May 20, 2026 City Council Budget Workshop

[ CALL TO ORDER]

[00:00:10]

8:30 A.M. I AM CALLING THIS MEETING OF ABILENE COUNCIL. COUNCILMAN ESPINOZA TO LEAD OUR

PLEDGE. >> LORD, THANK YOU FOR THIS DAY, THANK YOU FOR ALL THAT YOU POLICE WITH US, THANK YOU FOR ALL THE MEN AND WOMEN IN THE ROOM AND THOSE WHO ARE CONTINUALLY WORKING FOR OUR CITY.

I PRAY YOU GIVE US WISDOMAGE KNOWLEDGE TO MAKE WISE DECISIONS AND HAVE GOOD DECISION AND CONVERSATION OVER THE TOPICS THAT WILL BUILD THE FUTURE OF ABILENE.

THANK YOU FOR YOUR LOVE AND SON JESUS, LOVE.

IN YOUR SON >>

>> SUSS'S NAME WE PLAY. I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND

JUST FOR ALL. >> HONOR THE TEXAS FLAG, I PLEDGE ALLEGIANCE TO THE TEXAS, ONE UNDER GOD, ONE INDIVIDUAL.

[ PUBLIC COMMENTS]

>> WE WILL MOVE TO THE PUBLIC COMMENT PERIOD.

THERE BE NO FORMAL VOTE. THE PUBLIC COMMENT PERIOD WILL ALLOW MEMBERS OF PRESENT TO PRESENT IDEAS AND PLEASE COME FORWARD AND STATE YOUR NAME. AND THE CITY RERESIDE IN.

>> TAMMY FOGAL, GOOD MORNING. I WASN'T GOING TO GET UP HERE AND SAY ANYTHING BUT AS SOON AS I GOT HERE, I HAD TO BECAUSE I DON'T LIKE WASTING TIME TALKING TO ABOUT THINGS THAT AREN'T IMPORTANT BUT TODAY I WANT TO CELEBRATE THE COMMUNICATION THAT HAS HAPPENED FOR THE EVENT. THERE WAS A TIME LINE GIVEN OF WHAT THE PLAN IS FOR THE FUTURE AND AND THAT SO HELPFUL TO KNOW WHERE WE ARE GOING AND GIVES PEOPLE LIKE ME WHO ARE PLANNING SECURITY GOING THERE IS A PLAN. WE DON'T HAVE TO STRESS ABOUT WHERE THE DISDESTINATION IS. UP I REALLY WANTED TO HAPPEN IS THAT WE HAD THIS BUDGET WORKSHOP AFTER THE TAX APPRAISAL VALUES.

AND THAT WAS RESOLVED YESTERDAY. THERE WAS NOTHING ELSE.

I WOULD LIKE THE PRESENTATION NOTES BEFOREHAND AND THEN I WALK IN THE DOOR ANDHERE IS A COPY A DIGITAL COPY.

I WANT TO CELEBRATE THIS WIN. I THINK IT IS GREAT BECAUSE MAKING THIS INFORMATION AVAILABLE TO PEOPLE WHO WANT TO KNOW IS A HUGE THING AND IN THE ALWAYS APPRECIATED OR VALUED BUT THIS IS MY ONE MINUTE TO TELL YOU ALL, THANK YOU, I APPRECIATE. I APPRECIATE WHAT THE COMMUNICATION TEAM IS DOING ON SOCIAL MEDIA TO TRY TO GAUGE CITIZENS AND I JUST WANT TO TAKE A MOMENT TO SAY THANK YOU, I

APPRECIATE. >> WOULD ANYONE LIKE TO SPEAK AT

THIS TIME? >> MORNING, MY NAME IS RILEY.

WANTED TO COME IN WHEN I HAD A DAY OFF.

LOOKING HUH THROUGH THE PRIORITIZE, SOME OF THESE FOR LACK OF BETTER PHRASING STRIKE ME AS RICH I WANT TO REITERATE SOME OF THE ISSUES WE ARE FACING AND DEALING WITH ARE BECAUSE OF DECISIONS THAT WERE MADE. I JUST HOPE THAT -- I HAVE SEEN HOUSING STUFF IN HERE AND THAT GOOD TO SEE.

I HOPE THAT A LOT OF THAT WILL GO TO HELPING THE PEOPLE THAT ARE ALREADY HERE STRUGGLING WITH IT ON THE EDGE.

BECAUSE SOME OF THE PRIORITIES I SEE A LOT ABOUT TRYING TO ATTRACT NEW PEOPLE AND MORE PEOPLE IN.

BUT WE ALREADY HAVE 4,000 PEOPLE COMING IN AS AIRMEN.

THEY WILL BE A LOT. INCLUDING THEIR FAMILIES.

SO I HOPE THAT THE REST OF THIS MEETING IS REALLY ANGLED TO THE PEOPLE THAT ARE YOU ARE THE WILLING IN TOWN AND RESIDENTS THAT I HAVE SEEN ARE BEING DISPLACED AND HAVING TO MOVE TO DIFFERENT TOWNS BECAUSE THEY CANNOT LONGER AFFORD TO BE HERE.

SO I JUST WANT TO MAKE SURE THAT BROUGHT UP AT THE FOREFRONT.

BECAUSE WHILE WE DO HAVE A LOT OF GROWTH, WE HAVE A LOT OF ISSUESES THIS BUDGET, THIS NEW BUDGET WOULD GO TO HELP AND DEAL WITH HERE IN TOWN. AND I YOURS WANT TO MAKE SURE WE -- I JUST WANT TO MAKE SURE WE HAVE THAT AS A FOCUS.

>> ANYONE WOULD ANYONE ELSE LIKE TO SPEAK?

>> MY NAME IS SAMUEL GARCIA HERE IN ABILENE.

WHAT I WOULD WANT TO TALK ABOUT REAL QUICK IS MORE TO THE

[00:05:07]

THAT IS THE WAY WE SHOULD BE EXPECTING IT TO BE DONE AND THAT IS THE WAY IT SHOULD BE DONE. THERE IS ANOTHER PIECE THAT IS IMPORTANT. SO MANY TIMES WHEN YOU HAVE BOARDS, OF SCHOOL BOARDS, CITY COUNCIL, ANY TYPE OF SITUATION, BUDGETS, A LOT TIMES THE ADMINISTRATION COMES TO YOU AND SAYS, HEY, THIS IS WHAT WE WILL DO.

THIS IS WHAT YOU GOT MONEY TO DO.

AND THAT IS NOT THE WAY IT IS SUPPOSED TO WORK.

THE WAY IT IS SUPPOSED TO WORK IS YOU'RE SUPPOSED TO TELL THE ADMINISTRATION THESE ARE OUR PRIORITIES.

THESE ARE THE THINGS WE WANT TO MAKE SURE ARE FUNDED SO I'M EXPECTING THAT DURING THE PROCESS, THE BUDGET PROCESS THAT YOU TELL THE ADMINISTRATION THIS IS WHAT WE WAN.

BECAUSE THERE IS A COUPLE OF THINGS I WANT TO MENTION.

THE WONDERFUL GRAND OPENING WE JUST HAD AT REC CENTER.

YOU KNOW, WE SIT THERE AND WE -- ALSO THE STREETS OBVIOUSLY.

OUR STREETS HAVE BEEN JUST HORRIFIC AND GETTING WORSE EVERY DAY. WE ARE NOT GAINING ENOUGH REVENUE TO GET THEM DONE SO THERE HASSED TO BE PRIORITIES THERE. OUR FIREFIGHTERS NEED TO BE TREATED EQUITABLY, OUR POLICEMEN NEED TO BE GETTING TREATED FAIRLY. SO WE NEED TO MAKE SURE WE TELL THE ADMINISTRATION THESE ARE OUR PRIORITIES.

I DON'T LOOK AT PRE-BUDGETS OTHER THAN JUST REAL QUICK BECAUSE THE ONE THAT COUNTS IS THE ONE THAT IS ELECTED AND IMPLEMENTED AND FOLLOWING. ED.

SO YOU'RE SUPPOSED TO BE OUR REPRESENTATIVES THAT TAKE INFORMATION FROM YOUR COMMUNITY, THE FEEDBACK YOU GET ON A PRIORITY AND FOR ME, WHEN THOSE REC CENTERS WERE OPENED AND WE LEARNED AT THE RIBBING CUTTING, PEOPLE WERE SAYING WHAT ABOUT THE FOOD SERVICES OR THE LUNCH SERVICES FOR SENIORS? WHAT ABOUT THE CHILDREN THAT ARE GOING TO GET AFTER SCHOOL CARE OR SUMMER PROGRAMS? WHERE ARE THOSE AT? AND THOSE SHOULD BE A PRIORITY. BECAUSE IF YOU CAN HAVE A GIGANTIC PARTY FOR GIVING AN 858% TAX ABATE -- 85% TAX ABASEMENT TO PEOPLE WHO ARE BILLIONAIRE YARNS HAVE A HUGE CELEBRATION AND TELL US HOW WONDERFUL EVERYTHING GOING AND HOW MUCH REVENUE WE ARE BRINGING IN BECAUSE WE ARE BEING DYNAMIC IN THE WAY WE ARE DROPPING THIS WHILE PEOPLE ARE SUFFERING AND WE TURN AROUND AND TELL PARENTS THAT NO WE DON'T HAVE THE MONEY FOR THIS AND DON'T HAVE THE MONEY FOR THAT.

FIREFIGHT WE DON'T HAVE THE MUCH.

YOU CAN'T SAY BOTH. YOU CAN'T SAY WAIT, YOU GAVE 85% TAX ABASEMENT. BUT YOU CAN'T SAY IT ONE SIDE AND TELL THE PEOPLE THAT ARE PAYING THE TAXES AND NEEDING THE SERVICES THAT YOU DON'T HAVE ENOUGH MONEY TO PAY FAR IT.

THANK YOU. >> STILL IN THE COMMENT PERIOD.

[2. Presentation: Fiscal Year 2027 Pre-Budget Workshop]

WILL CLOSE THE DEPENDENT COMMENT PERIOD.

. THIS IS A PRESENTATION ON WHAT THE STAFF AND ALL THE WORK THEY HAVE DONE FOR DOING THIS IS ONLY A PRESENTATION AND WE GO GIVE GUIDANCE TO STAMP AS THE DIRECTION WE WOULD LIKE TO GO. WE LOOK FORWARD TO THIS INFORMATIONFF AS THE DIRECTION WE WOULD LIKE TO GO.

WE LOOK FORWARD TO THIS INFORMATION TODAY.

>> GOOD MORNING. I WOULD LIKE TO THANK ALL THOSE HERE TODAY TO HEAR THE PRE-BUDGET WORKSHOP.

THOSE WATCHING LATER. I WANT TO THANK YOU THE COUNCIL BECAUSE THIS IS ONE OF THE MOST IMPORTANT AND CRITICAL DUTY OF THE CITY COUNCIL IS TO GIVE DIRECTION AND PHYSICAL POLICY FOR THE STAFF ON MOVING FORWARD WITH THE BUDGET.

I ALSO WANT TO THANK OUR BUDGET TEAM, WHICH INCLUDES ALL THE DIRECTORS AND STAFF YOU SEE HERE BUT PRIMARILY, MARJORY AND I, CHRISTINE, NOEL, MYSELF HAVE BEEN WORKING ON THIS FOR SEVERAL MONTH. MARJORY AND I STARTED LOOKING AT A FINANCIAL MODEL IN OK CTOBER, CREATING A PROJECTION MODEL.

WE KNEW IN BUDGET WAS GOING TO BE SOMETHING LIKE WE HAVE SEEN BEFORE. WE WANTED TO MAKE SURE WE WERE PREPARED WITH FORECASTING AND MULTI-YEAR PLANNING BECAUSE OF THE CONSTRUCTION AND GROWTH AND THE ROLLER COASTER, HONESTLY, THAT WE ARE SEEING AND SOME REVENUES.

THIS IS SOMETHING THAT WE WANT TO MAKE SURE THAT YOU KNOW WE

[00:10:02]

WE ARE HAVING THIS WORKSHOP LATER IN THE YEAR AND THAT USUAL AND THAT IS BECAUSE WE DID NOT WANT TO COME TO YOU WITH ANY KIND OF NUMBERS. UNTIL WE HAD THE ESTIMATED TAX VALUES FROM TAYLOR CAD BECAUSE OF THE INCREASED PROPERTY TAXES WE ARE SEEING WITH ECONOMIC DEVELOPMENT, BECAUSE OF THE SALES TAX DYNAMIC, WE WANTED TO BRING YOU THE MOST ACCURATE PROJECTIONS POSSIBLE WHICH WE DID RECEIVE A COUPLE OF WEEKS AGO. SO FIRST WE WILL START WITH THE FISCAL STORY, WHICH IS BASICALLY LOOKING -- THERE WE GO.

WE ARE GOING TO LOOK BACKWARDS, LOOK FORWARDS A BIT.

PARTIALLY THAT IS BECAUSE AS YOU KNOW, THIS IS MY FIRST FULL BUDGET TO GET TO BE WITH THE CITY OF ABILENE.

AND HAVING CONTEXT OF WHERE WE HAVE BEEN CREATES A BETTER UNDERSTANDING OF OUR CURRENT REALITY AND SO WE ALSO WANTED TO PRESENT THIS TO YOU ALL AS THE COUNCIL, AND THE PUBLIC, TO REMEMBER THAT IT IS NOT JUST THE CURRENT SNAPSHOT IN TIME THAT WE GAIN WISDOM FROM BUT IT IS MORE OF A BROAD PERSPECTIVE.

SO AS YOU KNOW WE ARE ENTERING INTO THIS INTERESTING TIME, EXCEPTIONAL TRANSFORMATION, ECONOMICALLY, AND YET WE ARE ALSO COMING IN TO THIS SEASON ON THE HEEL OF A FAIRLY CONSTRAINED PAST FEW YEARS IN REGARDS TO SE SALES TAX. OUR GROWTH IS REQUIRING MORE OF US, INFRASTRUCTURE, PERSONAL SERVICES, AND SO WHAT WE ARE TALKING ABOUT TODAY, WE KNOW WILL SHAPE OUR LONG-TERM SERVICE CAPACITY, OUR INFRASTRUCTURE, AND OUR FINANCIAL DECISIONS.

SO WE WANT TO ALSO START WITH REMINDING YOU ALL OF THE COUNCIL PRIORITIES AND OBJECTIVES THAT YOU SET FOR US WHICH WAS IN OUR STRATEGIC PLANNING RETREAT IN FEBRUARY.

I WON'T READ ALL OVER THE INDIVIDUAL OBJECTIVES BUT WANTED TO BRING YOUR -- THESE ARE THE PRIORITY YOU SET AS THE COUNCIL, TELLING US AS STAFF WHAT IS MOST IMPORTANT FOR US FOCUS ON, WHAT ARE THE RESIDENTS' NEEDS THAT WE NEED TO PAY ATTENTION TO? AND ALLOCATE ADDITIONAL RESOURCE AND IMPROVE OUR SERVICE AND QUALITY DELIVER. COLLUDING INFRASTRUCTURE, COMMUNITY ENGAGEMENT, HOUSING, SUSTAINABLE GROWTH AND ORGANIZATIONAL EXCELLENCE. EACH ONE OF THESE SHOWS SOME OF THOSE OBJECTIVES THAT PIT UNDER EACH ONE OF THEM.

YU'RE GOING TO SEE THE ICONS ON OTHER PORTIONS OF OUR WORKSHOP PRESENTATION. AND SO WHEN YOU SEE THE ICONS KNOW WE ARE CALLING THEM OUT SPECIFICALLY TO DRAW ATTENTION TO THE FACT THAT THESE ARE COUNCIL PRIORITIES AND THEREFORE ONES THAT THE STAFF IS BEING VERY INTENTIONAL ABOUT ADDRESSING. SO WE ARE GOING TO TAKE A QUICK LOOK BEHIND US OVER THE PAST 20 YEARS, JUST BRIEFLY TO REMIND OURSELVES OF THE DYNAMICS THAT WE HAVE EXPERIENCED, FISCALLY, TO FRAME OUR CURRENT CONDITION. SO YOU KNOW WE ARE CURRENTLY EXPERIENCING A SIGNIFICANT GROWTH BUT WE HAVE BEEN GROWING OVER THE PAST 20 YEARS. IT HAS BEEN SLOW AND STEADY BUT THERE HAS BEEN GROWTH WITHIN ABILENE PORT MAND THAT AREA.

WE ARE ENTERING INTO A NEW PHASE OF GROWTH THAT IS REQUIRING ADDITIONAL SERVICE DEMANDS. OVER THE LAST 20 YEARS WE HAVE HAD EXPANDED EXPECTATIONS AND WE HAVE RESPONDED WITH PUBLIC SAFETY INFRASTRUCTURE AND DEVELOPMENT RESPONSIVENESS.

WE ALSO HAVE EXPERIENCED. COMPLEXITY IN OUR OPERATION AND WE GENERALLY THANK OUR STATE AND FEDERAL GOVERNMENT FOR GIVING THE US HIGHER REGULATIONS, ENVIRONMENTAL REQUIREMENTS, GENERALLY THESE THINGS DO ADD MORE TIME, MORE MONEY TO OUR

[00:15:05]

WE HAD A PRETTY SIGNIFICANT SELF-INSURANCE CRISIS BACK IN 2016 THAT WE HAD TO COMPLETELY REGROUP AND RESOLVE IN A FEW METHODOLOGY. 2019 IS WHEN THE CITY ADOPTED THE MEET AND CONFER AVERAGE PLUS FOUR METHODOLOGY FCIVIL SERVICE PAY WHICH WAS A BUDGETARY COMMITMENT AND 2020 WAS A BIG YEAR FOR A LOT OF REASONS. THAT WHEN IS S.P.2 WAS PUT IN PLACE IN REGARDS TO REVENUE CUP CH CAPTURE WITH OUR PROPERTY TAX AND 2024/25 YOU HAD THE SIGNIFICANT SALES TAX DOWNTURN. HOW WE ARE NOT RECOVERED FROM THAT PARTICULAR FISCAL DIEMENT THAT -- DYNAMIC.

YOUR BUDGET GREW AT 3.6%. JUST LOOKING AT THE FUTURE AND SOME OF THE PROJECTIONS WHICH WE RECEIVED FROM THE D.C.O.A., POPULATION INCREASE IS PROJECTED TO BE UPWARDS OF AND THE 15% OVER THE NEXT TEN YEARS. SO WHEN WE LOOK AT BUDGET GROWTH AND THEN WE LOOK AT POPULATION GROWTH AND DEMAND, THESE ARE IMPORTANT DYNAMICS TO KEEP IN MIND.

NOW IT WASN'T ALL HARD AND HARDSHIP.

WE HAVE HAD SIGNIFICANT PROGRESS WITH THE CITY OF ABILENE AND MANY OF OUR COUNCIL PRIORITIES THAT WERE AND STILL ARE ON THE FOREFRONT. SO JUST TO REMIND YOU AS WELL FOR INFRASTRUCTURE AND PUBLIC SAFETY, THAT STREET MAINTENANCE FEE WAS INSTITUTED IN 2019 AND GENERATED 3 MILLION A YEAR FOR STREET IMPROVEMENT IN ADDITION TO GENERAL FUND.

IN THE PAST TEN YEARS WE HAVE INVESTED $1265 -- 165 MILLION IN STREETS. WE KNOW THERE IS MORE 20 DO BUT WE WANT TO RECOGNIZE THE PROGRESS THAT HAS BEEN MADE.

WE HAVE REPLACED THREE FIRE STATIONS AND OF COURSE WE JUST OPENED FIRE STATION NUMBER NINE, WHICH INCLUDED THE ADDITION OF 15 FIVREFIGHTERS TO AFTER THE THAT.

WE INSTITUTED APPARATUS FUNDS FOR FIRE AND POLICE.

A CRITICAL AND IMPORTANT PUBLIC SAFETY INVESTMENT.

ON OUR COMMUNITY FACILITIES, REMINDING YOU WE HAVE OUR LAW ENFORCEMENT CENTER THAT WAS OPENED IN 2019 WITH OTHER CITY FACILITIES. THE ADVENTURE COVE AND SPLASH PADS WERE OPENED IN '17 AND NEW RECREATION CENTERS THAT JUST OPENED A FEW WEEKS AGO AND IN A FEW MORE WEEKS, WE WILL SEE THE CYPRESS STREET AND CYPRESS PLAZA REVITALIZATION COMPLETE.

ALL ARE REPRESENTING THE COMMUNITY ASSET NAS HAVE BEEN INVESTED IN AND IMPROVED AND ARE UTILIZED BY THOUSAND OF RESIDENTS A WEEK. ADDITIONALLY WE WANT TO CALL OUT IMPORTANT ECONOMIC DEVELOPMENT ADVANCES WITH OUR PUBLIC PRIVATE PARTNERSHIP AND COMMUNITY, D.C.O.A. AND CHAMBER.

THE DOUBLE THREE CONVENTION HOTEL OPENED IN 2023.

I AM EXCITED TO ANNOUNCE THAT FULLY SELF-SUFFICIENT.

THERE WILL BE NO CITY FUND ALLOCATED FOR ANY TYPE OF OPERATIONS FOR THE DOUBLE TREE HOTEL MOVING FORWARD.

THE ALL KINDS ANIMAL INITIATIVE WITH THE PARK FACILITY, WHICH HAS BEEN GREAT NEW ADDITION TO OUR RESIDENTS AND SERVING OUR COMMUNITY. WE BUILD A.B.I. HAS BEEN A HUGE BENEFIT IN HOUSING. THIS IS MEANINGFUL.

WITHIN WE LOOK AT ABOUT A 30 HOUSES A YEAR, THAT MAY SOUND SMALL BUT WE HAVE ALREADY A..ED OVER 100 HOMES IN OUR IN FILL DEVELOPMENT THAT PROVIDED AFFORDABLE HOUSING AND I SAY GENERATIONAL BLESSING AND IMPACT TO OUR RESIDENTS.

THIS IS A VERY IMPORTANT PROGRAM.

I'M VERY PROUD TO BE PART OF. AND OF COURSE, NEW DEVELOPMENT COMING ON I20 WITH COMMERCIAL AND RETAIL WITH THAT NEW BASS PRO ANNOUNCED AND THE SHOPS AT RAINY CREEK.

SO ALTHOUGH WE HAVE HAD HEAD WINDS, WE HAVE HAD CHALLENGES.

[00:20:05]

YOU KNOW THAT. THERE IS ON GOING MAINTENANCE, STAFFING, AND COST ASSOCIATED WITH THOSE.

SO LOOKING TO THE FUTURE WE MUST MAKE SURE THAT WE ARE CONTINUING TO INVEST IN THOSE EXISTING FACILITIES AND INVESTMENTS TO KEEP THEM QUALITY -- TO KEEP THEM SAFE AND QUALIFY FOR RESIDENTS SO THE TAKE AWAY TODAY THAT WE WANT TO REMEMBER MIND YOU IS THAT WE ARE LOOKING AT NEW NCHLINVESTMENT BUT WE CANNO LOSE SIGHT OF THE EXISTING COMMITMENTS THAT WE HAVE WITH DIFFERED MAINTENANCE AND WITH ON GOING OPERATIONS.

MOVING FORWARD, WE HAVE GOT HEAD WINDS THAT WE ARE WALKING IN TO, REGARDING SOME FISCAL CONSTRAINT AND DYNAMICS THAT DOES MAKE IT CHALLENGING AND SO LOOKING AT SOME OF THE HEAD WINDS WE JUST WANT TO RECOGNIZE THAT INFLATION HAS BEEN SIGNIFICANT.

SINCE WE STARTED OUR STREET MAINTENANCE FUND, THOSE DOLLARS ARE PROBABLY GOING ABOUT 50 TO 60% OF THE AMOUNT THAT ORIGINALLY WE WERE ABLE TO AFFORD IN STREET WORK.

SO ALTHOUGH WE HAVE THE MAINTENANCE FUND, IT'S IN THE GETTING US THE SAME AMOUNT OF WORK WE HAD 10 YEARS AGO AND THAT IS ALL DUE TO INFLATION AND COSTS.

WORKFORCE PRESSURES IS A VERY SIGNIFICANT PART OF THIS PESENTATION. YOU WILL HEAR IN REGARDS TO THE LABOR MARKET, OUR VACANCY RATES, OUR TURN OVER AND COMPETITIVE COMPENSATION FOR ALL OF OUR CITY STAFF.

AND THEN OF COURSE WE HAVE THE EVER GOING STRUGGLE WITH AIMING FACILITIES AND DIFFERED MAINTENANCE.

SO THIS IS NOT DOOM AND GLOOM. IT'S JUST THE REALITY OF WHERE WE ARE AND ALL OF THE PRIORITIES THAT WE HAVE TO BALANCE.

SO LOOKING AHEAD, THESE ARE SOME FUTURE INVESTMENTS THAT THE CITY IS COMMITTED TO THROUGH AGREEMENTS WE HAVE MADE IN THE PAST OR GOALS WE HAVE SET. ALL OF THESE WILL BE COFFERED IN MORE DETAIL AND THE BUDGET MORE -- -- MORE OF THE BUDGET PROJECTION PRESENTATION BUT JUST TO LET YOU KNOW THESE ARE COMMITMENTS THAT WE HAVE MADE FOR FUTURE INVESTMENT AND PUBLIC SAFETY. SO WE ARE STILL LOOKING TO ADD SIX NEW POLICE OFFICERS TO GET TO THE TIME AUTHORIZED FORCE THAT THE CITY COMMITTED TO A FEW YEARS AGO.

THIS WAS A MULTI YEAR PLAN. I DO WANT TO RECOGNIZE THE CHIEF AND I HAD A BRIEF DISCUSSION ON NEEDS WITH TO PATCH AND WHETHER OR NOT THERE IS GOING TO BE SOME MODIFICATIONS TO THE NUMBER OF NEW OFFICERS IN ORDER TO SUPPORT NEEDS AND DISPATCH AND OUR VACANCIES. SO I KEPT THIS IN THE PRESENTATION AS IS. BY THE TIME WE COME TO RECOMMENDATION, THIS COULD BE CHANGED SLIGHTLY.

AGAIN WE ARE LOOKING ARE AT OUR PRIORITIES, AND OUR NEEDS.

AND NEEDING TO MAKE SURE WE ARE COVERING ALL OF THE STAFF REQUIREMENTS. WE HAVE A NEW CAD R.M.S. INITIATIVE. WE EXPECT AND THAT TO BE THREE TO FIVE MILLION. I KNOW THAT BIG NUMBER.

WE DON'T HAVE THOSE R.F.P.'S BACK BUT THAT WILL BE A CAPITAL INVESTMENT WITH AN ANNUAL COST OF ANNEN CREASE OF ABOUT $500,000 TO OPERATE FROM OUR CURRENT SYSTEM.

OUR BODY WORN AND THAT CAR CAMERAS SOFTWARE, THAT PARTICULAR SYSTEM IS AGING OUT. IT IS TIME TO UPDATE AND THIS WILL BE A LARGE INVESTMENT WITH AN ANNUAL EXPENSE OF OVER $# MILLION MORE THAN WHAT WE ARE PAYING.

-- 1 MILLION MORE THAN WHAT WE ARE PAYING.

WE WILL GO INTO YEAR THREE OF THE ONE TO ONE VEHICLE INITIATIVE AND SO YOU CAN SEE THAT AS A COMMITMENT WE ARE STILL MAINTAINING. ALL IN ALL, POLICE AND FIRE DO MAKE UP THE LARGEST PORTION OF OUR GENERAL FUNDS AT 54%.

SO LOOKING SPECIFICALLY AGAIN AT COMPENSATION, AND COMMITMENTS, THAT WE HAVE, WITH PUBLIC SAFETY, YOU KNOW THAT OUR MEET AND CONFER AGREEMENTS HAVE BEEN TIED TO PEER CITY AVERAGES WITH AN AVERAGE PLUS 4%. THEY THERE HAS NOT BEEN A CAP ON

[00:25:01]

AND THAT HAS BEEN SOMETHING THAT OVER THE PAST FEW YEARS WE HAVE SEEN CHALLENGE IN. BECAUSE OUR REVENUE GROWTH ALONE, NATURALLY HAS NOT ALWAYS BEEN ENOUGH TO ABSORB THATTEST CHASING IN THE PAYROLL GROWTH IN ADDITION TO TO THE OTHER CITY SERVICE DEMANDS THAT WE HAVE. WE HAVE MANAGED THAT THROUGH TAX RATE INCREASE. WE HAVE MANAGED THAT THROUGH MAKING A PRIORITY DECISION AND REDUCING FUNDING TO OTHER SERVICES. IN ORDER TO CONTINUE THAT COMMITMENT. SO WHAT WE ARE WANTING TO JUST MAKE SURE THAT WE ARE LOOKING AT MOVING FORWARD IS THE LONG-TERM PLANNING ON HOW WE CONTINUE TO MEET THE DEMANDS OF PUBLIC SAFETY AND HAVING EXCELLENT SERVICE AND COMPENSATION BUT ALSO WITHIN A WAY THAT IS MANAGEABLE AND SUSTAINABLE WITHIN OUR BUDGET. WE HAVE ALSO USED ONE TIME SOLUTIONS SUCH AS ENTERPRISE SUPPORT AND I WILL SHOW YOU THAW LATER ON THAT TO CONTINUE TO MEET THE COMMITMENTS.

SO THIS IS OUR EXPENDITURES CURRENTLY BY GENERAL FUND IN 2026 SO YOU CAN SEE THE PERCENTAGE OF WHERE THESE DOLLARS ARE GOING. AND ALSO CONSIDERING OUR COUNCIL PRIORITIES YOU CAN SEE THE PERCENTAGE OF WHERE THOSE ARE LOCATED. SO ON THAT CONCEPT OF THE GENERAL FUNDS, THIS IS A LITTLE HISTORY OF OUR BUDGETED EXPENDITURES OF THE GENERAL FUND ALONE BASED ON THE CATEGORYS WE JUST NOW SAW. THERE IS A LOT OF CONTENT ON THEN CHART. I WANT TO DRAW ATTENTION TO A COUPLE OF THINGS. SO THIS HISTORY SHOWS OUR YEAR-OVER-YEAR EXPENDITURES IN EACH OF THE CATEGORIES, SHOWING HOW MUCH THEY WENT UP OR DOWN. I REFERENCED THE SALES TAX CRISIS IN 2024/25. YOU CAN SEE IN THE 25 COLUMN A LOT OF RED. BECAUSE OF THE SHORT FALL WE HAD TO MAKE ADJUSTMENTS AND A LOT OF ADJUSTMENTS WE SAW WERE IN PERSONAL. WE FROZE ABOUT 30, 31 FULL TIME EMPLOYEE POSITIONS TO BALANCE THE BUDGET THAT YEAR.

SINCE THAT TIME, WE STILL HAVE ABOUT 28 POSITIONS FROZEN SO WE TALK ABOUT RESTORATION AND NOT LOSING WHERE WE HAVE COME FROM, THIS IS A VERY BIG PART OF THAT DYNAMIC.

YOU CAN ALSO SEE THAT THERE WERE -- WHAT I WOULD LIKE TO HIGHLIGHT AS THOSE COUNCIL PRIORITY AREAS WHICH IS INFRASTRUCTURE AND DEVELOPMENT, AND THE CAPITAL PROJECTS M.I.P.

THOSE ARE HIGHLIGHTED ON THE GRAPH AS WELL.

THESE ARE THE AREAS THAT ALSO SEE REDUCTIONS WHEN WE ARE UNDER FISCAL CONSTRAINTS. IT IS WHEN WE DON'T SPEND AS MUCH ON OUR CAPITAL INFRASTRUCTURE OR NOT AS MUCH IN REPLACING OR ADDING COMMUNITY INVESTMENTS SUCH AS PLAYGROUND EQUIPMENT, PUBLIC RESTROOM, THOSE KINDS OF THINGS.

SO THIS IS AN EXAMPLE OF THOSE YEARS WHEN WE HAD DIFFICULT ECONOMIC IMPACT AND HOW IT AFFECTS THE ENTIRE CITY AND HOW WE HAVE MODIFIED AND ORDER TO CONTINUE TO MEET OUR REQUIREMENTS, BUT IN THAT WE ARE HAVING TO MAKE PRIORITY DECISIONS THAT ARE SHORTING SOME PROJECTS AND DEPARTMENTS.

I MENTIONED THE USE OF ENTERPRISE FUNDS TO SUPPORT THE GENERAL FUNDS AND HERE IS SOME EXAMPLE OF HOW WE DO THAT.

AND I WANT TO SAY THAT THESE ARE FULLY WITHIN OUR SCOPE.

IN FACT, IF WE DID NOT HAVE ENTERPRISE FUNDS SUPPORTING THE.

>> FUNDS, THEN ALL OF THOSE WOULD HAVE TO HAVE THEIR OWN H.R. AND ACCOUNTING AND LEGAL AND SO IT IS AN OFFICIAL USE OF OUR RESOURCES FOR THOSE ENTERPRISES.

-- ENTERPRISE FUND TO CONTRIBUTE TO GENERAL FUNDS OPERATION AND SHOWS YOU HOW MUCH WE ARE DEPENDING ON ENTERPRISE FUNDS OUTSIDE OF GENERAL FUND REVENUE IN ORDER TO SUPPORT THE GENERAL FUND AND SO YOU CAN SEE THOSE EXAMPLES WITH UTILITY SERVICE CREDIT, THE CUSTOMER -- THE UTILITY CUSTOMER SERVICE CENTRE, WATER WITH SUPPORT PAN LIGHT PATROL AND ENVIRONMENTAL ENFORCEMENT, SOLID WASTE, FRANCHISE FEES, ETC.

OK. NOW WE ARE GOING TO BRIEFLY

[00:30:03]

WE HAVE MAJOR REINVESTMENT OPPORTUNITIES.

WE KNOW THAT THROUGH OUR STREETS AND OUR WATER INFRASTRUCTURE THROUGH OUR AGING FACILITIES. WE STILL HAVE SIGNIFICANT AMOUNT OF FACILITY WORK WITH ROOF AND HVACS THAT WERE NOT COVERED THROUGH THE SCHNEIDER CONTRACT AND HAVE CONSTRAINT SUCH AS SANDY STREET OPERATIONS WHERE WE HAVE MANY OF OUR PUBLIC WORKS DEPARTMENTS WORKING AT A VERY AGED FACILITIESS.

OUR TRUCKS ARE BIGGER. OUR STAFF IS BIGGER.

THE FACILITIES ARE IN DIRE NEED OF IMPROVEMENT.

ALSO COVERED STREET AND INFLATION BEFORE.

AND THEN DRAINAGE. WE HAVE HAD A STORM WATER FEE BUT HAVE NOT BEEN ABLE TO ADDRESS ANY SIGNIFICANT PROJECTS IN STORM WATER BECAUSE THE COST OF OPERATING THAT DEPARTMENT HAS IN NOT ALLOWED USES TO DO MAJOR PROJECT WE INTENDED WITHIN WE SET UP THAT DIVISION.

MAINTENANCE. IF I HEARD IT ONCE FROM YOU, I HEARD IT 1,000 TIMES. DIFFERED MAINTENANCE AND THE COST THAT THAT HAS CREATED ON THE CITY AND THE IMPACT.

THIS IS A VERY INTERESTING PERSPECTIVE.

WHAT WE LOOKED AT WAS THOSE DEPARTMENTS THAT HAD AING IS CAPITAL AMOUNT OF MAINTENANCE COST WHICH WERE FACILITY MAINTENANCE, PARK STREET, SIGN, SIGNAL AND LIGHTING.

WHEN YOU LOOK AT TEN YEAR DIFFERENCE BETWEEN 2016 AND 2026, THE PERCENTAGE OF ALLOCATION HAS GONE DOWN.

WE HAD BUDGETED IN 2016, 12% FOR MAINTENANCE IN THE COLLECTIVE DEPARTMENTS AND NOW THAT IS DOWN TO 10.

THAT IS GOING TO THE WRONG WAY. DIFFERED MAINTENANCE IS A COUNCIL PRIORITY. AND FOR US TO BE ABLE TO ADDRESS THAT WE ARE GOING TO HAVE TO ALLOCATE ADDITIONAL RESOURCES TO THAT. WORKFORCE TYOU ALL ARE HIGHLY FAMILIAR THAT WE REIN A TIGHT COMPETITION SPECIALLY FOR OUR HIGHLY SKILLED AND TECHNICAL POSITIONS.

WE HAVE HAD A SIGNIFICANT AMOUNT OF VACANCIES IN THOSE POSITION AND IT IS GOING TO CONTINUE TO BE A CHALLENGE AND OUR RECRUITMENT AND RETENTION OF STAFF.

AS YOU RECALL WE DID GO OUT FOR AN R.F.P. FOR A NEW COMPENSATION PAY PLAN. WE DID RECEIVE THOSE RESPONSES JUST LAST WEEK. SO WE WILL BE REVIEWING THOSE AND SELECTING OUR VENDOR FOR THAT.

WHICH WILL ALSO GIVE US DIRECTION ON HOW TO MOVE FORWARD ON NON-CIVIL SERVICE AND CIVIL SERVICE PAY METRICS.

THE BOTTOM LINE IS WE JUST ARE NOT KEEPING UP IN OUR NON-CIVIL SERVICE PAY RATES AND THAT IS AFFECTING OUR SERVICE DELIVERY AND OUR TIMELYENS AND LIKE I MENTIONED BEFORE WE STILL HAVE OVER 27 F.T.E.'S THAT ARE FROZEN.

THIS IS A GRAPH THAT SHOWS US AUTHORIZED POSITION FOR THE PAST TEN YEARS AND SO ALL IN ALL YOU CAN SEE OUR STAFFING FOR GENERAL FUNDS HAS GROWN AT 1% RATE WHICH I WOULD SAY IS HIGHLY CONSERVATIVE, BASED ON THE NEEDS AND DEMANDS OF OUR COMMUNITY.

WE HAVE MADE SOME GREAT, GREAT PROGRESS ON OUR STAFFING FOR FIRE AND POLICE AND MAINTAINING THOSE SERVICE LEVELS FOR OUR COMMUNITY. AND SO WE HAVE DONE A VERY NOBLE JOB AND WE ARE PROUD OF THAT. PARKS AND REC HAS SEEN A REDUCTION IN STAFF NUMBERS. SOME HAD TO DO WITH OUT SOURCING BUT THIS REALLY IS RELATED TO OUR FROZEN POSITIONS AS WELL.

YOU KNOW WE CONTINUE TO ADD PARK FACILITIES, DOWNTOWN LANDSCAPING AND THE NEEDS AND THE DEMANDS THAT WE ARE PLACING ON THE PARKS DEPARTMENT, WE NEED TO ADDRESS APPROPRIATELY IN AFTER THING.

PUBLIC WORKS, THIS ONE HAS REMAINED FLAT FOR ABOUT A DECADE. EVEN THOUGH WE KNOW THAT OUR PRIORITIES AND OUR NEEDS CONTINUE TO GROW.

AND IN FACT CURRENTLY 21% OF THEIR POSITIONS ARE FROZEN.

THE ZOO HAS ALSO SEEN AN INCREASE IN STAFFING BUT I WANT TO REMIND YOU THAT IT IS THE THROUGH FUNDING THROUGH THE ABILENE ZOOLOGICAL SOCIETY SO THOSE HAVE NOT NECESSARILY BEEN THROUGH THE CITY'S GENERAL FUNDS.

[00:35:01]

WE HAVE LONG-TERM INVESTMENTS THAT REQUIRE ON GOING STAFFING AND MAINTENANCE. AND OUR INFRASTRUCTURE AND WORKFORCE PRESSURES ARE CONTINUING TO RISE.

SO OUR -- WE ARE LOOKING AT THE COMING YEARS WITH A GREAT DEAL OF UNDERSTANDING THAT OUR REVENUE FLEXIBILITY IS GOING TO BE A CONSTRAINT. WE WILL NOT ATTACK EVERY SINGLE ONE OF THE PRIORITIES WITHIN A YEAR OR TWO OR FIVE BUT WE WILL BEGIN WITH AN APPROACH THAT WE ARE GOING TO BE BRINGING TO YOU TO ADDRESS THOSE STRATEGICALLY. OUR REVENUE CONSTRAINTS JUST REMIND YOU AGAIN, 41% OF GENERAL FUNDS FUND IS PROPERTY TAX AND THAT HAS BEEN THE AREA THAT HAS HAD MORE LEGISLATION, THAT HAS IMPACTED THE REVENUE GROWTH IN THAT PARTICULAR PORTION OF OUR GENERAL FUND. SALES TAX AS WE KNOW HAS BEEN CURRENTLY VERY HIGH. WE ALSO KNOW THAT IS NOT THE NORM AND WE ALSO HAVE STILL REMAINING DEFICITS BASED ON THE DRAMATIC DOWNTURN IN SALES TAX IN 2024.

ALTHOUGH IT IS 34% OF THE BUDGET, IT IS A PERCENTAGE THAT IS DIFFICULT FOR US TO MAKE LONG-TERM PLANS WITH BECAUSE OF THE VOLATILITY. AND JUST TO REMIND YOU OUR CHARGES AND FEES ARE ONLY 1% OF THE TOTAL GENERAL FUND BUDGET.

MAKING CHANGES TO THE FEES ARE REALLY NOT A STRATEGY THAT WILL SIGNIFICANTLY CHANGE THE GENERAL FUND.

BACK TO PROPERTY TAX. IT IS OUR LARGEST REVENUE SOURCE FOR THE GENERAL FUND. JUST TO REMIND YOU THAT THESE STATE LEGISLATION IMPACTS ON OUR BUDGET WITH S.P.2 DOES LIMIT THE REVENUE GROWTH TO 3.5% WITHOUT VOTER APPROVAL.

HWEVER NEW VALUE OF COURSE IS EXDUDED FOR THAT FIRST YEAR.

3.5% REVENUE GROWTH ON PROPERTY TAXES HISTORICALLY HAS BEEN ABOUT 2 MILLION REVENUE FROM PROPERTY TAX A YEAR.

THAT WOULD EQUAL TO ABOUT 1.4 INFLATION RATE ON OUR BUDGET.

WE KNOW INFLATION HAS NOT BEEN 1.4 IN MANY YEARS.

WE HAVE ADDITIONAL LEGISLATION THAT IS BEING DISCUSSED AND SO JUST WANT TO MAKE A NOD TO THAT BE AWARE OF OTHER TYPES OF LLY - LEGISLATION. THAT MAY IMPACT OUR BUDGET.

THE H.P.9 WHICH WAS THE INCREASED BUSINESS AND PERSONAL TAX EXEMPTION. IT INCREASED FROM 2500 TO 125,000. BASED ON OUR EVALUATIONS, THAT IT WAS A 1.3 MILLION DOLLAR GENERAL FUND REVENUE LOSS SO THAT IMPACT DID AFFECT THE CITY'S REVENUES WE OTHERWISE WOULD HAVE RECEIVED. ABOUT 1.3 MILLION BECAUSE OF THAT PARTICULAR NEW POPULATION. NOT GOING DIVE INTO ALL OF THESE BECAUSE THEY ARE YET TO BE DETERMINED.

BUT JUST TO REMIND YOU THESE ARE OTHER PROPOSED EMERGING LEGISLATIVE DISCUSSIONS ABOUT PROPERTY TAX CAP AND GROWTH LIMITS, SPENDING CAPS, ON INFLATION AND POPULATION GROWTH.

EXPANDED VOTER APPROVAL REQUIREMENT AND THIS IS A BIG ONE. POTENTIAL LIMITS ON TRANSFER FROM ENTERPRISE FUNDS SO REMEMBER I JUST SHOWED YOU THE ENTERPRISE TRANSFERS TO SUPPORT THE GENERAL FUNDS, SO WE WILL BE ALSO WATCHING THAT CAREFULLY. AND THEN BECAUSE OF THE IMPACT OF US HAVING A DATA CENTER HERE NOR ABILENE AND THAT BEING SUCH A NEW INDUSTRY, THERE IS YET TO BE DETERMINED WHAT TYPES OF REGULATIONS OR LEGISLATION WILL AFFECT THE ECONOMICS OF THOSE DATA CENTERS TO. THERE IS A SIGNIFICANT SALES TAX BENEFIT THEY HAVE THROUGH THE STATE AND WE DON'T KNOW WHAT OTHER TYPES OF ECONOMIC LEGISLATION WILL COME DOWN THAT COULD POSSIBLY AFFECT THE CITY'S BUDGET IN REGARD TO DATA CENTRE.

SO THAT ALL JUST ADDS TO THE HEAD WHAT KIND OF THE CHALLENGES OF THINGS AND DYNAMICS WE MUST DEAL WITH.

SO AS A SUMMARY, WE ARE ENTERING ONE OF THE SIGNIFICANT PERIOD OF GROWTH AND TRANSFORMATION IN OUR HISTORY.

I HAD THE PLEASURE OF GOING TO HEAR JAY MOHR SPEAK AT THE PARAMOUNT AND IT WAS ENCOURAGING TO KNOW ABILENE HAS BEEN THROUGH CHALLENGES, HAS BEEN THROUGH GROWTH AND TRANSFORMATION, AND THIS GENERATION IS OUR TURN TO MANAGE THAT GROWTH AND TRANSFORMATION AND I AM CONFIDENT THAT WE WILL DO SO TOGETHER. THE GROWTH IS CREATING

[00:40:02]

I JUST WANT TO SHOW YOU A FINAL COUPLE OF GRAPHICS TO REMIND US AGAIN AT OF THE COUNCIL PRIORITY.

THESE ARE THE FIVE COUNCIL PRIORITIES THAT WE WORK TOGETHER TO IMPLEMENT EARLIER THIS YEAR. AND THE WAY I SEE THEM AS BASICALLY BUDGETS BUCKETS OF NEED AND DEMANDS WE MUST FILL TO PROVIDE THE SHE WASES TO OUR CITY AND TO OUR RESIDENTS.

THE KIND OF RESOURCES THAT EACH OF THING BUCKETS NEED ARE DIFFE.

SOME MAY BE POLICY CHANGES. SOME MAY BE STAFFING, SOME ARE NEW PROGRAM AND SOME ARE FINANCIAL CAPITAL.

SO OURS THAT, IS TO FILL THE BUCKETS, BY USING THE RESOURCES THAT WE HAVE, BUT I WANT TO ALSO ILLUSTRATE THAT NOT ALL THE BUCKETS HAVE THE SAME KIND OF NEEDS.

SO THIS IS A VISUAL TO BE AN EXAMPLE THAT ALTHOUGH THESE ARE ALL COUNCIL PRIORITIES THEY HAVE DIFFERENT TYPES OF NEEDS ESPECIALLY WHEN WE TALK ABOUT THE KIND OF RESOURCES.

SO FOR EXAMPLE, COMMUNITY ENGAGEMENT, AND THESE WATER LINES, IF YOU WILL, MEASURING LINES ARE BASED OFF OF SOME OF THE OBJECTIVES, UNDER EACH OF THE COUNCIL PRIORITIES.

MUCH OF WHAT WE HAVE UNDER COMMUNITY ENGAGEMENT IS EXPANDED INFORMATIONAL OPPORTUNITIES SUCH AS THE NEW PODCAST SERIES THAT OUR COMMUNICATIONS DEPARTMENT IS WORKING ON, ENHANCED PROGRAM LIKE BRINGING BACK THE ABILENE CITIZENS ACADEMY.

YES, THERE CAN BE RESOURCES SUCH AS SOFTWARE OR MATERIAL BUT THIS IS NOT A MULTI-MILLION DOLLAR CAPITAL NEED NECESSARILY.

WHEREVER MAURY IS. AND THEN HOUSING IS ANOTHER ONE.

A LOT OF THE EMPHASIS IN HOUSING IS THROUGH REGULATION, THROUGH COMMUNICATION, IT IS DEVELOPER PARTNERSHIPS.

YES, THERE ARE SOME FUNDING REQUIREMENTS IN REGARDS TO WHAT WE COULD BE DOING FOR INFRASTRUCTURE PARTICIPATION AND THOSE KINDS OF THINGS THROUGH OUR REBUILD A.B.I. PROGRAM BUT AGAIN, THE RESOURCES AND SOLUTIONS MAY NOT NECESSARILY JUST BE FISCAL. SUSTAINABLE GROWTH, INFRASTRUCTURE AND ORGANIZATIONAL EXCELLENCE ARE THOSE BIG BUCKETS. NOSE ARE THE ONES WHEN WE LOOK -- THOSE ARE THE ONES THAT HAVE THE MOST SIGNIFICANT NEED.

AND WE ARE LOOKING AT MAKING SURE THAT WHEN WE ARE ALLOCATING RESOURCES, AGAIN, WE ARE LOOKING AT A BACK FILL TYPE OF MENTALITY. WHERE HAVE WE HAD TO DIFFER MENACE? WHERE HAVE WE HAD TO CUT PROGRAMMING OR CUT STAFF AND MAKING SURE THAT WHEN WE HAVE NEW RESOURCES AVAILABLE TO ALLOCATE TO THE BUCKETS THAT WE ARE LOOKING AT A RESTORATION PLAN IN ADDITION TO ANYTHING THAT IS NEW. SO MAJOR AND COUNCIL, THAT CONCLUDES MY INTRODUCTION AND DO YOU ALL HAVE ANY COMMENT OR QUESTIONS AT THIS TIME BEFORE WE MOVE INTO THE NEXT SECTION?

>> ANY COMMENTS? >> THANK YOU.

>> GOOD MORNING, COUNCIL. MARJORY KNIGHT, DIRECTOR OF FINANCE. AS EMILY MENTIONED EARLIER, THIS BUDGET CYCLE WILL BE UNLIKE ANYTHING WE EXPERIENCED BEFORE.

WE HAVE SIGNIFICANT INCREASES IN TAXABLE VALUE AND SALES TAX ACTIVITY ASSOCIATED WITH THE DATA CENTER DEVELOPMENT AND ALL THE RELATED ECONOMIC ACTIVITY THAT IS HAPPENING BECAUSE OF IT.

WITH THAT BRINGS THE FINANCIAL ENVIRONMENT THAT IS MUCH MORE COMPLEX AND ALSO POTENTIALLY MORE VOLATILE THAN WE HAVE EXPERIENCED IN THE PAST. SO TODAY'S DISCUSSION IS REALLY ABOUT HOW WE RESPONSIBLY MANAGE A PERIOD OF EXTRAORDINARY GROWTH WHILE PROTECTING TO THE CITY'S LONG-TERM FINANCIAL STABILITY.

MY PART IS SPIT INTO THREE. THE FIRST WILL BE COVER FINANCIAL IMPACT OF THE DATA CENTER THEN WE WILL MOVE ON TO SOME RECOMMENDED FRAMEWORK APPROACHES AND THEN FINANCIALLY SOME F.Y.27 BUDGET SCENARIOS. BEFORE WE JUDGMP INTO THE NUMBE

[00:45:09]

THESE ARE ALL MANNING ESTIMATES TO HELP DECISION MAKE.

ALL THE NUMBERS ARE SUBJECT TO CHANGE.

WE ARE USING PRELIMINARY TAXABL VALUES SO YOU MAY SEE WHEN WE BRING THE PROPEZZED. BUDGET AT THE END OF OF JULY, SOME OF THE AMOUNTS MAY HAVE ING CHAPPED SIGNIFICANTLY.

WHAT COUNCIL NEEDS TO KNOW WE DO EXPECT 2027 TOP BE A STRONG REVENUE YEAR. SOME GROWTH WILL BE TEMPORARY.

SOME WILL BE LONG-TERM. WE DO EXPECT REVENUES TO BECOME LESS PREDICTABLE OVER THE NEXT FEW YEARS.

S HISTORICALLY THE GENERAL FUND COULD RELY ON ABOUT $6 MILLION IN ANNUAL GROWTH EACH YEAR. WE DO BELIEVE THAT THE LONG-TERM GROWTH CAPACITY IS GOING TO INCREASE TO A RANGE OF $6 MILLION TO $8 MILLION ANNUALLY BUT WE MAY EXPERIENCE LARGER SWINGS YEAR-TO-YEAR THAN WHAT WE HISTORICALLY EXPERIENCED.

ONE OF THE MOST IMPORTANT THINGS WE CAN DO IS CONTINUING TO SEPARATE ONE TIME REVENUE FROM REOCCURRING REVENUE AND ENSURING THAT OUR REOCCURRING REVENUE IS WHAT WE ARE USING TO FUND OUR REO REOCCURRING EXPENSES.

SO THE PURPOSE IS SO SHARE WHAT ARE SEEING AND DISCUSS THE OPPORTUNITY AND RISK ASSOCIATED WITH THIS GROWTH.

REVIEW POSSIBLE FINANCIAL APPROACHES AND WALK THROUGH BUDGET SCENARIOS. SO AT THE END OF THE PRESENTATION, STAFF WILL NEED DIRECTION ON SOME OF OUR FINANCIAL FREIGHT WORK FRAMEWORK -- FRAMEWORK APPROACH AND BUDGET PRIORITIES. .

SO HISTORICALLY THE CITY HAS PLANNED AROUND STEADY INCREMENTAL GROWTH, SO THE DATA CENTER INTRODUCES A NEW COMPLEXITY TO THIS. TO PREPARE FOR THIS PWE DEVELOPED A MULTI-YEAR FINANCIAL MODEL THAT IS INTENDED TO BE DYNAMIC. WE ARE UPDATING IT AS NEW -- AS WE RECEIVE NEW INFORMATION. SO SOME OF THE THINGS WE LEARNED SO FAR IS THAT OUR TAX BASE IS SHIFTING TO A POLICE PREDICTABLE REVENUE SOURCE, WHICH WE REFER TO AS BUSINESS PERSONAL PROPERTY. NEW VALUE AND ABATEMENT TIMING IS UNCERTAIN. EVEN IF WE WERE TO GET CLEAR DIRECTION FROM THE COMPANIES THAT ARE DEVELOP, THE DATA, CENTERS, YOU STILL HAVE THAT ELEMENT OF WHEN DOES THE APPRAISAL DISTRICT ROLL THAT VALUE ON? SO WE DO EXPECT THAT WE WILL EXPERIENCE BOTH TEMPORARY AND PERMANENT GROWTH FROM THIS. AND ALL OF THE FACTORS COMBINED IS GOING TO IMPACT HOW WE BUILT THE BUDGET, SET THE TAX RATE, AND JUST PLAN FOR THE NEXT SEVERAL YEARS.

SO SOME OF OUR KEY UNCERTAINTIES, WE DO EXPECT VALUES MAY ANYTHING CHORE FLUCT YEAR.

THAT BUSINESS PERSONAL PROPERTY IS GOING TO INTRODUCE SOME VARIABILITY INTO POUR ANOUR -- R ANNUAL REVENUES.

ONE OF THE CHALLENGE IS REVENUE TIMING AND EVALUATION PATTERNS ARE GOING TO FLUCTUATE MORE THAN WE HAVE HISTORICALLY EXPERIENCED. SO WHILE ALL OF THIS IS -- THIS IS POSITIVE GROWTH FOR ABILENE. THE UNCERTAINTY AROUND IT IS WHAT JUST REQUIRES US TO PLAN FOR STRATEGICALLY.

THIS GROWTH DOES CREATE A RARE OPPORTUNITY TO ADDRESS LONG-STANDING NEED AND ADDRESS THE TOO MUCH WITHOUT PLACING ADDITIONAL BURDEN ON TAXPAYERS. SOME OF THAT REVENUE CAN BE USED TO SUPPORT CAPITAL DIFFERED MAINTENANCE, 380 AGREEMENTS AND OTHER LONG-TERM NEEDS. SO I WOULD LIKE TO BRIEFLY EXPLAIN THE DIFFERENCE BETWEEN ONE TIME REVENUE VERSES REOCCURRING REVENUE AND THAT WHAT MEANS FOR THE CITY.

ONE TIME REVENUES ARE TIED TO TEMPORARY SHORT TERM ACTIVITY, BIG EXAMPLE OF THIS IS THE SALES TAX ASSOCIATED WITH THE DATA CENTER CONSTRUCTION. WE SHOULD NOTES YOU THIS REVENUE TO FUND PERMANENT REOCCURRING COSTS LIKE PAYROLL.

REOCCURRING REVENUE ARE MORE STABLE AND ON GOING SUCH AS

[00:50:01]

TO START OFF WE HAVE SALES TAX, SO THROUGH MAY 2026, SEAMS TACK IS 12 MILLION OR 34% OVER PRIOR YEAR TO DATE.

AND 13 MILLION OVER BUDGET. SO WE DID INCLUDE A 9% INCREASE OVER THE PRIOR ORIGINAL BUDGET AND WE DID INTENTIONALLY EXCLUDE ONE TIME SALES TAX REVENUE. OUR UPDATED PROJECTIONS FOR FY26 ESTIMATE WE MAY GENERATE 70 MILLION IN SALES TAX REVENUE.

BY THE END OF THE YEAR, ANTICIPATING 24 MILLION IN ONE TIME TEMPORARY REVENUE. MOST OF THE INCREASE IS TIEDED TO CONSTRUCTION. SO THE INCREASE WORKFORCE AND ABILENE IS DRIVING UP AXE AN TAXABLE SALES IN ALL CATEGORIES.

WHAT THIS HAS DONE AN IT HAS MADE IT VERY DIFFICULT FOR US TO BE ABLE TO IDENTIFY WHAT THE UNDERLYING GROWTH MIGHT BE.

TO SHOW THIS WITHIN A CHART, YOU CAN SEE THE 49 MILLION IN THE DARK BLUE IS OUR CURRENT OR RIDGE ORIGINAL ORIGINAL BUDGET 49 MILLION. 21 MILLION FOR ONE TIME REVENUE, ONE TIME COST. SO NOW WE WILL MOVE TO PROPERTY TAX REVENUES AND KIND OF TALK ABOUT THE DIFFERENCE BETWEEN PRELIMINARY AND CERTIFIED VALUES.

SO WE RECEIVED PRELIMINARY VALUE FROM THE APPRAISAL DISTINCT ON APRIL 30TH. THROUGHOUT THE PERIOD FROM APRIL TO JULY VALUES WILL REMAIN SUBJECT TO CHANGE AS THEY ARE PROTESTED, AS THEY CONTINUE GET PERSONAL PROPERTY RENDITIONS.

THE PRELIMINARY VALUES ARE FOR PLANNING PURPOSES ONLY.

SO ONE THING THAT HAPPENED AFTER IMMEDIATELY AFTER WE GOT THESE VALUES, IS CHECKED ON LINE PORTAL THE AFFRAY SAL DISTRICT HAS AND NOTICED A 1 BILLION DECREASE IN VALUE.

SO THAT REALLY JUST HIGHLIGHTED HOW FLUID THESE NUMBERS STILL ARE RIGHT NOW. SO WE STILL HAVE UNTIL JULY 25TH BUT WE RECEIVE THE CERTIFIED IN VALUES AND WHETHER OR NOT THAT ONE BILLION DECREASE CONTINUES, WE ARE JUST UNSURE AT THIS POINT. SO TO REVIEW THE POLICEMEN FAIR VA -- SO TO REVIEW THE PRELIMINARY VALUE, ONE THAT IS THIS FREEZE ADJUSTED TAXABLE VALUE.

SOP THAT HAS INCREASED FROM 9.4 BILLION, TO 12.8 BILLION, SO THAT IS 3.4 BILLION DOLLARS OR 36% INCREASE.

THIS IS AN EXTRAORDINARY INCREASE TO EXPERIENCE IN A SINGLE YEAR. FOR CONTEXT, IF I WERE TO GO BACK AND LOOK WE HAVE HADDIERS BETWEEN A 5% AND 10% IN THE INCREASES. SO EVEN IF WE END UP SEEING THAT VALUES FALL AN EXTRA $1 BILLION, THAT IS STILL END UP BEING ABOUT 26% INCREASE, WHICH IS STILL WOULD BE CONSIDERED EXTRAORDINARY. SOME OF THE HIGHLIGHTS ON WHERE THE GROWTH IS COMING FROM, WE HAVE ABOUT $1 BILLION IN COMMERCIAL REAL PROPERTY WHICH IS TIED TO THE DATA CENTER.

THE OTHER BIG CATEGORY IS THIS COMMERCIAL PERM PROPERTY WHICH YOU WILL HEAR ME REFER TO AS BUSINESS PERSONAL PROPERTY, ALSO B.P.P. THAT HAS INCREASED $2 BILLION OR 174%. WHICH I ALSO BLEACH AT LEAST UNDER 1 BILLION OF THIS IS DATA CENTER RELATED.

>> CAN YOU REPEAT? >> THE ONE BILLION -- RIGHT UNDE UNDER 1 BILLION IS DATA RELATE.

YOU CAN YOU EXPLAIN WHAT FREEZE ADJUSTED MEANS?

>> THEY START OFF WITH ASSESSED VALUES AND THEN DEDUCT OFF EXEMPTIONS SO THAT WILL BE THE NON-PROFITS, YOUR ABATED VALUES SO THAT IS WHY YOU SEE 5.1 GOING TO 9.8.

THAT IS THE MOST -- ABATED VALUE OF THE B.P.P. FOR THE DATA CENTERS. SO THEN AFTER THAT, THEY DEDUCT OFF WHAT IS CALLED THE FREEZE TAXABLE ADJUSTMENT, WHICH IS YOUR PROPERTIES THAT HAVE THE FROZEN LEVY ASSOCIATED WITH THEM, WHICH GET YOU THE FREEZE ADJUSTED TAXABLE VALUE.

THAT VALUE IS USED IN DETERMINE YOUR TAX RATING THAT IS THE

[00:55:02]

>> THANK YOU. >> YOU WILL NOTICE ALSO THAT JONES COUNTY WAS EXCLUDED FROM THIS PRESENTATION BECAUSE IT IS ONLY LESS THAN 1% OF THE CITY'S TAXABLE VALUE.

SO TAYLOR COUNTY IS WHAT IS DRIVELING ALL OF THE CITY'S VALUES. BECAUSE BUSINESS PERSONAL PROPERTY IS SUCH, GOING TO WHAT WE ANTICIPATE HAVE THE A BIG IMPACT I WOULD LIKE TO KIND OF TALK ABOUT WHAT THAT IS A BIT MORE. SO THIS B.P.P. INCREASE KINTRODUCES A SHIFT IN THE TAX BASE.

ONLY MADE UP 12% OF TAXABLE VALUE.

THIS INCREASED TO 23% OF TAXABLE VALUE.

THE SHIFT IS BEING DRIVEN BY THE DATA CENTER.

SO B.P.P. EXCLUDE LAND AND BUILDING AND INCLUDE MOVEABLE ASSET, EXAMPLES ARE LIKE EQUIPMENT AND FIXTURES CAN.

THE WAY THAT IT WORKS IS IT GETS ADD TO THE TAX ROLE THEN DEPRECIATED BASED ON ESTIMATED USEFUL LIFE.

SO THOSE VALUES END UP BEING MORE VARIABLE THAN REAL PROPERTY SO WHERE REAL PROPERTY YOU KIND OF PROJECT THAT IT GOING TO KIND OF STEADILY INCREASE YEAR-TO-YEAR.

B.P.P. BECAUSE OF THE DEPRECIATION MAY INCREASE, DECREASE EQUIPMENT REFRESHED, PGOES BACK UP SO IT CREATES THEE ROLLING PEAKS AND VALUE LESS. SO WE DO ANTICIPATE MOST OF THE DATA CENTER B.P.P. S WILL BE TECHNOLOGY RELATED WHICH MEANS IT IS MORE LIKELY TO BE SUBJECT TO THE VERY SHORT DEPRECIATION CYCLES. SO IF YOU ADD A LARGE VALUE, THAT VALUE CAN DECLINE MUCH FASTER THAN TRADITIONAL -- IN COMPARISON TO REAL PROPERTY. SO WE DO EXPECT THE DATA CENTER WILL HAVE A LARGER B.P.P INVESTMENT THAN NSHL INITIALLY EXPECTED. WE DID NOT EXPECT TO SEE SUCH A LARGE AMOUNT ROLL ON. THE HOPE IS AS ASSETS SICK SCYCE THROUGH -- ASSETS CYCLE THROUGH WE MAY SEE THE -- TO EXPLAIN IF WE ONLY HAVE BUILDING ONE TO TWO ON RIGHT NOW.

WOULD HAVE THE NEW VALUE COME ON.

IT WOULD START TO DEPRECIATE. THEN YEAR TWO IT WOULD DEAPPRECIATE AND MORE BUILDINGS ROLL ON AND YEAR THREE YOU MIGHT HAVE MORE BUILDINGS ROLL ON. SO WHAT WE ARE HOPING TO SEE IS THAT AT ANY GIVEN POINT, AS EQUIPMENT IS REFRESHED YOU DUB ENDS UNSTABLE LOSING ITSELF OUT. -- STABILIZING ITSELF OUT.

THIS IS STILL A THEORY. IT WILL TAKE MANY YEARS FOR US TO EVEN BE ABLE TO SEE PATTERNS, ESTABLISH PATTERNS, BUT IT IS MORE SO IN THE LONG-TERM THAT IT WILL THE TAKE US FOR TO BE ABLE TO SEE THE B.P.P. EVALUATION PATTERNS WILL BECOME MORE CHEER FOR US. SO THE DATA CENTER DEVELOPMENTMENT A VERY MEANINGFUL ECONOMIC EVENT FOR THE CITY. BUT IT DOES INTRODUCE NEW FINANCIAL CONSIDERATIONS ESPECIALLY WHEN IT COMES TO LONG-TERM PLANNING. SO PRELIMINARY VALUE INDICATE THAT THE PROPERTIES WILL REPRESENT OVER 15% OF THE CITY'S TAX BASE IN F.Y.27.

THIS MEANS THAT FLUCTUATION IN DATA CENTER VALUES WILL MORE SIGNIFICANTLY IMPACT THE CITY'S TAX BASE AND AS A RESULT PROPERTY TAX REVENUES AROUND THE TAX RATE WILL BE MORE CHEV HEAVY I HAVELY IMPACTEDIMPACTED IN CO SOP.

THE CITY BECOMES. MORE DEPENDENT ON THE VALUES REMAINING STABLE AND CONSISTENT LONG TERM.

WE MAY NEED TO LOOK AT THE TAX RATE E/* EVALUATED EVERY YEAR.

SO WE WILL BE MONITORING TO THE CHANGES VERY CLOSELY BUT WE DO RECOMMEND A CONSERVATIVE APPROACH WHEN FORECASTING REVENUE. SO WHAT I HAVE HERE IS AN EXAMPLE OF A TAXABLE VALUE SCENARIO USING PRELIMINARY VALUES, TO QUICKLY GO OVER SOME OF THESE ASSUMPTIONS, THESE ESTIMATES FOR BUILDING ONE AND TWO, INCLUDE THE B.P.P.S.

[01:00:03]

SO I WOULD PREFER TO PROVIDE A SCENARIO THAT IS MUCH MORE ON THE CONSERVATIVE LOWER RANGE OF THE SCALE.

SO IT MAKES ASSUMPTIONS ABOUT WHEN ABATEMENTS MAY BEFFECTIVE.

WE ESTIMATE NONDATA GROWTH. 3.5 ANNUAL GROWTH ON CURRENT VALUES AND ALSO 175 MILLION IN NON-DATA CENTER NEW VALUE.

SO WHAT WE ETCND UP SEEING IN F.Y.27 LOOK AT $23 MILLION INCREASE IN NEPHEW IN SINGLE YEAR.

THIS IS THREE YEARS OF REVENUE GROWTH COMPRESSED INTO ONE YEAR.

SO WHAT WE WOULD RECEIVE IN 27 REALLY NEEDS TO SUSTAIN GROWTH FOR THE NEXT TWO YEARS. F.Y.27 TO 29 ARE NOT NORMAL YEAR. IT END UP WITH AN AVERAGE ANNUAL INCREASE OF 7.# MI8 MILLION. THOUGH WE ARE EXPERIENCING ALL OF THE ECONOMIC IMPACT OF THE DATA CENTRE UP FRONT WITHIN A SINGLE YEAR. THEN ONCE WE FINALLY GET TO -- THE ABASEMENTS BECOME EFFECTIVE WE ARE LOOKING AT ON AVERAGE, IT IS ABOUT A 4.7 MILLION INCREASE FROM REVENUE MOVING FORWARD.

THESE ESTIMATES SO ONE OF THE THINGS TO KEEP IN MIND IS THIS IS NOT JUST SOLELY DATA CENTER IMPACTED.

IT IS OVERALL FINANCIAL FORECAST MODEL ON GROWTH FOR THE CITY IN GENERAL. SO TO RECAP THE PATTERNS WE DO EXPECT FY24 TO BE AN UNUSUALLY STRONG GROWTH YEARS, DRIVEN BY TIMING TO AND CONSTRUCTION, BY F.Y.30 WE EXPECT GROWTH WILL STEP DOWN AS CONSTRUCTION-RELATED ACTIVITIES CONCLUDE. OUR REOCCURRING ANNUAL GROWTH WILL NORMALIZE TO A 3,5 MILLION RANGE.

INCLUDE THE FACTORS TO OF ASSUMING THERE MAY BE THE ROLLING PEAK AND VALLEYS ASSOCIATED WITH THE B.P.P.

>> ANOTHER POINT TO CONSIDER IS THAT NOT ALL OF THE GROWTH I F.Y.27 SHOULD BE CONSIDERED TEMPORARY.

THERE IS A PORTION THAT IS CONSIDERED TO BE ONE TIME.

ASSOCIATED WITH VALUES THAT WILL BE ABATED IN A SUBSEQUENT YEAR.

SO TO RECAP THE DATA CENTER IMPACT TO SUMMARIZE ALL OF US, SO THE SHORT TERM IMPACT IS WE ANTICIPATE MAYBE A 50, 60 MILLION DOLLARS AND ONE TIME SALES TAX REVENUE OVER KNNEXT THREE YEARS. OUR LONG-TERM IMPACT IS THAT THREE TO FIVE MILLION DOLLARS IN PROPERTY TAX GROWTH ASSUMES THE TAX RATE STAYS FLAT. THOSE REVENUES REFLECT BOTH DATA CENTER ACTIVITY AND BROADER CITY EVALUATION.

THE BUSINESS PERSONAL PROPERTY MAY INTRODUCE SOME ON GOING VARIABILITY WITHIN THIS RANGE. SO ONE OF THE THINGS TO REMEMBER IS MOST OF THE REVENUE IS REALIZED UP FRONT BUT WE MAY SEE THAT WHEN WE GET INTO 28, 29, WITNESS YOU LOOK AT PROPERTY TAX REVENUE WE WON'T SEEK GROWTH BECAUSE WE EXPERIENCE MOST OF

THAT GROWTH IN FY27. >> SO ONE OF THE KEY TAKEAWAYS FROM THIS TABLE IS THAT WE ARE EXPECTING TO EXPERIENCE ONE TIME REVENUE AND PERMANENT INCREASE IN LONG-TERM REOCCURRING REVENUE CAPACITY. SO PORTIONS OF THE REOCCURRING GROWTH MAY STILL FLUCTUATE YEAR-TO-YEAR, WHICH IS WHY WE RECOMMEND A CONSERVATIVE APPROACH UNTIL WE SEE HOW THE PATTERNS DEVELOP. AND THAT COLUMN FOR THE REOCCURRING GROWTH IS WHERE YOU SEE THE POTENTIAL IMPACT OF THE DEPRECIATION CYCLE FORCING THAT REVENUE DOWN, THE EQUIPMENT GETS REFRESHED AND GOES BACK UP AGAIN.

AND FROM A PROPERTY TAX REAL PERSPECTIVE, ONCE ALL THE VALUES COME ON AND ABASEMENTS BECOME EFFECTIVE WE ARE LOOKING AT 3.6 MILLION DOLLAR VERY STABLE REOCCURRING REVENUE SOURCE FOR

[01:05:01]

SO OUR GOAL IS TO MAKE SURE THIS CITY BENEFITS FROM THE OPPORTUNITY WHILE ALSO PROTECTING THE CITY'S LONG-TERM FINANCIAL STABILITY AND FLEXIBILITY.

SO THIS CONCLUDES THE PRESENTATION ON THE DATA CENTER IMPACT. I WOULD LIKE TO PAUSE BEFORE MOVING ONTO THE NEXT SECTION. SEE IF COUNCIL HAS ANY

QUESTIONS. >> QUESTIONS?

>> COMMENT. I APPRECIATE THE CHALLENGES THAT YOU'RE FACING RELATED TO THIS. A COMMENT WAS MADE IN THE FIRST COMMENT ABOUT ABASEMENTS AND BEFORE THEY CAME TO TOWN, THIS PROPERTY WAS OUTSID THE CITY LIMITS SO WE WERE GETTING ZERO IN REVENUE FROM THAT PROPERTY. AND SO THE ABATEMENT WAS INSTRUMENTAL IN BRINGING THIS ABOUT AND IT IS CHALLENGING BUT IT'S EXCITING AS WELL BECAUSE WE HAVE OPPORTUNITIES TO FUND SOME ONE-TIME NEEDS AS WELL AS SEE THE LONG-TERM GROWTH THAT IS BRINGING TO THE CITY. SO JUST WANTED TO SAY THANK YOU

FOR YOUR WORK ON THIS. >> ABSOLUTELY.

>> APPRECIATE THE APPROACH. BEING VERY STRATEGIC AND HOW YOU PRESENT IN INFORMATION AND WHAT WE LEARN GOING FORWARD AND BEING ABLE TO ADAPT. IT WILL BE IMPORTANT.

>> I JUST WANT TOP REITERATE FOR THE PUBLIC, THAT IT EASY TO HEAR SOME OF THE NUMBERS AND JUST OH, MY GOSH, GOT ALL THE REVENUE, WHICH IS TRUE BUT SO MUCH OF THIS IS SHORT TERM REVENUE DOLLARS THAT WE CANNOTS YOU FOR REOCCURRING COSTS.

I CANNOT SAY THAT ENOUGH. I HEAR THAT ALL THE TIME.

WE GOT ALL THIS INCREASED MONEY. WE NEED TO INCREASE SALARIES, DO THIS, DO AND THAT. WE WILL SET OURSELVES UP FOUR OR FIVE YEARS FROM NOW, BEING IN THE HOLE IF WE DO NOT USE THAT PROPERLY FOR ONE TIME PURCHASES IN PARALLEL WITH IT BEING AT ONE TIME REVENUE. WE HAVE TO HAVE VERY CAUTIOUS TO RESIST THE TEMPTATION TO START PLUGGING THIS MONEY IN PLACES WHERE IT MAY IN THE ALWAYS BE UTILIZED.

. >> HISTORICALLY, LIKE WHEN YOU EXPERIENCE VERY STABLE GROWTH, THAT IS WHEN YOU WITH BUDGET YEAR BY YEAR AND IN THE WORRY ABOUT NEXT YEAR.

YOU CAN CONSISTENTLY RELY ON GROWTH.

BUT THERE CURRENT ENVIRONMENT IS SO DIFFERENT.

AS THOUGH WHENEVER WE VALUE WAIT A REOCCURRING EXPENDITURE WE NEED TO RUN IT THROUGH THE MODEL TO SEE THE IMPACT TWO TO THREE YEAR DOWN AND MAKING SURE WE CAN STILL AFFORD IT IN YEAR FOUR.

AN INTERESTING DYNAMIC FOR BUDGETING.

. >> JUST TO ADD ANOTHER PERSPECTIVE TO COUNCIL MEMBER BEER'S COMMENT, ONE WAY TO QUANTIFY BY ASSESS VOLATILITY AND VIS, RISK FACTOR IS HOW RATING AGENCIES LOOK AT OUR SITUATION.

WE HAVE MOODIE, FITC, AND STANDARD AND POORS.

THE MAKE UP OF THE TOP TEN TAXPAYERS.

WITH YOU HAVE ONE MAKE UP. 15, 20% OF YOUR TAX BASE, THEY TYPICALLY FLAG THAT AS A CONCENTRATION RISK SO JUST WANT TO MENTION THAT IS A METHODOLOGY WE CAN LOOK TO, TO KIND OF VALIDATE WHY THE FRAMEWORK THAT STAFF HAS WORKED ON AND PART OF WHAT MARJORY WILL UNPACK HERE, THOSE ARE THE THINGS THAT WE LOOK AT BECAUSE WHEN WE BEING LOOKED AT BY A THIRD PARTY, THAT IS A BIG FACTOR FOR THEM WHEN THEY LOOK AT OUR ECONOMIC PROFILE. MUCH LIKE IF YOU'RE A BUSINESS OWNER, YOU HAVE ONE SINGLE CUSTOMER THAT MAKES UP A BIG PART OF YOUR BUSINESS AND LOSE THAT CUSTOMER IT WOULD DESTABILIZE YOUR OPERATION. THAT IS ONE FACTOR THAT IS NEW TO OUR ECONOMIC PROFILE AND THAT WE SHOULD BE VERY COGNIZANT OF.

>> I THINK TO ADD ON TO THAT FOR PUBLIC, THE CONNED PURSUIT OF

[01:10:01]

I JUST WANT EVERYBODY TO UNDERSTAND THAT.

THIS IS GOOD FOR OUR -- I MEAN FOR EVERYBODY THAT IS UPSET ABOUT IT. I UNDERSTAND THAT.

BUT I MEAN JUST ONE YEAR ALONG WE GOT TO FIGURE OUT WHAT TO DO WITH $21 MILLION PROJECTED SALES TAX.

WE KE DO A LOT WITH THOSE THINGS.

>> WE ARE REPEAT THAT IF YOU WOULD LIKE.

>> WE ARE! >> OK.

>> I TO DO -- I DO APPRECIATE YOU CAPTURE CANNING ONE TIME VERSES THE BUDGET AROUND THE PEAK THAT MAY FADE AFTER CONSTRUCTION OR AFTER THINGS KIND OF SUBSIDE.

AND A LOT OF PEOPLE DON'T KNOW DOING IT WITH NOT A FULLY STAFFED CREW, SO THANK YOU FOR THE MANY, MANY HOURS YOU PROBABLY SACRIFICED WITH YOUR FAMILY TO BRING SUCH AN INCREDIBLE PRESENTATION SO THANK YOU.

>> APPRECIATE THAT. YET IT HAS BEEN CHALLENGE AND INTERESTING AND I HAVE LEARNED SO MUCH ABOUT HOW OUR PROPERTY TAX RATE WORKS THROUGH THIS.

>> NEW WAYS. >> OK SO NOW WE ARE GOING TO MOVE OVER TO THE FINANCIAL FRAMEWORK APPROACHES.

SO AFTER YOU HAVE SEEN ALL OF THAT REVENUE, HOW DO WE RESPONSIBLY MANAGE THOSE REVENUES? BEFORE WE GET INTO THIS SPECIFIC RECOMMENDATION, I JUST LIKE TO BRIEFLY GO OVER THE PURPOSE OF FINANCIAL FRAME WORK AND POLICIES THEY HELP PROVIDE STRUCTURE FOR THE DECISION MAKING. THEY HELP ENSURE CONSISTENCY AND DISCIPLINE ESPECIALLY DURING PERIODS OF SIGNIFICANT GROWTH AND CHANGE. WE DO BELIEVE THAT THE CURRENT ENVIRONMENT WARRANTS UPDATING OUR CURRENT FINANCIAL APPROACHES. BECAUSE WE NEED TO DESIGN FLEXIBILITY, WHILE OUR LONG-TERM REVENUE PATTERNS BECOME MORE CLEAR. SO OUR RECOMMENDED APPROACH TOWARDS THE PROPERTY TAX RATE IS THAT WE MAINTAIN THE PROPERTY TAX RATE AT THE CURRENT .7506 OR VOER APPROVAL TAX RATE WHICH EVER IS LOW PER. KIND OF TO GO ON WITH CONTINUE WITH WHAT NOWEL WAS TALKING ABOUT.

WE ARE EXPERIENCING A SIGNIFICANT INCREASE DRIVEN BY A SINGLE PROPERTY SO ADJUSTING THE TAX RATE TOO QUICKLY STARTS TO CREATE THAT DEPENDENCE. WE DO NOT -- THE LONG-TERM STABILITY OF THE VALUE HAS NOT YET BEEN PROVEN.

WE HAVE THE FACTORS SUCH AS THE B.P.P. THAT WE DON'T QUITE KNOW YET. SOMETIMES IT FEELS AS THOUGH YOU, THE COUNCIL AND WE ARE NEEDING TO PRESENT THESE FINANCIAL DECISIONS TO YOU BASED ON INFORMATION THAT WE DON'T FULLY HAVE YET. SO THIS IS SUPPOSED TO TAKE A CAUTIOUS APPROACH TO HOW WE PROJECT OUT ON PROPERTY TAXES OVER THE NEXT FEW YEARS. ONE OF OUR GOALS IS TO PROVIDE SUSTAINABLE TAX RELIEF, NOT REDUCTIONS THAT JUST NEED TO PRE VERSED AND RESPONSE TO FUTURE VOLATILITY WE MAY EXPERIENCE.

>> SO TO MOVE ON, OUR RECOMMENDED APPROACH FOR SALES TAX WE ARE RECOMMENDING THAT WE DO SET ASIDE 10% OF ONE-TIME SALES TAX FOR OPERATING RESERVES.

WHAT THAT THAT DOES IS ALLOWS US TO ADJUST THOUGHTFULLY IF THE UNDER LYING SALES TAX GROWTH IS NOT AS STRONG AS ANTIC ANTICIPATED.

I MENTIONED HAVING THE DATA CENTERS WORKER HERE IMPACTED EVERY CATEGORY. WHEN I TRIED TO PROJECT OUT THE SALES TAX REVENUE, I SAID I DON'T KNOW.

I CAN'T PULL ANYTHING OUT OF THIS THEY CAN TIE TO A CATEGORY THAT WOULD INDICATE WHAT THAT GROWTH RATE IS.

SO HAVING SOME ADDITIONAL RESERVES ON HAND MEANS IF WE END UP FINDING OUT WE PROJECTED TOO HIGH, WE HAVE SOMETHING TO TAP INTO OFFSET THAT. WE ARE ALSO RECOMMENDING THAT

[01:15:02]

>> YOU KNOW OUR NORMAL YEAR OVER YEAR BUDGET INCREASE FOR SALES TAX AT REOCCURRING WHAT THE YEAR -- IS ABOUT 3.

>> WE WOULD COME AT 2% IN A NORMAL YEAR.

WE WOULD LOOK AT WHATEVER WE WERE CURRENTLY EXPERIENCING AND USE THAT ESTIMATE. SO OUR HISTORICAL AVERAGE GROWTH

FOR THE SALES TAX IS 3%. >> ACTUAL.

>> THESE RECOMMENDATIONS, ARE THESE LONG-TERM OR JUST THIS YEAR YOU ARE TALKING ABOUT? THIS SET ASIDE OF 10% AND

REOCCURRING 5%? >> MANY OF THESE ARE SHORT TERM.

THERE ARE STRATEGIES LIKE ESPECIALLY IN THE WAY THAT WE BUDGET SALES TAX. THAT I WOULD RECOMMEND AS BEING A LONG-TERM STRATEGY. THE ASPECT TO IT THAT COULD BE EVALUATED IS WHAT YOU ESTABLISH YOUR BASE ON.

SO WHAT WE ARE PROJECTING IS THAT OUR BASE IS CURRENTLY THE ORIGINAL BUDGET. BUT AS WE START TO FIND OUT HOW GROWTH IS DEVELOPED AND WE GET BACK TO A POINT WHERE WE KNOW WHAT OUR VALUES ARE, WE WOULD RESTATE THAT PROBABLY TO AN ACTUAL DOLLAR AMOUNT IN THE FUTURE YEAR.

>> 10% PER YEAR FOR THE NEXT THREE YEARS?

>> THE 10% RESERVE WOULD BE A TEMPORARY.

>> THAT ONE TIME? >> THAT IS THROUGH THE PROJECT PERIOD FOR THE 10% FOR THE OPERATING RESERVES.

SO WE WOULD WANT TO GET OUT FURTHER OUT FROM THE END OF THE C CONSTRUCTION ACTIVITY AND LOOK AT RELEASING THE FUND PUT ASIDE THAT WE DIDN'T HAVE TO USE AND STOP THAT AT THAT POINT. SO THERE SAT COMPONENT OF THIS THAT IS DIRECTLY -- THAT WOULD BE A TEMPORARY POLICY APPROACH, POSSIBLY ANOTHER COMPONENT THAT MIGHT BE A MORE PERMANENT POLICY

APPROACH. >> WHAT IS YOUR THOUGHT PROCESS BEHIND CAPPING AT 5 OR BUDGETED 2?

>> I THINK WE ARE ALLOWING FOR THE POTENTIAL THAT WE DO HAVE HIGH GROWTH YEAR. IF YOU WERE TO LOOK AT YOUR HISTORICAL SALES TAX GROWTH, WHEN I SAY IT IS AVERAGED AT 3%, IT HAS IN THE ACTUALLY BEEN 3% IN MOST YEAR.

WE WILL HAVE A YEAR WHERE IT JUMPS UP, WOULJUMP UP 10% OR MO FOLLOWED BY A MORE MODERATE -- WE DON'T WANT TO COMPLETELY UNDERESTIMATE OUR GROWTH SO WE ARE JUST TRYING TO ALLOW FOR FLEXIBILITY WITH THAT. INSTEAD OF BEING JUST VERY WE

ARE OIL GOING TO DO THIS PERCEN. >> THANK YOU.

>> ALSO THERE A CURRENT COUNCIL POLICY STATEMENT THAT WILL NEED TO BE REVIEWED AND ADJUSTED IF WE DO CHANGE SALES TAX POLICIES.

SO WE DO HAVE THE CURRENT POLICY LANGUAGE THAT REQUIRES THE CITY TO CONTRIBUTE 5% OF SALES TAX RECEIPTS TO A MINOR IMPROVEMENT FUND FOR GENERAL GOVERNMENT RELATED CAPITAL PROJECT PURPOSES. THERE WAS A HARDSHIP CLAUSE IN THERE THAT THE COUNCIL WOULD BE NOTIFIED IF WE WERE UNABLE TO MAKE THAT REQUIRED TRANSFER. SO WHY WE ARE DISCUSSING SALES TAX POLICY TODAY? IT IS A GROWING AND VOLATILE REVENUE SOURCE. IT'S ALWAYS BEEN THE CITY'S MOST DIFFICULT REVENUE TO FORECAST. AND THE DATA CENTER DISRUPTED OUR HISTORICAL SALES TAX GROWTH PATTERN.

BECAUSE OUR UNDERLYING GROWTH PATTERN IS HARDER TO DETERMINE, WE DO BELIEVE THAT WE NEED A NEW STRUCTURED -- MORE STRUCTURED APPROACH TO ENSURE TEMPORARY REVENUES ARE NOT COMMITTED TO REOCCURRING COSTS. SOED AS PART OF THIS, THIS DOES -- THIS WOULD REQUIRE US TO RE-EVALUATE THE CURRENT POLICY STRUCTURE. SO THE CURRENT POLICY REQUIRES 5% OF TOTAL SALES TAX TO BE TRANSFERRED TO M.I.P.

REGARDLESS OF ECONOMIC CONDITIONS.

LIMITS USE TO CAPITAL PURPOSES. AND HAS ALWAYS REQUIRED MULTIPLE

EXCEPTIONS IN RECENT YEARS. >> ALSO DOESN'T PROVIDE ANY GUIDANCE OR FRAMEWORK FOR HOW WE BUDGET SALES TAX.

[01:20:03]

AND RESPONSE TO JUST CHANGING FINANCIAL CONDITIONS OVER THE PAST SEVERAL YEARS SO WE DO BELIEVE THAT THE REPEATED EXCEPTIONS INDICATE THAT THE POLICY STRUCTURE NEED TO BE NOT EARNIZED TO BETTER I LINE WITH THE CURRENT REVENUE ENVIRONMENT.

ONE OF THE OTHER FACTORS TO CONSIDER IS THE ORIGINAL POLICY WAS DEVELOPED UNDER MUCH MORE STABLE, MUCH MORE RELIABLE, VERY DIFFERENT REVENUE STRUCTURE SO WE ARE TRYING TO ADAPT TO THE CURRENT REVENUE ENVIRONMENT THAT WE ARE IN.

THIS IS AN EXAMPLE OF HOW THIS SALES TAX GROWTH CAP WOULD WORK.

SO FOR FY27 REESTIMATED SALES TAX WOULD GROW AT 4% INCREASE.

SO YOU CAN SEE, 1.9 MILLION WILL GO TO FUNDING REOCCURRING EXPENSE. ADOPTED AS PART OF THE BUDGET.

THEN THIS ILLUSTRATION WE WOULD HAVE WHAT WOULD BE CONSIDERED 18.3 AND ONE TIME REVENUE. SO THE 18.3 WOULD GO DOWN TO WATERFALL. WOULD TAKE THE 10% FOR OPERATING RESERVES OFF THE TOP AND THEN THE REMAINING WOULD GO TO OLYMPIC WARDS CAPITAL OR OTHER ONE TIME NEED AS DIRECTED BY COUNCIL. SO IN EXAMPLE, YOU WOULD SEE WOULD SEND 15.8 TO M.I.P. S TO BE ALLOCATED FOR CAPITAL PURPOSES. THE EXAMPLE SHOWS A NON-CAPITAL OUT -- WOULD BE FUNDED ADD ECONOMIC DEVELOPMENT AGREEMENT.

THIS HELPSEN SURE THAT ONLY STABLE SUSTAINABLE GROWTH SUPPORTS ARE REOCCURRING EXTENSIONS.

-- EXTENSIONS. SO BENEFIT OF THE PROPOSED POLICY INCLUDE IT HELPS US TO PREVENT OVER COMMITTING DURING TEMPORARY REVENUE SPIKES. HELPS US CREATE A CLEAR DISTINCTION BETWEEN REOCCURRING AND ONE TIME FUNDING AND REDUCES THE NEED FOR ANNUAL EXCEPTIONS TO THE POLICY.

SO ONE IMPLEMENTATION NOTE I WANTED TO BE CLEAR ABOUT IS THAT UNLESS DIRECTED OTHERWISE BY COUNCIL, WE WOULD PERMANENTLY ADOPT THE $1 MILLION FOR REBUILD A.B.I.

>> INTO THE GENERAL FUND. SO WE HAVE INCORPORATED THE FINANCIAL APPROACHES INTO OUR O BUDGET SCENARIOS TO FOLLOW.

BUT AT THE CONCLUSION OF THAT PRESENTATION, WE WILL NEED SOME DIRECTION ON THE PROPERTY TAX RATE FOR FY27 AND SOME OF THE SALES IS TAX APPROACHES. THIS BRINGS US TO THE LAST PART OF THIS FINANCIAL PRESENTATION. WHICH IS OUR F.Y.27 PRELIMINARY

BUDGET >> MARJORIE, IF YOU WOULD LIKE TO CONTINUE. THANK YOU SO MUCH.

>> OKAY. LET US GET STARTED TALKING ABOUT OUR FY27 PRELIMINARY BUDGET. SO, OUR PRIORITIES CAN BE CATEGORIZED IN TO RESTORE AND TO PLAN.

RESTORATION EFFORTS INCLUDE DEVALUING STAFFING LEVELS IN FROZEN POSITIONS. ADDRESSING COMPETITIVE COMPENSATION FOR AN ON LEVEL SERVICE EMPLOYEES.

AND CONTINUING TO REBALANCE THE GENERAL FUND.

OUR PLANNING EFFORTS INVOLVE DEVELOPING STRATEGIES FOR DIFFERENT MAINTENANCE, EVALUATING THE LONG-TERM USE OF LONGTIME REVENUES, AND BEGINNING DEVELOPMENT OF A COMPREHENSIVE CAPITAL IMPROVEMENT PROGRAM. SO WE DO EXPECT FY27 TO BE AN ABOVE AVERAGE REVENUE YEAR. ASSUMING THE TAX RATE REMAINS FLAT AT THE .7506, WE EXPECT THAT WE WOULD HAVE ABOUT $8 MILLION IN PROPERTY TAX REVENUE THAT COULD BE USED FOR RECURRING OPERATING EXPENSES. WHAT YOU WILL SEE IN THE ACTUAL BUDGET SCENARIO IS REVENUES-- PROPERTY TAX REVENUES ARE PROJECTED TO INCREASE 23 MILLION.

SO IT IS ONLY THAT $8 MILLION OF GROWTH THAT WOULD BE AVAILABLE FOR RECURRING. WE ALSO EXPECT INCREASES FOR SALES TAX AND OTHER REVENUES. THIS SALES TAX INCREASE OF 2 MILLION IS PROJECTED AT A 4% INCREASE.

AT THE SAME TIME, WE ARE ANTICIPATING A COUPLE REVENUE CONSTRAINTS. SO WE ANTICIPATE THAT THERE COULD BE A REDUCTION IN DISPATCHER-- DISPATCHER FUNDING

[01:25:03]

SO THAT WOULD BE ALMOST A HALF MILLION DOLLARS DECREASE IN 2027, AN ADDITIONAL HALF-MILLION DOLLAR DECREASE IN FY28, AND AN ADDITIONAL DECREASE IN 29. SO TOTAL REVENUE IMPACT OF 5 MILLION ACROSS THOSE TWO YEARS.

WE WILL ALSO BE REVERSING A ONE-TIME TRANSFER FROM THE SELF-INSURANCE FUND. THAT IS A ONE-TIME BALANCING TECHNIQUE THAT WE DISCUSSED WHEN WE TALKED ABOUT RESTORING THE GENERAL FUND. WHILE WE DO HAVE ALL OF THESE REVENUE INCREASES, WE ARE ALSO FACING SOME SIGNIFICANT COST PRESSURES IN FY27. SOME OF THESE MEASURE PRESSURES INCLUDE COMPENSATION AND STAFFING, WE STILL HAVE FROZEN POSITIONS, THESE ARE VALUED AT $1.9 MILLION.

WE HAVE OUR PUBLIC SAFETY PAY RAISES THAT WE ARE COMMITTED TO.

HIS WE HAVE THE SIX NEW POLICE OFFICERS, THE COMMITMENT OF THE FINAL PHASE OF THE VEHICLES. WE ALSO NEED TO REVERSE THE-- WE HAVE THE REVERSE FLEET REPLACEMENT CREDIT VALUED AT ABOUT $800,000. AND PROBABLY THE MOST SIGNIFICANT AND CONCERNING PRESSURE WE HAVE AT THE MOMENT IS OUR HEALTH INSURANCE CONTRIBUTION.

WHICH I WILL GET IN TO MORE DETAIL, NEXT.

SO WE HAVE SEEN SIGNIFICANT INCREASES IN HEALTH CLAIMS SINCE ABOUT AUGUST OF LAST YEAR. SO, INITIALLY THIS MIGHT BE DRIVEN BY A FEW HIGH-COST CLAIMS, BUT WHAT WE HAVE SEEN LATELY IS THAT THIS DOES APPEAR TO BE A BROADER TREND OF HIGHER ONGOING CLAIMS. PROBABLY COMBINED WITH SOMEONE TIME HIGH COST CLAIMS IN THERE. THROUGH MARCH, CLAIMS ARE APPROXIMATELY 50% OVER BUDGET. AND 42% OF FY25 ACTUALS.

THIS CREATES A SIGNIFICANT FINANCIAL IMPACT FOR THE CITY.

OUR CURRENT PROJECTIONS FOR FY26 IS THAT WE WOULD HAVE A $3.8 MILLION DEFICIT IN OUR HEALTH PLAN.

WE DO HAVE A HEALTHY SELF-INSURANCE FUND BALANCE AT THE MOMEN OF ABOUT SEVEN-- SEVEN AND A HALF MILLION.

IT CAN ABSORB THE SHORT-TERM IMPACT OF THIS, BUT IF YOU HAVE A $3.8 MILLION DEFICIT IN A SINGLE YEAR, SEVEN AND A HALF MILLION WILL NOT GET YOU VERY FAR, OR LAST VERY LONG.

WE DO FEEL THAT FULL CORRECTION IN A SINGLE YEAR IS NOT FEASIBLE. WE WOULD HAVE TO INCREASE GENERAL FUND REVENUES BY 2.6 MILLION.

OR ALLOCATE COST BY 2.6 MILLION OFF OF THAT IMPACT.

IT WOULD ALSO REQUIRE SIGNIFICANT EMPLOYEE PREMIUM INCREASES. WE ARE WORKING FOR-- TOWARDS STRATEGIES TO ADDRESS THESE COSTS.

WE ARE LOOKING AT SHORT-TERM AND LONG-TERM STRATEGIES.

ONE OTHER THING WE NEED TO SEND SUPPLEMENTAL URGENCY RESERVES OVER TO THE SELF-INSURANCE FUND TO HELP STABILIZE. ONE THING THAT WE KNOW IS THAT ANY PLANNED CHANGES, ESPECIALLY FROM A PREMIUM PERSPECTIVE, WITH THE PLAN YEAR STARTING IN JANUARY, IT TAKES TIME TO ACTUALLY REALIZE THE IMPACT OF THOSE.

SO THERE IS A PERIOD OF TIME THAT WE-- UNTIL PLANNED CHANGES CAN BE MADE, OR OTHER CHANGES CAN BE EVALUATED, WE ARE REALLY AT THE MERCY OF WHAT THESE CLAIMS JUST ARE.

THESE COST SURGES ARE JUST WHAT THEY ARE.

WE HAVE TO PAY THEM. THIS CHART KIND OF SHOWS THAT INCREASING CLAIMS OUTPACING THE CONTRIBUTIONS.

SO THAT LIGHTER BLUE IS THE CONTRIBUTIONS THAT INCLUDE THE CITY'S CONTRIBUTIONS, IT INCLUDES EMPLOYEE PREMIUMS. THE DARK BLUE IS OUR CLAIMS EXPENSES.

AS YOU CAN SEE, THAT RANGE BETWEEN THE BARS SHOULD BE LEVEL. THAT RANGES INCREASING AS YOU START TO LOOK AT THAT FINAL 2026 PROJECTED NUMBER.

AND THAT IS WHERE THAT REPRESENTS ABOUT THAT $3.8 MILLION LOSS PER DEFICIT. SO THE CITY DOES OFFER FREE HEALTH PLANS. LAST YEAR WE DID HAVE EMPLOYEE PREMIUM INCREASES, AND AN INCREASE IN THE CITY CONTRIBUTIONS. WE HAD PLANNED ON SPLITTING THAT BETWEEN TWO YEARS. SO WE KNEW GOING IN TO FY27 THAT WE WOULD DO ANOTHER INCREASE, BECAUSE WE HAD SEEN THAT CLAIMS WERE OUTPACING CONTRIBUTIONS AGAIN.

BUT EVEN WHEN THAT WAS ONLY GOING TO GENERATE ABOUT HALF A MILLION DOLLARS IN REVENUES, WHEN WE ARE LOOKING AT ABOUT AT

[01:30:05]

COMBINED WITH THAT WILL BE THE EVALUATION OF HEALTH PREMIUMS FOR EMPLOYEES AND WHAT WE DO THERE.

>> DO YOU KNOW IF THE ADMINISTRATIVE COSTS ARE FAIRLY

STABLE? >> YES, I WOULD SAY SO.

YES. AND EVEN OUR PRESCRIPTION CLAIMS HAVE BEEN STABLE PERFORMING WITH BUDGET TOO.

SO IT IS REALLY HER OUTPATIENT, INPATIENT, THAT IS WHAT APPEARS TO BE DRIVING ALL THESE INCREASES.

-- IT IS REALLY YOUR OUTPATIENT, INPATIENT, THAT IS WHAT APPEARS TO BE DRIVING ALL THESE INCREASES.

WIT THAT I WOULD LIKE TO PIVOT TO OUR BUDGET SCENARIOS.

THIS IS WHERE WE POOLED TOGETHER EVERYTHING WE HAVE DISCUSSED SO FAR AND PUT IT TOGETHER WITH NUMBERS.

THIS FIRST SCENARIO I AM SHOWING YOU IS AT THE BLACK 7.506 TAX RATE. IT ASSUMES THE PRELIMINARY TAX VALUES WERE WHAT WAS PROVIDED. 12.6 BILLION.

UNDER THIS SCENARIO IT DOES THE BUDGET IS $167 MILLION.

AND 18% INCREASE OVER FY26. SOME HIGHLIGHTS OF WHAT THIS BUDGET SUPPORTS IS COMPENSATION ADJUSTMENTS, SIX NEW POLICE OFFICERS. HEALTH INSURANCE INCREASES, AND ONE THING THAT I WANT TO POINT OUT IS THAT THERE IS THIS LINE WITHIN THERE THAT SAYS BIRD MAINTENANCE AND OTHER COUNCIL PRIORITIES. ONE THING THAT THIS BUDGET DOES DO IS THAT IT CREATES FUNDING TOWARDS RECURRING DEFERRED MAINTENANCE, WHICH WILL BEGIN IN-- AT ABOUT 800,000 AVAILABLE FOR 2027. BY THE TIME YOU GET TO 2030, THAT AMOUNT WOULD GROW TO ABOUT $6.7 MILLION ANNUALLY.

>> I'M SORRY. [LAUGHTER]

>> I AM DONE. >> AS YOU CAN SEE IN 2027, THERE IS A LARGE AMOUNT OF ONE-TIME REVENUES.

THAT IS WHERE I SAID WE WOULD HAVE A FRONTLOADED INCREASE-- OR A SURGE IN TAXABLE PROPERTY TAX REVENUE.

THAT IS WHERE THAT IS. SO IT HAS TO HAPPEN IN 27, IS WE HAVE TO SET ASIDE THE 15.6, AND NOT SPEND IT ON RECURRING.

SO IT IS AVAILABLE FOR RECURRING IN SUBSEQUENT YEARS.

THAT IS WHERE YOU SEE 50.6 AND 27 AND IT DECREASES TO 7.9 AND 28, AND YOU USE THE REMAINING TO FUND YOUR GENERAL INCREASES FROM YEAR TO YEAR. SO LET US MOVE TO SCENARIO TWO, WHICH INVOLVES A 1 CENT REDUCTION IN THE TAX RATE.

IT PRETTY MUCH ASSUMES ALL OF THESE SAME FACTORS AS THE PREVIOUS SCENARIO, WITH VALUATION, WHAT IS BEING FUNDED.

THE PRIMARY DIFFERENCES YOU CAN SEE THAT IT'S A BIT OF A LOWER BUDGET. IT'S A DIFFERENCE OF ABOUT $1.3 MILLION IN REVENUES THAT ARE LOWER THAN THE PREVIOUS SCENARIO. SO YOU END UP WITH A LITTLE BIT LESS BEING FOR MAINTENANCE AND OTHER COUNCIL PRIORITIES.

AND IT GENERATES LESS IN ACCUMULATIVE FUNDS.

MOVING OVER TO SCENARIO THREE, THIS KEEPS IT AT THE LOWER 1 CENT REDUCTION OF THE TAX RATE, BUT ALSO FACTORS IN THAT ONE BILLION-DOLLAR TAXABLE VALUE DECREASE THAT WE EXPECT MAY VERY

WELL BE A POSSIBILITY. >> ARE THE SCENARIOS FACTORING IN THAT CAP WE WERE TALKING ABOUT EARLIER?

>> YES, YES, IT IS. SO WE DID-- I ESTIMATED THE TAX REVENUE IN 27 TO BE 4%. I PROJECTED THE REMAINING YEARS AT 3% TO BE CONSERVATIVE. THAT IT DOESN'T FACTOR IN ANY ONE TIME TAX REVENUES. SO THIS SHOWS THE IMPACT OF THE

[01:35:02]

IT ENDS UP CREATING A DEFICIT, WHERE YOU SEE $1.7 MILLION IN THE DEFICIT. SO WHAT THIS MEANS IS-- AND ALSO, IF YOU WERE TO LOOK AT THAT DEFERRED MAINTENANCE AND OTHER COUNCIL PRIORITIES LINE, THAT GOD ZEROED OUT.

THAT GETS ZEROED OUT, AND WE WOULD MEET-- NEED TO FIND $1.7 MILLION IN CUTS SOMEWHERE WITHIN THAT CURRENT BUDGET.

IN ORDER TO BALANCE. SO, FOR CONTEXT, WE ARE GOING TO PRESENT PUTTING THE TAX RATE BACK UP TO THE FLAT.

SO WHAT DOES THIS LOOK LIKE WITH THE $1 BILLION THAT IS REDUCED? AND THE TAX RATE FLAT? THE DEFICIT IS JUST SMALLER NOW.

SO WE WILL BE LOOKING AT ONE POINT FOUR MILLION-DOLLAR IN CUTS THAT WOULD NEED TO BE IDENTIFIED.

-- $1.4 MILLION IN CUTS THAT WOULD NEED TO BE IDENTIFIED.

MOVING ON, HERE ARE SOME UPDATING KEY BUDGET DATES.

WE ARE ANTICIPATING CERTIFIED VALUES FROM THIS DISTRICT JULY 25TH. THIS TO SHOW THE DIFFERENCE IN OUR CURRENT BUDGET CALENDAR. WE PLAN TO, AS SOON AS WE GET CERTIFIED VALUES, WE ARE GOING TO READJUST EVERYTHING AND TRY TO GET A PROPOSED BUDGET TO COUNCIL BY JULY 31ST.

OUR FIRST READING BUDGET WORKSHOP IS SCHEDULED FOR AUGUST 24TH. AND FINALLY, THE FINAL APPROVAL OF THE BUDGET WOULD BE SEPTEMBER 10TH.

SO, ENCLOSING, OUR KEY TAKEAWAYS.

WE DO EXPECT THAT JULY 27 WILL BE A STRONG REVENUE YEAR, FOLLOWED BY SEVERAL YEARS WERE REVENUES MAY FLUCTUATE MORE THAN THE CITY'S HISTORICALLY EXPERIENCE.

PROPERTY TAX REVENUES MAYBE FLAT AND THE SUBSEQUENT COUPLE YEARS AS THE ABATEMENTS WORK THEMSELVES OUT.

BECAUSE OF THAT WE NEED TO REMAIN DISCIPLINED IN HOW WE USE ONE-TIME REVENUE, AND APPROACH A LONG-TERM FINANCIAL PLANNING APPROACH. THIS IS A SIGNIFICANT OPPORTUNITY FOR THE CITY. OUR GOAL IS TO MAKE SURE WE MANAGE IT IN A WAY THAT PROTECTS OUR LONG-TERM FINANCIAL STABILITY AND OUR FLEXIBILITY. I AM HAPPY TO ANSWER ANY

QUESTIONS. >> IN ALL FOUR SINGERS WE HAVE 10 MILLION GOING INTO THE FIREMAN'S RETIREMENT? IN GENERAL, WHAT DO YOU THINK THAT DOES TO THE HEALTH OF THE PLAN? AND HOW MUCH OF THAT IS COMING FROM EMPLOYEE VERSUS CITY CONTRIBUTIONS?

>> THE CURRENT SCENARIOS, WE'VE BEEN LOOKING AT WHAT A 10 MILLION-DOLLAR INCREASE LOOKS LIKE.

IT HAS A MUCH MORE SIGNIFICANT SUBSTANTIAL IMPACT THAN YOU WOULD ANTICIPATE IT WOULD. IT REALLY HELPS TO CORRECT THE PLAN, OR WHAT'S THE PLAN ON A PATH THAT IS INCREASING AT.

BUT ONE FACTOR TO CONSIDER IS WHETHER OR NOT ANY OTHER PLANNED CHANGES ARE MADE ALONGSIDE THAT THAT WILL ALSO END UP IMPACTING

HOW MUCH THAT ACTUALLY ENDS UP. >> IT GETS US HEADING IN THE

RIGHT DIRECTION. >> ABSOLUTELY.

>> THAT 10 MILLION IS A COMPLETE CITY CONTRIBUTIONS?

>> ARE RETHINKING THE 10 MILLION WILL BE THE BASELINE THAT IS NEEDED TO GET THAT PLAN ON THE RIGHT TRACK?

>> WE ARE WORKING WITH OUR ACTUARIAL'S, BECAUSE THERE'S IDEAS LIKE INCREASING THE BENEFITS,, THAT INCREASE OF THE BENEFITS CAP DOES COST INCREASE-- INCREASED LIABILITIES. SO WERE WORKING WITH THAT ALONGSIDE VARIOUS SHOP-- VARIOUS OPTIONS TO DETERMINE THE IMPACT OF THE 10 MILLION-DOLLAR INFUSION, COMBINED WITH THE

BENEFITS ADJUSTMENT. >> FOR SURE SOME SORT OF

INFUSION IS PLANNING TO BE DONE? >> THAT IS THE RECOMMENDATION.

IT APPEARS AS THOUGH WE WILL BE BRINGING THE PENSION BOARD IN TO

THE COUNCIL. >> ON THE INSURANCE FUNDS, SPECIFICALLY THE HEALTH OF THE INSURANCE, DO WE HAVE ANY IDEA, IS IT JUST HEALTH CLAIMS IN GENERAL? I KNOW YOU MENTIONED SOME OF THIS IS A COMBINATION OF SOME

[01:40:04]

>> THAT IS ONE THING I HAVE HAD A LOT OF DIFFICULTY TRYING TO NOTE. BECAUSE WE DO NOT GET THAT LEVEL OF DETAIL ON THE CLAIMS. SO I CANNOT SEE YOU FROM THE DATA THAT I HAVE WHERE THERE IS ONE SINGLE THING THAT IS DRIVING THIS. MAYBE SOMEONE ELSE WANTS TO

SPEAK ON NOT? >> HERE COMES HR.

>> NOW YOU ARE IN MY WORLD. GOOD MORNING, COUNCIL, MAYOR.

OUR PARTNERS ARE LOOKING AT THAT CLAIMS DATA.

WE REVIEW IT EVERY QUARTER. SO THERE HAS BEEN A HUGE SPIKE WHEN IT COMES TO INPATIENT AND OUTPATIENT SERVICES.

SO NOT ONE PARTICULAR LINE ITEM. AND ON ANYTHING WE CAN KIND OF CORRELATE TO TO A TYPE OF SERVICE.

WE DO HAVE A TOP TEN THAT WOULD REALLY NARROW DOWN, THAT HAS NOT CHANGED OVER TIME. SO THAT'S BEEN CONSISTENT THE LAST FIVE TO SEVEN YEARS. OTHER THAN THAT THERE IS NOT A LOT OF DETAIL AS TO WHY THE SIGNIFICANT INCREASE IS.

IF THERE HAS BEEN MORE OR NEW REPLACEMENTS, OR SHOULDER SURGERIES OR THINGS LIKE THAT. THERE IS NOT THAT TYPE OF LEVEL THAT WE'VE ANALYSED OR SEEN AN INCREASE IN NET.

>> THE REASON I ASK IS THAT THE FOLLOWING ONE WAS GOING TO BE WHAT STRATEGIES WE CAN IMPLEMENT TO.

>> WE ARE WORKING ON THAT. I MENTION THAT EARLIER WITH OUR BENEFITS COMMITTEE. NOEL HAS BROUGHT TO THE PERSPECTIVE THAT HE'S BROUGHT PREVIOUSLY.

WE HAVE THE OPPORTUNITY TO ENGAGE WITH DIRECTORS ON A CHANGE MANAGEMENT CONCEPT. SO WE ARE DOING THAT RIGHT NOW.

THAT'S GOING TO BE SOMETHING THAT INVOLVES A DIFFERENT WAY OF THINKING, A DIFFERENT WAY OF DOING THINGS.

SO WE ARE WORKING TO UNDERSTAND WHAT THAT MEANS.

WHAT CAN WE OFFER TO OUR EMPLOYEES, AND WHAT WILL HELP THE FUND AS WELL AS THE EMPLOYEES?

WE ARE WORKING ON THAT TODAY. >> THANK YOU.

>> RIGHT BEFORE THE BREAK YOU HAD INDICATED THAT YOU WERE LOOKING FOR DIRECTION ON THE REBUILDING THE FUNDING GOING FORWARD, AND WHETHER OR NOT TO BRING A RESOLUTION.

IS THAT SOMETHING YOU WANT TO DISCUSS NOW OR LATER?

>> I'M FINE WITH IT NOW. >> MA LOOK AT THE FUNDING OF

THAT SPECIFIC BUDGET ITEM? >> CAN YOU PULL YOUR MICROPHONES CLOSER TO YOU? I THINK THE AUDIENCE IS HAVING

TROUBLE HEARING. >> THANK YOU FOR RUINING THE

PLAN, SHAWNA. >> OUT OF CURIOSITY, ON THE CHART A FEW SLIDES BACK, HEALTH CONTRIBUTIONS VERSUS CLAIMS ADMINISTRATIVE COST. SEEMS TO BE A GOOD SPIKE IN THE 2026 PROJECTED. I KNOW WE KIND OF SAID THAT ADMIN COSTS HAVE BEEN STABLE. WAS THERE A REASON FOR THAT JUMP

THERE? >> THAT'S WHERE WE ARE SEEING THAT DEFICIT ON THE FUNDING. IT'S THE CLAIMS AND ADMINISTRATIVE COSTS, JUST THE TOTAL EXPENSES RELATED TO THE HEALTH PLAN. AND THE BAR NEXT TO IT IS THE ACTUAL CONTRIBUTIONS TO THE PLAN.

IN A PERFECT WORLD THEY WOULD BE THE SAME LEVEL.

>> ON THE PRELIMINARY BUDGET SLIDES THERE IS A NONSERVICE SERVICE COMPETENT-- COMPENSATION.

IS THAT BASED ON A FLAT PERCENT INCREASE? OR IS AT AN ESTIMATE OF WHAT WE ANTICIPATE THIS PAID PLAN TO

RECOMMEND? >> I ENDED UP JUST USING A 4% ON NET ESTIMATE TO WORK THAT OUT. I DO NOT BELIEVE THAT THAT IS A DECISION THAT HAS BEEN MADE THAT IS FINAL ON HOW WE ACTUALLY

APPROACH THAT, THIS BUDGET HERE. >> DO YOU ANTICIPATE THIS BUDGET

BEING FINISHED BEFORE JULY? >> WE DO NOT ANTICIPATE HAVING THE NEW CLASS PLAN COMPLETED, AND WE WILL ADDRESS THAT IN THE HR PORTION COMING. WE WOULD LIKE TO RECOMMEND A COMPENSATION INCREASE FOR ON CIVIL SERVICE AS SOMEWHAT OF A BRIDGE BEFORE WE CAN IMPLEMENT THE NEW PLAN.

ON THE CIVIL SERVICE, OF COURSE, WE KNOW WITH TRENDS, WITH FIRE AND POLICE, WHAT THAT COMPENSATION COULD BE.

AND FROM CONVERSATIONS FROM THE COUNCIL THAT WE HAD HERE RECENTLY, REGARDING FIRE, WE WOULD RECOMMEND AN AVERAGE PLUS 3% INCREASE FOR THE FIRE DEPARTMENT IN OUR UPCOMING BUDGET. ALTHOUGH WE MAY OR MAY NOT HAVE ANY KIND OF FORMAL AGREEMENT WITH THE FIRE DEPARTMENT AT THAT

TIME. >> THANK YOU.

[01:45:16]

>> AT THIS TIME, MAYOR AND COUNCIL, DO YOU HAVE DIRECTION FOR US? WHAT WE WOULD REALLY LIKE TO GET AN UNDERSTANDING FROM YOU, HIS MIND WE BRING TO YOU OUR PROPOSED BUDGET IN JULY, BASED ON SOME OF THESE SCENARIOS, REGARDING THE TAX RATE, INCLUDING THE DYNAMIC OF THIS ONE BILLION-DOLLAR VALUATION DECREASE, DO YOU HAVE DIRECTION FOR US IN WHAT TYPE OF TAX RATE THAT YOU WOULD LIKE FOR US TO

INCLUDE IN THE PROPOSED BUDGET? >> HOW LIKELY DO YOU THINK THAT

IS, THE $1 MILLION DECREASE? >> I THINK IT IS PRETTY LIKELY.

I HAVE BEEN FOLLOWING THE VALUES.

LAST I LOOKED IT'S ABOUT 11.9. SO IT'S NOT QUITE ABOUT 1 BILLION. THERE MAYBE ADDITIONAL VALUES, SO IT MIGHT NOT BE QUITE AS MUCH AS THAT.

BUT AT THIS POINT, TRYING TO PROJECT THAT OUT, I HAVE NO

IDEA. >> COULD YOU RESTATE WHAT THAT IS GOING TO BE, WITHOUT LOSS OF VALUE REPRESENTS WE ARE NOT

REALLY LOSING PROPERTY VALUE? >> WE ARE NOT LOSING PROPERTY VALUE. THE ORIGINAL ESTIMATES PROVIDED BY T C.A.D., WE RECEIVED ABOUT THAT $12.9 BILLION IN VALUE.

SO BY THE TIME THAT THE ACTUAL VALUES GET CERTIFIED WE ANTICIPATE WE COULD SEE UP TO A ONE BILLION-DOLLAR VALUE DECREASE. THAT IS JUST A MATTER OF PROTEST. AND JUST WORKING THROUGH THAT WHOLE PROCESS THAT THEY GO THROUGH EVERY YEAR.

>> KIMIKO BACK TO THAT SLIDE RIGHT THERE WITH THE FLAT ONE?

>> THIS IS THE FLAT ONE. THE FIRST ONE.

>> SCENARIO FOUR. SO THAT WOULD BE A ONE-POINT $4 MILLION SURPLUS? IS THAT CORRECT?

>> DEFICIT. >> IIC.

OKAY. -- I SEE, OKAY.

>> SO LOOKING AT CERTIFIED VALUES, THAT IS JUST A START.

>> I WOULD START WITH THE TAX RATE...

>> IN TERMS OF THE 1 BILLION VALUE, IS IT A ONE-TERM CORRECTION POTENTIALLY, OR A LONGER-TERM TREND UC? -- A LONG-TERM TREND THAT YOU ARE SEEING?

>> THIS IS ABOUT THE VALUES NOT BEING FINALIZED YET.

THEY TOOK IT IS A MOMENT IN TIME, AT THEY ARE WORKING ON IT.

>> FOR THE PUBLIC'S KNOWLEDGE, THIS IS A STARTING POINT TO START CREATING THE ACTUAL BUDGET IN JULY BEFORE WE GO THROUGH AND SET THE RATES? AND WE WILL KNOW MORE

INFORMATION BY THEN? >> THAT IS CORRECT.

>> BECAUSE IT HAS TO BE A BALANCED-BUDGET.

>> RIGHT. >> I AM GOOD WITH THAT.

>> I'M GOOD WITH THAT. >> THANK YOU, MAYOR AND COUNCIL.

AND ALSO THE SALES TAX POLICY AS TO THE POLICY THAT WE HAVE CURRENTLY VERSUS WHAT WE HAVE PRESENTED, I WOULD LIKE TO HAVE SOME DIRECTION ON YOU WITH THAT SPECIFICALLY SET ASIDE.

THAT WILL AFFECT THE PROPOSED BUDGET AS WELL AS WE WILL NEED TO PRESENT TO YOU A NEW POLICY FOR ADOPTION.

>> WHAT WAS THE DOLLAR FIGURE FOR 10%?

>> IT WAS RIGHT UNDER 2 MILLION. >> CLOSE TO THE DEFICIT WITH A FLAT TAX RATE OF A ONE BILLION-DOLLAR LOSS?

>> YES, BUT THOSE WOULD BE UNRELATED TO THIS BECAUSE WE DON'T FACTOR IN THE ONE-TIME SALES TAX REVENUE IN THE

OPERATING BUDGET. >> BUT THIS IS A PURPOSES ONLY PROJECTIONS FOR NEXT FISCAL YEAR.

THIS IS NOT FY26? >> WE WOULD HAVE SOME ONE-TIME SALES TAX REVENUE IN FY26. SO WE WOULD TRY TO GO AHEAD AND

[01:50:02]

ASIDE FOR OPERATING RESERVES. >> NOW WE ARE LOOKING AT

APPROXIMATELY WHAT? >> LET ME SEE.

>> 21 MILLION? 2.1 MILLION?

>> YES, THAT IS RIGHT. >> I'M JUST MAKING SURE, NOT FOR MY SAKE, BUT FOR THOSE LISTENING, IT SOUGHT ONE-TIME RESERVE, THE 10%. WHEN I HEAR YOU TALK ABOUT BUDGETING, ESPECIALLY IN THE WAY YOU FRAMED IT, IT SUPER HELPFUL FOR ME, I THINK OF OUR BUDGET BEING A PROMISES BUDGET.

IT'S NOT A ONE-TIME REVENUE OR HIGH TAX DOLLARS COMING IN, SO I'M DEFINITELY COMFORTABLE WITH THE 10% BEING SET ASIDE.

>> ENDED DOES NOT GO AWAY, IT'S JUST TEMPORARILY SET ASIDE TILL WE GET TO THE END OF THIS PROJECT PERIOD.

THEN IT WOULD BE RELEASED AND USED IN IT'S BROAD CONTEXT.

>> FROM A POLICY PERSPECTIVE, IF WE DON'T MAKE IT SO RESTRICTIVE, THEN WE CAN'T GET TO IT IF WE NEED IT.

>> BUT HISTORICALLY, IF WE HAVE HAD FLEXIBILITY--

>> WE WOULD RIDE IT IN A WAY THAT IT WOULD BE FLEXIBLE

ENOUGH. >> WE WILL BRING TO YOU A DRAFT OF OUR PROPOSED SALES TAX POLICY IN THE COMING WEEKS.

AND MARJORIE, I THINK THAT THAT COVERS ALL THE COUNCIL INPUT AT THIS TIME, IS THAT CORRECT, WITH WHAT WE HAVE NOW JUST COVERED?

>> ONE MORE QUESTION FOR CLARK, WE HAVE THE TRANSFER FOR THE 16 MILLION, AND ON THE OTHER SIDE, WERE LOOKING AT OUR PROPERTY TAX, AND PROJECTIONS THERE, SO WOULDN'T IT BE-- WE WOULD HAVE THIS 15, 16 MILLION COMING IN?

FOR VIP PURPOSES. >> THAT'S RIGHT.

IN A LATER PRESENTATION I WILL SHOW YOU WHAT THIS LOOKS LIKE

WHEN WE PUT IT ALL TOGETHER. >> OKAY., THANK YOU.

>> THANK YOU, COUNCIL. >> GOOD MORNING.

PAMELA WILLIAMS, DIRECTOR OF HUMAN RESOURCES.

CAN YOU HEAR ME OKAY? I AM HAVING SOME ISSUES THIS MORNING. THE CHANGE IN WEATHER IS GOOD BUT IT ALSO BRINGS SOME CHALLENGES.

I HAVE THE PRIVILEGE TODAY OF REVIEWING THE COMPENSATION PLAN WITH YOU. IT'S ABOUT ENSURING THAT THE CITY REMAINS IN A POSITION TO RECRUIT, RETAIN AND SUPPORT THE WORKFORCE TO DELIVER THE SERVICES THAT THE RESIDENTS DEPEND ON EVERY SINGLE DAY. I WILL TAKE OVER THE LAST COUPLE YEARS. WE LOOKED AT THE LABOR MARKET AND HOW IT HAS EVOLVED, AND I WILL WALK YOU THROUGH THAT TODAY. THE CITY IS TAKING MEANINGFUL STEPS TO RESPOND AND USE THOSE EFFORTS TO HELP US REMAIN OPERATIONAL DURING A CHALLENGING EMPLOYMENT TIME.

AT THIS TIME ARNON CIVIL-SERVICE COMPENSATION STRUCTURE IS NOT MOVING AT THE SAME PACE AS THE MARKET.

AND THAT'S WHAT WE WILL TALK ABOUT A BIT TODAY.

WHAT WE ARE EXPENSING IN THE MARKET'S POSITIONS ARE TAKING LONGER TO FILL, DEPARTMENTS ARE MANAGING VACANCY AND TURNOVER PRESSURE, AND HOW IT AFFECTS OUR DEPARTMENTS, WHO IN SOME CASES ARE RELY MORE HEAVILY ON OUTSOURCING, OVERTIME AND OTHER OPERATIONAL STRATEGIES TO MAINTAIN SERVICE LEVELS.

THIS FIRST SLIDE HERE TALKS TO YOU A BIT ABOUT WHAT THAT PAY STRUCTURE IS LOOKING LIKE. SOME OF THE COMPENSATION ADJUSTMENTS WE HAVE BEEN EXPERIENCING.

AND IT IS TELLING A STORY CUT THE STORY IT'S TELLING YOU IS ABOUT HOW MUCH IT'S WORKING HARDER TO USE-- HOW MUCH HARDER IT IS TO STABILIZE THE WORKFORCE AND HOW THAT STRAIN IS BECOMING MORE VISIBLE. ONE OF THE CLEAR SIGNS IS THE GROWTH AND COMPENSATION ADJUSTMENT.

AS YOU CAN SEE FROM FY23, THE CITY PROCESSES 262 COMPENSATION ADJUSTMENTS. BY FY26 THAT PACE IS MOVED UP TO 896. IT DOESN'T HAPPEN IN A VACUUM.

IT'S TELLING US THAT OUR DEPARTMENTS ARE INCREASINGLY RESPONDING TO COMPENSATION, COMPRESSION, WORKER RECRUITMENT CHALLENGES, RETENTION CONCERNS AND OTHER WORKFORCE PRESSURES.

WHILE AT THE SAME TIME, HIRING HAS BECOME MORE DIFFICULT.

FROM FY23 TO 26 THE NEW HIRING PACE HAS DECLINED BY 26%.

IN OTHER WORDS, WHAT WERE SEEING AS WERE BRINGING IN FEWER EMPLOYEES THAN WE WERE TAKING IN JUST A COUPLE YEARS AGO.

SO THERE HAS BEEN A DRASTIC CHANGE IN THAT.

WHEN WE DO HIGHER IT TAKES MUCH LONGER.

THE AVERAGE TIME TO HIRE HAS INCREASED FROM 29 TO 44 DAYS, AND THE NATIONAL BENCHMARK IS 35.

SO THE CITY OF ABILENE IS NINE DAYS LOWER THAN THAT.

THAT NINE-DAY GAP BECOMES PROBLEMATIC WHEN THE VACANT POSITION DOES NOT MEAN THAT THEY WERE JUST DISAPPEARS.

WHAT THAT TELLS US AS THEY WORK IS STILL EXISTING, BUT HAS TO BE COVERED BY CURRENT EMPLOYEES. SUPERVISORS OVER TIME, INTERIM

[01:55:04]

AND YOU ARE SEEING AND HEARING ABOUT THAT.

THAT'S THE OPERATIONAL REALITY BEHIND THIS SLIDE.

VACANCY IS NOT JUST AN EMPTY BOX ON AN ORGANIZATIONAL CHART, IT IS STILL WORK THAT HAS TO BE DONE, AND THAT IS WHAT I'M HOPING TO RELAY HERE TODAY. WE ARE ALREADY SEEING DEPARTMENTS USE OUTSOURCED SUPPORT TO MAINTAIN CRITICAL SERVICES. PARKS IS RELYING ON OUTSOURCING FOR HVAC, PLUMBING, MOWING, AND I.T. IS DOING THE SAME THING TO STRUCTURE THEIR SERVICES TO CONTINUE.

LET ME GO BACK TO THAT SLIDE SO I DON'T MISS ANYTHING.

THESE ACTIONS ARE NECESSARY, BUT DEFINITELY SHORT-TERM.

THEY SHARE THAT WORKFORCE STRAINS CARRY A COST HIGHER THAN WHAT IS BEING OFFERED. THE COMPENSATION BECOMES AN OPERATIONAL CAPACITY ISSUE. BECAUSE SHOWS UP THERE LONGER VACANCIES, REPEATED ADJUSTMENTS. THE NEXT SLIDE IS EXPLAINING WHAT IS HAPPENING BY LOOKING AT HOW DIFFERENT PAY PLANS MOVE EVERY TIME. AND THIS IS A LITTLE BIT-- THERE IS A LOT GOING ON HERE. I WILL TRY TO WALK YOU THROUGH IT. THIS SLIDE IT'S PLANES HOW THE CITY HAS ARRIVED AT THIS POINT. NOT ALL PAID PLANS HAVE MOVED THE SAME. YOU CAN TELL BY THE DIFFERENT COLORS FOR THE POLICE, DON CIVIL-SERVICE, AND WHAT IT'S REPRESENTING. SO FIRE AND POLICE EVER MADE MORE CLOSELY CONNECTED TO THE CURRENT MARKET BECAUSE OUR AGREEMENTS ARE BUILT AROUND THAT MARKET RESPONSIVE STRUCTURE.

SO THOSE PAID PLANS TARGET THE 4% ABOVE CITY MARKET WITH A 2% MINIMUM INCREASE WHEN A POSSESSION IS ABOVE THAT MARKET TARGET. THAT IS WHAT YOU ARE SEEING IN THIS SLIDE. NOT CIVIL SERVICES HAD A VERY DIFFERENT PATH. THE CHART ON THIS SITE IS AN INDEX ON THE LEFT-HAND SIDE THERE.

IT'S NOT A SALARY CHARGE. THAT LEFT ACCESS USES 100 TO REPRESENT THE 2021 MARKET STUDY. THE PURPOSE IS TO SHOW THE DIFFERENCE BETWEEN EMPLOYEE PAID MOVEMENT AND MARKET MOVEMENT OVER TIME. FOR NOT CIVIL SERVICE EMPLOYEES, THE CITY IMPLEMENTED THE 2021 MARKET STUDY IN THAT FY23-24 YEAR. THE MARKET WAYS TREND LINE ON THE SIDE IS NOT A NEW MARKET STUDY.

AND IT'S NOT A POSITION BY POSITION SALARY RECOMMENDATION.

IT SIMPLY SHOWS THAT THE MARKET MOVEMENT IS DUE TO THOSE STUDIES. IT'S IMPORTANT TO BE AWARE THAT WE ARE CURRENTLY IN THE PROCESS OF AN RFP THAT MS. CRAWFORD HAD MENTIONED EARLIER. WE RECEIVED SEVEN RESPONSES TO THE RFP REQUEST. SO WE ARE CURRENTLY EVALUATING THOSE, AND WE ARE KNEEING SOME PEOPLE INTO DO SOME FINAL INTERVIEWS AND SEE WHAT THEY CAN HELP THE CITY WITH ON A STRUCTURE FOR ALL EMPLOYEES, FIRE, POLICE AND NONCE CIVIL-SERVICE FOR AND OPEN AND CLOSED PAID PLAN.

SO WE CAN DISCUSS THAT FURTHER. MY HOPE FOR THIS SLIDE IN THE TAKE AWAY IS THAT IT IS COMPLETING THE XXI STUDIES WITH NECESSARY STRUCTURAL CORRECTION BUT NOT COMPLETING THE CURRENT MARKET RESET. THE NEXT SLIDE SHOWS HOW THE OPEN POSITION AND TURNOVER, IS COMPENSATION ISSUE TURNS INTO A WORKFORCE CAPACITY ISSUE. THIS SLIDE IS NOW CONNECTING WITH THAT COMPENSATION STORY TO WHAT THEY DEPARTMENTS ARE EXPERIENCING OPERATIONALLY. THEY CAN SEE TURNOVER, IT'S NEVER CAUSED BY ONE REASON. SO PEOPLE LEAVE ORGANIZATIONS FOR MANY REASONS. AND POSITIONS CAN BE DIFFICULT TO FILL FOR MANY REASONS. PAID COMPETITIVENESS AS A STRUCTURAL FACTOR THAT AFFECTS THE ABILITY TO RECRUIT AND RAIN TAINT-- RETAIN STAFF ANCHORED TODAY THE CITY HAS A TOTAL OF 153 VACANT POSITIONS ACROSS ALL PAID CLASSES.

OF THOSE, 103 ARE FULL-TIME, WHICH IS RESULTING IN A 7.3% FULL-TIME VACANCY-- VACANCY RATE.

SOME ARE SPIRITS HE PRESSURE MORE SHARP-- SHARPLY.

OUR I.T. DEPARTMENT HAS A 34% FULL-TIME VACANCY RATE.

AND A TURNOVER FROM FY25-26. THOSE NUMBERS ARE IMPORTANT.

AND SHOWS YOU THAT IT'S NOT JUST ISOLATED TO ONE POSITION, ONE DEPARTMENT OR ONE HIRING CYCLE. WHAT THIS IS COMMUNICATING IS IT'S A BROADER CAPACITY ISSUE, AFFECTING MULTIPLE AREAS OF OUR ORGANIZATION. WHEN VACANCY TURNOVER RISES, DEPARTMENTS HAVE FEWER PEOPLE THAT HAVE THE ABILITY TO OBSERVE THE SAME AMOUNT OF WORK, AND THAT WORK IS JUST BEING REDISTRIBUTED. SUPERVISORS ARE COVERING MORE, EMPLOYEES ARE TAKING ON MORE, AND WE ARE SEEING OVER TIME INCREASES. DEPARTMENTS ARE RELYING ON OUTSOURCING, AND SOME OF THAT WORK HAS TO BE DELAYED, REPRIORITIZED, AND EVEN REDUCED. THIS IS HOW A COMPENSATION ISSUE NOW BECOMES AN OPERATIONAL ISSUE.

THIS SLIDE ALSO GIVES AN IMPORTANT EXAMPLE FOR PARKS AND, FALLING FROM A RECENT COMPENSATION PLAN UPDATE, THE PARKS AND RECREATION'S DECREASED.

THIS DOES NOT MEAN THAT COMPENSATION IS THE ONLY ANSWER, BUT IT SHOWS THAT A TARGETED COMPENSATION CHANGE CAN MAKE A DIFFERENCE IN RECRUITMENT AND RETENTION FOR SPECIFIC ROLES.

THE KEY TAKE AWAY IS THAT VACANCIES AND TURNOVER CONVERT COMFORT-- CONVERSATION LEG INTO AN OPERATIONAL PRESSURE.

THE IMPACT SHOWS THAT THE REDISTRIBUTE IT WORK, AND IN THE

[02:00:03]

BEING ABLE TO DO THE COMPENSATION STRAIN AND HOW IT IS CREATING THAT CHAIN REACTION. WHEN PAID STRUCTURES FALL BEHIND THE COMPRESSION IS GROWING. WHEN COMPRESSION GROWS, RECRUITMENT AND RETENTION BECOME HARDER.

WHEN HIRING BECOMES HARDER, VACANCY STAY OPEN LONGER.

-- VACANCIES STAY OPEN LONGER. THE CURRENT METRIC IS SHOWING A 30.4 INCREASE FROM 2023 TO 2026 PROJECTED.

THIS CALCULATION IS FOCUSING ON NONCE CIVIL-SERVICE OVERTIME AND EXCLUDES THE FIRE AND POLICE. IT SUPPORTS THE POINT OF STOPPING PRESSURES BEING ABSORBED OPERATIONALLY.

TOGETHER THESE METRICS SHOW THE SAME PATTERNS FROM DIFFERENT ANGLES PICKED THE CITY IS TAKING LONGER TO HIGHER, USING MORE COMPENSATE OF ACTIONS AND ABSORBENT-- ABSORBING MORE OVER TIME PRESSURES ON BEFORE. DEPARTMENTS ARE USING OTHER STRATEGIES TO SUSTAIN SERVICES PROLONGING VACANCIES.

THEY ARE SHIFTING WORK AND EXPANDING ROLES INTO RESTRUCTURING POSITIONS, USING OVERTIME AND RELYING ON THESE TARGETED AREAS FOR PROFESSIONAL ADDITIONAL SERVICES.

OUR CURRENT BUDGET EXAMPLES INCLUDE APPROXIMATELY 393-- 390,000 FROM I.T. FOR GIS SERVICES, AND MORE THAN 200,000 FOR BUILDING INSPECTION REPORTS. THESE ARE NOT JUST BUDGET NUMBERS, THEY REPRESENT THE COST OF MAINTAINING SERVICE CAPACITY WHEN POSITIONS ARE DIFFICULT TO FILL OR KEEP FILLED.

THIS IS WHY THAT COMPENSATION DISCUSSION REALLY DOES MATTER.

COMPENSATION LEG DOES NOT STAY WITHIN THE PAID PLANE, IT MOVES INTO OPERATING ENVIRONMENT. THE FY27 PROPOSAL AND THE UPDATED COMPENSATION STUDY, WHICH IS MOVING FORWARD THROUGH THE RFP PROCESS WILL PROVIDE THE NEXT LAYER OF INFORMATION YOU WILL NEED. IT WILL HELP THE CITY UNDERSTAND CURRENT MARKET POSITION AND SUPPORT PUTIN-- FUTURE DECISIONS ON ALIGNING INVESTMENT WITH CERTAIN WORKFORCE NEEDS, COMMANDS AND THAT OPERATIONAL RISK THAT YOU ARE SOLVING FOR.

TO CLOSE ON THIS, THE 27 PROPOSAL SHOULD NOT BE UNDER THE STRUCTURAL CORRECTION. A COMPLETE SUPPLEMENTATION OF THE 2021 MARKET STUDY THAT YOU APPROVED, AND PAL PAULINE ON CIVIL-SERVICE EMPLOYEES, IS NOT THE NEW MARKET STUDY AND IT DOESN'T RECOMMEND FULL ALIGNMENT WITH MARKET CONDITIONS.

AT THE SAME TIME THE WORKFORCE DATA SHOWS WHY THIS CORRECTION MATTERS. THE IMMEDIATE OPPORTUNITIES TO COMPLETE 2021 IMPLEMENTATION OF THE NOT CIVIL-SERVICE STRUCTURE, AND THE LONG-TERM OPPORTUNITY IS TO USE THE UPCOMING COMPENSATION IS MORE OF A MARKET UPDATE. IT SHOULD BE A STRATEGIC PLANNING TOOL THAT HELPS YOU MAKE CLEAR MORE DISCIPLINED DECISIONS ABOUT PAID, STAFFING WORKLOAD, SERVICE EXPECTATIONS, AND OPERATIONAL RISK. AT IT'S CORE, THE WORK IS ABOUT PROTECTING THE CITY'S CAPACITY TO SERVE.

A STRONG COMPENSATION STRATEGY HELPS US KEEP CRITICAL POSITIONS FILLED, REDUCE WORK STRAINS IN THE DEPARTMENT.

SO IT'S NOT JUST THE OPPORTUNITY ABOUT WHAT WE DO WITH THE PAID PLAN, BUT HOW THE CITY REMAINS COMPETITIVE, RESILIENT TAKE CAPABLE OF DELIVERING ESSENTIAL SERVICES NOW, ENDED TO THE FUTURE. THAT'S A LOT OF INFORMATION, A LOT OF DATA ON THERE, ARE THERE ANY QUESTIONS I CAN ANSWER FOR

YOU. >> I SENT US AN EMAIL, BUT ONE THING YOU POINTED OUT WAS HVAC AND PLUMBING I DON'T KNOW WHAT KIND OF DEMAND WE HAVE FOR THAT. IS NOT A FULL-TIME POSITION? IS THAT SOMETHING WHERE THEY ARE NEEDED ON AVERAGE 20 HOURS PER WEEK OR SOMETHING? MY QUESTION WAS CAN WE REACH OUT TO OTHER COUNTIES? IF TWO OR THREE OF US NEED A PART-TIME PERSON IN THAT ROLE, DO WE HAVE A SHARED RESPONSIBILITY WHERE THEY ARE A CITY OR COUNTY EMPLOYEE OR WHATEVER, AND WE ARE CONTRIBUTE INTO WHATEVER THEY ARE CONTRIBUTE INTO OUR BUDGET AND BENEFITING FROM HAVING THAT PERSON AVAILABLE TO MEET THAT DEMAND? SAME THING WITH PLUMBING AND THESE OTHER POSITIONS.

I DID NOT KNOW IF THERE WAS AN OPPORTUNITY FOR US TO PARTNER WITH OTHER GROUPS TO MEET THAT NEED, OR IF IT IS A FULL-TIME POSITION-- WITH HVAC, MY YOUNGEST SON DOES HVAC.

AND I TALKED TO HIM ABOUT THE POSITION AND THE FUNDING, AND HE SAYS WELL THE CHALLENGES THAT THEY LOOK AT, NOT JUST WHAT THEIR BASE PAY IS, THEY EXPECT A CERTAIN AMOUNT OF OVERTIME, AND THAT IS SORT OF FACTORED INTO THEIR EXPECTATION THAT THE CITY'S POSITION WOULD BE "THIS IS YOUR SALARY." NOT HERE IS PLUS, PLUS, PLUS ON THAT.

SO I UNDERSTAND THAT. BUT ON THE OTHER HAND, WE END UP PAYING QUITE A BIT TO THE THIRD-PARTY PRIVATE PROVIDERS TO

GET HVAC SERVICES. >> WE HAVE IT AS FULL-TIME POSITIONS. I'M HAPPY TO LET LESLIE TALK ABOUT HER STAFF. WE'VE ADDED AS A FULL-TIME POSITIO. WE'VE HAD A COUPLE POSITIONS.

[02:05:02]

AND THAT'S A CHALLENGE WITH A DATA CENTER AND EMERGING MARKETS AND HOW THEY HAVE BEEN ABLE TO ATTRACT OUR TALENT, OVERSEE THEM. SO IT'S BEEN MORE DIFFICULT FOR US TO BE ABLE TO RETAIN THEM. THERE ARE SOME OF THESE PAID DISCREPANCIES. SO THE NEED, FROM MY UNDERSTANDING, IS FROM A FULL-TIME CAPACITY FOR MULTIPLE IS-- MULTIPLE POSITIONS. THEY HAVE A LOT OF RESOURCES, A LOT OF FACILITIES THEY NEED TO MANAGE.

SO I DON'T KNOW IF IT WOULD BE A PART-TIME POSITION THAT WOULD SOLVE THAT PROBLEM, BUT I THINK THERE IS ALWAYS OPPORTUNITY FOR

DISCUSSION OF SHARED RESOURCES. >> WE BROUGHT UP THE COMPENSATION STUDY THAT WAS DONE IN 21, AND WE ARE LOOKING AT STARTING THE RFP FOR A NEW COMPENSATION STUDY.

IS THERE A WAY-- AUTOMATE IS NOT THE RIGHT WORD.

BUT IS THERE A WAY TO REVIVE THAT COMPENSATION INTERNALLY? ONCE WE HAVE A BASE STUDY LIKE THE 21 STUDY, OR SOMETHING ON THE STREET MAINTENANCE INDEX? WE HAD FOOD GROW COME IN AND WE MAINTAINED IT FROM THERE. IS THERE A WAY WE CAN DO SOMETHING LIKE THAT, TAKE THE COMPENSATION STUDY THAT IS COMPREHENSIVE AND DO MINOR ADJUSTMENTS EACH YEAR TO KEEP UP WITH THAT? AND A SORT OF OUTSOURCE

REPEATEDLY THE DEMAND? >> THAT IS GREAT, COUNCIL MAN.

IF YOU LOOK AT THE SLIDE HERE AT THE VERY BOTTOM, AND YOU SEE THAT FISCAL YEAR IMPACT, AND WHAT WE ARE DOING EACH YEAR, YOU SEE THE MARKET ADJUSTMENT AND THE PAID A PLANNED ADJUSTMENT.

WHEN IT GOT TO FY23, THERE WERE NO LONGER ANY PAID PLAN ADJUSTMENTS THAT WERE TAKING PLACE.

SO REALLY, THE 23-24 YEARS, WHEN YOU IMPLEMENT THAT 21 REVIEW, NO PAID PLAN ADJUSTMENTS HAVE OCCURRED SINCE THAT.

REALLY, THE BEST PRACTICE IN MAINTAINING A PAID PLAN IS TO INCREASE THE PAID PLAN EACH YEAR.

SO WHEN YOU'RE DOING A MARKET ADJUSTMENT, YOU ARE DOING A PAID PLAN ADJUSTMENT AT THE SAME TIME.

SO THERE ARE INCREASED COSTS YOU WOULD NEED TO BE PREPARED TO COVER IN THE BUDGET AS WELL. BUT THAT IS THE BEST APPROACH, AT THAT IS HOW YOU PREVENT FROM GETTING INTO THIS PLACE, AT COUNCIL GETTING FURTHER AND FURTHER BEHIND, AND MAKING IT MORE DIFFICULT TO ATTRACT AND RETAIN THE TALENT THAT YOU DO HAVE. THAT IS THE CORRECT APPROACH.

>> I REMEMBER, I THINK BACK IN 21 WHEN WE LAST DID THIS, BUT THE CONCERN WAS THAT THERE WAS NOT SO MUCH A NEED OF A 2% ACROSS THE BOARD, OR 4% ACROSS THE BOARD, IT WAS THAT THESE DECISIONS ARE LOW MARKET POLITIES, THEY ARE A LOT CLOSER TO MARKET. SO THEY ARE DIFFERNT AMOUNTS APPLIED TO DIFFERENT POSITIONS ON THIS DISCREPANCY.

SO THAT WAS KIND OF WHERE THE VALUE OF THE MARKET-- THE EVALUATION WAS, AND THAT WAS KIND OF THE FOCUS OF THE QUESTION. IS THAT SOMETHING WE HAVE, FROM 21, AND THEY WILL BE UPDATING THAT FROM THIS RFP, OR ARE THEY STARTING FROM SCRATCH WITH A NEW ONE? AND IS THERE A WAY FOR US TO BE ABLE TO MAINTAIN IT INTERNALLY.

>> WE WILL TAKE THE INFORMATION WE STARTED WITHIN 2021.

EVERYTHING YOU HAVE APPROVED UP UNTIL NOW.

WE WILL REEVALUATE ALL JOB DESCRIPTIONS, POSITIONS, CURRENT DUTIES, MAKING SURE WE ARE FOCUSING ON WHAT THEIR DUTIES AND TASKS ARE TODAY. TALKING ABOUT ABOUT THE SLIDES, HAVING TO TAKE ON MORE WORK, OR DECIDING HOW DO WE KEEP THE CITY FUNCTIONING WITHOUT SERVICES BEING DELAYED.

SO PEOPLE HAVE TAKEN ON WORK THAT IS NOT THEIRS TO TAKE ON.

SO MAKING SURE THAT WE PUT THOSE POSITIONS WITH THEIR ESSENTIAL DUTIES AND ALIGNED THEM ACCORDINGLY, AND MAKE SURE THAT THAT FITS THE PLAN AND THE MARKET STUDY APPROPRIATELY.

WE WILL TAKE THAT INFORMATION AND APPLY IT TO HOW OUR COMPENSATION STRUCTURE IS RIGHT NOW.

WE WILL BE UPDATING THAT AND BRINGING BACK TO YOU HOW IT AFFECTS EVERY SINGLE POSITION, NOT JUST THE ORGANIZATION AS A WHOLE. SO YOU WILL HAVE VERY MUCH DETAIL FROM EACH POSITION. FROM THAT POINT WE WILL PUT INTO PLAN HOW YOU WANT TO DO IT EACH AND EVERY YEAR TO MAINTAIN

MOVING FORWARD. >> THAT WILL BE STARTING WITH WHATEVER WE APPROVED IN AUGUST AS THE BASE? EVEN THOUGH THAT WILL NOT COME INTO EFFECT UNTIL OCTOBER 1?

>> THAT WILL BE TAKEN IN TO CONSIDERATION TO CORRECT.

>> THE ONLY THING THAT I AM THINKING OF IS THAT I AGREE, GIVEN THE COMPENSATION PIECE, BUT I MORE SO THINKING OF IT FROM AN OUTCOME PERSPECTIVE WHAT HOLISTICALLY IS BEING ADDRESSED, BECAUSE YOU DEFINITELY HAVE THE PAY BEING ADDRESSED, BUT YOU MENTIONED EARLIER THE ONBOARDING PIECES.

AND I'M SURE THAT'S BECAUSE OF STAFFING AND SUCH.

SO IS THAT POSSIBLE TO HAVE A PLAN THAT ADDRESSES THE ENTIRETY OF IT ALL, RATHER THAN JUST COMPENSATION ALONE.

IS THAT SOMETHING BEING CONSIDERED AS WELL?

DOES THAT MAKE SENSE? >> THE CITY LOOKS AT ALL OR

[02:10:06]

WE LOOK AT HOW WE BRING PEOPLE ON QUICKER, HOW WE GET THROUGH THE HIRING PRACTICE. ALL OF THE PROCESSES THAT TAKE PLACE. WE HAVE A THOROUGH PROCESS.

WE ARE NOT GOING TO REDUCE OUR BACKGROUND CHECKS OR QUALITY OF THE REVIEW WE ARE DOING ON APPLICANTS, BUT WE ARE GOING TO ENSURE WE CAN GET THAT THROUGH THE PROCESS AS QUICKLY AS POSSIBLE. A LOT OF THAT DEPENDS ON HOW QUICKLY PEOPLE APPLY, HOW QUICKLY DEPARTMENTS ARE ABLE TO GET TO THE INTERVIEW WITH THE CANDIDATES, WHEN THE CANDIDATES CAN COME AND APPLY. SO THERE ARE DIFFERENT FACTORS THAT RESULT IN HOW LONG IT TAKES.

POLICE AND FIRE HAVE THEIR OWN PROCESS.

WHEN YOU ARE LOOKING FOR THE ABSOLUTE BEST 25 POLICE OFFICERS AND FIREFIGHTERS, IT TAKE SOME TIME TO GET TO THAT.

SO WE DO NOT FILL POSITIONS WITH BODIES, WE FILL IT WITH THE RIGHT PEOPLE, WITH THE RIGHT HEART, THE RIGHT INTENT FOR

PUBLIC-SERVICE. >> THOSE THAT ARE THE TOP CANDIDATES ARE GOING TO HAVE A MULTITUDE OF OPTIONS.

WE KNOW THE LONGER IT TAKES THE HARDER IT IS.

SO IT'S GOOD TO HEAR. >> ABSOLUTELY.

>> I KNOW IT MIGHT BE HARD TO DO THIS, BUT WHEN YOU ARE TALKING ABOUT LOSING QUALITY OF SERVICE, YOU DON'T KNOW WHAT YOU DON'T KNOW UNTIL YOU TRY TO GET INTO THE DETAILS OF SOMEBODY'S JOB AND WHAT SERVICES WE ARE MISSING OUT ON WITH THAT LACK OF POSITIONS. IS THERE A WAY FOR THAT TO BE COMMUNICATED TO US SO WE CAN HAVE A BETTER UNDERSTANDING OF WHAT IS BEING MISSED OUT ON BECAUSE OF THIS LACK OF FULL-TIME EMPLOYEES THAT ARE EITHER FROZEN-- OR IS THERE A WAY FOR THAT INFO TO GET TO US? I THINK THAT WOULD BE HELPFUL.

>> WHEN WE HAVE SOME OF OUR OTHER DEPARTMENTS COME FORWARD, THEY CAN EXPRESS THIS TO YOU, WE WILL HEAR FROM PUBLIC WORKS AND PARKS AND, THEY HAVE BOTH HAD SIGNIFICANT IMPACTS.

AND I.T. AS WELL. SO WE ARE HAPPY TO ADDRESS THAT WHEN THEY BRING THEIR DEPARTMENTAL PRESENTATIONS TO

YOU. >> THANK YOU.

>> I MADE IT THROUGH WITHOUT COUGHING.

>> FEEL BETTER. >> LESLIE ANDREWS, DIRECTOR OF PARKS AND RECREATION. ONE POINT I WANT TO TALK ABOUT JUMPS INTO WHAT YOU-- OR QUESTION WAS.

BUT I WANT TO START BIG PICTURE, IN THIS CASE WE ARE SPECIFICALLY TALKING ABOUT THE PARKS DIVISION.

MOST PEOPLE WHEN THEY THINK OF THE PARKS DIVISION THEY HAVE A HANDFUL OF PARKS THAT THEY THINK OF OR PARTICIPATE IN.

BUT THE PARKS DIVISION TAKES CARE OF A SIGNIFICANT AMOUNT MORE THAN JUST PARTS. SO WE PUT THIS SLIDE TOGETHER TO SHOW THE MAGNITUDE OF WHAT PARKS TAKES CARE OF.

702.6 ACRES OF PARKLAND AND MUNICIPAL GROUNDS.

174.4 WE CONTRACT OUT. BUT DUE TO LACK OF STAFFING, THAT WOULD BE THE CEMETERY MEDIANS AND UNDEVELOPED PARKLAND. NEW-- WE MAINTAIN 197,000 SQUARE FEET OF LANDSCAPING. 72,000 LINEAR FEET OF IRRIGATION. WE HAVE A 48-ACRE CEMETERY THAT DATES BACK IN TO THE 1800S. SO QUITE A BIT.

THERE ARE PIECES OF IT THAT ARE VERY OLD.

OF COURSE PLAYGROUNDS, PAVILIONS, ALL THOSE THINGS.

WE HAVE 21 NEIGHBORHOOD AND COMMUNITY PARKS WE MAINTAIN.

THAT'S WHAT MOST PEOPLE THINK OF AS WHAT PARKS DOES, AS THOSE 21.

BUT ANYTHING ABOVE THAT IS ALSO WHAT THEY DO.

WE HAVE TEN SPECIALLY-- SPECIALTY PARK USES.

AND 11 MUNICIPAL GROUNDS THAT ARE NOT PARKLAND.

THAT IS GOING TO BE CITY HALL, LIBRARY, RAILROAD RIGHT OF WAY.

TMP, BUILDINGS THAT THE CITY OWNS.

WE HAVE TENANTS THAT ACTUALLY WORK OUT OF THOSE BUILDINGS, BUT WE STILL MAINTAIN THE GROUNDS FOR THOSE LOCATIONS.

SO WE JUST WANTED TO PUT THOSE SLIDES TOGETHER AS A BIG PICTURE. AND THIS IS JUST THE PARKS DIVISION WE ARE TALKING ABOUT IN THIS PARTICULAR SLIDE.

SOME ADDITIONS THAT HAVE HAPPENED OVER THE LAST THREE TO FIVE YEARS AS WE ADOPTED A PARKS MASTER PLAN IN 2023.

WE DID RECENTLY OPEN THE TWO AND RECREATION CENTERS.

NEW DOG PARK, CEDAR CREEK TRAIL. WE HAVE FOUR NEW PLAYGROUNDS.

[02:15:02]

THAT ONE BURNED. SO WE HAD TO REPLACE THAT ONE.

THE PARK PLAYGROUND WE HAD TO REPLACE BECAUSE WE WERE DOING THE NEW RECREATION CENTERS. IF YOU WALK INTO THE RECREATION CENTER, THAT'S WHERE THE PLAYGROUND WAS.

AND UC WE HAD TO MOVE THAT. IT WAS AT END OF LIFE AND-- AND YOU CAN SEE WE HAD TO MOVE THAT. IT WAS ALWAYS AT END OF LIFE.

WE PUT NEW PARKS SIGNS AND ALL OF OUR PARTS.

ADDED SPLASH PADS AND SHADE. WE ADDED A NEW STORY BOOK IN THE FESTIVAL DISTRICT BETWEEN THE HOTEL AND THE CONVENTION CENTER.

WE HAVE STREET IMPROVEMENTS COMING ON, A PLAZA THAT WILL BE OPENING HERE IN A COUPLE WEEKS. WE HAVE A HALF-MILLION DOLLAR IMPROVEMENT TO STEVENSON PARK. SOME MAJOR IMPROVEMENTS TO NELSON WILSON PARK, AND WE HAVE RECEIVED A GRANT TO BUILD-- TO INSTALL TWO NEW FISHING PIERS, ONE AT KIRBY LAKE THAT WILL BE COMING VERY, VERY SOON, AND ONE AT FORT FANDOM IN A FEW MONTHS FROM NOW. THOSE ARE JUST A FEW ADDITIONS WE HAVE HAD TO OUR MANY THINGS THAT WE TAKE CARE OF IN THE PARKS DIVISION. ONE OF THE THINGS, BECAUSE THERE HAS BEEN SUCH AN EMPHASIS PUT ON DEFERRED MAINTENANCE AND INFRASTRUCTURE, WE HAD STAFF GO OUT AND TAKE A VERY IN-DEPTH LOOK AT OUR PARKS. THE CONDITION OF OUR PARKS.

IS WHERE WE STAND IN OUR PARKS SYSTEM ON CAPITAL IMPROVEMENT NEEDS. YOU WILL SEE THAT THIS IS A COUNT BY PARK. NOT A SPECIFIC HOW MANY RESTROOMS WE HAVE. IN REGARDS TO RESTROOMS, IN 12 PARTS WE HAVE RESTROOMS THAT ARE IN HIGH NEED OF BEING REPLACED.

TWO PARKS THAT ARE DOING GOOD. WE WILL NEED TO ADDRESS AT SOME POINT IN THE NEXT FIVE TO SEVEN YEARS.

AND THEN WE HAVE SIX PARTS THAT HAVE RESTROOMS IN THEM THAT HAVE RECENTLY BEEN REPLACED OR ARE ALREADY FUNDED TO BE REPLACED AND WILL BE COMING IN THE NEXT FEW MONTHS.

SO WE DID AN IN-DEPTH ANALYSIS OF ALL OF OUR RESTROOMS, OUR PAVILIONS, ALL OF OUR PLAYGROUNDS.

HARDSCAPE IS GOING TO BE THE STREETS AND PARKS.

THE PARKING LOT AND THE PARKS. THE SIDEWALK AND PARKS.

THE FENCING AND PARKS. ALL OF THAT HAS BEEN CLASSIFIED UNDER HARDSCAPE. SPORTS COURTS ARE GOING TO BE YOUR TENNIS COURTS, YOUR PICKLEBALL COURTS, THAT DOES INCLUDE ROSE TENNIS CENTER. WE ARE GOING TO BE NEEDING TO MAKE SOME SIGNIFICANT INVESTMENTS TO THE TENNIS CENTER VERY SOON, OR WE WILL START LOSING THE STATE TOURNAMENTS THAT WE BRING HERE. THEY HAVE MADE THEIR DESIRES KNOWN FOR SOME IMPROVEMENTS THAT NEED TO HAPPEN.

AND THAT HAS BEEN RELAYED TO US. WE ARE WORKING ON THAT AS WE GO.

ONE OF THE THINGS THAT PARKS BOARD ASKED US TO TAKE A LOOK AT WAS SAFETY IN OUR PARKS. SO YOU WILL SEE THAT THERE IS A HIGH NEED OF LIGHTING IMPROVEMENTS IN OUR PARKS SYSTEM. IF WE ARE GOING TO HAVE SIDEWALKS, IF WE WANT TO ENCOURAGE PEOPLE TO PARTICIPATE IN PARKS, HAVING CAMERAS DO TO ARSON ISSUES THAT WE DEAL WITH, WITH HOMELESSNESS, PEOPLE HAVING THE ABILITY TO WALK AT ALL HOURS, MAKING SURE THE LIGHTING IS WORKING IN ALL OF OUR PARKS IS SOMETHING THAT IS A HIGH NEED OF THE PARKS BOARD THAT THEY ASKED US TO TAKE A LOOK AT. ATHLETIC FIELDS, THAT'S BASEBALL, SOFTBALL, FOOTBALL, THE FLAT FIELDS, EVERYTHING THAT FALLS WITHIN OUR JURISDICTION. WALKING TRAILS AND IRRIGATION.

BACK IN THE 1980S WHEN WE HAD THIS SIGNIFICANT DROUGHT, IRRIGATION TO PARKS IN GENERAL WAS TURNED OFF AND HAS NEVER BEEN TURNED BACK ON. SYSTEMATICALLY, OVER THE YEARS, WE HAVE KEPT DEROGATION ON ATHLETIC FIELDS, OR WE HAVE INTENTIONALLY PUT IT-- WHEN WE PUT IN A SPLASH PAD, 15 FEET AROUND THE SPLASH PAD TO HOLD THE INTEGRITY OF THE SPLASH PAD, WE PUT IN IRRIGATION TO STABILIZE THAT AROUND THE RECREATION CENTERS WORK WITHIN SO MANY FEET WE PUT IN ARROGATE AND TO MAKE SURE WE ARE STABILIZING THE FOUNDATIONS AND THE FUTURE OF THOSE BUILDINGS. BUT PARKLAND AS A WHOLE IS NOT IRRIGATED. SO WHEN YOU THINK ABOUT GREEN SPACES AND WHEN PEOPLE ARE HAVING PICKUP GAMES, WHEN THEY ARE HAVING PRACTICE IS JUST OUT IN A PARK IN GENERAL, THAT IS NOT IRRIGATED. WE ARE AT THE MERCY OF MOTHER NATURE IN THOSE LOCATIONS.

SO THIS WAS A VERY IN-DEPTH NEED OF OUR CAPITAL NEEDS IN OUR PARKS SYSTEM. SEPARATE FROM THAT, WE ALSO LOOKED AT AMENITIES. THESE ARE OUR TRASH CANS, ARE

[02:20:08]

EVEN OUR NEWEST SPLASH PADS OR TEN YEARS OLD, FUNDED WITH 2015 BONDS. SO WE ARE STARTING TO SEE SOME END OF LIFE COMPONENTS IN OUR SPLASH PADS.

WHEN YOU TALK ABOUT PICNIC TABLES, WE HAVE 221 PICNIC TABLES WITHIN OUR SYSTEM AND 128 NEED TO BE REPLACED.

SO THAT'S ROUGHLY 68%. WHEN PEOPLE ARE GOING TO OUR PARKS, IT'S NOT ONLY THE HARD INFRASTRUCTURE WE TOOK A LOOK OUT. BUT IT'S WHAT WE CALL THE AMENITIES, WHICH ARE THE SMALLER THINGS THAT HAVE EASIER TURNOVER. HERE IS A SLIDE TALKING ABOUT OUR PARKS STAFFING. SO THIS GOES BACK TO SERVICE DELIVERY AND WHAT WE ARE ABLE TO MAINTAIN.

WE HAVE THE SAME AMOUNT OF FACILITIES THAT WE DID IN 2020.

BUT YOU SEE LEVEL HAS GONE DOWN. WHAT HAPPENED IN THE FY 20 YEAR, AS WE HAD 14 SEASONAL CONDITIONS THAT WERE TURNED INTO FTES.

BUT IT WAS NOT A ONE FOR ONE RATIO.

SO THE EFFECTIVENESS AS WE LOST SEVEN FTES.

FOR THOSE SEASONAL, WE HIRED 14 SEASONALS TO HELP WITH MOWING SEASON, SO THE FULL-TIME PARK STAFF COULD KEEP MAINTAINING ALL OF THIS. SO WHEN WE LOST THAT, THAT WAS MORE THAN OUR STAFF HAD TO PICK UP ON.

WHEN WE OUTSOURCED THE CEMETERY MOWING, WE LOST THREE FTES.

THE WAY WE HAD TO PAY FOR THAT CONTRACT IS WITH STAFFING.

WE LOST THOSE FTES. THE CEMETERY IS MORE THAN JUST MOWING. IT IS ALSO VARIABLES.

IT IS HEADSTONE LEVELING. IT IS ALSO CLEAN UP'S.

IT IS WORKING WITH THE FAMILIES. SO WE LOST THREE POSITIONS IN BEING ABLE TO DO THAT. REALIZING WHAT A HIT THAT THAT TOOK ON THE CEMETERY IS, WE HAD TO PULL TWO PEOPLE OUT OF OUR MOWING CREW AND PUT THEM BACK ON THE CEMETERY TO BE ABLE TO HANDLE THE VOLUME OF BURIALS AND HEADSTONE ISSUES THAT WE DEAL WITH ON A REGULAR BASIS. SO TWO POSITIONS ARE NOW ACTUALLY DEDICATED BACK TO THE CEMETERY.

BUT THAT MEANS THERE'S TWO MORE THAT WE LOST ON THE MOWING SIDE.

THEN WE HAD THREE FROZEN POSITIONS THAT HAPPENED BECAUSE OF THE 2024 CLAW BACK IN ITEMS LIKE THAT.

EFFECTIVELY WE ARE LOOKING WITH-- WORKING WITH 31 FULL-TIME STAFF. IF YOU SEE ON THE RED CHART, THE BENCHMARK IS THROUGH THE AND RPA PARKS MATRIX.

IT'S 9.2 EMPLOYEES PER 10,000. MAINTENANCE SHOULD HAVE 46% DEDICATED JUST TO THE MAINTENANCE OF PARKLAND.

SO ACCORDING TO THE BENCHMARK, IN 2026 WE SHOULD HAVE 52 TO 53 EMPLOYEES. AND WE ARE AT 31.

WE DID PUT TOGETHER A FIVE-YEAR PROJECTION FOR ADMINISTRATION TO LOOK AT HOW WE COULD START MOVING BACK TOWARDS A MORE POSITIVE SERVICE DELIVERY. AND HERE IS AN ESTIMATE OF WHERE WE WOULD LIKE TO GO OVER THE NEXT FIVE YEARS.

AS YOU CAN SEE YET KATZ'S BACK TO WHERE WE WERE IN 2020.

IT DOES NOT TAKE AN TO ACCOUNT THE SIGNIFICANT GROWTH WE HAVE HAD IN ABILENE IN THE LAST YEAR, OR WHAT IS PROJECTED TO HAPPEN OVER THE NEXT FIVE TO TEN YEARS. SOME KEY TAKEAWAYS, 41% OF CAPITAL ASSETS HAVE HIGH LEVELS OF CAPITAL IMPROVEMENT NEEDS.

63% OF OUR AMENITIES HAVE HIGH LEVEL OF REPLACEMENT NEEDS.

AND WE ARE CURRENTLY 41% BELOW THE BENCHMARK STAFFING LEVEL FOR A PARKS SYSTEM. SO I WILL PAUSE HERE, AND I'M HAPPY TO ANSWER ANY QUESTIONS. ALL RIGHT.

MOVING ON TO RECREATION CENTERS AND BRANCH LIBRARIES.

LOT OF WHAT YOU HAVE ALREADY HEARD-- HERE IS ANOTHER SCREEN THAT TAKES US IN TO CONSIDERATION.

STAFF, JULIENNED I, WERE ASKED TO PUT TOGETHER A STAFFING MODEL FOR THE TWO NEW RECREATION CENTERS.

WE WERE ASKED TO DO THAT IN NOVEMBER 2024.

[02:25:03]

THE CLAW BACK HAD JUST HAPPENED. THE SALES TAX WAS DOWN.

SO THE LIBRARIES WERE TOLD TO DO WHAT YOU CAN WHIT THE STAFFING THAT YOU HAVE AT MOCKINGBIRD, AND RECREATION WAS CLOSED.

THE DIVISION WAS COMPLETELY CLOSED.

AT THAT TIME, UNTIL THE TWO NEW RECREATION CENTERS COULD BE BUILT. AND WE GAVE A PROPOSAL FOR BASICALLY THE MINIMUM TO TURN THE LIGHTS ON, ALL THE WAY UP TO REALLY A FULLY SUSTAINED RECREATION CENTER THAT COULD GIVE THE FULL AMOUNT OF PROGRAMMING AND ANSWER THE NEEDS OF WHAT PEOPLE WANT TO SEE IN TODAY'S RECREATION CENTERS AND LIBRARIES. CURRENTLY THE RECREATION CENTERS ARE OPEN FROM NINE TO NINE ON MONDAYS, TUESDAYS AND THURSDAYS.

NINE TO SIX ON WEDNESDAYS, FRIDAYS AND SATURDAYS.

WE HAVE EIGHT FULL-TIME STAFF AND FOUR PART-TIME STAFF.

I WILL SAY, WE ARE STILL NOT FULLY STAFFED AND RECREATION, EVEN THOUGH WE HAVE THESE POSITIONS ON THE BOOKS GOING BACK TO WHERE WE WERE TALKING ABOUT COMPENSATION AND NEEDS AND BEING ABLE TO-- HOW LONG IT TAKES TO FILL THOSE POSITIONS.

WE ARE NOT COMPLETELY THERE YET. THE FIRST SCENARIO WE PRESENT IN THIS TO BE ABLE TO HELP WITH STAFFING LEVELS, AS WE ARE HOPING TO REQUEST ANY FULL-TIME POSITIONS-- TWO NEW FULL-TIME POSITIONS. ONE FOR EACH RECREATION CENTER.

THAT GIVES US THE ABILITY TO MEET THE NEEDS OF THE CITIZENS TO HAVE A PERSON THAT CAN BE DEVOTED TO WORKING WITH PROGRAMMING AND ALSO HELP WITH OPERATIONAL HOURS, IF SOMEBODY NEEDS TO GO ON VACATION OR IS SIX PACKET LIAISON PERSON FLOATING THE FLOOR. TWO PEOPLE ARE DEDICATED TO THE FRONT DESK TO COVER THE HOURS. IN A SCENARIO OR TWO, OR WHERE WE WOULD EVENTUALLY LIKE TO GO IS TO BE OPEN 6:00 A.M. TO 9:00 P.M. MONDAY TO TUESDAY TO THURSDAY.

2:00 P.M. TO 6:00 A.M. WEDNESDAY FRIDAYS AND SATURDAYS, AND POTENTIALLY WEDNESDAYS FROM 1:00 P.M. TO 6:00 A.M.

NOW THAT WE DO HAVE A WALKING TRACK WITHIN OUR RECREATION CENTERS AND THEY HAVE A FITNESS ROOM WITHIN OUR RECREATION CENTERS, AS WE GO IN TO THE WINTER MONTHS, AND IT'S NOT ADVANTAGEOUS TO WALK OUTSIDE, PEOPLE ARE GOING TO WANT TO WALK OUTSIDE. ALSO THE LIGHT IS MUCH SHORTER, SO PEOPLE BEING ABLE TO COME AND WORK AND USE OUR BUILDINGS IS SOMETHING THAT WE SIGNIFICANTLY ANTICIPATE.

AND WE JUST WANT TO DELIVER MORE PROGRAMS AND ADVANCE AND OUTREACH. ONE THING IN THE CURRENT SCENARIO THAT WE ARE NOT ABLE TO DO, IF YOU REMEMBER OLD RECREATION DIVISION, WE DO THINGS OUTSIDE THE BUILDING AS WELL AS INSIDE THE BUILDING. WE WOULD HAVE 10K RUNS, WE WOULD HAVE HIKES ON CEDAR CREEK. WE HAVE DADDY DAUGHTER.

MOTHER SUN. -- MOTHER SON.

WE HAD A BIKE RACE. PROGRAMMING THAT WE DID OUT AT PARKS AND OUTSIDE OF OUR BUILDINGS.

UNDER THE CURRENT STAFFING MODEL, WE ARE NOT ABLE TO ADD ANY OF THOSE BACK ON AT THIS TIME.

MOVING ON TO THE LIBRARY, AGAIN, IT WAS THE SAME SCENARIO.

JULIA HAD TO PREDICT IN NOVEMBED POTENTIALLY DO WITH STAFFING IN THE NEW RECREATION CENTERS. YOU CAN SEE SHE HAS LESS HOURS THAN THE RECREATION CENTER DOES. THEY ARE OPEN 10:00 A.M. TO 6:00 P.M. 10:00 A.M. TO 6:00 P.M. MONDAY THROUGH FRIDAY. AND 10:00 A.M. TO 2:00 P.M. ON SATURDAYS. THEY HAVE FOUR FULL-TIME AND FOUR PULL PART-TIME. I WILL SAY AGAIN THEY ARE NOT FULLY STAFFED FOR THESE RECREATIONS EITHER.

IT GOES BACK TO BEING ABLE TO HIRE THOSE PEOPLE.

AND IT'S REALLY THOSE 1.5 PEOPLE PER CENTER.

BUT THEY ARE OPEN 45 HOURS. SO WE ARE-- I SAY WE, I CONSIDER JA PART OF MY FAMILY, AS WELL AS JULIE, HE IS SPENDING A LOT OF A LOT OF TIME RUNNING BACK-AND-FORTH BETWEEN THE CENTERS TO MAKE SURE THE PROGRAMMING IS UP AND GOING, AND THAT THERE ARE ENOUGH PEOPLE IN THE BUILDING TO BE ABLE TO HANDLE WHAT IS GOING ON IN THAT CENTER AT THAT TIME.

IN SCENARIO ONE, IDEALLY, IF YOU CAN JUST GET ONE MORE FULL-TIME PERSON, SO HE COULD HAVE TWO FULL-TIME PEOPLE AT BOTH LOCATIONS, HE WOULD STILL BE RUNNING BACK-AND-FORTH, BUT HE WOULD AT LEAST HAVE TWO PEOPLE TO BE ABLE TO COVER ALL THE HOURS THAT THEY ARE OPEN. IDEALLY THEY WOULD LIKE TO BE OPEN CLOSER TO THE HOURS OF THE RECREATION CENTER AS A WHOLE,

[02:30:01]

A LOT OF WHAT WERE SEEING, THESE LIBRARY'S IN THESE RECREATION CENTERS WERE SUPPOSED TO BE TO HELP THE YOUTH, TO HELP THE CITIZENS IN THE AREAS, IF THEY NEEDED HELP OR COMPUTE ACCESS, AFTER-SCHOOL HOURS, AFTER WORK HOURS, ON WEEKENDS, AND BY CLOSING AT 6:00 P.M. THEY ARE MISSING OUT ON THE EVENING ABILITY TO WORK WITH THE CITIZENS IN THE EXTENDED HOURS ON SATURDAYS TO BE ABLE TO WORK WITH THE SYSTEMS, WITH THE CITIZEN. SO IDEALLY THEY WOULD LIKE TO MOVE MORE CLOSELY TO WORKING THE SAME HOURS.

WE ARE DOING JOINT PROGRAMMING. WE ARE LAYERING ON MORE PROGRAMMING EACH MONTH AS OUR STAFF IS ABLE TO DO NOW.

BUT EVENTUALLY WE WOULD LIKE TO BE ABLE TO BE ABLE TO DO MORE.

AND WITH THAT I'M HAPPY TO ANSWER ANY QUESTIONS.

ALL RIGHT. >> NOT SO MUCH A QUESTION, BUT A COMMENT, BUT THE CONCERN WAS RAISED DURING PUBLIC COMMENT, AND I GOT EMAILS ABOUT THAT AFTER-SCHOOL AND SUMMER PROGRAMMING THAT WE HAD BEFORE, AND WE ARE NOT DOING THIS YEAR, IT WAS NOT BUDGETED FOR THIS YEAR'S BUDGET.

CAN YOU TOUCH ON THE METRICS THAT YOU ARE COLLECTING, THE PROGRAM THAT WE ARE DOING AT THE REC CENTRES OVER THE SUMMER, AND WE CAN TAKE THOSE METRICS IN TO A DISCUSSION IN AUGUST TO DECIDE WHAT IT WILL LOOK LIKE NEXT YEAR AND GIVE DIRECTION THROUGH THE

BUDGET ON THAT? >> WHAT WE ARE FOCUSING ON IS PROGRAMMING FOR ALL AGES. AND WHEN I HAVE VISITED WITH PEOPLE, WHAT I HAVE TOLD THEM, IS WE WILL HAVE PROGRAMMING, AND WE WERE NOT ABLE TO DO CAMPS IN ANY FORMAT THIS YEAR.

IT IS DIFFICULT TO DO WHEN YOU ONLY HAVE TWO PEOPLE THAT CAN ACTUALLY DO THE PROGRAMMING AND OVERSEE IT.

BUT WE WANT TO GET TO THE POINT WHERE WE CAN HAVE-- WHERE WE CAN OFFER CAMPS TO YOUTH AND PEOPLE OF ALL AGES.

BUT IT LOOKS DIFFERENT. THERE IS A DIFFERENCE BETWEEN OFFERING CAMPS AND OFFERING PROGRAMMING AND HAVING THE ABILITY FOR KIDS TO HAVE A SAFE PLACE TO GO, AND IN TO CHILD CARE. BACK IN 23-24, WHEN THESE DECISIONS WERE HAPPENING, THE DECISION WAS THAT THERE ARE ORGANIZATIONS OUT THERE THAT FOCUS ON CHILD CARE.

THEIR LICENSED FOR CHILD CARE. THEY ARE LICENSE-- THEY HIRE FOR CHILD CARE. WE HIRE FOR RECREATION AND PROGRAMMING. AND WE HIRE A DIFFERENT SPECIALTY. THEY ARE TWO DIFFERENT COLLEGES AT UNIVERSITIES FOR A REASON, ON WHAT THERE FOCUSES OUR.

OUR FOCUS WAS MORE ON RECREATION AND PROGRAMMING.

AND WE STILL PLAN ON OFFERING A LOT OF THINGS THAT THE YOUTH WOULD HAVE DONE IN OUR AFTER-SCHOOL CARE, OR IN OUR SUMMER PLAYGROUND CARE. BUT IT IS NOT DAY CARE.

BUT IF WE WENT BACK TO THAT MODEL IN THESE BUILDINGS FOR THE HOURS THAT WE OFFER THAT, WE MIGHT HAVE TO CLOSE THE PUBLIC.

WE WOULD NOT BE ABLE TO OFFER LIBRARY PROGRAM, WE WOULD NOT OFFER THE PROGRAMMING WE CURRENTLY ARE, EVEN TODAY IN 26, BECAUSE OF THE SIZE OF THE BUILDINGS.

THE ORIGINAL 2019 RECREATION CENTERS WERE TWO-STORY BUILDINGS WITH MULTIPLE GEMS AND MULTIPLE CLASSROOMS. WHEN WE DECIDED TO GO TO THE VOTERS FOR TWO RECREATION CENTERS FOR 25 MILLION, THE SECOND GYM, SOME OF THE CLASSROOMS, ALL OF THAT WAS CUT DOWN.

NOT ONLY IS IT A STAFFING ISSUE, BUT IT'S THE SIZE OF THE BUILDING WHERE YOU WOULD PUT THAT PROGRAMMING, IF YOU GO BACK IN TO THE DAY CARE MODEL. YOU ARE GOING TO BE USING THE SAME CLASSES THAT THE LIBRARY USES.

YOU WILL USE THE SAME CLASSROOMS AND THE REC CENTRES PROGRAMMING.

YOU WILL BE USING THE SAME GYM SPACE, THAT THE OPEN GYM TIME IS. SO IT REALLY COMES BACK TO WHAT THE BUILDING CAN HANDLE. WE ARE GOING TO TRY TO DO AS MUCH AS WE CAN TO GIVE A SAFE PLACE FOR ALL INDIVIDUALS TO GO AND ALL THE HOURS THAT IT'S OPEN.

BUT IT LOOKS DIFFERENT. IT'S NOT A 1-20 RATIO.

IT IS PROGRAMMING, AND IT IS A SAFE PLACE FOR THESE KIDS TO GO AND HAVE A SAFE PLACE FOR COMMUNITY.

>> THE QUESTIONS BEING RAISED-- IS BEING RAISED IN THE PUBLIC.

I DON'T WANT TO IGNORE THE QUESTION.

[02:35:02]

I THINK THERE WAS AN ASSUMPTION MADE BY SOME.

SO I JUST WANT US TO BE CLEAR IN COMMUNICATING WHAT THE PLAN IS.

HOW WE ARE MOVING FORWARD, AND WHEN WE ARE LOOKING AT THOSE METRICS, AND HOW WE CAN BEST PLAN FOR NEXT YEAR BASED ON WHAT WE ARE SEEING FROM WHEN WE OPEN UNTIL AUGUST.

SO THANK YOU VERY MUCH. ANYONE ELSE?

THANK YOU. >> I WILL SAY, AND YOU DON'T HAVE TO ADDRESS IT, BUT THERE ARE A LOT OF NONPROFITS THAT ADDRESS SPECIFICALLY WHAT THE COMMUNITY IS ASKING FOR.

AND I THINK THAT OFTEN TIMES THE COMMUNICATION PIECES NEEDED SO OTHERS UNDERSTAND THAT THERE ARE DIFFERENT SERVICES THAT ARE ALREADY IN PLAY TO HELP ADDRESS. IT'S COMPLETELY DIFFERENT WHEN YOU'RE DOING A SUMMER CAMP VERSUS DAY CARE.

COMPLETELY DIFFERENT GAME. BUT I DO THINK HAVING AN OPPORTUNITY TO COMMUNICATE TO THE PUBLIC-- THE DIFFERENCE IS IF YOU'RE GOING FOR MORE ACADEMIC TUTORING, MENTORING AND THINGS LIKE THAT, THAT'S COMPLETELY DIFFERENT THAN WHAT THE REC CENTRES WOULD OFFER IN TERMS OF RECREATION.

BUT THANK YOU FOR YOUR TEAM AND THE HARD WORK THEY HAVE PUT IN.

I WILL SAY ALSO, OVER 700 ACRES BEING MAINTAINED BY YOU, THAT'S ABSOLUTELY ASTRONOMICAL. I WOULD LOVE FOR US TO CONTINUE TO COMMUNICATE THAT TO THE PUBLIC.

JUST THE VAST AMOUNT OF HOW MUCH WORK IS GOING INTO WHAT YOU GUYS DO EACH AND EVERY DAY. BECAUSE THERE ARE A LOT OF ENTITIES WHO LOVE TO AB-- I DON'T KNOW IF COMPLYING WOULD BE THE RIGHT WORD, BUT HAVE A SHORT SITE IN UNDERSTANDING WHAT YOU GUYS ARE DOING. IT WOULD BE SOMETHING I'D LOVE

FOR US TO LEAN INTO. >> I WILL SHARE A FUN FACT.

ROSE PARK IS THE EQUIVALENT OF 21 NFL FOOTBALL FIELDS THAT OUR STAFF MOVES 16 TIMES PER YEAR, AND MORE IF IT IS MOWING SEASON, AND THAT IS NOT OUR LARGEST PARK.

JUST A LITTLE PERSPECTIVE. >> REAL TALK.

>> IT USED TO HAVE A RACETRACK. >> AND A ZOO.

>> FOR EVERYBODY'S BENEFIT I WHERE TWO HAD TEAR AT THE CITY, ON THE INFORMATION ART'S TECHNOLOGY DIRECTOR, AND I'M THE PRESIDENT OF THE 911 EMERGENCY COMMUNICATION CENTER FOR THE COUNTY IN THE CITY OF ABILENE. TODAY WE ARE SPEAKING ABOUT THE 911 DISTRICT PROGRAM. AND THE EFFECT THAT MARJORIE INTRODUCED WITH REGARD TO THE DISPATCH REIMBURSEMENT PROGRAM.

THE DISTRICT HAS A PROJECTED REVENUE OF ABOUT 3.5 MILLION.

WE ARE COMING IN UNDER THAT THIS YEAR.

BY ABOUT 800,000. WE HAVE EXPECTED EXPENSES IN THE 3.1 MILLION RANGE. SO YOU CAN SEE IF THERE WILL BE A SHORTFALL THERE. THE PRIMARY DRIVER IS SET IN OUR REVENUE MODEL, DRIVEN-- IT'S DRIVEN BY WIRE LINE TAX AND A WIRELESS TAX. THE WIRELESS TAX COMES WITH A DISPROPORTIONAL-- WITH A PROPORTIONAL EMBARRASSMENT FROM TEXAS AND THE WIRE LINE TAX IS A DIRECT REIMBURSEMENT BY THE PROBATIONERS OF 911 SERVICES. THAT WIRE LINE FEE IS PREDOMINANTLY WHAT'S DRIVING THE CONCERN.

IT IS DECLINING FASTER THAN WE ANTICIPATED IN PREVIOUS MODELS.

AND UC THINGS START TO SHIFT MORE TO CELLULAR SERVICE FOR THEIR DELIVERY OF COMMUNICATION SERVICES, BOTH RESIDENTIAL AND BUSINESS MODELS. SO THAT IS THE PRIMARY CAUSE OR DRIVER OF THE DECLINE IN REVENUE.

THE CURRENT FINANCIAL MODEL OF THE DISTRICT DOES REIMBURSE OPERATIONS TO TAYLOR COUNTY AND THE CITY OF ABILENE.

WE ARE ONE OF THE FEW DISTRICTS WARTHOGS ACROSS THE STATE OF TEXAS THAT DOES SO. THERE ARE A FEW OTHERS, BUT THEY ARE NOT AS SUBSTANTIAL AS OURS. IT DOES DRIVE OUR RATE MODEL AS WELL. OUR RATES ARE SIGNIFICANTLY HIGHER THAN THE AVERAGE ACROSS THE CITY OF TEXAS.

COULD AVERAGE NUMBER AROUND THE ROOM WOULD BE ABOUT $2.

[02:40:01]

SO EIGHT TIMES THAT OF THE AVERAGE.

WE ALSO HAVE A FUN-- FUND BALANCE.

IT'S ABOUT 4 MILLION CURRENTLY. AND THE OFFER MENTIONED $800,000 SHORTFALL WOULD REDUCE THAT THIS FISCAL YEAR.

IN GENERAL, THAT WIRE LINE DECLINED-- THAT DECLINE IN REVENUE IS GOING TO CAUSE US TO HAVE FINANCIAL SUSTAINABILITY PROBLEMS GOING IN TO THE NEXT TWO OR THREE YEARS.

SO WE HAVE PROPOSED, AS MARJORIE INTRODUCED, THAT $497,000 INTRODUCTION IN OUR COMING% FISCAL YEAR BUDGET PROCESS, FISCAL YEAR 27. WE ARE PROPOSING A ONE-THIRD REDUCTION OVER THREE YEARS, AND I WOULD NOTE THAT WE WOULD REVIEW THAT EACH FISCAL PLANNING-- FISCAL BUDGET YEAR.

IT'S NOT SOMETHING THAT IS WRITTEN IN STONE.

BUT THE FIRST YEAR PROPOSED 497 TO THE CITY OF ABILENE.

SIMILAR TO THE DISPATCH REIMBURSEMENT ON A THIRD OF THEIR POTENTIAL REIMBURSEMENT AS WELL.

ONE THING TO NOTE, THIS IS THE LARGEST COST, TWO THIRDS OF THE EXPENSE IN THE PROGRAM. WITH SOME QUICK MATH YOU CAN SEE 1.5 IS THE TOTAL PROGRAM FOR THE CITY.

727-- 127,000 FILE THE COUNTY. THE FIRST SLIDE, OUR PREDICTED EXPENSES 3.1. 2.2 MILLION OF OUR PREDICTED EXPENSES IS JUST THE DISPATCH REIMBURSEMENT PROGRAM.

WE ARE TALKING ABOUT DOING THAT IN COLLABORATION WITH THE CITY AND THE COUNTY. SOME PARTNERSHIP.

WE UNDERSTAND OUR IMPACT ON TO THE LABOR BUDGET AND THE DISPATCHER POLICE DEPARTMENT. WE HOPE THIS INCREMENTAL APPROACH IS VIABLE AND WEEKEND ENTER INTO THIS TOGETHER.

WE ALSO, AS A DISTRICT, ARE WANTING TO PROPOSE RATE REDUCTIONS. THAT 16-DOLLAR PER BUSINESS TAXES IS PRETTY EXTRAORDINARY. WE WOULD LIKE TO USE THIS OPPORTUNITY TO ALSO ADDRESS OUR RATE MODEL.

IT DOES REDUCE OUR DEPENDENCY ON A DECLINING WIRE LINE MODEL.

WE ARE NOT SEEING AN END TO THAT AS THINGS SHIFT IN TECHNOLOGY COMMUNICATIONS. WE WILL SEE A LARGER AND LARGER SHIFT TO CELLULAR SERVICES AND THAT WIRE LINE TAX REVENUE OPPORTUNITY IS GOING TO DIMINISH SIGNIFICANTLY OVER THE NEXT COUPLE OF YEARS. WE DO NEED TO ESTABLISH THREE FACTORS. WE HAVE THAT RATE REVENUE, WE HAVE THE EXPENSE STREAM, CONTROLLED EXPENSES OF THE DISPATCH REIMBURSEMENT, AND THEN WE HAVE A FUND BALANCE TARGET THAT WE WOULD LIKE TO START WORKING TOWARDS.

SO THAT ENTIRE BALANCE ACROSS THESE THREE MAJOR FACTORS IS WHAT WE TAKE A LOOK AT. WE DO THINK THAT THE REDUCTION IN THE RATES IS GOING TO BE SOMETHING THAT WE WOULD LIKE TO SEE FROM A COMPETITIVE PRACTICE. PART OF THE WIRE LINE TRANSFER IS THAT THAT TAX IS SIGNIFICANT. SO THEY ARE INCENTIVIZED TO SHIFT TO CELLULAR SERVICE BY THE NATURE OF IT.

WE DO INTEND TO CONTINUE TO COORDINATE ON A GO FORWARD BASIS, AS MENTIONED, ACROSS THE NEXT THREE YEARS.

THIS IS JUST THE FIRST YEAR OF MANY CHANGES IN SERVICE AND THE EXPENSE OF REVENUE MODELS FOR THE DISTRICT.

WE DO LOOK FORWARD TO WORKING WITH THE CITY AND THE COUNTY TO FIGURE OUT HOW TO TRANSITION ACROSS THIS PERIOD OF CHANGE.

IS THERE ANY QUESTIONS? >> I'M CURIOUS, I DID NOT LOOK AT MY BUSINESS ILL. YOU USE VOIT OVER FIVE OR.

IS THERE A 911 CHARGE ASSOCIATED WITH THAT?

IS AT A THIRD TIER? >> BUSINESSES HAVE CHANGED THEIR TECHNOLOGIES OVER TIME. WE USE TO TALK ABOUT TRUNKS AND WIRES ON THE COPPER ACCOUNT NEEDED FOR A FACILITY.

YOU ARE CORRECT, WE NEED TO MOVE FORWARD WITH VOICE-OVER-- WITH THE SERVICES. THERE IS A RATE THAT IS USUALLY CHARGED FOR EACH ONE OF THOSE SERVICES.

VOIT VOIT. >> EVEN WITH BUSINESSES GOING TO

VOIT, IT'S A DECLINING RATE? >> IN MANY CASES THEY ARE DECLINING THOSE KIND OF SERVICES, AND IF YOU NOTICE IN THE ADS THAT WE SEE ON TV, THEY ARE SELLING CELLULAR SERVICE INTO YOUR BUSINESS. SO THEY ARE SHIFTING TO A CELLULAR SOLUTION. IN THE PAST IF YOU HAD A NEW BUSINESS, NEW CONSTRUCTION, THEY WOULD COME IN AND PUT A WIRE DEVICE, AND A BIBER BUILDING AND PROVIDE SERVICE.

TODAY THEY ARE ELIMINATING THAT ENTIRE ELEMENT AND THEY PUT A SMALL BLACK BOX THERE THAT HAS A CELLULAR ANTENNA AND IT, AND NOW YOU ARE GETTING CELLULAR SERVICE.

[02:45:01]

OF REVENUE. >> I WILL BE HONEST.

AM NOT SURE I FOLLOW THE PRESENTATION WITH REGARDS TO WHERE YOU ARE SEEING THE REVENUE AS YOU TALK ABOUT, DECLINING REVENUES. YOU'RE TALKING ABOUT SETTING UP A RESERVE FUND THAT WOULD REQUIRE EXTRA REVENUE.

I'M NOT SURE HOW IN FOLLOWING HOW ALL THOSE PIECES FIT

TOGETHER. >> IN THE PAST WE WERE FLUSH WITH WIRE LINE REVENUE AND THE FUND BALANCE FOR THE DISTRICT SWORD PRETTY HIGH. SO THE REACTION WAS TO REDUCE THE RATES AND REDUCE THAT BALANCE DOWN TO SOMETHING LESS, AND THAT CAUSED A SIGNIFICANT REDUCTION GIVEN THE REDUCTIONS IN THE WIRE LINE REVENUE. THAT ACCELERATED AND IT BROUGHT $4 MILLION OVER THESE LAST TWO OR THREE YEARS.

SO REVENUE IS NOT SUFFICIENT. IT WAS A SHORTFALL.

AS A REACTION TO THAT, TWO YEARS AGO, WE RAISED RATES.

IN THE LINE TO CORRECT THAT ACTION.

WE CORRECTED THAT ACTION AND STABILIZE THE FUND BALANCE, AND THE RATES ARE HIGH, BUT EXPENSES ARE STILL HIGH TOO.

SO WE ARE TRYING TO ACT IN MORE OF A SMART AND FIDUCIARY RESPONSIBLE MANNER TO TRY TO REDUCE RATES AND AT THE SAME TIME LOOK AT OUR EXPENSES THAT ARE BASICALLY AN ANOMALY FOR THE STATE OF TEXAS DISTRICTS. AT THE 2.2 MILLION DISPATCH REIMBURSEMENT, THAT'S ONE OF OUR LARGEST CONTROL POINTS.

>> SO YOU'RE SHIFTING IT, INSTEAD OF THE INCREASE GIVEN TO BUSINESSES, YOU WANT TO SHIFT THAT TO THE COUNTY AND THE CITY?

>> CORRECT. AND ONE COULD ARGUE THAT WE ARE SHIFTING THE LIABILITY FOR THOSE EXPENSES FROM ONE AREA TO ANOTHER. AND OUR-- IN OUR SITUATION, BECAUSE THERE IS NO BACKSTOP FOR THE DISTRICT, NOBODY IS GOING TO BACK OUR FINANCIALS, WE HAVE TO BE VIABLE AND IN THE BLACK.

SO WE HAVE TO MAKE THIS MODEL WITH ALL THE THREE MAJOR FACTORS. REVENUE, EXPENSES, BALANCE, WORK IT OUT SO THAT IT HAS A BALANCED ONGOING PROPOSITION.

>> I'M CURIOUS ABOUT ONE OTHER THING, WHERE DOES THE DISTRICT END? IS IT JUST TAYLOR COUNTY? DOESN'T GO GO TO JONES COUNTY? OR DOES IT GO TO TAYLOR COUNTY?

>> GOOD QUESTION. THE DISTRICT COVERS ALL OF TAYLOR COUNTY AND THE CITY OF ABILENE.

WE HAVE A 911 DISPATCH THAT COVERS THE CITY OF ABILENE.

WE CALL IT THE EXTENDED ZONE AROUND THE CITY.

AND THE TAYLOR COUNTY FOLKS AT THEIR 911 DISPATCH COVERS ALL THE OTHERS. THERE ARE SMALL ELEMENTS JUST NORTH OF LAKE VENOM THAT IS PART OF JONES COUNTY THAT WE ALSO

COVER. >> THANK YOU.

>> AT THIS TIME, TO HAVE QUESTIONS? OR TROY, CAN YOU ANSWER THE QUESTION ABOUT I.T. STAFFING AND

VACANCIES THAT YOU ARE SEEING? >> WE HAVE 26 POSITIONS ON THE BOOKS. WE HAVE 16 POSITIONS FILLED.

A LITTLE MATH AND THEN WE HAVE SEVEN VALID OPEN VACANCIES.

WE ARE BEGINNING A NEW INITIATIVE TO TRY TO FILL ALL OF THOSE SO WE CAN GET VIABLE CANDIDATES.

BUT WHAT YOU GENERALLY SEE IN THE TECHNOLOGY FIELD IS THAT IT'S TOUGH TO ATTRACT WITH OUR COMPENSATION PAY PLAN FOLKS IN THE CITY OF ABILENE. AND WE HAVE ANSWERED QUESTIONS PREVIOUSLY ON HIGHER CALIBER TALENT TO-- HIGHER CALIBER TALENT WOULD PROBABLY TAKE US OUTSIDE OF THE PLAN WITH EXCEPTIONS TO TRY TO RETAIN THOSE FOLKS.

BUT EVEN THOSE HIGHER NUMBERS WOULD PROBABLY BE TOUGH TO ACTUALLY ACHIEVE THAT. SO UCS USING A MIX OF CONTRACTORS, SOME OF THEM ARE FILLING IN THE VACANCIES, OR OUTSOURCING OUR MIDDLE LAYER JOBS OR MIDDLE TIER JOBS, AND AT THE SAME TIME WE ARE USING EXPERTS AT THE HIGHER END TO FULFILL A JOB THAT WE ANTICIPATE NEVER BEING ABLE TO FILL.

SOME OF THOSE FOLKS IN THE JOB CATEGORIES, NETWORK ENGINEER, NETWORK ARCHITECTS, THAT WOULD BE TOUGH TO BRING INTO THE CITY OF ABILENE, ESPECIALLY GIVEN THE NEW COMPETITION WE HAVE AT THE--

[02:50:02]

WE HAVE HAD A COUPLE DIFFERENT CANDIDATES.

WE'VE HAD SOMEBODY COME IN AND THEY WERE NOT AS SKILLED AS THEY NEEDED TO BE. AND WE HAD A ANOTHER CANDIDATE THAT WE WENT BACK AND FORTH WITH, NEGOTIATING BACK AND FORTH, AND WE THOUGHT THEY WOULD FINALLY ACCEPT THE OFFER AND DECLINED THE OFFER AT THE LAST MINUTE.

AND THAT WAS DUE TO COMPETITION, FROM WHERE THEY WERE SITTING WITH THEIR CURRENT EMPLOYEE OFFER.

>> SO THEY ARE USING US TO GET A RAISE?

>> YOU COULD PUT IT THAT WAY. >> I MOVED TO ADJOURN.

* This transcript was compiled from uncorrected Closed Captioning.