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YEAH. YEAH. SO BUT YEAH. ANYTHING OTHER. GOOD MORNING EVERYBODY TODAY IS FRIDAY AUGUST
[CALL TO ORDER]
THE 9TH YEAR 2024. IT IS 830 IN THE MORNING ON SOUTH CAMPUS AT 222 NORTH TENNESSEE STREET. THE CITY OF MCKINNEY, TEXAS. THE CITY CITY COUNCIL WORK SESSION. FIRST QUARTER OF BUSINESS WITH[Discuss Fiscal Year 2024-25 Budget]
THE PUBLIC COMMENTS OF WHICH I DO NOT SHOW THAT ANYBODY HAS SIGNED UP, NEXT WILL BE MOVING TO ITEM 2.01839 FOR FISCAL YEAR 20 2425. BUDGET GOOD MORNING, MR. MAYOR. MEMBERS OF THE COUNCIL, HAPPY TO BE HERE, YET ANOTHER YEAR, YET ANOTHER BUDGE. SO, MANY OF THE THEMES, YOU'LL HEAR US TALKING ABOUT, IT WILL FEEL FAIRLY ROUTINE, BECAUSE THAT'S KIND OF HOW THE BUDGET PROCESS WORKS, WE TRY TO WE HAVE A SYSTEM IN PLACE. WE TRY TO STICK TO THAT SYSTEM AND MAKE IT MAKE ADJUSTMENTS ON THE MARGINS AS THEY'RE NEEDED. BUT THIS ALL SHOULD FEEL VERY FAIRLY FAMILIAR TO YOU, INCLUDING MY INTRODUCTORY REMARKS. SO IF YOU'LL BEAR WITH ME AS I GO THROUGH SOME OF THOSE. BUT I LIKE TO TRY TO SET THE TONE, THE BROADER PICTURE, AND THEN I'LL TURN IT OVER TO MR. HOLLOWAY. HOUSEKEEPING, AS THIS IS AN INFORMAL BUDGET WORKSHOP. SO, FEEL FREE TO GET UP AND MOVE ABOUT IF YOU THERE'S PLENTY OF FOOD HERE FOR YOU AS WE ALWAYS HAVE JUICE AND COFFEE AND ALL OF THAT. AND EVEN MEMBERS OF THE AUDIENCE CAN CERTAINLY AVAIL THEMSELVES TO IT BECAUSE LAST YEAR, FOR THE FIRST 30 MINUTES, I'M SORRY, DID YOU PREFER TO PLAY VIDEO? WE COULD, IF YOU'D LIKE, BUT IT MIGHT TAKE LONGER TO FIND IT AND PULL IT UP SO ANYWAY, WELL, MAYOR, CITY COUNCIL FELLOW, STAFF, ON BEHALF OF ALL OF US, I'M PLEASED TO PRESENT TO YOU THE BUDGET FOR THE UPCOMING 2425 FISCAL YEAR. IT'S HARD TO BELIEVE WE'RE AT 20 FISCAL YEAR 25 WHEN WE THINK ABOUT IT, AS ALWAYS, I BEGAN THESE REMARKS WITH A BIT OF A SUMMARY ABOUT THE ROLE AND PURPOSE OF BUDGETS IN OUR WORK TOGETHER, LIKE ALL BUDGETS, THIS ONE REPRESENTS A SNAPSHOT IN TIME THAT CAPTURES WHAT WE UNDERSTAND TO BE THE PRIORITIES OF THE CITY COUNCIL. NAMELY, IT IDENTIFIES THE RESOURCES NEEDED DURING THE NEXT FISCAL YEAR TO ENSURE THAT WE CAN SUCCESSFULLY 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 THAT YOU ADOPTED THIS PAST MAY, MUNICIPAL BUDGETS ARE ULTIMATELY A POLITICAL PROCESS IN THAT THE ELECTED OFFICIALS, ALL OF YOU, SIGNAL YOUR POLICY PRIORITIES BY LITERALLY AND FIGURATIVELY PUTTING MONEY WHERE YOUR MOUTHS ARE, IF YOU WILL, OR WHERE YOUR INTERESTS LAY, IF POLITICS IS FUNDAMENTALLY ABOUT WHO GETS WHAT, WHEN, WHERE, AND HOW MUCH, THEN THE BUDGET IS THE PRIMARY TOOL IN WHICH WE MAKE THE POLITICS WORK IN A LOCAL COMMUNITY, USING PROFESSIONAL AND TRANSPARENT PROCESSES. AS EACH BUDGET YEAR COMES TOGETHER, IT OFTEN SEEMS AS IF EACH BUDGET HAS A THEME OR A UNIQUE SETTING IN WHICH THEY ARE BEING SHAPED OVER THE PAST FOUR BUDGETS, WE RANGED FROM A COVID BACKDROP TO LABOR SHORTFALLS AND THE ATTENDANT GREAT RESIGNATION CHALLENGES TO HIGH INFLATION AND HIGH INTEREST RATES. OUR PROPOSED EFFECTIVE TAX RATES REFLECTED CHALLENGES IN EACH OF THESE YEARS, BUT WE'VE BEEN ABLE TO MAINTAIN EFFECTIVE RATES BELOW THE CPI. WE THINK THIS IS IMPORTANT IN DOING OUR SHARE TO KEEPING PRESSURE OFF THE TAXPAYERS, AND IT COMPELS US TO FIND PRODUCTIVITY IMPROVEMENTS AND WAYS TO DELIVER SERVICES. A GREAT VALUE. YOU WILL SHORTLY SEE SOME INFORMATION THAT ILLUSTRATES THE HISTORY OF EFFECTIVE RATES WITH RESPECT TO CPI. THE DIFFERENCE BETWEEN THOSE LINES, WHICH YOU'LL SEE, THE LINE BETWEEN CPI AND WHAT THE EFFECTIVE RATES ARE THAT HAS TO BE MADE UP WITH PRODUCTIVITY IMPROVEMENTS OR SERVICE REDUCTIONS. WE'RE OPTING FOR PRODUCTIVITY IMPROVEMENTS IN OUR BUDGET PROPOSAL FOR FISCAL YEAR 25. WE ARE CONTINUING TO WRESTLE WITH HIGH INTEREST RATES, WHICH HAS SERVED AS A BRAKE ON ECONOMIC GROWTH. NATIONAL CPI IS 3% IN THE 12 MONTHS ENDED JUNE 2024. OUR REGIONAL CPI IS HIGHER, HOWEVER, AT 5.03%, WHICH LIKELY REFLECTS CONTINUING ROBUST ECONOMIC GROWTH AND LABOR SHORTAGES IN KEY SECTORS IN THE DFW REGION. AS STATED A MINUTE AGO, WE ARE UTILIZING TECHNOLOGY AND EQUIPMENT THAT HELPS US MAKE MORE PRODUCTIVE USE OF OUR LABOR AND RESOURCES, WHICH IN TURN ENABLES US TO CONTINUE TO KEEP OUR EFFECTIVE RATE INCREASES BELOW THE RATE OF INFLATION. FOR FISCAL YEAR 25, WE ARE PROPOSING A BUDGET THAT REPRESENTS AN EFFECTIVE RATE INCREASE OF 2.97%, WHICH IS BELOW THE NATIONAL CPI AND WELL BELOW THE CPI FOR THE DFW REGION. WE MAY BE A CITY IN THE HEART OF TEXAS AND AMERICA, AND CERTAINLY THE CENTER OF THE WORLD. BUT WE ALSO HAVE TO NOTE THAT EVENTS ON THE GLOBAL STAGE DO HAVE AN IMPACT ON US WAR. CONTINUED DISRUPTION TO GLOBAL SHIPPING ROUTES FROM REGIONAL CONFLICTS, SO-CALLED DE-GLOBALIZATION DEMOGRAPHIC AGING. ALL THESE WILL PLACE AN UPWARD PRESSURE ON PRICES. LONG TERM STRUCTURAL CAPITAL COSTS ARE LIKELY TO INCREASE OVER[00:05:03]
TIME, MEANING THAT WE SHOULD PLAN TO OPERATE IN A HIGHER INTEREST RATE ENVIRONMENT FOR SOME TIME. IN ADDITION, THE GLOBAL SECURITY THREATS ARE CAUSING CERTAIN RESHORING OF HIGH TECH MANUFACTURING THAT IS GOOD OVER THE LONG TERM, BUT IN THE SHORT TERM, IT WILL DRIVE HIGHER PRICES FOR LAND, LABOR, CAPITAL, HOUSING, CONSTRUCTION COSTS AND OTHER KEY INPUTS. WITH ALL OF THAT, ECONOMISTS GENERALLY AGREE THAT THE US SHOULD CONTINUE TO SEE ECONOMIC GROWTH, WITH GROWTH PROJECTED TO BE BETWEEN 1.5 AND 2% FOR THE REMAINDER OF 2024 AND WELL INTO 2025. MOVING CLOSER TO HOME OVER THE PAST YEAR, WE HAVE SEEN SIGNIFICANT GROWTH IN OUR TAXABLE VALUE IS NOW $39.7 BILLION, A 10% INCREASE OVER LAST YEAR. THIS INCLUDES 1.5 BILLION IN NEW VALUE AND ANOTHER 2.2 BILLION INCREASE IN EXISTING PROPERTY VALUES. THIS YEAR, WE ARE PROPOSING A BUDGET OF $219.4 MILLION IN THE GENERAL FUND, WHICH SERVES AS THE CITY'S OPERATING BUDGET. OUR ALL FUNDS BUDGET, WHICH, AS YOU KNOW, INCLUDES ENTERPRISE UTILITY FUNDS, INSURANCE FUNDS, CIP, ETC, TOTALS NEARLY $890 MILLION. WITH THESE RESOURCES, WE WILL CONTINUE TO FUND THE PROGRAMS THAT WE BELIEVE ARE CONSISTENT WITH THE CITY COUNCIL'S STRATEGIC PRIORITIES. HERE ARE A FEW. THE BUDGET CONTINUES TO PRIORITIZE PUBLIC SAFETY AS A KEY DRIVER IN THE COUNCIL'S PRIORITIES. AS FURTHER SUPPORTED IN OUR BI ANNUAL NATIONAL CITIZEN SURVEY. SPECIFICALLY, THIS PROPOSED BUDGET ADDS TEN NEW POSITIONS TO THE POLICE DEPARTMENT AND 11 FOR THE FIRE DEPARTMENT. SIX NEW POLICE FIRST RESPONDERS, TWO DETECTIVES, TWO FORENSIC INVESTIGATORS, AND UPGRADES TO THE INTERNAL SECURITY CAMERA SYSTEM TO FURTHER STRENGTHEN OUR INVESTIGATIVE EFFORTS. EIGHT FIREFIGHTERS AND TWO PUBLIC SERVICE OFFICERS FOR LOGISTICS AND FIRE DEPARTMENT. THE PROPOSED BUDGET WILL FUND EMPLOYEE STEP INCREASES AND MARKET ADJUSTMENTS TO ENSURE THAT THEIR SALARIES ARE MARKET COMPETITIVE AND THAT WE CONTINUE TO MAKE PROGRESS TOWARD RECOGNIZING AS MENTIONED IN PART, THROUGH SALARIES, OUR PRODUCTIVITY ADVANTAGE OVER NEIGHBORING CITIES. AS WE'VE MENTIONED EARLIER, AND THE BUDGET PROVIDES FUNDING TO ENSURE THAT OUR HIGH CUSTOMER SERVICE FUNCTIONS WILL CONTINUE TO FLOURISH WITH THE USE OF MODERN EQUIPMENT, VEHICLES, AND PRODUCTIVE TOOLS FOR OUR EMPLOYEES TO UTILIZE. SPECIFIC TO THE STRATEGIC PLAN YOU ADOPTED IN MAY, I WOULD LIKE TO HIGHLIGHT A FEW THINGS TO DEMONSTRATE HOW THE PROPOSED BUDGET ALIGNS WITH YOUR GOALS. UNDER THE CATEGORY OF STRATEGIC AND ECONOMIC GROWTH, THE COUNCIL ADDED. HIGH SPEED DIGITAL CONNECTIVITY AND EMPHASIS ON MCKINNEY BECOMING A LIVE WORK AND PLAY COMMUNITY. THE BUDGET INCLUDES CONTINUED CIP AND GENERAL FUND FUNDING FOR PARKS AND RECREATIONAL OPPORTUNITIES. CONTINUES TO INCLUDE ROBUST PROGRAMS AND ECONOMIC AND COMMUNITY DEVELOPMENT EFFORTS, INCLUDING OVER 24.5 MILLION IN SALES TAX DOLLARS ATTRIBUTED TO EACH OF OUR MEDIC AND CDC COMPONENT UNITS. THE PROPOSED CIP BUDGET INCLUDES SIGNIFICANT DOWN PAYMENTS TOWARD IMPROVING OUR STREETS AND UTILITY INFRASTRUCTURE, A MAJOR POINT OF EMPHASIS OF THE CITY COUNCIL AND OUR COMMUNITY IN GENERAL. YOU ALSO DIRECTED STAFF TO BUILD ON OUR OPERATIONAL EXCELLENCE, WHICH INCLUDES RESEARCH AND ADOPTION OF NEW TECHNOLOGIES, INCLUDING SELECT SMART CITIES TECHNOLOGIES TO AUGMENT OUR SERVICE LEVELS. SO THE BUDGET INCLUDES NEW AND REPLACEMENT EQUIPMENT FOR OUR PUBLIC WORKS AND PARKS AND RECREATION DEPARTMENTS, NEW IT SOFTWARE, EQUIPMENT AND INCREASED EFFORTS TO ENSURE FAIL SAFE CYBERSECURITY. LAST YEAR, WE MENTIONED THE IMPLEMENTATION OF A NEW POLICE BODY CAMERA SYSTEM, WHICH OFFERED US MORE SECURE STORAGE AND INTEGRATED ENVIRONMENT THAN THE INCUMBENT SYSTEM THIS YEAR. INCLUDED IN THE BUDGET ARE MORE UPGRADES TO THAT VERY CAMERA SYSTEM. ALL KEY INTERNAL SERVICE FUNCTIONS THAT HELP KEEP OUR ORGANIZATION RUNNING, FUNCTIONING AND LEON MARK'S UPCOMING UPCOMING PRESENTATION WILL FURTHER ILLUSTRATE HOW WE COMPARE WITH OTHER COLLIN COUNTY CITIES WITH RESPECT TO PRODUCTIVITY AND THE NUMBER OF RESIDENTS SERVED PER EMPLOYEE. PROVISION IS MADE IN THIS BUDGET TO BEGIN DEVELOPING A MORE COMPREHENSIVE AND UNIFIED DATA MANAGEMENT SYSTEM, OR DATA LAKE AS IT'S REFERRED TO. THE PURPOSE IS TO MARSHAL OUR DATA RESOURCES, TO ORGANIZE AND MINE OUR DATA FOR BETTER BASED, DATA BASED DECISION MAKING. THE BUDGET ALSO PROPOSES TO ADDRESS OUR COMMUNITY NEEDS THROUGH A PER CAPITA APPROACH TOWARD COMMUNITY PROGRAM FUNDING. THIS WAS NEW IN THE FISCAL YEAR 23 BUDGET, AND WAS INTENDED TO BRING MORE CLARITY AND PREDICTABILITY TO COMMUNITY FUNDING FOR THE PROPOSED BUDGET.THIS IS THIS NUMBER IS $3.08 PER CAPITA, WHICH IS ABOUT $675,000. PLEASE NOTE THAT THERE IS ONE LOOSE END RELATED TO THESE FUNDS, AND WE'RE GOING TO DISCUSS THAT AT THE END OF THE BUDGET PRESENTATION THIS MORNING. THERE ARE SEVERAL CIP BUDGET ITEMS. CITY HALL CONSTRUCTION IS WELL UNDERWAY AND ON SCHEDULE FOR COMPLETION IN THE FOURTH QUARTER OF 2024.
OUR AIRPORT RUNWAY SAW COMPLETION OF ITS SOUTH END EXTENSION AND WE'RE WE'RE EXPECTING THE NORTHERN SEGMENT TO BEGIN LATER THIS YEAR. WE CONTINUE TO EXPLORE THE BEST SCENARIOS FOR THE CITY COUNCIL TO CONSIDER WITH RESPECT TO PASSENGER SERVICE AND GENERAL AVIATION, AND MCKINNEY NATIONAL AIRPORT. PROVISION CONTINUES IN THE AIRPORT BUDGET CAN MAINTAIN OR CONTINUE EVALUATING AND DESIGNING FOR EXPANSION AT TKI. IN SUMMARY, THE PROPOSED FISCAL
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YEAR 25 BUDGET, LIKE ALL BUDGETS, IS A MATTER OF BALANCED PRIORITIES. SPECIFICALLY, WE WEIGHED THE DEMANDS OF A GROWING COMMUNITY WITH WHAT WE CAN REALISTICALLY DO WITHIN OUR REVENUE CONSTRAINTS AND BALANCING THE WAYS IN WHICH WE CAN IMPROVE THE QUALITY OF LIFE IN OUR COMMUNITY. FINALLY, I CONCLUDE WHERE I BEGAN BY STATING THAT A BUDGET ULTIMATELY CONVEYS WHAT YOUR PRIORITIES ARE FOR OUR COMMUNITY. IT'S A POLITICAL INSTRUMENT, AND THAT THOSE PRIORITIES ARE DETERMINED THROUGH THE REPRESENTATIVE PROCESS. IT'S ALSO A COMMUNICATION TOOL THAT CONVEYS CONVEYS THESE PRIORITIES TO ALL COMMUNITY STAKEHOLDERS. AND LASTLY, IT 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 YOU, CITY COUNCIL, ON BEHALF OF THE ENTIRE STAFF, THE ASSISTANT CITY MANAGERS AND I FEEL THAT THIS PROPOSED BUDGET BALANCES THOSE PRIORITIES AS ADOPTED BY THE COUNCIL. WITH THAT, I'M GOING TO TURN IT OVER TO CFO MARK HOLLOWAY AND BUDGET MANAGER TREVOR DOUGAN TO KICK OFF THE BUDGET PRESENTATION. THANK YOU, MR. HOLLOWAY. THANK YOU, PAUL.WE'LL GO AHEAD AND GET STARTED WITH THE, FORMAL PRESENTATION, I'D LIKE TO THANK MAYOR AND COUNCIL FOR, FOR BEING HERE TODAY. IT'S A PLEASURE TO PRESENT THE PROPOSED BUDGET FOR FISCAL YEAR 25, IT'S KIND OF REPRESENTS A CULMINATION OF A GREAT AMOUNT OF WORK, AND EFFORT FROM HUNDREDS OF CITY STAFF MEMBERS. I WANT TO SAY THANK YOU TO ALL OF THEM BEFORE WE BEGIN, I'D LIKE TO THANK EMPRESS AND TENACIOUS AND CITY SECRETARY'S OFFICE FOR PUTTING THIS ALL TOGETHER FOR US. THIS MORNING. AND ESPECIALLY I'D LIKE TO THANK TREVOR DAGEN AND PALOMA RODRIGUEZ FOR, FROM OUR BUDGET AND ABOUT A DOZEN DIFFERENT PEOPLE FROM FINANCE FOR HELPING US PRODUCE WHAT YOU SEE TODAY, HERE IS OUR AGENDA FOR THIS MORNING, WE'RE GOING TO COVER QUITE A, QUITE A BIT OF, OF AREA, THERE WILL BE SEVERAL DIFFERENT PEOPLE SPEAKING, YOU DON'T HAVE TO HEAR ME MUTTER THE ENTIRE TIME. AND WE FEEL AS PAUL MENTIONED, FEEL FREE TO ASK US QUESTIONS AT ANY TIME. IF I DON'T HAVE AN ANSWER IMMEDIATELY, WE HAVE PEOPLE STANDING BY TO GET IT, OR WE CAN GET IT IN THE IN THE COMING WEEKS. BEFORE WE GET TO THE NUMBERS, AND OUR, OUR RATE STUDIES, LET'S TAKE A FEW MINUTES JUST TO WALK THROUGH OUR VERY DELIBERATE PROCESS TO HOW WE PRODUCE A BUDGET EACH YEAR. SO LET ME BEGIN, AS PAUL SAID, KIND OF. HE BEGINS WHERE HE ENDS. I'M GOING TO BEGIN WHERE I ALWAYS BEGIN, WE JUST CALL THIS THE CIRCLE SLIDE. NOW, WE'VE ALL SEEN IT MANY TIMES. I KNOW THAT YOU HAVE. AND I WILL CONTINUE TO SHOW IT AGAIN AND AGAIN. EVERY TIME WE MEET. BUT THIS IS OUR BUDGET PROCESS, WE BEGAN EARLY IN THE CALENDAR YEAR, WITH OUR PLANNING PHASE. THIS INCLUDES STRATEGIC PLANNING DONE BY CITY COUNCIL. THE, THE ADOPTION OF OUR BUDGET GUIDELINES, AND RENEWAL OF OUR TEN YEAR PLANS.
SPRINGTIME. THEN, BRINGS US TO OUR OFFICIAL BUDGET KICKOFF AND THE BEGINNING OF OUR DEPARTMENT BUDGET PHASE, THIS IS WHEN THE DEPARTMENTS SUBMIT THEIR LINE ITEM BUDGETS TO FINANCE WITH REQUESTS TO EXPAND, EXTEND OR IMPROVE THEIR WORK PLANS. WE CALL THOSE THEIR SUPPLEMENTAL REQUESTS. AND THEN WE BEGIN TO COMPILE ALL THAT DATA. AS SPRING ENDS, SUMMER BEGINS, AND WE SHIFT TO THE CITY MANAGER'S PORTION OF THE PHASE OF THE BUDGET. DURING THIS PHASE, THE ENTIRE CITY MANAGER'S OFFICE MEETS WITH THEIR DEPARTMENTS, AND ULTIMATELY RECOMMEND THE BUDGET TO THE CITY COUNCIL. AND TODAY WE'VE REACHED A TRANSITION POINT AS WE MOVE TO OUR FOURTH DISTINCT PHASE, THE CITY COUNCIL REVIEW AND ADOPTION PHASE. AND THAT WILL TAKE PLACE OVER THE NEXT MONTH. THESE ARE THE GOALS AND STRATEGIES THAT WERE DEVELOPED AND AFFIRMED BY COUNCIL EARLIER THIS YEAR. PAUL HAS ALREADY MENTIONED THEM. THIS MORNING. WE USED THEM WHEN WE MAKE DECISIONS ABOUT EVERYTHING THAT GOES IN THE PROPOSED BUDGET, EVERY SUPPLEMENTAL THAT YOU WILL SEE THAT IS BEING RECOMMENDED MUST REFERENCE DIRECTLY ONE OF THESE GOALS, SPECIFICALLY AND FRANKLY, THE SETTING OF THEM EVERY YEAR REALLY HELPS DRIVE OUR PROCESS.
ONCE AGAIN, ANOTHER SLIDE SHOW EVERY YEAR JUST TO REMIND EVERYBODY WHAT WE'RE REALLY LOOKING AT. THE CITY OF MCKINNEY BUDGET TO US IS A THREE PART TOOL. IT'S A POLICY TOOL. PAUL MENTIONED SEVERAL TIMES THE COUNCIL'S ROLE IN SETTING THE POLICY, THIS HELPS US SET OUR PRIORITIES AND MOVES US TO THE MANAGEMENT SECTION. WHICH ALLOWS THE CITY MANAGER'S OFFICE AND DEPARTMENTS TO ALLOCATE RESOURCES. EFFICIENTLY AS POSSIBLE. AND THEN THOSE TWO
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PIECES FINALLY FLOW TO THE THIRD, THE COMMUNICATIONS PORTION, COMMUNICATES, SERVICE LEVELS TO CITIZENS AND TO STAFF OF HOW WE'RE GOING TO USE REVENUES AND WHAT, WHAT DIFFERENT PROJECTS AND PRIORITIES THAT, THAT WE HAVE FOR THE YEAR. SO OPERA, AS PAUL'S MENTIONED, ALSO, WE'RE TALKING ABOUT SNAPSHOTS IN TIME. OPERATING BUDGETS ARE OFTEN A SNAPSHOT IN TIME AND REACTIONARY TO WORLD OR LOCAL EVENTS. SO AS PART OF OUR PLANNING PROCESS, WE REFER TO TWO LONG RANGE PLANS THAT WE'VE DEVELOPED IN-HOUSE TO MAKE SURE WE ARE PLANNING, ADEQUATELY. THE FIRST IS THE GENERAL OBLIGATION DEBT SERVICE PLAN. IT OUTLINES OUR TOTAL DEBT CAPACITY AND IT MAINTAINS OUR INS RATE, PORTION OF THE TAX RATE, WE USE IT TO HELP PLAN ELECTIONS. AND THEN ALL OF OUR CAPITAL PROJECTS, GOING FORWARD, WE TURN AND THEN MARRY THAT TO A LONG TERM GENERAL FUND PLAN. IT'S A TEN YEAR PROJECTION OF REVENUES AND EXPENDITURES AND FINALLY, RECENTLY, WE'VE ADDED A CIP LEADERSHIP TEAM. I WANT TO TAKE JUST A LITTLE TIME TO MENTION THIS, IT'S COMPRISED OF MEMBERS FROM MANY DIFFERENT DEPARTMENTS OF THE CITY, AND THIS GROUP IS TASKED WITH USING OUR LONG RANGE DEBT SERVICE PLAN. AND, OUR LONG RANGE CAPITAL PLANS TO HELP US KIND OF FLOW OUR PROJECTS OVER THE NEXT FEW YEARS. AS PART OF THE PLANNING PART PURPOSES OF WE WERE TALKING ABOUT, OF THE DURING THE CIRCLE SLIDE, WE, WE PRODUCE BUDGET GUIDELINES THAT ARE AFFIRMED BY COUNCIL EACH YEAR, THESE ARE SOME OF THE JUST GENERAL GUIDELINES THAT WE USE TO PRODUCE THE BUDGET THAT YOU SEE TODAY, WE HAVE A FULLY FUNDED AND BALANCED BUDGET WITH A WE FEEL A CONSERVATIVE TAX LEVY. WE MAKE SURE THAT THAT BUDGET, HAS THE PROPER, PAY STRUCTURES BASED ON OUR MEET AND CONFER AGREEMENTS FOR POLICE AND FIRE AND THAT WE MAINTAIN OUR MINIMUM FUND BALANCES AND RESERVES THAT ARE REQUIRED BY OUR CITY'S FINANCIAL POLICIES. IF YOU RECALL, WE WILL WE UPDATE THOSE POLICIES AND ADOPT THOSE POLICIES EVERY YEAR AS PART OF THE BUDGET PROCESS. AND, YOU CAN SEE THAT, THAT, THAT WE WERE REQUIRED TO HAVE 25% OF BUDGET EXPENDITURES. WE DO HAVE, WE DO HAVE A LITTLE BIT MORE THAN THAT, AND WE DO TRY TO MAINTAIN THAT FOR BOND RATING PURPOSES ON THE UTILITY FUND SIDE, WE TRY TO MAKE SURE THAT OUR, OUR THE LONG TERM FINANCIAL, STABILITY OF THE FUND IS, IS SAFE AND THAT WE IMPLEMENT RATE ADJUSTMENTS AS RECOMMENDED BY APPROPRIATE RATE STUDIES OR RATE ADJUSTMENTS. AND I SAY THAT BECAUSE, NOW WOULD BE A GOOD TIME, TO INVITE OUR, OUR FRIEND DAN JACKSON FROM WILLDAN CONSULTING UP TO GIVE US HIS YEARLY UPDATE ON OUR WATER AND WASTEWATER RATE STUDY. IN ADDITION, DAN AND HIS GROUP HAVE ALSO, AT OUR REQUEST, TAKEN A LOOK AT OUR DRAINAGE FUND. WE'VE BEEN PLANNING TO DO THAT FOR SEVERAL YEARS. WE HAVE THE RESULTS OF THAT TODAY. WE HAVE A COMPREHENSIVE PLAN GOING FORWARD WITH OUR DRAINAGE FUND. HE'S HERE TO SHARE HIS FINDINGS, DAN, I BELIEVE YOU HAVE A PLANE TO CATCH TODAY. SO, WE WILL, WE'LL LET YOU MOVE UP HERE IN THE ORDER, AND I WILL BE QUIET AND LET YOU, LET YOU SPEAK. THANK YOU. DID YOU. DID YOU WANT TO? YES THERE YOU GO. GREAT. THANK YOU VERY MUCH. MAYOR. MEMBERS OF THE COUNCIL, I AM DAN JACKSON, VICE PRESIDENT OF WILLDAN, WE HAVE HAD THE PRIVILEGE OF BEING THE CITY'S WATER AND WASTEWATER RATE CONSULTANTS FOR THE PAST DECADE, AND WE REALLY APPRECIATE THE OPPORTUNITY TO COME AND TALK WITH YOU AGAIN TODAY. I'M ALSO ACCOMPANIED BY MY COLLEAGUE, MR. DAN LANNING, WHO HAS BEEN AN INTIMATE PART OF THIS PROCESS FOR THE LAST TEN YEARS. AND HE IS ALSO A RESIDENT OF THE CITY OF MCKINNEY. SO HE HAS A SPECIAL PURPOSE FOR, FOR BEING HERE TODAY. AS I SAID, AS MR. HOLLOWAY INDICATED, IT THE CITY HAS ALWAYS BEEN VERY, VERY PROACTIVE IN THE DEVELOPMENT OF ITS WATER AND WASTEWATER RATE POLICY. THIS IS IMPORTANT BECAUSE WITH REGARDS TO WATER AND SEWER RATES, THE CITY HAS A LOT OF CHALLENGES THAT IT'S FACING OVER THE NEXT DECADE. ONE IS, OF COURSE, THE CHALLENGE OF GROWTH AND ENSURING THAT YOU HAVE A WATER AND SEWER SYSTEM THAT IS ABLE TO MAINTAIN AND SERVICE THE ADDITIONAL GROWTH YOU ALSO HAVE SUPPLY CHALLENGES HERE IN NORTH TEXAS. SO WATER IS BECOMING A PRECIOUS AND DIMINISHING NATURAL RESOURCE, AND IT'S IMPORTANT THAT WE CONTINUE TO PROVIDE FOR THAT SERVICE. AND, AT THE SAME TIME,[00:20:06]
WATER AND SEWER COSTS ARE GOING UP AT A VERY, VERY ASTONISHING RATE. AND SO IT IS IMPORTANT THAT WE SET A POLICY THAT NOT ONLY ENABLES US TO PROVIDE WATER AND SEWER SERVICES FOR THE FUTURE, BUT ALSO TO DO IT IN A WAY THAT MINIMIZES THE IMPACT ON OUR RATEPAYERS AS WE GO FORWARD.SO THAT IS ONE OF THE REASONS WHY WE DO THESE UPDATES ON AN ANNUAL BASIS. SO WHAT I'M GOING TO DO IN TODAY'S UPDATE IS I'M FIRST GOING TO GO THROUGH OUR WATER AND SEWER RATES. AND THEN, AS MR. HOLLOWAY INDICATED, WE'RE GOING TO TALK A LITTLE BIT ABOUT YOUR STORM WATER DRAINAGE AS WELL. SO, I WANT TO START BY JUST KIND OF GIVING YOU THE HEADLINES HERE. WITH REGARDS TO YOUR BUDGET, YOUR BUDGET IS VERY MUCH IN LINE WITH WHAT WE HAVE BEEN PROJECTING IN THE PAST WITH REGARDS TO WHERE YOUR WATER AND SEWER EXPENSES WERE GOING TO BE. BUT THERE HAVE BEEN A COUPLE OF CHANGES SINCE LAST YEAR. ONE CHANGE INVOLVES NORTH TEXAS MUNICIPAL WATER DISTRICT. WHO IS THE SUPPLIER OF YOUR WATER RESOURCE? NORTH NORTH TEXAS IS BY FAR THE BIGGEST IMPACT ON YOUR WATER AND SEWER BUDGET. SO WHEN THEY CHANGE THEIR POLICY, IT'S GOING TO HAVE A IT'S GOING TO HAVE A BIG IMPACT ON WHAT YOUR RATEPAYERS ULTIMATELY PAY. SO I'VE GOT SOME GOOD NEWS AND SOME BAD NEWS FOR YOU. THE GOOD NEWS IS THAT NORTH TEXAS WATER RATE INCREASE HAS BEEN SCALED BACK FAIRLY SIGNIFICANTLY FROM WHERE THEY THEY SAID YOU WOULD BE THIS YEAR. SO THEIR WATER COSTS WHILE THEY ARE STILL CONTINUING TO GO UP ARE NOT GOING TO GO UP AS MUCH AS WHAT THEY SAID LAST YEAR. THAT'S THE GOOD NEWS. THE NOT SO GOOD NEWS IS THAT THEIR WASTEWATER INCREASES ARE GOING TO BE HIGHER THAN WHAT THEY ANTICIPATED IT WOULD BE LAST YEAR. NOW, SOME MORE GOOD NEWS WITH REGARDS TO YOUR WATER AND SEWER FUND. IS THAT THE DEBT REQUIRED TO FUND YOUR CAPITAL IMPROVEMENT PLAN HAS DECREASED FROM WHERE WE AND THE CITY STAFF THOUGHT IT WOULD BE LAST YEAR. AND ONE OF THE MAIN REASONS FOR THIS IS THAT YOU HAVE, YOUR STAFF HAS SUCCESSFULLY MANAGED TO GET ADDITIONAL GRANT FUNDING AND OF COURSE, THE MORE GRANT FUNDING YOU GET, THE LESS THE BURDEN IS GOING TO BE ON YOUR RATEPAYERS. SO THE COMBINATION OF NORTH TEXAS'S CHANGES, THE BUDGET AND THE GRANT FUNDING HAS MEANS THAT THE RATE ADJUSTMENT THAT WE'RE GOING TO RECOMMEND THIS YEAR IS GOING TO BE LESS THAN WHERE WE THOUGHT, WHERE WE PROJECTED IT WOULD BE LAST YEAR. IT'S STILL GOING TO BE YOUR RATES ARE STILL GOING TO HAVE TO GO UP, BUT THEY'RE GOING TO GO UP AT A LESS IN PACE THAN WHAT WE THAN WHAT THE 2022 OR 2023 ESTIMATE WAS GOING TO BE. SO JUST A COUPLE OF QUICK BACKGROUND SLIDES HERE. I WON'T SPEND A WHOLE LOT OF TIME ON THIS, BECAUSE I KNOW YOU'VE GOT A PRETTY FULL AGENDA HERE. THE AVERAGE RESIDENTIAL RATEPAYER HERE IN THE CITY USES SOMEWHERE AROUND 10,000 GALLONS OF WATER IN A MONTH, AND THEY USE ABOUT 5000 GALLONS OF WASTEWATER SERVICE A MONTH. THAT RATEPAYER PAYS $129.90 FOR THAT SERVICE. THIS CHART COMPARES WHAT A MCKINNEY RATEPAYER PAYS TO WHAT OTHER DFW, AND NORTH TEXAS CUSTOMERS PAY. AS YOU CAN SEE, YOU'RE RIGHT ABOUT IN THE AVERAGE YOU PAY MORE THAN SOME, YOU PAY LESS THAN OTHERS. SO YOUR RATEPAYERS ARE CERTAINLY DO NOT PAY A DISPROPORTIONATE AMOUNT FOR WATER AND SEWER SERVICE. THEY PAY RIGHT ABOUT WHAT EVERYBODY ELSE PAYS FOR THAT SERVICE, A LITTLE BIT OF BACKGROUND ON THE SIZE OF YOUR SYSTEM RIGHT NOW. YOU HAVE ABOUT 73,400 WATER ACCOUNTS AND ABOUT 68,000 WASTEWATER ACCOUNTS. WE'RE STILL PROJECTING A VERY HEALTHY AND ROBUST AMOUNT OF GROWTH FOR THE FUTURE, WE'RE PROJECTING THAT THE CITY IS GOING TO GROW BY ABOUT 2400 NEW WATER ACCOUNTS. AND WASTEWATER, AND ABOUT 2200 WASTEWATER ACCOUNTS OVER THE NEXT DECADE. LOOK GROWTH, GROWTH THAT IS MANAGED PROPERLY CAN BE VERY BENEFICIAL FOR A UTILITY. THE REASON FOR THAT IS THAT MOST OF THE COSTS OF A WATER SYSTEM ARE FIXED. SO THE MORE ACCOUNTS YOU HAVE, THE MORE CUSTOMERS YOU HAVE TO SPREAD THOSE COSTS OVER.
SO AS LONG AS YOU MANAGE THE GROWTH PROPERLY, YOU CAN DO THAT IN A WAY THAT BENEFITS NOT ONLY YOUR NEW CUSTOMERS, BUT YOUR EXISTING CUSTOMERS AS WELL. AND I WILL TELL YOU, AS A CONSULTANT WHO IS SOMEBODY WHO'S BEEN DOING THIS FOR 40 YEARS, I THINK THE CITY OF MCKINNEY HAS DONE AN EXTRAORDINARILY GOOD JOB AT MANAGING ITS GROWTH DEMANDS, MANY THIS IS THE KIND OF GROWTH THAT WOULD OVERWHELM MANY OTHER CITIES. AND I'VE SEEN THAT IN OTHER CITIES, PARTICULARLY IN OTHER STATES WHERE THE GROWTH IS JUST SIMPLY OVERWHELMED. THE COMMUNITY. YOU GUYS HAVE DONE A GREAT JOB AT MANAGING YOUR GROWTH, AND IT HAS REALLY BENEFITED YOUR WATER AND WASTEWATER CUSTOMERS. THIS CHART RIGHT HERE IS CHARTS THAT, YOU KNOW, WATER GEEKS LIKE ME REALLY LIKE BECAUSE IT SHOWS WHERE YOUR YOUR, YOUR HISTORICAL AND YOUR PROJECTED GROWTH. THE BLUE LINES IS THE BLUE BARS IS WHAT YOUR HISTORICAL GROWTH HAS BEEN OVER THE LAST SEVERAL YEARS. YOU CAN
[00:25:01]
SEE, YOU KNOW, IT'S GENERALLY TRENDS UP, BUT WATER CONSUMPTION OF COURSE IS GOING TO BE HIGHLY DEPENDENT ON WEATHER. IN WET YEARS, LIKE IN 2020 AND 2021, YOU'RE GOING TO HAVE LESS OIL USAGE, AND IN DRIER YEARS YOU'RE GOING TO HAVE A LITTLE BIT MORE USAGE. BUT THE TREND IS FAIRLY UP. WHAT'S INTERESTING IS THAT WE'RE ACTUALLY PROJECTING A LITTLE BIT LESS WATER USAGE THIS YEAR THAN WHAT WE PROJECTED LAST YEAR, BUT GENERALLY WITHIN THE MARGIN OF ERROR. BY THE YEAR 2034, YOU'RE PROJECTED TO SELL ALMOST 15 BILLION GALLONS OF WATER. THAT'S A LOT OF WATER.NOW, AS I SAID EARLIER, ONE OF THE BIGGEST INPUTS INTO ANY FORECAST FOR THE CITY OF MCKINNEY'S WATER AND SEWER CUSTOMERS IS GOING TO BE WHAT NORTH TEXAS IS CHARGING YOU.
THIS CHART RIGHT HERE SHOWS YOU WHAT THEY SAID THAT YOUR RATES WOULD BE IN APRIL OF 2023, AS OPPOSED TO WHAT THEY'RE NOW SAYING YOUR RATES ARE GOING TO BE. THE RED LINE IS THE APRIL 2023 FORECAST. IT IT SAID THAT NORTH TEXAS SAID THAT YOUR RATE WOULD BE $4.16 PER 1000 GALLONS FOR THE COMING YEAR. THEY'RE THEY'RE NOW SAYING THAT THAT RATE IS ONLY GOING TO BE $3.85.
SO THAT'S A PRETTY SIGNIFICANT DECREASE. IN OTHER WORDS, LAST YEAR THEY SAID THAT THIS YEAR YOU WERE GOING TO GET ABOUT A 9 TO 10% INCREASE IN THE NORTH TEXAS RATE. NOW IT'S 4%. AND THAT RATE IS GOING TO BE LESS IN THE NEXT SEVERAL YEARS. AS YOU CAN SEE, THEY PROJECTED THAT BY 2027, LAST YEAR, THEY SAID THE RATE WOULD BE $5.36. NOW IT'S ONLY GOING TO BE $4.77. AND SO THAT'S THE GOOD NEWS. THE BAD NEWS IS IT'S GOING TO CATCH UP BY ABOUT 2023 BY I'M SORRY, BY ABOUT 2033, THE RATE IS GOING TO PRETTY MUCH BE THE SAME AS WELL. BUT BUT THE GOOD NEWS IS THAT YOUR RATE INCREASES FOR NORTH TEXAS ON THE WATER SIDE ARE GOING TO BE LESS OVER THE NEXT SEVERAL YEARS, AND WE'RE ABLE TO PASS THOSE SAVINGS ON THROUGH TO YOUR CUSTOMERS. THIS, HOWEVER, IS YOUR WASTEWATER VOLUMETRIC RATE. THE RED LINE IS YOUR APRIL 2024 FORECAST, AND THE BLUE LINE IS WHAT THEY SAID IT WOULD BE LAST YEAR. AND UNFORTUNATELY, IT'S GOING TO BE A LITTLE BIT HIGHER. LAST YEAR THEY SAID THAT YOUR WASTEWATER RATE WOULD BE $3.06 PER THOUSAND GALLONS. NOW THEY'RE SAYING IT'S GOING TO BE 333. SO WHILE THE WATER RATE INCREASES HAVE BEEN LESS, THE WASTEWATER RATE INCREASES HAVE BEEN MORE. AND THEY'RE PROJECTED OVER THE NEXT 5 TO 10 YEARS TO BE SIGNIFICANTLY GREATER. WHAT ARE THE CONTRIBUTING FACTORS TO THAT? MARK, DO YOU WANT TO RESPOND TO THAT? BECAUSE I KNOW YOU'VE BEEN ATTENDING THE NORTH TEXAS MEETINGS AND, PAUL, YOU CAN FEEL FREE TO JUMP IN AS WELL. BUT, SOME OF IT IS A LOT OF IT IS THEIR, COST OF SERVICE AND THEIR CAPITAL NEEDS AS FAR AS AS GROWING THEIR SYSTEM, I THINK THAT PRETTY MUCH THE ON THE, ON THE POTABLE WATER SIDE, THEIR VARIABLE COSTS HAVE COME DOWN THEIR COSTS FOR CHEMICALS AND INPUTS SUCH AS THAT WHERE THEY SPIKED. A LOT OF IT WAS THROUGH GLOBAL SHIPPING AND SOME OF THE OTHER THINGS THAT WERE INTERRUPTED. AND THOSE COSTS HAVE STABILIZED AND COME DOWN.
SO THEY'RE ABLE TO PASS THAT ON. ON THE WASTEWATER SIDE, I THINK IT'S WHAT MARK'S TALKING ABOUT.
THEIR CAPITAL COSTS ARE HIGHER THAN THEY ANTICIPATED. THEY'RE HAVING TO BUILD SISTER GROVES.
THEY'RE HAVING TO BUILD SOME ENORMOUS, WASTEWATER LINES THAT THEY'RE PLANNING FOR TO CONNECT.
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
[00:30:03]
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
AND IF I COULD JUST WEIGH IN COULD WE. MARK, COULD YOU EXPAND ON THE GRANT FROM COLLIN COUNTY JUST TO REMIND THE COUNCIL AND FOR MEMBERS OF THE PUBLIC JUST SO THEY'RE AWARE OF THAT? SURE.
THE UTILITY RELOCATIONS, RIGHT? YES. AND COLLIN COUNTY IS TAKING ON, I BELIEVE THERE WERE A LOT OF MEETINGS, MR. MAYOR, AND WITH WITH STAFF AND TO GET, COLLIN COUNTY HAS AGREED TO HELP US WITH OUR, TEX DOT, FUNDING OF THE 380 BYPASS. AND IF YOU RECALL, LAST YEAR, AS WE WERE, PREPARING FOR, FOR WATER RATES, WE WERE PREPARING WITH THE WORST CASE SCENARIO THAT WE WOULD NOT SEE ANY OF THOSE DOLLARS. SO WE HAVE BEEN ABLE TO PULL THAT BACK. AND THEN ALSO SO JUST, THAT'S THAT'S WHERE THOSE NUMBERS COME FROM. THANK YOU. OKAY SO THIS CHART RIGHT HERE SHOWS THE TOTAL COST THAT YOU ARE FORECAST TO INCUR IN THE UPCOMING FISCAL YEAR 2025 FOR WATER SERVICE AND FOR WASTEWATER SERVICE. ONE OF THE REASONS I'VE ALWAYS LIKED SHOWING THIS CHART IS THAT IT REALLY ILLUSTRATES THE IMPACT OF NORTH TEXAS MUNICIPAL WATER DISTRICT ON YOUR WATER AND SEWER COST OF SERVICE. YOU CAN SEE FROM THE PIE CHART HERE THAT YOUR WATER COST IS EXPECTED TO BE $86.5 MILLION IN THE COMING YEAR, AND THAT'S ABOUT WHAT YOU WOULD EXPECT FOR A UTILITY OF THIS SIZE. BUT NORTH TEXAS IS 58% OF YOUR TOTAL COST. SO WHEN THEY CHANGE THEIR RATE STRUCTURE, IT HAS IS GOING TO RIPPLE THROUGH TO ALL OF YOUR RATEPAYERS. SAME THING IS TRUE ON THE WASTEWATER SIDE NORTH TEXAS IS 55% OF YOUR TOTAL COST. IN OTHER WORDS, NORTH TEXAS COSTS ARE GREATER THAN ALL OF YOUR OTHER WATER COSTS. OPERATING AND DEBT COMBINED. SO THAT'S WHY IT IS VERY IMPORTANT TO CONTINUALLY MONITOR WHAT NORTH TEXAS COSTS ARE. AND NORTH TEXAS COSTS HAVE BEEN CHANGING ON AN ANNUAL BASIS. THAT'S NO FAULT OF THEIRS. I MEAN, THESE COSTS ARE VERY DYNAMIC. THEY'RE THEY'RE QUITE VARIABLE, AND THEY'RE GOING TO CHANGE PRETTY RAPIDLY. AND IT IS CONTINGENT UPON ANY UTILITY IN ANY CITY TO STAY ON TOP OF THAT AND ADJUST YOUR OWN PLAN ACCORDINGLY. NOW, THIS IS YOUR TOTAL COST OF SERVICE FORECAST OVER THE NEXT TEN YEARS. AS YOU CAN SEE RIGHT NOW, IT'S COSTING YOU ABOUT $150 MILLION TO RUN YOUR WATER SYSTEM. THAT'S REFLECTED IN THE BAR CHART, THE, AND THAT COST IS EXPECTED TO BASICALLY DOUBLE OVER THE NEXT TEN YEARS TO OVER $300 MILLION. THE GOOD NEWS IS, IS THAT THE REVISED COST OF SERVICE FORECAST IS A LITTLE BIT LESS THAN WHERE WE PROJECTED IT WOULD BE LAST YEAR. THE LINE IS WHAT LAST YEAR'S FORECAST WAS. SO YOUR COST IS A LITTLE BIT LESS. AND THAT IS GOING TO BE SHOWN IN THE FORECAST RATE PLAN. SO BOTTOM LINE IS THIS WE ARE FORECASTING THAT YOU DO A WATER AND A WASTEWATER RATE ADJUSTMENT. THE WATER RATE ADJUSTMENT IS GOING TO BE FAIRLY SIGNIFICANTLY LESS THAN WHERE WE THOUGHT IT WOULD BE LAST YEAR. THE WASTEWATER RATE ADJUSTMENT IS GOING TO BE A LITTLE BIT HIGHER THAN WHERE WE THOUGHT IT WOULD BE LAST YEAR. THE BOTTOM LINE IS THAT THE OVERALL INCREASE IS PROJECTED TO BE LESS THAN WHAT WILL WHAT LAST YEAR'S FORECAST WAS GOING TO BE. THIS CHART RIGHT HERE IS YOUR RECOMMENDED RATES FOR YOUR WATER, FOR ALL OF YOUR WATER CUSTOMERS. I'LL FIRST SHOW YOU THE RATES THEMSELVES. THEN I'LL SHOW YOU THE IMPACT ON AN AVERAGE MONTHLY BILL. YOU CAN SEE WE'RE PROJECTING OR WE'RE RECOMMENDING THAT YOU INCREASE YOUR MONTHLY RESIDENTIAL MINIMUM CHARGE FROM $18.70 TO $19.05, AND WE AND WE RECOMMEND SIMILAR INCREASES FOR YOUR NONRESIDENTIAL BASE CHARGES. WE ALSO RECOMMEND INCREASES IN THE VOLUMETRIC RATE OF ABOUT 10 TO $0.20 PER THOUSAND GALLONS ACROSS EACH OF YOUR RATE BLOCKS ON THE WASTEWATER SIDE, WE RECOMMEND ADJUSTING YOUR MINIMUM
[00:35:07]
CHARGE FROM $24.55 TO $26, AND $0.75, WITH AN INCREASE OF ABOUT $0.50 $0.60. I'M SORRY, IN YOUR VOLUMETRIC RATE AND THE RATE ADJUSTMENT WILL BE SIMILAR FOR YOUR NON CUSTOMER. NON RESIDENTIAL CUSTOMERS AS WELL. SO THE KEY QUESTION EVERYBODY ALWAYS ASKS IS WHAT DOES THIS MEAN IN TERMS OF THE IMPACT ON YOUR AVERAGE CUSTOMER. REMEMBER HOW I SAID EARLIER THAT YOUR AVERAGE RESIDENTIAL CUSTOMER USES ABOUT 10,000 GALLONS OF WATER AND SEWER SERVICE A MONTH? THAT MEANS THAT ABOUT 70 TO 75% OF ALL MONTHLY BILLS ARE GOING TO BE 10,000 GALLONS OR LESS.THINK ABOUT HOW PEOPLE USE WATER. THEY USE LESS WATER IN THE WINTER, MORE IN THE SUMMER.
SO THEY HAVE 12 BILLS IN A YEAR. NINE OF THEM ARE GOING TO BE 10,000 GALLONS OR LESS. BUT SOMETIMES IN THE SUMMER MONTHS, JULY, AUGUST, SEPTEMBER, YOU'RE GOING TO USE A LITTLE BIT MORE WATER BECAUSE IT'S HOT AND YOU'RE WATERING YOUR LAWN. BUT A GOOD BENCHMARK FOR WHAT THE IMPACT IS GOING TO BE ON A RESIDENTIAL CUSTOMER WILL BE BETWEEN 5 AND 10,000 GALLONS. SO IF YOU'RE A 10,000 GALLON USER RIGHT NOW, YOU'RE PAYING $129.90. YOUR AVERAGE BILL WOULD GO UP BY ABOUT $6.70. UNDER THIS PLAN, IF YOU USE 5000 GALLONS, YOUR BILL WOULD GO UP BY ABOUT $6. SO FOR THE VAST MAJORITY OF YOUR CUSTOMERS, YOU'RE LOOKING AT AN INCREASE OF ABOUT 6 TO $7 A MONTH. UNDER THIS PLAN. COMMERCIAL CUSTOMERS WHO USE MORE WATER, OF COURSE, WOULD PAY A LITTLE BIT MORE. THIS CHART ALSO SHOWS THAT WE'RE PROJECTING SLIGHTLY HIGHER INCREASES IN 2025, 2026 AND 2027, AND THAT IS PRIMARILY DUE TO NORTH TEXAS, WHICH IS PROJECTING HIGHER PERCENTAGE RATE INCREASES IN 2025, 2026 AND 2027. NOW THIS CHART RIGHT HERE SHOWS YOU WHAT THE RATE PLAN IS AS OPPOSED TO WHERE WE PROJECTED IT WOULD BE LAST YEAR. SO YOU CAN SEE IT'S A LITTLE BIT LESS LAST YEAR WE TOLD YOU THAT THIS YEAR YOUR BILL WOULD GO FROM $129 TO $140.
SO IT'S ONLY GOING TO BE $136. I MEAN, IT'S NOT GREAT, BUT IT'S CERTAINLY LESS THAN WHAT WAS ANTICIPATED. AND THAT ONCE AGAIN SHOWS HOW IMPORTANT IT IS TO DO THESE ANNUAL UPDATES, BECAUSE BY DOING THIS ANNUAL UPDATE, YOU'RE ABLE TO PASS THROUGH THE COST SAVINGS FROM NORTH TEXAS, LESSER RATE INCREASES. SO WHILE IT'S NEVER EASY TO ASK RATEPAYERS TO PAY MORE, YOU CAN REST ASSURED THAT WE'RE DOING EVERYTHING WE CAN TO MINIMIZE THAT IMPACT ON AN ANNUAL BASIS. THIS RATE PLAN WILL ALSO ENABLE YOU TO CONTINUE TO PAY YOUR DEBT, CONTINUE TO EXPAND YOUR SYSTEM, AND TO CONTINUE TO PROVIDE A HIGH QUALITY OF WATER AND WASTEWATER SERVICE. SO NOW, AS MR. HOLLOWAY INDICATED, WE WANT TO SPEND JUST A COUPLE OF MINUTES TALKING ABOUT YOUR STORMWATER OR YOUR DRAINAGE FEES, LIKE MOST CITIES IN THE STATE OF TEXAS, YOU CHARGE ON A MONTHLY BASIS A DRAINAGE OR STORMWATER FEE FOR YOUR RESIDENTIAL AND YOUR NONRESIDENTIAL CUSTOMERS. SIDNEY MCKINNEY'S RATE RIGHT NOW IS $4 A MONTH FOR A RESIDENTIAL CUSTOMER. THAT MONTHLY FEE HAS NOT CHANGED IN A DECADE. IT'S BEEN THE SAME SINCE 2014. NOW, OF COURSE, SYSTEM HAS CHANGED PRETTY RADICALLY SINCE THEN. YOU HAVE. YOU'RE CONTINUING TO SEE A LOT OF ADDITIONAL GROWTH. THAT'S THAT GROWTH IS CONTRIBUTING TO INCREASED STORMWATER DRAINAGE COSTS AS WELL AS YOU PAVE OVER MORE OF THE CITY, YOU GENERATE MORE STORMWATER, AND THAT COST GOES UP IN IN MANAGING THAT STORMWATER. MOST OF THESE EXPENSES, LIKE EVERYTHING ELSE, IS EXPECTED TO GO UP BY 3 TO 5% A YEAR. AFTER ALL, COST OF EVERYTHING GOES UP 3 TO 4% A YEAR JUST DUE TO INFLATION. BUT THE KEY FACTOR IN YOUR DRAINAGE FUND IS THE NEED TO FUND ABOUT $40 MILLION IN CAPITAL IMPROVEMENTS OVER THE NEXT DECADE TO MANAGE THE INCREASED AMOUNT OF STORMWATER THAT IS FLOWING THROUGH YOUR SYSTEM. AND UNLIKE PRIOR YEARS, THE NEW PLAN IS ASSUMING THAT YOU ARE GOING TO FUND THIS ADDITIONAL DEBT DIRECTLY THROUGH THE STORMWATER FEE, AS OPPOSED TO DOING ANY KIND OF GENERAL OBLIGATION OR TAX BOND. SO AS A LITTLE BIT OF BACKGROUND, WHAT DO OTHER CITIES HERE IN THE DFW AREA CHARGE FOR STORMWATER? THIS CHART SHOWS THAT JUST ALL OF ALL OF THE DFW OR VIRTUALLY ALL OF THE DFW CITIES, MCKINNEY'S, MONTHLY FEE OF $4 IS RIGHT IN THE SWEET SPOT. THE AVERAGE IN THE IN THE STATE OF TEXAS IS $5.17 A MONTH FOR RESIDENTIAL. THE NATIONAL AVERAGE IS $6.05. BUT THE SWEET SPOT IS ABOUT 3 TO $6. AS YOU CAN SEE, MOST OF YOUR NEIGHBORS CHARGE SOMEWHERE BETWEEN 3 AND $6. DENTON FOR EXAMPLE, THE CITY I ACTUALLY LIVE IN THAT THAT FEE IS $5.45. PLANO IS $3.10. SOME CITIES. WELL, GOOD THING WE DON'T LIVE IN UNIVERSITY PARK
[00:40:08]
BECAUSE THEY CHARGE $31 A MONTH FOR STORMWATER DRAINAGE, ANOTHER INTERESTING. AGAIN INTERESTING BACKGROUND. AT LEAST GUYS LIKE ME THINK IT'S INTERESTING, BUT WHAT DOES WHAT DO STATES AROUND THE COUNTRY CHARGE? WELL, AS YOU CAN SEE, TEXAS AT $5.17 IS A LITTLE BIT BELOW THE NATIONAL AVERAGE. SOME STATES LIKE ALABAMA AND MISSOURI CHARGE VERY, VERY LITTLE IN TERMS OF STORMWATER FEES. BUT OTHER STATES ILLINOIS, OREGON, MINNESOTA CHARGE MORE THAN THAT.AND THE WINNER IS MICHIGAN, WHOSE STATE AVERAGE IS $15.32 A MONTH. YES, THEY GET A LOT OF RAIN UP IN MICHIGAN. I SUPPOSE, SO ON AS FAR AS YOUR STORMWATER SYSTEM IS CONCERNED, YOU CHARGE BASED ON WHAT'S KNOWN AS A SINGLE FAMILY UNIT EQUIVALENT, WHICH IS ABOUT 3000FTā S, OF IMPERVIOUS SURFACE AREA. AND THE NOW ALL OF YOUR RESIDENTIAL CUSTOMERS PAY THE SAME STORMWATER FEE, NO MATTER WHAT THEIR SIZE IS, BECAUSE, LOOK, YEAH, WE ALL KNOW THAT PEOPLE HAVE DIFFERENT SIZED HOUSES, BUT THE BUT THE BUT THE AMOUNT OF IMPERVIOUS SURFACE AREA GENERALLY GOES BETWEEN THREE, FIVE, 6000FTā S. IT'S NOT IT'S NT ENOUGH OF A DIFFERENCE FOR YOU TO TRY TO GO TO EVERY HOUSE AND FIGURE OUT HOW MUCH IMPERVIOUS SURFACE AREA IS. I MEAN, MY GOD, YOU'VE GOT 75,000 HOUSES HERE, SO YOU'RE NOT GOING TO DO THAT. BUT ON THE COMMERCIAL SIDE, YOU ARE GOING TO DO THAT BECAUSE THERE IS A VERY SIGNIFICANT DIFFERENCE IN IMPERVIOUS SURFACE AREA BETWEEN, SAY, A MOM AND POP FLOWER SHOP AND A WALMART THAT HAS A BIG PARKING LOT IN IT. SO WHAT YOU DO IS YOU ASSIGN THESE UNITS TO YOUR COMMERCIAL AREAS, SO YOU'RE GOING TO HAVE A WALMART OR A BIG COMMERCIAL CUSTOMER PAY A LOT MORE OF A STORM DRAINAGE FEE EACH MONTH.
AND THEY SHOULD, BECAUSE IF YOU HAVE A LARGE PARKING LOT, YOU'RE GENERATING A LOT MORE DRAINAGE, YOU'RE GENERATING A LOT MORE STORMWATER, AND YOU SHOULD PAY FOR THAT. AND THAT'S EXACTLY WHAT THIS SYSTEM DOES. SO THIS CHART RIGHT HERE SHOWS YOU THAT WHILE YOUR STORMWATER COSTS ARE EXPECTED TO INCREASE, YOUR OPERATING COSTS OF COURSE ARE GOING TO INCREASE 3 TO 5% A YEAR. THE REAL FACTOR IS GOING TO BE THE FUNDING OF THE DEBT FOR YOUR LONG TERM STORMWATER CAPITAL IMPROVEMENT PLAN THAT IS GOING TO RESULT IN YOUR STORMWATER COST OF SERVICE GOING FROM $5 MILLION A YEAR IN 2025, DOUBLING TO $10 MILLION BY 2034, AND THE YELLOW PORTION OF THAT IS THE DEBT SERVICE. AND THAT, OF COURSE, IS THE BIGGEST DRIVER. DAN, I WANTED TO MENTION THIS IS KIND OF A CHANGE FOR US, THE WAY WE'RE GOING TO BE FUNDING SOME OF THESE PROJECTS, FROM OUR STORMWATER DRAINAGE UTILITY, IN THE PAST, WE HAD SOME MORE MODEST NEEDS AND WE HAD BEEN FUNDING THOSE AS WE ISSUED OUR PROPERTY TAX DEBT EACH YEAR OR OUR GEO DATA. IN FACT, WE ISSUED ABOUT $4 MILLION OF DRAINAGE BONDS OR NOT, OF DRAINAGE DEBT THIS YEAR. BUT IT IS, IT WAS GOING TO BE HANDLED THROUGH THE PROPERTY TAX RATE. WE SEE THAT THERE IS A GREATER NEED, ESPECIALLY IT'S COMING, YOU KNOW, FROM ACROSS THE STREET. GARY AND ENGINEERING ARE LETTING US KNOW THAT WE HAVE THESE DEBT NEEDS THAT ARE, THAT ARE COMING, IN THE, IN THE NEAR FUTURE. SO WE WANTED TO BE ABLE TO, TO LEVERAGE THIS FEE TO TAKE SOME OF THAT BURDEN OFF THE PROPERTY TAX RATE BECAUSE WE, FRANKLY, HAVE OTHER PROJECTS THAT THAT ARE IN THE PIPELINE ON THE ON THE PROPERTY TAX SIDE. SO THIS IS THE REASON THAT ONE OF THE REASONS WE'RE HERE TODAY, ONE OF THE REASONS THAT WE DECIDED TO TAKE THIS IN THIS DIRECTION. SO I JUST WANTED TO JUST KIND OF, COLOR THAT IT'S STILL A RELATIVELY, I GUESS FOR THE AMOUNTS OF MONEY THAT WE'RE TALKING ABOUT, IT'S STILL A RELATIVELY MODEST AMOUNT OF INCREASE, BUT IT IS THE REASON THAT ONE OF THE DRIVING REASONS THAT WE'RE HERE TODAY. SO I JUST WANTED TO POINT THAT OUT. AND WHAT IS THAT IMPACT GOING TO BE? WELL, THIS IS THE PLAN THAT WE WOULD PROPOSE THAT YOU CONSIDER ADOPTING IN ORDER TO FUND THIS $39 MILLION DEBT ISSUANCE OVER THE NEXT FIVE YEARS, WE WOULD RECOMMEND THAT YOU ADJUST YOUR RESIDENTIAL STORMWATER FEE FROM THE CURRENT $4 AMOUNT TO $4.50 EFFECTIVE OCTOBER OF 2024. REMEMBER, THAT'S THE FIRST ADJUSTMENT IN A DECADE, SO IT WOULD GO TO $4.50 WITH THE ANTICIPATED NEED OF ADDITIONAL ADJUSTMENTS OVER THE NEXT FOUR YEARS TO $5.25 IN OCTOBER OF 2025, 550 IN 2026, AND $6.50 BY 2027. NOW, WE BELIEVE THAT ONCE YOU HIT 650, YOU OUGHT TO BE ABLE TO TOP THAT OUT FOR THE NEXT SEVERAL YEARS. WE DON'T
[00:45:01]
ANTICIPATE ANY FURTHER INCREASES UNLESS YOU ISSUE A LOT MORE DEB, AND THAT IS ALWAYS A POSSIBILITY, GIVEN THE FACT THAT CAPITAL COSTS HAVE BEEN GOING UP AT THE RATE THAT THEY HAVE BEEN.BUT THIS PLAN, THIS PLAN TO FUND THE $39 MILLION IN DEBT AND TO FUND THE OPERATING INCREASES WOULD, OVER THE NEXT FOUR YEARS, GRADUALLY ADJUST YOUR $4 FEE TO $6.50, $0.50 THIS YEAR, $0.75 IN OCTOBER 2025, $0.25 IN 2026, AND A DOLLAR IN 2027. AND WE WOULD ALSO RECOMMEND THAT YOU LIKE THE WATER AND SEWER RATES. LET'S JUST TAKE A LOOK AT THIS EVERY YEAR. LET'S SEE HOW MUCH DEBT YOU'RE ISSUING. CAN YOU CUT THAT BACK BY 2550, $0.75. YOU COULD DO THAT. WILL THE CAPITAL COST CHANGE? LET'S STAY ON TOP OF THIS AS WELL. BUT THIS IS OUR RECOMMENDATION FOR YOUR STORMWATER FEE. SO WITH THAT THAT REALLY CONCLUDES ALL MY PREPARED REMARKS. I JUST ONCE AGAIN WANT TO THANK YOU FOR THE OPPORTUNITY TO COME HERE ON AN ANNUAL BASIS. IT'S GREAT TO SERVE YOU ALL, AND I'D BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE AT THIS TIME. ANY QUESTIONS? IT WAS TREMENDOUSLY THOROUGH. THANK YOU VERY MUCH. APPRECIATE THAT. AS MR. HOLLOWAY SAID, I'M I HAVE TO LEAVE NOW. I'M OFF TO NEW YORK CITY TO VISIT MY DAUGHTERS. IT IS JUST A COMPLETE COINCIDENCE THAT THIS IS THE WEEKEND THAT THE RANGERS ARE PLAYING THE YANKEES AT YANKEE STADIUM, BUT I JUST PICKED THIS WEEKEND OUT OF THE BLUE TO GO UP AND SEE HIM. BUT ANYWAY, IT'S A BUCKET LIST THING. I'VE NEVER BEEN TO YANKEE STADIUM, SO I'M REAL EXCITED. ANYWAY, THANK YOU VERY MUCH. YOU ALL. THANK YOU. OH, I DID HAVE THE. OH, AND YES, I AM WEARING MY RANGERS JERSEY TOO BY THE WAY. SO THIS MAY BE THE LAST TIME YOU SEE ME SO THANK YOU ALL. THANK YOU DAN. SO NOW WE'D LIKE TO KIND OF BEGIN THE NUMBERS PORTION OF THE OF THE MORNING START KIND OF LOOKING AT AN OVERALL OVERVIEW OF THE 2025 BUDGET, WE'LL START WITH, IF YOU RECALL, WE HAD A BUDGET INPUT HEARING BACK IN APRIL, AT THAT TIME, WE ALSO KICKED OFF AN ONLINE SURVEY TOOL WE CALL IT A VIRTUAL TOWN HALL TO LET CITIZENS TELL US WHAT THEIR PRIORITIES FOR OUR BUDGET ARE. THIS YEAR, WE HAD 221 RESPONSES. THEIR RANKINGS ARE REPRESENTED HERE THAT YOU SEE ON THIS CHART. ALL COMMENTS ARE AVAILABLE AND WE WILL BE HAPPY TO PROVIDE EACH OF YOU WITH A HARD COPY OF THE RESULTS. THE LOWER THE NUMBER IS, THE HIGHER THE PRIORITY, FOR THE CITIZENS, THE NUMBERS ON THE BAR CHART ITSELF REPRESENT THE OVERALL RANK, AND THEN THE OVERALL AVERAGE ARE REPRESENTED BY THE BAR ITSELF, FOLLOWING ALONG THE BOTTOM AXIS, AS YOU CAN SEE, IT'S VERY CONSISTENT. THE TOP TWO PRIORITIES ARE, STREETS AND PUBLIC SAFETY. PUBLIC SAFETY AND STREETS, I GUESS BY BY THE ACTUAL ORDER. BUT THAT'S BEEN THE, THE CASE, EVERY YEAR THAT WE'VE HAD THIS SURVEY. AND I THINK, AS I SAY, PRETTY MUCH EVERY YEAR WE WILL FIND THAT THIS BUDGET IS ADDRESSING THOSE CONCERNS. SO THIS IS KIND OF A BIG OVERVIEW SLIDE. THIS IS WE CALL IT OUR BUDGET OPPORTUNITY SLIDE. OUR CURRENT TAX RATE, PROPERTY TAX RATE IS 0.427. THIS AS PAUL MENTIONED, WOULD, THE TAX RATE THAT IS BEING PROPOSED TODAY WOULD DECREASE THE PROPERTY TAX RATE BY 1.2 CENTS WITH THE PROPOSED TAX RATE FOR FISCAL YEAR 25 BEING 0.415513.
SALES TAX. WE TALK ABOUT IT A LOT. IT REMAINS STRONG. IT IS NOT SEEING THE EXPONENTIAL EXPANSION OF PREVIOUS YEARS. WE ARE ANTICIPATING THE SALES TAX TO REMAIN STEADY AT ABOUT 5%.
OUR INTERNAL MODEL THAT WE HAVE SUPPORTS THIS. AND ANECDOTALLY, WE HAVE SEEN THIS EXACT SAME GROWTH PATTERN IN THE LAST TWO FISCAL YEARS, ALMOST 5%. EXACTLY. SO THAT IS WHAT WE WILL BE PROJECTING FOR FISCAL YEAR 25. THIS THIS BUDGET ALSO PROVIDES MARKET ADJUSTMENTS FOR ALL NON-SWORN PERSONNEL, WHICH IS GENERAL GOVERNMENT EMPLOYEES. WE HAVE PROVIDED AN ALLOWANCE FOR THAT MARKET STUDY TO BE IMPLEMENTED. ALSO, STEP INCREASES FOR FISCAL YEAR 25.
ALSO, WE WILL BE MAKING ALL OF OUR PLANNED, STEP INCREASES FOR OUR SWORN PERSONNEL THAT ARE ALSO MANDATED BY THE MEET AND CONFER AGREEMENTS THAT WE HAVE, I WILL ALSO MENTION THE
[00:50:04]
CONTINUED FUNDING FOR STREET MAINTENANCE. THE COUNCIL SEVERAL YEARS AGO TOOK A MADE A DECISION TO REALLY BEGIN FUNDING OUR STREET MAINTENANCE AND REBUILDS AND RECONSTRUCTIONS, USING SOME OF OUR TYPE A AND TYPE B MONIES TO OFFSET SOME OF OUR, NEW CAPITAL CONSTRUCTION. SO WE'RE USING THOSE THOSE DOLLARS TO, TO DO SOME OF OUR REGULAR STREET MAINTENANCE, OUR NOT TO DO BUILD NEW ROADS AND USING SOME OF THOSE OTHER BOND DOLLARS THEN TO DO SOME RECONSTRUCTS, I CAN TELL YOU THAT WE ARE ALMOST EXACTLY ON FORECAST FROM WHAT WE SHOWED YOU IN FISCAL YEAR 23, FROM WHAT THE CITY WOULD BE RECEIVING FROM THE TYPE A AND TYPE B CORPORATIONS, FOR, FOR THE FIRST THREE YEARS, THOSE WILL CONTINUE TO RAMP UP AT HALF OF THE INCREMENT THAT WE TALKED ABOUT, OVER THE NEXT FEW YEARS. ONCE AGAIN, ALSO THIS, THIS BUDGET IS ADDRESSING STAFFING LEVELS.PAUL'S ALREADY MENTIONED THAT ON THE PUBLIC SAFETY SIDE, ADDING, SIGNIFICANT, POLICE AND FIRE, POSITIONS. WE WILL ALSO BE ADDING SEVERAL IN DEVELOPMENT SERVICES, PARKS AND RECREATION, PUBLIC WORKS, AND THEN OUR WATER AND WASTEWATER FUND, WILL ALSO BE SEEING SOME, STAFFING LEVEL INCREASES. THAT THEY NEED TO WORK TOGETHER, I DID WANT TO TAKE A SECOND TO UPDATE YOU ALL ON WHERE WE STAND WITH OUR BOND AND CIP PACKAGES. WE'LL TALK ABOUT THE CIP, WITH SOME, SOME SLIDES A LITTLE BIT LATER IN THE PRESENTATION. BUT I WANTED TO GIVE YOU A LARGER VIEW OF KIND OF WHERE WE STAND. AS YOU CAN SEE, WE HAVE LARGELY EXPENDED OUR 2019 PACKAGE, AND WE'VE ALREADY BEGUN. AS YOU KNOW, WE ISSUED BONDS, SOME OF OUR PARKS AND RECREATION BONDS FROM OUR 2024 PACKAGE. BACK EARLIER IN THE SUMMER. SO WE ARE MAKING VERY GOOD PROGRESS ON THE ON THE PROJECTS THAT WE HAVE PROMISED TO DO. AND WITH THAT, TREVOR. MINYARD WILL NOW TALK FOR A LITTLE WHILE ABOUT OUR PROPERTY TAX RATES AND WHAT WE'RE SEEING WITH OUR VALUES. AND, TREVOR, THANK YOU VERY MUCH. THANK YOU, MR. HOLLOWAY. WE WILL DO A HIGH LEVEL OVERVIEW OF KIND OF THE STATE OF THE CITY, IF YOU WILL, IN RELATION TO PROPERTY TAX AND THE VALUATIONS THAT WE'RE ENJOYING ACROSS ALL THE DIFFERENT TYPES OF, VERTICAL ASSETS THAT EXIST IN THE MCKINNEY AND HORIZONTAL AS WELL. THEN WE'LL GET INTO A LITTLE BIT OF DISCUSSION ABOUT THE TAX RATE AND THE COMPARISON TO WHAT PAUL MENTIONED IN HIS OPENING COMMENTS TO REGIONAL INFLATION.
AND THEN AT THE END, WE'LL TALK WE'LL SET THE STAGE FOR DISCUSSION ON OUR GENERAL REVENUES, OUR GENERAL FUND REVENUES AND OUR GENERAL FUND EXPENDITURES. SO REALLY STARTING HIGH LEVEL AND THEN FUNNELING DOWN INTO THE MEAT AND BONES OF THE BUDGET. SO TO KICK THAT OFF, MR. HOLLOWAY JUST MENTIONED FOR THE FIRST TIME THE PROPOSED TAX RATE AT 41.5 CENTS, WE HAVE A TEN YEAR LOOKBACK HERE WHERE YOU SEE, IN FISCAL YEAR 16, A 58.3 CENT TAX RATE, THAT'S ABOUT 16.5 CENTS, EXCUSE ME, 16.75 CENT REDUCTION OVER THAT TEN YEAR PERIOD. THAT SAID, THE RATE IS A FUNCTION OF YOUR VALUES. SO YOU SEE THE CORRESPONDING VALUES AND THE ORANGE BAR CHARTS, GOING UP CONSIDERABLY OVER THAT TEN YEAR PERIOD TO, BUT THIS IS JUST TO SHOW YOU AS OUR VALUES DO GO UP FROM AN ASSESSED VALUE PERSPECTIVE, THE CORRESPONDING IMPACT TO THE TAX RATE IS GENERALLY THAT THE TAX RATE GOES DOWN. BEFORE WE DIVE INTO THE MCKINNEY SPECIFIC VIEW OF OUR TAX VALUE MIX, OUR ASSESSED VALUE MIX, I SHOULD SAY, WE'VE TALKED ABOUT THIS SPECIFIC SLIDE A FEW YEARS NOW TO GIVE A LAY OF THE LAND FOR THE MAJOR CITIES IN COLLIN COUNTY AND HOW THEIR ASSESSED VALUES ARE MADE UP, PARTICULARLY WE HAVE HISTORICALLY MATCHED UP WITH ALLEN. MOST CLOSELY, THERE IS A LITTLE BIT OF VARIANCE IN PREVIOUS YEARS, TO THAT COMPARISON WITH ALLEN. I MEAN, WE WOULD BE IN 1% OF A CHANGE. HOWEVER, YOU'RE STARTING TO SEE OUR RESIDENTIAL BE LESS OF A PERCENTAGE OF THE TOTAL, THAN IN COMPARISON TO ALLEN. WE'RE REALLY STARTING TO LOOK MORE LIKE COLLIN COUNTY AT LARGE. AND THEN FRISCO, AS IT RELATES TO THE RESIDENTIAL COMMERCIAL MIX OF, ASSESSED VALUES ON THE GROUND. AND THEN THE SLIDE THAT
[00:55:01]
SHOWS YOU THE PERCENTAGE MIX OVER TIME. SO IN FISCAL YEAR 25, 67.5% OF THE TOTAL ASSESSED VALUE IS IN SINGLE FAMILY RESIDENTIAL, 8.4% IS IN MULTIFAMILY RESIDENTIAL, 20.4%, WHICH IS THE LARGEST PERCENTAGE, STAKE THAT COMMERCIAL HAS HAD IN THIS TEN YEAR LOOK BACK IS COMMERCIAL, AND THAT'S A POSITIVE VIEWPOINT BASED ON THE COUNCIL'S DESIRES TO HAVE COMMERCIAL TAKE ON MORE OF THAT PROPERTY TAX RATE. AND THEN FINALLY, YOU'LL SEE THAT LAND VALUES, WHILE LAND VALUES ARE STAYING RELATIVELY FLAT, INDEPENDENT OF THEIR OWN. THE AMOUNT OF LAND THAT'S AVAILABLE AND THE AMOUNT OF LAND THAT'S BEING ABLE TO BE ASSESSED SPECIFICALLY IS SHRINKING. AND THAT'S FAIRLY LOGICAL. AS WE BUILD OUT MORE LAND VALUE SHRINKS OR, EXCUSE ME, LAND ASSESSED VALUE AS A PERCENTAGE OF THE TOTAL SHRINKS, WE'LL BREAK DOWN EACH ONE OF THESE JUST SO YOU CAN GET A FEEL OF WHAT EACH SEGMENT, IS HOW EACH SEGMENT IS PERFORMING INDEPENDENT OF THE OTHER SEGMENTS. SO SINGLE FAMILY JUMPED UP CONSIDERABLY IN FISCAL YEAR 23, THAT'S DUE TO MARKET CONDITIONS. ALSO DUE TO HOW THE CAD VIEWED, VARIOUS APPRAISALS AND, THE, THE GENERAL AREA OF APPRAISALS IN THE DFW MARKET SO THAT 30% INCREASE THAT YOU SEE IN 2023, MANY OF THOSE VALUES AND SINGLE FAMILY HAVE 10% HOMESTEAD CAPS AND THAT'LL BE INDICATIVE WHEN YOU SEE SOME OF THE OTHER FACTS AND FIGURES IN RELATION TO THE TAX RATE, AS WE CONTINUE, BUT NOTWITHSTANDING FISCAL YEAR 2023, ANOTHER 15% INCREASE IN 2022, IN VALUES FOR SINGLE FAMILY, AND THEN THOSE VALUES HAVE SOMEWHAT COOLED TO NORMALIZED LEVELS IN FISCAL YEAR 25 WITH THE WITH THE OVERALL INCREASE IN SINGLE FAMILY VALUE AT 4.5%. MULTIFAMILY, HAS SOMEWHAT FOLLOWED THE TREND OF SINGLE FAMILY. AND IN REGARDS TO THE ASSESSED VALUATION TREND, 8.9% TOTAL INCREASE IN FISCAL YEAR 25, THE SAME BEING TRUE FOR MY COMMENTS OF SINGLE FAMILY FOR 23 AND 24. AND THEN COMMERCIAL IS SOMEWHAT OF AN ANOMALY. OVER THE LAST THREE YEARS. WHILE THE VALUE OF THE BUILDINGS IS OBVIOUSLY WHAT DRIVES THE ASSESSED VALUE AND THE MATERIAL INSIDE OF IT, WE SEE 17.8, 16.7 AND 17% INCREASES IN THE LAST THREE YEARS, YEAR OVER YEAR FOR THE VALUE OF COMMERCIAL IN THE CITY, BUT 17, I MEAN, THAT'S THAT'S THE SECOND LARGEST INDIVIDUAL YEAR OVER YEAR SPIKE. WE'VE HAD IN THE LAST TEN YEARS.SO THAT'S A STRONG INDICATOR. IT'S WHY YOU SEE ON THAT FIRST SLIDE THAT COMMERCIAL VALUE IS STARTING TO REPRESENT MORE OF THE TOTAL ASSESSED VALUE OF THE CITY. AND THEN FINALLY, JUST TO UNDERPIN MY COMMENTS EARLIER ABOUT LAND, AS WE SEE DEVELOPMENT OCCUR AND WE SEE PROPERTY TRACTS TAKEN DOWN, LAND VALUE WHILE STILL EXPENSIVE IN THE CITY OF MCKINNEY, HAS STABILIZED YEAR OVER YEAR. AS I MENTIONED EARLIER, THE CAD DID DO AN INCREASE TO THEIR LAND VALUES. THEY DO THAT ON A 3 TO 5 YEAR BASIS, MOST RECENTLY FOR THE FISCAL YEAR, 23 YEAR, WHERE YOU SEE THAT LARGE JUMP, WHERE WE HAVE THIS FLAT LAND VALUE STABILIZATION IN FISCAL YEAR 25.
YOU MAY SEE IN THE NEXT COUPLE OF FISCAL YEARS, THE CAD REASSESSED WHAT LAND VALUE ON A PER RATE BASIS IS. AND THEN WE'LL SPEND SOME TIME ON THIS SLIDE. THIS IS THE DETAIL BEHIND MR. GRIMES OPENING COMMENTS ABOUT OUR NO NEW REVENUE TAX RATE AND OUR PERCENTAGE ABOVE NO NEW REVENUE TAX RATE IN COMPARISON TO OUR REGIONAL CPI OR REGIONAL INFLATION. HE MENTIONED THAT NATIONWIDE INFLATION IS RIGHT AT 3%. HOWEVER, DFW IS DEPENDENT ON WHO YOU TALK TO. THE THIRD OR THE FOURTH LARGEST METRO IN THE NATION, AND WE'RE PROBABLY THE MOST EXPANSIVE DEVELOPMENT METRO ON PLANET EARTH, YOU KNOW, DEPENDING ON WHAT YOU THINK ABOUT WHAT'S GOING ON ACROSS THE PLANET IN DUBAI, BUT THERE'S DEFINITELY A GLUT OF DEVELOPMENT HERE, AND THERE'S A LOT OF FOLKS THAT WANT TO BE IN DFW. SO THE DFW INFLATION RATE IS RIGHT AT 5%, OUR NO NEW REVENUE, NO NEW REVENUE RATE. OUR PERCENTAGE RATE ABOVE NO NEW REVENUE IS RIGHT AT 2.97%, THAT'S ROUGHLY 2% BELOW OUR REGIONAL CPI. AND THE DALLAS FORT WORTH METRO, IT IS BELOW THE NATIONAL CPI OF 3%. AND THAT'S THAT 4.155 RATE. AGAIN, IF YOU'LL RECALL BACK TO OUR OPENING SLIDE ABOUT VALUES VERSUS TAX RATE. IT IS A FUNCTION OF WHEN VALUES GO UP, THE TAX RATE TRIMS DOWN. SO THE VALUE INCREASES THAT WE'VE SEEN OVER THE PAST DECADE, ARE MUCH
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TO DO WITH THE TAX RATE COMING DOWN. IN ADDITION TO THOSE, COMMENTS THAT MR. GRIMES MADE ABOUT BEING FASTIDIOUS WITH OUR FUNDS AND MAKING SURE THAT WE'RE DOING THINGS THAT ALLOW US TO BE MORE NIMBLE FROM THE SERVICE DELIVERY SIDE. I'D ALSO LIKE TO POINT OUT, TOO, HERE, THE PRACTICE, FOR THE LAST SIX YEARS HAS REALLY BEEN TO DO OUR LEVEL BEST TO BE BELOW ON THE TAX RATE PERCENTAGE ABOVE NO NEW REVENUE OF WHAT OUR REGIONAL CPI IS. YOU'LL SEE THAT IN ONE OF THE FORTHCOMING SLIDES OR THE NEXT SLIDE. EXCUSE ME. SO HERE THE GREEN REPRESENTS WHAT THE COUNCIL ADOPTED IN PREVIOUS YEARS AND WHAT THE TAX RATE PROPOSAL IS IN FISCAL YEAR 2025.THE ORANGE LINE IS THE REGIONAL CPI NUMBER MAY TO MAY, FOR THE DALLAS FORT WORTH METRO. AND EVERY INSTANCE SINCE FISCAL YEAR 25, WE HAVE THE COUNCIL HAS ADOPTED AND OR WE HAVE RECOMMENDED FROM THE STAFF LEVEL A TAX RATE THAT IS BELOW THE REGIONAL INFLATION RATE. THERE'S A LOT GOING ON IN THIS SLIDE. AND I'LL I'LL TRY TO DISSEMINATE IT AS BEST AS I CAN. BUT THIS IS JUST A COMPARISON OF NO NEW REVENUE PLUS INFLATION COMPARED TO WHAT WE ENDED UP ADOPTING.
AND ALSO WHAT WE COULD ADOPT THE WHAT'S CALLED THE VOTER APPROVAL RATE, YOU'LL SEE SPECIFICALLY IN THE LAST FOUR YEARS, WE'VE BEEN WELL BELOW INFLATION. WELL BELOW THE VOTER APPROVAL RATES. AND THEN THE MARGINS BECOME TIGHTER, THE LOWER THE TOTAL TAX RATE BECOMES. AND YOU SEE THAT THAT'S BEGINNING TO BE THE CASE AS WE GET INTO THE LOWER 40 CENT MARK OF OUR TAX RATE. THEN FINALLY, THIS IS JUST A SNAPSHOT OF BOTH THE MAINTENANCE AND OPERATION SIDE OF THE TAX RATE AND THE INTEREST AND SINKING SIDE OF THE TAX RATE, WHILE, BOTH SIDES MAINTENANCE AND OPERATION AND INS HAVE, DECREASED IN THE PAST TEN YEAR PERIOD, THERE IS A PRETTY THERE'S A LARGER OPERATIONAL SIDE DECREASE TO THE TAX RATE DUE TO THE DEBT OBLIGATIONS THAT THE INS SIDE OF THE RATE HAS TO MONITOR. AND THEN FINALLY, THIS IS THE IMPACT ON THE SINGLE FAMILY AVERAGE TAXABLE VALUE IN FISCAL YEAR 24 AT A TAX RATE OF 42.7 CENTS. OUR AVERAGE MARKET VALUE WAS AT 561,000. AVERAGE TAXABLE VALUE, MEANING SOMEBODY LIKELY HAD A, HOMESTEAD ON THEIR PROPERTY WAS AT 40 OR EXCUSE ME, 466,000 FOR A TOTAL LEVY OF RIGHT THERE AT $2,000. 1993 THIS YEAR, THE AVERAGE MARKET VALUE, WE TALKED ABOUT THAT SLIGHT INCREASE ON THE SINGLE FAMILY ASSESSED VALUE SLIDE EARLIER IN THE PRESENTATION IS JUMPED UP A LITTLE BIT TO $574,000. THE TAXABLE VALUE HAS JUMPED UP AS WELL, A LITTLE BIT TO 514,000. SO THE OVERALL AVERAGE TAX LEVY FOR SINGLE FAMILY. AND AGAIN THIS IS JUST A SNAPSHOT OF SINGLE FAMILY. IT DOES NOT INCLUDE COMMERCIAL. AND THE OTHER TYPES IS 2137 $2,137. AS WE JUMP INTO IN THE NEXT COUPLE OF SLIDES, THE GENERAL FUND REVENUES AND THE GENERAL FUND EXPENDITURES, FROM A STAFFING PERSPECTIVE, WE LAY THE LAND OF WHERE WE'RE AT IN COMPARISON TO SISTER CITIES, AS WELL AS JUST, VARIOUS METRICS, THIS IS A PER THOUSAND METRIC THAT A LOT OF CITIES USE. WE INCORPORATE IT INTO THE BUDGET PROCESS, BECAUSE WE THINK IT'S INTERESTING, BUT THEN ALSO AS A SERVICE TO OUR SISTER CITIES, BECAUSE THEY USE IT AS WELL TO KIND OF MONITOR, WHERE THE REGION IS ON A PER THOUSAND BASIS. SO PER THOUSAND RESIDENTS, YOU SEE HERE, OUR METRIC FOR, CITIZENS SERVED. AND THEN ONE THAT'S A LITTLE MORE AKIN TO HOW WE EVALUATE, HOW WE'RE MANAGING OUR EMPLOYEE RESOURCES, HOW WE'RE MANAGING OUR OTHER RESOURCES IS OUR CITIZENS SERVED BY TOTAL RESIDENTS. SO, FOR INSTANCE, YOU'LL SEE HERE IN 2024, THE AVERAGE EMPLOYEE. SO WE SPREAD ALL THE RESIDENTS ACROSS THE EMPLOYEE BASE, HAD A SERVICE LEVEL OF 139 RESIDENTS. WHILE THIS YEAR WE'VE MADE SOME PROGRESS IN THAT AND SOME OF THE POSITIONS THAT ARE BEING RECOMMENDED THAT YOU'LL HEAR ABOUT FROM TREVOR DAGEN IN A FEW SECONDS, YOU SEE THAT TICK DOWN.
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SO THERE'S BEEN SOME PROGRESS. THAT'S MADE. AND THEN WE DO SHARE THOSE SISTER CITY COMPARISONS. OUR LARGER SISTER CITIES IN COLLIN COUNTY OF ALLEN PLANO AND FRISCO AND YOU CAN SEE THAT SAME AVERAGE FOR THEIR MOST PREVIOUS ADOPTED BUDGET YEAR. OBVIOUSLY, THEY'RE GOING THROUGH THEIR BUDGET PROCEEDINGS SIMILAR TO WHAT WE'RE DOING THIS MORNIN. I BELIEVE THAT'S ALL SHE WROTE FOR ME. I'M GOING TO KICK IT OVER TO MR. HOLLOWAY. YES, TO GET US THROUGH GENERAL FUND REVENUES. SO THANK YOU. TREVOR, APPRECIATE, TALKING ABOUT THE PROPERTY TAX RATE AND THE MAKE UP OF THE VALUES, WANT TO SPEND A LITTLE TIME TALKING ABOUT JUST WHERE WE ARE ON OUR GENERAL FUND REVENUES? I DON'T THINK YOU'RE GOING TO SEE ANYTHING THAT'S TOO SURPRISING HERE, BUT LET'S KIND OF GO THROUGH WHERE WE STAND JUST AS A AS A MATTER OF FUNDAMENTALS, AS I'VE ALREADY MENTIONED, OUR SALES TAX, WE FEEL LIKE IS A IS A CONSERVATIVE NUMBER. IF WE DIDN'T MAKE THAT NUMBER, WE PROBABLY, YOU KNOW, RECOVER FROM THAT. IT'S NOT A 10 OR 15% INCREASE, BUT OUR, OUR ESTIMATE FOR FISCAL YEAR 25 IS THE FISCAL YEAR 24 NUMBER PLUS 5%. INTERESTINGLY, ON THE BUILDING PERMIT SIDE, THIS IS, THIS IS FAIRLY, THIS IS SOME REALLY GOOD NEWS. WE'RE, UP AT CURRENTLY ABOUT 1.8 MILLION FROM OUR FISCAL YEAR 24 BUDGET, THAT'S WHAT WE'RE FORECASTING, AND 29% OVER WHERE WE WERE IN FISCAL YEAR 23, THE GOOD NEWS HERE IS, AS YOU SEE, BUILDING PERMITS, YOU WILL SEE, AS I SAY, EVERY YEAR, YOU SEE BUILDING PERMITS FIRST, FOLLOWED BY ENGINEERING INSPECTIONS OR, OR YOU ACTUALLY SEE ENGINEERING FIRST, THEN YOU SEE BUILDING PERMITS AND THEN YOU SEE THAT AS A VALUE. ON THE TAX ROLL, SEVERAL FISCAL YEARS LATER, THIS SAYS THAT WE ARE STILL GROWING, THAT WE'RE GOING TO CONTINUE TO SEE GROWTH. THAT MEANS THAT WE'LL BE ABLE TO CONTINUE TO FUND OUR CAPITAL PROGRAM AND CONTINUE TO FUND OUR GENERAL FUND PROGRAM. ANOTHER NOTE, OUR CHARGES AND FINES, THAT'S A BIG LARGE GROUP, THAT THAT WE PUT TOGETHER IN THE BUDGET. OVERALL, OUR FINES ARE UP A LITTLE BIT, OVER LAST YEAR. THIS TIME, WE'RE ABOUT 8% ABOVE WHERE WE WERE, AND WE, AS A GROUP OVERALL, WE HAVE THAT BUDGETED ABOUT 14%, OVER THE 24 END OF YEAR, YOU WILL SEE HOW SMALL THAT ACTUALLY THAT GROUP ACTUALLY IS. WHEN WE, WE SHOW YOU THE SLIDE OF ALL OF OUR REVENUES. AND ONCE AGAIN, I LIKE TO SHOW THIS. IT SHOWS OUR FRANCHISE FEES CONTINUING TO GROW. WE HAD A COUPLE OF YEARS, BECAUSE OF SOME CHANGES IN THE LEGISLATION WHERE OUR FRANCHISE FEES LEVELED OUT. BUT THEN JUST WITH POPULATION GROWTH, WITH THE ROOFTOPS THAT WE'RE ADDING, OUR FRANCHISE FEES CONTINUE TO GROW AT A VERY STEADY RATE. WE THEY'VE REMAINED KIND OF FLAT. AND THEN WE'VE WE'VE SEEN THAT 2 TO 3% GROWTH, SOMETHING THAT, WE EXPECT TO SEE, DON'T WANT A WHOLE LOT OF, OF, SPIKES, IN THAT CATEGORY. SO, THIS IS A LEGACY SLIDE. IT HAS THIS TRADITION, AS IS TRADITION, IT PAINTS A PICTURE. ALTHOUGH I ADMIT THE PICTURE ISN'T TO SCALE, THAT IS INTERESTING. IT'S ACTUALLY A VERY INTERESTING SLIDE. WHEN YOU COUPLE IT WITH THE SLIDES THAT TREVOR SHOWED, EARLIER ABOUT HOW WE COMPARE PERSONNEL WISE TO OUR SISTER CITY. THIS SHOWS OUR REVENUES PER CAPITA, THIS IS OUR FISCAL YEAR 25 PROPOSED BUDGET COMPARED TO, OUR SISTER CITIES FISCAL YEAR 24, ADOPTED BUDGETS. SO, YOU SEE, WE'RE STILL, A LITTLE BIT BEHIND. WE WERE NOWHERE, AS FAR BEHIND AS WE WERE WHEN I FIRST PUT THIS SLIDE OUT. AND PROBABLY 2014, IT WAS A MUCH MORE STARK PICTURE. NOW THE SCALE HAS REMAINED THE SAME. I GOT TO BE HONEST. BUT THE NUMBERS ARE NOT, THOSE NUMBERS ARE CLOSING IN AND WE LOOK MORE AND MORE LIKE THOSE CITIES THAN WE DID, THIS IS JUST A LITTLE SNAPSHOT, DEALING, DETAILING OUR REVENUE GROWTH OVER THE AS A WHOLE IN THE GENERAL FUND, OVER THE PAST TEN YEARS. THIS IS ABOUT A 4.8% INCREASE FROM OUR FISCAL YEAR, 24 END OF YEAR, TO OUR ESTIMATED 25 PROPOSED, WHICH IS PAUL MENTIONED IS $219.4 MILLION. THIS SLIDE IS ALSO ONE OF CONSISTENCY. IF YOU LOOK FROM LEFT TO RIGHT, THE FISCAL YEAR 24 ORIGINAL BUDGET TO THE FISCAL YEAR 25 PROPOSED BUDGET, WE, WE WENT ABOVE THE 20% MARK ON SALES TAX. ABOUT A YEAR AND A HALF AGO[01:10:10]
OR MAYBE TWO YEARS AGO, TWO BUDGETS AGO. WE'RE SEEING THAT BEGIN TO LEVEL OUT, WE HAVE SIGNIFICANTLY REDUCED, OVER THE LAST TEN YEARS, THE AMOUNT OF GENERAL FUND REVENUE MADE UP BY PROPERTY TAXES. YOU CAN SEE THEIR FRANCHISE FEES BEING, ANYWHERE FROM 9 TO 10% OVER BOTH THOSE YEARS WITH OUR CHARGES AND FINES, AROUND 5%, AND FRANCHISE FEES MAKING UP, LIKE I SAID, REMAINING CONSISTENT, MAKING UP ABOUT 9 TO 10%. COUNCIL REQUESTED SEVERAL YEARS AGO THAT FOR US TO COMPARE OUR REVENUE MAKE UP TO OUR SISTER CITIES, ONCE AGAIN, WE ONLY HAVE OUR SISTER CITIES. FISCAL YEAR, 24 ORIGINAL BUDGETS. WE COMPARE IT TO BOTH OUR 24 ORIGINAL AND OUR 25 PROPOSED. YOU CAN SEE THAT, WHILE, PLANO, IS OUTSTRIPPING US ON, SALES AND USE TAX. WE, WE HAVE LOOKED FAIRLY FAVORABLY ON THE PROPERTY TAX SIDE WITH, WITH, ALLEN AND FRISCO. I DO ALWAYS MENTION THAT, WHAT ACTUALLY GOES IN THE GENERAL FUND BETWEEN ALL OF THESE CITIES IS SOMETIMES APPLES AND ORANGES. WE ALSO CATEGORIZE THINGS DIFFERENTLY, WHEN WE ACCOUNT FOR THINGS, BUT YOU CAN TELL QUITE A BIT, ESPECIALLY WITH THE PROPERTY TAX AND THE SALES AND USE TAX PORTION. HERE IS THE PROPERTY TAX REVENUE, MAKE UP OVER THE LAST TEN YEARS, IT'S APPROXIMATELY 7.3% INCREASE FROM OUR 24 END OF YEAR TO OUR 25, FISCAL YEAR. 25 PROPOSED. THIS IS ONLY THE MO PORTION OF THE TAX RATE. THIS IS ONLY WHAT GOES IN THE GENERAL FUND. THIS IS NOT WHAT WE WOULD BE RECEIVING ON THE INS SIDE, BUT, THAT THAT NUMBER IS 111.9 MILLION. SALES TAX. AND I PROBABLY TALKED A LOT ABOUT THAT, YOU CAN SEE THE SIGNIFICANT GROWTH, SINCE FISCAL YEAR 16 TO TODAY HERE, THAT'S 104% INCREASE, OVER THAT TEN YEAR TIME PERIOD, WE ANTICIPATE THIS YEAR, HOWEVER, BEING 5%, FROM FISCAL YEAR 24 TO 23. ONCE AGAIN, WE DID NOT CHANGE OUR END OF YEAR ESTIMATE. WE HAVE BEEN RUNNING RIGHT AT, A LITTLE ABOVE 5%. DIPPED A LITTLE BIT BELOW OUR LAST COLLECTION. NOT MUCH. SO WE'RE GOING TO STAY WITH OUR 5%, PROJECTION. QUICK COMMENT THAT SURE. FOR ANYONE WATCHING THAT THAT 45.4 MILLION INCHES SALES TAX REVENUE THAT GOES INTO THE GENERAL FUND, THERE'S ANOTHER 45.4 THAT GOES TO EDC AND CDC AND A LOT OF THAT FUNDS PARKS AND ECONOMIC DEVELOPMENT AND WHATNOT. ABSOLUTELY. AND IT WAS JUST LIKE I WAS TALKING ABOUT WITH THE PROPERTY TAX, THIS IS JUST THE PORTION OF THE GENERAL FUND. WE WILL TALK ABOUT THE TYPE A AND TYPE B AT THE END OF THE PRESENTATION, WE'LL SHOW THOSE FINANCIALS, AND THOSE PROPOSED, THOSE PROPOSED SALES TAX COLLECTIONS DO MARRY EXACTLY WITH THE 45 FOUR THAT YOU SEE HERE. AND HERE, FINALLY, BEFORE WE MOVE ON TO EXPENDITURES, MR. GRIMES SUGGESTED THAT WE PRESENT A NEW SLIDE THIS YEAR. IT'S INTERESTING. YES, THIS IS ART, MR. HOLLOWAY, WHAT IS THIS.THAT'S IT. THIS IS A SLIDE. THIS IS A SLIDE THAT DETAILS HOW THESE HOW OUR REVENUES FLOW INTO THE GENERAL FUND AND OUT TO DEPARTMENTS, AND THEN WHAT THOSE DEPARTMENTS SPEND, THEIR, THOSE REVENUES ON. SO, MR. GRIMES SUGGESTED TO SOME SOMETHING TO US CALLED A SANKEY DIAGRAM. AND THE SANKEY DIAGRAM IS NAMED FOR CAPTAIN MATTHEW HENRY PHINEAS RYLE SANKEY, WHO FIRST USED THIS TYPE OF DIAGRAM TO DIAGRAM HOW STEAM MOVES THROUGH STEAM ENGINES. SO THERE YOU ARE, THAT WAS THE HISTORY LESSON FOR THE DAY, I HAD NEVER HEARD OF THIS TYPE OF CHART, BUT I GOT TO ADMIT, I THINK IT'S PRETTY COOL, BUT YOU CAN SEE HERE HOW THESE REVENUES FLOW IN WHAT CATEGORIES THEY GO TO. AND THEN ONCE THEY ARE IN THOSE DEPARTMENTS, WHERE DO THE DEPARTMENTS SPEND THEIR MONEY? SO, FOR INSTANCE, YOU CAN SEE THE FIRE DEPARTMENT, LET'S JUST RIGHT THERE IN THE MIDDLE IN BLUE, THE, THE AS THE REVENUES COME IN TO THE GENERAL FUND, THEY GO INTO A POOL 46.8 MILLION, THEN FLOWS OUT TO THE FIRE DEPARTMENT FOR OPERATING, THEN YOU CAN SEE THE BULK OF THAT GOING OUT FOR PERSONNEL, AND YOU CAN SEE AT THE VERY END, MOST OF OUR EXPENDITURES ON THE
[01:15:05]
GENERAL FUND SIDE ARE FOR PERSONNEL. REALLY, ALMOST 75% OF OUR EXPENDITURES GO FOR PERSONNEL, THROUGHOUT THE ORGANIZATION OPERATIONS BEING 57 MILLION. THEN YOU SEE SMALL CAPITAL BEING 1 MILLION. WHAT, MOST OF OUR, CAPITAL THAT IS EXPENDED OUT OF THE GENERAL FUND, ACTUALLY FLOWS TO THE TRANSFER TO OTHER FUNDS WE PURCHASE MOST OF OUR CAPITAL OUT OF A DIFFERENT FUND AFTER WE MAKE THAT TRANSFER. IT'S A LITTLE DIFFERENT THAN SOME OF OUR OTHER CITIES. THAT'S WHY YOU WOULD SAY, WELL, KEEP TALKING ABOUT APPLES TO ORANGES AND WE DO THINGS A LITTLE DIFFERENTLY. WE SEND, WE BUY ALL OF OUR CAPITAL COLLECTIVELY OUT OF ONE FUND, A LOT OF OTHER CITIES DON'T DO IT THAT WAY, BUT THAT'S WHY THAT ONE DEAD ENDS, BECAUSE WE THEN WOULD HAVE TO SHOW THE SANKEY DIAGRAM TRANSFERRING TO THE OTHER FUND, AND THEN THE OTHER FUND, HOW THAT EXPENDED. SO THAT WOULD HAVE MADE THAT A LOT LONGER. BUT WE THOUGHT THAT WAS A VERY INTERESTING DIAGRAM. IT ALSO UNDERSCORES THAT SOMETIMES VISUAL REPRESENTATIONS ARE WAY BETTER THAN VERBAL. YEAH. NO OFFENSE, MR. HOLLOWAY. YEAH ABSOLUTELY. THANK YOU FOR.AND WITH THAT, MARK, COULD YOU JUST GIVE A SENTENCE OR TWO ON THE TRANSFER TO OTHER FUNDS, THE 9.3 MILLION? SURE. SO FOR INSTANCE, THE GENERAL FUND, MAKES SEVERAL DIFFERENT TRANSFERS OUT TO, TO OTHER FUNDS EVERY YEAR, THE ONE OF THEM BEING WHAT WE CALL OUR CAPITAL AND EQUIPMENT REPLACEMENT FUND. WE HAVE A COUPLE OF SLIDES ON THAT LATER OUT OF THAT FUND, WE BUY ALL OF OUR REPLACEMENT EQUIPMENT, EVERY PIECE OF EQUIPMENT THAT, THAT NEEDS TO BE PURCHASED, THAT IS, THAT IS OF EQUIPMENT THAT IS GOING TO BE LEAVING THE FLEET IS PURCHASED OUT OF THAT FUND. WE ALSO MAKE, TRANSFERS OUT OF THE GENERAL FUND EVERY YEAR TO OUR RISK AND INSURANCE FUND PAYS FOR ALL OF OUR GENERAL HEALTH INSURANCE AND ALL OF OUR LIABILITY INSURANCE.
WE ALSO MAKE TRANSFERS FROM THE GENERAL FUND TO WHAT WE CALL OUR TECH IMPROVEMENT FUND. OUR TECHNOLOGY IMPROVEMENT FUND. THIS GOES TO PURCHASE ALL OF OUR, CAPITAL NEEDS FOR CITYWIDE FOR, FOR OUR COMPUTER SYSTEMS. SO THAT'S WHERE WE MAKE OUR EXPENDITURE THERE TO OUT OF THOSE DIFFERENT FUNDS, SOME CITIES WOULD BUY THOSE DIRECTLY. THERE'S NO RIGHT OR WRONG OR BETTER, BETTER WAY. THAT'S JUST THE WAY WE'VE CHOSEN TO MAKE THOSE, THOSE EXPENDITURES. THANK YOU. ABSOLUTELY AND WITH THAT, WITH THE NEXT SLIDE, STARTS KIND OF US TALKING ABOUT OUR GENERAL FUND EXPENDITURES, WHICH MEANS, KIND OF HAND IT OFF TO TREVOR DAGAN DOWN THERE TO LET HIM TALK FOR A LITTLE WHILE. AND HERE IS THAT. ALL RIGHT. GOOD MORNING, MAYOR AND COUNCIL, PROMISE.
WE'RE IN THE HOME STRETCH HERE, SO, SPEAKING OF OUR GENERAL FUND EXPENDITURES, HERE'S THAT LOVELY SLIDE WE SAW EARLIER, AS YOU SEE, AT LEAST FOR US IN ALLEN, PER CAPITA WISE, EXPENDITURE REVENUES EQUAL EACH OTHER. SINCE WE BOTH PRESENTED BALANCED BUDGETS. ALLEN DID BACK IN 24, THIS IS OF COURSE, FOR THE UPCOMING FISCAL YEAR. 25 FOR OUR CITY, SO JUST SOME HIGHLIGHTS IN THE GENERAL FUND, ABOUT 6.6 MILLION IN NEW EMPLOYEES AND EQUIPMENT, THIS YEAR IN SUPPLEMENTAL REQUESTS THAT ARE IN THE PROPOSED BUDGET PROPOSED TO BE FUNDED, I THINK, MARK MENTIONED EARLIER STEP INCREASES FOR BOTH PUBLIC SAFETY AND YOUR GENERAL GOVERNMENT EMPLOYEES, ALSO IN THERE FOR THE GENERAL GOVERNMENT EMPLOYEES ARE THE CIVILIAN EMPLOYEES. AS AN ADDITIONAL ALLOWANCE FOR MARKET STUDY RESULTS, THAT WERE DONE AT THE END OF, JUST A MONTH OR TWO AGO, ACTUALLY, WE ALSO HAVE SOME ADDITIONAL FUNDING IN THERE FOR MAINTENANCE COSTS AT THE NEW CITY HALL, CONTRACTUAL INCREASES FOR JANITORIAL SERVICES, AND I SHOULD ALSO MENTION FOR THAT NEW CITY HALL, A COUPLE NEW POSITIONS, IN THAT 6.6 MILLION, TO HELP WITH MAINTENANCE OF A MUCH LARGER BUILDING THAN WE HAVE HERE, AND THEN, AS MARK MENTIONED, THE CAPITAL EQUIPMENT REPLACEMENT FUND, SOME OF THAT TRANSFER WE SPENT ABOUT $5 MILLION OVER THERE FROM THE GENERAL FUND, TO REPLACE OUR LARGE CAPITAL ITEMS. I JUST HAVE SOME ITEMS LISTED THERE. ABOUT 20 OF THE POLICE MARK TAHOE REPLACEMENTS THIS YEAR. AND THEN, FIRE ENGINES ARE GETTING QUITE EXPENSIVE THERE AT A 2.4 MILLION, AND THEN HERE'S JUST A BREAKDOWN OF OUR GENERAL FUND EXPENDITURES OVER THE YEARS, YOU CAN SEE JUST THIS LAST YEAR, WE FINALLY CROSSED INTO THE $200 MILLION THRESHOLD, AND THIS YEA, WITH THOSE SUPPLEMENTALS STEP INCREASES, WE'RE LOOKING AT ABOUT A EXPENDITURES OF ABOUT 219 MILLION, WHICH MATCHES OUR REVENUE, THAT WE'RE PROJECTING FOR 25, HERE, JUST OUR MAKEUP OF EXPENSES FROM LAST YEAR'S ORIGINAL PROPOSED BUDGET OR
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ORIGINAL ADOPTED BUDGET. SORRY TO THIS YEAR'S PROPOSED BUDGET. YOU'LL SEE. KIND OF LIKE OUR REVENUES, THE SHARE OF THE PIE HAS STAYED RELATIVELY THE SAME, IN THE DEPARTMENTAL BREAKDOWN, AND THEN HERE AGAIN, LIKE, WE COMPARED OUR REVENUES TO OUR SISTER CITIES, WE HAVE OUR EXPENSES, AGAIN, LIKE MARK MENTIONED, NOT APPLES TO APPLES. THEY MAY PUT DEPARTMENTS IN DIFFERENT CATEGORIES, AND SPECIFICALLY TRANSFERS IS WHERE YOU KIND OF SEE THAT THAT DIFFERENCE, BETWEEN US AND THE OTHER CITIES. ALL RIGHT. SO KIND OF GOING MORE SPECIFICALLY BY DEPARTMENT HERE, OF WHAT OUR EXPENSES LOOK LIKE IN 25, OUR GENERAL GOVERNMENT, THAT'S GOING TO INCLUDE YOUR IT, YOUR FINANCE, CITY MANAGEMENT, MARKETING, YOU KNOW, THOSE TYPES OF DEPARTMENTS. HR, SO WE GOT ABOUT 172 POSITIONS THERE. THAT INCLUDES THE FOUR NEW REQUESTS LISTED THERE ON THE SCREEN, THE FOUR NEW FTE REQUESTS, GOING OVER TO PUBLIC SAFETY, A LITTLE OVER 600, TOTAL FTES THERE, ABOUT 21 NEW, POSITIONS REQUESTED THIS YEAR. LET'S SEE HERE, ABOUT 16 OF THOSE ARE SWORN, AND YOU'LL SEE PRETTY SIGNIFICANT INCREASES. PUBLIC SAFETY WAS THE BIGGEST PART OF OUR BUDGET, WE ALWAYS TRY TO KEEP THAT IN LINE SINCE THAT IS THE USUALLY ALWAYS THE NUMBER ONE PRIORITY WHEN WE DO OUR CITIZEN SURVEY. CAN YOU EXPLAIN THE NURSE PRACTITIONER POSITION FOR THE FIRE DEPARTMENT, YES. I BELIEVE YOU. YEAH, IF YOU WOULD.SO WE, WE ALREADY CONTRACT WITH THE NURSE PRACTITIONER FOR OUR COMMUNITY HEALTH PROGRAM, AND IT'S A IT'S A VERY MODEST INCREASE TO TAKE THAT FROM A CONTRACTED POSITION TO AN ACTUAL FULL TIME POSITION WITH THE CITY. SO THAT'S REALLY THE CHANGE THERE. THAT PERSON ALREADY EXISTS. IT'S JUST HER STATUS WILL CHANGE AND ACTUALLY BE A CITY EMPLOYEE NOW. OKAY THANK YOU. SHE OKAY. NEXT WE HAVE OUR DEVELOPMENT SERVICES. THIS WOULD BE YOUR ENGINEERING.
PLANNING CODE, BUILDING INSPECTION DEPARTMENTS, YOU'LL SEE THERE, 126 AUTHORIZED POSITIONS, WHICH INCLUDES THE. WAS THAT TWO, 3456 NEW FTE REQUESTS? THIS YEAR. NEXT, OUR PUBLIC WORKS DEPARTMENTS, B OUR BUILDING MAINTENANCE OR STREETS DEPARTMENTS, AS FAR AS THE GENERAL FUND IS CONCERNED, OF COURSE, OUTSIDE THE GENERAL FUND, WE HAVE OUR WATER AND SOLID WASTE SERVICE, WATER DRAINAGE, DEPARTMENTS THERE, SO AGAIN, AS I MENTIONED, KIND OF THAT FACILITY CONSTRUCTION SUPERVISOR, BUILDING ATTENDANT, GO ALONG WITH OUR MOVE OVER TO THE NEW CITY HALL. BEING IN A BIGGER, BIGGER BUILDING, IT'S GOING TO REQUIRE MORE MAINTENANCE, OF COURSE WE WANT TO KEEP IT, LOOKING AS NICE AS WE'RE HOPING IT'S GOING TO LOOK, AND THEN THAT 22 TO 23, YOU'LL SEE THEY'VE KIND OF STAYED STEADY SINCE 23 AS FAR AS THEIR EXPENSES. THAT BIG JUMP, IS THAT, AS MARK MENTIONED, THAT IT WAS ABOUT $3 MILLION IN STREET MAINTENANCE, THAT WE ADDED THERE IN 23, AND THEN OUR PARKS AND LIBRARY, SO THREE NEW POSITIONS THERE ON THE PARKS SIDE, OF COURSE, THE BIGGEST PORTION OF THESE EXPENDITURES IS ON THE PARK SIDE, OUR PARK MAINTENANCE, BUDGETS HAVE GROWN, FAIRLY AT A GOOD PACE, MOST OF THAT WITH CONTRACTED SERVICES, YOU KNOW, FOR MOWING, OF THE PARKS AS WE CONTINUE TO EXPAND OUR, OVERALL CITY PARKS. SO HERE WE HAVE OUR GRANTS TO COMMUNITY SLIDE. WE SHOWED THIS TO YOU ALL EVERY YEAR. HAS NOT CHANGED MUCH OVER THE YEARS, I WILL MENTION THE COMMUNITY SUPPORT GRANTS, AS PART OF THE SUPPLEMENTALS THAT INCLUDES A $50,000 INCREASE, TO THAT LINE THERE, BUT WE DO SHOW THIS EVERY YEAR, AS THESE ARE ADOPTED BY COUNCIL WITHIN THE BUDGET. I CAN SWITCH IT BACK OVER TO MARK IF HE'S, SINCE HE LOVES TALKING ABOUT CIP. YOU WANT THIS BACK? THANKS TREVOR, JUST, WANTED TO SHOW OUR OVERALL CIP, OVER THE NEXT FIVE YEARS. THIS IS FROM ALL FUNDING SOURCES AND ALL CONSTRUCTION PROJECTS ACROSS ALL OF OUR, DIFFERENT, FUNDS, BUT YOU CAN SEE IT'S A VERY SIGNIFICANT, CAPITAL IMPROVEMENT PROGRAM, WE ALWAYS FOCUS A LOT ON ON OUR, OUR BOND
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SALES AND WHAT THOSE BOND PACKAGES ARE. BUT YOU CAN SEE THAT OVERALL, THE CAPITAL IMPROVEMENT PROGRAM, THE OVERALL NUMBER IS MUCH MORE THAN JUST, WHAT WE ARE ACTUALLY DEBT FUNDING WITH DEBT SERVICE, THROUGH AN ELECTION, THE TOTAL, PROJECTS ON THE BOOKS ARE ABOUT $2.1 BILLION OF, OF NEW INFRASTRUCTURE. SO JUST, ALWAYS LIKE TO, TO SHOW THAT NUMBER, TO SHOW THOSE, THOSE DOLLARS. HERE ARE SOME OF THE MAJOR PROJECTS WITH THE WITH FUNDING, IN THE 25, YOU CAN SEE THE, POTENTIAL FAA GRANT FUNDING ON THE AIRPORT SIDE, WE HAVE FACILITIES, PROJECTS, THE PUBLIC SAFETY PHASE SIX EXPANSION AND RENOVATIONS, PUBLIC WORKS COMPLEX, THOSE, THAT THAT PROJECT IS ABOUT TO REALLY START TAKING OFF. SO THAT'S SOME OF THE, INITIAL DOLLARS FOR THAT, WE'VE HAD QUITE A FEW PARKS PROJECTS OVER THE LAST FEW YEARS. SO THIS IS KIND OF A LITTLE BIT OF A SLOWER YEAR, WITH SOME IMPROVEMENTS AT IRWIN PARK AND AT TOWN LAKE, STREET PROJECTS. THESE ARE JUST HIGHLIGHTS. THE STREETS OF BOND PROGRAM WILL BE MUCH MORE ROBUST THAN THIS. I THINK IT'S GOING TO BE MORE LIKE A 30 OR $40 MILLION TOTAL, BUT YOU CAN SEE BLOOMDALE LANES ONE AND TWO, AND THE TENNESSEE STREET AND LAMAR STREET INFRASTRUCTURE PROGRAMS. AND THEN, OUR WATER AND WASTEWATER PROJECTS. ONCE AGAIN, YOU SEE THE US 380 UTILITY RELOCATIONS WITH THE COLLIN COUNTY, DOLLARS. AND THEN WE HAVE A LARGE WATER LINE, IN THE STONEBRIDGE AREA, FROM TUCKER HILL TO BLOOMDALE. THAT IS A THAT'S A RATHER LARGE PROJECT AS WELL, I ALREADY MENTIONED THIS ONCE. THIS MORNING, AND I'VE TALKED ABOUT THE BONDS JUST A SECOND AGO, BUT, WE DO HAVE AN ORIGINAL BOND PACKAGE, OF ABOUT 485.5 MILLION. OF THE PAST PROPOSITIONS. YOU CAN SEE THE TOTALS THERE, ABOUT 100, ABOUT 200. MILLION, AND EVERYTHING OTHER THAN STREET IMPROVEMENTS. AND THEN WE DO MENTION THE FAILED BOND PROPOSITION FOR THE MUNICIPAL COURT FACILITY. JUST BECAUSE THAT BOND FAILED DOES NOT CHANGE THE FACT THAT THERE IS A NECESSITY THERE. AND, TO DO SOMETHING WITH THAT FACILITY, SO JUST WANTED TO MAKE SURE THAT THAT STAYS ON THE RADAR, THAT EVERYBODY KNOWS THAT THAT HAS NOT THAT NEED HAS NOT CHANGED. AND I WANTED TO MAKE SURE THAT THAT WAS NOTED TODAY. AND MR. PASS BACK HERE LIKE OLYMPIAN. YEAH PASSING THE BATON. I DON'T KNOW IF WE THE THREE OF US WOULD WIN THE RACES BEFORE WE CONTINUE. I MIGHT JUST ASK, MR. MAYOR. NUMBER ONE, DOES ANYBODY NEED A BREAK, OR NUMBER TWO, ARE THERE ANY QUESTIONS ON THE GENERAL FUND? I SHOULD HAVE ASKED THIS BEFORE. DO YOU HAVE QUESTIONS ON THE GENERAL FUND OR THE CIP NOW THAT YOU'D WANT TO ASK? OR DO YOU WANT TO WAIT TILL AFTER ALL THIS IS PRESENTED? ANY PREFERENCE? NOT MYSELF OR ANYONE ELSE. DOES ANYONE CENSUS TO CONTINUE TO PLOW THROUGH OUR THROUGH? OKAY. WE HAVE ABOUT 22 SLIDES LEFT. SERVICE FUNDS. WE GET POWER THROUGH UP TO DEBT SERVICE. YES, SIR. I WORK. ALL RIGHT, SO OUR WATER AND WASTEWATER, FUND. JUST SOME HIGHLIGHTS HERE, OF COURSE, WE CONTINUE THE WATER LINE REPLACEMENT PROGRAM, WE'LL MENTION THAT'S BEEN A BIG PART OF THE THIRD BULLET YOU SEE THERE, WE PUT THAT IN THIS YEAR BECAUSE IT IS A PRETTY BIG DEAL, OUR TREATED WATER, OUR LOSS OF TREATED WATER IS DOWN 7% THIS YEAR, LOOKING BACK OVER THE YEARS, ABOUT ROUGHLY TEN YEARS AGO, WE WERE AT 28%, SO WE'VE SEEN A VERY STEADY DECREASE.IT'S AMPED UP IN THE LAST FEW YEARS, ALSO, WE ANTICIPATED DEBT SALE, LATER ON IN THE FISCAL YEAR 25. AS WE HAD ONE THIS YEAR, AND THEN THOSE ARE JUST SOME OF THEIR SUPPLEMENTALS, TO CONTINUE THEIR OPERATIONS THERE, AND MAYBE EVEN LOWER THAT LOSS OF WATER DOWN EVEN BELOW 7%, WHICH IS STILL AN AMAZING NUMBE, HERE'S OUR RATES FOR THAT FUND, I WON'T GO TOO MUCH DETAIL SINCE WE HAD THAT THOROUGH PRESENTATION EARLIER BY OUR RATES CONSULTANT, BUT JUST KIND OF JUST SOME NUMBERS HERE AS FAR AS THE RATES NORTH TEXAS CHARGES US, WE'RE SEEING A 4% INCREASE ON THE WATER SIDE, ABOUT 17% ON THE WASTEWATER SIDE FROM THE RATE THEY WERE CHARGING US OR ORIGINALLY PROPOSED TO US IN 24, AND THEN ON OUR SIDE, YOU SAW THE RATES HE PRESENTED EARLIER,
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THOSE WILL BE ABOUT 2% INCREASE ON THE WATER SIDE, TO OUR CITIZENS AND 9% ON THE WASTEWATER SIDE. HERE'S ONE OF THOSE LOVELY CHARTS AGAIN. NOT HAND DRAWN BY MR. HOLLOWAY, BUT, I'M NOT GOING TO GO INTO THE HISTORY OF MR. SANKEY AGAIN, BUT HERE YOU CAN SEE, THIS ONE NOT AS CONVOLUTED AS THE GENERAL FUND. YOU CAN, IT'S A LITTLE BETTER LOOKING, BUT YOU CAN SEE OUR REVENUE. OBVIOUSLY, THE BULK OF IS OUR WATER AND SEWER CHARGES, AND THEN THOSE FLOW INTO OUR TWO BIGGEST DEPARTMENTS, WHICH IS OUR, OUR PUBLIC WORKS SIDE OF THE HOUSE, THE WATER AND WASTEWATER SIDES, AND THEN YOU CAN SEE KIND OF LIKE WE SAW FROM THE RATE CONSULTANTS IN THEIR PIE CHART OF OUR EXPENSES, THAT NORTH TEXAS NUMBER IS A PRETTY BIG PIECE OF IT ALL, AND THEN, OF COURSE, DOWN THERE NON-DEPARTMENTAL, THAT'S MAINLY GOING TO BE MADE UP OF YOUR, OF YOUR DEBT PAYMENTS. ALL RIGHT. SO IF WE GO INTO OUR SOLID WASTE SURFACE WATER DRAINAGE FUNDS, SO OF COURSE, AS YOU ALL MAY HAVE HEARD, WE WILL HAVE A NEW SOLID WASTE PROVIDER ON OCTOBER 1ST, IN FRONTIER, WE'LL ALSO HAVE A NEW RECYCLING PROCESSOR IN BALCONIES, THE SOLID WASTE RATES, THEY WILL INCREASE FOR RESIDENTIAL CUSTOMERS. AND ON THE COMMERCIAL SIDE AS WELL, THERE WILL BE CHANGES TO THE RATES, AND THOSE WILL BE BROUGHT BEFORE YOU, I BELIEVE, IN A SEPTEMBER, FOR ADOPTION, AND THEN JUST A COUPLE SUPPLEMENTALS THERE THAT CODE OFFICER THAT THEY'RE PROPOSING IS TO HELP, WITH THE DOWNTOWN, ENFORCEMENT ISSUES, THEN ON THE SURFACE, WATER SIDE AGAIN, WE SAW THAT, THE RATE PROPOSALS FROM OUR CONSULTANTS, SO WE'RE PROPOSING TO ADOPT THOSE, AS YOU SAW, ABOUT 50% INCREASE ON THE RESIDENTIAL AND COMMERCIAL SIDE, THE FEES, AGAIN, AS I MENTIONED, WERE LAST CHANGE IN 2014, WHICH WAS IN FISCAL YEAR 15. SO IT'S BEEN BEEN ABOUT TEN YEARS, WE EXPECT THIS SHOULD BE ABOUT A 20% INCREASE IN OUR REVENUE FOR THE SURFACE WATER DRAINAGE FUND. THAT FUND, AGAIN, HAS REMAINED STAGNANT, AND WE'RE HOPING, THAT WITH THIS NEW FEE STRUCTURE, WE CAN START TO FUND OUR CAPITAL PROJECTS OUT OF THERE. AND THEN HERE'S OUR THAT CAPITAL EQUIPMENT REPLACEMENT FUND WE HAD MENTIONED EARLIER, STARTED BACK IN 2014, TO CASH FUND REPLACEMENTS, FACILITY UPGRADES, SOME OF THE, THE LARGER, CAPITAL ITEMS, AND THEN JUST HERE'S A BREAKDOWN OF WHAT WE'VE SPENT SO FAR IN 24, I CAN TELL YOU THE BULK OF THE FIRE IS AGAIN, REPLACEMENT FOR, I THINK, A COUPLE AMBULANCES AND A FIRE TRUCK. AND I SHOULD ALSO MENTION TWO OUT OF THIS FUND THIS YEAR.NOT LISTED HERE BECAUSE IT WASN'T SPECIFICALLY A REPLACEMENT, BUT WE DID MAKE A SIGNIFICANT TRANSFER OVER TO OUR FACILITY CONSTRUCTION FUND TO HELP WITH THE FUNDING OF CITY HALL. NEXT UP, WE GOT OUR AIRPORT. I THINK MARK, YOU WANT TO SPEAK A LITTLE ON THIS SLIDE? I CAN HOLD ON TO IT BECAUSE, SURE, IT'S A SLIDE, THIS, THE OPERATING BUDGET OF THE MCKINNEY NATIONAL AIRPORT IS PRESENTING A BALANCED BUDGET FOR FISCAL YEAR 25, I WANTED TO MAKE SPECIAL MENTION THAT, THAT THE DEBT PAYMENTS FOR THE NEW CORPORATE CORPORATE HANGAR AND CUSTOMER FACILITIES WILL BEGAN IN FISCAL YEAR 24, AND ALSO IN 25, ALL OF THOSE WILL BE FUNDED FROM THE OPERATING OPERATING BUDGET OF THE AIRPORT. THEY WERE NOT INCLUDED IN THE, CALCULATION FOR THE INS PORTION OF THE TAX RATE. I JUST WANT TO MAKE SURE THAT THAT WE NOTED THAT TO YOU. WE WERE, THAT WAS DIRECTION FROM COUNCIL, AND WE WERE VERY SPECIFIC TO MAKE SURE THAT THAT THAT HAD HAPPENED. SUPPLEMENTALS, VERY MODEST THIS YEAR. THEY ARE LOOKING FOR A TRANSFER FOR PUMP FOR THE FOR THE FUEL FARM, ONCE AGAIN, I JUST WANT TO MAKE SURE WE WERE VERY CLEAR WHERE THAT DEBT PAYMENT WAS GOING TO BE PAID FROM THE, OPERATING PORTION OF THE MCKINNEY NATIONAL AIRPORT. SO, MARK, WHAT I'M UNDERSTANDING YOU SAYING, CORRECT ME IF I'M WRONG. IS THAT, PROPERTY TAXES THAT CITIZENS PAY ARE NOT GOING TO FUND THE AIRPORT. THE AIRPORT IS BEING FUNDED EXCLUSIVELY BY AIRPORT OPERATIONS, INCLUDING THEIR DEBT PAYMENTS. IS THAT FAIR, FOR THIS SPECIFIC DEBT PAYMENT? YES THERE IS, THE ISSUE OF THE FIRST, THE FIRST PURCHASE OF THE AIRPORT, ASSETS, THOSE WERE, THOSE ARE PURCHASED WITH THOUSAND 14. THAT'S A 2014 ISSUANCE. BUT ANYTHING THAT HAS BEEN NEW IS BEING HANDLED BY THE, BY THE AIRPORT ITSELF. AND
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I WAS RESPONDING SPECIFICALLY JUST TO MAKE SURE THAT THAT WAS THE DIRECTION GIVEN BY COUNCIL.I WANTED TO MAKE SURE THAT THAT WAS NOTED, THAT THAT IS SCHEDULED TO BE PAID OUT OF THE OPERATING PORTION OF THE THANK YOU. ALL RIGHT. LAST FEW SLIDES HERE, JUST A QUICK LOOK AT OUR COMPONENT UNITS, YOU KNOW, WE HAVE OUR HOTEL FUND, DIFFERENT ITEMS WE CAN SPEND HOTEL TAX ON, WE'RE LOOKING FOR 25 AT ABOUT 2.9 MILLION, THIS FUND HAS COME ALL THE WAY BACK SINCE. I MEAN, IT WAS AT ITS LOWEST POINT DURING THE COVID 20. I THINK IT WAS DOWN TO ONLY BRINGING IN 1.4 MILLION. SO WE'VE MORE THAN DOUBLED THAT. SINCE THAT FISCAL YEAR, 20, 21 YEARS, OF COURSE, OUR A MAJOR PART OF THE HOTEL FUND, THEY FUND OUR VISIT MCKINNEY, SO YOU CAN SEE THEIR TOTAL OPERATIONS ARE UP JUST A BIT, AND THEY HAVE, SEVERAL SUPPLEMENTALS, THAT ARE INCLUDED IN THEIR BUDGET, A LOT OF THEM HAVE TO DO, FOR EXAMPLE, A SIMPLE VIEW WEB SERVICES HAVE TO DO WITH UPDATING THE WEBSITE. THAT THEY USE IN VARIOUS MARKETING PROMOTIONAL TOOLS. AND THEN JUST HERE'S A QUICK LOOK AT THEIR BUDGET, THEIR REVENUES AND EXPENDITURES. AGAIN, THE BIG PORTION OF THE REVENUES IS THAT TRANSFER FROM THE HOTEL FUND, I WILL SAY THEIR OTHER INCOME HAS GROWN, YOU KNOW, SIGNIFICANTLY. IT'S A SMALLER PART, BUT WORTH MENTIONING NOW THAT THEY DO OWN THE STOREFRONT OVER THERE, NOW FOR OUR EDC AND CDC. SO FOR BOTH OF THEM, THIS IS THE EDC SLIDE.
BUT SINCE THEY SPLIT THAT 1% EVENLY, THEY'RE BOTH ESTIMATED TO BRING IN A LITTLE OVER $24 MILLION IN SALES TAX, IN FISCAL YEAR 25. AND THEN JUST HERE'S A BREAKDOWN OF THAT, AND THEN I WILL SAY NO, MARK MENTIONED THE, THE ROADWAY, THE TRANSFER FOR ROADWAY IMPROVEMENTS, FOR FISCAL YEAR 25, IT'S ABOUT 1.7 MILLION EACH. SO ALMOST 3.5 MILLION BETWEEN THE TWO OF THEM. WE'RE PROJECTING FOR 25, AND HERE'S JUST A BREAKDOWN OF THEIR CURRENT STAFFING STRUCTURE. AND THEN AGAIN, SAME WITH THE CDC SIDE. AGAIN, THE LITTLE OVER 24 MILLION IN SALES TAX. THEY'RE LOOKING TO BRING IN NEXT YEAR, A LITTLE OVER THAT SAME 5% OVER, FISCAL YEAR 24 THAT WE'RE EXPECTING TO COME IN, THEN AGAIN, JUST A BREAKDOWN OF THEIR REVENUES AND EXPENDITURES, IN A MUCH SMALLER STAFF, THEY'RE JUST THE THREE PEOPLE. DID YOU WANT TO TAKE THIS ONE BACK? I THINK THERE'S OUR LAST TWO SLIDES. SO THERE ARE, WITH THE BUDGET, THERE ARE SOME LOOSE ENDS AND ONE IN PARTICULAR, IS THE REQUEST THAT WAS MADE OF THE CITY COUNCIL BY THE MF MCKINNEY.
EDUCATION FOUNDATION, FOR, $500,000 OVER THREE YEARS, STARTING WITH 250,000 IN FISCAL YEAR 25, CITY COUNCIL HAD A PRESENTATION AT WORK SESSION BACK IN JUNE, THERE WAS NO CONSENSUS, TO STAFF ON WHETHER OR NOT TO INCLUDE THIS IN THE BUDGET. SO WHAT WE WANTED TO DO IS BRING IT BACK AND TRY TO GET AN IDEA OF, DO YOU WANT US TO MOVE FORWARD OR NOT? WHAT WE WANT TO DO, THOUGH, IS PRESENT YOU WITH SOME OPTIONS, IF YOU WERE TO DO THAT, WHERE THE FUNDING WOULD COME FROM, HOW YOU WOULD PAY FOR IT, SO WHAT WE'VE PUT ON HERE IS IF YOU FUNDED IT WITH YOUR TAX RATE, MEANING EVERYTHING THAT'S PROPOSED IN THE BUDGET WOULD REMAIN. AND THEN YOU WOULD JUST ADD THIS, IT'D BE ADDITIVE TO THE BUDGET, THIS SHOWS YOU WHERE YOU WOULD, HOW YOU WOULD PAY FOR IT. BASICALLY YOUR EFFECTIVE RATE, YOUR RATE WOULD GO UP FROM 0.4155 TO 4 161, AND OUR EFFECTIVE RATE WOULD GO FROM POINT. I'M SORRY, FROM .2.9 7% TO 3.20%. AND YOU'D ADD ABOUT $3.24 TO THE TAX BILL, YOU COULD ALTERNATIVELY LOOK AT, TAKING IT FROM OTHER COMMUNITY GRANTS. AND WE'LL GO TO THE NEXT SLIDE TO GIVE YOU AN IDEA OF WHERE YOU WOULD HAVE TO LOOK AT SOME OF THOSE COMMUNITY GRANTS. IN OTHER WORDS, AS I SAY, SOMEBODY HAS TO TAKE A HAIRCUT SOMEWHERE ELSE, AND WHERE WOULD WE GET THAT FUNDING FROM? SO CAN WE GO TO THE NEXT SLIDE, PLEASE? THIS IS THE CURRENT PROPOSED FUNDING FOR COMMUNITY GRANTS. THIS IS THE REMEMBER EARLY IN MY COMMENTS THERE WAS LIKE $3.08 PER CAPITA IN MCKINNEY, TO PAY FOR COMMUNITY GRANTS, INVESTMENT IN THE COMMUNITY. AND IF YOU WANTED TO, YOU COULD TAKE FROM SOME OF THESE, REDUCE SOME OF THESE TO MAKE ROOM FOR FUNDING FOR THE MEF, AND THEN THE ALTERNATIVE IS
[01:40:09]
WHICH WAS MENTIONED ON THE PREVIOUS SLIDE, IS YOU COULD GO INTO SOME OF OUR SUPPLEMENTALS AND REDUCE SOME OF THOSE, THE SUPPLEMENTALS REMEMBER, THOUGH, WE HAD $21 MILLION IN SUPPLEMENTAL REQUESTS. WE HAD ABOUT 6 OR $7 MILLION TO BE ABLE TO FUND THOSE. WE HAD TO GO THROUGH EACH OF THOSE WITH A FINE TOOTH COMB AND IDENTIFY THOSE THAT ARE THE MOST IMPORTANT TO HAVE, BUT THAT IS THE PREROGATIVE OF THE CITY COUNCIL. IT'S YOUR BUDGET TO ADOPT IF YOU WANTED TO DO IT THAT WAY, AS WELL. SO WITH THAT, I WANTED TO BRING THIS TO YOUR ATTENTION, BECAUSE THAT WAS STILL AN UNADDRESSED OR UNRESOLVED MATTER THAT WE WANT TO MAKE SURE WE ADDRESS. SO I'LL LEAVE IT TO YOU. PAUL, I HAVE SOME OTHER IDEAS ON IT. I'M WONDERING, THOUGH, IF, THIS IS, OF COURSE, OUR FIRST MEETING. LIKE TO PUT IT BACK ON, ON WORK SESSION. OUR NEXT WORK SESSION. WORK SESSION TO HAVE JUST A TEN MINUTE DISCUSSION ON SOME OTHER IDEAS. DOES ANYBODY IN FAVOR OF DOING THAT? OKAY, SO IF WE CAN POSTPONE THAT DISCUSSION NOW TO NOT DERAIL THIS MEETING AND, AND HAVE THAT DISCUSSION AT OUR NEXT WORK SESSION, NEXT WORK SESSION WILL BE SEPTEMBER 6TH. WE GOT AN AUGUST 20TH, AUGUST 27TH. IS THAT AUGUST 20TH IS FINE. OKAY THE BUDGET ADOPTION IS SCHEDULED FOR SEPTEMBER 6TH. SEPTEMBER 6TH? YEAH SO I CAN TELL YOU THAT I'M PRETTY SURE THAT IF DECIDED, IT WILL NOT BE. I BELIEVE I'M GOING TO SPEAK FOR COUNCIL, THAT IT PROBABLY WILL NOT BE AN INCREASE IN THE TAX RATE, WHICH IS WHY I THINK WE CAN CONTINUE TO MOVE FORWARD NOW ANYWAY. BUT I WANT TO HAVE A DISCUSSION ON OTHER IDEAS, AT THAT WORK SESSION, BUT IT WOULDN'T ENTAIL COMING BACK TO AN INCREASED TAX RATE. ONE SLIDE THAT'S SAFE TO SAY. I GUESS THIS IS PROBABLY PRIOR COUNCIL. SO THIS IS JUST AUTOMATICALLY AGREED UPON THAT WE CONTINUE THIS AS IS OR THIS IS WHAT IS PROPOSED. THE ARTS COMMISSION, THAT NUMBER HAS GONE UP I BELIEVE IT HAS. AND THEN WE DO FUND, SOME OF THE ARTS COMMISSION. THIS IS JUST FROM THE GENERAL FUND. WE DO FUND A PORTION OF THE ARTS COMMISSION, FROM THE HOTEL MOTEL TAX FUND.ONCE AGAIN, THIS IS JUST THE GENERAL FUND PORTION. BUT YES, YOU ARE CORRECT. THERE'S THERE ORGANIZATIONS DO NOT REAPPLY ANNUALLY, THAT ARE LISTED HERE, BUT THAT IS WE SHOW THIS EVERY YEAR. WE SHOW WE MAKE COUNCIL AWARE THAT THAT THAT THESE ARE THE WE'VE BEEN DOING THIS AT LEAST SINCE I WOULD SAY 2000. WELL, SOME OF THEM HAVE CHANGED. SO LET'S LET'S CLARIFY THIS. SO THE ARTS COMMISSION THOSE ARE COMPETITIVE FOLKS HAVE TO COMPETE FOR ARTS COMMISSION GRANTS, COMMUNITY SUPPORT GRANTS, SAME THING. THOSE ARE COMMUNITY GROUPS THAT COMPETE FOR COMMUNITY SUPPORT GRANTS. DOWNTOWN SECURITY WAS ADDED. THIS IS KIM. CAN YOU MAYBE ADD ON WHAT THAT IS? I WANT TO MAKE SURE THAT THE RECORD SHOWS WHAT EACH OF THESE ITEMS ARE. YES. SO I THINK THIS WAS ADDED MAYBE TWO YEARS AGO AND THIS HELPED FUND THE PRIVATE SECURITY PERSON WHO WORKS EVENINGS AND WEEKENDS TO SUPPORT OUR GROWING DYNAMIC DOWNTOWN BUSINESS ENVIRONMENT.
DOES THAT COME? I'M SORRY. SOME FEEDBACK WE GOT FROM OUR MAIN STREET FOLKS ABOUT WE FUND PARKING DISCUSSION AND SOME STREETS SPACES. I ALSO JUST WANT TO ADD ON THE COMMUNITY SUPPORT GRANTS. THEY ARE COMPETITIVE AND THIS PAST YEAR WE RECEIVED OVER $1 MILLION IN REQUESTS. THESE ARE GIVEN OUT TO LOCAL NONPROFITS THAT PROVIDE FOOD, HOUSING ASSISTANCE, ETC. SO WE GET ABOUT $1 MILLION OF REQUESTS A YEAR, AND WE DOLE OUT ABOUT 225,000. WE VOLUNTEER MCKINNEY HAS BEEN A LONG STANDING ITEM ON HERE SINCE I'VE BEEN HERE. I THINK IT WAS AROUND 60 OR 65,000 PER YEAR WHEN I GOT HERE, IN 2016, IT WENT UP TO 75,000 A FEW YEARS AGO AND IS HELD STEADY AT THAT. I THINK ALL OF YOU ARE VERY WELL AWARE OF WHAT VOLUNTEER MCKINNEY DOES. I THINK THE RATIONALE FROM THE CITY HAS BEEN, IF WE DON'T FUND VOLUNTEER MCKINNEY, WE'RE GOING TO END UP HAVING TO PAY FOR SOME OF THIS STUFF OURSELVES OR DO SOME OF THIS OURSELVES. AND THEY DO A VERY GOOD JOB, PECAN GROVE MEMORIAL SERVICE HAS BEEN ON THERE FOREVER. IT'S A SMALL NUMBER. IT HASN'T CHANGED. BOYS AND GIRLS CLUB, $15,000 A YEAR. THEY DO AN AWFUL LOT FOR THE COMMUNITY. AGAIN, THIS IS ONE OF THOSE THINGS WHERE, IF WE DON'T FUND THEM, THEN, YOU KNOW, THEY'LL HAVE TO FIND THE FUNDING SOMEWHERE ELSE. BUT THIS IS RELATIVELY SMALL IN THEIR OVERALL BUDGET, ONE HEART MCKINNEY. THIS WAS ADDED A COUPLE OF YEARS AGO. AGAIN, ONE HEART MCKINNEY IS A, SORT OF AN AGGREGATOR OF, A MARSHALL. THE SOCIAL SERVICES IN THE COMMUNITY, THEIR ANNUAL BUDGETS, A COUPLE HUNDRED THOUSAND DOLLARS A YEAR. THIS IS A SMALL
[01:45:01]
CONTRIBUTION FROM THE CITY, DOWNTOWN HOLIDAY DECORATIONS, THIS IS ON HERE TO HELP, IMPROVE AND UPDATE OUR HOLIDAY DECORATIONS THAT WE HAVE, AND THIS IS A CITY CONTRIBUTION TO HELP MAKE THAT HAPPEN. I DO ALSO BELIEVE THE CDC, IS CONSIDERING, SOME ASSISTANCE IN THAT REGARD.AND THEN THERE'S A LITTLE BIT OF UNASSIGNED ASSISTANCE FOR CONTINGENCIES THAT MAY COME UP, BECAUSE THEY SOMETIMES DO THROUGHOUT THE YEAR. SO, THAT'S WHAT EACH OF THESE ITEMS ARE.
THEY'RE ALL SUBJECT TO COUNCIL APPROVAL AND THE BUDGET. THANK YOU. SO WITH WITH THAT SLIDE THAT REALLY BRINGS THAT BRINGS US TO THE TO THE END OF THE FORMAL PRESENTATION. WE'LL BE HAPPY TO TAKE ANY QUESTIONS. I DO WANT TO SHOW YOU THE CALENDAR GOING FORWARD. CITIZEN INPUT MEETING ON AUGUST THE 20TH. THAT IS NOT AN OFFICIAL PUBLIC HEARING. IT'S MUCH LIKE THE ONE WE HAVE IN APRIL. WE WANT TO ALLOW THE PUBLIC TO HAVE AS MANY OPPORTUNITIES TO SPEAK AS POSSIBLE, SO WE DO THIS USED TO BE A REQUIRED PUBLIC HEARING, BUT THE STATE CHANGED THE WAY THEY DO THINGS. WE ONLY HAVE TO HAVE ONE PUBLIC HEARING ON THE BUDGET. SO THIS IS, THIS IS WE'VE KEPT IT AS A MATTER OF PRACTICE. SO WE'LL HAVE A CITIZEN INPUT HEARING ON THE 20TH, OFFICIAL BUDGET. PUBLIC HEARING, TAX RATE, PUBLIC HEARING. WE HAVE TO DO A RATIFICATION OF PROPERTY TAX REVENUE INCREASE, AND THEN WE ADOPT THE BUDGET, THE TAX RATE AND A FEE ORDINANCE ALL ON SEPTEMBER THE 3RD. SO THAT'S ALWAYS A VERY BUSY MEETING, WITH THAT, I WILL STAND FOR ANY QUESTIONS, COMMENTS OR CONCERNS. QUESTIONS FOR MARK. YOU'RE TECHNICALLY SITTING I'VE GOT ONE. AND IF IT CAN'T BE ANSWERED TODAY, THAT'S OKAY. AND YOU GUYS TELL ME IF I'M OFF BASE. BUT A COUPLE YEARS AGO, I THINK IT WAS NOVEMBER OF 22. WE HAD AN ELECTION TO ALLOW FOR PACKAGED LIQUOR SALES HERE IN MCKINNEY, AND WE TALKED ABOUT THE PROPONENTS, TALKED ABOUT AN INCREASE IN SALES TAXES THAT THAT WOULD DRIVE. AND WE'VE ALL SEEN A NUMBER OF LIQUOR STORES POP UP HERE, AND I EXPECT THEY'RE DOING BUSINESS OR THEY'D BE OUT OF BUSINESS. RIGHT. SO I THINK THERE'S A REASONABLE CHANCE THAT THEY'RE SELLING A LOT OF LIQUOR, BEER AND WINE. BUT, YOU KNOW, OUR SALES TAXES ARE UP ABOUT 5% IS WHAT WE IS WHAT WE'VE GOT. AND IT SEEMS TO ME THAT I'D LOVE TO SEE A BREAKDOWN OF IF WE CAN, OF WHAT THE LIQUOR LIQUOR SALES ARE BRINGING IN AS FAR AS THE SALES TAX, BECAUSE IT SEEMS TO ME THAT PERHAPS OUR SALES TAXES MIGHT BE, AT LEAST IN MY MIND, A BIT DISAPPOINTING IN TERMS OF THE RATE OF GROWTH COMPARED TO OUR POPULATION GROWTH. AND, AND, AND THE FACT THAT WE DID GET THAT BECAUSE IN THE PREVIOUS YEARS WE WERE GETTING SOME REALLY ROBUST SALES TAX GROWTH FIGURES AND, SALES TAXES IN MY MIND ARE BETTER THAN PROPERTY TAXES, RIGHT? YOU KNOW, I THEY'RE JUST BETTER AS FAR AS A WAY TO FINANCE THE CITY. THEY PUT A DOWNWARD PRESSURE ON THE PROPERTY TAXES. OUR CITIZENS PAY. SO I'D LIKE TO GET A GOOD HANDLE ON, YOU KNOW, WHERE OUR SALES TAXES ARE COMING FROM, IS THERE AN IS ARE THERE AREAS THAT WE OUGHT TO CONSIDER? TARGETING FOR INCREASING THOSE, BUT MY THOUGHT WAS GENERATED AROUND THE LIQUOR STORES BECAUSE I'M THINKING, MAN, IF WE DIDN'T HAVE THOSE, WHAT WOULD OUR SALES TAX NUMBERS LOOK LIKE? UP 2%. UP 3%.
I DON'T KNOW THE ANSWER, BUT, I'D LIKE SOME FOCUS ON THAT. SURE. WE DO TRACK, THAT TO SOME EXTENT, AND WE, WE CAN PRODUCE SOME NUMBERS. I WILL SAY THAT A LOT OF THE EXPONENTIAL GROWTH THAT WE SAW WAS SOME OF IT WAS A PHILOSOPHICAL CHANGE FROM THE COMPTROLLER'S OFFICE OF HOW SALES TAXES WERE COLLECTED, I THINK THAT THAT THE INCREASED, SALES TAXES THAT, THAT WE'RE SEEING, YOU KNOW, WE BEFORE THE COMPTROLLER CHANGED THAT, WE WERE GROWING AT 4% A YEAR. AND WHEN WE'RE SEEING 5% GROWTH, WITH SOME OF OUR OTHER CITIES AROUND HERE NOT SEEING GROWTH AT ALL, THIS FISCAL YEAR, FRANKLY, WE'RE WE'RE IN A BETTER POSITION THIS FISCAL YEAR THAN SOME OF OUR, OUR NEIGHBORING CITIES, I WOULD SAY THAT, YOU'LL SEE SOME IMPACT FROM, FROM LIQUOR STORES IN THOSE TAXES, BUT IT, IT WAS IT'S, YOU KNOW, A NICE PORTION OF BUT IT'S NOT WHAT'S DRIVING OUR, OUR, OUR SALES TAX GROWTH. IT PROBABLY, WHILE IT HAS INCREASED IT, I DON'T THINK THAT IT WAS EVER INTENDED TO REALLY PUSH US OVER THE MARK. I WILL SAY THAT INTERNET SALES, ALSO THAT'S THE DRAMATIC IMPACT THAT THEY DID. AND I REMEMBER THAT WHEN, YOU KNOW, IT USED TO BE AMAZON WOULD WOULD PAY THE TAX TO THE CITY, IT LANDED AND THEN ULTIMATELY THE RESIDENT LANDED.
AND SO I GET THAT I, YOU KNOW, I DO THINK IT'S AT LEAST SOMETHING THAT I WANT TO FOCUS ON UP HERE
[01:50:06]
THAT IF WE HAVE OPPORTUNITIES TO INCREASE SALES TAX, THAT PUTS A DOWNWARD PRESSURE ON THE PROPERTY TAX, BECAUSE THE REALITY IS, IN THIS BUDGET, YOU KNOW, THE AVERAGE PROPERTY TAX ON A HOMEOWNER'S GOING FROM 1993 YEAR UP TO 21, 38, YOU KNOW, AND THAT'S I GET IT, YOU KNOW, I GET IT. WE'RE ADDING A LOT OF POLICE OFFICERS. WE'RE DOING A LOT OF THINGS. WE'RE IMPROVING THE STREETS. IT TAKES MONEY TO RUN THE CITY. AND I APPRECIATE ALL Y'ALL DO FOR THAT. AND I STILL THINK IT'S A GOOD VALUE. BUT, TO THE EXTENT SALES TAXES WERE HIGHER, THAT WOULD PUT A DOWNWARD PRESSURE ON THAT NUMBER. AND I WOULD JUST LIKE TO BE ABLE TO HAVE SOME FOCUS ON THAT AS WE MOVE FORWARD. ABSOLUTELY. WE'LL MAKE THAT AVAILABLE, WE'RE HAPPY TO DO IT.THERE'S A COUPLE OF OBSERVATIONS, COUNCILMAN CLAUDIA, THAT I WOULD OFFER.
NUMBER ONE, SALES TAXES ARE GREAT, BUT THEY'RE ALSO VOLATILE, AND, YOU KNOW, WHEN THE ECONOMY SLOWS DOWN, THEY'RE THE FIRST THINGS TO SEE FLATTEN OR EVEN GO DOWN. SO WE TRY TO BALANCE OUR, YOU KNOW, USE OF THOSE, AV IS FAR MORE STEADY OF A REVENUE SOURCE. BUT OBVIOUSLY WE DON'T WANT TO PUT TOO MUCH ON THE PROPERTY TAX PAYERS, BUT SALES TAXES ARE A NICE THING TO HAVE WHEN YOU HAVE THEM, THE OTHER THING I WOULD POINT OUT IS THAT WHILE WE BUDGETED A 5% INCREASE IN SALES TAXES, THE CPI IS 5%. SO WHEN YOU ADJUST FOR INFLATION, WE'RE FLAT, AND SO WE'RE GLAD TO STILL SEE THAT GROWTH THERE. BUT, I WOULD JUST POINT SOME CAUTION. TO WHEN YOU ADJUST FOR INFLATION AND THAT MAY BE WELL-FOUNDED. I JUST LIKE TO DIG INTO IT A LITTLE BIT, JUST ANECDOTALLY STATE THAT, THERE IS AN AVERAGE INCREASE OF $145 A YEAR. OF COURSE, THE AVERAGE INCREASE IN, IN VALUE EQUITY, IF YOU WILL, HAS BEEN ABOUT 80 TIMES THAT FOR EACH HOMEOWNER. SO IT'S WE'RE SPENDING 100. AND AS AN AVERAGE HOMEOWNER WE'RE SPENDING 100 OR $145 IN ESSENCE, TO CREATE 80 TIMES THAT IN EQUITY IN OUR HOME. YEAH. WHEN I WHEN I DO THE MATH ON PAGE EIGHT OF OUR BUDGET, THE AVERAGE TAXABLE VALUE OF A HOME FROM 15 THROUGH 24 IS GONE UP COMPOUNDED 7.74% A YEAR. THE AVERAGE TAX BILL FOR A CITIZEN HOMEOWNER HAS GONE UP 3.77. SO I DO UNDERSTAND AND AGREE THERE'S VALUE. I YOU KNOW, BUT FROM YEAR OVER YEAR WE'RE GOING UP ABOUT 7.2% HERE. AND, IT'S JUST SOMETHING I'D LIKE TO LOOK AT. AND YOUR POINT ABOUT SALES TAXES BEING POTENTIALLY A LITTLE BIT UNSTABLE IS A IS A GOOD ONE, BUT GOOD YEARS GIVE US THE OPPORTUNITIES TO DO SOME THINGS, ESPECIALLY WITH THE CDC AND EDC. AND SINCE THEY'RE HELPING US WITH INFRASTRUCTURE RIGHT NOW. SO, IF THERE'S AN OPPORTUNITY WE'RE MISSING ON SALES TAX, I WOULD JUST LOVE TO KNOW THAT. SO I'D JUST LIKE TO HAVE A LITTLE BIT OF FOCUS ON IT. BUT I APPRECIATE THIS VERY MUCH. IN YOUR BUDGET BOOKS, IF YOU HAVE THEM, I DON'T KNOW IF YOU HAVE THEM IN FRONT OF YOU, BUT ON PAGES 85 THROUGH 87 YOU'LL SEE THE SUPPLEMENTALS. WE PROVIDE THAT EVERY YEAR. THESE ARE THE SUPPLEMENTALS REQUESTED BY THE DIFFERENT OPERATING DEPARTMENTS. SUPPLEMENTALS ARE ADDITIONAL PERSONNEL PROGRAMS. IF YOU WILL, EXPANDED SERVICE, THAT'S NECESSARY TO CONTINUE PROVIDING THE HIGH LEVEL OF SERVICE THAT WE HAVE IN THE COMMUNITY. THE ONES THAT ARE HIGHLIGHTED IN YELLOW, I BELIEVE, ARE THE ONES THAT ARE INCLUDED, BAKED INTO THE BUDGET PROPOSAL, THE ONES THAT ARE NOT HIGHLIGHTED ARE THE ONES THAT DIDN'T MAKE THE CUT, IF YOU WILL. THEY THEY DIDN'T MAKE THE CUTTING FLOOR. SO, AND THAT HAPPENS EVERY YEAR. NOT EVERY REQUEST CAN MAKE IT, BUT IN, IN CONSULTATION WITH OUR DEPARTMENT DIRECTORS, AND SOME ITERATIVE PROCESS BACK AND FORTH, WE ARRIVE AT WHAT, WHAT BUDGET ITEMS WE THINK ARE THE MOST IMPORTANT TO BE ABLE TO FOLD INTO THE BUDGET PROPOSAL. ANY OTHER QUESTIONS? ALL RIGHT. OKAY. WELL, THIS MIGHT BE THIS MIGHT BE RECORD TIME. IT'S 1024.
IT ISN'T IT ISN'T SEVEN YEARS. YEAH. SEVEN YEARS, POWERED THROUGH WITHOUT MULTIPLE BREAKS.
SO OKAY. GOT TO GET SOME CLARIFICATION ON OUR, RESERVE BALANCE AT THE BEGINNING. YOU SAID IT WAS A POLICY THAT WE. IS IT MAINTAINED 25% OF OUR GENERAL FUND OR. WELL, YES, WE ARE REQUIRED BY, CITY CHARTER TO MAINTAIN 25%. WE CARRY, AS MOST GROWING CITIES DO. WE CARRY MORE THAN THAT. AND, WE DO TALK TO BOND RATERS, WHO PREFER US TO CARRY SOMEWHERE IN THE ESPECIALLY WITH OUR TRIPLE-A CARRY MORE IN THE 33 TO 35% RANGE. WE DO CARRY JUST A LITTLE BIT MORE THAN THAT. 35% STRIVE TO MAINTAIN THAT. SO THAT'S WHERE WE ARE. THE REASON I MENTIONED IT, BECAUSE WE HAVE A LOT OF CHARTS WHERE WE KIND OF COMPARE OURSELVES TO OTHER CITIES, BUT WE NEVER COMPARE. HOW MUCH ON RESERVE DO WE HAVE COMPARABLE TO OTHER CITIES,
[01:55:05]
BECAUSE THAT DOES THAT COULD AFFECT THE TAX RATE TOO. THEN IT DOES. BUT, WE HAVE WHEN WE HAVE CHOSEN TO USE RESERVES, WHICH WE HAVE DONE, WE GENERALLY DO THOSE FOR ONE TIME TYPE EXPENSES, NOT FOR ONGOING OPERATIONS BECAUSE WE, WE TRY NOT TO DO THAT, JUST AS A GENERAL PRINCIPLE, WE TRY TO PAY FOR CURRENT YEAR OPERATIONS WITH CURRENT YEAR TAXES WHEN WE DO HAVE RESERVES, OR WE DO SPEND DOWN RESERVES, WE TRY TO USE THOSE FOR ONE TIME TYPE ITEMS, WHETHER IT BE EQUIPMENT OR CAPITAL PROJECTS. RIGHT. BUT I'M JUST SAYING IF WE'RE IF WE ARE OVER RESERVING YOU KNOW, VERSUS OUR SISTER CITIES, THEN IT COULD LOOK A LITTLE SKEWED THAT, YOU KNOW, OUR, OUR PERCENTAGES AND EVERYTHING ARE OFF COMPARED TO OTHER CITIES WHEN WE ARE PROBABLY A LITTLE BIT MORE CONSERVATIVE THAN OTHER CITIES, PROBABLY. I THINK THAT'S A FAIR REQUEST. I THINK OUR STAFF CAN CERTAINLY PULL UP COMPARABLE INFORMATION ON WHAT OUR FUND BALANCE RESERVE THE UNRESTRICTED RESERVES ARE. IF WE WERE RESTRICTING MORE RESERVES THAN OUR PEERS, OUR RATE WOULD BE EVEN HIGHER. SO IF WE REDUCED THAT, OUR RATE WOULD ACTUALLY BE EVEN LOWER COMPARED TO OUR NEIGHBORING COMMUNITIES, SO, BUT THAT'S SOMETHING WE CAN ABSOLUTELY PULL UP AND PROVIDE, PROVIDE THAT TO THE COUNCIL, PROBABLY BEFORE THE NEXT WORK SESSION, CERTAINLY IN THE COMING DAYS. THANK YOU. ALL RIGHT, MOTION TO ADJOURN. SO MOVED. ALL IN FAVOR? AYE.* This transcript was compiled from uncorrected Closed Captioning.