN THAT.

THAT'S A THAT'S AN EXCELLENT POINT.

AND LISTEN, THE IF YOU PHASE IT IN OVER THREE YEARS, IT'S $1.28 A MONTH.

OKAY. I THINK THAT THAT'S THERE YOU GO.

SO AND THEN AT THE END OF THE THREE YEARS WE WON'T BE SUBSIDIZING ANYMORE OKAY I THINK THAT'S A GREAT PLAN.

EVERYBODY OKAY WITH THAT.

DO WE NEED TO MAKE THAT OFFICIAL.

YEAH. MAKING IT OFFICIAL WOULD BE HELPFUL.

OKAY I'D LIKE TO MAKE A MOTION THAT WE HAVE A PHASED APPROACH.

SCENARIO TWO OVER A THREE YEAR SPAN.

SECOND SCENARIO 2 OR 1.

OKAY. I WAS JUST MAKING SURE YOU SAID THREE YEARS, THREE YEARS, THREE YEARS OVER A THREE YEAR.

THREE. OKAY.

EVERYBODY OKAY? WE'RE GOOD. EVERYBODY UNDERSTAND? ALL IN FAVOR, RAISE YOUR HAND.

OKAY. THANK YOU.

OKAY. GO. YEAH. GO.

POINT OF CLARITY. REAL QUICK, REAL QUICK.

WE WANT TO DISCUSS SOMETHING JUST REALLY QUICK.

WE'RE GOING TO ADOPT ALL THIS.

OF COURSE. OCTOBER 1ST.

ALMOST. MATTHEW'S TEAM IS THE SECOND OR THIRD CONSULTANT WE'VE HIRED.

AND SAID, KAREN, ON YOUR COMMERCIAL RATES, COMMERCIAL AND SPRINKLER RATES, EVERYBODY'S TEARING THEM DIFFERENT THAN Y'ALL ARE.

SO WHAT WE WANT TO DO OVER THE NEXT YEAR IS TO GO BACK IN.

IT REQUIRES A LOT OF RESEARCH AND REVIEW AND COME BACK NEXT YEAR.

AND WE MAY BE IMPLEMENTING OR ASKING Y'ALL IF WE CAN IMPLEMENT SOME NEW TIERS ON COMMERCIAL AND SPRINKLER RATES FOR COMMERCIAL.

WE JUST WANTED TO MENTION THAT.

DO YOU HAVE ANYTHING TO ADD ON THAT? NO, MA'AM. I THINK THAT'D BE AN EXCELLENT IDEA TO KIND OF CREATE SOME STRATIFICATION IN YOUR COMMERCIAL CLASS.

YOU HAVE DIFFERENT USER TYPES, SUBSTANTIALLY DIFFERENT.

THE OTHER QUESTION I HAD FOR CLARITY, IF I MAY, I KNOW YOU'VE ALREADY TAKEN ACTION.

MY APOLOGIES ON THE MINIMUM CHARGE.

SCENARIO TWO DOES ENVISION NO CHANGE.

IS THAT STILL THE PLAN FOR FISCAL 25, OR DOES THAT MINIMUM NEED TO GO UP BY THE STANDARD SEVEN AND A QUARTER PERCENTAGE OR SEVEN AND 7.75. DO I NEED TO ALLOW THE MINIMUM TO ADJUST NOW THAT WE'RE NOT GETTING AS MUCH FROM THAT FIRST BUILD TIER? KAREN, WE HAVE A FAIRLY HEALTHY FUND BALANCE RIGHT NOW.

WATER, SEWER. I THINK WE COULD ABSORB THAT THIS YEAR AND NOT ADJUST THE MINIMUM.

SO NO MINIMUM CHANGE ADJUST.

THANK YOU SO MUCH. YEAH THAT'S ALL I HAD.

THANK YOU KAREN OKAY.

THANK YOU MATTHEW. THANK YOU.

WE APPRECIATE IT.

NO, MA'AM. GOOD EVENING EVERYONE.

I'M ABBY OWENS. I DON'T THINK IT'S ON.

THERE WE GO. I'M ABBY OWENS, DIRECTOR OF PUBLIC WORKS.

I CAME BEFORE YOU ALL LAST YEAR AND THE YEAR BEFORE ABOUT THE SOLID WASTE FUND AND INCREASES FOR RATES THERE.

THIS IS OUR CURRENT RATE.

AND THEN THE ADDITIONAL RATES THAT WERE RECOMMENDED WHEN WE WORKED WITH NUGEN TO DO OUR SOLID WASTE STUDY LAST YEAR.

SO WE ARE CURRENTLY AT THE 95 GALLON CART RATE OF $23.60, BASED UPON WHAT OUR FUNDING NEEDS WERE FOR THE NEXT FIVE YEARS.

WELL, FOR YEARS NOW, IT WAS RECOMMENDED THAT WE DO A $1 INCREASE FOR THAT CART AND THEN APPLY THAT PERCENTAGE TO THE 68 GALLON AND THE EXTRA

[02:00:05]

SO WITH THAT LOAN, WE WERE ABLE TO GO FROM NEGATIVE SEVEN DAYS OF WORKING CAPITAL TO 21 DAYS POSITIVE.

AND THEN THIS YEAR WE'RE SITTING AT ABOUT 38 DAYS.

BUT AFTER THE STORM, AS WE HAD TALKED ABOUT ON MONDAY SO FAR, THE SOLID WASTE FUND IS PLANNING TO TAKE ABOUT A $1.25 MILLION HIT DUE TO STORM RECOVERY.

SO ALTHOUGH WE ORIGINALLY THOUGHT THAT WE WOULD BE ENDING THIS YEAR WITH 38 DAYS OF WORKING CAPITAL, IT'S GOING TO BE PROBABLY CLOSER TO 23.

AND SO THAT YEAR FOR 2425, THAT DOES BUILD IN THAT $1 INCREASE SO THAT WE CAN GET TO THE 37 DAYS.

ANY QUESTIONS ON THIS? SO WE JUST WANTED TO KIND OF SHOW YOU ALL WHERE THIS WOULD HAVE US LIVE FOR THE REST OF OUR MEMBER CITIES WITHIN THE NORTH TEXAS MUNICIPAL WATER DISTRICT SOLID WASTE GROUP.

THIS STILL PUTS US TOWARDS THE TOP, BUT OTHER CITIES ARE HAVING TO INCREASE THEIR RATES AS WELL.

SO THESE ARE ACTUALLY WHAT THEIR PROPOSED RATES ARE FOR 2425.

AND THAT WAS IT.

ANY QUESTIONS? ANY QUESTIONS FOR ABBY.

THANK YOU. THANKS.

OKAY. WE'RE MOVING RIGHT ALONG.

JUST REAL QUICK.

[VII. Community Investment Program]

WE HAD A WHOLE PROGRAM THE OTHER NIGHT.

IT'S $317.3 MILLION.

JUST WANTED TO MAKE SURE YOU DIDN'T HAVE ANY QUESTIONS REGARDING ANY OF THE PROJECTS OR ANY OF THE FUNDING THAT WE DO HAVE FOR THE PROJECTS.

OKAY. SEEING NONE.

MR. ISRAELSON.

TAKE IT AWAY.

[VIII. Proposed Ad Valorem Tax Rate]

I HAVE BEEN ABLE TO GO BACK AND PULL SOME NUMBERS TOGETHER TO BE ABLE TO PRESENT YOU SOME OPTIONS.

SO AS YOU'LL REMEMBER, WE HAD WITHIN THE BUDGET $2.5 MILLION SET ASIDE FOR ONE TIME PAYMENTS, NOT BONUSES.

PAYMENTS TO GROSS PAYMENTS TO TO EMPLOYEES THAT WE INTENDED TO HAVE IN THE DECEMBER TIME FRAME.

ADDITIONALLY, WE HAD $2.8 MILLION SET ASIDE TO GO TO THE RAINY DAY FUND.

THAT COUNCIL WAS REDIRECTED AND ASKED THAT WE CONSIDER COMPENSATION ADJUSTMENTS.

PART OF THE SCENARIO ASPECT THAT I WOULD LOOK AT IS SHOULD COUNCIL CONSIDER THOSE SEPARATE OR TOGETHER, MY RECOMMENDATION WOULD BE TO LUMP THOSE TOGETHER, TO BE ABLE TO LOOK AT PROVIDING THE MAXIMUM VALUE BACK TO THE EMPLOYEES.

BUT THAT IS A COUNCIL DECISION.

SO COMBINED, IT'S $5.3 MILLION OF TOTAL AVAILABLE FUNDS TO BE ABLE TO DO THIS.

I WOULD ADD THE CAVEAT THAT THE MODELING THAT WE'VE LOOKED AT ANTICIPATES A JANUARY 1ST START DATE FOR ANY COMPENSATION ADJUSTMENTS.

IT WOULD NOT START OCTOBER 1ST, BUT JANUARY 1ST.

AND SO I DID LOOK AT SEVERAL SCENARIOS.

OUR COMPENSATION PHILOSOPHY IS MEDIAN PLUS 5%.

WE HAVE A NUMBER OF POSITIONS IN THE ORGANIZATION THAT ARE NOT AT MEDIAN PLUS 5% AS WE CURRENTLY STAND IN THE CURRENT YEAR.

SO NOT NOT EVEN TALKING ABOUT RAISES THAT MAY BE COMING IN OCTOBER OR JANUARY, BUT IN THE CURRENT YEAR.

SO OUR PHILOSOPHY IS NOT JUST MEDIAN PLUS 5%.

IT GIVES US SIX YEARS TO ACHIEVE THAT MEDIAN PLUS 5%.

SO TO ACHIEVE MEDIAN PLUS 5% IN THAT SIX YEAR TIME FRAME, AND LOOKING AT WHERE WE ARE IN THE COMPENSATION PHILOSOPHY, THAT WOULD BE $3.9 MILLION.

SO THAT LEAVES $1.4 MILLION THAT WE COULD USE FOR A FUTURE MIDYEAR ADJUSTMENT, RECOGNIZING THAT AS SOON AS WE MADE THIS ADJUSTMENT, THERE'S OTHERS THAT WOULD BE MAKING FURTHER ADJUSTMENTS AND IT WOULD AGAIN REQUIRE SOME RECALIBRATION.

SO IF WE DID THAT 3.9 AS OF ONE, ONE, 20, 24, IT WOULD LEAVE $1.4 MILLION TO AGAIN BE ABLE TO MAKE FURTHER MIDYEAR ADJUSTMENTS BASED ON THE TEN ONE OR THE ONE ONE ADJUSTMENTS THAT OTHER CITIES MAKE TO MAKE SURE WE'RE STILL COMPETITIVE WITHIN THE MARKET.

THE DISADVANTAGE TO THAT APPROACH IS NOT ALL POSSESSIONS RECEIVE AN ADJUSTMENT, AND I THINK THAT THAT'S SOMETHING THAT'S CONCERNED.

AND EVEN WITHIN THE POSITIONS RECEIVING THE ADJUSTMENT, THE ADJUSTMENT WILL NOT BE THE SAME.

IT WILL BE POSITION BY POSITION BASED UPON THE MARKET.

THAT'S KIND OF HOW THOSE GET EVALUATED.

SO IT WON'T BE A STANDARD 2%.

IT WOULD BE ONE MIGHT BE 2.1%.

ONE MIGHT BE 0.2%.

IT JUST DEPENDS ON THE POSITION.

BUT IT WOULD AFFECT THOSE POSITIONS AND IT WOULD ALLOW FOR CLOSER COMPLIANCE TO OUR COMPENSATION PHILOSOPHY.

THE OTHER ASPECT THAT WE COULD LOOK AT IS ACROSS THE BOARD DISCUSSIONS AND AS IT STANDS RIGHT NOW, $5.3 MILLION.

[02:05:07]

THE CHALLENGE WITH THAT ONE IS, AS WE TALKED ABOUT THE COMPENSATION PHILOSOPHY, NOT ALL POSITIONS WOULD BE AT THAT MEDIUM PLUS 5% BECAUSE IN LOOKING AT ACROSS THOSE, SOME TO GET TO THE MEDIUM PLUS 5% WOULD NEED GREATER THAN A 3%.

SOME MIGHT NEED LESS THAN 3%.

SO THERE'S PROS AND CONS TO EACH ONE.

BUT WE WELCOME THE FEEDBACK THAT COUNCIL MIGHT HAVE, AND WE ARE HAPPY TO TAKE THAT AND INCORPORATE THIS INTO THE BUDGET.

SO WITH THAT, I'M HAPPY TO ANSWER QUESTIONS.

I DON'T HAVE QUESTIONS ON THAT.

I APPRECIATE YOU COMING BACK WITH THOSE OPTIONS FOR US.

MY PREFERENCE IS TO GET THE PEOPLE UP TO MEDIAN PLUS FIVE BECAUSE I THINK IT HELPS US RETAIN OUR PEOPLE.

I THINK IT'S NICE TO BE ABLE TO GIVE EVERYBODY A RAISE, BUT I THINK I'VE SAID THIS EVERY YEAR THAT I'VE BEEN HERE, I'VE NEVER BEEN A PROPONENT OF JUST ACROSS THE BOARD RAISES BECAUSE I THINK IT YES, I THINK IT DECREASES MOTIVATION.

I DON'T THINK IT INCREASES MOTIVATION FOR THE HARD WORKERS TO KEEP WORKING HARD BECAUSE IT'S EVERYBODY GETS ONE, AND THEN YOU'RE REWARDING PEOPLE WHO MAY NOT DESERVE ONE.

SO I WOULD RATHER GET PEOPLE UP TO WHERE THAT MEDIAN RATHER THAN JUST DOING AN ACROSS THE BOARD RAISE FOR EVERYBODY. RICK.

THANK YOU. MAYOR. COULDN'T HAVE SAID IT BETTER.

COUNCIL MEMBER PRINCE.

AS AS I MENTIONED THE OTHER NIGHT AT OUR MEETING, I THINK THE THE REALLY CRITICAL ISSUE FOR ME IS THAT WE'RE CERTAIN THAT OUR PUBLIC SAFETY POLICE AND FIRE ARE DEFINITELY AT THAT MEDIAN, YOU KNOW, POINT FIVE, BECAUSE THAT'S WHAT KEEPS US ABLE TO DO THE THINGS THAT WE DO AS A CITY OF EXCELLENCE IS WE HAVE PUBLIC SAFETY.

THAT'S WHY PEOPLE WANT TO LIVE HERE.

THAT'S WHY CORPORATIONS WANT TO RELOCATE HERE.

SO I'M GLAD TO SEE US LOOKING AT THAT DIRECTION.

AND I WOULD LOVE TO SEE THE MEDIAN POINT FIVE IMPLEMENTED.

AND I WOULD ADVISE THAT THIS IS FOR ALL EMPLOYEES.

SO THERE ARE SO IT'S GOING TO BE PUBLIC SAFETY AS WELL AS ALL OF OUR GENERAL GOVERNMENT TECHNOLOGY SERVICES.

EVERYBODY ELSE. THANK YOU MAYOR.

I AGREE.

YOU KNOW, I'M THRILLED TO HEAR THAT WE'RE ABLE TO, YOU KNOW, TO MAKE THIS AMOUNT AVAILABLE FOR SALARY INCREASES FOR EMPLOYEES.

AND I AGREE WITH WHAT COUNCIL MEMBERS PRINCE AND SMITH HAVE SAID.

YOU KNOW, I THINK THE POINT OF OUR COMPENSATION PHILOSOPHY IS TO ATTRACT AND RETAIN GREAT TALENT BECAUSE AS I SAID EARLIER, AS WE'VE ALL SAID, YOU KNOW, THE CITY IS A PEOPLE ORGANIZATION. AND SO WE WANT THE BEST PEOPLE.

SO I THINK THAT'S THE BEST WAY TO DO IT.

I ALSO JUST WANTED TO SAY REALLY QUICKLY TO THE MAYOR, I JUST WANTED TO APOLOGIZE BECAUSE I FELT LIKE I FIRED BACK TOO AGGRESSIVELY DURING YOUR COMMENTS, DURING MY PRESENTATION, AND THAT MADE THE WHOLE TONE OF MY PRESENTATION HONESTLY MORE STRIDENT THAN I HAD INTENDED.

BUT THE REASON THAT'S IMPOSSIBLE COMING FROM YOU.

WELL, THAT'S KIND OF YOU TO SAY, MAYOR.

AND RIGHT BACK AT YOU.

SALUTATIONS, SALUTATIONS.

YES. WELL, THANK YOU, I APPRECIATE THAT.

I DID JUST WANT TO SAY REALLY QUICKLY, THOUGH, THE REASON I FELT IT IMPORTANT TO CLARIFY THAT IS THAT BECAUSE OF SOME OF THE EXEMPTIONS THAT THE COUNCIL HAS CREATED IN THE PAST, IT IS UNFORTUNATELY ACTUALLY NOT QUITE THE CASE FOR A HOMEOWNER WHO HAS A HOMESTEAD EXEMPTION, BUT NO OTHER EXEMPTIONS, THAT THEIR PROPERTY TAXES CAN ONLY INCREASE BY THE INCREASE IN THEIR PROPERTY VALUES, EVEN WHEN WE MAINTAIN THE SAME TAX RATE.

ANYWAY, I JUST WANTED TO SAY CAN WE SWITCH TOPICS? WELL, I THINK I THINK WE NEED TO FINISH SALARIES FIRST.

COUNCILMAN. OH, FANTASTIC.

SORRY, ANTHONY'S FOCUSED VERY, VERY DIRECTLY ON TOPIC, BUT THAT'S OKAY.

YOU'RE CLOSE. YEAH. WE'LL GET THERE.

JUST ONE SECOND. OKAY, SO I HAVE A QUESTION.

I AGREE WITH EVERYTHING THAT'S BEEN SAID OTHER THAN ANTHONY'S, BUT WHAT ABOUT THE ISSUE ABOUT THE HIRING FREEZE? DID WE ADDRESS THAT AT ALL? THE HIRING FREEZE WOULD NOT BE IMPACTED BY THIS.

THE HIRING FREEZE IS STILL NEEDED.

WE STILL NEED THE FUNDS THAT THE HIRING FREEZE IS GIVING US AS FAR AS THE RETAINED EXPENDITURES THAT WE'RE AVOIDING.

SO WE STILL NEED TO CONTINUE THAT HIRING FREEZE THROUGH JANUARY 1ST.

WE COULD HAVE GOTTEN RID OF THE HIRING FREEZE IF WE USED THE $2.8 MILLION TO FILL THAT HOLE, BUT WE THE CHOICE WAS TO FOCUS ON COMPENSATION FOR THE EMPLOYEES THAT ARE CURRENTLY HERE. OKAY, SO THE $2.8 MILLION WAS EITHER GOING TO BE GOING TO INCREASING SALARY FROM MEDIUM TO PLUS FIVE OR TO ELIMINATE HIRING FREEZE.

IS THAT WHAT I'M HEARING? OR ORIGINALLY IT WAS FOCUSED ON THE RAINY DAY FUND OF ADDING ADDITIONAL FUNDS TO THE RAINY DAY FUND.

AND THE 2.5 WAS GOING TO BE THE THOUSAND DOLLARS.

OH, AT THE BEGINNING OF THE YEAR.

RIGHT. SO NOW THEY'LL BE COMBINED ACCORDING TO EVERYBODY.

[02:10:03]

YOU KNOW, I'VE HEARD ON MOTIVATION, WE DO NOT HAVE A MERIT BASED PAY SYSTEM.

SO I THINK IT'S REALLY IMPORTANT THAT WE NEED TO BE CAREFUL IN WHEN WE TALK ABOUT MEDIUM PLUS FIVE.

THAT'S A MARKET BASED SYSTEM, NOT A MERIT BASED SYSTEM.

SO WHEN WE TALK ABOUT MARKET BASED WE'RE COMPARING OURSELVES TO OTHER CITIES.

SO AS FAR AS MOTIVATION GOES COMPENSATION IS A GREAT MOTIVATOR.

AND I'M NOT TAKING ANYTHING AWAY FROM IT.

BUT I DON'T WANT TO MISLEAD IN THAT, THAT IT'S NOT BASED ON MARKET.

SO IF OTHER CITIES RAISE THEIR RATES AND RAISE THEIR COMPENSATION, THAT'S GOING TO RAISE THINGS VERSUS ANYTHING ELSE.

AND I WILL TELL YOU, WE WILL BE DIGGING INTO THAT REALLY, REALLY HARD THIS FALL, BECAUSE RIGHT NOW PLANO IS IN EVERY SINGLE CITY'S COMPENSATION PHILOSOPHY AND COMPARISON. SO WE ARE WEIGHTED AS COMPARED TO EVERY OTHER CITY BECAUSE WE LEAD IN SO MANY DIFFERENT PLACES.

SO IN MANY WAYS, WHEN WE ACT, THEY ACT, WHICH MEANS WE HAVE TO ACT AGAIN.

IT'S A CIRCLE, AND THAT'S KIND OF WHAT WE'RE FACING RIGHT NOW AND LONG TERM.

I'VE GIVEN YOU ALL THE PICTURE OF WHAT WE'RE EXPECTING IN THE NEXT SEVERAL YEARS, AND I KNOW SOME OF YOU WON'T BE HERE, BUT SOME OF YOU WILL.

IT'S GOING TO BE DAUNTING.

WE NEED TO ADDRESS THIS IN A WAY THAT WE CAN MAKE A SUSTAINABLE MODEL THAT WORKS FOR EVERYBODY, AND THAT WE DO KEEP OUR GREAT EMPLOYEES.

BUT WE'VE GOT TO ADDRESS WHAT'S COMING DOWN THE PIPE.

OKAY. DO YOU NEED.

I'M SORRY.

I JUST WANT TO MAKE SURE WE'RE NOT ABOUT TO MAKE A DECISION RIGHT NOW, BECAUSE THAT JUST GAVE ME A LOT TO THINK ABOUT.

AND SO IF YOU'RE TALKING ABOUT MAKING A MOTION, I'M HOPING YOU'RE NOT.

AND BECAUSE I THINK THAT I'VE BEEN ON COUNCIL THREE YEARS, I GUESS I SHOULD HAVE UNDERSTOOD THAT.

I THOUGHT IT WAS OUR FIRST RESPONDERS THAT WERE STRICTLY ON THE ON THE SCALE.

I DIDN'T REALIZE WE DIDN'T HAVE ANY MERIT WHATSOEVER.

AND I THINK THAT I YEAH, IT'S GIVEN ME A LOT TO THINK ABOUT.

WELL, MAKE NO MISTAKE, WE DON'T HAVE MERIT, BUT WE STILL HAVE EVALUATIONS.

WE STILL HAVE PERFORMANCE MEASURES.

WE STILL HAVE A LOT OF OTHER ELEMENTS THAT ARE PART OF THAT.

BUT WE STRIPPED OUT THAT PARTLY BECAUSE THE SYSTEM THAT WE HAD HAD, WE WERE USING IT, THAT WE HAD BETWEEN 1 AND 3% TO BE ABLE TO MOTIVATE FOLKS. SO YOUR LOWEST PERFORMERS MIGHT GET 0 OR 1%, YOUR HIGHEST PERFORMERS GOT THREE.

AND WE FOUND THAT IT WASN'T REALLY AN INCENTIVE.

AND IN MANY WAYS IT BECAME A QUESTION OF, YOU KNOW, HOW MUCH YOU'RE ACTUALLY PUTTING IN.

AND THEN IN PRACTICALITY, THE WAY IT WAS APPLIED WAS MOST PEOPLE WENT TO TWO TO SO THAT THEY COULD JUST PROVIDE IT SIMPLY ACROSS THE BOARD.

SO YEARS AGO WE STRIPPED THAT OUT, WENT TO KIND OF ACROSS THE BOARD RAISES.

BUT THEY ACROSS THE BOARD RAISES AGAIN DOESN'T RECOGNIZE THAT THERE'S A DIFFERENT MARKET VALUATION FOR EACH POSITION.

AND SO WHEN YOU HAVE THAT, YOU HAVE TO BALANCE THAT OUT.

AMONGST THE CLASSES AND AMONGST THE MARKET.

SO THAT'S WHERE WE'RE AT.

SO IT'S NOT SOMETHING THAT THAT YOU KNOW, WE'RE VERY FORTUNATE TO BE ABLE TO HIRE GREAT FOLKS.

AND WE HAVE GREAT TALENTED CREATIVE FOLKS.

BUT I DIDN'T WANT THE MERIT BASED SYSTEM TO BE CONFUSED, BECAUSE I THINK THAT FROM A MOTIVATION PERSPECTIVE, THEY'RE MOTIVATED FOR VARIOUS REASONS TO, TO BE HERE, INCLUDING TO, TO WORK AT A GREAT CITY.

BUT I JUST WANTED TO MAKE SURE THAT AS WE'RE TALKING ABOUT THAT, I'M PROVIDING CLARITY FOR COUNCIL.

ALL RIGHT. SO DO WE WANT TO MAKE A DECISION ON THIS OR DO WE WANT TO WAIT TILL YOU KNOW, A LATER TIME? I THINK, YOU KNOW, MY VOTE.

I WANT I KNOW I SAID, I KNOW I WANT THE COMPENSATION, THE COMPENSATION, THE MEDIA PLUS FIVE, THE MEDIUM PLUS FIVE.

I JUST I GUESS I'M KIND OF STRUGGLING BECAUSE I KIND OF AGREE WITH COUNCILWOMAN HOLMER THAT I THOUGHT MAYBE THAT WE ALSO DEALT WITH THE HIRING FREEZE, AND I, I THOUGHT THAT WAS ONE OF THE THINGS THAT WE WERE GOING TO LOOK AT WAS ELIMINATING HIRING FREEZE AND ALSO DEALING WITH THE COMPENSATION FOR SALARY FOR RETENTION PURPOSES.

BUT I GUESS NOW BECAUSE WE DON'T HAVE ENOUGH MONEY, SO THEREFORE WE CAN ONLY DO ONE OR THE OTHER.

IS THAT I MEAN, IS THAT.

NO, THERE'S TWO THINGS.

REMEMBER, $3.9 MILLION ADJUSTS TO CURRENT DAY SALARIES.

WE'RE GOING TO HAVE A NUMBER OF OTHER CITIES THAT ADJUST IN OCTOBER AND JANUARY.

SO THERE'S $1.4 MILLION LEFT OVER FROM THAT 3.9 TO GET OUR ADJUSTMENT.

WHAT YOU DO WITH THAT 1.4, WE COULD BRING IT BACK AND DO MID-YEAR ADJUSTMENTS BECAUSE WE HAVE $2 MILLION ALREADY PLANNED FOR SOME OF THE MARKET ANALYSIS WE'RE DOING.

WE CAN ADD THAT 1.4 TO THAT, AND WE CAN MAKE SURE THAT WE ARE FULLY CAUGHT UP AT THAT POINT IN THE MARKET FOR ALL OF OUR EMPLOYEES.

AND AT THAT TIME, THE HIRING FREEZE SHOULD BE OVER.

WE'RE PLANNING ON ENDING IT JANUARY 1ST.

BUT IF COUNCIL SAID, WELL, LET'S TRY TO USE THAT 1.4 TO GET THE HIRING FREEZE OVER FIRST.

[02:15:04]

I UNDERSTAND THAT. OKAY.

CAN I JUST CAN I JUST ELABORATE ON THAT IS ABOUT THE HIRING FREEZE.

I MEAN, I FEEL LIKE WE HAVE TO LOOK AT EACH DEPARTMENT INDIVIDUALLY BECAUSE YOU MAY HAVE ONE DEPARTMENT THAT HAS A LOT OF GAPS AND PEOPLE ARE HAVING TO PULL THE WEIGHT OF OTHERS AND, AND OTHERS THAT ARE FULLY STAFFED, AND THEY'RE ALL GETTING BROUGHT UP TO MARKET RATE.

AND I JUST DON'T FEEL LIKE YOU CAN ACROSS THE BOARD MAKE A DECISION LIKE THAT AND IT BE VERY FAIR.

SO THAT'S WHY I'M STRUGGLING WITH MAKING THAT DECISION RIGHT NOW.

MAKE NO MISTAKE, THIS THERE IS A LOT OF BALANCING WITH EMPLOYEES RIGHT NOW, THERE'S A LOT OF WORK BEING DONE, AND EVERY VACANCY HAS A WORKLOAD THAT'S IMPACTING THE ORGANIZATION.

IT'S IMPACTING THE EMPLOYEES, BUT IT'S ALSO IMPACTING THE CITIZENS.

THERE'S MORE STUFF SAYING, HEY, WE CAN'T GET TO IT RIGHT NOW.

THIS IS GOING TO BE DELAYED.

THERE IS AN IMPACT.

BUT COUNCIL MAKE NO MISTAKE, THE FINANCIAL CONDITION WE'RE IN, WE HAVE GOT TO EITHER REDUCE EXPENDITURES OR RAISE REVENUES.

THAT'S WHERE WE'RE AT.

SO I DON'T WANT TO BE, YOU KNOW, POLLYANNAISH ABOUT ANYTHING.

BUT I ALSO DON'T WANT TO TELL YOU THAT THINGS ARE GOING TO BE ROSY IF THEY'RE NOT.

AND RIGHT NOW WE'VE GOT TO FACE THE ISSUE THAT IF WE'RE GOING TO BALANCE THE BUDGET AND DO SO IN A SYSTEMIC WAY THAT YEAR OVER YEAR, WE'RE GOING TO BE GOOD. WE HAVE TO REDUCE EXPENDITURES RIGHT NOW THAT'S WHERE WE'RE AT.

SO WE'RE DOING THAT.

AND WHAT WE'RE TRYING TO DO IS BE AWARE OF HOW WE'RE DOING THIS ACROSS THE ORGANIZATION, WHICH IS WHY WE'RE DOING A LOT OF STUDY RIGHT NOW ON OUR FISCAL ROADMAP.

WE'RE GOING TO BE BRINGING SOME STUFF BACK TO YOU IN THE NEXT SEVERAL WEEKS, MONTHS.

TO BRING BACK TO YOU ALL TO DISCUSS SOME OF THE POLICY CHANGES THAT WE THINK NEED TO BE MADE AT A HIGHER LEVEL TO TRY TO GET THROUGH THIS AS FAST AS POSSIBLE.

AND IF WE CAN END THAT HIRING FREEZE FASTER, WE WILL.

BUT I ALSO DON'T WANT TO MISLEAD THAT THAT WE THINK IT'S GOING TO END EARLY.

WE DON'T WE THINK IT'S GOING TO BE JANUARY 1ST.

AND IN THE MEANTIME, WE ARE TRYING TO BALANCE BECAUSE EVERY POSITION WE ADD IN, WE HAVE A $14 MILLION HOLE.

IF WE ADD THAT POSITION IN THAT HOLE GETS DEEPER AND HOW LONG IT TAKES US TO DIG OUT.

AND SO WE'RE TRYING TO MAKE SURE WE BALANCE THAT.

AND AGAIN, I DON'T DISAGREE.

WE'RE TRYING TO MAKE SURE WE KEEP SERVICE LEVELS AS CLOSE TO TO INTACT AS POSSIBLE.

BUT THERE WILL BE SERVICE LEVEL IMPACTS FOR BOTH EMPLOYEES AND CITIZENS.

IN THE MEANTIME, I DO HAVE A QUESTION WITH REGARDS TO THE HIRING FREEZE, BUT ALSO WITH REGARDS TO VACANCY, DO WE HAVE NUMBERS ON WHAT WE HAVE OR WHAT WE'RE SPENDING ON OVERTIME? TIME OF WHETHER IT'S FIRST RESPONDERS OR GUYS IN THE MAINTENANCE SHEDS OR PARKS AND REC.

DO WE KNOW WHAT THOSE NUMBERS LOOK LIKE? ABSOLUTELY WE DO.

SO, WE HAVE THOSE AND WE'RE WATCHING THOSE EXCEPTIONALLY CLOSELY.

COUNCILMAN RICCIARDELLI AND I HAD A LONG DISCUSSION ABOUT THOSE IN SOME SPREADSHEETS.

AND TRUST ME, WHERE WE CAN HIRE SOMEBODY INSTEAD OF PAYING OVERTIME IF IT'S A FULL POSITION, WE WILL DO THAT.

BUT THERE ARE GOING TO BE TIMES THAT IT IS SPOT WORK AND IT DOESN'T REQUIRE THAT.

SO WE ARE MANAGING THAT RIGHT NOW AND LOOKING AT THAT VERY CLOSELY AS WELL.

BUT OVERTIME IS ONE OF THOSE THINGS THAT AS WE TALK ABOUT SALARY INCREASES, THE FIRST THING I'M ADDING BACK IN, ITS OVERTIME IS GOING UP AS WELL.

SO WE'RE LOOKING AT ALL THE CASCADING COSTS FOR ALL OF THESE.

BUT WE ARE VERY, VERY CLOSELY MONITORING THE OVERTIME SITUATION.

SO, DOES THAT MEAN THAT IF I MEAN WHAT IS YOUR RECOMMENDATION IS HIRING FREEZE ELIMINATION OF HIRING FREEZE MORE OF A PRIORITY THAN PUTTING A, YOU KNOW, MEDIUM PLUS 5%? OR DO YOU THINK THAT THE MEDIUM PLUS 5% IS TAKES PRIORITY OVER ELIMINATING HIRING FREEZE.

I GUESS I WOULD FOCUS ON EITHER ONE OF THE HOURLY WAGE ADJUSTMENTS.

SO WHETHER IT'S ACROSS THE BOARD OR WHETHER IT IS THE MEDIUM PLUS 5%.

I WOULD BECAUSE THOSE FOLKS ARE DOING THE WORK RIGHT NOW LONG TERM.

THEY'RE OUR EMPLOYEES.

I WOULD RATHER FOCUS ON THAT.

SO I WOULD PICK EITHER ONE OF THOSE TWO RATHER THAN THE ELIMINATION OF THE HIRING FREEZE AT THIS POINT.

ALL RIGHT. I DON'T THINK I'M NECESSARILY READY TO VOTE ON THIS RIGHT NOW, BUT WE ARE SHIFTING FROM A GROWING CITY TO A MATURE CITY IN SO MANY WAYS RIGHT NOW, AND WE HAVE SO MANY THINGS TO FIGURE OUT TO ACHIEVE EQUILIBRIUM. GIVEN THAT, I THINK I'M IN FAVOR OF APPLYING ALL OF IT TO THE CITY, BRINGING EVERYBODY TO MEDIUM PLUS FIVE. THAT'S ONE OF THE THINGS WE'VE GOT TO FIGURE OUT FOR THE LONG TERM.

WELL, MAYOR AND COUNCIL, WE HAVE A PUBLIC HEARING ON THE 26TH, SO THAT'S ABOUT TEN DAYS AWAY.

SO WE I THINK WE HAVE THAT ON THE SCHEDULE TO HAVE A PUBLIC HEARING ON THE BUDGET.

WE'D LOVE TO BE ABLE TO GET YOUR GUIDANCE AT THAT POINT.

SO WE HAVE A FULLY PUBLISHED BUDGET TO BE ABLE TO BRING BACK ON SEPTEMBER 9TH FOR ADOPTION.

[02:20:03]

COME BACK MID-YEAR AND MAKE SURE THAT WE'VE COMPLETELY CAUGHT EVERYBODY UP.

I WILL BE RECEIVING SOME HATE EMAIL FROM OUR NEIGHBORS WHO THOUGHT WE WEREN'T GIVING RAISES THIS YEAR AND THEY WERE GOING TO GET THEY WERE GOING TO GET TO CATCH UP.

AND I WILL JUST SAY NOW, TOO BAD WE'RE GOING TO CONTINUE TO LEAD.

SO THERE YOU GO.

ALL RIGHT. WE GET THE CREDIT FOR THAT.

YES YOU DO. YES YOU DO.

YOU WILL. ALL RIGHT.

I NOW DECLARE THIS MEETING IS ADJOURNED.

YEAH.

* This transcript was compiled from uncorrected Closed Captioning.