ALL RIGHT. WE'RE GOING TO GO AHEAD AND START. TODAY IS THURSDAY, AUGUST 13TH. [00:00:08] THE TIME IS 6:00 AND I'M GOING TO OPEN THE SPECIAL MEETING. CAN I GET A ROLL CALL, PLEASE? FLORES HERE. TOBIAS. PRESENT HERE. MEDINA. HERE. ZAPATA. MCKINNEY. HARRIS. ALL RIGHT. WE HAVE FOUR. SO WE HAVE A QUORUM. IF WE COULD ALL PLEASE STAND FOR THE PLEDGE OF ALLEGIANCE. I PLEDGE ALLEGIANCE TO THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS. ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. ALL RIGHT. THANK YOU. NEXT WE HAVE CITIZENS COMMENTS. [II) Citizen Comment Period with City Council] THE CITY COUNCIL WELCOMES COMMENTS FROM CITIZENS. THOSE WISHING TO SPEAK ARE ENCOURAGED TO SIGN IN BEFORE THE MEETING BEGINS. SPEAKERS WILL BE PROVIDED WITH AN OPPORTUNITY TO SPEAK DURING THIS TIME PERIOD ON ANY AGENDA, ITEM OR ANY OTHER MATTER CONCERNING CITY COUNCIL BUSINESS, AND WE ASK THAT YOU OBSERVE THE THREE MINUTE TIME LIMIT. ALL RIGHT. FIRST UP, I HAVE NICHOLAS ESCAMILLA. OKAY. SO I LIVE IN SILVERADO. I'VE LIVED IN KYLE FOR 20 YEARS. AND THE TWO ISSUES I WANTED TO TALK ABOUT TODAY WAS LIKE MORE TRAFFIC IN KYLE AND THE NEW D LOT CAMERAS. I KNOW THEY'VE BEEN HERE FOR A YEAR, BUT THE TRAFFIC, ESPECIALLY ON VETERANS DRIVE LIKE I KNOW THEY'RE ADDING A SHOPPING CENTER, A CHURCH AND SCHOOL STARTING BACK UP. AND LIKE THE STOP SIGN THERE ALREADY BACKS UP LIKE A MILE. IT'S REALLY HARD TO TURN OUT IN MY NEIGHBORHOOD. AND THAT'S A CONCERN OF MINE. LIKE EVER SINCE AFTER COVID, THE TRAFFIC HERE GETS WORSE AND WORSE. AND I KNOW Y'ALL ADDED THE TURN LANE, BUT LIKE, I'M CONCERNED THAT THE CHURCH AND THE NEW SHOPPING CENTERS, LIKE A 50 FOOT TURN LANE WON'T BE ENOUGH. AND THEN THE NEW FLOCK CAMERAS, LIKE I DON'T. FIRST OFF, I SAW THAT KYLE HAS AROUND 47 FLOCK CAMERAS. IT HAS A POPULATION OF 60,000. AND THEN THE CITY OF AUSTIN, I THINK A MILLION RESIDENTS. THAT'S 40. I DON'T KNOW WHY KYLE NEEDS SO MANY. I GET THAT HELPS. THE POLICE ATTRACTS PLATES, BUT IT'S ALSO A PRIVACY CONCERN FOR. LIKE MANY PEOPLE I KNOW, SOME OF MY NEIGHBORS HAVE TALKED ABOUT IT AND LIKE, I DON'T UNDERSTAND WHY IT'S THE POLICE NEEDS TO KNOW THERE'S ONE AT MY NEIGHBORHOOD ENTRANCE, ONE WHEN I GET ON THE HIGHWAY AND MY EXIT ON THE HIGHWAY. SO LIKE KNOWS WHENEVER I GO HOME, LEAVE ANYWHERE I GO IN. KYLE, THERE'S A FLY CAMERA AND I KNOW IT SAYS, OH, IT'S ONLY FOR PLATES. LIKE MY DATA DOESN'T GET STORED EVERY 30 DAYS IT'S DELETED. BUT I DON'T KNOW IF I TRUST THAT COMPANY. AND LIKE, I DON'T, I DIDN'T CONSENT TO HAVE MY PLATE READ EVERYWHERE I GO, EVERY TIME I LEAVE MY HOME TO BE LIKE, SCANNED. BUT YEAH, THOSE WERE THE TWO MAIN CONCERNS. I KNOW THE TRAFFIC IS HARD BECAUSE A LOT OF PEOPLE MOVE TO KYLE. IT'S THE FASTEST, ONE OF THE FASTEST GROWING CITIES. BUT I MEAN, AS A LONG TIME RESIDENT, IT SEEMS LIKE MY QUALITY OF LIFE HAS BEEN GOING DOWN. I KNOW, I KNOW Y'ALL LIKE THE NEW LIKE PROPERTY TAX MONEY FROM ALL THE NEW BUILDINGS OR THE NEW NEIGHBORHOODS AND THE NEW STORES. BUT I DON'T KNOW, JUST AS A LONGTIME RESIDENT, LIKE IT JUST FEELS LIKE THE CITY ISN'T THE SAME AS IT WAS. AND THAT'S ALL I WANTED TO TALK ABOUT. OKAY. THANK YOU. ALL RIGHT. UP NEXT, I HAVE TRACY SEAGER. SHARKY. HELLO. THANK YOU ALL FOR THE OPPORTUNITY TO SPEAK. MY NAME IS TRACY SEAGER. SHARKY AND I LIVE IN AMBERWOOD, AND I'M HERE TO TALK ABOUT THE PET SITUATION, THE ANIMAL SHELTER THAT I KNOW. I'M HAVING FAITH THAT'S GOING TO BE BUILT. I DON'T KNOW HOW IT'S GOING TO BE FUNDED, BUT BESIDE ALL THAT, I JUST WANTED TO MY INTENTION FOR SPEAKING IS SO YOU CAN BE AWARE OF TNR AND YOU CAN BE AWARE OF THE PROBLEM THAT WE'VE HAD IN AMBERWOOD. THREE YEARS AGO, WE STARTED SEEING TONS OF DECEASED CATS AND KITTENS ON OUR STREETS IN FRONT OF MY HOUSE, BESIDE MY HOUSE, EVERYWHERE. IT WAS DEVASTATING TO SEE. TO MAKE A LONG STORY SHORT, I BECAME AN OFFICIAL VOLUNTEER TO DO TNR FOR THE CITY AND. AND BRIANNA HAS BEEN AMAZING. SHE IS A ROCK STAR AND I HOPE YOU ALL LISTEN TO EVERYTHING SHE SAYS ABOUT THE SHELTER. [00:05:06] BUT THE ISSUE IS I'VE DONE. I'VE LOST COUNT. ACTUALLY, IT'S 55 OR 60 CATS I HAVE RIGHT NOW. I HAVE FIVE THAT I NEED TO TRAP. SO WE HAVE A SERIOUS ISSUE WITH THIS. AND I JUST WANTED TO LET YOU ALL KNOW, THE WAY I DO IT, THIS IS PROBABLY GOING TO BE LIKE THE INTERIM PLAN. I WORK WITH PALS. I TRAP THE CATS IN MY NEIGHBORHOOD AND AROUND. THAT'S LIKE SEVEN STREETS FOR ME. I TAKE THEM TO PALS. IN THE PAST, I'VE PAID A LOT OF MONEY FOR EXTRA SHOTS AND THINGS LIKE THAT. I ACTUALLY, I DON'T HAVE MY NUMBERS WITH ME. I WISH I WOULD HAVE HAD TIME THIS WEEK TO GATHER MY NUMBERS. I KIND OF DON'T WANT TO LOOK AT IT BECAUSE IN THE PAST THREE YEARS, IT'S LESS THAN $10,000, I THINK. BUT IT'S RIGHT AROUND THERE WITH ALL THIS CAT FOOD AND JUST EVERYTHING. OF DOING IT. IT'S THE BIGGEST BURDEN IN MY LIFE. I DON'T WANT TO DO IT. I DO IT BECAUSE THE ANIMALS ARE SUFFERING. OKAY. AND THIS IS JUST A DIVERSION. THEY DON'T GO INTO THE SHELTER. I FOUND HOMES FOR THEM. SEVERAL HAVE BEEN THEY'RE FERAL AND I TAKE CARE OF THEM. WE HAVE CARETAKERS. IT'S JUST AN ISSUE. AND I JUST WANTED TO START THE CONVERSATION AND INTRODUCE MYSELF BECAUSE I'VE DONE A LOT FOR THIS CITY AND I PAID A LOT OF MY OWN POCKET. ANOTHER THING IS I WANT YOU ALL TO THINK ABOUT IS THE VET CARE THAT I PAY FOR WITH MY COLONY. I'VE HAD TWO THAT I'VE HAD TO HAVE X-RAYS. I THOUGHT I COULD REHAB THEM, BUT I ENDED UP HAVING TO PUT THEM TO SLEEP. THAT WAS JUST OVER $1,000. AND I CAN'T TAKE HIM TO PAL'S. THEY DON'T DO EMERGENCY CARE, YOU KNOW, THEY'RE JUST NOT SET UP FOR THAT. AS AMAZING AS THEY ARE, WE DON'T HAVE THAT. SO I END UP PAYING FOR THAT. AND I KNOW A COUNTY SHELTER CAN'T PROVIDE THAT. THEY CAN'T PROVIDE VETERINARIAN CARE. SO THERE'S GOING TO HAVE TO BE EITHER SOME SORT OF SEPARATE NONPROFIT OR SOMETHING, OR SET UP WITH SOME VETS OR SOMETHING, BECAUSE I CAN'T CONTINUE TO PAY THESE VET BILLS FOR THESE CATS. I WILL, I WILL, I WILL CONTINUE TO PAY IT. I'M JUST COMPLAINING RIGHT NOW, BUT I JUST WANTED AND I'M SORRY, THIS IS THE FIRST TIME Y'ALL MET ME. AND I HATE TO JUST COME IN COMPLAINING, BUT IT'S JUST A REAL ISSUE. AND I WANT Y'ALL TO BE REALLY FAMILIAR WITH TNR AND YOU KNOW, HOW WE'RE HOW WE'VE BEEN MANAGING IT AND HOW WE'LL CONTINUE TO MANAGE IT IN THE INTERIM UNTIL WE GET A SHELTER BUILT. I'M ALSO CONCERNED ABOUT THE GI BILL IF THAT DOESN'T PASS. AND THEN WE HAVE TO WAIT FIVE MORE YEARS FOR A SHELTER. THAT'S JUST GOING TO BE WORSE. SO THAT'S MY LAST CONCERN. OKAY. THANK Y'ALL. THANK YOU. NEXT I HAVE HOWARD CONNELL. HERE WE GO AGAIN. GOOD EVENING, MY MAYOR AND COUNCIL MEMBERS. I HAVE A QUESTION. WHY DID CITY MANAGER BRIAN LANG HIRE US TO DO A WATER RATE STUDY FOR 2025? AND 26? HAVE NEVER HEARD ANY REASON WHY THAT MAY HAVE BEEN DONE, BUT IT WAS DONE. SO IF YOU HAVE A TOOTHACHE, OKAY. DID YOU GO TO A DENTIST TO GET IT FIXED? IF YOU'RE A CITY MANAGER AND YOUR CITY IS COMING UP SHORT, YOU'VE GOT TO FIND SOMEBODY. ELSE IS THE PEOPLE TO GO TO YOU GO TO THEM AND YOU SAY I'M SHORT. FIND ME SOME MONEY. I'VE HEARD PEOPLE FROM SIX CREEK GET UP HERE AND SAY, WELL, THE WATER STUDY WAS SKEWED THIS AND THAT, WHATEVER. WELL, OKAY, MAYBE IT WAS, MAYBE IT WASN'T. BUT AFTER I READ YOU THIS, YOU'RE PROBABLY GOING TO HAVE YOUR HAIR STAND UP. RALPH TILLIS. WHAT DO WE DO? WE DO IDENTIFICATION OF PRICE OBJECTIVES, WORK WITH YOU TO DEVELOP PRICING OBJECTIVES THAT DELIVER THE RATE STRUCTURE THAT BEST SUITS YOUR STRATEGIC AND OPERATIONAL GOALS. THESE OBJECTIVES RANGE FROM PROMOTING WATER CONSERVATION TO ADDRESSING AFFORDABILITY CONCERNS TO FOSTER ECONOMIC DEVELOPMENT AND MORE. CUSTOMIZE RATE FEE STRUCTURES. WE HAVE DEVELOPED THOUSANDS OF CUSTOMIZED RATE STRUCTURES AND FEES TO MEET SPECIFIC NEEDS AND GOALS OF OUR CLIENTS, SUCH AS KYLE AND THEIR SHAREHOLDERS. THERE IS NO ONE SIZE FITS ALL SOLUTION, AND WE USE OUR EXPERIENCE TO HELP YOU DETERMINE THE OPTIMAL RATE STRUCTURE FOR YOUR AGENCY, BE IT THE CITY DEVELOPMENT OF COMPREHENSIVE FINANCIAL PLANNING, UTILITY RATES AND MUNICIPAL FEES ARE SET BASED ON REVENUE REQUIREMENTS AND A NUMBER OF ACCOUNTS FROM WHICH THESE COSTS MUST BE RECOVERED. [00:10:04] WE EMPLOY A PROVEN, DATA DRIVEN METHOD FOR FORECASTING COSTS AND CUSTOMER DATA TO INFORM OUR RATE SELLING PROCESS. WE WORK WITH YOU TO EXECUTE THIS WRITTEN, COMPREHENSIVE, RELIABLE AND FLEXIBLE FINANCIAL PLAN. OUR FINANCIAL PLANNING SYSTEM FORECASTS OPERATION AND MAINTENANCE COSTS, CAPITAL NEEDS, CUSTOMER USES, AND MONITORS YOUR OVERALL FINANCIAL PERFORMANCE. IN OTHER WORDS, WE'LL GIVE YOU WHATEVER WE NEED TO TO GET YOU SOME MONEY. GETTING A BUYBACK OF ADOPTION. YOUR GOVERNING BODY MUST APPROVE YOUR RATE OR FEE STRUCTURE. SO WE DON'T JUST ASSIGN SOUND RATES. WE BRING YOU COMMUNICATION AND OUTREACH EXPERTS TO HELP YOU BUILD UNDERSTANDING AND SUPPORT FOR YOUR NEW RATES AND FEES. IN OTHER WORDS, A BIG STORY IN MY OPINION. WE HELP TO DEMONSTRATE THE TRUE VALUE OF YOUR SERVICES AND COMPREHENSIVE ANALYSIS BEHIND OUR RECOMMENDED RATES TO ENSURE BROAD STAKEHOLDER BUY IN, WHICH MEANS APPROVAL AND ADOPTION. THANK YOU VERY MUCH. THANK YOU. UP NEXT, I HAVE CAROL DUGGINS. THANK YOU. OKAY. GOOD EVENING, MEMBERS OF THE COUNCIL. MY NAME IS CAROL DUGGINS, AND I'M HERE BECAUSE LAST YEAR'S 77% ETJ WATER RATE HIKES WERE BUILT ON A MODEL THAT HAS ALREADY BEEN PROVEN FLAWED. CAME BACK THIS YEAR AND REMOVED THE 18 MILLION OF REVENUE NEEDED THAT JUSTIFIED THE INCREASE, BUT LEFT THE OUTSIDE CITY RATES CITY RATE UNTOUCHED. KYLE NOW CHARGES ETJ RESIDENTS AND 86% PREMIUM, NEARLY TRIPLE THE HIGHEST PREMIUM IN THE REGION. IT APPEARS THAT NUMBERS THAT THESE NUMBERS HAVE BEEN HAVE. THEY HAVE NEVER BEEN REEXAMINED UNDER THE CURRENT MODEL. TONIGHT I AM ASKING RALPH TILLIS. HE'S PROBABLY NOT HERE TO EXPLAIN HOW THIS RATE WAS BUILT, WHY IT REMAINS FROZEN, AND HOW IT MEETS THE PUC JUST AND REASONABLE STANDARDS. I HAVE A FEW QUESTIONS. I KNOW Y'ALL ARE NOT GOING TO ANSWER THEM. WHY WAS THE OUTSIDE CITY RATES NOT REEXAMINED AFTER THE $18 MILLION CORRECTION? WHAT SPECIFIC COST DRIVERS. DRIVERS JUST THAT JUSTIFIED THE 86% PREMIUM FOR ETJ CUSTOMERS WITH NO REGIONAL UTILITY EXCEEDED 29%. WHY DID REF TAYLOR'S PRESENTATION COMPARE ONLY IN CITY RATES TO NEIGHBORING CITIES AND OMITTING THE OUTSIDE CITY COMPARISON? WAS INSTRUCTED BY THE CITY TO FREEZE THE ETJ RATES, OR WAS THAT AN INDEPENDENT RECOMMENDATION? DOES REF TELUS AFFIRM THAT THE 86 PREMIUM MEETS THE PUC JUST AND REASONABLE STANDARDS UNDER TEXAS LAW? IF LAST YEAR'S MODEL OVERSTATED REVENUE NEEDED A NEED BY 18 MILLION. WHAT ASSURANCE CAN YOU GIVE THAT THE ETJ COST ALLOCATION WAS NOT ALSO OVERSTATED? CAN YOU IDENTIFY ANY COST CATEGORIES WHERE ETJ CUSTOMERS ARE PAYING MORE THAN THEIR PROPORTIONAL SHARE? AND IF SO, WILL YOU COMMIT TO CORRECTING THAT ALLOCATION? THANK YOU. THANK YOU. IF YOU HAVE THAT PIECE OF PAPER, I WOULDN'T MIND. IF YOU'D LIKE ME TO ASK THOSE QUESTIONS, I CAN. OH YOU CAN YOU CAN ANSWER ALL THOSE. YEAH. IF YOU JUST WANT TO. I CAN'T, BUT I CAN ASK THEM. REPTILES IS ACTUALLY HERE. YES, SHE THE REPRESENTATIVE IS HERE. SO I WOULD BE MORE THAN GLAD. IF YOU WANT TO HAND YOUR QUESTIONS. I CAN HAVE SOMEBODY ON COUNCIL, YOU KNOW, ASK THEM. ALL RIGHT. THANK YOU. ALL RIGHT. NEXT I HAVE KENNETH ROCHA. GOOD EVENING, MAYOR, COUNCIL MEMBERS. I WANT TO SPEAK TO THE PROPOSED TAX RATE OPTIONS AND WHY THE NUMBERS BEHIND THEM MATTERS AS MUCH AS THE RATE ITSELF. THIS YEAR'S CERTIFIED TAXABLE VALUE FELL 1.2%, AND YOU'RE GOING TO HEAR ABOUT THE CITY'S OWN CALCULATION SHOWING SOMETHING UNUSUAL, [00:15:01] WITH THE NO NEW REVENUE RATE BEING ACTUALLY HIGHER THAN THE VOTER APPROVAL RATE. I'M INTERESTED IN HEARING AND UNDERSTANDING HOW THIS INVERSION CAME TO BE. WE'RE ALL AWARE OF HOW OUR RESERVE FELL FROM ROUGHLY 34 MILLION TO JUST OVER 10 MILLION OVER THE LAST THREE BUDGET CYCLES, AND OF THE 14.2 MILLION SHORTFALL THAT THIS BUDGET IS BUILT TO CLOSE STAFF'S OWN MATERIALS, SAY YEAR ONE IS ABOUT RESTORING RESERVES AND YEAR TWO SHIFTS TO CAPITAL AND DEBT FUNDS. I'D ASK COUNCIL TO HOLD THAT LINE BEFORE LAYERING ON NEW DEBT FUNDED CAPITAL COMMITMENTS. GOOD GOVERNANCE ISN'T SLOW OR GOVERNMENT. THIS IS A REQUEST FOR GOVERNANCE DISCIPLINE GOING FORWARD THAT INCLUDES REAL TIME BUDGET METRICS SO COUNCIL CAN SEE CAPITAL SPENDING, DEBT ACTIONS AND RESERVE POSITIONS ALL TOGETHER RATHER THAN LEARNING THE COMBINED EFFECT ONLY AFTER A SHORTFALL APPEARS. PLEASE BUILD THAT SAFEGUARD INTO THIS BUDGET CYCLE, NOT THE NEXT ONE. I FULLY BELIEVE WITH THE RIGHT LEADERSHIP AND DILIGENCE, WE CAN RETURN TO OUR 2023 STATUS OF A RESERVE FUND THAT WAS HEALTHY AND THE ENVY OF TEXAS AND A RATING AGENCY ASSET. THANK YOU FOR YOUR TIME AND COMMITMENT TO REALLY LOOKING AT THESE NUMBERS. I REALLY DO APPRECIATE IT. GREAT. THANK YOU. ALL RIGHT. THOSE ARE ALL THE FORMS I HAVE. WOULD ANYBODY LIKE TO COME UP AND SPEAK? ALL RIGHT. THANK YOU. OKAY. UP NEXT I HAVE LARRY GORELICK. GOOD EVENING, MAYOR, MAYOR PRO TEM AND COUNCIL LADIES. MY NAME IS LARRY GORELICK, A RESIDENT OF KYLE FROM SIX CREEKS. WATER AND SEWER RATES MUST BE JUST AND REASONABLE. THAT IS THE STANDARD THE PUC WILL HOLD. THE CITY OF KYLE TO TELL US IS HERE TONIGHT AND WILL PRESENT THE RECOMMENDATIONS FOR THE FISCAL YEAR 27 WATER AND WASTEWATER RATES. THEY'VE CONSULTED WITH THE CITY ON RATES FOR FISCAL YEAR 25, 26 AND NOW 27. IN 25 ENSITY RATES WERE RAISED, WHILE OUT-OF-CITY RATES REMAINED UNCHANGED. RAFF TOLD US THAT WAS BECAUSE THERE WAS A PUC DOCKET IN LEANDER THAT WOULD HELP DECIDE HOW TO PROCEED FOR OUT-OF-CITY RATES. WHILE OUT OF CITY RATES DIDN'T RISE IN 25, WE WERE STILL PAYING 27% MORE THAN IN CITY CUSTOMERS FOR 26. PLANNING REF TELLUS RECOMMENDED A RATE INCREASE OF 20% AND 77% FOR IN CITY AND OUT OF CITY, RESPECTIVELY. THE LEANDER DOCKET HAD BEEN SETTLED. ELLIS REPORTED THEY HAD CONFIDENCE RAISING THE OUT-OF-CITY RATES WOULD HOLD UP AGAINST THE PUC APPEAL BECAUSE THE LEANDER FINAL ORDER DENIED THAT RATE APPEAL. KEEP IN MIND, LEANDER. LEANDER WATER RATES WERE SOME OF THE LOWEST IN THE AREA, AND THAT APPEAL WAS FOR A 10% INCREASE. WHEN SETTING THE RATES LAST YEAR. THE DATA PROVIDED TO RETAIL IS SKEWED IN FAVOR OF AGGRESSIVE WATER AND SEWER INFRASTRUCTURE PROJECTS. THIS YEAR, WE LEARNED THAT POLICY. THAT WAS A POLICY DECISION, NOT ONE OUT OF NECESSITY, LEADING IN PART TO THE EXAGGERATED COST OF SERVICE STUDY. RALPH ELLIS PRODUCED THE RESULTS THE CITY WANTED, BUT THE CITY WASN'T PREPARED TO BUILD OR BEGIN BUILDING ANYTHING. DID THE STUDY INCLUDE THIS INFRASTRUCTURE? WHEN WHEN CALCULATING THE RATES. REGARDLESS, FAULTY INPUTS ARE NOT THE ONLY ISSUE. QUESTIONS MUST BE ASKED TO TELL US ABOUT THEIR DATA AND QUALITY CONTROLS. HOW THROUGH HOW THOROUGH ARE THEIR INTERNAL REVIEWS? DO THEY AUDIT THEIR OWN REPORTS OR HAVE THIRD PARTY THIRD PARTIES AUDIT THEM? IN FISCAL YEAR 26, A STUDY HAS FOUND IF THE FISCAL YEAR 26 REF STUDY IS FOUND TO BE FLAWED AND UNABLE TO SUPPORT THE 77% INCREASE, WILL THERE BE REFUNDS? COUNCIL, I ASK YOU TO TO QUESTION RALPH, TELL US WHY THEY ARE SHOWING YOU A PARTICULAR PICTURE THIS EVENING. I'VE PROVIDED EACH OF YOU WITH IT. YOU WILL SEE A SAMPLE OF WATER AND SEWER RATES FROM PEER CITIES. THESE GIVE THE CASUAL VIEWER IMPRESSION THAT KYLE'S RATES ARE REASONABLE. THEY'RE IN THE RANGE. WHAT ISN'T SHOWN IN THAT COMPARISON OF INCIDENCE IS IN CITY AND OUT OF CITY RATES FOR THOSE PEER CITIES. 11 IN TOTAL. DID YOU KNOW OF THESE? SOME HAVE NO DIFFERENTIAL BETWEEN IN AND OUT OF CITY RATES. OTHERS SHOW DIFFERENTIALS AS LOW AS 10% BUT AS HIGH AS 30%. THEN THERE'S KYLE WITH A WHOPPING 86% DIFFERENTIAL, NEARLY THREE TIMES HIGHER THAN THE NEXT CONTENDER. ASK YOURSELF THIS AS THE PUC HEARS THIS EVIDENCE AND WEIGHS ITS OPTIONS AND POTENTIAL REFUNDS, THE BURDEN OF PROOF IS ON THE CITY ACROSS MULTIPLE CRITERIA. IF ANY ONE IS FOUND UNREASONABLE, THAT IS GROUNDS FOR GRANTING THE APPEAL. NOW ASK YOURSELF AGAIN, ARE KYLE'S RATES JUST AND REASONABLE? WHAT I PRESENTED TO EACH OF YOU IS THIS, WHICH IS A SLIDE THAT IS IN THE DECK FOR TONIGHT. I'M QUESTIONING THE PFLUGERVILLE COST ON HERE, SHOWING $228 IF YOU FLIP TO THE NEXT PAGE. [00:20:09] I PULLED THE PFLUGERVILLE DATA DOWN THAT THEY POSTED TODAY ON TWITTER. THAT SAME 5500 GALLON DIFFERENTIAL SHOWS ABOUT 193. IT SHOWS 185 ON HERE FOR 5000. I ROUNDED IT TO 193 FOR 5500. SO 228 TO 193 IS QUITE A DIFFERENCE. AND THAT WHEN YOU LAY IN THE OUTSIDE CITY RATES IN COMPARISON, YOU END UP SEEING KYLE IS CLEARLY THE HIGHEST BY FAR, BEING 39% HIGHER THAN PFLUGERVILLE AND 74% HIGHER THAN KYLE'S AND CITY RATES. NOW, YOU HEARD 86%. I THINK THAT'S FAULTY BECAUSE THE DATA THAT I'VE SEEN SHOWS 140 TO 243 IS OUR PRICE DIFFERENCE. THE RAF TELL US REPORTS SHOW 140 AND COMPARING IT TO 261. I DON'T BELIEVE THAT NUMBER IS CORRECT. THANK YOU. THANK YOU. ALL RIGHT. I DO NOT HAVE ANY MORE FORMS. WOULD ANYBODY ELSE LIKE TO COME UP AND SPEAK? ALL RIGHT. SEEING NONE, I AM GOING TO CLOSE CITIZENS. COMMENTS. I WOULD LIKE TO MAKE A MOTION TO APPROVE COUNCIL MEMBER HARRIS'S ABSENCE. SHE DID NOTIFY US, OR SHE NOTIFIED THE CITY MANAGER THAT SHE WAS NOT GOING TO BE HERE DUE TO WORK. AND SO WITH THAT, I'D LIKE TO MAKE A MOTION TO APPROVE. SECOND. I GOT A MOTION TO APPROVE A SECOND BY MAYOR PRO TEM. ALL IN FAVOR, SAY AYE. AYE. AYE. OPPOSED? WE ALSO HAVE MISS ZAPATA. MOTION PASSES FIVE ZERO. ALL RIGHT. UP NEXT, CONSIDERING POSSIBLE ACTION, RECEIVE A REPORT. HOLD A DISCUSSION AND PROVIDE STAFF DIRECTION REGARDING THE FOLLOWING. [III.1) Receive a report, hold a discussion, and provide staff direction regarding the following: Results of the 2026 cost of service study update and rates for water utility service. Results of the 2026 cost of service study update and rates for wastewater utility service. Interim City Manager's recommendations for: Proposed water service rates for Fiscal Year 2026-27. Proposed wastewater service rates for Fiscal Year 2026-27. ] THAT'S AGENDA ITEM ONE. I DON'T NEED TO READ ALL THAT. RIGHT. YOU GUYS GOT IT. ALL RIGHT. ITEM PRESENTER IS GOING TO BE PEREZ MOJITO. MAYOR. MAYOR. PRO TEM COUNCIL MEMBERS. FOR THE RECORD, I'M PERVEZ MOHIT CITY'S INTERIM CITY MANAGER AND DIRECTOR OF FINANCE. BEFORE WE BRING UP TO PRESENT THEIR 2026 UPDATE RESULTS. I WANTED TO SHARE A FEW INFORMATION PIECES OF INFORMATION WITH YOU. SO THIS EVENING I'M GOING TO GO OVER SOME BACKGROUND INFORMATION AT A VERY HIGH LEVEL. I'M GOING TO COVER WHAT THE OBJECTIVES OF A COST OF SERVICE AND RATE STUDY IS ALL ABOUT. AND THEN I'M GOING TO GO OVER MY INTERIMS AS AN INTERIM CITY MANAGER, MY RECOMMENDATIONS FOR THE WATER AND SEWER RATES THAT I PRESENTED TO COUNCIL ON AUGUST 1ST. AND THEN I'M ALSO GOING TO GO OVER WHY I AM RECOMMENDING THOSE RATES. AND THEN AFTER THAT, I'M GOING TO INTRODUCE MISS ANGIE FLORES. SHE'S VICE PRESIDENT WITH REVITALIZE FINANCIAL. SHE'LL GO OVER THE 2026 COST OF SERVICE STUDY UPDATE, AND THEN WE'LL OPEN IT UP FOR QUESTION AND ANSWERS. SO SPEAKING OF BACKGROUND INFORMATION, CITY COUNCIL APPROVED A CONTRACT TO RETAIN THE SERVICES OF TELUS FINANCIAL CONSULTANTS TO CONDUCT THE INITIAL COST OF SERVICE AND RATE STUDY FOR THE CITY'S WATER AND WASTEWATER SERVICE AND SUBSEQUENT UPDATES IN FISCAL YEAR 2526. THE CURRENT FISCAL YEAR THAT WE'RE IN, REPTILES FINANCIAL WAS DIRECTED BY THE FORMER CITY MANAGER TO UPDATE THE WATER AND WASTEWATER COST TO SERVICE AND RATE MODEL FOR ALL INSIDE CITY AND OUTSIDE CITY WATER AND WASTEWATER CUSTOMER CLASSES. SO THAT WAS THEIR TASK FOR THIS FISCAL YEAR. AND THEY WILL GO OVER THE RESULTS OF THAT ASSIGNMENT. SO VERY BRIEFLY, AT A VERY HIGH LEVEL, WITHOUT GOING INTO CHAPTERS AND VERSES, THE PRIMARY OBJECTIVE OF A COST OF SERVICE AND RATE STUDY IS TO DETERMINE CITY'S COST OF PROVIDING WATER AND WASTEWATER SERVICE TO EACH CUSTOMER CLASS AND DETERMINE WATER AND WASTEWATER RATES TO RECOVER THE CITY'S COST FROM EACH ONE OF THOSE CUSTOMER CLASSES FOR PROVIDING WATER AND SEWER SERVICE. THAT, IN A NUTSHELL, IS THE BOTTOM LINE OBJECTIVE OF A COST OF SERVICE RATE STUDY. SO WHAT DID I RECOMMEND AS PART OF THE PROPOSED BUDGET TO CITY COUNCIL? ON AUGUST 1ST, IN MY RECOMMENDED PROPOSED BUDGET TO CITY COUNCIL, I RECOMMENDED TO CITY COUNCIL THAT THERE BE NO RATE INCREASE FOR WATER SERVICE FOR ALL INSIDE AND OUTSIDE CITY CUSTOMER CLASSES. [00:25:06] ADDITIONALLY, I ALSO RECOMMENDED TO CITY COUNCIL THAT THERE SHOULD BE NO RATE INCREASE FOR WASTEWATER SERVICE FOR ALL INSIDE CITY AND OUTSIDE CITY CUSTOMER CLASSES. SO WHATEVER THE RATES ARE, THEY'RE SUSPENDED AT THAT LEVEL. AND THESE ARE THE REASONS WHY I RECOMMENDED THAT THERE SHOULD BE, AT LEAST FOR THE TIME BEING, NO RATE CHANGE. AS YOU MAY RECALL, FROM MAY 5TH ON, I HAVE EMBARKED WITH OUR TEAM TO LOOK AT THE COST STRUCTURE OF EVERY CITY FUNCTION AND ACTIVITY THROUGHOUT THE CITY, ORGANIZATION, DEPARTMENT BY DEPARTMENT, LINE, ITEM BY LINE ITEM AND WATER UTILITIES WAS INCLUDED IN THAT. WE'VE DONE A LOT OF CHANGES AT THE WATER UTILITIES COST STRUCTURE, SO SIGNIFICANT COST REDUCTION AND COST CONTAINMENT MEASURES HAVE BEEN IMPLEMENTED WITHIN THE CITY'S WATER UTILITIES DEPARTMENT DURING THE CURRENT FISCAL YEAR AND ARE ALSO INCORPORATED. THOSE COST CONTAINMENT MEASURES ARE ALSO INCORPORATED INTO THE PROPOSED FISCAL YEAR BUDGET FOR NEXT YEAR. SO THE UTILITY'S COST STRUCTURE IS IS CHANGING, RIGHT. AND WE HAVEN'T COMPLETELY FINISHED THAT TASK OF REVIEWING THE UTILITY. IN TOTAL, WE STILL HAVE SOME WAYS TO GO BECAUSE WE ARE NOW GOING TO LOOK AT THE CIP SIDE OF THE CAPITAL STRUCTURE SIDE OF THE WATER UTILITY SYSTEM. SO AS THE COST STRUCTURE IS CHANGING, IT WOULD BE PRUDENT ON OUR PART TO NOT TO RAISE RATES OR CHANGE RATES, BECAUSE WE DON'T KNOW WHERE WE'RE GOING TO END UP AFTER WE GET DONE WITH ALL THE COST CONTAINMENT MEASURES. THAT'S ONE BIG THING. SECONDLY, THESE COST SAVING INITIATIVES ARE EXPECTED TO SUBSTANTIALLY AFFECT THE UTILITY'S COST STRUCTURE AND THE ALLOCATION OF FUNCTIONAL COSTS DURING FISCAL YEARS 27 THIS COMING FISCAL YEAR AND THE YEAR FOLLOWING THAT. AND IT WILL INVOLVE ALL OF IT. WATER SUPPLY. WHEN WE TALK ABOUT WATER SUPPLY, WE'RE TALKING ABOUT WE'RE TALKING ABOUT WE'RE TALKING ABOUT EDWARDS AQUIFER, ALL OF OUR PORTFOLIOS. WE'RE TALKING ABOUT OUR OPERATIONS AND MAINTENANCE COSTS. WE'RE TALKING ABOUT OUR CAPITAL IMPROVEMENT PROJECTS THAT THE UTILITY HAS PLANNED OVER THE NEXT FIVE YEARS. WE'RE GOING TO EXAMINE VERY CLOSELY THE SEQUENCING OF THOSE PROJECTS. ARE THEY IN ALIGNMENT WITH OUR MASTER WATER SUPPLY PLAN. BECAUSE THE MASTER SUPPLY PLAN IDENTIFIES OUR SUPPLY NEEDS BASED ON PROJECTIONS, WHAT WE'RE GOING TO NEED AND HOW ARE WE GOING TO MEET THOSE NEEDS, WHAT ARE THE SOURCES OF WATER SUPPLY? BUT YOU'LL ALSO RECALL THAT WE STARTED A NEW PROJECT THIS YEAR WHEREBY WE ARE REEXAMINING HOW WE PLAN OUR WATER SUPPLY NEEDS. IN THE PAST, WE RELIED ON DEVELOPERS TO TELL US THEIR LUNGS OR THEIR WATER DEMANDS. IN THE FUTURE, WE ASKED THE WATER DEPARTMENT THIS YEAR TO TO LOOK AT VERY CLOSELY EVERY SINGLE DEVELOPMENT AGREEMENTS WE HAVE IN PLACE. WHAT HAVE WE COMMITTED TO IN SUPPLYING THOSE DEVELOPERS? AND THEN LOOK AT HOW REAL ARE THOSE PROJECTIONS OF THE DEVELOPERS, BECAUSE IF I WAS A DEVELOPER, I'LL TELL YOU, I NEED THE WHOLE THING AND THE WHOLE THING WITHIN THE NEXT FIVE YEARS, ESPECIALLY IF THAT RESERVATION IS FOR FREE. BUT ON OUR SIDE OF THE FENCE ON THE CITY SIDE, WHEN A DEVELOPER GIVES US THEIR NEEDS, WE'RE RELYING ON THOSE COMMITMENTS THAT WE HAVE TO SECURE THAT WATER SUPPLY BASED ON THE TIMING OF THAT DEVELOPER'S PROJECTIONS. SO IT'S EASY, THE DEVELOPER TO JUST TELL US WE NEED TEN 000 PLUS, BUT FOR US, IT'S COSTING US MONEY TO BUY THE WATER SUPPLY TO MAKE SURE IT'S GOING TO BE AVAILABLE. WE GOT TO MAKE SURE THE INFRASTRUCTURE IS IN THE GROUND TO HAVE THAT WATER IN PLACE WHEN THE DEVELOPER SAYS HE OR SHE NEEDS IT. SO WHAT WE'RE DOING NOW IS, OKAY, MR. DEVELOPER OR MR. DEVELOPER, IF YOU'RE SERIOUS ABOUT THESE PROJECTIONS, THEN YOU'RE GOING TO HAVE TO PAY FOR THE RESERVATION BECAUSE IT'S COSTING US AND [00:30:10] OUR RATEPAYERS. YOUR PROJECTION IS COSTING US. SO WITH THAT PROGRAM, THAT'S GOING TO COME BEFORE COUNCIL FOR APPROVAL VERY SHORTLY. I THINK THAT'S GOING TO CHANGE THE PICTURE OF HOW WE PLAN OUR WATER SUPPLY SIGNIFICANTLY. THAT WATER GAP IN OUR SUPPLY GRAPH THAT YOU HAVE SEEN IN THE PAST. I THINK THAT'S GOING TO SHIFT BECAUSE OF THESE TIGHTENING UP THAT WE ARE DOING IN THE OPERATION SIDE, THE FUTURE PLANNING SIDE FOR WATER SUPPLY, FOR ASSOCIATED INFRASTRUCTURE. ALL OF THOSE THINGS ARE GOING TO SHIFT. SO THE NEXT TWO YEARS ARE VERY CRITICAL IN TERMS OF THE COST STRUCTURE FOR OUR WATER AND WASTEWATER SYSTEMS. SO IT WOULD BE PRUDENT ON OUR PART NOT TO CHANGE THE WATER RATES AT THIS POINT BECAUSE OUR COST STRUCTURE IS CHANGING AND THAT COST STRUCTURE MAY RESULT IN SHIFTING THE COST RATE INCREASES THAT WE HAVE PROJECTED IN THE PAST. WE MAY NOT NEED THOSE AS WE THOUGHT WE WERE GOING TO. ASK A QUESTION. I HAVE A QUESTION BECAUSE I FEEL LIKE EVER SINCE MY FIRST TERM, EVER SINCE I LEFT MY FIRST TERM, THERE'S NEVER BEEN A REAL SOLID IDEA OF HOW MUCH WATER WE HAVE. AND I'VE ALWAYS SAID, I SEE MORE GOING OUT THAN COMING IN. AND NOW WITH THE NEW OASIS RIVER AUTHORITY KIND OF IN LIMBO OR IN QUESTION, MY MY QUESTION TO YOU IS, DO WE HAVE A REAL CLEAR IDEA OF HOW MUCH WATER WE HAVE OR WHERE WE'RE AT WITH OUR WATER SUPPLY? WE KNOW EXACTLY WHAT OUR SUPPLY CAPACITY IS, WHAT WE ARE NOT SURE ON THE PLANNING HORIZON WHAT OUR DEMAND IS. IF THAT PROJECTION IS INACCURATE, THEN THE GAP THAT WE'RE TRYING TO CHASE IS INACCURATE. SO WE WILL BE COMING BACK BEFORE COUNCIL NOT NOT FAR FROM NOW TO SHOW YOU THE UPDATED WATER MASTER PLAN, THE UPDATED PROJECTIONS, AND WHERE OUR GAPS ARE. IF THERE ARE ANY GAPS. OKAY. SO THAT WILL BE COMING BEFORE COUNCIL VERY SOON. AND FINALLY, THE THIRD POINT I WANTED TO GET ACROSS WHY I AM RECOMMENDING A NO RATE INCREASE OR CHANGE IN RATE INCREASE. WE DO HAVE HEALTHY FUND BALANCES IN BOTH OUR WATER AND WASTEWATER UTILITY FUNDS. SO WE CAN SUSTAIN NEXT YEAR WITHOUT A RATE INCREASE UNTIL IT ALSO GIVES US TIME TO COMPLETE OUR COST CONTAINMENT ANALYSIS, RESTRUCTURING THE THE COST MODEL FOR OUR UTILITIES, RESTRUCTURING OUR CAPITAL IMPROVEMENTS PROGRAM BASED ON OUR SUPPLY NEEDS. SO WITH THAT, I'M GOING TO INTRODUCE MISS FLORES TO COME UP. SHE'S WITH US AND SHE'S GOING TO WALK YOU THROUGH THE 26 UPDATE. NOW, MY RECOMMENDATIONS TO COUNCIL FOR THE RATE IS NOT BASED ON COST OF SERVICE. WE'RE NOT IMPLEMENTING COST OF SERVICE NEXT YEAR. WE'RE MY RECOMMENDATION IS BASED ON A FINANCIAL PLAN THAT INDICATES WE HAVE A HEALTHY FUND BALANCE IN BOTH THE UTILITIES. WE DO NOT NEED TO ADJUST THE RATES OR INCREASE THE RATES AT THIS TIME. SO WITH THAT, ANGIE. THANK YOU. THANK YOU. THANK YOU. JUST. GOOD EVENING, MAYOR AND COUNCIL. FOR THE RECORD, I'M ANGIE FLORES WITH RALPH TILLIS. SO HAPPY TO BE HERE TO PRESENT THE RESULTS OF THE MOST RECENT STUDY. SO IN MY PRESENTATION, I'LL BE PRESENTING OUR STUDY OBJECTIVES. I'LL GO THROUGH SOME OF THE ASSUMPTIONS IN THE MOST RECENT STUDY AS WELL AS PROVIDE YOU WITH SOME BACKGROUND OF, OF THE, THE PROCESS THAT WE GO THROUGH WITH OUR STUDIES. WE'LL THEN LOOK AT THAT FINANCIAL OUTLOOK THAT PROVIDES WAS JUST TALKING ABOUT AND THEN WE'LL LOOK AT RATE IMPACTS AND COMPARISONS TO NEIGHBORING COMMUNITIES. SO FIRST I WANT TO START WITH A LITTLE BIT OF RATE STUDY BACKGROUND, WHICH HAS ALREADY BEEN MENTIONED BY OTHERS HERE. SO WE DID THE INITIAL STUDY FOR YOUR FY 2025 BUDGET YEAR. SO WE WERE HERE IN 20, THAT WOULD HAVE BEEN ABOUT 24 THAT WE WERE HERE. [00:35:05] AND AND DURING THAT STUDY, WE DEVELOPED YOUR FIVE YEAR FINANCIAL PLANNING MODEL. THAT MODEL IS SPECIFIC TO KYLE. IT HAS YOUR DATA IN IT. SO THAT'S YOUR CONSUMPTION DATA, YOUR BUDGET DATA. WE ALSO LOOK AT SOME HISTORICAL, WE LOOK AT HISTORICAL CONSUMPTION DATA, HISTORICAL BUDGETS, ACTUALS. ALL OF THAT INFORMATION GOES INTO THE MODEL. IT ALSO INCLUDES YOUR CAPITAL IMPROVEMENT PLAN WHICH IS MENTIONED BY PERVEZ. IS A SIGNIFICANT PART OF THAT FORECAST. YOU DID HAVE, YOU HAVE A HEFTY CIP PLAN, ESPECIALLY ON THE WASTEWATER SIDE. SO THAT CIP PLAN IS IN THAT MODEL. FINALLY WITHIN THAT MODEL, WE ALSO DO OUR COST OF SERVICE AND RATE ANALYSIS THAT WE'VE BEEN PRESENTING TO YOU EVERY YEAR. SO THAT FIRST YEAR, AS MENTIONED PREVIOUSLY, WE COMPLETED AN INSIDE CITY LIMIT COST OF SERVICE. WE DID NOT DO THE OUTSIDE CITY COST OF SERVICE AT THAT TIME BECAUSE OF RATE CASES THAT WERE BEFORE THE PUBLIC UTILITY COMMISSION. WE WERE WAITING FOR SOME RESULTS FROM THOSE RATE CASES TO MAKE SURE THAT WE WERE FOLLOWING THE SAME METHODOLOGY AND PROCESS THAT WOULD ULTIMATELY BE APPROVED BY THE PUC. SO THAT FIRST YEAR, THERE WERE NO RATE INCREASES TO THE OCL. THEY WERE LEFT THE SAME. IN 2025, WE CAME BACK AND LOOKED AT YOUR FY 2026 BUDGET. WE UPDATED THAT SAME FINANCIAL PLANNING MODEL. WE LOOKED AT YOUR HISTORICAL CONSUMPTION TO SEE, YOU KNOW, WHERE WE WERE TRACKING WHAT IT WAS LOOKING LIKE, HOW YOUR CUSTOMERS WERE USING WATER. AND AT THAT TIME, WE COMPLETED THE COST OF SERVICE ANALYSIS FOR THE CUSTOMERS. AND HERE IN A MINUTE, I'LL GO THROUGH THAT PROCESS AND THAT COST OF SERVICE PROCESS THAT WE DID FOR BOTH ICL AND OCO AT THAT TIME. AND FOR THAT FY 26 STUDY WE INCREASED THE RATES FOR THE INSIDE CITY LIMIT CUSTOMERS AS WELL AS THE OUTSIDE CITY LIMIT CUSTOMERS. NOW WE'RE UPDATING THE PLAN FOR FY 2027 BUDGET. AND SO THE MODEL HAS NOW BEEN UPDATED FOR THE NEXT FIVE YEARS, FY 27 THROUGH FY 2031. AS PERVEZ MENTIONED, WE ARE NOT RECOMMENDING ANY RATE INCREASES. SO THERE WILL BE NO CHANGES TO ICL OR FOR OCR RATES. SO THE RATE STUDY PROCESS. SO THE FIRST STEP IN, IN DOING THESE STUDIES IS WE DETERMINE HOW MUCH WE NEED TO FUND. AND AS I MENTIONED BEFORE, THAT INCLUDES YOUR BUDGET, WHICH IS YOUR OPERATIONS AND MAINTENANCE EXPENSE BUDGET. WE CONSIDER YOUR CAPITAL PLAN AND THEN LOOK AT THAT FORECAST OF THAT FINANCIAL PLAN BASED ON FORECASTED REVENUES AT EXISTING RATES. SO WE FIRST LOOK AT THAT PLAN WITH NO RATE ADJUSTMENTS TO DETERMINE WHAT ADDITIONAL RATE REVENUE MAY BE REQUIRED. THE SECOND STEP AND THIS IS REALLY WHEN WE DO THOSE, THAT COST OF SERVICE ANALYSIS IS TO DETERMINE WHO SHOULD PAY FOR THAT THAT REVENUE A REQUIREMENT. AND SO WE'LL LOOK AT HOW YOUR CLASSES OF CUSTOMERS ARE USING THE SYSTEM FOR, YOU KNOW, INSIDE AND OUTSIDE CITY CUSTOMERS. SO THAT'S KIND OF THE SECOND STEP. WHO SHOULD PAY FOR THAT REVENUE REQUIREMENT AND HOW. AND SO THAT'S THE THIRD STEP IS HOW SHOULD THEY PAY? SO AGAIN, LOOKING AT, YOU KNOW, WHAT THAT REVENUE REQUIREMENT IS BY CLASS AND THEN DETERMINING HOW THEY SHOULD PAY FOR THAT THROUGH THEIR RATES. SO THAT WAS THE, THAT'S ESSENTIALLY THE PROCESS WE'VE BEEN FOLLOWING THE LAST THREE YEARS. I WANTED TO COVER THE COST OF SERVICE PROCESS. I KNOW SOME OF YOU WEREN'T HERE LAST YEAR WHEN WE DID THE, OR THE PAST TWO YEARS WHEN WE DID THE COST OF SERVICE ANALYSIS. SO I DID WANT TO WALK THROUGH THAT A LITTLE BIT. SO THE COST OF SERVICE PROCESS AGAIN STARTS WITH THAT REVENUE REQUIREMENT. WHAT IS WHAT ARE THE COSTS THAT NEED TO BE RECOVERED BY THE RATES? WE TAKE THOSE COSTS AND WE FUNCTIONALIZE THEM. [00:40:02] AND ESSENTIALLY WHAT THAT MEANS IS WE GO INTO DETAIL ABOUT WHAT ARE THE COSTS PAYING FOR. WE TALKED A LITTLE BIT ABOUT WATER SUPPLY THAT PERVEZ WAS JUST DISCUSSING. FOR KYLE. YOUR WATER SUPPLY COSTS ARE A BIG PORTION OF YOUR OPERATIONS. OF COURSE, THEN WE HAVE STORAGE. YOU HAVE PUMPING, GETTING THE WATER OUT TO YOUR CUSTOMERS THE TRANSMISSION LINES, DISTRIBUTION LINES WITHIN THE SUBDIVISIONS AND THEN OF COURSE, METERS AND BILLING. SO ALL THOSE COSTS ARE SEPARATED INTO THOSE BUCKETS. THEN FROM THERE WE ALLOCATE THOSE COSTS BETWEEN BASS, WHICH IS YOUR AVERAGE TYPE USAGE. SO WE DETERMINE, YOU KNOW, WHICH OF THESE COSTS ARE RELATED TO JUST PROVIDING DAY TO DAY USAGE ON AN AVERAGE BASIS. THEN WE LOOK AT WHAT ARE THOSE MAX DAY AND MAX HOUR DEMAND COSTS. SO THESE ARE FOR YOUR RESIDENTIAL CUSTOMERS THAT USE MORE WATER IN THE SUMMERTIME TO WATER OUR LAWNS. THAT'S THAT CAUSES A PEAK IN YOUR SYSTEM. WELL, YOUR FACILITIES HAVE TO BE SIZED APPROPRIATELY AND YOUR WATER SUPPLY HAS TO BE SUFFICIENT TO SERVE THOSE CUSTOMERS AT THAT PEAK DEMAND. SO THERE'S COSTS RELATED TO BEING ABLE TO PROVIDE THE AVERAGE USAGE AS WELL AS THAT PEAK USAGE. SO WE GO THROUGH THAT PROCESS OF, OF FIGURING OUT WHICH COSTS ARE APPROPRIATE IN THOSE BUCKETS. AND THEN FINALLY, METERS AND BILLING ARE ANOTHER COMPONENT OF THAT ALLOCATION. FINALLY, THOSE COSTS ARE ALLOCATED TO THE CUSTOMER CLASSES BASED ON THEIR UNITS OF DEMAND. FROM AN AVERAGE PERSPECTIVE, A PEAK PERSPECTIVE, THE NUMBER OF METERS AND THE NUMBER OF BILLS THAT WE PROVIDE THEM. AND SO THAT'S HOW THE REVENUE REQUIREMENT IS DETERMINED FOR EACH CLASS. SO CUSTOMER CLASSES WITH HIGHER PEAK DEMANDS ARE THEN ALLOCATED MORE COSTS IS TYPICALLY HOW THIS FALLS OUT. NOW I DO WANT TO MENTION THAT FOR OUTSIDE CITY LIMITS THE REVENUE REQUIREMENT, WHICH IS AT THE BEGINNING IS A LITTLE BIT DIFFERENT. AND AGAIN, FOLLOWING THE METHODOLOGY THAT WAS COMPLETED IN THE LEANDER RATE CASE, WE ACTUALLY USE WHAT WE REFER TO IN THE INDUSTRY AS A UTILITY BASIS METHODOLOGY. IN THAT CASE, WE USE O&M EXPENSES. WE ACTUALLY LOOK AT YOUR ASSETS THAT ARE USED AND USEFUL TO THE OUTSIDE CITY LIMIT CUSTOMERS. SO IT'S A LITTLE BIT DIFFERENT. IT'S NOT DEBT SERVICE. IT'S ACTUALLY WHAT ARE THE ASSETS THAT ARE IN PLACE TO SERVE THOSE CUSTOMERS. AND THEN WE CHARGE THEM THE DEPRECIATION ON THOSE ASSETS AND A RATE OF RETURN. THAT IS BASED ON YOUR COST OF CAPITAL. SO THAT'S, IT'S A REALLY COMPLEX METHODOLOGY. IT'S, IT'S A LITTLE BIT MORE DIFFICULT TO, TO EXPLAIN THAN THIS OTHER PROCESS, BUT IT IS A LITTLE BIT DIFFERENT. IT'S IT ALLOWS THE CITY TO REALLY BE SURE THAT YOU'RE RECOVERING YOUR INVESTMENT THAT YOUR INSIDE CITY LIMIT CUSTOMERS HAVE PUT ON THE SYSTEM TO SERVE THOSE OUTSIDE CITY LIMIT CUSTOMERS. SO SAME THING ON WASTEWATER. WE FOLLOW THE SAME PROCESS. OBVIOUSLY FOR WASTEWATER YOUR FACILITIES ARE A LITTLE BIT DIFFERENT. AND KYLE, YOU ALL HAVE WASTEWATER TREATMENT PLANT. YOU'VE GOT COLLECTION CONVEYANCE AND OF COURSE LIFT STATIONS AND BILLS AS WELL THERE FOR WASTEWATER. THE PARAMETERS THAT WE USE THAT ARE A LITTLE BIT DIFFERENT FROM WHAT I WAS TALKING ABOUT ON WATER, WHICH, YOU KNOW, THE BASE AND THE PEAK. FOR WASTEWATER, WE USE FLOW STRENGTH LOADINGS AND BILLS FOR KYLE. YOU DON'T REALLY HAVE DIFFERING STRENGTH LOADINGS BY CUSTOMERS. YOU DON'T REALLY HAVE YOU KNOW, MAJOR INDUSTRIAL CUSTOMERS THAT WOULD USE THAT WOULD HAVE DIFFERENT STRENGTH LOADINGS IN YOUR WASTEWATER. AND THEN SAME THING HERE. THE UNITS OF DEMAND FOR EACH CUSTOMER CLASS BUILD UP THE REVENUE REQUIREMENT FOR EACH CUSTOMER CLASS. SO ONE THING I WANTED TO MENTION IS THAT COST OF SERVICE IS TYPICALLY DONE BY UTILITIES ABOUT [00:45:06] EVERY 3 TO 5 YEARS. IT'S NOT AN ANALYSIS THAT IS COMPLETED EVERY SINGLE YEAR. AND IN FACT I WANTED TO MENTION THAT SORES, SORES DOES THEIR COST OF SERVICE ANALYSIS ABOUT EVERY 3 TO 5 YEARS. THEY ACTUALLY HAVE A POLICY IN PLACE THAT REQUIRES THAT THE COST OF SERVICE ANALYSIS BE UPDATED EVERY FIVE YEARS. MBU THEY DO THEIR COST OF SERVICE EVERY TWO YEARS. THEY DON'T REALLY HAVE A FORMAL POLICY. THEY, THEY'VE JUST RECENTLY DECIDED TO DO ABOUT EVERY TWO YEARS THEY HAD BEEN DOING ABOUT EVERY FIVE YEARS. SAN MARCOS ACTUALLY DOES AN ANNUAL REVIEW OF THEIR RATES. THEY DO SOME COST OF SERVICE WITHIN THEIR MODEL. AND, BUT IT'S NOT DONE EVERY SINGLE YEAR. AUSTIN WATER. THEY ALSO HAVE A POLICY TO DO THEIR COST OF SERVICE EVERY FIVE YEARS. I DO WANT TO MENTION, HOWEVER, THAT ALL OF THESE CITIES LOOK AT THEIR RATES ON AN ANNUAL BASIS. SO THEY'RE UPDATING THEIR FINANCIAL PLAN, UPDATING THOSE FORECASTS TO ENSURE THAT THEIR RATES ARE IN THE RIGHT PLACE. AS THEY'RE LOOKING AT THEIR BUDGET EVERY YEAR. SO FOR THE FY 27 BUDGET AND YOUR MODEL I DO WANT TO REMIND YOU THAT WHEN WE DID THE MODEL BACK IN FOR THE FY 26 MODEL, WE HAD BEEN FORECASTING A NEED OF A 20% INCREASE AGAIN THIS YEAR. AND THAT WAS BASED PRIMARILY ON YOUR CAPITAL IMPROVEMENT PLAN. YOU HAD WE HAD A PRETTY ROBUST PLAN IN THE MODEL FOR THE NEXT FIVE YEARS. AND SO REALLY THE, THE NEED FOR THAT, THAT CAPITAL INVESTMENT WAS WHAT WAS DRIVING THAT 20% INCREASE. AS PERVEZ HAS MENTIONED THIS NEW MODEL REFLECTS THE NEW EXPENSES IN HIS 27 BUDGET. SO THOSE COSTS THAT COST CONTAINMENT AND EFFICIENCY MEASURES ARE IN OUR MODEL. AND THIS REDUCED THE REVENUE REQUIREMENT THAT WE HAD FORECASTED FOR 2027 BY $18 MILLION. THIS INCLUDED A REDUCTION OF $5 MILLION IN OPERATIONS AND MAINTENANCE COSTS, AND IT REDUCED THE FORECASTED DEBT SERVICE BY $13 MILLION. AND AGAIN, THAT'S DUE TO WHAT WE HAD FORECASTED IN THE CAPITAL PLAN. SO THESE ARE THE FY 27 RESULTS FOR WATER. SO JUST TO KIND OF POINT YOU TO WHAT I, WHAT IS SHOWING HERE ON THE SLIDE THERE ON THE LEFT SIDE IS OUR, WHAT WE CALL OUR WATER FINANCIAL PLAN. THIS IS SHOWING THOSE EXPENSES. AND YOU CAN SEE HERE THAT WE'VE GOT WATER, THE O AND M IS IN THAT DARKER BLUE BOX THERE. THE, THE LIGHTER BLUE BOX, THAT'S THE, THAT SHOWS THE 1.3. THAT IS THE DEBT SERVICE THAT'S FORECASTED FOR FY 27. AND THEN THE LINES ON TOP THERE ARE THE DARKER LINE IS YOUR REVENUE AT EXISTING RATES. AND THEN YOU'LL SEE THERE THAT THERE'S A LIGHTER BLUE LINE. THAT IS DEVIATING FROM THAT EXISTING RATE LINE. AND THAT'S BECAUSE WE DO HAVE ABOUT 2% RATE INCREASES IN THE PLAN STARTING IN FY 29, AS PERVEZ MENTIONED, IT'S GOING TO BE IMPORTANT THAT WE CONTINUE TO LOOK AT THIS ON AN ANNUAL BASIS. AS YOUR CITY CONTINUES TO GROW AND AS YOU'RE MAKING SOME OF THESE DECISIONS ABOUT WATER SUPPLY AND JUST MAKING SURE THAT YOUR RATES ARE RIGHT SIZED TO MEET YOUR COSTS. I DO WANT TO DRAW YOUR ATTENTION TO THE OPERATING FUND BALANCE. PERVEZ ALSO TALKED ABOUT THIS. YOUR FUND BALANCE IS HEALTHY. I DO WANT TO MENTION THAT FOR KYLE, ONE OF THE THINGS THAT WE'VE SEEN IN YOUR HISTORICAL CONSUMPTION IS THAT AS YOUR AS YOU MOVE THROUGH SOME OF YOUR DROUGHT STAGES, YOUR REVENUE REALLY FLUCTUATES WHICH MEANS THAT YOUR CUSTOMERS ARE DOING EXACTLY WHAT YOU WANT THEM TO DO, WHICH IS THEY, THEY REDUCE THEIR WATER CONSUMPTION AS YOU IMPLEMENT DROUGHT STAGES. [00:50:07] SO HAVING A HEALTHY BALANCE, I THINK FOR YOUR, FOR YOUR CITY AND, AND YOU KNOW, THE, AGAIN, THE PURCHASED WATER, I THINK IT'S IMPORTANT TO HAVE A HEALTHIER FUND BALANCE SO THAT YOU CAN REALLY YOU KNOW, HAVE, HAVE THAT CUSHION IF THERE IS, IF WE GET BACK INTO THE DROUGHT AGAIN AND THAT CONSUMPTION IS REDUCED. THIS IS WASTEWATER. SO WASTEWATER YOU CAN SEE HERE ON THIS FORECAST AGAIN, JUST YOU KNOW, LOOKING AT THAT GRAPH ON THE LEFT YOU CAN SEE HERE THAT WE ARE, WE ARE AGAIN FORECASTING SOME RATE INCREASES, BUT YOU CAN ALSO SEE THAT WE'RE NOT FORECASTING THAT THAT LINE IS ABOVE YOUR EXPENSES OUT THERE. AND STARTING IN 29 AND 30. ONE OF THE REASONS FOR THAT IS THAT ON WASTEWATER, AGAIN, YOU ALSO HAVE A HEALTHY BALANCE ON WASTEWATER. YOU'RE NOT IMPACTED FROM DROUGHT. AND SO ONE OF THE THINGS WE TOOK INTO CONSIDERATION WAS THE, YOU KNOW, THE POSSIBILITY OF USING THAT FUND BALANCE TO COVER SOME OF THAT SHORTFALL IN THOSE FUTURE YEARS. AND THAT WAY YOU DON'T HAVE TO MAKE RATE ADJUSTMENTS TO GET TO THAT FULL COST RECOVERY. HOWEVER, I DO WANT TO SAY THAT, AGAIN, IT WILL BE IMPORTANT TO LOOK AT THIS ON AN ANNUAL BASIS BECAUSE YOU DO HAVE SOME SIGNIFICANT WASTEWATER TREATMENT PLANT OR WASTEWATER CAPITAL NEEDS ESPECIALLY THE WASTEWATER TREATMENT PLANT EXPANSION. SO AGAIN, THIS IS JUST A FORECAST. LOOKING AT IT ON AN ANNUAL BASIS IS IMPORTANT. SO THIS IS THE FORECASTED INSIDE CITY LIMIT CUSTOMER RATE IMPACTS. AGAIN NO RATE INCREASE FROM 26 TO 27. THIS IS MONTHLY RESIDENTIAL WATER BILL AT 5500 GALLONS. THE LIGHTER BLUE BAR ON THE BOTTOM IS THE WATER RATE AND THE DARKER BLUE BAR ON TOP IS YOUR WASTEWATER RATE. SO THAT BILL IS AT $140. AND AGAIN THEN YOU CAN SEE THE IMPACT OF THOSE PROJECTED FUTURE RATE INCREASES. AS THESE ARE THE RATE IMPACTS FOR OUTSIDE CITY LIMIT CUSTOMERS. AGAIN $97 ON THE BOTTOM IS THE LIGHT BLUE BAR IS WATER. OH I'M SORRY. NO THAT'S WASTEWATER. AND THEN THE DARKER BLUE BAR IS WATER. FOR A MONTHLY BILL OF $261. HERE'S THE COMPARISON TO NEIGHBORING COMMUNITIES. I WILL ACKNOWLEDGE THAT THIS IS INSIDE CITY LIMIT COMPARISON ONLY. SO YOU CAN SEE THERE THAT KYLE IS THIRD FROM THE TOP. PFLUGERVILLE HAVING THE HIGHER RATE THERE AT $228. AND I DO WANT TO MENTION THAT THAT IS BASED ON A THREE QUARTER INCH METER WHICH KYLE YOU'RE USING A THREE QUARTER INCH METER FOR MOST OF YOUR CUSTOMERS NOW. SO THAT'S WHY WE'RE COMPARING THAT TO THEIR THREE QUARTER INCH METER. TYPICALLY CITIES WILL HAVE THE SAME RATE FOR 5/8 AND THREE QUARTER INCH METER. THAT IS NOT THE CASE IN PFLUGERVILLE. THEY ACTUALLY CHARGE A LITTLE BIT MORE FOR THEY CHARGE A HIGHER BASE CHARGE FOR, FOR FOR A THREE QUARTER INCH METER. IS THERE A REASON WHY YOU GUYS DIDN'T ADD THE OUT OF CITY WATER COMPARISON AS WELL? NOT REALLY. WE, I MEAN, WE CAN DEFINITELY PROVIDE THAT INFORMATION. IF IT'S SOMETHING THAT THE COUNCIL WOULD LIKE TO SEE, WE CAN CERTAINLY PROVIDE IT. OKAY. I WOULD LIKE TO SEE IT. WOULD ANYBODY ELSE LIKE TO SEE IT? YEAH. YEAH. WE HAVE WE HAVE THAT INFORMATION. WE CAN PROVIDE IT. THANK YOU. AND WITH THAT, ANY QUESTIONS? I SENT MY QUESTIONS. I HAVE A LOT OF QUESTIONS. I GUESS ONE OF THE QUESTIONS THAT WAS ASKED WAS AND I KNOW THE ANSWER, BUT I THINK IT'S IMPORTANT. EVERYBODY KNOWS WHY DID THE CITY AND THIS MIGHT BE FOR PEREZ. WHY DID THE CITY DO THE WATER STUDY TO BEGIN WITH? [00:55:04] MAYOR, IF YOU WOULD PLEASE CLARIFY THE QUESTION. ARE YOU ASKING ABOUT THIS UPDATE, THE RECENT UPDATE? NO, I THINK IT WAS IN GENERAL, IT WAS THE FIRST ONE. I THINK THAT WAS A QUESTION FROM THE AUDIENCE. YEAH. WHY YOU KNOW, WHY DID THEY DO WHY DID BRIAN LANGLEY HIRE ROBERT ELLIS FOR THIS REPORT. OKAY. SO THE CITY OF KYLE JUST GOING BACK IN HISTORY, THE CITY OF KYLE HAS ADJUSTED WATER AND SEWER RATES FOR THE LONGEST TIME BASED ON FINANCIAL PLANS. WE DON'T HAVE TO DO COST OF SERVICE STUDY EVERY YEAR. NO OTHER CITY DOES IT. NO OTHER UTILITY DOES IT. THE NORM IS ANYWHERE BETWEEN 3 AND 5 YEARS. SO WE CHUGGED ALONG DOING RATE ADJUSTMENTS ON A SYSTEM WIDE BASIS. BASED ON FINANCIAL PLAN. FINANCIAL PLAN BASICALLY IS OUR BUDGET. HOW MUCH ARE WE GOING TO SPEND EACH YEAR FOR WATER SUPPLY, FOR MAINTENANCE, FOR INFRASTRUCTURE AND CASH FUNDED SIPS. SO AS THE SYSTEM GREW, WE HAD MORE CUSTOMERS. WE STARTED BORROWING MORE MONEY FOR INFRASTRUCTURE FOR PIPES, PUMP STATIONS, LIFT STATIONS, THINGS OF THAT NATURE. IT BECAME IMPORTANT THAT WE NEEDED TO TRUE UP THE COST RESPONSIBILITY BETWEEN CUSTOMER CLASSES, BOTH INSIDE AND OUTSIDE THE CITY. SO THE FORMER CITY MANAGER, WHEN HE FIRST STARTED HERE, WHEN HE LEARNED THAT WE HADN'T DONE A COST OF SERVICE STUDY IN A LONG TIME, HE FELT VERY STRONGLY THAT IT WAS PROBABLY TIME FOR US TO DO OUR VERY FIRST ONE, TO FIND OUT EXACTLY IF OUR COST STRUCTURE IS IN ALIGNMENT WITH OUR RATE STRUCTURE, ARE WE RECOUPING THE COST OF THE UTILITY FROM THE RIGHT CUSTOMER CLASSES AND IN THE RIGHT AMOUNTS? SO THAT WAS THE OBJECTIVE OF DOING THAT STUDY. SO THE VERY FIRST STUDY, AS ANGIE MENTIONED, ONLY COVERED INSIDE CITY CUSTOMERS. IT DID NOT INCLUDE OUTSIDE CITY CUSTOMERS BECAUSE THERE WAS A PENDING CASE BEFORE PUC. WE WANTED TO MAKE SURE THAT WHATEVER PUC DECIDED, WE WOULD USE THE SAME METHODOLOGY THAT WAS ACCEPTABLE. SO THAT'S THE FIRST STUDY THAT WAS DONE. THE ANNUAL UPDATES THAT THE FORMER CITY MANAGER WANTED TO TO DO WAS PRIMARILY BECAUSE OF THAT, WE WERE HEAVILY INVESTING EVERY YEAR. IF YOU LOOK AT OUR CIP, LAST YEAR WAS $1.3 BILLION, AND MOST OF IT WAS FOR WATER AND WASTEWATER PROJECTS. SO HE WANTED TO MAKE SURE THAT WE WERE RECOVERING THE COST AND AND NOT DRAWING DOWN ON THE FUND BALANCES. AND THEN WITHIN NOT ONLY CUSTOMER CLASSES, BUT ALSO WITHIN, INSIDE AND OUTSIDE CITY CUSTOMERS THAT WE WERE FAIRLY AND EQUITABLY ASSIGNING COSTS. SO THAT'S WHEN ALL THIS STARTED. THE SECOND UPDATE INCLUDED OUTSIDE CITY CUSTOMERS AS WELL AS UPDATING THE INSIDE CITY CUSTOMERS. THIS IS THE THIRD UPDATE, AND YOU HAVE AN INTERIM CITY MANAGER THAT FELT VERY STRONGLY THAT GIVEN ALL THIS IMPROVEMENTS THAT WE'RE MAKING, COST CONTAINMENT INITIATIVES ELIMINATION OF REDUNDANCIES, REEXAMINING OUR CAPITAL SPENDING PLAN, BECAUSE CAPITAL SPENDING PLAN, IF IT IS NOT LOOKED AT VERY CAREFULLY, IT CAN DRIVE THE COST OF SERVICE MODEL FOR PROJECTING DEBT SERVICE. SO THAT'S WHERE WE ARE SAYING THAT WE NEED TO WE FOCUSED ON THE OPERATING COST, THE OPERATING COST STRUCTURE. NEXT YEAR WE'RE GOING TO FOCUS ON THE CAPITAL SPENDING PLAN AND TO ALIGN IT WITH OUR NEEDS, NOT JUST BECAUSE SOME CONSULTANT TOLD US TO GO SPEND $50 MILLION FOR A WATER RESERVOIR OR FOR A PUMP STATION. WE NEED OUR INTERNAL STAFF TO ASSESS OUR TRUE NEEDS, AND WHEN THOSE CAPITAL IMPROVEMENTS NEED TO COME ONLINE. SO THAT NEEDS TO HAPPEN. WE HAVEN'T REALLY COMPLETELY DONE THAT. IF YOU REMEMBER, DURING THE BUDGET DISCUSSIONS, I SHOWED YOU HOW THE FIVE YEAR PLAN LOOKS LIKE THE FIRST THREE ARE REALLY HIGH, AND THEN THE FOURTH AND FIFTH YEAR DROPS OFF THE CLIFF. THAT'S THAT'S NOT NORMAL. IT SHOULDN'T BE LIKE THAT. IT SHOULD BE EVENLY SPREAD OUT. SO WE'RE GOING TO DO THAT IN NEXT YEAR. SO ALL OF THOSE EFFORTS THAT WE ARE UNDERTAKING WITH MIKE MURPHY AND AMBER HELP WITH THE ENTIRE TEAM, [01:00:09] WE'RE REEXAMINING, REFOCUSING HOW WE DO BUSINESS AND OF COURSE, THAT'S GOING TO IMPACT WHAT THE MODEL IS GOING TO HAVE. WHATEVER INPUT WE GIVE IS GOING TO HAVE THE OUTPUT BASED ON THAT. SO I DIDN'T WANT IT TO TO RELY ON THE COST OF SERVICE MODEL TO MAKE A DECISION ON THE RATES FOR NEXT YEAR. WE CAN TRUE UP AFTER WE GET DONE WITH EVERYTHING WE CAN. TRUE UP WITH THE COST OF SERVICE STUDY, PERHAPS IN YEAR NUMBER 3 OR 4 IT'LL STILL BE TIMELY. IT'S NOT TOO LATE, BUT I WANTED TO BE CERTAIN THAT WE HAVE THE COST STRUCTURE IN PLACE BEFORE WE DID A TRUE UP ON RATES, BECAUSE IT COULD VERY WELL SAY THAT YOU DON'T NEED A RATE INCREASE FOR THE NEXT THREE YEARS OR TWO YEARS, WHATEVER THE CASE MAY BE. OKAY. CAN I HAVE YOU GO BACK TO SLIDE 21 BECAUSE YOU WERE JUST TALKING ABOUT DEBT. SO BY 2031, THE CITY OF KYLE WILL HAVE AS MUCH DEBT AS IT WILL REVENUE, AND THAT IS A REALLY SCARY PLACE TO BE. SO I'M GLAD THAT YOU BROUGHT UP THE FACT THAT YOU'RE DOING A COST CONTAINMENT FOR CIPS. DO WE KNOW HOW MUCH OF THE CIP WAS GOING TO BE WATER WASTEWATER BASED ACCOUNT? HOW MUCH OF OUR WATER AND WASTEWATER WERE GOING TO BE PART OF? WAS IT ALL CIPS OR. NO, WE HAVE OTHER CIP PROJECTS. YOU KNOW, WE HAVE PARKS, WE HAVE ROADS, WE HAVE SIDEWALKS. SO FOR UTILITIES, A GOOD PORTION OF OUR CIP SPENDING PLAN IS FOR OUR WATER, WASTEWATER AND DRAINAGE UTILITY SYSTEMS. ROUGHLY, I WOULD SAY ABOUT 60% OF OUR CIP SPENDING PLAN IS FOR NON-TAX SUPPORTED PROJECTS. BY THAT, I MEAN, THEY'RE NOT ROADS, STREETS, SIDEWALKS. THEY'RE MORE FOR WATER, WASTEWATER AND STORM DRAINAGE. ONE THING WE HAVE TO KEEP IN MIND, WE'RE IN THE MIDST OF WASTEWATER TREATMENT, PLANT EXPANSION. THAT BY ITSELF IS ABOUT $170 MILLION PROJECT. AND YOU WILL SEE THAT WE'LL HAVE TO ABSORB THAT WITHIN THE RATE STRUCTURE FOR WASTEWATER SYSTEM. THAT HAS TO BE TAKEN CARE OF. BUT THERE ARE OTHER PROJECTS WITHIN THE WASTEWATER MODEL, FOR EXAMPLE, THAT CAN SLIDE. IT DOESN'T HAVE TO BE BUILT NEXT YEAR OR THE YEAR AFTER THAT. SO THOSE ARE THE THINGS WE'RE GOING TO EXAMINE VERY CLOSELY. THE TIMING, THE SEQUENCING, THE ACTUAL NEEDS OF THOSE PROJECTS. ALL OF THAT WILL BE EXAMINED. OKAY. TO PUT THAT INTO PERSPECTIVE, THIS TIME LAST YEAR, WE WERE GOING TO SPEND APPROXIMATELY THE CITY $1.2 BILLION IN THE NEXT FIVE YEARS. THAT BREAKS DOWN TO APPROXIMATELY $240 MILLION PER YEAR. AND TO PUT THAT IN COMPARISON, OUR ROAD BOND THAT WE HAD BOND OUT FOR 20 YEARS, 40 YEARS, 296 MILLION. SO TO ME, IT IS VERY CLEAR AND EVIDENT THAT IF WE HAVE TO BOND OUT 300 MILLION, I CAN'T HELP BUT QUESTION THE MENTALITY OF COUNCIL AND STAFF AT THE TIME, HOW THEY THOUGHT WE WERE GOING TO BE ABLE TO AFFORD $240 MILLION A YEAR FOR THE NEXT FIVE YEARS. BECAUSE THAT, TO ME, IS NOT SUSTAINABLE AS A CITY. WHEN YOU TALK ABOUT TAXES AND YOU TALK ABOUT FEASIBILITY. SO I'M GRATEFUL THAT IT'S BEEN SCALED BACK, BECAUSE I THINK OUR NEW ONE IS STILL LIKE 180. NOW, WHAT IS IT, 900 OR $800 MILLION? SO WE WENT FROM $1.3 BILLION CIP PROGRAM TO ABOUT 800 MILLION. AND I THINK IT STILL CAN BE BROUGHT DOWN SOME MORE. YEAH, I FEEL I FEEL LIKE 800 MILLION IS STILL A SIGNIFICANT AMOUNT. AND THE REALITY OF IT. AND I KNOW PEOPLE WANT TO SAY, BUT KYLE'S GROWING AND PEOPLE WANT TO LIVE HERE. BUT IF WE CAN'T AFFORD THAT AS A CITY, THAT'S NOT A REQUIREMENT. THERE'S NO LAW THAT STATES YOU HAVE TO GROW SO PEOPLE CAN MOVE HERE. SO I THINK SOMETIMES WE'VE GOT TO GET OUT OF THAT MENTALITY OF LIKE, YEAH, WE COULD BE LIKE CEDAR CREEK UP NORTH. THERE'S A CITY THAT'S LANDLOCKED CEDAR PARK. YES. CAN'T EVEN COME IN THERE. YOU WANT TO BUILD, YOU BETTER GO SOMEWHERE ELSE. THERE'S NO SHAME IN THAT. AND SO I THINK WE AS A CITY, AS A COUNCIL, AS LEADERSHIP NEED TO BE OKAY WITH MAYBE RIGHT NOW WE JUST CAN'T AFFORD TO GROW THE WAY WE WANT IT TO. SO AGAIN, I WANT TO THANK YOU PERSONALLY BECAUSE I FEEL LIKE WE WERE HEADED DOWN A VERY SCARY ROAD OF SPENDING A LOT OF MONEY THAT WE DIDN'T HAVE. AND AS A HOMEOWNER AND A TAXPAYER, I APPRECIATE THE COUNCIL AND OUR STAFF REEVALUATING ALL THIS. SO THAT'S ALL I HAVE TO SAY. I THINK SO I SENT I DIDN'T. [01:05:05] MY COMPUTER IS DEAD. AND SO JENNIFER WAS KIND ENOUGH TO SEND THE QUESTIONS TO COUNCIL MEMBER, WHO HOPEFULLY WILL ANSWER SOME OF OUR WATER USERS CONCERNS. I HAVE SOME QUESTIONS BEFORE I GET TO THOSE, AND I THINK THAT MY QUESTION MIGHT WRAP UP SOME OF THE ONES THAT YOU HAD ALREADY ASKED, MISS DOUGAN'S. I HAVE CONCERNS ABOUT THE EFFECT OF THE 1952 CASE, WHICH IS CITY OF TEXARKANA VERSUS WIGGINS, WHERE IT BASICALLY STATES THAT A GEOGRAPHICAL LINE SUCH AS A CITY LIMIT CANNOT BE AN ARBITRARY FACTOR, THAT YOU DETERMINE WHAT IT COSTS TO PROVIDE SERVICE TO SOMEBODY. AND SO THAT SEEMS TO BE EXACTLY WHAT WE'RE DOING. WHAT I SEE AS AN ABSOLUTE POSSIBILITY OF SOMEBODY IN SIX CREEKS WHO IS OUTSIDE OF THE CITY LIMITS USING THE SAME 5500 GALLONS AS SOMEBODY INSIDE IN HOMETOWN. KYLE. SO SAME PEAKING DEMAND, SAME EVERYTHING. THEY COULD BE SIDE BY SIDE CUSTOMERS AND ONE OF THEM WILL STILL PAY SIGNIFICANTLY MORE BECAUSE THEY ARE PAST A GEOGRAPHICAL LINE. AND THAT TO ME, DOES NOT SEEM TO FALL IN LINE WITH THAT 1952 CASE, NOR WITH THE REAFFIRMATION IN THE SUPREME COURT IN 2021. SO THAT HIGHLY CONCERNS ME ABOUT THIS RATE STUDY. IT WOULD SEEM THAT WE HAVE NOT PICKED OUT SPECIFIC IMPLANT, WHICH IS USED TO PROVIDE THAT SERVICE, TO ACTUALLY PROVE THAT THEY COST THAT MUCH MORE TO SERVICE. SO CAN YOU SPEAK TO THAT? I'M NOT FAMILIAR WITH THE CASE THAT YOU JUST MENTIONED. SO NOT REALLY. AS IT RELATES TO THE OUTSIDE CITY LIMIT METHODOLOGY THAT WE FOLLOWED IT IS IN LINE WITH INDUSTRY STANDARD TO, TO USE THAT FOR CUSTOMERS THAT ARE NOT INSIDE THE CITY LIMITS AND DON'T PAY TAXES. AND, YOU KNOW, THAT'S THE METHODOLOGY THAT WE FOLLOWED. OKAY. I WILL BE SENDING THOSE TO YOU CASES THROUGH OUR CITY ATTORNEY BECAUSE FROM WHAT I'M READING AND LOOKING AT, IT DOES NOT APPEAR THAT WE HAVE MET THAT STANDARD THAT HAS BEEN SUPPORTED THROUGH SUPREME COURT RULINGS. SO THAT IS HIGHLY CONCERNING. AND I THINK THAT WAS A TREMENDOUS AMOUNT OF THE CONCERN THAT MR. BARNES HAD AND OTHERS HAVE HAD. AND WE WANT TO KNOW. SO A LOT OF HERS WERE IDENTIFYING ANY COST CATEGORY WHERE THE ETJ CUSTOMERS ARE PAYING MORE THAN THEIR PROPORTIONAL SHARE. YOU WILLING TO CORRECT THE ALLOCATION. A LOT OF THESE, I BELIEVE ARE GOING TO FALL IN LINE WITH ONE, ADJUSTING OUR RESERVE AMOUNTS, OUR CAPITAL REQUIREMENTS AND BEING ABLE TO REDO THAT. BUT I, I STRONGLY, STRONGLY HAVE CONCERNS THAT WE HAVE NOT SPECIFICALLY PROVEN THAT OUR RATES ARE NOT DISCRIMINATORY BASED ON THAT 1952 CASE. USING JUST AN ARBITRARY LINE VERSUS EXACTLY WHAT IT COSTS IN THE EQUIPMENT LINES, EVERYTHING ELSE TO PROVIDE SERVICE JUST SEEMS VERY DISCRIMINATORY TO ME. YEAH. I WILL SAY THAT THE YOUR OUTSIDE CITY LIMIT CUSTOMERS DO, DO PEAK HIGHER THAN YOUR INSIDE CITY LIMIT CUSTOMERS. WHICH WAS REALLY ONE OF THE DRIVERS THAT PULLED MORE COSTS TO THE OUTSIDE CITY LIMIT CUSTOMERS. IS THAT BECAUSE OF THE MIX OF CUSTOMERS WE HAVE IN THE CITY VERSUS THE MIX OF CUSTOMERS THAT WE HAVE WHO LIVE OUTSIDE OF THE CITY LIMITS? WE COMPARED RESIDENTIAL TO RESIDENTIAL. AND I MEAN, WE HAVE THE SAME CUSTOMER CLASSES OUTSIDE THE CITY LIMIT AS WE HAVE INSIDE. SO RESIDENTIAL AND COMMERCIAL WE KEPT THOSE SAME CLASSES FOR OCO. AND DID YOU DEDUCT OUT THE IRRIGATION TO SEE HOW IT MIGHT AFFECT THOSE PEEKING TIMES, BECAUSE I DID. THAT'S NOT TYPICAL FOR OUR, THE METHODOLOGY TO DO THAT. YOU, IF THEY'RE IRRIGATING IN THE SUMMERTIME AND THEY'RE PEAKING THAT THAT'S WHAT DRIVES THE PEAKING. WE ALSO HAVE A LOT OF NEW HOME BUILDERS OUT THERE WHO ARE USING THOSE IRRIGATION LINES. AND SO WHEN I SUBTRACTED THAT OUT, IT PUT THE PEAK BACK AT NORMAL ON THE PERCENT, LIKE AN EVEN PERCENT, 15%. SO IT DRAMATICALLY INCREASED HOW THOSE CUSTOMERS USE THAT. AND SO IF WE'RE IN A PERIOD OF BUILD OUT IN THOSE AREAS, IT DOES NOT SEEM EXACTLY FAIR TO CHARGE THAT TO OUR RESIDENTIAL CUSTOMERS WHO ARE LIVING THERE BECAUSE IT'S ARTIFICIALLY INFLATED DURING THOSE BUILD THOSE PEAK BUILDING SEASONS. THAT'S A GOOD POINT. OKAY. MR. OWENS, WAS THERE ANYTHING ELSE SPECIFICALLY? I'M CRYING. I'M JUST. OKAY. THANK YOU. [01:10:02] I CURRENTLY HAVE A LITTLE BIT OF RELIEF. I KNOW NOTHING HAS BEEN DONE YET, BUT I FEEL LIKE WE HAVE BEEN HEARD. SO THAT'S THAT'S ALL THAT MATTERS. THANK YOU. WELL, WE APPRECIATE IT. OUR JOB AS OUR ELECTED DUTIES TO MAKE SURE THAT YOU GUYS ARE HEARD BECAUSE YOU'RE OUR CUSTOMERS AND OUR NEIGHBORS. AND SO AND TO ADD TO THAT, COUNCIL MEMBER WHEN WE DO THE NEXT UPDATE, RIGHT. WE'RE LOOKING AT PERHAPS EVEN THOUGH THE, THE UTILITY BASIS FOR OUTSIDE CITY CUSTOMERS IS, IS ACCEPTABLE. METHODOLOGY BY THE AMERICAN WATER WORKS ASSOCIATION. WE WILL BE LOOKING AT PERHAPS CHANGING THAT METHODOLOGY TO A CASH BASIS. I'VE ALSO IN MY HEAD, I'M THINKING LONG TERM. DO WE NEED TO HAVE AN INSIDE OUTSIDE CITY SEPARATION? SO WE'LL LOOK AT ALL THOSE OPTIONS. WE'LL BRING IT BACK TO COUNCIL FOR YOUR CONSIDERATION. YEAH. AND I ALSO WANTED TO ADD TO YOUR POINT THAT, YOU KNOW, AS I MENTIONED BEFORE, THAT DOING THIS COST OF SERVICE ANALYSIS ON A REGULAR BASIS EVERY 3 TO 5 YEARS KIND OF TAKES INTO ACCOUNT, YOU KNOW, HIGH BUILDING PERIODS AS WELL AS, YOU KNOW, MAYBE ONCE THAT SMOOTHS OUT, THAT COST OF SERVICE COULD LOOK DIFFERENT. SO I WILL ACKNOWLEDGE THAT AS WELL. THANK YOU. AND WHEN YOU HAVE A UTILITY LIKE AUSTIN THAT'S 400MI², IT WOULD MAKE SENSE FOR INSIDE OUTSIDE DISTINCTION. WHEN YOU HAVE A CITY OF KYLE THAT'S 19MI² AND WE'RE ON TOP OF EACH OTHER. PERHAPS WE SHOULD REEXAMINE THAT. YEAH. AND I WANT TO STATE FOR THE RECORD THAT RALPH RAFTLESS WAS PROVIDED THE INFORMATION LAST YEAR, MEANING THEY WORKED WITH THE NUMBERS THAT THEY WERE GIVEN. THE CITY GAVE THEM INFORMATION, THEY UTILIZED THAT, AND THAT'S HOW WE GOT THAT RATE. SO RAFTLESS WAS DOING THEIR JOB IN A WAY WITH, WITH THE INFORMATION THEY WERE PROVIDED ULTIMATELY. YES. SO SO I SEE A HAND UP IN THE BACK AND IF, WAS THAT YOU, I DON'T KNOW IF YOU WANT TO SPEAK, HERE'S THE DEAL. TO KEEP THE, THE MEETING ORDERLY. I JUST WANT TO MAKE SURE THAT YOU'RE GOING TO SPEAK ON THIS ITEM. OKAY. SO AND I WANT TO EXPLAIN TO YOU THAT NORMALLY YOU WOULD JUST FILL OUT A COMMENT AND YOU WOULD SPEAK BEFORE THE ITEM PRESENTER CAME UP HERE. BUT I AM ALL FOR ONCE SHE'S DONE, YOU ARE MORE THAN WELCOME TO COME UP AND SPEAK. BUT NORMALLY IS PRIOR TO, BUT I KNOW WE'RE ALL NEW TO THIS. SO IF YOU CAN FILL OUT A FORM OVER THERE AND THEN YOU CAN GIVE IT TO ME AND THEN I'LL GIVE IT TO JENNIFER. BUT I WANT TO GIVE EVERYBODY A, YOU KNOW, THE ABILITY TO SPEAK OUT. AND I ALSO WANT TO, AGAIN, KIND OF BRING SOME GRACE TO RAF TILLIS BECAUSE NO, I KNOW HOW IT WORKS FROM BEHIND THE SCENES. YOU KNOW, SOME PEOPLE ARE LIKE, IT'S ALL RAF TELL US. BUT NO, THESE ARE COMPANIES THAT TAKE INFORMATION THAT'S PROVIDED BY THE CITY AND THAT'S PROVIDED BY THE CITY MANAGER. IT SHOULD BE AT LEAST. AND THEN THEY CREATE THE INFORMATION OUT OF THAT. SO I DON'T WANT TO BUILD ANY HOSTILITY TOWARDS THE COMPANY BECAUSE THEY DO EXACTLY WHAT WE ASKED THEM TO DO. SO DOES ANYBODY ELSE HAVE ANY COUNCIL MEMBER MEDINA SO AS SEEN ON YOUR SLIDE NUMBER 19 WITH THE BUDGET CONSIDERATIONS FOR 2027 WITH THE 26 MODEL, WE WERE FORECASTED ORIGINALLY FOR AN ADDITIONAL 20% INCREASE THIS YEAR. BUT WITH THE COST CONTAINMENT AND EFFICIENCY EFFICIENCY MEASURES THAT PEREZ WAS ABLE TO WORK THROUGH FOR US TO FIX THINGS THAT NEED FIXING. HAD HE NOT DONE THAT, HAD PEREZ NOT BEEN OUR MAGIC MAN FILLING THE SPOT FOR US AND WORKED THESE THINGS OUT FOR US? DO YOU THINK YOU WOULD HAVE COME BACK THEN WITH THIS STUDY AND SAID THAT WE NEEDED MORE THAN A 20% INCREASE? I CAN'T, I CAN'T, I, I, IT WOULD BE DEPENDENT ON THE BUDGET THAT WE WERE GIVEN. TO BE ABLE TO ANSWER THAT. I MEAN, IT WOULD HAVE BEEN AT LEAST A 20% IF THAT BUDGET HADN'T CHANGED FROM THE FORECAST THAT WE WERE. IF THE BUDGET HAD GONE UP, THEN IT COULD HAVE BEEN MORE THAN 20%. CORRECT. OKAY. THANKS, PEREZ. COUNCILMEMBER MCKINNEY. I THINK IT'S ALSO IMPORTANT TO NOTE, TOO, THAT AT THIS TIME LAST YEAR, WE WERE JUST COMING OUT OF THE DROUGHT RESTRICTIONS AND WE REALLY DIDN'T KNOW WHAT OUR, OUR DEMAND USAGE WAS GOING TO BE. WE BASICALLY BEEN CAPPING RESIDENTS FOR A SIGNIFICANT AMOUNT OF TIME. AND THAT THAT DROVE OUR REVENUES DOWN. AND SO WE WERE KIND OF FLYING A LITTLE BIT BLIND WHEN IT [01:15:03] CAME TO WHAT WE WERE EXPECTING THAT WE WERE GOING TO NEED. JUST BECAUSE WE DIDN'T KNOW BASICALLY HOW MUCH WATER WE WERE GOING TO SELL AS A UTILITY. SO IF YOU'RE NOT SELLING ENOUGH WATER, THEN YOU RUN INTO PROBLEMS PAYING YOUR BILLS AS A UTILITY. ONE QUESTION THAT I HAD I WAS UNDER THE IMPRESSION THAT WE WERE, WE WERE LEGALLY NOT ALLOWED TO OPERATE AT A DEFICIT. AND YOU'VE GOT US I THINK IT WAS SLIDE 21. WHERE OUR EXPENSES ARE EXCEEDING REVENUE. AND, AND THE INTENTION IS TO, TO DRAW ON THE THE RESERVES. IS THAT REQUIREMENT JUST FOR M AND O NO. OR IS IT OVERALL? I THINK THAT'S JUST FOR M AND O. I MEAN FOR THE ENTERPRISE FUND. OBVIOUSLY WE DON'T WANT TO WE DON'T LIKE TO RUN AT A DEFICIT. BUT YOUR FUND BALANCES, AS I MENTIONED, ARE FAIRLY HEALTHY, WHICH IS WHY WE FORECASTED THIS. BUT AGAIN, YOU KNOW, IT'S REALLY IMPORTANT TO CONSIDER WHERE YOU ARE, WHERE WE WILL BE IN FY. YOU KNOW, WE, WE'LL BE LOOKING AT FY 29 AND, YOU KNOW, DURING 28. AND SO IT'LL BE IMPORTANT TO SEE HOW THE SYSTEM YOU KNOW, HOW YOUR REVENUE HAS BEEN TRACKING. HAVE WE BEEN ABLE TO MAINTAIN THAT OPERATING FUND BALANCE? BEFORE WE WOULD REALLY RECOMMEND, YOU KNOW, THE LOWER RATE INCREASES, ALL OF THAT WOULD NEED TO BE TAKEN INTO CONSIDERATION. I THINK WE ALL WANT TO AVOID THOSE AS MUCH AS POSSIBLE. CORRECT. YOU KNOW, WE WE PAY FOR THE WATER JUST LIKE YOU KNOW, EVERY OTHER RESIDENT DOES. WE WE HAVE BEEN FORTUNATE THAT, YOU KNOW, THE WATER USAGE HAS GONE UP. YOU KNOW, WE'VE ACTUALLY SOLD MORE THAN WE WERE ANTICIPATING WHENEVER WE SET THOSE, THOSE RATES LAST YEAR. SO THAT'S CORRECT. YEAH. WE ARE IN A BETTER POSITION THAN WE WERE A YEAR AGO SIGNIFICANTLY. YEAH WE WERE WE. YEAH. THAT IS CORRECT. OKAY. THAT'S ALL I HAVE FOR NOW. MAYOR PRO TEM TO KIND OF REITERATE YOUR YOUR QUESTION COUNCILMEMBER MEDINA, THE RATES WERE GOING TO GO UP WHEN I WAS HAVING MY CONVERSATION LAST YEAR WITH THE CITY AND FORMER CITY MANAGER. AND THAT WAS ONE OF MY BIGGEST CONCERNS WHEN WE WERE HAVING THOSE CONVERSATIONS, THAT RATES WERE GOING TO GO UP THE SAME. AND I THINK THE OUR CITY WAS GOING TO GO UP ABOUT THE SAME AMOUNT TOO. SO THAT'S WHY WHEN WE'RE DOING THE 77% IT WAS TALK THAT THEY WERE GOING TO GO UP ANOTHER 20%, SO IT WOULD HAVE BEEN CLOSE TO 90% WITHIN TWO YEARS. AND THEN WE HAD JUST INCREASED THE CITY. AND THEN LAST YEAR, 20. SO WITHIN A MATTER OF THREE YEARS, THE CITY OF KYLE RESIDENTS WOULD HAVE HAD A 60% WATER INCREASE IN THREE YEARS. AND THE OUT OF ETJ WAS GOING TO GO UP ANOTHER 20%. SO THAT'S WHAT IT WAS LIKE. IT WAS GOING TO GO UP 97% WITHIN TWO YEARS. OKAY. ARE THERE ANY MORE QUESTIONS? I'LL HAVE IF YOU WANT TO. CAN I SAY SOMETHING? OH, YES. GO AHEAD. ALL RIGHT. SORRY ABOUT THAT. I KNOW THERE'S A SLIGHT LAG. SO I THINK ONE I JUST WANTED TO STATE FOR THE RECORD THAT THE SUPREME COURT CASE THAT COUNCIL MEMBER GOSA HAD SPOKEN ABOUT THAT 1952 CASE, THEY STATED THAT THE CITY COULD NOT CREATE ARBITRARY, QUITE LITERALLY, BECAUSE THE CITY AT THAT POINT, TEXARKANA HAD PASSED AN ORDINANCE WITH ABSOLUTELY NO DOCUMENTATION ASSOCIATED TO IT. LIKE THEY DIDN'T PROVIDE ANY REASONING AS TO WHY THEY WERE CREATING SEPARATE AMOUNTS FOR IN CITY LIMITS AND OUT OF CITY LIMIT RATES. SO THIS IS JUST CONTEXTUALLY EXTREMELY DIFFERENT. THE OTHER QUESTION THAT I HAD WAS I KNOW THAT THE WAY IN WHICH OUR COST STRUCTURE IS BUILT HAS SIX DIFFERENT TIERS, IF I REMEMBER CORRECTLY. AND I THINK MY QUESTION IS, HOW DOES THAT DIFFER FROM LIFELINE RATE STRUCTURES? AND I KNOW THAT LIFELINE RATE STRUCTURES HAVE DIFFERENT VARIATIONS, BUT I'M JUST WONDERING, HOW DOES OURS COMPARE TO WHAT THOSE USUALLY LOOK LIKE? YEAH. TYPICALLY A LIFELINE RATE IS WHERE YOU GIVE WATER. SO YOU MAYBE DON'T HAVE A CHARGE FOR WATER BETWEEN ZERO, SAY 0 TO 2000 GALLONS. SO THEY, THEY ONLY PAY THE WHATEVER THE BASE CHARGE IS, IS TYPICALLY HOW A LIFELINE RATE IS SET UP. PERVEZ AND I HAVE TALKED ABOUT LOOKING AT YOUR RATE STRUCTURE NEXT AND POSSIBLY YOU KNOW, LOOKING AT HAVING [01:20:10] A LOWER VOLUME RATE FOR THE LOWER TIERS WOULD BE SOMETHING WE COULD LOOK AT. AND YOU KNOW, LOOKING AT YOU'VE GOT SIX TIERS NOW THE POSSIBILITY ABOUT REDUCING THOSE AND REALLY SENDING A BIGGER PRICING SIGNAL TO YOUR LARGER USERS. SO THAT IS DEFINITELY SOMETHING WE COULD LOOK AT. BUT YEAH, TYPICALLY A LIFELINE RATE IS WHERE YOU GIVE YOUR LOWER USERS WHERE THEY DON'T PAY A VOLUMETRIC RATE. HOWEVER, I WILL SAY THAT FROM A CONSERVATION PERSPECTIVE AND THE WATER DEVELOPMENT BOARD RECOMMENDATION IS THAT YOU CHARGE FOR EVERY DROP OF WATER THAT'S USED. SO ONE OF THE THINGS THAT WE'RE SEEING IN THE INDUSTRY IS WHAT WE CALL A AN ESSENTIAL AFFORDABILITY KIND OF RATE FOR THAT LOWER TIER WHERE THAT LOWER TIER, THE RATE THEY STILL PAY FOR THE WATER THEY USE, BUT IT'S A MUCH LOWER RATE. AND OF COURSE, WE TAKE THAT INTO ACCOUNT AS WE'RE DETERMINING HOW MUCH REVENUE THAT CLASS WOULD NEED TO PAY. OKAY. YEAH. BECAUSE I WAS LOOKING INTO IT AND THE NATIONAL RESOURCES DEFENSE COUNCIL, WHICH IS LIKE ONE OF THE LONGEST STANDING LIKE ENVIRONMENTAL NONPROFITS IN THE US, ACTUALLY HAS A TOOLKIT SPECIFICALLY ON LIFELINE RATE STRUCTURES AND THE DIFFERENT WAYS IN WHICH THEY'RE COMPOSED. AND SO I THINK YOU SPOKE ABOUT TWO DIFFERENT VARIATIONS OF THEM, WHICH IS THE KIND OF THAT LOWER TIER DOESN'T HAVE TO PAY FOR THAT WATER USAGE. AND THEN THE OTHER OPTION, I MEAN, THERE'S SEVERAL OTHERS THAT WERE LISTED IN THIS TOOLKIT THAT THEY PROVIDE. BUT ONE OF THOSE OTHER OPTIONS WAS THAT FOR THOSE WHO JUST USE A VERY LIMITED AMOUNT, THEY HAVE LIKE A FIXED RATE OR IT, IT JUST SUBSTANTIALLY LOWER IN COMPARISON. AND SO THAT WAY THE OFFSET IS LIKE, THERE'S THE GREATER DIFFERENCE BETWEEN LIKE THOSE WHO ARE USING A LOT MORE ARE JUST GOING TO FACE A STEEPER PENALTY IN ORDER TO TRY TO KEEP RATES AS LOW AS POSSIBLE FOR THE MAJORITY OF PEOPLE WHO USE BELOW A CERTAIN AMOUNT. AND SO I THINK THAT'S SOMETHING THAT I MYSELF AM DEFINITELY INTERESTED IN LEARNING MORE ABOUT. AND I WOULD LIKE FOR US TO EXPLORE THAT OPTION ESPECIALLY BECAUSE WE ARE IN PRECARIOUS ECONOMIC CONDITIONS THAT I KNOW ARE AFFECTING OUR HOUSEHOLDS. SO IF THERE ARE WAYS IN WHICH WE CAN HELP ALLEVIATE SOME OF THAT STRESS AND STRUGGLE, IT IS SOMETHING THAT I DEEPLY WANT US TO LOOK INTO. OKAY. OKAY. OKAY. SO I HAVE SOME MORE QUESTIONS, MR. JACKSON. I DON'T KNOW IF YOU WANT TO SPEAK OR IF YOU WANT ME TO. LIKE, I HAVE A NEIGHBOR, I CAN. LET ME ASK THE QUESTION. YEAH. IF YOU WANT TO COME UP AND SPEAK AT CITIZENS COMMENTS, YOU CAN UNDERSTAND HOW THE RATE IS CALCULATED. I ACTUALLY TOOK A BILL. I HAVE A DETAILED BILL AND I JUST REALLY WANT TO UNDERSTAND HOW THE RATE IS CALCULATED BECAUSE I PICKED UP ONE OF THE SHEETS THAT Y'ALL HAVE UP THERE FROM WHEN I PAID A BILL AND ON A 27 HOUR DRIVE FROM THE EAST COAST BACK HERE, I ACTUALLY CALCULATED SEVERAL DIFFERENT WAYS. SO I REALLY WANT TO UNDERSTAND HOW IT'S CALCULATED. OKAY. YEAH, I THINK THAT'S GOING TO BE ONE OF THE MOST IMPORTANT THINGS THAT WE CAN DO. FOR ME, IT'S ALWAYS KNOWLEDGE, RIGHT? SO IF WE CAN INFORM OUR RESIDENTS OF HOW THEIR BILLS ARE STRUCTURED AND HOW THEY GET PAID, HOW THEY GET CHARGED BECAUSE SHE SAYS SHE HAS A NEIGHBOR WHO FILLS THEIR POOL. AND THEIR BILL IS HIGHER THAN HIS OR HERS AND THEY HAVE SO THE MONTH THAT THEY FILLED THEIR POOL, OUR BILL WAS HIGHER THAN THEIRS. OKAY. THAT'S ALL I KNOW. YEAH. AND, AND SHE HAS SEVERAL DETAILED BILLS. THEIR BILLS ARE AN AVERAGE OF 380 TO $400, WHICH TO ME, THAT'S LIKE MY ELECTRIC BILL ON A SUMMER DAY, ON A SUMMER MONTH. SO I COMPLETELY UNDERSTAND THE CONCERN. AND SHE ALSO STATED THAT THE IRRIGATION SYSTEM WAS OFF FROM LAST OCTOBER UNTIL THE JUNE OF THIS YEAR. AND YET THEIR BILL HAS STAYED THE SAME. SO I THINK THAT WOULD BE SOMETHING THAT WE WOULD GET YOU WITH STAFF. I DON'T HAVE YOUR PHONE NUMBER OR EMAIL, SO IF YOU WANT TO FILL THIS OUT, I CAN HAVE IS IT OKAY FOR US IF WE HAVE STAFF REACH OUT TO HER? I THINK MAYOR, IF WE CAN HAVE HER CONTACT INFORMATION, STAFF WILL REACH OUT. OKAY. IT IS VERY POSSIBLE THAT THE METER IS MALFUNCTIONING. OR THE BUILDER SWAPPED THE METERS BETWEEN THE TWO NEIGHBORS. [01:25:03] OKAY. WE'LL WE'LL LOOK AT ALL THAT. YEAH, WELL, THERE'S. I MEAN, SINCE I WAS ELECTED IN 2020, WATER HAS. AND COST AND USAGE HAS ALWAYS BEEN AN ISSUE. I WANT TO SAY RIGHT NOW WE'RE ALL SPEAKING OUT ABOUT IT AND WE HEAR YOU AND THE OUTSIDE USERS ESPECIALLY. BUT I REMEMBER HAVING THE SAME CONVERSATION WITH PEREZ. AND SO I DON'T KNOW IF GOING TO A TIERED LIKE COUNCIL MEMBER, ZAPATA HAS SUGGESTED IT WOULD BE BETTER FOR UNDERSTANDING OUR BILLING, BUT AS A CITY WE'VE GOT TO DO BETTER SO WE DON'T HAVE RESIDENTS THAT MISTRUST US, BECAUSE AT THE END OF THE DAY, I TRULY BELIEVE IF THEY TRUST THAT WE'RE GIVING THEM ACCURATE INFORMATION, THEY'LL BE LESS ANGRY OR SCARED, OR THEY'LL FEEL SECURE. AND I THINK THAT'S WHAT YOU NEED TO HAVE A SUCCESSFUL GOVERNMENT AND A SUCCESSFUL CITY IS TO, TO FEEL SECURE. SO IF ANYBODY HAS ANY MORE QUESTIONS, WE'RE GOING TO MOVE ON. I HAVE A COMMENT. GO AHEAD. I ACTUALLY WENT OUT TO MISS JACKSON'S HOME LAST SUMMER, AND I LOOKED AT BOTH THE WATER METER FOR HER AND HER NEIGHBOR. AND EVEN THOUGH WE HAD GONE AND VERIFIED THAT EVERYTHING WAS TURNED OFF IN THE HOUSE, YOU COULD STILL SEE IT FLUCTUATING, JUST LIKE PHANTOM METERING. AND THAT HAPPENED WITH HER NEIGHBOR AS WELL. AND THEN I HAD HER GO RUN HER FAUCET FOR TEN, 15 SECONDS AND THEN THAT PHANTOM METERING STOPPED. SO WE KNOW THAT THERE'S NOT A LEAK BECAUSE IF IT STOPS AS SOON AS SHE TURNS THAT OFF, WHY DID THE METER STOP RUNNING? BECAUSE THERE WAS NOTHING DIFFERENT OTHER THAN JUST RUNNING THE FAUCET FOR THAT FEW SECONDS. AND IT'S KIND OF THE SAME SCENARIO WITH HER NEIGHBOR FROM WHAT I RECALL. AND WE HAVE BROUGHT THAT UP TO OUR WATER BILLING AND THEY WERE LIKE, YOUR METER IS WORKING FINE. YOU JUST USE A LOT OF WATER WAS BASICALLY HOW IT WAS TREATED. BUT IF I'M SEEING THAT SOMETIMES THAT CAN BE FROM THERMAL CHANGES AT THE END OF A LINE, WHICH IS WHERE SHE'S AT. SO I DO HAVE SOME CONCERNS ABOUT HOW OUR SYSTEMS ARE WORKING OUT THERE AND WHETHER THERE IS SOME PHANTOM METERING GOING ON THAT'S RAISING THEIR BILLS EXTREMELY HIGH. WE'LL LOOK AT IT FOR SURE. OKAY. AND THAT'S WHAT YOU GET WHEN YOU GET AN ACTIVE COUNCIL. OKAY. DO YOU WANT TO COME FILL OUT YOUR INFORMATION? WE ARE SO MAYOR WITH WITH THE FINAL REPORT. I JUST NEED DIRECTION BASED ON MY RECOMMENDATION TO CITY COUNCIL. WE'RE NOT USING THE COST OF SERVICE STUDY. WE'RE PUTTING THAT ON ON SITE. THEY HAVE COMPLETED THEIR ASSIGNMENT. I'M GOING TO ASK THEM TO COMPLETE THE REPORT SO THAT PROJECT IS FINISHED. AND THEN AS PART OF THE BUDGET PROCESS ON SEPTEMBER 5TH WILL BE OUR FIRST PUBLIC HEARING ON FEES, RATES, CHARGES, PROPERTY TAX RATES. SO THIS THE THE RATE THAT I AM RECOMMENDING NO CHANGE IN RATE WILL BE PART OF THAT PROCESS ON THE FIFTH BEFORE YOU, UNLESS YOU GIVE ME A DIFFERENT DIRECTION TODAY. CAN CAN WE ALSO HAVE YOU BRING A TIERED SYSTEM LIKE COUNCIL MEMBER ZAPATA REQUESTED. SO THAT NEEDS TO BE REALLY EXAMINED AND STUDIED BECAUSE ITS LIFELINE RATES IS GREAT. WE CAN GIVE UP TO 4000 GALLONS OR 2000 GALLONS EMBEDDED WITHIN YOUR MINIMUM CHARGE, AND COUNCIL CAN CONSIDER THAT. HOWEVER, THE FIXED COST OF THE UTILITY DOESN'T GO AWAY. IT HAS TO BE RECOUPED FROM SOMEBODY. SO THE THE HIGHER THE TIERS ARE TOWARDS THE END, IT WILL CREATE VOLATILITY IN OUR REVENUE PROJECTIONS. THAT'S THE DRAWBACK OF THAT. AND WE NEED TO REALLY CLOSELY EXAMINE THAT AND WORK WITH THE EXPERTS LIKE REV. TELL US WHAT'S THE SWEET SPOT TO MAKE THAT HAPPEN. AND I CAN'T DO THAT IN TWO WEEKS. OKAY. FAIR ENOUGH. THANK YOU. OKAY, SO THAT WILL BE PART OF THE SEPTEMBER 5TH RATE PUBLIC HEARINGS. ALL RIGHT. IF NOTHING CHANGES TODAY, I'M GOOD WITH IT. ARE YOU GUYS OKAY? THANK YOU. THANK YOU. ALL RIGHT. ARE WE ON TO AGENDA ITEM TWO REPORT? HOLD THE DISCUSSION AND PROVIDE STAFF DIRECTION REGARDING THE CITY'S PROPERTY TAX INFORMATION AND RATES [III.2) Receive a report, hold a discussion, and provide staff direction regarding the City's property tax information and rates for Tax Year 2026 or Fiscal Year 2026-27 including but not limited to the following: Certified taxable property valuations for 2026. Comparison of 2026 and 2025 certified taxable property valuations. Property tax rate calculations and options for Fiscal Year 2026-27. Proposed property tax rates for Fiscal Year 2026-27. Looking ahead to Fiscal Year 2027-28. Next steps. City Council's Direction. ] FOR TAX YEAR 2026 OR FISCAL YEAR 2026 TO 2027, INCLUDING BUT NOT LIMITED TO THE FOLLOWING CERTIFIED TAXABLE PROPERTY VALUATIONS. COMPARISON OF 26 AND 25 CERTIFIED TAXABLE PROPERTY VALUATIONS. [01:30:02] PROPERTY TAX RATE CALCULATIONS AND OPTIONS FOR FISCAL YEAR 2627. PROPOSED PROPERTY TAX RATE FOR FISCAL YEAR 2627. LOOKING AHEAD TO FISCAL YEAR 2728. NEXT STEPS AND COUNCIL. CITY. CITY COUNCIL. DIRECTION. ITEM. PRESENTER. PEREZ. MOHIT. SO MAYOR, MAYOR, PRO TEM COUNCIL MEMBERS, WE'RE SHIFTING GEARS. WE'RE NOW GOING TO TALK ABOUT PROPERTY TAX VALUATIONS AND TAX RATE OPTIONS FOR COUNCIL TO CONSIDER. SO THIS IS WHAT I PLAN TO COVER THIS EVENING WITH YOU ALL. I'M GOING TO GIVE BECAUSE WE HAVE NEW COUNCIL MEMBERS FOR THE FIRST TIME WORKING WITH US ON BUDGET ON TAX RATES. I WANT TO SPEND A LITTLE TIME ON GIVING YOU SOME BACKGROUND INFORMATION, ESPECIALLY SOME SOME DEFINITIONS. WE'LL GO OVER THE TAXABLE ASSESSED VALUATION AND PROPERTY TAX RATES FOR TAX YEAR 26. AND THEN TALK A LITTLE BIT ABOUT VERY BRIEFLY LOOKING AHEAD TO FISCAL YEAR 2728. BECAUSE IF YOU RECALL, EVERY TIME I TALK ABOUT COST CONTAINMENT. BUDGET. I'M LOOKING AT TWO YEARS AT A TIME, AND THEN WE'LL TALK ABOUT NEXT STEPS AND THEN WE'LL OPEN IT UP FOR QUESTIONS. SO BACKGROUND ON PROPERTY TAX INFORMATION. SENATE BILL TWO IN THE 86TH LEGISLATIVE SESSION, WHICH WAS IN 2019, MADE SIGNIFICANT PROPERTY TAX REFORM, INCLUDING CHANGES TO THE TRUTH AND TAXATION PROCESS, HOW CITIES AND COUNTIES AND SCHOOL DISTRICTS AND WATER DISTRICTS WENT ABOUT CALCULATING THEIR TAX RATES. IT WAS HUGE. A LOT OF MAJOR CHANGES HAPPENED IN 2019. SO SOME OF THE DEFINITIONS AND RATES THAT WE TOSS AROUND. I WANTED TO SPEND TIME A LITTLE BIT TO GIVE YOU ALL AN UNDERSTANDING OF WHAT THOSE ARE. PRIOR TO SENATE BILL TWO, WE USED TO HAVE EFFECTIVE TAX RATE. UNDER THIS NEW LAW THAT WAS CHANGED WITH THE NEW NAME. TO MAKE IT EASIER FOR RESIDENTS AND TAXPAYERS TO UNDERSTAND WHAT THAT WAS, THEY NAMED IT NO NEW REVENUE TAX RATE. AND I'LL GO OVER EACH ONE OF THESE. HOW IT WORKS. THE ROLLBACK TAX RATE WAS RENAMED OR REDEFINED TO VOTER APPROVAL TAX RATE FOR EASE OF UNDERSTANDING. MAINTENANCE AND OPERATION RATE WAS RENAMED TO NO NEW REVENUE, MAINTENANCE AND OPERATIONS OR NO TAX RATE. AND THEN THEY INTRODUCED TWO ADDITIONAL TAX RATES. DE MINIMIS TAX RATE AND UNUSED INCREMENT TAX RATE. THOSE TWO. ESPECIALLY THE MINIMIS TAX RATE, DOESN'T APPLY TO US BECAUSE OUR TAX REVENUES ARE MORE THAN $500,000. SO I WON'T SPEND A LOT OF TIME ON THAT ONE. BUT I WILL EXPLAIN THE OTHERS. SO WHAT IS A NO NEW REVENUE TAX RATE. WELL IT USED TO BE THE EFFECTIVE TAX RATE. THIS IS A TAX RATE THAT WOULD PROVIDE A LOCAL TAXING UNIT, SUCH AS A CITY OR COUNTY, WITH APPROXIMATELY THE SAME AMOUNT OF PROPERTY TAX REVENUE AS THE PREVIOUS YEAR, BUT IT HAS TO BE FROM THE SAME PROPERTIES THAT WERE TAXED IN THAT PREVIOUS YEAR. SO THAT BASICALLY IS WHAT IS THE TAX RATE THAT NEEDS TO BE SET OR CALCULATED, THAT WOULD ALLOW THE CITY OR THE TAXING ENTITY, CITY OR COUNTY TO RAISE THE EXACT SAME AMOUNT, APPROXIMATELY THE SAME AMOUNT AS THE PRIOR YEAR FROM THE SAME PROPERTIES ON THE TAX ROLL. SO THAT'S THE NEW REVENUE TAX RATE. THE VOTER APPROVAL TAX RATE, WHICH WAS THE THE OLD ROLLBACK TAX RATE. THIS IS A TAX RATE CALCULATED AND DERIVED USING A VERY SPECIFIC PRESCRIBED FORMULA THAT IF EXCEEDED BY THE TAXING ENTITY AND IT'S ADOPTED BY THAT ENTITY, AN AUTOMATIC ELECTION [01:35:01] IS TRIGGERED FOR VOTERS TO APPROVE OR REJECT THAT TAX RATE. SO BASICALLY, IN A NUTSHELL, IT IS YOUR NO NEW REVENUE TAX RATE. PLUS WHAT THE CITY OR COUNTY NEEDS FOR TO PAY THEIR DEBT SERVICE PRINCIPAL AND INTEREST ON THE COMING FISCAL YEAR, PLUS A 3.5% INCREASE TO THE NO SIDE OF THE TAX RATE. CAN I CLARIFY THE VOTER APPROVAL TAX? TAX RATE SHOULD ALSO BE ONE THAT'S ALREADY BEEN APPROVED VIA LIKE A BOND, AND YOU CAN RAISE IT UP TO THAT AMOUNT. IS THAT CORRECT AS WELL. SO YOUR AND I'LL GO IN A MINUTE. TAX RATE HAS TWO COMPONENTS. THE MAINTENANCE AND OPERATIONS COMPONENT. AND THE INS ARE THE DEBT SERVICE COMPONENT. SO THE DEBT SERVICE COMPONENT IS ALWAYS ADJUSTED TO WHATEVER THAT ENTITY NEEDS TO PAY ITS OBLIGATIONS. BUT THE NO FLOATS. AND I'LL SHOW YOU IN A MINUTE WITH SOME EXAMPLES. OKAY. I JUST WANTED TO CLARIFY BECAUSE THE VOTER APPROVAL TAX RATE CAN BE GO TO A BOND AND WE CAN SAY YES OR NO, BUT IT COULD ALSO BE PRE APPROVED IN LIKE OUR ROAD BOND. WE SAID WE WOULD BRING IT UP TO 0.59. NO NO IT DOESN'T MATTER WHAT WE SAID. OKAY. EACH YEAR TAX RATES ARE CALCULATED BASED ON PROPERTY TAX ROLL CERTIFIED TAX ROLL. AND IT HAS 85 STEPS THAT YOU HAVE TO GO THROUGH TO ADJUST FOR VARIOUS THINGS THAT THE STATE LAW REQUIRES. OKAY. SO JUST BECAUSE WE SAID $0.59 FOR ROAD BONDS DOES NOT GUARANTEE US $0.59 TAX RATES. AND I'LL SHOW YOU IN A MINUTE, THAT'LL GET US IN TROUBLE. OKAY. THANK YOU. SO WHAT ADOPTED TAX RATE TRIGGERS AN ELECTION, AUTOMATIC VOTER ELECTION THAT HAPPENED IN AUSTIN. THAT HAPPENED IN A NUMBER OF COMMUNITIES. IF THE. IF THE ADOPTED TAX RATE IS BELOW VOTER APPROVAL TAX RATE, NO ELECTION IS REQUIRED. IF THE ADOPTED TAX RATE IS ABOVE THE VOTER APPROVAL TAX RATE, AN ELECTION IS AUTOMATICALLY REQUIRED. IF THE ADOPTED TAX RATE IS BELOW THE NO NEW REVENUE TAX RATE AND BELOW THE VOTER APPROVAL TAX RATE, THEN FOR SURE NO ELECTION IS REQUIRED. PROPERTY TAX RATES ARE TYPICALLY EXPRESSED IN UP TO SIX PLACES AFTER THE DECIMAL. SO FOR EXAMPLE, YOU'LL SEE IF YOU GO TO HAYS COUNTY TAX ASSESSOR'S WEBSITE. THEY PUBLISH A LIST OF ALL THE TAXING JURISDICTION IN HAYS COUNTY AND WHAT THEIR TAX RATES ARE, BOTH FOR M AND O AND FOR INS. MOST OF THOSE YOU WILL SEE THERE UP TO SIX PLACES. SO I JUST WANTED TO KIND OF EXPLAIN THAT WHY YOU SEE UP TO SIX DIGITS AND HOW TO READ THOSE SIX DIGITS. SO THIS IS JUST A REFRESHER. AND, AND IT'S A REFRESHER FOR ME EVERY YEAR BECAUSE I DON'T USE SIX DIGITS. I SHOULD IN MY PERSONAL BANK ACCOUNT. BUT SO IF YOU HAD A TAX RATE OF 0.123456 PER $100 TAX ASSESSED VALUATION, IF YOU LOOK AT MY CHART, THE FIRST PLACE AFTER DECIMAL IS ONE TENTH, SECOND PLACE, 100TH. SO ON AND SO FORTH. WHEN YOU GET TO THE SIXTH PLACE, NOW YOU'RE IN THE ONE MILLIONTH. SO IF YOU HAD A TAX RATE IN SIXTH PLACE, SIX DIGITS AND IT WAS ONE, TWO, THREE, FOUR, FIVE, SIX, YOU WOULD HAVE TO READ IT AS 123,000 456,000,000TH OF A DOLLAR. IT'S VERY CONFUSING, RIGHT? IT'S HARD FOR AVERAGE TAXPAYERS TO UNDERSTAND, TO TRANSLATE, TO CALCULATE. WE IN THE CITY OF KYLE, EVER SINCE I'VE BEEN HERE, THEY USED TO. WHEN I GOT HERE, IT WAS SIX DIGITS. THE FIRST TIME I PROPOSED A TAX RATE TO CITY COUNCIL, I MOVED IT TO FOUR PLACES. WE DON'T NEED TO GO BEYOND THAT. A LOT OF ENTITIES WILL DO THAT TO MAKE THE TAX RATE LOOK LOW, [01:40:09] BECAUSE THEY'RE BANKING ON THOSE LAST THREE DIGITS. BUT IT'S HARD FOR TAXPAYERS TO UNDERSTAND AND CALCULATE. SO FOR CAL, WE ONLY GO UP TO FOUR PLACES. A LOT OF THE ESDS YOU WILL SEE THEY WILL DO SIX PLACES. SO THIS IS OUR CURRENT PROPERTY TAX RATE, THE ONE THAT HAS BEEN ADOPTED AND APPROVED BY COUNCIL. IT HAS TWO COMPONENTS. OUR TAX RATE FOR CURRENT YEAR IS 59.57. THAT'S THE EASIEST WAY TO READ YOUR TAX RATE AND DESCRIBE YOUR TAX RATE TO ANYBODY. INSTEAD OF GOING IN THOSE TENTS AND MILLIONS AND THOUSANDS, IT'S 59.5 $0.05. SO THE TWO COMPONENTS OF A TAX RATE ARE MAINTENANCE AND OPERATIONS, OR COMMONLY REFERRED TO AS M AND O RATE AND INTEREST IN SINKING OR REFERRED TO AS THE INS RATE. MAINTENANCE AND OPERATION RATE COVERS AND PAYS FOR THINGS LIKE SALARIES IN THE GENERAL FUND. POLICE OFFICERS ARE OUR STAFF IN THE PARKS DEPARTMENT, OUR LIBRARY FOLKS, FINANCE DEPARTMENT PURCHASING. CITY ATTORNEY CITY MANAGER'S OFFICE. THOSE ARE GENERAL OPERATING COSTS PAID FOR THROUGH THE M AND O RATE. NOW, IN THE CITY OF KYLE, IF YOU REMEMBER WE TALK ABOUT OUR 4 OR 5 TOP DIFFERENT SOURCES OF REVENUES. OUR PROPERTY TAX REVENUE IS NOT ENOUGH TO COVER OUR ENTIRE GENERAL FUND BUDGET. BY ITSELF, IT IS A PORTION OF IT. IT'S ONE OF THE LARGEST SOURCES. SO WE HAVE PROPERTY TAX REVENUE. WE HAVE SALES TAX, WE HAVE DEVELOPMENT REVENUE, AND WE HAVE A WHOLE BUNCH OF OTHER REVENUES. BUT THIS IS A COMPONENT OF THE GENERAL FUND. SOURCES OF REVENUE TO PAY FOR OUR EVERYDAY EXPENSES OPERATING EXPENSES THE INTEREST AND SINKING FUND. THAT TAX RATE IS DETERMINED BASED ON OUR OBLIGATION WHAT WE NEED TO PAY NEXT YEAR. SO WITH TAX WITH PROPERTY TAX, NOT THE UTILITY DEBT, THIS IS JUST FOR TAX SUPPORTED OBLIGATIONS. SO A GOOD EXAMPLE WOULD BE THE ROAD BONDS OR THE SIDEWALKS OR. PARKS IMPROVEMENTS THINGS OF THAT NATURE. SO OUR CURRENT RATE, IF YOU LOOK AT THE RED LINE, IS 59.5 $0.07 PER $100. LAST YEAR, YEAR BEFORE IT WAS 46.93. SO JUST GIVE YOU A BACKGROUND PERSPECTIVE OF WHERE WE'RE STARTING. I STARTED KEEPING THIS CHART TO KIND OF TRACK OUR TAX RATE HISTORY. SO THE BLUE PART OF THIS BAR OF EACH BAR IS THE RATE. AND THE YELLOW PART OF THE BAR IS THE INS OR THE DEBT RATE. AND I WILL ONLY HIGHLIGHT THE THREE. ONES THAT I WANT TO CALL TO YOUR ATTENTION. IF YOU LOOK AT THE TALLEST BAR IN THIS 39 YEAR HISTORY, I BELIEVE IT'S 39. THE TALLEST BAR IS IN 1992 AND OUR CITY'S TAX RATE WAS 69. 26. THAT WAS THE HIGHEST RATE EVER. THE LOWEST RATE WAS IN 2008. THAT'S THE SHORTEST BAR SOMEWHERE IN THE CENTER. THAT WAS 2707. AND THEN TODAY, IF YOU LOOK AT THE LAST BAR IN 26, THAT'S OUR CURRENT ADOPTED TAX RATE OF 5957. SO THAT KIND OF GIVES YOU A PERSPECTIVE OF HOW WE HAVE MOVED THROUGH THE TIME SPECTRUM AND THE RATES HAVE FLUCTUATED, RIGHT? IT IS BASED ON A NUMBER OF THINGS THAT COME INTO PLAY VALUATIONS, DEBT AND THE TAX LAW AT THE TIME. SO. THE NEXT SLIDE IS JUST CURRENT APPROVED PROPERTY TAX RATES COMPARISON. [01:45:04] MOST OF THESE CITIES MAY PROPOSE A TAX INCREASE. WE DON'T KNOW YET. BUT THIS IS THEIR ADOPTED TAX RATE FOR THIS YEAR THAT WE'RE COMPARING TO. I KNOW PFLUGERVILLE WAS DOING SOMETHING WITH THEIR TAX RATE. AUSTIN WAS DOING SOMETHING. BUDDHA WAS CONSIDERING SOMETHING. I DON'T KNOW EXACTLY WHERE THEY ARE IN THEIR BUDGET PROCESS. SO LET'S MOVE ON TO THE ASSESSED TAXABLE ASSESSED VALUATION AND PROPERTY TAX RATES OF OUR DISCUSSION. SO ONE THING THAT WE NEED TO TALK ABOUT, AND THAT WAS COVERED IN MY EMAILS THAT I HAVE SENT TO COUNCIL TO LET YOU ALL KNOW THAT WE HAD AN ISSUE WITH CHURCH NUMBER FOUR THAT WE WERE TRYING TO RESOLVE, WITH THE HELP OF OUR PARTNERS AT THE TAX ASSESSOR COLLECTOR'S OFFICE, AND PRIMARILY WITH THE HEY CENTRAL APPRAISAL DISTRICT. IT GOT RESOLVED YESTERDAY, LATE YESTERDAY. SO WE HAD TO RECALCULATE ALL THE TAX RATES. BUT TO GIVE YOU A BACKGROUND, IN 24, THE CITY OF KYLE EXPANDED THE BOUNDARIES FOR TIRES NUMBER FOUR TO INCLUDE SIGNIFICANTLY MORE TRACTS OF LAND AND ALSO INCREASE THE TAX REVENUE INCREMENT PARTICIPATION FROM 40% TO 50%. AND I HAVE ATTACHED AN AGENDA ITEM. YOU'LL YOU HAVE ALL THE BACKUP AND EXHIBIT NUMBER THREE TO THIS AGENDA ITEM THAT GIVES YOU A BACKGROUND OF WHAT THAT AMENDMENT WAS ALL ABOUT. I WANTED TO TAKE A MOMENT TO. TO EXPRESS MY AND OUR CITY AS A WHOLE. COUNCIL AND STAFF. OUR APPRECIATION, OUR SINCERE APPRECIATION AND THANKS TO THE STAFF OF THE HAYS APPRAISAL DISTRICT. THEY CAME THROUGH AND SAVED OUR BACON. THEY DIDN'T HAVE TO. THEY'RE GOING THROUGH PROTEST. THEIR PLATE IS FULL. WE HAD ASSUMED IT'S GOING TO TAKE THEM LONGER, AND WE HAD TO ASSUME THAT WE WILL JUST USE THE ESTIMATES THIS YEAR AND TRUE UP NEXT YEAR. BUT THEY CAME THROUGH. THEY GAVE US THE FINAL VALUATIONS. SO I WANTED TO THANK THEM FOR THEIR ASSISTANCE AND RECONCILING AND RECONSTRUCTING THE FINAL BASE VALUATION FOR TERJE NUMBER FOR THEIR RESPONSIVENESS, THEIR PROFESSIONALISM AND COLLABORATION WERE INSTRUMENTAL IN ENSURING THE ACCURACY OF THE VALUATION AND ENABLING THE CITY OF KYLE US TO MEET OUR TRUTH AND TAXATION TAXATION REQUIREMENTS. THAT MEANS A LOT, ESPECIALLY WITH WITH STAFF THAT HAS THEIR PLATE FULL WITH ALL THE PROTESTS THAT THEY'RE HANDLING. BUT IT MEANS A LOT TO US BECAUSE NOW WE ARE ABLE TO GIVE YOU A CERTIFIED TAX RATE INSTEAD OF AN ESTIMATED PIECE OF IT THAT WAS MISSING. CAN I JUST BRIEFLY CLARIFY WHAT WE'RE BEING TOLD RIGHT NOW? BECAUSE I ALWAYS SAY PEREZ IS WAY TOO SMART FOR ME. BUT IN SIMPLE TERMS, WHAT HAPPENED WAS WE HAD WE THERE WAS A CHANGE TO THE SITTERS AREA IN THE CITY OF KYLE THAT WAS NEVER DOCUMENTED WITH THE COUNTY. SO WHEN WE RECEIVED OUR EVALUATIONS, THEY WERE INCORRECT BECAUSE WE NEEDED TO GO BACK AND SAY, HEY, THIS PART BELONGS TO THE COUNTY AND THIS PART BELONGS TO THE SERVICE. SO THE COUNTY AND CITY COMBINED. CORRECT? YES. NOW IT IS. I'M JUST I'M JUST TRYING TO GIVE A FEEL OF WHAT LED UP TO THIS. YEAH. SO LET ME JUST GIVE YOU A BRIEF BACKGROUND. OKAY. SO WHEN TERSE FOUR WAS INITIALLY CREATED, IT WAS A CITY ONLY TERSE. IT WAS JUST US COUNTY WAS NOT PARTICIPATING IN NUMBER FOUR. THEN IN 2024, THEY DID TWO THINGS. THEY THE CITY DID TWO THINGS. WE EXPANDED THE BOUNDARY. WE CHANGED THE INCREMENT PARTICIPATION. AND WE ALSO HAD COUNTY PARTICIPATE AT 50%. SO IT BECAME A BIGGER TOURS WITH MORE INCREMENT. POSSIBLE INCREMENT. AND THE CITY'S PORTION WENT UP FROM 40 TO 50%. SO BUT THAT MONEY WAS INCLUDED IN OUR GENERAL FUND AND NEEDED TO BE REMOVED AND PLACED BACK INTO THE FUND. SO THIS IS HOW IT IMPACTS IT ON THE TAX CALCULATION SIDE. THE CORE CITY, THE VALUATION, WHEN WE RECEIVED THE VALUATION, WE RECEIVED THE ENTIRE CITY, [01:50:06] INCLUDING TAXES, ALL SIX OF THEM. WE HAVE TO PULL THE VALUE OUT OF THE THE CORE CITY TO CALCULATE THE TAX RATE, WHAT IT WOULD IMPACT FOR THE CITY. SO IF TIRZ BASE VALUE WAS INCORRECT, THEN OUR ENTIRE CALCULATION FOR. NO NEW REVENUE TAX RATE FOR. VOTER APPROVAL TAX RATE AND OUR PROPOSED TAX RATE WOULD BE OFF. SO THE INITIAL VALUE FOR TOURIST NUMBER FOUR WAS 5 MILLION. THE BASE VALUE THE DAY YOU CREATED HERS. YOU HAVE TO IDENTIFY WHAT THE BASE VALUE IS ON THAT DAY. THAT GOES TO THE GENERAL FUND. ANY TAX COLLECTED ON THAT GOES TO GENERAL FUND. THE WORD INCREMENT COMES FROM WHEN THAT BASE VALUE INCREASES OVER TIME. THAT INCREMENTAL REVENUE INCREASE GOES TO THE TIRES. BUT EVERYTHING ON THE BASE GOES TO THE OWNER, CITY OR COUNTY, WHOEVER OWNS THAT TIRES. SO THAT'S HOW IT WORKS. SO IN FIRST CASE THE INITIAL VALUATION WAS 5 MILLION. COUNTY WAS SHOWING SOMETHING MUCH HIGHER 26 MILLION. THEN THE CITY'S. PIT ADVISOR WAS SHOWING $200 MILLION PLUS. SO IT WAS A WIDE VARIATION. SO WE NEEDED THE APPRAISAL DISTRICT TO RECONSTRUCT THE VALUATION OF. ON THE DAY OF CREATION WHEN THE AMENDMENT HAPPENED. THAT TOOK A LOT OF EFFORT ON THEIR PART TO DO THAT. BUT WHAT CAUSED IT IS, IS WHAT WE NEED TO IDENTIFY AND FIX IT GOING FORWARD. SO WHEN WHEN YOU EITHER CREATE A TERSE OR AMEND A TERSE. THE CREATING ENTITY, IN THIS CASE, THE CITY OF KYLE SHOULD HAVE IDENTIFIED THE METES AND BOUNDS OF THE NEW BOUNDARY TO THE APPRAISAL DISTRICT, SO THEY CAN START IDENTIFYING THE BASE VALUE ON THAT DATE AND MOVING FORWARD SOMEHOW, SOMEWHERE. THAT STEP WAS OVERLOOKED FOR NUMBER FOUR. I DON'T KNOW IF. STAFF GOT TOO BUSY, SIDETRACKED WHATEVER HAPPENED, BUT IT NEVER GOT TO THE APPRAISAL DISTRICT TO IDENTIFY THEIR MATES AND BALANCE FOR NUMBER FOUR. HAD THAT BEEN DONE, NONE OF THIS WOULD HAVE OCCURRED. IT ALSO AFFECTED THE COUNTY. YES, BECAUSE THEY'RE 50% ALSO PARTICIPATING. SO THEY NEEDED TO HAVE THE SAME VALUATIONS THAT WE NEEDED. SO WE BOTH DECIDED IF APPRAISAL DISTRICT WAS NOT ABLE TO DO IT BY THE DEADLINE WE BOTH HAD THAT WE WOULD GO WITH THE BEST ESTIMATE WE HAD, WHICH WAS OUR PIT ADVISORS. UNTIL THE NEXT CYCLE WHEN APPRAISAL DISTRICT COMPLETED THEIR RESEARCH. FORTUNATELY, THEY CAME THROUGH YESTERDAY, BUT THE COUNTY AND US WERE TAKING THEIR BASE VALUATION. AND THAT BASE VALUATION IS AROUND 154 MILLION. SO WE HAD FIVE, COUNTY HAD 26 OR 22. THEN P THREE HAD 200 PLUS. HAYS COUNTY COMES IN, GIVES US THE RECONSTRUCTED AMOUNT, ABOUT 154 MILLION. AND I'LL SHOW YOU IN A MINUTE HOW THAT IMPACTED US. SO I WANTED TO JUST FORMALLY THANK OUR APPRAISAL DISTRICT PARTNERS FOR FOR HELPING US OUT. SO THIS IS FOR ISSUE IMPACTED THE NO NEW REVENUE TAX RATE, THE VOTER APPROVAL TAX RATE AND OUR PROPOSED TAX RATE CALCULATIONS. ON TOP OF IT. WE ALSO HAVE A VERY UNUSUAL PROPERTY TAX SITUATION THIS YEAR FOR CITY OF KYLE. NO. NO. NEW REVENUE RATE USUALLY IS ALWAYS LOWER THAN THE VOTER APPROVAL TAX RATE FOR A MUNICIPAL GOVERNMENT. COUNTY GOVERNMENT. TYPICALLY, NO NEW REVENUE RATE IS ALWAYS THE LOWEST OF THE TWO. [01:55:02] VOTER APPROVAL RATE TYPICALLY IS HIGHER THAN THE. NO NEW REVENUE RATE. BECAUSE THE LAW ALLOWS AN ADDITIONAL 3.5% FOR NO. SO INTUITIVELY, IT SHOULD ALWAYS BE HIGHER THAN THE NO NEW REVENUE RATE. HOWEVER, THERE ARE SITUATIONS WHERE THE NO NEW REVENUE RATE CAN ACTUALLY BE HIGHER THAN THE VOTER APPROVAL RATE. AND THERE ARE REASONS FOR THAT. LEGITIMATE REASONS. THE CITY OF KYLE'S 2026 NO NEW REVENUE RATE. WHEN I WAS WORKING ON THE SLIDE AT THAT TIME, WE WERE WORKING WITH ESTIMATES, SO I HAD TO SAY THIS IS EXPECTED TO BE HIGHER FOR SURE. NOW WE KNOW IT IS HIGHER. SO I'LL GO OVER THAT IN A MINUTE. THE MOST COMMON REASONS FOR THIS UNCOMMON SITUATION ARISES WHEN THERE IS A SIGNIFICANT REDUCTION IN THE AMOUNT OF REQUIRED PRINCIPAL AND INTEREST PAYMENT DUE THE FOLLOWING TAX YEAR. AND IF YOU RECALL, IN THE CURRENT TAX YEAR, IN 26, CITY COUNCIL APPROVED A DEBT DEFEASANCE, WHICH WE HAD TO INCLUDE IN THE IN THE DEBT OBLIGATIONS IN IN THIS YEAR'S TAX RATE. WHEN? NEXT YEAR. WE'RE NOT HAVING A DEBT DEFEASANCE. SO THAT AMOUNT OF DIFFERENCE FALLS OFF. IN ADDITION, THERE IS A SLIGHT NOT SIGNIFICANT AS DEBT SERVICE. THERE IS A SLIGHT REDUCTION IN OUR VALUATION FOR NEXT YEAR. THAT ALSO PLAYS INTO THE NO NEW REVENUE TO BE LOWER THAN VOTER APPROVAL TAX RATE. SO THAT AS A BACKDROP, A NUMBER OF THINGS ARE IN PLAY WHEN IT COMES TO TAX RATE. SO THIS SLIDE CHANGED THREE TIMES BECAUSE OF CHURCH. NUMBER FOUR. THE THE NUMBERS I'M SHOWING YOU HERE ARE NET OF ALL SIX TERS VALUATIONS. SO THIS IS JUST FOR THE CORE CITY. THE 2026 TAXABLE ASSESSED VALUATION. THIS IS THE NET OF THE TERRACES. IT'S $6,346,275,039 THE YEAR BEFORE. SAME SET OF NUMBERS WAS 6,479,620,000 AND $260, A DECLINE OF 133 MILLION 345, WHICH IS 2.06. IF YOU RECALL, INITIALLY I HAD SHARED WITH YOU THAT WE WERE SOMEWHERE BETWEEN 1.23 AND 1.28% REDUCTION, BUT BECAUSE OF HOW THE TOUR'S VALUATION MOVED. IT IMPACTED US SLIGHTLY MORE. IT IS NOW 2.06%. SO THIS IS OVERALL CORE CITY'S TAXABLE VALUATION. SO THE 26 PROPERTY TAX RATES. SO LET ME LET ME STOP HERE FOR JUST A SECOND AND KIND OF EXPLAIN TO YOU WHEN I SAY 26 AND ALSO TALK ABOUT FISCAL YEAR, YOU'LL SEE TWO DIFFERENT DATES. THE TAX YEAR. PROPERTY TAX RATES ARE SET USING A TAX RATE CALENDAR. OUR BUDGET USES A FISCAL YEAR CALENDAR. SO THE TAX RATES ARE SET IN THIS CALENDAR YEAR WHICH IS 26. TAX BILLS WILL GO OUT IN OCTOBER WHICH IS 26. SO IT IS TAX YEAR 2026, AND IT IS ALSO FISCAL YEAR 26-27. SO WHEN YOU HEAR THOSE TWO THINGS TOGETHER IT'S THE SAME FOR US. SO FOR 26 PROPERTY TAX RATES THERE ARE A LOT OF NUMBERS ON THIS SLIDE. SO LET ME WALK YOU THROUGH THE HOW THE THE SLIDE IS FORMATTED. ON THE LEFT SIDE, I HAVE THE TWO COMPONENTS OF THE TAX RATE MAINTENANCE AND OPERATIONS INTEREST AND SINKING. [02:00:01] THAT TOTALS UP THE YELLOW HIGHLIGHTED LINE TOTAL PROPERTY TAX RATE. THEN I TRY TO SHOW YOU THE DOLLAR CHANGE FROM THE ADOPTED TAX RATE AND THE PERCENTAGE CHANGE FROM ADOPTED TAX RATE. SO GOING TOWARDS YOUR RIGHT THE SECOND COLUMN IS OUR ADOPTED TAX RATE FOR THIS YEAR. SO EVERY COLUMN IS GOING TO BE COMPARED TO THE CURRENT TAX RATE. OKAY, THE NEXT COLUMN OVER IS THE NO NEW REVENUE TAX RATE FOR 26. AFTER THAT IS THE VOTER APPROVAL TAX RATE. AFTER THAT IS THE PROPOSED TAX RATE. OPTION ONE PROPOSED TAX RATE. OPTION TWO. AND I WILL EXPLAIN TO YOU HOW I GOT TO THOSE OPTIONS ONE AND TWO. SO LOOKING AT THE CURRENT TAX RATE IS 5957. THAT'S OUR ADOPTED TAX RATE. EACH ONE OF THESE COLUMNS I'M GOING TO COMPARE TO THIS BASE RATE NOW. SO THE NEW NO NEW REVENUE TAX RATE FOR NEXT YEAR OR THIS 26 TAX YEAR. FISCAL YEAR 27 CALCULATED TO BE 0.6322 PER $100, IT IS 3.6 $0.05 HIGHER THAN OUR ADOPTED TAX RATE TODAY, OR 6.13%. THE VOTER APPROVAL TAX RATE COMES OUT TO 0.5650. THIS IS THE NEXT COLUMN OVER. NOW, WHEN YOU COMPARE THAT TO THE ADOPTED TAX RATE, IT IS 0.307 LESS THAN THE ADOPTED TAX RATE OR 5.1 5.15% LESS THAN OUR CURRENT ADOPTED TAX RATE. THEN I GAVE YOU TWO OPTIONS TO CONSIDER. YOU DON'T HAVE TO TAKE THESE. THEY'RE NOT SET IN STONE. PROPOSED PROPERTY TAX RATE. OPTION ONE FOR COUNCIL'S CONSIDERATION IS .5600 IS LESS THAN. THE VOTER APPROVAL TAX RATE AND IT IS LESS THAN THE. NO NEW REVENUE TAX RATE AND DEFINITELY IS LESS THAN OUR CURRENT ADOPTED TAX RATE. SO IF COUNCIL WAS TO ADOPT OPTION NUMBER ONE, IT WOULD BE 3.5 $0.07 LESS THAN OUR ADOPTED TAX RATE OR A REDUCTION OF ALMOST 6% IN THE TAX RATE. SAME THING FOR OPTION NUMBER TWO. IT WOULD BE IF COUNCIL WAS TO CONSIDER OPTION NUMBER TWO. AND I'LL SHOW YOU IN A MINUTE WHY AND HOW THESE WERE CALCULATED. THE TAX RATE WOULD BE 5340. AND IF YOU COMPARE IT TO THE ADOPTED TAX RATE THAT WE HAVE TODAY, IT WOULD BE 6.1 $0.07 LESS THAN THE ADOPTED TAX RATE, OR A 10.36% TAX RATE REDUCTION. BEFORE I MOVE ON, ONE THING TO KEEP IN MIND, AND WE CAN KEEP COMING BACK TO THIS SLIDE. SLIDE 15 IS IMPORTANT BECAUSE ALL FIVE OF OUR TAX RATES ARE IN ONE PLACE SIDE BY SIDE. YOU CAN YOU CAN SEE IT IN ONE VISUAL. WE KNOW FROM THIS TAX LAW THAT WE JUST TALKED ABOUT, WE CAN'T GO OVER THE VOTER APPROVAL TAX RATE UNLESS COUNCIL WANTS VOTER ELECTION. SO THAT'S LOCKED IN. VOTER APPROVAL TAX RATE IS 5650. THAT'S THE MAXIMUM WE CAN ADOPT WITHOUT TRIGGERING THE ELECTION. SO THAT'S THE MAX RIGHT? WE KNOW WE CANNOT ADOPT THE SAME CURRENT YEAR TAX RATE OF 59. 57 BECAUSE IT'S HIGHER THAN THE VOTER APPROVAL TAX RATE. SO THAT'S OFF THE TABLE. WE KNOW WE CAN ADOPT A NO NEW REVENUE TAX RATE BECAUSE THAT THIS YEAR IS HIGHER THAN THE VOTER APPROVAL TAX RATE. SO THAT WILL TRIGGER BOND ELECTION. SO THAT'S OFF THE TABLE. SO ALL WE HAVE NOW LEFT ARE THE THREE RIGHT COLUMNS. SO YOU'VE GOT THE MAXIMUM VOTER APPROVAL TAX RATE 5650. [02:05:04] THEN I'VE SHARED WITH YOU TWO OPTIONS THAT ARE WITHIN THAT RANGE. RIGHT. 5340 BEING ON THE LOW END. 5650 BEING ON THE HIGH END AND 5600 BEING IN THE MIDDLE. SO LET'S TALK ABOUT HOW THEY CAME ABOUT AND WHAT IT DOES TO THE REVENUE. SO THE NEXT FOUR SLIDES AND I APOLOGIZE FOR ALL THESE NUMBERS. BUT THAT'S WHAT TAX RATE CALCULATION IS ALL ABOUT. BUT I WILL I WILL SIMPLIFY IT AS BEST AS I CAN. THE NEXT FOUR SLIDES ARE GOING TO LOOK AND FEEL EXACTLY THE SAME. SO LET ME TAKE THE TIME TO EXPLAIN TO YOU HOW EACH ONE OF THESE IS SET UP. AND THE HEADING YOU WILL, YOU WILL SEE THE TYPE OF TAX RATE WE'RE TALKING ABOUT ON THIS SLIDE. SO IN THIS CASE IT'S THE NO NEW REVENUE TAX RATE. OKAY. THEN WHEN YOU LOOK AT THE CENTER THE THE SPREADSHEET THE TABLE, IT HAS TWO SECTIONS DIVIDED BY THAT BLUE DARK BLUE BAR TO THE LEFT. WE'RE COMPARING WHATEVER TAX RATE WE'RE TALKING ABOUT TO THE CURRENT ADOPTED TAX RATE. SO IN THIS CASE WE'RE TALKING ABOUT NO NEW REVENUE TAX RATE. AND IF YOU LOOK AT THE SECOND COLUMN WHICH IS HIGHLIGHTED THAT'S THE NO NEW REVENUE TAX RATE. AND THE COLUMN RIGHT NEXT TO IT IS THE CURRENT CITY'S CURRENT ADOPTED TAX RATE. SO WHEN YOU COMPARE THE TWO IT GIVES YOU THE INCREASE DECREASE DOLLAR AND THE INCREASE DECREASE IN PERCENTAGE. SO THAT'S ALL IT'S DOING. SO AND I'LL COME BACK TO IT. LET'S GO ON THE OTHER SIDE OF THE BLUE BAR. ON THIS SIDE. I AM TRYING TO SHOW YOU WHAT THE PROPOSED BUDGET HAS. FOR PROPERTY TAX REVENUES FOR M AND O AND FOR INS. THEN I'M SHOWING YOU RIGHT NEXT TO IT. IF YOU WERE TO ADOPT THIS RATE, WHATEVER RATE WE'RE TALKING ABOUT, THAT'S THE AMOUNT OF REVENUE IT'S GOING TO GENERATE RIGHT NEXT TO THE BUDGET. AND SAME THING HERE. I'M COMPARING THE BUDGET TO THE TAX RATE, CALCULATED REVENUE AND GIVING YOU A COMPARISON. IS IT GOING TO GIVE ME MORE MONEY OR LESS MONEY. AND WHAT THAT DIFFERENCE IS. OKAY EVERYBODY MAKE SENSE. ALL RIGHT. SO LET'S WALK THROUGH THE TWO THINGS THAT WILL STAY CONSTANT IN THE NEXT FOUR SLIDES. THE CURRENT ADOPTED TAX RATE. THE SECOND COLUMN FROM THE LEFT AND THE CITY MANAGER'S PROPOSED BUDGET REVENUE WILL STAY COMMON. I MEAN CONSTANT IN ALL OF THESE COMPARISONS BECAUSE THE BUDGET HAS ALREADY BEEN PRESENTED. THOSE NUMBERS ARE LOCKED IN. THE CURRENT ADOPTED TAX RATE IS ALREADY ADOPTED, IS LOCKED IN. AND THOSE ARE THE TWO THINGS WE'RE COMPARING TO. SO WHEN YOU LOOK AT THE NO NEW REVENUE TAX RATE OF 6322, AND YOU COMPARE THAT TO OUR CURRENT ADOPTED TAX RATE OF 5957, IT IS 3.6 $0.05 HIGHER THAN OUR ADOPTED TAX RATE, OR 6.13%. AND FOR DISCUSSION PURPOSES ONLY, WE KNOW WE CAN'T ADOPT THIS TAX RATE BECAUSE IT'S HIGHER THAN THE VOTER APPROVAL TAX RATE. IF THAT TAX RATE WAS TO BE IMPLEMENTED, IT WOULD RAISE $39.8 MILLION, WHICH IS MUCH HIGHER THAN WHAT THE PROPOSED BUDGET ALREADY HAS, THAT WE HAVE BALANCED THE BUDGET USING THOSE NUMBERS. WE HAVE CLOSED THE GAP AND WE HAVE RESTORED THE RESERVE BASED ON THOSE NUMBERS. SO IT GIVES YOU IF YOU LOOK AT THE COMPARISON, THE M AND O WILL BRING IN $6.3 MILLION MORE THAN WE NEED. AND THE I AND S WILL BE ABOUT 80 $88,000 LESS. BUT NET TOGETHER WILL BE 6.2 MILLION MORE THAN WHAT THE BUDGET ALREADY HAS BUILT IN. [02:10:03] DO Y'ALL HAVE ANY QUESTIONS BEFORE I GO TO THE NEXT? BECAUSE I WANT TO MAKE SURE THAT Y'ALL UNDERSTAND THE SETUP BECAUSE IT'LL BE THE EXACT SAME SETUP. OKAY, SO NEXT ONE UP IS THE VOTER APPROVAL TAX RATE. THIS IS THE RATE THAT WE CANNOT EXCEED WITHOUT TRIGGERING BOND ELECTION. SO WHEN YOU COMPARE THE VOTER APPROVAL TAX RATE OF 5650 TO OUR ADOPTED TAX RATE OF 5957, IT IS 3.0 $0.07 LESS THAN THE ADOPTED TAX RATE, OR 5.15%. SO THIS IS THE MAX WE CAN SET OUR TAX RATES ON. WE CAN'T EXCEED IT WHICH IS 5650. AND IF WE WERE TO ADOPT THIS TAX RATE WHAT WILL IT DO TO THE REVENUES. SO WHEN YOU LOOK AT THE REVENUE WE HAD BUDGETED 21 MILLION FOR 50 AND $300. IT WILL BRING IN 23, FIVE, 45 OR 2 MILLION, ALMOST TWO, A LITTLE SLIGHTLY OVER 2 MILLION MORE THAN WHAT WE HAVE IN THE BUDGET. THERE'S NOTHING WRONG WITH IT. IT'S A POLICY DECISION ON THE INS SIDE. IT WILL BE ABOUT THE SAME ROUGHLY. I'M NOT WORRIED ABOUT THE $88,000 SHORTFALL, BECAUSE NONE OF THESE NUMBERS ARE GOING TO LAND EXACTLY THE WAY THE SPREADSHEET IS SAYING, BECAUSE YOU'LL HAVE PROTESTS, YOU WILL HAVE PEOPLE GOING INTO BANKRUPTCIES, BUSINESSES GOING INTO BANKRUPTCIES. ALL THOSE FACTORS WILL COME INTO PLAY. RIGHT. THE APPRAISAL REVIEW BOARDS DECISIONS MAY AFFECT THESE NUMBERS AS WELL. SO AT 5650, IF YOU WERE TO ADOPT THE VOTER APPROVAL TAX RATE. IT WILL GIVE THE GENERAL FUND AN ADDITIONAL BOOST OF $2 MILLION. THIS IS THE THE HIGH END OF THE TAX RATE SPECTRUM THAT WE TALKED ABOUT ON SLIDE 15. SO HERE'S OPTION ONE. SO ON THIS OPTION WHAT I DID WAS I LOOKED AT A MIDPOINT. BECAUSE WHEN WE WERE TALKING ABOUT THE BUDGET PRESENTATION ON AUGUST 1ST, SOME COUNCIL MEMBERS WERE WERE INTERESTED IN PERHAPS. PROVIDING FOR SOME. WAGE ADJUSTMENT. FOR OUR EMPLOYEES. BECAUSE IF YOU RECALL, MY RECOMMENDED PROPOSED BUDGET HAS NO. MERIT INCREASE OR COST OF LIVING ADJUSTMENT ZERO. SO WHEN I HEARD THAT CONVERSATION WHEN I WAS WORKING ON THE TAX RATE, I SAID, OKAY, AT WHAT TAX RATE WILL IT HELP US IF COUNCIL WAS TO DECIDE TO IMPLEMENT THAT OPTION? AND I THINK FOR ALL OUR EMPLOYEES, 1% IS ABOUT HALF $1 MILLION ROUGHLY. SO IF YOU WERE TO ADOPT A TAX RATE OF 5600, IT'S LOWER THAN THE VOTER APPROVAL TAX RATE. IT WILL GIVE US THE MONEY WE NEED FOR OUR DEBT OBLIGATIONS, BUT IT WILL ALSO GIVE YOU ABOUT $1.8 MILLION CUSHION IN YOUR GENERAL FUND, AND THE OVERALL TAX RATE IS LOWER THAN THE CURRENT ADOPTED TAX RATE. SO THAT'S OPTION NUMBER ONE. THAT'S HOW I CAME UP WITH IT. THERE'S NO MAGIC TO IT OTHER THAN LISTENING TO COUNCIL MEMBERS COMMENTS AT THE AUGUST 1ST MEETING. IF THAT WAS TO. TO BE LOOKED AT, THIS IS ONE POSSIBILITY. THEN I SAID, OKAY. LET'S LOOK AT AN OPTION THAT WOULD GENERATE WHAT TAX RATE WOULD GENERATE EXACTLY WHAT WE HAVE IN THE BUDGET, OR AS CLOSE AS I CAN GET TO WHAT'S IN THE BUDGET. BECAUSE WHEN YOU'RE WORKING WITH FOUR DIGITS AND SIX DIGITS, IT'S VERY DIFFICULT TO LAND RIGHT ON THE DOLLAR. SO AT 5340, WHICH IS LESS THAN THE VOTER APPROVAL TAX [02:15:10] RATE, WHICH IS LESS THAN OUR CURRENT APPROVED ADOPTED TAX RATE AND IS LESS THAN OPTION NUMBER ONE. IT WILL HIT VERY CLOSE TO WHAT WE HAVE IN THE BUDGET. SO ON THE NO SIDE IS ABOUT 140,140 1000. ON THE INSIDE IT'S ABOUT 88,000. THE OTHER WAY NET IS ABOUT 53,000 TOGETHER. ANY QUESTIONS ON THE THREE TAX RATES WE COMPARED SO FAR? BEFORE I GO TO THE NEXT SLIDE. DO YOU ALL UNDERSTAND HOW I CAME UP WITH OPTION ONE AND OPTION TWO. THE DIFFERENCE BETWEEN THE TWO. ALL RIGHT. SO IF YOU WERE TO LOOK AT OPTION ONE, WHAT IS THE IMPACT OF OPTION ONE ON OUR AVERAGE RESIDENT. VALUE. AVERAGE VALUED RESIDENTIAL PROPERTY IN KYLE. THAT IS A HOMESTEAD, NOT A RENTAL PROPERTY A HOMESTEAD. SO FOR AN AVERAGE HOME IN LAST YEAR WAS VALUED AT $317,616 IN 26. THE AVERAGE HOME IS VALUED AT 301,530, OR A DECREASE OF ABOUT $16,086. THE AVERAGE HOME VALUE DROPPED BY 5%. THIS INFORMATION IS COMING FROM THE APPRAISAL DISTRICT. SO THIS IS NOT SOMETHING THAT STAFF PROJECTED ITS ACTUAL VALUATIONS. THEY LOOKED AT AND DIVIDED BY THE NUMBER OF PROPERTIES IN THAT CATEGORY. SO IF YOU WERE TO TAKE THE AVERAGE HOME VALUED AT 301,005 30 AND APPLIED OPTION ONE. AND IF YOU RECALL, OPTION ONE TAX RATE WAS 5600, THE BASE TAX LEVY WILL BE I'M GOING ACROSS ON THE LINE WHERE IT SAYS 2026, THE TAX LEVY FOR THE CITY'S TAX RATE. THE TAX BILL WILL BE $1,688.57. NOW REMEMBER WE'RE LOOKING AT A HOMESTEAD. SO THERE'S A HOMESTEAD DEDUCTION WE HAVE TO TAKE OUT FROM THAT TAX BILL. YOU DON'T GET TAXED ON THAT 4000 THAT YOU GET AS AN EXEMPTION FOR HOMESTEAD. SO USING THE 5600 AS THE TAX RATE, THE HOMESTEAD DEDUCTION OR REDUCTION, I SHOULD SAY IS $224. SO THE NET TAX BILL FOR AN AVERAGE HOME. IN 26, IF YOU WERE TO ADOPT TAX RATE OF 5600 WILL BE $1,464.57. BUT WHEN YOU LOOK AT THE 25 LINE, THE VALUE WAS HIGHER. THE TAX RATE WAS HIGHER. SO THE BILL THE BASE BILL WAS $1,892.04. AFTER YOU APPLY THE HOMESTEAD EXEMPTION, THE NET BILL WAS $1,653.76. SO IF YOU WERE TO ADOPT THIS TAX RATE, OUR AVERAGE HOME VALUED HOMEOWNER WILL SEE A REDUCTION OF $189.19 IN THEIR TAX BILL, OR 11.44%. THIS IS AN AVERAGE. NOT EVERYBODY IS GOING TO SEE THIS. SOME ARE GOING TO SEE A HIGHER IMPACT. SOME ARE GOING TO SEE A LOWER IMPACT THAN THIS. SAME CALCULATION FOR OPTION NUMBER TWO. SO UNDER OPTION NUMBER TWO REMEMBER WHAT IS I'M SOLVING FOR AT WHAT TAX RATE AM I GOING TO BE ABLE TO RAISE THE SAME AMOUNT OF MONEY THAT IS IN OUR PROPOSED BUDGET. SO 5340 IS THE TAX RATE THAT WILL GENERATE THAT AT THIS TAX RATE. THE AVERAGE NET TAX BILL AFTER THE HOMESTEAD REDUCTION IS $1,396.57. AND IF YOU COMPARE THAT TO THEIR AVERAGE BILL LAST YEAR, IT WOULD BE A REDUCTION OF $257.19 OR [02:20:04] 15.6%. SO THAT'S ON THE AVERAGE BILL. NOW LOOKING AHEAD, ANY QUESTIONS ON THE AVERAGE BILL CALCULATIONS? OKAY. LOOKING AHEAD TO NOT NEXT YEAR BUT THE YEAR AFTER. PROPERTY TAX RATE IS EXPECTED TO INCREASE IN FISCAL YEAR 2728 DUE TO FUTURE DEBT SERVICE REQUIREMENTS. AND WHAT DO I MEAN BY THAT? BECAUSE I WANT YOU TO BE AWARE OF JUST BECAUSE WE'RE HAVING A TAX RATE REDUCTION OPTION THIS YEAR DOES NOT MEAN WE'LL HAVE A TAX RATE REDUCTION IN 2728, BECAUSE WE KNOW NEXT YEAR WE'RE GOING TO ISSUE DEBT, TAX SUPPORTED DEBT FOR ROAD BONDS, BECAUSE WE'RE SPENDING MONEY ON THE ROAD BONDS THAT WE HAVEN'T ISSUED DEBT YET. FOR THAT PIECE, WE WILL ISSUE DEBT FOR FIVE TRAILS THAT WE'RE BUILDING. WE'RE GOING TO ISSUE DEBT FOR SIDEWALKS, PARKS, THINGS OF THAT NATURE. SO THE DEBT SERVICE FOR NEXT YEAR IS GOING TO GO UP. AND SO BY DOING THAT, THE I MS COMPONENT OF THE TAX RATE IS GOING TO GO UP. NOW HOW MUCH WILL IT GO UP. WE DON'T KNOW BECAUSE WE DON'T HAVE THE VALUATIONS YET FOR 28. IT WILL DEPEND ON THAT. SO THE EXAMPLES I USED HERE IS WHY WOULD IT GO UP. BECAUSE WE'RE GOING TO ONE FOR SURE. WE KNOW. WE'RE GOING TO ISSUE DEBT. AND THESE ARE FOR, LIKE I SAID, ROAD BONDS, BIKE TRAILS, STREET IMPROVEMENTS, PEDESTRIAN CROSSING SIDEWALKS, INTERSECTION IMPROVEMENTS, ANIMAL SHELTER. THAT'S GOING TO BE A BIG ONE, BUT I DON'T THINK WE'RE GOING TO SPEND ALL OF IT NEXT YEAR. IT'S GOING TO BE SPREAD OVER TIME. BUT ROAD BONDS ARE GOING TO HAVE AN IMPACT. PARK IMPROVEMENTS. THE OTHER THING TO KEEP IN MIND IS AS WE'RE MOVING THROUGH THIS TIME SPECTRUM, OUR MANAGEMENT TEAM AND OUR EXECUTIVE TEAM, JESSE AND AMBER, ARE HELPING US CONTINUOUSLY REVIEWING OUR DEPARTMENTS AND OUR OPERATING EXPENSES. WE'RE TRYING TO MANAGE THOSE COSTS AND CONTROL THOSE COSTS, SO IT WON'T BE AS MUCH A PRESSURE ON THE NO SIDE AS WE WILL HAVE THE INS SIDE. THE PRESSURE IS GOING TO BE ON THE DEBT SIDE IN 2728. SO FISCAL YEAR ONE. WITH ALL THE DISCUSSIONS WE'VE HAD SO FAR SINCE MAY, OUR FOCUS HAS BEEN TO STRUCTURALLY BALANCE AND RESTORE RESERVES IN THE CITY'S FOUR PRIMARY FUNDS GENERAL FUND WATER, WASTEWATER AND STORM DRAINAGE. THAT HAS BEEN OUR FULL FOCUS AND ATTENTION TO ELIMINATE REDUNDANCIES TO MAKE IT MORE EFFICIENT, IMPLEMENT COST REDUCTION STRATEGIES. THAT HAS BEEN OUR ENTIRE FOCUS FOR THE CURRENT YEAR AND GOING INTO NEXT FISCAL YEAR. YEAR NUMBER TWO, THAT FOCUS WILL CONTINUE. HOWEVER, A GREATER EMPHASIS IS GOING TO BE ON THE CITY'S CIP PROGRAM. THE CIP SPENDING PLAN AND THE ASSOCIATED DEBT THAT WE'RE GOING TO HAVE TO ISSUE. SO IT'S GOING TO BE VERY IMPORTANT, VERY CRITICAL FOR STAFF TO REALLY SCRUB THOSE NUMBERS AS TO WHAT WE'RE GOING TO ISSUE IN TERMS OF DEBT AND WHY IS IT ONE OF THOSE PROJECTS THAT WE ARE JUST OVERLY CONSERVATIVE AND WE WANT TO BUILD IT FIVE YEARS IN ADVANCE, OR IS IT SOMETHING THAT WE REALLY, TRULY NEED NOW THAT WE NEED TO SPEND MONEY ON? THAT'S THE EXERCISE WE'RE GOING TO GO THROUGH. WE HAVE A, I BELIEVE, CLOSE TO ABOUT 100 PROJECTS ON OUR PLATE. WE'RE GOING TO SCRUB EACH ONE OF THOSE AND WE'RE GOING TO. FIGURE OUT THE BUSINESS CASE FOR EACH. WE'RE GOING TO FIGURE OUT THE TIMING AND THE SEQUENCES OF EACH ONE OF THOSE. THERE WILL BE SOME PROJECTS THAT WILL MOVE FORWARD FROM MAYBE 28, 29 TO SOONER YEARS, EARLIER YEARS. THERE WILL BE SOME PROJECTS THAT WILL GET PUSHED ASIDE OUTSIDE OF THE FIVE YEAR SPENDING PLAN, BECAUSE WE WERE OVERLY ZEALOUS IN TERMS OF OUR PLANNING. SO THAT'S THE FOCUS THAT'S GOING TO HAPPEN AFTER THE BUDGET IS ADOPTED AND WE GET INTO NEXT FISCAL YEAR. [02:25:05] NOT THAT WE'RE GOING TO FORGET ABOUT THE OPERATING COSTS. WE WILL STILL CONTINUE LOOKING AT THOSE THAT WILL BE PART OF OUR CONTINUOUS IMPROVEMENT PROGRAM. BUT THE BIG MONEY IS IN THE CIP. BECAUSE IT DRIVES THE DEBT, IT DRIVES THE PROPERTY TAX RATES. WHEN WE LOOK AT THE TOTAL PICTURE, OUR GOAL, OUR GUIDING PRINCIPLES, IS WHAT IS THE IMPACT TO A HOUSEHOLD THAT WE ARE CREATING BASED ON OUR DECISIONS NOT LOOK AT EACH ONE OF THESE SEPARATELY. SO AN AVERAGE HOUSEHOLD HAS A PROPERTY TAX BILL, A WATER BILL, A WASTEWATER BILL, TRASH BILL. DRAINAGE FEE, ALL OF THOSE. HOW ARE WE IMPACTING AN AVERAGE RESIDENT IN A HOUSEHOLD IN KYLE? WE SHOULD NOT LOOK AT WATER BY ITSELF OR TAX RATE BY ITSELF. WE SHOULD LOOK AT IT IN TOTALITY. SO THAT'S OUR GOAL FOR NEXT YEAR. SO REAL QUICK ON NEXT STEPS. SO TONIGHT COUNCIL WE TALKED ABOUT THE COST OF SERVICE STUDY RESULTS. I'M GOING TO ASK THE CONSULTANT TO TO FINALIZE THE REPORT AND WE CAN CLOSE THAT PROJECT. WE REVIEWED THE PROPERTY TAX CALCULATIONS, VALUATIONS. AND THERE'S ANOTHER AGENDA ITEM THAT AMY IS GOING TO COVER AT THE END, WHICH IS AN APPROVAL OF A RESOLUTION. THIS IS REQUIRED BY STATE LAW. AND SHE'LL EXPLAIN IT TO YOU HOW THAT WORKS. SATURDAY, SEPTEMBER 5TH AT 5:30 P.M.. OUR FIRST SET OF PUBLIC HEARINGS WILL BEGIN. WE'LL HAVE OUR FIRST READING ON THE BUDGET ADOPTION ORDINANCE. WE'LL HAVE THE FIRST READING ON THE PROPERTY TAX RATE ADOPTION ORDINANCE. AND FIRST READING ON PROPERTY TAX INCREASE RATIFICATION. IF IT'S APPLICABLE. AND AMY IS GOING TO EXPLAIN THAT, WHETHER THAT'S GOING TO COME INTO PLAY OR NOT BASED ON THE RATES THAT Y'ALL, Y'ALL ADOPT. THEN ON TUESDAY, SEPTEMBER 15TH AT 7 P.M.. WE HAVE OUR SECOND ROUND OF PUBLIC HEARINGS, SECOND READING OF THE ORDINANCES THAT WILL HAPPEN ON SEPTEMBER 15TH. WE HAVE TO HAVE ONE OF THESE MEETINGS ON A REGULAR CITY COUNCIL MEETING. AGENDA IS REQUIRED BY CITY CHARTER. WE HAD TO HAVE SEPTEMBER 15TH TO MEET THE STATE LAW REQUIREMENTS BETWEEN NOTICE REQUIREMENTS, PUBLIC HEARING DATES AND SEPTEMBER 15TH IS ALSO STATE LAW PLUS CITY CHARTER. THAT RIGHT THERE, MR. PEREZ? YES, SIR. ARE THERE ANY THINGS THAT WE CAN MAYBE TABLE THAT NIGHT IF THERE'S ANY URGENT OR NOT URGENT AGENDA ITEMS ON THE 15TH. ON THE 15TH. YES, SIR. WE'RE LOOKING AT THAT NOW. WOULD WE? COULD WE MAYBE COUNCIL MEMBERS IF THEY'RE TRYING TO BRING AN AGENDA ITEM, WOULD YOU MIND KIND OF DOUBLE CHECKING AND LOOKING TO SEE IF THERE'S SOMETHING THAT'S PRECEDENT THAT YOU MIGHT NEED TO BRING FOR COUNCIL FOR DISCUSSION? BY ALL MEANS, I'M OPEN TO THAT. BUT I KNOW AS WE'RE GETTING INTO SEPTEMBER, THESE CONVERSATIONS GET LONG. YES, SIR. AND THEY'RE IMPORTANT. WE COULD HAVE A LARGE TURNOUT IN OUR AUDIENCE. SO MAYBE THAT COULD BE SOMETHING COUNCIL COULD CONSIDER. IF THERE'S AN AGENDA ITEM THAT MAYBE COULD BE TABLED UNTIL THE FOLLOWING MEETING, THE FOLLOWING MEETING, OR MAYBE IN OCTOBER. JUST SO THAT WAY WE COULD HAVE IT FOR DISCUSSION TIME, DEDICATED TIME FOR BUDGET DISCUSSIONS BECAUSE THAT'S WE'RE LOOKING AT THAT UNLESS IT'S ABSOLUTELY CRITICAL AND EMERGENCY AGENDA ITEM, WE'LL TRY TO POSTPONE IT TO THE FOLLOWING MEETING. SAME THING WITH CONSENT AGENDA ITEMS. IF IT'S SOMETHING THAT CAN BE TABLED, WE CAN JUST REALLY FOCUS MOST OF OUR SEPTEMBER MEETINGS. THAT WAS GOING TO BE. MY NEXT QUESTION IS, ARE Y'ALL OKAY WITH THE CONSENT AGENDA OR DO YOU WANT ME TO LOOK AT THAT AS WELL? I'M OKAY WITH THE CONSENT AGENDA. I MEAN, IF SOMEBODY WANTS TO, I THINK HISTORICALLY YOU'VE DONE AN EXCELLENT JOB WORKING WITH ME TO MAKE A GOOD CONSENT. AND YOU'LL SAY DURING THE MEETING, I THINK THIS IS GOING TO BE GOING TO BE POOLED. SO I'LL GO AHEAD AND PUT IT ON A DIFFERENT PART OF THE AGENDA. AND SO I'M OKAY WITH THE CONSENT IF EVERYBODY ELSE IS OKAY. [02:30:02] ARE YOU OKAY? COUNCIL MEMBERS. ADA. ALL RIGHT. CAN YOU GUYS. YEAH. SO WE CAN WE CAN DO CONSENT. LET'S BUT I AGREE. LET'S KEEP IT AS SIMPLE AS POSSIBLE. I VOW NOT TO PUT ANYTHING. ALTHOUGH THE 15TH IS MY BIRTHDAY. I VOW NOT TO PUT ANYTHING ON THERE. SO I THINK THAT WOULD BE FAIR TO THE RESIDENTS THAT WANT TO LISTEN AND SPEAK AND FAIR TO EACH OTHER. IF WE KIND OF JUST AGREE TO LET'S FOCUS ON THE BUDGET AND THE NECESSITIES. NOW, ONE THING I DIDN'T MENTION. AND I'LL GO BACK TO 15. SLIDE 15. SO WE HAVE TO COMPLY WITH THE TRUTH AND TAXATION REQUIREMENTS. AND IT HAS A SPECIFIC NOTICE REQUIREMENTS. AND IF I COULD REQUEST COUNSEL'S DIRECTION ON YOU DON'T HAVE TO VOTE ON THE TAX RATE. IF YOU COULD LET ME KNOW THE RANGE OR IF YOU ARE ALL IN AGREEMENT WITH WE'RE GOING WITH VOTER APPROVAL TAX RATE, OR WE'RE GOING WITH OPTION ONE OR OPTION TWO. I CAN START WORKING ON THE NOTICES THAT NEEDS TO BE PUBLISHED. WE HAVE TO WORK WITH THE TAX HAYS COUNTY TAX ASSESSOR COLLECTOR'S OFFICE TO GET THOSE FORMAL NOTICES LOCKED DOWN. THAT WOULD BE HELPFUL. JUST FOR THE RECORD, YOU DO HAVE TO VOTE ON A MAXIMUM TAX RATE. THAT'S THE NEXT ITEM. SO IF WE CAN GET AN IDEA OF WHAT YOUR MAXIMUM IS, THAT'S THE NEXT ITEM. WE ALREADY KNOW WHAT OUR MAXIMUM IS BECAUSE IT'S THE VOTER APPROVED, RIGHT? WE CAN'T EXCEED THAT WHICH IS BELOW OUR CURRENT RATE. ALL RIGHT. DOES EVERYBODY GET WHAT WE'RE DOING? I HAVE ONE QUESTION. AND THIS MIGHT BE BECAUSE I'M JUST A LITTLE BIT NEWER TO THE PROCESS. BUT IF I HAD BUDGET AMENDMENTS, DO I BRING THOSE UP IN THAT FIRST READING? I MEAN, I WOULD ASSUME THAT I WOULD TRY TO BRING THOSE UP BEFOREHAND, BUT I'M JUST NOT FAMILIAR WITH LIKE WHEN OR HOW THAT'S DONE. SO COUNCIL MEMBERS CAN BRING AMENDMENTS IN THE FIRST ON THE FIFTH DISCUSSION, FIRST ROUND OF HEARINGS. AND YOU CAN ALSO BRING AMENDMENTS ON THE 15TH. SO UNTIL UNTIL THE BUDGET IS FORMALLY ADOPTED, COUNCIL CAN MAKE AMENDMENTS. OKAY. ALL RIGHT. THANK YOU. I'M TRYING TO SEE IF WE HAVE ANY SPECIAL MEETINGS FOR THE BUDGET. IT LOOKS LIKE THURSDAY THE 27TH. WILL WE? I'M NOT SURE WHAT WE'LL BE GOING OVER, BUT I THINK HOW I'VE CURRENTLY DONE IT IS. I JUST FEEL LIKE WE'VE HAD. SO WE HAD A LOT OF MEETINGS AND THERE WAS A LOT OF DISCUSSION. AND SO IF WE DO FEEL LIKE WE WANT TO ADD ANOTHER MEETING TO A THURSDAY. SO WE CAN DISCUSS WHAT KIND OF AMENDMENTS WE'D LIKE TO TALK ABOUT. I DON'T NECESSARILY, I MEAN, I AGREE WE CAN DO IT UP UNTIL THE 15TH, BUT I THINK THAT KIND OF PUTS A LOT OF PRESSURE ON COUNCIL NOT TO HAVE TIME TO THINK THINGS THROUGH. SO IF WE CAN BRING ANY AMENDMENTS, PREFERABLY ON THE FIFTH, OR IF ANYBODY WANTS TO HAVE A SPECIAL CALLED MEETING TO DISCUSS BUDGET AMENDMENTS, I'M OPEN TO THAT AS WELL. JUST SO EVERYBODY ON COUNCIL FEELS HEARD AND FEELS LIKE THEY'VE HAD OPPORTUNITY TO ASK FOR THESE AMENDMENTS. I'VE SEEN, AND I WILL ALWAYS ADVOCATE FOR PEOPLE TO GO LOOK AT THE BUDGET AMENDMENTS. IT WAS BEAUTIFUL. BUT I THINK IT DID PUT PRESSURE ON COUNCIL TO, YOU KNOW, TO VOTE FOR THE AMENDMENTS AND AND RIGHTFULLY SO AT THAT TIME. BUT I DON'T WANT TO HOPEFULLY HAVE TO THINK ON A LAST MINUTE ABOUT THAT. SO IF WE CAN, I'M ALWAYS OPEN NOT THAT I WANT TO HAVE AN EXTRA MEETING, BUT ALWAYS OPEN TO HAVE THAT MEETING SO WE CAN ALL HAVE AN OPPORTUNITY TO TALK. IT'S COUNCIL'S CALL, WHATEVER YOU ALL DECIDE, WE'LL MAKE IT HAPPEN WITH MY EXPERIENCE. COUNCIL MEMBER ZAPATA, IF THERE'S ANY ITEMS THAT YOU WANT TO CONSIDER FOR AMENDMENTS IF YOU HAVE IT AND READY TO GO IT WOULD HELP THE CITY TO BE ABLE TO HAVE THAT EXTRA TIME. SO LIKE, LIKE THE MAYOR SAYS, IF YOU HAVE SOMETHING READY TO GO BY THE FIFTH, THEN THAT WAY IT GIVES THE CITY TO BE ABLE TO ADJUST THE BUDGET VERSUS AT THE LAST MINUTE. SO IF THERE'S SOMETHING THERE THAT YOU WANT TO CONSIDER OR LOOK AT, YOU KNOW, IT GIVES THEM THAT EXTRA TIME BECAUSE WHAT WE WILL BE ON THE CLOCK AS OF SEPTEMBER 1ST, BECAUSE WE'LL HAVE TWO MEETINGS AND THEN WE'VE GOT TO VOTE ON THE BUDGET. SO ANYTHING THAT YOU'RE LOOKING AT, I'VE LEARNED IN THE PAST ALSO BECAUSE THERE WAS OTHER WHEN WE HAD IT WITH OTHER YEARS WHERE PEOPLE COME IN AT THE VERY LAST MINUTE, LIKE AT THE LAST DAY SAYING, I WANT TO ADD THIS AND I NEED TO SUBTRACT THIS. WELL, IF YOU'RE GOING TO ADD A CERTAIN AMENDMENT OR YOU GOT TO PULL THAT MONEY FROM SOMEWHERE ELSE TO GO INTO WHAT YOU'RE TRYING TO GET. AND IT'S SOMETIMES AT THE LAST MINUTE WE'RE TRYING TO FINAGLE WHICH MONEY TO PULL FROM, YOU KNOW, IF WE WANT TO INCREASE IT BY 50,000 HERE WERE YOU'RE GOING TO HAVE TO TAKE 50,000 FROM SOMEWHERE ELSE OR OF SOMETHING OF THAT NATURE THERE. [02:35:08] SO AND I'M COMPLETELY READY FOR THAT. NO, I'M, I MEAN, I HAVE ALL OF MY BUDGET AMENDMENTS READY. IT'S JUST THAT THERE'S NO LIKE FORMALIZED PROCESS. SO I THINK I WOULD APPRECIATE A SPECIAL MEETING FOR US TO BE ABLE TO DISCUSS THAT AHEAD OF TIME. BECAUSE THE LAST THING THAT I WANT TO DO IS SPRING THESE UPON COUNCIL OR UPON STAFF, BECAUSE THAT WOULD BE A LOT TO TAKE IN IN ONE MEETING AND A LOT TO HAVE TO CHANGE WITHIN TWO WEEKS NOTICE FROM SEPTEMBER 5TH TO SEPTEMBER 15TH. YEAH, THAT'S KIND OF WHY, YEAH, THAT'S WHY WE WERE RECOMMENDED. AND MAYBE, MARK, YOU MAY HAVE HEARD WHEN WE WERE COMING IN, IF THERE'S ANY LIKE COUNCIL ITEMS THAT WE COULD JUST MAYBE TABLE OR IF THERE'S ANYTHING THAT'S URGENT THAT WE NEED TO BE ABLE TO FINALIZE IN CONSENT TO BRING IT IN THOSE MEETINGS AND JUST, JUST LIMIT JUST THE DISCUSSIONS FOR BUDGET IN SEPTEMBER ON THOSE. SO THAT WAY WE COULD HAVE OPPORTUNITIES TO DISCUSS LIKE SOME OF YOUR AMENDMENTS IF THERE'S ANYTHING THAT YOU'RE BRINGING FORWARD, SO FORTH. OKAY. MOVING ON. DO WE WANT TO PLAN A SPECIAL MEETING FOR THURSDAY? IT'S UP TO YOU. I'D RATHER I WOULD LIKE TO. I'D RATHER DO IT SOONER THAN LATER. SO IT'S AUGUST. OKAY. WE ALREADY HAVE ONE ON THE 27TH, DON'T WE? YES. WE WANT TO DO IT ON A SATURDAY OR THURSDAY BECAUSE I KNOW COUNCIL MEMBER HARRIS HAS ISSUES THE SECOND THURSDAY. YES, SHE HAS A COMMITMENT. SO WE COULD DO IT ON SEPTEMBER 3RD. THAT'S A THURSDAY. WE COULD DO IT ON THE 20TH. TODAY'S THE 13TH. JENNIFER, I'M GOING TO NEED YOUR HELP IN TERMS OF IF WE'RE COMMITTED, IF COUNCIL IS COMMITTED ON THOSE DATES, SEPTEMBER 3RD IS OPEN. OKAY. WOULD THAT BE TOO FAR AWAY OR ARE YOU COMFORTABLE WITH THAT? COUNCIL MEMBER SABATA, I THINK MY PREFERENCE IS LIKE WHAT'S COMFORTABLE FOR THE REST OF EVERYONE ELSE AND NELSON FOR STAFF. IF THE THIRD IS ACCEPTABLE, THEN I'M FINE WITH THAT. IF COUNCIL OR STAFF FEELS THAT IT WOULD BE BETTER TO HAVE IT EARLIER THAN THAT, AND IN ORDER TO MAYBE TAKE ITEMS INTO CONSIDERATION FOR A SEPTEMBER 5TH PROPOSAL. THEN I THINK THAT'S, THAT'S SOMETHING THAT I'M FLEXIBLE WITH FROM STAFF'S PERSPECTIVE. MAYOR. IT WOULD BE HELPFUL IF IT'S SOONER THAN LATER. HOW ABOUT THE 25TH? AUGUST 25TH? THAT'S A TUESDAY THOUGH. WELL, AND WE CAN ALSO DO SATURDAY, SUNDAY, SATURDAYS IF YOU GUYS ARE OKAY WITH THAT. IS THERE A REASON WE'RE NOT CONSIDERING ADDING IT TO THAT EXISTING THURSDAY ON THE 27TH? WHAT ARE WE WHAT IS THE 27TH? I DON'T THINK WE'VE SET THE AGENDA. WE HAVE I THINK WE HAVE ONE ITEM AND THEN WE HAVE THE SECURITY TRAINING. OKAY. SO WE HAVE THE VIVE TRAIL PROGRAM PRESENTATION TO COUNCIL AND WE HAVE THE SECURITY TRAINING FOR COUNCIL. OKAY. DO WE HAVE A PREFERENCE FOR A DAY? BECAUSE IF NOT, WE CAN JUST DO IT ON THE 22ND, WHICH IS A SATURDAY, AND WE COULD DO IT MAYBE IN THE MORNING. ARE YOU AVAILABLE IN THE MORNING OR. NO. STILL NOT AVAILABLE. STILL NOT UNTIL AFTER SEPTEMBER. I WILL BE AVAILABLE ON SATURDAY. SATURDAY'S MOVING FORWARD. OKAY. WHAT ABOUT THURSDAY, THE 20TH? DO YOU HAVE AN ETHICS COMMISSION MEETING? THAT'S WHY I WAS RECOMMENDED THE 25TH THAT TUESDAY. THERE'S PLANNING AND ZONING ON TUESDAY. WEDNESDAY THE 26TH. I'M AVAILABLE. IT'S AVAILABLE. AND YOU GUYS CAN DO THAT. WOULD THAT BE OKAY WITH YOU? COUNCIL MEMBER ZAPATA. THE 26TH FOR THE 26TH. I'M AVAILABLE FOR YOUR AMENDMENTS. ARE YOU OKAY? GOING VIRTUAL. IF YOU DON'T MIND GOING OFF CAMERA TO TALK ON THE PHONE. YOU'RE ALLOWED TO BE OFF CAMERA DURING A VIRTUAL MEETING AS LONG AS YOU'RE NOT DISCUSSING THE BUSINESS OF THE MEETING. IF THAT HELPS. OKAY. BECAUSE IT'S REALLY GOING TO BE BUDGET. BUT I DO. SO I THINK THAT'S WE NEED EVERYBODY'S FEEDBACK FOR THAT. DO WE WANT TO DO THE 29TH THEN JUST THAT EVENING. WHAT ABOUT THE 22ND. 22ND EVENING. I'M AVAILABLE TO DO VIRTUAL BUT I CAN DO VIRTUAL. [02:40:01] OKAY. WELL, THE 26TH FOR ME, I, I MIGHT NOT BE ABLE TO MAKE IT. I HAVE AN OUT OF TOWN WORK TRIP THE 21ST AND 22ND. SO I MIGHT BE ABLE TO MAKE IT IN DRIVING BACK IN FROM OUT OF TOWN, BUT I'M JUST NOT TOO SURE. AROUND WHAT TIME THAT WOULD BE. OKAY, WELL, I THINK THIS WOULD BE MAINLY FOR FOR YOU, FOR YOUR FOR YOUR AMENDMENT ITEMS. AND THEN OF COURSE OF ANYBODY ELSE. SO WOULD THE 25TH WORK OR WOULD THE MONDAY, I MEAN 25TH IS PNC, PNC DOES THE 23RD OF SUNDAY WORK? LIKE IF WE JUST DID A MORNING. I'M GOOD WITH THAT. I'M OKAY WITH THAT. IT'S UP TO STAFF. I MEAN, I KNOW SUNDAY I'M SORRY GUYS. YEAH I KNOW, I'M SORRY. I'M SORRY. MAYOR ALL OUR STAFF MEMBERS GO TO CHURCH. OKAY. YEAH, THAT MAKES SENSE. OKAY. NO, I'M JUST KIDDING. I THINK AFTERWARDS I THINK THE ONLY OPTION WOULD BE THAT WEDNESDAY THE MAYOR PRO TEM. I WAS JUST KIDDING. YEAH, YEAH, WE CAN DO THE 20. I THINK WE COULD DO THE 23RD IF WE MAKE IT. I MEAN, WE PUT A HARD STOP TO IT, LIKE A TWO OR WHATEVER. I'M TRAVELING THAT DAY. I CAN'T DO THE 23RD. OKAY. MARK MCKINNEY IS NOT GOING TO BE HERE. OKAY. SO WAS IT 29TH THEN? WAS OKAY IF WE DID THE EVENING. SO THAT WAY MAYOR PRO TEM WAS AVAILABLE. YOU KNOW, MAYOR THURSDAY 27TH IS A POSSIBILITY. WE CAN RESCHEDULE THE THE TRAINING PART OF IT. OKAY. WE CAN DO THE BIKE TRAIL FIRST AND GET THAT DONE. THEN WE CAN GET INTO THE BUDGET. OKAY. SO MY CONCERN IS I WANT TO GIVE FULL ATTENTION TO THE VIBE. I'M SURE I'M POSITIVE WE'RE GOING TO HAVE PEOPLE COME OUT. AND I JUST WANT TO MAKE SURE THAT WE A LOT AROUND THE RIGHT AMOUNT OF TIME FOR THEM TO COME OUT AND SPEAK AND FOR US TO ADDRESS ANY CONCERNS. WOULD THAT START AT SIX SIX? THERE YOU GO. YEAH. WE CAN START AT SIX. AND THEN AFTERWARDS WE WOULD HAVE THE AMENDMENT SECTION FOR YOU, MISS ZAPATA. WOULD THAT WORK? OKAY. THE 27TH. THAT THE MEETING THAT WE'RE GOING TO HAVE. YES. I THINK THAT WORKS. ESPECIALLY BECAUSE SOME OF THE AMENDMENTS THAT I'M PROPOSING MIGHT BE IN LINE IN TALKING ABOUT THE VIBE TRAIL. SO IT MIGHT BE HELPFUL TO HAVE THAT CONVERSATION AT ONCE. PERFECT. AND WHEN ARE WE GOING TO GET THE PRESENTATION FOR THE TRAIL THAT DAY. RIGHT. ON THE 27TH. WE'RE TALKING ABOUT CENTER STREET, OFF SYSTEM AND ON SYSTEM. AND THEN ON THE 10TH, WE'RE GIVING THE THE ENTIRE VIBE TRAIL PROGRAM DISCUSSION. OKAY. OKAY. SO I THINK CENTER STREET IS A MAIN CONCERN RIGHT NOW. YEAH. FOR A LOT OF PEOPLE. YEAH. AND YEAH, FOR A LOT OF PEOPLE, FOR A LOT OF DIFFERENT REASONS. BUT IT'S GOING TO BE IMPORTANT THAT WE ALSO INCLUDE THEM ON THE 10TH. SO YEAH, SO WE'RE GOING TO DO THE 27TH AN HOUR EARLIER STARTING AT SIX. OKAY. ALL RIGHT. ARE WE DONE WITH THIS ONE? WE CAN MOVE FORWARD. DO YOU NEED ANYTHING ELSE FROM US? NO. JUST ONE LAST ITEM THAT AMY WILL COVER. ALL RIGHT. GIVE A MINUTE FOR THE PRESENTATION TO POP UP. CAN I SEE THE PRESENTATION? OKAY. THERE WE GO. WHAT'S ON THE SCREEN? GOOD EVENING, MAYOR AND COUNCIL. [III.3) Approve a Resolution to record City Council's vote to place a proposal on the agenda of a future City Council meeting as an action item to adopt ad valorem tax rates (property tax rates) for the City of Kyle for Tax Year 2026 (Fiscal Year 2026-27); making findings of fact; and providing for related matters. (ROLL CALL VOTE IS REQUESTED)] AMY ALCORN, CITY ATTORNEY, FOR THE RECORD. SO THIS ITEM IS THE RECORD VOTE ON THE TAX RATE. THE INTERIM CITY MANAGER, AS YOU KNOW, IS PROPOSING AN AD VALOREM TAX RATE THAT DOES NOT EXCEED THE LOWER OF THE NO NEW REVENUE TAX RATE OR THE VOTER APPROVAL TAX RATE. AS HE EXPLAINED, THIS IS A VERY INTERESTING SITUATION WHERE OUR NO NEW REVENUE TAX RATE IS HIGHER THAN OUR VOTER APPROVAL TAX RATE. AND BECAUSE IT'S AN INTERESTING SITUATION, WE HAD TO SPEND A LITTLE BIT OF TIME LOOKING INTO WHAT YOU HAVE TO DO. SO TEXAS TAX CODE SECTION 26.061 REQUIRES THE CITY TO POST A SPECIFIC NOTICE OF A MEETING TO APPROVE AN AD VALOREM TAX RATE LIKE OURS. HOWEVER, THERE'S NO SPECIFIC SECTION IN THE CODE THAT REQUIRES YOU TO TAKE THIS RECORD VOTE, EXCEPT THAT THE NOTICE THAT WE HAVE TO PUBLISH HAS TO HAVE A RECORDING OF WHO WAS HERE, WHO VOTED, AND HOW THEY VOTED. THEREFORE, WE STILL HAVE TO TAKE THE RECORD VOTE. THE PURPOSE OF THE ITEM IS TO RECORD CITY COUNCIL'S VOTE ON A PROPOSED AD VALOREM TAX RATE, AS I MENTIONED. THIS SHOULD BE THE MAXIMUM RATE THAT WE CAN CONSIDER. SO WHEN WE HAVE OUR MEETING TO ACTUALLY ADOPT THE TAX RATE IN SEPTEMBER, YOU COULD APPROVE A LOWER TAX RATE, BUT YOU COULD NOT APPROVE A HIGHER TAX RATE. AND SO IF THE COUNCIL IS ON THE FENCE, I RECOMMEND THAT YOU PUT THE HIGHER TAX RATE IN THIS BECAUSE WE CAN ALWAYS LOWER IT LATER. [02:45:06] AND THEN AS INTERIM CITY MANAGER, PRESENTED THE. THE AD VALOREM TAX RATE WILL BE PRESENTED ON SEPTEMBER 5TH AND SEPTEMBER 15TH FOR A VOTE. SO OPTION ONE HERE IS TO APPROVE A RESOLUTION INCLUDING THE PROPOSED AD VALOREM TAX RATE OF EITHER THE THE VOTER APPROVAL TAX RATE OR ONE OF THE TWO OPTIONS THE CITY MANAGER, INTERIM CITY MANAGER PROVIDED, OR TO APPROVE IT WITH A DIFFERENT PROPOSED TAX RATE, OR TO DENY IT ALL TOGETHER. I RECOMMEND APPROVING IT WITH WHICHEVER PROPOSED TAX RATE COUNCIL PREFERS. OKAY. I'M OKAY WITH THE NO NEW REVENUE RATE SINCE IT'S VOTER APPROVAL RATE, VOTER APPROVAL RATE, VOTER APPROVAL RATE. THAT'S THE LOWER ONE. THAT'S LOWER. OKAY. YEAH. OKAY. THAT'S RIGHT. YOU'RE RIGHT. I THINK FOR THE FOR THE SAKE OF THIS DOING THE .56, FIVE ZERO, JUST TO ALLOW US THE FLEXIBILITY, I DON'T ANTICIPATE US BEING THERE, BUT FOR FOR WHAT WE'RE TRYING TO ACCOMPLISH. HOW DO YOU GUYS FEEL WITH THAT? DO WE WANT TO WAIT UNTIL COUNCIL MEMBER TOBIAS COMES BACK? YEAH, I THINK I THINK HE'LL BE RIGHT BACK. ROLL CALL. VOTE. YEAH. WE NEED A ROLL CALL. VOTE. WE NEED TO RECORD WHO'S HERE AND WHO'S NOT AND HOW THEY VOTED. OKAY, SO IF WE WANT TO GIVE MAYOR PRO TEM TO US A LITTLE BIT OF TIME. OKAY. WHILE WE'RE WAITING, CAN I IS IT. I WOULD LIKE TO ASK COUNCIL MEMBER IF SHE WOULD BE OKAY WITH PROVIDING AT LEAST THE INTERIM CITY MANAGER, IF NOT COUNCIL, WITH SOME OF HER PROPOSED AMENDMENTS SO WE CAN BE PREPARED. IF NOT, THAT'S FINE TOO. I WILL IF I HAVE THEM LIKE I, I DO HAVE THEM, SOME OF THEM KIND OF PREPARED. BUT THERE'S STILL SOME INFORMATION REGARDING FLOCK CONTRACTS THAT I STILL HAVEN'T RECEIVED. QUESTIONS ABOUT, ABOUT LIKE THE TOTAL AMOUNT AND HOW THAT WOULD AFFECT OUR OPERATING AND OUR RESERVES. OKAY. FAIR ENOUGH. WELL, IF YOU CAN SEND US WHAT YOU HAVE AND WE CAN JUST AT LEAST HAVE A CHANCE TO LOOK THROUGH THAT, I'D LIKE TO JUST MAKE SURE THAT WE GIVE IT ENOUGH THOUGHT FOR THE CHANGES. YEAH, OF COURSE, AND VICE VERSA. I WOULD APPRECIATE IT. IF THAT'S GOING TO BE LIKE A STANDING CORDIALITY AMONGST US FOR SURE. OKAY. OKAY. SO I JUST MAKE AN AMENDMENT TO APPROVE THE VOTER APPROVED RATE AT 0.5650.5650. THAT'S CORRECT. THAT'S MY MOTION APPROVING THE RESOLUTION WITH THE PROPOSED TAX RATE OF 0.5650. OKAY. MOTION BY MYSELF AND A SECOND BY COUNCIL MEMBER MCKINNEY. CAN I GET A ROLL CALL? VOTE, PLEASE. HARRIS IS ABSENT. ZAPATA. YES. YES. TOBIAS. YES. GOSA. YES. MEDINA. YES. MCKINNEY. YES. OKAY. THAT IS 660. YEAH. MOTION PASSES. AND ANYTHING ELSE BEFORE WE ADJOURN? THANK YOU. MAYOR AND COUNCIL, OF COURSE. OUR PLEASURE. GOOD JOB, GUYS. WE ARE ADJOURNED. THANK YOU. * This transcript was compiled from uncorrected Closed Captioning.