[CALL TO ORDER]
          [00:00:35]
          BECAUSE MANY OF THEM DON'T GET ENOUGH. THANKS. WE LOOK FORWARD TO THIS COMING YEAR. WE JUST ASK FOR YOUR GUIDANCE AND YOUR DIRECTION AS YOU. 
          SHOW UP. WELL, AS WE START THIS BUDGET HEARING, I JUST I WANT TO THANK OUR CITY MANAGER AND CITY STAFF. I KNOW WE'VE THERE'S BEEN SEVERAL REPORTS THIS WEEK, BUT IT SHOWS THAT YOU ARE ALREADY WORKING TOWARDS, YOU KNOW, SOLVING OUR, YOU KNOW, OUR BUDGET CHALLENGES THAT LAY AHEAD THAT ARE CERTAINLY COMMON AND CYCLICAL YEARS. AND BUT I APPRECIATE THAT. AND I KNOW PEOPLE MAY HAVE QUESTIONS, BUT I KNOW THAT'S WHAT WE'RE GOING TO BE ANSWERING TODAY. SO THANK YOU. THANK YOU. MAYOR. I'LL GO AHEAD AND GET US STARTED. WE'LL HAVE A PRESENTATION NEXT BY HDR ON OUR WATER AND SEWER RATES BY GRADY REED. BUT BEFORE BEFORE WE MOVE INTO THAT, MR. REED, I JUST WANT TO MAKE AN OPENING STATION STATEMENT. THIS IS THE THIRD WORK SITE WORK SESSION AS WE WORK THROUGH PREPARATION FOR THE FY 27 FISCAL YEAR BUDGET, WHICH BEGINS OCTOBER 1ST. AS WE'VE MENTIONED IN PRIOR WORKSHOPS, OUR OUR ESSENTIALLY OUR EXPENDITURES CONTINUE TO EXCEED OUR REVENUES, AND WE CONTINUE TO DIP INTO OUR FUND BALANCE. AND THAT'S NOT NECESSARILY UNIQUE TO THE CITY OF BEAUMONT. THAT HAPPENS, OF COURSE, IN CITIES AND STATES AND GOVERNMENTS IN OUR OWN HOMES. SO WE'RE USED TO THAT. 
          AND HERE AT THE CITY OF BEAUMONT, KIND OF LIKE AT YOUR HOME, WHAT WE NEED TO DO IS, IS TAKE A HARD LOOK AT OUR SPENDING AND OUR REVENUES AND ESSENTIALLY TIGHTEN OUR BELTS, AT LEAST WHAT WE'VE ALREADY STARTED TO TIGHTEN OUR BELTS THIS FISCAL YEAR. AND WE'RE PLANNING TO TIGHTEN OUR BELTS FOR NEXT FISCAL YEAR FY 27. THE IDEA BEING THAT THAT WILL GIVE US TIME TO ALLOW REVENUES TO CATCH UP WITH EXPENDITURES, AND THEN WE CAN RETURN TO. MAYBE A LITTLE BIT DIFFERENT STRATEGY. SO AGAIN, THAT'S THE STRATEGY THAT WE'RE ESSENTIALLY PRESENTING IN TODAY'S WORK SESSION. AND AGAIN, FOR THE BENEFIT OF THE PUBLIC, THIS IS A WORK SESSION TO AGAIN CONTINUE DISCUSSION AS WE WORK FOR THE FINAL DOCUMENT, WHICH WILL NEED TO BE ADOPTED IN SEPTEMBER. SOME OF THIS IS GOING TO BE A LITTLE BIT REDUNDANT BECAUSE MISS SCHMIDT, OUR BUDGET OFFICER, IS GOING TO PRESENT SOME OF THIS IN A MOMENT, BUT I WANTED TO GO AHEAD AND HIT SOME HIGHLIGHTS ON SOME OF THE THINGS THAT WE HAVE BEEN DOING TO TIGHTEN OUR BELT IN 26 THIS FISCAL YEAR, AS WELL AS 27 AS WE MOVE FORWARD. 
          WE'VE TALKED, TALKED, AND WE'LL TALK ABOUT A HIRING FREEZE. THIS IS FOR POSITIONS THAT AREN'T NECESSARILY PUBLIC SAFETY RELATED. AND WHAT THIS MEANS IS ESSENTIALLY, WE WOULD JUST HAVE TO LOOK AT EVERY SINGLE POSITION OUTSIDE THE SCOPE OF PUBLIC SAFETY TO SEE IF IF INDEED WE CAN HOLD IT. AT THE END OF THE DAY, WE NEED TO MAKE SURE THAT THE CITY FUNCTIONS PROPERLY. AND THE THINGS THAT WE DO TO KEEP THE CITY RUNNING CONTINUE TO DO SO CONTINUE TO HAPPEN. SO WE WILL. IT'S A DIFFICULT PROCESS TO REVIEW EACH EACH EXACT POSITION, BUT THE IDEA IS THAT WE'RE GOING TO REDUCE EXPENDITURES BY DOING THAT. ALSO CHARGING THE DIRECTORS WITH EFFICIENCIES. THEY MORE THAN ANYONE KNOW WHERE THEIR OPPORTUNITIES TO SAVE. WE A SUBSTANTIAL AMOUNT OF OUR GENERAL FUND BUDGET AND OTHER BUDGETS DO GO TOWARDS 
          [00:05:05]
PERSONNEL. AND SO THERE'S NOT A LOT OF ROOM FOR EFFICIENCIES, BUT WE CAN CERTAINLY FIND THEM AND TAKE ADVANTAGE OF THEM WHERE WE DO. YOU KNOW, CONSULTANTS ARE IMPORTANT. WE HAVE A COUPLE OF THEM HERE TODAY AND THEY HELP WHAT WE DO, HELP US BE MORE EFFICIENT AND DELIVER OUR SERVICES. BUT PART OF WHAT WE'RE DOING NOW IS LOOKING AT CONSULTANTS AND THOSE CONTRACTS TO SEE WHERE WE CAN REDUCE, WHERE WE CAN, ELIMINATING POSITIONS WHERE WE CAN. SO THIS GOES BEYOND HIRING FREEZE. SO EVEN IN OFFICES LIKE THE EXECUTIVE OFFICE, WE'RE LOOKING AT POSITIONS TO ELIMINATE. AND SO AGAIN, THAT WOULD SAVE TRAVEL AND TRAINING. 
          YOU'LL SEE TODAY THAT THAT IF YOU LOOK AT CITYWIDE, OUR BUDGET TRAVEL AND TRAINING IS QUITE A BIG NUMBER. WE JUST DO HAVE TO KEEP IN MIND THAT MANY, MUCH OF THE TRAVEL AND TRAINING IS ESSENTIAL FOR CERTIFICATION, TO MAKE SURE THAT WE DO OUR JOBS PROPERLY, EFFICIENTLY, AND IN ACCORDANCE WITH STATE, FEDERAL AND OTHER REGULATIONS. WE MAY LOOK AT CONDUCTING AN EFFICIENCY STUDY, ESPECIALLY AS A RESULT, REGARDING WATER AND SEWER REVENUE, BILLING COLLECTIONS, THINGS LIKE THIS. IS THERE A WAY TO DO THINGS BETTER, BUT ONLY DO THAT IF WE CAN CONVINCE OURSELVES THAT THERE WILL BE A POSITIVE RETURN ON INVESTMENT IN DOING SO, MISS SCHMIDT WILL TALK ABOUT ADDITIONAL REVENUE SOURCES LIKE FEES. AGAIN, WHEN WE TALK ABOUT FINES AND FEES, IT IS ONLY TO COVER OUR COSTS. IT IS NOT TO MAKE. IT IS NOT TO MAKE MONEY. 
          IT'S SIMPLY TO COVER OUR COSTS, WHICH AGAIN, AS I MENTIONED, OUR COST OUT, OUT, EXCEED OUR REVENUES. WE'LL HEAR TODAY ABOUT TALKING ABOUT EMPLOYEE BENEFITS. I THINK, AS WE KNOW, IT'S A NATIONWIDE ISSUE WITH ESSENTIALLY HEALTH CARE COSTS CONTINUE TO GO UP YEAR AFTER YEAR. AND SO PART OF OUR CHALLENGE IS RELATED TO THAT. SO WE'RE GOING TO STUDY WHAT OPPORTUNITIES THERE ARE TO SAVE MONEY IN THAT REALM. AND THEN ONE THING I'LL CLOSE WITH IS WE WILL CONDUCT A ESSENTIALLY A MID-YEAR BUDGET REVIEW IN APRIL. SO BECAUSE WE'VE HAD THESE CHALLENGES, WE WANT TO TAKE A HARD LOOK AT THE MID FISCAL YEAR IN APRIL TO SEE HOW WE'RE DOING BEFORE WE EVEN GET INTO THE FY 28 BUDGET CYCLE. SO LOOK FORWARD TO THAT. FOR THE PURPOSE OF TODAY'S WORKSHOP. WE DO WE DO ASK A FEW THINGS OF COUNCIL COMING OUT OF IT. AGAIN, JUST BECAUSE OF THE CHALLENGES WE HAVE. WE'RE GOING TO ASK IF COUNCIL HAS ANY ADDITIONAL SERVICES THAT WE DELIVER OR PROGRAMS THAT WE DELIVER. THAT COUNCIL WANTS TO ADD. IT WOULD BE GOOD TO KNOW THAT TODAY, IF THERE ARE SERVICES THAT COUNCIL WANTS TO REDUCE OR CHANGE, THAT WOULD BE GOOD TODAY TO KNOW TODAY, IT WOULD BE GOOD TO KNOW WE HAVE NO CONTROL REALLY ON OUR A LOT OF OUR RATES. BUT THE ONE RATE WE DO CONTROL TO SOME EXTENT, ALTHOUGH THERE ARE LIMITATIONS, IS WHAT WE SET OUR PROPERTY TAX RATE AT. SO IT WOULD BE GOOD TO KNOW WHAT THE COMFORT LEVEL IS WITH COUNCIL. AND THEN, YOU KNOW, WE TALK A LOT ABOUT OUR OUR BASICALLY OUR RAINY DAY FUND, OUR FUND BALANCE, GENERAL FUND FUND BALANCE. AND SO RIGHT NOW BY POLICY, WE SET IT AT 20% OF THE EXPENDITURES, ANNUAL EXPENDITURES. AND SO WE'LL TALK ABOUT TODAY IN TERMS OF BECAUSE I KNOW WE'VE TALKED ABOUT IN PRIOR PRIOR WORK SESSIONS, THAT IF WE CONTINUE DOING WHAT WE DO HAVE BEEN DOING, THE GENERAL FUND FUND BALANCE WILL CONTINUE TO BE DEPLETED. AND SO, AGAIN, WE'RE TRYING TO MAKE CORRECTIONS, BUT WHAT WHAT LEVEL WOULD COUNCIL LIKE TO SEE THAT OUT? WOULD IT. 20 1918 AS I MENTIONED IN PRIOR WORKSHOPS, THE STANDARD USUALLY IS YOU WANT TO HAVE AT LEAST TWO MONTHS, WHICH TRANSLATES TO ABOUT 16.5%. AND SO WE'RE NOT ADVOCATING THAT AND JUST GIVING YOU A POINT OF REFERENCE. AND THEN FINALLY, BECAUSE I KNOW THAT'S A LOT TO ASK, THERE'S A LOT TO THIS. AND AGAIN, WE WILL BE PRESENTING AND DISCUSSING DISCUSSING THIS MATTER IN AUGUST AND THEN AGAIN IN SEPTEMBER WHEN WE PRESENT THE FINAL PROPOSED BUDGET TO COUNCIL. BUT IF IF COMING OUT OF TODAY, COUNCIL FEELS LIKE WE NEED ANOTHER BUDGET WORKSHOP JUST BECAUSE OF THE CHALLENGES, YOU KNOW, WE NEED TO BE GOOD TO KNOW THAT TODAY AS WELL. SO BUT WITH THAT, I WILL I'LL GO AHEAD 
          [ Presentation by HDR on Water/Sewer Rate Study Presentation by Holmes Murphy on Employee Benefits FY 2027 Draft Proposed Budget Council discussion and direction to staff before preparation for the formal proposed budget]
AND MOVE INTO THE FIRST FIRST ITEM ON THE AGENDA. AND THAT'S A PRESENTATION BY HDR ON OUR 
          [00:10:07]
WATER AND SEWER RATE STUDY. AND FOR THE BENEFIT OF THE COUNCIL, THE PUBLIC, YOU KNOW, WE, WE HAVE A QUITE AN EXTENSIVE WATER AND SEWER SYSTEM. AND SO WE WORK WITH HDR TO ESSENTIALLY TRY TO SET RATES, NOT JUST LOOKING AT FY 27, BUT LOOKING OUT IN THE FUTURE TO MAKE SURE THAT THE RATES ARE SUFFICIENT. THE RATES THAT THE CITIZENS PAY FOR THESE SERVICES ARE SUFFICIENT TO MAKE SURE THAT WE CAN CONTINUE TO INVEST, REPAIR AND INVEST IN OUR WATER AND SEWER DELIVERY SYSTEM. SO WITH THAT, I WOULD INVITE MR. REED TO TO COME AND MAKE THE PRESENTATION. THANK YOU AND GOOD MORNING, MAYOR AND COUNCIL. BEFORE I GET STARTED THIS MORNING, I JUST WANT TO TAKE A QUICK MINUTE AND THANK YOUR STAFF, NOT ONLY MR. BOONE, BUT ALSO MISS, WHO HAS JUMPED IN KIND OF AT AT THE IN THE MIDDLE OF ALL OF THIS. AND HER AND HER STAFF HAVE DONE A FANTASTIC JOB OF GETTING US THE INFORMATION THAT WE NEEDED IN A TIMELY MANNER. AND THEN AND THEN AFTER THAT, SETTING UP AND SETTING UP TIMES TO MEET WITH US AND PROVIDE FEEDBACK. SO I JUST WANTED TO THANK YOUR STAFF. THEY'VE BEEN A, THEY'VE BEEN REALLY GREAT TO WORK WITH. AS WE, AS WE GO THROUGH THIS, IF YOU HAVE QUESTIONS, DON'T FEEL LIKE YOU HAVE TO WAIT TILL THE END. FEEL FREE TO TO STOP AND ASK ME QUESTIONS AS WE GO. I'M GOING TO TRY TO GO AS QUICK AS I CAN, BUT AT THE SAME TIME, I DO WANT TO TRY TO EXPLAIN SOME NUANCES AND SOME OF THE ASSUMPTIONS THAT WE'VE MADE. JUST SO EVERYONE'S AWARE OF HOW WE ARE LOOKING AT THIS AS WE AS WE GO THROUGH. AND YOUR CITY MANAGER'S ALREADY TALKED A LITTLE BIT ABOUT FUND BALANCES AND RESERVE REQUIREMENTS. SO THE UTILITY FUND IS CURRENTLY MEETING ITS RESERVE REQUIREMENT FOR THE UTILITY FUND. WE SET A 25% RESERVE, WHICH IS ABOUT THREE MONTHS WORTH OF RESERVES. SO THAT'S JUST THREE MONTHS WORTH OF YOUR TOTAL EXPENSES ON HAND. THE FUND BALANCES IS ABOVE THAT RIGHT NOW. THREE MONTHS IS IS TYPICAL WITHIN THE INDUSTRY, CERTAINLY FOR FOR WASTEWATER UTILITIES. THAT'S WHAT THEY WOULD USE. THERE ARE SOME WATER UTILITIES THAT THEY WILL SET A HIGHER RESERVE REQUIREMENT. BUT TYPICALLY WE SEE THAT IN UTILITIES THAT ARE MORE NOT COASTAL COMMUNITIES, BUT MORE ENTITIES LIKE IN CENTRAL TEXAS AND NORTH TEXAS, WHERE THE RAINFALL TENDS TO BE A BIT MORE VARIABLE IN THEIR REVENUES TEND TO SWING. THEIR WATER REVENUES TEND TO SWING A LITTLE BIT MORE FROM YEAR TO YEAR. SO THAT'S THAT'S GOOD FOR THE UTILITY. THE FUND BALANCE IS THERE SINCE THIS IS A PERCENTAGE OF SINCE YOUR RESERVE REQUIREMENT IS A PERCENTAGE PERCENTAGE OF YOUR EXPENDITURES, AS YOUR EXPENDITURES INCREASE, WHICH WHICH THEY ARE, WE HAVE THEM PROJECTED TO INCREASE. OBVIOUSLY THAT FUND BALANCE HAS TO CONTINUE TO GROW. IF YOU WANT TO CONTINUE TO MEET YOUR RESERVE REQUIREMENT FOR THIS UPCOMING FISCAL YEAR, THE TOTAL WATER AND WASTEWATER EXPENDITURES WERE ESTIMATING THOSE TO BE $72.2 MILLION. THAT INCLUDES A DEBT ISSUE OF ABOUT $42.5 MILLION IN THIS UPCOMING FISCAL YEAR FOR CAPITAL PROJECTS. AND WE'LL GET WE'LL GET TO THOSE IN A MINUTE. WE DO ASSUME ON THE DEBT THAT YOU'RE ISSUING THAT DEBT BASICALLY KIND OF IN THE MIDDLE OF THE YEAR SO THAT YOU'RE MAKING ONE PAYMENT OR AN INTEREST ONLY PAYMENT INSTEAD OF MAKING A FULL PAYMENT. JUST, JUST SO YOU'RE AWARE OF HOW WE HANDLE DEBT, AND THEN WE DO HAVE ADDITIONAL DEBT ISSUES AND EVERY YEAR HAS BEEN THE NORM. THOSE ARE TYPICALLY RUNNING AROUND BETWEEN $42 MILLION TO $50 MILLION, DEPENDING UPON THE LIST OF PROJECTS IN ANY GIVEN YEAR. SO THAT IS, YOU KNOW, OBVIOUSLY THAT IS THAT IS SIZABLE. AND AS YOU'LL SEE, THAT'S KIND OF WHAT'S DRIVING A LOT OF YOUR INCREASED EXPENSES ON YOUR WATER AND WASTEWATER UTILITY. IT'S A LOT OF IT'S JUST THE INCREASING DEBT LOAD. SO WE'RE GOING TO TRY TO TAKE YOUR UTILITY AND SPLIT IT INTO INTO TWO UTILITIES. SO SO IT'S WATER AND WASTEWATER. IT'S WITHIN ONE FUND, BUT WE TRY TO LOOK AT THEM INDIVIDUALLY. AND THE REASON THAT WE DO THAT IS BECAUSE IN A PERFECT WORLD, WE DON'T WANT WATER REVENUES COMING IN AND BEING SPENT ON WASTEWATER ITEMS AND VICE VERSA. 
          WE DON'T WANT WASTEWATER REVENUE COMING IN AND BEING SPENT ON WATER ITEMS. AND SO WE TRY TO LOOK AT THEM. WE TRY TO SEPARATE ALL OF THE REVENUES, ALL OF THE EXPENDITURES INTO THIS IS A WATER REVENUE AND EXPENDITURE. THIS IS WASTEWATER REVENUE OR EXPENDITURE. ON THE WATER SIDE, WE TRY TO PLAN FOR AN AVERAGE YEAR, AND I PUT I PUT AVERAGE IN QUOTES. AGAIN, YOU'RE. YOU DON'T SEE AS MUCH VARIABILITY IN YOUR PER CONNECTION WATER USE AS SOME 
          [00:15:01]
COMMUNITIES THAT ARE NOT LOCATED IN COASTAL COMMUNITIES. BUT WE STILL WILL SEE SOME VARIABILITY YEAR TO YEAR. AND HOW MUCH WATER, SAY, A HOUSEHOLD IS USING. AND THAT'S LARGELY DRIVEN BY WEATHER, WHICH OBVIOUSLY WE DON'T KNOW WHAT THE WEATHER IS GOING TO BE LIKE NEXT YEAR, NEXT SUMMER. SUMMER IS CHRISTMAS TIME FOR A WATER UTILITY. AND SO IF WE HAVE A SUMMER THAT'S LIKE IT IS OUTSIDE RIGHT NOW, YOUR WATER REVENUES ARE GOING TO BE DEPRESSED. BUT IF YOU HAVE A HOTTER, DRIER SUMMER, YOU WOULD TYPICALLY HAVE HIGHER THAN EXPECTED REVENUE. SO WE JUST TRY TO AVERAGE THAT OUT AS BEST WE CAN PLAN FOR AN AVERAGE YEAR. 
          WE'RE ASSUMING THAT THE AVERAGE SINGLE FAMILY RESIDENTIAL CONNECTION WOULD USE BETWEEN 5000 AND 5500 GALLONS OF OF WATER PER PER MONTH. WE HAVE JUST UNDER 43,000 CONNECTIONS IN THIS UPCOMING FISCAL YEAR IS WHAT WE'RE PLANNING FOR, WITH A TOTAL BILLED WATER USE OF 5.6 TRILLION GALLONS. THE CITY HAS BEEN GROWING, BUT THAT THAT GROWTH HAS BEEN BEEN RATHER LIMITED. AND SO WE ARE NOT PROJECTING A LOT OF GROWTH IN OUR IN OUR RATE MODEL. LOOKING FORWARD, WE LOOK OUT TO THE YEAR 2031. WE LOOK OUT FIVE YEARS. WE DO HAVE SOME GROWTH BEGINNING IN 2028 AND 2028 AND 2029, WE'VE ASSUMED ABOUT A HALF A PERCENT OF GROWTH. AND THEN IN 2030 AND 21, 30 AND 31, WE'VE ASSUMED A 1% GROWTH. AND THAT'S IMPORTANT BECAUSE YOUR EXPENSES TEND TO GROW. YOU KNOW, IF WE JUST ASSUME A NORMAL, NORMAL RATE OF INFLATION, THAT'S 3 TO 4%. AND SO WITH WITH GROWTH THAT'S BELOW THAT. IF YOU JUST DO THE MATH, THAT MEANS THAT YOU'RE GOING TO HAVE TO DO RATE INCREASES TO KIND OF MAKE THAT UP. IF YOUR GROWTH, IF YOU'RE GROWING AT THE SAME RATE THAT YOUR EXPENSES WERE INCREASING, THEN EVERYTHING WOULD BE OKAY. BUT THAT'S TYPICALLY NOT NOT WHAT WE'VE SEEN OVER THE LAST SEVERAL YEARS HERE. ON THE WATER SIDE, WE'RE ASSUMING THAT $72.2 MILLION, THAT $39.8 MILLION OF THAT IS GOING TO BE WATER EXPENSES. AGAIN, THIS IS SOMEWHAT IF I'M BEING HONEST, THIS IS SOMEWHAT OF AN ARBITRARY NUMBER WITHIN YOUR BUDGET. THERE ARE ITEMS THAT ARE CLEARLY WATER AND THERE ARE ITEMS THAT ARE CLEARLY WASTEWATER. AND THEN THERE'S ITEMS LIKE ADMINISTRATION THAT ARE THAT ARE BOTH. AND SO WE TAKE THOSE THOSE COMMON EXPENSES, ADMINISTRATION, YOUR PAYMENT IN LIEU OF TAXES, THOSE TYPES OF THINGS. AND WE ALLOCATE THOSE INTO EITHER A WATER EXPENSE OR WASTEWATER EXPENSE. AND WE TYPICALLY SPLIT THEM BASED ON THE PROJECTED REVENUE COMING IN. JUST SO EVERYONE'S AWARE, BUT THAT $39.8 MILLION, IT'S NOT A NUMBER THAT YOU'RE GOING TO SEE IN YOUR BUDGET ANYWHERE, BUT WE'RE TRYING TO, AS BEST AS WE CAN TO FIGURE OUT THIS IS WHAT WE THINK OUR TOTAL WATER ONLY EXPENSES ARE GOING TO BE THAT $39.8 MILLION. WE WE WOULD PROJECT THAT THAT WOULD INCREASE TO $47.7 MILLION BY THE TIME WE GET TO FISCAL YEAR 31. AND AGAIN, MOST OF THAT INCREASE IS IS DUE TO DEBT SERVICE PAYMENTS. THIS IS JUST THE THE CAPITAL IMPROVEMENT PLAN THAT WE HAVE IN THE MODEL. SO IF WE LOOK AT THE FIVE YEAR TOTAL ON THE ON THE WATER SIDE, IT'S ABOUT $145 MILLION OF CAPITAL PROJECTS. I'M NOT OBVIOUSLY, I'M NOT GOING TO GO THROUGH THESE. I'M NOT AN ENGINEER, SO I EVEN IF I WAS, I WOULDN'T UNDERSTAND WHAT WHAT SOME OF THEM ARE DOING. BUT YOU CAN JUST SEE THE YEARLY EXPENDITURES FOR 2027. WE HAVE ABOUT $30 MILLION OF THAT. WE'RE ASSUMING THAT $10.3 MILLION OF THAT WOULD BE GRANT FUNDED. GRANT FUNDED PROJECTS ARE OBVIOUSLY GREAT BECAUSE THEY THEY DON'T INCREASE RATES. 
          THEY HAVE NO IMPACT ON RATES. BUT BUT WE ALSO DO HAVE SOME DEBT FUNDED PROJECTS OF JUST UNDER $20 MILLION THAT WE WOULD BE ASSUMED THAT WE ARE ISSUING DEBT FOR. SWITCHING GEARS REAL QUICK TO THE TO THE WASTEWATER SIDE ON THE IF WE IF WE LOOK AT YOUR UTILITY AS A WHOLE, IT PROBABLY MAYBE FALLS INTO SOME OF YOUR OTHER THINGS THAT THAT YOUR CITY MANAGER'S ALREADY TALKED ABOUT WHERE REVENUES AREN'T NECESSARILY COVERING EXPENSES. WE SEE THAT CERTAINLY MORE ON THE, ON THE WASTEWATER SIDE. AGAIN, JUST IF WE LOOK AT AT OUR SPLIT OF THE REVENUES AND EXPENSES, THE WASTEWATER SIDE OF THAT SIDE OF THE UTILITY SEEMS TO BE STRUGGLING A LITTLE BIT MORE THAN THE WATER SIDE. AND SO THAT'S SOMETHING THAT WE WOULD CERTAINLY WANT TO TRY TO TRY TO ADDRESS. ON THE WASTEWATER SIDE, WE'RE ASSUMING JUST UNDER 41,000 CONNECTIONS. TOTAL BILLED USE OF 35.38 TRILLION GALLONS, AGAIN, LIMITED NUMBER OF OF GROWTH AND CONNECTIONS. WE'RE USING THE SAME GROWTH RATE ON ON WASTEWATER AS WE ARE FOR WATER. TOTAL PROPOSED EXPENSES SLIGHTLY LESS THAN WATER $32.4 MILLION FOR THIS UPCOMING FISCAL YEAR. THAT DOES ASSUME A DEBT ISSUE. AND THEN WE'RE EXPECTING THAT $32.4 MILLION TO GROW TO $38 MILLION BY THE TIME WE GET TO FISCAL YEAR 31. AND AGAIN, MOST OF 
          [00:20:05]
THAT IS DUE TO DEBT PAYMENTS. THIS IS THE WASTEWATER CIP THAT WE'RE USING IN THE RATE MODEL, AGAIN, SLIGHTLY LESS THAN WATER TOTAL FIVE YEAR EXPENDITURES OF ABOUT $108.5 MILLION IN 2027. 
          THIS UPCOMING FISCAL YEAR, TOTAL PROJECTS JUST UNDER $26 MILLION, 4.6 MILLION OF THAT, WE'RE ASSUMING, IS BEING GRANT FUNDED, WITH THE REMAINDER BEING DEBT FUNDED. SO KIND OF GETTING DOWN TO WHERE DOES THIS LEAVE US WITH RATES FOR WATER, WE WOULD RECOMMEND NO INCREASE TO THE WATER RATES, WHICH I WOULD HOPE WOULD BE VIEWED AS AS POSITIVE NEWS. IT IS IMPORTANT TO REMEMBER THAT LAST YEAR, THE MAJORITY OF YOUR CUSTOMERS LAST YEAR ALSO DID NOT SEE A WATER RATE INCREASE. WE CHANGED THE RATE STRUCTURE SO THAT METERS LARGER THAN 5/8 INCH DID SEE A RATE INCREASE, BUT EVERY CUSTOMER THAT HAD A FIVE INCH METER DID NOT SEE A WATER RATE INCREASE LAST YEAR. SO THIS WOULD BASICALLY BE TWO YEARS WITHOUT A WATER RATE INCREASE FOR FOR THE MAJORITY OF YOUR OF YOUR CUSTOMERS. ONE THING THAT WE I DO WANT TO SPEND A LITTLE BIT OF TIME DISCUSSING IS THE SENIOR CITIZEN RATE. SENIOR CITIZENS DO PAY A DIFFERENTIAL RATE. IN THE PAST, THAT RATE WAS JUST DIFFERENTIAL ON THE DEMAND SIDE. 
          SO YOUR WATER RATE IS MADE UP OF TWO PARTS, A DEMAND CHARGE IN WHICH YOU YOU PAY REGARDLESS OF HOW MUCH WATER YOU USE, AND THEN A VOLUME CHARGE THAT IS DEPENDENT UPON YOUR WATER USE. 
          IN THE PAST, THE SENIOR CITIZEN CHARGE ON THE VOLUME CHARGE, IT WAS THE SAME ON THE DEMAND CHARGE. THEIR DEMAND CHARGE WAS LESS LAST YEAR. WAS THAT CHANGED. AND SO NOW THEY HAVE A DIFFERENTIAL RATE FOR BOTH THE DEMAND AND THE VOLUME CHARGE, NOT ONLY FOR WATER BUT ALSO FOR WASTEWATER. AFTER I MADE MY PRESENTATION LAST YEAR, I THINK THERE WAS SOME FURTHER DISCUSSION ABOUT THE SENIOR CITIZEN RATE, AND WE WENT BACK AND BASICALLY MODELED AT THAT RATE WOULD BE FROZEN AT ITS CURRENT LEVEL. SO WE TOOK WE TOOK ANY RATE INCREASES OUT OF THE SENIOR CITIZEN RATE OVER THE NEXT FIVE YEARS. IN OUR RATE MODEL, WE WENT BACK AND WE WE RELOOKED AT THAT AND REVISITED THAT A LITTLE BIT. AND WE'RE PROPOSING THAT THE SENIOR CITIZEN RATE, AT LEAST HOW WE HAVE IT MODELED IN OUR RATE MODEL, THAT IT WOULD INCREASE AT HALF OF THE RESIDENTIAL RATE. THIS IS A DECISION THAT COUNCIL WOULD WOULD JUST NEED TO MAKE AND PROVIDE FEEDBACK ON. AND THE RATIONALE BEHIND IT, AND I DO UNDERSTAND IN THE CITY SHOULD BE LAUDED FOR FOR DOING WHAT THEY CAN TO TRY TO REDUCE EXPENSES FOR SENIOR CITIZENS OR THOSE ON A FIXED INCOME. BUT IF WE'RE LOOKING AT IT STRICTLY FROM A COST STANDPOINT, IT DOESN'T COST THE CITY ANY LESS TO SERVE A SENIOR CITIZEN, AS IT DOES A NORMAL SINGLE FAMILY HOUSEHOLD. AND SO THEY DO HAVE A RATE DIFFERENTIAL ALREADY WITH THIS PROPOSAL THAT THEIR RATE WOULD INCREASE AT HALF THE RESIDENTIAL RATE, THAT DIFFERENTIAL IS GOING TO CONTINUE TO INCREASE, BUT IT'S NOT GOING TO INCREASE QUITE AS MUCH AS IT WOULD IF WE JUST FROZE THEIR RATES. AND MY CONCERN WITH FREEZING THEIR RATES IS THAT DIFFERENTIAL IS JUST GOING TO CONTINUE TO GROW AND GROW AND GROW. AND THEN AT SOME POINT, IF WE WANTED TO GO BACK AND TRY TO CORRECT THAT, WE WOULD HAVE TO END UP DOING A LARGER RATE INCREASE FOR SENIOR CITIZENS THAN PERHAPS YOUR OTHER CUSTOMERS. AND THAT'S OBVIOUSLY SOMETHING THAT WE WOULD WANT TO AVOID. IT DOESN'T MAKE A GREAT DEAL OF DIFFERENCE IN YOUR REVENUES, QUITE HONESTLY. BUT FOR EVERY DOLLAR THAT SOMEONE DOESN'T PAY, FOR EXAMPLE, FOR SENIOR CITIZENS, FOR EVERY DISCOUNT THAT THEY DO GET, THAT'S A DOLLAR THAT HAS TO BE PICKED UP BY YOUR REMAINING CUSTOMERS. YOUR EXPENSES DON'T CHANGE. SO JUST SOMETHING TO SOMETHING TO KEEP IN MIND. THE OTHER POSITIVE NEWS IS THAT LAST YEAR WHEN WE WERE HERE, WE DID PROJECT THAT THE WATER RATES WOULD GO UP 5%. SO THE FACT THAT WE'RE RECOMMENDING THAT WE DON'T CHANGE THEM AT ALL IS, AGAIN, GOOD NEWS. WE WANTED TO TRY TO FOCUS AS MUCH AS WE COULD ON WASTEWATER. AGAIN, AS I AS I SAID EARLIER, IF WE JUST LOOK AT YOUR TWO UTILITIES AND SEPARATE THOSE, IT SEEMS LIKE WASTEWATER WOULD BE STRUGGLING A LITTLE BIT MORE THAN WATER. SO WE WANTED TO TRY TO TAKE THIS THIS TIME TO SAY, HEY, LET'S TRY TO HOLD OFF ON, ON WATER. YOU DO HAVE FUND BALANCE THERE TO, TO USE, OBVIOUSLY, AS YOUR CITY MANAGER SAID, YOU CAN'T CONTINUE TO DO THAT FOREVER. BUT, BUT WE CAN DO IT IN THE SHORT TERM. SO LET'S TRY TO USE THAT FUND BALANCE IN THIS CASE TO, TO TRY TO HOLD OFF ON DOING ANY WATER RATE INCREASES. AND LET'S FOCUS ON WASTEWATER. SO WE WOULD RECOMMEND A 10% ACROSS THE BOARD RATE INCREASE FOR WASTEWATER. NO CHANGES TO THE WASTEWATER RATE STRUCTURE. JUST EVERY WASTEWATER RATE WOULD GO UP 10%. SO THAT WOULD EQUATE TO 
          [00:25:05]
ABOUT $3.72 PER MONTH FOR 5000 GALLONS OF USE. YOUR TYPICAL SINGLE FAMILY RESIDENTIAL CUSTOMER IS ONLY BEING BILLED FOR ABOUT 3000 TO 3500 GALLONS OF WASTEWATER, SO THEIR ACTUAL BILL INCREASE WOULD BE A LITTLE BIT LESS THAN $3.72. AGAIN, FOR SENIOR CITIZENS, WE'RE PROPOSING NOT THAT THEIR RATES REMAIN FROZEN, BUT THAT THEIR RATE WOULD GO UP AT HALF THE RESIDENTIAL RATE, SO THEY WOULD SEE A 5% INCREASE TO THEIR TO THEIR WASTEWATER RATES AND NOT THE FULL TEN. LAST YEAR WHEN WE WERE HERE, WE WERE PROJECTING THAT WASTEWATER WOULD GO UP 10%. 
          AND SO WE'VE KIND OF HELD TO THAT AND ARE ARE STICKING WITH THAT. SO BASICALLY WHAT THIS MEANS IS THAT FOR TOTAL FOR WATER AND WASTEWATER, YOUR IF YOU LOOK AT YOUR UTILITY BILL, IT'S ALMOST SPLIT 5050 BETWEEN WATER AND WASTEWATER BETWEEN THE TWO UTILITIES. SO HOLDING WATER THE SAME AND GOING UP 10% ON WASTEWATER WOULD BASICALLY MEAN THAT MOST OF YOUR RESIDENTS WOULD SEE, OR MOST OF YOUR CUSTOMERS WOULD SEE ABOUT A 5% INCREASE TOTAL ON THEIR WATER AND WASTEWATER BILL. WITH THAT INCREASE, THIS KIND OF SETS THE STAGE. THE BAD NEWS IS THAT WE DO HAVE OTHER RATE INCREASES. LOOKING FORWARD, OBVIOUSLY, AGAIN, BECAUSE WE TALKED ABOUT HOW YOUR EXPENSES ARE REALLY GOING UP FASTER THAN YOUR GROWTH. AND SO THE ONLY WAY TO KIND OF RECTIFY THAT IS TO KEEP DOING RATE OR KEEP DOING SOME RATE INCREASES. BUT LOOKING FORWARD, WE DO HAVE A PLAN TO KIND OF KEEP YOU ABOVE THAT RESERVE TARGET. THIS JUST SHOWS WHAT FUTURE BILLS WOULD BE WITH NO WATER RATE INCREASE AND A 10% WASTEWATER RATE INCREASE. AND AGAIN, YOU CAN SEE MOST BILLS FOR MOST OF YOUR CUSTOMERS, RESIDENTIAL COMMERCIAL DOESN'T REALLY MATTER. WOULD GO UP ABOUT 5%. SENIOR CITIZENS WOULD GO UP JUST UNDER 2.5% IS WHAT WE WOULD WHAT WE WOULD PREDICT. SO LOOKING AT THE LOOKING AT JUST THE WATER UTILITY, AGAIN, JUST KIND OF SUMMARIZES YOUR EXPENSES ARE THE ARE THE BARS AND THEN YOUR FUTURE REVENUE IS THE, IS THE DASHED LINE YOU ARE, WE WOULD HAVE YOU PROJECTED TO RUN A LITTLE BIT OF A DEFICIT ON THE WATER SIDE. IT'S NOT IT'S NOT SOMETHING THAT'S INSURMOUNTABLE. OBVIOUSLY, IT'S NOT SOMETHING THAT YOU CAN CONTINUE TO DO YEAR AFTER YEAR. 
          BUT AGAIN, SINCE YOU DO APPEAR TO HAVE ADEQUATE RESERVES A LITTLE BIT ABOVE YOUR TARGET, WE THINK THAT THE BEST USE OF THOSE RESERVES IS PROBABLY TO JUST FOREGO WATER RATE INCREASE FOR THIS YEAR. LET'S SEE HOW THINGS SHAKE OUT AND REEVALUATE THINGS FOR FOR 2028. WE DO HAVE FUTURE EXPENSE, FUTURE INCREASES IN THERE. THOSE ARE ON THE BOTTOM. SO FOR 2028, WE WOULD PROJECT BOTH A 5% INCREASE ON WATER FOR 2028 AND 2029. AND THEN MAYBE THAT WOULD GO DOWN A PERCENT IN THESE OUTER YEARS JUST ON THE EXPENSES. I DO JUST WANT TO POINT OUT THAT THE THE RED ON THE VERY TOP, THAT IS NEW DEBT SERVICE. SO AGAIN, AS WE CONTINUE TO ISSUE THAT DEBT YEAR AFTER YEAR, BOTH ON WATER AND WASTEWATER, TO THE TUNE OF, AGAIN, ANYWHERE BETWEEN 42 TO $50 MILLION A YEAR, THAT IS REALLY WHAT IS DRIVING YOUR INCREASED EXPENSES. YOUR O&M EXPENSES ARE CERTAINLY GOING UP. WE'VE ASSUMED BETWEEN A THREE AND A 5% INCREASE IN O&M EXPENSES, DEPENDING UPON WHAT THE LINE ITEM IS, BUT THE REAL DRIVER IS DEBT. I BELIEVE THAT YOU DO HAVE SOME DEBT COMING OFF AS WE GO THROUGHOUT THE PROJECTION PERIOD, AND SO THAT DOES HELP. BUT NEW DEBT IS COMING ON FASTER THAN OLD DEBT IS IS GOING AWAY. SAME SUMMARY FOR WASTEWATER IN HERE. JUST KIND OF THE TAKEAWAY IS, IS A LOT OF THE SAME THINGS THAT I THAT I SAID EARLIER. YOU CAN SEE THAT THE REVENUE IS, IS FALLING EVEN SHORTER OF EXPENSES FOR, FOR WASTEWATER. WE WOULD EXPECT THAT TO CONTINUE NOT ONLY IN THIS UPCOMING FISCAL YEAR, BUT 2028 AND 2029 A LITTLE BIT AS WELL. 
          AND THEN HOPEFULLY BY 2030 AND 2031, YOU WOULD BE WHERE REVENUES HAVE KIND OF CAUGHT UP, CAUGHT UP TO EXPENSES. THE DOWNSIDE OF THAT IS THAT WE ARE PROJECTING PRETTY SIGNIFICANT WASTEWATER RATE INCREASES. AGAIN, THIS CHANGES FROM FROM YEAR TO YEAR, JUST KIND OF DEPENDING UPON HOW THINGS GO AND WHAT YOUR EXPENDITURES ACTUALLY ARE, WHAT YOUR FUTURE BUDGETS LOOK LIKE, WHAT THAT CIP LIST LOOKS LIKE, WHAT YOUR FUND BALANCE LOOKS LIKE. BUT I JUST TRY TO ALWAYS SHOW THIS SO THAT IF YOU ALL HAVE ME BACK NEXT YEAR THAT I DON'T, I DON'T SHOW UP AND HAVE A WASTEWATER RATE INCREASE IN HERE AND IT BLINDSIDES EVERYONE. SO I'M JUST SAYING THAT GOING FORWARD, IT APPEARS THAT THERE MAY BE HIGHER INCREASES TO THE 
          [00:30:01]
WASTEWATER RATES THAN THAN THE WATER RATES. BUT AGAIN, THAT'S SUBJECT TO CHANGE. AND IT WILL CHANGE AS WE AS WE MOVE FORWARD AND KNOW WHAT 2028 IS GOING TO LOOK LIKE WITH MORE CLARITY. 
          BUT AGAIN, YOU CAN SEE THE RED BARS AT THE TOP INCREASING. AGAIN, THE POSITIVE NEWS IS THERE IS DEBT THAT THAT'S FALLING OFF, WHICH CERTAINLY HELPS BY THE TIME WE GET OUT THERE TO 2031. AND SO AT LEAST FOR A YEAR, YOU MAY HAVE SOME KIND OF STABILIZATION IN YOUR EXPENSES, WHICH WOULD HELP KIND OF HELP YOU CATCH THAT REVENUE UP TO YOUR EXPENSES. THIS JUST LOOKS AT THE, AT THE UTILITY AS A WHOLE. SO AGAIN, YOU CAN SEE WE DO HAVE YOU PROJECTED KIND OF DEFICIT SPEND IN 2027, 2028, A LITTLE BIT IN 2029. BY THE TIME WE GET TO 2030 WITH THOSE RATE INCREASES, THE GOAL IS THAT YOUR REVENUE WOULD BE PRETTY MUCH EQUAL TO YOUR EXPENDITURES. WE TALKED A LITTLE BIT ABOUT RESERVES, AND THIS IS JUST A VERY SIMPLE CHART THAT JUST SHOWS THAT THE 25% KIND OF GOAL, AND THEN THE DASHED LINE IS WHAT WE WOULD ACTUALLY PROJECT YOUR RESERVES TO BE. AND SO AGAIN, WE'RE FOR 2027. IT DOES APPEAR THAT YOU'RE GOING INTO THE YEAR WITH, WITH HIGHER RESERVES THAN THAN WHAT IS REQUIRED. AND SO, AND OUR, OUR ASSUMPTIONS ARE THAT WE'RE GOING TO USE THOSE RESERVES WHILE WE DO STILL HAVE SIGNIFICANT RATE INCREASES IN HERE, WE ARE TRYING AS BEST AS WE CAN TO USE THOSE RESERVES TO LIMIT THOSE RATE INCREASES TO THE TO THE POINT POSSIBLE. I WILL ADDRESS THIS. JUST BECAUSE I ALWAYS GET ASKED IS, WELL, IF WE HAVE MORE MONEY THAN IT'S THAN WE REALLY SAY THAT WE NEED, WHY ARE WE DOING ANY RATE INCREASES AT ALL? I GET ASKED THAT QUESTION ALL THE TIME, AND REALLY, I KIND OF USE THIS ANALOGY. IF YOU WANT TO VIEW THAT DASHED LINE, IMAGINE A BALL KIND OF SITTING ON THAT DASHED LINE. YOU COULD DO NO RATE INCREASES AT ALL, BUT IT'S GOING TO PULL YOU DOWN TO YOUR TARGET REALLY QUICK, AND THAT BALL IS GOING TO ROLL DOWN THAT THAT DASHED LINE REALLY QUICK. AND WHEN IT HITS THAT TARGET, THAT 25%, IT'S GOING TO HAVE A LOT OF MOMENTUM. IN ORDER TO STOP THAT MOMENTUM, YOU'RE LOOKING AT LARGE RATE INCREASES. 
          SO EVEN THOUGH YOU'RE ABOVE YOUR REQUIRED FUND BALANCE, IT IS STILL A GOOD IDEA TO DO RATE INCREASES. TRY TO DRAW THAT FUND BALANCE. WE'RE TRYING TO CONTROL THE DRAWDOWN OF THAT FUND BALANCE, DRAW IT DOWN SLOWLY OVER TIME, SO THAT WE DON'T END UP IN A SITUATION WHERE WE HAVE TO COME BACK AND SAY, HEY, YOU'VE USED UP ALL OF YOUR RESERVES. WE HAVEN'T DONE ANY RATE INCREASES FOR A YEAR OR TWO. AND SO NOW YOU'RE LOOKING AT A 20 OR 30% RATE INCREASE. THAT'S WHAT WE'RE TRYING TO AVOID IS LET'S DO PLANNED SMALLER RATE INCREASES RATHER THAN TRYING TO HIT HIT YOUR RESIDENTS WITH A REALLY LARGE RATE INCREASE AT ANY POINT IN THE FUTURE. SOME MORE POSITIVE NEWS, JUST KIND OF IF WE COMPARE YOU TO SURROUNDING CITIES, THIS IS FOR RESIDENTIAL CUSTOMERS. WE'RE USING FIVE AND 10,000 GALLONS OF WATER AND SEWER. THERE'S NOTHING MAGICAL ABOUT THOSE NUMBERS. THAT'S WHAT THE TEXAS MUNICIPAL LEAGUE USES IN THEIR ANNUAL BILL SURVEYS THAT THEY SENT OUT. SO WE'RE WE'RE USING THAT BECAUSE IT'S DATA THAT'S READILY AVAILABLE. SO IF WE COMPARE YOU TO YOUR PEERS, YOU'RE CURRENTLY KIND OF AT THE BOTTOM END OF THAT TABLE. AND WITH THE PROJECTED RATE INCREASES ON SEWER, YOU WOULD MOVE UP A COUPLE OF SPOTS, BUT YOU'RE STILL KIND OF BELOW MOST OF YOUR PEERS, I WILL SAY. AND WE'VE TALKED ABOUT SITUATIONS THAT WE'RE TRYING TO AVOID. AND WITHOUT NAMING ANY OF THESE CITIES, THERE ARE SOME CITIES THAT THIS PAST YEAR, THEY HAVE SEEN SOME RATHER LARGE RATE INCREASES BECAUSE THEY HAVEN'T BEEN THEY HAVEN'T BEEN DOING RATE INCREASES, AND THEY'VE BEEN KIND OF FALLING BEHIND, WHETHER THAT'S IN CIP PROJECTS OR MAINTENANCE, REHABILITATION OR JUST THE ABILITY TO HIRE AND KEEP STAFF'S STAFF WITHIN YOUR WATER AND WASTEWATER UTILITY TO HAVE THE SKILLS REQUIRED TO KEEP PROVIDING YOUR CUSTOMERS WITH A HIGH LEVEL OF SERVICE. AND SO BECAUSE OF THAT, AND THEY'VE KIND OF FALLING BEHIND, THEY REALLY KIND OF BEEN CHALLENGED. AND FINALLY, I THINK WE'RE STARTING TO SEE SOME OF THEM JUST KIND OF BITE THE BULLET AND DO RATHER LARGE WATER AND WASTEWATER RATE INCREASES. AND AGAIN, THAT'S THE SITUATION THAT THAT I, I RECOMMEND THAT YOU TRY TO AVOID. 
          I KNOW IT'S, I KNOW IT'S GOOD AND I KNOW IT'S GREAT TO, TO SAY, HEY, WE DON'T WANT TO DO ANY RATE INCREASES. BUT IN MY EXPERIENCE, EVENTUALLY THAT ENDS UP THAT ENDS UP TURNING BAD AT SOME POINT IN THE FUTURE. JUST BECAUSE YOU FALL BEHIND ON ON PROJECTS, YOU FALL BEHIND ON MAINTENANCE, STAFFING, ALL OF THAT TYPE OF STUFF. SO I VIEW THAT THIS IS THIS IS GOOD NEWS. 
          YES, BILLS WOULD GO UP, BUT YOU'RE STILL PRETTY COMPETITIVE COMPARED TO YOUR PEERS. SAME 
          [00:35:01]
THING ON COMMERCIAL SIDE. AGAIN, WE'RE USING 50 AND 200,000 GALLONS. THAT'S JUST WHAT TML USES. THIS WOULD PUT YOU WITH THE PROPOSED RATE INCREASE FOR WASTEWATER ON THE COMMERCIAL SIDE, THIS WOULD PUT YOU ABOUT IN THE MIDDLE OF YOUR PEER CITIES THAT WE HAVE BEEN USING. 
          YOU'RE CERTAINLY VERY FAR FROM THE TOP, AND YOU'RE KIND OF RIGHT IN THERE IN THAT IN THAT MIDDLE, MIDDLE GROUP. IF WE LOOK AT BILLS FOR COMMERCIAL CUSTOMERS. WITH THAT, I'LL STOP TALKING. AND I'M HAPPY TO ANSWER ANY QUESTIONS THAT ANY OF Y'ALL HAVE. COUNCILMAN COUNCILMAN TURNER NEXT. THANK YOU, MR. MAYOR. SIR. GENERALLY, IT SEEMS LIKE FROM LAST YEAR WE ALWAYS REFER TO THIS AS THE ENTERPRISE FUND, BUT TODAY IT'S BEEN ALL UTILITY FUND. WE'RE TALKING ABOUT THE SAME FUND, CORRECT? YES. THE SAME FUND? YES. OKAY. IS THERE A REASON WHY WE'VE MOVED AWAY FROM ENTERPRISE AND WE'VE STARTED USING UTILITY? I JUST CALL IT UTILITY FUND. YOUR WATER AND WASTEWATER FUND IS AN ENTERPRISE FUND. BASICALLY. 
          IT'S A IT'S A BUSINESS. IT'S IT'S A BUSINESS. GOTCHA. JUST JUST MAKING SURE WE'RE TALKING ABOUT THE SAME FUND ON I, AND I APPRECIATE YOU PROPOSING A ZERO WATER PERCENT INCREASE THAT THAT THAT THAT'S VERY HELPFUL. THIS COUNCIL LAST YEAR. AND IT WAS SOMETHING THAT I PUSHED DID NOT WANT TO INCREASE RATES FOR OUR RESIDENTIAL CUSTOMERS. AND I WAS PROUD TO SEE THAT WE DID NOT DO THAT. AND WE WON'T DO THAT AGAIN THIS YEAR. THAT SAID, IT SEEMS TO ME LIKE I DO BELIEVE AN INCREASE ON OUR INDUSTRIAL SIDE IS APPROPRIATE, AND I THINK THAT INCREASING THAT NOW, AGAIN, HELPS US IN THE FUTURE WITH HAVING TO INCREASE RATES ON RESIDENTIAL AND COMMERCIAL ACCOUNTS. ABOUT WHAT PERCENTAGE ARE OUR INDUSTRIAL CUSTOMERS? ONE, I WANT TO SAY, LAST YEAR YOU TOLD US 10%. IS THAT STILL ACCURATE? YEAH. LET ME LET ME GET THERE AND I CAN SHOW YOU OR I CAN I CAN GIVE YOU A NUMBER. DO YOU WANT THE REVENUE PERCENTAGE? SURE. SO YOUR INDUSTRIAL CUSTOMERS, THEY WOULD BRING IN ABOUT $1.2 MILLION IN REVENUE. 
          WHICH IS ABOUT THREE 3.4% OF YOUR TOTAL REVENUE. IT'S ONLY 3.4%. SO IT'S NOT 10%. NO, SIR. 
          OKAY. AND ON THE WASTEWATER SIDE IS RESIDENTIAL, ABOUT 40%. AND COMMERCIAL AND INDUSTRIAL REPRESENT ABOUT 60%. SURE THAT I HAVE THIS ON THE RIGHT MODEL SOMEWHERE, BUT I'M JUST GOING TO CALCULATE IT AGAIN REAL QUICK. SO I HAVE IT. RESIDENTIAL IS ABOUT 33%. AND THEN THAT'S JUST SINGLE FAMILY RESIDENTIAL. THAT DOES NOT INCLUDE MULTIFAMILY. OKAY. THE SECOND PART OF THAT QUESTION WAS ABOUT COMMERCIAL AND MULTIFAMILY, COMMERCIAL AND INDUSTRIAL. SO IT'S ABOUT 35, 65. YES. SO IF WE NEEDED TO GET TO THE OVERALL WASTEWATER INCREASE OF 10% THAT YOU'RE PROPOSING, WHAT WOULD THE NET INCREASE HAVE TO BE IF IF THE COUNCIL MADE THE DECISION ONLY TO INCREASE COMMERCIAL AND INDUSTRIAL ACCOUNTS? I, I CAN FIGURE THAT OUT. I WOULD I WOULD APPRECIATE IT IF YOU WOULD LET ME LOOK AT THAT OVER THE NEXT COUPLE OF DAYS. YEAH, YEAH, YEAH. NO PROBLEM. SO I THINK YOU CAN KIND OF SEE WHERE I'M GOING WITH THIS, SIMILAR TO WHAT I PROPOSED LAST YEAR, INSTEAD OF RAISING RESIDENTIAL RATES FOR WASTEWATER, I WOULD PROPOSE THAT WE INCREASE, NUMBER ONE, INDUSTRIAL AS AS MUCH AS POSSIBLE. I WOULD BE FINE WITH EVEN A 20% INCREASE ON THE INDUSTRIAL SIDE ON THE WASTEWATER RATE, AND THEN MAYBE A COMMERCIAL INCREASE OF SOMEWHERE AROUND, YOU KNOW, 7 TO 8%. THAT WAY OUR RESIDENTS ARE NOT FEELING ANY TYPE OF AN IMPACT. AND I KNOW YOU SAID THAT IT'S ONLY $4 A MONTH, BUT, YOU KNOW, YOU'D BE SURPRISED HOW QUICKLY THAT ADDS UP. AND I, 
          [00:40:08]
I HATE TO SEE THOSE RATES INCREASE FOR OUR RESIDENTS. SO YEAH, TAKE YOUR TIME TO FIGURE OUT WHAT THAT NUMBER WOULD NEED TO BE TO GET TO THE INCREASE IN REVENUE THAT YOU'RE LOOKING FOR ON THE WASTEWATER SIDE. BUT I WOULD GREATLY APPRECIATE IF WE COULD LOOK AT ONLY RAISING THAT ON THE INDUSTRIAL. THAT'S ONE OF THE THINGS THAT WE'LL LOOK AT, AND WE'LL LET STAFF OR MYSELF REPORT BACK. ALSO, I, I APOLOGIZE BECAUSE I KNOW THIS IS GOING TO GO AGAINST WHAT YOU'RE PROPOSING, BUT I JUST REALLY FEEL LIKE CONTINUING THE FREEZE ON. SENIORS IS IMPORTANT. 
          I UNDERSTAND YOU WERE SAYING SOMETHING ABOUT CHANGING THE WORDING OR SOMETHING SO THAT IT'S A SLIGHT INCREASE OR SOMETHING AND MOVING AWAY FROM THE WORD FREEZE, BUT THAT'S WHAT THEY UNDERSTAND. THAT'S WHAT I UNDERSTAND. I HAVE A FEELING THAT'S WHAT PROBABLY THE MAJORITY OF THE COUNCIL UNDERSTANDS. SO. IT WOULD BE MY PREFERENCE THAT WE WOULD CONTINUE WITH THE FREEZE FOR SENIORS, BECAUSE I THINK THAT THAT'S SOMETHING THAT'S IMPORTANT TO THEM. AND THAT SEEMS TO BE SOMETHING THAT I RECALL BEING VERY POPULAR WITH THE COUNCIL LAST. I'D LIKE TO TALK ABOUT. YOU KNOW, IT SEEMS LIKE TO ME, AND I'M NOT TRYING TO BE CRITICAL, I'M JUST BEING REAL WITH YOU. IT SEEMS LIKE TO ME, YOU KNOW, ANYTIME WE TALK ABOUT WHAT WE CAN DO TO INCREASE THE BALANCE FOR THE ENTERPRISE FUND OR THE UTILITY FUND THAT WE WANT TO TALK ABOUT INCREASING RATES, I'D LIKE TO TALK TO YOU ABOUT WHAT WE CAN DO TO INCREASE COLLECTIONS. OKAY. I'VE HEARD RUMORS THAT, YOU KNOW, THE CITY HAS AN ISSUE WITH ACTIVE TAPS VERSUS TAPS WE'RE ACTUALLY COLLECTING ON. DO YOU HAVE ANY DATA FOR US THAT YOU CAN SHARE WITH THAT SO FAR AS WHAT ARE THE ACTIVE NUMBER OF TAPS RIGHT NOW IN THE CITY OF BEAUMONT COMPARED TO WHAT TAPS ARE? ACTUALLY, THE PERCENTAGE ARE ACTUALLY PAYING WHAT THEY'RE ACCURATELY USING? I DO NOT OKAY, BUT I CAN I CAN REQUEST THAT YOUR YOUR BILLING DEPARTMENT SHOULD HAVE THAT DATA. OKAY. SO SO WE COULD REQUEST THAT DATA FROM YOUR FROM YOUR BILLING DEPARTMENT BECAUSE I'M, YOU KNOW, I'M ALWAYS CONCERNED THAT THE MINUTE SOME, YOU KNOW, FAMILY FALLS BEHIND ON THEIR WATER BILL, YOU KNOW, WE'RE RUNNING OUT THERE AND READY TO TURN IT OFF. BUT WE HAVE GIANT CORPORATE CUSTOMERS HERE IN BEAUMONT THAT OWE THE CITY HUNDREDS OF THOUSANDS OF DOLLARS IN BACK WATER BILLS, BECAUSE WE'VE BEEN BILLING THEM AN ESTIMATED AMOUNT AND NOT AN ACTUAL AMOUNT OF THEIR USE. AND WE'RE NOT COLLECTING THAT MONEY. AND SO THAT, THAT THAT CONCERNS ME. WHAT ABOUT CAN YOU GIVE US ANY GOOD NEWS ON NEW TAPS? I KNOW YOU SAID WE'VE KIND OF BEEN STAGNANT, BUT DO WE HAVE ANY NUMBERS SO FAR AS NEW TAPS FROM LAST YEAR TO THIS YEAR THAT WOULD SHOW US MAYBE SOME POSITIVE NEWS ON INCREASE? I WISH THAT I COULD OKAY. IF WE LOOKED AT YOUR IF I COMPARED YOUR BILLING DATA THAT WE WERE SENT LAST YEAR VERSUS THIS YEAR, THERE REALLY WAS NO, NO INCREASE OR VERY SLIGHT INCREASE IN, IN CONNECTIONS AND ACTIVE CONNECTIONS. OKAY. SO A SLIGHT INCREASE THERE IF NO INCREASE. GOTCHA. ALL RIGHT. SO YEAH, I THINK YOU KIND OF PICK UP THERE ON WHERE I'M GOING WITH ALL THIS. I WOULD LIKE TO SEE THE STAFF DO A BETTER JOB WITH COLLECTIONS. I, I WOULD BE AGAINST A WASTEWATER INCREASE FOR OUR RESIDENTS OR OUR RESIDENTIAL ACCOUNTS AND LOOK AT A, AN INCREASE ONLY ON THE INDUSTRIAL AND COMMERCIAL SIDE. 
          AND I ALSO THINK AN INDUSTRIAL RATE INCREASE IS APPROPRIATE ON THE WATER SIDE. AND I WOULD LIKE TO CONTINUE THE FREEZE WITH SENIORS. THANK YOU, MR. MAYOR. THANK YOU. COUNCILMAN TURNER AND THEN COUNCILMAN HILLIARD. THANK YOU, MAYOR, I APPRECIATE IT. BEFORE OUR CITY MANAGER, I AGREE THAT I STRUGGLE WITH A RATE INCREASE ON RESIDENTIAL CITIZENS AS WELL AS OUR SENIOR CITIZENS. ONE THING THAT I'M CONCERNED ABOUT, AND I RECENTLY MET WITH A DEVELOPER ABOUT TWO MONTHS AGO ABOUT DOING A MASSIVE PROJECT IN BEAUMONT. AND ONE OF THEIR FIRST QUESTIONS WAS, WHAT IS YOUR CITY'S IMPACT FEES? I'M NOT OKAY THAT WE DON'T HAVE IMPACT FEES. WHEN YOU'RE HAVING MASSIVE DEVELOPMENT GOING INTO OUR SEWER AND DRAINAGE SYSTEM, WHEN IT'S KIND OF STANDARD IN MOST CITIES THAT ARE GROWING THROUGHOUT THE STATE OF TEXAS, I KNOW IT'S AN UNCOMFORTABLE CONVERSATION, BUT I DON'T THINK WE'RE IN A POSITION TO NOT DO IT WHEN IT'S BEING SUCCESSFUL IN OTHER PLACES. EVEN IF WE COME WITH A FORMULA THAT MAKES SENSE, IT KIND OF OFFSETS US TALKING ABOUT THE 2.5% FOR THE SENIOR CITIZENS. BUT IF YOU'RE 
          [00:45:03]
GOING TO COME IN AND A BIG INDUSTRY PUTS IN A PLANT AND WE GOT TO GO ON BOARD WATER AND NOTICE, AND IT'S NO TYPE OF FEES THAT THEY'RE PLUGGING INTO OUR WATER SYSTEM, BUT OUR RESIDENTS ARE BEING, YOU KNOW, PENALIZED FOR IT, NOT BEING ABLE TO UTILIZE WATER. I DON'T THINK THAT'S SUSTAINABLE FOR THE CITY OF BEAUMONT, ESPECIALLY WHEN WE HAVE INSTANCES WHERE WE DO HAVE TO GO ON BOIL WATER NOTICES. IF ANYTHING IS GETTING INTO OUR SYSTEMS THAT OUR REGULAR RESIDENTS UTILIZE. SO I WOULD LIKE TO SEE US LOOK INTO THAT OR SOMETHING BE PROPOSED TO COUNCIL BEFORE WE EVEN START TALKING ABOUT PUTTING AN INCREASE ON OUR RESIDENTS. SO AND I KNOW WE WE STRUGGLE WITH COMPLAINTS, YOU KNOW, DEVELOPERS WHO MAY DEVELOP IN, YOU KNOW, MAYBE SMALLER COMMUNITIES IN OUR AREA WITH THE FEES AND PROCESSES THAT WE HAVE. SO WE ARE WE DO STAY COGNIZANT OF THAT. HOWEVER, IMPACT FEES ARE, YOU KNOW, COMMONLY USED. I WOULD ASK GRADY, DO YOU HAVE JUST A QUICK SUMMARY IN TERMS OF IMPACT FEES AND HOW THEY'RE USED THROUGHOUT THE REST OF THE STATE? YEAH. SO SO WHAT IMPACT FEES ARE FOR THOSE THAT MAY NOT KNOW, IT'S A ONE TIME CHARGE THAT GETS LEVIED TO ONLY NEW DEVELOPMENT. SO IT DOES NOT AFFECT YOUR EXISTING CUSTOMERS. THE POINT OF IMPACT FEES IS THAT THEY ARE DESIGNED TO HELP RECOUP THE COST OF PROVIDING WATER AND WASTEWATER SERVICE TO THAT NEW DEVELOPMENT. SO, YOU KNOW, AS YOU'RE BUILDING INFRASTRUCTURE, WATER LINES, INCREASING TREATMENT PLANTS OR STORAGE OR WHATEVER YOU HAPPEN TO DO, LIFT STATIONS. IT IS DESIGNED TO HELP RECOUP THAT COST NOT ONLY FOR NEW PROJECTS, BUT YOU CAN ALSO USE IMPACT FEES IF YOU HAVE THE DATA TO GO BACK AND RECOUP EXISTING COSTS THAT THE CITY HAS ALREADY PUT IN. IMPACT FEES ARE ARE COMMON, CERTAINLY FOR FAST GROWING MUNICIPALITIES. 
          IT GIVES THEM ANOTHER SOURCE OF REVENUE SOMETIMES, YOU KNOW, MULTIPLE MILLIONS OF DOLLARS A YEAR DEPENDING UPON THE CITY AND JUST WHAT THEIR IMPACT FEES ARE AND HOW FAST THEY'RE GROWING. FOR A CITY THAT'S NOT GROWING. HONESTLY, I STILL DON'T THINK THAT THEY'RE A BAD IDEA. I WAS HERE AT ONE POINT AND WE HAD THAT CONVERSATION. IT WAS A VERY INTERESTING CONVERSATION THAT WE HAD WITH WITH THE CITY ABOUT IMPACT FEES. AND THERE WAS THERE WAS CERTAINLY SOME SOME DISAGREEMENTS ON, ON WHETHER THAT WAS A POSITIVE OR A NEGATIVE FOR THE CITY. I STILL TEND TO THINK THAT THAT WITH IMPACT FEES, EVEN FOR A SMALL GROWING ENTITY, IT'S IT'S ADDITIONAL SOURCE OF REVENUE. MAYBE IT'S A COUPLE HUNDRED THOUSAND DOLLARS A YEAR IN SOME YEARS, BUT MAYBE YOU GET A LARGE DEVELOPMENT OR A LARGE INDUSTRIAL CUSTOMER THAT COMES IN AND YOU HAVE A ONE YEAR, YOU KNOW, IF IT'S 1 MILLION OR $2 MILLION, WHATEVER, THAT THAT HELPS. I MEAN, IT'S NOT A HUGE DENT, BUT IT IS A DENT. SO IT IS SOMETHING THAT THAT THE CITY COULD LOOK AT AGAIN, WITH, WITH LIMITED GROWTH. I WOULDN'T, I WOULDN'T EXPECT THAT THAT'S GOING TO SOLVE YOUR RATE INCREASE WOES. YOU'RE STILL GOING TO NEED NEED RATE INCREASES. BECAUSE I, I WOULD THINK THAT THE REVENUE COMING IN OFF IMPACT FEES WOULD BE, WOULD BE FAIRLY MINIMAL. BUT IT IS, IT IS ANOTHER SOURCE OF REVENUE. SO JUST TO FOLLOW UP ON WHAT I WAS STATING, RESIDENTIALLY, WE MAY NOT BE GROWING, BUT ECONOMIC. THE CITY OF BEAUMONT AND JEFFERSON COUNTY IS IN THE ECONOMIC BOOM. 
          SO I TEND TO DISAGREE THAT WE DON'T WANT TO UTILIZE THAT FOR THE INDUSTRY RIGHT NOW, BECAUSE RIGHT NOW OUR NUMBERS ARE HIGHER THAN THEY'VE BEEN IN A LONG TIME. SO I THINK WE ARE MISSING OUT ON THAT OPPORTUNITY, ESPECIALLY THE AMOUNT OF DEVELOPMENT THAT ARE GOING INTO OUR COMMUNITIES AND THE INFLUX THAT'S GOING INTO OUR INFRASTRUCTURE. WE CAN'T SUSTAIN OR BE SUSTAINABLE IF WE'RE NOT WILLING TO FIGURE OUT WAYS TO BRING IN MORE REVENUE. 
          AND I DON'T THINK THE WAY TO BRING IN MORE REVENUE IS ALWAYS TAXING YOUR CITIZENS, ESPECIALLY WHEN YOU GOT NEW CUSTOMERS PLUGGING INTO YOUR WATER LINES. AND SOMETIMES WE, LIKE I STATED EARLIER, OR ATTEMPTING OR WE'RE EXPERIENCING BOIL WATER NOTICES FOR SOME DEVELOPMENTS THAT HAVEN'T EVEN BEEN IN EXISTENCE FOR TWO YEARS. SO I JUST, I STRUGGLE TO SUPPORT TAXING CITIZENS. AND WE'RE NOT ACTUALLY MAKING THOSE ENTITIES PAY THEIR PART. YES, SIR. WE CAN CERTAINLY BRING A PROGRAM TO THE COUNCIL IMPACT FEE IMPACT FEE PROGRAM. YES, SIR. AND THEN, COUNCILMAN HILLIARD, THANK YOU, COUNCILMAN TURNER. 
          SO I APPRECIATE YOU BEING HERE, AND I AGREE THAT WE SHOULDN'T I'M AGAINST RAISING WATER RATES, BUT I'M ALSO AGAINST RAISING WATER RATES ON OUR OUR BUSINESS CUSTOMERS BECAUSE YOU HAVE THE TRICKLE DOWN EFFECT. SO EVEN THOUGH YOU RAISE THE RATES ON THE COMMERCIAL CUSTOMERS, THEY'RE GOING TO RAISE THEIR RATES AND THE CITIZENS ARE GOING TO END UP PAYING IT. BUT I THINK THAT WE NEED TO LOOK AT, NUMBER ONE, THE WAY WE READ OUR METERS, I BELIEVE, AND IT'S 
          [00:50:03]
BEEN BROUGHT TO MY ATTENTION THAT THERE'S MILLIONS OF DOLLARS THAT'S BEING LEFT ON THE TABLE BECAUSE WE ARE NOT READING THE METERS PROPERLY. SO IT HAS TO START AT THE FUNDAMENTAL LEVEL. WE HAVE TO MAKE SURE THAT WE HAVE A PLAN IN PLACE THAT WE'RE READING THE METERS CORRECTLY. IT'S BEEN BROUGHT TO MY ATTENTION THAT OVER $200,000 HAVE BEEN BILLED TO TWO DIFFERENT CUSTOMERS, THAT THEY HAD NO IDEA THAT THEIR METERS WERE NOT BEING READ PROPERLY. SO WE CAN RAISE THE RATES. BUT IF WE'RE NOT READING THE METERS CORRECTLY, THEN WE'RE GOING TO CONTINUE. SO I WOULD LIKE TO KNOW HOW MANY MILLIONS OF DOLLARS IN UNREAD METERS, OR SAYING THE METER WAS UNREADABLE OR COULD NOT BE FOUND, AND PEOPLE HAVE BEEN PAYING JUST AN ESTIMATED RATE FOR SO LONG. SO, YOU KNOW, WE CAN RAISE THE RATES, BUT IF WE'RE NOT READING THE METERS PROPERLY, IF WE'RE NOT CHARGING THE CUSTOMERS PROPERLY, THEN WE JUST CONTINUE TO RAISE RATES. AND SO WE NEED TO START AT THE FUNDAMENTAL LEVEL, AND WE NEED TO HAVE A CHECK AND BALANCE SYSTEM IN PLACE TO SAY, HEY, I COULDN'T FIND THE METER. SO A SUPERVISOR NEEDS TO GO OUT AND IF THE SUPERVISOR CAN'T FIND IT, THEN WE NEED TO FIND IT AND READ IT SO THAT WE GET WE'RE PROPERLY BILLING EACH CUSTOMER THAT THAT WE SERVICE WATER TO, BECAUSE RIGHT NOW WE'RE NOT. AND I WOULD ESTIMATE PROBABLY IN THE TENS OF MILLIONS OF DOLLARS OVER THE LAST TEN YEARS THAT HAVE HAVE NOT BEEN READ PROPERLY OR HAVE NOT BEEN BILLED PROPERLY. SO, YOU KNOW, I MEAN, WE GOT TO START AT THE FUNDAMENTAL LEVEL. WE GOT TO MAKE SURE THAT THE PEOPLE ON THE GROUND ARE READING THE METERS AND THAT WE'RE BILLING PROPERLY. AND RIGHT NOW WE'RE NOT DOING THAT. THAT IS SOMETHING THAT WE COULD WE COULD WORK WITH CITY STAFF TO GET GET THOSE NUMBERS. COUNCILMAN. AGAIN, GRADY, THEY'RE MODELING THE FINANCES IN TERMS OF HOW MUCH REVENUE WE NEED TO COVER OUR EXPENSES AND OUR BOND ISSUES TO TRY TO GET OUR INFRASTRUCTURE UP TO WHERE WE NEED IT TO BE. BUT I THINK WHAT YOU'RE REFERRING TO IS, YOU KNOW, SOME INTERNAL OPERATIONS, AND WE'RE LOOKING AT THAT WITH WITH OUR GROUP, YOU KNOW, WITH OUR FINANCIAL STAFF, WITH, WITH, WITH THE GROUP THAT READS THE METERS. AND I DON'T WANT TO PUT YOU ON THE SPOT, BUT DO YOU HAVE A SENSE OF IS THERE A AND AGAIN, IT'S LESS FINANCIAL, BUT IT'S KIND OF FINANCIAL. SO IS THERE A KIND OF A TARGET PERCENTAGE OF METERS THAT MAYBE DON'T GET READ JUST FOR ONE REASON OR ANOTHER? MAYBE IT'S TECHNOLOGICAL BECAUSE THE METER TRANSMISSION DOESN'T WORK. AND AGAIN, I KNOW THIS IS MORE OPERATIONAL THAN FINANCE, BUT I DIDN'T KNOW IF YOU HAD A SENSE OF, YOU KNOW, A KIND OF A STANDARD METRIC IS A CERTAIN PERCENTAGE DON'T DON'T GET HIT. 
          I DON'T KNOW OF ANYTHING PUBLISHED THAT WOULD GIVE THOSE METRICS. MY, MY PERSONAL SENSE IS THAT YOU SHOULD TRY TO KEEP REALLY, YOU SHOULD BE READING 100% OF YOUR METERS. THAT'S THAT'S THE GOAL. I RECEIVED A PHONE CALL THIS LAST WEEK AND AT. THAT'S JUST TWO. AND WE'RE TALKING LIKE ALMOST $300,000 IN MISS READ METERS. AND THAT'S JUST TWO PEOPLE, TWO CUSTOMERS. 
          SO THAT AGAIN, THAT COULD BE SOMETHING THAT THAT YOUR BILLING, I'M NOT FAMILIAR ENOUGH WITH YOUR BILLING SYSTEM, BUT A LOT OF BILLING SYSTEMS, THEY, THEY HAVE WAYS AND FLAGS THAT YOU CAN FLAG METERS THAT ARE, THAT ARE ZERO READS OR METERS THAT ARE ESTIMATED. AND CERTAINLY THOSE, THOSE HIGH WATER USERS YOU WOULD WANT TO FOCUS ON, ON YOUR COMMERCIAL CUSTOMERS. AND ALSO, IF YOU DON'T HAVE AN ESTABLISHED, YOU KNOW, METER TESTING AND METER CHANGE OUT PROGRAM, THAT WOULD BE SOMETHING THAT I WOULD RECOMMEND AS WELL. AND YOU TYPICALLY WOULD WANT TO START THAT WITH YOUR, YOUR HIGHER END CUSTOMER, YOUR, YOUR HIGH USE CUSTOMERS. YES. THANK YOU. GREG. AND TO YOUR POINT, THOUGH, WE ARE, WE ARE STUDYING THAT AND TRYING TO RESOLVE THAT AS WE SPEAK. THANK YOU. YES, SIR. COUNCILWOMAN SHERWOOD, I HEARD YOU SAY SOMETHING ABOUT WHEN THEY BROUGHT UP IMPACT FEES, RECOUPING FEES. IF YOU CAN PROVE THE COST. WHAT WHAT DO YOU MEAN BY THAT? CAN YOU EXPLAIN THAT A LITTLE BIT? YEAH. 
          SO SO TALKING ABOUT IMPACT FEES, THERE'S THERE'S SOME NUANCES IN HOW THEY'RE CALCULATED, BUT IN THEIR MOST SIMPLE TERMS, HOW YOU CALCULATE AN IMPACT FEE IS YOU TAKE PROJECTS, YOU WOULD LOOK OUT TEN YEARS AND YOU WOULD SAY, OKAY, THESE ARE ALL THE PROJECTS THAT ARE RELATED TO GROWTH. SO THAT IS A DISTINCTION WITH IMPACT, WITH IMPACT FEES, THINGS LIKE WATER LINE REPLACEMENT, TYPICAL OPERATIONS AND MAINTENANCE EXPENSES, THOSE TYPES OF THINGS. 
          THOSE ARE NOT YOU CANNOT INCLUDE THOSE IN IMPACT FEES. YOU CAN ONLY INCLUDE PROJECTS THAT ADD NEW CAPACITY TO YOUR SYSTEM AS THE WAY THAT THE STATUTE IS WORDED. OKAY, SO SO THE WAY THAT IMPACT FEES ARE CALCULATED IS WE BASICALLY TAKE THAT SUBSET OF PROJECTS. YOU HAVE A SIP LIST. NOT ALL OF THOSE PROJECTS ARE ELIGIBLE FOR IMPACT FEES, BUT SOME ARE IF THEY'RE ADDING NEW CAPACITY TO YOUR SYSTEM. SO WE TAKE THAT COST. THE THING THAT WE HAVE TO 
          [00:55:01]
DO IS WE HAVE TO LOOK AT HOW MUCH OF THE CAPACITY OF THAT PROJECT WE WOULD EXPECT TO USE AT THE END OF THAT TEN YEAR PERIOD. AND SO WE'RE GOING TO REDUCE THE COST OF THOSE PROJECTS A LITTLE BIT, BECAUSE WE CAN ONLY RECOUP THE COST OF THOSE PROJECTS THAT THAT THAT IS RELATED TO THE CAPACITY THAT WE'RE USING. BUT THEN YOU TAKE THAT COST, WHATEVER THAT COST IS, AND YOU WOULD TAKE THAT COST. AND IN SIMPLE TERMS, YOU WOULD DIVIDE IT BY THE NUMBER OF THE GROWTH AND WHAT WE CALL A LIVING UNIT EQUIVALENT OR LUE. AND THEN THAT BECOMES YOUR NEW THAT BECOMES YOUR IMPACT FEE. WELL, THAT ONCE YOU GET THERE, YOU HAVE, THERE'S ONE OTHER STEP. YOU EITHER HAVE TO TAKE THAT NUMBER AND CUT IT IN HALF, OR YOU HAVE TO DO A RATE CREDIT. 
          BUT AT THE END OF THE DAY, THAT'S THAT'S HOW WE WOULD CALCULATE THEM. IT'S A COST DIVIDED BY GROWTH. AND THEN THAT THOSE IMPACT, THEY DO ONLY GET ASSESSED TO NEW GROWTH. NOT NOT AGAIN, NOT NOT NOT EXISTING CUSTOMERS. AND YOU KNOW, TYPICALLY THOSE FEES ARE ALL OVER THE, ALL OVER THE MAP. SOMETIMES IT'S, YOU KNOW, SOMETIMES WE'VE SEEN FEES AS LOW AS, YOU KNOW, 2 TO $3000 PER LOUIS. CERTAINLY IN CENTRAL TEXAS, FAST GROWING AREAS, WE'RE NOW SEEING IMPACT FEES APPROACH $30,000 PER LUI. SO IT IS IT IS A COST TO NEW DEVELOPMENT, BUT IT IS ALSO A SOURCE OF REVENUE TO THE CITY TO PAY FOR A SUBSET OF THAT SIP LIST. OKAY. ONE OTHER THING. REALISTICALLY, COUNCIL IS SAYING NO RATE INCREASES. BUT IN ALL HONESTY. WHEN THERE'S NO GROWTH, HOW DO WE NOT INCREASE FEES? BECAUSE I DON'T THINK THAT WE'RE BEING HONEST AND REALISTIC ABOUT PRICES AND USAGE AND EXPENSES, RIGHT? I MEAN, WE WE NEED TO BE HONEST ABOUT WHAT WE ARE GOING TO BE FACING WITH THE COMMUNITY FEELING GOOD AND NOT WANT TO SAY OR DO CERTAIN THINGS. IT'S CUTE. BUT IN REALITY, WHAT ARE WE FACING WHEN WE SAY NO INCREASE TO RATES. IT'S IF I'M BEING HONEST AND ALL DO DO REFERENCE TO. COUNCIL MEMBER CRENSHAW I. YOU NEED RATE INCREASES. I THINK TO MR. CRENSHAW'S POINT IT'S. IT'S TRYING TO DECIDE WHERE WHERE DO WE LEVY THOSE RATE INCREASES? SO SO WE HAVE WHENEVER WE'RE DOING RATES. AGAIN, IF WANT TO GET A LITTLE BIT TECHNICAL, YOUR YOUR EXPENSES. THOSE ARE YOUR EXPENSES. BUT IN RATE MAKING, WE CALL THAT YOUR REVENUE REQUIREMENT. THAT'S THE AMOUNT OF MONEY THAT YOU HAVE TO BRING IN. AND THEN WE'RE BASICALLY ALLOCATING THOSE COSTS OUT TO YOUR DIFFERENT CUSTOMER CLASSES. SO THIS IS RESIDENTIAL, COMMERCIAL, SO ON AND SO FORTH. SO YOU'RE ASKING THE QUESTION OF OF. I THINK THE QUESTION THAT HAS TO BE ANSWERED IS HOW, HOW ARE WE, HOW WOULD WE PROPOSE TO RECOUP THAT REVENUE REQUIREMENT? DO WE WANT TO PLACE MORE OF THE BURDEN ON COMMERCIAL CUSTOMERS, WHICH I AGREE A LOT OF TIMES IS THE IS THE EASY ANSWER, BUT IT'S NOT ALWAYS THE BEST ANSWER. 
          I HONESTLY BELIEVE THAT IN MOST CASES, I DO KNOW THAT RATE INCREASES FOR CITIZENS AND SINGLE FAMILY RESIDENTIAL CUSTOMERS IS NOT POPULAR. I DO UNDERSTAND THAT. HOWEVER, A LOT OF TIMES AND WE TALKED ABOUT THIS WHEN WE USE THE TERM ENTERPRISE FUND. AND SO THE DIFFERENCE BETWEEN AN ENTERPRISE FUND AND LIKE THE GENERAL FUND IS YOU'RE TYPICALLY YOU'RE RUNNING YOUR WATER AND WASTEWATER UTILITY AS A BUSINESS. YOU NEED TO VIEW IT AS A BUSINESS. AND SO YOU ARE PROVIDING A SERVICE TO YOUR CUSTOMERS. AND SO CERTAINLY IN, IN EVERY OTHER ASPECTS IN OUR EVERYDAY LIVES, WE'VE SEEN COSTS GO UP BECAUSE EXPENSES HAVE GONE UP. THERE WAS A PERIOD NOT TOO LONG AGO WHERE EXPENSES WERE GOING UP VERY QUICKLY. AND SO I TYPICALLY THINK THAT YOUR CUSTOMERS, THEY DO X I, THEY UNDERSTAND THAT THEY SHOULD UNDERSTAND THAT, HEY, OUR COSTS GO UP, WE NEED TO PAY OUR STAFF MORE. 
          SOMETIMES WE NEED TO DO CATCH UP ON, ON SALARIES SO THAT WE CAN BRING IN TALENTED STAFF THAT WILL STAY WITH THE CITY, SO WE CAN PROVIDE A HIGH COST, HIGH COST OF SERVICE TO OUR CUSTOMERS. AGAIN, THIS IS A BUSINESS AND YOU'RE PROVIDING A SERVICE. AND SO YOU WANT TO MAKE SURE THAT YOU'RE ABLE TO PROVIDE A HIGH LEVEL OF SERVICE TO THOSE CUSTOMERS. WELL, AND I KIND OF I'M SORRY TO CUT YOU OFF. I'M RANTING AND I MEAN, I HATE TO CUT YOU OFF, BUT I THINK THAT WE HAVE TO GET REALISTIC AND HONEST ABOUT WHAT'S ACTUALLY HAPPENING. GAS WENT UP TO $4 A GALLON. YOU DIDN'T QUIT RUNNING YOUR CAR BECAUSE GAS WENT UP. YOU PAID THE $4 BECAUSE THAT'S JUST A PART OF IT. KIND OF LIKE EXPENSES. WHEN EXPENSES GO UP, 
          [01:00:04]
YOU DON'T CUT THE COST AND SAY, HEY, I'M NOT GOING TO CHARGE YOU. YOU SAY, HEY, I GOT TO INCREASE THE RATE. I UNDERSTAND IT, BUT I THINK REALISTICALLY, WE'VE GOT TO BE HONEST WITH OUR COMMUNITY ABOUT WHAT IT'S GOING TO TAKE TO RUN THIS JOB AND THIS BUSINESS, BECAUSE THAT'S WHAT IT IS. I MEAN, THAT'S JUST ME. AND SO THAT'S BUT THAT IS ONE OF THE THINGS THAT WE WILL LOOK AT. WE WILL LOOK AT PRESENTING, YOU KNOW, YOU HAVE ONE OPTION BEFORE YOU THAT WE'VE PRESENTED. WE CAN LOOK AT OTHER OPTIONS OF WHAT IF WE KEEP THE RESIDENTIAL RATES UNCHANGED? WHAT WOULD THAT LOOK LIKE FOR YOUR OTHER CUSTOMER GROUPS AS WELL? AND I KNOW COUNCILMAN WILLIAMS, I'M GOING TO GO TO HIM NEXT. AND ONE THING THAT WE HADN'T BROUGHT UP, AND I AND I'VE HAD CONVERSATIONS WITH OUR CITY MANAGER ABOUT, I THINK IN THE LAST FOUR YEARS, WE HAD A LOT OF DEFERRED MAINTENANCE IN OUR WATER AND SEWER FOR, FOR YEARS. 
          AND OFTENTIMES PEOPLE AREN'T COMPLAINING WHEN THEIR WATER AND SEWER WORKS FINE. BUT WHEN SOMEBODY ELSE IS, WHEN SOMEBODY'S HAVING A PROBLEM, THEY REALLY CARE. WE'VE MADE GREAT STRIDES, BUT IT'S BEEN BECAUSE WE'VE BEEN DOING, I BELIEVE, A BETTER JOB SERVICING AND MAINTAINING OUR LINES. BUT THAT COSTS MONEY. AND I SEE THE PROJECTION OF THE ANTICIPATED COST. MY CONCERNS, IF WHICH I WOULD NOT WANT TO SEE HAPPEN WITH RATE FREEZES OR RATE HOLES, IS IF WE END UP DEFERRING MAINTENANCE FOR FUTURE PROJECTS THAT RIGHT NOW WE KNOW NEED TO HAPPEN, BUT WE TAKE THE MONEY AWAY FROM THREE YEARS FROM NOW, WHICH ENDS UP HAVING AN EFFECT SIX, SEVEN, EIGHT YEARS FROM NOW. AND, YOU KNOW, I WANT US TO BE MINDFUL OF HOW WE GOT OURSELVES IN THIS SITUATION. AND IT WAS THROUGH, I BELIEVE, TOO MUCH DEFERRED MAINTENANCE ON OUR WATER AND SEWER SYSTEM IN YEARS PAST. AND NOW WE'RE OVERCOMING THAT, WHICH THERE'S A COST, THERE'S ALWAYS A COST. BUT WITH THAT, WE HAVE TO PAY THAT COST. AND AND SO THERE'S NOBODY ON COUNCIL THAT EVER WANTS TO INCREASE TAXES OR INCREASE RATES BECAUSE PEOPLE DON'T LIKE THAT. BUT ALSO PEOPLE DO WANT CITY SERVICES. PEOPLE GO TO CHICK FIL A AS OPPOSED TO SOME OTHER PLACES BECAUSE OF THE SERVICE AND THE QUALITY OF THE FOOD. YOU KNOW, WE WANT PEOPLE COMING TO BEAUMONT BECAUSE OF THE QUALITY OF THE SERVICE THAT WE PROVIDE AND HAVING LESS PROBLEMS. SO WE AS LONG AS OUR ADMINISTRATION, WHICH I KNOW THEY WILL, WILL KEEP THAT IN MIND, THAT WE WANT TO AGGRESSIVELY STILL REPAIR AND MAINTAIN OUR SYSTEM SO THAT WE CAN GET OUT OF THE PROBLEMS THAT WE'RE CURRENTLY HAVING. AND SO I'M JUST SAYING THAT MORE AS A POINT OF CON, BECAUSE I, I AGREE THAT PEOPLE DON'T LIKE RATE INCREASES. AND THAT'S NOT SOMETHING WE ALL, WE, WE LOVE TO BE ABLE TO NOT DO. BUT I ALSO DON'T WANT IT TO INFECT AFFECT OUR FUTURE MAINTENANCE. COUNCILMAN WILLIAMS, OUR LOCAL CHICK FIL A LAST NIGHT AND HAD GREAT SERVICE THERE. THERE ARE OTHER GREAT CHICKEN PLACES IN BEAUMONT, TEXAS. CLARITY AND I APOLOGIZE THAT I USED CHICK FIL A AS AN EXAMPLE. I'LL HAVE TO SAMPLE THOSE NEXT TIME I'M HERE. 
          YES. THANK YOU MAYOR. I MEAN, I AGREE WITH A LOT OF WHAT'S BEEN SAID. I THINK MY BIGGEST STRUGGLE IS, IS, YOU KNOW, BUSINESS OWNERS ARE RESIDENTS TOO. I MEAN, THERE'S PEOPLE SITTING UP HERE THAT DON'T. AND SO TO ACT LIKE JUST RAISING ON BUSINESSES WON'T AFFECT RESIDENTS, I, I STRUGGLE IN SEEING HOW, YOU KNOW, WE WANT TO SAY BEAUMONT IS A PLACE COME OPEN AND DO BUSINESS. BUT WHENEVER WE NEED TO BALANCE OUR BOOKS, WE'RE GOING TO DO IT ON THE BACKS OF BUSINESS OWNERS. AND SO I THINK WE SHOULD BE CAREFUL GOING DOWN THAT PATH. 
          AND FROM LOOKING AT THIS, YOU KNOW, I IT FEELS LIKE WHATEVER, IF WE DON'T DO ANYTHING, WE'RE JUST KICKING THE CAN. AND SO WHEN'S THE LAST TIME WE HAD A WATER RATE INCREASE? LAST YEAR, RIGHT. IT DID FOR FOR CERTAIN CUSTOMERS LAST YEAR WE HELD THE SENIORS. OKAY. AND PRIOR TO THAT, WHEN DID IT GET YOU THE FULL LIKE SEVERAL YEARS IN TERMS OF INCREASES? YEAH. WE CAN GET YOU THE AMOUNT. YEAH. WE'VE BEEN WE'VE BEEN TRYING. YEAH. SO WE'VE BEEN TRYING TO DO SMALLER RATE INCREASES ANNUALLY INSTEAD OF GETTING TO THE POINT WHERE WE HAVE ONE LARGE RATE INCREASE LAST YEAR, THE WATER RATES FOR EVERYONE WITH A 5/8 INCH METER REMAIN THE SAME. IF YOU HAD A LARGER METER, YOU DID SEE A RATE INCREASE, BUT MOST OF YOUR SINGLE FAMILY RESIDENTIAL CUSTOMERS ARE SMALL BUSINESSES. LAST YEAR THAT JUST HAD A FIVE INCH METER, THEY WOULD HAVE NOT SEEN A WATER RATE INCREASE LAST YEAR. OKAY. THANK YOU, COUNCILMAN COUNCILMAN DARIA, I JUST WANT TO ADDRESS ONE ONE OF OUR JOBS. BEING ON COUNCIL, YOU HAVE TO HAVE COURAGE TO MAKE DECISIONS THAT MIGHT NOT BE POPULAR, BECAUSE OUR JOB IS TO 
          [01:05:01]
BALANCE, BALANCE THIS BUDGET. AND IF THAT'S THE ONLY WAY WE CAN DO IT, IS RAISING THESE RATES. WE'RE GOING TO HAVE TO DO IT. LIKE I SAID, IT MIGHT NOT BE POPULAR POLITICALLY, BUT IT'S WHAT WE'RE OUR JOB IS LIKE. IT TAKES COURAGE TO BE UP HERE BECAUSE A LOT OF STUFF WE DO IS NOT POPULAR, BUT IT'S NEEDED TO RUN THIS CITY. AND I ALSO HAVE ANOTHER QUESTION ON THE MISREAD METERS. ARE THEY BEING MISREAD OR ARE THEY GETTING CHARGED TOO MUCH OR IS THE CITY NOT CHARGING ENOUGH? THEY'RE NOT CHARGING ENOUGH. OKAY, SO SO YEAH, JUST JUST TO BE CLEAR. SO WE HAVE ABOUT 42,000 CUSTOMERS IN THE CITY. AND SO THE ISSUE THAT WE'VE, WE'VE DISCOVERED IS THAT BECAUSE THERE ARE SO MANY, THERE ARE ALWAYS METERS THAT AREN'T FUNCTIONING PROPERLY. 
          AND SO WE ALSO HAVE A RADIO SYSTEM THAT, YOU KNOW, USED TO BE MECHANICAL METERS. YOU GO OUT AND READ THEM. AND SO THOSE, YOU KNOW, THOSE WERE A LITTLE MORE RELIABLE. NOW WE HAVE A RADIO SYSTEM WHICH HELPS US COLLECT THE READINGS. AND SO YOU'RE ALWAYS GOING TO HAVE SOME THAT, YOU KNOW, AREN'T READING CORRECTLY OR THEY'RE DIFFICULT TO FIND. SO THAT'S ALWAYS GOING TO BE THE CASE. BUT WE HAVE DISCOVERED A FEW, ESPECIALLY HIGHER USAGE CUSTOMERS THAT HAVE ESSENTIALLY THE METER HAS NOT BEEN READ. AND SO THERE'S AN ESTIMATED AMOUNT. AND SO IT'S TYPICALLY A LOWER AMOUNT CAN BE HIGHER IN SOME CASES. BUT ONCE THE METER IS READ PROPERLY AND WE CAN DETERMINE HOW MUCH USAGE HAS BEEN MADE, THEN YOU MAKE AN ADJUSTMENT. AND SO WE'VE HAD A COUPLE. WELL WE HAVE SEVERAL HIGHER VOLUME CUSTOMERS. AND SO AGAIN WE'RE WORKING THROUGH THAT NOW ESPECIALLY TO PRIORITIZE THOSE LARGER, LARGER VOLUME CUSTOMERS, BECAUSE THOSE ARE THE ONES THAT ARE OBVIOUSLY WOULD HAVE THE LARGER IMPACT. 
          AND BASICALLY HOW WE CAN TRY TO MINIMIZE THAT IN THE FUTURE AND RECOVER THOSE, RECOVER THAT REVENUE. ONE OTHER THING A FEW YEARS AGO, WHEN WE MAY HAVE JUST GOTTEN ON COUNCIL, THEY CAME TO US AND THEY WANT TO DO A RATE INCREASE OF 4%. BUT THEY SAID IT REALLY WASN'T GOING TO HELP BECAUSE WE WOULD HAVE TO DO ANOTHER 4% THE NEXT YEAR. AND SO WE WENT AHEAD AND DONE 8% BECAUSE THAT'S WHAT WE WERE SUPPOSED TO DO. THAT WAS MIGHT HAVE BEEN IN 21, SOMETHING LIKE THAT. BUT THAT'S WHAT THEY RECOMMENDED. THEY CAME WITH A RATE INCREASE THAT WOULDN'T HAVE HELPED REALLY, BECAUSE WE WOULD HAVE TO DO IT AGAIN THE FOLLOWING YEAR. SO WE HAD TO DO MORE THAN, THAN WHAT THEY WHAT THEY ASKED, JUST LET YOU KNOW. COUNCILMAN TURNER. YEAH. AND A FOLLOW UP QUESTION, MR. BOONE, I KNOW WE DISCOVERED SOME OF THESE ACCOUNTS WERE BEING COLLECTED ON. BUT IF POSSIBLE, I THINK IT'S IMPORTANT THAT COUNCIL RECEIVES A FOLLOW UP ON WHAT IS THE PLAN OF ACTION TO GET THERE? WHAT TOOK PLACE WITH THE REASONS WE WERE INEFFICIENT? WAS IT LACK OF EQUIPMENT? WAS IT SIMPLY NOT TRAINING? WAS IT SOMEONE NOT FOLLOWING UP WITH THEIR ROLES AND RESPONSIBILITIES OF WHAT NEEDS TO BE DONE? I THINK WHEN WE'RE LOOKING AT REVENUE LOSS, I THINK IT NEEDS TO BE KIND OF SHOT OUT TO US TRANSPARENTLY BECAUSE I'M HEARING IT, BUT I WANT TO KNOW THE DETAILS OF WHAT GOT US TO THIS PLACE. YES, SIR. WE CAN GET YOU A FULL, FULL ASSESSMENT OF NOT ONLY HOW WE GOT TO THIS ISSUE, WHAT IS THE ISSUE, HOW WE GOT HERE, BUT ALSO WHAT STAFF IS DOING TO ADDRESS IT. THANK YOU, COUNCILMAN DARIA, WHAT DO YOU DO TO ADDRESS IF YOU CAN'T FIND A METER? HOW, HOW, HOW LONG DO WE KEEP ON ESTIMATING? IF WE CAN'T FIND A METER BEFORE WE DO WE GO AND REPLACE THE METER OR. 
          WELL, THAT'S JUST IT. YOU HAVE TO IDENTIFY FIRST OF ALL, YOU HAVE TO FIND IT. AND IN SOME CASES IT'S DIFFICULT TO FIND. YOU MIGHT HAVE A PERSON WHO'S NOT. YOU MIGHT HAVE A DIFFERENT PERSON, A NEW PERSON. YOU KNOW, AGAIN, THERE ARE 42,000M OUT THERE. SO AS YOU CAN IMAGINE, A SINGLE FAMILY HOME, PRETTY EASY TO FIND IF YOU GET INTO AN INSTITUTION, A LARGE FACILITY, A SCHOOL OR COLLEGE, SOMETHING LIKE THAT, THEY CAN BE A LITTLE TRICKIER TO FIND. AND SO WHAT HAPPENS IS IF THEY CAN'T FIND IT, THEN THEY'LL ESTIMATE IT. BUT WHAT WE'RE TRYING TO WORK THROUGH NOW IS, OKAY, THAT'S FINE, BUT LET'S HAVE A PROCESS TO MAKE SURE THAT WE CAN GET OUT THERE AS SOON AS POSSIBLE TO FIND THE METER AND TO TRY TO AVOID MINIMIZE HAVING ESTIMATED, BUT KNOWING THAT THEY'RE ALWAYS GOING TO BE SOME. BUT YOU WANT TO TRY TO MINIMIZE IT BECAUSE IT AFFECTS NOT ONLY AFFECTS OUR REVENUES, BUT IT AFFECTS, YOU KNOW, IT AFFECTS THE CUSTOMERS BECAUSE THEN IT MESSES UP THEIR THEIR ACCOUNTS PAYABLE. SO IT'S, IT'S, IT'S AGAIN, IT'S ALWAYS AN ISSUE WITH THAT MANY METERS. BUT WE WANT TO TRY TO ELIMINATE IT BECAUSE WE CAN'T JUST KEEP 
          [01:10:03]
ESTIMATING FOREVER JUST BECAUSE WE CAN'T FIND IT. DO YOU ALL EVER ACTUALLY JUST JUST GO IN AND INSTALL ANOTHER METER IF YOU CAN'T FIND THAT ONE? WELL, NOT WELL. SO IF IF THE METER IS BROKEN OR MAYBE THE RADIO SYSTEM, THE RELAY SYSTEM IS NOT WORKING. WE REPAIR ALL THAT, BUT WE DON'T WANT TO BE IN A POSITION OF NOT READING A METER. BUT THAT'S WHAT WE'RE TRYING TO RESOLVE. WE FIND ALL THE METERS. EVENTUALLY. EVENTUALLY WE WILL FIND THEM. THANK YOU, COUNCILMAN COUNCILMAN HILLIER, I JUST WANT TO ECHO. YOU KNOW, WE ARE A BUSINESS. WE'RE A CORPORATION. AND IT'S IMPORTANT THAT OUR BOOTS ON THE GROUND ARE ARE GETTING THE NUMBERS WE NEED SO THAT WE CAN LOOK AT AN ACT AND AN ACTUAL BUDGET THAT REFLECTS WHAT WE'RE COLLECTING AND WHAT WE'RE SPENDING. BECAUSE RIGHT NOW, I'D BE WILLING TO BET THAT IF WE PUT THE NUMBERS TO IT, THIS HAS BEEN GOING ON FOR QUITE A NUMBER OF YEARS, AND IT'S PROBABLY IN THE MILLIONS OF DOLLARS. AND IF WE CAN READ ALL THEM 4200 ZERO METERS. AND ACTUALLY, I MEAN, I, I HAVE, I DON'T KNOW, 15 OR 20 000 CUSTOMERS. AND I CAN PROMISE YOU THAT WE NEVER MISS A CHANCE TO BUILD THEM WHEN WE DO SERVICE FOR THEM. AND SO, YOU KNOW, IF WE'RE MISSING THE SERVICE, WE'RE NOT BUILDING THE CUSTOMERS. AND WE'RE TALKING ABOUT LARGE WATER USE CUSTOMERS THAT WOULD REALLY OFFSET THESE NUMBERS. SO IT'S IMPORTANT THAT WE GET A. AND I THINK THAT YOU'VE MADE SOME CHANGES. I THINK WE'VE WE'VE MOVED THAT OVER. AND I THINK THAT THE WATER DEPARTMENT NOW IS IN CHARGE OF THAT. AND MIKE AND I THINK THAT WE'RE GOING TO MAKE SOME GOOD HEADWAY. SO I THINK IT'S IN GOOD HANDS. THANK YOU, COUNCILMAN HILLIARD. OH, I GOT INK ON MY MOUTH, TOO. THEY'RE JUST. THEY'RE SETTING ME UP UP HERE. IT'S REAL BAD. GOOD. OKAY. YOU KNOW, I'M GONNA TELL YOU, YOU KNOW, I'M GOING TO KEEP IT REAL. THANKS. SO I HAD A QUESTION ABOUT HAVE WE EVER DONE, LIKE AN EFFICIENCY STUDY OR, YOU KNOW, BECAUSE OF ALL THE THINGS THAT WE'RE DISCUSSING, HAVE WE THOUGHT ABOUT DOING SOMETHING ABOUT EFFICIENCY? LIKE IF THIS DEPARTMENT IS, YOU KNOW, IF, YOU KNOW, OPERATING TO THE BEST OF ITS EFFICIENCY, RIGHT? SO THERE'S MULTIPLE THINGS INVOLVED. SOME OF IT'S MORE OF A FINANCIAL BILLING. AND I KNOW OUR CITY ATTORNEY HAS HELPED DELVE INTO SOME OF THAT AND RESOLVE SOME OF THAT. BUT THEN, OF COURSE, SOME OF ITS OPERATIONS. SO WE TALK ABOUT, YOU KNOW, METER READING AND, AND AGAIN, I, WE'RE GETTING A BETTER HANDLE ON IT, BUT THAT'S OUT IN THE FIELD THAT'S OPERATIONAL. THAT'S, YOU KNOW, TRYING TO COLLECT ALL THAT INFORMATION. BUT TO THAT END, WE ARE CONSIDERING. YOU KNOW, POSSIBLE EFFICIENCY STUDY IN A VARIETY OF AREAS. AND THAT MIGHT JUST BE ONE OF THEM. OKAY. 
          I JUST WANT TO PUT IT ON THE RECORD. WE NEED TO MAKE SURE THAT WE'RE OPERATING OPTIMALLY. 
          THAT'S A BIG DEAL FOR ME. YES, MA'AM. SO TO THAT POINT, WE DID, AS THE MANAGER MENTIONED, DO A REORGANIZATION OF THE DEPARTMENT A WHILE AGO. FOR EXAMPLE, THE INDIVIDUALS WHO WERE METER READERS WERE ORIGINALLY REPORTING UNDER WATER CUSTOMER SERVICE. THEY NOW REPORT UNDER MIKE HARRIS, BECAUSE THOSE GUYS ARE ALREADY IN THE FIELD. THEY WERE ALREADY DOING THE WORK SO THAT THEY'RE NOW DOING THAT. AND SO HE'S ABLE TO TO ALLOCATE CREWS APPROPRIATELY. AND WE'VE BEEN ABLE TO, TO THAT POINT, RELOCATE OR DETERMINE TO FIND NEW METERS TO, TO ADDRESS SOME OF THOSE BILLING ISSUES. THAT'S WHY THEY'RE COMING UP NOW IS THAT THOSE GUYS ARE IN THE FIELD. THEY'RE DOING THAT WORK. SO THERE HAS BEEN SOME CHANGES MADE, AND THAT'S WHY A LOT OF THIS STUFF IS SURFACING NOW. AND SO AS YOU CONTINUE TO MOVE FORWARD, WE'LL NEED TO THE MANAGER WILL BE BRINGING FORTH OTHER THINGS TO REDIRECT. THANK YOU. OKAY. AND I DO WANT TO ADD THAT LAST YEAR WE HAD JOHN HOPKINS UNIVERSITY COME AND DO A STUDY AND WORK WITH OUR WATER AND SEWER DEPARTMENT AND TO LOOK AT EFFICIENCIES. AND WE GOT A REAL GOOD REPORT. AND THAT WAS AT NO CHARGE TO THE CITY. YEAH. AND ONE OF THE THINGS I'LL MENTION IS. YOU KNOW, WE HAVE PRETTY GOOD DATA, PRETTY GOOD MAPPING, BUT THERE ARE CASES. AND AGAIN, WE'VE GOT A LOT OF INFRASTRUCTURE SPREAD ACROSS 80MI■!S. SO BUT ONE OF TE THINGS WE'RE TALKING ABOUT IS MAYBE A, A CONCERTED EFFORT TO, YOU KNOW, IDENTIFY TO THE BEST WE CAN, YOU KNOW, WHAT LINES WE'VE GOT WHERE AGAIN, WE HAVE MOST OF THIS INFORMATION, LOCATIONS OF VALVES, YOU KNOW, THAT CAN BE THAT CAN PRESENT A PROBLEM WHEN WE HAVE DROUGHTS AND WE HAVE BROKEN LINES, WE HAVE TO IDENTIFY AND ISOLATE LINES TO REPAIR. WE AGAIN, WE CAN FIND MOST OF THEM. IT'S JUST SOME OF THOSE HARD TO FIND ONES. AND SO MAPPING METERS COULD ALSO BE A COMPONENT OF THAT MAPPING EFFORT SO THAT ANYBODY IN THE FIELD, WHETHER 
          [01:15:03]
IT'S THEIR FIRST DAY OR WHATEVER, WOULD BE ABLE TO HAVE A GIS AND A GPS THAT COULD TAKE THEM RIGHT TO A VALVE OR A METER OR A LINE. AND SO IT'S A TALL ORDER FOR 80MI■!S, BUT IT'S SOMETHING THAT, YOU KNOW, I KNOW WE WORKED ON THE PAST, BUT WE PROBABLY WANT TO TAKE A RENEWED EFFORT TO TRY TO HAVE THAT DATA BECAUSE ONCE WE HAVE THE DATA, YOU KNOW, IT GOES GOES BACK TO A VARIETY OF THINGS, WORK ORDERS WHERE WE DISCOVER A LINE THAT WE THOUGHT WAS HERE, WAS ACTUALLY HERE, AND AGAIN, CAN'T MAP IT ALL, BUT TRY TO TAKE A RENEWED EFFORT TO TRY TO UPGRADE OUR OUR MAPS AND GIS. THANK YOU, CITY MANAGER. AND ANOTHER QUESTION FROM COUNCILMAN TURNER. AND THAT WAS MY QUESTION. I KNOW ABOUT TWO YEARS AGO, WE DISCUSSED THE GIS SYSTEM TO KIND OF LOCATE ALL METERS. IF THAT'S SOMETHING WE STILL ARE WORKING TOWARDS, OR IS THAT WAS SOMETHING THAT WAS JUST BROUGHT UP TO MAKE IT MORE EFFICIENT? WELL, SO WE HAVE A PRETTY EXTENSIVE GIS SYSTEM AND MOST OF OUR THINGS ARE MAPPED. BUT TO ANSWER YOUR QUESTION, I DON'T THINK WE EVER ENACTED THE PROJECT TO BASICALLY, YOU KNOW, PROBABLY BE INVOLVE, YOU KNOW, HIRING SOMEBODY TO COME IN AND HELP US GEO LOCATE, YOU KNOW, EXACTLY WHERE ALL THE METERS ARE. GEO LOCATE WHERE ALL THE VALVES ARE TO THE EXTENT WE CAN. 
          BUT TO ANSWER YOUR QUESTION, I DON'T BELIEVE THAT THAT WAS WAS ENACTED, BUT THAT'S WHAT I'M TALKING ABOUT. I UNDERSTAND APPRECIATE YOU. BUT AFTER LISTENING TO, YOU KNOW, COUNCILMAN CRENSHAW, COUNCILMAN HERE ABOUT SOME OF THE BILLING ISSUES, I THINK THAT MAY BE SOMETHING IT'D BE PRETTY IMPORTANT TO PRESENT TO THE COUNCIL SOONER IN THE FUTURE. 
          AND AGAIN, WITH 80MI■!S, IT MIGT BE AN EXPENSIVE EFFORT, BUT THE RETURN ON INVESTMENT, WHEN WE'RE TALKING ABOUT LOST REVENUE, WE'RE TALKING ABOUT, YOU KNOW, GETTING LINES CLOSED. 
          AND DURING DROUGHTS, WHEN WE HAVE WATER LINE BREAKAGE, I THINK I THINK IT WOULD PAY FOR ITSELF EVENTUALLY. THANK YOU. THANK YOU ALL VERY MUCH. I WILL WORK WITH STAFF TO ANSWER THE QUESTIONS THAT I CANNOT ANSWER FOR YOU ALL TODAY, AND EITHER STAFF OR MYSELF WILL REPORT THOSE ANSWERS BACK TO YOU. THANK YOU SIR. THANK YOU, MR. REED. AND NEXT, WE'RE GOING TO HAVE A PRESENTATION BY HOLMES MURPHY ON EMPLOYEE BENEFITS. AND INTRODUCING IS OUR OWN SUSAN CHRISTOPHER OVER BENEFITS. 
          GOOD MORNING EVERYONE. THANK YOU. MY NAME IS JULIE RICKMAN. I'M WITH HOLMES. MURPHY. WE'RE YOUR BENEFITS CONSULTANT FOR YOUR EMPLOYEE BENEFITS SPECIFICALLY. SO I'M GOING TO TALK THROUGH A LITTLE BIT ABOUT HOW YOUR PLAN IS PERFORMING, A LITTLE BIT ABOUT WHERE WE'RE LOOKING TO PROJECT FOR THE FUTURE, WHETHER RECOMMENDATIONS ARE CURRENTLY, AS WITH THE GENTLEMAN BEFORE ME, IF YOU HAVE ANY QUESTIONS, WANT ME TO STOP OR SLOW DOWN? I TYPICALLY TALK REAL FAST WHEN I AM EXCITED ABOUT A TOPIC. SO SORRY ABOUT THAT. IF I TALK A LITTLE TOO QUICKLY. SO I'M SLICING AND DICING THE DATA A LITTLE BIT DIFFERENT FOR SOME OF THIS INFORMATION, SPECIFICALLY BECAUSE WE DON'T HAVE A FULL PLAN YEAR OR FISCAL YEAR RIGHT NOW FOR HOW YOUR PLAN HAS BEEN PERFORMING. BUT REALLY WHAT I WANT TO POINT OUT IS IF YOU LOOK AT THE WAY THE PLAN WAS PERFORMING FOR 2025, OUR MEDICAL PLAN PAID WAS INCREDIBLY HIGH COMPARED TO PRIOR YEARS. REALLY, THAT BOILED DOWN TO HIGH COST CLAIMANTS. I'LL TALK A LITTLE BIT ABOUT THAT. YOUR PHARMACY HAS BEEN PERFORMING A LITTLE BIT BETTER HISTORICALLY IN 2025, DUE TO THE CONTRACTS THAT YOU HAVE THROUGH YOUR CURRENT PBM. 
          AND THEN RIGHT NOW, WHEN WE'RE LOOKING AT OCTOBER THROUGH 2025 THROUGH MAY OF 2026, YOU'RE KIND OF PROJECTED. THESE ARE THE EIGHT MONTHS OF PROJECTED CLAIMS. RIGHT NOW, YOU'RE KIND OF TRACKING A LITTLE BIT BETTER FROM THE PHARMACY SIDE THAN YOU WERE IN THE PAST, AND CERTAINLY BETTER FROM THE MEDICAL SIDE THAN YOU HAD IN THE PRIOR PLAN YEAR. WHEN WE'RE LOOKING AT THE WAY THAT YOUR PLAN HAD BEEN PERFORMING. WHEN WE'RE LOOKING AT OUR HIGH COST CLAIMANTS, THIS IS REALLY WHERE THE CLAIMS SPEND HAPPENS. SO IF YOU LOOK BACK IN 2025, YOUR TOTAL CLAIMS SPEND FOR 2025 FOR YOUR HIGH COST CLAIMANTS, THOSE OVER $100,000 WAS $11 MILLION IN CLAIMS SPEND. AND WHEN YOU LOOK AT THE PRIOR YEARS, YOU CAN SEE THOSE NUMBERS WHILE THEY'RE SIGNIFICANTLY LESS. YOU CAN ALSO SEE THE NUMBER OF CLAIMANTS OVER $100,000. YOU KNOW, YOU'RE RUNNING IN THAT 30, 30, 30 EMPLOYEES OR SO, 30 MEMBERS RANGE. SO REALLY WHAT THAT REALLY TELLS US IS WE HAD SOME REALLY HIGH COST CLAIMS THAT HAPPENED FOR SPECIFIC MEMBERS. WE DIDN'T HAVE AN INCREASE OF THE NUMBER OF PEOPLE THAT WERE HIGH COST CLAIMANTS, JUST THOSE INCREDIBLY COMPLEX, HIGH COST CLAIMS THAT REALLY DID A LOT OF INCREASE YOUR TOTAL SPEND ON YOUR MEDICAL YEAR TO DATE, YOUR MEDICAL HIGH COST CLAIMS ARE AROUND A LITTLE UNDER $2 MILLION. PHARMACY CLAIMS IS AROUND $700,000. SO PERFORMING 
          [01:20:03]
CERTAINLY BETTER THAN YOU HAD PRIOR WHEN WE TALKED ABOUT YOUR HIGH COST CLAIMANTS. THE CITY OF BEAUMONT HAS WHAT'S CALLED STOP LOSS INSURANCE. SO WHAT THIS DOES IS A LAYER OF PROTECTION. SO ANY CLAIMANT THAT'S INDIVIDUAL CLAIMANTS OVER $275,000, THERE'S AN EXTRA INSURANCE POLICY THAT KICKS INTO PLACE THAT BASICALLY PAYS THE DIFFERENCE OVER THE 275. SO IT'S AN INDIVIDUAL DEDUCTIBLE FOR ALL EMPLOYEES ON YOUR PLAN. IF YOU LOOK IN THE PAST, YOU CAN SEE THE NUMBER OF CLAIMANTS OVER THAT $275,000 THRESHOLD. TEN, 13, 12. BUT WHEN YOU LOOK AT THE REIMBURSEMENT, THAT RED LINE SECOND FROM THE BOTTOM, IN 2024, WE HAD AROUND $2 MILLION OF REIMBURSEMENTS IN 2023. AROUND THREE, 2025, WE HAD ALMOST $5 MILLION IN REIMBURSEMENTS. AND YOU CAN SEE THE NUMBER OF CLAIMANTS DIDN'T INCREASE. WE JUST HAD SOME INCREDIBLY COMPLEX, EXPENSIVE CLAIMS THAT HAPPENED CURRENTLY YEAR TO DATE. WHEN WE'RE LOOKING AT IT, WE HAVE TWO CLAIMANTS OVER THAT, AROUND $1.3 MILLION IN PREMIUMS, BUT ONLY $218,000 WORTH OF REIMBURSEMENTS. SO THIS USUALLY HAPPENS FOR MOST EMPLOYERS. 
          WE'LL HAVE A FLUX OF LARGE CLAIMS THAT HAPPEN. WE CALL THEM THE FLOOD YEARS. SO YOU KIND OF LOOK BACK AND YOU SAY, WHEN YOU TRACK BACK SEVERAL YEARS, YOU CAN SEE IT'S BEEN TRACKING PRETTY WELL, AND THEN YOU HAVE A BIG BLIP AND THEN IT'LL GO DROP BACK DOWN AGAIN. 
          THAT'S VERY COMMON PART OF THE REASON WHY YOU HAVE A FUND BALANCE, TO BE ABLE TO OFFSET THOSE YEARS THAT YOU'RE PERFORMING POORLY. BUT IN THIS PARTICULAR CASE, LAST YEAR WAS A VERY DIFFICULT YEAR WHEN IT CAME DOWN TO THE NUMBER OF HIGH COST CLAIMS SPECIFICALLY THAT WE HAD. CAN YOU EXPLAIN WHAT EXACTLY ARE THE REIMBURSEMENTS? WHO DO THE REIMBURSEMENTS GO TO? THEY COME BACK TO THE CITY OF BEAUMONT. SO ANY INDIVIDUAL PERSON THAT GOES OVER THE $275,000 THRESHOLD, THOSE DOLLARS GO BACK TO THE CITY OF BEAUMONT. BASICALLY, WE GET A REIMBURSEMENT FOR THOSE INDIVIDUALS. AND SO LAST YEAR, YOU HAD ALMOST $5 MILLION OF REIMBURSEMENTS FOR THOSE INDIVIDUALS THAT WENT OVER THAT THRESHOLD. OKAY. YEAH. THANK YOU. OF COURSE, WHICH IS GOOD FOR YOU ON THOSE YEARS WHEN YOU'RE HAVING LIKE, FOR EXAMPLE, LAST YEAR, THAT HELPED CONSIDERABLY. WE BUDGET FOR ABOUT A 15% INCREASE TO PREMIUMS. SO IF YOU LOOK ON THE PREMIUMS LINE, YOU CAN SEE WE SPEND AROUND $2 MILLION IN PREMIUMS A YEAR FOR YOUR STOP LOSS, BUT OBVIOUSLY YOUR REIMBURSEMENT LEVEL IS INCREDIBLY HIGH FOR LAST YEAR. THIS THE STOP LOSS IS A FULLY INSURED PRODUCT. SO IT'S IN A POOL OF OTHER EMPLOYERS. SO THAT 15%, WHILE IT MIGHT SEEM LOW BECAUSE IT'S A POOLED PRODUCT, IT'S PROBABLY NOT AS LOW AS IT COULD BE, ESPECIALLY SINCE YOU'RE PERFORMING WELL THIS YEAR. AND WHAT THEY DO IS WHEN WE DO OUR STOP LOSS MARKETING, WHICH WILL BE A LITTLE LATER IN THE YEAR WHEN WE HAVE ADDITIONAL CLAIMS DATA. WHEN WE DO THAT MARKETING, THEY TAKE INTO ACCOUNT HOW YOUR PLAN IS CURRENTLY PERFORMING, YOUR CURRENT CLAIMS ACTIVITY AND THOSE TYPES OF THINGS. SO THEY LOOK AT YOUR PAST AS WELL. BUT WE'RE ALSO LOOKING AT THE CURRENT AND TO SEE HOW YOU'RE GOING TO PERFORM. AND THAT'S HOW THAT RENEWAL WILL COME THROUGH. AND THIS IS A LITTLE BIT BLURRY, BUT I DID WANT TO SHOW YOU SO LARGE CLAIMS OVER $200,000 PAID YEAR TO DATE. AND SO I HID A LOT OF INFORMATION IN HERE BECAUSE THERE'S PHI IN HERE, AND I DON'T WANT TO GIVE YOU PROTECTED HEALTH INFORMATION FOR ANY INDIVIDUAL CLAIMS, BUT I WANTED TO POINT OUT A FEW THINGS ON HERE. SO FOR EXAMPLE, THE NUMBER ONE INDIVIDUAL ON HERE, YOU'LL SEE IT'S MEDICAL CLAIMS IS ONLY 23,000, ALMOST $24,000. 
          PHARMACY CLAIMS ON THIS INDIVIDUAL IS CLOSE TO $400,000. THIS INDIVIDUAL IS GOING TO CONTINUE. AND THE WAY THAT THAT PURPLEY SECTION WITH THOSE LITTLE BARS IN THERE, THAT MEANS EACH MONTH THAT IT'S A DARKER COLOR IS WHEN YOU SEE THAT THEY HAVE HIGHER CLAIMS EACH MONTH. SO THIS PARTICULAR PERSON, FOR EXAMPLE, WHEN I WAS TALKING ABOUT THE STOP LOSS RENEWAL, THIS PERSON MIGHT MAY HAVE CONTINUING ONGOING CLAIMS BECAUSE OUR PHARMACY CLAIMS, WHERE YOU LOOK AT THAT NUMBER FOUR PERSON, YOU CAN SEE IT'S A DARK PURPLE IN APRIL FOR THAT PARTICULAR PERSON, BUT IT LIGHTENS UP AFTER THAT. THAT INDIVIDUAL MIGHT HAVE HAD A LARGE CLAIM THAT HIT IN APRIL. SO SAY FOR EXAMPLE, A SURGERY OR SOMETHING LIKE THAT. AND THEN THEY'LL THEY'LL TRACK LATER, THEY'LL DROP OFF A LITTLE BIT LATER ON IN THE YEAR. 
          WE KEEP TRACK OF ALL THAT FOR SEVERAL REASONS. IF THERE'S AN INDIVIDUAL THAT'S ON A HIGH COST PHARMACY CLAIM OR MEDICATION, WE WORK WITH THE PHARMACY CARRIER TO MAKE SURE THAT WE'RE GETTING THE BEST PRICING FOR THOSE, THOSE TYPES OF THINGHIS A BLIP ON THE RADAR, OR IS IT SOMETHING THAT'S GOING TO BE AN ONGOING LONG TERM HIGH COST CLAIMANT? SO A LITTLE BIT OF INFORMATION THAT WE KIND OF PULLED THROUGH. YOU'LL NOTICE THAT THE AVERAGE HEADCOUNT, WE MAINTAIN THE AVERAGE HEADCOUNT WHEN WE'RE LOOKING AT OUR FISCAL YEAR BUDGET SUMMARY WITH NO CHANGES. SO WE LEFT THAT AT THE 1350. I KNOW CONSIDERATION IS POSSIBLY HAVING A HIRING FREEZE. WE WANT TO KEEP THAT NUMBER THE SAME. SO WHEN WE'RE LOOKING AT THE GROSS CHANGE TO BUDGET, SO WHAT WE HAVE AT THE TOP IS THE GROSS COST. SO THAT'S THE COST OF WHAT YOUR PLAN IS. MEDICAL PHARMACY, ASO FEES, STOP LOSS INSURANCE, THOSE TYPES OF THINGS. AND THEN YOU HAVE YOUR EMPLOYEE CONTRIBUTIONS. THAT'S A BLENDED RATE. SO THAT GOES ACROSS ALL YOUR TEARS. SO DEPENDING ON WHERE THEY'RE AT, IT BLENDS THAT TOGETHER FOR YOU TO GIVE YOU THAT. 283 WHEN WE LOOK AT THE GROSS COST FOR THAT FIRST COLUMN, THE 2025 2026 
          [01:25:07]
BUDGET, WE PROJECTED TO BE 1521, BUT THE REFORECAST IS SHOWING COMING IN AROUND 1479. THE REASON FOR THAT SPECIFICALLY IS YOUR PHARMACY IS COMING IN A LITTLE BIT LOWER. WE DON'T HAVE AS MANY HIGH COST CLAIMANTS. WHEN THE BUDGET WAS DONE LAST YEAR, WE KNEW THAT YOUR HIGH COST CLAIMANTS WERE A BIG REASON FOR THE INCREASES THAT WE'RE LOOKING AT. SO YOU KIND OF LEVEL THAT OUT AGAIN, HOW YOUR PLAN IS HISTORICALLY PERFORMED. AND SO WE'RE REALLY COMING, PROJECTING AND COMING IN A LITTLE BIT UNDER BUDGET FOR THIS PLAN YEAR OR THIS FISCAL YEAR FOR NEXT YEAR, YOU CAN SEE THAT 8.5% GROSS CHANGE TO BUDGET, OR 10.2% NET CHANGE TO BUDGET. THAT GROSS CHANGE TO BUDGET REALLY IS FOLLOWING WHAT TREND IS TREND FOR MEDICAL IS SITTING AROUND 9.3. PHARMACY IS SITTING AROUND 11, SO YOU'RE EVEN COMING IN BLENDED BETWEEN THE TWO OF THOSE. UNDER WHAT MEDICAL TREND AND PHARMACY TREND IS CURRENTLY. SO THAT 8.5% FOR YOUR GROSS CHANGE EQUATES TO ABOUT $2.5 MILLION. YES. WHAT IS THE WHAT IS THE AVERAGE EMPLOYEE CONTRIBUTION TO THIS? I'M ASSUMING WE DON'T PAY 100%. YEAH, IT'S THE TWO 8083 CURRENTLY IS THE AVERAGE. THAT DEPENDS ON WHAT TIER THEY'RE ON. SO IF THEIR EMPLOYEE, EMPLOYEE SPOUSE EMPLOYEE CHILDREN, EMPLOYEE FAMILY, SO 283 IS AVERAGE WHEN IT COMES TO IT. AND I ACTUALLY HAVE THE RATES IN HERE ABOUT THE PROPOSED RATES WITH THE PROPOSED INCREASE FOR THIS YEAR. SO I CAN SHOW YOU WHAT THAT WOULD BE. BUT THAT'S THE AVERAGE. YES. THANK YOU. SO THERE'S A LOT MORE NUMBERS ON THIS SLIDE. BUT REALLY WHAT I WANT TO POINT YOUR ATTENTION TO IS THE PROJECTION WITH CHANGES, WHICH IS THE FOURTH COLUMN OVER. 
          THAT WILL SHOW YOU THE AVERAGE EMPLOYEE EMPLOYEE PER MONTH CONTRIBUTIONS INCREASES FROM THE 283 TO 300. THIS IS A 9% INCREASE. SEEMS LIKE A LOT, BUT I'LL SHOW YOU THE PREMIUMS ON THE NEXT SLIDE, WHICH WILL SHOW YOU BECAUSE WHEN WE'RE TALKING ABOUT THE CONTRIBUTIONS FOR EMPLOYEES, 9%, YOU KNOW, IS NOT A SIGNIFICANT DOLLAR AMOUNT FOR INDIVIDUAL EMPLOYEES. WHAT THAT DOES IS OFFSETS FOR AROUND $300,000 TO THAT 2.49 OR $2.5 MILLION INCREASE THAT WE'RE PROJECTING FOR EMPLOYEES GOING FORWARD. AND THEN THIS IS THE SEMI MONTHLY. SO THERE ARE 24 PAY PERIOD PREMIUMS THAT ARE RECOMMENDED, THAT 9% INCREASE. SO IT WILL SHOW YOU THOSE MONTHLY RATES FOR THE THE INDIVIDUALS. SO YOU CAN SEE THE MEDICAL RATES ON THERE AS WELL AS THE DENTAL AND THE VISION AS WELL. SO I'LL PAUSE ON THERE. I SAW YOU HAVE A QUESTION. I DO HAVE A QUESTION. IT'S A LITTLE OFF TOPIC, BUT SO I BROUGHT THIS UP PREVIOUSLY. BUT I KNOW THAT AT THE COUNTY THEY HAVE LIKE A SICK CALL, A SICK CALL HALL, KIND OF LIKE YOU CAN GO IN IF YOU'VE GOT A COLD OR IF YOU NEED THINGS AND SEE A MEDICAL CLINIC MODEL, KIND OF LIKE A CLINIC MODEL THAT WOULD IT ALLEVIATES SOME COSTS, RIGHT? BECAUSE NOW WE'VE GOT A DOCTOR OR NURSE OR WHOMEVER THAT'S ON STAFF OR EVEN I WENT MY BACK WAS HURTING AND THEY CRACKED IT IN THERE, YOU KNOW, SO I'M SAYING THAT TO SAY THIS, LIKE YOU CAN GO IN WITH LITTLE ISSUES THAT NOW YOU DON'T HAVE TO GO TO THE DOCTOR. DO WE HAVE DOES THE CITY HAVE A PLACE LIKE THAT OR ANYTHING THAT. NO. THERE'S NOT. SORRY, SORRY FOR INTERRUPTING. THERE'S NOT. WE ACTUALLY HAVE I HAVE A FEW THINGS IN HERE ABOUT WHAT THE CLINIC MODEL COULD LOOK LIKE. 
          SO WE DO HAVE THE OPPORTUNITY TO LOOK AT SOMETHING LIKE THAT. WHAT I WOULD STRONGLY SUGGEST IS DOING A FULL RFP FOR THAT, SIMPLY BECAUSE IT IS A LARGE EXPENSE TO START OFF WITH. IT'S NOT AN INEXPENSIVE ENDEAVOR TO PUT THAT IN PLACE. AND REALLY, IT'S THE SAVINGS ON THOSE MODELS, 100% IS CONTINGENT ON THE ADOPTION OF YOUR EMPLOYEES ON THE PLAN. IF YOU DON'T HAVE PARTICIPATION, YOU'RE NOT SAVING MONEY. SO THERE ARE SOME MODELS THAT WILL DO THINGS LIKE THEY'LL HAVE A GUARANTEE IN PLACE SAYING, RIGHT NOW, YOUR CURRENT SPEND IS THIS MUCH WE'RE GOING TO GUARANTEE WE'RE GOING TO SAVE YOU $2 MILLION NEXT YEAR. AND IF WE DON'T SAVE YOU THE $2 MILLION, WE'RE GOING TO PAY YOU BACK THE DIFFERENCE. AND SO IF WE ARE GOING TO EXPLORE SOMETHING LIKE THAT, I WOULD PERFORM A FULL RFP OR PROPOSE TO DO A FULL RFP, BECAUSE TO ME, THERE'S A LOT OF DIFFERENCES IN WHAT THOSE MODELS DO. SO THIS ONE CRACKED YOUR BACK. SOME OF THEM DON'T DO CHIROPRACTIC. SO IT DEPENDS ON WHAT WE'RE LOOKING FOR. AND THEN ALSO WHAT IT WOULD LOOK LIKE FOR LONG TERM. WHAT IS OUR PROJECTIONS? GENERALLY SPEAKING, FOR MOST CLINIC MODELS, IF YOU'RE BREAKING EVEN, I WOULD SAY YOU'RE DOING GREAT, WHICH YOU KNOW, IS NOT NECESSARILY SAVINGS, BUT IF YOU GET A LOT OF ADOPTION INTO THOSE PLANS AND A LOT OF PARTICIPATION, YOU CAN SAVE MONEY. IT JUST TAKES TIME TO BUILD UP THAT THAT MODEL. NO, NO, NO, PLEASE. THANK YOU. I LIKE THE QUESTIONS. THOSE ARE HELPFUL. ANYTHING ELSE ON THE RATES THAT YOU HAVE QUESTIONS ON? YES. SO I SEE WE HAVE. CT MEDICAL DENTAL AND THEN DENTAL AND AND THEY HAVE DIFFERENT. CORRECT. WHY THEY'RE NOT ALL UNDER THE SAME. THERE'S 
          [01:30:05]
A COLLECTIVE BARGAINING. AND I THINK THAT FOR THE POLICE SPECIFICALLY, THIS IS HISTORICALLY ALWAYS HAD THE SEPARATE RATES. AND SO YOU CAN ONLY INCREASE FOR SO MUCH DEPENDING ON THE DIFFERENT DEPARTMENTS ESSENTIALLY. SO THIS DOESN'T INCLUDE RETIREES, DOES IT. NO. THIS DOES NOT HAVE THE RETIREES ON HERE. HE'S A RETIREE. OKAY. GOT IT. GOT IT. 
          NO THAT'S FAIR. GOOD QUESTION. YEAH WE CAN I CAN PULL THE RETIREE RATES FOR THE NEXT CONVERSATION TO. OKAY. SOME OF THE SUGGESTIONS THAT WE KIND OF LOOK THROUGH RIGHT NOW, YOU HAVE CURRENTLY HAVE A $1,000 DEDUCTIBLE ON YOUR MEDICAL PLAN. THAT'S A DEDUCTIBLE THAT'S DEFINITELY LOWER THAN WHAT WE SEE OVERALL, JUST BENCHMARK. AND SO ONE OF THE OPTIONS THAT WE LOOKED AT WAS INCREASING DEDUCTIBLES. SO WE HAVE FOUR DIFFERENT INCREMENTAL INCREASES THAT WE CAN LOOK THROUGH. AND SO WHEN WE'RE LOOKING AT DEDUCTIBLE, IF WE RAISE IT TO $1,200 FOR AN INDIVIDUAL PERSON, THAT IS AN ADDITIONAL $104,000 SAVINGS BASICALLY TO THE CITY, SAVINGS IS KIND OF A, YOU KNOW, IT IS WHAT IT IS. IT'S BASICALLY A COST SHIFT, ESSENTIALLY. BUT BASICALLY IT'S $104,000. YOU'LL NOTICE IT LOWERS DOWN. IT'S NOT DOLLAR FOR DOLLAR WHEN YOU INCREASE AN ADDITIONAL $250, BECAUSE THERE'S GOING TO BE INDIVIDUALS THAT MEET THAT DEDUCTIBLE. AND THEN THERE'S THOSE THAT DON'T. SO WHEN YOU GET TO THAT $2,000 MARK, YOU'LL HAVE A SUBSECTION OF YOUR POPULATION THAT WILL NEVER REACH A $2,000 DEDUCTIBLE. 
          SO YOU CAN KIND OF SEE IT'S A LITTLE BIT INCREMENTALLY DIFFERENT, BUT 100, $101,000, ESSENTIALLY FOR 250,000 OR $250 INCREASE TO YOUR DEDUCTIBLE. THANK YOU. YOU'RE WELCOME. THE OTHER THING THAT WE WERE TALKING THROUGH IS INCREASING THE EMERGENCY ROOM COPAYS. 
          RIGHT NOW, IT'S CURRENTLY $250. I HAVE A SLIDE IN HERE. I'LL GO THROUGH SHOWING HOW YOUR EMERGENCY ROOM UTILIZATION IS PRETTY HIGH THERE. YOU HAVE TELEMEDICINE OPTION, AND YOU HAVE A LOT OF EMERGENCY ROOM VISITS THAT ARE NON-EMERGENCY CARE. SO ESSENTIALLY, PEOPLE GOING IN FOR YOUR CHILD HAS A EAR INFECTION, THEY'RE CRYING AT NIGHT. YOU TAKE THEM IN BECAUSE THAT'S WHAT YOU DO. WE HAVE OPTIONS TO HELP PROMOTE THAT. WE CAN PROMOTE THAT ARE LOWER COST ALTERNATIVES, BUT ALSO MORE CONVENIENT FOR YOUR EMPLOYEES. AND HAVING TO TAKE A THREE YEAR OLD TO THE ER AT 10 P.M. SO THERE'S ABILITIES TO DO THAT. SO THAT WAY WE MAYBE CAN DISCOURAGE PEOPLE FROM USING THE EMERGENCY ROOM AS THEIR PRIMARY CARE OR URGENT CARE, BECAUSE THOSE CLAIMS ARE INCREDIBLY EXPENSIVE. AND I'LL GO INTO MORE DETAILS ON THAT. 
          WHEN I LOOK AT THAT A LITTLE BIT MORE. THE OTHER THING THAT WE HAVE IS WE HAVE THE CIVIL SERVICE CONTRACT REQUIREMENTS. WE CAN'T DO A TON. TO YOUR POINT ABOUT THE DIFFERENCE IN PREMIUMS, THERE'S NOT A LOT THAT WE CAN DO WHEN IT COMES TO THE PREMIUM SPREAD ON THOSE, BUT WE CAN HAVE THE OPTION POSSIBLY OF ADDING A HIGH DEDUCTIBLE HEALTH PLAN IN THE FUTURE. IT'S JUST WE MIGHT HAVE SOME, SOME, SOME CHALLENGES WITH THAT. WHEN IT COMES TO THE CIVIL SERVICE CONTRACTS, IF WE'RE ABLE TO DO THAT, BECAUSE YOU HAVE TO HAVE ENOUGH OF A SPREAD BETWEEN PREMIUMS TO MAKE THAT AN ATTRACTIVE PLAN FOR YOUR EMPLOYEES. HIGH DEDUCTIBLE HEALTH PLANS FOR A LOT OF YOUR EMPLOYEES WILL BE A BENEFICIAL PLAN. IT SOUNDS, YOU KNOW, DIFFICULT BECAUSE YOU SAY HIGH DEDUCTIBLE. SO IT SOUNDS LIKE IT'S GOING TO BE, YOU KNOW, MAYBE NOT ADVANTAGEOUS. BUT IF THE CITY HAS SOME SEED MONEY THAT GOES INTO THEIR YOU HAVE A SECTION OF YOUR POPULATION THAT NEVER SEE A DOCTOR. SO FOR THEM, A HIGH DEDUCTIBLE HEALTH PLAN WITH LOW PREMIUMS IS NOT A BIG DEAL. THEY CAN CONTINUE TO ACCUMULATE DOLLARS INTO A HEALTH SAVINGS ACCOUNT. AND SO IF THEY DO HAVE A CATASTROPHIC CLAIM, THEY HAVE MONEY SET ASIDE TO BE ABLE TO OFFSET THOSE COSTS. SO THEY'RE ATTRACTIVE FOR LONG TERM, ESPECIALLY INDIVIDUALS. AND THEY'RE GREAT FOR PEOPLE THAT ARE MAYBE JUST STARTING OFF AND BUILDING THAT HEALTH SAVINGS ACCOUNT. AND THEN AGAIN, PEOPLE THAT ARE GETTING CLOSE TO RETIREMENT, YOU CAN HAVE THOSE MONIES SET ASIDE IN A TAX DEFERRED ACCOUNT THAT CONTINUE TO ACCUMULATE, THAT YOU CAN USE LATER ON IN LIFE. SO THERE'S SOME BENEFITS AND ATTRACTIVENESS TO THESE PLANS. WE DO HAVE A CHALLENGE, THOUGH, WHEN IT COMES TO YOUR CURRENT CONTRACTS, BECAUSE THE SPREAD OF THE PREMIUMS CAN'T BE ENOUGH THAT IT WILL ATTRACT PEOPLE INTO THOSE PLANS. SO GIVING THAT AS A FOOD FOR THOUGHT. THE OTHER THING WAS THE ON SITE CLINIC VERSUS TRADITIONAL HEALTH CARE. SO YOU ASKED THE BEST QUESTION ON THAT. AS FAR AS THAT GOES, THERE'S A LOT OF WORDS ON THIS PAGE, BUT WHAT I REALLY WANTED TO POINT OUT IS THERE'S A LOT OF OPTIONS WHEN IT COMES TO WHAT'S OUT THERE. AND SO IT'S EVERYTHING FROM DIRECT PRIMARY CARE, WHERE YOU HAVE BASICALLY A RELATIONSHIP WITH A PRIMARY CARE PROVIDER IN THE CITY AND SAY, THIS IS OUR PERSON TO AN ON SITE CLINIC NEAR SITE CLINIC, VIRTUAL CLINICS. THERE'S TONS OF OPTIONS OUT THERE. SO FOR ME, IF AS YOUR CONSULTANT, I WOULD RECOMMEND, HIGHLY RECOMMEND DOING A FULL RFP ON THIS TO BE ABLE TO DETERMINE WHAT'S GOING TO SAVE YOU DOLLARS LONG TERM. WHAT KIND OF GUARANTEES DO WE HAVE IN PLACE? WHAT SERVICES ARE BEING OFFERED? AND THIS SHOWS YOU KIND OF AN IDEA OF BASED ON 500 EMPLOYEES, HOW MUCH THESE MODELS CAN COST. AND SO YOU'LL SEE THAT DEPENDING ON WHAT IT IS, IF YOU'RE DOING A FULL BUILD OUT OF A CLINIC MODEL OR IF YOU HAVE SPACE CURRENTLY, OR IF IT'S A SHARED 
          [01:35:05]
SITE CLINIC, THERE'S A LOT OF OPTIONS OUT THERE. AND AGAIN, TO MY POINT BEFORE, IF YOU HAVE A ROI THAT'S 1 TO 1, YOU'RE JUST BASICALLY BREAKING EVEN YEAR ONE, YOU'RE DOING GREAT. 
          THE BIG KEY TO THAT IS HAVING PEOPLE BE ABLE TO UTILIZE IT. AND IF YOU DON'T HAVE UTILIZATION, YOU'RE NOT GOING TO HAVE SAVINGS. SO QUESTION. YES. WOULD THIS BE SOMETHING THAT COULD BE RUN OR HOUSED AT OUR OWN HEALTH DEPARTMENT? IT CAN BE. YEAH. SO BASICALLY WHAT WE DO IS DETERMINING ON WHAT YOU'RE LOOKING FOR. THE RFP CAN BE WRITTEN IN SUCH A WAY THAT WE HAVE SPACE HERE, AND THIS IS WHAT WE'D LIKE TO DO. OR IT COULD BE WRITTEN AS WHAT'S YOUR OPTIONS? AND WE DO A FULL EVALUATION ON WHAT'S AVAILABLE AND WHAT THE COSTS WOULD BE FOR ANY OF THOSE THINGS. AND, YOU KNOW, ONE THING THAT I'VE BEEN THINKING ABOUT IN MY MIND IS YOU GOT A LOT OF PARENTS THAT TAKE KIDS TO THE DOCTORS FOR FEVERS AND ALL KINDS OF STUFF THAT DON'T EVEN MAKE SENSE. STUFF LIKE THIS IS YOU AT THE EMERGENCY ROOM, AND WE DON'T NEED THAT. THAT'S COSTING US THOUSANDS AND THOUSANDS OF DOLLARS. SO YEAH, YOU'RE CORRECT. I MEAN, MY MIND BE THINKING LIKE, AND I DON'T BELIEVE WE DO, BUT DO WE HAVE ANY INCENTIVES FOR EMPLOYEES TO USE TELEMED? YOUR TELEMEDICINE VISITS ARE $5. SO IT'S IT'S LESS EXPENSIVE THAN GOING TO YOUR PCP, FAR LESS EXPENSIVE GOING TO THE EMERGENCY ROOM. 
          THE ISSUE WITH THE EMERGENCY ROOM IS YOU GO IN, YOU MIGHT HAVE A $250 CO-PAY, BUT YOU DON'T HAVE TO PAY IT AT THE TIME OF SERVICE. AND SO YOU'RE NOT NECESSARILY DISCOURAGING PEOPLE FROM GOING TO, TO DO THAT. I WILL SAY FOR TELEMEDICINE, THE $5 CO-PAY IS, IS REALLY INEXPENSIVE AND IT'S, IT'S AN OPTION. I THINK A LOT OF PEOPLE DON'T REALIZE THAT IT'S THERE. AND WHAT THEY CAN TREAT, I THINK IS PART OF THE THE PIECE. I HAVE A QUESTION TOO. SO A LOT OF THESE PROGRAMS THAT OFFER SERVICES ON DEMAND WITHOUT HAVING TO PHYSICALLY GO THERE, I DON'T KNOW WHO'S IN CHARGE OF PROMOTING THAT, WHO'S IN CHARGE OF MAKING SURE THAT OUR EMPLOYEES KNOW THIS IS AN OPTION AND IT'S $5. LIKE, I MEAN, I THINK SOMETIMES PEOPLE MISS IT BECAUSE THEY DON'T KNOW. RIGHT? I IT TOOK ME A WHILE TO REALIZE THAT I COULD DIAL A NUMBER ON THE BACK OF MY CARD AND SEE A DOCTOR AND SEE I DIDN'T EVEN YOU KNOW, I'M SAYING THAT TO SAY WHO'S PROMOTING INFORMATION. YEAH, IT'S A COMBINATION OF SEVERAL FACTORS. SO OBVIOUSLY DURING OPEN ENROLLMENT AND WHEN YOUR NEW HIRES COME ON BOARD, THAT'S ONE PIECE. THE CARRIERS CAN ACTUALLY SEND OUT POSTCARD MAILERS, FLIERS. WE CAN HELP WITH THAT AS WELL. COMMUNICATIONS. SO IF YOU'RE LOOKING TO DO A POSTERS INSIDE BATHROOMS, LET PEOPLE KNOW THAT SOMETHING IS AVAILABLE. YOU KNOW, THINGS LIKE THAT. SO PROMOTION IS, IS KEY. SO YOU'RE CORRECT. THERE'S, THERE'S SEVERAL WAYS THAT WE CAN PROMOTE. AND I THINK THAT I ACTUALLY HAVE A FLIER THAT I DID FOR SOMEONE REALLY RECENTLY WHERE THE COST OF YOUR CARE IS DEPENDING ON WHERE YOU PARK YOUR CAR. AND SO IT'S IF YOU'RE PARKED IN YOUR OWN DRIVEWAY, IT'S $5 FOR THE CITY OF BEAUMONT EMPLOYEES. BUT IF YOU GO TO THE EMERGENCY ROOM, IT'S $250. SO IT GIVES YOU AN IDEA OF WHAT THAT'S GOING TO COST AND WHAT THEY CAN TREAT. SO WE CAN CERTAINLY DO A LOT OF PROMOTION AROUND THAT. YOU KNOW, I WOULD BE EVEN INTERESTED IN LIKE MAYBE A MONTHLY TEXT OR SOMETHING THAT GOES OUT. HEY, DID YOU KNOW, DID YOU KNOW WHERE YOU WERE, WHERE WHATEVER IT GO RIGHT TO YOUR CITY PHONE OR WHATEVER DIRECTLY TO YOU. THIS IS A SERVICE THAT WE OFFER THAT YOU DON'T, YOU KNOW, WHATEVER, I DON'T KNOW, BUT PEOPLE CHECK THEIR TEXTS. AND SO I THINK, YOU KNOW, SOMETIMES A TEXT GOING OUT IS A REMINDER THAT THEY DID, YOU KNOW. YEAH, YEAH. DID YOU KNOW? I MEAN, THE, THE CHALLENGE YOU ALWAYS HAVE WITH HEALTH CARE IN GENERAL IS MOST PEOPLE DON'T REALIZE WHAT'S THERE UNTIL THEY NEED IT. AND THEN WHEN THEY NEED IT, THEY DON'T REALIZE WHAT'S THERE. 
          BECAUSE, YOU KNOW, IT'S A COMPLICATED SYSTEM JUST IN GENERAL. AND SO YOU HAVE TO GET IN FRONT OF PEOPLE A LOT. SO TO YOUR POINT, SO ALSO WE COULD GO OUT, YOU SAID PEOPLE CHECK THEIR TEXTS, THEY CHECK THEIR CHECKS. ALSO GO OUT WITH YOUR CHECK OR WITH YOUR STATEMENT. 
          GOOD IDEA. YEAH. I JUST I KNOW THAT IN THE PRIVATE SECTOR, IN THE BUSINESS SECTOR, I KNOW THE BEST THAT WE CAN GET ARE FOR MY COMPANY. AND I SPEAK FOR PROBABLY A LOT OF SMALL BUSINESSES. I MEAN, WE'RE LOOKING AT $900 TO GO TO THE EMERGENCY ROOM AND WE THE BEST WE CAN DO IS A $6,000 DEDUCTIBLE WITH A $12,000 FAMILY. SO THIS IS INCREDIBLE INSURANCE. IT IT REALLY IS. AND I DON'T KNOW IF, IF WE, THE PEOPLE IN THE CITY REALIZE WHAT KIND OF A POLICY THEY'RE GETTING HERE AND HOW HOW TERRIBLE IT IS IN THE PRIVATE SECTOR. YEAH. AND, YOU KNOW, KIND OF GOING BACK TO YOUR POINT, YOU KNOW, LOOKING AT THOSE DEDUCTIBLE INCREASES, EVEN A NOMINAL INCREASE OF $250. YOU KNOW, IT'S NOT A LOT ON THE INDIVIDUAL PERSON CERTAINLY DOES SAVE THE CITY SOME DOLLARS. BUT YOU'RE CORRECT. WHEN WE'RE LOOKING AT BENCHMARK, WHEN IT COMES TO DEDUCTIBLES, YOU'RE CERTAINLY ON THE LOW END WHEN IT COMES TO WHAT WHAT THE MARKET LOOKS LIKE, AND NOT JUST THE MARKET, BECAUSE I ONLY WORK WITH MUNICIPALITIES. AND SO FOR ME, MY BOOK OF BUSINESS IS A LITTLE BIT DIFFERENT THAN THE PRIVATE SECTOR, BECAUSE MUNICIPALITIES TYPICALLY HAVE RICHER BENEFITS THAN PRIVATE SECTOR EMPLOYERS. SO EVEN WITH THE MUNICIPALITIES, I HAVE A COUPLE THAT STILL HAVE $500 DEDUCTIBLES, BUT MOST OF THEM ARE SITTING AROUND. THAT $1,500 RANGE WOULD BE PRETTY FAIR FOR A STANDARD PPO PLAN. SO $1,000 IS A LITTLE LOW, BUT YOU CAN STAIR STEP INTO IT IF YOU 
          [01:40:05]
WANTED TO. THERE'S THERE'S OPTIONS, CERTAINLY WHEN IT COMES TO THAT. THE OTHER THING, THERE'S SOME COUNCIL CONCERNS RAISED A COUPLE YEARS AGO. SO I WANTED TO TALK THROUGH A COUPLE OF THINGS ON THIS. SO THIS IS YEAR OVER YEAR, PER MEMBER PER MONTH SPENDS. AND SO BASICALLY WE USE A PER MEMBER PER MONTH TO NORMALIZE IT. AND ONE OF THE THINGS I WANT TO POINT OUT IS PLAN YEAR 2025. THE PLAN PAID $644 PER MEMBER PER MONTH. AND BOOK OF BUSINESS BENCHMARK FOR BLUE CROSS BLUE SHIELD WAS SITTING AROUND 463. THAT IS REALLY, TRULY BECAUSE OF HIGH COST CLAIMANTS. THAT IS NOT NECESSARILY BECAUSE YOUR EMPLOYEES WERE UTILIZING. THERE IS SOME SOME UTILIZATION PATTERNS AND THAT OFFSETS THAT. BUT HIGH COST CLAIMANTS IS TRULY WHAT HAPPENED THERE. BUT THE OTHER THING I WANT TO POINT OUT IS THE PLAN PERCENTAGE RIGHT THERE WHERE IT SAYS 88.1% ON THE PLAN YEAR 2025. THAT IS WHAT THE PLAN PAYS VERSUS WHAT WHAT THE PLAN PAYS VERSUS WHAT EMPLOYEES PAY. USUALLY WE SEE THAT MORE AROUND 85%. AND SO YOUR PLAN IS A LITTLE BIT RICHER JUST IN GENERAL, THAT GOES BACK DOWN TO THAT $1,000 DEDUCTIBLE. SO TO OFFSET A LITTLE BIT, YOU KNOW, IF YOU RAISE THAT DEDUCTIBLE, IT'S NOT NECESSARILY KEEPING OUT OUT OF LINE WITH THE MARKET WHEN IT COMES TO THAT. SO GENERALLY SPEAKING, FOR MOST PLANS, YOU WANT TO SEE AN 8515 SPLIT. THE PLAN PICKS UP 85%. THE MEMBER PICKS UP THE 15. THE OTHER THING I WANTED TO POINT OUT, THIS GOES BACK TO THAT EMERGENCY ROOMS OR EMERGENCY ROOM STATS. THERE'S A COUPLE OF THINGS ON HERE. SO WE NORMALIZE THIS OUT FOR EMPLOYEE NUMBER OF VISITS, ER VISITS PER 1000 MEMBERS. AND THAT'S JUST BECAUSE BOOK OF BUSINESS FOR BLUE CROSS BLUE SHIELD. THAT'S THE BEST WAY FOR THEM TO NORMALIZE THAT. YOUR PER 1000 IS ALMOST 300 WHERE THEIR BOOK OF BUSINESS IS 240. SO YOUR FOLKS DO UTILIZE THE ER, THERE'S A COUPLE PIECES ON HERE. THE YOU HAVE INCREASED UTILIZATION FOR NON-EMERGENCY CARE. AND THEN YOU ALSO HAVE LARGER CLAIMS WITH MORE COMPLEX CARE. SO THAT GOES BACK TO YOUR HIGH COST CLAIMANTS. WE CAN'T IMPACT THOSE. IF I HAVE A BLOOD CONDITION AND I HAVE TO GO TO THE EMERGENCY ROOM OR A HEART ATTACK, THAT'S WHAT THAT'S WHAT IT'S FOR, WHAT WE'RE TRYING TO OFFSET FOR IS FOR THOSE PEOPLE THAT ARE GOING IN FOR NON-EMERGENCY SITUATIONS. AND SO THAT'S WHAT WE'RE REALLY LOOKING TO BECAUSE AT ALMOST 300 PER 1000 VERSUS UNDER TWO, 50 PER 1000 IN THE BOOK OF BUSINESS, YOUR FOLKS ARE UTILIZING THE EMERGENCY ROOM MORE THAN THEY NEED TO EMERGENCY ROOM. DOES THIS INCLUDE LIKE THE EMERGENCY CLINICS THAT THEY HAVE AROUND? SO IT DEPENDS. IT DEPENDS ON THE CLINIC. SO SOME OF THEM IT DEPENDS ON THE WAY THAT THEY HAVE IT. SO SOME OF THEM WILL SAY URGENT CARE. AND THEN NEXT TO IT WILL HAVE A DOOR THAT SAYS EMERGENCY. IF YOU WALK THROUGH THAT EMERGENCY ROOM DOOR, IT PAYS AS THOUGH IT'S AN EMERGENCY ROOM. IF YOU GO AFTER CERTAIN HOURS, IT PAYS AS THOSE EMERGENCY ROOMS, THOSE FREESTANDING EMERGENCY ROOMS WILL PAY. JUST LIKE IF YOU GO TO THE HOSPITAL EMERGENCY ROOM, THE PLAN WILL PAY THAT JUST LIKE SO. THEY CAN BE INCREDIBLY EXPENSIVE. WE WOULD RECOMMEND PEOPLE NOT UTILIZING THOSE IF THEY CAN. BUT AGAIN, MY ARM FALLS OFF. I'M GOING TO THE EMERGENCY ROOM. I'M HAVING A HEART ATTACK. I'M GOING TO THE EMERGENCY ROOM. BUT YOUR KID HAS AN EAR INFECTION. YOU PROBABLY CAN USE TELEMEDICINE, AND IT'S AGAIN, MORE CONVENIENT FOR YOU AS A MEMBER AND ALSO EASIER JUST IN GENERAL ON THE PLAN. IF THEY GO IN THAT URGENT CARE DOOR, THOUGH, THAT'S A LOT CHEAPER THAN GOING INTO EMERGENCY ROOM. YES. ISN'T IT? YES, BUT IT DEPENDS ON WHAT TIME OF DAY YOU GO. SO SOME OF THOSE URGENT CARE FACILITIES, AFTER A CERTAIN HOUR WILL SWITCH OVER AUTOMATICALLY TO PAYMENT STRUCTURE AS AN EMERGENCY ROOM. SO IT'S IT DEPENDS ON THE, THE, THE PARTICULAR FACILITY. THANK YOU. COUNCILMAN. OKAY. PREVENTIVE CARE. A COUPLE THINGS ON THIS OR PROFESSIONAL SERVICES. A COUPLE THINGS ON THIS. SO YOU CAN SEE YOUR PROFESSIONAL SERVICES. PRIMARY CARE USE HAS DECREASED. SO VISITS PER 1000 YOU'RE AROUND 12,500. SO YOUR FOLKS ARE GOING TO THE DOCTOR. SO THAT'S THAT'S A GOOD THING. 
          YOU'RE ABOVE BENCHMARK. YOU'RE PAID PER MEMBER PER MONTH IS HIGHER THAN BENCHMARK GOES BACK DOWN TO WHEN WE'RE LOOKING AT PROFESSIONAL SERVICES, HIGH COST CLAIMANTS. YOU GO TO A SPECIALIST, THOSE ARE GOING TO BE MORE EXPENSIVE IN GENERAL. BUT THE COST OF VISITS HAVE INCREASED IN GENERAL. I THINK THAT GOES BACK AGAIN TO THE COMPLEXITY OF SOME OF THE CARE THAT YOU'VE HAD. AND THEN YOUR SERVICES PER THOUSAND HAVE IS HIGHER THAN BENCHMARK. BUT, YOU KNOW, AGAIN, THAT THAT GOES BACK TO SEVERAL DIFFERENT FACTORS. WHEN WE LOOK AT THE PAID PER SERVICE, YOU CAN SEE THE PAID PER SERVICE. THAT IS WHAT A MEMBER PAYS PER SERVICE. 
          AND YOU CAN SEE THAT IS BELOW BENCHMARK. SO BENCHMARK ON AVERAGE IS $86. WE'RE SITTING AT $68 PAID PER SERVICE. SO AGAIN THE PLAN IS PICKING UP MORE THAN MEMBERS ARE WHEN IT COMES TO BLUE CROSS BLUE SHIELD BOOK OF BUSINESS, WHICH YOU KNOW, IS A SIGNIFICANTLY LARGE BOOK OF BUSINESS. AND SO WHEN WE'RE LOOKING AT THAT, THAT'S SOMETHING THAT WE CAN EXPLORE. 
          EVEN WITH MY MUNICIPALITY BOOK OF BUSINESS, IT'S YOU'RE STILL YOUR PLAN PICKS UP MORE THAN WHAT A STANDARD MUNICIPALITY BOOK OF BUSINESS WOULD PICK UP. PREVENTIVE CARE. THIS IS 
          [01:45:03]
ACTUALLY A GOOD NEWS ONE IF YOU LOOK AT YOUR BENCHMARK FOR CERVICAL CANCER, COLORECTAL CANCER SCREENINGS AND MAMMOGRAMS. SO MAMMOGRAMS AND CERVICAL CANCERS, YOU CAN SEE WE'RE ABOVE BENCHMARK WHEN THAT WHEN ON THOSE, WHICH IS GREAT. I LOVE SEEING THAT THE COLON CANCER SCREENINGS A LITTLE BIT BELOW BENCHMARK, BUT I'VE SEEN ONES THAT ARE IN THE SINGLE DIGITS AND SO NOT AS CONCERNED, WOULD LOVE TO PROMOTE THAT MORE BECAUSE OBVIOUSLY WHEN IT COMES TO SCREENINGS, IF WE CAN CATCH A CANCER EARLY AND A STAGE ONE, STAGE TWO, YES, IT SAVES THE PLAN MONEY, BUT QUALITY OF LIFE FOR AN INDIVIDUAL CHANGES SIGNIFICANTLY, LONGEVITY FOR THAT INDIVIDUAL CHANGES SIGNIFICANTLY. SO SCREENINGS ARE IMPORTANT. YOUR ANNUAL PHYSICALS ARE BELOW BENCHMARK, BUT THAT IS NOT SURPRISING. YOU HAVE FIRE AND I BELIEVE POLICE MIGHT HAVE THEIR OWN PHYSICALS THAT THEY DO. BUT I KNOW FIRE DOES. AND SO THAT WILL USUALLY OFFSET OR LOWER YOUR ANNUAL PHYSICAL PERCENTAGE BELOW BENCHMARK. IN GENERAL, YOUR CHILDHOOD IMMUNIZATIONS. WELL, INFANT CARE, WELL-CHILD CARE, AND THEN THE SCHOOL AGE CHILD CARE. SOME OF THOSE GO UP OR DOWN A LITTLE BIT. SCHOOL AGE, CHILD CARE. THERE MAY BE PROGRAMS THAT YOU HAVE LOCALLY THAT PEOPLE CAN JUST TAKE THEIR KID FOR A SPORTS PHYSICAL OR SOMETHING LIKE THAT. THAT'S A FREE THING THAT THEY DON'T NECESSARILY GO TO THEIR PCP. 
          FOR THOSE BEING A LITTLE BIT LOWER THAN BENCHMARK DOESN'T USUALLY CONCERN ME TOO MUCH. IF THE IMMUNIZATIONS ARE PRETTY MUCH IN LINE WITH THE BOOK OF BUSINESS AND THEN YOU'RE, WELL, INFANT CARE IS CLOSE TO BOOK OF BUSINESS. DEFINITELY WOULD WANT TO PROMOTE A LITTLE BIT MORE OF MAKING SURE PEOPLE ARE GETTING THAT CARE DONE. CURRENT DRIVERS OF SPEND. SO A FEW THINGS ON HERE. I DID WANT TO POINT OUT THAT ONE OF THE THINGS THAT YOU MIGHT NOTICE IS BLOOD. YOU CAN SEE THAT IN 2024 VERSUS 2025, A SIGNIFICANT INCREASE, AGAIN, THAT GOES BACK DOWN TO HIGH COST CLAIMS. SO YOU HAVE A HIGH COST CLAIMANT OR TWO THAT INCREASES YOUR PEPM SPEND FROM $6.88 TO $65.49. SO A VERY SIGNIFICANT INCREASE. THAT IS NOT SOMETHING YOU CAN CHANGE WITH A CLINIC MODEL OR SOMETHING LIKE THAT. IT'S SOMETIMES YOU JUST HAVE THOSE HITS THAT HAPPEN BASED OFF OF, YOU KNOW, HOW YOUR CLAIMS ARE GOING. THE OTHER THING I LIKE TO POINT OUT IS HEALTH STATUS. THIS ONE YOU WANT TO SEE ABOVE BENCHMARK THAT'S KIND OF ABOUT ABOUT HALFWAY DOWN. IT'S A GRAY BOX ABOUT HALFWAY DOWN. HEALTH STATUS IS BASICALLY PEOPLE GOING TO THE DOCTOR. SO WHEN YOU HAVE PEOPLE GOING TO THE DOCTOR TO GET THEIR ANNUAL PHYSICALS TO CHECK UP CHECKUPS, THOSE TYPES OF THINGS, WE WANT TO SEE THAT A LITTLE BIT HIGHER WHEN IT COMES TO HEALTH STATUS. BUT OVERALL, WHEN WE'RE LOOKING AT THIS, YOU CAN SEE THAT SOME OF THESE ARE HIGHER THAN BOOK OF BUSINESS. AND, YOU KNOW, INJURY AND POISONING IS ANOTHER ONE THAT I'D LIKE TO POINT OUT. SO YOU'RE PAYING LAST YEAR WAS 47, ALMOST $48. BOOK OF BUSINESS IS 33 HIGH COST CLAIMANTS. SO NOT A WHOLE LOT WE CAN DO TO IMPACT THOSE SPECIFIC THINGS. BUT WHEN WE COME TO CANCERS AND MUSCULOSKELETAL AND THOSE TYPES OF THINGS, WE CAN IMPACT THOSE BY DOING PROMOTIONS, MAKING SURE THE CARRIER IS GETTING INFORMATION OUT TO PEOPLE, PEOPLE GETTING THEIR ANNUAL PHYSICALS, SEEING THEIR DOCTOR ON A REGULAR BASIS. AND I THINK THAT'S ALL I HAVE. SO IS THERE ANYTHING SPECIFIC THAT YOU WANT ME TO ADDRESS, TALK THROUGH THAT WOULD BE HELPFUL FOR THIS CONVERSATION? I DON'T BELIEVE SO. THANK YOU VERY MUCH. OKAY, PERFECT. THANK YOU. THANK YOU. JULIE. OKAY. NEXT ITEM IS TO AMY SCHMIDT. OUR BUDGET OFFICER WILL DISCUSS THE PROPOSED DRAFT BUDGET. AND YOU SHOULD HAVE A COPY HARD COPY OF OF MISS SCHMIDT'S PRESENTATION IN FRONT OF YOU. YES, SIR. IT'S THE SAME THING THAT SHE'LL BE PRESENTING RIGHT NOW. 
          ALL RIGHT, NOW THE FUN BEGINS. GOOD MORNING, MAYOR, CITY COUNCIL, I WOULD LIKE TO START OFF BY SAYING LIKE LOCAL MANY LOCAL GOVERNMENTS ACROSS THE COUNTRY, OUR CITY IS STILL CONTINUING TO EXPERIENCE INFLATION, RISING OPERATING COSTS, INCREASING EMPLOYEE HEALTH CARE EXPENSES, CONTRACTUAL WAGE OBLIGATIONS AND MARKET ADJUSTMENTS, THE COST OF GOODS AND SERVICES THE CITY RELIES UPON TO DELIVER DAILY OPERATIONS HAS ALSO INCREASED. IN ADDITION TO THESE COST PRESSURES, THE GENERAL FUND CONTINUES TO SUPPORT TRANSFERS THAT ARE CRITICAL TO MAINTAINING CITY SERVICES, INFRASTRUCTURE INVESTMENTS AND LONG TERM OPERATIONAL NEEDS. WHILE THESE TRANSFERS ARE NECESSARY, THE FEATHER LIMITS OF FLEXIBILITY AVAILABLE WITHIN OUR OPERATING BUDGET. I WOULD ALSO LIKE TO TAKE THE TIME TO EXPRESS MY SINCERE APPRECIATION TO THE CITY MANAGER, DEPARTMENT DIRECTORS AND STAFF FOR YOUR COLLABORATION, DILIGENCE, AND THOUGHTFUL INPUT THROUGHOUT THIS BUDGET PROCESS. WE WOULD 
          [01:50:02]
NOT BE ABLE TO DO THIS WITHOUT EACH AND EVERY SINGLE ONE OF YOU. ALL RIGHT, SO TODAY WE WILL WALK THROUGH THE KEY COMPONENTS OF THE BUDGET PROCESS, DISCUSSING THE FINANCIAL CHALLENGES AND ASSUMPTIONS THAT INFLUENCE OUR RECOMMENDATIONS AND HIGHLIGHT THE STRATEGIES THAT WE HAVE IMPLEMENTED TO ADDRESS CURRENT AND FUTURE NEEDS. ALL RIGHT. SO WE'RE GOING TO START OUT WITH THE BUDGET CALENDAR. SO AS YOU'LL SEE, WE'RE JUST GOING TO KIND OF HIGHLIGHT THE NEXT IMPORTANT DATES. AUGUST 18TH WILL BE THE NEXT IMPORTANT DATE WHERE THE CITY MANAGER WILL DO THE PRESENTATION OF THE BUDGET TO THE CITY COUNCIL. WE DID CHANGE THAT FROM THE FOURTH TO THE 18TH. SO DO PLEASE NOTE THAT WE WILL BE GETTING THAT OUT TO YOUR CALENDARS AS WELL. ON THAT SAME DAY, COUNCIL WILL. RESOLUTIONS OF THE PROPOSED BUDGET 20 FY 27 BUDGET AND THE CIP. ALSO ON THAT DAY, WE'LL DO RECORD VOTE ON PROPOSED TAX RATE, SCHEDULE, PUBLIC HEARINGS ON THE BUDGET AND THE TAX RATE AND THE CAPITAL PROGRAM. ON THE 20TH. WE WILL PUT THE NOTICES FOR THE TAX RATE PUBLISHED IN THE NEWSPAPERS AND ON THE WEBSITE. THE 21ST. WE WILL DO THE NOTICE OF THE PROPERTY, THE PROPERTY TAX ON THE CITY WEBSITE, AND THEN THE NEXT DATE WILL BE SEPTEMBER THE 8TH, WHERE WE'LL HAVE THE PUBLIC HEARING ON THE BUDGET TAX RATE AND THE ORDINANCE ADOPTING BUDGET AND ACCEPTING THE APPRAISED ROLE. AND THEN ON SEPTEMBER THE 22ND WILL BE THE ORDINANCE ADOPTING TAX RATE AND RATIFYING THE PROPERTY TAX. ALL RIGHT. SO JUST SOME IMPORTANT DATES TO REMEMBER. NEXT, WE'LL GO INTO AN OVERVIEW OF OUR PERSONNEL. YOU PROBABLY REMEMBER THIS SLIDE FROM THE LAST PRESENTATION. JUST KIND OF REMINDER THAT PERSONNEL REPRESENTS ABOUT 71% OF OUR TOTAL GENERAL FUND BUDGET, WHICH SIGNIFICANTLY AFFECTS THE FINANCIAL STABILITY. OKAY. SO WITH THIS CHART, YOU'LL SEE EACH YEAR OUR TOTAL FTE AND THAT IS TOTAL FULL TIME EQUIVALENTS. AND 25. WE STARTED ADDING PART TIME INTO THAT TOTAL. SO YOU'LL SEE WHY THAT THAT'LL BE WHY THAT INCREASE IS THERE. AND THE MIDDLE IS OUR ADDED POSITIONS THAT WE DID EACH YEAR. SO YOU'LL SEE IN 24 WE ADDED 13 NEW POSITIONS, 25 FISCAL YEAR 25 WE ADDED 15 FY 26, WE ADDED 11. AND WE'RE PROPOSING FY 27 TO 0 CURRENTLY. THIS IS A PIE CHART THAT JUST SHOWS OVERALL PERSONNEL WITHIN THE GENERAL FUND BY DEPARTMENT. JUST TO KIND OF HIGHLIGHT HOW MUCH EACH DEPARTMENT MAKES UP THE MAKES UP OF THE PERSONNEL, THE GENERAL FUND, AS YOU CAN SEE, OBVIOUSLY POLICE AND FIRE WAGES AND BENEFITS ARE ESTIMATED AROUND 62% OF THE TOTAL GENERAL FUND OPERATING BUDGET. ALL RIGHT. SO LET'S START LOOKING AT NUMBERS. SO HERE ARE THE GENERAL FUND NUMBERS AS WE SET. CURRENTLY THESE ARE ALL PROJECTIONS FY 26 PROJECTIONS THAT WE HAVE GOTTEN FROM EACH DEPARTMENT ON EXPENSES. THESE ARE REVENUE PROJECTIONS. THIS IS ALSO WHAT WE ARE PROJECTING FOR FY 27 TO THIS POINT. SO KEEP IN MIND AS I GO THROUGH ALL THESE NUMBERS, WE ARE STILL LOTS OF WORK TO BE HAD, LOTS OF THINGS TO STILL WORK THROUGH, BUT LET ME TALK YOU THROUGH THESE NUMBERS. SO INCLUDED IN THESE NUMBERS, YOU HAVE YOUR POLICE WAGE INCREASE OF 5% FOR FY 27, WHICH IS APPROXIMATELY $1.2 MILLION. YOU HAVE YOUR FIRE WAGE INCREASE OF 3%, WHICH IS APPROXIMATELY $727,000. YOU HAVE A CIVILIAN COLA INCREASE OF 2%, WHICH IS ABOUT $800,000. YOU HAVE ADDITIONAL GENERAL FUND TRANSFER OF THE 1.3 TO TRANSIT FOR FY 26. FY 27 TRANSIT. TRANSIT TRANSFER WILL BE 1.9 ADDITIONAL GENERAL FUND TRANSFER THAT WE HAD TO MAKE OF 1.5 TO EMPLOYEE BENEFITS AND FY 26, AND THAT IS ALSO REFLECTED IN FY 27 NUMBERS. CAPITAL RESERVE TRANSFER IS SITTING AT 2.9 AT THIS POINT. IN THIS IN THIS SCENARIO, FOR FY 26 AND 27, YOUR FIRE PENSION INCREASE TO 23% AND FY 27 IT WAS AT. IT WAS AT 20 AT 22% IN FY 2226. I'M SORRY, YOU HAVE YOUR TERS REFLECTED IN FY 26 AND FY 27. SO THAT'S HERS. REALLOCATION COMES OUT OF THAT PROPERTY TAX NUMBER ON THE. ALSO ON THE REVENUE SIDE, WE HAVE OUR PROPERTY TAX HERE SET AT CURRENT RATE. WHICH IS THE 0.659663 AT A 97% COLLECTION RATE. OKAY. SO AS YOU CAN SEE, YOUR TOTAL REVENUES FOR FY 26 IS PROJECTED AT 170 72, 352. YOUR EXPENSES IS 178. SO THAT LEAVES US WITH THAT ENDING FUND BALANCE OF 34,000,880 $80, FIVE 505 FOR 19% FUND BALANCE MOVING 
          [01:55:04]
OVER INTO 27. AS YOU CAN SEE, OUR TOTAL REVENUE PROJECTION AT THIS POINT IS 172,000 798, AND YOUR EXPENSES ARE 181,175, LEAVING THAT FUND BALANCE AT THE 28000 AT A 15% FUND BALANCE. 
          YES, MA'AM. 20%. SO TELL ME. 26 AGAIN, IT'S GOING TO BE AT WHAT, PERCENT, 19%? AND THEN 2715. 
          AND COUNCILMAN TURNER, JUST JUST A. JUST A QUESTION. I JUST WANT WITH STAFF, WHEN WE NEGOTIATE THINGS AND CONTRACTS, I KNOW WE PUT A NEGOTIATION TEAM TOGETHER AND I KNOW THE CITY OF BEAUMONT OR THE COUNCIL, WE DON'T GET INTO THE DAY TO DAY OPERATIONS AND DO THE NEGOTIATION. BUT, YOU KNOW, JUST LOOKING AT THESE NUMBERS, CAN WE OR DO WE LOOK AT A FINANCIAL PROJECTION OF WHAT WE CAN AFFORD PRIOR TO INCREASES BEING RECOMMENDED TO US? BECAUSE I'M LOOKING AT THE NUMBERS AND I UNDERSTAND EVEN WITH THE FUND BALANCE, I WANT COUNCIL TO UNDERSTAND THAT THE 20% IS SOMETHING THAT COUNCIL SAID. WE WEREN'T BOUND TO IT IN THE PAST. IT WAS LESS THAN 20%, BUT WE RAISED IT TO 20% BECAUSE WE WERE DOING FINANCIALLY WELL. 
          SO THAT'S NOT SOMETHING WE'RE BOUND TO. I WANT TO MAKE THAT CLEAR, BUT I ALSO WANT TO TALK ABOUT THE RECOMMENDATIONS THAT COME TO US BECAUSE WE'RE NOT IN DAY TO DAY OPERATIONS. AND WHEN WE SEE THESE NUMBERS AND WE GET THESE RECOMMENDATIONS BROUGHT TO US NOW, IT'S KIND OF LIKE STAFF HAS VETTED IT, AND THIS IS WHAT WE CAN AFFORD TO DO. AND IT'S KIND OF SEEMING LIKE WHAT WE'RE BEING RECOMMENDED WE CAN'T AFFORD TO DO. RIGHT. SO TO ANSWER YOUR QUESTION, THIS IS THE FUND, YOU KNOW, SO COUNCIL MAKES DECISION BASICALLY AT THE FUND LEVEL, THE DAY TO DAY LINE ITEM WITHIN EACH FUND, OF COURSE, IS DISTRIBUTED ACROSS THE DEPARTMENTS OF THE CITY. AND SO WHEN WE BRING A CONTRACT TO COUNCIL, IT WOULD FALL WITHIN BASICALLY WOULD FALL WITHIN THE APPROVED BUDGET. SO IN OTHER WORDS. THAT'S WHAT WE'RE GOING TO BRING FORTH, THE THINGS THAT MISS SCHMIDT WILL TALK ABOUT TODAY. IN OTHER WORDS, WHY ARE WE OVER? THOSE ARE THINGS THAT AREN'T NECESSARILY CONTRACTED. SO LIKE IN OUR PRIOR PRESENTATION, ONE OF THE BIG HITS WAS OUR EMPLOYEE BENEFITS FUND. SO THE QUESTION IS, WELL, WHY? WELL, SHE EXPLAINED, WE HAVE SOME VERY HIGH LEVEL CLAIMANTS THAT HIT THE FUND THAT ARE OUT OF OUR CONTROL. SO. BUT TO ANSWER YOUR QUESTION, WHEN WE BRING YOU SOMETHING, IT'S GOING TO BE WITHIN THE APPROVED BUDGET, OR WE'RE GOING TO BRING YOU A BUDGET AMENDMENT. 
          AND AND I UNDERSTAND THAT. BUT EVEN SOME OF OUR INCREASES IN WAGES AND BENEFITS, AND I KNOW WE'RE SAYING WITHIN APPROVED BUDGET, BUT IT'S IT'S SOMEWHAT LOOKING AT LOOKING LIKE WHEN YOU LOOK AT 20% GOING TO 19, GOING TO 15, THAT WE'RE GIVING OUR INCREASES THAT WE CAN'T AFFORD TO GIVE OUT, IN MY OPINION. AND THIS IS WHY I STRUGGLE, BECAUSE WE'RE CONSISTENTLY TOLD WE CAN'T BE IN DAY TO DAY OPERATIONS, BUT WE ARE BROUGHT THE FINAL NUMBER AND ASKED TO APPROVE IT. YEAH. THE DAY TO DAY WOULD REFLECT THE APPROVED BUDGET, AND WE DON'T DO ANYTHING WITHOUT COUNCIL APPROVAL, GIVING US THE GO AHEAD IN THE NEXT FISCAL YEAR TO SAY THIS IS YOUR BUDGET TO THE BEST WE KNOW, BUT WE CAN'T SPEND A PENNY WITHOUT COUNCIL'S APPROVAL. SO BUT AGAIN, IT'S KIND OF LIKE YOU RELY ON YOUR EXPERTS TO GIVE YOU THE NUMBERS AND THIS IS THE BEST GOING FORWARD. AND I KIND OF FEEL LIKE WE KIND OF MAYBE NEED TO BE MORE CONSERVATIVE WHEN WE'RE DOING THESE NEGOTIATIONS TO MAKE SURE SOMETHING WE CAN CONSISTENTLY MAINTAIN WITH OUR FUND BALANCE GOING. SO JUST MY OPINION AND MY EXPERIENCE SINCE I'VE BEEN ON COUNCIL. YES, SIR. AND REAL QUICK, LET ME POINT OUT. SO AMY JUST LISTED SOME ASSUMPTIONS ON THIS PROPOSED. AND AS WE GO THROUGH THE BUDGET, WE'LL HAVE SOME ADDITIONAL ALTERNATIVES WITH A DIFFERENT DIFFERENT ASSUMPTIONS. BUT I JUST WANTED TO POINT THAT OUT BECAUSE IT'S KIND OF TOUGH WHEN YOU TAKE, LET'S JUST SAY, PUBLIC SAFETY, FOR EXAMPLE, POLITICALLY, YOU BRING US THIS NUMBER AND SAY, WE CAN AFFORD TO DO THIS. AND WHAT COUNCIL. IT LOOKS HORRIBLE FOR US TO SAY, NO, WE CAN'T AFFORD THIS. AND NOW WE LOOK AT THESE NUMBERS IN THE IN THE LONG HAUL. AND I KNOW SOME NUMBERS AREN'T CONTROLLABLE, BUT THE PERCENTAGES AND INCREASES WE HAVE BROUGHT THAT THAT IS SOMETHING WE CAN CONTROL AND NEGOTIATIONS. AND SO WE TALKED ABOUT, YOU KNOW, SOME OF THE REVENUE INCREASE OR EXCUSE ME, EXPENDITURE INCREASES, OF COURSE, AS MISS SCHMIDT MENTIONED, ARE RELATED 
          [02:00:03]
TO INCREASE PAY FOR PUBLIC SAFETY. OF COURSE, THOSE ARE ALREADY OBLIGATED THROUGH AGREEMENTS THAT HAVE ALREADY BEEN EXECUTED. SO SHE'LL COVER THE FUTURE YEARS AS TO WHAT THAT MEANS. THE DISCRETIONARY AT THIS POINT FOR THE FY 27 BUDGET, AS SHE MENTIONED, IS CIVILIANS. SO THAT'S THE DISCRETION WE HAVE RIGHT NOW. SHE'S GOT IN THESE NUMBERS PROPOSED 2%. BUT AGAIN, THAT'S THAT'S WHAT'S UP FOR DISCUSSION IN TERMS OF AS WE FINALIZE THAT. 
          BUT SO THIS CURRENT THIS THESE CURRENT NUMBERS RIGHT HERE ARE AS WE SIT RIGHT NOW, EVERYTHING THAT I JUST LISTED PRETTY MUCH HAS TO HAPPEN DUE TO CONTRACTS AND DUE TO SUPPORTING TRANSFERS TO OTHER FUNDS, MINUS THE CIVILIAN 2%. THAT'S THE ONLY THING THAT WE CAN TECHNICALLY TAKE OUT OF THESE NUMBERS THAT WOULD MAKE IT A LITTLE BETTER. BUT THESE ARE TRUE. IF WE DO NOTHING ELSE. THIS IS WHAT WE HAVE TO DO FOR FY 27. YES, MA'AM, AND I UNDERSTAND THAT. 
          BUT THE THE, THE CONTRACTS THAT WE ARE OBLIGATED TO ARE NEGOTIATED BY STAFF AND IS BROUGHT TO US. AND, AND NOW WE'RE IN A POSITION WHERE WE'RE HAVING TO OPERATE WITHIN THAT. 
          I DON'T THINK NOBODY UP HERE WOULD WANT TO NOT GIVE AN INCREASE TO PUBLIC SAFETY OR STAFF. AND WE'RE DEPENDING ON THE NUMBERS BEING AS TIGHT AS POSSIBLE AND WHAT WE CAN AFFORD. 
          WHEN YOU GUYS BRING IT TO US. RIGHT. I AGREE WITH YOU AND I AGREE WITH COUNCILMAN TURNER. I THINK SOME OF THE INCREASES IN WAGES, SALARIES, BENEFITS NEED TO KIND OF BE IN LINE WITH WHATEVER THE STATE AVERAGE IS. AND IF I UNDERSTAND CORRECTLY, Y'ALL CORRECT ME, WE'RE ABOVE STATE AVERAGE ON SOME OF THESE WAGE INCREASES AND BENEFITS. IS THAT CORRECT? SO AS IT RELATES TO YOUR FIRE PENSION FUND, WE DID NEGOTIATION. WE WERE NOT ABOVE STATE AVERAGE. AND AS A MATTER OF FACT, THAT'S WHY WE THE THE PENSION BOARD FOR THE FIREFIGHTERS WHEN WE WENT TO AUSTIN TOGETHER, CHALLENGED US TO KIND OF GET IN LINE BEFORE THEY HAD TO TAKE OVER THE FUND. 
          AND SO, AND THIS IS THIS HAS BEEN AN ONGOING THING. THE FIRE PENSION BOARD REEVALUATED THEIR BENEFITS AND THE CITY, AND THEY INCREASED THEIR CONTRIBUTIONS IN THE CITY, COMMITTED TO INCREASING OUR CONTRIBUTIONS OVER A PERIOD OF TIME TO GET TO THE AVERAGE. SO IN SOME OF THAT, THEY SAID THAT OUR CONTRIBUTIONS ON THE CITY SIDE SHOULD HAVE BEEN SOMEWHERE CLOSER TO 25%. AND I THINK AT THE TIME WE WERE JUST LIKE AT 20. SO NOT ALL OF OUR CONTRIBUTIONS ARE OVER AS IT RELATES TO POLICE DURING THEIR CONTRACT NEGOTIATION, THEY PREVENTED PRESENTED DATA THAT SAID THAT THEIR SALARIES FOR FOR INCOMING AND I BELIEVE, SERGEANT, I'M LOOKING IN THE BACK FOR THEM TO KIND OF CONFIRM WAS BELOW THE STATE AVERAGE. AND SO THEY WERE THEIR FOCUS FOR THEIR CONTRACT FOR THE LAST TWO CONTRACT CYCLES HAS BEEN ON RECRUITMENT AND RETENTION AND GETTING THEM ABOVE THE STATE AVERAGE. SO INCREASING MORE GREAT ONES, BUT ALSO RETAINING THEM WHEN THEY PROMOTE UP TO THAT FIVE AND TWO YEAR RANGE, BECAUSE THAT'S WHERE THEY KIND OF SAID THAT IT TRAILED OFF AND THEY WERE NO LONGER AT THE STATE AVERAGE. SO THOSE ARE SOME OF THE DATA THAT KIND OF DO THAT. NOW AS IT RELATES TO OUR BENEFITS, I DO THINK THAT WE ARE IN LINE. I KNOW SHE SAID THAT WE WERE KIND OF UNDERPERFORMING SOME AREAS, BUT IN TERMS OF WHAT WE PAY ACROSS THE BOARD, I THINK OUR BENEFIT PACKAGES ARE IN LINE. I THINK TO A LARGER POINT, WHAT I'M SAYING IS THE AMOUNT OF MONEY THAT WE DEDICATE TO PUBLIC SAFETY IN TERMS OF STATE AVERAGE, WHERE DO WE FALL AS FAR AS HOW MUCH OF OUR BUDGET THAT THEY. REPRESENT STATE STATEWIDE? WHERE DO WE FALL IN A PROPORTION TO HOW MUCH OF THE BUDGET THEY REPRESENT? WHEN YOU SAY THEY PUBLIC SAFETY, PARTICULARLY FIRE AND POLICE, RIGHT. SO WE CAN GET THOSE BENCHMARKS FOR YOU. IN TERMS OF A TOTAL GENERAL FUND BUDGET, EVERY CITY IS DIFFERENT, BUT MAYBE A BETTER METRIC IS PER THOUSAND. OKAY. IN OTHER WORDS, PER THOUSAND. HOW MUCH IS PUBLIC SAFETY? I'D BE JUST INTERESTED TO KNOW STATEWIDE AVERAGES ON WHERE DO WE FALL WITH 62% OF THE BUDGET BEING, HOW DOES THAT LINE UP STATEWIDE? WE CAN GET YOU THAT. YES. OKAY. YES. COUNCILMAN CRENSHAW, THANK YOU. COUNCILWOMAN, THE 6.6 MILLION IN THAT WERE OVER BUDGET IN PROJECTED FOR 26, AND THE 8.4 MILLION THAT WERE OVER BUDGET FOR PROJECTED 27. THAT DOES NOT INCLUDE PLEASE TELL ME THE PROPOSED 3 MILLION A YEAR AND COST SAVINGS WITH THE TEMPORARY HIRING FREEZE. CAN YOU REPEAT. NOT THIS SCENARIO. NO, SIR. OKAY. SO ASSUMING THE HIRING FREEZE, WHICH I'M VERY 
          [02:05:02]
MUCH IN FAVOR OF, THAT THE CITY MANAGER IS IMPLEMENTED. THOSE NUMBERS END UP BEING ACCURATE. 
          WE'RE TALKING ABOUT 3 MILLION COMING OFF THE 6.6 AND 3 MILLION COMING OFF THE 8.4. AND WE'LL SHOW THAT IN IN THE NEXT SLIDE. I HAVE IT OKAY. IN FUTURE SLIDES. YEAH. I KNOW SOME OF THOSE NUMBERS THAT IF WE CAN WRITE DOWN SOME QUESTIONS, BECAUSE I THINK SOME OF THOSE QUESTIONS ARE GOING TO BE ANSWERED IN PROPOSAL THAT THEY'RE MAKING TODAY IN TERMS OF ADJUSTMENTS, IT'S NOT THAT THE QUESTIONS AREN'T VALID, IT'S JUST THAT I THINK THEY'RE GOING TO APPROACH. I THINK THEY'RE GOING TO ADDRESS SOME OF THOSE. CORRECT. ANYTHING ELSE FOR NOW. OKAY. SO NEXT YOUR THESE SLIDES WERE USED IN OUR LAST PRESENTATION. SO I'M JUST GOING TO BRIEFLY GO OVER THESE AGAIN, BUDGET CHALLENGES AND PAST PRACTICES THAT LED US TO THESE CURRENT THIS CURRENT SITUATION, THE CURRENT NUMBERS. SO AGAIN, YOU HAVE YOUR CONTRACTUAL BARGAINING AGREEMENTS WITH THE WAGE INCREASES FOR POLICE AND FIRE. 
          YOU HAVE YOUR FIRE PENSION INCREASE THAT WE HAVE DONE OVER SINCE 25. IT WAS AT 20%. AND THEN IN 27, IT'S GOING TO BE AT THE 23%. YOU HAVE YOUR THE ANNUAL VACANCY POSITIONS THAT WE'VE DONE FOR FOR FIRE THAT WE IMPLEMENTED THIS YEAR. THEN YOU ALSO HAVE YOUR CIVILIAN WAGE INCREASES AS A RESULT OF THE SALARY SURVEY THAT WE'VE DONE OVER THE PAST THREE YEARS THAT IS COMPLETED. AT THIS POINT, YOU HAVE YOUR CIVILIAN COST OF LIVING INCREASES THAT WE'VE ALSO DONE OVER THE PAST SEVERAL YEARS TRANSIT, COST OF LIVING. THEY HAD THEY GOT A 5% IN 26, A 3.5 AND 27. AND THEN YOU ALSO HAVE INCREASE IN OVERTIME DUE TO VACANCIES AND ADDITIONAL SERVICES. OUR EMPLOYEE HEALTH BENEFIT, THE HEALTH CLAIMS CONTINUE TO TREND UPWARD AND REQUIRING INCREASED GENERAL FUND SUPPORTS, EMPLOYEE BENEFITS FUND AND FY 26, WE HAD THAT ADDITIONAL $1.5 MILLION TRANSFER TO RESTORE THAT FUND BALANCE, TO HELP TRY TO RESTORE THAT FUND BALANCE. YOU ALSO HAVE THOSE HIGH CLAIMANT CLAIMS THAT WE'VE WE'VE DISCUSSED PREVIOUSLY IN FY 27. YOU HAVE THE ADDITIONAL LEGISLATIVE MANDATES OF THE 15,000 FOR THE CRITICAL ILLNESS POLICY AND FOR THE RETIRED FIRST RESPONDERS. AND THAT $200,000 FOR THE FIRE CANCER SCREENING THAT WE HAD TO IMPLEMENT AS WELL. THEN YOU HAVE YOUR ONGOING CAPITAL NEEDS, PARTICULARLY FLEET REPLACEMENT. AND PRIOR YEARS, FLEET WAS FUNDED BY OPERATING CASH IN FY 26. WE DECIDED TO DO THAT 3.1 TAX NOTE THAT WAS ISSUED TO KEEP BE ABLE TO KEEP US TO HAVE FLEET PURCHASES AND FY 26, THE GENERAL FUND TRANSFER TO CAPITAL RESERVE WAS BUDGETED AT 2.9. AT THIS POINT, IT WAS ONGOING. INFLATION CONTINUES TO DRIVE INCREASES OVER COST IN GOODS AND SERVICES ACROSS ALL DEPARTMENTS. VOTER APPROVAL RATE TAX RATE IS ALWAYS SUBJECT OF TOPIC. THE CITY IS ALSO ISSUED AN RFP FOR AN ERP SYSTEM THAT IS HIGHLY NEEDED TO REQUIRE, AND THAT'S GOING TO REQUIRE UPFRONT INVESTMENTS THROUGHOUT SEVERAL YEARS. IT WON'T BE A 1.7 COST ALL UP FRONT, IT WILL BE SEVERAL DIFFERENT PHASES. THE GENERAL FUND TRANSFERS CONTINUE TO GROW TO SUPPORT THOSE TO SUPPORT OTHER FUNDS. SO PROJECTIONS FOR 26 IS 14.8. CURRENT BUDGET CHALLENGES THAT WE'RE FACING. SO REVENUE UNCERTAINTY UNCERTAINTY. YOU HAVE THE REALLOCATION OF THE 1.7 PROPERTY TAX COLLECTION RATE AND FLUCTUATING FLUCTUATING ECONOMIC CONDITIONS. INFLATIONARY PRESSURES, INCLUDING COST OF GOODS, INCREASES IN COST OF GOODS, SERVICES AND CONTRACTS, INCREASED OPERATING EXPENSES, REDUCING AVAILABLE FUNDS FOR NEW INITIATIVES. AGAIN, WE HAVE THE PERSONNEL COSTS, WHICH IS RISING HEALTH CARE COSTS AFFECTING OUR EMPLOYEE BENEFITS FUND. AGAIN, THAT ADDITIONAL TRANSFER RECRUITMENT AND RETENTION CHALLENGES CAUSING INCREASES IN OVERTIME. AND THEN OUR CONTRACTOR WAGES AND CERTIFICATION INCREASES FOR SWORN PERSONNEL AND OUR COST OF LIVING ADJUSTMENTS FOR CIVILIANS. WE ALSO HAVE THOSE CAPITAL DEMANDS. WE HAVE AGING FACILITIES AND EQUIPMENT REQUIRING REPLACEMENT OR REPAIR. 
          WE HAVE LIMITED FUNDING FOR THOSE FOR THOSE MAJOR CAPITAL INVESTMENTS. GENERAL FUND TRANSFER OF 4.3 IS WHAT WE'RE PROPOSING FOR 27. CURRENT EXPENDITURE SAID IT'S 6.4. 
          AGAIN, WE DID THAT TAX NOTE FOR 3.1 FOR FLEET TO PURCHASE FLEET IN 26. WE ALSO HAVE TECHNOLOGY AND CYBER SECURITY NEEDS. SO SYSTEM UPGRADES AND SOFTWARE LICENSING LIMITED FUNDING FOR THAT NEW. WE HAVE THE NEW ERP AND THEN WE HAVE THE CITY WORK SOFTWARE THAT IS END OF LIFE THAT WE'RE GOING TO HAVE TO REPLACE. SO JUST TO KIND OF GIVE YOU AN IDEA, DIVE A LITTLE BIT DEEPER. OUR ANNUAL WAGE INCREASES. THESE ARE INCREASES THAT WE'VE BEEN CONTRACTED TO 
          [02:10:05]
WITH FIRE. AS YOU CAN SEE, FOUR, SEVEN, FOUR, THREE. WE WILL BE BACK IN NEGOTIATIONS WITH THEM NEXT YEAR. POLICE CONTRACTUAL WAGE INCREASES. THEIR NEW CONTRACT GOES THROUGH 2030. SO THEY GET 5% THE NEXT THE NEXT FOUR YEARS. AND THEN OUR CIVILIAN COLA 24 WAS TWO, TWO, THREE AND THEN 27 2 OR 0. HERE'S A SLIDE THAT SHOWS OUR GENERAL FUND OVERTIME JUST SO YOU CAN GET A LITTLE PERSPECTIVE. THIS IS BY EACH DEPARTMENT THAT IS IN THE GENERAL FUND, WHAT OUR OVERTIME BUDGET IS SO ESTIMATED FOR FY 26, WE'RE PROJECTING TO END THE YEAR AT $10.5 MILLION IN OVERTIME. FY 27, WE'RE AT 8.8 PROJECTED AS OF 27 AS OF RIGHT NOW. AND YOU CAN SEE OUR ACTUALS IN 25 ENDED AT THE TEN POINT IS THAT 10.8 I'M HAVING. 
          I SHOULD HAVE WORN MY GLASSES. 10 MILLION. WE'LL JUST SAY 10 MILLION. SO YOU CAN SEE A LOT OF A LOT OF MONEY IS SPENT IN THE CITY AND OVERTIME. THE NEXT SLIDE YOU'LL SEE OUR GENERAL FUND TRANSFERS. SO I'LL TALK ABOUT THE TRANSFERS A LOT. THESE ARE ALL THE TRANSFERS THAT THE GENERAL FUND TRANSFERS OUT TO OTHER FUNDS TO SUPPORT THEM. SO YOU'LL SEE THE TRANSIT TRANSFERS, THE CAPITAL RESERVE TRANSFER, THE EMPLOYEE BENEFITS, THE GENERAL LIABILITY, SO TOTALING 14.4 FOR 26 AND 14.5 FOR 27. OUR TRAVEL AND TRAINING AS ONE OF OUR PROPOSED, WE'RE GOING TO LOOK LOOKING AT THAT TRAVEL AND TRAINING. SO THIS IS BROKEN DOWN FOR BUDGET BY EACH DEPARTMENT WITHIN THE GENERAL FUND. SO AS YOU CAN SEE, OUR PROJECTIONS FOR FY 26 OF 767,000, OUR PROPOSED 27, OUR PROJECTED 27 IS 924,000. AND TRAVEL AND TRAINING. SO YOU'LL SEE ACTUALS FOR 25. WE ACTUALLY SPENT IN 25 654,000 AND OUR BUDGETED IN 26 WAS 950 WAS 955. 
          SO WE'RE COMING IN UNDER AS FAR AS PROJECTIONS ON THAT. OUR ACTUALS TO DATE FOR FY 26 WERE AT 541,000. POTENTIAL SOLUTIONS. AGAIN, THESE ARE SLIDES THAT I PRESENT. WE PRESENTED IN THE LAST BUDGET WORK SESSION. SO JUST GOING OVER OUR VOTER APPROVAL RATE AGAIN ON THE TAXES ON OUR TAX RATE, WE HAD LIMITED SUPPLEMENT LIMIT SUPPLEMENTAL REQUESTS FOR FY 27 HIRING FREEZE FOR NON PUBLIC SAFETY TRAVEL, FREEZE FOR NON-ESSENTIAL TRAVEL, LIMIT FLEET AND EQUIPMENT PURCHASES TO ESSENTIAL ONLY. REVIEW ALL RATES AND FEES CHARGED BY THE CITY, INCLUDING SOLID WASTE AND INDUSTRIAL OUTSIDE CITY WATER RATES. ADD A SUPPLEMENT HEALTH BENEFIT TO REDUCE OVERALL HEALTH CARE COSTS. EVALUATE INTERFUND TRANSFERS. ONLINE TRAINING ONLY REQUIRED FOR CONTINUED EDUCATION HOURS WHEN AVAILABLE. LEASE VEHICLES INSTEAD OF PURCHASE OUTRIGHT. I DISCONNECT FEES TO UNPAID WATER ACCOUNTS. REVIEW CITY SPONSORED EVENTS. REVIEW CITY SERVICES FOR EFFICIENCIES AND OUTSOURCE VARIOUS TASKS THAT CAN BE DONE MORE EFFICIENTLY OR COST EFFECTIVELY. CONTINUE TO LOOK FOR GRANTS AND CORPORATE SPONSORSHIPS. SO IF NOT ALL, MOST OF ALL OF THOSE HAVE BEEN DONE AND THE IN THE LAST SEVERAL WEEKS. SO NOW WE'RE GOING TO COME INTO OUR FY 27 SUPPLEMENTAL REQUEST. THE LIST IS WAY TOO LONG TO SHARE ALL OF THEM WITH YOU. SO JUST TO KIND OF SUM UP THE SUPPLEMENTAL, WE ASKED EVERY DEPARTMENT EVERY YEAR TO GIVE US A LIST OF WHAT THEY'RE, WHAT THEY WOULD LIKE, WHAT NEW REQUESTS THEY HAVE FOR THE NEW FISCAL YEAR. SO THESE SO WITH DOING SO, WE HAD 91 TOTAL SUPPLEMENTAL REQUESTS AMONGST ALL DEPARTMENTS, AND THEY INCLUDED ANYTHING FROM CARPETS, ROOFS, HVAC SYSTEMS, OFFICE FURNITURE, K9 KENNELS, TRAFFIC STUDY, FLOOD MONITORING SENSORS, A DISHWASHER FOR TESTING, A WASHER AND DRYER FOR ANIMAL CARE. AND I CAN GO ON. 
          THE TOTAL ESTIMATED COSTS WERE $21 MILLION. OF ALL THOSE SUPPLEMENTALS. JUST TO PINPOINT AND HIGHLIGHT SOME OF THE SUPPLEMENTALS FOR FY 27 AT THE TOP. THOSE LISTED ARE NECESSARY BECAUSE WE DESPERATELY EITHER NEED IT OR IT'S END OF LIFE, OR IT'S ALREADY BEEN APPROVED BY COUNCIL, THE ENTERPRISE, THE ERP SYSTEM. WE ALREADY HAVE AN ER, AN ERP OUT THERE. SO THAT'S 726,000 CITY WORK SOFTWARES, END OF LIFE. SO THAT'S 767,000. THE SEX OFFENDER REGISTRATION SOFTWARE IS 34,000. THAT WAS APPROVED LAST WEEK. ADDITIONAL PARK CAMERAS OF 36,500. THAT'S 
          [02:15:01]
A BIG TOPIC FOR COUNCIL. AND THEN VARIOUS I.T END OF LIFE SYSTEM UPGRADES AND LICENSING. 
          THAT LICENSING THAT HAS TO HAPPEN THAT WE REALLY DON'T HAVE MUCH CONTROL OVER IS A TOTAL OF 257,000 ESTIMATED COST OF 257,000. SOME OF THE OTHER SUPPLEMENTALS THAT WERE KEY THAT AT THIS POINT HAVE NOT BEEN INCLUDED IN THE FY 27 PROJECTIONS. PARK CAMERA PHASE THREE OF 225,000. THE WASHER AND DRYER FOR ANIMAL CARE OF 12,000 CONCESSIONS CABINETS AT JEFFERSON. 15,000 K9 KENNELS FOR PD 2800 CDL TRAINING FOR PUBLIC WORKS 27,000 AND ADDITIONAL CLEARING DEMO COSTS OF 6000. JUST TO HIGHLIGHT A FEW. AND THESE ARE. THESE ARE KEY SUPPLEMENTALS THAT DEPARTMENT, THESE DEPARTMENTS KIND OF REALLY LIKE TO SEE PUSH THROUGH. SO THAT'S KIND OF WHY I'M HIGHLIGHTING THEM. IT ALSO REQUESTS FROM EACH DEPARTMENT THE REQUEST EVERY YEAR FOR THEM TO SUBMIT THEIR REQUESTS FOR THEM FOR ANY I.T SUPPLEMENTS THAT THEY ANY NEW IT SUPPLEMENTS THAT THEY'RE REQUESTING. THEIR REQUESTS ENDED UP BEING ABOUT 2.9 MILLION FACILITIES MAINTENANCE DOES THE SAME THING FROM EVERY DEPARTMENT REQUEST SUPPLEMENTALS EACH YEAR, AND THOSE REQUESTS WERE 5.6 MILLION. 
          SO LOTS OF REQUESTS FROM OUR DEPARTMENTS THAT WE NEED FUNDING FOR. YES. COUNCILMAN CRENSHAW, CAN WE DO A TAX NOTE FOR ANY OF THOSE SUPPLEMENTAL EXPENSES? I MEAN, THE FLEET WE COULD LOOK AT DOING POSSIBLY FLEET AGAIN, LIKE WE DID THIS THIS FISCAL YEAR FLEET REPRESENT OUT OF THE 21 FLEET. SO I HAVE A SEPARATE SLIDE FOR FLEET. THIS IS NOT EVEN INCLUDING FLEET. OKAY. BUT OUT OF THE 21 MILLION, ANYTHING IDENTIFIED IN THERE THAT COULD BE USED WITH A TAX NOTE, I I'M NOT GOING TO SAY NO, BUT I WOULDN'T SUGGEST THEY'RE NOT. 
          WE'RE JUST ISSUING MORE DEBT. I GET. YEAH. SO I MEAN, I'M NOT LOST ON ME. I'M JUST TRYING TO COME UP WITH A WAY THAT WE CAN SATISFY OUR FUND BALANCE AND, YOU KNOW, SPREAD THIS OUT OVER A NUMBER OF YEARS WITH THE IDEA THAT WE'RE GOING TO HAVE MORE INDUSTRIAL REVENUE COMING ON IN THE NEXT SEVERAL YEARS. IT CAN BE LOOKED AT, BUT IT'S A LOT OF OPERATIONAL ITEMS, LIKE JUST DAILY, YOU KNOW, OPERATIONAL ITEMS THAT THEY NEED. SO IT WOULD DEPEND UPON THERE THERE ARE SOME SUPPLEMENTAL SUPPLEMENTAL REQUESTS THAT WE'RE LOOKING TO SEE IF WE CAN CONSOLIDATE AND USE C O BONDS TO PAY FOR. GOTCHA. CORRECT. SO A LOT OF YOUR FACILITY MAINTENANCE, WHICH IS YOUR YOUR AIR CONDITIONING, YOUR HVAC AND YOUR ROOFS, WE'RE, WE'RE MORE THAN LIKELY GOING TO SHIFT THAT TO CIP. SO THAT WAY THOSE THINGS CAN GET DONE. THOSE ARE MORE YOUR INFRASTRUCTURE. WATCH YOUR MIC. SO THE NEXT IS YOUR FLEET REQUEST. SO JUST TO GIVE YOU AN IDEA, THE FLEET GENERAL FUND PURCHASE REQUEST WAS 6.1. THIS MILLION THIS YEAR LEASE REQUEST IS 840 000. FOR YOUR WATER FUND. THERE'S 2.5 MILLION AT LEASE PURCHASE. AT LEASE, IT WOULD BE 786 000. SOLID WASTE HAS GOT A REQUEST OF 5 MILLION, FOR A GRAND TOTAL OF 13.6 FOR YOUR PURCHASE, AND THEN 1.6 FOR YOUR TOTAL LEASE. AND WE ARE LOOKING AT THIS YEAR TO BE ABLE TO HELP FUND OUR FLEET IS DOING MORE OF THE LEASING, ESPECIALLY FOR OUR PUBLIC SAFETY PROGRAMS, THAT IT WOULD BE CHEAPER. WE ARE LOOKING AT GOING, MAYBE POSSIBLY GOING THAT ROUTE AS WELL. SO WE HAVE TWO DIFFERENT OPTIONS. WE CAN DO, WE CAN DO, WE COULD DO ANOTHER TAX NOTE, OR WE CAN ALSO LOOK INTO LEASING, WHICH WILL LOWER THAT COST SIGNIFICANTLY. CLOSING THE GAP BETWEEN YOUR REVENUES AND YOUR EXPENDITURES OR EXPENDITURES RISING MORE THAN YOUR REVENUES. SO AS WE'VE MENTIONED, THAT HIRING FREEZE, THAT WOULD SAVE US ABOUT $4.2 MILLION. DECREASE IN OPERATING SUPPLIES AND EQUIPMENT IS 300,000 CUT TRAVEL BUDGETS BY 60%. THAT WILL SAVE US 554 55,000 INCREASE. AND WE'RE THE INCREASE IN EMPLOYEE BENEFIT CONTRIBUTION TO 9% WOULD BE 300 000. SO LET'S LOOK AT THIS SCENARIO. SO IF WE TAKE EVERYTHING FROM THAT FIRST SET OF NUMBERS AND EVERYTHING THAT WE JUST KIND OF WENT THROUGH THAT WE'RE PROPOSING FOR FY 27. SO WE HAVE THIS ONE. SO IF WE ARE REVENUE, WE'RE KEEPING OUR TAX RATE THE SAME. THE 0.659663 AT A 90% COLLECTION RATE. THIS THIS INCLUDES ALL OF YOUR NECESSARY SUPPLEMENTALS FOR FY 27 THINGS THAT INCLUDING OF. THAT'S ERP OF 726 THE CITY WORKS. 767 YOUR I.T NECESSITIES, THE ADDITIONAL PARK CAMERAS, THE SEX OFFENDER REGISTRATION 
          [02:20:07]
AND THEN WE HAVE TO INCREASE THE CAPITAL RESERVE TRANSFER FROM GENERAL FUND IN ORDER TO SUPPORT A LOT OF THE SUPPLEMENTALS. MOST OF THESE SUPPLEMENTALS WILL GO INTO YOUR CAPITAL RESERVE. SO WHICH GENERAL FUND SUPPORTS THE CAPITAL RESERVE FUND? SO THAT TRANSFER HAS TO INCREASE BY THAT 1.4 TO SUPPORT THAT. NOW I WILL SAY THE ERP AND THE CITY WORKS IS ALSO SHARED WITH THE WATER WILL BE SHARED WITH THE WATER FUND. SO THAT SPLIT DOES REFLECT HERE. THERE IS A SPLIT THERE. SO THAT LEAVES OUR FY 26 FUND BALANCE STILL AT THAT 19% FY 27. WE'RE TO THAT $2,424 MILLION. AND LEAVING US AT THAT 14%. SCENARIO TWO. SO LET ME SAY THIS TO YOU AS I'VE BEEN TALKING ABOUT THE TAX RATE. WE DO NOT HAVE THE FINAL NUMBERS YET. WE WILL NOT HAVE THOSE UNTIL AUGUST. AUGUST 7TH IS THEIR FINAL DEADLINE. SO THESE WILL MAY, WILL PROBABLY CHANGE. THESE ARE OUR BEST GUESS ESTIMATES AT THIS POINT. OKAY. 
          SO THIS SCENARIO IS EVERYTHING THAT I'VE JUST INCLUDED THAT WE JUST SAID IN THE PREVIOUS ONE. 
          BUT THIS IS TAKING INTO ACCOUNT OUR COST SAVINGS THAT WE'VE CAME UP WITH, WHICH IS REDUCTION OF THIS 60% REDUCTION OF TRAVEL AND TRAINING, REDUCING 500. AND THAT'S A COST SAVINGS OF 554 55,000. REDUCTION OPERATING SUPPLIES AND EQUIPMENT THROUGHOUT THE CITY. SAVINGS OF 300,000 DETER SUSPENSION OF 1.7. AND THEN THIS IS ESTIMATING OUR VOTER APPROVAL RATE. AND THAT 97% COLLECTION. SO THIS DOES INCREASE OUR PROPERTY TAX. AND IT DOES TAKE IT TO THAT VOTER APPROVAL RATE. SO THAT WAY THE TOTAL TAX RATE ESTIMATED WOULD BE THE 0.70. AND THE SCENARIO. THIS DOES NOT INCLUDE ANY FLEET. WHAT WOULD IT DO IF WE LEFT THE RATE THE SAME. AND IT WOULD BE THE THAT THE PREVIOUS ONE WOULD BE YOUR 275 AMOUNTS TO BE 14%. 
          SO THE DIFFERENCE AND THIS ALSO THIS TAKES IN THE HIRING FREEZE AS WELL. OF THE 4.2. THIS THIS THIS ONE. I'M SORRY, I FORGOT TO MENTION THAT THIS ALSO HAS THE HIRING FREEZE OF THE 4.2. 
          OKAY. SO IT'S NOT JUST THE TAX RATE. CORRECT. IT'S ALSO 4.2 OF THE OF THE HIRING FREEZE ON YOUR EXPENDITURE SIDE. SO WHAT WHAT WOULD THE -960 000 BE IF WE LEAVE THE TAX RATE THE SAME IT'S NOT GOING TO BE 10 MILLION BECAUSE YOU DIDN'T FACTOR IN THE HIRING FREEZE. AND THAT WITH ALL THE SAVINGS ON THAT SLIDE YOU HAD WAS TO 5 MILLION. SO WHAT WAS 4.2. AND THEN THE THREE. SO TO BE. HERE IT'LL BE THE DIFFERENCE IN. 
          SO YOUR DIFFERENCE IN YOUR. PROPERTY TAX IS 6.1. SO THAT'S THE REVENUE THAT IT WOULD GENERATE BY GOING TO VOTER APPROVAL. SO IT'S A DIFFERENCE REVENUE. SO YOU'RE SAYING IT WOULD BE WE WOULD BE -7 MILLION. BECAUSE RIGHT NOW YOU'RE YOU'RE PROPOSING WE WOULD BE -960 000. SO IF WE DON'T INCREASE TAX REVENUE BY 6.1 MILLION, WE WOULD BE. THEN YOU WOULD TAKE. I'D HAVE TO DO THE NUMBERS JUST TO MAKE SURE. BUT YOU WOULD TECHNICALLY BECAUSE YOU'RE YOU'RE YOU'RE. SO SO IF YOU'RE TRYING TO GET TO THIS SLIDE HERE, LET ME GET BACK TO IT. THIS RIGHT HERE IS AT YOUR IS AT YOUR CURRENT TAX RATE. SO HERE YOU WOULD TAKE INTO EFFECT THE SORRY, HANG ON. I DON'T WANT TO GIVE YOU WRONG NUMBERS. 
          [02:25:03]
I DON'T WANT TO QUOTE ANYTHING. SO THERE YOU WOULD JUST TAKE OUT YOU WOULD ADD THE HIRING FREEZE TO MINUS YOUR EXPENDITURE. SO THAT WOULD BE THAT 4.2 HERE. BECAUSE THAT'S 84 RIGHT. I'M LOOKING AT YOUR CLOSING THE GAP SLIDE. IT'S THE SALARY FREEZE IS 4.24.2 CORRECT. 
          AND THEN THE DECREASE IN OPERATING SUPPLIES AND EQUIPMENT 300,000 CUT AND TRAVEL BUDGETS 550,000. INCREASE IN EMPLOYEE BENEFIT CONTRIBUTION 300 000. THAT IS ABOUT 5.4 MILLION. SO WHY CAN'T WE TAKE 5.4 MILLION OFF OF 9.9 MILLION? AND THAT WOULD GIVE US I'M GOING TO CALL SCENARIO X, WHICH IS NO INCREASE IN TAXES. AND WE'RE ONLY GOING INTO THE RESERVE FUND BY ABOUT 4.5 MILLION. THAT THAT THAT WOULD BE ACCURATE, CORRECT? YES. AND I CAN GET YOU WE'LL GET YOU THAT NUMBER IF AMANDA CAN CALCULATE IT REAL QUICK. AND WHY DON'T WE HAVE SAVINGS BETTER IN THE FISCAL YEAR 2026 PROJECTIONS IF WE'RE IMPLEMENTING A HIRING FREEZE NOW, WE'RE LATE IN THE YEAR. YEAH. I MEAN, WE ONLY HAVE I GET THAT, BUT I MEAN, THERE'S YOU'RE ONLY REFLECTING A TOTAL OF A 300 ZERO ZERO $0 IN SAVINGS FOR THIS YEAR BY IMPLEMENTING A HIRING FREEZE AND THE CUTS IN TRAVEL. BUT DON'T WE REALISTICALLY THINK THAT THAT NUMBER COULD BE HIGHER BECAUSE THESE ARE POSITIONS THAT HAVEN'T BEEN FILLED IN A WHILE? WELL, ARE WE TALKING ABOUT LIKE 100 JOBS? OR OTHER CURRENTLY THERE'S THERE ARE 100 VACANCIES, CORRECT. OKAY. AND THOSE THOSE HAVEN'T BEEN FILLED JUST FOR THE NEXT THREE MONTHS. THOSE HAVEN'T BEEN FILLED FOR SEVERAL MONTHS PRIOR TO THAT. SO WHERE I'M GOING WITH ALL THAT IS I'M TRYING TO SEE WHERE ON THE, THE 2026 PROJECTION IS GOING TO SEE BETTER NUMBERS, OBVIOUSLY, AS WELL AS THE 27 PROJECTED PROPOSED PERFECT. THAT WAY WE GET THAT FUND BALANCE PERCENTAGE UP HIGHER THAN THE 19% IN THE 14%. SO IF YOU TAKE THAT THAT BACK TO THE IF YOU TAKE THE ON THAT THIRD ONE, IF YOU TAKE THE. BECAUSE IT INCLUDES EVERYTHING, ALL THE COST SAVINGS THAT WE'RE DOING EVERYTHING. SO THE ONLY THING WE'RE GOING TO CHANGE IS THAT PROPERTY TAX RATE. IF WE TAKE IT BACK DOWN TO CURRENT, THEN THAT GETS YOU AT A 16% FUND BALANCE. WHAT WHAT SCENARIO ARE YOU ON? I'M SORRY. OKAY. I MEAN TO MAKE THIS CONFUSING. THAT'S OKAY. WE JUST WANT TO FOLLOW THE SCENARIO. SO THE SCENARIO SO THE TAKING INTO CONSIDERATION THE HIRING FREEZE THE CORRECT. SO THAT WOULD BE YOUR LAST SLIDE. SO THAT'S THE ONLY THING THAT WE'RE CHANGING ON THAT LAST ON THAT SCENARIO TWO WOULD BE THE DIFFERENCE IN THE TAX RATE. SO IF LIKE MR. CRENSHAW'S WANTING TO KEEP IT AT THE CURRENT TAX RATE. SO YOU'RE GOING TO BACK OUT THAT 6.1 OUT OF THAT PROPERTY TAX RATE. SO THEN THAT GIVES YOU THAT GETS YOU THAT LOWERS YOUR REVENUES. YOUR EXPENDITURES STAY THE SAME, THAT LOWERS YOUR REVENUES. AND THEN THAT, AND YOU HAVE TO REDO THE CALCULATIONS. AND AMANDA DID IT, AND IT GETS YOU TO A 16% FUND BALANCE. BUT MY QUESTION AND I THINK HIS QUESTION IS, WHERE'S THE SCENARIO WHERE WE TAKE INTO CONSIDERATION THE 5.4 THAT WHERE IS THAT SCENARIO? WHAT IS THAT? SO WE ONLY HAVE TO SCENARIO TWO. THIS IS THIS IS TRAVEL CUT. THIS IS OPERATING SUPPLIES CUT. THAT'S YOUR SALARY SAVINGS CUT. THAT IS THAT. SCENARIO TWO HAS GOT ALL OF THAT IN IT. THE ONLY DIFFERENCE IS, IS WE GOT THAT VOTER APPROVAL TAX RATE CALCULATED IN THERE TO SHOW YOU IF WE IF WE CAN GET TO THAT, WE CAN GET TO A 19% FUND BALANCE. OKAY. THAT'S THE SCENARIO. IF YOU DON'T WANT TO DO THAT, THEN YOU'RE GOING TO BACK OUT THAT VOTER APPROVAL RATE AND YOU'RE GOING TO BACK AT ABOUT $6.1 MILLION IN YOUR REVENUE. AND THEN THAT WILL GIVE YOU TO THE 16% FUND BALANCE. I THINK WHAT WE'RE STRUGGLING IS THESE NUMBERS DON'T. THE MATH AIN'T MATH. AND IF IF $5.4 MILLION IS BEING CUT IN SCENARIO TWO, AND WE ONLY MOVED 1% ON FISCAL YEAR 2026 AND 2027, SO THE WHERE'S THE THE FIVE BECAUSE YOU'RE GOING FROM 19, YOU'RE GOING FROM 16 TO 19. SO THAT'S A LOT OF PERCENTAGE BECAUSE IT TAKES ABOUT, I THINK IT'S LIKE 1.3 OR 1.4 MILLION EACH PERCENTAGE THAT YOU HAVE TO CUT TO GET DOWN A PERCENTAGE. SO. THAT ONE ENTITY SCENARIO TWO HAS ALL THE CUTS. WHY DOES SCENARIO ONE HAVE I JUST I COULD HAVE DONE A THIRD SCENARIO. YOU'RE CORRECT, MA'AM, I SAID YES, I SHOULD HAVE DONE A FOURTH SCENARIO. 
          YOU ARE CORRECT. I WOULD ENCOURAGE WE ALWAYS HAVE A SCENARIO WHERE WE DON'T INCREASE TAXES. YOU KNOW, FIRST ONE, THE FIRST ONE. CORRECT? YEAH, YEAH. BUT IT'S NOT 
          [02:30:06]
ACCURATE BECAUSE IT DOESN'T HAVE ANY OF THE CUTS IN IT. YEAH. THE 5.4 MILLION ARE NOT IN PROPOSAL ONE. CORRECT. IT IS NOT. SO CAN WE GET A PROPOSAL ONE WITH THE CUTS SO THAT WE CAN SEE. YES I CAN DO THAT REAL QUICK ACTUALLY. IF Y'ALL WANT TO GIVE ME YOUR NUMBERS ARE DRASTICALLY DIFFERENT IN ONE AND TWO. IF WE INCLUDE THE 5.4 MILLION, YOU BASICALLY GO UP TO A -7 MILLION BY SAYING THAT WE HAVE TO ADD 6.1 MILLION IN TAX REVENUE THAT WE'RE GETTING UP. 
          BUT IF WE LOOK AT PROPOSAL ONE AND WE SUBTRACT 5.4 MILLION IN SAVINGS, IT SHOULD BE AROUND THE $4.5 MILLION MARK. SO THAT'S WHERE WE'RE CONFUSED. SO AND WE'RE TALKING ABOUT FOR 27 PROPOSALS. SO YOU HAVE TO SO THAT THAT THAT REVENUE IS OVER UNDER EXPENDITURES. AGAIN AS YOU'RE TAKING YOUR REVENUES MINUS YOUR EXPENDITURES. SO IF YOU LOWER THAT REVENUE NUMBER, THEN, WHICH IS WHAT WE'RE GOING TO DO BY REDUCING THAT TAX RATE. SO YOU LOWER THAT REVENUE NUMBER, THEN THAT NUMBER IS GOING TO BE HIGHER. THAT NEGATIVE NUMBER IS GOING TO IS GOING TO BE BECAUSE YOU'RE MINUSING YOUR EXPENDITURES, WHICH IS GOING TO BE HIGH, WHICH IS STILL HIGH. IT'S LIKE, I FEEL LIKE IT SHOULD BE AROUND 4.5 MILLION, BUT YOU'RE TELLING ME IT'S GOING TO BE AROUND. I'D HAVE TO DO THE MATH. I HAVE TO DO THE COMPLETE CALCULATION TO GIVE YOU AN EXACT NUMBER. COUNCIL. COUNCILMAN TURNER, DO YOU HAVE A QUESTION? YES, SIR. 
          JUST A FEW QUESTIONS. WE'RE WE'RE TALKING ABOUT WE WOULD BE ROUGHLY 4 MILLION OFF. BUT I KNOW WE ASKED YOU GUYS TO SIT WITH THE TAX ASSESSOR. COLLECTOR. AND WHAT IS OUR CURRENT PERCENTAGE ON COLLECTION RIGHT NOW? IS IT STILL ROUGHLY 97%? WE DON'T HAVE THAT YET. WE WON'T HAVE THAT UNTIL THE END OF THIS MONTH. WE DON'T HAVE THE EXACT NUMBER YET, BUT WE'RE EXPECTING IT TO BE AROUND 97%. THAT'S WHAT WE'RE THAT'S WHAT WE'RE BUDGETING FOR. I THOUGHT I READ SOMETHING THAT SAID IT WAS LOW, LIKE 90. YEAH, THAT'S WHAT I'M STRUGGLING AT BECAUSE WE, WE, WE'RE TALKING ABOUT REVENUE AND MONEY. AND I THINK I ASKED THIS A COUPLE OF MONTHS BACK, BUT IF WE'RE NOT COLLECTING AT A DECENT RATE, WE'RE, IF WE IF WE ARE NOT AROUND 90%, I DON'T KNOW IF THIS IS CORRECT OR NOT, BUT I READ THE SAME THING COUNCILMAN CRENSHAW READ, MAN, WE'RE TALKING ABOUT ROUGHLY 3 TO $4 MILLION. LIKE IF WE HAD 90% OUT OF 100%. THERE YOU GO. AND I AGREE WITH YOU AND I AGREE WITH YOU. SO AND I DO, AND I DO THINK THAT THAT COLLECTION RATE IS, LIKE I SAID, I DON'T KNOW WHAT THAT IS YET. 
          THEY GIVE THAT TO US. SO I'M NOT SURE WHAT THAT EXACT NUMBER IS YET, BUT I DO. JUST LOOKING AT THE PROJECTIONS FOR FY 26, I MEAN, WE'RE ALREADY ALL THE WAY THROUGH JUNE AND WHAT WE'VE COLLECTED SO FAR IS, IS, IS LESS IT'S, IT'S A LOT LESS SO. SO THAT COLLECTION RATE HAS, IS PROBABLY DECREASED. IF I CAN ONLY IMAGINE IN THE NAME OF JESUS, IT HAS JUST BY JUST BY THE PROJECTIONS OF. 26 AND I UNDERSTAND THAT, BUT WE KIND OF ASKED FOR SOMETHING TO BE PRESENTED TO US AND IS AT A POINT WHERE, YOU KNOW, BECAUSE IT'S I KNOW IT'S JUSTIN COUNTY, BUT WE'RE THE LARGEST CITY IN THE COUNTY. WE JUST NEED TO KNOW WHERE WE'RE AT, WHAT'S THE ISSUES AND WHAT CAN WE DO TO ASSIST. AND I KNOW WE'VE MET WITH THE TAX ASSESSOR, COLLECTOR, AND IT'S NOT AN ATTACK AT ALL, BUT I KNOW. YEAH. AND AGAIN, SOME OF THE FEEDBACK IS THEY WERE THEY WERE GOING TO GET WITH LINEBARGER AND, AND TRY TO DO BETTER. AND SO JUST IT WAS PRETTY MUCH THEY'RE DOING EVERYTHING THEY CAN. AND THAT LINEBARGER HAS GOTTEN BETTER AT COLLECTIONS. IT'S PRETTY MUCH WHAT WE GOT. SO. WELL, MAYBE MAYBE. WELL, I'LL LEAVE THAT ALONE RIGHT NOW, BUT YOU CAN TALK OFFLINE WITH IT. YOU CAN SEE IN THIS SCENARIO, I MEAN, EVEN ON THE SCENARIO TO ANY OF THEM, ACTUALLY, YOU CAN SEE WHAT OUR WHAT OUR BUDGET FOR 26 WAS AND WHAT WE'RE ACTUALLY PROJECTING TO, TO RECEIVE. SO, I MEAN, YOU'RE LOOKING AT A $3 MILLION DIFFERENCE ROUGHLY. I KNOW THOSE NUMBERS ARE KIND OF SELF-EXPLANATORY. AND WITH THAT 10%, 10%. THE OTHER THING I WAS KIND OF WONDERING, WE'RE SAYING WE'RE CUTTING ESSENTIAL TRAVEL, MAN. CAN WE BE SPECIFIC? WHAT DO YOU MEAN BY ESSENTIAL TRAVEL? WHO'S ESSENTIAL, WHO'S NOT? RIGHT. SO BASICALLY EVERY TRAVEL REQUEST. WELL, FIRST OF ALL, I'M GOING TO ASK EVERY AND HAVE ASKED EVERY DEPARTMENT DIRECTOR TO REVIEW EVERY TRAVEL REQUEST AND NOT TO SUBMIT IT TO THE CITY MANAGER FOR REVIEW UNLESS IT'S ABSOLUTELY ESSENTIAL. NOW YOU SAY, WELL, WHAT IS ESSENTIAL? OBVIOUSLY, THE VERY ESSENTIAL IS TO MAINTAIN A REQUIRED CERTIFICATION OR LICENSE WITH THE STATE OR SOME OTHER AGENCY. 
          THAT'S ESSENTIAL. WE ALSO HAVE TRAINING REQUIREMENTS. SO YOU HAVE PROMOTIONAL SITUATIONS, YOU HAVE NEW EMPLOYEE SITUATIONS. AND SO THEY'VE GOT TO BE TRAINED. AND THEN IT GOES ON KIND OF DOWN THE LINE. PROFESSIONALS HAVE TO HAVE CONTINUING EDUCATION CREDITS. 
          THAT'S WHERE IT STARTS TO DROP OFF. THERE ARE OPPORTUNITIES FOR ONLINE AND A VARIETY OF WAYS TO TRY TO GET SOME OF THOSE CREDITS. SO THOSE WOULD HAVE TO BE LOOKED AT ON A CASE BY CASE BASIS. AND THEN, OF COURSE, YOU KNOW, THERE ARE CONFERENCES AND, YOU KNOW, WE GO TO TEXAS MUNICIPAL LEAGUE AND THINGS LIKE THAT, GOLD TRIANGLE DAYS. AND THOSE THINGS ARE VALUABLE BECAUSE NOT ONLY ARE YOU, YOU KNOW, BEING ABLE TO NETWORK, BUT MORE 
          [02:35:01]
IMPORTANTLY, LEARN ABOUT NEW LEGISLATION THAT'S EITHER IN THE WORKS OR COMING DOWN THE PIPELINE THAT'S GOING TO AFFECT THE THINGS WE DO. AMY MENTIONED THE STATE MANDATE ON SOME ADDITIONAL BENEFITS IMPOSED BY THE STATE, HOW TO HANDLE THAT. SO, YOU KNOW, SO IT'S IT'S NOT JUST, YOU KNOW, SEMINARS AND NETWORKING. YOU'RE ACTUALLY LEARNING, YOU KNOW, WHAT'S GOING ON, BEST PRACTICES AND ALL THAT STUFF. BUT THAT'S WHERE IT REALLY STARTS TO DROP OFF. SO WE'RE STARTING WITH WHAT'S LICENSING REQUIRED, WHAT'S MANDATED. BECAUSE AGAIN, IT'S JUST YOU SAW THE SLIDE ON THE TOTAL AMOUNT. IT'S JUST UNDER A MILLION, AROUND A MILLION. SO IT'S, IT'S GOING TO BE A TOUGH CHALLENGE. AND MY, MY LAST QUESTION, MAYOR, IS IT'S A HUGE DISCONNECT IN WHO'S RESPONSIBLE FOR PROPERTY VALUES AND GOING UP IN BEAUMONT, TEXAS. 
          I'VE BEEN IN SEVERAL PLACES WHERE WE'RE TOLD THE CITY RAISED MY PROPERTY TAXES, AND I KNOW WE'VE HAVE DECREASED PROPERTY TAXES SINCE WE'VE BEEN ON THE COUNCIL. CAN CAN STAFF EXPLAIN THAT PROCESS ON THE RECORD SO PEOPLE UNDERSTAND HOW THAT WORKS WITH THE APPRAISAL DISTRICT? AND WE HAVE NO AUTHORITY OVER THE APPRAISAL DISTRICT. YEAH. I MEAN, ESSENTIALLY THE CITY DOES NOT SET THE. SO YOUR TAXES, WHEN YOU GET YOUR TAX BILL ARE KIND OF MADE UP OF A COUPLE COMPONENTS. ONE IS THE VALUE OF YOUR PROPERTY. AND THAT'S SET BY THE APPRAISAL DISTRICT, WHICH IS A SEPARATE BODY. WE DO NOT SET THAT. THIS BODY DOES. 
          AND OTHER GOVERNMENTAL BODIES DO. THEY SAID IS THE TAX RATE. AND SO TAKE THAT VALUE AND APPLY THE RATE. AND SO THE LION'S SHARE OF A LOT OF THAT INCREASE IS RELATED TO VALUES. 
          YEAH. BUT IT PUTS US IN A TOUGH SPOT. YOU KNOW WHEN THE VALUES ARE GOING UP AND WE HAVE NO CONTROL AND PEOPLE DON'T KNOW WHO TO SPEAK TO, WHO TO TALK TO. LIKE HOW DO WE GIVE THEM DIRECTION? THAT'S RIGHT, THAT'S RIGHT. AND, YOU KNOW, WE TALKED A LITTLE BIT ABOUT THE THE VOTER APPROVAL RATE. MOST FOLKS KNOW THIS, BUT JUST FOR THE BENEFIT OF THE PUBLIC, WE ARE LIMITED ON WHAT RATE BECAUSE AGAIN, THAT'S SOMETHING THAT WE CAN CONTROL TO SOME DEGREE. BUT THE STATE LAW OBVIOUSLY LIMITS US ON WHAT THAT RATE CAN BE. AND IF IT GETS TOO HIGH, THEN THE VOTERS HAVE TO APPROVE IT. SO THAT'S ALL CALCULATED AS WELL. I KNOW COUNCILMAN WILLIAMS HAS BEEN. DOES THE PROPOSED HIRING FREEZE HAVE ANY IMPACT ON OVERTIME IN THESE NUMBERS? I MEAN, WHAT WE WOULD WHAT WE WANT TO DO AND WHAT WE WOULD LIKE TO DO IS LOOK AT EVERY DEPARTMENT AND KIND OF HAVE THEM REEVALUATE THEIR DEPARTMENTS AND SEE WHERE EMPLOYEES CAN BE BETTER SITUATED OR HOW, HOW YOU WANT TO WORD THAT BECAUSE THEN THE BECAUSE THEN YOU'RE RIGHT, THE, THE, THE SHIFT IN FOCUS TO, TO FOCUS IS TO RETENTION, RIGHT? WE NEED TO KEEP OUR EMPLOYEES THAT WE HAVE HERE. WE NEED TO MAKE SURE THAT EVERYONE CAN DO THEIR WORK EFFECTIVELY. AND SO THEN IT GOES TO RETENTION. SO IF THAT MEANS WE HAVE TO, YOU KNOW, JUST SOME POSITIONS. AND THAT'S WHAT WE'LL LOOK AT DOING TO MAKE SURE THAT IT WILL AFFECT OVERTIME AT LEAST AMOUNT AS POSSIBLE. BUT THERE'S THAT'S NOT REFLECTED IN THESE NUMBERS. 
          ANY IMPACT OVERTIME. NO, NO. OVERTIME IS SET AS YOU KNOW WHAT WE'RE PROJECTING OVERTIME TO BE, WHICH IS WHICH IS THAT $10 MILLION RANGE. COUNCILMAN DARIO, DID YOU HAVE SO THESE THESE VACANT POSITIONS THAT WE CURRENTLY HAVE, ARE WE CURRENTLY FILLING THOSE WITH OVERTIME ONES THAT WE'RE NOT UNDER? THE HIRING FREEZE IS GOING TO AFFECT. SO THERE ARE A LOT OF DEPARTMENTS HAVE SAID THAT THAT YES, THEY'RE OVERTIME IS DUE TO NOT BEING ABLE TO RETENTION OF EMPLOYEES, NOT BE ABLE TO KEEP EMPLOYEES WILL CONTINUE TO DO THAT TO FILL THE VACANT POSITIONS. WELL. SO AGAIN, IT DEPENDS ON THE POSITION EVERY. AND AGAIN, PUBLIC SAFETY. WE'RE NOT LOOKING AT THAT. BUT NON PUBLIC SAFETY WHICH AGAIN WE TALKED ABOUT 100 VACANT POSITIONS. YOU KNOW THE WORK'S GOT TO GET DONE. OKAY. AND SO WE HAVE TO LOOK AT EVERY SINGLE ONE OUTSIDE OF THAT ON A CASE BY CASE BASIS. SO THAT AND TO THAT POINT, YES. 
          I MEAN, IF WE JUST START MAKING A BLANKET, WE'RE NOT HIRING ANYBODY. WE HAVE TO LOOK AT THAT CASE BY CASE BECAUSE THEN, YES, ALL OF A SUDDEN THE WORK HAS TO GET DONE. SO NOW ALL OF A SUDDEN IT SHIFTS TO OVERTIME. AND OF COURSE, THE PAY RATE IS MUCH HIGHER. AND SO THAT'S, THAT'S THE CHALLENGE. YOU LIKE, LIKE THE CURRENT WEATHER THAT WE HAD WITH THE FLOODING AND THE UNABLE TO FLUSH TOILETS AND STUFF LIKE THAT. I MEAN, WE, WE'RE, WE'RE NOT GOING TO HIRE PEOPLE IF THEY HAVE VACANCIES. THEY'RE, WE'RE NOT GOING TO HIRE PEOPLE TO FILL THEM. SO SERVICES ARE NOT GOING TO BE THEY'RE GOING TO BE WORSE. THE GOAL IS TO NOT THE. THE GOAL IS FOR THE PUBLIC TO NOT FEEL THIS RIGHT. AND SO WHILE SOME THINGS THERE MIGHT BE A LITTLE SLOW DOWN, URGENT THINGS, PUBLIC SAFETY THINGS, THE GOAL IS TO NOT. AND AGAIN, THAT'S WHY, YOU 
          [02:40:02]
KNOW, THE EXPERTS, OUR DEPARTMENT HEADS, OUR DIVISION MANAGERS, THEY KNOW. AND SO, YOU KNOW, MAYBE THEY'VE GOT SEVEN POSITIONS AND THEY SAY, YOU KNOW WHAT? I CAN, I CAN REDISTRIBUTE SOME OF THIS WORK, WORK A LITTLE MORE EFFICIENTLY, EFFICIENTLY. AND I CAN, I CAN DO WITHOUT THAT POSITION FOR NOW. AND SO, BUT WE'RE GOING TO HAVE TO LOOK AT IT CASE BY CASE. 
          YOU SAID YOUR MAIN GOAL IS, IS RETENTION. WELL, IF YOU'RE GOING TO GO UP ON HOW MUCH YOU'RE CHARGING FOR INSURANCE AND NOT GOING TO GIVE THEM A PAY RAISE, THAT'S NOT GOING TO HELP WITH RETENTION. YES, SIR. SO AGAIN, WE INCLUDED 2% IN THIS. AND SO, WELL, ONE OF THE PAGES SAID 2% OR ZERO, RIGHT. YES, SIR. AND ONE POINT OF REFERENCE, BECAUSE WE'VE SAID THIS SEVERAL TIMES FOR THE PUBLIC CONTRACTS, WE HAVE CONTRACTS WITH FIRE AND POLICE. 
          SO WHEN WE TALK ABOUT HIRING FREEZES, IT DOESN'T AFFECT THOSE CONTRACTUAL OBLIGATIONS THAT WE HAVE. I'M CONCERNED ABOUT I'VE GOT A CONCERN THAT THE NUMBERS THAT YOU'RE SEEING THAT YOU'RE GOING TO SAVE WITH THE HIRING FREEZE, DOES IT TAKE INTO ACCOUNT THE OVERTIME? NO CONSIDERATION ON THE OVERTIME WITH THE HIRING FREEZE? YES OR NO? NO. THE OVERTIME HAS REMAINED THE SAME AS PROJECTED. EACH DEPARTMENT HAS GIVEN ME WHAT THEY PROJECT THEIR OVERTIME IS GOING TO BE. AND THAT INCLUDES THAT HAS NOT BEEN REDUCED. IT'S NOT BEEN REDUCED ANY. SO IT'S BEEN IT'S STAYING IT CURRENT WHAT THEIR PROJECTIONS ARE OKAY. BUT THAT'S WITH THE SAVINGS OF THE HIRING FREEZE. RIGHT. SO I'M SAYING WE ISSUE A HIRING FREEZE NOW. WE'RE NOT FILLING THESE POSITIONS. IT DOESN'T REALLY MATTER. BUT IN THE PROJECTION IS THE OVERTIME GOING TO BE CONSIDERED WITH THE POSITIONS. THAT'S NOT GOING TO BE NOW FILLED NO LONGER IN THE FIELD, BECAUSE WE'RE SAYING WE'RE GOING TO CREATE MORE OVERTIME BY NOT FILLING THESE POSITIONS. RIGHT? THEY HAVE PROJECTED THEIR OVERTIME. BUT, YOU KNOW, I MEAN, I THINK ONE THING WE NEED TO BE CLEAR ON, THERE ARE MANY VARIABLES FROM WEATHER TO OTHER EVENTS THAT CAN HAPPEN THAT CAN AFFECT OUR ONGOING BUDGET. AND YES, COUNCILMAN DARIO, YOUR POINT IS, WHEN WE HAVE LESS MONEY, IT CAN IT'S GOING TO IT'S GOING TO TAKE SOME SERIOUS MANAGEMENT TO MINIMIZE THE EFFECT TO OUR RESIDENTS. AND THAT'S ONE REASON WHEN WE LOOK AT WHETHER WE HAVE ANY INCREASES, WHETHER THEY WOULD PREFER, YOU KNOW, SMALLER INCREASES IN CONTINUATION OF, YOU KNOW, THE SAME SERVICES. THAT'LL BE A DECISION THAT WE'RE UP TO. BUT YOU'RE RIGHT, WHEN YOU CUT REVENUES, IT'S GOING TO THERE'S, THERE'S NO WAY IT'S NOT GOING TO AFFECT JUST LIKE IN YOUR HOUSEHOLD, IF YOU REDUCE YOUR INCOME, YOU'RE GOING TO HAVE TO MAKE SOME REDUCTION SOMEWHERE ELSE, IF NOTHING ELSE, JUST IN SAVINGS AND RETIREMENT, BUT IT WILL AFFECT YOU SOMEWHERE. IT'S GOING TO HIT YOU AND IT'S GOING TO HIT US. IN MY HOUSEHOLD, MY WIFE WOULD NOT ACCEPT THAT. I'D HAVE TO FIND THAT REVENUE. 
          YOU'D HAVE TO GET ANOTHER JOB. THAT'S RIGHT. SO WE'D SEE HIM OUT THERE. WELL, AND I MEAN CITY COUNCIL AT ANOTHER CITY TO TWO CITY COUNCILS. WELL, NO. AND I MEAN, THE HONESTY IN THAT IS WE'VE GOT TO BE HONEST ABOUT THESE TOUGH CONVERSATIONS. SO I'M GLAD, I HOPE THAT PEOPLE TUNE IN AND WE SHARE THIS BROADCAST OR WHATEVER, BECAUSE THE TRANSPARENCY IN IT IS THAT THERE ARE SOME TOUGH DECISIONS THAT HAVE TO BE MADE. AND IF THE CITIZENS AREN'T PARTICIPATING OR WE DON'T HEAR FROM THEM AND WE MAKE THESE DECISIONS, AND THEN THEY SAY, WELL, YOU DID THIS AND BLAH, BLAH, BLAH. NO, WE NEED TO MAKE SURE THAT WE'RE HONEST ABOUT WHAT'S GOING ON. OH, HOW LONG IS THE HIRING FREEZE? YOU'RE GOING TO DO IT FOR THE LENGTH OF THIS BUDGET, OR YOU'RE GOING TO SEE EVERYTHING GOING OR BY CASE. SO WE'VE WE'VE ENACTED IT ALREADY. AND AGAIN, IT'S A REVIEW CASE BY CASE, BUT IT'S BUILT IN TO THE PROPOSED FY. 
          BASICALLY THE REMAINDER OF 26, WHICH WE ONLY HAVE 60 DAYS OR JUST A LITTLE OVER 60 DAYS LEFT IN 26. BUT IT'S BAKED INTO THE PROPOSED 27. BUT AGAIN, AS I MENTIONED, WE'RE GOING TO DO A MID-YEAR MID BUDGET YEAR REVIEW IN APRIL TO SAY, HEY, YOU KNOW, MAYBE, HOPEFULLY THINGS ARE BETTER AND WE CAN EASE OFF OF IT. BUT SO DOES THIS JUST AFFECT THE VACANCIES THAT ARE CURRENT? OR IF ANYONE LEAVES OR WE'RE UNABLE TO RETAIN SOME EMPLOYEES DURING THIS BUDGET, WE'RE NOT GOING TO FILL THOSE EITHER. RIGHT? SO WE'RE CONSTANTLY WITH THIS NUMBER OF EMPLOYEES. THERE'S CONSTANT CHURN PROMOTION, NEW FOLKS LEAVE AND COME. AND SO BASICALLY IT APPLIES ACROSS THE BOARD AGAIN, WITH THE EXCEPTION OF PUBLIC SAFETY. SO IF SOMEBODY RETIRES, YOU KNOW, AT THE END OF THIS WEEK, THEN THAT'S GOING TO HAVE TO BE LOOKED AT THAT POSITION. AND I KNOW AS WE TALK ABOUT THIS, ONE OF THE THINGS THAT WHEN YOU WERE PROMOTED AND HIRED FOR THE CITY MANAGER, YOU MENTIONED THAT POPULATION GROWTH AND 
          [02:45:04]
ATTRACTING PEOPLE TO THE CITY IS AT THE TOP, AND THAT CERTAINLY COULD IMPACT THESE NUMBERS. BUT WE ALSO HAVE TO LIVE IN THE REALITY WHEN THEY'RE WHEN WE'RE NOT EXPERIENCING THAT RIGHT NOW. SO AS THAT WOULD CHANGE, THAT COULD GREATLY IMPACT OUR REVENUE STREAM. BUT UNTIL IT DOES, IT'S NOT ANYBODY'S FAULT THAT THE COST OF EVERYTHING IS GOING UP AND OUR REVENUE IS GOING DOWN. IT'S JUST A REALITY WE HAVE TO DEAL WITH. YEAH. AND AGAIN, I'LL RESTATE AND AMY SCHOEN, I MEAN, WE'RE IT'S NOT IT'S JUST GOING TO BE TOUGH, I THINK FOR THE SHORT, SHORT TERM, THE IDEA BECAUSE OUR REVENUES ARE STILL GOING UP, IT'S JUST WE NEED TO KIND OF PAUSE, SLOW DOWN A LITTLE BIT AND LET THEM LET THEM CATCH UP. SO TO CIRCLE BACK AROUND, MR. CRENSHAW, I JUST DID THE REPORT REAL QUICK. SO WITH SCENARIO TWO, TAKING THAT PROPERTY TAX BACK DOWN TO CURRENT PROPERTY TAX RATE, YOUR REVENUES TOTALS ONE 774 MILLION FOR 23 710. EXPENDITURES BECOME 179 MILLION 82046, WHICH GIVES YOU THE -5.3. AND THEN YOUR FUND BALANCE IS 29 MILLION 784, WHICH GIVES YOU A SEVEN. I WAS OFF I WAS PERCENTAGE. IT GIVES YOU 17% FUND BALANCE. OKAY. AND THAT WAS NEGATIVE FIVE .45.5.51 POINT. IF YOU WANT AROUND YES, 5.4, 5.4 MILLION. AND IT WOULD BE A YOU SAID 17%, 17%. YOUR ENDING FUND BALANCE IS 29,000,007 84169 OKAY. AND THEN ANY BETTER SAVINGS THAT WE COULD ESTIMATE FOR 26 PROJECTIONS, BECAUSE IT DOESN'T REALLY SEEM LIKE WITH THE PROPOSED CUTS THAT YOU'RE MAKING, THAT WE'RE REALLY GETTING MUCH SAVINGS IN. 26. AND I KNOW THAT'S I KNOW THAT'S A HARD NUMBER FOR YOU TO COME UP WITH RIGHT NOW STANDING IN FRONT OF US, BUT CAN'T WE BE REALISTIC AND SAY THAT THERE'S A VERY GOOD CHANCE THAT THAT -6.3 MIGHT ACTUALLY BE SOMETHING CLOSER TO THE TO THE FIVE NUMBERS OR THE FOUR NUMBERS IN TERMS OF WHAT KIND OF SAVINGS IN TERMS OF THE THE HIRING FREEZE AND ALL THE OTHER THE TRAVEL FREEZE AND ALL THE OTHER THINGS THAT YOU'VE IMPLEMENTED ALREADY, THE HIRING, THE TRAVEL WE'VE DONE THE OPERATING SUPPLIES AND EQUIPMENT THAT EVERYONE, BECAUSE OUR ACTUALS ON THERE ARE WAY LOWER THAN WHAT WE THAN WHAT WE. AND OUR ACTUALS FOR. 25 AND OUR PROJECTIONS FOR 26 ARE WAY LOWER. SO WE CAN. I'M GOING TO ASK EVERY DEPARTMENT IF THEY CAN CUT THEIR. WE HAVE. 
          WE HAVE THOSE 27 SUPPLEMENTALS IN HERE THAT ARE NECESSARY. WE CAN RELOOK AT THOSE AND SEE HOW NECESSARY THEY ARE. I MEAN, WE 1 MILLION. THE. NO. THE ONES THAT ARE IN HERE, JUST THE ERP, THE CITY WORKS I.T STUFF. WE CAN LOOK AT THOSE AGAIN. AND THEN IT'S JUST, I MEAN, THEN YOU GET DOWN TO OPERATIONS. I MEAN, OUR OPERATIONS, WE RUN SO LEAN. NOW I FEEL LIKE EVERY DEPARTMENT DOES A REALLY GOOD JOB OF REALLY LOOKING AT THEIR EXPENSES AND REALLY ONLY USING WHAT THEY ABSOLUTELY HAVE TO SPEND. SO IT JUST THEN YOU START LOOKING AT BIGGER PICTURES. DO WE WANT TO HAVE TO DO SALARY CUTS? I MEAN, THAT'S A MAJORITY OR, YOU KNOW, POSITIONS BECAUSE THAT'S A MAJORITY OF OUR BUDGET. SO IF YOU WANT TO, IF YOU WANT THOSE BIG NUMBERS, YOU HAVE TO START LOOKING AT THE BIGGER PICTURE BECAUSE AS I SAID, YOU KNOW, EVERY PERCENTAGE IS LIKE $1.4 MILLION. YOU HAVE TO CUT. SO THAT'S A LOT. THAT'S A LOT. AND I GUESS WHERE I'M GOING WITH THIS, MR. BOONE, IS THAT I'M TRYING TO FIGURE OUT A WAY. 
          IT'S GREAT THAT NOW WE'RE UP TO 17%, BUT I'M TRYING TO FIGURE OUT A WAY THAT IF THE 26 PROJECTIONS IMPROVE, WE'RE GETTING CLOSER TO THAT 20% MARK SO THAT WE DON'T HAVE TO DEVIATE FROM THAT AND WE DON'T HAVE TO RAISE TAXES OR REDUCE SALARIES OR ANYTHING LIKE THAT. 
          ALSO, THAT 17% OF THAT 29 MILLION THAT YOU JUST GAVE US ON THE REVISED SCENARIO TWO, THAT ALSO INCLUDES A 2% COLA INCREASE. CORRECT. AND YOU CAN WE CAN WE CAN EXCLUDE THAT. AND I'M NOT IN ANY WAY ADVOCATING FOR EXCLUDING IT YET, BUT I WOULD LIKE JUST CLARIFICATION. 
          WHAT IS THAT? 2% REPRESENT ABOUT 800,000. SO THAT'S ALMOST ANOTHER MILLION. SO THAT WOULD THAT WOULD GET US CLOSER TO 4.5 MILLION IF WE DID NOT DO THAT NEGATIVE FOR 27. CORRECT. SO ON LAST YEAR'S BUDGET, WE WERE GIVEN THE OPTION TO DO A TAX INCREASE BELOW WHAT THE VOTER APPROVAL RATE WAS. BUT WE'RE NOT GIVEN THAT YOU DIDN'T PUT THAT OPTION ON HERE THIS YEAR. 
          SO I JUST GOT IT AT THAT VOTER APPROVAL RATE. YES, YOU'RE RIGHT. WE CAN ALWAYS GO DOWN. 
          WE JUST COULD YOU JUST ONCE YOU SET THAT RATE, YOU JUST CAN'T GO ABOVE THAT RATE. SO YOU CAN ALWAYS DECREASE IT. ABSOLUTELY. YOU JUST CAN'T GO BEYOND THAT. SO THAT'S WHY I JUST SAID IT. 
          [02:50:01]
IT JUST WE JUST DID PROJECTIONS BASED OFF THAT RATE GOING DOWN ON IT WOULD NOT HELP US. NO, NO NO I'M NOT GOING DOWN. I'M TALKING ABOUT STAYING BELOW. YOU CAN GO UP BUT STAY BELOW THE VOTER APPROVAL RATE. RIGHT. THAT'S RIGHT. AND THAT'S THOSE ARE THE SCENARIOS WE'RE LOOKING AT IS WHETHER OR NOT TO GO UP TO THAT VOTER APPROVAL RATE OR NOT. AND YOU CAN GO CERTAINLY LOWER. BUT AS AS MISS SCHMIDT MENTIONED IN AUGUST, WHEN WE WHEN WE MEET AGAIN ON THIS. 
          WE'LL ASK YOU TO SET A RATE AND WHATEVER THAT IS. BUT ONCE YOU SET IT, YOU CAN'T GO LOWER, YOU CAN'T GO HIGHER. AND AT THIS POINT, WE'RE APPROACHING NOON. AND I KNOW WE'VE WE'RE GOING TO BE GOING AT THIS FOR A WHILE LONGER. SO I'M GOING TO SAY WE'RE GOING TO HAVE A RECESS HERE FOR LUNCH AND RESTROOM. AND I WOULD SAY, LET'S GO WITH 1240 TO BE REALISTIC. AND WE WILL START AT 1240. THAT'S NOT I DO, WHAT, 40 MINUTES FOR LUNCH? WELL, SOME NOT EVERYBODY'S GOING TO STAY HERE, I'M AFRAID. DO WE NEED TO WE CAN GO WITH 30 MINUTES. 33 MINUTES. WE'LL DO IT. 1230. I WAS THINKING LONGER. I WAS LOVED, BUT WE DO. THERE IS FOOD IN THE CONFERENCE ROOM. I'M SURE THERE IS. THAT DOESN'T MEAN I WANT TO EAT IT. I GOTTA GO BY MY CONTRACT AT SOME POINT. OKAY. SO 1:00 WOULD BE FINE. 1:00 WORKS. WE'LL
* This transcript was compiled from uncorrected Closed Captioning.