Jul 27, 2024 City Council Special Meeting

[I) Call Meeting to Order, Roll Call, and Excuse Absences]

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WON THE TIME IS 8:03 A.M. IT IS SATURDAY, JULY 27TH. AND I'M GOING TO CALL THIS SPECIAL CITY COUNCIL MEETING TO ORDER. WOULD CITY SECRETARY PLEASE CALL THE ROLL? MITCHELL. HERE. RIZZO.

PRESENT. HEIZER ZUNIGA. HARRIS. HERE. PARSLEY TOBIAS. I'M HERE, THAT'S FIVE FOUR MEMBERS PRESENT. WE HAVE A QUORUM, NEXT UP IS CITIZEN COMMENTS. PERIOD. I KNOW MOST OF THE FOLKS HERE. I

[III) Consent Agenda]

WE'RE GOING TO CLOSE CITIZEN COMMENTS, NEXT UP IS. AGENDA ITEM NUMBER ONE. CONSIDER AN APPROVAL OF A RESOLUTION APPOINTING GENEVA GARZA AS CIVIL SERVICE COMMISSIONER. GOOD MORNING, MR. MAYOR. MEMBERS OF THE COUNCIL. I'M COMING THIS MORNING AS THE INTERIM CIVIL SERVICE DIRECTOR ASKING FOR REAPPOINTMENT OF COMMISSIONER GENEVA, GARZA TO THE CIVIL SERVICE BOARD. I'D LIKE TO MAKE A MOTION TO APPOINT GENEVA GARZA TO THE CIVIL SERVICE BOARD.

SECOND MOTION BY THE MAYOR, SECONDED BY MAYOR PRO TEM. IS THERE A DISCUSSION ON THE

[2) Public Hearing concerning the expansion of the boundaries of and approving an amendment to the final project and finance plan for Tax Increment Reinvestment Zone Number Four, pursuant to the provisions of Chapter 311 of the Texas Tax Code.]

ALL RIGHT, NEXT UP IS A PUBLIC HEARING, PUBLIC HEARING CONCERNING THE EXPANSION OF THE BOUNDARIES AND APPROVING AN AMENDMENT TO THE FINAL PROJECT AND FINANCE PLAN FOR TAX INCREMENT REINVESTMENT ZONE NUMBER FOUR, THIS IS, GO AHEAD, MR. MCCULLUM. GOOD MORNING, MAYOR AND COUNCIL. THIS IS A PUBLIC HEARING FOR THE EXPANSION, TOWARDS NUMBER FOUR, YOU CAN KIND OF SEE THE HIGHLIGHTED AREA FOR THAT. WE'RE ACTUALLY HOPING JUST TO OPEN THE PUBLIC HEARING TODAY AND CONTINUE IT TO THE AUGUST 6TH MEETING AND HAVE ADDITIONAL CONSIDERATION AT THAT MEETING. SO THIS IS JUST OPENING IT. WE NOTIFIED FOR THE STATE. WE ALSO NOTIFIED IN ADDITION FOR THE AUGUST 6TH STATE AS WELL, SO IF WE COULD DO THAT THAT WOULD BE GREAT. OKAY, IF THERE ARE NO OBJECTIONS, I'M GOING TO OPEN THE PUBLIC HEARING. PUBLIC

[3) Receive a presentation, hold a discussion, and provide staff direction regarding the City Manager's proposed operating and capital budgets for fiscal year 2024-2025.]

AND YOU HAD ASKED US AT A COUPLE OF MEETINGS AGO TO COME BACK WITH SOME OPTIONS FOR YOUR COUNCIL BUDGET. WE'LL HAVE SOME INFORMATION FOR YOU ON THAT AND SOME OPTIONS FOR YOU TO CONSIDER. SO FIRST UP IS THE BUDGET PROCESS OVERVIEW AND STRATEGIC PLAN. AND THIS IS AN OVERVIEW OF ALL THE DIFFERENT THINGS THAT WE'VE DONE WITH THE BUDGET PROCESS. AS YOU KNOW, WE CHANGED THE BUDGET PROCESS THIS YEAR TO MAKE SURE YOU HAD MORE TIME TO SPEND ON SOME OF THE KEY TOPICS THAT WE'RE GOING TO BE COMING FORWARD IN THE BUDGET, AND THAT'S REQUIRED A LOT MORE TIME AND EFFORT FROM THE COUNCIL TO DO THAT. BUT WE HOPE THAT THAT'S BEEN A MUCH MORE IN-DEPTH REVIEW OF SOME OF THE TOPICS AND DEPARTMENTS THAT HAVE BEEN COMING FORWARD. I PERSONALLY BELIEVE THE BUDGET IS THE MOST IMPORTANT POLICY DOCUMENT THAT YOU APPROVE EVERY YEAR, AND FOR THAT REASON, WE SPEND A LOT OF TIME WITH YOU ON IT. IF IT'S NOT IN THE BUDGET. IT'S AN INTERESTING CONVERSATION GENERALLY, BUT IF IT'S IN THE BUDGET, IT GETS DONE. AND SO THAT'S WHY WE SPEND A LOT OF TIME WITH YOU ON IT. SO THIS PROCESS STARTED BACK IN FEBRUARY WITH THE COUNCIL VISIONING WORKSHOP. AND THEN IN FEBRUARY WE HELD A NUMBER OF DIFFERENT DISCUSSIONS WITH YOU ABOUT BUILDING INSPECTIONS, OUR STREET PAVEMENT ANALYSIS, AND MAINTENANCE FUNDING PLAN WE PRESENTED TO YOU IN APRIL. THE COMMUNITY SURVEY RESULTS. I'LL GO BACK THROUGH THAT VERY QUICKLY WITH YOU IN JUST A MOMENT. AND THEN IN MAY, JUNE AND JULY WE PRESENTED A NUMBER OF OTHER TOPICS TO YOU DETAILING VARIOUS DIFFERENT PARTS OF THE

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TRAFFIC, ROADS. CONGESTION AND INFRASTRUCTURE ARE THINGS THAT THE COMMUNITY IS WANTING US TO ADDRESS AMONG A NUMBER OF OTHER THINGS. SO, AGAIN, THIS BUDGET WILL TRY TO ADDRESS MANY OF THESE ITEMS. AND THEN YOU CAN SEE, ONE OF THE OTHER THINGS WE DID THIS YEAR IS WE CREATED A BUDGET SURVEY ON OUR WEBSITE BETWEEN JULY 1ST AND JULY 22ND, AND WE ASKED RESIDENTS TO CHIME IN AND SAY WHAT WOULD BE THE MOST IMPORTANT THINGS THAT YOU WOULD LIKE US TO CONSIDER IN THIS UPCOMING BUDGET? AND I'M PLEASED TO SAY, SEE, THAT WE HAD OVER 275 RESPONSES. SO WE THOUGHT THAT WAS A REALLY GOOD RESPONSE FOR A SURVEY LIKE THIS. A LOT OF TIMES PEOPLE GLAZE OVER WHEN YOU ASK THEM ABOUT BUDGET, BUT PRIORITIES IS SOMETHING THAT'S REALLY IMPORTANT FOR US TO GET A GOOD UNDERSTANDING AND SEE SOME OF THE SAME TOPICS. THERE POLICE AND PUBLIC SAFETY WAS THE NUMBER ONE ITEM ON THIS PARTICULAR SURVEY. WATER AND WASTEWATER INFRASTRUCTURE, STREETS AND TRANSPORTATION FOLLOWED BY THE REST OF THE ITEMS ON THE LIST. A LOT OF THESE WILL BE ADDRESSED. ALL THESE TOP ITEMS WILL BE ADDRESSED IN SOME WAY IN THIS BUDGET. SO I WANTED TO MENTION THAT TO YOU. WE ALSO ARE PROPOSING THE CITY'S FIRST EVER STRATEGIC PLAN. AS PART OF THIS BUDGET. THIS IS OUR PLAN THAT WE'VE BEEN WORKING ON WITH THE COUNCIL OVER THE LAST SEVERAL MONTHS. IT INCORPORATES THE VARIOUS COMMUNITY FEEDBACK THAT WE'VE HAD, THE COUNCIL FEEDBACK, THE STAFF FEEDBACK OVER THE LAST SEVERAL MONTHS. THERE'S A NUMBER OF STRATEGIC OUTCOMES AND GOALS IDENTIFIED BY COUNCIL IN THE VISIONING WORKSHOP WE HIRED. AS YOU REMEMBER, WE HIRED AN OUTSIDE FACILITATOR TO HELP US GO THROUGH THAT PROCESS AND GUIDE THOSE DISCUSSIONS AND DEVELOP SOME CONSENSUS. AND THEN AFTER THAT, THE STAFF ALSO HAD A SIMILAR TYPE OF RETREAT WITH THE SAME FACILITATOR IN APRIL. AND THEN FROM THAT WE DEVELOPED A VARIETY OF GOALS AND OBJECTIVES BASED ON THOSE OVERALL COUNCIL PRIORITIES. AND SO IN YOUR BACKUP, YOU HAVE A DRAFT OF THAT STRATEGIC PLAN. YOU I KNOW YOU'VE SEEN IT BEFORE, BUT WE'RE GOING TO BE ASKING YOU TO CONSIDER THAT AS YOU BRING FORWARD THE BUDGET, THAT IT REALLY I THINK THE STRATEGIC PLAN IS WHAT WE BELIEVE IS A FOUNDATIONAL ELEMENT FOR THE BUDGET PROCESS, IS THAT YOU WANT YOUR, YOUR, YOUR POLICIES AND YOUR PRIORITIES AND YOUR PLAN TO DRIVE THE NUMBERS IN THE BUDGET, NOT THE OTHER WAY AROUND. AND IT'S REALLY IMPORTANT TO HAVE THE RIGHT PLAN, BECAUSE EVEN JUST A SMALL DEVIATION OF THE DIRECTION OF THE CITY HAS A TREMENDOUS IMPACT. AND I THOUGHT THIS WAS INTERESTING FOR YOU AS I PUT ON HERE OVER THE NEXT FIVE YEARS. AND THIS PARTICULAR BUDGET, WE EXPECT THE CITY TO SPEND ABOUT $1.6 BILLION. THAT'S A BIG NUMBER AND EVEN A 5 OR 10% CHANGE IN DIRECTION. IT ENDS UP BEING A LOT OF MONEY. SO WE WANT TO MAKE SURE THAT WE'RE HEADING WE KNOW THE TARGET WE'RE TRYING TO HIT AND WE'RE PUTTING THE RESOURCES AND THE STAFF AND ALL OF THE DIFFERENT THINGS THAT GO WITH THOSE PROGRAMS IN THE STRATEGIC PLAN AND BUDGET TO MAKE SURE THAT IT HAPPENS. BILLION WITH A B BIG NUMBER. SO THESE ARE THE STRATEGIC OUTCOMES THAT WERE IDENTIFIED BY THE CITY COUNCIL DURING OUR VISIONING

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AND THEN IN ADDITION TO THAT, EACH DEPARTMENT IS GOING TO BE ASKED TO CREATE THEIR OWN STRATEGIC PLAN, WHICH TIES BACK TO THE CITY WIDE STRATEGIC PLAN. SO AGAIN, AS YOUR PRIORITIES ARE, SET, YOUR GOALS AND OBJECTIVES, WE'RE DRILLING THAT DOWN INTO THE ORGANIZATION SO THAT EVERYBODY KNOWS HOW THEY CONTRIBUTE TO MAKING THOSE THINGS HAPPEN. WE HAVE A NUMBER OF DIFFERENT THINGS INCLUDED IN THIS PLAN OVER THE NEXT YEAR. THAT INCLUDES THE DESIGN AND CONSTRUCTION OF A NEW SPORTSPLEX. AND WE'LL BE TALKING MORE WITH YOU ABOUT THAT ON AUGUST 6TH TO CONTINUE THAT CONVERSATION. CREATION OF NEW PARKS AND THEIR REINVESTMENTS IN OUR CURRENT PARK SYSTEM, DESIGN AND CONSTRUCTION OF A VARIETY OF KEY WATER AND WASTEWATER PROJECTS. WE'LL TALK ABOUT MANY OF THESE TODAY. CONSTRUCTION, OF COURSE, OF THE VOTER APPROVED BOND PROGRAM THAT WAS APPROVED BACK IN 2022. AND WE HAVE A VARIETY OF OTHER TRANSPORTATION INITIATIVES THAT WE'RE GOING TO SHOW YOU TODAY AS WELL, WE'RE ALSO PROPOSING THE ENHANCEMENT OF CUSTOMER SERVICE THROUGH THE 311 SYSTEM. AND THE IMPROVEMENT OF OPERATIONAL EFFICIENCY THROUGH OUR LEAN GOVERNMENT AND PERFORMANCE MANAGEMENT PROGRAMS. SO A LOT OF STUFF, BUT ALL OF THAT IS IN THIS PROPOSED BUDGET. AND WE'LL TALK MORE ABOUT THAT TODAY. OKAY. THAT'S THE FIRST 11 SLIDES. WE'VE GOT 124 LEFT. WE'RE GOING TO TRY TO KEEP GOING. KEY BUDGET INITIATIVES AND FOCUS AREAS. I'M GOING TO TALK ABOUT THESE SIX PARTICULAR AREAS WITH YOU IN DETAIL. I THINK EACH OF THESE HAVE MAJOR IMPACTS ON THE BUDGET. EACH OF THESE HAVE, KEY AREAS THAT WE'RE TRYING TO ADDRESS FOR THE COMMUNITY, BUT THESE ARE THE SIX FOCUS AREAS THAT WE LOOKED AT.

UP FIRST IS OPERATIONAL IMPROVEMENTS AND COST CONTAINMENT INITIATIVES. AND I BELIEVE THESE ARE REALLY IMPORTANT AS WE START LOOKING AT THE BUDGET TO MAKE SURE WE HAVE A GOOD FOUNDATION MOVING FORWARD. THEY'RE FOUNDATIONAL ELEMENTS TO MAKE SURE WE'RE TAKING CARE OF OUR OPERATIONS AND USING EVERY DOLLAR MOST EFFICIENTLY. WE HAVE A NUMBER OF DIFFERENT THINGS THAT WE'VE IMPLEMENTED THIS PAST YEAR AND MANY MORE THAT ARE PLANNED. AND SO I'M GOING TO GO THROUGH THOSE WITH YOU. THE FIRST THING I WANT TO MENTION IS WE'VE CREATED A STRONG BUSINESS TEAM, AND THEY ARE FOCUSED ON CUSTOMER SERVICE AND ACCOUNTABILITY. VERY PROUD OF THE TEAM. MANY OF THEM ARE SITTING BACK HERE, BUT I THINK WE'VE REALLY ASSEMBLED AN OUTSTANDING TEAM THAT WILL HELP US ACCOMPLISH ALL THE THINGS THAT YOU WANT TO ACCOMPLISH IN THIS ORGANIZATION. SOME OF THE THINGS THAT WE'VE DONE RECENTLY HAS IMPROVED THE CITY COUNCIL AGENDA MANAGEMENT SYSTEM, AND PROCESS. WE'VE IMPLEMENTED THAT NEW ELECTRONIC AGENDA MANAGEMENT SYSTEM OVER THE LAST FEW MONTHS, WHICH INCREASED THE TRANSPARENCY OF AGENDA MATERIALS FOR BOTH THE COUNCIL AND THE PUBLIC. WE'VE REALLY WORKED TO MAKE SURE YOUR MATERIALS ARE VERY ACCURATE AND THAT YOU HAVE A LOT OF DETAILS TO CONSIDER YOUR BUSINESS WHEN IT COMES BEFORE THE COUNCIL, WE'VE ALSO ENGAGED, THE COMMUNITY ENHANCED COMMUNITY ENGAGEMENT AND TRANSPARENCY.

WE'VE CREATED A QUARTERLY NEWSLETTER. IT'S MAILED TO EVERY ADDRESS, EVERY QUARTER. WE ALSO HAVE A WEEKLY FRIDAY REPORT THAT'S POSTED ONLINE FROM FROM MY OFFICE. AND WE'VE ALSO, POSTED THE RESPONSES TO OPEN RECORDS REQUESTS ONLINE AS WELL. THEY'RE DISPLAYED FOR EVERY ONE TO SEE WHAT'S BEEN RECEIVED PREVIOUSLY AND WHAT'S BEEN PUBLISHED OUT ON THE WEST WEBSITE ON OUR GOV QA PORTAL. WE'VE ALSO CREATED A CENTRALIZED PURCHASING FUNCTION, THIS REALLY HELPS US MANAGE OUR PROCUREMENT AND CONTRACT MANAGEMENT FUNCTIONS MORE EFFICIENTLY, AND HELPS US COMPLY WITH ALL THE VARIOUS CONTRACTS THAT ARE OUT THERE. THIS IS A IT'S A SOMEWHAT OF A BACK OFFICE FUNCTION, BUT IT'S VERY, VERY IMPORTANT TO MAKE SURE IT'S DONE CORRECTLY TO MAXIMIZE THE OPERATIONS IN THE CITY. AND IN THE PAST, THAT FUNCTION WAS DECENTRALIZED AND IT LED TO INCONSISTENT PROCESSES AND SOMETIMES INEFFECTIVE CONTRACT MANAGEMENT. SO WE'RE REALLY PROUD THAT WE'VE IMPLEMENTED THAT. THIS YEAR. WE ALSO HAVE A NUMBER OF OTHER IMPROVEMENTS PLANNED OVER THE COMING YEAR. ONE OF THOSE KEY ELEMENTS IS THE CREATION OF THE NEW 311 CUSTOMER SERVICE CENTER. BY MARCH OF 25. I BELIEVE THIS WILL BE ONE OF THE BIGGEST INCREASES IN CUSTOMER SERVICE THAT THE CITY HAS EVER SEEN. I'VE DONE THESE IN OTHER CITIES THAT I'VE BEEN A PART OF, AND WE'RE REALLY EXCITED TO BRING THIS TYPE OF TECHNOLOGY AND PROGRAM TO THE CITY JUST WITH ONE NUMBER OR ONE CLICK ON YOUR APP. ANY SERVICE OF THE CITY WILL BE AT RESIDENTS FINGERTIPS, AND WE'LL ALSO HAVE ALL THAT DATA AND TRACKING TO MAKE SURE

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WE'VE REVIEWED OUR OPERATIONS VERY CAREFULLY OVER THIS PAST YEAR AND INCREASED THE EFFICIENCY OF THE TEAM. THIS BUDGET PROPOSES THE NET ELIMINATION OF TEN FTES. THE ASSISTANT CITY MANAGER, DIRECTOR OF PUBLIC WORKS AND DIRECTOR OF HUMAN RESOURCES POSITIONS WERE ELIMINATED. THAT SAVES THE CITY ABOUT $867,000 PER YEAR. AND WITH THE NEW 311 SERVICE, OUR CENTRALIZED PROCUREMENT, PAYROLL AND CALL TAKING OPERATIONS, THAT'S ALLOWED US TO REMOVE SOME OF THESE SILOED OPERATIONS AROUND THE CITY AND AN EFFICIENT SERVICE MODEL THAT WE HAD IN SOME PARTICULAR AREAS. THAT'S ALLOWED US TO ELIMINATE ANOTHER SEVEN FTES. THAT REDUCES OUR COST BY ABOUT $589,000, JUST WITH THOSE SEVEN FTES. AND IT ALSO ALLOWS WHAT WE CALL A SOFT COST SAVINGS IN THE WATER UTILITIES FUND. ABOUT 287,000. IF NOT FOR THIS CHANGE, WE WOULD HAVE HAD TO ADD ADDITIONAL STAFF TO PERFORM OTHER FUNCTIONS. SO IT'S A SOFT COST SAVINGS, BUT IT IS REAL. AND WE WANTED TO NOTE THAT IN TOTAL, THOSE REDUCTIONS THAT I JUST MENTIONED FOR THOSE TEN FTES IS ABOUT $1.5 MILLION IN COST SAVINGS THIS YEAR IN THIS BUDGET. SO THIS IS IN THE BUDGET BEFORE YOU. SO WE'RE REALLY PROUD TO BE ABLE TO BRING THAT FORWARD TO YOU. WE'VE ALSO BEEN LOOKING AT A NEW LEGISLATIVE PROGRAM WE'VE CREATED THAT WE'VE APPLIED FOR OVER $100 MILLION IN GRANTS. THIS IS A VERY SIGNIFICANT NUMBER. A LOT OF ZEROS ON THAT, AS YOU KNOW, WE HAD CONGRESSMAN CASAR HERE WITH US JUST A COUPLE OF WEEKS AGO. WE PRESENTED $1 MILLION CHECK. WE HOPE TO HAVE MANY MORE OF THOSE COMING FORWARD, MUCH LARGER AMOUNTS.

THERE'S TWO IN PARTICULAR THAT WE'VE APPLIED FOR THE CHRISTIE GRANT AND THE INFRA GRANT FOR ABOUT $49 MILLION COMBINED. FOR SOME WORK. WE'RE HOPING TO HEAR BACK ON THAT IN THE NEXT 30 TO 60 DAYS, HOPEFULLY WE'LL HAVE GOOD NEWS AND OTHER VERY LARGE CHECKS TO PRESENT AT SOME POINT, WE'VE ALSO PREPARED THE NEW WATER AND WASTEWATER IMPACT FEE STUDY. YOU GUYS TOOK A LOOK AT THIS EARLIER IN THE YEAR. AND THIS IS ONE OF THOSE STUDIES THAT WHEN YOU LOOK AT IT ON ITS FACE, YOU MAY WONDER, WELL, IT'S A IT'S AN INTERESTING STUDY. DOES IT JUST COLLECT DUST ON THE

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SO THIS DOES WORK. HAND IN HAND IS REALLY A FOUNDATIONAL ELEMENT TO BRING US FORWARD, A BUDGET LIKE THIS TODAY. OKAY WE'RE ROLLING. I'M GOING TO TRY TO KEEP IT INTERESTING. SLIDE 20, ORGANIZATIONAL EXCELLENCE AND STRATEGIC SERVICE DELIVERY, THIS IS ANOTHER FOCUS FOR US. THERE'S A LOT OF DIFFERENT WAYS TO LOOK AT ORGANIZATIONAL EXCELLENCE. AND I'VE JUST GOT A FEW THINGS FOR YOU ON THESE NEXT FEW SLIDES THAT I THINK ARE INTERESTING. ONE OF THOSE IS TO TRY TO ASSESS OUR OVERALL EFFICIENCY, THIS IS NOT A PERFECT WAY TO DO THIS, BUT IT'S ONE WAY IS TO LOOK AT THE NUMBER OF EMPLOYEES WE HAVE PER 1000 RESIDENTS. YOU CAN SEE KYLE IS AT 6.8 EMPLOYEES PER 1000 RESIDENTS. SO THAT'S STILL EVEN WITH ALL THE POSITIONS THAT WE'RE TALKING ABOUT ADDING THIS PARTICULAR YEAR, WE THINK WE'RE STILL VERY EFFICIENT COMPARED TO ALL THE OTHER CITIES ACROSS THE AUSTIN METRO REGION. WE ALSO LOOK AT OUR ASSESSED VALUE PER CAPITA. AND IF YOU LOOK AT KYLE, EVEN THOUGH WE'VE GROWN TREMENDOUSLY BASED ON THE 2023 VALUES, WE'RE STILL RELATIVELY LOW ON AN ASSESSED VALUE BASIS PER CAPITA. IT'S GROWING, BUT WE STILL TRAIL SOME OF OUR PEERS, SO WE'RE MORE EFFICIENT ON THE NUMBER OF EMPLOYEES WE HAVE, AND WE GENERATE LESS REVENUE PER CAPITA THAN OTHER CITIES. SO I THINK THAT'S AN INTERESTING COMBINATION. I KNOW THE MAYOR LOVES THIS CHART. IT'S A BIT IT'S A BIT COMPLICATED, BUT I DO THINK IT'S INTERESTING TO SHOW YOU OVER THE LAST TEN YEARS OR SO HOW MUCH SALES TAX PER CAPITA DO WE GENERATE? AND IF YOU LOOK FOR KYLE, WHICH IS THIS, PURPLISH COLOR, THE THIRD FROM THE BOTTOM, YOU CAN SEE FOR MANY YEARS WE'VE TRAILED A LOT OF OUR PEERS ON SALES TAX, PER CAPITA, I DON'T KNOW WHO'S DRIVING, BUT I LIKE THAT. IS THAT WHO'S DRIVING THAT WITH A IT'S MAGIC. I DON'T KNOW HOW. I'M JUST TALKING. MAYBE IT'S MARCO IN THE BACK, BUT BUT THAT IS THE CHART THAT SHOWS YOU YOUR SALES TAX PER CAPITA. AND IT YOU CAN SEE IT'S REALLY GROWN OVER THE LAST 2 OR 3 YEARS SIGNIFICANTLY.

WE'RE HOPING THAT IN 2024 AND 25, WITH SOME OF THE PROJECTS THAT YOU'VE RECENTLY APPROVED, LIKE THE NEW QUEST PROJECT ON THE CARAWAY TRACT, THAT THIS WILL CONTINUE TO GROW. AND WHAT THAT MEANS IS KYLE THEN BECOMES THAT REGIONAL DESTINATION FOR, SERVICES, RESTAURANTS, RETAIL, THOSE KINDS OF THINGS. AND SO THOSE DOLLARS HELP OFFSET COSTS THAT WOULD OTHERWISE BE BORNE BY THE RESIDENTS OF KYLE. SO I THINK IT'S AN INTERESTING CHART. WE'VE GOT A LONG WAY TO GO, BUT I DO BELIEVE WE'VE MADE VERY STRONG PROGRESS OVER THE LAST FEW YEARS. WE ALSO LOOK AT ORGANIZATIONAL EXCELLENCE IN TERMS OF OUR EMPLOYEES, OF COURSE, AND WE WANT TO MAKE SURE THAT WE HAVE AN EMPLOYEE BASED, EXCUSE ME, A MARKET BASED EMPLOYEE COMPENSATION AND BENEFITS PROGRAM. THE COUNCIL HAS BEEN EXTREMELY SUPPORTIVE OF THIS OVER THE LAST COUPLE OF YEARS. WE HAVE IDENTIFIED OUR TEN PEER CITIES THROUGHOUT THE AUSTIN AND SAN ANTONIO CORRIDOR THAT WE COMPETE FOR, FOR TALENT, WE'VE ALSO WORKED ON THAT COMPENSATION PHILOSOPHY, BENCHMARK OUR COMPARISONS AND JOB JOBS TO THOSE CITIES, AND WE'LL BE PUTTING IN A NEW SALARY STRUCTURE BASED ON THE PAY AND COMPENSATION PLAN THAT THE COUNCIL APPROVED, JUST A FEW MONTHS AGO. OUR WHOLE HOPE HERE IS TO BE AN EMPLOYER OF CHOICE, THE BEST IN THE REGION. AND WE WANT TO DO THAT BY OFFERING GREAT PAY, GREAT BENEFITS, GREAT CULTURE AND GREAT PROJECTS. AND I THINK THROUGH ALL THE THINGS THAT THE COUNCIL HAS BEEN LETTING US WORK ON, THOSE PROJECTS ARE EXCELLENT. AND YOU'VE BEEN VERY SUPPORTIVE OF THE TEAM. SO I THINK WE'RE WE'RE DEFINITELY DOWN THAT PATH FOR THIS YEAR. WE'RE PROPOSING A 4.5% MERIT INCREASE FOR EMPLOYEES. THAT'S ABOUT A $967,000 COST FOR ALL FUNDS. WE ALSO ARE FUNDING THE POLICE INCREASE FOR YEAR THREE, THEIR STEP PROGRAM, 387,000, IS IN ACCORDANCE WITH THE MEET AND CONFER CONTRACT. AND I'M ALSO PROPOSING FOR THIS YEAR AN ADDITIONAL $450,000 FOR POLICE SWORN POSITIONS TO MAKE ADJUSTMENTS IN THEIR PAY TO PUT THEM IN A MORE COMPETITIVE POSITION. WE'VE LOOKED AT POLICE IN PARTICULAR, HAS BEEN A VERY CHALLENGING ENVIRONMENT TO RECRUIT AND RETAIN OFFICERS, AND THAT'S NATIONWIDE, NOT JUST HERE IN THIS REGION. IT'S BEEN VERY CHALLENGING. AND SO EVERYONE HAS BEEN INCREASING PAY AND WE'VE FALLEN A BIT BEHIND ON THAT.

THIS PARTICULAR BUDGET RECOMMENDATION WILL PUT US IN THAT TOP 25% OF OUR REGION THAT WE CAN COMPETE AGAINST, AND WE'RE REALLY PROUD TO BRING THAT FORWARD. SO I'LL HAVE SOME ADDITIONAL DETAILS IN JUST A MOMENT. ON THAT, WE'VE ALSO HAD SOME FUNDING FOR OTHER EQUITY ADJUSTMENTS AS WE FINALIZE OUR PAY STUDY. IF WE DETERMINE THAT THERE'S A PARTICULAR CLASS OR

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