* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. [00:00:19] BUT I THINK THAT WOULD BE VERY HELPFUL. RIGHT. OKAY. OKAY. IT IS 4:00 PM ON [ CITY OF BAYTOWN NOTICE OF MEETING BAYTOWN FINANCE COMMITTEE THURSDAY, AUGUST 24, 2023 4:00 P.M. BAYTOWN CONFERENCE ROOM, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ] THURSDAY, AUGUST 24TH. 2023. I CALL TO ORDER THE BAYTOWN FINANCE COMMITTEE MEETING. WE DO HAVE A QUORUM. ITEM ONE A IS [a. Consider the approval of minutes for the Finance Committee meeting held July 27, 2023.] CONSIDER THE APPROVAL OF MINUTES FOR THE FINANCE COMMITTEE MEETING HELD JULY 27TH, 2023. ALL IN FAVOR? I MAKE A MOTION. OH YEAH. FOR APPROVAL. I'LL MAKE A MOTION. ALL IN FAVOR? AYE. ALL RIGHT. MOTION PASSES. UH, ITEM TWO [a. Discuss debt issuance for FY24.] A IS DISCUSSED DEBT ISSUANCE FOR FISCAL YEAR 24. OKAY. SO FOR DURING THE WORK SESSION, IT WAS MENTIONED THAT, UM, WE WERE PROPOSING TO ISSUE $15 MILLION IN DEBT THIS YEAR. AND SO BASICALLY WE'RE JUST HERE TO ENSURE THAT YOU'RE OKAY WITH THAT PROPOSAL FOR THIS PROJECT. SINCE I WAS NOT PRESENT, I WOULD BE GREAT IF YOU WOULD GO OVER THAT SO WE NOT OVER THE PRICE, JUST OVER THE DEBT, UH, AND TOTAL RATES. OKAY. SO HELLO. HELLO. GOOD. HOW ARE YOU? SO YOU JUST WALK ME THROUGH THIS. OKAY. SO THIS, UM, IS JUST A SUMMARY OF ALL THE DEBT THAT WE'RE PROPOSING FOR THIS YEAR. FOR BA IS THE 10 MILLION AND WATER AND SEWER IS THE 24.5 MILLION. AND THEN WE HAVE IMPACT FEES, 11 MILLION, UH, M IS SEVEN THAT YOU HAVE ALREADY APPROVED THAT BUDGET. AND TURS IS 11.4. AND THEN STORM WATER IS 27 POINT, I MEAN 25.7 MILLION. AND THEN GENERAL FUND IS 15. AND DURING THE, UM, BUDGET WORK SESSION, WE TALKED ABOUT THIS, IF WE ISSUE DEBT FOR 15 MILLION, THAT'S STILL, WE'RE STILL ABLE TO DO 75 DAYS ON OUR, UM, DAYS OF OPERATING. MM-HMM. UM, AND THEY HAVE A LIST OF PROJECTS THAT THEY'RE PRESENTING RIGHT NOW TO THE CIPC. SO 15, THE 1 0 4 IS THE TOTAL, YOU'RE JUST ISSUING DEBT FOR 15 FOR GENERAL FUND. 15. JUST GENERAL FUND. OKAY. THE ONLY NUMBER HERE THAT IMPACTS THE GENERAL FUND AND THEREFORE PROPERTY TAXES IS THE, THE 15. AND, OKAY. ANY QUESTIONS FROM COUNSEL? DON'T HAVE ANYTHING. I, I MEAN, SO WE JUST WANNA BE CLEAR, CLEAR WITH YOU ALL THAT FROM SOURCE. UM, THERE WAS A SUGGESTION AT ONE POINT WHEN WE REDUCED, IF YOU REMEMBER, THE CASH ALLOCATION OF C IN THE GENERAL FUND, THAT THAT WOULD BE SUPPLEMENTED BY ADDITIONAL DEBT. UM, WE ARE NOT RECOMMENDING, NOT BE CLEAR THAT YOU, THE COMMITTEE ARE HAPPY WITHOUT RECOMMENDATION ON DISTRICT 15 ORIGINALLY AT THIS. HAVE Y'ALL LOOKED AT THE LINK WITH THE PROJECTS OF THE CIP? WE, WE HAVE. WE BEEN, HAVE WE? NOT FOR THE FINANCE COMMITTEE. NO, MA'AM. SO COUNSEL, DID Y'ALL DO THAT IN THE WORK? WE'LL DO THAT THIS EVENING. WE'LL SHOW THE LIST THIS EVENING. UH, UH, SO FOR US, WE WANTED, WHEN WE ORIGINALLY WERE SCHEDULING THIS, WE WERE STILL UNDER THE, UNDER THE THOUGHT THAT WE MIGHT NEED TO RAISE THIS UP TO 17. I THINK WHEN WE STARTED THE DISCUSSIONS FOR THIS. UM, AND THAT WAS GONNA BE ONE OF THE MAIN TALKING POINTS FOR THIS. UM, THE SECONDARY POINT WAS MAKING SURE Y'ALL ARE OKAY WITH THE 15 MILLION AND THEN IF Y'ALL ARE OKAY WITH THE 15 MILLION, THAT'LL HELP FACILITATE WHAT THEY'RE DOING RIGHT NOW WITH THEIR MEETING. AND THEN WHEN WE MEET FOR COUNCIL TONIGHT, AND THERESA GOES OVER THE BUDGET TONIGHT, WE WILL ACTUALLY GO THROUGH THE FULL LIST OF THE, THAT FINANCE COMMITTEE IS RECOMMENDING 15 MILLION IN DEBT. CIP COMMITTEE HAS THIS MANY PROJECTS. THESE ARE THE PROJECTS THAT THEY SELECTED THAT FITS WITHIN THE 15 MILLION. AND THEN COUNCIL COULD OPENLY DEBATE THAT FROM THAT POINT. I'M SURE Y'ALL DID Y'ALL'S DUE DILIGENCE ON THE FACT THAT WHATEVER PROJECTS THEY'RE GONNA PROPOSE ALIGNS WITH THE MATRIX WE CREATED. RIGHT. FOR DEBT ISSUANCE. RIGHT. SO FOR ME TO SAY I'M OKAY WITH IT WITHOUT EVEN KNOWING WHAT THE PROJECTS ARE, I DON'T KNOW IF I COULD DO THAT, BUT I'M ASSUMING YOU'VE DONE THAT DUE DILIGENCE. SO WHEN I DO SEE THE LIST RIGHT, I'LL FEEL COMFORTABLE THAT THEY'RE RIGHT WORTHY OF DEBT ISSUANCE. THE, THE, THE ONLY, YEAH. THE PROJECTS THAT WILL BE LISTED TO BE FUNDED FROM DEBT HAVE TO MEET THE, THE CURRENT POLICIES, WHICH INCLUDE THE MATRIX AS YOU SAY. SO WE'VE DONE THAT. UM, AND MIKE IS GONNA ACTUALLY GO OVER SOME OF THAT AS WELL. UM, UH, 'CAUSE THEY HAVE A CASH FUNDING PORTION NOW, WHICH WE DID NOT HAVE. AND SO MIKE IS, IS TRYING TO SAY THE 15 MILLION, UM, WE FEEL COMFORTABLE MEETS THE DEBT, THE DEBT MATRIX, AND THEN WE SHOULD CASH FUND THESE PROJECTS AS WELL. [00:05:01] AND SO THEIR, THEIR CONVERSATION IS MOSTLY RELATED AROUND THE CASH PORTION OF THAT, NOT TRYING TO INTERFERE WITH WHAT THIS COMMITTEE'S ROLE IS AT THE SAME TIME. SO FROM THEIR POINT OF VIEW, THEIR UNDERSTANDING THAT ANY PROJECT THAT THEY RECOMMEND IS GONNA MEET THE, THE DEBT MATRIX STANDARD. WOULD Y'ALL PREFER TO SEE THE PROJECTS BEFORE AGREEING TO THAT THERE'S 50 MILLION DEBT OR IS IT IRRELEVANT? I AM INTERESTED IN THE PROJECTS AND TO SEE WHAT THAT LOOKS LIKE. I MEAN, DO Y'ALL WANNA SEE 'EM? YES, BUT I UNDERSTAND THE SPLIT OF FINANCE AND I MEAN, WHAT WE'RE TRYING TO ACCOMPLISH THE SPLIT OF FINANCE AND CIP AND KEEP 'EM COMPLETELY YEAH. SEPARATE. THAT'S A GOOD POINT. YEAH. I MEAN, BECAUSE REMEMBER THAT THE PURPOSE OF THAT PARTICULAR COMMITTEE IS TO IDENTIFY THE PRIORITIES AND, AND HAVE A LIST OF PROJECTS THAT MEET THE CRITERIA. WE JUST DRAW THE LINE. CORRECT. YOUR YOUR RESPONSE IS TO SAY, THIS IS HOW MUCH YOU'RE ALLOWED TO HAVE. THAT'S IT. AND THAT'S WHAT RICHARD BS AND 15 MILLION IS THE CAP. RIGHT? SO LIKE IF Y'ALL START, IF Y'ALL HAVE A DISCUSSION LIKE, OKAY, LOOK, THE 15 MILLION, UH, IS, ARE WE COMFORTABLE WITH IT? NO. OKAY. WHAT ARE YOU COMFORTABLE WITH? 14. OKAY, LET'S TAKE IT, LET'S LET CIP COMMITTEE KNOW THAT THEY NEED TO REMOVE ANOTHER MILLION DOLLARS FROM, FROM THEIR PROJECTS. AND I MEAN THAT'S BASICALLY HOW IT WOULD WORK. UM, UH, HOW DID Y'ALL LAND ON THE NUMBER 15? JUST IDENTIFYING PROJECTS THAT WE NEED. SHOULD WE HAVE INITIALLY A LIST OF PROJECTS THAT ALL CAME TO ABOUT 25 MILLION. AND THE ORIGINAL, UM, THINKING WAS THAT WE COULD DO 15 OF THAT FROM DEBT BASED ON, UH, BECAUSE WE STILL WANT TO DROP THE TAX RATE. SO WHAT COULD WE DO AND STILL REDUCE THE TAX RATE? AND 15 WAS THE FIGURE AND THAT LEFT 10, UH, CASH FUND THAT, THAT HAS BEEN REDUCED OVER TIME. AND I SAID TO CIP COMMITTEE, YOU KNOW, YOU NEED TO FIT YOUR LIST NOW TO THAT SMALLER ENVELOPE OF FUNDING AND THAT'S WHAT THEY'VE BEEN BEEN DOING. RIGHT. AND AT THE SAME TIME, IT DOES TURN INTO A BIGGER CONVERSATION FOR THIS COMMITTEE ON WHAT Y'ALL'S PHILOSOPHY NEEDS TO BE ON THE DEBT, UH, THE DEBT SET UP FOR THE CITY. SO IF Y'ALL'S GUIDANCE IS TO THE COUNCIL THAT HEY, OUR DEBT NEEDS TO CONTINUE TO GO DOWN. UM, SO RIGHT. WAS IT A 28 7 7 RIGHT NOW? 27 7 28 7. SO THE TAX RATE PORTION OF THE TAX, OR THE DEBT PORTION OF THE TAX RATE IS 28,077. AND FOR THIS COMMITTEE, IF WE'RE SAYING THAT WE WANT TO KEEP THAT 28 7 7 STABLE IN PERPETUITY, RIGHT? OR WE WANT TO MAKE SURE THAT STARTS DRAWING DOWN AND START CASH FUNDING MORE PROJECTS, THEN THAT'S THE PHILOSOPHY THAT WE NEED TO TALK ABOUT IN HERE. SO WE CAN SHOW WHAT ARE THE IMPACTS TO OVERALL PROJECTS. AND SO WHEN WE WORK WITH THE 28 7 7, IT ALSO GIVES US A NUMBER RIGHT OUT THE GATE, LIKE I THINK IT WAS 25 MILLION TO STAY AT 28. SEVEN SEVEN OR WHATEVER THE CA WHATEVER JOE RECOMMENDED, RIGHT? UM, 28 7 7 GIVES US A AMOUNT OF DEBT THAT WE CAN AFFORD. AND FROM THERE WE KIND OF WORK BACKWARDS LIKE, OKAY, THE MAX PROJECTS THAT WE CAN DO IS 25 MILLION. WE DON'T THINK THE FINANCE COMMITTEE WILL GO WITH THAT. LET'S KEEP IT SOMEWHERE REASONABLE AROUND $15 MILLION MARK. AND THEN JUST TO ANSWER YOUR QUESTION, THAT'S HOW IT ALL STARTS PLAYING OUT. I GUESS FOR ME, I'D WANNA KNOW THE PROS AND CONS OF THE DIFFERENT PHILOSOPHIES BECAUSE THERE'S PROBABLY NOT A RIGHT OR WRONG WAY. IT'S JUST, IT'S JUST PHILOSOPHY THAT, SO FOR ME TO HAVE A CONVERSATION ABOUT THAT, I'D NEED TO KNOW WHAT THE PROS AND CONS OF EITHER PHILOSOPHY YES, MA'AM. WERE YEP. WE'D PROBABLY HAVE TO SIT AROUND, SET ASIDE AN AFTERNOON TO GO OVER THAT, THAT TWO AFTERNOONS. ONE, ONE OF THE OTHER SUGGESTIONS THAT WE'VE BEEN MAKING IS LOOKING AGAIN AT HOW WE ISSUED THAT. SO, SO HISTORICALLY THE CITY'S BEEN USE CERTIFICATE OF OBLIGATION RATHER, GENERAL OBLIGATION VOTERS. UM, THERE IS A SUGGESTION THAT WE CAN CHANGE THAT GOING FORWARD AND, BUT YOU HAVE THEN SAY A FIVE YEAR PLAN, FIVE YEAR CIP PLAN, YOU LINK THAT TO A FIVE YEAR DEBT ISSUANCE THAT IS OVER APPROVED. AND THAT'S THE ONLY DEBT WE ISSUE THAT'S FUNDED FROM PROPERTY TAXES. AND WE USE COS JUST FOR UTILITY FUNDS, ENTERPRISE FUNDS FOR THE, THE PAYMENTS COME FROM THE FEES NOT FROM PROPERTY TAX. THAT THAT'S, AND THAT'S A PHILOSOPHICAL AND A POLICY DISCUSSION. I THINK YOU COULD HAVE USEFULLY 'CAUSE THAT AGAIN, WILL HELP US WITH PLANNING. I MEAN, QUITE FRANKLY, I'M ATTRACTED BY THAT PROPOSITION. IT DOES MEAN WE HAVE TO PLAN AHEAD AND IT DOES MEAN WINS AND VOTERS. I I WOULD BE FRIGHTENED WITH THAT. NOT THIS, BUT NOT THIS [00:10:01] . NO. WE NEED TO LEAD IN TO DO THAT. I THINK FOR ME, UM, FOR ME TO SAY THAT WE, WE SAID 15 MILLION IS WHAT WE'RE COMFORTABLE WITH IS A LITTLE DISINGENUOUS. 'CAUSE I MEAN Y'ALL, Y'ALL CAME UP WITH THAT NUMBER. YEAH, I TRUST YOU. I DON'T, I DON'T KNOW HOW YOU CAME UP WITH IT. RIGHT. I REALLY HAD NO, NOTHING TO DO WITH THAT. WE DON'T MIND SHOWING THE PROJECTS AT ALL. I I I'M NOT TRYING TO HIDE THE PROJECTS FROM Y'ALL. DO WE HAVE 'EM AVAILABLE ON LIKE IN A FOLDER OR DO YOU HAVE A PRINT? I JUST HAVE, UH, WHAT BRENT WAS PRESENTING TO CFP TODAY. OKAY. DO YOU HAVE IT WITH YOU OR I GUESS MY POINT IS, UM, YOU KNOW, YOU GO TO THE CIP AND YOU SAY, WELL FINANCE SAID THEY'RE ONLY GOOD WITH 15 MILLION WORK WITHIN THAT. I MEAN, Y'ALL CAME UP WITH THE 15 MILLION NOT RIGHT. NOT US. WHAT WOULD, I MEAN, WHAT WOULD 25 MILLION DO? IT WOULD RAISE THE, I DON'T THINK WE WOULD TAX RATE. I DON'T, I DON'T THINK IT WOULD RAISE THE TAX RATE. WELL, IT MIGHT LIKE HALF A CENT MAYBE. MAYBE WOULDN'T. I WOULDN'T NO, IT IMPACTS NEXT YEAR IS WHAT IT IMPACTS. NOT THIS YEAR. IT IMPACTS NEXT YEAR IS THAT FIRST PAYMENT IS PRETTY MUCH SET. YEAH. IT DID CHANGE THE VOTER APPROVAL RATE. RIGHT. WHEN WE WERE PLAYING WITH IT, IT CHANGED THE VOTER APPROVAL RATE. IT DOESN'T CHANGE IN NO NEW REVENUE. BASICALLY WHAT IT MEANS IS YOU HAVE TO USE, YOU HAVE TO USE MORE OF THE PROPERTY TAX TO FUND DEBT AS OPPOSED TO FUND OPERATIONS BASICALLY. CORRECT. AND THAT'S ONE OF THE REASONS WE'RE SUGGESTION. WE DON'T DO THAT AND WE KEEP IT AT 15, KEEPS IT FAIRLY STABLE AND YEAR OVER YEAR. UM, OTHERWISE, AND WE'RE GONNA GET THERE, YOU KNOW, WE ALSO, THE GRAPH, THE CROSSOVER GRAPH, AT SOME POINT WE ARE GONNA HAVE TO START CUTTING OPERATIONAL COSTS. RIGHT. BUT MS. BEFOR, THERE'S, THERE THE LIST IS RIGHT HERE IF Y'ALL JUST WANT TO GLANCE AT IT, BUT IT'S, THAT'S CIP LIST. THAT'S CIP LIST. AND ARE Y'ALL STILL HAMMERING THIS OUT? THEY ARE. THE CIP IS TRYING TO FINALIZE IT TODAY. YES MA'AM. BUT FOR, FOR, UM, TO YOUR POINT, YES. IF THE CIP COMMITTEE DIDN'T LIKE OUR LIST AND THEY WANTED MORE TO BE DONE ON THERE AND THEY SAID, HEY, WE WANT TO ADD THREE PROJECTS TO THIS LIST, WE WOULD BRING IT BACK TO THIS BODY AND SAY, HEY, ARE Y'ALL COMFORTABLE RAISING THE LIMIT UP TO 17? WHEREAS THEY DON'T HAVE THE COMPLETE ABILITY TO JUST DRIVE WHAT THE DEBT RATE OR WHAT THE DEBT ISSUANCE IS. RIGHT. LIKE Y'ALL HAVE TO, IF Y'ALL ARE SAYING NOPE, I'M STILL NOT COMFORTABLE WITH 17 MILLION, WE'RE STICKING IN 15 AND THEN WE JUST HAVE THE OPEN DEBATE AND COUNCIL AT THAT POINT, PARKS WERE ON THE MATRIX FOR DEBT FUNDING? NO, THERE'S A CASH PORTION FOR OKAY. FOR SOME OF THAT. THAT'S TWO POINT, UM, ABOUT 2.3 MILLION IN CASH FROM AVAILABLE, UH, PRIOR YEAR. OKAY. I GUESS LOOKING AT THE LIST, UM, I WASN'T SURE WHICH IS BEING FUNDED BY CASH VERSUS DEBT. OKAY. BECAUSE IT'S TOTAL ABOUT 18 MM-HMM . MM-HMM SO TROY THIS TO THAT. OH, I SEE. IT'S BROKEN DOWN THERE. THIS IS NOT SO, UM, I DON'T HAVE THE BREAKDOWN RIGHT NOW FOR BETWEEN THE 2.3 IN FRONT OF ME BECAUSE IT'S BROKEN DOWN IN A DIFFERENT FORMAT. THIS IS WHAT WAS JUST SUMMARIZED FOR THE CIP COMMITTEE, BUT WE CAN GET YOU THAT INFORMATION. AND THEN THERE WERE TWO PROJECTS ALSO THAT THOSE AMOUNTS WERE REALLOCATED. IT WAS ABOUT $815,000 THAT WAS MOVED FROM TWO PROJECTS THAT WERE CANCELED. AND IT WAS, THAT MONEY WAS PUT INTO THE CONTINGENCY AND THAT ADDED UP TO ABOUT A A MILLION WITH THE TRANSFER OF 275,000 ON THE, THE BUDGET THAT ADDED UP TO ABOUT, UM, 1,089,000. SO IF WE CAN GET YOU THAT DETAIL, THIS IS JUST THE SUMMARY THAT THEY'RE REVIEWING RIGHT NOW. QUESTIONS, I MEAN I'VE STATED MY, YOU KNOW, AS FAR AS POLICY GOES, I WANT, I'D LIKE TO SEE DEBT DRIVEN TOWARDS ZERO, UM, LIKE WE TALKED ABOUT AND, AND MOVE MORE TOWARDS CASH FUNDING OF THESE PROJECTS. UM, SO I MEAN BUT IT WAS YOUR APPROVED DEBT? YES. YEAH. YES. GI SHOULD SAY MOVE AWAY FROM COS RIGHT. UM, AND MAYBE A FIVE YEAR PLAN OF, OF VOTER APPROVED DEBT. UM, UH, EVERY FIVE YEARS WE HAVE A NEW PLAN. UM, BUT YES, I GUESS I'D JUST SAY I'D LIKE TO MOVE TOWARDS ALL VOTER APPROVED DEBT. OKAY. AWAY FROM COS I PIGGYBACK ON WHAT YOU'RE SAYING THERE, UH, MOVING TOWARDS THE VOTER APPROVED DEBT AS WELL AND UH, YEAH, I'D LIKE TO SEE THAT HAPPEN AS WELL. I'M NOT SURE I WOULD AGREE WITH THAT. UM, I THINK THERE IS ROOM FOR COS UM, AND NOT NECESSARILY ALWAYS VOTER APPROVAL, SO OKAY. MIGHT NOT GET A CONCERN ON THAT, BUT NO, IT'S, YEAH, RIGHT NOW I, I THINK WHAT ONE THING WE DID DISCUSS IS [00:15:01] I, I FELT COUNCIL WAS OKAY WITH WATER AND SEWER INFRASTRUCTURE BEING COS AND SOME FACILITIES, NOT ALL FACILITIES BEING CO UH, I THINK THAT'S WHERE IT LANDED, UH, JUST ON A GENERAL DISCUSSION AND NOT ON A, UH, THIS IS THE WAY WE'RE MOVING FORWARD TYPE IDEA. BUT IT'S GOOD TO KNOW Y'ALL'S PHILOSOPHIES SO THAT WE CAN DISCUSS THAT IN HERE. UM, IS THERE, WE DID TRY TO LIKE FINE TUNE THIS THIS YEAR TO TRY TO DO IT DIFFERENTLY. I GUESS IS THERE A BETTER WAY THAT WE CAN WORK WITH THIS COMMITTEE SO YOU FEEL MORE COMFORTABLE WHEN WE'RE TALKING ABOUT DEBT AND PREPARING THAT FOR DISCUSSION IN HERE? I KNOW IT'S HARD TO ANSWER. I DON'T KNOW WHAT I DON'T KNOW. RIGHT. YOU KNOW. YEAH. SO IT'S, I WE UNDERSTAND THAT WE'RE JUST TRYING TO FIGURE OUT THE BEST PROCESS TO MAKE Y'ALL FEEL COMFORTABLE TOO. I, I GUESS JUST FOR ME, LIKE WHAT YOU HEARD ME SAY EARLIER, UM, I WOULD'VE LIKED TO HAVE UNDERSTOOD HOW YOU CAME UP WITH THE 15 MILLION, WHICH IS A PERFECTLY REASONABLE EXPLANATION BEFORE YOU GO TO THE OTHER COUNCIL MEMBERS AND SAY WE'VE DICTATED THAT TO THEM. RIGHT. WHICH WE HADN'T. SO, OKAY. FAIR ENOUGH. GUYS. I AGREE WITH WHAT THEY'RE SAYING, UM, TO MAKE SURE THEY'RE UNDERSTANDING THAT THIS IS, THIS WAS COMING FROM THE CITY AND WE WE'RE GOING ON WHAT Y'ALL ARE SAYING THAT, YOU KNOW, THIS IS THE RIGHT COURSE OF ACTION AND IT'S NOT, IT'S NOT THAT WE JUST PULLED OUT OF OUR HEAD. SO. YEAH. SO THAT'S A GOOD POINT. UM, A TALKING POINT ON THAT AND MR. THERE, PLEASE HELP ME WITH THIS. A TALKING POINT ON THAT WOULD BE IF WE CAME TO Y'ALL, WE WOULD BRING PROBABLY A FULL COMPREHENSIVE CIP LIST, NOT GO OVER PROJECTS, RIGHT. BUT GIVE YOU WHAT STAFF'S RECOMMENDATION, LIKE THE EASIEST REC, THE EASIEST UH, OR LOWEST UM, DEBT ISSUANCE AND THEN THE MAX DEBT ISSUANCE AND THEN Y'ALL DECIDE NOT PRIORITIZING ANY OF THE PROJECTS, BUT PRIORITIZING WHERE YOU FEEL COMFORTABLE IN BETWEEN THE MID, THE LOW AND THE HIGH RANGE ON THAT. AT THAT POINT, I THINK I WOULD'VE PREFERRED THAT JUST HAVING BEEN IN YEARS PAST AND I WANTED TO SEE HOW THIS WOULD FUNCTION THIS YEAR. OKAY. BUT I, I DID ENJOY SEEING THE FULL LIST. RIGHT. BECAUSE I DON'T KNOW WHAT THEY'VE CUT. AND IT MAY HAVE BEEN SOMETHING THAT THE THREE OF US OR TWO OF US WOULD'VE BEEN LIKE, WHOA, NO, WE, WE SHOULDN'T CUT THAT. BUT I'LL NEVER KNOW NOW. RIGHT. BECAUSE WE'RE ONLY GONNA SEE THE REDUCED LIST. OKAY. AND MAYBE, MAYBE THAT'S HOW, MAYBE THAT FUNCTIONS BETTER. I DON'T KNOW. I WANTED TO SEE HOW IT WOULD FLUSH OUT, BUT WHAT, HOW YOU JUST DESCRIBED THE PROCESS. I THINK I WOULD'VE PREFERRED THAT BETTER. OKAY. AND LOOKING AT THAT AND THEN US SAYING WE'RE COMFORTABLE IN A DEAD WINDOW OF THIS AND THEN MAYBE LETTING THEM, OKAY. WELL PART OF THE CONVERSATION TOO IS THAT WE DO WORK WITH THE FINANCIAL ADVISOR TO SEE WHAT THE CAPACITY IS, ESPECIALLY IN TRYING TO KEEP UP WITH THE PHILOSOPHY OF REDUCING THE TAX RATE. SO ORIGINALLY OUR FIRST CALCULATION THAT THEY CAME BACK WITH WAS AROUND 15 TO STAY WITHIN THAT CAPACITY. SO THAT WILL ALSO BE A PART OF THE CONVERSATION OF SEEING WHAT WE CAN ACTUALLY AFFORD TO DO AS WELL. THAT'S A GOOD POINT. 'CAUSE IF WE LOOK AT THE LIST AND WE'RE LIKE, HEY, WE'RE COMFORTABLE WITH 30 MILLION 'CAUSE WE LOVE ALL THESE PROJECTS. AND THEN YOU COME BACK AND YOU SAY, WELL IT'S GONNA CREATE A 2 CENT TAX RATE INCREASE. ARE YOU GOOD WITH THAT? EXACTLY. THEN, BUT THEN, THEN WE HAVE CHOICES THOUGH, THEN WE CAN MAKE AND WE MIGHT BE, OR THAT YOUR FUTURE COUNCIL MIGHT BE GOOD WITH A 2 CENT TAX RATE INCREASE FOR THESE PROJECTS. I DON'T KNOW. BUT IF YOU DON'T GIVE THEM THOSE OPTIONS, YOU'LL, YOU WON'T KNOW. YEAH. I I I CON IMAGINE WE'D EVER RECOMMEND THAT IT WAS TOTALLY . OKAY. AND WE APPRECIATE Y'ALLS PATIENCE AS WE FIGURE OUT A A BETTER PATH. I LOOKING AT IT NOW, IT LOOKS LIKE WE WENT FROM ONE EXTREME TO THE OTHER. UM, JUST THANK YOU FOR YOUR PATIENCE AS WE FINE TUNE THIS PROCESS. SO ANYTHING ELSE? UH, ONE MORE THING, UH, THAT PLAYS INTO IT IS THE UNSPENT BOND FEES. SO WE HAVE LIKE $64 MILLION THAT HASN'T BEEN SPENT ON PROJECTS ALREADY. SO IF YOU'RE LOOKING AT MORE DEBT EACH YEAR, ALTHOUGH ALL THESE THINGS PLAY INTO THAT, WE ARE THINKING ABOUT THAT AS WELL. 'CAUSE WE NEED THEM TO SPEND THAT MONEY ON THE PROJECTS. AND THIS IS THIS BECAUSE WE'RE BUDGETING PROJECTS THAT WE CAN'T PHYSICALLY EXECUTE. RIGHT. IN THE PAST, WHAT WAS THE CON OF HAVING THOSE PROCEEDS JUST SIT THERE LEGALLY? THEY HAVE TO BE WE HAVE CORRECT. YOU'RE SUPPOSED TO SPEND THREE YEARS, WE HAVE TO HAVE 'EM SPEND ON, ON YOUR, BASICALLY YOU'RE TYING OFF TAXPAYER MONEY TO PAY [00:20:01] OFF DEBT THAT YOU'RE NOT ACTUALLY INVESTING IN INFRASTRUCTURE THAT BENEFITS THEM. BUT THAT'S ALSO WHY WE'RE GOING TO THE LOWER END OF A DEBT ISSUANCE THIS YEAR AS WELL IS AS WE TALKED ABOUT WITH NOT BEING ABLE TO EXECUTE THESE PROJECTS, THERE'S NO POINT IN GOING OUT FOR DEBT THAT WE CAN'T EXECUTE PROJECTS FOR. YEAH. RIGHT. AND SO THESE ARE LARGER SCALE PROJECTS THAT ARE BEING ISSUED DEBT FOR MM-HMM . SO THEY START AND THAT MONEY IS SPENT ON BECAUSE THE LAST DEBT OR THE LAST PIECE THAT WE HAD, THE LAST FEW IS JUST THESE RANDOM PROJECTS THAT EAT UP YES. HUNDREDS OF MILLIONS OF, OF DEBT. YES. AND YOU'RE LIKE, OKAY, 'CAUSE I THINK WE SAW SOME FROM WHAT, 2018? RIGHT? 1919 AND THE SMALL AMOUNT IN 2020 17, ARE THEY STILL FUNDED THEN? SINCE THE THREE YEARS HAS PASSED? THEY'RE STILL STILL FUNDED. IS SO WHAT HAPPENS IS THE, A GOVERNMENTAL AGENCY CAN COME TO THE CITY AND BE LIKE, HEY, WHAT THE HECK? AND EITHER, UM, ACTUALLY I DON'T KNOW WHAT THEY DO AFTER THEY CAN FIND YOU. I KNOW THAT, I DON'T KNOW IF THEY'RE ALLOWED TO TAKE THE BOND PROCEEDS AT THAT POINT, BUT I I THINK IT'S JUST A FINE HONESTLY, YOU, YOU CAN GET DINGED ON YOUR, UH, BOND RATING. OH, OKAY. IS WHERE YOU GOT, SO YOU SHE'LL COST YOU MORE. YEAH. DO WE HAVE A PLAN TO CATCH UP ON THAT? ABSOLUTELY. OKAY. THAT'S, AND THERESA, I THINK Y'ALL SEEN ON HER REPORTS NOW SHE'S STARTING TO REPORT TO Y'ALL ON SPENT BOND PROCEEDS. SO THAT Y WE'RE TRYING TO GET RID OF THAT AT THIS POINT. HOW MUCH WE ARE. WHERE ARE WE AT WITH UNSPENT BOND PROCEEDS RIGHT NOW? IT'S PROBABLY ON THAT ONE. IT'S UH, 64,000,004 POINT. YEAH, IT'S ON THIS PAGE IS OUTTA CURIOSITY. WHAT'S THE OLDEST PROJECT THAT IS FUNDED YET? NOT EXECUTED. THANK YOU. PROBABLY, YEAH, I DON'T KNOW OFF THE TOP OF MY HEAD. THERE'S 309,000 FROM 2017. SO WHAT WAS THAT SUPPOSED? I WOULD SAY THERE, THERE'S ONE FOR ANNEXATIONS THAT WE DID. YEAH. UM, I WANNA SAY BARLO IS ONE OF THEM WHERE WE WENT OUT TO FOR BID ON THAT AND IT CAME BACK DOUBLE THE COST. AND SO WE HAD TO FIND ADDITIONAL MONEY TO GO TOWARDS THE BARLO PROJECT. SO THAT'S IN DISTRICT FOUR AND THEY WOULD NOT HAVE THEIR FEELINGS HEARD. IF YOU DE ANNEXED THEM, THERE IS A LAW THAT WAS PASSED WHERE THEY CAN ASK TO BE DE DISEN XED, THEN YOU WOULDN'T HAVE TO PUT IN THE INFRASTRUCTURE. SO THAT'S CORRECT. YEAH. HOUSE BILL 2038. THAT'S WHAT WE DO. OR, OR WHAT WE COULD DO, WE SHOULD HAVE DONE IN THE FIRST PLACE AND GIVE 'EM SOME TAX MONEY BACK BY. WE DO JUST STAND SOME OF THOSE RESIDENTS STILL CAN'T EVEN VOTE IN OUR ELECTIONS BECAUSE OF, WE TOOK CARE OF THAT THIS YEAR. OKAY. YEAH, NO, THAT WAS A PROJECT TWO, ONE MORE PROJECT. OKAY. ANYTHING ELSE? UM, WITH THIS DEBT ISSUANCE AND, UH, THE TAX RATE STILL IS AT 74 AND A HALF, BUT YOU UH, WE MAY GO DOWN TO 73 AND A HALF DEPENDING ON, WE HAVEN'T RECEIVED THE CERTIFIED TECH GROUP ROLES FOR HARRIS COUNTY, THE OFFICIAL ONE. SO WE'RE, IT'S STILL PRELIMINARY RIGHT NOW WE'RE BETWEEN 73 AND A HALF. 74 AND A HALF. IT DOESN'T AFFECT THE ACTUAL BUDGET. UM, IT WILL AFFECT THE TAX RATE. SO OBVIOUSLY WE WANT TO BE OUT OR BELOW THE NEW REVENUE RATE. BUT IT DOES AS A, BECAUSE OUR AGENDA IS ON DEBT, IT DOES IMPACT, UH, QUITE A FEW THINGS. UH, BECAUSE THE ONE THING THAT WE'RE FIGHTING ON IS THE TURS VALUE AND THERE IS A TUR ISSUANCE IN HERE. AND THE, WHAT ARE THEY? OVERVALUING? OUR TURS. THAT'S OKAY. I'M, SO, I'M OKAY WITH THIS. I KNOW I'M JUST RELATING THE AGENDA TO THIS DISCUSSION. REMIND ME OF WHAT THE DEBT ISSUANCE AND MDD IS. THAT'S FOR THE I 10 STATION. THAT'S THEIR CONTRIBUTIONS. REMEMBER WE BUDGET IT'S 600 OR 700 GRAND A YEAR IN THE MDD AND IT'S THEIR CONTRIBUTION TOWARDS A DEBT ISSUANCE. AND THE TURS DEBT ISSUANCE IS FOR INFRASTRUCTURE IN THE TURS? YEAH. YEAH. IS WHICH, WHICH, WHICH AREA? HERE BY BURG. UH, NORTH STAR MARTIN. AGAIN, ONE RELATED YOU THESE A LIFT STATION AND SOME WATER PART. THERE'S A, THAT THERE IS JUST NEW DATA. OH, THIS IS NEW ISSUE. YEAH, SORRY, SORRY, SORRY. YEP. OKAY. ANYTHING ELSE? NO MA'AM. SORRY. IT'S OKAY. TRYING TO GIVE YOU ALL INFORMATION. THAT'S ALL I WAS TRYING TO, INFORMATION IS GREAT. QUESTIONS FROM COUNSEL COMMENTS, THEY'LL TAKE COMPLIMENTS AS WELL. OKAY. SURE. . THANK Y'ALL. [00:25:01] ALRIGHT. WITH ALL ITEMS HAVING BEEN ADDRESSED ON THE AGENDA, THIS MEETING'S NOW ADJOURNED. IT IS 4:24 PM. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.