[PRELIMINARY OPEN MEETING] [00:00:06] I NOW DECLARE, THE PLANO CITY COUNCIL IS CONVENED IN OPEN SESSION THAT ALL COUNCIL MEMBERS ARE PRESENT. THE COUNCIL WILL NOW RECESS INTO EXECUTIVE SESSION IN TRAINING ROOM A TO HOLD A CLOSED EXECUTIVE MEETING PURSUANT TO THE PROVISIONS OF VERNON'S TEXAS CODE ANNOTATED GOVERNMENT CODE, CHAPTER 551. THE OPEN MEETINGS ACT IN ACCORDANCE WITH THE AUTHORITY CONTAINED IN SECTION 551071 TO CONSULT WITH THE ATTORNEY, RECEIVE LEGAL ADVICE, AND DISCUSS LITIGATION. AND SECTION 551087 TO DISCUSS ECONOMIC DEVELOPMENT MATTERS. THANK YOU BRIEFLY AND GET THAT DONE. SO I NOW DECLARE THAT THE PLANO CITY COUNCIL PRELIMINARY OPEN MEETING IS CONVENED IN OPEN SESSION, THAT ALL COUNCIL MEMBERS ARE PRESENT. OUR FIRST ITEM IS ON THE PRELIMINARY AGENDA IS CONSIDERATION ACTION RESULTING FROM THE EXECUTIVE SESSION. OUR NEXT ITEM IS THE COMPREHENSIVE MONTHLY FINANCIAL REPORT. DENISE TACKE. GOOD EVENING. YOU CAN PULL THAT. PULL IT? YEAH. THERE YOU GO. OKAY. THERE YOU GO. CAN YOU HEAR ME? OKAY. SO THIS IS OUR. I'M DENISE TACKE. I'M THE FINANCE DIRECTOR FOR THE CITY OF PLANO. THIS IS OUR COMPREHENSIVE MONTHLY FINANCIAL REPORT FOR SEPTEMBER 2024. THIS IS EFFECTIVELY OUR RESULTS OF OUR ENTIRE YEAR. SO THIS SLIDE REPRESENTS REVENUES COMPARED TO BUDGET BY FUND. THE GENERAL FUND HAS REVENUES OF 362.2 MILLION FOR THE FISCAL YEAR. THIS REPRESENTS 100.9% OF THE TOTAL ANNUAL BUDGET. THE WATER AND SEWER FUND HAS 222.9 MILLION IN REVENUES, WHICH REPRESENTS 101.9% OF THE OF THE TOTAL ANNUAL BUDGET. OUR EXPENSES. EXPENDITURES BY FUND. THE GENERAL FUND HAS EXPENDITURES OF 359.3 MILLION FOR THE FISCAL YEAR, WHICH REPRESENTED 99% OF THE BUDGET. THE WATER AND SEWER FUND HAS EXPENDITURES OF 181.6 MILLION, WHICH REPRESENTS 96.4% OF THE TOTAL ANNUAL BUDGET. THIS SLIDE REPRESENTS OUR NET CHANGE IN FUND BALANCE FOR THE PAST THREE YEARS IN THE GENERAL FUND FOR THE FISCAL YEAR. FUND BALANCE DECREASED BY 14.3 MILLION. THIS IS LOWER THAN WHERE WE WERE TRENDING LAST YEAR, WHERE WE ONLY WERE AT A DECREASE OF 12.3 MILLION. THE WATER AND SEWER FUND HAS A HAS INCREASED BY 3.8 MILLION. AND THIS IS LOWER THAN PRIOR YEAR WHERE OUR FUND BALANCE HAD INCREASED BY 13.6 MILLION. OUR GENERAL FUND REVENUES ARE HIGHER THAN THE PRIOR YEAR BY YEAR BY 19.3 MILLION. THIS WAS AN INCREASE IN PROPERTY TAX REVENUE OF $12.9 MILLION. SALES TAX REVENUE INCREASED BY 4.1 MILLION OVER THE PRIOR FISCAL YEAR, AND INTEREST INCOME INCREASED BY 1.5 MILLION. OUR GENERAL FUND EXPENDITURES ARE HIGHER THAN THE PRIOR YEAR BY 39.2 MILLION. PERSONNEL COSTS INCREASED BY 23.5 DUE TO BUDGETED SALARY AND LONGEVITY PAY INCREASES, AS WELL AS INCREASED OVERTIME IN THE FIRE DEPARTMENT. CONTRACTUAL AND PROFESSIONAL FEES INCREASED BY 2.5 MILLION DUE TO HIGHER WATER USAGE IN CITY DEPARTMENTS AND LEASE OF SOME FIRE EQUIPMENT. OUR HEALTH CLAIMS FUND HAD AN INCREASE IN FUND BALANCE OF ABOUT 4.3 MILLION. THIS IS MOSTLY DUE TO PLANNED DESIGN CHANGES, WHICH INCLUDE USING A HEALTH CARE HIGHWAY NETWORK THAT NEGOTIATES LOWER RATES WITH CERTAIN UNEMPLOYMENT RATES IN JUNE WERE 3.9%, AND THEY WENT DOWN TO 3.6% IN SEPTEMBER FOR THE CITY OF PLANO. OUR SALES TAX FOR THE MONTH OF OCTOBER WERE DOWN COMPARED TO THE PRIOR YEAR BY 2.2%. THERE WAS A POSITIVE AUDIT ADJUSTMENT, HOWEVER, IN THE PRIOR FISCAL YEAR, AND THERE WAS AN EVEN LARGER POSITIVE AUDIT ADJUSTMENT IN THE PRIOR FISCAL YEAR THAN THIS YEAR. OVERALL, OUR SALES TAX NUMBERS CONTINUE TO LOOK PRETTY GOOD, THOUGH OUR REAL ESTATE MARKET RECAP SHOWS THE NUMBER OF DAYS ON MARKET WAS AT 32 DAYS IN SEPTEMBER, COMPARED TO 28 IN SEPTEMBER OF 2023. THE PERCENT OF ASKING WAS AT 98.1% THIS SEPTEMBER, WHEREAS THAT DECREASED FROM 98.5 IN SEPTEMBER OF 2023. HOTEL OCCUPANCY TAX IS UP BY [00:05:01] 415,000 COMPARED TO THE PRIOR FISCAL YEAR. AND THEN THESE NEXT THREE SLIDES ARE EQUITY AND TREASURY POOL. OUR INVESTMENT PORTFOLIO MATURITIES AND OUR INVESTMENT PORTFOLIO DIVERSIFICATION. AND MARK WHITAKER WILL BE GOING OVER THOSE. SO I'M NOT GOING TO SPEND ANY TIME ON THOSE RIGHT NOW. AND I'LL BE HAPPY TO ANSWER ANY QUESTIONS. THANKS. ANY QUESTIONS FOR DENISE? THANK YOU. THANK YOU. OUR NEXT ITEM IS THE FOURTH QUARTER INVESTMENT REPORT. MARK WHITAKER. GOOD EVENING. I'M MARK WHITAKER. I'M THE TREASURER HERE AT CITY OF PLANO. AND I'M GOING TO GO OVER THE FOURTH QUARTER INVESTMENT REPORT ENDING SEPTEMBER 30TH, SAME TIME AS THE COMFORT. AND A BRIEF UPDATE ON THE ECONOMY. AND THEN WE'LL DIVE INTO THE INTO THE PORTFOLIO. INFLATION CAME IN AT 2.4% THIS QUARTER, WHICH IS CLOSER TO THE FED FUNDS AT EXPECTATIONS OF 2%. SO WE'RE EDGING CLOSER TO THAT WHICH IS A GOOD SIGN. GDP WAS 2.8% GROWTH COMPARED TO A 3% IN THE PRIOR QUARTER, WHICH AGAIN IN INDICATES A SOFT LANDING WHICH WAS THE EXPECTATIONS OF ALL THE HIGH RATES THAT WE'VE BEEN DEALING WITH OVER THE LAST TWO YEARS. LABOR MARKET STAYED AT A 4.1% NATIONAL PERCENTAGE. UNEMPLOYMENT PERCENTAGE COMPARED TO THE 3.9 OF PLANO, WHICH AGAIN POINTS TO THE DIRECTION THAT THE FEDS WERE TRYING TO GO WITH THE RATES AND THEIR POLICIES. THE AVERAGE TWO YEAR TREASURY, WHICH IS OUR BENCHMARK, DECREASED OVER THE LAST THREE MONTHS 4.5%, 3.9 AND THEN DOWN TO 3.6. THAT WAS EXPECTED AS THEY DECIDED TO EDGE CLOSER TO DROPPING RATES, WHICH THEY DID DO IN SEPTEMBER. THEY DROPPED RATES BY 50 BASIS POINTS, WHICH HAS BEEN EXPECTED, AND WE'VE BEEN LOOKING FORWARD TO THAT FOR THE LAST SEVERAL YEARS. AND WE FINALLY GOT TO THE POINT WHERE THE ECONOMY HAS REACHED THAT TIPPING POINT, WHERE THEY'RE GOING TO START DECREASING RATES FROM THIS POINT FORWARD. THESE ARE JUST THE MINUTES FROM THEIR LAST REPORT IN SEPTEMBER, AGAIN STIPULATING THAT THEY'VE GOT THE 2% GOAL AND THEY'RE GOING TO BE LOOKING AT DATA MOVING FORWARD AS THEY TRY TO DECIDE WHEN AND HOW TO DROP RATES IN THE FUTURE. THIS IS A GRAPH SHOWING THE SIX MONTH, TWO YEAR AND TEN YEAR TREASURY. AGAIN, IT JUST SHOWS THIS IS HOW THE ECONOMY HAS BEEN RESILIENT OVER THE LAST TWO YEARS. LUCKILY, WE ARE GETTING TO A POINT NOW WHERE WE'RE GOING TO SEE SOME MOVEMENT. WE'RE GOING TO SEE SOME EXCITING TIMES AS FAR AS RATES GO AND THE IN THE ECONOMY. THE TREASURY YIELD CURVE SHOWS THAT WE CONTINUE TO BE IN AN INVERTED YIELD CURVE STATUS, WHICH IS NOT A TYPICAL YIELD CURVE. NORMALLY, SHORT TERM RATES ARE MUCH LOWER THAN LONG TERM RATES AS EXPECTATIONS. BUT SINCE JUNE OF 2022, THIS IS HOW THE YIELD CURVE HAS BEEN. AND WE ARE LOOKING FORWARD TO FINALLY GETTING TO THE POINT WHERE LONG TERM RATES ARE HIGHER THAN SHORT TERM. S&P. GETTING INTO THE PORTFOLIO. WE HAVE ABOUT $129 MILLION MATURE IN THIS QUARTER BETWEEN AGENCIES AND CDS. WE THEN TURNED AROUND AND INVESTED AROUND 120 MILLION OF THAT. WE HAVE A DIP IN BOOK VALUE OF THE PORTFOLIO BY $111 MILLION. THAT IS TYPICAL FOR THIS TIME OF YEAR. MOST OF THAT IS BECAUSE WE HAVE A LARGE DEBT SERVICE PAYMENT IN THIS QUARTER, AND THAT IS WHAT DRIVES THAT DIP. WE HAD A $99 MILLION DIP IN PRIOR YEAR DURING THE SAME FISCAL. THIS IS THE LATTER OF THE PORTFOLIO. WE CURRENTLY HAVE 41% IN THE 0 TO 1 SHORT TERM RATE. WE HAVE 2,321% IN THAT 3 TO 4 YEAR RANGE. IS THE TAX DOLLARS THAT WE HAVE BEEN RECEIVING OVER THE LAST 2 TO 3 MONTHS. THAT IS WHERE WE'LL BE FOCUSING THOSE INVESTMENTS TO FILL THAT LACK OF MATURITIES THERE. SO THAT 3 TO 4 YEAR RANGE, WHERE IT'S AT 4% IS WHERE WE'LL FOCUS AND WE'LL BE INVESTING THOSE FUNDS. SO THAT WILL DIP UP AND WE'LL JUST CONTINUE THIS LADDER FROM THE 3 TO 4. AND THEN WHEN WE GET FUNDS IN WE'LL INVEST IN THE 4 TO 5 YEAR PORTFOLIO PERCENT. THE PORTFOLIO YIELD IS AT 3.34% AT THE END OF THIS QUARTER. [00:10:01] THAT IS CLOSE TO THE TWO YEAR BENCHMARK. THAT GAP, WHICH IS AT 3.62%, IS MUCH CLOSER THAN IT HAS BEEN IN THE PAST TWO YEARS. BUT AS THEY CONTINUE TO DROP RATES, WE SHOULD EXCEED THE BENCHMARK BECAUSE OF THAT LADDERING EFFECT THAT WE JUST SHOWED. WE HAVE NONCALLABLE BONDS, SO IT IS NOT AFFECTED BY INTEREST RATE CHANGES. SO THAT 3% WILL CONTINUE TO STAY STEADY AND SLIGHTLY INCREASE OVER THE NEXT, HOPEFULLY AROUND IN THE NEXT 3 TO 4 YEARS. AND UNTIL, YOU KNOW, RATES CHANGE, WE HAD A 5.6 MILLION INTEREST EARNINGS THIS QUARTER WITH ABOUT A 20 MILLION TOTAL FOR THE YEAR. AS I MENTIONED, THE TWO YEAR BENCHMARK TWO YEAR TREASURY IS WHAT WE BENCHMARK. AND THIS GRAPH SHOWS OUR PORTFOLIO. THAT GAP THERE AT THE VERY RIGHT OF THE SCREEN HOW CLOSE THAT IS. SO, IN THE IN THE NEXT QUARTER, WHICH WE'VE ALREADY EXPERIENCED, THOSE SHOULD CROSS OVER. AND THESE ARE THE SLIDES THAT DENISE WAS JUST MENTIONING. THE DIVERSIFICATION OF THE PORTFOLIO. WE HAVE 36% MUNICIPAL BONDS AND ABOUT 35, 30, 39% IN AGENCY BONDS. THAT IS FLIPPED FROM THE LAST QUARTER. BUT WE WILL FOCUS ON THE MUNICIPAL BONDS WITH THESE NEXT INVESTMENT ROUNDS AND INCREASE THAT NUMBER, BECAUSE THAT'S WHERE THE YIELD IS AT THE MOMENT. WE'LL TAKE ADVANTAGE OF THE AREAS THAT WE CAN TO MAXIMIZE AS MUCH AS WE CAN. IT JUST SHOWS THE BOOK VALUE OF THE PORTFOLIO. AND YOU CAN SEE THIS HOW CYCLICAL THIS IS. EVERY FOURTH QUARTER WE DO HAVE THAT DROP BECAUSE OF THAT LARGE DEBT SERVICE PAYMENT AND OTHER EXPENSES. BUT IT IS CYCLICAL. AND THIS IS JUST A SUMMARY OF THE TREASURY POOL SHOWS A SHOWS A BREAKDOWN OF THAT $111 MILLION DECREASE IN BOOK VALUE. YOU'RE LOOKING AT $41 MILLION IN THE GENERAL FUND. 53 MILLION. IS THAT LARGE DEBT SERVICE PAYMENT AND THEN 29 MILLION IS THE CAPITAL IMPROVEMENT SPENDING, WHICH JUST MEANS WE'RE SPENDING ON PROJECTS. WE'RE GETTING THINGS DONE. WE'RE SPENDING THE MONEY THAT WE ISSUED THE DEBT FOR. SO THAT IS A BREAKDOWN OF THAT DECREASE. THERE'S NO CHANGES TO THE INVESTMENT POLICY AT THIS TIME THAT WAS APPROVED LAST MONTH. AND I'M READY FOR QUESTIONS. THANKS, MARK. ANY QUESTIONS? THANK YOU VERY MUCH. NEXT ITEM IS CONSENT AND REGULAR AGENDAS. IS THERE AN ITEM A COUNCIL MEMBER WOULD LIKE TO REMOVE? NEXT ITEM IS COUNCIL ITEMS FOR FUTURE AGENDAS. ALL RIGHT. * This transcript was compiled from uncorrected Closed Captioning.