Aug 10, 2023 CITY COUNCIL WORK SESSION

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SO

[ CITY OF BAYTOWN NOTICE OF MEETING CITY COUNCIL WORK SESSION THURSDAY, AUGUST 10, 2023 5:00 P.M. COUNCIL CHAMBER, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ]

IT IS 5:03 PM WE DO HAVE A QUORUM.

UH, SO WE HAVE, OUR FIRST ITEM IS CITIZEN COMMENTS.

I'M NOT SURE WE HAVE ANY CITIZEN COMMENTS SIGNED UP.

IF NOT, WE'LL MOVE ON TO ITEM TWO A, WHICH IS TO DISCUSS, UM, DISCUSSION REGARDING THE TAX INCOME REINVESTMENT ZONE IN THE CITY OF BAYTOWN, MISS CITY MANAGER.

AND WE'RE GONNA MOVE PAST THAT, MR. MAYOR.

OKAY.

SO WE'LL MOVE ON TO ITEM TWO.

WE'RE GONNA REVISIT THAT AT ALL, NOT TODAY.

OKAY.

SO THEN WE'LL MOVE ON TO ITEM TWO, SEPTEMBER 1ST, SEPTEMBER.

ALRIGHT, SO WE'LL MOVE

[b. Discuss the City of Baytown Fiscal Year 2023-24 Proposed Budget.]

ALRIGHT, MAYOR COUNSEL, THANK YOU, UH, FOR BEING HERE TONIGHT.

I'M GOING TO, AS Y'ALL NOTICE, Y'ALL ARE SITTING IN DIFFERENT SPOTS, UH, IN AN EFFORT TO FACILITATE THE CONVERSATION TODAY.

SO I'M GONNA GO THROUGH A QUICK PRESENTATION ON THE FY 24 BUDGET, AND THEN WE WILL HAVE A FACILITATOR, MS. CAROL FLINT, THAT WILL, OR MRS. CAROL FLINT TO COME UP HERE AND FACILITATE SOME QUESTIONS BASED ON THE BUDGET.

WE ARE NOT DOING ANY KIND OF TEAM BUILDING STUFF OR ANYTHING ELSE LIKE THAT.

WE'RE GONNA FOCUS ON, UH, POLICY DISCUSSIONS WITHIN THE BUDGET AND WHAT THAT MEANS.

AND SO IT'S A LITTLE BIT DIFFERENT THAN HOW WE'VE DONE THE BUDGET IN THE PAST, UH, BUT IT'S IMPORTANT TO SEE HOW POLICIES PLAY OR HAVE AN IMPACT ON THE BUDGET AND, UH, WHERE WE CURRENTLY STAND WITH, UH, WITH THE BUDGET AND GOING FORWARD.

OKAY? SO WITH THAT, YOU DO NOT NEED TO LOOK AT ME WHILE I'M PRESENTING.

EVERYTHING WILL BE UP ON THE SCREENS, UM, WHILE WE'RE TALKING OR WHILE WE'RE GOING OVER THIS, UH, PLEASE FEEL FREE TO CHIME IN AT ANY MOMENT, ASK QUESTIONS.

UH, BUT WE WILL HAVE A LITTLE, UH, Q AND A AT THE END OF THIS.

UH, UH, THAT CAROL WILL WILL JUMP IN SHORTLY.

ALL RIGHT, MAYOR COUNSEL, WELCOME.

GOOD EVENING.

UH, AS, AS WE STATED, WE'RE HERE TO DISCUSS THE FY 24 DRAFT BUDGET.

TODAY IS GONNA BE A FOCUS ON THE, UH, ON THE WORKSHOP.

IT'S GONNA BE FOCUSED ON A, UH, POLICY AND IMPACT TO THE ACTUAL BUDGET.

SO OUR GOAL TODAY IS TO PROVIDE A BRIEF OVERVIEW OF THE ELEMENTS THAT CREATE A BALANCED CITY BUDGET AND TO HIGHLIGHT HOW COUNCIL POLICY AND PHILOSOPHY CAN INFLUENCE THOSE ELEMENTS AND AFFECT THE OVERALL BUDGET SO THAT THE CITY COUNCIL WILL FEEL MORE CONFIDENT IN IDENTIFYING IMPORTANT DECISION POINTS THAT LEAD TO BUDGET ADOPTION AND CITY AND CITY ADMINISTRATION HAVE A BETTER UNDERSTANDING ABOUT EACH, OR ABOUT WHICH SPECIFIC POLICIES AND PHILOSOPHIES COUNCIL WOULD LIKE TO SEE REFLECTED IN THIS YEAR'S BUDGET.

WE ARE NOT HERE TODAY TO TAKE A DEEP DIVE IN THE FY 24 BUDGET, BUT TO PROVIDE YOU WITH A SIMPLIFIED OVERVIEW OF THE ELEMENTS THAT GO INTO THE CREATION OF A BALANCED BUDGET.

FOR EACH ELEMENT, WE WILL DESCRIBE THE PHILOSOPHICAL OR POLICY DECISIONS THAT COUNCIL INFLUENCES AND HOW THOSE DECISIONS ULTIMATELY SHAPE THE OVERALL BUDGET.

THE BUDGET MAY SEEM LIKE A BIG SCARY THING, UM, BUT I GUARANTEE YOU THAT MANY, MANY HOURS HAVE BEEN DEVOTED TO ITS CREATION AND MANY, MANY CITY STAFF HAVE HAD A HAND IN THE PROCESS.

I'M SURE YOU'VE ALL TAKEN THE TIME TO REVIEW AND STUDY AS MANY PAGES.

I DON'T WANT TO UNDERESTIMATE OR UNDERSTATE THE EFFORT IT TAKES TO PUT THIS DOCUMENT TOGETHER OR THE TIME IT TAKES TO FULLY DIGEST IT, BUT I'M SERIOUS WHEN I SAY AT ITS FUNDAMENTAL LEVEL, A MUNICIPAL BUDGET IS A PRETTY SIMPLE MATH PROBLEM.

WE ARE REQUIRED TO ADOPT A BALANCED BUDGET.

BOTH SIDES OF THE EQUAL SIGN MUST ALIGN TODAY.

I WANT TO EXPLORE WITH YOU THE VARIABLES IN THE EQUATION AND ELICIT THE FEEDBACK.

WE WILL NEED TO BE SURE YOUR PHILOSOPHIES AND POLICIES, UH, THAT YOUR PHILOSOPHIES AND POLICIES ARE REFLECTED IN THE FINAL PRODUCT PRODUCT SO THAT BOTH THE CITY COUNCIL AND THE CITY ADMINISTRATION HAVE CONFIDENCE IN THE ADOPTED BUDGET.

THIS BUDGET SERVES, OR THIS, ALL OF OUR DISCUSSION TODAY SERVES AS OUR GUIDEPOST FOR THE NEXT FISCAL YEAR AND BEYOND.

GREAT FINANCIAL AND BUDGET POLICIES CAN ESTABLISH LEFT AND RIGHT BOUNDARIES THAT SIMPLIFY THE ANNUAL BUDGET AND PROVIDE CONSISTENCY FOR YOU STAFF AND OUR COMMUNITY.

AS WE JUMP INTO THE FORMULA, EACH BUDGET STARTS OFF WITH THE BEGINNING FUND BALANCE, WHICH WAS THE ENDING FUND BALANCE FROM THE PREVIOUS YEAR.

COUNCIL'S POLICY CENTERS AROUND PROVIDING GUIDANCE ON THE AMOUNT OF RESERVES TO BE HELD.

THIS TYPICALLY TRANSLATES INTO HOW MANY DAYS OF FUNDING WE HAVE TO SUSTAIN OPERATIONS SHOULD WE

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THIS AMOUNT PLAYS A ROLE IN THE CITY'S BOND RATING AS WELL.

EACH YEAR ON OUR BOND CALLS, WE ANSWER QUESTIONS ABOUT OUR FINANCIAL HEALTH.

WHEN OUR RESERVE MAKES LARGE CHANGES, AS IT DID, AS IT DID IN THE FY 23 BUDGET.

STAFF HAS TO EXPLAIN TO THE RATING AGENCIES WHY OUR FUND WENT FROM 144 DAYS TO 74 DAYS ON A FUN FUNCTIONAL ASPECT FOR THE, UH, BEGINNING FUND BALANCE.

THIS AMOUNT IS ADJUSTED BASED ON HOW, HOW SPENDING WENT THE PREVIOUS YEAR.

ONE OF THE, ONE OF THE DISCUSSION POINTS LAST YEAR WHEN THE DRAWING, WHEN DRAWING DOWN THE RESERVES WAS THAT WE TYPICALLY COME IN HIGHER BECAUSE WE SPEND LESS THAN WE BUDGET.

SO WE CAN SPEND IT DOWN TO THE 74 MARK AND END THE YEAR AT AT 90 AS THE BUDGET.

AS THE BUDGET SITS TODAY, WE'RE ACTUALLY CLOSE TO THAT MARK.

AND SO THE POLICY DISCUSSION AROUND THAT WAS, UM, WAS REAL IN COMING TO LIFE AS, AS PREDICTED AT AT LAST YEAR'S DISCUSSION.

THE NEXT ITEM IS THE LARGEST REVENUE REVENUE CONTRIBUTOR TO THE BUDGET.

ONE POLICY FACTOR IS TYPICALLY, UH, THE MOST ANTICIPATED AND WIDELY DISCUSSED WITH COUNSEL, STAFF, AND THE CITIZENS.

AND THAT IS THE TAX RATE.

IN AN EFFORT TO PROVIDE CONSISTENCY FOR EVERYONE, A POLICY ON THE TAX RATE WOULD BE BENEFICIAL.

IT SIGNALS WHAT THE INTENTION IS OF THE COUNCIL AND HELP STAFF APPROPRIATELY PLAN.

A SUGGESTION ON THE POLICY WOULD BE THAT THE TAX RATE IN ANY ONE YEAR SHALL BE THE LOWEST OF THE NO NEW REVENUE RATE, THE, UH, VOTER APPROVAL RATE, OR ONE HALF CENT LESS THAN THE CURRENT RATE UNTIL A RATE OF 68 CENTS IS ACHIEVED.

THEREAFTER, THE TAX RATE SHALL BE THE LOWER OF THE NO NEW REVENUE RATE OR THE VOTER APPROVAL RATE.

THE GROWTH RATE ESTABLISHED WITH THIS POLICY WILL BE A DRIVER FOR EXPENDITURES IN THE BUDGET.

UM, AS YOU CAN SEE ON THE SCREEN, OUR GROWTH RATE BASED ON POLICIES THAT COUNCIL SET IN THE PAST OR FOR THE FY 23 BUDGET GOING INTO FY 24, IT LED TO A GROWTH RATE OF OUR REVENUES AT 2.3%.

AND SO I JUST WANT TO RELATE HOW THAT DOES IMPACT, UH, THE BUDGET.

THE SALES TAX RATE HAS ALREADY BEEN ESTABLISHED.

IT WAS ESTABLISHED LONG AGO.

IT'S BEEN IN PLAY FOR A WHILE.

UM, BUT COUNCIL RESERVES THE RIGHT TO REVIEW IT AND OR CHANGE IT.

THIS RESOURCE MAY SOON PASS THE AMOUNT OF REVENUE COLLECTED IN PROPERTY TAXES, WHICH WILL BE A NEW ONE FOR BAYTOWN.

HOWEVER, PLEASE NOTE THAT SELL SAX IS VERY FICKLE AND SWINGS WITH THE MARKET.

WHILE THIS REVENUE CATEGORY IS GOOD FOR THE CITY, IT CAN CHANGE OVERNIGHT, SO IT'S HARD TO FULLY DEPEND ON IT.

TWO TWELVES AND IDAS AND ALL THE OTHER AGREEMENTS THAT COME WITH OUR INDUSTRY PARTNERS, THESE ARE VARIABLE ITEMS AND HAVE BEEN OPERATIONAL GUIDELINES FOR YEARS.

COUNSEL CAN APPROVE, DENY NEW AND RENEW PROPOSALS AS THEY'RE PRESENTED.

AS AN ASIDE, THE REVENUE GENERATED FROM THIS, UH, FROM THIS RESOURCE IS THE FUNDING SOURCE FOR OUR ENTIRE PUBLIC SAFETY DEPARTMENTS.

SO THE AMOUNT OF REVENUE THAT COMES THROUGH WITH THE, WITH THE TWO TWELVES AND IDAS FULLY FUNDS POLICE AND FIRE, UM, ALMOST AT A HUNDRED PERCENT.

THE CITY PROVIDES A MULTITUDE OF SERVICES AND THE REVENUE COLLECTED HERE IS MEANT TO COVER THE COST OF SPECIFIC SERVICES THAT EACH FEE RELATES TO.

AND THAT'S WHAT WE FIND IN REVENUE ACUTE, AND IT'S JUST THESE ARE MADE UP NAMES FOR ALL THESE TO MAKE IT SIMPLE.

SO I'M NOT TRYING, THESE ARE NOT TECHNICAL TERMS, MATT, IT'S NOT TECHNICAL TERMS. ALRIGHT.

UM, IN THE BUDGET, THE REVENUE SECTION IS GEARED AROUND FEES, LICENSING, UH, ET CETERA, AND MAKE UP ROUGHLY, ROUGHLY 7% OF OUR TOTAL REVENUES IN OUR BUDGET DOCS.

YOU WILL SEE FINES.

I NEED TO HIGHLIGHT THAT WHILE THE FINES ARE IN OUR BUDGET DOCUMENTS AS A, UH, REVENUE ACUTE AREA, THOSE ARE DECIDED BY THE JUDGE AND THE COURT.

SO WHILE THEY MAY BE LUMPED INTO THAT CATEGORY, THEY DO NOT FALL INTO THIS OR THAT COUNSEL HAS, UH, A POLICY THAT GUIDES OVER THEM.

NO, IN THEORY, THESE FEES SHOULD BE REVIEWED ANNUALLY SO THAT THE COSTS OF PROVIDING THE SERVICES ARE AT ADEQUATELY COVERED.

COUNSEL CAN ADDRESS THAT THROUGH A POLICY SO THAT THE REVENUE SUPPORTING THE SERVICES IS APPROPRIATELY ADDRESSED.

CURRENTLY, OUR RATE SCHEDULES ARE, UM, ARE MODIFIED PERIODICALLY.

AND A FEW EXAMPLES TO GO WITH THAT.

COUNSEL RECENTLY ADOPTED A NEW RATE SCHEDULE FOR OUR AMBULANCE FEES.

THE LAST TIME THAT THAT WAS ADDRESSED WAS 2006.

OUR PERMIT FEES, THE LAST TIME IT WAS ADDRESSED WAS 2019.

SO AS OUR EXPENSES GET MORE AND WE CONTINUE TO PROVIDE THESE SERVICES, OUR RATES ARE NOT KEEPING UP WITH WHAT THOSE SERVICES COST.

UM, SO THE FEES

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UH, A POLICY FOR CONSIDERATION THOUGH, IS THAT COUNSEL CAN DECIDE ON A FEE SCHEDULE, A FEE RENEWAL SCHEDULE, DO ALL FEES ADJUST AUTOMATICALLY BY A CERTAIN PERCENTAGE WITHIN THE ADOPTION OF EACH BUDGET BUDGET, OR ARE THEY INDIVIDUALLY ADDRESSED ANNUALLY OR AS NEEDED? IF COUNCIL WERE TO ASK IF THIS WAS A SOURCE TO ADDRESS, TO ADDRESS RE REVENUE INCREASES, IT WOULD NOT BE A FOCAL POINT.

IT WOULD NEED SIGNIFICANT CHANGES ACROSS ALL OF THEM TO MAKE ANY KIND OF IMPACT.

AS AN EXAMPLE, IF EVERY SINGLE FEE FINE AND SERVICE CHARGE THAT WE HAVE IN THE CITY WERE INCREASED BY 10%, EVERY SINGLE ONE OF THEM WERE INCREASED BY 10%, IT WOULD ONLY INCREASE REVENUE BY $900,000 IN THEORY.

SO, AND IN, IN A PERFECT WORLD.

SO, UM, IT'S NOT SOMETHING THAT'S GOING TO TO CHANGE THE WORLD FOR, UH, FOR THE CITY ON A REVENUE FRONT, HOWEVER, IT IS VERY IMPORTANT TO NOTE THAT FEES SHOULD ONLY BE AT A LEVEL THAT COVERS THE COST TO PROVIDE THAT SERVICE.

OUR LAST REVENUE PIECE IN THE EQUATION, UM, INCLUDES FUNDING THAT COMES FROM OTHER FUNDS WITHIN THE BUDGET COUNCIL AUTHORIZES TRANSFERS FROM FUNDS OUTSIDE OF THE GENERAL FUND TO BE TRANSFERRED IN TO TYPICALLY BASED OFF A WORKING AGREEMENT.

THIS IS A POLICY FOR COUNSEL WITH THOSE AGREEMENTS.

COUNSEL IS AUTHORIZING STAFF TO ADMINISTER THE OTHER FUNDS FOR A SMALL SERVICE CHARGE INSTEAD OF HIRING OUTSIDE PERSONNEL TO DO THAT.

THE BIGGEST CONTRIBUTOR TO THIS FUND IS THE WATER SEWER FUND AT APPROXIMATELY 1.5 MILLION.

THIS FUND TYPICALLY HAS APPROXIMATELY 3 MILLION TRANSFERRED IN, UH, FROM A HANDFUL OF OTHER FUNDS TO INCLUDE THE MDD BAWA, ET CETERA.

UH, BUT THE BIGGEST CONTRIBUTOR IS 1.5 MILLION FROM THE WATER SEWER FUND.

A POLICY DISCUSSION THAT WILL MOST LIKELY BE BEFORE COUNCIL ON FY 24, UM, IS, DOES COUNCIL WANT TO CONTINUE THE $1.5 MILLION TRANSFER FROM THE WATER SEWER, UH, AS THE WATER SEWER INFRASTRUCTURE IS ADDRESSED, UH, WITHIN THE COMING YEARS? IF SO, WHAT ARE THE IMPACTS TO THE WATER SEWER? WHAT ARE THE IMPACTS TO THE GENERAL FUND? I'M NOT REALLY ASKING THAT WE NEED TO ADDRESS THAT NOW, BUT THESE ARE THE TYPES OF ISSUES THAT CAN OCCUR WITH EVERY SINGLE ONE OF THESE FUNDS THAT TRANSFERS MONEY IN HERE.

AN IMPORTANT POLICY DECISION WITH THESE ONE TIME TRANSFERS IS HOW THEY'RE USED.

COUNSEL SHOULD SET STANDARDS THAT ONE-TIME REVENUES CAN ONLY BE USED TO FUND ONE TIME COSTS AND OR COMP CONTRIBUTIONS TO THE CAPITAL PROJECTS.

WELL, I DON'T HAVE MY NOTES AT ALL FOR, FOR THIS ONE, SO I'M GONNA WING IT .

SO, UM, THIS IS A VERY, THIS IS PROBABLY THE BIGGEST POLICY PIECE THAT THE COUNCIL IS INVOLVED WITH.

THE FIRST POLICY IS THAT COUNCIL CREATES AND FUNDS EACH AND EVERY SINGLE DEPARTMENT WITHIN THE BUDGET EVERY SINGLE YEAR WHEN THE BUDGET IS PASSED.

UM, COUNSEL ALSO AUTHORIZES WHAT PROGRAMS AND WHAT SERVICES WILL BE PROVIDED WHEN, WHEN THOSE SINGLE THINGS ARE ARE IMPLEMENTED INTO THE, INTO THE BUDGET.

IT HAS A SIGNIFICANT IMPACT ON A FINANCES BECAUSE THOSE PROGRAM SERVICES AND DEPARTMENTS DETERMINE HOW MANY PERSONNEL ARE GOING TO BE NEEDED TO COVER THOSE SERVICES.

ROUGHLY 73% OF ALL THE EXPENDITURES IN THE OPERATING EXPENSE LINE IS PERSONNEL.

OKAY? AND SO, CHANGES TO THE BUDGET ON ANY KIND OF SIGNIFICANT LEVEL IS REALLY GOING TO DETERMINE WHAT PROGRAMS AND SERVICES ARE ACTUALLY NEEDED SO THAT WE CAN KEEP OUR, UM, UM, GROWTH RATE AT A, AT A DECENT LEVEL THIS YEAR AS IT'S PROPOSED, THE GROWTH RATE IS AT 7.9%.

THAT IS BECAUSE OF HOW THINGS WERE REDONE IN THE BUDGET TO ACCOMP TO, UM, ACCURATELY PORTRAY WHAT THE PERSONNEL EXPENSES ARE.

AND SO THAT IS CONTRIBUTING A, A HEAVY PIECE TO WHAT THE, UM, TO WHAT'S IN THIS, UH, OPERATING EXPENDITURES.

THE FINAL PIECE THAT WE HAVE IS, OR THE FINAL PIECE ON THE LEFT SIDE OF THE EQUATION, UM, IS THE EXPENSES NON-RECURRING.

THE EXPENSES COVERED IN THIS AREA ARE TYPICALLY FOR ONE TIME EXPENSES HERE.

UM, THE COUNCIL'S POLICY DISCUSSION IS MOSTLY GEARED TOWARDS THE CIP CAPITAL OUTLAY PROJECTS, UH, TO SUPPORT OPERATIONS, THE CITY'S CONTINGENCY AND SUPPORTING OTHER FUNDS IN THE BUDGET.

THE CITY'S CONTINGENCY WAS, WAS TYPICALLY AROUND 2% OF THE BUDGET, WHICH I FEEL IS AN APPROPRIATE AMOUNT.

HOWEVER, IT DOES SHOW

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IT WOULD BE HELPFUL TO HAVE A SET DETERMINATION, LIKE ONE PER TWO, ONE OR 2% GOING FORWARD.

AS WE REALIGN, I WOULD SUGGEST A NEW POLICY FOR THE CIP THAT THE CIP OR, UH, THAT IT IS THE CITY ADOPTS A FIVE YEAR CIP, WHICH SETS A MOTION, A CHAIN OF EVENTS FOR HOW ADMINISTRATION MOVES FORWARD.

THE NEXT ASPECT OF, UH, OF THAT IS DETERMINING IF WE'RE FUNDING THAT CIP WITH DEBT, CASH OR A HYBRID.

IF DEBT IS USED, WE NEED TO DETERMINE IF WE'RE GONNA CONTINUE TO USE CERTIFICATES OF OB OBLIGATION FOR THAT DEBT OR IF WE'RE GONNA USE GEN GENERAL OBLIGATION BONDS.

FROM THERE, WE ARE ABLE TO DETERMINE IF COUNSEL WOULD LIKE TO USE REMAINING CASH FOR CIP, UH, OFFSETS OR TO SUPPORT OTHER SERVICES.

THE FINAL THING THAT WE HAVE WITH OUR NON-RECURRING EXPENSES IS THAT WE ARE SUPPORTING ENTERPRISE FUNDS.

IDEALLY, EACH ENTERPRISE FUND IS EXPECTED TO COVER THE FULL COST OF OPERATIONS FROM FEES CHARGES TO END USERS.

IN CASES OF EXTREME NEED, THE CITY MAY SUPPORT THE ENTERPRISE FUNDS THROUGH INVESTMENT AND CORE INFRASTRUCTURE.

THIS MAY TAKE THE FORM OF A TAX SUPPORTED DEBT OR DIRECT TRANSFERS FROM THE GENERAL FUND.

IN EACH INSTANCE, THE CITY COUNCIL MUST DECLARE THE EXTREME NEED AND VOTE SEPARATELY ON THAT.

WHEN SETTING THE ANNUAL BUDGET, WE CURRENTLY SUPPORT ENTERPRISE FUNDS TO THE TUNE OF A FEW MILLION.

AND ON THE RIGHT SIDE OF THE EQUATION IN THIS MATH PROBLEM, WE TYPICALLY KNOW WITH THE RIGHT SIDE OF THE EQUATION IS GONNA BE EQUAL OR GREATER TO THE MINIMUM FUND BALANCE SHALL EQUATE TO AT LEAST 60 DAYS OF OPERATING EXPENSES.

BUT COUNSEL HAS RECENTLY STATED THAT THEY WERE MORE COMFORTABLE IF IT WAS GREATER THAN 70 DAYS.

THIS POLICY DECISION IS A STARTING POINT WHEN BUILDING THE BUDGET, BECAUSE WE ALL KNOW THE PLUSES AND MINUSES NEED TO SUM UP TO MORE THAN $22 MILLION.

AND WHEN WE WORK ON THESE, WHEN WE WORK ON EACH OF THESE VARIABLES AND SET POLICIES THAT ADDRESSES EACH THING WITHIN THIS EQUATION, IT DOES GIVE LEFT AND RIGHT BOUNDARIES FOR US.

AND I'LL HIT ON THAT HERE IN A MINUTE.

YOU'VE SEEN THIS BEFORE.

THIS IS THE GRAPH THAT SHOWS THE CITY'S TOTAL REVENUE COMPARED TO OUR OPERATING EXPENSES.

THIS LINE, THE EXPENSE LINE ON THE BOTTOM, DOES NOT INCLUDE NON-RECURRING EXPENSES.

THIS IS STRICTLY OPERATING EXPENSES, AS THEY HAVE SHOWN SINCE 2018 OR FY 2018.

UM, IN ADDITION TO THAT, THE FY 24 PIECE UP THERE DOES NOT INCLUDE ANY NEW PERSONNEL.

THIS IS THE BUDGET THAT WAS PRESENTED TO THE CITY A FEW WEEKS AGO.

THERE WERE NO NEW PERSONNEL IN THAT BUDGET.

I KNOW THAT WE WILL DISCUSS THAT IN THE FUTURE.

UH, BUT AS WE SIT TODAY, THIS IS WHAT THE BUDGET LOOK LIKE.

LOOKS LIKE WE'VE OPERATED IN THE PAST WITH THE ASSUMPTION ON POLICIES, BUT WE DO NOT HAVE AGREED UPON STRATEGIC PHILOSOPHIES OR POLICIES THAT DRIVE OUR BUDGET, OUR BUDGET PROCESS.

WITH, WITHOUT THESE POLICIES, WE ARE COMPLETELY REACTIONARY AND HAVE THE PROPENSITY TO END UP WITH A CHART LIKE THIS.

THIS CHART IS A DRAFT MODEL OF OUR BUDGETS, AND FOR ANYBODY THAT'S TRYING TO SENSATIONALIZE IT, PLEASE NOTE THAT THIS IS A TALKING POINT ONLY.

OKAY? THIS IS NOT ACTUAL FINANCES FOR THE CITY.

UH, THIS IS A MODEL THAT IS STRICTLY USED FOR A TALKING POINT.

UM, THIS IS A CHART, UM, OF OUR BUDGETS FROM FY 21 TO FY 24 TO THE RIGHT OF FY 24.

WE HAVE MODERATE ASSUMPTIONS BUILT IN.

PLEASE NOTE THAT THE FY 24 BUDGETS, AS I SAID BEFORE, DOES NOT HAVE ANY PERSONNEL ON IT.

THE ASSUMPTIONS THAT ARE PLACED INTO THE MODEL HAVE A 3% GROWTH RATE IN THE REVENUE AND A 5% GROWTH RATE IN EXPENSES.

ON AVERAGE.

ON AVERAGE, OUR GROWTH IS AROUND THREE TO 4% FOR REVENUE AND SIX TO 7% IN EXPENSES IN ALL OF THESE SCENARIOS.

YOU CAN SEE ON THE CHART THAT AN INTERSECTION IN TWO YEARS.

SO IN THE MIDDLE OF FY 25 AND 26, WE, THIS MODEL SHOWS THAT THE EXPENSES OUT DOES, UH, OUTWEIGHS THE REVENUE, BUT COUNSEL HAS A CHANCE TO REALIGN AND AVOID THIS INTERSECTION.

YOUR WORK ON THE BUDGET POLICIES THIS YEAR AND NEXT WILL CREATE A NEW MATHEMATICAL DIRECTION FOR THE FY 24 BUDGET AND BEYOND.

AND SO FOR US, AS WE

[00:20:01]

THIS WILL HELP THE BUDGET REVIEW EACH YEAR AND SH AND IDENTIFY IF STAFF IS MEETING YOUR EXPECTATIONS.

IT SHOULD SHORTEN THIS BUDGET PROCESS TREMENDOUSLY BECAUSE IF ALL POLICIES AND ALL LEFT AND RIGHT BOUNDARIES ARE SET IN PLACE, WE KNOW WHAT OUR REVENUE GROWTH IS, WE KNOW WHAT OUR EXPENSE GROWTH IS, WE KNOW HOW WE'RE ISSUING DEBT.

WE KNOW WHAT YOUR EXPECTATIONS ARE TO ADDRESS PERSONNEL GROWTH IN, IN THE FUTURE.

ALL THAT REALLY MEANS IS IF WE'RE MEETING ALL OF THOSE EXPECTATIONS THAT ARE SET IN PLACE IN A POLICY, THEN WHEN WE BRING A BUDGET IN HERE AND IT MEETS ALL THOSE EXPECTATIONS, THE BUDGET MEETINGS COULD REALLY BE DONE IN ONE DAY OR TWO HOURS IF ALL OF THOSE EXPECTATIONS ARE MET.

NOW, I WILL TELL YOU THAT THIS IS NOT THE FAULT OF ANY ONE PERSON.

IT'S NOT THE FAULT OF THE CITY COUNCIL.

THIS IS NOT THE FAULT OF OF, OF ANYBODY IN THIS ROOM AT THIS POINT.

THIS IS SOMETHING THAT WE HAVE JUST NOT ADDRESSED AS A WHOLE, UH, UNIT, AND I'M BRINGING IT FOR BEFORE Y'ALL, SO THAT WE CAN SIT HERE AND TALK ABOUT HOW WE MOVE FORWARD, HOW WE REALIGN FOR A BETTER TOMORROW, AND CREATE A BUDGET THAT IS GONNA BE SUSTAINABLE AND EASY TO UNDERSTAND, NOT JUST FOR Y'ALL, BUT FOR STAFF.

IT'S EASY TO CREATE FOR THE FINANCE TEAM.

IT'S EASY TO TRACK.

AND THEN OUR CITIZENS HAVE A, A LOT OF TRANSPARENCY ON HOW THINGS ARE OPERATING AND HOW THINGS ARE BUILT.

AND WITH THAT MAYOR AND COUNCIL, I'M GONNA TURN THIS OVER TO MS. CAROL FLINT.

AND, UH, SHE HAS A FEW QUESTIONS FOR Y'ALL.

ALL RIGHT.

SO, UM, EXCUSE ME.

I WANNA WALK Y'ALL THROUGH A FACILITATED CONVERSATION.

SO THIS REALLY IS ABOUT Y'ALL'S CONVERSATION, BUT THIS CONVERSATION IS REALLY TO HELP JAY GRANT MYSELF AND OUR STAFF TO BRING FORWARD THE INFORMATION THAT Y'ALL NEED TO MAKE THESE POLICY DECISIONS.

UM, JAY TALKED ABOUT REALIGNING, WE TALKED BACK IN MARCH IN OUR, UH, RETREAT WITH Y'ALL ABOUT TAKING SOME TIME TO REALIGN A LOT OF THE PROGRAMS AND OUR PLANS AND ALL THAT SORT OF, UM, THINGS AND FOCUSING BACK ON CORE SERVICES.

AND SO THIS IS STILL PART OF ALL OF THAT AND COMING BACK AND REALLY KIND OF LEVEL SETTING, STARTING AT A POINT WHERE WE ALL HAVE THE SAME, UH, COMMON UNDERSTANDING SO THAT WE CAN BUILD GOING FORWARD.

SO THAT'S WHAT THIS CONVERSATION IS ABOUT.

I'M GONNA WALK YOU THROUGH A SERIES OF QUESTIONS, AND I KNOW Y'ALL HAVE A LOT IN YOUR MIND AND YOU'RE GONNA WANNA JUMP AHEAD OF ME.

PLEASE DON'T, BECAUSE I CAN'T JUMP TODAY.

OKAY, .

SO I'M GONNA ASK Y'ALL, UM, TO WALK WITH ME THROUGH THIS CONVERSATION.

I THINK YOU'LL HAVE AN OPPORTUNITY TO REALLY KIND OF GET ALL YOUR THOUGHTS OUT AND HELP US PREPARE FOR OUR NEXT WORK SESSION, UM, WHICH WILL BE NEXT WEEK.

UM, SO WITH THAT, I'LL WANNA START OFF, IF YOU'LL TAKE YOUR WIPE BOARDS, ALL OF Y'ALL SHOULD HAVE, UM, ONE AVAILABLE TO YOU AND, UH, A EXPO MARKER TO, TO WRITE IT.

THE FIRST THING I WANT Y'ALL TO DO IS JUST GIVE IT ABOUT 30 SECONDS.

DO NOT OVERTHINK THIS.

AND I'M GONNA ASK YOU TO USE ABOUT FIVE WORDS OR LESS.

YOU CAN USE A PICTURE IF YOU WANT.

UM, JUST WHAT REALLY STOOD OUT TO YOU ABOUT ALL OF THE INFORMATION THAT JAY JUST GAVE TO YOU ABOUT THE BUDGET? IS THIS THE ONE THING THAT STOOD OUT? FIVE WORDS OR LESS? MAYBE A PICTURE.

UH OH.

DID YOU? MORE INVISIBLE WET.

YOU DIDN'T WANT MY COMMENT? GIVE YOU RED MIKE.

GIMME RED.

THANK YOU, MA.

YEAH, SO WE DON'T USE IT AGAIN.

IT'S THAT BUDGET.

.

I THINK I'VE GOTTA CHOOSE UP.

SORRY, SECOND.

ALL RIGHT.

I WANT TO HEAR EVERYBODY'S, UM, VOICE ON THIS.

SO, UM, IF SOMEBODY WANTS TO START,

[00:25:02]

.

I WROTE THAT WE NEED TO REFOCUS PRIORITIES AND SPENDING.

OKAY.

WOULD YOU LIKE TO GO RIGHT OR LEFT ACROSS ? OKAY.

I PUT ESTABLISHING BASIC POLICIES FOR THE FUTURE.

OKAY.

YEAH, I HAD JUST LACK OF CLEAR DIRECTION IN THE PAST.

WITHOUT THESE POLICIES, THERE MIGHT HAVE BEEN COMPETING, YOU KNOW, PRIORITIES? MM-HMM .

OKAY.

CLEAR, CONCISE, ORGANIZED, EXPECTED, BUT HOW TO IDENTIFY THESE TRENDS, FINANCIAL TRENDS SOONER.

IDENTIFYING OUR REVENUES AND EXPENSES, PLANNING AHEAD.

NOT MANY OPTIONS.

ALL RIGHT.

YOU CAN CLEAR YOUR, YOUR WHITEBOARDS.

YOU CAN USE THAT OR THE SCRATCH PIECE OF PAPER.

FOR THIS NEXT ONE, I WANT YOU TO JUST TAKE A, A COUPLE OF MINUTES ON THIS AND, AND THINK ABOUT, UM, TWO DIFFERENT THINGS.

SO YOU CAN KIND OF DIVIDE YOUR PAPER, YOUR WHITEBOARD IN, IN HALF.

ON ONE SIDE, I WANT YOU TO THINK ABOUT WHAT WAS THE GOOD NEWS THAT YOU HEARD, OKAY.

AND, AND WHAT JAY TALKED ABOUT.

WHAT WAS SOME OF THE GOOD NEWS THAT YOU HEARD? AND THEN ON THE OTHER HALF, WHAT DID YOU HEAR THAT WAS CONCERNING TO YOU? I'M TRYING TO COME BACK WITH TWO OR THREE THINGS THAT WERE THE GOOD NEWS AND TWO OR THREE THAT ITEMS THAT WERE CONCERNING TO YOU.

JUST ANOTHER COUPLE, COUPLE SECONDS HERE.

SEE SOME THOUGHTS STILL FLOWING THROUGH A PEN.

ALL RIGHT, LET'S GO AHEAD, SHARE SOME OF THE GOOD NEWS.

AND CURRENTLY IN THE POSITIVE, LIKE WE'RE, I MEAN, STABLE, NOW THAT WE HAVE A PLAN, WHAT OTHER GOOD NEWS PROJECTIONS FOR SALES TAX REVENUE, AND THAT WE ALREADY HAVE SOME POLICIES IN PLACE TO ADDRESS SOME OF THESE ISSUES.

FUTURE GROWTH.

I PUT IT'S GOOD TIMING TO SET THE TONE FOR THE FUTURE MINE'S.

ALONG, ALONG THE LINES OF THAT IS, IS THAT WE DON'T TAKE IMMEDIATE ACTION, BUT WE DO NEED TO TAKE, LIKE SET EITHER NEW POLICIES, THE BOUNDARIES NOW SO THAT WE CAN AVOID, ALTHOUGH IT'S JUST THEORETICAL, WE CAN AVOID KIND OF THE COLLISION AND, AND SOME OUT YEARS.

SO THAT, AND, AND ALSO THE, THE FIVE YEAR CIP PLAN, I JUST THINK THAT'S THE FIVE YEAR C-C-C-I-P PLAN AND HOW TO FUND IT.

I THINK WILL, WILL CERTAINLY PROVIDE A ROADMAP FOR STAFF COUNCIL AND THE COMMUNITY.

THE FACT THAT, UH, THE ADMINISTRATION'S LOOKING AT SETTING SOME, SOME BASELINES FOR SETTING THIS BUDGET AND HAVING SOME GROUND LEVEL TO, UH, A STRUCTURE MOVING FORWARD.

BIG POSITIVE.

I THINK I'M CONCERNED.

'CAUSE ARE WE JUST DOING, WE'RE NOT DOING, I'M DONE.

OKAY.

I THINK SARAH WAS ABOUT TO SAY SOMETHING GOOD.

AND I DON'T WANNA MS. GOOD NEWS.

.

UM, I THINK IT'S ALWAYS GOOD TO SET BOUNDARIES FOR FOUNDATIONS AND

[00:30:01]

THEY ALL KIND OF SAID THE SAME THING THAT I WRITTEN DOWN, BUT SETTING BOUNDARIES WITHIN A GOVERNMENT IS ALWAYS WHEN IT COMES TO MONEY.

ALL RIGHT.

WE'LL MOVE ON TO CONCERNS.

GREAT.

OH, UM, I THINK THE, THE FACT THAT ENTERPRISE FUNDS, I MEAN, THEY'RE SUPPOSED TO BE SELFSUSTAINING AND SELF-SUFFICIENT AND THE FACT THAT THEY'RE OBVIOUSLY THEY'RE, THEY'RE NOT, IN SOME CASES ENTERPRISE FUNDS AND STATE MANDATED REVENUE CAPS, STAGNANT PERSONNEL, MEANING NO NEW HIRES RELATED TO THAT? I WOULD SAY IT'S CONCERNING.

I MEAN, THE PERCENT GROWTH, I DON'T REMEMBER EXACTLY WHAT THE NUMBER WAS.

SEVEN, MAYBE AROUND 7% GROWTH IN THE PERSONNEL.

BUT THAT'S WITHOUT ANY NEW POSITIONS JUST IN SOME OF THE REPORTING OF THAT.

SO THAT'S CONCERNING.

UM, AND THEN THE OTHER CONCERNS, OBVIOUSLY THAT CHART WHERE WE'RE GONNA INTERSECT IF WE DON'T CHANGE SOMETHING.

AND THAT'S WHAT I HAD OUR TREND, UM, OUR TREND MOVING FORWARD.

BUT I ALSO, UM, PUT OUR IMPACTS WHEN REDUCING CONTINGENCIES.

UM, I DIDN'T KNOW ABOUT THE IMPACT TO REDUCING THE 74 DATES.

SO ANY OTHER CONCERNS? I SHARED SOME OF THE CONCERNS WITH, YOU KNOW, THE WAY THINGS WERE GOING WITH THE TREND, YOU KNOW, EXPENSES GOING OVER REVENUE.

KIND OF TOUCHED ON THAT.

MY LAST, UH, I WOULD'VE SAID LAST, BUT, UM, DEFINITELY ECHO WHAT LAURA AND, AND, UH, MR. POWELL SAID.

OKAY.

UH, I'LL GIVE JAMIE A MINUTE TO CHANGE CHARTS.

OH, OKAY.

.

IT WON'T TAKE A MINUTE.

.

THERE YOU GO.

ALRIGHT.

I DIDN'T KNOW IF HE WAS GONNA RIP OR NOT.

JAMIE'S, YEAH, WHO KNOWS WHAT ELSE SHE'S GONNA DRAW.

ALL RIGHT.

CAN WE ERASE? YEAH, Y'ALL CAN WRITE .

YEAH.

AND THIS ONE, YOU WON'T HAVE TO USE YOUR BOARD UNLESS YOU WANT TO.

UM, SO, SO LET'S, UM, NOW KIND OF THINK ABOUT WHAT ARE SOME OF THE INSIGHTS NOW THAT YOU'VE KIND OF THOUGHT ABOUT WHAT WAS PRESENTED? WHAT WAS THE GOOD NEWS? WHAT WERE THE THINGS THAT WERE CONCERNING? WHAT ARE SOME OF THE INSIGHTS AND WHAT ARE SOME OF THE UNDERSTANDINGS THAT YOU'RE BEGINNING TO HAVE? SOME NEW UNDERSTANDINGS? UH, I'LL START OFF ON SOMETHING AND IT'S PROBABLY GONNA POKE THE BEAR, BUT WHAT DID IT TAKE IN ORDER FOR STAFF TO IDENTIFY AND RECOGNIZE? LIKE WE HEARD FOR YEARS, I'VE HEARD FOR YEARS AT LEAST, LIKE, YOU KNOW, YEARS, GREAT SALES TAX, VERY POSITIVE FINANCIAL OUTLOOKS.

YOU KNOW, WE CAN DO GREAT THINGS.

AND THEN WHEN THOSE YEARS APPROACHED US, YOU KNOW, IT'S NOT THE CASE.

AND, AND FOR ME, I WOULD SAY THERE WAS A CHANGE.

OBVIOUSLY WE, WE CHANGED CITY MANAGERS AND I'M VERY INTERESTED IN KNOWING WHAT WAS THE ACTIVITY OR, UM, MOTIVATION TO GO AND LOOK AT THIS ACROSS THE BOARD AND SAY, WE NEED TO TALK, WE'RE GONNA CAPTURE THAT.

I KNOW IT'S LOT.

MAYBE COME BACK TO LATER TODAY.

IT'S A LOT, MAYBE AT A, AT A DIFFERENT DATE.

, IT'S A LOT.

OKAY.

WHAT ELSE? OTHER INSIGHTS OR NEW UNDERSTANDINGS THAT YOU HAVE IN HEARING THAT WHOLE PICTURE? THE MATH FORMULA.

HOW IMPORTANT A FUND BALANCE, GETTING THE FUND BALANCE RIGHT IS, UH, BALANCING THAT THE 90 DAYS.

AND SO I THINK EVEN GOING THROUGH OUR EXERCISE TODAY WITH CIPI THINK, YOU KNOW, WE NEED TO HAVE A BETTER UNDERSTANDING IN TERMS OF THE IMPACT OF CIP AND TRANSFERS IN AND OUTS AND HOW THAT IMPACTS THE GENERAL FUND OVERALL.

SO I JUST APPRECIATED KIND OF SIMPLIFYING IT DOWN TO, YOU KNOW, A SIMPLE MATH EQUATION, WHICH IS WHAT IT IS.

SO, I MEAN, AS FAR AS INSIGHTS GO, JUST KIND OF UNDERSTANDING, YOU KNOW, WHAT PIECE OF POLICY IN EACH ONE OF THOSE BOXES DO WE REALLY HAVE CONTROL OF.

UM, IT WAS A GOOD, A GOOD WAY TO ILLUSTRATE THE BUDGET AS A WHOLE.

ANY OTHER INSIGHTS? OH, I, I THINK IT, IT REALLY KIND OF POINTS OUT THAT, AND WE HAD THIS DISCUSSION IN THE CFP, IS THAT WE KIND OF GOT TO A POINT WITH THE POTENTIAL CONVERGENCE OF THE TWO TRENDS, REVENUE VERSUS THE EXPENDITURES THAT WE REALLY NEED TO SIT DOWN AND TALK ABOUT WHAT OUR PRIORITIES ARE VERSUS WHAT'S IMPORTANT.

AND, AND THEY'RE NOT THE SAME, UH, THE TWO DIFFERENT ISSUES WANTS AND NEEDS.

UM, WE'VE BEEN LED TO BELIEVE IN THE PAST THAT, YOU KNOW, WE'RE

[00:35:01]

THAT'S NOT NECESSARILY THE CASE.

WE NEED TO START TRIMMING THAT DOWN AND ADDRESS THE NEEDS AND THE PRIORITIES.

AND THEN IF THERE'S ANYTHING LEFT, WE'LL GET DOWN TO THE WANTS AND THE IMPORTANT ISSUES.

AND THAT'S A TOUGH, THAT'S TOUGH FOR US TO DO.

ALL RIGHT.

LET'S TALK A LITTLE BIT ABOUT WHAT ARE THE CURIOSITIES THAT YOU STILL HAVE, YOU KNOW, WHERE ARE PLACES WHERE YOU NEED MORE INFORMATION, YOU WOULD LIKE TO SEE MORE INFORMATION? WHAT GAPS DO YOU HAVE OPTION STAFF IS GONNA PRESENT TO US ON CORRECTING THE ENTERPRISE FUND ISSUE? UM, I'M CURIOUS AS TO, UM, IF THERE'S EVER BEEN A SITUATION WHERE THE SALES TAX WASN'T WHAT WAS PROJECTED BECAUSE, AND MR. REYNOLDS, UM, INFORMATION THAT HE PRESENTED TO US, UM, WITH THE, THE TALKING POINT GRAPH, YOU KNOW, IT'S A HYPOTHETICAL OF WHAT COULD HAPPEN IF THE, THE REVENUE IS NOT WHERE IT'S SUPPOSED TO BE IN 75 YEARS.

HAVE HA HAS THERE EVER BEEN A TIME THAT IT WASN'T, I JUST TO KNOW THAT WELL, I MEAN, I WOULD SAY LETS NARROW IT DOWN LESS THAN SEVEN, FIVE YEARS AGO, , BUT YES, I MEAN, THE NEXT 10 YEARS, YEAH.

SO LIKE FIVE YEARS OR SOMETHING? NO ONE OFF 75 .

I'M SURE IT MAY OCCURRED, I DON'T KNOW , BUT OKAY.

BUT THAT'S A CURIOSITY I HAVE.

NOT 75, BUT IN RECENT HISTORY, YOU KNOW, BECAUSE FOR ME, WE CAN HYPOTHETICAL THAT IT'S GONNA INTERSECT, BUT WHEN YOU'RE LOOKING AT DATA, YOU KNOW, YOU LOOK AT TRENDS AND IF THE TREND FOR DECADES HAS BEEN THAT WE'VE ALWAYS, UH, THE SALES TAX HAS ALWAYS MET WHAT WAS PROJECTED THEN I DON'T FEEL LIKE WE HAVE TO PREDICT DIRE STRAITS.

SO I JUST WOULD LIKE A HISTORY ON THAT.

I WOULD SAY JUST, I WOULD SAY, LET'S GO BACK.

I MEAN, I DON'T KNOW WHY YOU WANNA BACK, BUT 2000 IF YOU JUST, IF WE HAVE THAT DATA, I KNOW THAT'S KIND OF FAR BACK, THE REASON WHY I KNOW IN OH EIGHT AND OH NINE, THOSE, THOSE WOULD'VE BEEN SOME THINGS WITH KIND OF THE FINANCE CRI, THE FINANCIAL MARKET CRISIS IN OH 8, 0 9.

THAT WOULD SHOW THE FIRST KIND OF PROBABLY DIP, AT LEAST IN MODERN TIMES, I GUESS.

AND THEN OBVIOUSLY WITH COVID AND OTHER THINGS THAT PROBABLY HAPPENED IN THE LAST, LAST YEARS.

AND THEN PROBABLY FOR COUNCIL'S, UM, INFORMATION OR, OR I GUESS INSIGHT WOULD BE WHAT DID WE DO RIGHT? UM, BUT LIKE COVID AND, AND THE PANDEMIC ITSELF, WE, WE ACTUALLY EXCEEDED, WE EXCEEDED CELL SEX.

SAME THING THAT HAPPENS AFTER HURRICANES.

THAT WAS KIND OF THE REASON I WAS CURIOUS, RIGHT? YEAH.

SO YEAH, .

SO ANYWAY, IT'S JUST, IT'S KIND OF A WEIRD TRIP, BUT LIKE OH 8, 0 9 AND THEN I WOULD SAY PROBABLY, PROBABLY THE PANDEMIC AND, AND OTHER THINGS THAT THEY'RE REALLY FACTORS THAT HAPPEN OUTSIDE OF OUR CONTROL ANYWAY, THAT THERE'S NOT A POLICY WE HAVE, BUT THEY HAPPEN.

BUT HOW DO WE REACT TO IT? MM-HMM .

BECAUSE I WOULD, PER THE PERSON, I WOULD SAY OH 8 0 9 BUDGETS WERE EXTREMELY DIFFICULT.

OKAY.

SO I'D LIKE FURTHER DISCUSSION ON OUR TAX RATE.

UM, I KNOW OUR GOAL WAS ALWAYS TO REDUCE.

UM, SO I'D LIKE TO SEE KIND OF A TREND.

HAVE WE ACTUALLY MADE AN IMPACT AND, UM, ON OUR, UM, CONSTITUENTS, AND NOT ONLY THAT, BUT THE IMPACT THAT IT MAKES ON THE BUDGET OVERALL.

DID WE, ARE WE, ARE WE OKAY AS WE REDUCE, UM, DO WE NEED TO STAY STAGNANT? DO WE NEED SHORTER? I MEAN, LOWER REDUCTIONS, UH, BECAUSE WE'RE NOT THE HIGHEST TAXING, TAXING AGENCY, ALTHOUGH WE ALWAYS GET THE ONES THAT ARE HIT, YOU KNOW, OUR TAXES ARE JUST SO HIGH, BUT WE AREN'T THE HIGHEST TAXING ENTITY.

AND SO ARE THERE OTHER, UH, OTHER THINGS THAT WE CAN REDUCE OTHER THAN THE, UM, OUR TAXES, PROPERTY TAXES.

SO I, I'M ALWAYS CURIOUS TO JUST SEE BENCHMARKING AGAINST LIKE SIMILAR, UH, MUNICIPALITIES.

I MEAN MM-HMM .

ACROSS THE BOARD, YOU KNOW, WHETHER THAT'S WATER, SEWER RATES, TRASH RATES, BUT THEN, I MEAN, UM, JUST THE SERVICES WE PROVIDE, UM, UM, LEVEL OF STAFFING, EVERYTHING.

I MEAN, BENCHMARKING AGAINST OTHER, OTHER MUNICIPALITIES REALLY PROVIDES VALUABLE, UH, DATA FOR ME.

I LIKE THAT TOO.

MUNICIPALITIES OUR SIZE, OUR RIGHT.

YEAH.

LIKE WE HAVE SOME PRETTY GOOD EQUIVALENTS.

I MEAN, YOU NEVER GET THE SAME.

YEAH, NO, NO TWO ARE EVER IDENTICAL, BUT YOU TRY TO GET SIMILAR.

I, I MEAN MY, MY TAKE, I MEAN ON IF IT'S A CONVERSATION LIKE PARA LAND IN MANY WAYS IS VERY SIMILAR, I WOULD SAY STRUCTURALLY.

UH, BUT THEY DON'T, THEY DON'T OUT ON THE WATER.

WE'RE ON THE WATER.

SO WE HAVE OTHER, WE HAVE OTHER THREATS, RIGHT.

AND OTHER RISK.

AND THEY DON'T HAVE INDUSTRY.

YEAH.

YEAH.

BUT THESE, LIKE, THEY JUST RECENTLY STARTED A WHOLE INDUSTRIAL DISTRICT, BUT, YOU KNOW, SO THEY'RE ATTRACTING KIND OF MAN SOME MANUFACTURING AND SOME OTHER HIGH WAGE JOBS, RIGHT? SO MM-HMM

[00:40:01]

YEAH.

OKAY.

ANY OTHER CURIOSITIES OR GAPS AND INFORMATION THAT YOU WANT FILLED? WHY WE'RE SITTING DOWN HERE IN THE MIDDLE , WE'VE DONE, WE'VE DONE WORK, WE'VE DONE BUDGET STUFF LIKE THIS IN A WORK SESSION AND STUFF LIKE THAT.

I WAS GONNA SAY, YEAH, MY, MY PREFERENCE IS OUR TRAINING FILLED, BUT, YOU KNOW, , SOMEBODY SAID, LET'S HAVE A COUNCIL MEETING.

SO DOES IT FEEL DIFFERENT TO YOU ? DOES IT FEEL DIFFERENT TO YOU? YEAH.

OKAY.

NOT, NOT THE AUDIENCE WATCHING US, BUT SITTING HERE IS WEIRD.

.

YEAH, THERE'S NO CANDY.

I'M SORRY.

.

NO CANDY.

ALRIGHT, SO LET'S MOVE ON, UM, TO OUR NEXT QUESTION.

AND SO, UH, A LOT WAS PUT IN FRONT OF YOU, A LOT OF THIS IS ABOUT POLICY.

AND SO WHAT POLICY OR PHILOSOPHIES DO YOU THINK NEED TO BE ADDRESSED AS KEY DECISION POINTS FOR THIS BUDGET? I THINK SOME OF 'EM WERE MENTIONED, LIKE A POLICY ON WHAT WE WANT TO DO WITH TAX RATE, KIND OF LOOKING FORWARD.

MM-HMM .

ON SALES TAX AS WELL.

A FOCUS ON, AS JASON PUT IN OUR CORE SERVICES IN FIRST RESPONDING.

I, I, I AGREE.

WHERE THE DIRECTION, WHERE HE IS TRYING TO GO WITH THE BUDGET WITH THAT.

SO KIND OF GETTING BACK TO THE BASICS, WHAT OTHER POLICIES NEED TO BE ADDRESSED AS, AS KEY FOR THIS BUDGET POLICIES THAT TIE IN THE BIG PICTURE TO WHERE OUR CITY'S MOVING.

NOT, IT'S VERY MUCH FELT TO ME LIKE EVERYTHING IS COMPARTMENTALIZED AND IT'S VERY HARD TO DIG THROUGH POLICIES FOR EACH MEETING, EACH COMMITTEE, UM, JUST EVERYTHING.

SO TO BRING ALL OF THAT TOGETHER AND LOOK AT THE BIGGER PICTURE, WHICH JASON'S BEEN DOING SOME PRESENTATIONS THAT I THINK IS DOING A GOOD JOB OF THAT.

BUT JUST CONTINUE THAT PROCESS.

MY MINE WAS ALONG KIND OF SOLD THE DEBT POLICY, UM, RECENTLY, THE FINANCIAL COMMITTEE AND COUNCIL, YOU KNOW, WE KIND OF HAVE A, A MATRIX LIKE WHEN, WHEN CERTAIN PROJECTS, HOW THEY SHOULD BE FUNDED, WHAT TYPE OF FUNDING SOURCE, SO ON, RIGHT? SOMETIMES IT COULD BE THE VOL, THE, I GUESS YOU'D SAY THE, THE PRICE TAG ASSOCIATED.

UM, SO STILL THE DEBT POLICY, I THINK WE KIND OF DID PUT SOME BOUNDARIES FROM A POLICY IN THE PAST, BUT MAYBE WE NEED MORE, I GUESS, UH, TAX RATE.

UM, KIND OF WHAT, WHAT IS THE END? IS THERE AN END GAME, RIGHT? SO THERE'S SOME PEOPLE LIKE WHAT SHOULD THE TAX RATE BE? AND REALLY OUR TAX RATE IS, IS JUST A FINANCIAL FUNCTION OF REVENUES AND EXPENSES.

AND, AND WHERE WE KIND OF COULD END UP, THERE'S FACTORS THAT CAN, THAT CAN CHANGE THAT, THAT ARE EXTERNAL.

OBVIOUSLY THINGS THAT HAPPEN IN AUSTIN, SOMETIMES WE GET HANDCUFFED, SOMETIMES WE GET HANDCUFFED, NOT JUST FINANCIALLY, SOMETIMES WE GET HANDCUFFED AS AN ENTITY AND LOCAL GOVERNMENT ITSELF.

AND SO THOSE ARE THE THINGS THAT REALLY IMPACT US TO, TO HAVE THE ABILITY TO GOVERN LOCALLY.

UM, AND THOSE ARE POLICIES.

HOW DO WE REACT? 'CAUSE THERE'S LEGISLATION THAT CAN HAPPEN EVERY TWO YEARS.

IT CERTAINLY SEEMS THAT COUNTIES, UM, COUNTIES AND CITIES, UH, FROM A GOVERNMENT STANDPOINT IS, IS UNDER ATTACK FROM AUSTIN, UM, FROM SOME.

AND, UH, THAT'S PRETTY MUCH WHAT I HAVE RIGHT NOW.

OKAY.

ANY OTHER, OH, I THOUGHT, I THOUGHT I HEARD SOMETHING FROM A HOBBY , ANYTHING ON PROGRAMS OR SERVICES? I THINK WE HAVE CORE, I THINK YOU SERVICES, RIGHT? YEAH.

AND, AND CORE SERVICES THAT COULD GO INTO CERTAIN PROGRAMS OR WHATEVER.

BUT THE CORE SERVICES, BACK TO THE BASICS.

I ALWAYS HATE, I ALWAYS HATE THAT TERM BACK TO THE BASICS BECAUSE WHAT ARE THE BASICS? BUT, UH, YEAH, I THINK CORE SERVICES NEED TO BE REVIEWED ALL THE WAY FROM LIKE THE ULDC, WE'LL TALK ABOUT LATER TO FINANCIAL ISSUES.

THERE'S SOME ISSUES I THINK WE'RE GONNA TALK ABOUT LATER ON THOSE, UM, YEAH, CORE SERVICES ARE A BIG, BIG ISSUE.

TAX RATE IS REALLY DEPENDENT ON SO MANY VARIABLES.

MM-HMM .

PERSONNEL, PERSONNEL ISSUES.

UM, I WAS A LITTLE CONCERNED WHEN THE COMMENT WAS MADE, TRIED TO COME UP WITH A MATRIX THAT IT BECOMES AN AUTOMATIC THING.

IT'S LIKE, THAT'S, THAT CONCERNS ME.

WHAT PART? HUH? WHAT PART ON PERSONNEL THAT, YOU KNOW, BASED ON THE MATRIX TO GROW THE GROWTH RATE AND ITS KIND THAT MAKES IT A LITTLE TOUGH.

OH, I THINK, I, I MAY HAVE MISUNDERSTOOD, BUT YEAH.

I MAY HAVE MISCOMMUNICATED THAT IN TION.

SO, BUT, UH, YOU KNOW, THERE'S SOME EXAMPLES.

YOU KNOW, THE CITY'S GROWING.

SO AS THE CITY GROWS, OBVIOUSLY PERSONNEL AND OPERATIONS

[00:45:01]

WE NEED TO, WE NEED TO BE ABLE TO LOOK AT THAT ON AN ANNUAL BASIS OR PROJECT IT OUT.

UM, BUT TO HAVE SOME TYPE OF FORM THAT SAYS, OKAY, WELL WE GREW BY X PERCENTAGE AND THEREFORE PERSONNEL GROWS BY X PERCENTAGE.

I, I WOULD BE LEERY OF THAT.

SO, BUT, BUT AGAIN, THAT'S THE BIG PICTURE.

UH, CORE SERVICES ARE REALLY WHERE WE NEED TO GO.

YEAH.

I, I JUST WANNA ADD, YOU KNOW, I WOULD AGREE, MIKE, IT, IT'S EASY FOR US TO GO AND SAY LIKE, YOU KNOW, LET'S GET BACK TO THE BASICS.

AND I, I, I DO BELIEVE WE'RE OBVIOUSLY, WE'RE ALWAYS FOCUSED ON THAT, BUT WE ALSO HAVE QUALITY OF LIFE ISSUES.

MM-HMM .

YOU KNOW, 'CAUSE THERE'S SOME PEOPLE THAT WOULD, WOULD LIKE US JUST TO GO AND LET'S JUST SAY FOCUS ON THE BASICS.

THAT MEANS NO PARKS PROGRAMS, THAT MEANS NO FESTIVALS.

THERE'S NOTHING.

RIGHT? AND I DON'T THINK THAT'S REALLY, AS A COUNCIL IN THIS COMMUNITY, I THINK THAT'S REALLY WHERE WE WANT TO GO.

SO THAT, THAT'S ONLY A SLIPPERY SLOPE.

UH, IT SEEMS REALLY IN THE PAST TWO YEARS, I REALLY LEARNED EVEN MORE ABOUT LOCAL GOVERNMENT.

AND US AS A CITY, A CITY OF BAYTOWN, WE ARE A FULL SERVICE CITY.

THAT MEANS A LOT AT, IT MEANS MORE THAN I EVER THOUGHT UNTIL I'VE TALKED TO OTHER MAYORS AND OTHER, AND, AND NOT JUST LOCAL, LOCAL MAYORS, BUT MAYORS ACROSS THE COUNTRY WHERE, YOU KNOW, WE HAVE OUR, WE CAN GO AND ACTUALLY HAVE, WE HAVE TWO WATER TREATMENT PLANTS THAT WE CAN PROVIDE FRESH WATER TO OUR CITIZENS.

AND SO OBVIOUSLY THAT WOULD'VE BEEN GREAT ABOUT A YEAR AND A HALF AGO OR SO.

BUT, UH, WITH THE FREEZE, BUT OF BEING A FULL SERVICE CITY AND BE ABLE TO, TO REALLY IN A SENSE, MASTER THE CORE SERVICES.

I WOULD LIKE US TO BE ABLE TO DO THAT.

UM, BUT, UM, AND YOU KNOW, WE HAVE A LOT OF DYNAMICS THAT HAPPENS IN OUR CITY TO RUN IT, RIGHT? AND SO, AS YOU SAY, 73% OF PERSONNEL, THAT'S JUST TO PAY PUBLIC SAFETY.

BUT, YOU KNOW, IF YOU GO AROUND TOWN, YOU SEE ALL OUR PUBLIC SERVICE, OUR, OUR PUBLIC WORK FOLKS, OUR PORTION REC, THEY'RE OUT, THEY'RE MOWING, THEY'RE FIXING THINGS.

THERE'S WATER LINES BREAKING RIGHT NOW BECAUSE OF THE DROUGHT.

AND SO WE ALL THOSE, ALL THOSE CORE SERVICES ARE EXTREMELY NEEDED.

AND NOT EVERY CITY HAS THE ABILITY TO RESPOND.

AND SO WE, SOMETIMES WE HAVE TO REACT, BUT CERTAINLY I THINK WE HAVE TO TRY TO PLAN FOR THOSE THINGS.

THEY WILL HAPPEN.

SO.

OKAY.

UH, I WANT TO ASK ONE LAST TIME.

THINKING BACK ON THE PRESENTATION AND THE POLICY THINGS THAT JAKE COVERED, ARE THERE ANY OTHER POLICY ISSUES THAT YOU FEEL ARE KEY TO DISCUSS DURING THIS BUDGET PROCESS? ONLY THING ONLY, ONLY CAVEAT I WILL SAY IS ALTHOUGH WE MAY NOT BE SAYING HERE'S A POLICY, I, I DON'T KNOW.

I, I WILL TELL YOU THERE'S PROBABLY SOMETHING, AT LEAST A FEW POLICIES THAT CAN BE CREATED UNTIL WE DI DIVE DEEPER.

I, I CANNOT IDENTIFY THAT.

I MEAN, I WANT RESERVE THE RIGHT TO GO WITH RESPOND.

NO, THIS IS IT.

I DON'T WANNA SAY DOOR.

SHOULD I PUT T TBA UP? EVEN WHEN THE MAYOR WAS SAYING, YOU KNOW, THE WHOLE BACK TO THE BASICS, THAT THAT'S FOR ME PERSONALLY BEEN AN ISSUE BECAUSE IT'S, THAT'S SUBJECTIVE TO EACH PERSON INVOLVED IN MAKING THE POLICY.

UM, SO YOU'RE ASKING IF WE WANT TO REVISIT, I THINK THAT'S KIND OF WHAT WE DO EVERY TIME, EVERY TIME WE MEET IS WE'RE REVISITING SOMETHING.

UM, WE HAVE TO, PART OF POLICY MAKING FOR ME HAS BEEN FIGURING OUT AND DIGGING THROUGH EVERYONE'S, UM, DEFINITION OF BASICS OR, YOU KNOW, NEEDS VERSUS WANTS.

'CAUSE UM, I KNOW I THINK WE'D ALL AGREE WATER IS WHAT WE NEED, THAT THAT'S EASY.

BUT THEN THERE'S OTHER THINGS THAT THEY BE THAT WE DIFFER.

UM, SO I ALSO THINK IT'S IMPORTANT THERE WAS A LOT OF MONEY SPENT SPENT ON STRATEGIC PLANNING THAT WE USE SOME OF THOSE ITEMS WHEN WE'RE BUILDING THESE POLICIES TO MAKE SURE THAT WE'RE ALSO, UM, REACTING TO WHAT OUR COMMUNITY HAS BEEN VERY VOCAL ABOUT WANTING.

SO I THINK IT'D BE WORTH HAVING A DISCUSSION ON THE TRANSFERS BETWEEN FUNDS.

UM, THERE'S OCCASIONS MAYBE WHERE THAT'S WARRANTED.

AND SO MAYBE THE DISCUSSION IS AS SIMPLE AS COUNCIL'S NOTIFICATION AND COMFORT LEVEL.

BUT I DON'T THINK WE'VE EVER DISCUSSED TRANSFERS.