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GO. MY BROTHER LIKE FIVE. YEAH. TODAY IS TUESDAY, MARCH, 19TH 2024 WERE AT COUNCIL CHAMBERS AT
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TWO. YOU WORK. CITY. CITY COUNCIL. I DON'T BE AND YEAH. FOR A WORK SESSION. I.[Presentation on Refuse Rates]
ALL RIGHT. GOOD AFTERNOON. MAYOR CITY COUNCIL. UH, RYAN GILLINGHAM DIRECTOR OF PUBLIC WORKS, SO I AM HERE THIS AFTERNOON TO TALK ABOUT SOLID WASTE MORE SPECIFICALLY ABOUT THE SOLID WASTE RATE STUDY THAT WAS RECENTLY COMPLETED. OUR AGENDA FOR THIS AFTERNOON IS WE'RE GOING TO TALK ABOUT THE BACKGROUND OF SOLID WASTE. WE'RE GONNA START WITH TALKING ABOUT THE SOLID WASTE MANAGEMENT STUDY THAT WAS COMPLETED AND MOVING ON THROUGH THE, UH, REQUEST FOR PROPOSAL PROCESS THAT THE CITY WENT THROUGH RIGHT NOW THROUGH THE TRANSITION PERIOD. SECONDLY WE HAVE SCOTT PASTERNAK WITH, UH BURNS AND MCDONNELL HERE WHO'S GOING TO TALK IN MORE DETAIL ABOUT THE MODEL AND RESULTS FROM THE SOLID WASTE RATE STUDY. AND THEN THERE ARE TWO ITEMS FOR WHICH WERE SOLICITING YOUR FEEDBACK ON TODAY. UH, THE FIRST IS WE'RE GONNA GET YOUR FEEDBACK ON RES RESIDENT. AND COMMERCIAL RATES AS WELL AS WE GET YOUR FEEDBACK ON THE CENTRAL BUSINESS, DISTRICT RATE STRUCTURE AND BILLING OPTIONS. SO FIRST TO START WITH, UH, THIS HAS BEEN A LONG JOURNEY FOR THE CITY. UH, STARTED ABOUT FOUR YEARS AGO WITH THE COMPLETION OF THE SOLID WASTE MANAGEMENT STUDY THAT MOVED ON THROUGH THE COMPLETION OF THE REQUEST FOR PROPOSAL PROCESS WHERE THE CITY SOLICITED PROPOSALS FOR SOLID WASTE COLLECTION AS WELL AS RECYCLING. UM, AS YOU KNOW, THIS PAST SUMMER, THE CITY APPROVED CONTRACTS WITH FRONTIER FOR SOLID WASTE COLLECTION AS WELL AS WITH BALCONY'S FOR RECYCLING. UH, THE MAJOR DATE THAT WE'RE TALKING ABOUT HERE IS OCTOBER 1ST. UH, BOTH OF THOSE CONTRACTS KICK OFF. THE NEXT THING WE ARE ALSO GOING TO TALK ABOUT TODAY IS GARBAGE SERVICES WITHIN THE CENTRAL BUSINESS DISTRICT, SO THE CITY HAS FOUR CENTRALIZED DUMPSTER LOCATIONS IN THE CITY, AS WELL AS 7095 GALLON CONTAINERS LOCATED THROUGHOUT SO THE BUSINESSES THROUGHOUT THE CENTRAL BUSINESS DISTRICT ARE EXPECTED TO TAKE THEIR GARBAGE TO THOSE LOCATIONS. TRASH IS PICKED UP SIX DAYS A WEEK. ONE OF THE CHALLENGES WITH THE CENTRAL BUSINESS DISTRICT IS THAT THE PARTICIPATION RATE ABOUT 69 OUT OF 180 BUSINESSES PARTICIPATE OR PAY FOR THE SERVICE. THAT'S ABOUT A 38% PARTICIPATION. AS WE GET INTO MORE OF THE DETAILS OF THE CENTRAL BUSINESS DISTRICT FINANCES, WHAT I WOULD LIKE TO DO IS GIVE YOU THE BOOKENDS. SO ON ON THE ONE END OF THE 69 BUSINESSES THAT THAT PARTICIPATE THE CITY COLLECTS ABOUT $62,000 ON THE OTHER END AS PART OF THE SOLID WASTE RATE STUDY, WE HAVE DETERMINED THAT THE ACTUAL COST OF THOSE IS ABOUT $850,000 TO PROVIDE THAT SERVICE. CERTAINLY THERE IS A GAP IN BETWEEN THOSE NUMBERS $850,000. IS THE ESTIMATED COST CORRECT. AND SO ONE OF THE CHALLENGES IF YOU LOOK HERE AT THE CHART THAT YOU'LL SEE IS THAT THE CURRENT SERVICES, THEIR RATES ARE TIED TO RATES THAT WERE ESTABLISHED IN 1993. SO IF YOU WERE TO LOOK AT AN EQUIVALENT BUSINESS WITHIN THE CENTRAL BUSINESS DISTRICT AND ASK, WHAT WOULD THEY PAY OUTSIDE? YOU CAN SEE THOSE RATES ON THE RIGHT HAND SIDE AND IN SOME CASES, YOU CAN SEE THAT THOSE RATES ARE ABOUT FIVE TIMES THE COST. SO OVER THE LAST SEVERAL YEARS, CITY STAFF HAS SOUGHT FEEDBACK, UH, FROM THE CENTRAL BUSINESS DISTRICT ON THE SERVICES DOWNTOWN, AND THOSE CAN GENERALLY BE GROUPED INTO THREE CATEGORIES. UH, ECONOMICS, FAIRNESS AND COMPLIANCE AND AESTHETICS ON THE FIRST ONE ECONOMICS. THAT'S PRETTY STRAIGHTFORWARD. BUSINESSES WANT TO KEEP RATES AS LOW AS POSSIBLE FAIRNESS AND COMPLIANCE. THE FEEDBACK THAT WE RECEIVED WAS BUSINESSES WANTED EVERYONE TO PARTICIPATE. AND THEN ON THE AESTHETICS. WE HAVE A VERY NICE, WELL DEVELOPED DOWNTOWN. THAT'S VERY CLEAN, AND IT WAS IMPORTANT TO THE BUSINESSES THAT WE KEEP THAT HIGH LEVEL OF SERVICE. SO TAKING ALL THAT FEEDBACK, AS WELL AS CALCULATING THE COST THAT INCLUDE THE REQUEST FOR PROPOSAL PROCESS AS WELL AS THE CITY'S COST. WE ASKED BURNS MCDONALD TO DEVELOP THREE RATE STRUCTURES RATE STRUCTURE A IS WHAT I CALL THE ISOLATED COST OF SERVICE MODEL IN THIS PARTICULAR RATE MODEL. YOU TAKE EACH CUSTOMER CLASS AND THEIR RESPONSIBLE FOR THEIR SPECIFIC COSTS. SO RESIDENTIAL IS RESPONSIBLE FOR RESIDENTIAL COMMERCIAL FOR COMMERCIAL AND THE CENTRAL BUSINESS DISTRICT IS RESPONSIBLE FOR ITS COST. RATE STRUCTURE. B IS WHAT I'M CALLING THE SHARED COST OF SERVICE MODEL[00:05:03]
IN THIS PARTICULAR MODEL. YOU TAKE THE COST OF THE SERVICES FOR PROVIDING THE SERVICES DOWNTOWN AND THAT IS SPREAD OVER ALL COMMERCIAL CUSTOMERS IN THE WAY THAT WE HAVE SET UP THIS RATE MODEL. IS IT A PHASED IN APPROACH? SO IN YEAR ONE, WE'RE LOOKING AT ALL CENTRAL BUSINESS DISTRICT BUSINESSES PAY FOR THE SERVICE YEAR, 2 25% OF THE COST WOULD BE PAID BY THE BUSINESSES AND YEARS 34 AND FIVE WOULD BE PAID. AT THE 50% LEVEL. AND THEN THE LAST RATE MODEL IS WHAT I'M CALLING THE AVERAGE SHARED COST OF SERVICE RATE MODEL. THIS IS THE EXACT SAME AS B, EXCEPT THE, UH, INCREASES OVER FIVE YEARS ARE AVERAGED, AND YOU'LL SEE THAT MORE IN SCOTT'S STUDY.RYAN, WHO IS PAYING IF YOU CAN GO BACK WHO IS PAYING IN YEAR ONE. SO WHAT WE'RE LOOKING AT IN , UH, RATE MODEL B IS THAT ALL THE BUSINESSES DOWNTOWN? WOULD PAY AT THE CURRENT RATES AT THE CURRENT RATES, WHICH MEANS THAT THE CITY OR SOMEONE IS SUBSIDIZING THE REST OF IT.
THAT'S CORRECT. OK, THANK YOU. OK, AT THIS POINT, I AM GOING TO TURN IT OVER TO SCOTT, WHO'S GOING TO TALK IN MORE DETAIL ABOUT THOSE DIFFERENT RATE MODELS. RIGHT? GOOD AFTERNOON, MAYOR OF CITY COUNCIL MEMBERS SCOTT PASTERNAK WITH BURNS AND MCDONNELL AND WE WE'VE BEEN ADVISING CITIES ON THEIR SOLID WASTE, PLANTING CONTRACTUAL AND FINANCIAL ISSUES IN MY CAREER FOR ABOUT 20 YEARS, I WOULD SAY THAT RIGHT NOW IS PROBABLY THE MOST CHALLENGING AND OPPORTUNISTIC OPPORTUNITY TO LOOK AT, UH, ADDRESSING SOLID WASTE RATES BECAUSE OF WHAT WE ARE SEEING WITHIN THE BROADER ECONOMY FROM AN INFLATIONARY PER ACTIVE. AND WHAT WE WANT TO TALK TO YOU ABOUT THIS AFTERNOON IS WHAT THE RATES OR THAT ARE BEING CONSIDERED FOR THE CITY OF MCKINNEY AS PART OF THE RATE DESIGN DISCUSSION THAT MR GILLINGHAM WAS WAS JUST REFERRING TO, BUT I AM GOING TO START WITH A BRIEF OVERVIEW OF THE METHODOLOGY THAT WE HAVE UNDERTAKEN. AND THEN AFTER WE WALK THROUGH THE RATE DESIGN, UH WE'LL OPEN IT UP FOR ANY QUESTIONS THAT YOU MAY HAVE FOR US FROM A METHODOLOGY OVERVIEW. THIS SLIDE JUST GIVES YOU A 10,000 FT PERSPECTIVE OF THE STEPS THAT WE'VE TAKEN TO COLLABORATE WITH CITY STAFF TO DEVELOP THE ANALYSIS. WE'RE GOING TO PRESENT TO YOU THIS AFTERNOON. SO FROM LEFT TO RIGHT , IT STARTED WITH, UM OUR PROJECT INITIATION MEETINGS WITH COUNCIL AND DATA COLLECTION EFFORTS. AND THEN THE COST OF SERVICE ANALYSIS IS IN THE MIDDLE PART OF THIS SLIDE. I'M GONNA GO INTO THAT AND JUST A LITTLE BIT MORE DETAIL ON ON THE FOLLOWING SLIDE, BUT WHAT I WANT TO DRAW YOUR ATTENTION TO THIS AFTERNOON IS, UH, THE LAST BLOCK FROM A RA DESIGN PERSPECTIVE, SO YOUR SOLID WASTE SYSTEM OPERATES AS AN ENTERPRISE FUND, SO THAT MEANS THAT IT'S EFFECTIVELY A NEEDS TO BE A STAND ALONE BUSINESS AT THE END OF EACH YEAR . IT NEEDS TO MAKE SURE IT HAS ENOUGH REVENUE COMING IN TO MEET ALL OF ITS EXPENSES AND OPERATE AS A BUSINESS AND SO THE RATE OPTIONS THAT WE'RE GOING TO PROVIDE FOR YOUR CONSIDERATION THIS AFTERNOON, OUR INTENDED TO SUPPORT THE FINANCIAL INTEGRITY OF THE SYSTEM AS AN ENTERPRISE FUND. GOING BACK TO THAT METAL BOX FROM THE PRIOR SLIDE. THIS GIVES YOU A SENSE OF WHAT OUR PROCESS IS IN WORKING WITH THE CITY TO DEVELOP WHAT WE CALL A TESTY REVENUE REQUIREMENT. WHAT THAT IS, IS ESSENTIALLY WHAT ARE ALL THE COSTS THAT A CITY IS GOING TO HAVE THAT ARE REFLECTIVE OF A TYPICAL YEAR BECAUSE WE THEN USE THOSE COSTS TO FORECAST OUT HOW YOUR COSTS ARE GONNA CHANGE. UM, IN THIS CASE OVER THE NEXT FIVE YEARS, AND THERE ARE A NUMBER OF IMPORTANT MOVING PARTS WITHIN THE CITY OF MCKINNEY THAT WE HAVE TAKEN INTO ACCOUNT. YOU HAVE MULTIPLE NEW CONTRACTS FOR COLLECTION, RECYCLING PROCESSING , AS WELL AS FOR YARD WASTE PROCESSING. WE HAVE A STRONG RELATIONSHIP WITH THE NORTH TEXAS MUNICIPAL WATER DISTRICT FOR LANDFILL DISPOSAL THAT THEY'RE GOING TO BE MAKING CAPITAL INVESTMENTS OVER THE NEXT FIVE YEARS, SO THOSE COSTS ARE ALSO ACCOUNTED FOR IN OUR ANALYSIS AND WHAT I ALSO WANT TO DRAW YOUR ATTENTION TO ON THIS SLIDE IS THERE IS ACTUALLY A TOTAL OF 18 WHAT WE CALL COST CENTERS OR PRIMARY FUNCTIONS THAT ARE PROVIDED BY YOUR SOLID WASTE ENTERPRISE FUND. SO IT'S MUCH MORE THAN SIMPLY JUST PICKING UP THE TRASH AND THE RECYCLING. UM SO THESE ARE ALL COSTS THAT NEED TO BE ACCOUNTED FOR AND PAID FOR AMONGST YOUR VARIOUS CUSTOMER CLASSES. CATEGORIES FROM A RIGHT DESIGN PERSPECTIVE BEFORE WE GET INTO THE ACTUAL PERCENTAGES OF INCREASES THAT YOU COULD BE LOOKING AT FOR THE THREE DIFFERENT SCENARIOS THAT MR GILLINGHAM PRESENTED A MOMENT AGO. I WANT TO GIVE YOU SOME HISTORICAL PERSPECTIVE OF WHAT'S BEEN HAPPENING WITHIN THE SOLID
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WASTE INDUSTRY FOR ABOUT THE LAST 8 TO 9 YEARS, SO I THINK WE HAVE ALL BECOME MUCH MORE ACQUAINTED WITH WHAT HAS BEEN HAPPENING WITH THE CONSUMER PRICE INDEX, THEN PROBABLY ANY OF US REALLY CARE TO GET INTO OVER THE LAST COUPLE OF YEARS OR SO, BUT THIS HAS BEEN AN ISSUE OF GREAT IMPORTANCE FOR THE SOLID WASTE INDUSTRY FOR A MUCH LONGER PERIOD OF TIME. WHAT THIS SLIDE IS SHOWING IS WITH THE BLUE BARS AS WELL AS THE TOP DARKER BLUE LINE THAT REPRESENTS A, UM, AN INDEX TRACKED BY THE BUREAU OF LABOR STATISTICS THAT IS SPECIFIC TO THE SOLID WASTE INDUSTRY. IT'S CALLED THE GARBAGE AND TRASH INDEX, SO INDEX ON AN ANNUAL BASIS HAS TYPICALLY EXCEEDED THE REGULAR CP I, BY ABOUT 1 TO 2. AND THIS IS REALLY IMPORTANT BECAUSE THIS GIVES US A SENSE OF HOW COSTS FOR THE SOLID WASTE INDUSTRY HAVE BEEN CHANGING. NOT ONLY HISTORICALLY, BUT WHAT WE EXPECT TO CONTINUE TO OCCUR INTO THE FUTURE. I AM ALSO GOING TO COME BACK TO THIS SLIDE TO GIVE YOU A SENSE OF HOW THEY'RE PROPOSED RESIDENTIAL RATES IN MCKINNEY COMPARE TO WHAT THEY WOULD HAVE LOOKED LIKE HISTORICALLY HAD THEY SIMPLY TRACKED WITH THIS GARBAGE AND TRASH INDEX. IN TERMS OF SOME OF THE KEY FORECASTING CONSIDERATION AND ASSUMPTIONS THAT ARE PART OF OUR ANALYSIS. HISTORICALLY THE CITY OF MCKINNEY HAS BEEN ABLE TO HAVE A SOLID RATE RATES SET IN PLACE THAT WERE HISTORICALLY HIGH ENOUGH TO BE ABLE TO SUSTAIN YOUR ENTERPRISE FUND, UH, THROUGH COST ADJUSTMENTS FROM THE PRIOR CONTRACT WITHOUT VERY SIGNIFICANT INCREASES TO RESIDENTIAL CUSTOMERS. BECAUSE HE HAD A GAP BETWEEN WHAT YOUR RATE WAS AND WHAT YOU NEEDED TO PAY YOUR CONTRACTOR. THAT GAP HAS BEEN NARROWED AND YOU BUT YOU'VE BEEN ABLE TO ABSORB THAT, UH, OVER THE COURSE OF SEVERAL YEARS, BUT YOUR ABILITY TO DO THAT GOING FORWARD BECOME THAT MUCH MORE CHALLENGING. AND THEN, AS WE SHOWED BEFORE ON ON THAT SLIDE WITH THE 18 DIFFERENT COST CENTERS, UH, WE HAVE NOW ACCOUNTED FOR ALL OF THOSE IN THE PROPOSED RATES THAT NEED TO BE TAKEN INTO BUT NOT ALL OF THOSE COSTS HAVE HISTORICALLY BEEN ACCOUNTED FOR IN YOUR RATES. AND THEN CITY DID RECENTLY. AS AS MR GINGHAM MENTIONED, UH, PROCURED A COMPETITIVE AND COST EFFECTIVE COLLECTION CONTRACT WITH FRONTIER WASTE SOLUTIONS, AND SO WHERE WE ARE TALKING A FEW MOMENTS AGO ABOUT HOW THE COST IN THE INDUSTRY HAS INCREASED THAT IS REFLECTIVE IN YOUR NEW CONTRACT. I WILL MENTION.HOWEVER THE COST OF THAT CONTRACT IS SIGNIFICANTLY LESS THAN IT WOULD HAVE BEEN HAD YOU CONTINUED WITH YOUR CURRENT CONTRACTOR BY ABOUT 16% PER YEAR. OTHER KEY ASSUMPTIONS TO MENTION IN OUR RATE MODELING, UH, THE CITY AND I THINK THIS ITEM WAS BROUGHT BEFORE COUNCIL IN THE LAST FEW MONTHS WAS ABLE TO RECEIVE A $15 PER CARD GRANT FOR YOUR RECYCLING CARS. SO THIS IS DEFINITELY GONNA HELP OFFSET YOUR YOUR COST TO THE TUNE OF SEVERAL $100,000. I WILL ALSO SHOW THIS LATER IN IN ONE OF THE SLIDES, BUT, UH, THE PLAN FOR PURCHASING THOSE CARDS UP FRONT IS TO UTILIZE FUND BALANCE, BUT THEN TO REPAY THAT FUND TO MAKE THAT WHOLE OVER A SEVEN YEAR PERIOD OF TIME, AND THEN WE'VE ALSO BEEN RELATIVELY CONSERVATIVE IN OUR FINANCIAL ANALYSIS AND AN EXAMPLE OF THAT IS, UH, WITH YOUR NEW RECYCLING PROCESSING CONTRACT. THE CITY WILL GET PAID, UH, FOR THE SALE OF RECYCLABLE COMMODITIES, BUT WE HAVE ASSUMED THAT THE VALUE OF THAT MATERIAL WILL BE HISTORICALLY AT A LOW LOW AMOUNT AGAIN, JUST TO BE FINANCIALLY CONSERVATIVE. SOME GOOD NEWS IS, UH, WE'VE SEEN SOME UPTICK IN THE VALUE OF THOSE MATERIALS MORE. OUR ANALYSIS IS VERY IN-DEPTH. JUST AS AN EXAMPLE OF THIS. THIS GIVES YOU A SENSE OF WHAT ARE THE COSTS ARE ASSOCIATED WITH YOUR RESIDENTIAL COST OF SERVICE. SO HISTORICALLY RESIDENTIAL, RECYCLING RESIDENTIAL TRASH AND THEN HAULING DISPOSAL HAVE COMPRISED THE VAST MAJORITY OF THOSE COSTS . AND THEY STILL DO BUT LIKE WE TALKED ABOUT PREVIOUSLY THERE ARE A NUMBER OF OTHER COSTS THAT ARE IMPORTANT SERVICES THAT STILL NEED TO BE ACCOUNTED FOR WITHIN THE RESIDENTIAL RATE. NOW WHAT WE'RE GOING TO DO IS WALK YOU THROUGH. ON A PERCENTAGE BASIS EACH OF THESE THREE DIFFERENT OPTIONS THAT WE'VE WORKED VERY CLOSELY WITH CITY STAFF TO DEVELOP AS AS RATE DESIGN OPTIONS FOR COUNCILS CONSIDERATION, SO I'LL JUST GO THROUGH EACH ONE OF THESE. THESE INDIVIDUALLY FIRST, STARTING WITH THE ISOLATED COST OF SERVICE RATE MODEL, SO ESSENTIALLY WHAT THIS MEANS IS EACH OF YOUR CUSTOMER TYPES WILL BE PAYING FOR WHATEVER THE ASSOCIATED RATE ADJUSTMENT. IS ON A PERCENTAGE BASIS YEAR BY YEAR. IT IS ESSENTIALLY EACH CUSTOMER YEAR BY YEAR HAS TO STAND ON ITS OWN. FROM AN INCREASED PERSPECTIVE. THOSE PERCENTAGES ARE SHOWN HERE ON THIS SLIDE. LET ME WALK YOU
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THROUGH WHAT'S HAPPENING, UH, ON THE RESIDENTIAL FRONT, AND THEN I'LL I'LL WALK THROUGH A COUPLE OF OTHER BRIEF EXAMPLES. SO WHEN YOU GET TO THE FIRST YEAR OF THE FORECAST AND THE UPCOMING FISCAL YEAR OF 2025, THAT'S WHERE THERE WOULD BE APPROXIMATELY A 4.9% INCREASE. THAT IS MAINLY ATTRIBUTABLE TO THE NEW, SOLID WASTE CONTRACT. BUT THEN WHEN YOU GET INTO 26 AND 27, YOU'RE SEEING VERY SMALL INCREASES IN THOSE YEARS OF 0.3 AND 0.9% RESPECTFULLY. THAT'S WHEN YOUR NEW RECYCLING CONTRACT, UH, FACILITY WOULD GO INTO PLAY INTO EFFECT. SO UNDER YOUR CURRENT CONTRACT, YOUR CONTRACTOR IS NOT ABLE TO PROCESS AS MUCH OF THE RECYCLABLES OR TO SELL IT AS AS GOOD OF A PRICE AS WE THINK WILL OCCUR WITH THE NEW FACILITY, SO THAT'S WHY YOU WOULD SEE A VERY MODEST INCREASE UNDER THIS SCENARIO IN 26 AND 27, BUT THEN WHEN YOU GET TO YEARS 28 AND 29, THAT'S WHERE WE SEE OF INFLATION , UH, CONTINUING TO KIND OF PLUG AWAY. UH, THERE'S ALSO GOING TO BE SOME INCREASES OF ABOUT 6% IN 2028 AND THEN ABOUT 11% IN 2029 ON YOUR LANDFILL DISPOSAL COSTS AND SO THAT THAT HAS AN AN EFFECT AS WELL. SO THAT JUST KIND OF GIVES YOU, UH, SOME EXAMPLE OF WELL OF DETAIL THAT WE GOT INTO IN IN THESE RATE DESIGN OPTIONS AND THEN ON THE DOWNTOWN NO SERVICES. WE KNOW THAT IS A VERY LARGE PERCENTAGE. BUT THIS IS JUST SIMPLY TO SHOW MATHEMATICALLY. UH, IF YOU'RE DOWNTOWN CUSTOMERS WOULD PAY FOR THEIR PROPORTIONAL SHARE OF THEIR COSTS THAT IT WOULD REPRESENT A 594% RATE INCREASE IN THAT FIRST YEAR, BUT THOSE WOULD BE MORE MODEST IN THE ENSUING YEARS. THEN ON THE NEXT TWO OPTIONS IS WHERE THERE WOULD BE A SHARED COST BETWEEN COMMERCIAL CUSTOMERS THAT IS GOING TO IMPACT THE COMMERCIAL TRASH ROW AND THEN THE VERY BOTTOM ROW OF YOUR YOUR DOWNTOWN SERVICES. SO THE RESIDENTIAL COSTS, UM, ON THIS SCENARIO ARE EXACTLY THE SAME AS THE ONES THAT WE JUST SHOW OUR SORRY TO INTERRUPT COMMERCIAL ROLL OFF. WHAT IS THAT? IS THAT LIKE WHERE A BUSINESS RENTS AN EXTRA DUMPSTER FOR A WHILE, THAT'S GONNA BE MORE OF A TEMPORARY TYPE DUMPSTER COMMERCIAL CONSTRUCTION. YEAH, SO IT'S GONNA BE LIKE THE LONGER ONES. YEAH SO I NEED A DUMPSTER BECAUSE I'M REDOING SOMETHING. AND I ONLY NEED IT FOR A MONTH AND OK, THANK YOU. AND SO ON.THIS ONE THE DOWNTOWN UH, THESE PERCENTAGES ARE CONSISTENT WITH WHAT MR GILLINGHAM MENTIONED WHERE THEY WOULD NOT BE ANY RATE INCREASE IN, UH 2025. BUT AND THEN 2026. THEY WOULD START TO INCREASE THEIR PROPORTIONAL SHARE OF THE COSTS AND THEN THAT WOULD CONTINUE INTO 2027 AND THEN LEVEL OUT BEYOND THAT, AND SO WHAT THAT WOULD MEAN IS, UH, THAT THERE WOULD BE A GREATER IMPACT FOR COMMERCIAL TRASH, WHICH ARE JUST THE REGULAR DUMPSTERS FOR TYPICAL COMMERCIAL BUSINESS. THEY WOULD SEE A GREATER PERCENTAGE INCREASE IN 2025, BUT THEN THEY INCREASES WOULD MODERATE FOR THE MOST PART IN THE REMAINING FOUR YEARS. AND SO THEN THE THIS SCENARIO IS JUST ON AN AVERAGE. COST WERE WE JUST LOOKED AT IF YOU WOULD SIMPLY JUST AVERAGE EACH OF THESE COSTS. WHAT TYPE OF A PERCENTAGE INCREASE WOULD YOU NEED FOR EACH OF YOUR DIFFERENT CUSTOMER CLASSES? SO FOR RESIDENTIAL IT COMES OUT TO A LITTLE OVER 3% AND THEN YOU CAN SEE WHAT THEY ARE FOR THE REST OF YOUR CUSTOMER CLASSES. AND THEN IN A MOMENT WHEN WE WHEN WE WHEN MR GILLINGHAM GETS INTO THE QUESTION AND ANSWER PERIOD, WE WILL BE ASKING YOU FOR DIRECTION ON WHAT WOULD YOU LIKE TO SEE AS FAR AS THESE RATES, WHETHER IT'S ANY ONE OF THESE SPECIFIC RATE DESIGN OPTIONS OR VARIOUS COMBINATIONS OF THEM? OUR MODEL IS SET UP SO THAT WE CAN TAKE THAT DIRECTION FROM FROM THE COUNCIL IN TERMS OF HOW HE WOULD LIKE TO SEE THIS PROCEED. THIS SLIDE IS A VARIATION OF THAT OF THAT VERY FIRST ONE OF THE VERY FIRST ONES THAT I SHOWED IN TERMS OF HOW CP I HAS ACTED OVER THE PAST SEVERAL YEARS. AND SO THIS THE BLUE DOTTED LINE SHOWS WHAT WOULD HAVE HAPPENED HAD, UH, YOUR RAGE SIMPLY INCREASED AT THE SAME RATE, WHICH WAS ABOUT 4.7% AS THE GARBAGE AND TRASH INDEX THAT IS IMPORTANT TO KEEP IN MIND BECAUSE THE RATES THAT THAT WERE PROPOSING FOR YOUR CONSIDERATION WITH THE GREEN TRIANGLE OF 1952. WHICH IS
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ISOLATED AND SHARED COST MODEL OR THE RED SQUARE, WHICH IS THE AVERAGE SHARED COST ARE BOTH IN THAT 1919 TO 1950 RANGE, WHICH IS STILL QUITE A BIT LESS. THAN THE 2174. SO I DON'T KNOW WHAT THAT PURPLE LINE WAS THAT SHOWED UP THERE. SO TO GIVE YOU SOME PERSPECTIVE OF HOW DOES THIS COMPARE TO YOUR NEARBY COMMUNITY? YOU WOULD BE SLIGHTLY MORE VAN ALLEN, UH, BUT BUT DEFINITELY LESS THAN THAN THE COMMUNITIES OF FRISCO, RICHARDSON AND PLANO. SO THE ONES FOR MCKINNEY, THE 1861 IS YOUR CURRENT MONTHLY RESIDENTIAL RATE. AND THEN THE 1919 AND THE 1952 ARE AGAIN THE TWO OPTIONS THAT WE JUST WALK THROUGH WITH YOU THIS AFTERNOON. SO MY LAST MATHS. MY LAST SLIDE JUST GIVES YOU A SENSE OF THE OVERALL. NET OPERATING POSITION OF THE SOLID WASTE ENTERPRISE FUND FROM A CASH FLOW PERSPECTIVE, SO IF WE LOOK AT THIS SLIDE, UH FROM THE BOTTOM UP THE BLUE BARS REPRESENTS WHAT YOUR NET CASH POSITION WOULD BE AT THE END OF EACH YEAR, AND SO THERE WOULD BE A UNDERCOVER IN 25 AND 26. BUT THEN YOU WOULD BE POSITIVE, UH, IN 27 AND 28 AND ESSENTIALLY BREAK EVEN IN FISCAL YEAR 29. AND THEN, UH, THE NEXT DOTTED LINE REPRESENTS YOUR OPERATING RESERVE, WHICH IS EQUAL TO 90 DAYS OF YOUR OPERATING REQUIREMENTS. AND SO RIGHT NOW THAT NEEDS TO BE ABOUT $3 MILLION, AND WITH THE INCREASES THAT ARE FORECAST THAT WOULD NEED TO BE AT ABOUT $3 MILLION AT THE END OF THE FIVE YEAR PERIOD. AND THEN THE INCREASING SLANTED BLUE BAR. WHAT THAT REPRESENTS IS THE INCREASE IN I IN ANNUAL NET OPERATING POSITION , YEAR OVER YEAR. AND SO THE REASON WHY THAT IS INCREASING AS MUCH AS IT IS TO REPAY. THE USE OF THE CASH WILL BE USING TO PAY FOR THOSE CARDS AND SO RIGHT NOW . YOU YOU HAVE, UH, UNTIL YOU PURCHASE THOSE CARDS YOU'VE GOT ABOUT $10 MILLION IN IN CASH.WHEN YOU BUY THOSE CARS, IT'S GOING TO BRING YOU DOWN TO CLOSER TO ABOUT $3 MILLION. SO WHAT THAT BLUE BAR DOES IS IT ALLOWS YOU TO REBUILD THAT CASH POSITION. UH, SO THAT BY THE END OF YOUR SEVEN THAT BLUE LINE WILL INTERSECT WITH THE GRAVE WITH THE GRAY LINE. UH, BECAUSE THAT IS WHAT YOUR TARGET TOTAL RESERVE FUND BALANCE WILL BE SO THAT YOU'RE ABLE TO MAKE YOURSELF ON THE PURCHASE OF THOSE CARDS THAT YOU CAN PLAN FOR. IN 7 TO 10 YEARS FROM NOW, WHEN THOSE CARS NEED TO BE REPLACED, WHILE ALSO MAINTAINING THE OPERATING RESERVE THAT IS REQUIRED. SO WITH THAT, I'LL I'LL BE HAPPY TO ANSWER ANY ANY QUESTIONS AS WELL AS TURN THINGS BACK OVER TO RYAN. RYAN ON THE I DON'T THINK REALLY IDENTIFIED THE ISOLATED COST OF SERVICE RATE MODEL EXPLAINED FOR EVERYONE THAT WHAT THOSE DIFFERENT CLASSES WOULD BE AND WHY. WHY THERE IS A THOUGHT TO HAVE A DIFFERENT RATE FOR THOSE DIFFERENT CLASSES. THE DIFFERENT RATE CLASSES GENERALLY ALIGN WITH WHAT SCOTT WAS SHOWING HERE . SO WE HAVE WELL, LET US GO TO THAT ONE. YOU HAVE RESIDENTIAL COMMERCIAL TRASH COMMERCIAL RECYCLING COMMERCIAL ROLL OFF IN DOWNTOWN SERVICES. WHAT I WAS TALKING ABOUT THE ACTUAL BUSINESS TYPES. THE ACTUAL BUSINESS TYPES FOR SO FOR I MEAN , IN TERMS OF THE DIFFERENT COMMERCIAL, SO ALL COMMERCIAL, UM REFUSE SERVICE IS REQUIRED TO PARTICIPATE AS PART OF A FRANCHISE ANY BUSINESS IN THE CITY IS INCLUDED WITHIN THAT COMMERCIAL TRASH. LET ME LET ME YOU KNOW, I UNDERSTAND THAT LET ME SAY A DIFFERENT WAY. IS WHAT WE HAVE NOT DISCUSSED. HERE IS THE DIFFERENT TYPES OF BUSINESSES AND THE PRODUCTION OF TRASH THAT THEY PRODUCE AND THEREFORE DIFFERENT. RATES THAT WE MIGHT CONSIDER FOR THE DOWNTOWN. YES, ACTUALLY, WE HAVE A SLIDE TO SHOW THAT AND I THINK THAT I'LL GIVE A LITTLE BIT OF BACKGROUND I THINK WE HAVE AND IN A SUPPORTING SLIDE SO ONE OF THE THINGS WHEN WE THINK ABOUT HOW WE MIGHT STRUCTURE, UM YOU KNOW, DOWNTOWN, UH, RATES WE HAVE TO THINK ABOUT WHAT FACTORS MOST CLOSELY CORRELATE TO DEMAND OF SERVICE, RIGHT? AND SO YOU CAN THINK ABOUT IT A COUPLE OF DIFFERENT WAYS, ONE OF WHICH IS THE TYPE OF BUSINESS RIGHT. AN OFFICE VERSUS A RETAIL VERSUS A RESTAURANT ARE GOING TO HAVE DIFFERENT DEMANDS ON THE SERVICE . OTHER FACTORS THAT CORRELATE CLOSELY WITH DEMAND OF SERVICE COULD BE THE SIZE SO 0 TO 2000
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TO 1,020,000 PLUS. SO IN THIS MODEL, THIS IS AN IDEA THAT STAFF DEVELOPED AND CERTAINLY WE WOULD APPRECIATE ANY INPUT IS THAT IT WOULD BE A MATRIX WHERE WHAT WE ARE TRYING TO DO IS TO ESTABLISH RATES FOR THE CENTRAL BUSINESS DISTRICT THAT MOST CLOSELY CORRELATE TO DEMAND ON SERVICE. SO AS YOU CAN SEE HERE, THIS IS ONE EXAMPLE THAT WE MIGHT CONSIDER AND YOU CAN SEE HOW RATES WOULD INCREASE GOING FROM THE TOP LEFT TO THE BOTTOM, RIGHT? UH, JUST ONE CLARIFICATION. UM YOU KNOW FROM FROM SCOTT'S PRESENTATION IS THAT YOU KNOW, WHILE WE ARE HOPEFUL WE WILL GET THE $15 PER CART GRANT. IT HAS NOT YET BEEN AWARDED. SO YOU MIGHT SEE A SLIGHT IF THE CITY WERE NOT AWARDED THAT YOU MIGHT SEE A SLIGHT ADJUSTMENT ON THE RESIDENTIAL RATES THAT GRANT AMOUNTS ABOUT $850,000 JUMPING AHEAD ON THIS SLIDE, LET'S YOU KNOW, FIRST GO TO SERVICE AND BILLING. UM, STAFF RECOMMENDS THE CONTINUATION, YOU KNOW? TERMS OF HOW WE PERFORM THAT SERVICE DOWNTOWN THROUGH A COMBINATION OF DUMPSTERS AND CARTS. ADDITIONALLY STAFF ALSO RECOMMENDS THAT THE CITY TAKE OVER BILLING FOR THE DOWNTOWN RIGHT NOW, BILLING IS HANDLED BY THE CURRENT CONTRACTOR, AND IN ORDER TO BE ABLE TO MORE EFFECTIVELY HANDLE BUILDING WE ARE RECOMMENDING THAT THE CITY UH, TAKE THAT OVER NOW JUMPING BACK AHEAD TO THE TOP ONE. WE'RE HERE TO ANSWER ANY QUESTIONS AND GET YOUR FEEDBACK ON THE DIFFERENT, UH, RATE OPTIONS THAT WERE PRESENTED. THAT BUILDING TAKE PLACE. WE JUST ADD IT TO LIKE THE WATER BILL OR RIGHT? THAT IS A GOOD QUESTION. GENERALLY SPEAKING, YES, UM, IT IT IS GOING TO BE. WE BELIEVE THAT THERE ARE ABOUT 180 BUSINESSES WITHIN THE CENTRAL BUSINESS DISTRICT. OUR INITIAL THOUGHT IS THAT WE WOULD HAVE A CODE ENFORCEMENT OFFICER WHO WOULD WORK WITH OUR WATER BILL FOLKS TO HANDLE THAT BILLING. THERE ARE SOME CASES WHERE THAT MIGHT NOT WORK OUT. UH, FOR EXAMPLE, YOU MAY HAVE A BUILDING THAT HAS ONE WATER SERVICE AND TWO BUSINESSES, AND IN THOSE CASES, WE WILL HAVE TO COME UP WITH A DIFFERENT STRUCTURE TO BE ABLE TO MANAGE THAT. IMAGINE WE HAVE QUITE A FEW OF THOSE WHERE THERE IS ONE WATER SERVICE, AND THEY HAVE SUB METERS THAT ARE HANDLED BY THE LANDLORD ON UH, UTILITY COSTS FOR EACH TENANT.MHM. THE DOWNTOWN NOW, YOU KNOW, JUST I'LL JUST SAY THIS. IT SEEMS LIKE WE HAVE DONE A GOOD JOB. I'M GLAD WE MADE THE CHANGE FRONTIER IN BALCONES. I THINK WE'RE YOU KNOW, IT'S NICE TO SEE US. COMPARING WELL TO OUR SISTER CITIES AROUND HERE. RATES. IS PROPOSING THEM OR RIGHT IN LINE, AND I THINK WE'RE A CITIZEN OUGHT TO HAVE AN EXPECTATION. THE BIG DELTA SEEMS TO BE THE DOWNTOWN. A FEW THINGS STRIKE ME THERE. FIRST I HAVE A QUESTION. WHAT WHO IS PAYING FOR OR SUBSIDIZING THIS IF WE CALL IT AN 858 $150,000 COST TO A 69,000 COLLECTED REVENUE. IS IT T, THE GENERAL FUND WHO IS CURRENTLY SUBSIDIZING THAT CURRENTLY IT IS OTHER RATEPAYERS, RESIDENTIAL AND COMMERCIAL THAT ARE PAYING FOR DELTA. OK? A COUPLE THINGS STRIKE ME ABOUT DOWNTOWN AND YOU KNOW, I JUST IN THE INTEREST OF FULL DISCLOSURE I'VE BEEN AT DOWNTOWN. MY BUSINESS HAS BEEN DOWN HERE FOR 26 YEARS, BUT YOU KNOW, THERE'S SOMETHING THAT DOWNTOWN BRINGS TO MCKINNEY THAT DESERVES THE SUPPORT OF THE CITY. I AGREE WITH THAT. BUT I ALSO AGREE THAT YOU KNOW. A BUSINESS OUGHT TO BE ABLE TO HELP. PROVIDE FOR ITS OWN TRASH SERVICE. BUT WE CANNOT REENGINEER DOWNTOWN AND STILL KEEP IT DOWNTOWN. AND SO IT STRIKES ME AND I DON'T WANT TO GET AHEAD OF OUR SKIS HERE. BUT IT STRIKES ME THAT THE IDEA OF A PIG DOWNTOWN TO HELP ABSORB THIS COST AND POSSIBLY USING TOURS TO HELP WITH THE PID IS SOMETHING THAT WE OUGHT TO EXPLORE WITH THAT, BECAUSE AS I UNDERSTAND IT WITH THE P, I IT WOULD BE AN INCREMENTAL ADDITIONAL PROPERTY TAX CHARGED TO THE BUSINESS TO THE PROPERTY OWNERS DOWNTOWN, WHO WOULD AUSPICIOUSLY PASS IT OFF TO THEIR TENANTS, WHO WERE ESPECIALLY PASS IT OFF TO THEIR CUSTOMERS AND CLIENTS.ā UH AND I'D BE ONE OF THOSE THAT WOULD BE PASSED OFF ON TO IN THE FORM OF MY LEASE. BUT IT SEEMS LIKE A PIT IS A GOOD IDEA AND I. I DID, BUT IT ALSO SEEMS TO ME THAT WE'D HAVE TO GET BUY IN FROM THE PROPERTY OWNERS DOWN HERE BUT PERHAPS A COMPELLING IDEA TO GET THE BUY IN OR AT LEAST GET THEM TO PAY ATTENTION WOULD BE TO SAY WE ARE LOOKING AT A 500% RATE INCREASE ON YOUR TRASH IN ORDER TO MAKE THIS RIGHT UM SO I'M VERY INTERESTED IN ANYTHING STAFF HAS TO SAY OR ANYTHING OTHER COUNSEL HAS TO SAY ABOUT THAT. I I JUST WANNA ADD FOR BECAUSE A LOT OF PEOPLE DON'T
[00:30:04]
KNOW WHAT APPEARED PIT IS, UM THE ACRONYM FOR PUBLIC IMPROVEMENT DISTRICT. BUT IN THIS CASE, IT WOULD REALLY, I THINK. WAY TO LOOK AT IT WOULD BE LIKE A COMMERCIAL OWNERS ASSOCIATION BE SIMILAR TO THAT. AT LEAST FOR THE WAY THAT WE WOULD BE UTILIZING FUNDS AND TRYING TO TRYING TO SHARE IN THOSE, UH, EXPENSES. THAT YEAH, CERTAINLY. THAT'S A POLICY DECISION BY THE CITY COUNCIL TO CONSIDER THAT AND I UNDERSTAND THE POINT YOU'RE MAKING I DO.THE PART THAT I WOULD ADD, IS THAT THERE IS A TIMING ASPECT TO THIS RATE STRUCTURE AND SETTING THE RATES WHICH IS OUR OUR NEW VENDOR. FRONTIER IS IN THE PROCESS OF MEETING WITH COMMERCIAL CUSTOMERS. AND SO PART OF GETTING THE RATE STUDY NOW DONE IS THAT WE HAVE TO GO OUT AND TALK OR THEY HAVE TO GO OUT AND TALK TO THE DIFFERENT CUSTOMERS AND YOU CAN EXPECT WHEN FRONTIER COMES AND TALKS TO THE CUSTOMERS OR TO THE COMMERCIAL CUSTOMERS. ONE OF THEIR FIRST QUESTIONS IS GOING TO BE HOW MUCH SO IT IS THIS CONVERSATION THAT WE NEED TO HAVE IN ORDER TO BE ABLE TO PROVIDE THOSE RATES BACK TO FRONTIER WHO CAN TALK TO THE COMMERCIAL CUSTOMERS? BECAUSE ONCE THEY HAVE THAT CONVERSATION, THEN THEY CAN DECIDE THE LEVEL OF SERVICE THEY NEED, BECAUSE THEN THEY HAVE TO ORDER THE DUMPSTERS THAT ARE NEEDED, WHICH STILL NEED TO BE MANUFACTURED. SO THERE'S A TIMING COMPONENT, BUT THAT IS SOMETHING THAT WE COULD CONSIDER OVER. YOU GO BACK TO THAT SLIDE, WHERE IT SHOWED FORGIVE ME. I'M LOSING MY THOUGHT HERE FOR A MOMENT WHERE IT WHERE IT SHOWED THE 500% INCREASE IN THE FIRST YEAR OR NO. IT SHOWED THE SUBSIDY WHERE THE IN IN YEAR ONE PEOPLE WOULD PAY THE CURRENT RATES OR THE RIGHT. THAT'S THE ONE I WANNA SEE. SO LET'S LET'S TALK ABOUT B FOR A MOMENT WITH THE PIT, AND I REALIZE THERE'S A LOT MORE DISCUSSION HAS TO BE HAD WITH THIS. BUT IF WE SAID WE ARE GOING TO GO WITH B, THE SHARED COST MODEL AND FRONTIER AND BALCONES WERE ABLE TO GO TO THESE POTENTIAL CUSTOMERS AND SAY THE CUSTOMERS AND SAY HERE IS WHAT WE ARE LOOKING AT. YOU KNOW IT THAT WOULD GIVE SOME RUNWAY TO A DISCUSSION TO BE ABLE TO ESTABLISH API FOR THAT FIRST YEAR AND THE AND IF IT WASN'T ESTABLISHED OR NOTHING WAS ESTABLISHED, THEN THERE ON THE PATH TO YEAR 234 AND FIVE. THAT'S RIGHT YEAR. ONE IS EVERYBODY PAYS AT THE CURRENT RATES. SO THAT DOES GIVE SOME RUNWAY TO BE ABLE TO HAVE THAT DISCUSSION ABOUT THE PIT FROM A FUNDING STANDPOINT, IT REPRESENTS ABOUT $125,000 IN YEAR ONE. THAT'S WHAT THE RATE MODEL ASSUMES WHAT WE WOULD COLLECT IN YEAR ONE. EVERYBODY PAID. THAT'S EVERYBODY PAYING VERSUS 62. THAT IS CORRECT. WHAT WOULD WHAT WOULD THE BOUNDARIES OF THE PIB WOULD IT BE JUST THE COMMERCIAL BUSINESSES OR WOULD YOU INCLUDE AN AREA AROUND IT THAT INCLUDED APARTMENTS AND RESIDENTIAL AND SURE. WELL THIS CURRENTLY IS THE CENTRAL BUSINESS DISTRICT BOUNDARIES.
UM, I'M NOT FAMILIAR WITH WHAT THE PIT LAW WOULD SAY ABOUT HOW TO ESTABLISH THOSE BOUNDARIES.
BUT I CAN TELL YOU, THIS IS GENERALLY WHAT IS CONSIDERED THE CENTRAL BUSINESS DISTRICT WITHIN MCKINNEY. OK SO WE'VE GOT DAVIS ON THE SQUARE. INCLUDED IN THIS. IT APPEARS TO ME AND CERTAINLY THE AREA THAT WE'RE SITTING IN RIGHT NOW THAT WE'RE REDEVELOPING. SAID. SOME SQUARES. THOUGHT IT LOOKS LIKE IT'S AT THE BOTTOM. RIGHT NO, BECAUSE THERE'S THE IS THAT THE WATER TOWER THERE. OH, I'M SORRY . YOU'RE RIGHT. IT'S NOT ON THERE. I'M VERY SORRY ABOUT THAT . YEAH, BECAUSE IT'S JUST OUT THERE. I'M SORRY. THANK YOU, JUSTIN. WOULD IMAGINE THAT THEY HAVE AN ACCOUNT SET UP OUTSIDE THIS I MEAN, THEY THEY THEY HAVE SPECIFIC SERVICE. THEY'RE NOT A THEY WOULDN'T BE A SHARED YES, THEY HAVE THEIR OWN SEPARATE SERVICE. IF I COULD ADD PROVIDE SOME CLARIFICATION OR A DIFFERENT ANGLE OF THIS. THERE'S BASICALLY TWO FUNDAMENTAL ISSUES. FUNDAMENTAL ISSUES THAT THE COUNCILS HAVE TO DEAL WITH HERE. THE FIRST ISSUE IS SORT OF THE FREE RIDERSHIP ISSUE. YOU'VE GOT A NUMBER OF FOLKS WHO AREN'T PAYING HAVE BEEN PAYING ANYTHING , AND IT IS A VESTIGE OF MANY YEARS. THAT HAS SORT OF OCCURRED THAT WAY. UH IN THE CENTRAL BUSINESS DISTRICT, AND I, IT'S NOT SURE THAT THAT WAS THE INTENT. PROBABLY NOT, BUT THAT'S HOW IT HAS ENDED UP AFTER A NUMBER OF YEARS IN THE COUNCIL. THE QUESTION FOR THE COUNCIL IS OR DO WE WANT TO RECTIFY THE ISSUE OF THE FREE RIDERSHIP ISSUE AND THAT IS THAT EVERYBODY NEEDS TO PAY. THERE'S A COUPLE OF WAYS WE CAN APPROACH IT. P IS ELEGANT IN THE SENSE THAT IT'S ALL THE PROPERTY OWNERS WILL HAVE TO PAY WITHIN THE CENTRAL BUSINESS DISTRICT. IF THAT'S WHAT YOU CHOOSE, AND THEN THEY'LL PASS IT ON TO THEIR TENANTS WHO WILL PASS IT ON TO THEIR CUSTOMERS. AND THEN THE SECOND QUESTION IS THE SUBSIDY, AND THAT IS A SEPARATE QUESTION.
[00:35:01]
BUT HOW MUCH OF A SUBSIDY IT MAY BE THAT THE COUNCIL SAYS, WE THINK A SUBSIDY IS WARRANTED FOR THE CENTRAL BUSINESS DISTRICT. THAT MAKES SENSE IN A NUMBER OF DIFFERENT WAYS. IF YOU WANTED TO DO THAT, BUT I CAN ASSURE YOU BEFORE WE DID THIS ANALYSIS. YOU DIDN'T REALIZE HOW MUCH IT WAS AND WHAT THE FREE RIDERSHIP IS. SO THERE'S A COUPLE OF INTERACTIVE INTERACTION ISSUES GOING ON HERE. BUT THE SUBSIDY IS A DIFFERENT POLICY QUESTION RELATED TO THE WHOLE THING. WE NEED TO GET ANSWERS TO BOTH. BUT THOSE ARE THE TWO THINGS THAT ARE HAPPENING RIGHT NOW. THE US TAKE THOSE TWO. THE FIRST ONE. I AM GUESSING WILL BE FAIRLY EASY. EVERYONE SHOULD PAY WOULD BE MY THOUGHT. IS THERE ANYONE THAT THINKS THAT THERE SHOULD BE 38% OF THE BUSINESS IS NOT PAYING.MOVEMENT. SO, SO THAT'S EASY AS FAR AS WHAT WE WANT TO ACHIEVE. GETTING THERE IS MAY BE A LITTLE MORE DIFFICULT. I WANT TO GO BACK TO THE P I DISCUSSION. I. I LOVE THE IDEA OF IT ON ONE HAND, ON THE OTHER HAND, YOU KNOW THAT'S WHY I WANTED YOU TO GO BACK TO THAT. THAT SLIDE EARLIER. JUST UH, BECAUSE THAT'S A CONSIDERATION IN MY MIND. A PIG WOULD BE A UNIFORM. UM SUBSIDY BY EVERYBODY. UH YOU KNOW, THE COST SHOULD BE ADVERTISED OVER EVERYONE EQUALLY, AND THAT THAT'S HOW WE WOULD BASICALLY SEE A PIT HAPPENING AS FAR AS REVENUE COLLECTED AND EXPENSE WHICH IS NOT NECESSARILY EQUITABLE, BECAUSE IF YOU'VE GOT A 5000 SQUARE FOOT RESTAURANT THAT'S GENERATING A TREMENDOUS AMOUNT OF TRASH. AND YOU'VE GOT PATRICK OVER THERE UP IN HIS, YOU KNOW, OFFICE. THAT'S THAT'S ONLY 10 SHEETS OF PAPER AT THE END OF THE DAY, THAT IS A MUCH DIFFERENT MUCH DIFFERENT ANIMAL OFFICE USE AND RESTAURANT USE AND RETAIL USE. MY ONLY HESITATION ON THAT IS HOW WE HOW WOULD WE MAKE IT EQUITABLE? OR IS THERE THE DESIRE TO NOT WORRY ABOUT MAKING IT EQUITABLE ON THE USES AND JUST LOOK AT IT AS A HOLISTIC? I HAVE A QUESTION ABOUT THAT. THEN I WAS UNDER THE IMPRESSION PERHAPS INCORRECTLY THAT THE PIT WOULD BE FUNDED BY AN ADDITIONAL PERCENTAGE OF PROPERTY TAX, WHICH WOULD BASICALLY BE BASED ON ADVIL OR AND VALUE OF THE BUILDING. I'M IN A FOR ME. I AM IN THE 950 SQUARE FOOT OFFICE. IN A ROUGH IN A BUILDING THAT HAS 27,000 ROUGHLY SQUARE FEET AND ABOUT 9000 THAT'S TAKEN UP BY A RESTAURANT. UH, MY LANDLORD TO BE RESPONSIBLE FOR PAYING THE COST OF THE PIT. HE WOULD AUSPICIOUSLY NEED TO TAKE IT DOWN TO MY LEVEL IN THE FORM OF RENT. WHAT AM I MISSING ON THAT? WHAT I AM SAYING. WHAT I AM SAYING IS AND I KNOW I WAS. I'M STILL IN THIS. I AGREE WITH THE IDEA OF POTENTIALLY A PIT, BUT SO MARK, YOU CAN ANSWER THAT IF THERE'S A 27,000 SQUARE FOOT BUILDING THAT'S ALL OFFICE AND A 27,000 SQUARE FOOT BUILDING THAT IS MADE UP OF RESTAURANT AND RETAIL. UM THEORETICALLY, THEY HAVE THE SAME VALUE. YOU KNOW ON C AD. BUT THE USE IS VERY, VERY DIFFERENT. SO HOW WOULD WE ADDRESS THAT? THE PIT STATUTE ALLOWS YOU TO FIND A METHODOLOGY THAT IS THAT IS REASONABLE AND EQUITABLE. IT CAN BE SQUARE FEET . IT CAN BE VALUATION. IT CAN BE A NUMBER OF COMBINATION OF USE AND VALUATION OF USE IN SIZE. IT IS NOT JUST ONE OR THE OTHER, AND IT'S NOT A TAX EITHER. IT'S AN ASSESSMENT. SIMILAR TO I TRIED TO LIKE HER TO AN ASSOCIATION OF HOMEOWNER COMMERCIAL OWNER ASSOCIATION.
CORRECT THERE ARE VARIOUS WAYS TO WORK. THE RATE OR ASSESSMENT BASED ON FACTORS, BUT IT STILL HAS TO BE EQUITABLE ACROSS THE PROPERTIES IN THE DISTRICT. SO THERE IS A WAY TO GET THERE. AND I FULLY REALIZE I DON'T MEAN TO HIJACK THIS CONVERSATION. I FULLY REALIZE THAT THAT IS NOT ON OUR FRONT BURNER ISSUE, BUT IT JUST SEEMS LIKE IT'S A IT'S A WHOLE OTHER MATTERS, FIRE EYES OR ROOMS DOWNTOWN. IT'S SOMETHING. I THINK THAT COULD BE A VERY USEFUL TOOL DOWNTOWN IN OUR CENTRAL BUSINESS DISTRICT THAT WE'RE NOT USING. THAT COULD HELP WITH A NUMBER OF ISSUES AND THIS BEING ONE OF THEM, BUT I DO FULLY REALIZE THAT YOU KNOW, WE'VE GOT A BIG JOB AHEAD OF US RIGHT NOW TO FIGURE OUT IT WOULD ALSO REDUCE DRAMATICALLY IN UNLESS I'M MISSING SOMETHING.
THE UM THE ENFORCEMENT THAT CHASING DOWN IDENTIFYING WHO THE TENANTS ARE THE DIFFERENT BUSINESSES HAVING TO IDENTIFY 168 BUSINESSES, AND WHEN DO THEY CHANGE AND WHAT OFFICERS MAY HAVE BEEN COMBINED FOR A SINGLE TENANT VERSUS MULTIPLE TENANTS? IF WE ARE DOING IT BASED ON SOME METRIC OF USE AND FOOTAGE, FOR EXAMPLE, AND IT IS HITTING JUST THE FOR EXAMPLE, YOUR YOUR BUILDING LANDLORD, WHOEVER THAT IS AND NOT HAVING TO IDENTIFY THE 15 DIFFERENT BUSINESSES THAT SEEMS LIKE IT WOULD ALSO BE A TREMENDOUS RELIEF OF THE BURDEN. ON US, ESPECIALLY WHEN YOU SAY THAT YOU FEEL THAT STAFF AND CITIES SHOULD TAKE ON, UM, IDENTIFYING THOSE BUSINESSES VERSUS THE PROVIDER. YEAH, WE RECOGNIZE THE DIFFICULT TASK IN WHAT YOU'VE DESCRIBED, BUT IT BUT IT SIMPLIFIED IF WE APPROACH IT FROM A KID. YEAH, CERTAINLY SO SOUNDS LIKE A PIT WOULD MAKE
[00:40:06]
IT SIMPLER FOR STAFF. WE COULD FIGURE OUT AN EQUITABLE METRIC USED FOR USE AND SIZE. AND WHAT AM I MISSING? THAT. UNDERSTAND IS LIKE, HOW LONG DOES THE STAY IN PLACE FOREVER? IT'S JUST WE DO. BECAUSE HE WAS SHOWING SOME MERIC SHOWING THAT WE WOULD BE PROFITABLE OVER A COUPLE OF YEARS. I MEAN, WOULD IT STILL BE A NEED FOR THE PIT AFTER 5 TO 6 YEARS OR THERE'S ALWAYS GOING TO BE, UM, REPLACEMENT COSTS AND STUFF. I DON'T UNDERSTAND THAT, BUT THERE'S ALWAYS GOING TO BE COST FOR SERVICING THE DOWNTOWN, RIGHT. AND SO IF THE CITY COUNCIL WERE TO ESTABLISH A METHODOLOGY FOR HOW THAT'S PAID, I WOULD ASSUME THAT THE PID WOULD BE ADJUSTED TO COLLECT THOSE COSTS OVER TIME. SERVICES THAT COULD BE FUNDED. WITH A P AS WELL. AND THAT'S WHAT KIND OF SPEAKING HERE FOR INSTANCE, BECAUSE THEY'RE GONNA BE LIKE, WELL, AT SOME POINT, THIS THING IS GONNA BE ANOTHER LOT OF MONEY THAT IS GOING TO KEEP BUILDING SO THERE ARE MANY THINGS YOU COULD SPEND P DOLLARS ON AND YOU KNOW YOU HAVE A LOT OF EVENTS DOWNTOWN. WE'VE TALKED ABOUT THIS INTERNALLY. THAT'S NOT TODAY'S DISCUSSION. THE ADDITIONAL SECURITY DOWNTOWN, YOU KNOW. AND MARK WITH THE PID. THE PROPERTY OWNERS WOULD HAVE TO BE FOR IT TO FORM IT. WE CAN'T DO A TOP DOWN EDICT TO DO THIS, SO IT WOULD HAVE TO BE IN THEIR BEST INTEREST. THEY'D HAVE TO VOTE TO FORM IT. THEY WOULD BE THE GOVERNMENT GOVERNING BODY OVER IT. NOW, YOU WOULD SET THE BOARD WE WOULD OK, OK, BUT THERE IS A PERCENTAGE REQUIRED OF OWNERS OR VALUE THAT MIGHT BE BOTH TO GET THE 50% THRESHOLD TO HAVE THE PIN FOR AND WE'D ALSO HAVE THE HAVE THE ABILITY IN A PIT TO CHANGE THE PERCENTAGE OF THE METRICS THAT I'M GONNA CALL THE TAX OR ASSISTS ASSESSMENT.WE HAVE THE ABILITY TO CHANGE THAT ASSESSMENT TO NOT LET IT JUST IT. WE COULD TREAT IT LIKE A AC O. A THAT IS A NONPROFIT AND AS WE IDENTIFY AS A BOARD AND FEEDBACK FROM THE OWNERS WE IDENTIFY WHAT? WHAT SERVICES? DO WE WANT TO FUND? MIGHT IT BE ADDITIONAL SECURITY DOWNTOWN? MIGHT IT BE CERTAINLY TRASH SERVICE? MAYBE OWNERS WOULD WOULD OPT IN. FOR SOME OF THAT ASSESSMENT BEING USED FOR, UH, SHUTTLE SERVICE BETWEEN THE PARKING GARAGES. I THINK RIGHT THAT WE HAVE THAT FLEXIBILITY. IT'S VERY SIMILAR TO A TO AC, A CORRECT AND IT COULD JUST BE A PORTION OF THIS COST. YOU COULD STILL HAVE A RATE. AND YOU COULD HAVE A P ASSESSMENT AS WELL. SO DIFFERENT. SO WE MAY HAVE DERAILED THE CONVERSATION A LITTLE BIT. THAT'S MY FAULT. NO, NO, IT'S BUT IT'S HAVE TO GET THERE. OH, STEVE HAS SOMETHING IF I MAY IN TERMS OF HAVING A CONVERSATION GOES TO THE EARLIER POINT BEING MADE, I THINK WHAT I AM HEARING FROM THE COUNCIL, PLEASE CORRECT ME IF I'M WRONG AS WE WANT TO FURTHER EXPLORE THE PIT DISCUSSION THAT WAS TALKED ABOUT A STRATEGIC PLANNING. IF THAT IS THE CASE, AND ALSO WHAT WE HEARD FROM THE COUNCIL IS THEIR DESIRE TO HAVE EACH OF THE BUSINESSES PAY AT LEAST PAY RIGHT NOW UNDER THE CURRENT ORDINANCE, AND WHERE WE ARE AT THERE WAS AN EARLIER WOULD ENSURE THAT EVERYBODY PAYS IT WOULD BE 100. DISTRIBUTED AMONG THE BUSINESSES. IF THE COUNCIL WERE OK WITH YEAR ONE OF THIS SERVICE, MEANING OVER THE COURSE OF STARTING OCTOBER 1, THERE WILL BE AN ADVERTISING CAMPAIGN IN THE DOWNTOWN CURRENT RATES. WHEN I SAY CURRENT RATES MEAN THE 1993 ORDINANCE DEFINITELY FAIR RATES. GET FOLKS IN THE HABIT WHO ARE NOT PAYING MAY HAVE NOT PAID FOR 20 YEARS.
THEY ARE GOING TO NEED TO START PAYING OUR CURRENT RATE MODELS THAT YOU'LL SEE. UM IF WE DO THAT FOR YEAR ONE WHAT THAT WOULD ALLOW, AND THESE RATE MODELS THAT YOU'RE SEEING HERE.
ALLOW US BASICALLY, THE COUNCIL WOULD NEED TO NEED TO MAKE A DECISION BETWEEN THE SHARED COST AND THE AVERAGE COST BETWEEN THESE TWO DOWN HERE AND RYAN, PLEASE, PLEASE CORRECT ME. IF I'M WRONG. WHAT THAT DOES IS. IT ALLOWS US TO SET THE COMMERCIAL RATES AS WELL AS THE RESIDENTIAL RATES FOR THE DOWNTOWN RATES. WE HAVE EVERYONE START TO PAY STARTING OCTOBER 1 OVER THE COURSE OF THE NEXT YEAR. WE CAN BRING BACK THE PIT DISCUSSION BASED ON THE DIRECTION FROM THE PIT DISCUSSION. IF WE ENTER INTO A PIT GREAT WILL OBVIOUSLY ADJUST THE RATES IN THE DOWNTOWN BUSINESSES AS NEED BE BASED ON THE COUNCIL'S DIRECTION. IF ULTIMATELY THE COUNCIL DECIDES THAT IT IS NOT WHAT IS FOR THE DOWNTOWN, WE CAN MOVE TOWARDS A MODEL IN THIS PARTICULAR CASE, IT WAS THE 2500 AND 5050. THE COUNCIL COULD HAVE THE CONVERSATIONS AT THAT POINT IN TIME ABOUT IS IT 25 AND 5050 THE APPROPRIATE RATES FOR THE DOWNTOWN. IF WE DON'T GO TO THE PIT ROUTE, SEE DURING THAT SAME PERIOD OF TIME, YOU COULD DEVELOP A MODEL OF WHAT A PIG WOULD LOOK LIKE AND BE ABLE TO SPEAK TO THE BUSINESSES AND SOLICIT INPUT ON WHAT SERVICES
[00:45:04]
AND BRING THAT BACK. AS IT WAS DISCUSSED HERE. THE PIT WOULD BE MORE THAN JUST REFERENCE RATES AND REFERENCE SERVICE DOWNTOWN. WE WOULD BRING BACK OPTIONS ON WHAT OTHER SERVICES WOULD BE INVOLVED IN THAT DOWNTOWN B. IS REALLY BETWEEN THESE TWO. SO REALLY, UH, IN IN TERMS OF THE I THINK THE FINAL PIECE OF INFORMATION THAT WE NEED FROM THE COUNCIL TONIGHT IS LIKE A MODEL THAT FOR THE DIFFERENT CATEGORIES RESIDENTIAL COMMERCIAL ROLL OFF THAT HAS GENERALLY SPEAKING A SPIKE IN THE FIRST YEAR BECAUSE THE NEW IMPLEMENTATION OR BASICALLY THIS ONE, WHERE IT EVENS OUT BASICALLY WHAT THOSE COSTS ARE OVER THE COURSE OF THE FIVEYEAR PERIOD. I THINK FROM STAFF'S PERSPECTIVE, THIS ONE MAKES MORE SENSE. BUT AGAIN, THIS BECOMES A POLICY DECISION. IT IS EASIER TO MARKET TO ADVERTISE. HERE IS WHAT RATES ARE GOING TO BE OVER THE NEXT 345 YEARS. I AGREE. YEAH. I AGREE TO ENOUGH DIRECTION FOR NOW. IT IS THE ONLY THING I THE ONLY THING I WOULD ADD, IS THAT WE MAY HAVE TO COME BACK TO THE RATE MODEL IN FUTURE YEARS, DEPENDING ON WHAT'S DECIDED AS THE MARKET CHANGES, AS WELL AS AS WE IMPLEMENT THE NEW CONTRACT, WE MAY HAVE TO LOOK, WE MAY HAVE TO FINE TUNE THAT MODEL YEAR AFTER YEAR JUST TO MAKE SURE THAT WE'RE HITTING THE RIGHT TARGETS. RIGHT? MR MAY I WILL BE VERY BRIEF ON THIS, BUT I WANT TO SAY TWO THINGS. I HAD THE BENEFIT OF GOING WITH RYAN AND ERIC, UM, HERE TO, UH, THING IN FRISCO. JUST LOOK AT THEIR RECYCLING AND SOME OF THE WAYS THEY ARE REALLY SMART ABOUT IT. AND THESE ARE THINGS I'D LIKE TO LOOK AT. UM ALSO, YOU KNOW, WE HAVE CHIEF DOWN HERE AND I'D LIKE AT SOME POINT TO HAVE HIM TALK TO COUNSEL ABOUT. PERHAPS THE ALTERNATIVE EXISTENTIAL DANGER OF OUR DOWNTOWN BUSINESS DISTRICT FOR A LACK OF RIGHTS OR ROOMS FOR FIRE SUPPRESSION. AND IF YOU LOOK AT RICK'S NEW BUILDING THE HARVEST, HE'S GOT A RISE A ROOM IN THERE, BUT MANY OF THE OTHER BUILDINGS DON'T AND THAT'S SOMETHING THAT I THINK IS DOWNTOWN AFICIONADOS WE ALL OUGHT TO BE THINKING ABOUT IS HOW DO WE GET FIRE SUPPRESSION IN OUR DOWNTOWN, SO WE DON'T HAVE AN EXISTENTIAL EVENT DOWN THERE. SO THANK YOU, MR VIEW.PROACTIVE. UH PROACTIVE PROGRAM WITH TOURISTS. EXACTLY. YEAH, EXACTLY. ALL RIGHT. WELL IN TERMS OF NEXT STEPS, UM, I THINK YOU CAN CHANGE THE FIRST BULLET POINT TO GENERALLY SPEAKING THAT WE'RE GOING TO IMPLEMENT AS DISCUSSED AND THEN CONSIDER THE PIT OVER THE NEXT YEAR OR TWO.
WE HAVE TO INCORPORATE THE PROPOSED RATE STRUCTURE INTO THE FISCAL YEAR 25 BUDGET JUST TO GIVE YOU A LITTLE FLAVOR OF WHERE WE ARE WITH THE TRANSITION. UH CURRENTLY ARE 130,000 CARTS THAT WE HAVE ORDERED WILL START TO BE MANUFACTURED HOPEFULLY WITHIN THE NEXT MONTH, AND THOSE WILL BE DELIVERED TO THE CITY. KINNEY STARTING THIS SUMMER. THEY'RE BEING MANUFACTURED IN DALLAS BY A COMPANY CALLED R. UH, FRONTIER HAS ORDERED ALL THEIR VEHICLES.
THOSE WILL START TO BE DELIVERED THIS MONTH THROUGH JULY. SO THAT'S IN PROGRESS AS WELL. AND AGAIN. THE MAJOR DATE FOR US IS OCTOBER. 1ST IS WHEN THE NEW UH TWO NEW CONTRACTS START. SO UH, THAT IS EVERYTHING. THE OTHER QUESTION. THANK YOU VERY MUCH. I REALLY APPRECIATE YOUR WORK.
[Discuss History of McKinney Airport Advisory Board]
THANK YOU. ITEM 241347 DISCUSS HISTORY OF MCKINNEY AIRPORT ADVISORY BOARD.AREA. YOU'RE SITTING IN THE BACK. GOOD AFTERNOON, MEMBERS OF THE COUNCIL KARLEY AIRPORT DIRECTOR. I'VE GOT A SHORT PRESENTATION FOR YOU ON THE HISTORY OF THE AIRPORT BOARD. SO A PRETTY HIGH LEVEL TIMELINE TO START WITH, UH, WE FOUND THAT THE THERE'S EVIDENCE OF A BOARD ACTUALLY, AS FAR BACK AS 1977 BEFORE THE AIRPORT EVEN OPENED, UM, WORKING, JUST LOOKING AT SOME OF THE MINUTES FROM FROM BACK, THEN WORKING ON THE FUNDING AND THE SOURCES OF FUNDING TO BUILD THE RUNWAY INITIALLY AND SOME OF THE INITIAL CONSTRUCTION MEETINGS WERE HELD. PERIODICALLY THEY WEREN'T NECESSARILY MONTHLY THROUGH THE COURSE OF SEVERAL DECADES. IT WAS REALLY SOMETIMES EVERY MONTH. SOMETIMES MAYBE THREE OR FOUR A YEAR, JUST DEPENDING ON WHAT WAS GOING ON. INTERESTING LITTLE SIDE NOTE IN IN THE FIRST MEETING MINUTES, THEY HIRED A CONSULTANT OR RECOMMENDED THE CITY HIRE A CONSULTANT WHO WAS THE RETIRED CHIEF ENGINEER OF THE TEXAS AERONAUTICAL COMMISSION, AND THEY WERE GOING TO PAY HIM $15 AN HOUR PLUS EXPENSES. SO ANYWAY . JUST KIND OF LOOKING AT THIS AGAIN. A HIGH LEVEL OVERVIEW.
WE'RE GOING OVER FIVE OR SOME DECADES. THAT'S MORE THAN WE GET PAID. I HAVE MORE OF THAT. AND
[00:50:01]
THAT WAS IN 1977, SO I'LL GET INTO SOME OF THESE OTHER MILESTONES IN MORE DETAIL, BUT IN IN 2007 CITY COUNCIL ADOPTED A RESOLUTION APPROVING ARTICLES OF INCORPORATION AND BYLAWS FOR THE MCKINNEY AIRPORT DEVELOPMENT CORPORATION. SO THERE WAS SOME EVIDENCE BACK THEN THAT THERE WAS AN INTEREST IN MAYBE, UM ELEVATING THE ROLE OF THE BOARD ABOVE BEYOND AND BEYOND JUST ADVISORY AND THEN ALMOST IMMEDIATELY AFTER IN APRIL OF 2008, THERE WAS AN ADMINISTRATIVE SERVICES AGREEMENT BETWEEN THE CITY AND THE INMATE AC. IT FURTHER CLARIFIED THEIR ROLES, AND WE WILL TALK A LITTLE MORE DETAIL ABOUT THAT. FAST FORWARD TO 2013 . THAT'S A SIGNIFICANT DATE IN SEPTEMBER, UM THE CITY ACTUALLY ACQUIRED THE FBO THEN SO NOW THE AIRPORT IS TRANSITIONING FROM JUST THE SPONSOR, THE LANDLORD TO AN AERONAUTICAL SERVICE PROVIDER, CLAIMING THE FUELING ENTERPRISE IS A PROPRIETARY RIGHT AND BEGINNING TO OFFER AERONAUTICAL SERVICES AND THEN HOME ALMOST IN IMMEDIATELY AT THE SAME TIME, THE BYLAWS WERE THEN AMENDED AGAIN, WHICH I'LL TALK ABOUT LATER. BUT THEN THEY'RE ACTUALLY, UM, KIND OF DOWNGRADING THE ROLE OF THE ADVISORY OR THE AIRPORT ADVICE. AIRPORT. DEVELOPMENT CORPORATION THAT KIND OF INTO AN ADVISORY BOARD. AND THEY OPERATED IN THAT MAYBE REDUCED CAPACITY IF YOU WILL, TILL TILL THE END IN JULY OF 2015. THE UM BOARD PASSED A RESOLUTION TO DISSOLVE AND THEN ARTICLES OF DISSOLUTION WERE FILED WITH THE STATE IN OCTOBER OF 2015. AND THEN LOOKING AT THE AIRPORT ADVISORY BOARD. BACKGROUND UM YOU KNOW, DIFFERENT MAYBE ITERATIONS AT DIFFERENT TIMES THERE WERE BETWEEN FIVE AND SEVEN AIRPORT BOARD MEMBERS. THEY WERE APPOINTED BY COUNSEL MEMBERS WHO ARE REQUIRED TO BE A RESIDENT OF THE CITY OR OR EITHER OWN OR BE EMPLOYED BY A MCKINNEY BUSINESS. THERE COULD BE UP TO 22 MEMBERS THAT WERE RESIDENTS OF COLLIN COUNTY WITH THE SAME REQUIREMENT ON IT OR BE EMPLOYED BY A COLLIN COUNTY BUSINESS. UH, THEY HAD OFFICERS, INCLUDING THAT INCLUDED THE PRESIDENT, VICE PRESIDENT, SECRETARY AND TREASURER. PRETTY MUCH THROUGHOUT THE TENURE OF THE BOARD. IT SERVED AS AN ADVISORY BOARD MET MONTHLY, UM, OCCASIONALLY CALLING SPECIAL MEETINGS. IT LOOKED LIKE IN THE LAST YEAR OR SO OF MINUTES. THEY MEET TRANSITIONED AND WEER GINNLY O BI NTHLY MOWARDSTO E VERYTHND LAS ET S MONTHIXOR A THEN NDE MEETTHGS.IN UM UH, WERE ATTENDED BY OBVIOUSLY THE AIRPORT ADMINISTRATIVE STAFF . AND THEN PERIODICALLY, UH, EVIDENCE IN THE MINUTES OF THE MAYOR IN CERTAIN COUNCIL MEMBERS , THE CITY MANAGER, STAFF CITY MANAGER'S OFFICE STAFF MEMBERS OF E DC CDC ATTENDING THE MEETINGS AS WELL AS THE AIR TRAFFIC CONTROL MANAGER. SO BETWEEN 2007 AND 2013, THE CITY APPEARS TO HAVE DELEGATED CITY COUNCIL APPEARS TO HAVE DELEGATED SOME ADDITIONAL AUTHORITY TO THE M MA DC. WITH THE INTENT TO HAVE THEM FUNCTION MORE LIKE THE E, DC AND THE CDC THAT WE HAVE. TODAY THERE WAS AN AIRPORT MANAGEMENT AGREEMENT SIGNED IN APRIL 2008 WHERE THEY WERE REALLY MANAGING THE OPERATIONS DEVELOPMENT, MARKETING PROMOTION OF SERVICES. THEY HAD THE AUTHORITY TO HIRE THE AIRPORT MANAGER AND STAFF AS NEEDED TO SERVE THEIR FUNCTIONS. UM THEY WERE ALLOWED TO OVERSEE CAPITAL PROJECTS IN TERMS OF THE PLANNING, CONTRACTING NEGOTIATING, ENGAGING WITH IF A CAPITAL PROJECT WAS APPROVED IN THE AIRPORT BUDGET. BY CITY COUNCIL. THEY DIDN'T NECESSARILY HAVE TO COME BACK TO COUNCIL FOR APPROVAL OF THAT CAPITAL. PROJECT I DIDN'T SEE ANY EVIDENCE IN THE MINUTES THAT THEY ACTUALLY DID THAT. BUT THAT DID HAVE THAT LANGUAGE IN THAT, UM 28 AGREEMENT. AND THEN AGAIN IN 2013 THEY THE ROLE WAS KIND OF DOWNGRADED TO AN ADVISORY. CAPACITY THERE WAS A SECOND AMENDED BYLAWS PASSED IN OCTOBER OF 2013. THEIR ROLE BECAME ADVISING AGAIN. INSTEAD OF ACTING ON BEHALF OF THE CITY. THEY WERE NO LONGER INDEPENDENTLY MANAGING OR OPERATING THE AIRPORT. UM THEY VERB THE AUTHORITY TO HIRE THE AIRPORT DIRECTOR WAS REMOVED AND THAT WAS TRANSFERRED BACK TO THE CITY MANAGER. UM AND THEN THE FINANCE DEPARTMENT REALLY ASSUMED THE RESPONSIBILITY FOR ALL OF THE CUSTODY. SECURITY OF THE AIRPORT FUNDS BUILDING THE BUDGET DOING THE FINANCIAL REPORTS. EARLY EVIDENCE OF WHY THAT HAPPENED, UH, MAYBE A MISMANAGEMENT OR AN EVENT THAT HAPPENED THAT YOU COULD RESEARCH THAT. THAT THE MINISTER WORRIED[00:55:06]
THAT THEY NEED TO TAKE THE REINS BACK. YEAH, THE MINISTER KIND OF AMBIGUOUS ON THAT. THEY DON'T REALLY SAY A LOT OF DETAIL IN THE MINUTES ABOUT THAT, UH, SPECIFIC ISSUE. I THINK IT'S NOT INSIGNIFICANT THAT IT ALSO IS HAPPENING AT A TIME WHEN THEY, UM, BECOMING AN AERONAUTICAL SERVICE PROVIDER IN I THINK THE IN THE INDUSTRY. I THINK THERE ARE SOME CONCERNS ABOUT CONFLICTS OF INTEREST WHEN YOU ARE IN THAT ROLE. I HAVE NOT FOUND A AIRPORT THAT HAS CLAIM THAT PROPRIETARY RIGHT AS WE HAVE THAT ACTUALLY HAS AN AIRPORT BOARD. I'M I'M SURE THERE ARE SOME OUT THERE. I JUST HAVEN'T COME ACROSS THAT YET. BUT TO ME, THE TIMING OF THOSE TWO THINGS SEEMS, UH NOT MAYBE MORE THAN COINCIDENTAL. UM SO SEE YEAH. TYPICALLY A MEETING HAD, YOU KNOW, UM, A REPORT FROM THE BOARD CHAIRMAN REPORT FROM THE AIRPORT DIRECTOR. THE FBO HAD AN OPERATIONS REPORT. THERE WAS AN AIRPORT OPERATIONS REPORT FINANCIAL REPORT AND THEN LIAISON UPDATES. THOSE WERE PRETTY MUCH ALMOST ON EVERY AGENDA. UM I DID SEE THAT SOMETIMES THEY COULD NOT HAVE A QUORUM AND MEETINGS WERE CANCELED. SOMETIMES UM, A SPECIAL MEETING WILL GET SCHEDULED SO THAT SOMETHING COULD MAKE IT TO COUNCIL ON SCHEDULE OR ON TIME. UM TYPICALLY, A LOT OF THE OTHER STUFF OTHER THAN THOSE STANDING REPORTS WAS JUST APPROVING RESOLUTIONS AND ORDINANCES THAT ULTIMATELY CAME TO COUNCIL FOR AUTHORIZATION. UH AND THEN THEY WOULD REVIEW THE PROPOSED FEE SCHEDULES FOR THE FB AND THE AIRPORT LAND LEASE RATES. UH, SOME OF THE THINGS TO CONSIDER IF YOU ARE CONSIDERING, YOU KNOW, STANDING UP IN AIRPORT BOARD, THERE WILL BE AN ADMINISTRATIVE WORKLOAD FOR IT.ADDITIONAL WORKLOAD THAT WE NECESSARILY DON'T HAVE A HOME FOR TODAY, SO THAT WOULD BE SOMETHING TO CONSIDER, UM, WE WOULD EITHER NEED TO PROBABLY ADD SOME STAFF AT THE AIRPORT OR RELY ON OTHER CITY DEPARTMENTS FOR SOME OF THE ADMINISTRATIVE FUNCTIONS WITH AGENDAS AND MINUTES AND EVERYTHING TODAY WE'VE GOT ABOUT 30 EMPLOYEES AND 25 OF THOSE ARE FULL TIME IN THE FIELD. SO OUR OF STAFF IS RELATIVELY SMALL. AS I SAID THERE WERE SOME ISSUES APPEARING IN THE MINUTES ABOUT THE TIMELINESS OF GETTING THINGS TO COUNCIL. IF A QUORUM WASN'T MADE, THEN SOMETHING GOT PUSHED BACK ANOTHER MONTH. UM AND THEN CONFLICTS OF INTEREST. I THINK, UM, YOU KNOW, THERE ARE CONCERNS ABOUT THAT, IN TERMS OF IF BOARD MEMBERS ARE DRAWN FROM AIRPORT TENANTS OR SOMEBODY THAT HAS AN AFFILIATION WITH AN AIRPORT TENANT. THESE ARE THE PEOPLE THAT ARE POTENTIALLY SETTING RATES AND CHARGES. POLICIES FOR THE AIRPORT, LAND LEASE RATES AND THOSE KIND OF THINGS. SO UM, THAT'S JUST KIND OF ONE OF THE THINGS THAT SEEMS TO HAVE SURFACED IN SOME OF THE MY RESEARCH ON AIRPORT BOARDS, BASICALLY. UM PROBABLY HEARD THE SAYING OR MAYBE YOU HAVEN'T IN THE INDUSTRY. WE HAVE A SAYING. YOU'VE SEEN ONE AIRPORT. YOU'VE SEEN ONE AIRPORT BECAUSE THEY ALL ARE UNIQUE. AND SO YOU CAN KIND OF TAKE THIS FOR WHAT IT'S WORTH, BUT I WAS CURIOUS THAT WE DID REACH OUT AND LOOKED AT WHAT OTHER TEXAS GENERAL AVIATION NATIONAL AIRPORTS THE LARGER ONES IN TEXAS ARE DOING. DO THEY OR DO THEY NOT HAVE ADVISORY BOARDS? ARLINGTON DOES NOT. ADDISON DOES NOT. ADDISON USED TO HAVE ONE. THEIRS WAS DISBANDED IN THE NINETIES. DALLAS EXECUTIVE DOES NOT. ELLINGTON DOES NOT. GEORGETOWN DOES NOT. SUGAR LAND DOES NOT DENTON HAS AN ADVISORY BOARD, FORT WORTH ALLIANCE AND MEACHAM.
BOTH ARE, UM, BASICALLY HAVE THE SAME SPONSOR AND THE SAME ADVISORY BOARD ADVISING BOTH AIRPORTS, CONRO NEW BRONZE AND SAN MARCOS ALL DO HAVE ADVISORY BOARDS. AND DO YOU KNOW, THOUGH, IF ANY OF THOSE THAT DO HAVE AN ADVISORY BOARD ALSO OWNED THE FBO TO MY KNOWLEDGE, NONE OF THOSE DO OWN THE FBL. THAT'S PRETTY MUCH WHAT I HAVE FOR YOU. I'M HAPPY TO ANSWER QUESTIONS. I WASN'T HERE WHEN THE BOARD WAS AROUND, SO A LOT OF THIS IS JUST A LOT OF RESEARCH, LOOKING BACK THROUGH MEETING MINUTES AND PIECING THINGS TOGETHER, BUT I WILL DO MY BEST TO ANSWER YOUR QUESTIONS. JUST MAKE A STATEMENT FOR ME THE JOB THAT HE BAR STAFF ALL. WAY THE AIRPORT IS OPERATING NOW IS OPERATING FANTASTICALLY. WOULD NOT BE IN FAVOR OF IMPLEMENTING AN ADVISORY BOARD, WHICH I THINK WOULD HAVE TREMENDOUS POTENTIAL TO BECOME. QUITE BUREAUCRATIC AND POLITICAL AND, UH, JUST PUT A BODY WHICH MAY OR MAY NOT HAVE THE SAME INTEREST FOR CERTAINLY MAY HAVE CONFLICTS OF INTEREST IN BETWEEN OUR STAFF AND OPERATIONS IN THE AIRPORT.
COUNCIL DIRECTLY. AND BASED ON WHAT I'VE HEARD FROM THE CITIZENS ABOUT THE AIRPORT OVER
[01:00:03]
THE LAST YEAR, I'M NOT SURE I CAN FIND SEVEN PEOPLE. I DISLIKE ENOUGH TO SERVE ON THAT BOARD.THAT'S HOW I FEEL. THANK YOU FOR THE UPDATE. I I ASKED ACTUALLY ASKED THAT THIS ITEM BE PUT ON THE AGENDA FOR DISCUSSION. THE REASON IS BECAUSE WE ARE INVESTING GREATLY IN THE AIRPORT , AND THERE'S A LOT OF DEVELOPMENT STILL TO COME. AND WE HAVE OTHER BOARDS THAT WE USE AS ADVISOR TO US TO CONSIDER WHEN WE HAVE VERY LARGE BUDGETS THAT WE ARE SPENDING OUR TAXPAYER DOLLARS ON, AND SO I WANTED TO MAKE SURE THAT WE'RE NOT MISSING AN OPPORTUNITY TO GET MORE FEEDBACK, ESPECIALLY SINCE THIS IS A VERY HOT TOPIC IN COMMUNITY. UM THE ONE THING I DIDN'T CONSIDER WAS THE CONFLICT OF INTEREST AND THE PEOPLE THAT I WOULD THINK TO SERVE ON THIS BOARD WOULD HAVE A CONFLICT OF INTEREST IN TERMS OF THEIR BUSINESS ASSOCIATION WITH THE AIRPORT. SO I DO UNDERSTAND THAT SO I APPRECIATE THE VERY THOROUGH BACKGROUND AND PRESENTATION FOR THAT REASON, UM YOU KNOW, I JUST I WANTED US TO DO OUR DUE DILIGENCE AND INVESTIGATING IT. SINCE WE ARE HAVE A LOT OF MONEY THAT WE NOBODY YEAH, I WILL SAY, DR PHELPS. I APPRECIATE YOU BRINGING THIS UP BECAUSE IT'S BEEN SOMETHING I'VE TURNED OVER IN MY HEAD AND THIS HAS BEEN LIGHTNING FOR ME TOO. BEFORE WE INVEST IN A TOOL WE HAVE WE DETERMINE WHAT PROBLEM DOES IT SOLVE? AND UM I AGREE WITH THE MAYOR THAT FROM AN OPERATION STANDPOINT, I DON'T SEE A PROBLEM AT THE AIRPORT, BUT SOMETHING THAT THE MAYOR PRO TEM ALLUDED TO FROM A GENERAL CITIZENRY, UNDERSTANDING POINT ABOUT THE AIRPORT AND WHAT THE ASSET DOES FOR US. I DO SEE SOME ISSUES. BUT THEN IS THIS THE RIGHT TOOL? TO BE ABLE TO HELP SOLVE THAT PROBLEM. IF WE DID HAVE THE BOARD IN MY MIND, IT WOULD BE SOMETHING THAT WOULD LOOK MORE LIKE THE PARKS ADVISORY BOARD. UM AND, UH, I'LL SAY THAT I THINK VERY HIGHLY OF THAT BOARD. I'M THE COUNCIL LIAISON TO IT. BUT YOU KNOW, SOMETIMES WE GET PEOPLE ON THAT BOARD THAT FEEL LIKE THEY NEED TO BE INVOLVED IN OPERATIONS, AND I'M HAVING TO COACH THEM AWAY FROM THAT BECAUSE OPERATIONS GO THROUGH. IT WAS MIKE AND THEN RYAN NOW AMY AND STEVE AND UP TO PAUL. AND I THINK THAT WE DO A GREAT JOB ON THAT, AND I COULD SEE HOW FOCUS ON THIS BOARD MIGHT BE A MOTH TO A FLAME TRYING TO GET INVOLVED IN OPERATIONS, WHICH I WOULD NOT BE IN FAVOR OF DOING, BUT I THINK IT IS A GREAT DISCUSSION POINT. AND BUT IF WE DID DO SOMETHING, I'D WANT IT TO BE AN ADVISING ROLE. BUT I'M NOT SURE WHAT PROBLEM THAT SOLVES. AND I WOULD JUST ADD TO THAT THAT UNLIKE A PARKS, SPORT OR OTHER NEED BOARD. I CAN THINK OF RIGHT NOW. I AM SURE THERE IS ONE THAT I CAN BE CONTRADICTED ON. BUT THOSE ARE AREN'T BUSINESSES.
THIS IS A BUSINESS. UM WE ARE. WE ARE OPERATING A LARGE BUSINESS, UNLIKE PARKS, WHERE WE ARE JUST MAKING DETERMINATIONS ON WHERE TO SPEND TAX DOLLARS FOR AMENITIES, BUT THERE IS NOT A REVENUE EXPENSE COMPONENT EXPENSE COMPONENT, BUT NOT A REVENUE COMPONENT. THIS IS A VERY DIFFERENT TYPE OF OPERATION , SO AN IN LIES. ALL THE POTENTIAL FOR CONFLICT UNLIKE ANY OF OUR OTHER BOARDS. BE HARD PRESSED TO COME UP WITH A CONFLICT FOR SOMEONE ON A PARKS BOARD VISIT MCKINNEY BOARD. POTENTIALLY YOU COULD ON A MAIN STREET, MAYBE BORED BUT SHOULD BE HARD PRESSED TO FIND CONFLICTS THERE. THIS WOULD BE POTENTIALLY WROUGHT WITH CONFLICTS. SO I THINK CONSENSUS IS STATUS QUO. THAT VERY GOOD, GREAT CONVERSATION AND ALL THOSE THINGS AS WELL. SO APPRECIATE IT BEING BROUGHT FORWARD. THANK YOU. THANK YOU. WE ARE GOING TO
[EXECUTIVE SESSION]
MOVE INTO EXECUTIVE SESSION SINCE WE ARE RUNNING LATE. WE ARE IN ACCORDANCE WITH TEXAS GOVERNMENT CODE SECTION 10,107 1 CONSULTATIONS WITH ATTORNEY IN ANY WORK SESSIONS. SPECIAL SESSION REGULAR SESSION AGENDA ITEM REQUIRE CONFIDENTIAL ATTORNEY CLIENT AND ADVICE.NECESSITATED BY THE DELIBERATION OF DISCUSSION OF SAID ITEMS 31 EAST UNIVERSITY DRIVE IN 1020, NORTH MCDONALD STREET. LOT ONE R BLOCK A OF THE HIGH MOTORS, THE USA EDITION BEING 11.034 ACRES OUT OF THE WILLIAM DAVIS SURVEY. ABSTRACT 248 CITY MCKINNEY, COLLIN COUNTY, TEXAS SECTION 10,108 7 DELIBERATION REGARDING ECONOMIC DEVELOPMENT MATTERS, PROJECT HEMISPHERES. THERE WILL BE ACTION A DOOR. WE ARE BACK IN SESSION FROM EXECUTIVE SESSION TO WRAP UP OUR
[ACTION ON EXECUTIVE SESSION]
WORK SESSION. MR MARY, MAY I MAKE A MOTION, PLEASE? MAKE A MOTION THAT WE AUTHORIZE THE CITY ATTORNEY TO FILE FOR REALLY UNDER CHAPTER 54 OF THE TEXAS LOCAL GOVERNMENT CODE. IN ORDER TO ADDRESS THE ISSUES DISCUSSED IN EXECUTIVE SESSION. I WILL. SECOND YEAH. I SECONDED ALL IN[01:05:12]
FAVOR. RIGHT? TO ADJOURN, MOVED ALL IN FAVOR. WE ARE ADJOURNED. IT WILL TAKE SEVEN OR EIGHT MINUTES TO RESET ALL THE VIDEO AND AUDIO CAPTURING TECHNOLOGY TAKES A LITTLE TIME TO SWITCH OVER. THERE* This transcript was compiled from uncorrected Closed Captioning.