[CALL TO ORDER]
[00:00:05]
ROW, PLEASE. IS OUR CITY COUNCIL WORK SESSION ON FRIDAY, AUGUST 13TH YEAR 2021. IT IS 8 36 IN THE MORNING OR IN COUNCIL CHAMBERS AT 2 22 MORE TENNESSEE STREET. TEXAS. AND I GUESS I WILL TURN THIS OVER TO CITY MANAGER. MR MAYOR, MEMBERS OF THE COUNCIL. THANK YOU. I
[Budget Work Session]
APPRECIATE IT HAPPY FRIDAY. IT IS FRIDAY THE 13TH BUT FRIDAY THE 13TH FOR US AS GOOD STUFF.IT'S GOOD THINGS. WE HAVE A GOOD BUDGET TO PRESENT TO. YOU WERE EXCITED TO DO THAT. AND SO WHAT WE'LL DO TODAY IS I'LL STARTED OFF WITH A FEW OPENING REMARKS SORT OF BIGGER PICTURE PERSPECTIVE. I WILL TURN IT OVER THEN TO MR HOLLOWAY, OR CHIEF FINANCIAL OFFICER WHO WILL THEN. AND DIVE RIGHT INTO THE BUDGET PRESENTATION. UM WE HAVE WE WILL BE HANDING THE BATON OFF TO SOME FOLKS THROUGH THE WAY NUMBER ONE JUST SO YOU DON'T GET BORED OF HEARING ONE PERSON TALK ALL THE TIME, BUT NUMBER TWO THEY'RE COVERING DIFFERENT ASPECTS OF THE BUDGET.
WE HAVE OUR CONSULTANTS FOR OUR WATER FUND OR FOR OUR WATER RATE MAKING CONSULTANTS. THEY WILL GIVE A PRESENTATION ABOUT OUR WATER RATES. I THINK IT'S FASCINATING, INTERESTING STUFF.
BUT THEN AGAIN, I'M A PUBLIC ADMINISTRATORS. WE FIND THOSE THINGS FASCINATED AND INTERESTED, BUT WE WILL DO OUR BEST. THEN THE BOTH DANCE BACK THERE ARE VERY GOOD AT PRESENTING. COMPLICATED WATER INFORMATION AND MAKING DOING A REALLY GOOD JOB MAKING SENSE OF IT FOR EVERYBODY ELSE. ANYWAY WITH THAT, I'M PLEASED TO KICK OFF THIS PRESENTATION OF THE BUDGET PROPOSAL FOR FISCAL YEAR ENDING SEPTEMBER 30TH 2022. I'D LIKE TO OPEN ONCE AGAIN BY THANKING MARK HOLLOWAY. IN THE ENTIRE STAFF IN THE FINANCE DEPARTMENT FOR THEIR HARD WORK AND WORKING WITH ALL OUR OPERATING DEPARTMENTS IN PREPARING THE BUDGET DOCUMENT.
IT'S KIND OF A COMPLICATED CHOREOGRAPHY THAT THEY DO A BUDGET ANALYSIS, STAFF MEETINGS AND THEN RE ANALYSIS. AND THEN IF YOU ADD THE PERSISTENCE OF A PANDEMIC AND VARIOUS REVENUE SOURCES AND EXPENDITURE ITEMS THEY WEREN'T BUDGET IN THE CURRENT THE CURRENT YEAR'S BUDGET BECAUSE WE DIDN'T KNOW WHAT FORM THEY WOULD TAKE. AND WHEN THEY WOULD COME AND WHAT IT WOULD LOOK LIKE. SO WHEN YOU FACTOR THAT, IN ONE CAN APPRECIATE THE NIMBLE WORK OF ROOF. UM VERY FINE BUDGET STAFF. THEY REALLY MAKE IT LOOK EASY, SO I WANT TO THANK THEM. UM FOR ALL THE WORK THAT THEY'VE DONE. SO I OPENED LAST YEAR'S BUDGET WORKSHOP WITH DISCUSSION ABOUT WRECKAGE. THAT WAS THE WORD I USED, UH, TOO, ARE RESTAURANTS AND PORTIONS OF OUR RETAIL INDUSTRY, AND WE DID HAVE A VERY DIFFICULT YEAR LAST YEAR AND THE YEAR OF THE PANDEMIC.
WE ARE STILL IN A PANDEMIC, OF COURSE, AS WE ARE REMINDED EVERY DAY, BUT WE HOPE THAT THE WORST IS OVER. AND CERTAINLY WE'VE, UH AT THAT TIME WE URGED CAUTION DUE TO THE EXPECTED LAYOFFS IN THE AIRLINE INDUSTRY AT THIS TIME LAST YEAR, ALONG WITH UNCERTAINTY ABOUT FEDERAL AID PROGRAMS. FORTUNATELY THE WORST OF THE LAYOFFS WAS NOT REALIZED, AND FEDERAL COVID RELIEF AID HELPED WITH AVOIDING THE WORST OF THE SOCIAL COSTS ASSOCIATED WITH THE PANDEMIC.
IN FACT, THIS BUDGET IS WRESTLING WITH SOME FACTORS THAT WE MAY NOT HAVE ENVISIONED AT THIS TIME LAST YEAR. PRIMARY AMONG THESE FACTORS OF THE SHARP INCREASE IN LABOUR MARKET DEMAND, PARTLY AS A RESULT OF RECOVERY AND PARTLY A RESULT OF SOME FOLKS SIMPLY LEAVING THE LABOR MARKET. AND PARTLY THE RESULT OF AID THAT HAS THE PERVERSE IT HAD THE PERVERSE EFFECT OF KEEPING SOME FOLKS OUT OF THE LABOR MARKET. THIS LABOUR DEMAND HAS LED TO AN INCREASE IN WAGES, WHICH IS SIGNIFICANTLY IMPACTED HEADLINE INFLATION. THAT MEANS OUR COST OF INPUTS FOR THE VARIOUS SERVICES WE PROVIDE FROM ONE MAINTENANCE. THE JET FUELS.
BUILDING RENOVATIONS AND CONSTRUCTION MATERIALS. WE'VE SEEN A SIGNIFICANT RISE IN INFLATION. FROM JUNE OF 2022 JUNE 2021 ANNUALIZED INFLATION IN THE DFW REGION EXCEEDED 6.
THIS BUDGET ATTEMPTS TO BALANCE THE GROWING DEMANDS FOR OUR SERVICES ARE NEED TO ATTRACT AND RETAIN TALENTED AND SKILLED EMPLOYEES, ALONG WITH THE INFLATIONARY PRESSURES WE FACE ALL WITH THE DESIRE TO KEEP OUR TAX RATE AS LOW AS WE CAN. WE'RE PROPOSING A BUDGET THAT LIMITS THE NEW REVENUE TO 2. WELL BELOW THE CURRENT RATE OF INFLATION AND IN LINE WITH THE AVERAGE OVER THE PAST SEVERAL BUDGET YEARS. YOUR SUPPLEMENTAL BUDGET INCLUDES NINE NEW FIREFIGHTER POSITIONS AND E. M S CAPTAIN AND RETAINING SIX FIREFIGHTER POSITIONS THAT WERE PREVIOUSLY FUNDED THROUGH A SAFER GRANT. POLICE DEPARTMENT INCLUDES FUNDING FOR THE ADDITION OF 11, NEW POLICE OFFICERS AND SPECIFICALLY NEW DETECTIVES TO ADD TO OUR CRIMINAL INVESTIGATIONS DIVISION. THE BUDGET INCLUDES ADDITIONAL FUNDING FOR STREET MAINTENANCE. YOU WILL NOT BE SUFFICIENT TO MEET OUR LONGER TERM NEEDS IN THIS AREA, BUT IT IS AN INCREASE AND WILL BE VERY HELPFUL AND ARRESTING THE DECLINE OF OUR PAVEMENT CONDITION INDEX. REFERENCE OUR WORK SESSION WE HAD ON AUGUST 3RD AND THERE'LL BE MORE DISCUSSIONS ON THIS IN THE COMING WEEKS. BUT THEN WE HAVE A LITTLE BIT. WE'LL TOUCH ON IT SOME MORE LATER IN THIS PRESENTATION. ARE INCLUDING FUNDING THAT BEGINS A GRADUAL MARCH OF OUR EMPLOYEESSALARIES TOWARD BETTER REFLECTING OUR WORKPLACE PRODUCTIVITY RELATIVE TO OUR COMPARABLE COMMUNITIES. AS I HAVE STATED ON MULTIPLE OCCASIONS PREVIOUSLY, IF WE'RE
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DOING MORE WITH LESS. WE HAVE TO PAY FOR PRODUCTIVITY. WE HAVE A PRODUCTIVITY ADVANTAGE OVER OUR COMPARABLE CITIES, AND WE HAVE TO PAY FOR THAT PRODUCTIVITY. THAT'S WHAT YOU DO IN THE MARKETPLACE. IT ALLOWS US TO SUSTAIN THE TALENT THAT ENABLES US TO SCORE THAT ADVANTAGE. AND WE HAVE WE HAVE TO BE PREPARED TO PAY FOR IT. THE BUDGET INCLUDES FUNDS TO CONTINUE OUR ECONOMIC DEVELOPMENT INCENTIVES, PRIMARILY THROUGH OUR CHAPTER 3 80 AGREEMENTS. WE HAVE VARIOUS DIFFERENT TOOLS TO PROVIDE ECONOMIC DEVELOPMENT CENTER GIVES ECONOMIC PROBLEM CORPORATION AND COMMUNITY DEVELOPMENT CORPORATION. THE CITY ITSELF, PRIMARILY OFFERS ECONOMIC DEVELOPMENT SENT US THROUGH OUR CHAPTER 3 80 AGREEMENTS. PROPOSED BUDGET NOTES THAT APPROXIMATELY 3.3 MILLION IS ATTRIBUTED TO OUR CURRENT CHAPTER. 3 80 AGREEMENT OBLIGATIONS. THE BUDGET ALSO ACCOMMODATES ARPAIO. AMERICAN RESCUE PLAN ACT FUNDING THAT WE WILL RECEIVE THIS YEAR AND NEXT FOR ONGOING PANDEMIC RECOVERY AND STIMULUS THAT TOTAL AMOUNT WILL BE ABOUT $23 MILLION IN MR HOLLOWAY WILL TOUCH ON THIS A LITTLE LATER. CAPITAL FUNDING FOR CITY HALL AND ALL ASSOCIATED EXPENDITURES WITH THAT IS IN, UH IN THE BUDGET. CAPITAL FUNDING FOR NEW FIRE HEADQUARTERS AND OTHER NECESSARY IMPROVEMENTS. ROADS PUBLIC WORKS FACILITY PARKS, IMPROVEMENTS AS WELL AS UTILITY RELOCATIONS AND IMPROVEMENTS. NOW, IF WE PICK BEYOND THE HORIZON A LITTLE BIT, THERE ARE SOME CHALLENGES THAT WE HAVE TO ADDRESS AS A COMMUNITY. PRIMARY AMONG THESE IS A LONG TERM FUNDING SOLUTION TO ADDRESS OUR ROAD MAINTENANCE NEEDS. WE TALKED ABOUT THIS ON AUGUST 3RD.WE'LL TALK ABOUT IT SOME MORE. BUT HISTORICALLY, THE CITY HAS ENJOYED THE BENEFIT OF NEW SUBDIVISIONS. NEW CONSTRUCTION. LONG LIFE OF CONCRETE STREETS TO SOFTEN THE IMPACT OF ROAD MAINTENANCE FUNDING. HOWEVER WE KNOW THERE ARE SYSTEM WIDE PAVEMENT CONDITION IS DETERIORATING AND THE COUNCIL IF IT WISHES TO ADDRESS THIS PROBLEM FOR THE LONG TERM, WE'LL HAVE TO MOVE BEYOND SWINGS AND ANNUAL FUNDING. IN THE GENERAL FUND TO SOMETHING THAT'S MORE CONSISTENT AND SUBSTANTIVE. AGAIN, AS WE ALLUDED TO ON AUGUST, 3RD STAFF WILL BE PRESENTING SOME STRATEGIES IN MID SEPTEMBER EARLY OCTOBER FOR THE COUNCIL TO CONSIDER. WE HAD ANOTHER GOOD YEAR THIS PAST YEAR IN TERMS OF NEW GROWTH. CONSIDER THE FOLLOWING FIGURES OVER THE PAST THREE YEARS. IN 2017. WE HAD 811 MILLION NEW VALUE HIT THE TAX ROLLS, THEN SET A NEW CEILING FOR NEW GROWTH IN 2018 AT 991 MILLION IN 2019. WE ADDED ONE BILLION IN NEW GROWTH TO THE TAX ROLLS FOR THE VERY FIRST TIME. AND FOR 2020, WE ADDED 805 NEW PROPERTY TAX VALUE. AND DEMOCRAT. NOT OUR GROWTH IS CONTINUING ALMOST UNABATED. FOR THIS NEXT YEAR. WE EXPECT OUR NUMBERS TO REMAIN CONSISTENT WITH ABOUT 795 MILLION BEING ADDED TO THE ROLLS. MCKINNEY HAS ADDED ALMOST 264 MILLION IN COMMERCIAL TAX BASE. THE CITY HAS ALSO ADDED EVEN MORE IN NEW RESIDENTIAL PROPERTY VALUE AND AN ESTIMATED TOTAL OF ALMOST 287 MILLION FOR 2021. LOOKING FORWARD. THE DEVELOPMENT SERVICES SPOKES HAVE ISSUED 1141 RESIDENTIAL PERMITS THROUGH JULY. THAT IS A RATE THAT IS HIGHER THAN LAST YEAR AND IN LINE WITH THE AVERAGE OVER THE PAST SEVERAL YEARS.
SHORT WROTE. THE MAKENI IN THE REGION CONTINUES AND WE EXPECTED TO FOR SOME TIME.
COUPLE MORE HIGHLIGHTS IN THE BUDGET PROPOSAL FOR YOU TODAY PROPOSED GENERAL FUND BUDGET OF $171 MILLION 618 MILLION AND ALL FUNDS INCLUDE THE TAX RATE REDUCTION OF A LITTLE MORE THAN ONE CENT. 1.5082 POINT 497. SO FOR THE FIRST TIME, WE ARE BELOW 50 CENTS IN THE PROPOSED TAX RATE. THIS IS THE EFFECTIVE RATE PLUS 2. PLEASED TO OFFER AN EFFECTIVE RATE OF ONLY 2% WHEN WE ARE IN SUCH AN INFLATIONARY ENVIRONMENT AGAIN, WE'RE AT 6% IN OUR INFLATIONARY ENVIRONMENT ENVIRONMENT IN THE NORTH TEXAS REGION. CONSTRUCTION COST INDEX. LABOR COSTS HAVE SIGNIFICANTLY INCREASED OVER THE PAST YEAR, PARTICULARLY AS FEDERAL GOVERNMENT STIMULUS AND PAYCHECK PROTECTION HAS CREATED CONDITIONS FOR LABOR SHORTAGES TO OCCUR. WE WILL HAVE A SLIDE SHOWING THE COMPONENTS OF THAT IMPACT TO US. AND UNIQUELY AS MUNICIPALITY THAT ARGUABLY MAKES THE NUMBER EVEN HIGHER. WE'LL SHOW YOU THOSE THE CONSTRUCTION COST INDEX. THE LABOR COSTS ARE PARTICULARLY RELEVANT TO A MUNICIPAL CORPORATION IN MUNICIPAL OPERATION. AND WE'LL SHOW YOU SOME OF THOSE FIGURES A LITTLE BIT LATER. THE BUDGET INCLUDES 2.5 MILLION FOR STREET REPAIRS AND MAINTENANCE. THAT'S INCREASE OF A MILLION DOLLARS FROM LAST YEAR'S GENERAL FUND BUDGET. AS MENTIONED. THE PROPOSED BUDGET INCLUDES FUNDING FOR 10 NEW FIRE STAFF 11 9, ADDITIONAL FIREFIGHTERS AND EMS CAPTAIN RESUMPTION AT CITY'S EXPENSE. OF THE SIX SAFER GRANT FUNDED POSITIONS.
THOSE ARE POSITIONS THAT WE HAD A FEDERAL GRANT APPROVED IT SEVERAL YEARS AGO, AND NOW THAT GRANT HAS RUN OUT, AND WE'RE PROPOSING TO CONTINUE THOSE POSITIONS ABSORB THOSE INTO THE OPERATING BUDGET. RUNNING FOR 11 NEW POLICE OFFICERS FOR WHICH ARE DETECTIVES. THE PROPOSED BUDGET INCLUDES A TOTAL OF 43 NEW GENERAL FUND POSITIONS, 23 OF WHICH ARE FOR PUBLIC SAFETY. FUNDING FOR CONTINUED SPORTS, FIELD IMPROVEMENTS AND OTHER RECREATIONAL FACILITIES IN THE CITY. ADDRESSING COMMUNITY NEEDS WITH OVER 4.3 MILLION AND
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FUNDS, VISIBILITY, HOUSING AND COMMUNITY RELATED SERVICES, SOME OF WHICH WE USE TO LEVERAGE ADDITIONAL FEDERAL AND STATE GRANT FUNDING. CAPITAL IMPROVEMENT PROGRAM CONTINUES AND WE'RE MOVING AHEAD WITH VARIOUS CRITICAL INFRASTRUCTURE PROJECTS AS WE CONTINUE TO INVEST IN OUR COMMUNITIES FUTURE. REDEVELOPMENT AND REVITALIZATION INITIATIVES EAST OF HIGHWAY FIVE OR MOVING INTO HIGH GEAR. AND THIS NEXT YEAR, WE'LL SEE CONSTRUCTION ACTIVITY BE GETTING ON KEY CIVIL ENGINEERING PROJECTS TO MAKE IT ALL POSSIBLE. NEWLY ACQUIRED PUBLIC WORKS FACILITY ALONG THE CENTRAL EXPRESSWAY IS BEING READY FOR OUR USE AND AIRPORT CONSTRUCTION PROJECTS ARE CONTINUING TO MOVE FORWARD THE RUNWAY LENGTHENING CONSTRUCTION IS EXPECTED TO BEGIN THIS FISCAL YEAR. THIS NEXT FISCAL YEAR. SO IN CLOSING, I WOULD SAY THEY WERE ADVANCING FULL SPEED AHEAD IN OUR EFFORTS TO FUND THE SERVICES AND PROGRAMS IN OUR COMMUNITY APPEARS TO WANT AND LIKE. THERE'S NOT A DAY THAT GOES BY. I CAN ASSURE YOU IN OUR ROLES THAT WE DON'T RECOGNIZE HOW FORTUNATE WE ARE TO BE A MCKINNEY AT THIS TIME.IT'S OUR TIME TO SHAPE OUR FUTURE AND LEAVE SOMETHING GREAT FOR THE NEXT GENERATION OF RESIDENTS OF OUR GREAT CITY. WE'RE EXCITED THAT THIS BUDGET PROPOSAL HELPS US TO ACHIEVE JUST THAT, AND IT ALIGNS WITH THE COUNCIL STRATEGIC GOALS THAT YOU'VE ADOPTED, DIRECTED STAFF TO CARRY OUT. WITH THAT. WILL TURN THIS OVER TO OUR CHIEF FINANCIAL OFFICER, MARK HOLLOWAY, TO KICK OFF THE BUDGET DETAILS. THANK YOU. DRAW AWAY. THANK PAUL APPRECIATE.
I'M EXCITED TO BE HERE AGAIN THIS MORNING. THIS IS MY EIGHTH OR NINTH BUDGET. CAN I START TO LOSE COUNT? UM. I ALWAYS FORGET TO SAY THANK YOU, UM AT THE END OF THE PRESENTATION TO, UM NOT ONLY FINANCE STAFF, BUT THE BUDGET STAFF, SO I WANT TO BEGIN WITH THAT THIS YEAR, AND I WANTED TO THANK. UH COLUMBA AND TREVOR DAGON FOR THEIR HARD WORK AND THEN ALSO JUST EVERYBODY ELSE IN FINANCE THAT HAS CONTRIBUTED, HELP HIM PUT THIS PROCESS TOGETHER. BUT AFTER ALWAYS FORGET TO SAY THANK YOU ARE RUSSIAN. SO I WANT TO MAKE SURE I THINK THIS YEAR. AT THE BEGINNING. WE HAVE A LOT OF INFORMATION. UM TODAY TO COVER. THIS IS OUR AGENDA.
UM GOING TO HAVE SOME HELP AS I TALK BECAUSE I'M ALREADY STARTING TO LOSE MY VOICE, BUT.
TREVOR MENU EXPLAINED TO HELP PRESENTATION TODAY AND TREVOR DAGON AND THEN ALSO OUR CONSULTANTS FROM WELDON ARE GOING TO HELP US WITH OUR WATER AND WASTEWATER PORTION. UM SO FEEL FREE TO ASK US ANY QUESTIONS DURING THE PRESENTATION. IF I DON'T HAVE AN ANSWER IMMEDIATELY HAVE SOME PEOPLE THAT STANDING BUDDY, GET IT IF WE CAN'T GET IT, UH, THAT QUICK, THEN I'LL MAKE SURE THAT WE GET YOU ANSWERS IN THE NEXT DAY OR SO. SO. FEEL FREE TO STOP ME AT ANY TIME. UM WE ALWAYS. I LIKE TO BEGIN THE PRESENTATION EVERY YEAR BY BRINGING ATTENTION TO OUR BUDGET PROCESS AND THE STEPS THAT IT TAKES FOR US TO GET HERE TODAY. A LAP WITH STAFF AT THE BEGINNING OF THE PROCESS THIS YEAR OR EACH YEAR. WANNA SHOW THIS NEXT LOT? I KNOW IT'S REPETITIVE. MOST OF YOU HAVE SEEN IT BEFORE. BUT THIS IS OUR BUDGET PROCESS CYCLE. WE ARE CREATURES OF HABIT, AND I WILL BE LIKE OUR ROUTINE. SO AS YOU CAN SEE, HERE, THERE ARE FIVE DISTINCT PHASES OF OUR BUDGET PROCESS BEGINS IN JANUARY. IT'S THE PLANNING. THE PHASES. THE FIRST PHASE. IT'S DONE BY COUNCIL. UM IT'S A THE ADOPTION OF OUR GUIDELINES AND THEN ALSO IN FINANCE. WE RENEW OUR TENURE PLANS. I'LL TALK A LITTLE BIT ABOUT THOSE IN A FEW MINUTES. AS WE MOVE THROUGH THE SPRING, WE GO TO THE DEPARTMENT BUDGET.
THAT'S WHERE THE DEPARTMENT'S PLAN THEIR UPCOMING YEAR IDENTIFY THEIR NEEDS AND COMMUNICATE THOSE TO US. MOVES ON TO THE CITY MANAGER'S BUDGET IN THE SUMMER. CEMENTED OFFICE MEETS GOES THROUGH THE BUDGET REQUEST DECIDES WHAT'S GOING TO BE PROPOSED, AND THEN PRESENTS THAT TO YOU TODAY WHEN IT BECOMES THE CITY COUNCIL'S BUDGET. AND THIS IS WHERE WE ARE GOING TO PRESENT THE BUDGET DO YOU GUYS TODAY? THESE ARE GOALS AND STRATEGIES THAT WERE DEVELOPED AND AFFIRMED BY BCOUNCIL EARLIER THIS YEAR. PAUL'S ALREADY MENTIONED THIS MORNING. WE USE THESE WHEN MAKING DECISIONS ABOUT EVERYTHING THAT GOES INTO THE PROPOSED BUDGET, AND YOU'RE SETTING OF THEM REALLY HELPS DRIVE OUR PROCESS. SO I ALWAYS LIKE TO PUT IT IN HERE AND JUST REMIND EVERYBODY THAT THESE WERE THE GOALS AND STRATEGIES.
ANOTHER SLIDE. I SHOW EVERY YEAR IT'S ASSUMED MCKINNEY BUDGET IT OPERATES AS A THREE PART TOOL. WE LIKE TO TALK ABOUT IT THE POLICY. IT'S THE CITY THAT THE COUNCIL PORTION OF THE TOOL. YOUR POLICY SETS OUR PRIORITIES AND MOVES US TO THE TO THE TO THE NEXT PART, WHICH IS THE MANAGEMENT TOOL ALLOWS THE CITY MANAGER'S OFFICE AND DEPART HEADS TO ALLOCATE THEIR RESOURCES. AS EFFICIENTLY AS POSSIBLE. UM THE 1ST AND 2ND FLOW INTO THE THIRD.
IT COMMUNICATES OUR RESOURCES THAT WILL BE ALLOCATED CITY STAFF EACH YEAR AND TO THE PUBLIC. AND HOW WE WILL USE THOSE REVENUES FOR OUR DIFFERENT PROJECTS AND SERVICES. WHILE FISCAL YOUR BUDGETS ARE ONLY FOCUSED ON 12 MONTHS AT A TIME WE DO PLAN FOR
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THE LONG TERM INTERNALLY. SEVERAL YEARS AGO, WE CREATED TWO YOUNG LONG TERM PLANS.THEY'RE THE GENERAL OBLIGATION DEBT SERVICE PLAN THAT OUTLINES ARE TOTALED THAT CAPACITY THAT WE USED TO SET OUR OWN AS TAX RATE AND ALSO MAKE SURE THAT WE CAN PAY FOR THE, UH, LARGER BOND PROJECTS THAT WE HAVE THAT ARE OUT THERE. UH ESPECIALLY. WE USED IT QUITE EXTENSIVELY DURING THE 2019 BOND ELECTION. MAKE SURE THAT WE COULD AFFORD ALL OF THOSE PROJECTS AND MAINTAIN OUR OWN IS TAX RATE. AND THEN ALONGSIDE OF THAT WE HAVE OUR GENERAL FUND PLAN THAT PROVIDES A 10 YEAR PROJECTION OF OUR OPERATING REVENUES AND EXPENDITURES. AS WE'RE GROWING.
WE NEED TO MAKE SURE THAT WE CAN CONTINUE TO, UH, FORD EVERYTHING THAT WE'RE BUILDING AND CONTINUE TO GROW FOR THE FUTURE. SO WE DO LOOK OUT FOR 10 YEARS AND TRY TO MAKE SURE THAT WE'RE ABLE TO MAINTAIN OUR OPERATIONS AND MAINTAIN OUR FUND BALANCES AND MAINTAIN.
YEAH. EVERYTHING THAT WE CURRENTLY HAVE. SO AS PART OF THE OVERALL PLAN, IF YOU REMEMBER IN FEBRUARY EVERY YEAR WE ADOPT THE COUNCIL ADOPTS BUDGET GUIDELINES. IT'S KIND OF THE BEGINNING OF OUR BUDGET CYCLE AND HELPS US TO GET TO OUR PROPOSED BUDGET TODAY. AS YOU CAN SEE, THESE ARE VERY BASIC, BUT THEY ARE FUNDAMENTAL. WE HAVE A FULLY FUNDED AND BALANCED BUDGET. WE WANT TO MAINTAIN A CONSERVATIVE TAX LEVY, WHICH. PAUL HAS ALREADY MENTIONED THIS YEAR. WE'RE GOING BECAUSE PROPOSING TO CUT THE TAX RATE OVER ONE CENT. WE WANT TO MAINTAIN OUR POLICE AND FIRE. UH PERSONNEL PAY STRUCTURES, AND AS YOU CAN SEE, ALSO, WE MOVE INTO THE UTILITY FUNDS. WE WANT TO MAKE SURE THAT OUR FUNDS ARE A LONG TERM FINANCIALLY SUSTAINABLE. AND WE WILL IMPLEMENT RATE ADJUSTMENTS AS RECOMMENDED BY APPROPRIATE RATE STUDIES, WHICH IS A PERFECT SEGUE. BECAUSE TODAY I HAVE DAN JACKSON, UM FROM WILDER, WHO HAS COMPLETED OUR MOST RECENT WATER AND WASTEWATER, SIR, UH FORECAST.
BUT WE DO THIS EVERY TWO YEARS. WE TALKED TO THEM IN THE INTERIM YEARS TO MAKE SURE THAT OUR. WATER AND WASTEWATER RATES ARE APPROPRIATE. AND WITH THAT. THEY HAVE COMPLETED A STUDY AND THEY DO HAVE RECOMMENDATIONS FOR US TODAY AND I WILL TURN IT OVER TO YOU. THANK YOU. THANK YOU. THANK YOU, MAYOR. MEMBERS OF THE COUNCIL. MY NAME IS DAN JACKSON, VICE PRESIDENT OF WILDER AND FINANCIAL SERVICES. I'VE GOT WITH ME. MY COLLEAGUE, MR DAN LANDING OF WILLED AND ALSO MR LANNING, BY THE WAY, IS A PROUD RESIDENT OF THE CITY OF MCKINNEY. I'M A RESIDENT OF THE CITY OF FRISCO AS WELL. UM UH, I DO APPRECIATE THE CHANCE TO BE HERE BEFORE YOU ALL TODAY.
WE'VE BEEN WE'VE HAD THE PRIVILEGE OF BEING YOUR RATE CONSULTANTS FOR ABOUT THE LAST 8 TO 9 YEARS AND WE REALLY APPRECIATE THE, UH, CONFIDENCE YOU ALL HAVE SHOWN IN US, AND IT'S A PLEASURE WORKING WITH CITIES LIKE MCKINNEY, WHO LOOK AT THESE WHO TAKE THE LONG TERM VIEW AND ARE WILLING TO MAKE THE SOMETIMES VERY DIFFICULT DECISIONS. THAT HAVE RESULTED IN YOUR WATER AND WASTEWATER FUN BEING IN VERY GOOD FINANCIAL CONDITION. UH, WE'D LIKE TO PRESENT TO YOU AS BRIEFLY AS POSSIBLE. THE RESULTS OF OUR LATEST STUDY AND OUR RECOMMENDATIONS FOR YOUR RATE PLAN GOING FORWARD. START BY TALKING A LITTLE BIT ABOUT WHAT YOUR CURRENT RATES ARE. THEN I'M GOING TO TALK ABOUT YOUR VOLUMES AND YOUR REVENUE REQUIREMENTS AND THEN WILL PRESENT TO YOU OUR RECOMMENDED RATE PLAN. BUT I ALWAYS LIKE TO START THESE PRESENTATIONS OFF BY TALKING A LITTLE BIT ABOUT WHAT'S GOING ON IN THE INDUSTRY BECAUSE I THINK IT'S VERY IMPORTANT FOR DECISION MAKERS SUCH AS YOURSELVES TO UNDERSTAND THAT THE DYNAMICS THAT ARE AFFECTING THE WATER BUSINESS. ARE COMING FROM A LOT OF OUTSIDE SOURCES AND OUR FOR OUR DUE TO A LOT OF FACTORS THAT ARE SIMPLY BEYOND YOUR CONTROL. REMEMBER ONE THING THAT'S VERY IMPORTANT. WATER IS A BUSINESS LIKE ANY OTHER BUSINESS. YOU PRODUCE A PRODUCT. WATER IS A PRODUCT AND SO IT IS IMPORTANT THAT THE REVENUES THAT YOU RECOVER FROM THE SALE OF YOUR PRODUCT COVER ALL THE COSTS OF PRODUCING THAT PRODUCT. IF YOU IF MANY UTILITIES OUT THERE SELL THEIR GO SELL WATER SERVICE AT LESS THAN THEIR COST. THAT'S NOT A PARTICULARLY GOOD BUSINESS DECISION. AT THE SAME TIME, WATER IS A VERY UNIQUE BUSINESS. YOU ARE IN THE BUSINESS OF SELLING A PRODUCT THAT YOU WOULD THAT YOU'RE TRYING TO GET YOUR CUSTOMERS NOT TO BUY. BECAUSE IT'S VERY IMPORTANT THAT WE CAN SERVE WATER. IT'S A PRECIOUS AND DIMINISHING NATURAL RESOURCE.
SO YOU HAVE TO STRIKE A BALANCE BETWEEN WANTING TO SELL WATER TO YOUR CUSTOMERS AND MAKING SURE THAT THEY USE IT IN HIS PRUDENT A MANNER AS POSSIBLE SO AS NOT TO WASTE THIS RESOURCE.
UM. WATER RATES ARE GOING UP THERE GOING UP ALL OVER THE NATION. THE AVERAGE UTILITY HAS BEEN RAISING ITS RATES 5 TO 6% EVERY YEAR, AND THAT TREND IS EXPECTED TO CONTINUE. AS A MATTER OF FACT, THE AMERICAN WATER WORKS ASSOCIATION EXPECTS THAT WATER AND SEWER RATES ARE GOING TO TRIPLE. THE NEXT 15 YEARS. UM WHY IS THIS THE CASE? WELL, A LOT OF THE REASONS WHY WATER COSTS ARE GOING UP OR FOR REASONS THAT ARE BEYOND YOUR CONTROL. FOR EXAMPLE, DUE TO
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INFLATION COST OF EVERYTHING GOES UP BY 3 TO 4% A YEAR, SO IT'S REASONABLE TO EXPECTED YOUR COSTS ARE GOING TO RATCHET UP OVER TIME. AND THEN WHEN YOU LOOK AT SOME OF THE KEY COMPONENTS OF THE WATER BUSINESS, THINGS LIKE CHEMICALS, ELECTRICITY INSURANCE, WORKERS' COMPENSATION. ALL OF THOSE ARE GROWING UP AT RATES HIGHER THAN INFLATION. SO IT IS VERY IMPORTANT THAT ANY LONG TERM FINANCIAL AND RATE PLAN TAKE ALL THOSE CONSIDERATIONS, UM, INTO ACCOUNT. FINALLY ANOTHER IMPORTANT THING TO UNDERSTAND IS THAT 30 TO 40% OF UTILITIES RIGHT NOW CHARGE RATES THAT DON'T COVER THEIR COSTS. SO JUST BECAUSE A NEIGHBORING UTILITIES RATES ARE LOWER THAN YOURS. THAT DOESN'T NECESSARILY MEAN THAT THEY'RE RUNNING MORE EFFICIENT OPERATION. IT MIGHT MEAN THAT THEY'RE SUBSIDIZING THEIR RATES FROM THEIR GENERAL FUND. CITY. MCKINNEY DOES NOT DO THAT HAS NEVER DONE THAT AS LONG AS WE'VE BEEN, UH, WORKING FOR THE CITY. AND IT'S NOT GENERALLY GOOD BUSINESS PRACTICE. I MEAN, IT'S NOT ILLEGAL, BUT IF YOU SELL A PRODUCT FOR LESS THAN WHAT IT COSTS TO PRODUCE IT THAT'S GENERALLY NOT GOOD BUSINESS. SO, UM. LET'S TALK A LITTLE BIT ABOUT YOUR WATER RATES THEMSELVES. WHAT DO YOU CHARGE FOR CUSTOMERS? WELL YOU CHARGE FOR WATER SERVICE IN TWO WAYS.YOU CHARGE A MINIMUM CHARGE AT ANY CHARGE RATE FOR EVERY 1000 GALLONS OF WATER THAT'S SOLD.
MOST OF YOUR RESIDENTIAL CUSTOMERS ARE THREE QUARTER INCH METERS. FOR THEM, YOU CHARGE BASE CHARGE OF $16.50 A MONTH. IF YOU HAVE A LARGER METER, YOU'RE ASSESSED A HIGHER MONTHLY CHARGE BECAUSE YOU EXERT A GREATER DEMAND ON THE SYSTEM. UM FOR ALL GALLONS OF WATER. YOU ARE IF YOU'RE A RESIDENTIAL CUSTOMER, YOU ARE CHARGING INCREASING AMOUNT BASED ON THE AMOUNT OF GALLONS YOU USE. THIS IS KNOWN AS AN INVERTED BLOCK RATE. THE 1ST 7000 GALLONS. YOU PAY A RATE OF $4 PER 1000 GALLONS, AND AS YOU CAN SEE, AS YOU USE MORE AND MORE WATER, YOU PAY HIGHER RATES. THE INTENT IS TO TRY TO ENCOURAGE THE PRUDENT USE OF WATER. COMMERCIAL CUSTOMERS PLAY FLAT PAY A FLAT RATE OF $4.65 PER 1000 GALLONS. THE PHILOSOPHY IS THAT A COMMERCIAL BUSINESS DOESN'T GENERALLY HAVE THE SAME ABILITY TO CONSERVE WATER THAT A RESIDENTIAL BUSINESS DOES. THINK ABOUT IT. IF YOUR RESIDENTIAL HOME YOU WATER YOUR LAWN IN THE SUMMERTIME. YOU FILL YOUR SWIMMING POOL. YOU DON'T DO THAT IN THE WINTER TIME AND YOU HAVE THE ABILITY TO CONSERVE WATER USAGE IF YOU MAYBE NOT WATER YOUR LAWN QUITE AS MUCH. BUSINESSES GENERALLY, ALL THE WATER THEY USE IS WATER THAT IS USED FOR BUSINESS PURPOSES, SO THAT'S WHY IT MAKES SENSE TO CHARGE AN INVERTED BLOCK RATE FOR RESIDENTIAL CUSTOMER AND A FLAT RATE FOR COMMERCIAL CUSTOMER. ON THE SUICIDE. YOUR CHARGE A MINIMUM CHARGE OF $19.85 AND A REST IN A VOLUMETRIC GREAT, BASED ON A WINTER AVERAGE OF $5.55. NOW, WHAT DOES THIS MEAN? IN TERMS OF WHAT PEOPLE PAY? THE AVERAGE RATE PAYER HERE IN THE CITY OF MCKINNEY, YOU HAVE THE RESIDENTIAL RATE PAIR USES SOMEWHERE AROUND 8 TO 10,000 GALLONS OF WATER SERVICE A MONTH A LITTLE MORE IN THE SUMMER, MAYBE A LITTLE LESS IN THE WINTER. BUT 10,000 GALLONS IS A GOOD BENCHMARK. OKAY, SO WHAT DOES SOMEBODY PAY FOR 10,000 GALLONS HERE IN MCKINNEY? THAT PERSON PAYS $108.60 FOR 10,000 GALLONS. AS YOU CAN SEE, THIS IS A COMPARISON OF WHAT MCKINNEY CUSTOMERS PAY AS OPPOSED TO OTHER CUSTOMERS HERE IN THE NORTH TEXAS CORRIDOR. AS YOU CAN SEE YOUR YOU'RE RIGHT ABOUT WHERE YOU WOULD EXPECT TO BE YOUR HIGHER THAN A FEW CITIES.
YOU'RE LOWER THAN A LOT OF CITIES. YOU'RE ACTUALLY RIGHT ABOUT AT THE STATE AVERAGE STATE AVERAGE $110. YOU'RE A COUPLE OF DOLLARS BELOW THAT. ALSO BELOW GARLAND MESQUITE AND, UH, VAN ALSTYNE. MELISSA, YOU'RE YOU'RE YOU'RE DEFINITELY LESS THAN A LOT OF OTHER CITIES, BUT YOU'RE A TAD GREATER THAN SOME OTHER CITIES. IN OTHER WORDS. WHAT PEOPLE PAY FOR WATER SERVICE HERE IN MCKINNEY IS CERTAINLY NOT OUT OF PROPORTION TO WHAT PEOPLE PAY HERE IN THE NORTH TEXAS CORRIDOR. OKAY? UM. AS WE DO EVERY COUPLE OF YEARS. WE DO A COMPREHENSIVE, LONG TERM FORECAST OF YOUR WATER AND SEWER SYSTEM. FORECAST IS NOT A GUARANTEE. THE FORECAST IS A PREDICTION BASED ON A SERIES OF REASONABLE ASSUMPTIONS. ONE OF THE ASSUMPTIONS THAT YOU USE WHEN YOU DO. A LONG TERM FORECAST IS YOU HAVE TO LOOK AND SEE WHERE YOUR UTILITY IS GOING. YOUR UTILITY TODAY. IT'S NOT GONNA BE THE SAME AS YOUR UTILITY TOMORROW. AND ONE OF THE KEY IS IMPACTS OF WATER SERVICE IN THE CITY OF MCKINNEY OVER THE NEXT 10 YEARS IS GOING TO BE GROWTH IN THE SYSTEM. GROWTH IS A VERY, UTILITY SERVIE UTILITIES OPERATE UNDER A CONCEPT KNOWN AS ECONOMIES OF SCALE. THE MORE ACCOUNTS YOU HAVE, THE LESS IT COSTS YOU TO SERVE EACH OF THOSE ACCOUNTS, SO IF YOU MANAGE YOUR GROWTH PROPERLY, IT IS A GREAT BENEFIT. TO THE CITY AS A WHOLE AND TO THE UTILITY SERVICE IN PARTICULAR. THIS HERE IS A HISTORICAL AND FORECAST OF THE TOTAL NUMBER OF NEW WATER AND WASTEWATER ACCOUNTS EXPECTED PER YEAR. AS YOU CAN SEE YOU'VE BEEN AVERAGING ABOUT 1500 TO 2500 NEW ACCOUNTS PER YEAR. DIPPED A LITTLE BIT IN THE LAST COUPLE OF YEARS. THIS IS DEFINITELY PANDEMIC RELATED, BUT AS YOU CAN SEE THE GROWTH ESTIMATES FOR THE NEXT 10 YEARS
[00:25:02]
ARE VERY, VERY BULLISH. WE WORKED WITH THE CITY STAFF IN TRYING TO DEVELOP SOME OF THESE GROWTH ESTIMATES. YOU'VE GOT A LOT OF NEW RESIDENTIAL SUBDIVISIONS COMING IN. AND SO AS YOU CAN SEE, WE'RE ANTICIPATING THAT YOU'RE GOING TO SEE A LOT OF GROWTH OVER THE NEXT 10 YEARS. EVERY NEW ACCOUNT IS A NEW MINIMUM CHARGE EVERY NEW ACCOUNT AS A NEW VOLUMETRIC CHARGE, AND SO, LIKE I SAID, IT IS VERY, VERY BENEFICIAL TO THE COMMUNITY TO THE UTILITY AS A WHOLE. DON'T YOU FIND THE GO BACK LAUGHING? SURE. 20 PANDEMIC. I WOULD THINK MORE PEOPLE WERE HOME AND WATER USAGE WOULD HAVE GONE UP, WOULDN'T IT? WELL THIS IS NEW ACCOUNTS. THIS IS ACTUAL GROWTH INTO ACCOUNT. SO WHAT YOU SAW IS CONSTRUCTION SLACKENED OFF A LITTLE BIT LAST YEAR, BUT IT'S COMING BACK. YOU KNOW, YOU KNOW, IN A RUSH RIGHT NOW. AND INTERESTINGLY IF I, UM. I'VE GOT A CONSUMPTION CHART. I'M ABOUT TO SHOW YOU, UM FIRST.THIS IS YOUR TOTAL NUMBER OF ACCOUNTS YOU'VE GOT ABOUT 65,000 WATER ACCOUNTS AND ABOUT 62,000 WASTEWATER ACCOUNTS BY THE YEAR 2031. YOU'RE EXPECTED TO YOUR FORECAST TO HAVE AS MANY AS 94,000 NEW WATER WATER ACCOUNTS. NOW THIS IS THE CONSUMPTION NUMBER. LOOK AT THIS. THIS IS CONSUMPTION FOR THE LAST THREE YEARS. YOU SOLD ABOUT 9.2 BILLION GALLONS OF WATER IN 2018. IT DIPPED A LITTLE BIT IN 2019. BECAUSE IT WAS IT WAS A PRETTY MILD YEAR.
BUT IN 2020 AND 2021 THE PANDEMIC YEARS IT WAS RIGHT AT WHERE IT WAS, IS. WHAT HAPPENED IS PEOPLE WERE STAYING HOME. THEY WERE USING WATER AT HOME, BUT THEY WEREN'T GOING TO THEIR BUSINESSES. SO INSTEAD OF USING THE WATER IN THEIR BUSINESSES, THEY WERE USING IT AT HOME. SO IF YOU DIVE DEEPER INTO THE NUMBERS, YOU SEE THAT RESIDENTIAL USAGE IS ACTUALLY GONE UP IN THE LAST YEAR OR TWO AND COMMERCIAL USAGE HAS GONE DOWN A LITTLE BIT, BUT IT'S OFFSET EACH OTHER. UM SO. I FIND THAT TO BE VERY, VERY INTERESTING IMPACT OF THE PANDEMIC AND AS A PANDEMIC RECEDES AND AS GROWTH GOES BACK TO NORMAL, WE ANTICIPATE THAT YOUR USAGE IS GOING TO CONTINUE TO CLIMB. IN THE NEXT 10 YEARS. SO HOW MUCH DID WE PAY? HOW MANY BILLIONS DID WE PAY FOR? LAST YEAR IN NORTH TEXAS. NO CITY OF MCKINNEY. WITH THE TAKER. PAY MINIMUMS. I THINK OUR OUR TAKE WAS 9.2 BILLION. UH IF YOU SAY THAT WAS OUR HIGH WATERMARK, SO, MAN, NOT ATTORNEYS UPON THERE IN 2018 SO. THE WAY THE RATES ARE SET WITH MORE TEXAS YOU HAVE TO TAKE. SORT YOUR HIGHEST AND THAT WOULD HAVE BEEN 9.2. NOW WE DO GET REBATES ON THE ON THE BACK SIDE THAT FOR WATER THAT ISN'T TREATED, BUT THEN THAT FOR 2019, THIS SYSTEM THAT HAD. SORT OF BEEN, YOU KNOW, BENNETT HAS BENEFITS FOR GROWING CITIES.
YOU KNOW, THERE WAS THE OPPOSITE EFFECT IN 2019, BUT WE STILL WERE CASH POSITIVE AND YOU KNOW, AND IT GETS ALL YEAR FOR 2019 FINANCIALLY. BUT THAT IS THE. THE THAT THAT WHAT WE DID PAY FOR WATER THAT WE CLEARLY DIDN'T TAKE. WE'RE JUST GOING TO CONTINUE TO INCREASE.
YES, YES. MHM. AS THE NEW ACCOUNTS COME IN, YOU'RE GOING TO SEE USAGE CONTINUE TO CLIMB OVER THE NEXT 10 YEARS AND YOU'LL BE SITTING NEW TAKER PAY LEVELS IN THE NEXT 10 YEARS BECAUSE YOU'LL BE EXCEEDING YOUR YOUR AVERAGE IS UNLESS, OF COURSE, THE ONE WILD CARD IS WEATHER. YOU CAN'T PREDICT THE WEATHER. THIS HAS BEEN A MILD SUMMER SO YOU MAY SEE USAGE DIP A LITTLE BIT IN THE NEXT COUPLE OF MONTHS. BUT IF WE HAVE A DRY YEAR NEXT YEAR, IT'S GOING TO SPIKE. BUT ON AVERAGE IS GOING TO GENERALLY CLIMB. SO. OKAY, SO WE'VE TALKED A LITTLE BIT ABOUT USAGE. LET'S NOW TALK A LITTLE BIT ABOUT YOUR EXPENSES. WHERE YOU THINK YOUR WELL YOUR REVENUES AND YOUR COSTS ARE GOING TO GO OVER THE NEXT 10 YEARS? WELL, AS WE GENERALLY LIKE TO ASSUME WE ASSUME COST OF EVERYTHING GOES UP BY ABOUT 3% A YEAR JUST DUE TO INFLATION, SO MOST OF YOUR OPERATING EXPENSES THEY'RE PROBABLY GOING TO GO UP THREE OR SO PERCENT EACH YEAR. SOME EXPENSES MAY GO UP A LITTLE BIT MORE THAN THAT. FOR EXAMPLE, THINGS LIKE INSURANCE AND WORKER'S COMP. WE'RE KIND OF ASSUMING ARE GOING TO GO UP A LITTLE BIT HIGHER THAN 3. AS YOU GROW. YOUR SYSTEM IS GOING TO GET LARGER. YOU'RE GOING TO HAVE TO ADD SOME MORE PEOPLE. UM WITH STAFF, WE, UH, DID A FORECAST THAT ASSUME THAT YOU PROBABLY AT ABOUT 40 TO 45 NEW FTS OR FULL TIME EQUIVALENTS OVER THE NEXT DECADE. IT MAKES PERFECT SENSE IF YOU'RE GOING TO BE ADDING 30,000 ACCOUNTS ARE GOING TO HAVE TO HAVE MORE PEOPLE IN ORDER TO SERVICE THEM. UM WHAT IT COST THE SERVICE STUDY DOES IS IT TAKES A LOOK AT YOUR BUDGET ITEMS, AND IT ALLOCATES IT BETWEEN THE WATER AND THE WASTEWATER DEPARTMENT. I'M NOT GOING TO GO INTO ALL THAT DETAIL RIGHT NOW. BUT THAT'S BASICALLY HOW YOU ALLOCATE YOUR NON DEPARTMENTAL AND CUSTOMER OPERATIONS BETWEEN THE WATER AND WASTEWATER UP.
OPERATIONS HOWEVER, THERE ARE TWO FACTORS THAT DRIVE THE BUS WHEN IT COMES TO WATER AND WASTE WATER RATES. ONE FACTOR IS NORTH TEXAS MUNICIPAL WATER DISTRICT, WHO IS YOUR SUPPLIER OF WATER AND WASTEWATER TREATMENT. AND THE OTHER IS THE DEBT THAT YOU ISSUE TO FUND
[00:30:01]
YOUR CAPITAL IMPROVEMENT PLAN. LET'S TAKE A LOOK AT THOSE FACTORS. NORTH TEXAS. YOU BUY ALL YOUR WATER FROM NORTH TEXAS, AND THEN YOU TURN AROUND AND SELL IT TO YOUR CUSTOMERS. FOR THE SECOND YEAR IN A ROW. NORTH TEXAS HAS ANNOUNCED THAT THEY'RE NOT GOING TO INCREASE THEIR RATES. THEY DIDN'T INCREASE THEIR RATE IN 2021. THEY'RE NOT INCREASING IT IN FISCAL YEAR 2022. THE RATE RIGHT NOW IS $2.99 PER 1000 GALLONS, SO LET'S ENJOY IT WHILE WE CAN. BECAUSE THEY JUST PUT OUT A FORECAST THAT INDICATED THAT AFTER 2022, THEY'RE GOING TO START DOING INCREASES AGAIN. 7% IN 2023, THEN FLORIDA 4 TO 6% EACH YEAR AFTER THAT, NOW, THESE NUMBERS ARE GOING TO EVOLVE. NORTH TEXAS, REVISING THEIR FORECASTS EVERY YEAR, BUT I THINK IT'S REASONABLE TO ASSUME THAT YOU'RE GOING TO SEE SOME OF THESE INCREASES. BUT A WELL DEVELOPED FINANCIAL PLAN TAKES INTO CONSIDERATION THE FACT THAT SINCE RATES AREN'T GOING TO GO UP IN THE NEXT TWO YEARS, YOUR WATER FUND WILL BENEFIT AND THAT WAY YOU CAN DEFER RATE ADJUSTMENTS ON YOUR OWN CUSTOMERS. THE OTHER FACTOR IS YOUR CAPITAL IMPROVEMENT PLAN. AS THE CITY OF MCKINNEY GROWS, YOU HAVE TO CONTINUE TO INVEST IN THE FUTURE. YOU HAVE TO BUILD INFRASTRUCTURE, YOU HAVE TO EXPAND INFRASTRUCTURE. THE CITY HAS DONE A REMARKABLE JOB AT MANAGING THE UNPRECEDENTED GROWTH. I CAN TELL YOU. THIS IS A PERSON WHO'S LIVED IN THE DALLAS FORT WORTH AREA ALMOST ALL MY LIFE. IT IS NOTHING SHORT OF REMARKABLE TO SEE. WHAT THE CITY OF MCKINNEY AND THE COLLIN DENTON COUNTY CORRIDOR HAS EVOLVED INTO. OVER THE LAST 20 YEARS. THE REASON WHY THE GROWTH HAS BEEN AS ROBUST AS IT HAS BEEN, IS THAT THE CITY HAS ALWAYS BEEN WILLING TO MAKE THE DIFFICULT DECISIONS TO DO THE INVESTMENTS TO ENSURE THAT THE GROWTH IS PROPERLY MANAGED. ONE OF THE BENEFITS OF WATER SYSTEM IS THAT GROWTH AND INVESTMENT IS DIRECTLY INTO THE STREETS AND ALLEYWAYS OF THE CITY. THE CITY IS ANTICIPATED TO INVEST AS MUCH AS 154 MILLION IN WATER AND SEWER SYSTEM. UH INFRASTRUCTURE IN THE NEXT FIVE YEARS 110 MILLION IN THE WATER SYSTEM $43 MILLION IN THE WASTEWATER SYSTEM. THAT'S A LOT OF MONEY. BUT THE GOOD NEWS IS IT'S GOING TO GO TO CONSTRUCT ASSETS THAT WILL NOT ONLY DIRECTLY BENEFIT YOU BUT YOUR CHILDREN AND YOUR GRANDCHILDREN AND MAYBE EVEN YOUR GREAT GRANDCHILDREN AS WELL, BECAUSE THESE ARE ASSETS THAT HAVE LIFESPANS OF 50 TO 75 YEARS. SO. HOWEVER YOU DON'T HAVE $154 MILLION, SO YOU GOT TO GO OUT AND BORROW IT. SO HOW SO? ANOTHER IMPORTANT FACTOR THAT HAS TO BE TAKEN INTO CONSIDERATION IN ANY LONG TERM WATER PLAN IS HOW YOU FUND THIS THIS CAPITAL CONSTRUCTION. THIS IS THE ASSUMPTIONS FOR THE AMOUNT OF DEBT THAT NEEDS TO BE ISSUED TO FUND WATER AND SEWER SYSTEM. CAPITAL IMPROVEMENTS AS YOU CAN SEE WHERE, ANTICIPATING THAT YOU'RE GOING TO ISSUE ABOUT $142 MILLION OF DEBT OVER THE NEXT FIVE YEARS, OF WHICH ABOUT 100 MILLION IS WATER AND ABOUT $42 MILLION OF IT IS WASTE WATER. YOU CAN SEE A LITTLE BIT MORE DEBT IS EXPECTED TO BE ISSUED IN THE FIRST TWO YEARS. 38 35 MILLION WITH ABOUT 20 TO 25 MILLION EACH YEAR AFTER THAT. THAT MEANS OF COURSE, THAT YOU'RE GOING TO HAVE TO MAKE PRINCIPAL AND INTEREST PAYMENTS EACH YEAR, AND SO YOU HAVE TO SET A RATE PLAN INTO PLACE THAT ENSURES THAT YOU CAN MEET THAT PRINCE. THOSE PRINCIPAL AND INTEREST PAYMENTS EACH YEAR AND THIS RATE PLAN THAT WE'RE GOING TO PRESENT TO YOU WILL ENABLE YOU TO DO THAT. BUT YOU ALSO HAVE ONE OTHER MAJOR ADVANTAGE. YOU HAVE VERY PRUDENTLY STRUCTURED THE DEBT THAT YOU ISSUED IN THE PAST. AND WHAT THAT MEANS IS THAT SOME OF THE CURRENT DEBT THAT YOU HAVE RIGHT NOW IS GOING TO START TO ROLL OFF IN THE NEXT COUPLE OF YEARS. YOU'RE GOING TO START TO RETIRING. SEE THE BLUE PORTION OF THIS CHART. RIGHT? HERE IS YOUR CURRENT DEBT AND THE RED PORTION IS YOUR FUTURE DEBT. RIGHT NOW. YOU'VE GOT ABOUT $16 MILLION IN PRINCIPAL AND INTEREST PAYMENTS THAT YOU'RE MAKING IN THE CURRENT YEAR. IN THE FUTURE, AS YOU CAN SEE, YOU'RE GOING TO BE ADDING MORE DEBT. BUT YOU'RE GOING TO BE RETIRING A LOT OF YOUR EXISTING DEBT. SO YOUR CURRENT DEBT IS GOING TO GO FROM $16 MILLION DOWN TO A LITTLE BIT MORE THAN $10 MILLION IN THE NEXT 10 YEARS. THAT'S GOOD FINANCIAL MANAGEMENT BECAUSE THAT FREES UP 6 TO $7 MILLION A YEAR THAT YOU CAN USE TO ISSUE NEW DEBT TO FUND FURTHER SYSTEM IMPROVEMENTS WITHOUT UNDULY BURDENING YOUR RATEPAYERS. SO WHILE YOU WHILE YOUR TOTAL AMOUNT OF DEBT IS GOING TO GO UP ON THE NEXT 10 YEARS, IT'S NOT GOING TO GO UP ANYWHERE NEAR AS MUCH AS IT COULD HAVE. HAD YOU NOT INSTITUTED SOME VERY PRUDENT FINANCIAL POLICIES IN THE PAST. OKAY? I REALLY LIKE THIS CHART BECAUSE THIS CHART REALLY ILLUSTRATES WHAT THE CHALLENGES THAT YOU'RE FACING. THIS IS YOUR TOTAL WASP. THE WATER COST OF SERVICE IN THE CURRENT YEAR, IT'S COSTING ABOUT $61 MILLION TO RUN YOUR WATER SYSTEM THIS YEAR. 59% OF THAT IS NOTHING MORE THAN PASSED THROUGH COST IN NORTH TEXAS. THAT'S WHY. WHAT NORTH TEXAS DOES HAVE SUCH A MAJOR IMPACT ON YOUR WATER[00:35:01]
OPERATION WHEN NORTH TEXAS DOESN'T INCREASE THEIR RATES THAT THAT HAS A DIRECT BENEFIT.BUT WHEN NORTH TEXAS DOES INCREASE THEIR RATES, IT ALSO HAS A SIGNIFICANT IMPACT ON YOU. ANOTHER 13% OF THAT IS DEBT SERVICE. SO ALMOST 70. FIVE OF ABOUT 72% OF YOUR TOTAL WATER COST OF SERVICES BASICALLY, TOTALLY BEYOND YOUR CONTROL. AND ONLY 28% OF HIS IS MORE DISCRETIONARY. AND EVEN THAT ISN'T VERY DISCRETIONARY BECAUSE YOU GOT TO PAY YOUR PERSONNEL. AND YOU'VE GOT TO PAY YOUR OPERATIONS AND YOUR SUPPLIES. SO THIS IS YOUR WATER COST OF SERVICE, AND YOU'VE GOT A SIMILAR CHART ON THE WASTEWATER COST OF SERVICE.
WASTEWATER COST OF SERVICES $49 MILLION IN THE CURRENT YEAR, OF WHICH 52% OF THAT IS NORTH TEXAS, AND THE REST OF IT IS YOUR OTHER PAYMENTS. SO. THIS CHART RIGHT? HERE IS A DEPICTION OF YOUR FORECAST COST OF SERVICE FOR THE NEXT 10 YEARS. AS YOU CAN SEE, IT'S COSTING YOU A LITTLE BIT MORE THAN $100 MILLION TO RUN YOUR WATER AND SEWER OPERATION RIGHT NOW, OF WHICH THE BLUE PORTION IS NORTH TEXAS AND, YOU KNOW, THEN YOU'VE GOT OPERATING AND DEBT SERVICE AND CAPITAL OUTLAYS AND TRANSFERS. AS YOU CAN SEE, THAT NUMBER IS EXPECTED TO INCREASE TO ABOUT 170 TO $180 MILLION BY THE YEAR. 2030 WE KNOW OUR COSTS ARE GOING UP. SO LET'S PLAN ACCORDINGLY, AS WE HAVE DONE IN THE PAST. SO LET'S TALK ABOUT OUR PROPOSED RATE PLAN. UM. THE CITY IN THE PAST HAS IMPLEMENTED MULTI YEAR RATE PLANS OR WHAT YOU'VE DONE IS YOU'VE DONE A SINGLE ORDINANCE WHERE YOU HAVE DONE AUTOMATIC RATE ADJUSTMENTS FOR 2 TO 3 YEAR PERIOD. WE RECOMMEND THAT YOU CONTINUE DOING THAT. YOU DO AN ORDINANCE THIS YEAR THAT SETS YOUR RATES FOR THE NEXT 2 TO 3 YEARS. WE ASSUME THAT YOU MAKE NO CHANGES IN YOUR BASIC RATE STRUCTURE THE WAY YOU'VE GOT IT RIGHT NOW. IT'S WORKED IN THE PAST IS GENERALLY CONSIDERED TO BE FAIR, JUST AND REASONABLE IN THE COMMUNITY.
HOWEVER WE ARE RECOMMENDING THAT YOU DO KNOW WATER RATE INCREASE FOR THE NEXT TWO YEARS. THE MAIN REASON IS THAT THE NORTH TEXAS RATES ARE NOT GOING UP AND YOU'RE GETTING A LOT OF GROWTH. YOUR WATER FUND IS VERY HEALTHY RIGHT NOW. SO WE DON'T THINK YOU HAVE TO ADJUST YOUR WATER RATES AT ALL. THAT'S THE GOOD NEWS. HOWEVER WE DO THINK THAT YOU DO NEED TO DO SOME MINOR ADJUSTMENTS IN YOUR WASTE WATER RATES. YOUR WASTE WATER FUND IS STARTING TO UNDER RECOVER A LITTLE BIT, AND SO WE RECOMMEND THAT YOU DO WASTEWATER ADJUSTMENTS. NORTH TEXAS DID NOT INCREASE THE WATER RATE, BUT THEY DID INCREASE THEIR WASTE WATER RATES, SO WE DO RECOMMEND SOME WASTEWATER ADJUSTMENTS. ALSO YOU HAVE BEEN GRADUALLY ADJUSTING YOUR OUTSIDE CITY RATES. YOUR GOAL IS A 25% RATE DIFFERENTIAL, WHICH, IS A FAIRY VERY COMMON RATE DIFFERENTIAL. WE RECOMMEND THAT YOU CONTINUE TO DO THAT OVER THE NEXT COUPLE OF YEARS. SO WHAT'S THE IMPACT ON YOUR RATEPAYERS? THIS IS THE PROPOSED RATE PLAN. WE WOULD RECOMMEND THAT YOU DO A TWO YEAR RATE PLAN. IN THE TWO YEAR RATE PLAN. AS YOU CAN SEE, YOUR WATER RATES DO NOT CHANGE AT ALL. WE DO BELIEVE WHEN WE'RE PROJECTING THAT BEGINNING IN OCTOBER OF 2023, YOU'RE PROBABLY GOING TO NEED TO ADJUST YOUR WATER RACE. YOU DON'T HAVE TO DO IT FOR THE NEXT TWO YEARS, BUT AFTER THAT, WE DO THINK YOU'RE GOING TO HAVE TO DO SOME NOMINAL WATER RATE ADJUSTMENTS. ON THE WASTEWATER SIDE. WE ARE RECOMMENDING THAT YOU DO AN IMMEDIATE ADJUSTMENT TO TAKE A PLATE TAKE EFFECT IN OCTOBER OF 2021. WE WOULD RECOMMEND TAKING YOUR BASE CHARGE FROM $19.85 TO $21.05. WE RECOMMEND TAKING YOUR VOLUMETRIC RATE FROM $5.55 TO $5.90. AND THEN AS YOU CAN SEE, WE'RE LOOKING AT SIMILAR ADJUSTMENTS FOR EACH OF THE NEXT FOUR YEARS AFTER THAT. SO YOU SAID A TWO YEAR RATE PLAN, PUT IT IN PLACE AND RECOGNIZE THAT PROBABLY TWO YEARS FROM NOW YOU'RE GOING TO HAVE TO REVISIT IT AND DO ADDITIONAL RATE ADJUSTMENTS. IN THOSE YEARS. SO THE KEY QUESTION IS, WHAT KIND OF IMPACT IS THIS GOING TO BE ON YOUR AVERAGE RATEPAYER? WELL, THIS IS PROBABLY ONE OF THE MOST IMPORTANT CHARTS IN THE ENTIRE PRESENTATION, BECAUSE WHAT THIS DOES IS IT SHOWS YOU WHAT THE ACTUAL IMPACT IS GOING TO BE ON YOUR RATEPAYERS. REMEMBER SOMETHING VERY IMPORTANT. YOU CHARGE FOR WASTEWATER SERVICE ON SOMETHING CALLED A WINTER AVERAGE, WHICH IS EFFECTIVELY A CAP ON THE AMOUNT OF GALLONS THAT YOU'RE CHARGED FOR WASTEWATER SERVICE. WITHOUT GOING INTO A LOT OF DETAIL THE FUNDAMENTAL PHILOSOPHY BEHIND THIS IS THAT PEOPLE USE WATER IN THE SUMMER TIME THAT THEY DON'T USE IN THE WINTER TIME THEY WATER THEIR LAWN. THEY WASH THEIR CAR. THIS WATER DOES NOT GO BACK INTO THE SEWER SYSTEM. AND SO YOU DON'T CHARGE SEWER CHARGES ON THAT. CHARGE SEWER SERVICE BASED ON HOW MUCH THROUGH WATER USAGE YOU USE IN THE WINTER MONTHS BECAUSE IN THE MONTHS OF DECEMBER, JANUARY AND FEBRUARY, YOU GENERALLY DON'T USE WATER OUTDOORS. SO IF YOU ARE A FIVE OR 10,000 GALLON WATER USER, YOU GENERALLY HAVE A WASTEWATER CAP OF 5000 GALLONS. SO WHAT DOES THIS MEAN? IF YOU ARE A 5000 GALLON USER, RIGHT NOW, YOU'RE PAYING $84 A MONTH. AND UNDER THIS
[00:40:04]
RATE PLAN, YOUR BILL WOULD GO BY $2.95 A MONTH. THAT'S A 3.5% INCREASE. IT'S ONLY A WASTEWATER INCREASE. NOW, LET'S SAY YOU'RE A 10,000 GALLON USER. IF YOU'RE 10,000 GALLON USER, YOU'RE PAYING $108.06 60 CENTS UNDER THIS PLAN. YOUR BILL ALSO GOES UP BY $2.95 A MONTH. BECAUSE YOUR WASTEWATER WINTER AVERAGE IS 5000 GALLONS. AND IF YOU'RE EVEN GREATER WATER USER AT 30,000 GALLONS, AND YOU ALSO HAVE A $5000 WELL, WINTER AVERAGE. YOU'RE PAYING $233 UNDER THIS. CURRENTLY IT WOULD GO UP BY $2.95. SO, BASICALLY WHAT THIS MEANS IS THAT FOR THE VAST MAJORITY OF YOUR RESIDENTIAL RATEPAYERS. YOUR BILL WOULD GO UP BY ABOUT 2 TO $3 A MONTH. UNDER THIS PLAN. NEXT YEAR. IT WOULD BE THE SAME GO BY ABOUT $3 A MONTH. SO IF YOU SET THE TWO YEAR RATE PLAN, YOU'RE LOOKING PROBABLY AT ABOUT 2 TO $3 A MONTH INCREASES FOR MOST OF YOUR RATEPAYERS THIS YEAR AND NEXT YEAR AND THEN THE YEARS AFTER THAT, WHEN YOU START BUMPING YOUR WATER RATES, ASSUMING NORTH TEXAS FOLLOW US THE RUN THEIR COMMITMENT TO INCREASE THEIR RATES. THEN YOU'LL PROBABLY HAVE TO DO SLIGHTLY HIGHER INCREASES. BUT. I ALWAYS HATE TO TAKE THESE VERY COMPLEX FINANCIAL PLANS AND TRY TO SUMMARIZE THEM IN TERMS OF ONE OR TWO NUMBERS. I DON'T LIKE TO DO THAT. BUT IF I DID, I WOULD TELL YOU THAT FOR THE VAST MAJORITY OF YOUR RATEPAYERS. YOU'RE LOOKING AT AN ADJUSTMENT OF 2 TO $3 A MONTH ON THEIR AVERAGE MONTHLY BILL. OKAY. THE FURTHER GOOD NEWS IS THAT WE'RE ACTUALLY BELOW WHERE WE THOUGHT WE WOULD BE IN 2019. IN 2019. WE PROJECTED THAT YOUR AVERAGE 10,000 GALLON WATER USER, HIS BILL WOULD HIT $129 BY THE YEAR 2024. UNDER THIS CURRENT PLAN. WE'RE PROJECTING. IT'S ONLY GOING TO $126 SO THE BENEFITS THAT HAVE ACCRUED IN THE LAST COUPLE OF YEARS, PARTICULARLY THE NORTH TEXAS, THE FACT THAT NORTH TEXAS HAS AN INCREASED THEIR RATES HAS ENABLED US TO PASS THOSE SAVINGS THROUGH TO OUR RATEPAYERS. THAT'S WHAT PRUDENTLY RUN UTILITIES DO. SO YOU'LL BE HAPPY TO KNOW HIM TO MY LAST SLIDE. JUST WANT TO TELL YOU THAT IT'S ALWAYS VERY DIFFICULT TO ASK RATEPAYERS TO PAY MORE FOR ANYTHING AT ANY TIME FOR ANY REASON. WE CERTAINLY UNDERSTAND THAT. BUT THE CITY HAS ALWAYS MADE THE VERY DIFFICULT DECISIONS IN THE PAST, AND WE URGE THAT YOU CONSIDER THIS RATE PLAN, UH TODAY AS WELL. BECAUSE THE ADOPTION OF THIS RATE PLAN WILL ACTUALLY BE VERY BENEFICIAL TO THE CITY. YOU MIGHT SAY TO YOURSELF HOW IN THE WORLD CAN A RATE INCREASE, POSSIBLY BE BENEFICIAL? WELL, IT'S BENEFICIAL BECAUSE IT WILL ENABLE YOU TO CONTINUE OPERATING YOUR WATER AND SEWER FUND ON A STANDALONE BASIS AND INDEPENDENT OF GENERAL FUND ASSISTANCE. 30 TO 40% OF UTILITIES HAVE THE GENERAL FUND SUBSIDIZE THE WATER AND SEWER FUND. YOU DON'T DO THAT. YOU HAVE NEVER DONE THAT AND THIS RATE PLAN WILL CONTINUE TO ALLOW YOU NOT TO DO THAT. REMEMBER EVERY DOLLAR FROM THE GENERAL FUND THAT GOES TO SUB SUBSIDIZED WATER RATES AS A DOLLAR THAT'S NOT AVAILABLE FOR OTHER CITY. VITAL SERVICES LIKE POLICE, FIRE ROADS AND THINGS LIKE THAT. YOU DON'T DO THAT.YOU'VE ALWAYS HAD WATER RATES COVER ALL COSTS. THIS RATE, WE'LL WE'LL HELP YOU COVER THE INCREASED COSTS OF NORTH TEXAS WASTE WATER SURFACE. IT, WILL IT WILL. YOUR YOUR FUND IS VERY HEALTHY FINANCIALLY RIGHT NOW, BUT HEALTHY FINANCIAL FUNDS CAN BECOME UNHEALTHY VERY QUICKLY.
IF YOU DON'T STAY ON TOP OF THESE COST INCREASES. THIS RATE PLAN WILL ENABLE YOU TO STAY FINANCIALLY HEALTHY AND IT WILL IT ALSO IT ASK, IT ONLY ASKED RATEPAYERS TO PAY WHAT IT'S COSTING YOU TO PROVIDE THAT SERVICE. AND FINALLY, IT WILL ALLOW $150 MILLION. OF CAPITAL INVESTMENT INTO THE FUTURE OF THE CITY OF MCKINNEY. WE STRONGLY RECOMMEND THAT YOU CONSIDER AND ADOPT THIS TWO YEAR RATE PLAN, AND WITH THAT, I'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE AT THIS TIME. WE, UM. IN THE BLACK EVERY YEAR. WITH OUR WEIGHT OF WATER AND WASTE WATER. I GUESS WE ADDED TO OUR. SURPLUS FUND, RIGHT? WE THERE THERE ARE YEARS THAT WE DO AND THE. YEARS LIKE 2019, WHERE IT'S VERY CLOSE. BUT YOU KNOW, A LOT OF YEARS WERE AROUND A MILLION DOLLARS. I WOULD SAY I DON'T HAVE TO GO GET YOU AN AVERAGE, BUT, UH, WE BUDGET TO BE SOMEWHERE UNDER A MILLION DOLLARS OR SO. BUT WE DO RUN US. WE TRY TO RUN A SMALL SURPLUS. UNLIKE. WE DO A BALANCED BUDGET FOR THE GENERAL FUND. WE DO TRY TO MAKE SURE OUR UTILITY THAT WE ARE, UH DO HAVE A SMALL, POSITIVE BALANCE THAT DOES GO TO OUR FUND BALANCE. JUST IN THE FUND BALANCE RIGHT NOW. I BELIEVE WE'RE OVER. WERE AROUND 40%
[00:45:01]
THINK IT'S. I THINK IT'S ABOUT 40,000,001 THING. THAT'S VERY IMPORTANT ABOUT WATER BUSINESSES THAT BECAUSE IT IS SO WEATHER DEPENDENT THAT MAKES IT VERY IMPORTANT TO RECOVER A LITTLE BIT MORE BECAUSE THAT WAY IN YEARS LIKE 2019, WHERE YOU HAVE A LOT OF RAINFALL, AND YOU DON'T RECOVER AS MUCH REVENUE. THEN YOU'VE GOT THE MONEY TO COVER ANY SHORTFALLS.AND LIKE I SAID, IT'S FUNNY BUSINESS. I MEAN, YOU WANT YOU Y WANT RAINFALL. RAINFALL IS GOOD FOR THE COMMUNITY. IT'S GOOD FOR THE ENVIRONMENT, BUT IT'S NOT PARTICULARLY GOOD FOR YOUR WATER REVENUES. AND SO WHEN YOU HAVE A LOT OF RAINFALL, AND WE'VE HAD A LOT OF RAINFALL THIS SUMMER, TOO. IF YOU RECOVER REVENUES RECOVER A LITTLE BIT LESS. YOU WANT THAT SURPLUS BALANCE TO COVER THE DIFFERENCE. AND IN OTHER YEARS, IF YOU KNOW IF YOU CONTINUE TO BUILD UP THAT SURPLUS THAT GIVES YOU A LITTLE BIT OF EXTRA MONEY TO INVEST IN YOUR CAPITAL IMPROVEMENTS, AND THEN YOU DON'T HAVE TO ISSUE AS MUCH DEBT, SO THAT'S WHY THE CITY IS ALWAYS TRYING TO FOLLOW THAT POLICY. WELL, AND THEN ON THE REVERSE IS THAT YOU KNOW WHEN IT'S NOT RAINING. IN THE WATER SAYS CONSERVE WATER. YOU CAN'T YOU KNOW YOU CAN'T WATER YOUR LAWN AND. WE GET TO PAY FOR ALL THE STUFF THAT WE DIDN'T THAT THEY'RE TELLING US NOT TO YOU.
YEAH, IT'S A FUNNY BUSINESS. BUT THE FUND BALANCES 45 MILLION, SAID 40. THANK YOU.
YEAH. VERY THROUGH PRISON. GOOD. I WANT TO REALLY THANK DAN AND DAN BECAUSE THEY REALLY DO A GREAT JOB PRESENTING WATER RATE INFORMATION, WHICH IS FOR A LOT OF FOLKS IS KIND OF DRIVE A REALLY DOING A REALLY NICE JOB. EXPLAIN IT. I WANT TO THANK THE DO YOU ALSO WANT TO POINT OUT THAT WILL PIN IS A CONSULTANT THAT WORKED WITH THE CITY'S ON SETTLING WITH THE WITNESS THE DISPUTE IN THE WATER DISTRICT. HOPE TAKE OR PAY DISPUTE AND WHAT WE REACHED A SETTLEMENT AGREEMENT. THEY WERE THE CONSULTANTS THAT ALL OF THE CITY'S REALLY USED THAT THE WATER DISTRICT USED TO HELP WORK THROUGH SOME OF THE NUMBERS, SO THEY'RE INTIMATELY FAMILIAR WITH WHAT WE'RE DOING IN TRANSITIONING. TO A ROLLING AVERAGE IN THE COMING YEARS. SO THEY'RE WELL POSITIONED TO HELP ADVISE US AND OTHERS IN THAT REGARD, SO THANK YOU. THANK YOU. I'VE HAD THE PRIVILEGE OF RAISING THE RATES ON ABOUT 30 CITIES HERE IN THE DALLAS FORT WORTH AREA, SO MHM. INCLUDING THE CITIES OF MY IN LAWS LIVE IN. SO THAT DIDN'T GO OVER REAL WELL, BUT BUT I DO APPRECIATE IT. ONE QUICK QUESTION. YOU HAVE A REALLY NICE FORECASTING FOR WATER. DO YOU HAVE SOMETHING SIMILAR FOR WASTEWATER AS WELL SHOW THE RATE INCREASES BECAUSE I KNOW YOU'RE SAYING THAT FOR THE NEXT TWO YEARS, WE'RE NOT GOING TO SEE AN INCREASE ON WATER. BUT WE WILL ON WASTEWATER. YES THE WASTEWATER NUMBERS ARE A LOT MORE TENTATIVE. NORTH TEXAS HAS SOME VERY AGGRESSIVE PLANS TO DO, UM, CAPITAL IMPROVEMENTS IN THEIR AREA AND IF THEY FOLLOW THROUGH THOSE PLANS, THEY'RE GOING TO HAVE SOME MUCH HIGHER INCREASES, BUT THEY DON'T THEY DON'T DO AS AS AS. AS THOROUGH A FORECAST ON THE WASTEWATER SIDE AS THEY DO ON THE WATERSIDE. THEY ONLY I THINK THE ONLY FORECASTED AHEAD FOR ONE OR TWO YEARS. MY RIGHT, MR LYONS. THEY DO WE HAVE A SLIDE. OKAY? OKAY? MHM BUT BUT LIKE I SAID, I MEAN, THOSE NUMBERS COULD CHANGE VERY SIGNIFICANTLY IN THE NEXT FEW YEARS, JUST DEPENDING ON THE CAPITAL PROJECTS THAT THEY DO ULTIMATELY DECIDE TO UNDERTAKE.
ALSO WITH WITH THESE WATER AND WASTEWATER RATE ADJUSTMENTS IS WE CAN ATTEST. WE'VE BEEN VERY NIMBLE. IN FACT, THE LAST TIME WE HAD THIS PRESENTATION, WATER RATES WERE YOU KNOW HE IS HE IS HE WAS TALKING ABOUT. WE'RE SUPPOSED TO INCREASE. BUT WHEN THEY DIDN'T WE HAVE A SHORT TALK WITH THEM, AND WE HELD THOSE DOWN. SO WE IF WASTEWATER DOES NOT CONTINUE TO INCREASE, WE WOULD PROBABLY BE ABLE TO TRUMP HOLDING ON THAT, AS WE HAVE WITH THE WATER RATES. VERY MUCH. THANK YOU. SO THANKS TO WILLED AND I APPRECIATE IT. THEIR EFFORTS. IT'S BEEN BEEN A SMOOTH PROCESS WITH THEM. WITH THAT I'LL BE HAPPY TO MOVE ON INTO THE FISCAL YEAR. 22 BUDGET OVERVIEW. UM AFTER A COUPLE SLIDES, THEN TREVOR IS GOING TO TALK ABOUT TAXES, AND, UH. AND PROPERTY VALUES, SO WE'LL WE'LL START MOVING THROUGH THIS, BUT I WANTED TO START WITH A VERY BROAD OVERVIEW OF THE FISCAL 22 BUDGET. BUT OUR BUDGET, UH, INPUT HEARING BACK IN APRIL, WE ALSO KICKED OFF AN ONLINE SURVEY TO WE TALKED ABOUT. IT'S A VIRTUAL TOWN HALL THAT LETS
[00:50:05]
CITIZENS TELL US WHAT THEIR PRIORITIES FOR OUR BUDGET, ARE. WE WE'VE DONE THIS THE LAST 3RD 45 YEARS. THEIR RANKINGS AND COMMENTS ARE AVAILABLE AND WE'LL BE HAPPY TO PROVIDE ALL.UH WE HAD 153 SURVEY COMPLETIONS BE HAPPY TO PROVIDE YOU A HARD COPY OF THOSE RESULTS. UM. SO TO THE SLIDE THEMSELVES, THE LOWER THE NUMBER THE HIGHER THE PRIORITY BECAUSE EVERYBODY HAS TO RANK THEIR NUMBER ONE PRIORITY. UH THE SLIDING SCALE SHOWS YOU WHAT THE AVERAGE OF THOSE NUMBERS ARE. AND AS YOU CAN SEE THE TOP TWO PRIORITIES. THEY FLIPPED, UH, SOMETIMES THIS YEAR, THEY'RE THE SAME, BUT PUBLIC SAFETY AND STREETS ARE THE TWO NUMBER ONE PRIORITIES AS IDENTIFIED BY THE. PEOPLE COMPLETING THE SURVEY. UM AS YOU CAN GO THROUGH AS WE GO THROUGH THE BUDGET. I THINK THAT YOU'LL SEE THAT A LOT OF, UH. OF OUR EMPHASIS HAS BEEN ON PUBLIC SAFETY AND OUR STREETS FUNDINGS. SO. I WOULD LIKE TO START THESE ARE THIS WERE 22 BUDGET OPPORTUNITIES, MOSTLY SPEAKING ABOUT THE GENERAL FUND HERE, BUT THERE IS A LITTLE BIT OF WATER WASTEWATER STEPPING AT THE END, BUT. THE MAIN THING I WANTED TO DRIVE HERE IS THAT WE ARE PROPOSING TO DECREASE THE PROPERTY TAX RATE ONCE AGAINST, PAUL SAID. UNDER THE 50 CENT TOTAL, WHERE 500.508 NOW 2.4976 SO JUST A 1.1 SENSE. OUR SALES TAX IS VERY STRONG. UM AND. I THINK THAT'S AN UNDERSTATEMENT. I'M STILL SURPRISED AT OUR GROWTH. WE'RE ANTICIPATING GROWTH TO BE OVER 10% THIS YEAR. AND UH, THAT'S MORE. JUST 21 OVER FISCAL YEAR 20 AND WE ARE SETTING IS I'LL TALK ABOUT A COUPLE SLIDES. WE'RE GOING TO BE SETTING OUR BUDGET FOR FISCAL YEAR 20 TO ABOUT 5% ABOVE THAT NUMBER. UM, UH, YOU KNOW, FOR YEARS AND WE HELPFUL ON THIS YEAR AND WE WERE AFRAID WHAT PANDEMIC WAS GOING TO DO IF YOU RECALL SO WE SET ARE WE SET OUR NUMBER AT THE FISCAL YEAR 19 NUMBER, WHICH WE WELL EXCEEDED. I'M VERY HAPPY TO SAY THAT, BUT WE WERE TRYING TO BE VERY PRUDENT AT THIS TIME LAST YEAR IF YOU GUYS RECALL. SO WE'LL TALK ABOUT SALES TAX AND ALL WHILE ALSO IN THIS BUDGET, WE'RE GOING TO BE PROVIDING MARKET ADJUSTMENTS FOR ALL EMPLOYEES. UM ALL OF THE STEP INCREASES FOR FISCAL YEAR. 22 IF YOU WERE ALSO OFFICIALLY 21. WE DID NOT DO STEP INCREASES.
GENERAL GOVERNMENT EMPLOYEES. WE DID DO MARKET ADJUSTMENTS FOR THEM. WE DID 1.5% AND THEN ONCE SALES TAX CAME IN STRONG, WE DID ANOTHER ONE HALF PERCENT BEING A FULL 3% WHICH WOULD EQUAL A STEP. AS PAUL MENTIONED, WE ARE PROVIDING A COST OF LIVING ADJUSTMENT, THE PAPER PRODUCTIVITY THAT HE MENTIONED. WE HAVE ADDED THAT INTO THIS BUDGET AS WELL. AND WE ARE.
CONTINUING TO PLAN TO DO OUR STEP INCREASES FOR OUR SWORN PERSONNEL. ON TOP OF WHAT WE DO IN OUR STREETS DEPARTMENT BUDGET. WE ARE GOING TO INCREASE OUR FUNDING IN OUR STREETS RECONSTRUCTION PLAN. THIS WAS A PLAN THAT WE STARTED. PROBABLY ABOUT FOUR OR FIVE YEARS AGO. WE START TRYING TO PUT $23 MILLION ARE, YOU KNOW? UM, IT WAS IT WAS JUST 20 MILLION OVER OVER 10 YEARS. WE'RE GOING TO INCREASE OUR FUNDING FROM 1.5 MILLION LAST YEAR. 2.5 MILLION. THIS IS THIS GOES INTO JUST RECONSTRUCTIONS. THIS ISN'T IN OUR NORMAL STREET BUDGET. ONCE AGAIN WE ARE PLANNING FOR A DEFICIT IN OUR EPIC CENTER FUND. UM THINGS ARE STARTING TO RECOVER, BUT STILL VERY SLOWLY DO THE PAINT IN IT. AND ONCE AGAIN, PAUL MENTIONED STAFFING WITH 43 NEW STAFF IN THE GENERAL FUND. MOST OF THAT BEING PUBLIC SAFETY. UM SOME IN PARKS AND RECREATION, PUBLIC WORKS, AND THEN WE ARE ADDING A FEW PEOPLE IN OUR WATER AND WASTE WATER FUND, BUT IT'S FAIRLY NORMAL. ONE OF THE THINGS WE ALWAYS LIKE TO TALK ABOUT, OR AT LEAST LIKE TO MENTION IS WHERE WE ARE ON OUR 2019 BOND PACKAGE. THE TUNNEL THAT TOTAL PACT WAS $350 MILLION. WE'VE ISSUED ABOUT 14.7 OF 75 MILLION AUTHORISED IN OUR PUBLIC SAFETY FACILITIES. EIGHT MILLION ARMY ARE MUNICIPAL CENTER COMPLEX.
FEELING THAT'S GOING TO BE MOVING AND IN THE UP MOVING UP IN FISCAL YEAR 22. BUT WE DO HAVE 50 MILLION AUTHORIZATION. WE HAVE 42 MILLION OF THAT AUTHORISATION REMAINING. PARKS AND RECREATION THAT HAS MOVED THE FASTEST WITH OUR RECENT LAND PURCHASE. WE'VE ISSUED 46 MILLION OF THE 91 AUTHORIZED. PUBLIC WORKS FACILITY. WE'VE ISSUED 13.7 MILLION. AND IN OUR STREETS, IMPROVEMENT OF OUR 100 MILLION WE'VE ISSUED ABOUT JUST UNDER JUST UNDER 20% OF THAT.
WITH THAT. I'M GOING TO LET TREVOR MANURE TALK ABOUT OUR PROPERTY TAXES GOING TO TALK ABOUT OUR TAX RATES AND OUR VALUATIONS OVER THE LAST FEW YEARS. MR HOLLOWAY. MR. MAYOR MEMBERS COUNCIL OVER THE NEXT FEW SLIDES WILL BE TOUCHING BASE ON THE TAX RATE MAKEUP,
[00:55:03]
EVALUATION, MAKEUP AND THEN, AS MR GRIMES MENTIONED DURING HIS OPENING COMMENTS WILL GET INTO SOME DETAILS ON. SOME INFLATIONARY NUMBERS THAT ARE CAUSING OUR RESPONSE OF A TAX RATE RECOMMENDATION FOR YOU TODAY. SO THIS FIRST SLIDE IS SOMEWHAT OF THE 30,000 FT VIEW OF THE EVALUATION MAKEUP OF THE CITY AS WELL AS THE TAX RATE THAT'S BEING PROPOSED TODAY. WE ARE SITTING AT ABOUT 26 A HALF BILLION DOLLARS EVALUATION. THAT'S NEW CONSTRUCTION AND EXISTING EVALUATION. THAT'S IN THE PROPOSED BUDGET, AND THAT'S RESULTED IN A RECOMMENDED TAX RATE OF 49.77 CENTS. OR THAT 1.1 CENT DECREASE AS HAS BEEN MENTIONED EARLIER. THIS IS A COMPARISON TO THESE CITIES AROUND US, AS WELL AS COLLIN COUNTY AND THEIR GENERAL APPRAISED VALUE MAKEUPS, SO YOU'LL SEE MOST CLOSELY RESEMBLE THE CITY OF ALAN. AND THEN PLANO, FRISCO AND COLLIN COUNTY HAVE SOMEWHAT OF A SIMILAR MAKEUP BUT SOMEWHAT DIFFERENT AS WELL. AGAIN. THIS IS JUST THE VALUATIONS OF THE PROPERTY TAX. WE'LL GET INTO A LITTLE LATER OF THE REVENUE MIX VERSUS OF PROPERTY VERSUS SELLS TAX A LITTLE LATER ON IN THE PRESENTATION. I ALWAYS SAY EVERY YEAR THIS IS MY FAVORITE SLIDE IN THE PRESENTATION, AND, UM THIS GIVES US A LITTLE CONTEXT INTO WHAT EACH OF THE APPRAISED VALUE SEGMENTS ARE SHOWING ON A YEAR OVER YEAR BASIS. I WOULD REMIND THE COUNCIL AGAIN. THIS IS NOT JUST NEW CONSTRUCTION OR EXISTING. IT IS BOTH COMBINED. SO YOU'LL SEE. WE'VE HAD A HEALTHY INCREASE TO THE ASSESSED VALUE OF RESIDENTIAL BOTH ON THE SINGLE FAMILY AND MULTI FAMILY.AS WELL AS MAINTAINING OF THE INCREASES WE'VE SEEN OVER THE LAST FEW YEARS IN THE COMMERCIAL ASSESSED VALUE WITHIN THE CITY. WHEN WE TALK A LITTLE BIT ABOUT SALES TAX IN THE NEXT FEW SLIDES COMING UP AFTER ME, YOU'LL SEE THAT THAT, UH, ASSESSED VALUATION IS TRANSLATED IN SYSTEM INCREASES THEMSELVES TO ACCESS MARKETS MENTIONED PREVIOUSLY. DIVING INTO EACH ONE OF THESE SECTORS, UM. OVER THE PREVIOUS YEAR. WE'VE SEEN AN 8.7% INCREASE IN THE ASSESSED VALUATION OF SINGLE FAMILY ITSELF, SO THAT'S NEW CONSTRUCTION, BUT THEN ALSO APPRECIATION. OF SINGLE FAMILY ASSETS ON THE GROUND THAT HAVE BEEN HERE FOR YEARS. OH, TO GET BACK. YOU'RE SAYING IN 21 4.2 WAS NOT ONLY THE INCREASE IN ADDITIONAL, BUT THE INCREASE IN THE VALUES OF OTHERS. CORRECT ANYBODY WOULD AGREE WITH THAT. I MEAN, YOU'RE SAYING THAT AND THAT STATE THAT MOST EVERYBODY'S PROPERTY TAXES WENT UP BY MORE THAN 4. SO THIS THIS ISN'T NECESSARILY TAX. THIS IS THE VALUATION ON THE GROUND, SO IT'S A AGGREGATE NUMBER OF ALL SINGLE FAMILY IN OUR CITY LIMITS TELLING YOU THAT MY MIND WENT UP 7% AND EVERYBODY ELSE.
I MEAN, THAT'S THE BIGGEST THING THAT WE HEAR IS. OUR TAXES ARE GOING UP AND WE EXPLAINED NOT BECAUSE WE'RE RAISING TAXES BECAUSE. AND YOU'RE SAYING IT'S ONLY 4.2% WITH NEW CONSTRUCTION AND THE INCREASES EVERYBODY GOT. THAT WAS THAT WAS FOR FISCAL YEAR.
21 THAT WAS THE ACTUAL NUMBER. THERE WAS VERY LITTLE NEW GROWTH. ACTUALLY THERE WAS THERE WAS VERY LITTLE ADJUSTMENT TO THE TAX RATE. TO THE VALUES DONE BY THE BY COLLIN COUNTY IN FISCAL YEAR 21 DUE TO THE PANDEMIC, THEY HELD THE LINE ON A LOT OF THE VALUES. IT DOESN'T MEAN THAT EVERYBODY. THAT DOESN'T MEAN THAT EVERYBODY'S DIDN'T GO UP.
SO TO MARK'S POINT, IF YOU'LL NOTICE ON THE SCREEN FY 20 VERSUS FY 21, THE EVALUATION CHANGE OF ALL SINGLE FAMILY VOWED. EXCUSE ME ALL VALUE IN THE CITY. WAS. A LITTLE BIT OVER ONE BILLION, WHEREAS YOU SEE THIS YEAR WE SEE THAT CHANGE CLOSER TO THE TWO BILLION RANGE AND TWO BILLION HAS KIND OF BEEN THE CONSISTENT CADENCE WE'VE SEEN ON A YEAR OVER YEAR BASIS. SO THAT'S REALIZED AND THAT SINGLE FAMILY NUMBER THAT'S EXPRESSED ON THE SLIDE RIGHT HERE FOR THE F LIKE 20 BUDGET. UM THE FLIP SIDE OF THAT IS WE SEE THAT START TO NORMALIZE TOWARDS HISTORIC NUMBERS FROM FY 22 COMPARED TO FY 21, WHERE THERE IS AN 8.7% INCREASE YEAR OVER YEAR IN THE VALUATION TOTAL. YEAH. YOU GO BACK. JUST I JUST WANTED TO COMMENT ON THE ONE BEFORE THAT. YOUR FAVORITE SLIDE. TREVOR, UM SO THE. THERE ARE TWO SO FISCAL YEAR 20 TO 21. THE AS IT WAS A LITTLE TOO CAD APPRAISAL DISTRICT BASICALLY SAID WITH THE PANDEMIC AND A NUMBER OF OTHER THINGS, WE'RE JUST GOING TO KEEP THE VALUES PRETTY MUCH WHERE THEY ARE. THAT'S WHAT THEY THAT'S WHAT THEY DID WHAT YOU'RE SEEING, THOUGH. GO BACK
[01:00:06]
TO THE NEXT ONE. I GUESS THE INCREASE IS MOSTLY NEW VALUE THAT WAS ADDED NEW BUILDINGS.NEW CONSTRUCTION ADDED TO THE VALUE. IT WASN'T BECAUSE OF THE EXISTING VALUE GOING UP. IT WAS MOSTLY FOR THAT YEAR. NEW VALUE THAT WAS ADDED TO THE TAX RULES. WHAT WE'RE SEEING IN 22 IS A COMBINATION OF BOTH. WE'RE SEEING CONTINUED NEW CONSTRUCTION BEING ADDED, BUT WE'RE ALSO SEEING NOW IN APPRECIATION THE EXISTING VALUES PICKED ON BECAUSE MINE WAS 7, SO I'M JUST LIKE. I JUST KNOW WHAT I EXPERIENCE IT WAS PERSON ARE. GREAT TAX REVENUE WAS 54. TO VALUE IN THIS SEE YOUR FISCAL YEAR. 40 PERCENT. IS THAT ABOUT RIGHT? IN THE CURRENT FISCAL YEAR OF THE PROPOSED WHAT'S THAT? I'M SORRY GIRL. THE PROPOSAL. THAT NUMBER RIGHT OFF HERE. I'LL HAVE TO DO THIS. IT WAS SIX SOME ODD MILLION DOLLARS IN PROPERTY TAX REVENUE OF THAT 50 FOREST PERCENT WAS NEW CONSTRUCTION. WHOA! YES ESPECIALLY WHEN YOU'RE WHEN WE'RE TALKING ABOUT THE ACTUAL RATES THEMSELVES IF THE RATES ARE GOING UP WITH WITH NEW CONSTRUCTION IS GOING UP 3.1% THIS YEAR. WHAT'S INCREASING OUR ROLES FROM THE $24 BILLION NUMBER TWO. THE $26 BILLION NUMBER. THEN IF WE IF WE GO NEW NEW REVENUE PLUS 2% YOU'RE LOOKING AT A 3 TO 2 BASIS OF NEW VERSUS EXISTING SO THAT WOULD BE ABOUT A 60 40 SPLIT. SO AGAIN. THIS IS SINGLE FAMILY, UH, TOTAL ASSESSED VALUATION ON THE GROUND. WE MOVE INTO MULTI FAMILY. YOU CONTINUE TO SEE THAT NOT ONLY IS THEIR NEW MULTI FAMILY PERMITS GOING OUT THE DOOR BUT ALSO THE MULTI FAMILY THAT'S ALREADY ON AND DEVELOPED IS APPRECIATING IN VALUE AS WELL. SO THAT 10% YEAR OVER YEAR INCREASE EVALUATION OF MULTI FAMILY. EVER DID. YES YOU GO BACK ABOUT FIVE SIDES PER SECOND DISTANCE YOU RIGHT THERE. JUST LOOKING AT FISCAL YEAR, 20. COUPLE APPRAISED VALUES OF MCKINNEY IS 8% 10. 7% IN FRISCO. YEAH. I MEAN, IT'S A GOOD POINT, GENERALLY CONSISTENT WITH THE AREA. THE REST BECOME SINCE. CISCO DID COME IN NUMBER ONE IN THE COUNTRY. FREEDOM. AND PLANO'S NUMBER TWO IN THE STATE OF TEXAS OF DENSITY. OH, I GET IT. THE 30% UNDER. THE COMMERCIAL VALUES. UM, WHILE IT'S CONSTRAINED IN THE OVERALL CHART, THIS IS STILL A VERY GOOD STORY. WHEN YOU PULL COMMERCIAL OUT AND LOOK AT IT INDIVIDUALLY ON A YEAR OVER YEAR BASIS, WE SEE ALMOST AN 8% INCREASE THE EVALUATION OF COMMERCIAL IN MCKINNEY. AND THAT'S AGAIN OVER THE PANDEMIC YEAR LAST YEAR, AND THEN WE SEE THOSE DOUBLE DIGIT INCREASES THAT HAVE HAPPENED IN THE LAST 4 TO 5 YEARS, SO THAT'S A POSITIVE STORY AND CONTINUES TO HELP US. GET TOWARDS THAT MIX OF RESIDENTIAL VERSUS COMMERCIAL THAT WE TALKED ABOUT SO OFTEN. FINALLY AS UM, LOGIC WOULD TELL YOU WHEN YOU HAVE INCREASING VALUES OF SINGLE FAMILY, MULTI FAMILY AND COMMERCIAL. THAT MEANS YOUR VACANT LAND IS GOING AWAY. THAT DOESN'T MEAN VACANT LAND IS CHEAPER. IT JUST MEANS THERE'S LESS OF IT TO BE UTILIZED FOR DEVELOPMENT. SO WE SEE THAT. HERE IN THIS CHART THAT WHILE THE TOTAL AMOUNT OF VACANT LAND REPRESENTS A SMALLER NUMBER OF EVALUATION TOTAL, WE STILL KNOW THAT LAND PRICES ARE INCREASING. SO SWITCHING GEARS FROM JUST EVALUATION ESTIMATE. EXCUSE ME. EVALUATION TOTALS FOR THE. VARIOUS SECTORS. WE WANTED TO DO SOME KIND OF FURTHER DEEP DIVE THAN WE'VE DONE IN PREVIOUS YEARS ON INFLATION BECAUSE IT'S BEEN SUCH A HOT TOPIC OVER THE PAST 12 TO 18 MONTHS. PARTICULARLY IN RESPONSE TO THE PANDEMIC AND VARIOUS SEGMENTS THAT WILL GET INTO SO IN THE PREVIOUS FIVE YEARS, THE COUNCIL HAS ADOPTED, UM ARE. REALLY IN THE LAST FOUR YEARS, THE COUNCIL HAS ADOPTED A TAX RATE THAT'S SOMEWHERE BETWEEN ZERO AND 2.5% ABOVE THE EFFECTIVE RATE OR THE NO NEW REVENUE RATE AS ITS BRANDED THESE DAYS. CP HOWEVER, UM, HAS OUTPACED THAT SO OVER THE PAST FIVE YEARS, THE. INFLATIONARY INDEX FOR CPI IS SOMEWHERE IN THE RANGE OF 14.5% WHILE THE PERCENTAGE THAT WE'VE GONE ABOVE THE EFFECTIVE RATE, AN AGGREGATE OVER THE PAST FIVE YEARS IS RIGHT AROUND 12% OR SO. UM THAT'S WHY YOU SEE THE FY 22
[01:05:04]
PROPOSED RATE AT 2% ABOVE THE NO NEW REVENUE RATE, OR THE EFFECTIVE RATE, AS WERE HISTORICALLY USED TO CALLING IT, UM, THAT IS, AS PAUL MENTIONED IN HIS OPENING COMMENTS. IT'S QUITE A BIT LESS THAN THE INFLATIONARY NUMBERS THAT WE'RE EXPERIENCING IN THE REGION. SPECIFICALLY IN RELATION TO THE NUMBERS WE'RE GOING TO SEE ON THE NEXT SLIDE, WHICH ARE THE INDEXES THAT IMPACT US, UM, TO A GREATER EXTENT AT THE MUNICIPAL LEVEL, PRIMARILY WITH CONSTRUCTION. EMPLOYMENT AND THEN ALSO HEALTH INSURANCE. SO. THIS SLIDE IS GOT A LOT OF INFORMATION ON IT, BUT IT'S INFORMATION THAT WE WANT TO MAKE SURE THE COUNCIL'S AWARE OF BECAUSE WE DON'T TAKE RECOMMENDING A 2% ABOVE EFFECTIVE TAX RATE LIGHTLY. WE WANT YOU TO SEE THE CONTEXT FOR WHERE THAT RECOMMENDATIONS COMING FROM. SO CONSTRUCTION COSTS ALONE IN THE LAST YEAR IS ALMOST 9% UP FROM WHERE IT WAS A YEAR AGO FOR AND JUST PURELY INFLATION. UM EMPLOYMENT COST IS OVER 3% ABOVE WHERE IT WAS A YEAR AGO. MEDICAL CARE HAS STAYED SOMEWHAT LEVEL. HOWEVER IF YOU LOOK AT PREVIOUS YEARS, WHERE AGAIN TO MY COMMENT EARLIER WHERE WE'VE AVERAGED ABOUT 0 2.5% ABOVE THE EFFECTIVE RATE, WE STILL REALIZE MEDICAL CARE ER INCREASES ANYWHERE FROM 3 TO 4% A YEAR. ALL OF THAT COMING INTO AN AGGREGATE NUMBER OF INFLATION AT ITS TAKEOVER ANYWHERE FROM TWO TO WHAT WE SEE THIS YEAR OF THE 6% INCREASE, SO UM. THIS SLIDE GETS THAT INTO CONTEXT WITH WHAT THE TAX RATE HAS BEEN AT THE ADOPTION OF EACH YEAR. SO THE BLUE OR THE YOU KNOW, GREEN, WHATEVER YOUR COLOR PALETTE TELLS YOU THROUGH YOUR EYES. IS THE TOTAL TAX RATE AND THEN THE YELLOW KIND OF MUSTARD COLOR. THAT'S THE NO NEW REVENUE RATE OR WHAT WE'VE CALLED IN THE PAST THE EFFECTIVE RATE. THE AQUA LINE IS THE TOTAL AMOUNT OF TAX RATE THAT WE COULD YOU GO UP TO WITHOUT VOTER APPROVAL, AND THEN THE RED LINE IS OUR NO NEW REVENUE RATE PLUS INFLATION. WHICH IS SOMETHING THAT WE'VE USED SOMEWHAT AS A METRIC TO GAUGE WHAT'S THE REASONABLE UH, TAX RATE THAT WE COULD RECOMMEND WHILE STAYING WITH INFLATION BUT NOT OVERCHARGING, SO TO SPEAK. YOU'LL NOTICE THAT IN THIS YEAR THIS IS THE FIRST YEAR THAT THE NO NEW REVENUE RATE PLUS INFLATION HAS EXCEEDED THE TOTAL VOTER APPROVAL RATE. UM.ALL THAT TO SAY WE ARE NOT RECOMMENDING THAT WE GO UP ALL THE WAY THROUGH INFLATION OF RAID SIX PLUS PERCENT INCREASE TO THE TAX RATE, LEVY. WE WILL BE RECOMMENDING 2% ABOVE NO NEW REVENUE. GREAT, BUT THIS IS JUST GOOD CONTEXT TO SEE HOW THAT CROSSOVER HAS OCCURRED INTO WHAT OUR METRIC HISTORICALLY HAS BEEN AND WHAT WE'RE REALIZING ON A DAY TO DAY BASIS. I WOULD LIKE TO MENTION AT THIS POINT ALSO THAT THE VOTER APPROVAL RATE IS THE NO NEW REVENUE RATE, PLUS 3.5% IT WAS AT ONE POINT THE NOTED REVENUE RATE PLUS 8. THIS.
BECAUSE OF THE WAY THE LEGISLATURE DOES THAT WE WERE ALSO ENTITLED BECAUSE LAST YEAR WE DID NOT USE ANY OF THAT 3.5% YOU COULD HAVE BANK THAT 3.5% AND GONE TO, UH, NO NEW REVENUE PLUS 7% THIS YEAR. WHICH WE YOU CAN SET YOUR TAX RATE CEILING AT NO NEW REVENUE. PLUS, UH, ALMOST 3.5. SO WE DIDN'T EVEN TALK ABOUT POSSIBLY USING THE INCREMENTS THAT WILL REMAIN UNUSED. ONE OF. DOES THAT CONTINUE TO ACCRUE? YES SO THE BANKED INSTRUMENT IS A FIVE YEAR LOOK BACK, AND IT CONTINUES TO ACCRUE UP TO THE PREVIOUS 8% AMOUNT. SO WE COULD USE THE BANK DURING PERMIT IN A FUTURE YEAR OF THE COUNCIL SO DIRECTED, UM UP TO THAT 8% WITHOUT VOTER. THIS TAX RATE SLIDE IS TO SHOW YOU THE PICTURE BETWEEN THE S OR THE DEBT SIDE OF THE TAX RATE IN THE M AND OVER THE MAINTENANCE AND OPERATION SIDE OF THE TAX RATE AGAIN, YOU'LL SEE THAT TOTAL RATE OF 49. WHICH SEVEN CENTS THERE. UH, THE INTERESTING PART OF THIS IS AS WE'VE TRIED TO DO IN OUR BOND PROGRAMS IS TO MAINTAIN THE S RATE. SO THAT IN FUTURE YEARS AS WE HAVASE THOSE CAPITAL PROJECTS, WE CONTINUE TO FUND THOSE AND HAVE THE CAPACITY ON THE S OR THE DEBT SIDE OF THE TAX RATE. TO ISSUE BONDS THAT WILL ALLOW US TO DELIVER THE PROJECTS THAT WE HAVE ENVISIONED OVER THE NEXT SPOT TO 10 YEARS IN THE CAPITAL PROGRAM. IS HOW MUCH IF WE TAKE THAT RATE MUCH MORE. IN ADDITION, BOND, COULD WE ISSUE GREAT. THE. THE WAY WE'VE TRIED TO STRUCTURE OUR DEBT IS FOR THE NEXT 300 THE NEXT FIVE YEARS, I'LL MENTIONED A LONG TERM PLAN. AS WE WENT INTO THE 2019 BOND ELECTION. WE ATTEMPTED TO STRUCTURE OUR. TAX RATE AND OUR DEBT SERVICE SO
[01:10:04]
THAT WE COULD ISSUE THE BALANCE OF THAT $350 MILLION OVER 5 TO 7 YEAR PERIOD AND NOT AFFECT THAT POINT THAT 15 ATTACK A PORTION OF THAT TAX RATE. SO. TODAY. UM, LESS VALUES. PLUMMET WE WOULD BE ABLE TO ISSUE THE FULL $350 MILLION OVER THE NEXT 4 TO 5 YEARS AND NOT AFFECT THAT ONE. THAT 15 CENT PORTION OF THE BUSINESS TAX RATE THAT'S BEEN OUR PLAN ALL ALONG IS TO MAINTAIN THAT PORTION. OF THE 3 50. HOW MUCH HAVE WE SPENT SO FAR? UM LET ME CAN WE ROLL BACK WITH THE SLIDES AND THE I'LL WE'LL GO THROUGH WHAT WE'VE ACTUALLY ISSUED. IN EACH ONE OF THOSE. SO LET'S SAY 22, A AND 68 81 ALMOST 100 MILLION OF THE $350 MILLION HAVE BEEN ISSUED THAT YOU CAN SEE EXACTLY WHAT WE'VE ISSUED THERE. OKAY? AND THE PLAN IS OVER THE NEXT. 4 TO 5 YEARS TO CONTINUE TO, UH TO THOSE BONDS GET ISSUED, AND STUFF LIKE THAT. THAT RATE IS NOT SUPPOSED THAN THAT WAS THAT WAS OUR PLAN FROM THE VERY BEGINNING WAS TO MAINTAIN THAT RATE. IN FACT, IF YOU GO BACK TO WHEN WE WERE ACTUALLY DOING IT, THE PLAN WAS TO MAINTAIN IT AT THE 16 CENT LEVEL. WE'VE NOW CHANGED OUR PLAN BECAUSE OF VALUES. CHANGING WE'RE MAINTAINING IT AT AROUND 15 CENT LEVEL. SO WE'VE ISSUED 100. WE HAVE THE CAPACITY TO CONTINUE TO PAY ON 250. WHERE DOES THE EXTRA MONEY GO? THAT WE'RE COLLECTING, BUT NOT PAYING ON THE 250? WELL WE HAVEN'T ACTUALLY ISSUED ANY OF THOSE BONDS YET. SO YOU HAVE THE AUTHORIZATION TO ISSUE THAT 300. I'M JUST SAYING WE'RE STILL COLLECTING THE 15. BUT WHO'S TO ONE? YOU'RE PAYING OFF CURRENT DEBT WITH THAT, AND HIS CURRENT DEBT FALLS OFF. WE WILL ISSUE THE OTHER DEBT. PLUS WE'RE GROWING OUR VALUES. SO IT'S THE COMBINATION OF DEATH.THAT IS, WE'RE PAYING OFF AND AN INCREASE IN OUR VALUES WERE ABLE TO MAINTAIN OUR DEBT SERVICE AT A LEVEL 15 CENTS, SO IT'S A BALANCING ACT AND. WE'VE WE'VE DONE A GOOD JOB OF TRYING TO MAKE SURE THAT OUR, UM OUR DEBT IS CURRENT. SOMETIMES WE PAY THINGS OFF. YOU KNOW, QUICKLY, UH, AND THAT'S THAT'S HOW WE'RE MAINTAINING THAT ABILITY TO BOND THOSE DOLLARS AND THAT'S BEEN THE BALANCING ACT THAT WE'VE WE'VE PRETTY MUCH REFINANCE ANY THE COLORFUL NOTES. WE WERE ALWAYS SAY YES, WE ARE CURRENT WITH ANYTHING THAT IS CALLABLE AND EVERY YEAR I THINK THAT IT'S USUALLY EVERYTHING'S BEEN ON A 10 YOUR CALL, SO I KEEP THINKING THAT WELL, INTEREST RATES WERE AT THEIR LOWEST. 10 YEARS AGO, BUT THEY WEREN'T SO WE END UP DOING A RE FUNDING. UM I HAVE SAID SEVERAL OF THIS IS THE LAST ONE OF THESE, BUT THEY NEVER SEEMED TO BE, BUT WE ARE CURRENT ON ALL OF OUR RE FUNDINGS. THE ONE ITEM GOOD. MARK WAS MENTIONING ABOUT THE DEBT SERVICE PLAN. THAT'S IMPORTANT FOR I THINK US TO UNDERSCORE IS ON THE 10 YEAR PLAN. 10 YEAR CAPITAL PLAN. WE ALWAYS ASSUME THE MAINTENANCE AND OPERATION SIDE THAT CAN SUSTAIN THAT'S IN YOUR CAPITAL, SO WE DON'T JUST PICK OF PROJECTS AND SAY THAT'D BE GREAT TO HAVE IN THE CITY AND THEN FIGURE OUT HOW TO OPERATE THOSE PROJECTS AT A LATER DATE.
10 YEARS. CAPITAL PLAN HAS A MAINTENANCE AND OPERATION COMPONENT TO IT SO THAT WHEN A FIRE STATION, FOR EXAMPLE, COMES ON, AND YOU KNOW, SIX YEARS DOWN THE ROAD WE HAVE ALREADY EVALUATED THE MAIN EXCUSE ME. THE OPERATIONAL COSTS WILL REALIZE ON THE GENERAL FUND SIDE TO FUND 18 FIREFIGHTERS. I JUST THINK THAT'S IMPORTANT TO UNDERSCORE BECAUSE WHILE THE ARMS RACE SOMEONE STANDS ALONE, IT'S STILL PRODUCES ASSETS ON THE GROUND THAT HAVE TO BE FUNDED OPERATIONALLY FROM THE GENERAL FUND, SO WE KEEP THAT IN MIND AND MAKING THOSE LONG RANGE PLANS. THIS IS. VERY CLEARLY THE MONEY SLIDES, SO TO SPEAK, SO THIS IS THE AVERAGE LEVY THAT, UM, THE AN AVERAGE RESIDENT FOR THEIR SINGLE FAMILY VALUE WOULD REALIZE IN THE 21 FISCAL YEAR, THAT NUMBER WAS AT $1792. WITH THE 2% OVER NO NEW REVENUE THAT CREATES A NOMINAL INCREASE TO 18 62, OR $70 ON ANNUALIZED. THAT'S ROUGHLY 5 5.5 BUCKS A MONTH. AGAIN THAT'S ON THE AVERAGE VALUE HOME THAT WE SEE IN THE KIDNEY. SO SWITCHING GEARS A LITTLE BIT FROM THE PROPERTY TAX DISCUSSION INTO JUST OPERATIONS EACH YEAR WE'VE BEEN SHARING WITH COUNSEL FOR THE PAST FEW YEARS ABOUT HOW. OUR EMPLOYMENT NUMBERS INTERNALLY ARE SHOWING BUT ALSO IN COMPARISON TO SISTER CITIES.
[01:15:02]
THIS GOES BACK TO SOME COMMENTS THAT PAUL MADE HIS OPENING REMARKS ABOUT PRODUCTIVITY THAT OCCURS HERE IN MCKINNEY, BASED ON THE EMPLOYMENT NUMBERS THAT WE HAVE. SO YOU'LL SEE THAT THIS METRIC YOU COULD BE EMPLOYEES FOR 1000. WE CALL IT CITIZENS SERVE FOR EMPLOYEE. UM.ROUGHLY SIX YEARS AGO WAS AT 1 63. THE APEX CAME ON BOARD AS WELL AS I BELIEVE A NEW FIRE STATION SO THAT BROUGHT THAT NUMBER DOWN AND THEN WE'VE CHIPPED AWAY TO SOME EXTENT OVER THE PREVIOUS FEW YEARS TO ADD MORE EMPLOYMENT. UM AND. ULTIMATELY GET US TO MORE PRODUCTIVITY EACH YEAR IN THE BUDGET MAKING PROCESS. THAT SAID, WE SHOW THIS SLIDE EACH YEAR JUST TO GIVE YOU A BAROMETER OF WHERE WE ARE WITH THOSE SISTER CITY COMPARISONS THAT WE USE IN OTHER METRICS LIKE VALUATIONS OURSELVES TAX COLLECTIONS. THIS IS JUST ON GENERAL EMPLOYMENT. YOU'LL SEE MCKINNEY'S 21 NUMBER COMPARED TO OUR SISTER CITIES 21 NUMBER HERE ON THE LEFT SIDE AFTER THE GAP. THIS IS THE PROPOSED BUDGET NUMBERS, SO WE STAY RELATIVELY LEVEL. WHERE WE WERE PREVIOUSLY IN THE PREVIOUS FISCAL YEAR AT 146 EMPLOYEES SERVE CITIZEN EXCUSE ME FOR EMPLOYEE. AND I DON'T KNOW IF ALL YOU WANT TO. MENTIONED AGAIN ABOUT TO PAY FOR PRODUCTIVITY. WELL, IT'S JUST A REITERATION OF WHAT WE TALKED ABOUT AT THE STRATEGIC GOAL SETTING MEETING. UM AND CERTAINLY THE REALITIES OF WHERE WE ARE IN THE MARKETPLACE. AS WE ARE IN PLACE. WE JUST YOU JUST APPROVED A MEETING CONFER AGREEMENT WITH OUR POLICE ASSOCIATION. CERTAINLY NEGOTIATING CURRENTLY WITH OUR FIRE ASSOCIATION. AND THAT INTENDS TO TAKE OUR MIDPOINT WHERE WE ARE 50TH PERCENTILE IN SALARIES IN THE MARKETPLACE THAT'S BEEN HISTORIC POSITION OF CITY.
MCKINNEY IS NOT MORE, NOT LAST. 50TH PERCENTILE. AND IN MY VIEW, WE'RE MISSING THE BOAT ON THAT WHERE WE'RE ASKING OUR EMPLOYEES TO BE MORE PRODUCTIVE, AS EVIDENCED BY THE DAY THAT YOU JUST SAW AND OTHER EVIDENCE. YET WE'RE NOT PAYING FOR THAT PRODUCTIVITY AND THAT OVER TIME, IF WE'RE GOING TO MAINTAIN WE'RE GOING TO BE ABLE TO KEEP THE TALENT KEEP THE EMPLOYEES. GOING TO HAVE TO MOVE UP A LITTLE BIT IN THE MARKETPLACE. WE DON'T HAVE TO BE AT THE HIGHEST PAID, BUT CERTAINLY WE WANT TO BE SOMEWHERE ABOUT 50TH PERCENTILE. SO FOR POLICE ASSOCIATION, WE ARE GRADUALLY REMOVING THE AGREEMENT IS A FOUR OR SIX YEAR DEPENDING ON WHETHER OR NOT THE PARTIES DECIDED TO REOPEN IT FOUR OR SIX YEAR AGREEMENT, BUT DURING THAT TIME WE'RE GOING TO GRADUALLY INCREASE. THEIR POSITION IN THE MARK RELATIVE TO THE MARKETPLACE. ITS 50TH PERCENT OUT, PLUS A CERTAIN PERCENTAGE. WE'RE NEGOTIATING SOMETHING SIMILAR WITH THE FIRE ASSOCIATION, AND WE ALSO PROPOSED TO DO START THAT PROCESS WITH OUR CIVILIAN EMPLOYEES AS WELL, PERHAPS NOT AS AGGRESSIVELY, BUT CERTAINLY WE WANT TO BRING THEM ALONG AS WELL TO BE ABLE TO RAISE THEIR POSITION RELATIVE TO THE MARKETPLACE. AND THE 50TH PERCENTILE. SPECIFICALLY WE WANT TO INCREASE THAT OVER TIME. CAN'T BE DONE OVERNIGHT. IT'S NOT CHEAP SALARIES ARE THE SINGLE BIGGEST EXPENSE IN OUR OPERATING BUDGET. WE'VE GOT LOTS OF OTHER THINGS WE'VE GOT TO DO, BUT WE DO WANT TO GRADUALLY INCREASE THAT IN THIS BUDGET INCLUDES. CIVILIANS AS WELL AS THE OTHERS AND SLOWLY STARTING TO MARCH THAT NORTHWARD. THAT'S WHAT I WAS ALLUDING TO AND I'M JUST MAKE NOTE THAT ALL OF COUNCIL WAS VERY, VERY, VERY SUPPORTIVE OF THAT, OF COURSE, AND BELIEVE THAT IS ONE OF THE MOST IMPORTANT INITIATIVES THAT WE HAVE. SO THAT SOMEONE CONCLUDES THE ECONOMIC CONDITION OF THE AREA OR CITY SPECIFICALLY, KICK IT BACK OVER TO MR HOLLOWAY, AND HE'LL GET INTO SPECIFIC REVENUE SOURCES AND THEN WE'LL GO ON TO EXPENDITURE SOURCES. AS WE CONTINUE. THANKS FOR HELPING US OUT. TREVOR I'VE ALWAYS APPRECIATED YOUR WELCOME. ALWAYS SUCH A PLEASURE. ALL RIGHT, SO I WANT TO TALK A LITTLE BIT ABOUT. REVENUE ESTIMATES FOR FISCAL YEAR 22 AS I MENTIONED EARLIER, OUR SALES TAX AND I NEVER THOUGHT I WOULD SAY THIS IS A CONSERVATIVE SALES TAX ESTIMATE OF A GROWTH OF 5. THERE WERE THERE WERE TIMES WERE WE BUDGETED ONE OR 2% SO, SAYING THAT 5% IS CONSERVATIVE IS STRONG, SO I'M HAPPY TO BE ABLE TO SAY THAT UM. BUILDING PERMITS, UH OR DOWN A LITTLE BIT, UM, OUR FISCAL YEAR 21 BUDGET, THEY'RE STARTING TO CREEP BACK UP. WE'RE GOING TO BUDGET THEM ABOUT 3.5% OVER OUR FISCAL YEAR. 20 ACTUALS. FISCAL YEAR. 20 WAS A PRETTY GOOD BELLWETHER, SO WE'RE GOING TO JUST THAT TO MAKE SURE THAT.
THAT WE'RE NOT OVER BUDGETING THERE AT HOME AND IS A TOTAL THAT'S TOTAL. AND IT IS
[01:20:01]
SPECIAL. EVERYTHING I THINK WE OVERSHOT A LITTLE BIT THINKING OF THIS YEAR, SO WE'RE JUST.WE'RE MAKING AN ADJUSTMENT. YEAH, JUST DIALING IT BACK A LITTLE BIT, BECAUSE SALES TAX IS STRONG. IT DIDN'T IT DIDN'T REALLY. AFFECT OUR OVERALL OPERATIONS. BUT I WANT TO MAKE SURE THAT, UH, I WOULD RATHER I'D RATHER MISS BUILDING PERMITS ON THE LOW SIDE, SO THAT'S KIND OF WHERE WE'RE HEADED THERE. TRAFFIC FUNDS ARE A LITTLE BIT LESS THAN OUR FISCAL YEAR 21 BUDGET. UH BUT SO WE'RE GOING TO MATCH THOSE WITH OUR FISCAL YEAR 20 ACTUALS. 21 HAS BEEN A PANDEMIC YEAR, SO I'M. I WANT TO 20 IS PROBABLY A LITTLE BIT MORE ACCURATE TRAFFIC FUNDS ARE VERY SMALL PORTION OF OUR BUDGET, SO I'M NOT TOO CONCERNED ABOUT ABOUT THAT. INTEREST INCOME ONCE UPON A TIME, AND I SAY THIS EVERY YEAR, INTEREST INCOME WAS ROBUST AND. YEAH, AND NOW IT'S EVEN LESS THAN FISCAL YEAR, 19. ALMOST $2 MILLION LESS THAN WHAT WE SAW IN THOSE YEARS AND. WE DON'T ACTUALLY COUNT ON IT VERY MUCH ANYMORE. BUT. PREVIOUSLY I WAS IN AN INTEREST INCOME WAS WAS A BIG PART OF OUR BUDGET, BUT WE DON'T GENERATE MUCH INTEREST ANYMORE. AND FRANCHISE SPEEDS. WE'RE STARTING TO SEE RECOVERY.
THEY'RE JUST BECAUSE OF POPULATION GROWTH. I THINK IT WAS A SENATE BILL 11 52 STARTED CUTTING INTO OUR FRANCHISE FEES SOMEWHAT. BUT WE ARE STARTING TO SEE THOSE START. UH WE READJUSTED OUR LEVEL AND THEN THOSE ARE STARTING TO GROW THEM. I JUST WANT TO REITERATE THAT SO WHAT IT'S NOT SHOWING IS WHILE OUR FRANCHISE FEES ARE RECOVERING WHEN MARK ALLUDES TO THAT. IT'S ONLY BECAUSE OF GROWTH. IT'S NOT BECAUSE OF ANY BENEFIT FROM THE LEGISLATURE LEGISLATURE TOOK OUR ABILITY TO ASSESS FRANCHISE FEES OR SOME OF OUR ABILITY. SO WHAT WE'RE NOT TALKING ABOUT IS WHAT WE COULD HAVE COLLECTED OR WHAT WE WOULD HAVE BEEN ABLE TO COLLECT. WITH SCUSE ME, EXCEPT FOR THAT BILL. BUT FOR THAT, BILL, SO, UM IT'S REALLY ATTRIBUTED TO GROWTH THAT WE'RE SEEING FRANCHISE FEES RECOVER, BUT IT'S NOT BECAUSE OF ANY OTHER REASON WE LIKE I SAID, WE'VE LEVEL SET FROM FROM THAT. AND NOW. WE'RE JUST ADDING IN OUR NORMAL GROWTH. WORK I WOULD LIKE TO SAY FOR THE RECORD THAT MY FAMILY MY CHILDREN HAVE DONE THEIR PART IN TRYING TO KEEP OUR TRAFFIC FINES IN COME UP, SO IT IS NOT. I AM NOT TO BLAME FOR THAT, FOR THAT DECREASE OF THE DECREASE WE ARE DOING OUR PART. EVERYONE HAS TO DO THEIR PART. WE'RE DOING OUR PART. MY KIDS ARE ABSOLUTELY I'M TRYING NOT TO DO MY PART. TEXAS CITY.
OH, SO. I THINK TREVOR IS THIS LOT BEEN AROUND SINCE 2013. IT HAS. I THINK SO, MAYBE 2014, BUT WE THINK IT'S VERY RELEVANT. UM WE SHOW YOU HOW WE COMPARE PERSONNEL WISE TO OUR SISTER CITIES. THIS SLIDE SHOWS YOU A COMPARISON OF OUR REVENUES PER CAPITA TO OUR SISTER CITIES.
THIS IS OUR FISCAL YEAR. 22 PROPOSED BUDGET COMPARED TO THE ADOPTED BUDGETS OF THE FISCAL YEAR, 21. SO IT'S ONE YEAR IN REARS OF THOSE THREE SISTER CITIES. WE WE DO BRING IN A LITTLE BIT LESS REVENUE PER CAPITA, WHICH PROBABLY A LOT OF THAT WOULD TRANSFER THAN INTO.
CITIZENS ARE PER EMPLOYEE. SO WE DO HAVE A LITTLE BIT LESS REVENUE. WE ARE STARTING TO MAKE SOME GAINS. THIS NUMBER WAS A LOT MORE STRIKING BACK IN 13 4014, BUT WE ARE JUST WANTED TO MENTIONED THAT. WHEN YOU SAY IT WAS A LITTLE YOU MEAN THERE WAS A BIG DIFFERENCE BETWEEN THE TERRORISTS THAT. I CAN ACTUALLY GET THOSE NUMBERS FOR YOU AND GO BACK. I'LL TELL YOU WHAT, I'LL GO BACK AND LOOK AT WHERE WE WERE IN 2013% DIFFERENCE FROM, SAY, FRISCO TO US OR PLAYING AT US AND WHERE WHERE WE ARE TODAY. I DON'T HAVE THAT NUMBER WITH ME RIGHT NOW. BUT THIS IS THE THING. I THINK ALL OF US. I MEAN, WE APPRECIATE THE FACT THAT RATES ARE GOING DOWN A LITTLE BIT AND STUFF LIKE THAT. BUT. BUT FOR ME ANYWAY, I JUST WANT TO MAKE SURE WE'RE MEETING THE NEEDS OF THE CITY. WE'RE MEETING THE NEEDS OF THE EMPLOYEES AND EVERYBODY ELSE AND I HOPE WE ARE ALWAYS. TEASING YOU ABOUT SYNCING YOUR BELTS AND TIGHTEN IT. WE NEED TO MAKE SURE THAT WE'RE. SEDATIVE. YOU KNOW THAT WE'RE GETTING THE THINGS DONE THAT WE NEED TO IN THE CITY, AND HOPEFULLY THAT'S ALWAYS THE CASE TO IT. LET ME LET ME TAKE A LOOK AT THAT NUMBER. I THINK WHAT WE'LL FIND IS WE'RE EATING THE APPLE SLOWLY INSTEAD OF ALL IN ONE BITE, BECAUSE THESE NUMBERS WERE MORE STRIKING YEARS AGO, SO. THIS IS THE MAKEUP OF OUR TOTAL REVENUE. UM. THAT SHOWS A COMPARISON OVER 10 YEARS. OUR GENERAL FUND REVENUE.
YOU CAN SEE THAT, UH, AND FISCAL YEAR 12 GENERAL FUND REVENUES WERE ABOUT 92 MILLION.
[01:25:03]
IT'S ALMOST DOUBLED IN 10 YEARS THE SIZE OF THE GENERAL FUND, SO OH, ON MY FIRST YEAR WE WERE UNDER 101 100 MILLION AND SAY THAT WE WERE CROSSING, YOU KNOW, IN THE 170 MILLION THIS YEAR. ALL RIGHT. THIS WAY YOUR YEAR END. BUDGET WE'RE LOOKING AT ABOUT $166.9 MILLION BUDGETING 1 71.3. THAT'S ABOUT 3% GROWTH FROM END OF YEAR THIS YEAR, TOO. BEGINNING OF YOUR NEXT YEAR. AND THEN WE DO ALSO PUT IN THE REVENUE PER CAPITA JUST TO SHOW YOU THAT. THAT IS, UH, SLOWLY GROWING OVER OVER TIME. MM. THIS IS OUR GENERAL FUND REVENUE. MAKEUP. UM. YOU CAN SEE THAT, FOR THE FIRST TIME. OUR SALES AND USE TAXES ARE STARTING TO JUMP. THE WELL, I WOULD SAY TWO OR THREE YEARS AGO. THIS LOOKED A WHOLE LOT MORE LIKE PACMAN, CLOSING HIS MOUTH. WITH THE PROPERTY TAX BEING ABOUT. YOU KNOW, CLOSER TO 60% OF OUR GENERAL FUND BUDGET. NOW IT'S MOVED BACK EVEN MORE THIS YEAR TO 54% WITH THE GREENPEACE THERE THE SALES AND USE TAXES BEING GOING UP 4% YEAR OVER YEAR. SO, UM. VERY EXCITED ABOUT SEEING THAT CHANGE WELL. A LITTLE BIT MORE THAT WE'RE STARTING TO MIRROR A LITTLE BIT MORE ARE SISTER CITIES AND WHAT? THEIR REVENUE? UH, LOOKS LOOKS LIKE SEE THAT FRISCO BRINGS IN ABOUT 25% OF THEIR REVENUES FROM SALES AND USE TAXES. AND ABOUT 52% FROM PROPERTY TAX. PLANO, UM. BIGGER COMMERCIAL BASE, 28% AND 48% FROM PROPERTY TAXES, AND WE PASSED ALAN OURSELVES AND USE TAX. UH FOR THE FIRST TIME AND. STILL DOING A LITTLE BIT MORE ON THE PROPERTY TAX SIDE, BUT THAT THAT IS CLOSING DOWN, BUT WE DO LIKE THE THIS WAS THIS WAS A COUNCIL REQUESTED TO SEE HOW THESE HOW WE MIRROR. SEVERAL YEARS AGO WILL DO THE SAME THING ON THE EXPENDITURE SIDE TO SHOW YOU HELP. THEY'RE SPENDING THEIR THEIR DOLLARS AS WELL. UM. THIS JUST SHOWS OUR PROPERTY TAX GROWTH ONCE AGAIN. MIRRORS OUR BUDGET. UM SO ABOUT 44.8% INCREASE FROM FISCAL YEAR 21 END OF YEAR TWO. FISCAL 22 PROPOSED. THIS REPRESENTS ONLY THE M N O PORTION OF THE TAX RATE. THIS DOES NOT SHOW THE 15 CENTS OF THE BUSINESS SIDE OF TAX RATE. THIS IS THAT YOU HAVE PORTION THAT GOES DIRECTLY FOR OPERATIONS. WOULD YOU MIND JUST QUICKLY. EXPLAINING OR. QUICK OVERVIEW ON WHAT THE PROPERTY TAX REVENUE PER CAPITA LINE IS AS PEOPLE SEE THIS, UM, START TO INTERSECT. THE PROPERTY TAX REVENUE. WHAT THAT WOULD THAT INDICATES? UM SURE. I THINK THE MAIN THING THAT THIS INDICATES IS, UM YOU SEE IT STARTING TO FLATTEN OUT, WHICH MEANS THAT WE ARE CLOSER TO OUR NO NEW REVENUE RATE EACH YEAR. YOU CAN SEE THE INCREASES, AS IS IN THE ABOUT. SIX OR SEVEN YEARS AGO. UH THE. THE CITY WAS CLOSER TO THE 8% OR WOULD BE UNDER THE 8% CAP THAT THE TIME WAS CALLED THE ROLLBACK, RIGHT? IT WAS ALWAYS UNDER, BUT IT WAS CLOSER TO WITH THE FLATTENING OUT OF THE LINE. WHAT YOU'RE SEEING IS. AS BEING SOMEWHERE AROUND INFLATION OR LESS IN THE 2% OR LESS RANGE, ALSO, AS IT CROSSES. JUST FELT THERE'S A REALLY, REALLY IMPORTANT SLIDE THAT CAN. PEOPLE MAY NOT QUITE UNDERSTAND WHAT THIS SHOWS AND TREVOR MADE A GOOD POINT. UH, AS OUR COMMERCIAL RATE HAS HAS COMMERCIAL TAX BASE HAS GROWN.YOU SEE LESS OF THAT TAX BURDEN BEING ON THE CITIZEN AND ALSO MOVING TOWARDS TOWARDS THE BUSINESSES BECOME LESS RESIDENTIAL. SO I THINK THAT'S ALSO ANOTHER REPORTED PART OF IT. BUT. JUST THE FACT THAT IS IT FLATTENS THAT WE'RE IT'S A COMBINATION OF VALUE. AND RIGHT. UM BOTH. SO IF YOU HADN'T HAVE CUT RATE YOU WOULD SEE THE. PER CAPITA PORTION OF THAT STILL CONTINUE TO TREND UP EVEN WITH OUR COMMERCIAL VALUES GROWING. SO IT IT'S IMPORTANT TO MENTION THAT IT'S TWO FACTORS THERE. JUST WE ALSO TAKE A LOOK BACK AT OUR SALES TAX. YOU CAN SEE. UH I'LL TELL SAY TO EVERYBODY DON'T REALLY LOOK AT THE FISCAL YEAR 21 ORIGINAL BUDGET. WE WENT AND MIRRORED THE FISCAL YEAR 19 COLLECTIONS BECAUSE WE DIDN'T
[01:30:03]
KNOW WHAT WE'RE GOING TO GET WITH THE PANDEMIC. IT WAS. IT WAS A LOW ESTIMATE. CLEARLY WE TALKED ABOUT IT LAST YEAR. UH THE IMPORTANT THING HERE IS TO SEE THE GROWTH AND THEN AND THEN IF YOU TAKE UP THE FISCAL YEAR, 21, YOU SEE HOW EXPONENTIALLY THE SALES TAX REVENUE IS GROWING. THIS THIS 35 0.3 MILLION FOR THE PROPOSED FISCAL YEAR BUDGET DOES NOT INCLUDE THE CDC AND CDC SALES TAX PORTIONS. AS WE THEY GET 1% SPLIT BETWEEN THEM. THEIR PORTIONS WOULD BE SOMEWHERE IN THE $17 MILLION RANGE FOR FISCAL YEAR. 22 WE'LL SHOW YOU THEIR SLIDES HERE IN A FEW MINUTES. SO THIS IS JUST HALF OF THE SALES TAX THAT IS BROUGHT ABOUT THE CITY. WELL, WHY IS YEAH. END OF YEAR SO THAT THAT'S UH, SCREWING UP THE FISCAL YEAR 21 BUDGET AND WE CLEARLY KNEW THAT WE EVEN SAID WE HOPE WE WERE WRONG WHEN WE GIVE YOU THE FINDINGS WERE 21 ORIGINAL. AND SO WHAT HAVE WE DONE IN THE MEANTIME, WHILE WE WERE ABLE TO GO AHEAD AND GIVE THE MARKET ADJUSTMENTS, UH, WE PUT MONEY AWAY FOR CITY HALL.WE PUT MONEY AWAY FOR TECHNOLOGY, SO THAT'S WHAT WE USE THOSE FUNDS THAT CAME IN.
WE USE THEM FOR ONE TIME THINGS. NOW WE LEVEL SET THAT SO TO SPEAK AND CONTRIBUTOR TO UM. THAT IS THE INTERNET CELLS. IS THAT WHAT WE KIND OF. HOW DID WE JUMP SO MUCH? UM WELL.
LIKE I SAID, TAKE THE 21 ORIGINAL OUT BECAUSE THAT WAS THAT WAS AN ESTIMATE JUST BASED ON FISCAL YEAR 19 COLLECTIONS. UM, BUT WE'VE JUMPED FROM FISCAL YEAR 18 FROM 25 MILLION TO 35 MILLION THIS YEAR. SO SPEAK. A LOT OF IT IS THE NEW WAY THAT WE ARE GETTING THE SALES TAX IN FROM FROM THOSE INTERNET SALES THEY'RE BEING ATTRIBUTED TO THE POINT OF SALE. BUT ALSO WE'RE STARTING TO SEE RETAIL GROWTH. SOME OF OUR BIGGER BOX STORES ARE PUTTING OUT QUITE A BIT MORE SELL SEX, WHILE IT IS MOSTLY ATTRIBUTED TO THAT WE'RE SEEING IT ACROSS ALL OF OUR SECTORS. UM. SO ITS ECONOMY WE'RE HAVING A STRONG, STRONG, STRONG ECONOMY, BUT THE INTERNET SELLS A BIG DROP THE BIG BOX ELEMENTS DURING THE PANDEMIC. WHEN PEOPLE WERE STAYING HOME. THEY WEREN'T GOING TO FURNITURE STORES. THEY WEREN'T GOING TO DO YOUR TYPICAL RETAIL SHOPPING THAT SOME OF OUR. NEIGHBORING CITIES MIGHT HAVE MORE OF LIKE PLANO AND FRISCO IN PARTICULAR. THEY HAVE MORE OF THOSE SORT OF. I DON'T KNOW WHAT YOU WOULD WHAT THEY WOULD EVEN ATTRIBUTE IT AS BUT ITS MERCHANDISE RETAIL. IT'S NOT RELATED TO BASICS LIKE CLOTHING AND WHATEVER. THE BIG BOX STORES DID VERY WELL, UM, COSTCO. WE WERE VERY FORTUNATELY AT COSTCO ONLINE WHEN WE DID BECAUSE COSTCO'S. THEY WERE BOOMING TARGETS. WALMART ALL OF THOSE STORES DID VERY VERY WELL DURING THE PANDEMIC. WE DIDN'T EXPECT THAT WE DIDN'T PROJECT THAT INTO. FRANKLY, NONE OF US HAVE BEEN THROUGH A PANDEMIC, SO. WE WERE EXPECTING RECESSION, AND SO WE SAID, LET'S ATTENUATE THE FORECASTED GROWTH. WHAT WE SAW WAS A SHIFT IN THE BUYING PATTERNS. UM NOW WHAT'S INTERESTING IS OUR SALES TAX GROWTH, WHILE STILL ROBUST ISN'T EXACTLY THE SAME PERCENTAGE BECAUSE SOME PEOPLE ARE NOW MIGRATING BACK TO THOSE RETAIL STORES THAT WERE REALLY, REALLY HURTING. FROM BEFORE, BUT. THERE IS A PERMANENT SHIFT TO ONLINE SALES. THE WAY SALES ARE BOOKED NOW AT THE STATE AND COLLECTED THE SALES TAXES HAVE BENEFITED US BECAUSE IT'S GOING TO THE POINT OF OR TO THE PERSON WHO'S BUYING. THAT NOT NOT THE ORIGINATION, BUT THE DESTINATION. AND THAT'S.
BENEFITING US, SO IT'S VERY INTERESTING TO SEE HOW THAT DYNAMIC IS PLAYED. AND I THINK WE'RE GOING TO CONTINUE TO SEE GROWTH IN THAT AREA BECAUSE AS WE GROW AND WE HAVE FOLKS MINE ONLINE SALES WERE GETTING THE BENEFIT OF THOSE SALES TAXES WHERE IT WASN'T ALWAYS THE CASE A NUMBER OF YEARS AGO. THIS IS A CHART WE LIKE TO INCLUDE EVERY YEAR TO SHOW THE, UM HOW ARE PER CAPITA GROWTH HAS BEEN FOR OUR TWO MAIN REVENUE SOURCES. AND WE SHOW YOU, YOU KNOW. THE PARAGRAPH OF. THE SIZE OF PROPERTY TAX AND THE SIZE OF SALES TAX AND SENSE OF, YOU KNOW, I MENTIONED THAT THE SALES TAX WAS GOING TO BE OVER 20% THIS YEAR. YOU CAN YOU CAN SEE THAT FOR YEARS, OUR PER CAPITA EVEN WITH OUR GROWTH HERE IN MCKINNEY, OUR OUR SALES TAX PER CAPITA REMAINED FAIRLY FLAT. THE CHANGE IN THE SYSTEM BACK IN FISCAL YEAR, 19 YOU CAN SEE SEE THE GROWTH. STARTING TO DESPITE THEIR ON THE SALES TAX, AND THEN FOR FISCAL YEAR 20 TO PROPOSE WORK $171 PER CAPITA, UH, PROPERTY TAXES IS STARTING TO FLATTEN OUT LEVEL OUT, WHICH IS, UH, IS A GOOD SIGN ONCE AGAINST THE TWO FACTORS OF RATE AND VALUE AND WITH OUR
[01:35:03]
COMMERCIAL BASED, UH, TAKING OVER MORE OF THE OF THE PROPERTY TAX BURDEN. AND. SO WITH THAT, I'M GOING TO KICK IT OVER TO TREVOR GAGGING. AND LET HIM TALK ABOUT OUR GENERAL FUND EXPENDITURES. HE'S GOING TO TALK A LITTLE BIT ABOUT, UH, WHAT YOU WILL FIND NEW IN EACH ONE OF OUR SOME OF OUR MAJOR DEPARTMENTS. FOR FISCAL YEAR 22. RIGHT. THANK YOU. MARK MORNING, MAYOR AND COUNCIL. UH MY NAME IS TREVOR DAGON OR TRIBUTE TO I GUESS THEY REFER TO ME AS BETTER LOOKING FOR US. RIGHT, SO WE'RE GOING TO GO THROUGH OUR GENERAL FUND EXPENDITURES HERE KIND OF SEE A LOT OF THE SAME CHARTS. HERE IN THE REVENUE ONES THAT MARK TALKED ABOUT. SO AGAIN. HERE'S THIS CHART HERE, UM, WHICH CAN BARELY READ UP THERE WITH THE GREEN. UM, BUT AGAIN, IT'S JUST KIND OF SHOWING OUR EXPENDITURES NOW PER CAPITA, WHICH OBVIOUSLY FOR US. THAT SAME 8 30 NUMBER SINCE WE DO PROPOSE A BALANCED BUDGET THIS YEAR. SO SOME OF OUR HIGHLIGHTS FOR THE GENERAL FUND, UM IN FY 22 WE HAVE ABOUT 7.9 MILLION AND NEW EMPLOYEES AND EQUIPMENT THAT WE'RE PROPOSING TO ADD THIS YEAR. MUCH BIGGER INCREASE IN WHAT WE PROPOSED LAST YEAR WHEN WE WEREN'T SURE WHAT OUR REVENUES WERE GOING TO BE.WE'RE ALSO PROPOSING, AS WAS MENTIONED EARLIER 2.5 MILLION TRANSFERRED TO, UH, STREET. C I P FOR RECONSTRUCTION AND REPAIR. AND THAT'S UP FROM THE 1.5 MILLION. FROM OUR ORIGINAL FY 21 BUDGET. AND THEN FOR OUR PUBLIC SAFETY STEP INCREASES AND MARKET ADJUSTMENTS. THOSE ARE ABOUT 1.8 MILLION. AND THEN, AS WAS MENTIONED EARLIER BEFORE WE ARE PROPOSING A MARKET ADJUSTMENT AS WELL AS A STEP INCREASE THIS YEAR FOR ALL NON SWORN PERSONNEL. SO HERE AGAIN IS THE SHARP LIKE WITH OUR REVENUES. THIS IS OUR GENERAL FUND EXPENDITURES OVER THE YEARS. SO FOR OUR FY 22 PROPOSED WERE ABOUT 7.5% ABOVE OUR ORIGINAL, UM FY 21. ADOPTED BUDGET. UM AND JUST LIKE WITH THE REVENUES SINCE IT IS A BALANCED BUDGET. WE ARE ABOUT 3% ABOVE OUR END OF YEAR FOR FY 21. NEVER REALLY QUICKLY BEFORE YOU. GO ON. CAN YOU GO BACK? THIS 11 WASHING. DO WE HAVE A NUMBER FOR THE MARKET ADJUSTMENT? THE STEP INCREASE.
OR THAT LAST POINT FOR THE LAST ONE? YES FOR THE MARKET ADJUSTMENT. I THINK IT'S ROUGHLY. IT'S ABOUT 430,000 FOR THE 1. FOR THE STEP IS A 3. WANT TO SAY. POSSIBLY ABOUT 1.3 MILLION. I WANT TO SAY, UM I'D HAVE TO DOUBLE CHECK ON THAT. UM, I DO KNOW THE 1% MARKET. IT IS ABOUT 4 30. RIGHT AND DOUBLE CHECK ON THE 3% STAFF. YES. YES. AND THEN HERE WE HAVE OUR MAKEUP OF THOSE GENERAL FUND EXPENSES OF 171 MILLION. SO HERE WE'RE COMPARING OUR ORIGINAL LEFT BY 21 WITH WHAT WE'RE PROPOSING FOR FY 22. YOU CAN SEE THESE NUMBERS STAYED.
PRETTY MUCH EXACTLY THE SAME YEAR TO YEAR. THEY'RE ALWAYS RELATIVELY CLOSE. NOT MUCH CHANGES BECAUSE OF YOU KNOW, WE'RE ALWAYS PROPOSING THAT BALANCED BUDGET EACH YEAR. AND THEN HERE. I LIKE BEFORE THE REVENUES. WE ARE COMPARING OUR PROPOSED BY 22 BUDGET TO OUR SISTER CITIES ADOPTED FY 21. SO YOU CAN SEE. FOR ALL OF US ARE LARGEST EXPENSES. THE PUBLIC SAFETY SIDE WHICH WE ARE. RELATIVELY COMPETITIVE WITH THE OTHER SISTER CITIES, YOU KNOW, ON THE HIGH 40% RANGE. AND THEN A LITTLE BIT ABOVE ALLEN AT 45. OUR GENERAL GOVERNMENTS VARY A LITTLE BIT. UM, IN THE TWENTIES, UH, OUR PARKS AND LIBRARY ARE A BIT LOWER THAN SOME OF OUR SISTER CITIES WERE 9% PLAYING FOR SCORE AT 12 AND 13. OUR PUBLIC WORKS. OUR INVESTMENT.
PUBLIC WORKS IS A LITTLE HIGHER THAN ANYONE ELSE AGAIN. THAT'S JUST GENERAL FUND PUBLIC WORKS.
AND THEN YOU ALSO HAVE OUR DEVELOPMENT SERVICES. ALSO AT ABOUT 8% WHICH IS PRETTY COMPETITIVE, UH, WITH THE REST OF THE CITIES. UM. THEN OUR TRANSFERS OBVIOUSLY WORRIED ABOUT 6% THE REST OF THEM. THE WAY THEY KIND OF MAKE UP THEIR BUDGETS LITTLE DIFFERENT THAN
[01:40:06]
THE WAY WE MAKE UP OURS, WHICH IS THE REASON FOR OUR TRANSFER SHOWING HIGHER THAN THEIRS. ALL RIGHT. SO NOW WE KIND OF GO THROUGH A FEW SLIDES ON. KIND OF EACH SET OF DEPARTMENTS IN THE GENERAL FUND. SO THE STAR. WE HAVE OUR GENERAL GOVERNMENT, WHICH ARE OUR INTERNAL SERVICES LIKE US IN FINANCE CITY MANAGER CITY SECRETARY I TH OUR MARKETING, YOU KNOW THOSE KIND OF DEPARTMENTS. SO, UH, RIGHT NOW AND THERE WE HAVE ABOUT 162 AUTHORIZED POSITIONS. SO SOME OF THOSE NEW EXPENDITURES FOR FY 22 WE ARE PROPOSING FOR A DEPUTY CITY MARSHAL. GRANT, ADMINISTRATOR. UM, A FINANCIAL ANALYST. UM. THE HOMELESS RESPONSE. AND UH I T MAINTENANCE WAS A BIT OF AN INCREASE IS VIEWED YOU. IMPLEMENTING THE NEW YEAR P SYSTEM THAT IS COMING UP HERE IN 22. NEXT IS OUR PUBLIC SAFETY BREAKDOWN. OF COURSE, POLICE AND FIRE. UM SO FOR THEM OVERALL, WE GOT ABOUT 43 NEW POSITIONS WERE ADDING POLICE AND FIRE MAKE UP 23 OF THOSE. SO FOR POLICE, WE ARE ADDING FOUR NEW LIEUTENANTS FOR DETECTIVES TO TRAFFIC OFFICERS TO COMMUNICATION SPECIALISTS. AND THEN AN S R O. WHICH, OF COURSE WE DO. GET SOME REIMBURSEMENT FROM THE SCHOOL DISTRICT FOR THAT. AND THEN ON THE FIRE SIDE, WE ARE ADDING NINE NEW FIREFIGHTERS AND EMS CAPTAIN WHICH MAKE UP THE 10.AND THEN THERE. IS THAT ADDITIONAL, UH, SIX POSITIONS FROM THE SAFER GRANT THAT WE ARE RETAINING, UM THIS YEAR. GOING FORWARD. I SHOULD SAY SORRY. NEXT WE ARE DEVELOPMENT SERVICES, SO THAT CONSISTS OF. PLANNING ENGINEERING DEPARTMENTS AND CODE AS WELL.
UM. SO THEY'RE WHAT WE'RE PROPOSING. NEW FOR FY 22 IS AN ENVIRONMENTAL HEALTH SPECIALIST.
FOUR CODE, A MAINTENANCE TECHNICIAN, WHICH IS FOR TRAFFIC AND ENGINEERING. AND THEN TO PLANT OR TWOS. ON THE PUBLIC WORKS SIDE SO AGAIN, THIS IS JUST GENERAL FUND PUBLIC WORKS, AS CONSISTS OF PUBLIC WORKS, ADMIN FACILITIES, MAINTENANCE AND STREETS. MM.
MARK WILL DISCUSS SOME OF THE OTHER PUBLIC WORKS FUNDS, YOU KNOW, LIKE WATER, WASTEWATER SALT WASTE IN THOSE LATER ON. SO FOR FY 20 TO WHAT WE ARE PROPOSING FOR THEM, UM, IS A IT'S KIND OF A PACKAGE THAT CONCRETE CREW FOR STREETS, WHICH INCLUDES THOSE TWO MAINTENANCE TEXTS AND A CREW LEADER, PLUS THE CONCRETE TRUCK. AND THEN THERE'S ALSO A POTHOLE PATCH ER, WHICH IS THE ACTUAL TRUCK. PLUS THE PERSON TO DRAG THE TRUCK. NEXT WE GOT PARTS OF LIBRARY SUPPORTS PARKS AND LIBRARY. SO ON THAT SIDE, YOU KNOW, WITH OUR AMOUNT OF PARKS AND THE GROWING NUMBER, PARKS OR PARKS DOES LIKE TO STAY AT A CERTAIN AMOUNT OF PARKS MAINTENANCE WORKERS PER ACRE. SO WE'RE ALWAYS SEEING AN INCREASE IN THE PARKS.
MAINTENANCE WORKERS EACH YEAR. THIS YEAR WE'RE PROPOSING FOR NEW MAINTENANCE WORKERS THERE.
AS WELL AS A BUILDING ATTENDANT OLD SETTLERS, UM AND THEN TO NEW PART TIME CUSTOMER SERVICE THREAT AT THE SENIOR CENTER. AND THEN THEY ARE ALSO PROPOSING A INCREASE TO THEIR CONTRACT KNOWING, UM, FOR THIS COMING YEAR. AND THEN OUR. WE ALWAYS LIKE TO SHOW THE SLIDE EACH YEAR, UM, TO SHOW THAT OUR LINE ITEM THAT WE HAVE IN THE GENERAL FUND FOR OUR GRANTS TO COMMUNITY. THIS JUST KIND OF GIVES YOU BREAK DOWN TO THAT, SHOULD YOU? THE ARTS COMMISSION GRANTS COMMUNITY SUPPORT GRANTS. THE VARIOUS ONES THAT WE HAVE IN THERE. ALL RIGHT. I THINK I'M GONNA PASS IT BACK TO MARK FOR OUR C I P SHOULD, UM. YES, SIR. THINK ABOUT A QUICK BREAK. ER, DO YOU WANT TO FINISH THIS? UH WE TAKE A QUICK BREAK AND TAKE POVERTY IN MINUTES AND I WOULD LIKE TO MENTION YEAH. I WOULD LIKE TO MENTION EVERYBODY THAT, UH, YOU KNOW, TREVOR WAS TALKING ABOUT OUR EXPENDITURES, THE SUPPLEMENTALS THE NEW REQUEST.
ALL THOSE ARE AVAILABLE IN OUR IN THE PROPOSED BUDGET BOOK IN THE APPENDIX, THE SONG LINE AS WELL. BUT IF YOU WANT TO SEE WE DIDN'T WRITE EVERYTHING THAT WE WERE PROPOSING DOWN. THOSE WERE THE HIGHLIGHTS, BUT AND ALSO ALL OF OUR REPLACEMENT EQUIPMENT, AND ALL OF THOSE ARE HIGHLIGHTED IN THAT SUPPLEMENTAL REQUEST. SO I WANT TO MAKE SURE THAT IF YOU HAD ANY LARGER QUESTIONS ABOUT EVERYTHING THAT'S BEING YEAH. REQUESTED AGES 81 THROUGH 84.
YES SPECIFIC AND REPUBLICAN VOTES. ABSOLUTELY I JUST WELL, THOSE WERE THE HIGHLIGHTS. I
[01:45:05]
JUST WANTED TO MENTION THAT THEY'RE ALL THERE ACROSS ALL FUNDS, AND I JUST WANT SOMETHING. DO YOU FEEL THIS IS AN OKAY PLACE TO TAKE A BREAK. I DON'T WANT TO INTERRUPT. SURE SPEAK PERFECT THINGS. IT SEEMS AS WE MOVE TO CAPITAL IMPROVEMENT PROGRAM. WE COULD ABSOLUTELY RIGHT, SO MR HOLLOWAY. I THINK YOU WERE IN THE MIDDLE OF. BAD START CAPITAL IMPROVEMENT PROGRAM. WE WERE THANK YOU, MAYOR. BRIEFLY JUST BRIEFLY TOUCH ON OUR OUR SEE IP. UM IT'S A FIVE YEAR PLAN. SOME OF THESE HAVE FUNDING. SOME OF THESE DO NOT HAVE FUNDING. UM UH ASSOCIATED WITH THEM. THE NEEDS OR THE PROJECTS PROPOSED BY OUR STAFF ARE AT $1.2 BILLION. OVER OVER THE NEXT FIVE YEARS CLEARLY WILL STRETCH SOME OF THAT OUT OVER TIME, BUT WE DID CROSS THAT $11 BILLION THRESHOLD LAST YEAR OF FUTURE PROJECTS. ONCE AGAIN, THESE ARE NOT ALL BOND FUNDED. FUNDING COMES FROM FROM MANY DIFFERENT SOURCES. BUT FOR THE NEXT YEAR. I JUST WANT TO TALK ABOUT SOME MAJOR PROJECTS. THAT WOULD WOULD FUNDING FOR THOSE WILL BE COMING UP THIS WEEK. 22. DO NOT SEE THE CITY HALL ON AIR OF THE CITY MUNICIPAL COMPLEX. WHEN AS WE GET THROUGH THAT PLANNING PROCESS, WE WILL BRING THAT TOHA YOU AS A FULL ANOTHER BUDGET AMENDMENT. TO DO THAT. DO THAT PORTION SO THAT FULL AMOUNT IS NOT INCLUDED IN YOUR OVERALL C I P. BUT YOU CAN SEE WE HAVE 30 MILLION AIRPORT PROJECTS FOR FISCAL YEAR 22. COMBINED PROJECTS THAT ARE WATER AND STREETS TOGETHER. WE HAVE, UH, PARKS PROJECTS. THESE ARE SOME OF THESE ARE BOND FUND. SOME OF THEM ARE NOT FUNDED BY THE C.D. C. PUBLIC SAFETY BAR STREETS IN EIGHT RECONSTRUCTION. IF THAT MOVES FORWARD, IT COULD BE CONSIDERED IN FISCAL YEAR 22. UM AND WE ALWAYS HAVE QUITE A BIT OF STREETS NEEDS AND THEN WATER AND WASTEWATER PROJECTS. AS YOU HEARD EARLIER. WE HAVE A VERY, VERY LARGE WATER WASTEWATER. C I P ABOUT $150 MILLION OVER THE NEXT FIVE YEARS. THAT WILL BE LOOKING TO MOVE FORWARD WITH. BUT WE HAVE QUITE A FEW MAJOR PROJECTS WILL BE UNDERWAY IN FISCAL YEAR 22.
YEAH. NOT INCLUDING THE MUNICIPAL CITY. UM. PART OF THE BUDGET PRESENTATION THIS YEAR IS CLEARLY A NEW SLIDE. WE TALKED ABOUT THE R TO THE AMERICAN RESCUE PLAN ACT A FEW MONTHS AGO. WE BROUGHT TO YOU, UM SOME POTENTIAL PROJECTS WE TALKED ABOUT USES OF THE MONEY, AND I SAID THAT WOULD TAKE TAKE SOME OF YOUR YOUR SUGGESTIONS. UH AND COME BACK DURING THE BUDGET PROCESS. NONE OF THESE ARE BEING PROPOSED TO BE BUDGETED. UH THESE PROJECTS WOULD BE PROPOSED BE BUDGETED IN THE FISCAL YEAR 22. THE ADOPTED BUDGET. WHAT WE WERE LOOKING FOR IS WE BROUGHT FORTH SOME POTENTIAL PROJECTS OR TAX POTENTIAL TYPES OF PROJECTS AND WE WERE LOOKING FOR ONCE AGAIN. GOD IT'S I'M HOW TO SPIN THESE AND AS AS THESE PROJECTS MOVE FORWARD, UH, WE WOULD BRING EACH ONE OF THESE TWO TO THE COUNCIL WITH AN UPDATE ON HOW MUCH HAS BEEN SPENT. WHERE WHERE THE DOLLARS HAVE BEEN SPENT. AND DO THOSE INDIVIDUALLY INSTEAD OF AS ONE, UH, IS BEING ADOPTED WITH THE FISCAL YEAR 22 BUDGET. SO I WANTED TO KIND OF GO BACK THROUGH. UH THE POTENTIAL PROJECTS AS AS. HAS LISTED BY US. THE $2.9 MILLION FOR THE APEX AND FUN BALANCE IF YOU RECALL STILL PLANNING ON ON A DEFICIT FOR THAT FUND GOING FORWARD, AND THIS WOULD THIS WOULD BE REPLACING THE 2.9 MILLION THAT HAD BEEN LOST TO DATE BECAUSE OF THE PANDEMIC. MCKINNEY PERFORMING ARTS CENTER AT $150,000. THOSE TWO IN PARTICULAR. I WOULD LIKE, UH, TESTED APPROVAL TO MOVE FORWARD WITH FISCAL YEAR 21 AS WE CLOSE FISCAL YEAR, 21. AS PART OF THE END OF YOUR TRUE UP BECAUSE I NEED TO MAKE SURE THAT THOSE FUND BALANCES ARE LEVEL AT THE END OF THE YEAR TO HAVE A BALANCED BUDGET FOR THEM NOT HAVE NEGATIVE FUND BALANCES. THE REST OF THE PROJECTS MOVING FORWARD. WE HAVE OVER $4 MILLION FOR INFRASTRUCTURE IN EAST MCKINNEY. THERE'S CERTAIN PROJECTS THAT WE DON'T HAVE GOOD NUMBERS ON. THAT'S WHY YOU SEE THE FOUR MILLION PLUS. I'M STILL TALKING ABOUT EXPANDING FIBER, TWO CITY PARKS IN THE DOWNTOWN SQUARE. WE HAVE $14 MILLION OF POTENTIAL PROJECTS OF ACTIVE IN FUTURE, SEE IF HE REQUESTED OUR WATER AND
[01:50:01]
WASTEWATER JUST MENTIONED WE HAVE $150 MILLION PROJECTS THERE OVER THE NEXT FIVE YEARS.$2.5 MILLION FOR ECONOMIC DEVELOPMENT PROJECTS AND ABOUT 1.3 MILLION IN COMMUNITY HOUSING AND DEVELOPMENT FOR HOUSING ASSISTANCE IN NEIGHBORHOOD PRESERVATION. UM.
I WOULD. I THINK THAT IF IT WOULD. SUIT YOU JUST IF YOU HAVE ANY OTHER SUGGESTIONS FOR THOSE DOLLARS THAT WOULD THIS WOULD BE A GOOD TIME FOR ME TO HEAR THAT, AND THEN ALSO KNOW THAT AS WE MOVE FORWARD WITH THE ART OF FUNDING, WE WILL BRING EACH ONE OF THOSE INDIVIDUALLY. WITH WITH AN UPDATE OF WHERE WE ARE ON EACH ONE OF THOSE TYPES OF BUCKETS.
THIS DOESN'T LOCK YOU INTO ANYTHING OTHER THAN THE APEX CENTER FUND BALANCE IN MCKINNEY PERFORMING ARTS CENTER. WE WOULD KIND OF LIKE TO LOCK THAT IN BECAUSE WE THAT THAT IS ABSOLUTELY ACCEPTABLE. AND INTENDED USE OF RP FUNDS IS TO REPLENISH REVENUES WHERE THEY WERE LOST. AND WE NEED TO SHORE UP THE BUDGET FOR FISCAL YEAR, 21. MHM. THE OTHER ONES ARE A LITTLE BIT MORE FLEXIBLE, BUT WE'RE OUTLINING FOR YOU. WHAT WE WHAT WE'VE HEARD AND WHAT WE THINK IS A RELATIVE BALANCE OF THE USE OF ARE ACCEPTABLE OR ELIGIBLE USES OF RP FUNDS. AND WE TRY TO STRIKE THAT BALANCE. BUT ALL THAT SAID, THINGS COULD COME ALONG AND YOU SAY YOU KNOW WHAT WE'RE GOING TO ULTIMATELY SPEND MORE MONEY ON SIP REQUESTS OR ANYTHING ELSE? WHAT WE TRIED TO OUTLINE FOR YOU IS A BALANCED USAGE OF THESE ARP OF FUNDS, KNOWING THAT AT THE END OF THE DAY, YOU'RE GOING TO CONSIDER EACH ONE OF THESE. YOU HAVE ANOTHER BITE AT THE APPLE.
YOU CONSIDER EACH ONE OF THESE ON THEIR OWN MERITS. SO LONG AS THERE EXCEPT ONE ELIGIBLE WITHIN THE ART OF FUNDING USES. WE'VE GOT HALF THE MONEY THIS YEAR. WE'RE GOING TO GET ANOTHER HALF OF IT NEXT YEAR. ON WE CAN WE CAN WE TALK ABOUT. I GUESS APEX ON ITS OWN LIKE WHAT'S THE PLAN? TO BRING IT BACK TO STABILIZATION. THE 2.9 KIND OF. THOSE WERE ESTIMATED, BUT THAT'S JUST THROUGH. YOU SAID THAT'S JUST RIGHT. SIZING THE BALANCE THROUGH THE END OF YEAR 2021. WHAT WHAT? YOU KNOW THE BUDGET SHOWING A. LOSS OF 1.7. UM. I GUESS WHAT'S THE TIME FRAME ON STABLE AND RE STABILIZATION OR FROM THE TALKS I'VE HAD WITH WITH MICHAEL KOWSKI, UM THEY'RE HOPING THAT IN THE NEXT TWO FISCAL YEARS THAT WE MOVED BACK TO WHAT'S FUNNY, THE THAT'S NOT SORRY, BUT HE'S NOT THE WORD. APEX ARE BUILT A LARGE FUND BALANCE AND NOT LARGE BUT SEVERAL MILLION DOLLARS AND THEY WERE BECOMING THEY WERE SELF SUFFICIENT AND THEY WERE HANDLING THEIR OWN CAPITAL AND. AND BUILDING MAINTENANCE NEEDS. AND WITH THAT FUND, MELONS AND NOW BECAUSE OF THE SHUTDOWN WITH THE PANDEMIC, THEY NOT ONLY.
YOU KNOW, BURNED THROUGH. THIS IS WHY WE KEEP FUND BALANCES. BUT APEX IS A PARK. UH THE WE WILL FILL THE GAP FROM THE GENERAL FUND BECAUSE IT IS A AT THE END OF THE DAY WHILE ITS ITS OWN FUN. IT IS A PARK AND IT IS WE WERE REQUIRED TO PAY FOR IT THROUGH THE GENERAL FUND. IT IS A GOVERNMENTAL FUND. IT IS NOT LIKE THE WATER FUNDED. WHICH IS TRUE ENTERPRISE FUND. THAT'S IT'S A BUSINESS THAT STANDS ON ITS OWN APEX AT THE END OF THE DAY IS A PARK AND WE WILL IF. THE NEXT TWO YEARS. WE WILL CONTINUE. WE WILL DO THIS TO SHORED UP NOW.
BUT AS WE WILL HAVE TO USE GENERAL FUND DOLLARS TO SHORT UP UNTIL AND HOPEFULLY THE NEXT TWO YEARS, WE'LL SEE. THAT'S THAT'S THE PARTS GOLD TO GET THAT BACK BECAUSE IT WAS IT WAS MAKING A NICE, UH, PROFIT BEFORE. WITH THIS. I DON'T KNOW WHAT THEIR MEMBERSHIP NUMBERS ARE TODAY. I DON'T HAVE THE NUMBER WITH ME. BUT THEY BLED MEMBERS. CERTAINLY THEY HAD TO SHUT DOWN. THEY WERE REALLY HAVING ANY REVENUES, AND THEN THEY LOST SOME MEMBERS BECAUSE A LOT OF FOLKS JUST CANCEL THEIR MEMBERSHIP. HAVE NOT YET GOTTEN BACK TO WHERE WE WERE BEFORE. I BELIEVE OUR MAXIMUM MEMBERSHIP IS AROUND 5300 AND 5500, AND WE HAVEN'T. GOTTEN BACK TO THAT NUMBER, BUT WE ARE SEEING THE NUMBERS GO BACK UP. I THINK WE GOT DOWN TO SOMEWHERE AROUND 3500. SO, UM, WE NEED MORE MEMBERS. I BELIEVE WE'RE BUILDING THOSE MEMBERS BACK. BUT CERTAINLY WE HAVE NOT GOTTEN BACK TO FULL RECOVERY WHERE WE WERE BEFORE, BUT IN THE MEANTIME, WE'VE LOST SOME REVENUES AND WE GOT TO. WE GOT TO SHORE THAT UP. THAT IS WHAT THAT SPECIFICALLY, WHAT ARE THE FUNDS? ARE INTENDED TO DO IS TO PROVIDE. LOCAL GOVERNMENTS, THE ABILITY TO MAKE UP PERSON LOST REVENUES. I WOULD ASSUME THAT. PEOPLE ARE GOING TO START
[01:55:05]
COMING BACK TO THESE TYPES OF FACILITIES, HE SAYS. THIS PANDEMIC HAS LASTED LONGER THAN WE THOUGHT IT WAS GOING TO LAST. I COULD SEE THAT THAT TO YOUR NUMBER BEING VERY CONSERVATIVE. UH THE JUST FOR CONTEXT WHEN WE BEGAN, UH, APEX. IT WAS SUPPOSED TO BE THREE YEARS BEFORE IT BECAME COST NEUTRAL. IT WAS COST NEUTRAL WITHIN ABOUT A YEAR AND A HALF AND BEGAN GENERATING FUND BALANCE AT THAT POINT, SO. HOPEFULLY WE SEE THAT THAT RAPID RISE AGAIN BECAUSE THERE WAS GOING TO BE A SUBSIDY EARLY ON IN THE APEX CENTERS OF LIFE COMING FROM CDC DOLLARS, WHICH WERE NOT NECESSARY. AFTER AFTER A YEAR AND A HALF, SO HOPEFULLY WE'LL SEE THAT RECOVERY THAT THERE'S A PLAN FOR A TWO YEAR RECOVERY HERE. AND I THINK THAT IT'S DEFINITELY POSSIBLE. SO, UH, WITH THAT, I'LL MOVE ON TO WATER AND WASTE WATER. UM YOU'VE ALREADY HEARD FROM OUR CONSULTANTS THIS MORNING ABOUT OUR WATER WASTEWATER RATES.WHAT OUR PLAN IS THERE. I WANTED TO TALK A LITTLE BIT ABOUT THE OPERATIONS WON'T WON'T HIT HIM TOO HARD, BUT. WITH THAT WE DO WANT TO CONTINUE OUR WATERLINE REPLACEMENT PROGRAM, UM, FOR INFORMATION. THIS WAS A PROGRAM THAT WE BEGAN ABOUT 55 YEARS AGO TO REPLACE ALL THE COPPER SERVICE LINES THAT WERE WE WERE HAVING QUITE A BIT OF LEAKING IN OUR SYSTEM. WE WILL LOT OF LOT OF WATER LOSS. AND WE TRIED SEVERAL DIFFERENT THINGS WITH WHETHER REPLACING METERS AND WE FOUND THAT WHAT WHAT WE HAD WERE COPPER SERVICE LINES TO DO OUR NEIGHBORHOODS THAT WERE LEAKING. SO WE BEGAN A PROCESS OF CASH FUNDING AT WATERLINE REPLACEMENT TO LOWER OUR WATER LAWSUIT. WE'RE GOING TO CONTINUE CONTINUE THAT WATERLINE REPLACEMENT PROGRAM, BUT WE ARE STARTING TO HEAD TOWARDS THE END OF THAT OF THAT, BUT THERE WILL ALWAYS BE NEEDS FOR WATERLINE REPLACEMENTS, BUT THIS WAS A PROGRAM THAT WE STARTED SEVERAL YEARS AGO. DO ANTICIPATED DEBT SALE AGAIN IN FISCAL YEAR 22 FOR CAPITAL PROJECTS. AND SUPPLEMENTALS. FOR HAVE BEEN REQUESTED ABOUT WATER. OUR STREET CUT REPAIR CREW TRUCK FOR THE LIFT STATION. YEAH. IN A RETROFIT CAMERA, AND I ALSO KNOW THAT ON THE UTILITY BUILDING SIDE NOT LISTED HERE, THERE WILL THERE'S AN ANALYST BEING REQUESTED. SO THERE ARE SEVERAL UM BUT. THAT I'M NOT EXACTLY THAT WE DO HAVE PERSONNEL AND UTILITY BUILDING. I'M CURIOUS WHEN I FIRST GOT ON COUNCIL. THAT WATER, REPLACING THOSE, UM, LINES WERE KIND OF A PRIORITY BECAUSE I THINK IT WAS LIKE FOUR BILLION GALLONS THAT WE WERE LOSING JUST KIND OF CRAZY NUMBERS. AND WHAT IS THAT NUMBER? NOW? WHAT ARE WE LOSING? WELL, WE WERE LOSING IT. IT WAS 25 WAS MORE THAN 24% I THINK IT WAS 26 OR 7% 1 YEAR, UH, HAD BEEN LOST THROUGH OUR SYSTEM. THOSE NUMBERS ARE NOW BACK DOWN IN THE ACCEPTABLE RANGE, WHICH. LET'S GO. STOP IT! WHAT ONLY 20% 12% HOUSE. WE'VE WE'VE OVER CUT THAT IN HALF.
AND SEW. THE WATERLINE. REPLACEMENT PROGRAM HAS WORKED AND WE HIT THE HOT SPOTS FIRST.
AND CLEARLY START BRINGING IT DOWN QUICK, BUT, UH, I THINK THAT WE HAVE ABOUT ONE MORE YEAR OF THE COPPER LINES. REPLACEMENTS, UH, DOUBLE CHECK, BUT THEN THEY JUST MOVED TO NORMAL MAINTENANCE. AT THAT POINT IS 12% KIND OF STANDARD. THAT IS A FAIRLY STANDARD SOUNDS A LOT LIKE A LOT AND IT DOES SOUND LIKE QUITE A BIT BUT, UH, BENCHMARK IS TYPICALLY AROUND. I THINK B TO 10% AND THEN THAT'S A GOOD WATER SYSTEM. BELIEVE IT OR NOT. A W W EIGHT. AMERICAN WATER WORKS ASSOCIATION GENERALLY SETS WITH THAT ACCEPTABLE TARGET WATER LOSSES, SO WE'RE DEFINITELY GETTING TOWARD THAT NUMBER. SO I GOT SOME WORK TO DO, THOUGH, BECAUSE I THINK THAT A LOT OF YOU KNOW. IT'S KIND OF ALL INCLUSIVE BECAUSE WHEN THEY THEY COME AT THE END OF MY STREET, I DON'T KNOW HOW OFTEN THEY DO, AND THEY. THEY OPEN UP THE LINES BECAUSE I GOT TO CLEAR THOSE. I MEAN, THAT'S PART OF THE LOSS AS WELL. I MEAN, SO, SO IT'S NOT JUST FLUSHING LINES. THAT'S UNBILLED WATER, RIGHT? IT'S UNBILLED WATER, SO IT'S YES. SO IT'S. SO THERE'S SO IT'S NOT JUST WASTED JUST LOT WATER RUN AGAIN.
THERE'S CERTAIN PROBABLY ANOTHER FOUR OR 5% IS BECAUSE WE DO CERTAIN THINGS THAT ABSOLUTELY, UH, WE JUST GOT TO ACCOUNT FOR THAT. SO MHM. WITH THAT WE TALKED QUITE A BIT
[02:00:05]
ABOUT WATER AND WASTE WATER RATES EARLIER THIS MORNING, UM NORTH TEXAS MUNICIPAL WATER DISH WILL BE INCREASING OUR WASTE WATER RATES ABOUT 11% THIS YEAR. LET'S DO AS HE MENTIONED CAPITAL IMPROVEMENTS DISTRICT WIDE THEY HAVE A VERY ROBUST CAPITAL IMPROVEMENT PLAN. THERE WILL BE NO INCREASE ON THE WATER AS CITY OF MCKINNEY PROPOSES TO NOT INCREASE OUR WATER AND WASTEWATER INTO A 6% INCREASE ON THE WASTEWATER SIDE. THIS ALLOWS US TO CONTINUE TO BE SELF SUFFICIENT AND FUND ALL OF OUR CAPITAL NEEDS. AND I GOT A QUICK QUESTION ON THE WASTE ONE OF THE CAPITAL EXPENDITURE FOR THE NORTH TEXAN IS WATER DISTRICT. HOW MUCH OF THAT IS IN MCKINNEY? ARE WE PAYING FOR? YOU'RE PAYING FOR, UH, A LOT OF JUST GROWTH DISTRICT WIDE, BUT THERE THERE I WOULD HAVE TO CHECK AND FIND OUT EXACTLY HOW MUCH OF THEIR CAPITAL PROGRAM IS DIRECTLY. I'D LIKE TO KNOW HOW MUCH. THEY'RE PUTTING IN OUR, YOU KNOW, OUR INFRASTRUCTURE WERE COMING THROUGH OUR CITY. I'LL BE HAPPY TO GET THAT NORTH TEXAS COUNTRIES REPORT WILL MAKE SURE THAT WE GET BACK TO YOU, OKAY? THANK YOU. WITH THAT. I'LL MOVE ON TO JUST TOUCH ON SOME OF OUR OTHER MAJOR FUNDS. STARTING WITH SOLID WASTE. ARE SOLID WASTE RATES DID INCREASE DOLLARS 60 FOR RESIDENTIAL CUSTOMERS AND 10% THIS YEAR. THIS WAS THE FIRST RATE INCREASE TO OUR CUSTOMERS SINCE FISCAL YEAR 2000 AND SIX WE ARE CURRENTLY GOING UNDER A STRATEGIC REVIEW OF OUR SOLID WASTE AND RECYCLING STRATEGY TO PREPARE US FOR OUR NEXT CONTRACT. IN A FEW YEARS. AND WITHIN THAT FUND, WE DO HAVE ONE SUPPLEMENTAL FOR A CUSTOMER SERVICE REP RESENTING. SURFACE WATER DRAINAGE. NO MAJOR CHANGES HERE. NO CHANGES TO THE FEE SCHEDULE THAT WAS LAST UPDATED IN 2000 AND 15. YEAH. SUPPLEMENTALS INCLUDE, UH UH, QUITE A BIT OF EQUIPMENT. SKID STEER MINI EXCAVATOR AND A TRUCK AND TRAILER. THIS IS FOR A CREW THAT HAVING TO SHARE EQUIPMENT WITH ANOTHER CREW. SO WILL MAKE US UH MORE EFFICIENT, SO TO SPEAK, SO. THESE COME OUT OF LIKE I SAID OLIVER SERVICE FIRE DREAMS. THIS IS OUR EQUIPMENT FACILITIES REPLACEMENT PLFUND. UM THIS WE BEGAN THIS IN 2014 TO ADDRESS OUR FLEET REPLACEMENTS IN OUR FACILITIES. UM. THIS WAS AN ATTEMPT TO FUND DEPRECIATION AND ALL OF OUR FUNDS AND TO LESSEN OUR DEPENDENCE ON DEBT. WE HAVE BEEN ABLE TO DO QUITE A BIT OF BUILDING MAINTENANCE. I KNOW A LOT OF YEARS. I'LL SHOW PICTURES. I LEFT THOSE OUT THIS YEAR, BUT WE DO EVERYTHING FROM H B. A. C. ROOFS. UM AND WE PAY FOR QUITE A BIT OF ARE KEEPING OUR BUILDING MAINTENANCE UP WITHOUT HAVING THE DEBT FUNDED THROUGH OUR EQUIPMENT FACILITIES REPLACEMENT FUND.SOMETHING THAT WE'RE PRETTY PROUD OF. THESE ARE THE DEPARTMENTS. WE SPENT ALMOST $7 MILLION IN FISCAL YOU'RE 21. AND THESE ARE THE DEPARTMENTS THAT THAT'S ALL THAT QUITE A BIT OF THAT WAS FAR BUT THIS DOES. IT ALSO INCLUDE EQUIPMENT, AND WE DID PURCHASE SOME FIRE TRUCKS IN FISCAL YEAR 21. MOVING ON TO THE TO THE AIRPORT. UM WE HAVE A BALANCED BUDGET PRESENTED FOR FISCAL YEAR. 22 WHICH INCLUDES THE REINVESTMENT IN THE AIRPORT DESTRUCTION FUND. AND WE DID END OUR ANNUAL GENERAL FUND CONTRIBUTION IN 20. THAT WAS A BIG STEP FOR THE AIRPORT. IT REQUIRED A SUBSIDY. FOR HOWEVER MANY YEARS BEFORE TO BE OPERATIONALLY SOLVE IT. AND THEN IN FISCAL YEAR 20 THAT THAT CONTRIBUTION WAS NO LONGER NEEDED AND THE AIRPORT FUND NOT ONLY IS ABLE TO REINVEST IN ITS, UH, OWN CONSTRUCTION FUND IT DOES. IT IS OPERATIONALLY. STAND ALONE. IS ASKING FOR A COUPLE SUPPLEMENTALS IN THEIR BALANCED BUDGET FOR AIRPORT MARKETING PLAN AND THEN A FULL TIME CUSTODIAN. THEY HAD BEEN DOING SOME OF THAT. WORK. WITH, UH. CAN CONTRACTORS SO THIS WOULD BE BRINGING IN A CUSTODIAN FULL TIME OUT OF THE AIRPORT FOR THE NEW FBO BUILDING? WE ALWAYS LIKE TO BRING UP THE COMPONENT UNITS, UM. TALK ABOUT THEM A LITTLE BIT. DO YOU WANT TO TALK ABOUT THE HOTEL MOTEL FUN BECAUSE WE TALK ABOUT? WE'LL TALK ABOUT THE. THE CBB THAT IS FUNDED FROM HOTEL MOTEL TAX FUNDS. THE COUNCIL, UH CITY COLLECTS IN THE COUNCIL CAN THEN EXPAND
[02:05:04]
HOTEL MOTEL TAX FUNDS UNDER TWO CRITERIA. UM TO PROMOTE TOURISM AND IN THE CONVENTION HOTEL INDUSTRY, AND THEN EACH ONE OF THOSE HAS TO BE OUT OF NON STATUTORY PROVIDED CATEGORIES.SO NOT ONLY DO YOU HAVE TO, UH. TO SPEND HOTEL MOTEL TAX MONEY. IT HAS TO PROMOTE TOURISM, AND THAT HAS TO BE ONE OF NON DIFFERENT CATEGORIES. IN FISCAL YEAR 22. WE ARE ANTICIPATING COLLECTING $1.6 MILLION IN HOTEL MOTEL TAX, HOPING THAT NUMBER GOES UP A LITTLE BIT.
WE'VE BEEN FAIRLY STEADY BEFORE THE PANDEMIC THE THREE YEARS PRIOR, BRINGING ABOUT $1.7 MILLION. HOTEL MOTEL REVENUE IT DIPPED DOWN DURING. LAST FISCAL YEAR TO ABOUT 1.3 OR FOUR AND WE'RE BACK ON ABOUT 1.6 NUMBER FOR THIS YEAR, SO WE'RE STARTING TO RECOVER IN THE, UH IN THE HOTEL MOTEL TAX FUNDS. AS I MENTIONED ONE OF THE, UH NON STATUTORY AWAY. YEAH.
CATEGORIES THAT COULD GIVE. WE CAN SPEND HOTEL THAT THE COUNCIL CAN SPEND HOTEL MOTEL TAX MONEY ON IS A CONVENTION OF VISITORS BUREAU. SO, UH, WITH THIS BUDGET. YOU APPROVE THE VISIT MCKINNEY BUDGET EACH YEAR, UM. WE KEEP THEIR THEIR FUND BALANCE AT A LEVEL NUMBER.
UM THEIR OPERATING COSTS OVER FISCAL YEAR 21 ARE UP ABOUT $23,000 THAT DUE TO A COUPLE OF SUPPLEMENTALS THAT THEY HAVE AND THEN JUST OTHER OPERATING COSTS. THIS IS A SNAPSHOT OF THEIR, UM OF THEIR BUDGET AND THEIR STAFFING LEVELS OVER THE LAST YEAR, YOU CAN SEE THEIR STAFFING LEVEL REMAINS UNCHANGED. WITH THEIR OVERALL BUDGET GOING FROM $920,000 ORIGINAL TO 943 IN FISCAL YEAR, 22. MOVING ON TO THE EC, WHICH, AS I HAVE SAID, FOR A SALES TAX MENTIONED EARLIER THAT WHEN I SHOWED THE, UH, CITY SALES TAX COLLECTION, IT WAS ONLY HALF 1/4 OF SALES TAX COLLECTIONS GO. TO THE E. V. C FOR WHAT THEY CALL FOR A FUNDS CAN BE USED FOR LAND BUILDING FACILITIES, IMPROVEMENTS AND EXPENDITURES RELATING TO ALL OF THOSE CATEGORIES THAT YOU SEE THERE. ESTIMATED COLLECTIONS ONCE AGAIN WITH THE 11 HALF OF WHAT WE HAVE IN THE CITY GENERAL FUND AT $17.7 MILLION. HERE IS A SNAPSHOT OF THEIR FUNDING. UH OVER THE PAST FEW YEARS, YOU CAN SEE HELD THEIR SALES TAXES GROWN SIGNIFICANTLY, UH, MIRRORING THE CITIES FROM 14 MILLION. IN FISCAL YEAR 19 TO 17.7 MILLION IN FISCAL YEAR 22.
SO WE'RE LOOKING AT THE BEGINNING FUND BALANCE. SO STARTING THIS FISCAL YEAR WILL HAVE 2.8 MILLION. WELL, SO WE HAVE TO ACCOUNT FOR EVERY PROJECT THAT THEY HAVE ON THE BOOKS IF THEY PAID THEM OUT. IMMEDIATELY, WHICH. IS PROBABLY NOT GOING TO BE THE CASE THAT WE HAVE TO COUNT AS IF THOSE WERE DUE IMMEDIATELY. SO THAT'S WHAT YOU SEE IN THEIR SERVICES AND THEIR CAPITAL LINE ITEMS. UM, WHAT YOU'LL SEE. PROBABLY IS THAT THEIR FUND BALANCE WILL BE MORE THAN CLEARLY MORE THAN THE 2.8 MILLION, BUT WE DO HAVE TO WILL ADJUST IT. AT THE FISCAL YEAR END. BUT WHAT YOU SEE, THERE IS IF EVERY BILL CAN DO THEY WOULD KNOW THE TWO THERE WOULD BE A $2.8 MILLION DOES THAT INCLUDE WITH THEIR WITH THE COLLECTIONS OR 17? YES AND THAT'S SAYING THEY DO. THEY FELT THEY HAVE A BALANCED BUDGET FOR NEXT YEAR. AND THEN THEY HAVE ALL OF THEIR POTENTIAL EXPENSES IN THE FISCAL YEAR 21 BUDGET WHICH WE KNOW. THEY WILL NOT PAY ALL OF THOSE INCENTIVES AND THINGS IN THE FISCAL YEAR 21 WHICH WOULD ENROLL THEIR FUND BALANCE IN THE FISCAL YEAR, 22, YOU'LL SEE THE SAME THING FOR THE CBC.
WHAT THEY'RE ENDING FUND BALANCE WILL ACTUALLY BE MUCH HIGHER THAN 2.8 THAT IS LISTED.
WHAT'S THE WHAT'S THE BONDING CAPACITY? IS THAT THEN TAKE THAT INTO ACCOUNT SO I CAN I CAN DO A QUICK NUMBER FOR YOU. I THINK I'VE DONE IT IN THE PAST, IF YOU IF YOU LOOK AT WHERE THEY ARE CURRENTLY IN YOU. ELIMINATE ALL OF THEIR OPERATING EXPENSES AND ONLY LOOK AT WHAT THEY COULD GET. I THINK THEY'RE BONDING PASS, IT WOULD BE SOMEWHERE. THIS IS REALLY ROUGH. OKAY, THAT'S OKAY. $100 MILLION. 500,000,100 190, OKAY? IT WOULD BE A LOT.
SO, UH, BUT WHICH THAT WOULD BE ELIMINATING EVERY. EVERY INCENTIVE AND EVERYTHING ELSE AND JUST MAKING IT A DEBT SERVICE FUND. SO WHAT? WHAT? WHAT WHAT THEIR CAPACITY IS AND WHAT SUSTAINABLE OR TWO DIFFERENT THINGS RIGHT? I WASN'T SUGGESTING WE USED I'M JUST I WAS JUST BACK OF THE ENVELOPE TRYING TO THE NUMBERS. OKAY. THANK YOU. AND THIS IS
[02:10:08]
THE CURRENT STAFFING LEVEL OF THE EEC. NO CHANGES FOR FISCAL YEAR 22 ARE BEING PROPOSED. CBC IS A FOUR B SALES TAX, SAME ESTIMATED COLLECTION, WHICH IS ABOUT ONE HALF OF THE CITY'S ONE QUARTER OF THE TOTAL. FOUR B OR C. C C CAN DO EVERYTHING THAT THE FDC DOES. PLUS THESE ADDITIONAL CATEGORIES, WHICH QUALITY OF LIFE PROJECTS? UH AND THEN YOU SEE ALL OF US.THOSE OTHER WON'T READ ALL OF THEM. HERE'S A SNAPSHOT OF THEIRS ONCE AGAIN. THIS INCLUDES ALL OF THEIR PROJECTS THAT ARE POSSIBLY ON THE BOOKS. UH AND THEIR FUND BALANCE WILL LOOK DIFFERENT AT END OF YEAR. UM. THEN IT DOES. UH, TO SHOW FOR THEIR PROPOSED BUDGET. ALSO DOES HAVE THEIR STAFFING LEVELS. NO STAFFING LEVEL CHANGES. UH FOR FISCAL YEAR 22.
BUT THAT THIS IS MY LAST SLIDE. HAVE OFFICIALLY YOU CAN SEE WHAT WE HAVE GOING FORWARD.
WHAT WAS BEHIND US? WE HAD THE TAX RATE RECORD VOTE WHERE WE SET OUR TAX RATE CEILING. ON AUGUST THE THIRD, UM THAT TAX RATE CEILING WAS MORE THAN THE PROPOSED BUDGET THAT YOU SAW TODAY TAX RATE IS 40 ABOUT 400.497. ON TUESDAY NIGHT, WE WILL HAVE A BUDGET CITIZEN INPUT HEARING. UM. WE'LL HAVE AN OFFICIAL PUBLIC HEARING ON THE BUDGET ON ON SEPTEMBER THE SEVENTH. WE ALSO HAVE THE TAX RATE PUBLIC HEARING THAT WAS CALLED ON AUGUST THE THIRD AND THEN WE WILL DO THE RATIFICATION AND THE ADOPTION OF THE BUDGET. SEPTEMBER, THE SEVENTH. WITH THAT I'LL BE HAPPY TO TAKE ANY QUESTIONS THAT YOU ALL MIGHT HAVE. WELL, I GUESS I'LL PUT IT IN THE FORM OF QUESTION. UM, AND IT'S REALLY JUST FOR EDUCATIONAL PURPOSES, YOU KNOW, UH, ABOUT A PUBLIC. INQUIRES I GET OR OR EMAILS I GET. AND I HAVE TO HAVE THIS CONVERSATION. AND MAYBE HAVING IT PUBLICLY MIGHT ALLEVIATE SOME OF MY NEED TO RESPOND TO FUTURE EMAILS. UM SOME. SOME OF THE PUSHBACK THAT, UH, WE GET WHEN WE TALKED ABOUT EFFECTIVE TAX RATE, WHETHER WE WERE AT EFFECTIVE LAST YEAR 2% OVER THIS YEAR. BEING, OF COURSE THAT SIGNIFICANTLY UNDER, UM INFLATION, ESPECIALLY WHEN YOU. INFLATION WHICH REALLY RELEVANT TO THE CITY. THERE THIS MISCONCEPTION THAT. THAT SHOULD ALL BE OFFSET BY THE NEW TAX REVENUE. AND SO A COUPLE THINGS I WANT TO ASK YOU RHETORICALLY FOR MYSELF, BUT UM.
TRAILS PROBABLY SOMEWHERE BETWEEN A YEAR AND 18 MONTHS. UM WHAT. THE HAVE WARMED VALUE THAT WE SEE, UH IN A BUDGET YEAR IS TRAILING WHAT IS ACTUALLY THERE AND WHEN I SAY IT WAS ACTUALLY THERE, I'M TALKING ABOUT. IF HAVE LAUREN VALUE IS TRAILING 18 MONTHS ON RESIDENTIAL HOMES, THOSE RESIDENTS ARE ACTUALLY IN THOSE HOMES PRIOR TO SEE THE COMPLETE YOUR FULL VALUE. SO THE NEED TO PROVIDE SERVICES ARE THERE WELL IN ADVANCE, AND WHEN WE SEE THAT ACTUAL VALUE WOULD THAT BE A CORRECT STATEMENT? THAT IS CORRECT AND YOU AND YOU WILL SEE THE CONVERSE OF THAT DURING, UH RECESSION, SO TO SPEAK. UH, VALUES GENERALLY, LIKE YOU SAID THEY LAG. SO IF WE'RE HAVING A RECESSION AND VALUES ACTUALLY GO DOWN, IT TAKES GENERALLY A FISCAL YEAR OR MORE TO CATCH BACK UP. SO THERE'S. IT VALUES DO LACK, THEN THE EXPENSE THAT WE ENCOURAGE THE CITY. WE DON'T WAIT. FOR EXAMPLE, IF WE HAVE 1000 NEW HOMES THAT ARE BUILT, WE DON'T WAIT TO THOSE HOMES ARE BUILT BEFORE WE PROVIDE INFRASTRUCTURE. AND OUR PORTION OF ROADS AND FIREMEN AND POLICE. WE ACTUALLY DO THAT ON THE FRONT SIDE AND PREPARATION. FOR THAT GROWTH IS THAT ACCURATE? YES. YES, SIR. AND WHEN WE OPEN POWER STATION, FOR INSTANCE, WE HAVE TO BEGIN THAT HIRING PROCESS SEVERAL YEAR, YEAR OR YEAR AND HAPPENING. WE HAVE ALL THAT TRAINING AND AGAIN. THAT'S THAT'S. TO BE PREPARED AND READY FOR THE GROWTH. NOT NOT AFTER THE GROWTH. WE DON'T WE DON'T HAVE THAT GROWTH AND THEN.
PRAY THAT WE DON'T HAVE AN ISSUE FOR A YEAR WHILE WE GET UP TO SPEED. WE DO TRY TO MAKE SURE THAT WE HAVE. SO I GUESS WHAT I'M SAYING VERY. DEFINITELY, HOPEFULLY IS THAT WE HAVE ALL THAT EXPENSE. AS A CITY. ACTUALLY AHEAD OF THE GROWTH. AHEAD OF THAT. WHAT WOULD THAT GROWTH BEING? UH YOU KNOW, TAX REVENUE PROPERTY TAX REVENUE. SO IT'S NOT. SOME PEOPLE HAVE REFERRED TO IT AS FREE MONEY. SOMETHING THAT WE HAVE. IT'S THAT'S THAT'S MONEY
[02:15:01]
ABOVE AND BEYOND WHAT WE HAVE. BUDGET EXPENSE FOR IT'S ACTUALLY LAGGING NUMBER ONE IN INCOME, AND IT'S FROM AN EXPENSIVE BY EXPENSE SIDE. IT'S IN MANY WAYS FRONT LOADED FOR THE CITY. THAT WOULD BE. WHEN A NEW SUBDIVISION OF 1000 HOMES, FOR EXAMPLE, IS BUILT. WE DON'T WAIT FOR THE FOUR ASSESSED VALUE. WE DON'T WAIT IN FACT, OFTENTIMES BUILD THE ROADS AFTER THE FACT TO MAKE THEM USE HORSE AND BUGGY UNTIL WE DON'T WAIT FOR THE PEOPLE SOMETIMES TO EVEN COME BECAUSE SOME OF THE SERVICES WERE PROVIDED, EVEN FOR THE FOLKS ACTUALLY MOVE IN. WE CERTAINLY DON'T WAIT TO PROVIDE SERVICES UNTIL WE'RE GETTING THE FULL COLLECTION OF THE ASSESSED VALUES ON THOSE HOMES. WE HAVE TO GET STARTED RIGHT AWAY. WE GOT TO STAFF UP WHEN POLICE FIRE AND ALL THE OTHER THINGS I THINK IS WHAT YOU'RE SAYING.PEOPLE CAN'T WAIT, AND THAT'S MY POINT. SO WHEN PEOPLE SEE THAT HE HAD THREE POINTS.
WHATEVER MILLION DOLLARS IN IN NEW ADD NEW TAX REVENUE, THEREFORE, THAT SHOULD COMPENSATE. FOR INFLATION. WELL WE HAVE THAT EXPENSE AND THE INFLATION OF THAT EXPENSE AS WELL IN PREPARATION THAT HAS ALREADY BEEN EVERY YEAR AHEAD OF THAT GROWTH. AGAIN AND.
WANTING JUST HOPEFULLY HELP PEOPLE UNDERSTAND. THE THING I WOULD SAY ABOUT THE INFLATION.
SOMEBODY COULD SAY WELL, WE SHOULD WE SHOULD DO EFFECTIVE PLUS A HIGHER PERCENTAGE BECAUSE INFLATION IS HIGH, AND WE'RE HAVING TO ABSORB IT. WE ARE ABLE TO SPREAD IT OUT OVER WITH THE ECONOMIES OF SCALE. WE ARE ABLE TO TAKE SOME OF THAT INFLATION AND SPREAD IT OUT OVER A LARGER TAX BASE. SO THAT DOES ALLOW US TO BE ABLE TO MITIGATE THE IMPACT, OR I SHOULD SAY THE INCREASE IN OUR EFFECTIVE RATE TO JUST PLUS 2. VERSUS WHAT THE ACTUAL RATE OF INFLATION IS, BUT WE CAN'T BE MINDFUL OF THE WAY WE CAREFUL THAT WE DON'T OVEREXTEND OURSELVES OR WE DON'T CUT OURSELVES SHORT. AS WE CONTINUE TO GROW OUR COMMERCIAL TAX BASE IN RETAIL AND SALES TAX REVENUES INCREASE. THAT'S ONE OF THE WAYS THAT WE ARE OFFSETTING THIS FRONT LIVING EXPENSE IN THE PROPERTY TAX ARE HAVING BEING ABLE TAKE COLLECTIONS LESS THAN. INFLATION ON THE EXPENDITURE SIDE. ANYONE ELSE QUESTIONS OR COMMENTS? I GOT A COUPLE QUESTIONS. UM. WHAT IS THE MAIN STREET AND COMMUNITY EVENTS BUDGET? IN THE GENERAL FUND. STORY BEHIND THE CHANGES. I DON'T KNOW THAT IT IS ON THE SLIDE. THAT WAS THE QUESTION, JUSTIN. I MISSED IT. THE MAIN STREET AND COMMUNITY EVENTS BUDGET LINE ITEM IN THE GENERAL GOVERNMENT. ARE YOU ASKING? WHY THAT DECREASED? YEAH. THAT IS AN INTERNAL CHANGE. THE, UM. WE HAD BUDGETED ALL OF OUR SPECIAL EVENTS OVER TIME IN THE ENTIRE CITY. IN THAT BUDGET. UM AND IT WAS NOT WORKING. SO WHAT WE DID WAS WE PULLED THAT OUT AND REDISTRIBUTED BACK OUT THE OVERTIME BUDGET BACK TO EACH OF THE INDIVIDUAL DEPARTMENTS. FOR INSTANCE, YOU KNOW, WE HAD. WE WERE CHARGING PUBLIC WORKS, UM, OVERTIME OR FIRE OVER TIME INTO THAT OUR SPECIAL EVENTS. WE WERE FINDING THAT INTERNALLY. THOSE COLLECTION CODES IT WASN'T WORKING, AND IT WAS BETTER FOR US TO REDISTRIBUTE THAT OUT BACK TO OUR DEPARTMENTS. SO IT'S NOT AN OVERALL REDUCTION TO ANY OF THEIR OPERATING BUDGET. IT'S AN INTERNAL, UH IT'S AN INTERNAL FUNCTION. BUT YES, YES, SIR. AND. UH ON THE RP FUNDS. SAID THAT T HOSE. THAT EACH TIME YOU IDENTIFY ONE TO USE THEM, YOU'LL BRING IT BACK AS A, UH, CHANGE TO US. SO THE UH, 2023 MILLION TOTAL, WHICH HALF WILL RECEIVE IN THIS BUDGET YEAR. YES SIR. THAT 11.5 OR WHATEVER ISN'T IN THE BUDGET. IT IS NOT.
WE ARE NOT APPROPRIATING THOSE DOLLARS. I WILL IF. IF IT IS THE WILL. THE COUNCIL WILL APPROPRIATE THE FISCAL YEAR $21 FOR APEX AND THAT, BUT WHAT WE WILL DO IS THEN HOLD THOSE DOLLARS. AND AS WE USE THEM, WE WILL BRING THEM TO YOU. AND SAY, WE'LL SHOW YOU THE 23 TOTAL.
WHAT? WE'VE SPENT IT ON TODAY AND HERE'S THE PROJECT AND WHAT IT WILL DO TO THAT TUNNEL AS WE GO FORWARD IS WE WILL DO A BUDGET AMENDMENT FOR EACH TIME WE USE THOSE ARMS AND FUNDS.
HOW DOES THAT REVENUE. GET RECOGNIZED AND PUT. IT'S ALREADY THE 1ST 11 MILLION HAS ALREADY BEEN RECOGNIZE. WE'VE HONEST AND WE ARE SETTING IT ASIDE, SO TO SPEAK IT WELL, IT GOES INTO ITS OWN FUND BALANCE. AND THEN EACH TIME WE USE WE DO ONE OF THESE PROJECTS WE WILL HAVE YOU DRAW DOWN FROM THAT IT WILL BE IN ITS OWN PLACE, AND I WILL. SO WHEN YOU'RE LOOKING AT THE SIP PRIORITIES THAT ARE, UH, HAD THE PAGE NUMBER. BUT, UH, 100 SOME ODD MILLION THAT WE'RE SPENDING AND SIP DOLLARS. THE. ADDITIONAL FUNDS THAT WERE SAYING WE'RE PRIORITIZING AREN'T NECESSARILY IN THERE SOME OF THE OPERATIONAL DOLLARS AREN'T IN THE GENERAL FUND COMMENTARY YET. CORRECT JUST JUST FOR INSTANCE, LIKE I WAS MENTIONING WITH THE CITY HALL.
[02:20:08]
UH THAT IS NOT ACTUALLY IN THE SIP. UH WE HAVE A PLACEHOLDER FOR SOME OF THOSE DOLLARS. BUT WE KNEW THAT THE CITY HALL IS GOING TO COST MORE THAN WHAT WE HAVE TO SET ASIDE. SO WHEN WE ARE READY WHEN WE HAVE THE AMOUNT OF CITY HALL IS, WE WILL BRING TO YOU. AMENDMENT FROM FROM OUR DIFFERENT PLACES TO ACTUALLY FUND THAT SO THOSE DOLLARS WOULD NOT BE ADOPTED AND APPROPRIATED. UH, AT THIS TIME. THEY WILL BE APPROPRIATE WHEN WE BRING IT BACK TO YOU.UM. ALL. I THINK YOU MENTIONED AT THE VERY BEGINNING SOMETHING ABOUT THE STREET PRESENTATION AND UM. LOOKING AT THE REQUEST PAGES. THE MM HMM. STREETS, HAS A LARGE, JUST KIND OF. HAD HAD A NUMBER, BUT THEN WE'VE IDENTIFIED NEW CONCRETE TRUCK AND NEW CREW TEAM AND STUFF LIKE THAT. I'D LIKE TO DO THOSE COSTS GO INTO. YOU KNOW THAT THE IDEA THAT OUR MAINTENANCE DOLLARS HAVEN'T MOVED FOR FIVE YEARS OR, LIKE TWO COMPONENTS TO IT. THERE'S THE ACTUAL OPERATING COSTS, WHICH WOULD INCLUDE STAFF AND EQUIPMENT. AND THEN THERE'S THE $2.5 MILLION. BUT THAT'S REALLY MATERIALS. THAT'S REALLY EITHER IF WE HAVE A CONTRACT WITH A PAYMENT CONTRACTOR OR DO IT OURSELVES. THAT'S FOR THE ACTUAL PAVING ITSELF OR OR ROAD ROAD MAINTENANCE. UH, YOU WANT TO ADD ANYTHING TO THAT? IT'S SO. LIKE PAUL SAID. THE 2.5 MILLION IS A WHOLE DIFFERENT PROGRAM. THIS WOULD THE CONCRETE CREW IN THE. THE POTHOLE. PATRICK WOULD BE PART OF THAT. 10 MILLION THE NUMBER THAT YOU SAW, SO THERE ARE LARGER NEEDS THERE. LIKE LIKE I SAID, WE'RE GOING TO HAVE TO ADDRESS AS WE MOVE INTO THE FUTURE. WITH POSSIBLE DEDICATED REVENUE SOURCES, WHETHER IT BE SEE IP OR SOMEWHERE ELSE TO DO STREET RECONSTRUCTIONS. THIS IS. SMALL PART OF PAINTING THAT OFF. AND I THINK THE. UH HUH.
WHAT YOU HAD QUANTIFIED UP THERE IS ABOUT $800,000 IN EQUIPMENT AND OPERATING COSTS THAT GO INTO THAT NEW CREW. THAT'S WHAT'S ON THE SUPPLEMENTAL REQUEST PAGE. YES, SIR. SO. THEORETICALLY THAT ENABLES US TO. DO MORE MAINTENANCE ON AN ONGOING BASIS, BUT IT IS STILL NOT ANYWHERE IN LINE WITH THE SUFFICIENCY NEEDED TO MEET THE NEEDS. AND THEN I GUESS WHEN I WHEN I WAS LOOKING AT THE SUPPLEMENTAL REQUEST LINE ITEM, IT HAS A $10 MILLION FOR STREET MAINTENANCE IN THERE. LIKE IT. IS THAT. JUST A REMINDER TO US THAT WE'RE NOT DOING IT WAS LIKE. YES. BASICALLY THIS IS WHAT WE THINK IS GOING TO BE NEEDED TO BE ABLE TO MEET OUR STREET MAINTENANCE REQUIREMENTS. AND. OUR POINT IS IN THE BUDGET PROPOSAL. WE'RE PUTTING AS MUCH AS WE CAN PUT IN THERE WITHIN THE GIVEN TAX RATE THAT WERE PRESENTED TO YOU AND ALL THE OTHER NEEDS, WE HAVE, BUT THAT IS A TARGET. THAT'S A BOGEY THAT WE OUGHT TO BE WORKING TOWARD. WE THINK THAT WE'RE GOING TO NEED TO SPEND. UPWARD OF $10 MILLION A YEAR OR MORE TO BE ABLE TO MAINTAIN OUR PAVEMENT CONDITION INDEX AT A AT A LEVEL THAT THE CITY COUNCIL FEELS EXCEPT THAT'S ANOTHER KEY POINT WHICH WE HAVEN'T DECIDED YET. WE HOPE TO GET THAT DIRECTION FROM THE COUNCIL IS WHAT DO YOU WHAT IS YOUR TARGET PAVEMENT CONDITION INDEX THAT'S ACCEPTABLE FROM A LEVEL OF SERVICE TO THE COMMUNITY. AND THEN WE BACK INTO THAT WOULD HERE'S HOW MUCH MONEY WE NEED TO GET THERE. BUT WE THINK $10 MILLION REQUEST WAS 10 MILLION. NOT GOING TO GET THERE THIS YEAR, BUT WE ARE MAKING A PRETTY. SIZABLE INVESTMENT WHEN YOU FACTOR IN THE EQUIPMENT, THE CRUDE WHO CAN DO A LOT OF THAT STUFF THEMSELVES, IN ADDITION TO US CONTRACTING OUT ADDITIONAL PAVEMENT MAINTENANCE PREPARED. FROM THE STANDPOINT OF THAT REPORT. I THINK I ASKED THIS LAST TIME. THERE'S SEVERAL. UM ROADS IN THAT REPORT THAT ARE WELL BELOW MAINTENANCE. I DON'T NEED TO BE RECONSTRUCTED. THAT'S NOT IN THAT. $10 MILLION IS, UM SOME OF IT IS, BUT SOME OF IT IS ALSO THERE WOULD BE IN YOUR CAPITAL IMPROVEMENT, RIGHT? YEAH THE MONEY THAT WE WOULD ACTUALLY BOND OUT BECAUSE YOU WOULD GO OUT AND YOU WOULD REBUILD THE STREET RECONSTRUCT THE STREET, WHICH WOULD LAST FOR 30 40 YEARS. IN WHICH CASE THAT'S AN ACCEPTABLE CAPITAL IMPROVEMENT INVESTMENT. YOU CAN JUSTIFY ISSUING DEBT FOR STREETS LIKE THAT. SO WE TRY TO PUSH THOSE IN A DIFFERENT BUCKET. INSOFAR AS THAT PARTICULAR STREET IS OF THAT CATEGORY. IN THE TIMING OF PUSHING THOSE TO A DIFFERENT BUCKET WE'RE TALKING ABOUT. YOU KNOW, THOSE THOSE ARE THEN UNDER PRIORITIZED UNDER EVERY OTHER PROJECT WE ALREADY HAVE
[02:25:02]
IN OUR C. I P INTO THEM. THEY THEN HAVE TO GO INTO, YOU KNOW, GETTING. APPROVAL FOR THE FINANCING OF THEM IF WE DO BOND THEM, I ASSUME AND SO YOU'RE TALKING ABOUT. WE GOT A REPORT THAT SHOWS A NUMBER OF FAILED AND. UNACCEPTABLE ROADS AND IT'S GOING TO TAKE US, YOU KNOW, MINIMUM 2 TO 3 YEARS TO GET TO WHERE WE HAVE DOLLARS TO DEAL WITH THAT IS THAT THAT'S A FAIR STATEMENT. BUT. I WILL SAY THAT WE ARE WE AND CURRENTLY IN RCMP. WE DO ADDRESS. UM UH, FAILING STREETS. UM THERE ARE DOLLARS PUT ASIDE EACH YEAR THAT ARE PART OF THOSE BONDS THAT. ON SALE THAT WE DO EACH YEAR THAT ENGINEERING PUTS FORWARD. THE $2.5 MILLION THAT WE KEEP MENTIONING THAT WE ARE SENDING DIRECTLY FROM THE GENERAL FUND TO THE CRP, UH, DO ADDRESS SOME OF THESE FAILING STREETS SO. AS WE PRIORITIZE EACH ONE OF THOSE STREETS. UM THERE IS FUNDING AVAILABLE AT SOME LEVEL. UH FOR THESE STREETS, RECONSTRUCTION. WE JUST FEEL LIKE POSSIBLY REITERATE POLICY HERE. THAT AS WE DO THIS, THIS CONDITION PAYMENT IN INDEX AND WE REALLY LOOK INTO IT. AND THE AMOUNT OF FUNDING IS GOING TO NEED TO BE SIGNIFICANTLY INCREASE EITHER IN THE QUEUE AND THE ABILITY TO GET TO EACH OF THOSE STREETS AS A FUNCTION OF AVAILABLE FUNDING. SOME OF ITS STAFFING AND RESOURCES, BUT YOU CAN CONTRACT A LOT OF THAT STUFF OUT. BUT IT'S A MATTER REALLY. THE BIGGEST PINCH POINT IS GOING TO BE THE AVAILABLE FUNDING TO BE ABLE TO GET THE QUEUE OF ALL THESE THINGS ARE IN THE HOPPER. THESE STREETS, THEIR SUB QUALITY OR SUB GRADE AND NEED TO BE REBUILT AND RECONSTRUCTED. THEY JUST HAVE TO GET TO THEM WHEN WE CAN. AND MOST OF THAT. THE PRIME THE PRIMARY DRIVER OF THAT IS GOING TO BE AVAILABLE FUNDING. THAT THE ARE PROFOUND. THE 14 MILLION IS NOT AVAILABLE FOR ROAD FOR STREET CONSTRUCTION OR UTILITY INFRASTRUCTURE. WATER WASTEWATER FIBER IS SPECIFICALLY FORBIDDEN FOR STREETS AND. THIS WAS THE RP FUNDS. UH IF WE'RE TALKING ABOUT CFT WERE MOSTLY RESTRICTED TO WATER AND WASTEWATER PROJECTS AND STORM WATER, UM AND BROADBAND. THE STREETS WERE NOT INCLUDED IN THE IN THE LISTING OF AVAILABLE PROJECT FOR RP FUNDS. JUST. QUESTION WHEN WE GO REPLACE GREEN GREEN STREET, WHICH IS, YOU KNOW, ON THE AROUND. THE EAST MCKENNEY PROJECT. CAN WE USE RP FUNDS FOR THE UNDERGROUND UTILITIES AND THAT AND OUR SIP FUNDS FOR THE STREET IMPROVEMENTS LIKE HOW DO WE MIX THOSE FUNDS? AND HOW DO WE LEVERAGE. THE RP FUNDS IF WE ARE PUTTING. 60 70 80% OF THOSE RP FUNDS INTO INFRASTRUCTURE. HOW DO WE LEVER THAT IN A WAY THAT WE'RE DEALING WITH SOME OF THE STREET? UM BACKLOG THAT WE HAVE OUR DEFERRED MAINTENANCE THAT WE HAVE. I KNOW THAT WITH EVERY, UM. EVERY ONE OF THESE STREET PROJECTS. UH ENGINEERING AND RCMP. PEOPLE ARE WORKING TOGETHER TO MAKE SURE THAT. IF WE ARE REPLACING A STREET NAME, REPLACING THE STREET TO GO WITH IT, AND WE DO IT ALL AT THE SAME TIME, SO WE CAN WE CAN USE, YOU KNOW. DIFFERENT BOND FUNDS. OTHER PROPER PURPOSES ON THE SAME PROJECT WE'RE LOOKING AT. SO THE $4 MILLION THAT WE HAD MENTIONED IN THERE ABOUT THE CITY HALL PROJECT. THAT'S MONEY THAT WE CAN USE THE ARM OF MONEY TO BUILD THE UTILITY STUFF, WHICH FREES UP THOSE RESOURCES TO DO MAYBE MORE STREET. SURFACE IMPROVEMENTS. THAT'S HOW WE INTEND TO TRY TO LEVER. LEVERAGE THOSE FUNDS AS MUCH AS POSSIBLE AND. GOT TO DO IT IN EVERY CASE POSSIBLE. IT'S FREE UP THOSE FUNDS TO BE ABLE TO DO SOME OTHER THINGS WITH THE CAPITAL PROVEN FUND. NO ONE ELSE. I DID HAVE A COMMENT, UM.I REALLY LIKE YOUR FORMAT AND HOW YOU PUT THESE THINGS TOGETHER. IT'S VERY READABLE.
IT'S EASY TO UNDERSTAND. AND SO I APPRECIATE THAT, ESPECIALLY THIS. WHAT WE WENT OVER TODAY WAS, I THINK ANYBODY COULD UNDERSTAND IT. AND SO WE APPRECIATE THAT AND APPRECIATE THE EFFORTS YOU GO THROUGH. TO MAKE SURE THAT WE CAN UNDERSTAND IT. SO THANK YOU.
THANK YOU. THANKS THANKS. YOU GO TO TREVOR DIPLOMA AND DONNA. THEY'RE THE ONES LIKE THEM PUT ALL THIS TOGETHER. HE THANKED THEM ON THE FRONT OF THE MEETING. LET'S I'M GONNA GET IT NOT BE REDUNDANT. IT COST MONEY. THANK YOU. YEAH, I WOULD JUST LIKE TO SAY THANK YOU TO ALL OF YOU DID THIS WORK? IT'S A TREMENDOUS AMOUNT OF WORK THAT YOU PUT TOGETHER FOR US EVERY YEAR. YOU GUYS DOING EXCELLENT JOBS. CITY OF MCKINNEY IS VERY BLESSED TO HAVE SUCH QUALITIES STAFF WORKING FOR THE THANK YOU. OBVIOUSLY, I ECHO THAT. DUE TO THE SAME HERE IF YOU MAKE IT VERY EASY FOR EVERYBODY TO STAND. MANY YEARS OF YOU ALL
[02:30:05]
RECEIVED AWARDS FOR YOUR BUDGET. WELL EQUIPPED. WOW 36 OR SEVEN SO I CAN TAKE IT. I WILL TAKE CREDIT FOR ALL 37. OKAY BACK WHEN HE WAS 13. RIGHT? WELL THEN I THINK WE WERE PREPARED TO ADJOURN THIS MEETING. BACK TO TALK ABOUT WHEN THE BUDGETS YEAH, WE DO THE CALENDAR. WE'VE GOT PUBLIC HERE AND YOU WANT TO SURE I WILL. WE'LL MENTION AGAIN. THE PROPOSED BUDGET IS AVAILABLE ONLINE NOW. ON THE FINANCE WEBSITE. THE THIS PRESENTATION IS AVAILABLE ALSO ONLINE. AND WE WILL HAVE A CITIZEN HEARING ON THE 17TH. AND THEN ALL OF OUR, UH, ADOPTION THAT IS SCHEDULED FOR SEPTEMBER. THE SEVENTH. WE HAD TO MOVE IT UP ONE MEETING THIS YEAR TO MEET SOME DEADLINES. I DO APOLOGIZE FOR THAT, AND WE'LL TRY TO MAKE SURE IT'S MOVED BACK NEXT YEAR POSSIBLE. RIGHT? THANK YOU. EVERYONE MOTION TO ADJOURN. SO MOVED SECO* This transcript was compiled from uncorrected Closed Captioning.