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WELL YOU TO OUR CITY COUNCIL BUDGET MEETING. IT IS, UM 8 32. AH! WE WILL EXCUSE THE MAYOR FOR A FEW MINUTES BEFORE WHY HE FINISHES A CALL AND HE'LL JOIN US LATER. OUR FIRST ITEM ON THE AGENDA IS. UM PUBLIC COMMENTS ON AGENDA ITEMS. THEY WANT TO TALK, OKAY? THEN WE'LL GO RIGHT INTO
[Budget Work Session]
OUR WORK SESSION ITEM 2 TO 0736. OR BUDGET WORK SESSION. TURN THAT OVER TO MR GRAHAM. THANK YOU, MAYOR PRO TEM, MEMBERS OF THE COUNCIL. GOOD MORNING. JUST A COUPLE OF, UM, OVERVIEW OF THIS. I'LL START OFF MAKING A FEW INTRODUCTORY REMARKS. I'LL TRY NOT TO BORE YOU TOO LONG.BUT I DO WANT TO SUMMARIZE A FEW THINGS. AND THEN AS WE NORMALLY DO, WE'LL TURN IT OVER TO OUR FINANCE CHIEF FINANCIAL OFFICER MARK HOLLOWAY AND HIS STAFF WHO ARE GOING TO THEN TAKE US THROUGH A SERIES OF SLIDES. UM SIT BACK. RELAX FEEL FREE TO GET UP AND GRAB SOME COFFEE OR WHATEVER YOU NEED. AS WE GO THROUGH, THESE WILL TAKE A BREAK. WE'LL PROBABLY FIND A BREAKPOINT THAT WORKS FOR YOU. SO UM, WE CAN USE THE FACILITIES OR WHATEVER YOU NEED, AND THEN WE ALSO HAVE OUR WATER. UM GREAT CONSULTANTS HERE. WATER RATES ARE RATES FROM WATER DISTRICT ARE INCREASING THEIR GOING TO SUMMARIZE FOR YOU WHAT THE IMPACT IS AND WHAT THAT'S GOING TO MEAN FOR OUR WATER RATES HERE. SO I THINK THAT WILL BE VERY INFORMATIVE, VERY HELPFUL, AND THEY DO A VERY GOOD JOB WITH THAT. SO WITH THAT, ARE THERE ANY QUESTIONS ABOUT THAT ARE OTHERWISE WE'LL GET IN AND GET STARTED. ANYTHING. OKAY? WELL ON BEHALF OF THE CITY STAFF AND PLEASED TO PRESENT TO YOU THE BUDGET FOR THE UPCOMING FISCAL YEAR 2022 23 OUR FISCAL YEAR ENDS AS YOU KNOW, ON SEPTEMBER 30TH OF EVERY YEAR. SO IN THIS CASE, THIS BUDGET WILL END ON SEPTEMBER 30TH OF 2023. LIKE ALL BUDGET PRESENTATIONS. THIS BUDGET REPRESENTS A SNAPSHOT IN TIME THAT CAPTURES WHAT WE BELIEVE TO BE THE PRIORITIES OF THE CITY COUNCIL. NAMELY IT IDENTIFIES THE RESOURCES NEEDED THIS NEXT YEAR TO ENSURE THAT WE CAN CARRY OUT THE STRATEGIC PRIORITIES SET FORTH BY THE COUNCIL IN YOUR FEBRUARY AND MARCH STRATEGIC GOAL SETTING MEETINGS. AND FURTHER DETAILED IN THE STRATEGIC GOALS ADOPTED BY YOU ON JUNE 7TH AND EACH OF THESE PAST FEW BUDGET CYCLES, WE SEEM TO COME BEFORE YOU WITH ONE UNUSUAL CHALLENGE AFTER ANOTHER AND 2020, FOR EXAMPLE, WE PRESENTED A BUDGET IN THE MIDST OF THE COVID PANDEMIC WITH UNCERTAINTY ABOUT HOW THE PANDEMIC MIGHT IMPACT OUR REVENUE STREAMS AND THE BROADER ECONOMY DUE TO THE SHELTER IN PLACE ORDERS AND SOCIAL DISTANCING REQUIREMENTS. THIS WAS NEW TERRITORY FOR EVERYBODY ON EARTH. TODAY WE HAVE NOT LIVED THROUGH A GLOBAL PANDEMIC AND THERE WERE LOTS OF QUESTIONS ABOUT WHAT'S THIS GOING TO MEAN? FOR THE ECONOMY? WE DID SEE SEVERE IMPACTS ON THE AIRLINE, RESTAURANT, HOSPITALITY AND PERSONAL SERVICES SEGMENTS OF OUR ECONOMY, AND IT WAS NOT CLEAR HOW LONG IT WOULD TAKE FOR THEM TO BALANCE BACK.
IRONICALLY, WE SAW OUR SALES TAX REVENUE SPIKE. DUE TO THE ENORMOUS RISE IN DEMAND OF BIG BOX AND ONLINE RETAILERS. WITH SO MUCH UNCERTAINTY, WE PROPOSED A NO NEW REVENUE FISCAL YEAR 21 BUDGET FOR THE VERY FIRST TIME. LAST YEAR, WE PROPOSED THE BUDGET IN THE CONTEXT OF WHAT WE FELT WAS THE SLOW EMERGENCE FROM THE PANDEMIC, ACCOMPANIED BY INCREDIBLE CHALLENGES WITH LABOR DEMAND MEANS SPECIFICALLY SHORTAGES AND WHAT RISING WAGES AS SUCH, WE BROUGHT A BUDGET WITH AN EFFECTIVE RATE OF PLUS 2% 2.0 WITH HEADLINE INFLATION AT THAT TIME A YEAR AGO AT ABOUT 6. SURELY WE THOUGHT INFLATION WAS TRANSITORY. AND WE WILL SOON SEE A MODERATION. SO FAR, THIS HAS NOT BEEN THE CASE. TODAY WE SEE AN ANNUALIZED INFLATION RATE HOVERING AROUND 9. 9.1% IN JUNE TO BE SPECIFIC AND 8.5% IN JULY. THIS IS PLACING INCREDIBLE STRAINS ON EVERYONE FROM FAMILIES HAVING TO ADJUST TO HIGHER FOOD AND CLOTHING COSTS TO CONSTRUCTION CONTRACTS WITH CONSTANT INCREASES IN THEIR INPUT COSTS, INCLUDING BUILDING MATERIALS AND FUEL. OUR BUDGET WON'T BE AT THE RATE OF INFLATION NOT EVEN CLOSE, WHICH MEANS THAT WHEN YOU ADJUST FOR INFLATION, WE ARE REDUCING THE BUDGET. AND WE'RE HAVING TO MAKE ADJUSTMENTS TO HOW WE DO THINGS SO WE CAN ABSORB THE INFLATIONARY IMPACT. SO TODAY WE SEE OURSELVES WHIPSAWED FROM A PANDEMIC TO AN INFLATIONARY ENVIRONMENT AND A GREAT TURNOVER IN THE LABOR FORCE TO THIS YEAR IN WHICH GLOBAL EVENTS PRESENT THEIR OWN UNCERTAINTY AND INFLATIONARY PRESSURES.
CONTINUED DISRUPTION TO GLOBAL SHIPPING ROUTES FOR REGIONAL CONFLICTS. THE GLOBALIZATION AND DEMOGRAPHIC AGING WILL DRIVE UP PRICES. AGING DEMOGRAPHICS WILL TRANSFORM BABY BOOMERS FROM PRODUCERS AND SAVERS TO CONSUMERS. IS THAT TAKES SHAPE. THEY WILL SPEND DOWN SAVINGS
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THAT SERVES AS A MAJOR SOURCE OF CAPITAL. CAPITAL COSTS, IN TURN WILL LIKELY INCREASE OVER TIME, MEANING THAT WE HAVE TO BE PREPARED TO OPERATE IN A HIGH INFLATION, HIGHER INTEREST RATE ENVIRONMENT FOR SOME TIME. WE WILL SHOW YOU SOME SLIDES A BIT LATER. BUT PLEASE KNOW THAT OVER THE PAST SIX BUDGET CYCLES, WE HAVE PROPOSED BUDGETS THAT WERE BELOW THE RATE OF INFLATION.FIVE OF THOSE SIX TIMES. THE EFFECTIVE RATE WILL INCREASE THIS YEAR IN NOMINAL TERMS, BUT OUR TAXPAYERS SHOULD KNOW THAT THEIR PROPERTY TAXES WILL NOT INCREASE WHEN YOU ADJUST FOR INFLATION. IN FACT, IN AN ANALYSIS OF PER CAPITA SPENDING DONE BY OUR FRIEND LOUIS MCLANE FROM 2009 TO 2022. ONCE ADJUSTED FOR INFLATION ARE PER CAPITA SPENDING HAS DECREASED BY 8.1.
I'LL SAY THAT AGAIN. OUR PER CAPITA SPENDING HAS DECREASED BY 8.1. IN OUR STAFFING PER CAPITA HAS DECLINED BY 8.33. YOU'LL SEE THE MCKINNEY CONTINUES TO OFFER A COMPARATIVE BARGAIN IN OUR REGION FOR OUR PROPERTY TAXPAYERS. THIS YEAR. WE'RE PROPOSING A BUDGET OF NEARLY $191 MILLION IN THE GENERAL FUND. WHICH SERVES AS THE CITY'S OPERATING BUDGET. OUR TOTAL BUDGET, WHICH INCLUDES ENTERPRISE UTILITY FUNDS INSURANCE FUND C I P ETCETERA.
TOTAL $652 MILLION. WE CONTINUE TO FUND THE PROGRAMS THAT WE BELIEVE ARE CONSISTENT WITH THE CITY COUNCIL'S STRATEGIC PRIORITIES. TO NAME A FEW PUBLIC SAFETY, INCLUDING AN IMPORTANT REORGANIZATION THAT INCLUDES THE ESTABLISHMENT OF A CIVILIAN DIRECTOR OF PUBLIC SAFETY TO HELP PROVIDE INTEGRATED STRATEGIC, ADMINISTRATIVE AND POLICY DIRECTION FOR OUR ENTIRE PUBLIC SAFETY FUNCTION, FUNDING TO HELP KEEP OUR EMPLOYEES WORKING FOR MCKINNEY AND NOT OUR NEIGHBORING CITIES. SO, IN OTHER WORDS, WE WANT TO MAKE SURE THAT WE'RE PAYING COMPETITIVELY BECAUSE INFLATION IS TAKEN A BITE. WE KNOW IT. FIRE STAFFING TO PROVIDE RELIEF TO OUR FIREFIGHTERS WERE TRYING TO BUILD OUR BENCH AND OUR FIRE DEPARTMENTS. NOT ONLY KEEPING UP WITH THE GROWTH BUT BEING ABLE TO PROVIDE THE STAFFING SO THAT OUR FIREFIGHTERS AREN'T WORKING OVERTIME. AND BY TOO MUCH BY WAY TOO MUCH OVERTIME THAT WE'RE SPENDING RIGHT NOW. OVER TIME WON'T GO AWAY, BUT WE CERTAINLY CAN MODERATE THOSE IMPACTS BY MAKING SURE THAT WE HAVE A BENCH OF FIREFIGHTERS HAS BEEN SOMETHING THAT THEY'VE BEEN VERY VOCAL ABOUT AS WELL. NEW AND REPLACEMENT EQUIPMENT FOR PUBLIC WORKS AND PARKS AND RECREATION DEPARTMENTS. NEW I T EQUIPMENT AND INCREASED EFFORTS TO ENSURE CYBERSECURITY OTHER PARTS AND RECREATION IMPROVEMENTS. ALL KEY INTERNAL SERVICE FUNCTIONS THAT HELP KEEP OUR ORGANIZATION RUNNING, FUNCTIONING AND LEAN.
YOU WILL FIND IN THE UPCOMING PRESENTATION THAT WHEN COMPARED TO OUR COLLIN COUNTY CITIES ARE STAFFING AND COST STRUCTURE ACROSS SEVERAL MEASURES DEMONSTRATES JUST HOW EFFICIENT AND LEAN WE ARE, BUT WE INVEST IN THAT WE HIRE TALENT, AND WE MAINTAIN THE TALENT SO THAT WE CAN CONTINUE TO BE AS LEAN ON ORGANIZATION AS WE CAN BE. LEAN SYSTEMS ALSO REFLECT THAT WE ARE MORE PRODUCTIVE THAN OUR NEIGHBORING CITIES. HOWEVER WE HAVE TO PAY FOR PRODUCTIVITY, AND LAST YEAR THE COUNCIL MADE IT CLEAR THAT WE NEED TO MOVE OURSELVES UP THE MARKET, SO TO SPEAK, AND MORE APPROPRIATELY AND FAIRLY COMPENSATE OUR DEDICATED STAFF THIS BUDGET INCLUDES FUNDS FOR ANOTHER MARKET STUDY TO ENSURE THAT WE ARE DOING SO AND ALONG THE WAY THAT WE'RE MAKING PROGRESS TOWARD OUR TARGET OF 60% 60TH PERCENTILE. MOVING FROM 50TH WHERE WE HAVE BEEN HISTORICALLY OF THE MARKET. THIS BUDGET ALSO PROPOSES TO ADDRESS OUR COMMUNITY NEEDS THROUGH A NEW PER CAPITA APPROACH TOWARD COMMUNITY, THE COMMUNITY PROGRAM FUNDING. ESSENTIALLY THIS BUDGET PROPOSES FUNDING FOR VARIOUS COMMUNITY NEEDS. OUR COMMUNITY GRANTS PROGRAM, ETCETERA AT ABOUT $2.76 PER CAPITA IF WE ASSUME A POPULATION TO BE ABOUT 210,000 ON OCTOBER 1ST THAT'S ABOUT WHERE WE ARE. THAT WILL VARY DEPENDING ON THE POPULATION IS BUT TAKING THE CHANGES THAT WE WOULD DO A PER CAPITA BASIS, SO AS WE GROW AS A COMMUNITY, THAT FUND WILL ALSO GROW BECAUSE WE'RE ATTACHING A NUMBER ON A PER CAPITA BASIS. AND THESE ARE THE FUNDS THAT WE USE TO, UM FUNDED A VARIETY OF STITCHED THE LIKE ALL STITCHING THE COMMUNITY TOGETHER, BUILDING A PATCHWORK OF A COMMUNITY FOR VARIOUS DIFFERENT SOCIAL OR OTHER COMMUNITY PROGRAMS USING THIS FORMULA, WHICH MEETS OR EXCEEDS FRISCO AND PLANO'S ALLOCATION RATE ENABLES US TO CONTINUE TO GROW THOSE FUNDING SOURCES AS WE GROW AS A COMMUNITY AS I MENTIONED AND WE THINK THIS IS A MORE CONSISTENT AND PREDICTABLE WAY TO GENERATE FUNDS TO MEET ALL OF OUR COMMUNITIES NEEDS. SEPARATE AND APART FROM THE PREVIOUS ITEM. THE PROPOSED BUDGET ALSO INCLUDES A NEW FUNDING ITEM FOR CHESTNUT SQUARE IN THE AMOUNT OF $50,000 FOR OPERATING BUDGET ASSISTANCE FUNDED FROM OUR HOTEL MOTEL TAX FUND. AS YOU KNOW, CHESTNUT SQUARE IS NOT ONLY A HISTORICAL HISTORICAL GEM IN OUR COMMUNITY , BUT THEY GENERATE SIGNIFICANT ACTIVITY THROUGH WEDDINGS AND OTHER CELEBRATIONS, MANY OF WHICH YIELD OVERNIGHT STAYS AND RESTAURANT PATRONS. SEVERAL C I P BUDGET ITEMS. CITY HALL CONSTRUCTION TO BEGIN IN OCTOBER
[00:10:05]
AIRPORT RUNWAY TO BEGIN IN EARLY 2023 AT LEAST THE FIRST EXTENSION PHASE WHILE THE SECOND EXTENSION THAT WILL COME LATER AND WORK AHEAD FOR NEW ROADWAY AND WATER UTILITY NEEDS AND THEN THE BUDGET INCLUDES NEW SALES, TAX SHARING METHODOLOGY, WHICH YOU'RE VERY WELL AWARE OF. THIS WILL PROVIDE A LONGER TERM SOLUTION TO HELP FUND NEW CRITICAL ROADWAYS FOR ECONOMIC DEVELOPMENT, WHILE ENABLING US TO FREE UP EXISTING RESOURCES TO ADDRESS AGING ROADWAY INFRASTRUCTURE. THIS IS A SIGNIFICANT REFORM AND HOW WE SECURE LONG TERM FUNDING SOURCES WHILE TRANSFERRING SOME OF THAT TO NONRESIDENTS WHO COME AND SHOP IN MCKINNEY AND USE OUR INFRASTRUCTURE. SPECIFICALLY BY TRANSFERRING SOME OF THE MAINTENANCE RISK TO THE SALES TAX REVENUE SOURCE. WE PROVIDE SOME RELIEF TO OUR PROPERTY TAXPAYERS AND MAINTAINING OUR ROADWAYS. IN CLOSING. I WOULD SUMMARIZE THAT THE PROPOSED FISCAL YEAR 23 BUDGET IS A PRUDENT BALANCE BETWEEN THE ECONOMIC CHALLENGES WE ALL FACE AND TODAY'S UNPREDICTABLE WORLD AND WITH WHAT WE CAN REALISTICALLY DO TO CONTINUE INCREMENTALLY IMPROVING THE QUALITY OF LIFE IN OUR COMMUNITY. ULTIMATELY A BUDGET CONVEYS WHAT OUR PRIORITIES ARE AS A COMMUNITY. IT'S A POLITICAL INSTRUMENT AND THAT IT DETERMINES THE COMMUNITIES PRIORITIES THROUGH THE REPRESENTATIVE PROCESS. IT'S ALSO A COMMUNICATION TOOL THAT CONVEYS THESE PRIORITIES TO ALL OF OUR STAKEHOLDERS. AND LASTLY REPRESENTS A SOCIAL CONTRACT WITH THE CITIZENS WE SERVE AND THAT IT IMPLEMENTS THE RESOURCES PROGRAMS AND PROJECTS THAT ULTIMATELY CONTRIBUTE TO THE MATERIAL WELL BEING OF MCKINNEY AS DETERMINED BY THE CITY COUNCIL. WITH THAT I WILL TURN THIS OVER TO OUR CFO MARK HOLLOWAY, AND HE WILL KICK OFF OUR BUDGET DETAILS. THANK YOU. THANKS, PAUL. UM. SO TODAY MARKS AN IMPORTANT MILESTONE IN OUR ANNUAL BUDGET PROCESS. CITY STAFF FINANCE AND EVERY DEPARTMENT IN THIS CITY. HAVE BEEN WORKING VERY HARD THROUGHOUT THE SPRING AND SUMMER TO COMPLETE OUR DOCUMENT THAT HAS BEEN POSTED AND PROVIDED TO YOU AND TO READY THIS PRESENTATION FOR TODAY. UM FIRST OF ALL, I'D LIKE TO THANK EVERYONE THAT'S HAD A HAND IN THIS AND A SPECIAL THANKS TO DONNA CHAMBERLAIN, TREVOR DAGAN. UM, PLUMBER. RODRIGUEZ AND ALL OF THE REST OF THE FINANCE STAFF THAT HAVE APPRECIATE YOUR EFFORTS. THANK YOU GUYS. UM THIS IS OUR AGENDA FOR THIS MORNING.IT'S A LOT OF INFORMATION, AND I'M GOING TO HAVE SOME HELP PRESENTING IT BECAUSE WE ALL KNOW THAT YOU PROBABLY WANT TO HEAR ME MOTHER FOR FULL SEVERAL HOURS, SO WE'LL GET WE'LL GET SOME HELP IN HERE, UM TREVOR MINIATURE HAS AGREED TO HELP ME AGAIN THIS YEAR. TREVOR DAGON IS GOING TO PRESENT SOME AND THEN WE HAVE OUR CONSULTANTS. WATERY CONSULTANTS WILLED IN HERE IN JACKSON IS HERE AND, UH, WE'LL BRING HIM UP IN A FEW MINUTES. BUT PLEASE FEEL FREE TO STOP ME ANYTIME AT ASK US ANY QUESTIONS YOU HAVE AND IF I DON'T HAVE AN ANSWER FOR YOU GUYS IMMEDIATELY.
I'VE GOT PEOPLE STANDING BY THAT WE CAN GET IT FOR YOU. OR IF IT TAKES A LITTLE WHILE WE'LL WE'LL MAKE THAT AVAILABLE TO YOU SOMETIME AFTER THE PRESENTATION. SO IF YOU'VE EVER SEEN THIS PRESENTATION BEFORE, UM YOU KNOW THAT I ALWAYS BEGIN WITH A SHORT REMINDER OF HOW WE GET TO THIS PRESENTATION TODAY AND WHERE WE GO FROM HERE. SO YES. HERE HERE IT IS. THIS IS MY CIRCLE. UM, IT'S TRADITION FOR ME TO SHOW THIS. BUT IT'S ALSO AN ACCURATE DEPICTION OF THE PROCESS ITSELF.
THE PROCESS WE'RE IN AND A REMINDER OF ALL THAT HAS GONE IN TO OUR DOCUMENT THAT YOU SEE THAT YOU HAVE THAT'S BEEN POSTED AND THIS PRESENTATION SO OUR DEVELOPMENT CYCLE BEGINS WITH PLANNING. STRATEGIC PLANNING IS DONE BY THE COUNCIL. UM ADOPTION OF THE BUDGET GUIDELINES THAT THE COUNCIL DOES AND WE RENEW OUR TENURE PLANS BOTH GENERAL OBLIGATION DEBT SERVICE PLAN, AND I ALWAYS SAY, GENERAL, IT JUST SHOULD BE OUR DEBT SERVICE PLAN AND THEN OUR GENERAL FUND PLAN. UM ONCE WE GET THAT DONE IN THE JANUARY FEBRUARY TIMELINE , WE KIND OF KNOW WHERE WE'RE HEADED, UM, BECOMES THE DEPARTMENT BUDGET. THAT'S WHERE THE DEPARTMENT'S TELL US WHAT THEY NEED WHAT THEY WANT TO CHANGE THE IDENTIFY THEIR NEEDS. THEY PROPOSED TO US A BUDGET, WHICH FINANCE STAFF THEN WORKS THROUGH WITH THE DEPARTMENTS. AND THEN WE PRESENT THAT TO THE CITY MANAGER WHO GOES THROUGH THOSE BUDGETS WITH EACH DEPARTMENT LOOKS AT THEIR NEW NEEDS AND REQUESTS AS QUESTIONS. CITY MANAGER NOW HAS MADE HIS RECOMMENDATION TO YOU TODAY.
WITH THIS PRESENTATION, IT BECOMES CITY COUNCIL'S BUDGET THROUGHOUT AUGUST AND SEPTEMBER BUDGET ADOPTION IN SEPTEMBER. AND THEN WE MOVE FORWARD, AND THE CYCLE WILL REPEAT AGAIN NEXT YEAR. QUICK QUESTION ON ON THIS, UM, BUDGET SOMEWHERE AND STUFF. THE TOTAL EXPENDITURES IS ANY OF THAT PAID FOR BY BONDS. OR IS THAT JUST THAT'S OUR EXPENDITURES ARE BASED ON OUR
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REVENUE? YES ESPECIALLY ON OUR OPERATING FUNDS, YOU KNOW? SO YOU HAVE YOUR CAPITAL IMPROVEMENT FUNDS, WHICH WERE WHERE WE DO ALL OF OUR CAPITAL PREMISES. THAT'S WHERE YOUR BOND FUNDS WOULD BE FOUND. BUT WHEN WE'RE TALKING GENERAL FUND WHEN WE'RE TALKING WATER WASTE WATER FUND WHEN WE'RE TALKING ABOUT THE ACTUAL OPERATIONS OF THE CITY, WE ARE NOT BORROWING MONEY TO PAY FOR OPERATIONS OF THE CITY. OKAY THAT'S ALL. I THINK I KNEW THAT. BUT I JUST WONDERED ABOUT VERIFY THAT QUESTION. SO WE ARE WE REMIND EVERY YEAR THAT THESE ARE THE GOALS AND STRATEGIES THAT WERE DEVELOPED AND AFFIRMED BY THE COUNCIL THIS YEAR. UM PAUL'S TALKED ABOUT HIM THIS MORNING. WE USE THESE WHEN WE'RE MAKING OUR DECISIONS ABOUT EVERYTHING THAT GOES INTO THE PROPOSED BUDGET. YOU'RE SETTING OF THEM REALLY DRIVES THIS PROCESS. AND, FRANKLY, EVERY NEW PROGRAM AND EVERY NEW EMPLOYEE IN THIS BUDGET ARE BACKED BY THESE GOALS, IN FACT, WHEN DEPARTMENTS SUBMIT NEW REQUESTS THEY ARE REQUIRED TO TELL US WHAT GOAL IS BEING MET WITH EACH ONE OF THESE WITH THEIR REQUESTS, SO UM, IT'S AN IMPORTANT PART OF DRIVING WHERE WE'RE GOING. SO THIS IS ALSO ANOTHER SLIDE. I SHOW IT EVERY YEAR. WE DO THIS BECAUSE THE BUDGET AND THE BUDGET PROCESS IS A TOOL. WE USED TO TELL OUR STORY AND GOT US FOR THE NEXT YEAR, UM, THE CITY OF MCKINNEY'S BUDGET WE OPERATED AS A THREE PART TOOL. THE FIRST IS THE POLICY TOOL. THIS IS THE COUNCIL PORTION OF THE TOOL POLICY SETS OUR PRIORITIES. AND MOVES US IN THE NEXT DIRECTION, WHICH IS THE MANAGEMENT TOOL. THIS ALLOWS THE SAME MANAGER'S OFFICE AND THE DEPARTMENTS TO ALLOCATE RESOURCES THAT WE HAVE TO OPERATE IS OFFICIALLY AS WE CAN TO GET THINGS DONE THAT WE NEED TO DO. SO FIRST TO FLOW INTO THE THIRD, WHICH IS A COMMUNICATIONS TO TELLS EVERYONE, WHETHER IT'S CITY STAFF OR CITIZENS OR OR ANYONE THAT WANTS TO KNOW. HOW ARE WE GOING TO USE OUR RESOURCES? WHAT ARE WE GOING TO DO AND WHERE WE HEADED FOR THE FOR THE NEXT YEAR? I MENTIONED AS PART OF THE PLANNING PROCESS THAT WE DO LONG TERM PLANNING, UH, FISCAL YEAR BUDGETS THAT YOU ADOPT HER FOR ONE YEAR, BUT THEY'RE FOCUSED ON THE NEXT 12 MONTHS. BUT WE DO PLAN FOR THE LONG TERM INTERNALLY. WE CONTINUALLY DO THAT. WE STARTED THIS PROCESS. SEVERAL YEARS AGO WE CREATED TWO PLANS WE COMPLETE COMPLETED THE DEBT SERVICE PLAN . MAKE SURE THAT WE CAN BUILD ALL THE THINGS THAT WE NEED TO BUILD. UM THAT WE MEET YOUR EXPECTATIONS FOR THAT THAT WE CAN DO THAT WITHIN THE TAX RATES THAT WE CURRENTLY HAVE. AND THEN WE MARRY THAT WITH WHAT OUR GENERAL FUND PLAN. THAT ALLOWS US TO MAKE SURE THAT WE CONTINUE TO BE ABLE TO FUND THE OPERATIONS OF THE CITY. WE LOOK AT THAT IN A 10 YEAR HORIZON.THINGS CHANGE CLEARLY, BUT WE TRY TO MAKE SURE THAT WHAT WE'RE DOING TODAY WE CAN AFFORD TO PAY FOR OPERATIONALLY. IN THE NEXT 5 TO 10 YEARS, SO WE TRY TO MAKE SURE THAT WE'RE LOOKING FORWARD WHILE WE'RE PLANNING 12 MONTHS IN THE TIME TO. SO I MENTIONED ALSO THE BUDGET GUIDELINES. FEW SLIDES BACK. I THINK IT WAS DURING THE ANNUAL CIRCLE SLIDE. UM, BUT DURING ABOUT THE PLANNING PORTION OF OUR BUDGET, ONE PART OF THAT PROCESS. IS THE COUNCIL AFFIRMATION OF OUR BUDGET GUIDELINES. WE DEVELOPED THIS FRAMEWORK. IT'S ALLOWED US TO DEVELOP OUR PROCESS EACH YEAR. WE FINE TUNED THESE SINCE ABOUT 2014 OR 15. IT PROVIDES THE STRUCTURE AND COUNCIL ADOPTS THIS EVERY YEAR AT THE BEGINNING OF OUR BUDGET CYCLE TO GET US TO OUR PROPOSED BUDGET. YOU CAN SEE THEY'RE KIND OF PILLARS THAT WE LOOK FOR, UM THAT WE MAKE SURE THE GENERAL FUNDS THAT WERE FULLY FUNDED AND BALANCED BUDGET. WE TRY TO MAINTAIN A CONSERVATIVE TAX LEVEL LEVY. WE ALWAYS WANT TO PAY FOR OUR POLICE AND FIRE SWORN PAY PERSONNEL STRUCTURES THAT ARE IN OUR MEETING. CONFIRM AND THEN WE MAINTAIN OUR MINIMUM FUND BALANCES. AND THERE ARE OTHER THERE ARE OTHER ONES WON'T READ THEM ALL TODAY, BUT WE TRY TO MAKE USE THESE AS A PILLAR FRAMEWORK TO GET US FORWARD ON THE UTILITY FUNDS. WE'RE ALWAYS LOOKING AT THE LONG TERM FINANCIAL SUSTAINABILITY OF THE FUNDS, AND WE TRY TO IMPLEMENT RATE ADJUSTMENTS, AS RECOMMENDED BY OUR RATE STUDIES AND SO. THIS SLIDE IS A NICE SEGUE. UM SO, SPEAKING OF THE RATE ADJUSTMENTS AND STUDIES, UM, WE DO HAVE SOME GUESTS WITH US THIS MORNING. UM I WASN'T ANTICIPATING HAVING THEM HERE THIS YEAR. WE USUALLY DO OUR WATER WASTEWATER RATE STUDIES EVERY TWO YEARS. BUT IF YOU REMEMBER WE DID THIS LAST YEAR. BUT DUE TO SOME UNEXPECTED NEWS FROM NORTH TEXAS MUNICIPAL WATER DISTRICT REGARDING OUR WATER RATES FOR THIS YEAR, WE RECENTLY CONTRACTED AGAIN WITH WELDING. TO MAKE SURE WE'RE ON THE RIGHT TRACK WITH OUR WATER UTILITY. UM, DAN JACKSON. UH, IS
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HERE TODAY TO KIND OF LEAD US THROUGH THEIR REPORT TO US AND THEIR RECOMMENDATIONS FOR THE NEXT FISCAL YEAR FIXED NEXT FEW FISCAL YEARS. AND IF YOU'RE READY, WE'RE READY FOR YOU. I HAVE A QUESTION FOR YOU BEFORE YOU GET IN HIM ON PAGE EIGHT. MHM IT SAYS PROPERTY TAX EVALUATION TAX RATES, AND IT JUST SHOWS WHICH IS VERY INTERESTING. UM IT SAYS, THE AVERAGE PROPERTY TAX AND IT GOES THROUGH THERE IS THAT IS THAT IS THAT JUST RESIDENTIAL PROPERTY OR IS THERE IS NO COMMERCIAL IN THAT CORRECT. SO YES, YOU'RE ON PAGE A. THIS IS THIS IS OUR TOTAL VALUATIONS, BUT, UM THIS THIS DOES INCLUDE ON ALL OF OUR ASSESSED VALUES, COMMERCIAL AND RESIDENTIAL, BUT WE DO HAVE THE AVERAGE MARKET VALUE OF A HOME IN HERE. WE DON'T HAVE AVERAGE COMMERCIAL VALUES AND ALSO THE AVERAGE PROPERTY TAX. WHAT WHAT THAT SHOWING IS THE AVERAGE HOME , NOT THE AVERAGE HOME AND COMMERCIAL COMBINED. CORRECT AND FRANKLY, THIS IS THIS IS TAX BASED OFF OF MARKET VALUE, WHICH WE'RE GOING TO SHOW YOU SOMETHING VERY DIFFERENT, WHICH IS, UM, WHICH WILL BE THE ACTUAL TAX BASED ON THE TAXABLE VALUE OF A HOME, WHICH IS VERY DIFFERENT THAN THE MARKET VALUE OF A HOME. THERE IS A STATE CAP ON HOW MUCH MARKET UM TAXABLE VALUES CAN DROP GO UP EACH YEAR. FOR INSTANCE, THIS SHOWS THAT ON THE MARKET VALUE HOME OF WHICH IS MCKINNEY'S IS 4 96 THIS YEAR. WE'VE GOTTA SLIDE A LITTLE BIT LATER. WE'LL SHOW YOU THE ACTUAL TAXABLE VALUE OF HOMES ABOUT 4 411,000. IT'S ONLY ALLOWED TO RISE 10% ABOVE THE RATES LAST YEAR, SO WE'LL SHOW THAT IN A LITTLE WHILE. OKAY THANK YOU. UH HUH. RUSSIA. THANK YOU. UM THANK YOU. MEMBERS OF THE COUNCIL. MY NAME IS DAN JACKSON. I'M VICE PRESIDENT OF WORLD AND FINANCIAL SERVICES. UM WE'VE HAD THE PRIVILEGE OF BEING THE CITY'S WATER AND WASTEWATER RATE CONSULTANTS FOR BETTER PART OF THE LAST DECADE. WE DO WORK FOR OVER 100 CITIES HERE IN THE STATE OF TEXAS. WE DO WORK FOR 35 CITIES IN THE DALLAS FORT WORTH METROPLEX, AND ALL OF THESE CITIES ARE DEALING WITH AND WRESTLING WITH MANY OF THE SAME ISSUES THAT I'M GOING TO BRING UP IN THIS RELATIVELY BRIEF PRESENTATION TODAY, I'M ALSO HAVE WITH ME, MR DAN LANNING WITH WELDON, WHO IN ADDITION TO BEING A LONG TERM WILL THEN CONSULTANTS, ALSO A RESIDENT OF THE CITY OF MCKINNEY . SO IN SOME SENSES, HE SORT OF ACTING AGAINST HIS OWN INTERESTS BY BEING HERE TODAY. BUT AS MR HOLLOWAY INDICATED, WE GENERALLY DO UPDATES TO OUR RATE PLANS EVERY 2 TO 3 YEARS AND THAT'S BECAUSE WATER IS A PRETTY CONSISTENT BUSINESS. PEOPLE USE WATER IN THE SAME PATTERNS EVERY YEAR. YOU TEND TO KNOW AND UNDERSTAND WHAT YOUR COST INCREASES ARE GOING TO BE SEVERAL YEARS IN ADVANCE. UNFORTUNATELY, WE'RE NOT IN TYPICAL TIMES RIGHT NOW, WE'VE HAD A LOT OF VERY SIGNIFICANT IMPACTS TO THE WATER SYSTEM IN THE LAST DECADE, WHICH IS SORT OF NECESSITATED THE NEED FOR US TO COME BACK AND REVISIT THE LONG TERM RIGHT PLAN. SO WE'RE GOING TO PRESENT TO YOU A NEW RATE PLAN TODAY, AND THE RATE PLAN HAS BEEN INFLUENCED BY FOUR SIGNIFICANT FACTORS. KEEP THIS IN MIND. YOU TRY TO RUN YOUR WATER AND WASTEWATER OPERATION LIKE A BUSINESS. YOU WANT THE REVENUES FROM YOUR RATES TO COVER ALL THE COSTS OF PROVIDING THAT SERVICE? YOU WANT YOUR CUSTOMERS TO REIMBURSE YOU FOR THE COSTS THAT YOU INCUR IN PROVIDING SERVICE. UNLIKE A LOT OF BUSINESSES, YOU DON'T TRY TO MAKE A PROFIT BY RUNNING A WATER BUSINESS. YOU'RE JUST TRYING TO COVER YOUR COSTS. AND SO WHEN THOSE COSTS GO UP, YOU'VE GOT NO CHOICE BUT TO PASS THOSE COSTS THROUGH YOUR RATEPAYERS. THE CITY OF MCKINNEY HAS MADE A SERIES OF VERY DIFFICULT DECISIONS OVER THE LAST DECADE IN SETTING YOUR LONG TERM WATER AND WASTEWATER RATES, BUT THOSE DECISIONS HAVE PAID OFF IN THE SENSE THAT RIGHT NOW YOU HAVE A WATER AND WASTE WATER FUND THAT IS VERY HEALTHY FINANCIALLY.HOWEVER HEALTHY WATER FUNDS CAN BECOME UNHEALTHY VERY QUICKLY. IF YOU DON'T STAY ON TOP OF THE CHANGING DEVELOPMENTS IN THE INDUSTRY. NOW WHAT HAS HAPPENED IN THE LAST DECADE? THAT IS NO SUCH STATED US TO COME BACK HERE FIRST AND FOREMOST, AS MR HOLLOWAY INDICATED, NORTH TEXAS MUNICIPAL WATER DISTRICT HAS ANNOUNCED THAT THEY'RE IMPLEMENTING A 13% WATER RATE INCREASE. YOU BUY ALL YOUR WATER FROM NORTH TEXAS, AND THEN YOU TURN AROUND AND RESELL IT TO YOUR DISTRIBUTED TO YOUR CUSTOMERS AND RESELL IT TO THEM. WELL WHEN YOUR MAIN SUPPLIER INCREASE THEIR COSTS BY 13% THAT'S GOING TO HAVE A MAJOR IMPACT ON YOUR COSTS. THEY HAVE ALSO INDICATED THAT THEY'RE GOING TO DO ANYWHERE BETWEEN THEY'RE GONNA THEY'RE GONNA DO AN 11% INCREASE NEXT YEAR AND THEN 429% INCREASES EACH YEAR. AFTER THAT. THESE ARE SIGNIFICANTLY HIGHER THAN ANYTHING THEY'VE TOLD US IN THE PAST, SO IT'S TAKEN A LOT OF CITIES HERE IN THE NORTH TEXAS AREA BY SURPRISE, INTERRUPT YOU FOR A MOMENT. ABSOLUTELY. IT'S
[00:25:05]
OVER HERE. I'M SORRY. ALRIGHT, UM OUR MAIN SUPPLIER. WHO IS THAT RIGHT NOW? THERE WOULD BE NORTH TEXAS MUNICIPAL WATER DISTRICT. YOU BUY ALL YOUR WATER FROM THAT, UM, THE WITH BORDER ART LIKE COMING ONLINE. HOW IS THAT GOING TO IMPACT YOUR SUPPLY , RIGHT? UM THE BOW DARK LEG WE BELIEVE IS A FACTOR IN SOME OF THESE RATE INCREASES. IT HAS COST NORTH TEXAS OVER A BILLION DOLLARS TO BUILD THE BOW DARK. RESERVOIR IT'S NEEDED. IT'S NECESSARY. THE METROPLEX WILL NOT BE ABLE TO CONTINUE TO GROW WITHOUT IT. WE KNEW THAT GOING INTO IT RIGHT. MHM ONE POINT OH, NINE BILLION IS THAT CORRECT? SOMETHING ALONG THOSE LINES? YES MHM, AND THAT IS ONE OF THE FACTORS THAT DEFINITELY IS ONE OF THE FACTORS THAT HAS LEAD LEAD TO THESE INCREASES. UM THERE ARE OTHER FACTORS AS WELL. NORTH TEXAS HAS HAD VERY LITTLE IN THE WAY OF WATER RATE INCREASES OVER THE LAST COUPLE OF YEARS. AND MY QUESTION WAS MORE TOWARDS IN THE FUTURE. WHEN THAT LIKE COMES ONLINE. IS IT NOT GOING TO REDUCE OUR SUPPLY COST? I AM NOT REALLY SURE I HAVEN'T LOOKED AT ANY GREAT EXTENT AS TO WHAT NORTH TEXAS IS. ACTUAL COSTS ARE THERE ARE GOING TO BE A LOT OF COSTS AND MAINTAINING THE LAKE AND PUMPING THE WATER FROM THE LAKE TO THE METROPLEX. ALL THOSE COSTS WILL BE ABSORBED. I THINK YOU CAN MAKE THE ARGUMENT THAT THERE WILL BE SOME RELIEF TO LIVE ON. AND THE NORTH TEXAS'S OTHER RESOURCES, BUT THERE ARE GOING TO BE ADDITIONAL COSTS AND, OF COURSE, THE DEBT. THAT THEY HAVE TAKEN OUT TO BUILD THE LAKE HAS BEEN ASTRONOMICALLY HIGH. SO I THINK ALL IN ALL IT'S GOING TO IN OVERALL, IT'S GOING TO INCREASE THE COST OF WATER HERE IN THE METROPLEX. IF I COULD ADD , UM THEY MADE IT CLEAR TO US WITH THIS RATE INCREASE THAT A LOT OF KEY FACTOR AS WELL IS THEIR INPUTS THEIR COST OF CHEMICALS AGAIN. THIS IS MANY OF THE CHEMICALS ARE SHIPPED THROUGH SHIPPING ROUTES. SOME OF THEM COME FROM PARTS OF THE WORLD THAT, UM IT'S HARD TO GET THEM NOW. AND SO THAT IS THAT DISRUPTION SUPPLY DISRUPTIONS GREATLY DRIVEN UP THE COST OF SOME OF THEIR INPUTS, AND THAT'S INCREASED THEIR OPERATING COSTS SO TO SPEAK TO DELIVER THE WATER. LET ME ASK THIS CHART. I MEAN, PUT WORDS IN YOUR MOUTH. BUT I THINK WOULD BE RELEASED IN MY MIND. WE'VE KNOWN THIS LIKE SALMON COMING ON FOREVER. BUT YET YOU'RE HERE TODAY TELLING US WHAT WE'RE SURPRISED BY THIS RATE INCREASE. SO THE LAKE IS NOT THE REASON FOR THE SURPRISE RATE INCREASE BECAUSE WE KNEW THIS LAKE. SO YOU SAID THERE WERE FOUR FACTORS CURIOUS. WHAT ARE THE FOUR FACTORS ONE OF THEM? MR GRIMES SAID. IT'S THE COST OF CHEMICALS. WHAT ARE THE OTHER FOUR THAT GET US TO THIS PROFOUND JUMP OVER THE NEXT FEWE FACTORS IN IN THAT ARE GOING TO INFLUENCE THE CITY OF MCKINNEY.UM AND NORTH TEXAS IS ONE OF THE FOUR FACTORS BUT AS FAR AS THE REASONS WHY NORTH TEXAS IS INCREASING THEIR RATES, THAT'S WHAT I WANT TO KNOW. AND MR GRIMES, I MIGHT NEED A LITTLE BIT OF HELP HERE. I'M GOING TO FIND THEIR LETTER THAT THEY SENT TO US. THEY OUTLINED IT. THEY SENT IT TO ALL OF US. THEY COMMUNICATE TO ALL OF US A COUPLE OF MONTHS AGO THAT THIS IS COMING. HERE ARE THE MAIN FACTORS DRIVING IT. I'LL FIND IT AND WE'LL SHARE THAT WITH YOU.
AND UM SO FACTOR NUMBER ONE FOR THE CITY OF MCKINNEY IS NORTH TEXAS AS WATER INCREASES FACTOR NUMBER TWO IS NORTH TEXAS'S WASTEWATER INCREASES BECAUSE YOU ALSO SEND ALL YOUR SEWAGE TO WASTEWATER TO NORTH TEXAS TO HAVE THEM TREATED AND THE EAST FORK INTERCEPTOR COSTS THERE ARE NOW INDICATING ARE GOING TO COST AS MUCH AS 20% MORE. THAN WHAT THEY JUST INDICATED LAST YEAR, GIVEN FOR A LOT OF THE SAME REASONS, CHEMICALS COSTS, INSURANCE COSTS, PERSONNEL COSTS GOING UP ENERGY COSTS. ALL OF THOSE ARE FACTORS THAT ARE INCREASING NORTH TEXAS'S COSTS.
THE THIRD FACTOR THAT'S IMPLEMENTING THE CITY OF MCKINNEY IS THE OVERALL INFLATION RATE. REMEMBER YOU RUN THE OPERATION LIKE A BUSINESS. WE HAVE A 9.1% OVERALL INFLATION RIGHT RIGHT NOW. THAT IS ONE OF THE THINGS THAT MAKES INFLATION SO INSIDIOUS IS THAT IT NOT ONLY IMPACTS OUR HOUSEHOLD BUDGETS WHEN WE GO TO THE GROCERY STORE WHEN WE GO TO THE GAS STATION.
POSSIBLE EFFECTS ARE WATER BILLS. BECAUSE ALL OF THAT RIPPLES THROUGH TO YOUR WATER COSTS. I THINK THE CITY HAS DONE AN ADMIRABLE JOB, KEEPING ITS 2023 BUDGET AS MINIMAL AS POSSIBLE, BUT IT'S SORT OF LIKE PUTTING YOUR FINGER IN THE DIKE. I MEAN, THERE'S ONLY SO MUCH YOU CAN DO AND YOUR COSTS ARE GOING TO GO UP AND THAT IS GOING TO IMPACT YOUR WATER RATES AS WELL.
AND THE FOURTH FACTOR IS ANOTHER FACTOR THAT IS TIED TO INFLATION. AND THAT IS YOUR CAPITAL IMPROVEMENT PLAN. COSTS ARE GOING UP. IT COSTS YOU MILLIONS OF DOLLARS TO RUN TO BUILD AND OPERATE A WATER AND WASTEWATER SYSTEM TO PUSH WATER THROUGH THE CITY TO GET IT TO ITS END USER. YOU HAVE TO DO A SERIES OF CAPITAL IMPROVEMENTS IN ORDER TO MAINTAIN REPLACE
[00:30:05]
REPAIR AND EXPAND THAT SYSTEM. WELL, GUESS WHAT THOSE CAPITAL COSTS HAVE SKYROCKETED IN THE LAST FEW YEARS. ANYBODY WHO'S TRYING TO BUILD A HOUSE IN THE LAST COUPLE OF YEARS I'M ONE OF THEM HAS SEEN HOW MUCH MATERIALS COSTS HAVE GONE UP AND HOW CONTRACTORS ARE VERY BUSY RIGHT NOW, AND THEY'RE NOT BIDDING AS COMPETITIVELY AS THEY HAD ALL OF THOSE A FACTORING INTO AN INCREASE IN YOUR CAPITAL COSTS. SO ALL OF THESE FOUR FACTORS TOGETHER HAVE PUSHED YOUR COSTS UP TO A HIGHER EXTENT THAN WHAT HAS PREVIOUSLY BEEN FORECAST IN PRIOR YEARS. SO LET'S TALK A LITTLE BIT ABOUT THE SYSTEM ITSELF AND YOUR AND YOUR WATER AND SEWER COSTS RIGHT NOW. THE AVERAGE RESIDENTIAL RATEPAYER HERE IN THE CITY OF MCKINNEY USES SOMEWHERE AROUND 7 TO 9000 GALLONS OF WATER AND SEWER SERVICE A MONTH. VARIES A LITTLE BIT. OBVIOUSLY, IT'S MORE IN THE SUMMER OR LESS IN THE WINTER. BUT WHEN YOU COMPARE THE CITY OF MCKINNEY'S COST TO YOUR NEIGHBORS, YOU COMPARE ACTUALLY QUITE FAVORABLY. THIS CHART RIGHT HERE SHOWS A MONTHLY CHARGE COMPARISON FOR 10,000 GALLONS OF WATER WITH A WINTER AVERAGE OF 5000 GALLONS OF WASTEWATER. THE AVERAGE MCKINNEY CUSTOMER WHO USES THIS VOLUME PAYS $111.55 AS YOU CAN SEE YOUR HIGHER THAN A FEW CITIES, YOU'RE LOWER THAN MANY OTHER CITIES. IS UM BUT IMPORTANTLY, YOU'RE ABOUT $10 BELOW THE STATE AVERAGE. SO WHAT THIS CHART TELLS US IS THAT YOUR RATES AND YOUR COSTS ARE CERTAINLY NOT OUT OF PROPORTION TO WHAT OTHER CUSTOMERS HERE IN NORTH TEXAS AND THROUGHOUT THE STATE OF TEXAS ARE PAYING FOR WATER AND SEWER SERVICE. UH AND AS YOU CAN SEE, THIS CHART ALSO INCLUDES MANY, MANY NORTH TEXAS CUSTOMERS LIKE ROY CITY AND MESQUITE AND GARLAND AND LITTLE ELM AND WILEY AND OTHER CITIES LIKE THAT, SO ALL OF THESE CITIES ARE BEING SUBJECTED TO THE SAME INCREASES. YOU ALL ARE. UM. WE ALL KNOW MCKINNEY IS A FAST GROWING CITY. THE FACT THAT YOU'RE GROWING AS AGGRESSIVELY AS YOU HAVE BEEN IN THE PAST HAS REALLY BENEFITED YOUR WATER AND SEWER SYSTEM BECAUSE EVERY NEW EVERY NEW ACCOUNT AS A NEW MINIMUM CHARGE AS A NEW VOLUMETRIC CHARGE, WATERS, A BOOK COMMODITY YOU KNOW, SO THE MORE YOU SELL, THE LESS IT COSTS YOU PER 1000 GALLONS TO SELL THIS CHART RIGHT HERE IS A FORECAST OF YOUR HISTORICAL AND PROJECTED NEW ANNUAL ACCOUNTS THAT WE USED IN OUR LATEST LONG TERM FORECAST. AS YOU CAN SEE, YOU ARE GROWING VERY AGGRESSIVELY OVER THE LAST SEVERAL YEARS. 24 2500 ACCOUNTS WHEN COVID HIT IN 2020 AND 2021 . IT APPEARS TO HAVE DEPRESSED YOUR YOUR ACCOUNT GROWTH A LITTLE BIT DOWN TO ABOUT 3800 TO 2000 ACCOUNTS. IT'S RECOVERED PRETTY WELL IN 2022. OKAY? AND ALL INDICATIONS ARE THAT IT'S GOING TO CONTINUE AGGRESSIVELY IN THE NEXT 10 YEARS. NOW, REMEMBER, THIS IS A FORECAST FORECAST IS NOT A GUARANTEE. IT'S A PREDICTION BASED ON FUTURE BASED ON REASONABLE SETS OF ASSUMPTIONS. THERE ARE SOME STORM CLOUDS ON THE HORIZON WITH REGARDS TO YOUR GROWTH. THE MOST IMPORTANT ONE, OF COURSE, IS INTEREST RATES. INTEREST RATES HAVE GONE UP BY ALMOST AN ENTIRE PERCENTAGE POINT THIS YEAR. IF THEY CONTINUE TO GO UP THAT COULD THREATEN THE AMOUNT OF GROWTH THAT YOU HAVE IN, PARTICULARLY IN RESIDENTIAL HOUSING. THAT'S WHY IT'S IMPORTANT THAT OVER THE NEXT COUPLE OF YEARS WE KEEP OUR EYES VERY CAREFULLY ON WHAT YOUR CONTINUED GROWTH IS AND ADJUST OUR RATE AND FINANCIAL PLANS ACCORDINGLY. THIS CHART RIGHT HERE JUST SHOWS THAT AS OF THE CURRENT YEAR YOU HAVE ABOUT 65,933 WATER ACCOUNTS. AND THAT AMOUNT IS PROJECTED TO GROW TO ABOUT 96,000 BY THE YEAR 2032.SO WE'RE STILL CONTINUING TO ASSUME PRETTY AGGRESSIVE GROWTH. THIS CHART RIGHT HERE IS INTERESTING TO WATER GUYS LIKE ME, BUT IT SHOWS THE INCREASE IN YOUR WATER SALES OVER THE LAST DECADE AND YOUR FORECAST INCREASE OVER THE NEXT DECADE. IN THE MOST AS YOU CAN SEE IN THE YEAR 2013 YOU SOLD OR CONSUMED ABOUT 7.2 BILLION GALLONS OF WATER. THIS ISN'T THE AMOUNT OF WATER YOU BOUGHT FROM NORTH TEXAS. THIS IS THE AMOUNT THAT PEOPLE ACTUALLY CONSUMED.
AS YOU CAN SEE, IT'S GROWN FAIRLY STEADILY. AND AS YOU WOULD EXPECT WITH WATER SALES, THEY'RE GOING TO BE HIGHER AND DRY YEARS AND LOWER THAN IN WET YEARS. LOOK AT THE LAST COUPLE OF YEARS. IF YOU RECALL, 2020 AND 2021 WERE RELATIVELY MILD SUMMERS, SO OUR USAGE WAS DOWN A LITTLE BIT. AND AS YOU ALL KNOW, THIS YEAR HAS BEEN A VERY, VERY HOT SUMMER. WHAT'S REALLY INTERESTING ABOUT THIS YEAR IS THAT YOUR USAGE WAS ACTUALLY DOWN FOR THE FIRST SEVERAL MONTHS OF 2022, BUT IT HAS SKYROCKETED IN THE LAST COUPLE OF MONTHS. IT'S 30 TO 40% GREATER IN THE SUMMER OF 2022 THAN IT WAS IN THE SUMMER OF 2021. WELL THAT TENDS TO HAPPEN WHEN YOU HAVE 40 DAYS OF 100 DEGREE PLUS WEATHER. WE'RE NOW PROJECTING THAT YOU'RE GOING TO SELL ABOUT 10.8 BILLION GALLONS IN THE YEAR 2022, WHICH IS GOING TO BE A RECORD HIGHEST AMOUNT YOU'VE EVER SAW. BUT WE'RE ALSO ANTICIPATING THAT NEXT SUMMER PROBABLY WON'T BE AS HOT AS THIS
[00:35:04]
SUMMER. BETTER NOT BE TELL YOU THAT AND SO IF THAT IS THE CASE, THEN YOUR WATER USAGE IS GOING TO COME BACK DOWN A LITTLE BIT. AND SO WE'RE PROJECTING. IT'S PROBABLY GOING TO DECREASE A LITTLE BIT, AND THEN IT WILL STEADILY INCREASE OVER THE NEXT DECADE. NOW LOOK WHAT'S WHAT'S REALLY GOING TO HAPPEN IS IT'S GOING TO GO UP AND DOWN AND UP AND DOWN, BUT IT'S GOING TO TREND UPWARDS OVER THE NEXT DECADE. UH FOR INTERRUPTING, SIR. BUT IS YOUR ESTIMATE BASED SOLELY ON FINGER IN THE AIR? WHAT'S THE WEATHER GOING TO BE, OR IS IT GOING TO BE ON? HEY, OUR WATER RATES JUST WENT UP 13% 10% 9% A YEAR AND SO WE'RE USING LESS TOO, BECAUSE BECAUSE WE'RE RATIONAL CONSUMERS, AND WE DON'T WANT TO PAY THESE HIGH BILLS FACTOR INTO THIS. ABSOLUTELY INCLUDING THAT OUR MODEL HAS IN WHAT WE CALL AN ELASTICITY, FACTORING IT THAT DOES TEND TO DECREASE USES. LOOK, THERE'S AN OLD ECONOMIC SAYING. WHEN YOU RAISE THE PRICE OF SOMETHING, YOU GET LESS OF IT. THAT'S GOING TO HAPPEN, HOWEVER. THAT BEING SAID WATER IS FAIRLY IN ELASTIC BECAUSE NOT LIKE YOU'RE GOING TO DRINK LESS WATER BECAUSE THE PRICES HIGHER. I MEAN, YOU'RE GOING TO DO CERTAIN THINGS. YOU'RE GOING TO WATER YOUR LAWN A LITTLE BIT LESS. YOU MAY NOT FILL THE POOL AS OFTEN BUT YOU KNOW, THERE'S ONLY SO MUCH SAVINGS THERE'S GOING TO BE THERE WILL BE SOME BUT NOT A TON. BUT WE TRY TO FACTOR THAT IN BUT THE BIG WHAT THIS CHART TELLS US IS THE BIGGEST SINGLE FACTOR IS GOING TO BE WEATHER. YOU KNOW THAT'S THAT'S OBVIOUS AND THIS CHART RIGHT HERE SHOWS THAT I THINK IS PLAIN AS DAY. I GOT ONE. I WANT TO ADD ONE THING. WE WERE AS WE RUN OUR UTILITY. WE DON'T RUN IT AS IF IT'S GOING TO BE WET YEAR OR A DRY YEAR. WE TRY TO RUN IT AS IT'S GOING TO BE AN AVERAGE YEAR EVERY YEAR, AND WE UNDERSTAND SOME YEARS WE'RE GONNA SELL THIS SOME YEARS. WE'RE GOING TO SELL MORE, BUT WE TRY NOT. WE TRY TO FOLLOW WHATEVER THE THIS THIS TREND LINE AND I CAN TELL YOU YOU'RE ABSOLUTELY RIGHT ON WHETHER WE THINK WE'RE GOING TO SELL LESS WATER IN THE FUTURE TO MORE CUSTOMERS WERE ACTUALLY TRYING TO BUILD CONSERVATION INTO OUR RATES. WE STARTED DOING THAT SEVERAL YEARS AGO AS WE MOVED INTO THE NEW REALITY OF THE WAY NORTH TEXAS IS GOING TO BUILD US FOR WATER. WITH WITH THE NEGOTIATIONS THAT THAT WE HAD GONE THROUGH, SO WE'RE GOING TO BE CONTINUING TO ADD CONSERVATION RATES TO TRY TO DRIVE THE AMOUNT OF WATER THAT WE'RE ACTUALLY USING DOWN A LITTLE BIT, SO I'VE ALWAYS RUNNING UP RUNNING A WATER UTILITY IS VERY STRANGE. IT'S THE YOU WANT PEOPLE TO USE YOUR SERVICE AND THEN YOU TELL THEM NO, WE DON'T WANT WE WANT YOU TO USE LESS OF IT, AND WE DON'T WANT SO, UM WE'RE NOT THE WERE AS HE SAID. WE'RE NOT JUST STICKING THEIR FINGER IN THE AIR GOING. HEY, IT'S GOING TO BE WET OR DRY. WE'RE WE BUDGET OFF OF THE TREND OVER TIME, AND THEN WE ALSO ARE TRYING TO BUILD CONSERVATION INTO THESE BUDGETS.SO BUT THE BUT THE WAY THAT WE PAID FOR BY THE WAY THE CITY PAYS FOR ITS WATER. IT DOESN'T MATTER IF WE CONSERVATOR, NOT. WE'RE WE HAVE. WE'RE PAYING FOR A CERTAIN AMOUNT, SO THEY'RE MAKING MONEY. AND SO IF WE'RE PAYING FOR 12 BILLION GALLONS, AND WE USE SIX WE GET NO REFUND . MAYBE THE CHEMICALS REFUND, WHICH IS YOU KNOW NICHOLS ON THE DOLLAR, BUT BUT AND SO THAT'S WHAT ALWAYS BOTHERS ME ABOUT. THIS WHOLE THING IS THAT WE KNOW EXACTLY THE AMOUNT OF THAT WE'RE PAYING FOR WATER EVERY YEAR. AND OR NOT, AND THAT METHODOLOGY WILL CHANGE OVER TIME. THAT WAS PART OF THE NEGOTIATION TEXTS MUNICIPAL WATER DISTRICT, AND THAT'S WHY WE'RE BUILDING IN CONSERVATION TO GET US TO WHEN WE ACTUALLY HAVE MADE THAT FULL SWITCH. WE'RE TRYING TO MAKE SURE THAT OUR RATES TO OUR CUSTOMERS REMAIN AS LOW AS THEY CAN, BECAUSE WE'RE TRYING TO CONSERVE THE AMOUNT THAT WE'RE BUYING. ON THE FIVE YEAR AVERAGE WHEN WE HAVE EVENTUALLY GET TO THAT POINT, SO THAT'S ONE OF THE REASONS WE'RE BUILDING IN THE CONSERVATION RATES TODAY.
SPEAKING OF THAT, DO WE DO WE STILL HAVE AN IDEA OF HOW MUCH WE LOSE EVERY YEAR. THROUGH LEAKS. HOPEFULLY IT'S A LOT BETTER, RIGHT? YES WE HAVE SEVERELY CURTAIL THAT IF YOU LIKE 445 BILLION GALLONS, BUT IT WAS IN WE, YOU KNOW, I THINK THAT 10 YEARS AGO WE WERE SOMEWHERE AROUND 23 OR 4% WATER LOSS WE'VE GOTTEN DOWN INTO WHERE THE INDUSTRY STANDARD IS IN THE 10 TO 12% RANGE, I THINK AND I THINK THAT WAS WHAT THE LAST ONE SAID. I CAN GET THE EXACT NUMBER. IT'S ALRIGHT, BUT THAT'S WE HAVE WE IDENTIFIED SEVERAL YEARS AGO. UM THAT ARE COPPER ALLIANCE SERVICE LINES WERE LEAKING. SO WE DIDN'T CRP PROGRAM CASH FUNDED IT. THROUGH THE OPERATIONS. UH TO REPLACE ALL OF THOSE COPPER LINES. OKAY WE ALSO REPLACED ALL OF OUR WENT AND STARTED DOING MEDIA REPLACEMENTS BECAUSE WE THOUGHT MAYBE WE'RE LOSING SOME THREE M AND WE HAVE ARRESTED THAT THAT LOSS FROM WHERE IT WAS TO WHAT IS WELL WITHIN INDUSTRY.
[00:40:03]
STRANGERS WOULD LIKE TO GET IT EVEN LOWER. DON'T LIKE LOSING EVEN ONE GALLON. UM, BUT BUT THAT'S WHERE WE ARE. THANK YOU. MHM DAN, I'M SO SORRY. I WANTED TO WEIGH IN HERE FOR A MINUTE.UM JUST GRAB A COUPLE COPIES FOR US MARK SO I WANTED TO EXPLAIN A LITTLE BIT MORE ON THE LETTER WE TALKED ABOUT ABOUT THE WATER DISTRICT INPUT COSTS. WHAT WE'RE GOING TO DO OR PASSING OUT HERE IS A COPY OF THEIR LETTER THAT WAS SENT TO US IN JULY. IN THIS BASICALLY OUTLINES THEIR BUDGET AND SOME OF THE FACTORS AND REALLY THE MAIN ONE TO LOOK AT. HERE IS THE LAST PARAGRAPH ON PAGE ONE, WHERE THEY TALK ABOUT THEIR ANNUAL BUDGET. WHAT SOME OF THE MAIN DRIVERS ARE I ALSO HAVE AN EMAIL FROM THEIR EXECUTIVE DIRECTOR EARLIER WHEN THEY BASICALLY KIND OF GAVE US A HEADS UP AND SAID, YOU KNOW, WATER RATES ARE GOING TO BE GOING UP AND HEAR SOME OF THE PRIMARY FACTORS. I WANT TO OUTLINE A COUPLE OF THOSE FOR YOU BECAUSE I THINK IT PROVIDES SOME CLARITY ON THIS ISSUE NUMBER ONE UM THEIR CHEMICAL COSTS. SO AS AS QUOTED HERE DUE TO LACK OF SUPPLY AND LIMITED VENDOR OPTIONS WERE FORECASTING A 42% INCREASE IN THE REGIONAL WATER SYSTEM. UM WHICH CONSUMES THE MAJORITY OF THE CHEMICALS. UM, IN A TYPICAL YEAR, WE SEE ABOUT A 3% INCREASE IN THESE COSTS FOR FISCAL YEAR 22 WE PLANNED FOR A 10% INCREASE.
HOWEVER THE COMBINATION OF WORLDWIDE EVENTS INCLUDING THE PANDEMIC, AND THE RUSSIA UKRAINE CONFLICT HAVE AFFECTED OUR CHEMICAL COST INCREASE FROM ABOUT 50 MILLION IN FISCAL YEAR 22 TO MORE THAN 70.5 MILLION IN FISCAL YEAR 23. THAT'S A MAJOR IMPACT. SECOND ONE CITED IS THE GREAT RESIGNATION, WHICH WE'RE ALL DEALING WITH. YOU KNOW, ECONOMICS, THEY WOULD TELL YOU THAT LABOR MOBILITY IS A GOOD THING. BUT MAN, IT'S REALLY DISRUPTIVE AS AN EMPLOYER REASON. IT'S A GOOD THING IS THAT IN THEORY, PEOPLE'S PRODUCTIVE USES OR PLAY OR IF THERE WILL BE ABLE TO TAKE THEIR SKILLS INTO MORE PRODUCTIVE USE BY HAVING LABOR MOBILITY. THE PROBLEM WITH THAT IS IT'S REALLY DISRUPTIVE, AND IT DRIVES THE MARKET AND WHEN YOU HAVE REALLY LABOR SHORTAGES LIKE WE'RE DOING GOING WITH NOW. THAT MEANS PRICE GOES UP, OF COURSE, SO IT'S A SELLER'S MARKET ACROSS A NUMBER OF FACTORS. LABOR IS ONE OF THEM . THEIR EMPLOYEE TURNOVER RATE HAS DOUBLED IN THE PAST YEAR TO 16% INFLATION NUMBERS ARE THE HIGHEST THEY HAVE BEEN IN 40 YEARS. UM SO LIKE US, THEY'RE DEALING WITH COMPETITIVE PAY, AND THAT TYPE OF THING AND THEN CAPITAL IMPROVEMENT PROGRAM GROWTH INCORPORATED REVISED FORECAST FOR THEIR CAPITAL IMPROVEMENT PROGRAMS TO ADDRESS GROWTH, MAINTENANCE OF AGING INFRASTRUCTURE AND PEAK FLOWS IN THE REGIONAL WATER SYSTEM. THEY'RE ALSO PLANNING FOR NEW WATER SOURCES. TO MEET THE NEEDS OF FAST GROWING REGION. CONSTRUCTION COSTS AND INTEREST RATES ARE ON THE RISE, ADDING TO DEBT SERVICE EXPENSE. UM SO I MEAN, THOSE ARE REALLY THE PRIMARY HIGHLIGHTS WHICH ARE OUTLINED IN THE LETTER THAT YOU HAVE BEFORE YOU UM, THE WATER. THE BOAT. DARK LAKE IS THAT'S BEEN BAKED INTO THEIR BUDGET. THEY NO. THEY IN THEIR CAPITAL PLAN. THAT'S NOT NEW. WHAT MAY BE NEW, HOWEVER, IS THE OPERATION OF DARK LAKE AND THE CHEMICAL INPUTS AND THE FINALIZING THE FINAL PIECES OF THE CONSTRUCTION. UM AND THE SETTING UP THE OPERATING THE HIRING THE STAFF TO OPERATE THE FACILITY. AND, OF COURSE, ALL THESE OTHER INPUTS INDIRECTLY DARK LAKE AMONG THEIR OTHER ASSETS, AND WHEN I SAY THERE ARE OTHER ASSETS, THOSE ARE OUR OTHER ASSETS BECAUSE WE'RE MEMBER COMMUNITIES WERE ALL CONTRIBUTING TO THE WATER DISTRICT. EFFECTIVELY. IT'S OUR AGENCY. ON WHICH WE HAVE REPRESENTATION, SO IT'S A TOUGH ENVIRONMENT WHEN IT COMES TO CAPITAL PROJECTS WHEN IT COMES TO CHEMICAL INPUTS HAS NEVER REALLY BEEN SEEN IN OUR LIFETIMES. DID THIS KIND OF A SHORTAGE. YOU KNOW, WHEN YOU THINK ABOUT OIL PRICES THEY'VE COME DOWN. FORTUNATELY LATELY, BUT WHEN THEY SPIKE AND WHEN YOU HAVE THE UNCERTAINTY OF OIL AND WORLD WHERE YOU HAVE CONFLICT IN A PART OF THE WORLD WHERE THOSE INPUTS CHEMICALS, A LOT OF OUR CHEMICALS AND FERTILIZERS ARE PRODUCED IN RUSSIA AND UKRAINE.
AND YOU CAN'T GET THEM TO THE MARKETPLACE. THIS IS A MAJOR PROBLEM AND EVEN FOR US, WE USE THOSE INPUTS TO MAKE CHEMICALS. AND SO WHEN IT'S HARDER TO GET THOSE INPUTS, YOU'RE GOING TO HAVE A HARDER TIME YOUR PRICES GOING TO GO UP BECAUSE YOUR SUPPLY IS GOING TO GO DOWN. SO THOSE ARE SOME OF THE FACTORS THAT ARE DRIVING THIS. IF YOU HAVE ANY MORE QUESTIONS, WE CAN CERTAINLY WORK WITH YOU OR HAVE THE WATER DISTRICT. I WANTED TO MAKE SURE THAT THAT WAS CLARIFIED. YEAH I APOLOGIZE FOR INTERRUPTING. HAVE ANOTHER. YES SIR. WHY DO WE HIRE A CONSULTANT WHEN WE JUST WORKED WITH WHEN WE JUST WORKED WITH NORTH TEXAS? WHAT DOES THE CONSULTANT WELL, THEY STILL WORK WITH US TO SET OUR WATER RATES SO WE GET OUR WATER DISTRICT IS THE WHOLESALER , AND THAT IS THE SINGLE BIGGEST COSTS THAT WE HAVE IN OUR OWN WATER SYSTEM. BUT WE HAVE A WATER UTILITY. WE HAVE TO HAVE A BUSINESS CASE WE'VE GOT TO MAKE AND WE DELIVER IT AND WE HAVE OUR OWN COSTS THAT WE HAVE TO HAVE. WE HAVE TO HIRE ON LABOR AND OUR OWN. WE DON'T TREAT THE WATER PER SE, BUT WE HAVE OUR OWN COST STRUCTURE IN OUR CONSULTANT WORKS WITH US. IN OUR RATEPAYERS TO MAKE SURE THAT OUR RATES ARE ALIGNED WITH OUR WHOLESALE COST OF WATER AS WELL
[00:45:02]
AS THE OTHER THINGS THAT WE DO, AND THEY HELP US SET THOSE RATES, OKAY? WHILE WE'RE ON A BREAK, I'D LIKE TO ASK A QUESTION ABOUT COULD YOU GIVE ME A VERY SHORT EXPLANATION OF THESE INTERCEPTORS SYSTEMS THAT YOU HAVE LISTED HERE ARE SOME OF YOUR MAJOR COST. THERE'S THE UPPER EAST FORK INTERCEPTOR IN THE MCKINNEY INTERCEPTOR. WHAT IS THAT? UM AN INTERCEPTOR IS A WASTE WATER LINE. THAT TRANSPORTS THE WASTEWATER FROM YOUR HOMES TO THE WASTEWATER TREATMENT PLANT. AND SO IT'S. IT'S A WATER LINE, BUT IT'S FOR WASTEWATER. HAVE YOU EVER DRIVE ALONG? YOU SEE BLUE PIPES? THOSE ARE WATER PIPES. IF YOU SEE GREEN PIPES SITTING ON THE GROUND THAT THEY'RE GETTING READY TO PUT IN THE GROUND, GREEN PIPES ARE WASTEWATER PIPES. AND SO THE WASTE WATER IS TRANSPORTED TO THE PLAN. AND APPARENTLY THE EAST FORK LINE, CONSTRUCTION COSTS AND OPERATING COSTS ARE TURNING OUT TO BE FAR MORE EXPENSIVE THAN WHAT THEY ORIGINALLY ANTICIPATED THAT THEY WOULD BE QUITE EXPLANATION. BEING IN FINANCE GUY. IT'S GREAT . I JUST TELL YOU HOW MUCH THINGS COST. I DON'T KNOW A WHOLE LOT ABOUT HOW THEY OPERATE. BUT YEAH, AND THEN THEN BECAUSE THE WAY THE SYSTEM WORKS AS YOU'RE ADDED TWO DIFFERENT DIFFERENT ONES OF THEIR WASTEWATER TREATMENT PLANTS AND WASTE WATER LINES, WE HAVE TO BEAR OUR RESPONSIBILITY OF THE COST OF THOSE SO SOME CITIES WOULD WOULD BEAR THE COST OF THE CERTAIN INTERCEPTORS. THIS ONE'S ONE OF OURS SO THANK YOU. AND I DIDN'T MEAN TO GET YOU OUT OF YOUR REALM OF EXPERTISE, BUT NOT AT ALL. UM YES, MA'AM COMMUNITY JUST TO THE REST OF US. FIRST TIME LOOKING AT RATES COMPARISON BETWEEN US AND FRISCO, PLANO. UM AND I THINK YOU KNOW WHEN WE'RE LOOKING AT FRISCO TO ANOTHER RAPIDLY GROWING COMMUNITY RIGHT PROJECTS AS WELL. WHY ARE THEIR RATES? HOW HOURS? WELL, WE KNOW THAT, BUT SURE, LET'S LOOK AT FIRST WE'LL TALK ABOUT PLANO BECAUSE THEIR LONGSTANDING CLIENT OF OURS AND WE'LL TALK ABOUT FRISCO BECAUSE I LIVED IN FRISCO FOR 20 YEARS. UM IN PLANO. THEY HAVE THEY? THEY DECIDED A LONG TIME AGO THAT THEY WOULD GEAR THEIR RATES. TOWARDS THEIR LOWER VOLUME CUSTOMERS. THEY HAVE A BLOCK AND INVERTED BLOCK RATE JUST LIKE YOU DO WHERE THE MORE YOU USE, THE MORE YOU PAY. BUT A LONG TIME AGO, PLANO DECIDED THAT THEY WOULD SET THEIR FIRST YEAR. GALLONS UP TO 5000 GALLONS 3000 GALLONS. 3 TO 3 TO 3000 GALLONS , THEY WOULD CHARGE 77 CENTS PER 1000 GALLONS, SO THEY CHARGE A VERY, VERY LOW RATE, AND THE PHILOSOPHY WAS THAT THEY HAVE A LOT OF, UH, SENIOR CITIZENS, PEOPLE ON FIXED INCOME IN THE CITY. AND SO THEY AND THOSE PEOPLE TEND TO USE VERY LITTLE AMOUNTS OF WATER, SO THEY WANTED THEM TO PAY THE LOWEST RATE. BUT PLANO'S HIGHEST RATE IF YOU GET ABOVE 20,000 GALLONS IS $8.5 PER 1000 GALLONS, SO THEY GO FROM 77 CENTS TO $8.5. SO WHEN YOU DO A RATE COMPARISON LIKE THIS FOR THE VAST MAJORITY OF CUSTOMERS WHO DON'T USE THAT MUCH WATER, PLANO COMPARES VERY FAVORABLY NOT ONLY TO MCKINNEY BUT TO EVERY OTHER COMMUNITY. BUT IF I WERE TO SHOW YOU A CHART OF 40,000 GALLONS PLANE, IT WOULD BE RIGHT AT THE TOP. EXCUSE OH, DOES NOT IS NOT QUITE AS AGGRESSIVE AS PLANO IS, BUT THEY ARE DEFINITELY MORE AGGRESSIVE THAN THAN THE CITY AND WE GOT MORE AGGRESSIVE AS WELL WITH OUR RATES. WELL, WHAT WAS IT LAST YEAR WE ADOPTED A RATE STRUCTURE THAT DID LOWER THE RATE FOR THE FIRST THE 1ST 5000 FOR US. UM, UM AND SO FOR THE SAME CONCEPT. IT'S THOSE THAT ARE LOWER USERS. GENERALLY SENIORS AND RETIREES THAT THEY WOULD PAY LOWER RATES, NOT 77 CENTS, BUT IT'S DEFINITELY LOWER. BUT THERE'S YOU KNOW, EVERY ACTION HAS AN EQUAL OPPOSITE REACTION IF YOU CHARGE 77 CENTS FOR THE FIRST FEW 1000 GALLONS FOR WATER THAT YOU'RE PAYING NORTH TEXAS $3 1000 GALLONS FOR WHAT THAT MEANS. IS THAT YOUR HEAVILY SUBSIDIZING THOSE VERY LOW VOLUME CUSTOMERS. AND IT'S YOUR HIGHER VOLUME CUSTOMERS IN YOUR COMMERCIAL CUSTOMERS THAT ARE PAYING HIGHER RATES TO SUPPORT THAT RATE STRUCTURE. IT'S A DECISION RATE MAKING IS AN ART, NOT A SCIENCE. THERE ARE MANY, MANY DIFFERENT RATES YOU CAN PUT INTO PLACE THAT WILL GET YOU THE REVENUE YOU NEED. BUT EVERY RATE STRUCTURE IS GOING TO IMPACT DIFFERENT PEOPLE DIFFERENTLY. AND SO IT BECOMES A POLICY DECISION ON THE PART OF YOURSELVES AND EVERY OTHER COMMUNITY AS TO WHAT YOU WANT TO DO. PLAIN OLD LONG AGO. MADE THE CHOICE THAT THEY WERE GOING TO SET THAT RATE. AND AS A MATTER OF FACT, FEW YEARS AGO, WE WERE ADDRESSING THE PLANO CITY COUNCIL AND WE SAID, YOU KNOW, YOU MIGHT WANT TO THINK ABOUT RAISING THAT THAT LOWER RATE BECAUSE YOU'RE SUBSIDIZING AND THE REACTION OF THE COUNCIL VIRTUALLY UNANIMOUSLY WAS NO. WE LIKE IT THE WAY IT IS, AND WE'RE GONNA KEEP IT THAT WAY, AND THAT IS CERTAINLY THEIR CHOICE. SO SO THAT'S WHAT RATE COMPARISONS ARE[00:50:05]
NOT PERFECT. YOU KNOW, THERE ARE PEOPLE WANT TO SEE THEM. SO I THINK THE BIGGEST TAKEAWAY FROM A RAPE CHART LIKE THIS IS TO SHOW THAT YOU ARE CERTAINLY NOT OUT OF PROPORTION TO WHAT OTHER PEOPLE ARE PAYING. UM, NOW FARMERSVILLE WHO IS NOT A CLIENT OF OURS, BY THE WAY, IF YOU'RE IF YOU'RE IN FARMERSVILLE, YOU MIGHT HAVE A VERY LEGITIMATE QUESTION ABOUT WHY IT IS THAT WE'RE PAYING $170 FOR THE AMOUNT OF WATER THAT PEOPLE IN PLAIN OVER PAYING $85 FOR. THAT MIGHT BE A VERY LEGITIMATE QUESTION, BUT IT CERTAINLY ISN'T FOR THE CITY OF MCKINNEY. SO SURE. OKAY, UM. NORTH LAST YEAR IN 2021, NORTH TEXAS, SAID THAT THEY WOULD BE RAISING THE RATE BY 7.5% THIS YEAR. THEN THEY CAME BACK WITH THIS YEAR'S PROJECTION , AND NOW IT'S 13.4% AND IT'S 11% NEXT YEAR, AND YOU CAN SEE THE VERY HIGH INCREASES THAT THEY'RE LOOKING AT. IMPLEMENTING OVER THE NEXT DECADE. NORTH TEXAS CHARGES A RATE PER 1000 GALLONS UNDER THIS TAKE OR PAY CONTRACT RIGHT NOW, THE TAKER PAY RATE IS $2.99 PER 1000 GALLONS. LAST YEAR THERE FORECAST PROJECTED THAT THE RATE WOULD HIT $3.82 BY 2027 $4.64 BY 2031. YOU CAN SEE WHAT THE IMPACT OF THEIR REVISION HAS BEEN. NOW THEY'RE PROJECTING $4.72 BY 2027 $6.16 BY 2031.OBVIOUSLY WHEN THAT MAN OF TOO MUCH OF A MAGNITUDE OF CHANGE OCCURS YOU IT'S GOING TO RIPPLE THROUGH AND YOU'RE GONNA HAVE TO GO BACK IN AND REVISIT ALL OF YOUR NUMBERS. ON THE EAST FORK INTERCEPTOR COSTS. UM THE CITY WAS LAST YEAR, THE CITY PROJECTED THAT IT WOULD SPEND $27.5 MILLION IN EAST FORK INTERCEPTOR COSTS. THAT AMOUNT HAS GONE UP BY ALMOST A MILLION DOLLARS JUST THIS PAST YEAR. BY 2031. YOU'RE NOT PROJECTED TO SPEND ALMOST $9 MILLION MORE IN EAST FORK INTERCEPTOR COSTS THAN YOU DID IN LAST YEAR'S FORECAST. THE FINAL THE YOU KNOW THE NUMBER FOUR REASON WAS THE CAPITAL IMPROVEMENT PLAN LOOK, CAPITAL IMPROVEMENT PLANS ARE CRITICAL. BUT THEY IMPACT RATES IN THREE WAYS. HOW MUCH YOU HAVE TO SPEND WHEN YOU HAVE TO SPEND IT AND HOW YOU FINANCE IT. NOW WE DEAL WITH SOME CITIES THAT HAVE VERY, VERY LOW RATE, AND ONE OF THE REASONS WHY THEY HAVE LOW RATES IS THAT THEY DON'T PUT ANY MONEY INTO THEIR SYSTEM. AND SO THEIR SYSTEM IS LITERALLY FALLING APART. AND SO IT'S SORT OF LIKE SAYING YOU CAN SAVE $100 BY NOT CHANGING OIL IN YOUR CAR. BUT A YEAR LATER, YOUR ENGINE BLOWS OUT. THE CITY OF MCKINNEY HAS ALWAYS BEEN VERY ADMIRABLE IN ITS WILLINGNESS TO INVEST IN ITS SYSTEM TO ENSURE THAT A HIGH QUALITY OF SERVICE IS CONTINUALLY AVAILABLE. TO ALL OF ITS CITIZENS. THIS IS RESULTED IN AN AWFUL LOT OF MONEY YOU'VE HAD TO SPEND AND THAT AMOUNT IS GOING UP. YOU'RE RIGHT NOW FORECAST TO SPEND $245 MILLION IN BOND ISSUES TO FUND CAPITAL CONSTRUCTION OVER THE NEXT 5 TO 6 YEARS. NOW THE GOOD NEWS IS THAT THIS IS A DIRECT INVESTMENT IN THE FUTURE OF THE CITY OF MCKINNEY, BECAUSE ALL THE ASSETS YOU PURCHASE WITH THIS DEBT IS GOING TO BE USED BY YOURSELF.
YOUR CHILDREN, YOUR GRANDCHILDREN AND MAYBE EVEN YOUR GREAT GRANDCHILDREN. IT IS A DIRECT INVESTMENT IN THE CITY'S FUTURE. BUT IT'S A LOT MORE NOW THAN IT WAS JUST A YEAR OR TWO AGO. LOOK AT WHAT THE IMPACT OF INFLATION COST INCREASES. ENERGY COST INCREASES , YOU KNOW, UM DEVELOPERS AND CONTRACTORS THAT ARE UPDATING PRICES. IT'S MORE THAN $100 MILLION MORE THAN WHAT YOU ANTICIPATED. IT WOULD BE JUST A YEAR OR TWO AGO. IT HAS TO BE SPENT. IT'S GOING TO BENEFIT THE COMMUNITY, BUT IT ALSO HAS TO BE RECOVERED THROUGH YOUR LONG TERM RIGHT PLAN. SO THIS CHART RIGHT HERE IS YOUR FORECAST COSTS TO SERVICE HOW MUCH? IT'S COSTING YOU TO RUN YOUR WATER AND SEWER OPERATION IN THE CURRENT YEAR ON THE WATERSIDE IS COSTING YOU $72 MILLION OF THAT TOTAL 58% OF IT IS NORTH TEXAS MORE THAN ALL OF YOUR OTHER COSTS COMBINED. ON THE WASTEWATER SIDE IS COSTING YOU $52 MILLION IN THE FISCAL YEAR 2023 TO RUN YOUR OPERATION 54% OF IT IS NORTH TEXAS AND EVERYTHING ELSE IS 46% SO WHILE OPERATING COSTS AND INCREASED SALARIES AND INCREASED DEBT SERVICE IS IMPORTANT, IT'S DWARFED BY THE IMPACT OF NORTH TEXAS AND THEIR COST INCREASES. THIS RIGHT? HERE IS A FORECAST OVER THE NEXT 10 YEARS TO NO GREAT TO NO GREAT SURPRISE COSTS ARE FORECAST TO CONTINUE TO INCREASE. IT'S COSTING YOU JUST SOUTH OF $120 MILLION TO RUN YOUR OPERATION. TODAY WE'RE PROJECTING THAT'S GOING TO DOUBLE IN THE NEXT 10 YEARS. SO AH, AND AS YOU CAN SEE, IT'S $30 MILLION MORE THAN WHAT WAS JUST
[00:55:07]
FORECAST LAST YEAR DUE TO THE DURA ALL OF THESE IMPACTS, SO BECAUSE OF THESE FOUR REASONS WE'RE GOING TO RECOMMEND THAT YOU IMPLEMENT A NEW ONE YEAR RATE PLAN JUST FOR THIS YEAR.AND WE ALSO RECOMMEND THAT YOU DO SOME ANNUAL REVIEWS FOR THE NEXT COUPLE OF YEARS. WE'RE IN VERY UNCERTAIN TIMES ECONOMICALLY RIGHT NOW. AND SO WE DON'T KNOW WHETHER OR NOT THESE NORTH TEXAS INCREASES ARE GOING TO CONTINUE. WE DON'T KNOW WHAT THE INFLATION RATE IS GOING TO BE. WE DON'T KNOW WHAT THE IMPACT IS GOING TO BE ON YOUR HOUSING MARKET. AND SO, WHEREAS WE TYPICALLY LIKE TO DO PLANS FOR 2 TO 3 YEARS, WE REALLY THINK YOU OUGHT TO LOOK AT IT ANNUALLY FOR THE NEXT COUPLE OF YEARS, JUST TO MAKE SURE THAT ANY CHANGES ARE FULLY INCORPORATED. AND QUITE FRANKLY, THESE CHANGES MIGHT BE BENEFICIAL TO BECAUSE OF INFLATION DOES START TO COME DOWN IN THE NEXT COUPLE OF YEARS. THEN YOUR COST INCREASES WILL LESSEN, SO LET'S LOOK AT IT ANNUALLY. SO THIS IS WHAT WE PROPOSE THAT YOU CONSIDER IMPLEMENTING FOR THE FOR THE FISCAL YEAR 2023 EFFECTIVE OCTOBER 20 TO 2022. WE RECOMMEND ADJUSTING YOUR RESIDENTIAL INSIDE MINIMUM CHARGE FROM $16.50 TO 17 65. WE RECOMMEND TAKING YOUR VOLUMETRIC RATE FOR THEIR 1ST 7000 GALLONS PER 1000 GALLONS FROM $4 TO 4 35 WITH PROPORTIONATE INCREASES IN EACH OF YOUR OTHER VOLUME TIERS. THE COMMERCIAL SIDE. WE RECOMMEND SIMILAR INCREASES ON BOTH OF BOTH THE MINIMUM CHARGE AND THE VOLUMETRIC RATE. PROJECT WE'RE PRESENTING THIS AS A FORECAST BECAUSE WE'RE FORECASTING THAT YOU'RE GOING TO NEED SIMILAR INCREASES IN EACH OF THE NEXT THREE YEARS, BUT WE DON'T RECOMMEND YOU ACTUALLY IMPLEMENT THAT RATE PLAN. WE RECOMMEND THAT YOU COME BACK AND LOOK AT IT NEXT YEAR. FOR YOUR IRRIGATION RATES. WE ALSO RECOMMEND A SIMILAR SET OF ADJUSTMENTS, YOUR MINIMUM CHARGE BEING BY METER SIZED THE MINIMUM CHARGE BEING HIGHER FOR EVERY METER SIZE BECAUSE THE LARGER METER THE METER YOU HAVE THE GREATER THE STRESS IT PUTS ON YOUR SYSTEM. AND SO THE COST IS GREATER TO SERVICE. A LARGER METER. AND SO WE RECOMMEND SIMILAR ADJUSTMENTS ON THE MINIMUM CHARGE AND ON THE VOLUMETRIC RATE. ON THE WASTEWATER TO INTERRUPT YOU AND I'M SO SORRY ABOUT THIS, NOT AT ALL DEFINED IRRIGATION CHARGE VERSUS NORMAL MONTHLY WATER COMES THROUGH MY METER. HOW HOW DOES ANYONE KNOW WHAT'S GOING TO IRRIGATION VERSUS WHAT WE'RE PUTTING IN THE BATHTUB? BECAUSE DIFFERENT BECAUSE THESE ARE FOR SPECIFIC IRRIGATION METERS. MANY OF YOUR CUSTOMERS HAVE A SEPARATE METER. THAT IS JUST FOR IRRIGATION PURPOSES, AND THAT IS THE AND THAT MAKES A LOT OF SENSE WHEN YOU THINK ABOUT IT, BECAUSE, LET'S SAY, LET'S SAY YOU'VE GOT A BUSINESS WITH A LARGE YARD OR A OR A SCHOOL CAMPUS OR SOMETHING LIKE THAT.
OKAY, YOU BIG THAT YOU'RE TALKING ABOUT A NONRESIDENTIAL. I'M JUST TRYING TO UNDERSTAND THAT SHOW THE RESIDENTS TO DO WE HAVE SEPARATE METERS FOR IRRIGATION. AND I'M SORRY. I DON'T KNOW THIS BUT YOU DO HAVE SOME SOME, BUT IT'S NOT PROMOTE VERY, VERY SMALL AMOUNT. BUT THIS IS THIS IS SET FOR COMMERCIAL CUSTOMERS SO THEY DON'T HAVE TO PAY SEWAGE. THE SEWAGE CHARGER WASTEWATER CHARGE ON IRRIGATION METERS. THANK YOU . ANSWER MY QUESTION. I APOLOGIZE FOR INTERRUPTING. THANK YOU ALL AND IF YOU'VE GOT A VERY LARGE LOT IF YOU'VE GOT AN ACRE LAWN ACRE AND A HALF LOT, IT MAKES A LOT OF SENSE TO HAVE AN IRRIGATION METER.
BECAUSE YOU'RE GONNA YOU'RE GONNA USE A LOT OF WATER FOR IRRIGATION, AND YOU DON'T WANT TO BE PAYING WASTEWATER CHARGES ON THAT POINT, SO IT DOES MAKE A LOT OF SENSE TO DO IT THAT WAY.
FAIR POINT AT THE SAME TIME. BY SETTING A SEPARATE IRRIGATION RATE. YOU ARE PROVIDING AN INCENTIVE FOR PEOPLE TO IRRIGATE AS LITTLE AS POSSIBLE, BECAUSE IRRIGATION REQUIRES A LOT OF WATER, AND SO YOU'VE GOT A TIERED RATE FOR YOUR IRRIGATION CUSTOMERS, SO THE MORE THEY USE, THE MORE THEY PAY, AND SO THAT PROVIDES THEM WITH A POWERFUL INCENTIVE TO IRRIGATE ONLY WHEN THEY ABSOLUTELY HAVE TO. ON THE WASTEWATER SIDE. WE RECOMMEND TAKING YOUR MONTHLY MINIMUM CHARGE FROM $21.05 TO 22 75 WITH YOUR VOLUME RATE FROM $5.90 PER 1000 GALLONS TO 6 35 WITH SIMILAR INCREASES FOR YOUR NON RESIDENTIAL CUSTOMERS. NOW, WHAT DOES THIS MEAN? IN TERMS OF WHAT PEOPLE PAY? OKAY THIS IS PROBABLY MOST IMPORTANT CHART IN THE ENTIRE PRESENTATION. BECAUSE THIS SHOWS YOU WHAT THE IMPACT OF THIS PLAN IS. WHAT THIS BASICALLY SAYS, IS THAT MOST RATEPAYERS ARE LOOKING AT ABOUT A 7.98% RATE ADJUSTMENT UNDER THIS PLAN IF YOU STILL APPROVE IT AND KEEP THIS IN MIND YOUR YOUR NORTH TEXAS WATER INCREASES GOING UP BY 13% AND YOUR WASTEWATER INCREASES GOING UP BY CLOSE TO 20. BUT THE RATE ADJUSTMENT ONLY HAS TO BE 8 TO 9% FOR THE REASON THAT A NORTH TEXAS IS NOT QUITE ALL OF YOUR COSTS AND B, YOU HAVE DONE A VERY GOOD JOB AT MINIMIZING YOUR OTHER COST INCREASES. HOWEVER YOU CAN'T YOU CAN'T SQUEEZE BLOOD OUT OF A STONE. AND WHEN YOUR BIGGEST SUPPLIER HAS THAT KIND OF AN INCREASE, YOU HAVE TO
[01:00:03]
PASS THOSE COSTS THROUGH TO YOUR RATEPAYERS. SO IF YOU'RE A 10,000 GALLON USER, AND THAT'S A VERY TYPICAL RESIDENTIAL USER. RIGHT NOW, YOU PAY $111.55. UNDER THIS PLAN, YOUR MONTHLY BILL WOULD GO UP BY $9.05 OR ABOUT 8% IF YOU'RE 5000 GALLON USER, YOU'RE PAYING $87.05. YOUR RATE WOULD GO UP BY $6.85 NOW BECAUSE THE AVERAGE USAGE FOR RESIDENTIAL CUSTOMERS IS 8 TO 9000 GALLONS A MONTH. THAT MEANS ABOUT 70 TO 75% OF YOUR MONTHLY BILLS ARE GOING TO BE 10,000 GALLONS OR LESS. THINK ABOUT RESIDENTIAL CUSTOMERS 12 BILLS IN A YEAR. FOR ONE FOR EVERY MONTH. NINE OF THOSE BILLS ARE GOING TO BE VERY LOW. BUT THE JULY AUGUST AND SEPTEMBER BILLS ARE PROBABLY GOING TO BE PRETTY HIGH BECAUSE MIDDLE OF THE SUMMER BUT THE MAJORITY OF CUSTOMERS WILL PAY ABOUT 6 TO $9 MORE A MONTH. UNDER THIS PLAN. NOW SOME CUSTOMERS WILL PAY MORE . OBVIOUSLY THERE YOU HAVE SOME RESIDENTIAL CUSTOMERS USE AN AWFUL LOT OF WATER. NOT VERY MANY, BUT YOU HAVE SOME, AND THEY WOULD SEE A HIGHER INCREASE FROM BOTH THE DOLLARS FROM A DOLLAR STANDPOINT AND BUT BASICALLY THE SAME PERCENTAGE INCREASE AS WELL. CHART ALSO SHOWS US THAT YOU'RE LOOKING PROBABLY AT SIMILAR INCREASES OVER THE NEXT COUPLE OF YEARS AND MAYBE A LESSER INCREASE IF NORTH TEXAS ACTUALLY DOES DO LESSER INCREASES IN THE OUT YEARS. BUT THE BOTTOM LINE IS THIS. THE VAST MAJORITY OF RATEPAYERS WOULD SEE THEIR BILLS GO UP BY 7 TO $9 A MONTH IF YOU APPROVE THIS PLAN SO IT'S NEVER EASY OBVIOUSLY TO ASK CUSTOMERS TO PAY MORE, BUT BY DOING THIS, AND BY IMPLEMENTING THIS RATE PLAN, YOU WILL NOT ONLY ENSURE THAT YOUR CUSTOMERS THAT YOUR WATER AND SEWER UTILITY CONTINUES TO BE VERY HEALTHY FINANCIALLY, BUT IT WILL ALSO ENABLE YOU TO INVEST IN THE FUTURE OF THE CITY THAT IS SO DEPENDENT ON GROWTH AND SO DEPENDENT ON THE MAINTENANCE OF A HIGH QUALITY OF SERVICE FOR ALL OF YOUR CUSTOMERS. WITH THAT I'D BE HAPPY TO ANSWER ANY FINAL QUESTIONS YOU HAVE AT THIS TIME.HAVE A QUESTION. SO THE YOUR, UM ON ON PAGE 26 PAGE 26. IT, SAYS 7.9. BUT YET WHEN I DO THE MATH, THE WATER IS 8.75. SO WHAT DO YOU THE WATER INCREASE FROM 4 TO 34 TO 3.5. IS 8.75. AND YET, YOU'RE YOU'RE TELLING US THAT IT'S A NINE POINT OR 7.9% INCREASES THAT BECAUSE WE'RE NOT INCREASING THE OTHER? I MEAN THE OTHER COST OR BRINGING IT DOWN. THE WATER COST IS GOING UP BY 8.75. RIGHT, MHM, BUT YOU'RE TELLING US THAT OUR RESIDENTIAL MONTHLY CHARGES IS GOING TO GO UP 7.9% AND BECAUSE YOU'RE YOU'RE GOING TO INCREASE YOUR REVENUE THROUGH TWO FACTORS. ONE FACTOR IS THE RATE INCREASE. THE OTHER FACTOR IS THE INCREASE IN VOLUME SALES. BECAUSE YOU ARE ANTICIPATED TO HAVE AS MANY AS 3000 NEW ACCOUNTS IN THE NEXT YEAR. AND SO THAT'S 3000 NEW MINIMUM CHARGES, AND THAT'S A LARGER CUSTOMER BASE. SO FOR GROWTH CITIES LIKE MCKINNEY, YOUR GREAT INCREASES DO NOT GENERALLY TRACK YOUR COST INCREASES. THEY DON'T RATE INCREASES DON'T HAVE TO BE AS MUCH BECAUSE YOU'VE GOT A LARGER CUSTOMER BASE EVERY YEAR. WHEN YOU SAY 3000 IS THAT COMMERCIAL HOMES, APARTMENTS, DIFFERENT APARTMENTS? I MEAN, IS THAT JUST EVERYTHING? IT'S ALL NEW CUSTOMERS? YES, RESIDENTIAL AND NONRESIDENTIAL AS WELL. SO IS THAT SO? BECAUSE BECAUSE WE'RE NOT GOING TO HAVE 303,000 HOMES AND WE'RE NOT GOING TO HAVE 3000 HOMES AND COMMERCIAL. BUT SIR, IS THAT INCLUDING APARTMENTS, EVERY APARTMENT IS, UM. IT WOULD DEPEND ON HOW THEIR METERED YOU CAN SEE. WE SHOWED YOU ON THE COMMERCIAL SIDE. UH YOU KNOW, LARGER METERS LARGER COST TO GO INTO. BUT YOU KNOW SOME OF THE NEW DEVELOPMENTS WE HAVE OR THEY'RE THEY'RE NOT GOING TO BE METER. THEY'RE GONNA BE METERED INDIVIDUALLY. WE'VE TRIED TO TAKE ALL OF THOSE INTO ACCOUNT, BUT YOU KNOW MOST OF THE TIME THAT'S THAT'S NOT WHAT YOU'RE SEEING. THERE IS AN INDIVIDUAL APARTMENT. UH UNIT. THOSE ARE FOR THE MOST PART. METERED UM, IN ONE MASTER METER THAN THEY CHARGE THOSE OUT. SO IS THAT HOW APARTMENTS ARE NORMALLY BUILT NOW IS WITH THE MASTER METER THAT COUNTS AS ONE CUSTOMER VERSUS IT. 200 UNIT COMPLEX WILL BE 200 M. IT'S DONE BOTH WAYS. WHAT DO WE NORMALLY SEE WHAT WE'RE SEEING? YOU ARE STARTING TO SEE WHEN YOU'RE STARTING TO SEE MORE AND MORE APARTMENT COMPLEXES. UP METERING THEIR THEIR UNITS IN CHARGING EVERY UNIT INDIVIDUALLY USED TO BE 2030 YEARS AGO. YOU JUST HAVE A MASTER METER. AND YOUR WATER BILL WILL BE PART OF YOUR OVERALL. UM RED, RIGHT. BUT MORE
[01:05:01]
AND MORE. YOU'RE STARTING TO SEE INDIVIDUAL APARTMENTS BEING CHARGED FOR SERVICE AND MORE AND MORE. YOU'RE SEEING CITIES STARTING TO CHART MAKE UNIT CHARGES ON EACH UNIT IN AN APARTMENT COMPLEX. SO IF YOU HAVE SAY AN APARTMENT COMPLEX WITH 100 UNITS IN IT, YOU HAVE 100 MINIMUM CHARGES AT THE 5/8 CENTURY, RIGHT? NOW. GOOD GIRL. LOT OF TIMES. APARTMENT OWNERS DON'T LIKE THAT, BECAUSE THEIR ARGUMENT IS GOING TO BE WELL IN ANY GIVEN MONTH. 20% OF MY APARTMENTS ARE GOING TO BE VACANT WHILE YOU CHARGING ME A MINIMUM CHARGE FOR A VACANT NO APARTMENT AND THE ANSWER IS A. WE DON'T KNOW THAT IT'S VACANT BE. IT MAY NOT BE VACANT THE ENTIRE MONTH AND SEA WATER HAS TO BE AVAILABLE FOR THAT APARTMENT, WHETHER IT'S USED OR NOT. AND SO I THINK RIGHT NOW, SO FOR THAT REASON, EVEN IF SOMEBODY IS NOT NECESSARILY LIVING IN THAT APARTMENT, STILL INCURRING COSTS, MAKING THAT WATER AVAILABLE BECAUSE SOMEBODY COULD MOVE IN TOMORROW, AND THEN THEY'RE GONNA WANT TO TURN THAT TAP ON, AND THEY'RE GONNA WANT WATER TO COME OUT OF IT. SO YOU KNOW THEY'RE ALWAYS GOING TO BE ARGUMENTS FOR AND AGAINST ANY ANY PARTICULAR RATE PLAN. APPRECIATE IT. THANK YOU. I'M IN A LITTLE BIT HERE FROM THE MCKINNEY EXPERIENCE. WE DON'T HAVE A SORT OF A CONSISTENT APPROACH. IT IS PROJECT BY PROJECT SO THERE ARE SOME PROJECTS THAT MIGHT HAVE A MASTER METERS. SOME MIGHT HAVE METERS PER BUILDING. INTERESTINGLY THE PRODUCT WE'RE SEEING A LOT OF NOW THE SINGLE FAMILY FOR RENT. THIS HAS BEEN AN ISSUE WE'VE BEEN WRESTLING WITH BECAUSE HAVING A UNIT ON EVERY OR HAVING A METER ON EVERY UNIT IS A SIGNIFICANT COST INCREASE FOR THE DEVELOPER BECAUSE OF ME OR FEES, SO WE WORKED OUT SOME SCENARIOS WHERE THERE'S KIND OF ONE M AND THEN SUBMITTERS FOR EACH UNIT, SO IT IS PRETTY VARIABLE ACROSS THE BOARD IN MCKINNEY. THANK YOU.THANK YOU. ALL RIGHT. THANKS. THANK YOU, SIR. THANK YOU VERY MUCH. NEXT? YEAH. THAT'S WHAT HOW YEAH. YOU WANT TO KEEP ROLLING? YES, PLEASE. WE'RE DONE. BUT YEAH, EVOLUTION IT. WE ONLY HAVE 972 MORE SLOTS WAS ABOUT 10% OF JUST DID YEAH. BEAUTIFUL. SO WE'RE GOING TO KIND OF TREND BACK. WE APPRECIATE YOU GUYS BEING HERE TODAY. UM, THEY CAN LET ME LET THEM MOVE ON WITH THEIR DAY, BUT I WANT TO MOVE BACK TOWARDS THE GENERAL FUND HERE. UM. AS YOU MAY REMEMBER, UM, AND OUR BUDGET INPUT HEARING THAT WE HAD BACK IN APRIL, WE KICKED OFF AN ONLINE SURVEY, TOO. IT WAS PART OF A VIRTUAL TOWN HALL TO LET OUR CITIZENS TELL US WHAT THEIR PRIORITIES WOULD BE FOR THIS YEAR'S BUDGET. AH RANKINGS IN THE COMMENTS. RECEIVED THEIR AVAILABLE ONLINE AND IF ANYBODY WANTS A HARD COPY, BE HAPPY TO GET THAT TO YOU. UM, FRANKLY, I'M NOT SURPRISED BY THE RESULTS THAT WE'VE GOTTEN. IT SEEMS LIKE THEY HAVEN'T CHANGED THAT. BUT FOR US HERE, THE LOWER THE NUMBER, THE HIGHER THE PRIORITY. THE NUMBERS ON THE BAR REPRESENT THE OVERALL RANKING, AND THE OVERALL AVERAGES ARE ARE ON THE ON THE BOTTOM. SO YOU CAN SEE HERE. UM IT'S THE SAME AS LAST YEAR AND THE YEAR BEFORE PUBLIC SAFETY AND STREETS SEEM TO BE OUR TWO TOP PRIORITIES. UM, THE GENERAL FUND BUDGET THAT WILL BE PRESENTING TO YOU TODAY FROM THE CAPITAL PERMIT BUDGET. AS WELL. UM WILL WILL REPRESENT THAT. UM SO ALSO THE GENERAL FUND BUDGET CAPITAL IMPROVEMENT PROGRAM, UH , LIKE TO ALSO MENTION THE IMPORTANT WORK COUNCIL HAS DONE OVER THE LAST YEAR, ESPECIALLY ON THE STREET SIDE. UM WITH EVERYTHING TO GET US A FUNDING SOURCE FOR THOSE FOR THE FUTURE ALSO REFLECT THESE PRIORITIES. THIS SURVEY WAS COMPLETED BY 150 CITIZENS WE'VE IT'S BEEN ABOUT THE AVERAGE OF THE LAST FEW YEARS WE'VE SEEN IT AS HIGH AS 250 OR 300. WE'VE SEEN A LITTLE BIT LOWER THAN THIS, BUT WE DID GET 100 AND 50 RESPONSES. SO UM , THIS IS THESE ARE SOME OF THE BIG POINTS THAT WE WANT TO TALK ABOUT IS WE'RE GOING TO GO THROUGH THE MORNING. HERE. UM ON THE FISCAL YEAR 23 BUDGET UM, BUT THE BIG THE BIG NUMBERS, THE DECREASE IN OUR PROPERTY TAX RATE, THE CITY MANAGER'S PROPOSED PROPERTY TAX RATE FOR FISCAL YEAR 23.45748 CURRENT RATE IS 4.497. THIS WOULD BE A DECREASE OF FOUR CENTS TO THE OVERALL TAX RATE. UM YEAH, THAT THAT NUMBERS. IT'S A LITTLE SHOCKING, BUT IT IS BACKED BY
[01:10:03]
THE VALUES THAT WE'RE SEEING, UM SO, UM, THAT'S THE NUMBER OF THIS BEING PROPOSED. GO BACK ONE SLIDE FOR ME. I HAVE A YEAH. JUST CURIOUS WHY THE IS OPEN LANDS AND GREEN SPACE IS GOT ITS OWN SEPARATE BUDGET, RECREATION . IT DOES NOT. UM WE'RE JUST LOOKING AT AT THIS WAS THIS WAS PART OF WHAT PEOPLE WANTED TO FIND OUT THAT IT DOES NOT HAVE ITS OWN BUDGET REALLY WANTED TO PLACE IT SOMEWHERE, PROBABLY WITH PARKS AND RECREATION. THE TWO TOGETHER, UM SHOWS THAT THE PARTS WILL BE A VERY HIGH PRIORITY FOR THE CITY DON'T ALIGN WITH A PARTICULAR DEPARTMENT. SOME CASES THEY DO, BUT IT'S REALLY IN TERMS OF QUALITY OF LIFE AND PRIORITIES.THERE'S A SIGNIFICANT INTEREST AND DEMAND BY YOUR RESIDENTS UNDERSTAND THIS IS NON SCIENTIFIC. THIS IS BUT THIS IS BACKED UP BY WHAT YOU SEE IN OUR SCIENTIFIC SURVEY. WE DO IT EVERY TWO YEARS. IN FACT, WE HAVE ONE COMING UP THIS NEXT WINTER. UM IS THAT THE PUBLIC WANTS TO MAINTAIN OPEN LANDS AND GREEN SPACES. HOWEVER WE DO IT AS MARK MENTIONED. IT'S TYPICALLY DONE THROUGH THE PARKS AND RECREATION LAND ACQUISITION PROCESS. I CAME FROM A COMMUNITY THAT HAD ITS OWN OPEN LANDS PROGRAM SEPARATE AND DISTINCT FROM YOUR PARKS AND REC. IT WAS LITERALLY AN OPEN LANDS PROGRAM. WHERE YOU WOULD BUY LAND TO KEEP IT OPEN. THAT WOULD OTHERWISE BE DEVELOPABLE. BUT THIS IS JUST LETTING YOU KNOW THAT THEY'RE IT LEAST FOR THESE SELF SELECTED SURVEY RESPONDENTS, WHICH I THINK YOU'LL SEE ALSO BACKED UP IN THE SCIENTIFIC SURVEY THIS WINTER THAT THERE IS A SIGNIFICANT SEGMENT OF THE COMMUNITY THAT THINKS THAT THIS IS A PRETTY BIG PRIORITY. HOWEVER YOU DO IT. THANK YOU. THANK YOU, MARK. ABSOLUTELY I HAD ONE QUESTION. UM HOW DOES THAT FOUR CENTS RANK HISTORICALLY. WELL, I WOULD SAY IT'S. DEFINITELY IT WOULD. I WOULD SAY IT'S A UNICORN. UM IT , UH IT IS STANDING OUT BY ITSELF. IT IS THE DEFINITELY THE LARGEST DECREASE IN THE HISTORY THAT I COULD FIND. AND THAT COMES IN OFF THE HEELS OF A THREE CENT ONE THAT WE HAD BETWEEN. I THINK 2017 AND 18. SO VERY LARGE DECREASES WILL SHOW YOU THE TAX RATE HISTORY OVER THE LAST 10 YEARS. UM SHOWS UP, OKAY, SHOW THAT TREND OVER TIME, BUT THIS IS IT'S UNPRECEDENTED AND CALL IT A UNICORN, SO TO SPEAK, JUST BECAUSE OF THE PROPERTY VALUES, AND WE'LL GO THROUGH THAT TREVOR IS ABOUT TO DO A WHOLE BUNCH OF SLIDES ON OUR PROPERTY VALUES AND TAXES, OKAY? MAYBE NOT A WHOLE BUNCH BUNCH, BUT THAT'S NOT AN OFFICIAL TERM. UM SO. SO WITH THAT, I'LL JUST SAY SALES TAX IS STRONG. I SAID LAST YEAR, AND I SAY IT AGAIN THIS YEAR. I'M STILL SURPRISED AT THE OVERALL GROWTH OF OUR SALES TAX, AND I THINK AS A PART OF OUR DISCUSSION ON THE TYPE A AND TYPE B SALES TAXES THAT WE HAD EARLIER IN THE FISCAL YEAR, UM, PLUS SOME WORK WE'VE HAD DONE THERE ARE CONSULTANT LOUIS MCLANE. WE'VE DONE A BETTER JOB OF ESTIMATING OUR END OF YEAR SALES TAXES, AND WE'VE ADDED A 5% MULTIPLIER FOR FISCAL YEAR. 23 THAT'S OUR PROJECTION. UM ALLOWS US TO REMAIN CONSERVATIVE IF WE STILL SEE SOMEWHERE IN THE 10% RANGE, THAT WOULD BE GREAT, BUT I THINK 5% ALLOWS US TO MAKE SURE THAT WE'RE GOING TO MAKE OUR BUDGET BUT WE'VE DONE A GOOD JOB. I THINK OF RIGHT SIZING WHERE WE THINK WE'RE GOING TO END THIS FISCAL YEAR. UM, WE BECAUSE OF THE PANDEMIC AND SOME THINGS WE WERE SEEING. LAST YEAR WE KIND OF HAD FALLEN BEHIND OF OUR PROJECTION AND WE WERE A LITTLE BIT TOO LOW. SO I THINK WE'RE GOING. WE'VE WE'VE RIGHT AND DONE A GOOD JOB OF RIGHT SIZING THAT THIS YEAR. UM SO WITH THOSE TWO IMPORTANT POINTS ON OUR REVENUES, I WOULD LIKE TO TALK ABOUT SOME OF THE BIG THINGS ON THE ON THE APPROPRIATIONS SIDE. WE ARE GOING TO MAKE SURE THAT WE PROVIDE MARKET ADJUSTMENTS FOR ALL OUR EMPLOYEES. THAT'S OUR STEP INCREASES FOR FISCAL YEAR 23. WE ARE MAKING AN ALLOWANCE AS POLL INDICATED FOR A MARKET STUDY. THAT IS CURRENTLY UM I THINK WE'VE WE'VE STARTED THAT WE CAN IMPLEMENT DURING THE YEAR. WE'RE MAKING ALLOWANCE FOR THAT IN THIS YEAR'S BUDGET. AND THEN OF COURSE, WE'RE GOING TO MAKE OUR PLAN STEP INCREASES FIRST ONE PERSONNEL UM I WOULD ALSO LIKE TO MENTION THAT WE ALSO HAVE JUST IMPLEMENTED A, UH , COLA OR MARKET ADJUSTMENT DURING THIS FISCAL YEAR. 2% WE DID THAT IN JULY. SO THIS THESE STEP INCREASES IN THE ALLOWANCE
[01:15:01]
FOR THE MARKET STUDY WOULD BE ON TOP OF THE COLA THAT WE JUST DID IN REACTION TO WHAT WE WERE SEEING WITH INFLATION. UM SO I WOULD LIKE TO ALSO MENTION THE INCREASED FUNDING FOR STREET MAINTENANCE. UM THIS, UH, THIS WAS THE GENERAL FUND PORTION. THERE'S ALSO AN INCREASE, UH, FOR ROAD RECONSTRUCTIONS IN OUR CRP, BUT THIS IS THE GENERAL FUND PORTION. WE'VE INCREASED THAT FUNDING SIGNIFICANTLY, UH, THAT HAD BEEN DONE AS A TRANSFER IN THE PAST. AND IT'LL GET MENTIONED AGAIN WHERE WE WERE TRANSFERRING THOSE GENERAL FUND DOLLARS TO THE C API TO DO RECONSTRUCTIONS. WE'RE ACTUALLY GOING TO KEEP THAT IN THE GENERAL FUND. IT'S GONE DIRECTLY INTO THE PUBLIC WORKS STREET FUNDS, AND WE'RE GOING TO DO MAINTENANCE WITH THAT, UH, THAT MONEY AND THEN WE'RE ALSO BOLSTERING WHAT WE'RE DOING IN OUR CRP FOR RECONSTRUCTIONS AS WELL. FULL RECONSTRUCTION. BUT WE ARE WE KEEPING THOSE DOLLARS IN THE GENERAL FUND? AND THEN ALSO IN THIS BUDGET, YOU'LL SEE INCREASE STAFFING. WE'VE GOT THE SPECIFICS. WE'LL GO THROUGH SOME OF THOSE IN A LITTLE WHILE. YOU ALSO HAVE THOSE IN YOUR BOOK, BUT WE'RE MAKING ALLOWANCES FOR PUBLIC SAFETY'S VERSION. ROBUST YEAR FOR THEM, BUT POLICE AND FIRE WE'RE INCREASING OUR BUILDING SERVICES STAFFING. WE'RE SEEING DEVELOPMENT. CONTINUE UM CLEARLY PARKS AND RECREATION PUBLIC WORKS AND THEN WE ARE HAVING SOME STAFFING INCREASES IN WATER AND WASTEWATER. THEY ARE FAIRLY MODEST WITH ON THAT FUND. UH, WHEN YOU TAKE A LOOK AT THE OVERALL SIZE OF THE FUND SO YOU ALSO ALWAYS LIKE TO TALK ABOUT GIVE GIVE YOU AN UPDATE EVERY YEAR WHERE WE STAND ON OUR RECENT BOND ELECTION. THIS IS THE 2019 PACK PACKAGE. YOU CAN SEE THAT WE'RE MAKING FANTASTIC PROGRESS AND ON THIS PACKAGE, AND WE'RE ON TRACK TO FULLY EXHAUST THE $350 MILLION OF BOND. BONDS THAT WE WERE ALLOWED TO ISSUE BY THE CITIZENS BY FISCAL YOU'RE NEARING FISCAL YEAR 2025. UM. THOSE WERE THE ISSUE THAT THE ISSUES AS YOU CAN SEE THAT WE ARE FULLY ISSUED ON THE MUNICIPAL COMPLEX. I WANT TO TALK A LITTLE BIT ABOUT THAT BEFORE BEFORE HIM THE SOFT TO TREVOR TALK ABOUT TAXES. EVALUATIONS. UM WE WILL HAVE THE FULL CAPITAL STACK FOR CITY HALL BUILT ON SEPTEMBER, THE 30TH OR DURING THE BUDGET IMPLEMENTATION THIS YEAR. SO WE WILL BE READY TO HAVE THAT. CONTRACT, LET AS SOON AS COUNCIL IS READY TO MOVE FORWARD WITH IT. IT'S BEEN A BIG GOAL OF OURS TO GET THAT DONE APPRECIATE EVERYBODY'S HELP, BUT IT WAS THAT WE SPENT A LOT OF TIME IN FINANCE THIS YEAR BUILDING THAT CAPITAL STACK AND WORKING ON IT, AND IT'S BEEN WORKING A LOT OF PEOPLE OUTSIDE OF FINANCE TO SO, UM, BUT BUT THAT THAT 50 MILLION IS FULLY ISSUED AT THIS POINT, SO WE'LL BE READY TO MOVE FORWARD. IN OCTOBER. IF YOU ALREADY TO MOVE FORWARD, SO WHAT? WHAT IS THE INTEREST RATE THAT WE'RE PAYING RIGHT NOW? SO WE JUST ARE ISSUED AT RATHER JUST ISSUED TRES BONDS THIS WEEK. UM AND OUR TOURS WAS , UM, IF YOU REMEMBER I TOLD YOU WE WERE GOING TO GET THAT WRITING, AND I WAS A LITTLE BIT WORRIED ABOUT THAT BOND RATING ON OUR TOURS, ONE WHICH WAS ISSUED FOR THE MUNICIPAL COMPLEX. THAT WAS A DOUBLE A RATING. SO WE WERE VERY, VERY PLEASED WITH THAT. THE RATING AGENCY LOOKED AT THE CITY OVERALL AND SAID, UH, THE CREDIT CREDIT WORTHINESS OF THE CITY IS TRIPLE A LET'S GO AHEAD AND MOVE THAT TOURS UP TO A DOUBLE A ON THAT DOUBLE A CREDIT THIS WEEK WE RECEIVED RIGHT AT 4% TOTAL INTEREST COSTS ON 30 YEAR NOTE. UM, WHICH WAS A LOT LOWER THAN I THOUGHT WE WERE GOING TO GET THAT'S TOTAL INTEREST COST, ESPECIALLY WITH THE 30 YEAR PORTION. I THOUGHT WE MAY SEE FOUR AND A QUARTER 4.5. SO WE TYPICALLY ON OUR GENERAL OBLIGATION BONDS ISSUE YOU KNOW , IS BEING ISSUED TRIPLE A, I WOULD SAY GET SOMEWHERE AROUND.3.5 3.75 TOTAL INTEREST COSTS ON THOSE RIGHT NOW IS THE ARE THOSE CALLABLE THEY DO ISSUE WE HAVE A CALL. GENERALLY A NINE YEAR CALL . UM SO YEAH, ABSOLUTELY. THAT'S THE INDUSTRY STANDARD. RIGHT NOW IS A ABOUT A NIGHT. WE HAD BEEN DOING A 10 YEAR CALL ON 20 YEAR NOTES. THEY'VE MOVED THAT TO NINE, UM, WITH SOME OF OUR DEBT, UM E D. C DEBT THERE WAS WE MADE THOSE INSTANTLY CALLABLE OR WITHIN ONE YEAR. UM AND THEN WE CALL THOSE AND REFINANCED. SO IF WE DO SEE INTEREST RATES COME BACK DOWN. WE CLEARLY CALL WE DO THAT. WE DO REFINANCINGS ALL THE TIME. PROBABLY GONNA DO LESS OF THEM. UM BECAUSE WE, UH OVER THE NEXT FEW YEARS, I HAVE A FEELING WITH THE WAY INTEREST RATES ARE
[01:20:03]
GOING BECAUSE WE WE'VE BEEN SEEING. YOU KNOW, WE'VE SEEN RATES 2.5 3% THAT WE'VE BEEN BORROWING AND I DON'T THINK WE'RE GOING TO SEE THAT FOR A FEW YEARS AGAIN, SO I MIGHT BE DOING LESS REFINANCINGS, BUT WHEN THEY'RE AVAILABLE, IF WE ANYTHING WE BORROWED AT 4% WHEN THOSE COME DOWN, WE WILL CALL BUT WE WILL CLEARLY, THANK YOU. SO WITH THAT I WILL HAND THE PRESENTATION OVER THE TREVOR MIGNOT. HE'S GOING TO TALK ABOUT OUR VALUATIONS IN OUR PROPERTY TAX. THANK YOU, MR HOLLOWAY. MAYOR MEMBERS COUNCIL WILL SPEND THE NEXT FEW SLIDES RUNNING THROUGH THE EVALUATIONS OF THE VARIOUS TYPES OF VERTICAL ASSETS HAVE GONE UP OVER THE LAST YEAR WILL BREAK THOSE OUT INTO THOSE SPECIFIC TYPES. INDIVIDUALLY WE'LL TALK A LITTLE BIT ABOUT TAX RATES AND THEN WE'LL HAVE A HOPEFULLY ROBUST DISCUSSION ABOUT INFLATION AS WELL. SO BUCKLE UP AS THEY SAY. SAYS A GENERAL 30,000 FT VIEW OF WHAT WE'RE SEEING OVER THE PAST 10 YEARS OR SO AS IT RELATES TO THE TAX RATE AND THE INVERSE RELATIONSHIP. THE TAX RATE HAS WITH THE VALUES THAT ARE ON THE GROUND ON THE RIGHT SIDE OF THIS CHART. WE TALKED A LITTLE BIT ABOUT THE RATE THAT'S BEING PROPOSED TODAY AT 45 75, OR AS WE'VE MENTIONED IT, 2.81% ABOVE THE NO NEW REVENUE RATE. NEXT TO THAT FISCAL YEAR. 23 BAR YOU SEE FISCAL YEAR 23 CEILING. IN THE PREVIOUS COUNCIL MEETING, THE COUNCIL ADOPTED A TAX RATE CEILING OF NO NEW REVENUE, PLUS 3.49% SO THAT IT'S NOT ABLE TO BE KIND OF RECOGNIZED ON THE SCREEN VERY WELL. BUT THAT DE MINIMUS DIFFERENCE BETWEEN +4595 AND +4575. IS THE DIFFERENCE BETWEEN THE TAX RATE CEILING AND WHAT THE RECOMMENDED TAX RATE IN THE CITY MANAGER'S BUDGET THAT WE'RE DISCUSSING TODAY IS. THIS IS A GENERAL LOOK AT THE MAKEUP OF APPRAISED VALUES OF MCKINNEY IN COMPARISON TO THE COUNTY AT LARGE AND THE THREE CITIES THREE LARGE CITIES WITHIN COLLIN COUNTY, AS YOU'RE ABLE TO GLEAN FROM THE SLIDE. WE ARE MOST LIKE THE CITY OF ALLEN IN OUR MIX. WE HAVE A LITTLE LESS RESIDENTIAL PERCENT MORE OF MULTI FAMILY AND THEN WE'RE NECK TO NECK ON COMMERCIAL. AND THEN YOU SEE THE MAJOR DIFFERENCES BETWEEN US AND FOR SCALE OR US IN PLANO. UM AS YOU LOOK AT THE COUNTY AT LARGE RIGHT IN LOCKSTEP OF THE COUNTY AVERAGE ON THOSE ASSESSED VALUE MAKEUPS THAT TENDS TO TRACK WITH LOGIC BEING THAT WE HAVE A LOT OF POPULATION RIGHT HERE IN THOSE THREE MAJOR CITIES. THIS IS ONE WE KIND OF STOPPED DOWN ON EACH YEAR JUST TO CHAT ABOUT THE ASSESSED VALUATION MAKEUP OF OUR TOTAL VALUATION ON THE GROUND, SO WE HAVE SOMEWHERE IN THE RANGE OF, UM 36 BILLION ON THE GROUND RIGHT NOW. 31 BILLION TAXABLE AND EACH ONE OF THOSE PERCENTAGES THAT YOU SEE ON THE BAR CHART ON THE FAR RIGHT. OF FISCAL YEAR. 23 IS RESIDENTIAL AT 69.4% MULTI FAMILY AND 8% COMMERCIAL AT 18.4% AND THEN LOT LAND, FAMILY OR VACANT OPEN LAND AT 4.2. IN PREVIOUS YEARS WE'VE TALKED ABOUT OKAY. WHAT'S THAT? YOU KNOW, UM, PERFECT MIX OF VALUATION, WHETHER IT'S 60 40 70 30 WHATEVER PERCENTAGE MIX THAT YOU'D LIKE OF COMMERCIAL VERSUS RESIDENTIAL RESIDENTIAL BEING BOTH MULTI FAMILY AND SINGLE FAMILY, SO YOU'LL SEE IN THIS CURRENT YEAR. THE MARKET ASSESSED VALUATIONS HAVE DRAMATICALLY SHIFTED THAT PERCENTAGE MAKEUP THAT WE'VE TALKED ABOUT AND PREVIOUS BUDGET YEARS WE'RE GOING TO DIVE INTO THOSE A LITTLE BIT AND TALK A LITTLE BIT ABOUT THE DIFFERENCE BETWEEN MARKET VERSUS TAXABLE SPECIFICALLY AS IT RELATES TO SINGLE FAMILY RESIDENTIAL. UM BUT YOU'VE HEARD PAUL TALKED ABOUT THE GLOBAL FACTORS IN RELATION TO INFLATION. THAT GLOBAL FACTOR COMES DOWN AS YOU TIGHTEN THE APERTURE TO REGIONAL FACTORS AND STATE FACTS. ACTORS. SPECIFICALLY AS IT RELATES TO WHAT'S HAPPENING WITH CENSUS AND DEMOGRAPHICS AND NET DOMESTIC MIGRATION, ETCETERA, ETCETERA. SO FIRST AND FOREMOST IN THE LARGEST PORTION OF OUR VALUATIONS ON THE GROUND IS SINGLE FAMILY SO YEAR OVER YEAR WE SEE A 34.7% INCREASE IN VALUE IN SINGLE FAMILY EVALUATION ON THE GROUND IN COMPARISON TO LAST YEAR, SO THAT'S ALL IN FROM LAST YEAR COMPARED TO ALL IN FROM THIS YEAR. NEW VALUE VERSUS NEW VALUE SET VALUE VERSUS SET VALUE. EXCUSE ME. MARKET MARKET VALUE CORRECT. AND THIS IS THIS[01:25:04]
IS THE MARKET VALUE WILL GET INTO TAXABLE VALUE. SO THAT 30% INCREASE. UM WHAT? WHAT WILL NOTICE THAT THE END OF THE SLIDES THAT I'M VIEWING? THAT'S NOT WHAT THE TRADITIONAL HOMEOWNER THAT HAS A HOMESTEAD THAT HAS THAT 10% CAPITAL EXPERIENCE ON THEIR TAX RATE OR TAX BILL. UM THAT'S JUST THE MARKET VALUE OF THE HOME AND I TALKED A LITTLE BIT ABOUT NET DOMESTIC MIGRATION AND ALL THAT. I JUST WANT TO KIND OF UNDERSCORE WHAT'S HAPPENING AND THE REGION ITSELF. SO COLLIN COUNTY, ACCORDING TO THE CENSUS , THERE'S 3000 COUNTIES IN THE UNITED STATES. COLLIN COUNTY HAD THE SINGLE OR THE SECOND LARGEST POPULATION. NUMERICAL GROWTH OF ALL THOSE COUNTIES IN THE UNITED STATES BETWEEN 2020 AND 2021. WHEN YOU INCREASED THE NUMBER OF DEMAND SO RESIDENTS, THE SUPPLY HAS A LARGER VALUE. IT'S SIMPLE ECONOMICS IN THAT SENSE. IN THE STATE OF TEXAS. THE DALLAS METRO STATISTICAL AREA. IT WAS NUMBER FOUR AND POPULATION GROWTH. THE STATE OF TEXAS ITSELF HAD FOUR OUT OF THE TOP 10 SO FROM THE FROM THE WIDER LOOK OF THE UNITED STATES, TEXAS. THIS KIND OF BEING THE LANDING SPOT HAVE A LOT OF DEMAND OR NEW RESIDENTS.NEW FOLKS LOOKING FOR HOUSING. UM, WE SEE THAT IMPACTING US HERE LOCALLY IN MCKINNEY AND HIGHER PRICING OR HIGHER VALUATION OF THE STOCK THAT WE HAVE ON THE GROUND OR NEW STOCK COMING INTO THE MARKET. THAT'S WHY WE SEE THAT SIGNIFICANT UPTICK AND FRANKLY, IT'S WHY WE'VE SEEN THE UPTICK OVER THE PAST 10 YEARS. YOU GO BACK TO THAT SLIDE. THE 34.7% INCREASE IN PERCENTAGE OF CHANGE. HOW MUCH OF THAT IS ON EXISTING SINGLE FAMILY VALUE FROM PREVIOUS YEAR. HOW MUCH IS NEW VALUE? DO I DON'T KNOW THIS PERCENTAGE BREAKDOWN. OFFHAND I CAN TELL YOU THAT THE TOTAL NEW VALUE OF RESIDENTIAL ON THE GROUND FOR FISCAL YEAR 23 IS GOING TO BE 315 MILLION. SO THAT'S 60 THIS ON THIS SLIDE THAT 69.4% YOU SEE? UM THAT THAT MAKES UP A PORTION OF THAT AND IN COMPARISON TO PREVIOUS YEAR WE HAD 286.7 MILLION HIT THE GROUND NEW LAST YEAR. WHAT'S INTERESTING, THOUGH IN THE PAST 10 YEARS OF FISCAL YEAR, 23 IT WILL RANK AS THE EIGHTH LARGEST DOLLAR VALUE AND SINGLE FAMILY RESIDENTIAL OVER THE PAST 10 YEARS. SO AGAIN 4% OF THE ASSURANCE NEW SURE SO THAT MAYBE 30% IN AND OF THAT IS JUST INCREASED VALUE OF EXISTING HOUSES ALREADY ON THE ON THE GROUND MARKET VALUES AND WE'LL SHOW YOU THAT THIS IS THE MARKET VALUE OF A OF A HOUSE IN MCKINNEY LAST YEAR MARKET VALUE TAXABLE TAXABLE 30% ABOUT WHAT WE SAW TONIGHT, SAID THE POINT I WAS GONNA MAKE IS JUST IT'S A POINT OF INTEREST. THAT HOME VALUE HAS INCREASED. 30% IF YOU LOOK AT THE CHANGE IN EFFECTIVE RATE, YOUR TAX RATE HAS GONE UP 2.8. FIVE PROPOSED TO BE 2.81 THIS YEAR 1% AND BUT YOUR VALUE MARKET VALUE HAS GONE UP ABOUT 30. OVERALL IN AVERAGE, ON AVERAGE, SO JUST YOU 2.812. 30% INCREASE. AND WE'LL SEE IN A FEW SLIDES. THE AVERAGE TAXPAYER THAT HASN'T HOME SAID HOW THAT AFFECTS THEM. UM BUT ABSOLUTELY THE LARGE INCREASE THAT WE SEE IN THE VALUE OF SINGLE FAMILY RESIDENTIAL, WHETHER IT'S NEW VALUE, HITTING THE GROUND BEING A HIGHER PRICE, OR IT'S YOU KNOW, THE HOUSE THAT I'VE BEEN LIVING IN FOR THE PAST DECADE, INCREASING IN VALUE JUST BECAUSE OF THE DEMAND AND SUPPLY ECONOMICS THAT WE'RE SEEING HERE REGIONALLY. TREVOR COULD YOU GIVE BACK THAT LAST SLIDE ONE MORE TIME SINCE GEORGE ASKED I'M CURIOUS. WHY IN 2023 THE COMMERCIAL WOULD BE DROPPING RATHER THAN INCREASING. SURE. CAN YOU HELP ME WITH THAT? YEAH IT'S LAW OF LARGE NUMBERS. THERE THERE'S MORE RESIDENTIAL STOCK ON THE GROUND. SO IF WE GO RIGHT TO THE, UM COMMERCIAL VALUE, SO COMMERCIAL, IT'S A SMALLER SEGMENT OF LOTS IN RELATIVE TERMS TO THE NUMBER OF LOTS. YOU HAVE HAVE SINGLE FAMILY, YOU KNOW, THERE'S MORE SINGLE FAMILY LOST IN THE CITY THAN THERE IS COMMERCIAL. NOW THEY MAY BE HIGHER IN VALUE ON A SQUARE FOOTAGE BASIS OR WHATEVER METRIC YOU WOULD LIKE TO USE. BUT FROM A NUMBERS PERSPECTIVE, THERE'S LESS OF THEM. THEY ONLY INCREASED ABOUT 7.8% YEAR OVER YEAR IN COMPARISON TO FISCAL YEAR 22. SO IT EATS INTO THAT PERCENTAGE MAKEUP THAT YOU SEE ON THIS SLIDE BECAUSE YOU'RE SINGLE FAMILY RESIDENTIAL VALUE INCREASED AT A HIGHER CLIP THAN YOUR COMMERCIAL VALUE INCREASED AND MY ANALYSIS AND WHAT YOU HEARD FROM PAUL AND KIND OF OUR TAKE IS IT HAS A LOT TO DO WITH
[01:30:02]
THE MIC NET DOMESTIC MIGRATION PATTERNS THAT WE'VE SEEN OVER THE LAST FEW YEARS. UM AGAIN, THERE'S 3000 COUNTIES IN THE UNITED STATES. COLLIN COUNTY RANKED NUMBER TWO IN POPULATION GROWTH OUT OF ALL OF THOSE COUNTIES ACROSS THE COUNTRY. IN ADDITION, MORE PEOPLE MOVED INTO OUR METROPOLITAN STATISTICAL AREA THAN ANY OTHER METROPOLITAN STATISTICAL AREA IN THE NATION.SO ONE. SOME COUNTY. I BELIEVE IN MARYLAND, WHICH IS MAKES SENSE. YOU KNOW YOU'RE RIGHT THERE ADJACENT TO D. C. UM THE POINT I'M UNDERSCORING WITH THAT IS THAT THERE'S AN INCREASED DEMAND IN RESIDENTIAL SUPPLY, WHICH IS NO, NO SECRET ANY OF US. WE'VE BEEN TALKING ABOUT AFFORDABLE HOUSING AND THE NEED FOR DIFFERENT TYPES OF HOUSING. AND HOW CAN WE CURB SOME OF THAT? BUT WE'RE SEEING THAT DEMAND, HIT THE GROUND AND HIT THE MAP, SO TO SPEAK ON OUR VALUATION MIX THAT WE HAVE HERE. AND I DO WANT TO POINT THIS OUT BECAUSE IT SOUNDS LIKE MAYBE IT SOUNDS LIKE I'M SAYING THAT WELL, RESIDENTIAL IS OUTPACING COMMERCIAL COMMERCIALS NOT KEEPING UP ETCETERA, ETCETERA, ETCETERA. SO WE PULL THE LAST 10 YEARS OF RAW DOLLAR VALUE. IT'S NOT GONNA BE ON THE SCREEN. SO YOU HAVE TO TRUST ME THAT I'M READING CORRECTLY OF RAW DOLLAR VALUE OF EACH ONE OF THOSE SEGMENTS. SO AGAIN THIS YEAR THAT WE'RE DISCUSSING OF THE LAST 10 YEARS, RANKS EIGHTH. IN NEW RESIDENTIAL VALUE, WHICH THAT'S GOOD. WE WANT TO SEE MORE COMMERCIAL VALUE HIT THE GROUND OFFSET THAT TAX BURDEN. THE COMMERCIAL VALUE IN THE MULTI FAMILY VALUE THIS YEAR IS SECOND . BOTH OF THOSE ARE THE SECOND HIGHEST IN THE LAST 10 YEARS. SO WE ADDED $271.4 MILLION IN COMMERCIAL VALUE $216 MILLION IN MULTI FAMILY VALUE. BOTH OF THOSE ARE THE SECOND HOUSE IN THE LAST 10 YEARS. SO YOU SEE THAT SWING OCCURRING IN REAL DOLLARS WHERE THERE IS A SHIFT IN THE PERCENTAGE MAKEUP. UM, GO AHEAD. YES, SIR. HELP ME UNDERSTAND WHAT YOU'RE ABOUT TO SAY. MULTI FAMILY IS IT LISTED IN COMMERCIAL IS NOT SO IT'S BROKEN OUT. YOU SEE HERE ON THE SCREEN SIMILAR TO RESIDENTIAL MULTI FAMILY HAS A PERCENTAGE INCREASE THAT IS FAIRLY SIGNIFICANT IN COMPARISON TO PREVIOUS YEARS. IT'S THE SAME CONCEPT THAT I JUST TALKED ABOUT THE VALUE OF MULTI FAMILY PROPERTIES ARE GOING UP, BUT THERE'S MORE DEMAND FOR THAT TYPE OF PROPERTY AS WELL. JUST BECAUSE OF THE POPULATION GROWTH. ON THE COMMERCIAL SIDE. I MENTIONED THIS WERE, UM EXPERIENCING THE SECOND HIGHEST LEVEL OF COMMERCIAL INVESTMENT IS FROM EVALUATION STANDPOINT. IN THE PAST 10 YEARS THIS YEAR, THE HIGHEST ACTUALLY OCCURRED IN 2020. SO IT'S RELATIVELY RECENT THAT WE'VE HAD EVEN CLOSE TO WHAT WE ARE HITTING THIS YEAR, AND THAT'S THE POINT. I'D LIKE TO UNDERSCORE AS WELL, JUST FURTHER DRIVE THE POINT HOME THAT JUST BECAUSE THE PERCENTAGE MAKEUP SHIFTS ON A YEAR OVER YEAR BASIS, IT DOESN'T MEAN WE AREN'T SEEING SIGNIFICANT, ALBEIT YOU KNOW, RECORD BREAKING INVESTMENT OF COMMERCIAL VALUE IN THE CITY THAT THAT IS HAPPENING. YOU DON'T HAVE TO TRAVEL TOO FAR. YOU CAN GO TO WHAT'S HAPPENING IN THE ROOM, ALMOST 1 21 INTERSECTION, HARDENING ELDORADO OR WHEREVER YOUR COMMERCIAL CORRIDOR OF CHOICE MIGHT BE. I MEAN, JUST.
TO GIVE EMPHASIS TO WHAT TREVOR WAS SAYING OVER THE LAST FOUR YEARS ON THE COMMERCIAL VALUES, JUST NEW VALUES HITTING THE BOOKS. WE PUT OVER A BILLION DOLLARS OF NEW VALUE FROM COMMERCIAL IN THE IN THE LAST FOUR YEARS. THAT'S SIGNIFICANTLY HIGHER THAN WHAT YOU HAVE BEEN SEEING EARLIER IN THE DECADE WHEN MAYBE A COUPLE OF 100 MILLION HAD BEEN ADDED TO THE ROLL OVER. FOUR OR FIVE YEARS, BUT OVER A BILLION DOLLARS IN NEW VALUE, WHICH THEN BEGINS TO GROW AND HELPS US REDUCE THE TAX RATE. EVEN MORE THAN YOU KNOW, CONTINUE TO REDUCE THE TAX RATE.
THAT'S A IT'S BEEN SIGNIFICANT THE LAST FOUR YEARS, EVEN WITH THE COVID HIT THAT WE HAD IN FISCAL YEAR, 21 IT'S VERY SIGNIFICANT. THEN IT'S WORTH NOTING THAT THE AMOUNT HAS BEEN PUT ON THE GROUND THE LAST FOUR YEARS, SO WOULD IT BE A BETTER INDICATOR OF COMMERCIAL GROWTH TO LOOK AT THE GROWTH IN THE SALES TAX? IT IS. WE'RE GONNA GET INTO THAT IN A FEW SLIDES MARK WHEN HE TAKES THE CLICKER BACK IS GOING TO TALK ABOUT. DON'T LET ME GET AHEAD OF NEW REVENUES. YES, SIR. SO AGAIN, WE HAVE TOUCHED BASED ON COMMERCIAL VALUES. UM THE PAST FEW YEARS.
YOU'VE HEARD ME SAY THAT AS MORE DEVELOPMENT COMES, THERE'S LESS LAND AVAILABLE, SO THE LAND VALUE IN AGGREGATE, UM HAS A SMALLER PERCENTAGE GROWTH. BUT IF ANYBODY'S TRYING TO BUY ANY LAND OR IF YOU'VE BENEFITED FROM SELLING LAND IN THE PAST, 12 TO 18 MONTHS, YOU'VE PROBABLY REALIZED LARGER RETURN ON YOUR ORIGINAL INVESTMENT, OR YOU EXPERIENCE TO SELL. THAT MAY
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HAVE BEEN A LITTLE HIGHER THAN WHAT YOU MAY HAVE THOUGHT OF 12 MONTHS AGO. IT'S LIKE IT GOES BACK TO THOSE SUPPLY AND DEMAND FACTORS, THE SMALLER AMOUNT OF LAND WE HAVE THE HIGHER VALUE OF THAT LAND. ALSO FROM THE APPRAISAL DISTRICT SIDE, THE APPRAISAL DISTRICT. UM UH, MARKS THEIR LAND TO MARKET ON A LESS FREQUENT BASIS FOR EACH ONE OF THE SINGLE FAMILY. LOTS AS WELL . SO YOU'LL SEE YOUR LAND. EXCUSE ME, YOU'LL SEE YOUR LAND VALUE. ON A GIVEN ASSESSED VALUATION MAILER THAT YOU GET FROM THE APPRAISAL DISTRICT STATE LEVEL FOR A COUPLE OF YEARS AND THEN TAKE UP MAYBE EVERY THIRD OR FOURTH OR FIFTH YEAR, DEPENDING ON WHAT THEIR MODELING OVER FROM THE APPRAISAL DISTRICT CALLS FOR. SO HERE'S THE MONEY SLIDE. UM WE'RE GOING TO TALK A LITTLE BIT ABOUT THE TAX RATE FOR THE BALANCE OF MY SLIDES AND SPECIFICALLY IN RELATION TO THE TAX RATE REGIONAL AND I WANNA UNDERLYING REGIONAL CP I OR INFLATION, SO.THIS IS THE PAST FIVE YEARS OF OUR TAX RATE ABOVE THE NO NEW REVENUE OR WHAT WAS PREVIOUSLY CALLED THE EFFECTIVE RATE ON THE RIGHT HAND SIDE OF THIS SLIDE, AND THEN THE REGIONAL CP I JULY TO JULY OF THE DALLAS FORT WORTH REGIONAL INFLATION NUMBER THAT WE GET FROM, UM, THE BUREAU OF LABOR STATISTICS. SO YOU CAN SEE 2017 TO 2019. YOU KNOW INFLATION WASN'T ZERO. IT WAS KIND OF IN THE ROOM. YOU WOULD EXPECT A COUPLE PERCENT HERE, THERE. THEN 2020 IT LEVELED OFF. AND THEN IN 2021 PAUL MENTIONED IN HIS OPENING COMMENTS. WE STARTED TO SEE AN UPTICK IN INFLATION. AND THEN THIS YEAR IF YOU'VE TURNED ON THE TV OR LOOKED AT YOUR PHONE IN THE PAST 3456 MONTHS.
IT'S BEEN KIND OF THE HEADLINE THING. INFLATION'S UP, SO I JUST WANT TO CLARIFY OR OR RECONCILE OUR NUMBER THAT EARLIER I HAD TALKED ABOUT 9.1 IN JUNE AND 8.5% IN JULY. THAT'S A NATIONAL NUMBER IS A REGIONAL NUMBER. SO THIS 2020 TO 9.3% OF REGIONAL CP I THE NATIONAL NUMBER HOVERING AROUND 9% AND THEN THE EFFECTIVE EXCUSE ME THAT NO NEW REVENUE RATE THAT THE 2.81% ABOVE THE NO NEW REVENUE RATE OF WHAT THE CITY MANAGER'S PROPOSED TAX RATE IS. GET YOU THAT 45 74 NUMBER UM , SO THAT DELTA'S RIGHT AT 6% YOU KNOW, 6.5. EXCUSE ME. 5.5% BETWEEN INFLATION AND THEN, ACTUALLY WHAT WE'RE PROPOSING A NEW SLIDE. THIS YEAR'S COMPARISON OF THAT HISTORY. SO THAT YOU CAN SEE IT JUST KIND OF IN A TABULAR FORMAT OF LINE FORMAT TO KIND OF DRIVE THE POINT HOME OF WHILE WE EXPERIENCE INFLATION, AND WE'RE DOING OUR LEVEL BEST TO WHERE SOME OF THAT FOR, UM, THE TAXPAYERS OF MCKINNEY THEN SALES , TAX GROWTH AND ALL OF THOSE OTHER TYPES OF REVENUE SOURCE GROWTHS ARE HELPFUL. THE PRIMARY REVENUE OF THE CITY OF MCKINNEY AT THIS POINT IS PROPERTY TAX, SO AS INFLATION GOES, YOU SEE THE DIFFERENCE HAPPENING BETWEEN WHAT WE ADOPT FROM A TAX RATE AND EXCUSE ME PROPOSED TODAY AND ADOPT IN PREVIOUS YEARS IN THE TAX RATE AND WHAT WE EXPERIENCE FROM AN INFLATIONARY FACTOR. UM AS AN ORGANIZATION THAT HAS 1400 EMPLOYEES AND WE HAVE A $1.3 BILLION CAPITAL PROGRAM THAT WE'LL TALK ABOUT LATER. WE OBVIOUSLY HAVE IMPACTS OF INFLATION AND WHAT WE DO AND BUILDING AND PAYING FOR HEALTH CARE AND PAYING FOR SALARIES. ETCETERA ETCETERA, ETCETERA. WE'RE FORTUNATE TO HAVE SOME OFFSETTING FACTORS OFFSETTING REVENUES, SUCH AS OURSELVES TAX GROWTH. THAT HELPS US TO CURB THAT LINE. THE GREEN LINE YOU SEE THERE, BUT WE DO WANT TO SHOW THAT SPECIFICALLY OVER THE LAST SIX YEARS, BUT IN THE LAST THREE YEARS, THERE IS A GAP BETWEEN WHAT WE ADOPT FROM A TAX RATE STANDPOINT AND THE INFLATIONARY ENVIRONMENT THAT WE EXIST IN. THIS IS ANOTHER KIND OF FUN SLIDE FOR ME. IT MAY NOT BE FOR EVERYBODY ELSE IN THE ROOM, BUT I LOVE IT. UM THE KIND OF AQUA COLOR ON THE BAR CHART. THAT'S OUR TOTAL TAX RATE THAT ENDED UP BEING ADOPTED. THE MUSTARD COLOR IS THE NO NEW REVENUE TAX RATE WENT IN PREVIOUS YEARS WAS CALLED THE EFFECTIVE TAX RATE. AND THEN YOUR AQUA LINE. THERE IS THE VOTER APPROVAL TAX RATE, WHERE THE HIGHEST WE COULD GO BEFORE WE HAD TO HAVE VOTER APPROVAL. AND THEN FINALLY, THE NO NEW REVENUE RATE PLUS INFLATION, AND THAT'S THAT REGIONAL INFLATION NUMBER. SO I'M GONNA I'M GONNA BREAK US DOWN ON THIS SLIDE FOR A LITTLE WHILE, UM I TEASED, MR GRIMES, WHAT WE'RE SEEING HERE A LITTLE BIT. WE ZOOMED IN. SO THIS ISN'T THE FULL CHART. WE'VE ZOOMED INTO THE 20 CENT BAND BETWEEN 40 CENTS AND 60 CENTS OF THE TAX RATE TO KIND OF GIVE A LITTLE BIT MORE CONTEXT FOR WHAT'S HAPPENING, BUT WHAT WE'RE SEEING IS A STATISTICAL ESCARPMENT. UM WE'RE SEEING A
[01:40:01]
LITTLE BIT OF A DOWNWARD TREND IN THE TAX RATE OR A CLIFF IN THE TAX RATE BECAUSE OF THE INCREASE IN VALUES. IT HAS AN INVERSE RELATIONSHIP. IT'S A MATH PROBLEM, FOR THE MOST PART , UM, SPECIFICALLY 22 TO 23. THAT'S WHERE YOU SEE THE DROP OFF. SO YOU ZOOM IN ON 22 YOU ZOOM IN ON 23 YOU SEE THAT FOUR CENT TAX WORK DEDUCTION? UM, WE TALKED A LITTLE BIT EARLIER ABOUT A LARGER TAX DIRECTION OF THAT HAPPENED BACK IN THE 17 18 BUDGET WHERE THAT WAS THREE CENTS. YOU'LL SEE THAT TICK OFF AS WELL. SO IT KIND OF COMES DOWN. WHAT I WANT TO POINT OUT ON THIS SLIDE BECAUSE WE'RE TALKING ABOUT INFLATION WE'RE TALKING ABOUT OKAY. WHAT WOULD IT TAKE IF WE WERE GOING TO BE IN KEEPING UP WITH INFLATION? EVERY PREVIOUS YEAR. BESIDES THE LAST TWO, THIS AQUA LINE THAT'S THAT VOTER APPROVAL RATE. MEANING WE COULD GO TO THE VOTER . OR WE CAN GO ALL THE WAY UP TO THIS LINE BEFORE WE HAD TO HAVE AN ELECTION TO INCREASE THE TAX RATE TO THAT PROPORTION. THE COUNCIL WILL JUST HAVE TO MAKE AN AFFIRMATIVE VOTE. IN THE PAST TWO YEARS, THE VOTER APPROVAL LINE AND THE NO NEW REVENUE RATE PLUS INFLATION. THEY LAY OVER EACH OTHER. IF THIS RED LINE WAS A LITTLE MORE TRANSLUCENT, YOU MAY BE ABLE TO SEE THAT AQUA LINE A LITTLE BETTER, BUT WHAT THAT MEANS IS EVEN TO KEEP UP WITH INFLATION, THE CITY WOULD HAVE TO HAVE AN ELECTION. THAT'S THE COUNCIL WOULD HAVE HAD TO CALL AN ELECTION WE WOULD HAVE HAD TO HAVE AN ELECTION AND GET AN AFFIRMATIVE VOTE FROM THE VOTERS TO SAY YES ADOPT NO NEW REVENUE. PLUS WHATEVER 9% 9.3% WHATEVER INFLATION NUMBER OF THE DAY WE'RE NOT RECOMMENDING THAT WE'RE RECOMMENDING A RATE THAT'S A NO NEW REVENUE RATE PLUS 2.81% WHICH IS WHERE YOU SEE THIS.KIND OF BLUE TOTAL TAX RIGHT HERE WELL BELOW THE VOTER APPROVAL RATE AND WELL BELOW THE NO NEW REVENUE RATE PLUS INFLATION, BUT INDEED HIGHER THAN THAN THE NEW REVENUE RATE.
SO DO WE KNOW IF THERE'S ANY ANY CITIES OR HAVING TO GO TO THEIR VOTERS FOR, UM, I WOULDN'T HATE ACROSS TEXAS. THERE WILL BE CITIES THAT DO THAT. YOU KNOW, WE'VE TALKED A LITTLE BIT AND IT'S REALLY INSIDE BASEBALL, BUT WE HAVE UM, INCREMENTS STACK UP ON A FIVE YEAR ROLLING BASIS. SO FOR EVERY TIME A COUNCIL WHETHER IT'S THIS COUNCIL OR OTHER COUNCILS THROUGHOUT THE STATE OF TEXAS ADOPTED TAX RATE, THAT'S NO NEW REVENUE PLUS A NUMBER BELOW 3.5% SO JUST FOR EASY MATH FOR ME, LET'S SAY NO NEW REVENUE . PLUS 3% WAS WHAT WE WERE PROPOSING TODAY THAT HALF PERCENT WE WOULD BE ABLE TO BANK INTO ANOTHER YEAR. SO IN THE FOLLOWING YEAR IF YOU ADOPTED NO NEW REVENUE PLUS 3% YOU WANTED TO IN THE FOLLOWING YEAR ADOPT NO NEW REVENUE PLUS 4. THAT'S HALF A PERCENT ABOVE THE 3.5 CAP. YOU WOULD BE ALLOWED TO DO THAT WITHOUT AN AFFIRMATIVE VOTE OF THE VOTERS BECAUSE YOU HAD BANKED IT FROM A PREVIOUS YEAR'S BUDGET, AND YOU CAN DO THAT ON A FIVE YEAR BASIS SO YOU CAN HAVE FIVE YEARS OF CREDIT AND USE IT ALL IN ONE YEAR STARTS OVER. SO THE OLDEST YEAR FALLS OFF IN THE NEW YEAR COMES ON. BUT TO ANSWER YOUR QUESTION, SPECIFICALLY REGIONALLY, I'M NOT. WE'RE AWARE OF OUR LOCAL CITIES THAT ARE GOING TO HAVE AN ELECTION. UM BUT ACROSS THE STATE, THERE WILL INEVITABLY BE SOMEBODY THAT DOES . WE'VE LOOKED AT OUR THREE R THREE COMPARISON CITIES HERE IN IN THE COUNTY. ONE OF THEM IS GOING TO POSSIBLY GO INTO THEIR INCREMENT. EVERYBODY ELSE IS GOING TO BE SOMEWHERE BETWEEN, UM NO NEW REVENUE AND THE 3.5% CAP, BUT ONE IS POSSIBLY GOING INTO THEIR INCREMENT. INTERESTING. THERE'S NO NEW REVENUE. NO ONE. NONE OF THE THREE IN THE COUNTY HAVE PROPOSED NO NEW REVENUE. I CAN'T SPEAK FOR WHAT THEIR COUNCILS WILL DO. BUT THE OTHER THREE CITIES THAT WE'RE TALKING ABOUT.
HAVE NOT PROPOSED A NO NEW REVENUE RATE. I KNOW WHETHER THEY ADOPT THEM OR NOT. THAT'S THAT'S IT. BUT WE DID. WE DID CHECK SIMILAR TO THIS PROCEEDING WERE THE CITY MANAGER'S RECOMMENDING NO NEW REVENUE PLUS 2.81% BUT THE VOTE OF THE TAX RATES. ULTIMATELY THE COUNCIL'S TREVOR, YOU MAY RECALL THAT YOU AND THE MARIGNY AND THIS IS ANECDOTAL, SO I WON'T NAME THE CITY, BUT WE WERE IN THE EVENT ON TUESDAY WITH A BUNCH OF REGIONAL CITIES. THERE WAS ONE IN PARTICULAR THAT, UM, SAID THAT WITHOUT GOING TO THE VOTERS , THEY CAN'T AFFORD THEIR STREET MAINTENANCE THAT THEY HAD PLANNED AND THEY CAN'T AFFORD THEIR FIRE TRUCKS AND THEY'RE NOT GOING TO THE VOTERS, AND SO THEY WERE KIND OF THROWING THEIR HANDS UP, AND I'LL BE HAPPY TO SHARE THAT WITH ANY OTHER COUNCIL MEMBER OFF, NOT ONE NAMED THE CITY RIGHT NOW, BUT THESE CITIES ARE HAVING REAL PROBLEMS WITH THIS, AND NONE OF THEM HAD ANY APPETITE. THEY ALL LOOKED AT THIS FATALISTIC TO HAVE TO GO TO THE VOTERS. THAT'S CORRECT, AND I'LL MENTION AGAIN AS I'VE SAID A COUPLE TIMES, WHILE YES ARE PROPOSED TAX RATE AT 2.81 ABOVE THE NO NEW REVENUE RATE IS LOWER THAN INFLATION. MR HOLLOWAY IS GOING TO TALK ABOUT OUR OTHER REVENUE SOURCES THAT HAVE BEEN INCREASING, SUCH AS SALES TAX BEING THE PRIMARY ONE. WE'RE FORTUNATE IN THAT SENSE
[01:45:01]
AND UM, AGAIN SPECIFICALLY THAT YOU'RE THE CITY. YOU'RE MENTIONING. THEY DON'T HAVE THE SALES TAX BASE THAT WE ENJOY. SO THAT'S ONE OF THOSE OFFSETTING FACTORS THAT ALLOWS US TO, YOU KNOW, LEAN ENVIRONMENT, ALBEIT LEAN ENVIRONMENT. OFFER A RECOMMENDATION THAT STILL HAS OTHER REVENUE SOURCES COMING IN TO OFFSET THAT, AND THEY DON'T HAVE THE COMMERCIAL TAX BASE, EITHER. THE BIG COMPANIES BASED THERE AND GIVEN. THEY'RE NOT ON A MAJOR ARTERIAL, THEY PROBABLY NEVER WILL CORRECT. IN YOUR EXAMPLE ON BANKING. THE HALF PERCENT IS THAT A STATUTORY MAX THEY HALF PERCENT. EXCUSE ME. IT'S THE FIVE YEARS IS THE STATUTORY LIMIT FOR HOW FAR THE LOOK BACK IS SO, FOR INSTANCE, IF YOU OR IF A COUNCIL WHETHER IT WAS THIS ONE OR A DIFFERENT 13. I'M SORRY. IT'S THREE YEARS. FIVE YEARS WAS THE ORIGINAL, BUT THE NAME ENDED. I APOLOGIZE. IF YOU WERE A DIFFERENT COUNCIL WERE TO ADOPT RIGHT AT 3.5% EVERY YEAR. YOU WOULD HAVE NO INCREMENT IF YOU ADOPTED AT 33 AND THREE YOU WOULD HAVE A PERCENT AND A HALF OF AN INCREMENT, SO IT'S A STATUTORY TOOL THAT WE CAN USE AS CITIES THROUGHOUT THE CITY OF TEXAS, AND SO WE COULD MAXIMUM WOULD BE 1.5% AFTER THREE YEARS. IN MY SCENARIO, YES, WE ENJOY A LITTLE HIGHER THAN THAT, BECAUSE TWO YEARS AGO YOU ADOPTED THE NO NEW REVENUE RATE LAST YEAR YOU ADOPTED NO NEW REVENUE PLUS 2% SO EFFECTIVELY. WE HAVE 3 4.5% INCREMENTAL RIGHT NOW AND THEN THIS YEAR'S DIFFERENCE BETWEEN 3.5 AND 2.81. IF THAT'S WHAT THE COUNCIL ENDS UP, ADOPTING WOULD GO ON TOP OF THAT RIGHT NOW. YOUR UNUSED INCREMENTS OVER THE LAST THREE YEARS IS A CENT AND A HALF. UM TO THE TOTAL TAX RATE. WE CAN'T GO THAT HIGH NOW BECAUSE THE TAX RATE CEILING UM THE TAX RATE CEILING WAS SET ALREADY AT AT THE CURRENT RATE, BUT THE BORDER APPROVAL RATE PLUS THE INSTRUMENT COULD BE AS HIGH AS 47.3 CENTS. SO THAT'S WHERE YOU WERE SAY THAT THERE IS AN UPPER LIMIT THAT YOU CAN'T GO OVER THE PREVIOUS 8% CAP. SO EVEN IF YOU HAD SPENT THREE YEARS AND YOU'VE BANKED ALL 3.5% AND YOU WERE UP TO 10.5, YOU WOULD NOT BE ALLOWED TO DO THAT . 8% CAP IS STILL THERE. IF YOU GO ABOVE 8% YOU'VE GOT TO HAVE AN ELECTION. NOT THAT I'M HOPING THAT WE EVER NEED TO DO THAT. CORRECT BUT IT SEEMS LIKE WE'RE IN A PRETTY CUSH POSITION TO BANK 1.5% SOME FLEXIBILITY IN THE CASE OF COUNCIL, INCLUDING A SCENARIO IF YOU NEEDED BY A FIRE TRUCK OR A COUPLE OF THEM, FOR WHATEVER REASON, WE HAVE THE FLEXIBILITY OF BEING ABLE TO DRAW UPON THESE CREDITS WITHOUT HAVING TO GO TO THE VOTERS FOR AN ELECTION BECAUSE OF WHAT THE STATE LAW ALLOWS. WE DON'T INTEND TO DO THAT SOMEWHERE PROPOSING TO DO BUT IT IS NICE TO KNOW THAT YOU HAVE SOME FLEXIBILITY WE'VE GOT. THAT'S WHAT I WAS LOOKING AT. THANK YOU VERY MUCH. THANK YOU, SIR. ALRIGHT. SO COMING FULL CIRCLE BACK TO THE TAX RATE. UM ITSELF , AND THIS IS A BREAKDOWN BETWEEN THE M N O OR THE MAINTENANCE AND OPERATION SIDE OF THE RATE AND THE I N S INTEREST IN SINKING THE DEBT SIDE OF THE TAX RATE. UM, AGAIN , IT'S KIND OF INSIDE BASEBALL. BUT WHEN WE TALK ABOUT NO NEW REVENUE RATE THAT'S IN, THAT'S IN CONJUNCTION WITH THE MAINTENANCE AND OPERATIONS SIDE OF THE TAX RATE, SO THE MAINTENANCE AND OPERATION SIDE AND NO NEW REVENUE PLUS 2.81 IS WHAT WE'RE DISCUSSING. YOU WILL SEE ON THE PROPOSED TOTAL TAX RATE. THERE IS A DEDUCTION NOT ONLY IN THE MANDO RATE, BUT ALSO IN THE I N S OR THE DEBT RATE, AND THAT'S JUST A FUNCTION OF THE VALUES THE VALUES THAT WE EXPERIENCE ON THE GROUND. WE BACK INTO WHAT THE TAX RATE LIMITATIONS ARE AND THEN THROUGH DELIBERATIONS THROUGHOUT THE SUMMER WITH THE CITY MANAGER AND THE VARIOUS DEPARTMENTS, WE COME TO A RECOMMENDED TAX RATE TO THE CITY COUNCIL, AND THAT'S THAT 2.81 NUMBER WE'VE LANDED ON THIS YEAR. ALRIGHT WE'VE BEEN PROMISING THIS SO HERE IT IS IN PREVIOUS YEARS DUE TO THE RELATIVELY NOT GONNA SAY MINOR BECAUSE WHEN YOU HAVE 10% OR 12% INCREASES IN HOME VALUES THAT'S STILL PRETTY MAJOR. BUT IN COMPARISON TO THIS YEAR, RELATIVELY MINOR PREVIOUS YEARS INCREASES IN ASSESSED VALUATION . WE ONLY SHOWED MARKET TO MARKET THIS YEAR. WE'VE ADDED IN AVERAGE TAXABLE VALUES, SO GOING DOWN THE LEFT SIDE LEFT SIDE OF THE SLIDE IN FISCAL YEAR 22, OR TAX RATE WAS 49. CENTS AND SOME CHANGE THE AVERAGE MARKET VALUE OF A HOME WAS 37 374,000. THE AVERAGE TAXABLE VALUE IS A LITTLE LESS THAN THAT OF 372,000 . AVERAGE TAX LEVY AVERAGE TAX BILL. WAS 1851. WE TALKED ABOUT VALUATIONS FROM THE BROAD SENSE OF MCKINNEY EARLIER ON THE RIGHT[01:50:01]
HAND. TAX RATES BEING PROPOSED AT 45 7. THE AVERAGE MARKET VALUE IS A SIGNIFICANT JUMP.$496,000 IS THE AVERAGE MARKET VALUE OF A HOME DOESN'T MEAN YOUR HOME. IT JUST MEANS ON AVERAGE THROUGHOUT THE ENTIRE CITY. THE AVERAGE TAXABLE VALUE IS MUCH LESS THAN THE AVERAGE MARKET VALUE. SO IF YOU ARE A SINGLE FAMILY, RESIDENTIAL HOME OWNER AND YOU HAVE A HOMESTEAD YOUR AVERAGE TAXABLE VALUES AT 4 15. THAT DOESN'T MEAN THAT'S WHAT YOUR HOUSE WOULD SELL FOR.
IT MEANS THAT'S WHAT YOU ARE TAXED ON. AND AGAIN. THAT'S IF YOU THAT'S YOUR HOMESTEAD. IF YOU HAVE 20 RENTAL PROPERTIES, THOSE ARE INCOME PRODUCING. SORRY YOU'RE GONNA BEAR THE FULL BRUNT OF THE MARKET. IN THAT SCENARIO. THERE WE SEE THE AVERAGE TAX LEVY GOING TO 18 99.
THAT'S A $48 SWING UP FOR THE AVERAGE TAXPAYER MCKINNEY FOR THEIR CITY TAX BILL. WE'LL TALK A LITTLE BIT LATER ABOUT WHAT THE PERCENTAGE MAKEUP IS ROUGHLY 22 23 25% OF THE TOTAL TAX BILL IS YOUR CITY BILL, BUT THAT $48 NUMBER IS THE. YOU KNOW, MAIN STREET IMPACT FOR A RESIDENTIAL HOME OWNER IN MCKINNEY THAT THEY'LL SEE ON THEIR ANNUAL TAX BILL, AND THEN A LITTLE LATER IN THE PRESENTATION WILL TALK ABOUT WHAT THAT $48 IN CONJUNCTION WITH THE OTHER REVENUE SOURCES IS BEING PROPOSED TO PURCHASE IN THE NEW FISCAL YEAR. THE AVERAGE HOME VALUE, ONE OF $122,000 AND THE AVERAGE TAX BILL INCREASE TO A RESIDENT MCKINNEY TO THE CITY. MCKINNEY IS $48. YES, SIR. I WAS. I WAS JUST TELLING ME I WAS AT THE APPRAISAL OFFICE THE OTHER DAY, AND THEY SAID THEY HAD LIKE 7000. YES. YEAH I'M JUST SORRY. GOOD LUCK. SO WE WANT TO POINT WE WANTED TO PAUSE ON THAT A LITTLE BIT JUST BECAUSE IT'S A NEW SEGMENT TO THIS KIND OF STANDARD SLIDE. WE ALWAYS SHOW BECAUSE OF THE NATURE OF THE MARKET INCREASES IN VALUATIONS. WE THOUGHT IT WAS PRUDENT TO PUT THE TAXABLE VALUE IN HERE BECAUSE THAT'S RELATIVELY WOULD MOST OF THE CITIZENRY IS GOING TO EXPERIENCE ON THEIR RESIDENTIAL HOME. FRANKLY, FOR MOST OF MY TIME HERE, UM THE TAXABLE VALUE IN THE MARKET VALUE HAD BEEN THERE'S BEEN VERY LITTLE DIFFERENCE. THIS IS THE FIRST YEAR THAT YOU SEE US A STRIKING DIFFERENCE BETWEEN THE TWO SO.
THAT MEANS YOU CAN GUARANTEE IT'S GOING UP CONTINUALLY FOR A YEAR, TWO YEARS. SO NOW THAT WE'VE KIND OF HAD THE ECONOMICS LESSON OF OUR REGION, WE'RE GONNA COME AND WE'RE GONNA GET INTO WHAT THAT MEANS FOR US. FROM AN OPERATIONAL STANDPOINT, PAUL MENTIONED THIS IN HIS COMMENTS, AND WE'LL TALK ABOUT IT A LITTLE BIT LATER, SPECIFICALLY AS IT RELATES TO PUBLIC SAFETY CHANGES AND RECOMMENDED INCREASES IN STAFFING, BUT WE CONTINUE TO SEE A DEGRADATION IN CITIZENS SERVED FOR EMPLOYEE AND THAT DOESN'T MEAN DEGRADATION AND SERVICE.
THAT MEANS DEGRADATION AND MATH , SO I'LL PUT UP OUR CITY EMPLOYEES AND THE CUSTOMER SERVICE THEY PROVIDE AND THE QUALITY OF WORK THEY DO AGAINST ANYBODY BUT FROM A 1 TO 1 BASIS , CITIZEN SERVE PER EMPLOYEE. AH IT'S TAKING UP NOW WE'VE IMPLEMENTED VARIOUS INNOVATION STRATEGIES, LEAN PROCESS, MANAGEMENT STRATEGIES AND THE HOST OF OTHER THINGS INTERNALLY AND OPERATIONALLY TO ALLOW US TO DO THOSE TYPES OF THINGS. WITH SMALLER WORKFORCE, BUT IT'S JUST A O. G S NUMBERED. KEEP ON THE COUNCIL'S FOREFRONT THAT WE'D LIKE TO SHARE AT LEAST ONCE A YEAR, IF NOT SEGMENTED IN DEPARTMENTS AND WORK SESSIONS THROUGHOUT THE YEAR, SO THAT YOU'RE KIND OF AWARE OF HOW WE STACK HERE, BASED ON OUR HISTORY, BUT THEN ALSO BASED ON OUR NEIGHBORS. SORRY THIS IS BASED ON OUR NEIGHBORS SAY IT EVERY YEAR AND I'LL SAY IT AGAIN THIS YEAR. THIS IS OUR FISCAL YEAR. 23 PROPOSED NUMBER ON THE RIGHT SO AGAIN, THAT MUSTARD MUSTARD COLORED BAR COMPARED TO LAST YEAR'S ADOPTED BUDGETS FOR NOT ONLY MCKINNEY ON THE GREEN FAR LEFT, BUT THE LARGE CITIES IN COLLIN COUNTY THERE IN THE MIDDLE, SO WE'RE MAINTAINING OUR STAFFING LEVEL. AT 1 41 144 CITIZENS SERVED PER STAFF MEMBER. THE SAME NUMBER AS LAST YEAR REMAINED TRAINING THAT STAFF LEVEL BUT WE DO SEE SOME VARIATION BETWEEN WHAT THE EXPERIENCE IS. IT IS ON CITIZENS SERVE PER STAFF MEMBER IN OUR NEIGHBORING COMMUNITIES. SO THAT'S THE FINAL ONE OF MY SLIDES. I'M GOING TO PASS IT BACK TO MR HOLLOWAY. AND YOU HAVE ANY QUESTIONS? THANK YOU. WE'LL TAKE IT FROM THERE. SO. THE MICROPHONE SO WITH WE'VE TALKED, I WOULD LIKE TO TALK A LITTLE BIT ABOUT GENERAL FUND REVENUES AS A WHOLE. NOW, UM, YOU KNOW, WE'LL STILL TALK ABOUT PROPERTY TAXES, BUT THAT THAT SECTION IS, UH IT WAS IMPORTANT
[01:55:04]
TO TALK ABOUT. WELL HIT IT ONE MORE TIME. BUT I WANT TO TALK ABOUT GENERAL FUND REVENUES, UM , WITH SOME OF THE OTHER FACTORS INVOLVED. UM SO YOU CAN SEE. THESE ARE THESE ARE THE REVENUE ESTIMATES FOR SOME OF OUR LARGER UM UM SOURCES. WE TALKED TO THE PROPERTY TAX QUITE A BIT. SO LET'S TALK ABOUT OUR SALES TAX ESTIMATES WE BUILT IN A 5% MULTIPLIER OVER FISCAL YEAR. 22 WE'RE TALKING ABOUT SEEING DOUBLE DIGIT INCREASES AGAIN FOR FISCAL YEAR. 22 I THINK WE'VE GOT A REALLY GOOD HANDLE ON WHERE WE'RE GOING TO END FISCAL YEAR 22 PROBABLY THE BEST ONE WE'VE HAD. AH IN SOME TIME, UH, IF WE SEE A LARGER INCREASE, THAT WOULD BE FANTASTIC, BUT I THINK THAT ALL THAT WE CAN REALLY, UM HOPE FOR OUR REALLY BUDGET FOR IS ABOUT A 5% INCREASE ANYTHING ELSE? I WOULD START FEELING FAIRLY UNCOMFORTABLE. UM, I LIKE TO KEEP US AS AS CONSERVATIVE AS I CAN, AND 5% EVEN ALWAYS SCARES ME SO FRANKLY, IT WOULD BE IT WOULD BE LESS IF IT WERE UP TO ME. BUT 5% IS ABOUT WHERE I DO FEEL LIKE A 5% IS REACHING WILL GO CLEARLY FROM WHAT FROM WHAT OUR EXPERIENCE HAS BEEN THE LAST FEW YEARS. SO SOME GOOD NEWS.UM, ARE BUILDING PERMITS. RIGHT NOW WE'RE UP ABOUT $600,000 FROM WHERE WE'RE GOING TO END FISCAL YEAR 22. THAT'S 10% ABOVE OUR FISCAL YEAR 21 ACTUALS AND WE'RE USING WHAT WE'RE SEEING FROM OUR FISCAL YEAR 22 ENGINEERING INSPECTIONS. TO ALLOW US TO RAISE THAT ABOVE WHERE WE THINK FISCAL YOUR UH, 23 WILL BE THE THING ABOUT THAT IS SO THOSE ARE TWO LEADING INDICATORS THAT WE SEE. TWO YEARS BEFORE WE HAVE NEW VALUE HITTING THE GROUND, SO OUR ENGINEERING INSPECTIONS ARE WAY UP THIS YEAR, SO WE WHAT WE'LL SEE IS BUILDING PERMITS GO UP THE NEXT YEAR AND THE YEAR AFTER THAT, YOU WOULD HOPEFULLY SEE THE VALUE ON THE ON OUR APPRAISALS. SO IT'S A 123 THING THAT WE'RE LOOKING AT. SO HELP ME WITH THIS. I'M SORRY TO INTERRUPT YOU. BUT 600,000 THAT IS THE COP THAT IS THE FEES PAID FOR PERMITS TO THE CITY FOR BUILDING CORRECT AND THAT IS THROUGH WIND END OF JULY. YES WE'RE ANTICIPATING THE FISCAL YEAR 23 BUDGET TO BE 600,000 MORE THAN THE FISCAL YEAR 20 TO 600,000 MORE. YES. OKAY. SORRY. 10% ABOVE. 21 IT WASN'T CLEAR THAT WAS MY MISTAKE. SORRY THANK YOU. AND THEN WHAT DRY WHILE WE'RE SEEING THIS IS BECAUSE OF WHAT WE'RE SEEING IN ENGINEERING INSPECTIONS THIS YEAR. SO THAT MODES WELL FOR TWO FISCAL YEARS FROM NOW FOR THOSE APPRAISALS, WHETHER THEY'RE SINGLE FAMILY HOMES OR COMMERCIAL. I DON'T HAVE THAT BREAKDOWN TODAY, BUT WE CAN GET THAT FOR YOU. BUT THAT'S THAT'S REALLY GOOD NEWS.
WE LIKE TO SEE THAT AS A LEADING INDICATOR, SO UM, HOPEFULLY WE'LL COME BACK NEXT YEAR AND TELL YOU THAT THE BUILDING PERMITS ACTUALLY WENT UP BECAUSE THOSE REALLY DO FLUCTUATE. WE'VE SEEN YEARS. WHERE WHERE WE HAVEN'T HIT OUR PROJECTIONS AND YEARS THAT WE'VE GONE WAY THROUGH OUR PROJECTIONS. WE IT'S NOT A HUGE REVENUE SOURCE. BUT IT'S ENOUGH THAT WHERE WE REALLY WATCH IT SO WE CAN WE CAN SEE WHAT OUR PROPERTY TAXES WHERE PROPERTY TAXES ARE HEADED.
INTEREST INCOME. THIS ONE WAS A SURPRISE SHOULDN'T HAVE BEEN, BUT IT'S A WELCOME. IT'S A WELCOME OFFSET TO SOME OF OUR, UM, OUR INFLATION ISSUES. BUT WE'RE THIS ONE FOR MAYOR PRO TEM ROGERS. WAS THAT SOME INTEREST GROWTH? WE'RE HAVING INTEREST INCOME GROWTH. OKAY SO, UH, FRANKLY, UH, THIS WAS THIS IS WE SAID THAT THIS WAS A SURPRISE TO US. UH, UM, JUST IT'S ALMOST AN UNWELCOME SURPRISE BECAUSE OF THE AMOUNT OF INFLATION. WE'RE SEEING THE INTEREST RATES GOING UP. IT'S COSTING US MORE TO BORROW. BUT ON THE OTHER SIDE OF THAT, WE'RE GOING TO SEE MORE INTEREST INCOME. NOW. I WON'T GET INTO EVERYTHING. IT DOESN'T REALLY BENEFIT US ON THE CRP, PSA FOR MONIES THAT WE BORROWED BECAUSE WE HAVE WE HAVE ARBITRAGE ISSUES, BUT ON THE GENERAL FUND SIDE FOR WHAT? WE BANK WE ARE GOING TO SEE ABOUT $2.5 MILLION MORE IN INTEREST, SO THAT'S HELPING TO OFFSET SOME OF THE OF THE INFLATION THAT WE'RE SEEING. ONCE AGAIN FRANCHISE FEES. NOT QUITE. IT'S NOT A HUGE PORTION OF OUR REVENUES, BUT WE'RE SEEING IT ABOUT A 4% RISE. FRANCHISE FEES GENERALLY RUN ALONG WITH WHAT WE'RE SEEING IN POPULATION RISE , UM AND 34% BUT WHEN WHAT WE'VE SEEN WE HAD ONE YEAR AFTER SOME , UM ISSUES WITH, UH, WITH SOME
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LEGISLATION AT THE STATE WHERE WE LOST A LITTLE BIT OF FRANCHISE FEES, BUT WE'RE STARTING TO SEE THE 33 TO 4% GROWTH AGAIN. ONCE AGAIN. THIS IS THIS IS A SLAB. WE SHOW EVERY YEAR. IT'S MORE CIRCLES REALLY BIG ON CIRCLES. THIS SLIDE HAS BEEN AROUND. PROBABLY SINCE 2013 OR 14, I ASSUME WE SHOW IT EVERY YEAR. UM THIS IS OUR GENERAL FUND REVENUES PER CAPITA. THIS IS BASED. THIS IS OUR FISCAL YEAR, 23 PROPOSED BUDGET. COMPARED TO OUR SISTER CITIES FISCAL YEAR, 22 ADOPTED BUDGETS , SO I DON'T KNOW HOW THEY'RE ACTUALLY GOING TO PERFORM AND I DON'T KNOW WHAT THEY'RE ACTUALLY BUDGETING JUST SHOWING YOU WHERE WE STAND. WE HAVE MADE SOME PROGRESS, UH, OVER TIME, BUT WE WERE STILL DO LAG BEHIND THEM A LITTLE BIT. WE'RE LIKE $1 OFF FROM FRISCO. THAT'S THEIR 22 ADOPTED COMPARED TO R 23 PROPOSED. SO WE'RE A YEAR IN ARREARS. I'M ASSUMING THAT THEY'RE GOING TO GO UP 20 OR $30. I WOULD JUST BE IF I WERE A BETTING MAN. I'D SAY WE WOULD STILL LAG THEM BUT MIGHT WANNA WE MIGHT WANT TO GO BACK. AND AS YOU GET THIS MIGHT BE FUN TO SEE WHAT WE WERE IN 2014 AND SHOW THE SAME SLIDE COMPARED BECAUSE I THINK WE'VE MADE SOME PROGRESS . OKAY THAT MIGHT BE SOMETHING THAT WE CAN PULL UP FOR. UM UH AND GET GET OUT TO YOU BECAUSE I THINK THAT WOULD BE INTERESTING TO SEE. OKAY? SO THIS IS JUST THE MAKEUP OF OUR TOTAL REVENUES OVER OVER TO 10 YEARS THAT YOU CAN SEE THERE ON THE GENERAL FUND, SO SLIDE. IT'S A ABOUT A 5.4 IN PERCENT INCREASE OF OVER OUR END OF YEAR BUDGET, UM, FROM FISCAL YEAR 23 PROPOSED FISCAL YEAR 22 END OF YEAR. WE ALSO JUST MARRIED ALONG WITH OUR PER CAPITA REVENUE GROWTH. YOU CAN'T SEE THAT WE'VE GONE FROM ABOUT 1 50 FISCAL YOUR 14 TO, UM JUST UNDER 200, WHICH IS HELPING US MAKE THOSE THOSE GAINS AGAINST OUR SISTER CITIES. SO $190.6 MILLION IN GENERAL FUND REVENUES, THAT'S ALL. PRETTY. GIVING THE GIVING, GIVING PRETTY PRETTY LARGE. SO THIS IS OUR GENERAL FUND REVENUE MAKEUP. YOU CAN SEE. THIS IS COMPARISON OF OUR ADOPTED BUDGET LAST YEAR TO WHERE WE WERE BUDGETING THIS YEAR. I'M HAPPY TO SEE THIS TREND ON OUR PROPERTY TAXES CONTINUE. YOU CAN SEE THAT ONCE AGAIN. WE'RE A LITTLE LESS RELIANT EACH YEAR. UM, ON OUR PROPERTY TAXES. WE'VE SHIFTED A OVER THE LAST SEVERAL YEARS, WE'VE SHIFTED QUITE A BIT OVER INTO OUR SALES TAXES. UM AND YOU CAN SEE OUR LICENSE AND PERMITS ARE UP A LITTLE BIT THIS YEAR, BUT WE'RE MOVING. WE'RE STARTING TO MOVE AWAY A LITTLE BIT FROM, UM FROM FAMILY TAX RELIANCE. UM ALSO, IT'S GOOD. JUST ONE OTHER THING. IT'S GOOD TO SEE THE AH! IT'S KIND OF LIKE OUR PERSONAL INVESTMENT PORTFOLIOS WERE BECOMING MORE DIVERSIFIED. SO TO SPEAK ON ON THE WAY OUR REVENUES COME UP. IT MAKES US A LITTLE LESS. IT MAKES US MORE RESILIENT WHEN WE'RE HAVING IN FACE OF RECESSION OR ANYTHING LIKE THAT. SO COUNCIL ON ONCE REQUESTED FOR US TO COMPARE OUR REVENUES TO OUR SISTER CITIES. UM KIND OF HOW WERE OUR BREAKDOWN? YOU CAN YOU CAN SEE THAT WE WERE LOOKING MORE AND MORE LIKE OUR SISTER CITIES, ESPECIALLY WHEN IT COMES TO OUR PROPERTY TAXES. UM PLAY KNOWS THAT ABOUT 49% WE'RE RIGHT ON TRACK WITH FRISCO ALLEN'S AT 51% YOU CAN SEE WHERE WE'RE LAGGING IS ON SALES TAX PORTION OF THE BUDGET. THEY'VE THEY'VE GOT A LARGER PORTION THERE. FRISCO AND PLANO, BOTH 28% WHERE OURS IS AROUND 21% I STILL THINK THAT'S A REALLY GOOD COMPARED TO WHAT THEY HAVE VERSUS WHAT WE HAVE. I'M VERY PLEASED WITH THAT . THAT'S THAT'S PRETTY GOOD. VERY GOOD IS THE TOTAL MAKEUP. WE WERE MAKING PROGRESS ON THAT.THAT'S THE IMPORTANT THING. YOU KNOW, IT'S TIME GOES ON LIKE TO LOOK MORE LIKE THE PLANO MODEL.
UM AND, UH, LESS LESS LIKE THE ALLEN MODEL, BUT WE'RE WE ARE DEFINITELY MAKING PROGRESS. SO PROPERTY TAX REVENUE MAKEUP PAST 10 YEARS. WHAT YOU SEE IS A 5.5% INCREASE FROM FISCAL YEAR 22 TO
[02:05:02]
FISCAL YEAR. 23 THIS REPRESENTS ONLY THE MAINTENANCE AND OPERATIONS PORTION OF THE TAX RATE. THE THIS IS NOT THAT THE DEBT SERVICE PORTION. THIS IS JUST THE PORTION THAT GOES TO THE GENERAL FUND. SO THIS IS THE GENERAL FUND PORTION OF OUR OURSELVES TAXES. THESE ARE ADJUSTED FOR TOURS AND INCLUDE MIXED DRINK TAXES. UM, THIS IS A 4.9% OVERALL INCREASE THAT DOES INCLUDE THE 5% MULTIPLIER LIKE I MENTIONED ON JUST OUR GENERAL SALES TAXES, BUT WITH MIXED DRINK TAXES REMAINING FLAT, PULLS THE OVERALL SALES TAX REVENUES FROM 5% TO 4.9. YOU CAN SEE THAT WE ARE PROJECTING TO PUT INTO THE GENERAL FUND $40.8 MILLION IN SALES TAX IN FISCAL YEAR 23 COMPARED TO WHERE WE THINK WE'RE GOING TO END FISCAL YEAR 20 TO 38.9 MILLION, SO ALMOST A $2 MILLION RISE IN THE OVERALL SALES TAXES OF THE CITY. UH, BETWEEN 22 23. NEVER QUESTION YES, SIR. GENERAL QUESTION, BUT UH, THE LIQUOR SALES. IS ON THE BALLOT FOR NOVEMBER. IS THAT CORRECT? AND IF THAT PASSES WHEN COULD WE ANTICIPATE SEEING SOME FORM OF SALES TAX INCREASE FROM LIQUOR SALES IN MAKIN. I WOULD SAY, I WOULD SAY IT'S GONNA TAKE AT LEAST ONE MORE FISCAL YEAR. YOU'RE GOING TO HAVE TO BUILD SOME OF THESE. YOU'RE GOING TO SEE THAT THAT LAND WE'LL HAVE A WHOLE DIFFERENT CONVERSATION WHEN WE ACTUALLY SEE THOSE.HOPEFULLY WE'RE HAVING THAT CONVERSATION NEXT YEAR, UM ONE WAY OR THE OTHER WILL WE'LL TALK ABOUT YOU KNOW THINGS HAVE STAYED FLAT OR THIS IS WHAT WE'RE GONNA SEE FOR FISCAL YEAR.
24 I DON'T WANT TO GET YOU TOO FAR OFF TRACK OR OUTSIDE OF THE REALM OF THIS MEETING. BUT IF YOU GUYS LOOKED AT WHAT OTHER CITIES ARE BRINGING IN JUST OFF OF LIQUOR, SELF UM, WE WE'VE HEARD. WE'VE HEARD SOME THINGS. WE HAVE NOT STARTED RUNNING THOSE MODELS YET. I THINK THAT IT'S FAIR TO SAY THAT WE PROBABLY WILL BEGIN DOING THAT AND TALKING TO SOME OF OUR OUR CITY, SISTER CITIES THAT HAVE THESE, BUT WE'VE SEEN SOME OF THE NUMBERS THAT SOME OF THE CONSULTANTS HAVE PUT FORWARD AND IT COULD BE A VERY SIGNIFICANT AMOUNT OF MONEY. THANK YOU, SIR.
SO WITH THAT, THAT'S AH. HOW UM , LEVEL LOOK AT OUR GENERAL FUND REVENUES FOR FISCAL YEAR 23 WITH THAT I'M GOING TO GET OUT OF THE WAY AGAIN FOR A LITTLE WHILE AND LET UH, TREVOR DAGON TALK ABOUT GENERAL FUND EXPENDITURES AND WHAT'S GOING TO BE NEW ON THAT SIDE OF THE OF THE WORLD AND HE'S GOING TO TAKE US A LITTLE BIT FURTHER THAN THAT. I THINK, TOO. SO TREVOR MARK, YOU KNOW, WE NEED A BREAK FOR A SECOND. SURE ANYONE NEED A FIVE MINUTE BREAK. YOU WANT TO TAKE THAT? SURE JUST A FIVE MINUTE BREAKS. WE'RE A LI YOU'RE BACK ON. RIGHT? GOOD MORNING, MAYOR AND COUNCIL TREVOR DAGON CITY MCKINNEY. UM YOU KNOW, THANKS FOR STANDING MY 2.5 HOUR. WAIT TIME, ANOTHER FIVE MINUTES, BUT, UH, BUT ANYWAY, UM SO YOU KNOW, MARK JUST WENT OVER THE REVENUES FOR THE GENERAL FUND. I'M GONNA START BY TAKING IT OFF TO THE EXPENDITURES AND THEN WE'LL TAKE A BRIEF LOOK AT R. C I P AND THEN GO THROUGH A FEW OF OUR ENTERPRISE FUNDS. SO WITH THAT, UM. AND HERE'S ANOTHER ONE OF OUR LOVELY CIRCLES MATCHES UP WITH THE ONE WE SHOWED YOU BEFORE, UM, IN REGARD TO THE REVENUES PER CAPITA WHEN IT COMES TO OUR GENERAL FUND. UM, AGAIN FOR US IN PARTICULAR, YOU'LL SEE OUR NUMBER DIDN'T CHANGE FROM THE REVENUE SIDE SINCE WE DO PRESENT THAT BALANCED BUDGET, WHICH IT LOOKS LIKE LAST YEAR, FRISCO AND ALLEN DID THE SAME. ALL RIGHT, SO SOME OF OUR HIGHLIGHTS ON THE EXPENDITURE SIDE FOR THIS UPCOMING FISCAL YEAR WE HAVE ABOUT 7.8 MILLION IN NEW EMPLOYEES AND EQUIPMENT. UM AS WE GO THROUGH THE NEXT FEW SLIDES THROUGH SOME OF OUR DEPARTMENTS. WELL BRIEFLY TOUCH ON SOME OF THOSE, UM NEW EMPLOYEES NEW POSITIONS. BUT IN THE BACK OF YOUR PROPOSED BOOK, THERE IS A FULL LIST OF ALL THOSE APPROVED. SUPPLEMENTAL REQUESTS. UM THAT'S 7.8 MILLION. AS WE MENTIONED SEVERAL TIMES EARLIER, OUR STREET MAINTENANCE . UM WE'VE INCREASED THAT FROM 2.5 MILLION LAST YEAR TO THREE MILLION THIS YEAR, AND WE HAVE MOVED IT TO THE OPERATION SIDE THE GENERAL FUND, SO WE'LL BE USED SPECIFICALLY FOR STREET
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MAINTENANCE IN THE UPCOMING YEAR. UM, AND THEN JUST KIND OF THE COST OF OUR STEP INCREASES FOR BOTH OUR PUBLIC SAFETY AND NON SWORN PERSONNEL. ABOUT 1.5 MILLION STEP INCREASE FOR PUBLIC SAFETY. AND 1.4 MILLION STEP INCREASE FOR OUR GENERAL GOVERNMENT EMPLOYEES. UM. ALSO JUST TO MENTION AS I THINK WE MENTIONED EARLIER, WE DID DO A COST OF LIVING ADJUSTMENT OF 2% OF JULY OF THIS YEAR WHEN WE IMPLEMENTED THAT. AND THEN ALSO TO AGAIN THAT ADDITIONAL ALLOWANCE WE DO HAVE BAKED IN THE BUDGET FOR MARKET STUDY RESULTS. ALRIGHT. SO AGAIN, HERE'S OUR GENERAL FUND EXPENDITURES YOU CAN SEE FOR FY 23 LIKE WITH THE REVENUES WILL BE ABOUT $190.6 MILLION. SO IT'S ROUGHLY 12% ARE SORRY. $12 MILLION INCREASE OVER THE END OF YEAR 22 BUDGET. UM, AGAIN THAT COMES FROM THAT ALMOST $8 MILLION IN SUPPLEMENTALS FOR NEW POSITIONS, EQUIPMENT. UM AND THEN. ABOUT $3 MILLION TOTAL IN THIS STEP INCREASES THAT WE TALKED ABOUT EARLIER MAKE UP THE BULK OF THAT. AND THEN HERE WE SHOW OUR EXPENSE MAKE UP FOR THE GENERAL FUND. YOU'LL SEE FROM THE PRIOR FROM THIS CURRENT YEAR TO THE NEXT YEAR. OUR MAKEUP ESTATE RELATIVELY THE SAME. AS FAR AS THE PERCENTAGES ALLOCATED TO EACH PART DEPARTMENTS. I MEAN , HERE WE COMPARE THAT SAME CHART TO OUR SISTER CITIES. UM NOW AGAIN, THIS MAY NOT BE APPLES, APPLES ON THE EXPENDITURE SIDE BECAUSE YOU KNOW THEY MAY BUDGET DIFFERENTLY , DEPENDING ON WHICH DEPARTMENTS ARE INCLUDED. WHERE ESPECIALLY ON THE TRANSFER SIDE. ARE TRANSFERS ARE HIGHER THAN THOSE SISTER CITIES DUE TO THE FACT ESPECIALLY THAT WE FUND A LOT OF OUR CAPITAL REPLACEMENTS AND WE CASH FUND THOSE WHICH WE'LL TALK ABOUT A LITTLE LATER AND WE DO HAVE A TRANSFER FROM THE GENERAL FUND TO OUR CAPITAL EQUIPMENT REPLACEMENT FUND. SLIDE ALRIGHT . SO FIRST, WE'LL KIND OF TALK ABOUT OUR GENERAL GOVERNMENT. UM, YOU KNOW, THAT INCLUDES EVERYTHING FROM FINANCE TO I T CITY MANAGER'S OFFICE MARKETING . UM I'LL JUST KIND OF YOUR GENERAL, UM, ADMIN POSITIONS. AND SO IN THE GENERAL GOVERNMENT , UH, WILL HAVE ABOUT 165 AUTHORIZED POSITIONS THAT INCLUDES ANY NEW POSITIONS ADDED FOR THE UPCOMING BUDGET. UM, AND SOME OF THOSE DO INCLUDE NEW HUMAN RESOURCE ANALYSTS, COMMUNITY SERVICES COORDINATOR.UM COUPLE I T POSITIONS. AND THEN JUST GENERAL, I T MAINTENANCE. AND THAT WE SEEM TO HAVE EVERY YEAR. NEXT WEEK. PUBLIC SAFETY UM BETWEEN OUR FIRE AND POLICE, WE HAVE ABOUT 583 AUTHORIZED POSITIONS. AND YOU'LL SEE WE HAD THE BULK OF OUR NEW, UM POSITIONS THAT COME FROM THESE TWO DEPARTMENTS FOR THIS UPCOMING YEAR. WE HAVE ABOUT 16 POSITIONS IN OUR POLICE DEPARTMENT. EIGHT FIRST RESPONDERS, ANOTHER MENTAL HEALTH COORDINATOR. OPEN RECORDS SPECIALISTS TO COMMUNICATIONS SPECIALISTS, THREE DETECTIVES AND ONE PUBLIC SERVICE OFFICER.
AND THEN FIRE. WE HAVE 11 NEW POSITIONS. NINE OF THOSE BEING FIREFIGHTERS. UM OUR ASSISTANCE REVIEW SPECIALISTS AND THEN TO COLLEGE INTERNS. YOU SAID ANOTHER MENTAL HEALTH PROVIDER.
YES. WE HAVE ONE RIGHT NOW. CORRECT ADDING A SECOND CORRECT END UP FIRST ONE A COUPLE OF YEARS AGO. I WANT TO SAY THIS TWO YEARS AGO IN 2020. YES, WE ADDED 12 YEARS AGO IN THE BUDGET , AND WHAT THEY DO IS THEY HANDLE KIND OF THE PROGRAM GENERALLY, BUT THEY ALSO DO RIDE OUT WITH WHEN THE NEED ARRIVES, BUT THEY DON'T THEY DON'T OPERATE INDEPENDENTLY. THANK YOU. RIGHT NEXT UP. WE HAVE OUR DEVELOPMENT SERVICES DEPARTMENT. THIS INCLUDES PLANNING AND ENGINEERING. BUT 116 AUTHORIZED POSITIONS THERE. UM AND THEY HAD ABOUT 14 POSITIONS. ADAM PROPOSED TO BE ADDED FOR THIS UPCOMING BUDGET THAT INCLUDES CIVIL ENGINEER TO AN ASSISTANT ENGINEERING DIRECTOR, NEIGHBORHOOD PLANNER AND ADMIN ASSISTANT. THE NEXT ONE IS PUBLIC WORKS. UM SO THERE YOU GET YOUR FACILITIES. MAINTENANCE UM, UM AGAIN. THIS IS JUST GENERAL FUND PUBLIC WORKS. THIS IS NOT INCLUDE WATER'S SURFACE WATER, SALT WASTE. ABOUT 80 AUTHORIZED POSITIONS THERE. AND FOR THE UPCOMING FISCAL YEAR WE
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GOT ABOUT FOUR NEW MAINTENANCE TEXT PROPOSED ANOTHER CREW LEADER. RIGHT OF WAY. SUPERVISOR ANY PLANS. EXAMINER? AND THEN AGAIN, ALSO, A BIG PART OF THEIR BUDGET THIS YEAR IS THAT $3 MILLION OF YOU ADDED TO STREET MAINTENANCE. AND THE NEXT UP. WE HAVE OUR PARKS IN LIBRARY. UM, SO BETWEEN PARKS AND LIBRARY, WE HAVE 200 AUTHORIZED POSITIONS. SOME OF THEIR NEW EXPENDITURES PROPOSED THIS UPCOMING BUDGET. UM PARKS. WE HAVE TWO NEW MAINTENANCE WORKERS DEVELOPMENT PLANNER. I'M A COUPLE SPECIAL BANK COORDINATORS. UM, FOR SOME OF OUR PARTS FACILITIES. AND THEN CONTRACT MOWING INCREASE. UM AND THEN FOR THE LIBRARY SIDE , A DIGITAL LIBRARY EXPANSION TO EXPAND THEIR UH, OFFERINGS TO THEIR DIGITAL LIBRARY. AND THERE ARE GRANTS TO COMMUNITY. I THINK PAUL MITCHELL AND IN THE OPEN SO OBVIOUSLY WE ADOPT THIS ANNUALLY . THIS KIND OF GIVES YOU A BREAKDOWN OF THOSE GRANTS TO COMMUNITY. WE'VE INCREASED THIS THIS YEAR ABOUT ANOTHER 70 GRAND . AND THEN AS PAUL MENTIONED OUR PER CAPITA THERE IS ABOUT $2.76. I MEAN, AGAIN, THAT'S BASED ON THAT TOTAL $570,000 NUMBER IN OUR CURRENT POPULATION. SO WE'RE GONNA BRIEFLY JUST KIND OF MENTION HER SHOW R C I P PROGRAM. AND SO HERE, THIS SHOWS OUR C I P FOR THE NEXT FIVE YEARS. FROM 23 TO 27. YOU'LL SEE IT TOTALS OUT TO BE ABOUT 1.2 BILLION OVER THE NEXT FIVE YEARS. THAT'S 1.2 BILLION NOT MILLION. SO IT IS FAIRLY LARGE. THIS JUST KIND OF GIVES YOU A BREAKDOWN OF WHAT'S PROJECTED OVER THE NEXT FIVE YEARS. UM IN THESE DIFFERENT PROJECT AREAS.OF COURSE, THIS IS FLUID THE CHANGE AS WE ADOPTED EACH YEAR. TREVOR IF YOU LOOK AT ON THAT SLIDE, SECOND ENTRY DRAINAGE. FUNDED THROUGH FY 20 TO 15,000,015 MILLION AND THEN ADJUSTMENTS WAS HALF OF THAT. CAN YOU HELP ME UNDERSTAND WHY THE ADJUSTMENTS WERE 7.9 MILLION . AND WHAT HAPPENED THERE? CAN ANYBODY HELP ME WITH THAT? YEAH THAT'S THAT'S NOT REALLY. THAT'S HOW THE BUDGETS HAVE JUST MOVED AROUND. DURING THE FISCAL YEAR THEY DIDN'T LOSE $8 MILLION.
THEY'VE JUST MOVED BUDGET AROUND, AND, UM THE OVERALL APPROPRIATION. THE WEIGHT STRUCK ME WAS WE PLANNED ON SPENDING 15 MILLION IN DRAINAGE MILL WHEN WE DIDN'T SPEND ALMOST EIGHT OF IT , AND SO THAT SEEMS LIKE A BIG DELTA TO ME, BUT YES, IT'S WE CAN. WE CAN ACTUALLY BRING. YOU KNOW WE CAN HAVE, UM ACROSS THE STREET STOP BY AND TALK ABOUT THEIR ADJUSTMENTS FOR THE YEAR, BUT IT'S A THAT'S JUST THE WAY IT'S FUNDED AND WHAT'S COMING AND GONE OUT. SO IT'S FINE FOR ME IF THERE WAS SOME ENTRY AND MANAGERS NOTES ABOUT THAT, JUST WE'LL GET THOSE WHAT WE'LL GET THE DESCRIPTIONS OF EACH ONE OF THOSE ADJUSTMENTS TO YOU, BUT IT'S FAIRLY STANDARD OF WHAT'S COMING IN WHAT'S GOING OUT. YOU CAN SEE THE FACILITIES. THERE WAS A FACILITIES ADJUSTMENT OF $60 MILLION. THAT'S FROM BOND SALES AND THINGS LIKE THAT, SO IT'S JUST THE WAY WE ACCOUNT FOR THINGS. IT'S NOT NECESSARILY PROJECTS THAT WE'RE NOT DOING OR DOING. IT'S JUST IT'S THE CHANGES IN THE IN THE OVERALL FUND DURING THE YEAR. OKAY, THANK YOU. AND THEN THIS JUST GIVES A LISTING OF SOME OF OUR MORE MAJOR PROJECTS, UM, USING FY 23 FUNDING JUST TO KIND OF MENTION A FEW ON HERE. UM OBVIOUSLY, THE ONE OF THE BIG ONES IS THAT MUNICIPAL COMPLEX DESIGN AND CONSTRUCTION WE HAVE ON THERE FOR 18 MILLION ALSO THE RENOVATIONS OVER AT THE ORIGINAL PUBLIC WORKS COMPLEX. UM, OVER THERE OFF COLLEGE. YOU ALSO HAVE THE RECONSTRUCTION OF FIRE STATION NUMBER EIGHT. I'M IN THERE AT ABOUT 11.5 MILLION AND THEN, OF COURSE, VARIOUS STREET PROJECTS. UM AND ALSO AS ALWAYS, WATER AND WASTEWATER PROJECTS. UM CONSTRUCTION AND, UM, TRANSMISSION IN MAINE REPLACEMENTS. QUESTION CAN YOU HELP ME TRACK THE WAY THAT YOU'VE EXPLAINED THE STREET MAINTENANCE? BECAUSE THE YOU'RE SAYING IN THE GENERAL FUND UNDER PUBLIC WORKS. WE NOW HAVE THREE MILLION. BUT IN THE PAST WE'VE HAD IT GOES THROUGH THE CITY.
[02:20:02]
BUT HERE YOUR SHOW AND. CITY WIDE STREET REPAIRS PROGRAMMED AT FIVE MILLION I GUESS. ARE ALWAYS DO WE EXPECT TO SPEND FIVE MILLION IN THE NEXT YEAR OR DO WE EXPECT TO SPEND THREE MILLION OR AH, YES. SO BOTH. UM SO THE WAY THIS HAD WORKED IN THE PAST. IF YOU RECALL, WE BONDED A CERTAIN AMOUNT FOR STREET RECONSTRUCTIONS, AND WE HAD ALSO SENT 2.5. SOME YEARS.IT WAS 1.5. SOME YEARS IT WAS TO JUST DEPENDING ON ON THE FUNDING LEVEL FROM THE GENERAL FUND OVER INTO THE CRP, AND THEN WE WOULD DO MORE STREET RECONSTRUCTIONS. SO THE CHOICE WAS MADE THIS YEAR TO KEEP FULL AMOUNT, WHICH IS $3 MILLION. IN THE FIRST WE'LL TALK ABOUT THE OTHER FIVE MILLION IN A SECOND, THAT $3 MILLION IN THE GENERAL FUND JUST TO GO AHEAD AND INSTEAD OF TRANSFERRING IT OUT, WE'LL LEAVE IT. INPUT WITH PUBLIC WORKS TO DO MAINTENANCE. WE'RE STILL GOING TO DO ANOTHER FIVE PLUS MILLION GOT FIVE MILLION. SO FAR. I HAVE A FEELING THAT WHEN WE ACTUALLY COME TO SELL BONDS WILL BE HIGHER. TO DO TO CONTINUE STREET RECONSTRUCTION, SO YOU'VE INCREASED THE AMOUNT OF FUNDING FROM BOTH FROM BOTH SECTIONS BOTH WHAT WE WERE BONDING ON THE C I P SIDE AND WITH THE GENERAL FUND WAS PUTTING IT ON FOR RECONSTRUCTIONS. SO YOU'RE SEEING AN OVERALL GROWTH OF BOTH IS WHAT IT DISSIPATES TO FUNDING SOURCES IS TWO DIFFERENT FUNDING SOURCES. SO THE OVER THE OVERALL GROWTH THAN IS NOW IT RESULTS IN $8 MILLION EXPECTED IN THIS BUDGET COMPARED TO WHAT IN LAST YEAR'S BUDGET. SO I WELL, IT WAS IT WAS AROUND SEVEN LAST YEAR.
YOU'RE SEEING EIGHT. WHAT I FORESEE, THOUGH, IS WHAT WE'RE ACTUALLY GOING TO BOND FOR RECONSTRUCTIONS BECAUSE WE'LL COME TO YOU BEFORE WE REALLOCATE. WE ARE IN THE PROCESS OF TAKING A LOOK AT AT OUR REMAINING REMAINING AUTHORIZATIONS FOR BONDS. WE REEVALUATE THOSE ALL TERMS. SO BEFORE WE BOND, THOSE DOLLARS A WEEK. WE CHECKED. MAKE SURE WE CAN BOND THOSE SAFELY AND THEN WE'RE PROBABLY GONNA HAVE A RECOMMENDATION DID NOT JUST DO FIVE MILLION. I WOULD ASSUME WE'RE GOING TO GROW THAT 7.5 OR MORE, BECAUSE THERE ARE A LOT OF ST RECONSTRUCTIONS THAT THAT NEED TO BE DONE. THIS WAS JUST THE CARRY OVER FIVE. SO INCREASE THE GENERAL FUND AND I AM ANTICIPATING. THAT FIVE BEING ACTUALLY MORE THAN THAT. SO TO LAST YEAR WE WERE AT ABOUT SEVEN MILLION THAT WE WERE SPENDING TIGER C 2.5 OUT OF THE GENERAL FIND FIVE UNDER THE C I P BONDED PROGRAM. THIS YEAR'S BUDGET HAS THREE MILLION KEPT IN THE GENERAL FUND AND FIVE MILLION AGAIN AT LEAST AND THEN I'M ANTICIPATING WHEN WE ACTUALLY GO TO SELL MORE. I WILL SAY THIS THAT THREE MILLION. THAT'S NOT ALL OF OUR STREET MAINTENANCE.
THERE WAS ALREADY YOU KNOW, OVER $2 MILLION IN THAT STREET MAINTENANCE FUND. WE'RE JUST INSTEAD OF TRANSFERRING IT FOR C I P. WE'RE INCREASING THAT TOO. ABOUT $3 MILLION JUST TO KEEP THAT IN THE STREETS FUND. IT'S INCREASING BY THREE MILLION. THE MAINTENANCE IS THE OVERALL AMOUNT THAT WE WERE TRANSFERRED . WE'RE NOT GOING TO TRANSFER IT NOW TO CRP. AND DO, UH, WE'RE GONNA WE'RE GONNA TRY TO INCREASE THE AMOUNT THAT WE'RE ACTUALLY GOING TO BOND FOR RECONSTRUCTIONS THERE. THIS IS JUST STREET MAINTENANCE FOR OUR PUBLIC WORKS. YOU'RE SEEING THAT BUDGET. GO UP BECAUSE OF THE KEEPING IT IN THE JOURNAL FUND. HMM. OKAY? NEXT WE'LL KIND OF GO THROUGH A COUPLE OF OUR ENTERPRISE FUNDS, BEGINNING WITH WATER. WASTEWATER WILL TOUCH THIS. UH BRIEFLY, SINCE YOU KNOW WE HAD THOSE 20 SLIDES EARLIER WATER RATES. UM SO SOME OF OUR HIGHLIGHTS THERE EVERY YEAR. UM THEY DO BUDGETS CERTAIN AMOUNT FOR THE WATERLINE REPLACEMENT PROGRAM. THOSE INCLUDED IN THEIR BUDGET EACH YEAR, UM, AGAIN FOR THIS UPCOMING YEAR TOWARDS THE END OF THE YEAR, 23 WILL ANTICIPATE ANOTHER DEBT SALE THERE FOR ANY CAPITAL PROJECTS THAT THEY HAVE COMING UP. AND THEN SOME OF THEIR SUPPLEMENTALS. UM YOU HAD ABOUT FIVE NEW, UM, POSITIONS THERE, UH, COUPLE SUPERVISORS AND ABOUT THREE WATER UTILITY TEXT. AND THEN ALSO MADE AN INCREASE FOR MANHOLE INSPECTIONS, AUTO FLUSHES AND A HYDRO EXCAVATOR.
AND THEN AGAIN, WE'LL BRIEFLY TOUCH ON THE RATES HERE. KIND OF WHAT YOU ALL SAW EARLIER FOR NORTH TEXAS. WE'RE SEEING ABOUT THAT 13% INCREASE ON THE WATERSIDE FOR OUR COSTS. UM ORIGINALLY COMING INTO THIS YEAR, WE WERE NOT EXPECTING AN INCREASE, SO THAT WAS QUITE A JUMP. AND THEN ON THE WASTEWATER SIDE, UH, A LITTLE OVER AN 8% INCREASE. UM IN OUR COSTS. AGAIN
[02:25:05]
AS WE KIND OF MENTIONED, UM, BASED ON WHAT THEY SAID THESE WERE DUE TO, UM, INCREASES DUE TO INFLATION, MARKET CONDITIONS, COMMODITY PRICES. AND THEN UH, SO FOR OUR PROPOSAL JUST TO KIND OF GIVE YOU A PERCENTAGE BASIS ON WHAT WE SAW EARLIER FOR THE GREAT NUMBERS WOULD BE ABOUT A 9% INCREASE ON THE WATERSIDE. TO THE ACTUAL RATES. YOU KNOW THE ACTUAL PAIN CUSTOMER RESULTS AROUND EIGHT 8% INCREASE ON THE WASTEWATER SIDE, UM, AGAIN JUST TO THE RATES. AND THIS AGAIN ALLOWS ARE FUN TO REMAIN SELF SUFFICIENT. SO WE ARE NOT FALLING BEHIND. ALL RIGHT. NEXT WE HAVE OUR SOLID WASTE AND DRAINAGE FUND ALSO TOUCH ON OUR CAPITAL REPLACEMENT FUND. AH! SO FOR SALT WASTE, UH, LAST YEAR, WE HAD THAT INCREASE BOTH RESIDENTIAL AND COMMERCIAL CUSTOMERS. THAT WAS OUR FIRST RATE INCREASE. UM SINCE 2006 SO IT'S BEEN QUITE AWHILE ACTUALLY INCREASED THE RATES ON THE CUSTOMER SIDE. AH! AND THEN THIS YEAR I BELIEVE IT WAS IN DECEMBER WAS THAT 2ND 10% INCREASE ON THE COMMERCIAL SIDE . I WAS KIND OF PART OF A 10 10 5 INCREASED FOR COMMERCIAL RESIDENTIAL AGAIN REMAIN THE SAME FOR THIS YEAR. I BELIEVE MENTIONED THE LAST COUNCIL MEETING. A COUPLE OF COUNCIL MEETINGS. UM AGO. WE ARE WORKING WITH A CONSULTANT AS WE WANT TO GO TO THE DEVELOPMENT OF A SOLID WASTE. RFP FOR THOSE SERVICES.AND THEN THERE'S SUPPLEMENTALS JUST INCLUDED JUST ONE ADDITIONAL POSITION. A CUSTOMER SERVICE REPRESENTATIVE. AND THEN IN SURFACE WATER IN REGARDS TO THEIR FEE SCHEDULE. THERE'S NO CHANGES THERE. THOSE HAVE NOT BEEN UPDATED SINCE FISCAL YOU'RE 15. UM. WE MAY SEE IN THE FUTURE , A GREAT STUDY DONE THERE TO UPDATE THOSE FEES, MAYBE MORE, ALIGN THEM WHERE THEY SHOULD BE . BUT I WILL SAY I AM I THINK ANTICIPATING DURING FISCAL YEAR 23 BEGINNING TO TAKE A LOOK AT AT THIS FUND, UM IT THE PIECE SCHEDULE MAY NEED TO BE UPDATED ITS. IT'S BEEN QUITE A WHILE.
FUND IS STILL DOING WELL, BUT IT'S PROBABLY NOT BEING ABLE TO DO QUITE AS MANY OF THE CAPITAL PROJECTS FROM DRAINAGE THAT I WOULD LIKE TO SEE. WE'VE BEEN HANDLING SOME SOME ISSUES INTERNALLY TO MAKE SURE THAT WE'RE BUILDING THE CORRECT AMOUNT ONCE WE'VE GOT THOSE HANDLED. HOPEFULLY THIS YEAR WE'RE WORKING WITH DEVELOPMENT SERVICES. WE CAN THEN MOVE FORWARD AND SEE IF THERE IS A NEED TO DO THAT. SO POSSIBLY MIGHT BE TALKING A LITTLE BIT MORE ABOUT THAT NEXT YEAR. UM, BUT I JUST WANTED TO MENTION THAT THAT THAT THOSE MIGHT BE ON THE HORIZON, BUT NOT RIGHT? NOT RIGHT TODAY, BUT WE MAY BE BACK IN FRONT OF YOU NEXT YEAR WITH WITH SOME DIFFERENT SCHEDULE. OH, NO, YOU ARE FINE. AND THEN AGAIN THERE. THERE'S JUST SOME OF THEIR, UH SUPPLEMENTAL PROPOSALS FOR THIS NEXT YEAR, WHICH INCLUDE ON THE ENGINEERING SIDE OF OUR DRAINAGE FUND. UH GRADUATE ENGINEER, AND THEN THE PUBLIC WORKS SIDE OF OUR DRAINAGE FUND, A NORMS WHO ARE TELEVISING CREW. ALL RIGHT. SO NOW WE HAVE OUR CAPITAL EQUIPMENT REPLACEMENT FUND. UM THIS WAS A FUN THAT WAS INITIATED BACK IN 2014. TO ADDRESS THE NEED FOR ANY KIND OF CAPITAL REPLACEMENTS COMES TO FLEET OF VEHICLES SPECIFICALLY AND THEN ALSO TO ANY MAJOR UPGRADES OR REPAIRS OF FACILITIES SUCH AS H FACTS, ROOFS, ANY KIND OF THOSE MAJOR REPLACEMENTS. THEY ESSENTIALLY RESPONDED STARTED. SO IT'S INSTEAD OF HAVING TO DEBT FUND ANY OF THESE, WE ARE ABLE TO CASH ON THEM EACH YEAR. THIS JUST KIND OF GIVES YOU A BREAKDOWN VOTE WE'VE REPLACED SO FAR THIS YEAR IN 22 CLOSE TO $6 MILLION HAS BEEN USED FOR REPLACEMENTS IN OUR VARIOUS, UM GENERAL FUND DEPARTMENTS. AND THE FIRE IS. THE BULK OF IT BECAUSE THOSE AMBULANCES AND REPLACEMENT FIRE TRUCKS DO COST QUITE A BIT. AND THEN ON THE PUBLIC WORKS SIDE, THOSE WOULD BE THEIR FLEET VEHICLES AND THEN THAT WOULD ALSO BE WHERE WE BUDGET FOR ANY, UM, UPGRADES OR REPLACEMENTS TO ANY OF OUR FACILITIES, REPLACING H BACK, UM , PLACE OF ROOF FLOORING. WHAT HAVE YOU. AND THEN WE'LL TOUCH HERE ON OUR AIRPORT SLIDES. UM SO FOR THIS FISCAL YEAR, THE AIRPORT IS PROPOSING A BALANCED
[02:30:04]
BUDGET. AND THEN EACH YEAR THEY DO, UH, THAT INCLUDES OUR REINVESTMENT IN THEIR AIRPORT CONSTRUCTION FUND. AND THE BIG THING HERE IS BACK IN FISCAL YEAR. 20. WE ENDED THE GENERAL FUND CONTRIBUTION THE AIRPORT FUND SO THEY NO LONGER HAVE THAT SUBSIDY THEY HAVEN'T FOR THE LAST FEW YEARS. WHICH MEANS THEY ARE SELF SUSTAINING AND BEING ABLE TO NO PAY FOR THEIR OWN THINGS OUT THERE AND ACTUALLY DOING QUITE WELL SPECIFICALLY THIS YEAR. AND THEN SOME OF THEIR SUPPLEMENTALS. THEY HAVE THREE NEW POSITIONS SUPERVISOR COORDINATOR AND A LINE SERVICE TECH. AND THAT'S ALL I HAVE SO ALTERNATE BACK OVER TO, MARK. UM WHAT KIND OF TAKE YOU THROUGH THE END, WE'LL TOUCH ON OUR COMPONENT UNITS BRIEFLY. SURE I WANT TO TALK ABOUT JUST FOR A FEW MINUTES. THE MM CVB, THE M E, D. C AND M C D. C AH, THESE THREE ORGANIZATIONS PREPARE THEIR OWN BUDGETS. WE DO WORK IN CONCERT WITH HIM TO GET THOSE BUDGETS. UM BUT THOSE HAVE TO BE ULTIMATELY ADOPTED BY COUNCIL. I'LL START WITH THE M C. VB WHICH IS FUNDED BY HOTEL MOTEL TAX, WHICH IS COLLECTED BY THE CITY. UM YOU CAN SEE HERE, BUT THE HOTEL MOTEL TAX LAW SAYS HAS TO MEET TWO CRITERIA. TO BE SPENT THAT WAY AND THEN THE SECOND CRITERIA AND THEN FIT INTO NONE OTHER CATEGORIES. IT'S FAIRLY COMPLICATED, BUT THIS IS WHERE WE DO FUND THE CBB FROM WE ARE ESTIMATING THAT OUR FISCAL YEAR 22 INTERVIEW YEAR, UH, COLLECTIONS FOR HOTEL MOTEL TAX WILL BE $2.1 MILLION, WHICH IS SIGNIFICANT INCREASE FROM LAST YEAR. AH DURING OUR COVID YEAR, WE SAW THOSE FOLLOW ABOUT 1.4 MILLION AH, UP TO 1.8 LAST YEAR , AND YOU'RE LOOKING AT ABOUT 2.1 THIS YEAR. SO WE'RE WE DO MAINTAIN THOSE LEVEL BECAUSE THE HOTEL MOTEL TAX TAX FUND WHEN WE FORECAST I DON'T WANT TO GET AHEAD OF OURSELVES, BUT IT ISN'T DIRECTLY FUNDING ANY OTHER OPERATIONS THAT WERE HOLDING IT BACK IF WE WERE A LITTLE BIT UNDERSHOT THERE SO. JUST TALK ABOUT VISIT MCKINNEY'S BUDGET. TOTAL OPERATING COSTS ARE UP ABOUT $93,000 OVER THE LAST FISCAL YEAR, AND THE SUPPLEMENTAL ITEMS IS THEY'RE GOING TO PROBABLY BRING THE THEIR STORE IN HOUSE AND THEY'LL NEED TO PROCURE SOME SOME ITEMS. UM TO GET THAT DONE. DO THEY CARRY A BALANCE? I MEAN, THEY THEY HAVE A RESERVE. THE CBB CARRIES A VERY SMALL RESERVE. WE HAD ALWAYS ATTEMPTED TO MAKE SURE THAT WAS LEVEL BECAUSE THEY'RE FUNDED WHOLLY FROM THE FROM HOTEL MOTEL TAX. IF THEY NEED DOLLARS, WE'VE ALWAYS BEEN ABLE TO MOVE THOSE BACK AND FORTH. THEY CARRY A VERY SMALL BALANCE, AND WE WOULD WE'VE ATTEMPTED TO MAINTAIN IT ZERO, BUT THEY RUN A SURPLUS BUDGET MOST YEARS, SO THEY KEEP SOME FUNDS IN THERE, SO WE ALWAYS TRANSFER OVER A LITTLE BIT LESS THAN PROBABLY THEIR EXPENSES, BUT WE'VE ALWAYS MADE THEM WHOLE. AND IF THERE WAS SOMETHING THAT CAME UP DURING THE YEAR, WE WOULD JUST IT LOOKS LIKE THEY'RE GOING TO MAKE A MILLION DOLLARS. FOR THIS. I MEAN THEIR OPERATING COSTS RIGHT THERE. IT SAYS THERE ARE NO THEIR BUDGET IS YOU KNOW, LET'S SAY IT ON THE HIGH SIDE WON $1 MILLION IN THERE AND THE ESTIMATED COLLECTIONS IS 2.1. BUT THE HOTEL MOTEL TAX FUND.FUNDS THE CVB THEY THE HOTEL MOTEL TAX FUND DOES OTHER THINGS BESIDES CONVENTION AND VISITORS ARE VISIT MCKINNEY THAT ARE NOT INCLUDED IN THE BUDGET NOT INCLUDED IN VISIT MCKINNEY'S BUDGET VISIT. MCKINNEY DOES NOT BUDGET THE FULL AMOUNT OF OUR HOTEL MOTEL TAX. THAT IS A SEPARATE FUND. WHICH WE THEN MAKE A TRANSFER FROM TO FUND THEM. FOR INSTANCE, WE FUND UM SO IT'S PAID TO THE CITY OF MCKINNEY. YES AND THEN AND THEN WE JUST WITH THEM. WE FUND THE CBB AND WE'VE KEPT UP WITH WITH THEIR ASKS OVER THE YEARS, AND IF THERE IS SOME NEED FOR FUND BALANCE OR MORE THAN WE'VE ALWAYS BEEN ABLE TO ACCOMMODATE THAT. UM THIS IS A SNAPSHOT OF THEIR ACTUAL BUDGET. THIS IS MY FIRST YEAR WORKING WITH AARON. HE KIND OF STARTED LATE IN THE PROCESS. SO I YOU KNOW, HE TOOK WHAT WAS ALREADY PUT FORWARD AND WE CAN MOVE FORWARD WITH THAT, BUT I HAVE A FEELING THAT WILL WORK WITH HIM OVER THE NEXT YEAR. AND YOU KNOW THE BUDGET MAY CHANGE SOME FOR NEXT YEAR. AND YOU CAN SEE THAT THE STAFFING LEVEL IS A CURRENTLY SIX FOR CBB OR VISIT MCKINNEY. SORRY. SO THEY ACTUALLY OVER THERE. D D WAS REPLACED BY AARON
[02:35:03]
AARON WORK. THIS WAS HE CAME IN KIND OF LATE DURING THE PROCESS . SO THIS WAS HIS FIRST BUDGET WERE. HE DIDN'T EVEN PROPOSED THIS BUDGET. WE WORKED THROUGH IT WITH HIM, BUT HE DID MAKE SOME CHANGES, BUT I LOOK FORWARD TO WORKING WITH HIM. NEXT YEAR. I JUST WANTED TO TALK A LITTLE BIT ABOUT THE E D. C TYPE A SALES TAX. WE'RE ESTIMATING COLLECTIONS FOR THEM AT ABOUT $21.7 MILLION FOR NEXT YEAR. YOU CAN SEE I WON'T READ EVERYTHING THAT TAIPEI FUNDS CAN BE USED FOR. UM, BUT THIS IS. SNAPSHOT OF THEIR CURRENT BUDGET AND SEE REVENUES. UM JUST UNDER ARE JUST AROUND 22.2 MILLION WITH EXPENSES AT 22.1 SHOWING NET INCOME OF ABOUT $161,000. FOR FISCAL YEAR 23. HMM THAT'S THE CURRENT STAFFING LEVEL. UH ONE ADDITIONAL POSITION OF A PROJECT MANAGER IS BEING REQUESTED FOR FISCAL YEAR 23. MARK. I NOTICED . I DON'T MEAN TO JUMP AHEAD, BUT IN THE APPENDIX, IT LOOKS LIKE THEY'RE BUYING AND FORD EXPEDITION. YES, THAT HAS BEEN REQUESTED AS PART OF THEIR SUPPLEMENTAL PACKAGE FOR THIS. WE'RE 23. SO THEIR BOARD APPROVED THAT THAT'S PART OF THE OVERALL THAT WERE CORRECT. THAT IS PART OF THEIR OVERALL ASK IS IT IS IT IS CAPTURED IN THE PROPOSED FISCAL YEAR 23 BUDGET. I'M ASSUMING THAT'S THE CAPITAL NUMBER OF THE 77,000 THAT YOU'RE SEEING THEIR PROPOSED 23. THAT WOULD BE THE FORD EXPEDITION.I'M ASSUMING IT'S IN THERE. C D. C S A TYPE B SALES TAX OR IN THE STATE, TEXAS SAME ESTIMATED COLLECTIONS AS THE AS THE E. D. C YOU CAN SEE THAT IT CAN DO EVERYTHING THAT A TYPE A SALES TAX CAN DO, PLUS QUALITY OF LIFE PROJECTS. UM HERE IS A SNAPSHOT OF THE CDCS BUDGET AND STAFFING.
UM. GOT A BALANCED BUDGET, UM, MAKING SURE THAT THEY PROGRAMMED MOST OF THEIR BUDGET INTO THE SERVICES AND CENTURIES THERE, WHICH ARE THE PROJECT BUDGET THAT YOU SEE. SO WITH THAT, I GUESS THE. THE TRAIN IS ROLLING . UM, NOT SURE IF IT'S UH THE POLAR EXPRESS OR SOME OTHER TYPE OF TRAIN, BUT YOU CAN SEE WHERE WE ARE ON THE BUDGET CALENDAR. AT THE AUGUST 16TH MEETING. YOU WILL HAVE ANOTHER CITIZEN INPUT HEARING OR NOT. IT'S NOT A FULL PUBLIC HEARING IS JUST ANOTHER CITIZEN INPUT SESSION. YOU'RE SCHEDULED RIGHT NOW. WE HAVE THE BUDGET BEING ADOPTED ON SEPTEMBER THE SIXTH WITH A PUBLIC HEARING AND RATIFICATION OF THE TAX RATE ON SEPTEMBER THE SIXTH AND THAT ALSO REQUIRE A RATE AND FEE ORDINANCE AT THE SAME TIME, BECAUSE THAT'S WHERE WE ADJUST WATER RATES AND ANY OTHER SMALL OH, THINGS THAT NEED TO BE CHANGED IN OUR FEE ORDINANCE. WITH THAT? THAT'S THE END OF OUR FORMAL PRESENTATION. UM BE HAPPY TO TAKE ANY QUESTIONS, COMMENTS OR ANYTHING LIKE THAT, THOUGH. YEAH I'LL BE . I'LL STOP TALKING FOR LONG.
WHERE ARE WE? FROM A HOUSING STANDPOINT, WHEN WE HAVE TO FIND LIKE A COMMUNITY LAND TRUST. I DON'T SEE A DOLLAR AMOUNT FOR THAT. AND THERE WE ACTUALLY FUNDED, UH, THAT? YEAH WE JUST FUNDED THAT WITH A BUDGET AMENDMENT IN FISCAL YEAR 22. WE TOOK THAT FROM GENERAL FUND FUND BALANCE. UM LOOKS LIKE WE'RE GONNA HAVE A SURPLUS BUDGET FOR 22. SO WE TOOK IT FROM THE GENERAL FUND FUND BALANCE OF 22 . THAT WAS A ONE TIME SEED FUNDING BECAUSE EFFECTIVELY WE'RE MARK DOESN'T LIKE ME TO SAY THIS, BUT EFFECTIVELY. IT'S OUR MONEY, BUT IT'S OUR MONEY THAT WE FREED UP FOR OTHER THINGS, BUT ANYWAY THAT MILLION DOLLARS WITH SEED FUNDING WAS A ONE TIME THING. WE DO NOT HAVE MONEY IN THE GENERAL FUND FOR THE COMMUNITY LAND TRUST. OUR THOUGHT IS THAT THAT'S SOMETHING THAT THE CASE WOULD BE MADE TO THE COMMUNITY DEVELOPMENT CORPORATION AND ANY OTHER ENTITIES THAT COULD HELP FUND THAT COMMUNITY LAND TRUST FUND.
IF THE COUNCIL WISHES TO DO GENERAL FUND CONTRIBUTION THAT'S UP TO YOU TO LET US KNOW, BUT WE DID NOT INCLUDE IT IN AS A ROUTINE GENERAL FUND CONTRIBUTION. SOMETHING WE COULD LOOK IN MID YEAR. IF WE HAVE A SURPLUS SOMEWHERE, SOMETHING WE DIDN'T SPEND EXACTLY. ALRIGHT SO AUGUST 16TH IS OUR CITIZEN INPUT. MEETING. SEPTEMBER, 6TH WILL BE THE PUBLIC HEARING TAX
[02:40:06]
RATE PUBLIC HEARING RATIFICATION. ADOPTING AT ALL. YES, SIR. THAT'S THAT'S WHERE IT'S SCHEDULED FOR TODAY. ANY QUESTIONS? WELL DONE. THANK YOU FOR THE GOOD WORK. THANK YOU ALL. I GUESS THE MOTION TO ADJOURN ANTICLIMATIC? NO IT SAID THERE SHOULD BE A IS THERE A IS THERE A PARADE? IS THERE ANY ENTERTAINMENT? IS THERE ANY ANYTHING? SO I MOVE TO ADJOURN MOVED TO A JOURNEY ON* This transcript was compiled from uncorrected Closed Captioning.