City Council - workshop

We will call ourselves to order here. Welcome. This Friday morning around 810, recognized our quorum. We're going to get started on our last day of budget workshop. Going to open with prayer. Councilman Simpson, if you don't mind.

Let us pray. Heavenly Father, we thank you for this morning, the opportunity together, and I ask a special blessing on all that are in this room and for what they do for our community, and just ask that you look over them and continue to guide them. Lord, be with us today. Let us look to you for a direction in all that we say and do. We pray this in Jesus' name. Amen.

Amen. Thank you, sir. All right. Can we get back to you, Mr. Freeman? Yes, sir. Pick up where we left off.

I can jump in real quick just to kind of get started. Mayor, members of council, thank you for being here for day three of the budget workshop. I think we made great progress yesterday. We thank you all for all the great feedback you gave us. I know we did a quick overview of supplementals and CIPs, and we thank you for the guidance you gave us. We have prepared some recommendations for both supplementals and CIPs. You have those in front of you. For our agenda today, we took direction from the council. We have a few presenters to start off with today. Just kind of run through the agenda. The intended agenda here is that we do have Max ready to talk about OEM ACC. We have Michael Kashuba ready to talk about some budget highlights. We have Donna prepared to talk about municipal court third-party delinquent tax collections. We have MIT prepared to talk about a health plan add-on request. We also have some slides for the HOT subsidies requested by Councilmember Simpson. We'll have those ready to go. Let's see here. We'll have a discussion about recommended CIPS of mental requests after that. Lola and finance team will talk about discussion direction on debt requests and present schedules and upcoming debt retiring that's coming up for City Hall and those things. We talked about that yesterday. We have that ready to go for today. We also have the Water-Wastewater ACFER cash flow calculation to discuss today regarding cash flow depreciation and other examples about how we calculated those from ACFER to the available funds. And then after that, we'll take any remaining questions you have and any guidance you can give us. I do know that Councilor Reed has to leave today at 1.30, is that correct? And so my hope and goal is to build a power through all these things today before he leaves. But obviously, if we need to keep on going, that's to the council's purview. And then again, I always like to say we can always do more days if you need it. So we're not telling you you have to stop today. So if the council decides at the end of the day that you need some more time, we need to come back again next week or so, we can do that. So with that, I'm going to turn it over to Andrew to take us from here.

Yes, sir. We'll bring Max up to go over AEC and OEM highlights.

All right. Good morning, Mayor and Council. Thank you for the opportunity. We can start with AECC. I know Councilman Simpson, about a year and a half ago, you had concerns about our team and AECC, our times, things like that. Our staffing levels are going up, but also so is our call load. Our trajectory right now in projections are looking at right around 300,000 calls. But more importantly, what that means is 1.1 million radio transactions for our team. The mental and physical weight that takes on our team is pretty detrimental. SO WE ARE LOOKING AT NEEDING MORE BOTH SUPERVISION AND ACTUAL EMERGENCY COMMUNICATION SPECIALISTS FOR THAT TEAM. RIGHT NOW OUR OPERATIONS ARE 24-7, 365. WE DO NOT HAVE THE SUPERVISION CAPABILITY TO RUN A 24-7, 365. SO THERE IS TIMES THAT WE DO NOT HAVE the middle management to oversee our team. It doesn't mean things are slowing down or stopping. We just simply are chugging along the way we can with what we have, and we're doing very well at it. However, our teams are strained. Really, that work-life balance is being hit pretty hard. I'd be reminisced to say that I wasn't one of the offenders for overtime myself. However, I don't want to dwell on that because that's not the direction we're going. We have moved forward. We have made changes to ensure that does not go back that way. However, within those changes we've made comes with those cost savings of that overtime that we were seeing. So as we push forward through that overtime and bring those costs down, the ask that we have for this personnel, which is not understandably a small ask, But anything we can get would be helpful. We do need emergency communication specialists. We do need supervisors. We do need a terminal agency coordinator at TAC that helps both fire, or excuse me, police and AECC as far as overseeing those duties. These are aspects in the team that we absolutely need. We are still mandating overtime and mandating shifts for people to come back because we do need people. As far as staffing numbers, I'm pleased to tell you that we have well over 200 applicants to our team. There is a pipeline. We are identifying these choke points in our pipeline, however, 100%, 200 applicants can very easily be whittled down to five within the course of 90 days of our pipeline, between our academies of 90 days. And that's simply because of requirements, what it takes, background checks, things like that. So as we push forward, our goal is to continue to get as much support for our team via resources, people, supervisors, things like that, that we can to ensure that our level of service stays at what it is. But also, not only our calls are growing, but our facility itself is growing. You will see hopefully soon in coming councils, we're bringing on new agencies to dispatch for. So our workload is also going up. That is not uncommon throughout the country, is bringing in multiple agency PSAFs, as we have. but that is the the directory that we have we do need supervisory oversight we do need help as far as dispatchers and call takes things like that to ensure that we get the the accountability to our citizens who are asking for help a one point to note that just the non-emergent calls that we get that come to us is about 131 000 of non-emergency calls that come to our center That constitutes, like I said, we're looking at right around 300,000 projected in this coming year. So it's about a third of what we're looking at are calls just non-emergent. So in that, we need people. We are absolutely looking. I've heard what the vision that you all have, that we are absolutely looking to offset with softwares and tools like that. That is already well underway with projects in the works. However, we still need people to answer those calls and dispatch our first responders. I will tell you our overtime costs, historically and habitually, we've been paying around $900,000. That is coming down and has come down quite a bit. We are actively tracking those on a weekly basis to ensure that our time and reporting those to city management to ensure that our time is absolutely monitored and we are cutting everything that we can to ensure that those times come down. But in that savings, that I believe is about 23 or 20-ish FTEs worth of money. So in that, we do see some cost savings that hopefully we can put straight into a new FTE. Again, those steps that we're taking fully and proactively, very aggressively trying to cut down on OT as much as possible to ensure that if we can just transfer some of those habitual funds we've been paying for OT to FTEs, that is a long-term solve for that problem. Questions on AECC, sir.

So how many FTEs do you need right now to satisfy the overtime issues and work-life balance?

Our request was 28 FTEs in total. 28 new? 28 FTEs in total was our request. 10 emergency telecommunications specialists, 12 telecommunications shift supervisors, four senior telecommunications specialists, one terminal agency coordinator. So 27, excuse me, 27 in total.

What's the percentage of non-emergency calls that we're getting into the center that really could go somewhere else?

I don't know if they could go somewhere else necessarily. So this is a continued project with 311 to ensure call routing is accurate and ensuring that some calls, so whether it's like a barking dog call, things like that, we are working with 311 and have been for over a year to ensure that 311 takes as much as they can. But as far as the percentage of calls that are coming in, it's still about 33% of our calls right now.

33% of calls probably would have been best directed to 311 and or maybe the police. That's even after going to 311. Okay. Well, anything that you – because, I mean, I think people are just – 911 is a number that they remember. 311 is not as common as probably – nobody's got the non-emergency police line memorized either. It's just 911 is – but I just wonder if, you know, one thing that we've done, I think, over the course of the last several years is people now know that if I've got bulk waste, I don't put it in the alley. I put it out front. And that seems to be something that people have gotten used to, and we spend a lot of time promoting that. I just wonder if there's more availability to help people understand where the best place to give a call is other than 911.

Absolutely. 311 can absolutely continue to offset. non-emergent calls and they do however there is always going to be a time where it needs to be fully transferred over to one of our call takes and 911 to ensure that that level of service is given those processes procedures and even tools are are things that over the last 12 months we've been working with i will continue to work with kristen and her team at 311 to ensure that those are seamless processes of which we can share uh offsetting as much with softwares, things like that, to ensure that we can automate, therefore kind of offsetting FTE costs. However, we are actively working into cutting down those as much as possible. Well, I agree, because that's the part that can relieve the stress as well as the cause of those types of things.

I just remember seeing some campaigns on hey, don't put it in the alley, we'll come pick it up. But I don't know if I've seen any campaigns to try to say, hey, here's how to direct your call if you have something going on to be able to help people realize that this is the best way to do it.

Times like Fourth of July, fireworks versus gunshot calls, things like that, we do put some of that out during those super high times. Like I said, once we continue to finalize and hash out the processes, procedures, and softwares that we intend to use, that's probably when we'll start actually doing active campaigns.

Thank you. So to be clear, Max, your ask is for 27 positions. Is that correct?

That is the full ask, yes, sir.

That's the full ask. Over here on the recommended sheet that y'all came up with, I see one. Is that correct?

Yes, sir.

Yeah, that's right. So what we ask departments to do, like police, fire, ACC, show us your true need. We're not going to be able to fund all those. That may have to be a future voter approval tax rate election to add that many people because you can't absorb that in an annual allocation.

And you said, Max, you've got 200? Is that what you said? What was your total number of people you have over there?

people, I have a total of 64 in that department as a whole.

So your ask is 27, almost a 50% increase.

Correct. So of those 64, 52 of them are actual dispatchers and call techs.

Okay. So, but you obviously are functioning right now, but like you said, it's a heavy load. I mean, mentally.

Mentally, it is actually costing us people.

They can't, I mean, it's just too much. And you're basically spending the same in overtime to cover that.

Last year was almost a one for one. This year it's, but it is, it does cause long-term problems, operational problems, staffing struggles. I'm not in the business of, of, Physically beaten down and mentally beaten down my team. I want to help them as much as possible. And what that takes is people and things.

And so, I mean, I see here for the 1 person, so it's almost 1 for 1. so if you bring somebody on to work 40 hours, but you eliminate 40 hours of overtime. Obviously, you're it's a net. positive really to the budget right correct but is that is that what you're saying andrew i mean you it tracks over time but eventually you find where you're still gonna have people taking leave you're still gonna have training so there's always gonna be over time but we've got to try and get the balance better yeah but i figure you're paying someone time and a half right or you bring somebody on to take that load and you're paying them correct our current overtime budget is about 235 000 which i think that is a realistic budget to have so so when we budget these are we taking that into account i mean if we look at like he want you know we're looking at the proposal like well it's one employee was that not going to be a wash i mean if we bring them for 40 hours now i get benefits and the whole thing there's a whole lot more in there besides salary is it almost a wash potentially

Yeah, we'd have to find out, because until you add the exact number, you don't know.

But pretty close. I would have to guess pretty close. Instead of paying overtime at one and a half time the rate, you're bringing somebody in and just paying single.

It just depends on how many people are taking leave with their vacation time, because then you're still paying time and a half.

But there is a trade-off.

Mm-hmm.

Okay. But okay, but we're not really taking that into account when I'm looking at the salary, how we've kind of taken into account in the past with fire.

Now that they've gotten to that point, we over hire that you're paying the over hire for the salaries and hoping your overtime drops. We haven't seen the full effect of that yet. So fires kind of testing that out right now, but it should math out that.

i mean it's almost i mean so last year we did get our staffing levels to about 95 and immediately uh those conversations started about over hiring but to to your point sir is absolutely there's we we do take an account for time off sick calls things like that um however yes there there is There's still struggle. We're always going to have overtime to some extent. Like I said, we do have a six-figure budget for overtime. However, we do need to continue to try to – I need to serve my team the best I can.

And I know there's a training issue as well. So maybe first month or one month isn't a good look, but when you're about 95 percent – full, what did your budget look like? Did overtime go down? Yes, absolutely. Considerable.

So overtime is trending to either time itself is flat or down.

Okay. And we do have the space for the people.

Yes. Okay.

Okay.

Thank you.

Yes, sir. I think we'd be amiss if we didn't say thank you for juggling this and thank you to your staff for the burnout and the churn for doing what you do with the limited resources.

Thank you. We have an amazing team, very dedicated, passionate professionals, and honestly, public safety first response, passion is what drives it, and I can't imagine a more passionate team than what I have. Thank you, sir. Tell them all thank you from us. Will do, sir.

Councilman Reed, you got anything down there? Morning, Max. Morning, sir. Thanks for coming back. Yes, sir. You got 64 positions in AECC and OEM. Is that right?

We have 64 in AECC. That also includes three administrative in AECC, and then we have a total of eight in emergency management. One of them is an office manager, one of them is an outdoor siren tech, who their sole jobs are office manager work and working on our outdoor siren system. So technically six operational in the basement down in OEM.

Yeah, so last year's budget 1.6, revised estimate, looks like you're bringing it in at around 1.2, and then this year's budget 1.6 again on OEM. Is that correct? Yes. And then going back to AECC, last year's budget 6.7, revised estimate 6.5, this year's budget roughly 6.7. So under budget both times.

Yes, sir.

Okay, and you're doing that with paying all of the overtime?

So OEM, we have We've made exempt as much as possible in that vein. However, if they were non-exempt, they would be looking at around 4,500 hours of overtime just out of eight people. To your question, and ACC keeping it under budget, that is, yes, offsetting costs by trying to save money elsewhere in other lines.

So I just want to make sure we're not hearing something different than you're saying it. So right now you're working with 52 of your 64 positions full?

We are, I'd have to, I can't remember the exact number off the top of my head. We are short some of our emergency communications specialists.

So tell us a little bit about the 27 position request. That's just an overhire? Open those positions up in order to go and hire so you can train and then you would significantly decrease your overtime pay, and you would still make that budget number work with the request?

In a sense, if we're looking at it, and again, my ignorance when it comes to our overtime budget versus my ask, The ask itself is right around, for 20, for 27, it's right around that 2.4 million impact. Right now, even if we had just one for one, we threw 900,000 at it, that would drastically improve my team and help our team.

Okay, so you've got... You're giving us kind of the high, right? And we're making do with what we've got. Here's what we really would like. But then even if we could get $900,000 budget approval for FTEs, how much was your overtime in that department last year? That was about $900,000.

Oh, okay. So that is the one for one. Correct. And if you're looking at your budget book, I don't think our revised estimate is correct. It's showing 260 flat. It's going to be higher this year than 260 flat.

You're showing 260 in the OT? On page 174. That is the budgeted number.

But you can see 22, 23, we had actuals of $864,000, 23, 24, actuals of $970,000. So similar to police and fire, they spend the overtime and then it ends up being covered by all the other departments by the end of the year and excess sales tax revenue.

Max, what does it do for you if we move those line items around?

The ability to get any more people, any more telecommunicators will drastically improve. One, the ability to give people time off, to give people actual breaks during their shift. Yeah. That drastically improves.

Mr. Freeman, how do we make that happen on your end? Because I know you were public safety for a good while, and this has been under you. So what would you advise if the goal here would be to get roughly 10 FTEs budgeted, but then recognizing that we need to still stick with that 6.7 million overall?

I wouldn't budget it. Continue to work with Grayson for authorization to over hire like we're doing with the fire. And then we're going to figure out that balance and see what we can actually bring on formally in the budget next year would be my recommendation.

And why not just budget those 10 FTEs in order to over hire?

Because it's going to show you're upside down. It won't be a balanced budget. Because you still have to budget for both because you don't know the true net impact.

Even if his actuals are $6.5 million and he's under budget for the year, but then— I don't think that's accurate. I think our revised estimate's off. We'd need to double-check those numbers. Well, actuals were $6.4 in 2025, and then they're showing actuals projected $6.5 and budget $6.7. Yeah. So I'm just curious in wanting to hear, you know, if it's semantics and he has what he needs, then let's move on. But if it's not, if it's where Max, you know, or Mr. Dunlap is like, well, I still can't go and open this up. So if council's giving good direction to understand, you know, you have a million dollars there, plus you've got an ask over here, right, that we would intend to fulfill.

Yeah, one for each department we currently have slated in there. And I think part of why we don't recommend building it now, they're not at 100% staff. So we don't want to add positions until they get to fully staff. So it's a sequencing thing as well, which is what we deal with fire. And hopefully we're soon getting to with police. Once they have a full number, we're going to do an academy where they'll overhire about 20 officers, and we'll build it into the next budget is the plan.

Okay.

Yes, sir.

Mr. Dunlap? Yeah, that's the model I think that works well for us is in these departments that have struggled to get to full hire, we don't know the full picture until we get the full hire. And so I think what Andrew's saying is very, very good. We want to start an over-hire process to get everything done. fully staffed, over hire, and then that starts to settle the waves out. And we start over time starting to see where things actually fall, where how leave is happening, where overtime is happening. That allows us to have a better budget picture going forward. So I'd like for us to get to the over hire picture. That's going to be a great victory right there. Because I know Max has done a tremendous amount of work over there just to try to get the culture to where it's got to be at. And so we can start getting to that point. And then when that happens, we can start really giving you better numbers over budget.

Thank you. I heard Councilman Prescott take a minute to make sure that everybody heard us say thank you. We appreciate you guys. Mr. Dunlap, I hope what you would hear here is the direction from council. I believe, and council could redirect it, would be for you to go ahead and continue with that over-hire practice and continue to try to build out that team, whether that is in the form of working within your current budget because you are having to pay some of that OT or you're able to bring those people on and cut the OT down. definitely see the the need to keep you prioritized in our public safety system and then we would want you to be able to communicate back that that gives you what you need for this next year with a goal in place of expanding those departments, OEM as well, and continuing to bring OEM up to a level of collaboration with all 26 counties. Also, a lot of the things that are growing outside of the city limits, and continue to be a burden and a stress on you to figure out in your strategic plan? Do you have a master plan? Do you have your planning tool? Do you have all your lines of communication open to those other entities so that you can do what you need to over there in the basement?

Yes. We continue to work through as new projects pop up in the region in our jurisdiction. We continue to try to work with those partners as much as possible. And AECC, as we grow, and I appreciate that feedback, as we bring people on, I absolutely need the supervision to oversee those frontline team members. So that would be the ask, is supervision. if anything, at the very least.

And I think, too, the nice thing that, given the, this has been good discussion, that given the direction I think I'm getting from council is, as we are over-hiring, get to that point, as I start seeing mid-year budget savings and overtime, based off what I'm hearing, I might be able to start making some mid-year changes to start shifting money over to some hiring positions. We want to vet that out. I probably want to get with you guys as we're doing that because I want to make sure I feather this out right to keep the budget within budget. But I think as we are overhiring and if we do see overtime coming down, I think I may have some opportunity here from council to start shifting it over to the salary lines a little bit.

I don't think Max touched on it either. He's continuously looking for new revenue sources. So actually coming on council is going to be a new contract with AISD. That could fund a position. So those will help as well. But it's not locked in yet. If it gets approved, we could probably build that into the budget right away before September so we can go ahead and count on that funding in one new position as well.

Okay. Question. I think we answered this APD, but with the overtime that has been typical over there, we don't adjust the budget for that, do we? So when you look at that apartment, even though the last few years have shown that it's... We had to find savings across the general fund to cover it. Yeah, we don't. Okay. So that's exactly the way this is drawn up as well.

Yes, sir.

Okay, but we anticipate, I guess, we're going to have money to pay the overtime.

Yes. Okay. Yeah, mostly between other departments and the turnover of not filling staff and then hopefully excess sales tax revenues and it all comes together again.

Yeah, that's the work that we're going to be doing throughout the year, hopefully as vacancies are, because we're going to have some vacancies and we don't know who and when and where, but we're going to have that and it is big. Our job as management is to be making sure that those savings can cover for those overages. Then hopefully over years to come, we can start, as you see in your supplementals there, start chipping away at that budget to get it trued up.

So like APD and FIRE and OEM, we just We're just going to cover it out of general fund, and we just hope that it's going to be there to cover, whether we dip in reserves or whatever. We know it's coming. I guess I'm still confused why we don't adjust the budget for that, but okay.

Because if you actually show it on paper, you won't. It doesn't show it. It shows you'll be busting the budget.

Oh, you don't show the overtime, and so you're not able to track it.

Yeah, because otherwise you're not dropping or adjusting salaries because we hope to be fully staffed, so we're showing that so there's no swapping it around. And APD and FIRE is a little tougher because they have guaranteed training. Sure.

minimum staffing and all that that's still going to be paying overtime for yeah i i guess i mean well and again maybe an accounting issue but why can't we have a line item that we just budget overtime and then as we see the full staff those will trade out right we have that we have that time to come down and we have a line for overtime it's just under budget it's about two million instead of say pd needs four million okay yeah okay

And so hopefully what we see first is that we budget for every position, hoping we're going to fulfill them. So in theory, we don't budget for the full overtime because we're hoping we're going to fill every position. But then whenever the salaries do come in under, we have that starting point to help fund overtime. But in some of these situations, that's not always enough. That's where we look for other departments.

But we're not budgeting for the ask of 27, correct?

No, sir.

That's in addition to. Correct.

Those are just supplementary requests so you can see the true need.

So what's truly full staff then? I don't understand. Because I would say that Max would tell me that fully staffed would be his staff plus 27. Well, that would be the ideal scenario.

But we don't budget for that. He's not fully staffed yet with his budgeted FTEs now. But we don't budget for that.

the the full fte the 95 yes we do have that fully budgeted right now but that does not include the 27th no because that's around 60 you have to add another 20. and our goal is to get to the current fully staffed i got you so we we can't get to that just what's current fully staffed this 27 plus or no no no it's in your book current current fully staffed 64 total okay 64. okay i guess i heard you wrong i guess i heard that like we're going to budget for this and then hopefully

No, we're going to overhire and then adjust next year as we're seeing the balance, and then we can try and build it into the budget.

Yes, step one is to get to be able to fill these positions it's budgeted for. That's step one. Step two is to overhire, and then step three is based on the overhires, start making some adjustments over time and salaries to start making that 64 go to 67, 68, whatever. Then step four or five where I'm at now, next year bring back to you a more – a better budget now that we've had some real numbers to work with over the year. So it's a multi-step process that we're working through.

OK. Thank you.

I had just a very quick question on overtime on APD. Is there any revenue recognition for the overtime services? I mean, when they're providing security and things, how does that work?

That's off-duty work. That's off-duty work. So that's they're getting a check from whoever they're working for. It's not coming to the city.

Okay, so there's not any cost recovery for the overtime activities.

That's strictly... That's like a second job for them that they can go do the side jobs and... No, it's not costing us anything, but that's, yeah, we're not getting any.

I just wanted to verify that we weren't paying that and there was not a cost recovery mechanism.

That's strictly between whoever hires them, if it's a school event or any of those kind of off-duty jobs.

I understand. Thank you.

I just want to thank all the departments, particularly those that look at overtime, with the effort that you're putting into monitoring the overtime. My experience is if you don't monitor, if you don't tightly look at the overtime, it can get out of control if somebody's not watching and monitoring it. But I feel totally confident in the public safety divisions with what I've heard the last couple of days. You guys are doing a great job, so thank you, and thank you for staying on top of that. We don't want to, you know, it's got to be paid, but I think, I really feel like we're doing a really good job at managing that, because it's, If you look at when we went over and if we go over in overtime, yes, we have the savings on the empty positions. But if we didn't have that saving on the empty positions, and this year, for example, if we didn't have the sales tax, more sales tax, it could be problematic that we're going over that. So I appreciate everybody really monitoring that, and I feel confident you guys are doing a great job. Thank you.

Thank you, sir. For sake of time, I'll kind of close up with OEM. So like I said, we have a total of 18 in the Office of Emergency Management serving well over six figures of participants and citizens, with six of them being actually operational. Right now, we spend roughly between 75% and 80% of our time in some sort of response mode at any given moment of the day. We are a 24-7 operation as well. We run duty officer shifts Monday to Monday, 08 to 08. However, it does get very hard. So we do need a little help in emergency management. We are absolutely, as Andrew pointed out, in both our teams, we are looking at revenue opportunities with AISD upstairs for dispatch. as well as an emergency management. There's other agencies for our services that we're looking into, whether it's emergency management services, whether it's outdoor warning siren services, anything like that. So we are absolutely going down that to ensure to offset any possible down the road, bringing on new team members. Hopefully those contracts can offset those costs. But like I said, we are right around that, probably 13 000 hours short of availability a year with our mandates we have over 185 mandates whether plans procedures things that we have to upkeep and we're running short when it comes to uh just basic to 2080 hours a year based on the people we have we are about 12 to 13 hours short of our what our need is

So you said 12,000 hours? Yes, sir. So you need six and a half FTEs?

That would be the full ask. Right. I will be happy with one. I'm no stranger to doing more with less. One person in emergency management does a lot. We are very actively pursuing offsetting with softwares and automation, very much using AI to the extent that we can and are available to use AI to offset those FTEs or at least aspects of them. We have progressed very far down that road in the industry, both when Rich was still here and also for me reaching out to colleagues and things like that around the country with other state and federal agencies. of how that works for us, how we can offset that. We are very far down the road with using our situational awareness tool, the VOC, of offsetting both our operations, as well as our planning, as well as our asset management, also utilizing those tools for recruitment. So an example of when Chief Mays sends a team out on a TIFMS assignment on his mutual aid assignment, There's a lot of tracking of documents and funds that need to be happening. This tool that we have can automate those things to an extent and bringing that back while they're in the field, bringing that back to us. It's no different for if I were to deploy one of our team out to anywhere through our contracts, whether it's in the state or the country, they will have real time communication with us here back at the agency. but we we absolutely need the help anything at this point one person absolutely would be helpful but yes in in a perfect world we would need six to seven just a few more things we'll let you um get out of the way so um you know with police and fire we have

Levels of promotion so so we go from you know sergeant lieutenant captain so like how does AECC promote?

So we have different levels of leadership So our emergency communications specialist is kind of our frontline team member from there It can move into a shift supervisor or a junior supervisor from there It is a senior supervisor which are trying to reclass their name to manager and from there it gets into upper management

Question, so probably for Mr. Freeman. Public safety overall tends to work pretty good with strategic, we're looking at a 3% increase that we're trying to find in the existing tax rate for all personnel. But when you look at, and it's not that every department doesn't have a team environment, they do. But when you're running a large team, that deals with trauma. There's a different level of burnout, so there also is a different level of supervision. And there's also, to a great extent, there's a different camaraderie and relational aspect And so we would hope that that would continue through the entire organization, but where it has to be foundational is in areas like AECC. So in giving a directive of, hey, we really want you to build the strongest team you can, and the way we're hearing you say that you would do that better is through supervision. What if he was able to take the overall budget, and this might even equate on overtime pay as well, COULD WE BUILD IN A DIFFERENT LINE, ANOTHER LEVEL OF LEADERSHIP OVER THERE SO MUCH LIKE COUNCILMAN TIPS you know, stated yesterday, a lot of our job is about performance and we want to reward high performing. It doesn't mean that others aren't high performing, but there are those that are willing to come in early, stay late, work the OT, and then, you know, there needs to be the capitalism in it. So what could we do in AECC that would create a different level of supervision?

Yeah, we can look at those things. Max and Jamie, the assistant director, they've been working on kind of strategies of if you grow the staff, how would you do the levels of management to do that career ladder and reward those employees for more experience, give them the opportunity to supervise. So we can review those, and then as part of our overhiring process, like Max said, we need to adjust those to see where it fits in in the hierarchy. So we can take a look at that.

We're doing that strategically in both departments right now. Even with eight people, there's still a structure, and I'm trying to at least break glass ceilings in both departments, to your point, Mayor.

Yeah, so we'll work on that. They've got, I think, multiple strategic plans at this point that we can evaluate and tweak, knowing that we have the support from council to overhire and make some adjustments and see what works best for the group.

Well, we'll walk out of this budget workshop. We'll pass a budget. We'll never hear from you, right? You'll just show up when the tornado hits and the fire in the flood happens. Y'all will work 48 hours straight and we'll never know it. So why don't we not do that? Let's have you come back at a council meeting in the future. Let's have you bring in a discussion item for here's my strategic plan. Here's what you guys gave me once the budget's all worked out and here's how I'm using it. Here's the health of our team. You know, here is who our team is. You know, when we had our first flood over there or my first flood, bring the team over sometime, you know, end of the year or in between catastrophes, if you would. And then let's hear from you. Let's see how you're doing on those two very important roles. Anything further, council? Okay, thank you, sir.

Thank you.

All right. Next up is Michael Kashuba to talk budget highlights for parks.

Mayor and Council, Michael Koshuba, Director of Parks. Just wanted to kind of give a quick update on where we've been, where we're going, some of the bigger capital items and some of the bigger supplementals. So over the last five years, obviously, there's been a pretty significant investment in parks to the tune of over $36 million. What we're proposing next year is a focus on details. We've been really focused on getting these bigger projects done. And what we're looking at this next year is really focusing more on the detail work, you know, signage, fixing up areas that may not look as good as they have in the past. So really focused on maintaining kind of our existing infrastructure, trying to make that look better. On the cost recovery front, tennis is doing extremely well. We anticipate them being in the black at the end of the fiscal year. Golf, we anticipate being, if not in the black, very close to cost recovery. We do have some proposed fee increases in the budget, so we would obviously recommend those. That's going to be $2 per round, and then some increases on the golf carts. But again, that continues to move golf in the positive direction when it comes to cost recovery. So we're very happy with the progress that the team has made. They're going from basically $2 million upside down to breaking even. And then obviously we continue to work on athletics. So we don't have any fee increases for tennis. We do have for athletics. So there's a small fee for field rentals, for games and practices. And then we also have gone up a little bit on some of the league fees. So those are all in there as supplementals in terms of the fee increases. So we would recommend all of those. Tennis, because it's done so well, we would say just hold tight and we'll continue to monitor it and then make those necessary changes as we kind of move forward. AS I MENTIONED, WHEN WE PUT TOGETHER OUR CAPITAL LIST THIS YEAR, WE REALLY HAD SOME DIFFERENT FOCUSES. NUMBER ONE WAS MAINTAINING THE EXISTING. SO YOU'LL SEE PARKS E&I OBVIOUSLY IS GOING TO BE OUR HIGHEST REQUEST. THAT'S THAT ONGOING INFRASTRUCTURE MONEY WHERE WE CAN GO AND MAKE THOSE IMPROVEMENTS IN THE PARKS. WE ALSO HAVE THE WARFORD POOL, THE PLASTER IS REALLY STARTING TO FALL APART, SO THAT'S ABOUT 250,000. We have about 1,500 people a month use that pool. Actually in June we had 4,600 people that actually used that pool during the month. The other kind of areas that we kind of grouped them in was the continuous irrigation improvement. Obviously there's been a high focus on irrigation this year. One of the things that we're proposing is an increase on the irrigation line item. The irrigation line item and park maintenance is currently budgeted at 125, and we're almost at 300,000 already this year, just because of all the repairs that have needed to be made. Along with that, there's a supplemental to start buying some additional seed because a lot of those areas that were irrigating a few years ago during COVID, the weeds kind of took over some areas. And so as we're killing off those weeds, we're starting to see bare spots. So some additional funding just to get some seed to kind of fill in those spots that are kind of bare. One of the things that we're proposing as a supplemental, it shows as a negative, is bringing some irrigators in-house. That was one of the challenges, obviously, with the contract is when there's an irrigation issue, we're relying on a contractor to go fix it. Currently, we have four irrigators that cover our entire parks. So we would be looking to bring six additional irrigators back in-house. But what we would do is that money would come out of the landscape maintenance contract. So currently those services are provided in that contract. What we would do is back out the amount for those irrigators out of that contract. So we would just net it out at a zero. And then as we've kind of mentioned, we're currently have that temporary landscape maintenance agreement. That is something that we will be rebidding this fall. There is a supplemental for some additional properties to be added to that contract. So those are properties that the city has accrued over the last year or the last couple of years that we would add to that landscape maintenance. And then some of the other groups of projects that we had put in for capital, obviously irrigation, so central control. Our irrigators currently have to go out to each park, and I'll give an example. John Stiff may have 10 different controllers, so they're having to manually set those controllers. There's no way to do it remotely from our main office. So we're proposing that we would kind of update the technology where we can take a quick look. I can't tell you how many park staff have gone out to, and the controllers are off. And it's not staff that's turning them off. So we would like to have better eyes on that from a distance where we can monitor that and make adjustments as necessary. Will those have rain sensors too? Yes. So a lot of the new technology with those centralized controllers will automatically have got software that will adjust for rain, freeze, everything that goes with it. So again, we would be looking at some pump stations or some parks that just don't have quite enough pressure. There is one that we would recommend pulling out of it because we don't have an agreement with them. We've been historically maintaining it. That's Hillside School Park. Historically, the city has maintained it even though we don't have an agreement. So we would not recommend that being included in that project. But the other parks are all city parks or we maintain the school portion of it.

Now, when you say you don't recommend to have it, is it included in here right now?

So in the irrigation pump stations, we have a line item of 350, and Hillside is about 45,000. So the request for the irrigation pump stations would be about 305. So that would come down a little bit.

So I would say make that adjustment for sure.

Yeah. Michael, how did the controllers get turned off? Are they secure, or is it just citizens going out turning them off, or kids, or whatever? We don't know.

Unfortunately, a lot of those controllers have the same key. And so unless we go in and manually change each key on that, which would be quite a process, or secure them a different way, every irrigator in town has a key to those controllers.

Interesting.

It's just a standard, industry standard key. Hunter key or something, yeah. So we've gone out to some parks where we've seen valves turned off, we've seen double checks turned off, we've seen, I mean, you name it. So we want to get some better eyes so we can see if water's flowing, if water's not flowing, you know, obviously we can send somebody out to make those adjustments, so. That's something that we would recommend. Councilman Simpson brought this up yesterday, the discussion about restrooms. We would propose removing the restrooms that are on school parks. We've actually sent over a joint resolution to the school district for consideration for us to remove those restrooms from those school parks. And then we also put some money in if council so chose to start replacing some of those restrooms in the parks. We have some requests for playgrounds. The playgrounds we put in there are in very bad condition. Again, there's five that are being proposed. Three of those are on school parks that we would recommend. The Parks Master Plan recommends terminating those agreements. So we've got one at Landergan, Hilltop, and Margaret Wills that need to be replaced. Those are currently under those maintenance agreements that need to be replaced. But again, we're having conversations about those agreements. So we would recommend, obviously, Sunrise, which is one that we would fund the city portion and the one at Memorial. And then there's some, what I would say, planning ahead projects. We put in capital for the aquatic replacement just to start design on it. With council's recent guidance on the aquatic feasibility, I think we just put that one on hold for a year. That's something we could come back based on what the feasibility study says. The Parks Master Plan Council has given previous guidance on that. We'll put that one on hold as well. And then one of the things that we put on here just for Council's visibility is that artificial turf. I know there's been some conversations in the past about what would it take to turf some of those fields. So we just put that in more as a planning number, not as opposed to that needs to be funded immediately. THERE'S THOSE THREE PROJECTS THAT WE WOULD SAY ARE PLANNING AHEAD. SO IT'S THE AQUATIC FEASIBILITY OR THE REPLACEMENT, THE MASTER PLAN, AND THEN THE ARTIFICIAL TURF. SO THOSE ARE JUST ITEMS WE HAVE. AND THAT'S UNDER WHICH LINE ITEM? THOSE ARE WHAT WE HAD SUBMITTED TO CITY MANAGEMENT. OH, OKAY. BUT THEY'RE NOT LINE ITEMS HERE?

okay no this is our work from late last night to try and come with a constrained recommendation okay i know this is not for today but can we have a report out on that or have a deeper dive in the artificial turf and what the roi looks like on that for long term could if we did we have not done that yet in terms of it what the true significant impact that the city could be if we put the artificial turf at some of these locations for the the larger events and things

What we could do is we've got the numbers. So we've actually worked with the company to get us very specific numbers for each of those fields. So we've got numbers for if we were to just do the infields, if we were to do the entire fields themselves. Obviously, we would know what our staffing costs are. I think the one that we would have to work with the CVB is the hotel stays, because obviously the more, and that's not going to show up in the city budget, but obviously that's revenue that comes into the city. So we could work with CVB to look at those financial impacts on hotel stays, you know,

not not now but just i mean if we could look at that in the fall that would be i think that would give us a lot of clarity michael do do we see that there's a big volume discount in that turf in other words could we tack on to what they're doing at kids inc right now and use their buyer would it be significantly less or have we even looked into that I know they're a different entity, but maybe we could.

Yeah, we could look into it. I think we've got to follow our procurement laws. So I think the dollar that big, we would have to probably procure it ourself. But I think with larger volume, you're probably going to get more interest and you're probably going to get a bigger discount. So if we were committing to doing four complexes or three complexes, obviously you're going to get a volume discount on that. So. And at that point, if we were to look that direction, we would put it out to bid. We just wanted to have back pocket numbers of what we anticipate those costs being. It could be lower than that. It could be higher than that. But those are the budgetary estimates that we have at this point. Thank you.

So with your bathroom proposal, at the end of all this, any bathroom that is still standing will be open?

Yes, so currently the only ones that are closed are the school park restrooms, which are at the discretion of council. So a couple budgets ago we had proposed keeping regional parks open, the restrooms in regional parks and community parks, closing the ones in neighborhood parks and school parks, At that time, the council recommended that we keep the ones in regional community and neighborhood open, keep the ones at school parks closed. So that's been the guidance that the department has operated on for the last couple years. So yes, we currently open all of those other ones, with the exception of sewer issues, plumbing issues, or other unforeseen issues. But our goal is to keep those ones open. And the other item would be to start replacing some of those. Some of those structures are in really poor condition to just start addressing that. So we're actually working with facilities on kind of coming up with a system-wide design for that that I think we could replicate throughout the park system.

And this follows the strategy that we've had in Parks and Recreation, at least I've been over here. We're investing in the larger parks because more people use them. We can serve more people. We can invest the money there. We just don't have the resources to provide everything in every part in the city.

Correct. And that's guidance that comes from the Parks Master Plan where it really talks about scaling back and focusing where we put assets. So putting bigger, better assets in those larger parks and maybe scaling back in some of the smaller parks. It allows us to focus and get better products, but it also helps us manage our staff time. Because if we're having staff going to 15, 16 different splash pads, it's a lot different than going to two or three. So, again, that's part of the reason we wanted to look at that as a part of the aquatic feasibility was looking at splash pads along with those other pools. Good.

I'm all for handling the bathroom situation.

So the school district-owned restroom situation, you feel like it's got a good strategic plan now, right?

I like this plan.

Okay. All right. So the city owned restrooms, you've made a lot of progress on and they're open and we're updating them and communities are painting the outside of them and they look better. concessions look good out there at the recreation fields, all sorts of good progress, right?

Well, and that's one of the things that I've mentioned previously with that park scene. Our goal is to kind of freshen stuff up. So it may be repainting the restrooms, looking at some fixtures, things like that, where it's not those bigger projects. It's more focused on the details. So what is the sorry, what is the E&I that's in your budget for parks? It's currently 922 is what's being proposed.

And that's in the budget. No, it's still, we have to approve it. We go ahead and put it on the list, but it comes out of that $11.9 million. Now, why is that? So it's not in his budget? No, because we just do it as a CIP, and they basically do subprojects as the needs go. We have that along with multiple departments. Traffic has an E&I. Facilities has an E&I.

Yeah, and so I see that on kind of the list where it comes out of that $12 million CIP, right?

Historically, that's just been the way we've had to fund it with a one-time fund versus building it into operations.

If you go through the parks and rec cost here under leisure, there's no E and I built into your budget. Correct just comes out of comes out of excess revenues every year right as a as an allocation.

Yeah, we usually take the eyes off the top of the allocation to start with and then everything else is. Okay, other projects.

Can we jump into the budget and why it's maybe recognized like it is? If you look at Parks and Rec 434, that's the page. We've got an actual of a million. This is just admin. Then in 25, admin shows 6.7 million. Then it drops back down to 1.2. What are we doing there? Why did that jump up so much? I thought it was operations maybe were being done under admin at that time, but then if you flip over to operations, which is the maintenance more or less at 466, we still had 10.2 million in actuals. So a little over budget in 25 on both, is that right?

What I'm thinking, and I don't know the answer, this would be a finance question, but I think it's probably the way some of those capital projects may have been coded.

AND THAT IS EXACTLY WHAT I WOULD HOPE WE CLUE IN ON. WE DON'T NEED TO BE PULLING CAPITAL PROJECTS INTO BUDGET, YOU KNOW, RUNS. WELL, THE CONTRACTUAL SERVICES? YOU'RE SAYING ON PAGE 466 OR OVER ON, OH, YEAH. SO CONTRACTUAL SERVICES ARE LISTED TWICE THEN. THAT'S A GOOD CATCH. YEAH, IT'S 5.6 MILLION. THAT'S YOUR DIFFERENCE. What is that, you know, Ms. Lola, if you got that, or maybe somebody in finance?

Well, what comes out of that, I think that's your mowing contracts.

No, they come out of park maintenance. That $6 million, I'm not sure what that number was.

I just want to make sure we don't have CIP monies funneling back through actuals on, like, what is O&M, right?

So if you'll go to page 434.

LOOK AT THE ACTUALS. I'M ASSUMING THOSE COME FROM THE ACFER, RIGHT? AND SO EXPENDITURES ARE 6.7 MILLION IN 25, AND THEN WE'RE PROJECTING THIS YEAR TO BE AT 1.2.

BUT THE DIFFERENCE IS THAT CONTRACTUAL SERVICES NUMBER OF 5.5.

THAT'S A GOOD CATCH. SO IF YOU FLIP OVER TO PAGE 466, YOU'RE GOING TO SEE THE CONTRACTUAL SERVICES AT 6.8 MILLION FOR THE ACTUALS IN 25. Look to be in line this year. Just trying to find an extra $5 million there if possible.

But that's not considered administrative costs, right?

Shouldn't be categorized. Shouldn't have contractor services under admin, right? You've got a budget for admin. That's all in-house.

Because if you go to page 387, it shows that $6.6 million for 24-25 as administrative costs.

Are two justice working on this? I think many the moment here to to to bring the answer to you so we can bring that back to you.

So Kashuba, on that, let's assume we have an error, maybe, in how the budget got written down. And if we did recognize some cash flow that would come through that general fund, That would be a benefit. But then if not, we're still looking at your asks. And so you need $922,000.

Again, that 5.7, that's a prior year actual. That's not existing. So that was a year or two ago. So, yeah, we can figure out what that was. We'll get back to you.

I would just say, I guess, Mr. Path, if it was recognized as a, as in, an entry that was done in error, that comes through to that cash flow, right? It comes through to the general fund in current year. If it was an error, it would be part of that one time general fund capital. Right.

But then if it's not an error, we would- But it would have been in the current year budget.

Well, we would just need to see what the explanation is if we spent

what would be 11 plus million dollars in contractor services yeah yeah justin's working on that right now so um if we can come back to that once he's done we can get some other things done here and we can we can circle back to this real good um so the the e and i what are you going to do with that money what what all can we get done with that so that's a lot of those little projects so again replacing a lot of the signs going in there painting facilities cleaning up those facilities so it's going to be a lot of those types of projects And then anything that comes up that's kind of more on the emergency side, something we have to address, is something that'll generally come out of there.

And I was thinking we had an E&I built into your actual budget every year, but we don't.

It's just coming out, okay.

Can you tell us anything else about any of your other requests that were supplemental? I mean, I know kind of the, I guess here, let me lead into this, the Kids Inc. facility, all the turf that's going out there. What does that alleviate for you guys in wear and tear on fields? What does that open up to for MRLO? You're thinking about tournaments and stuff like that. So really look at an ROI on that. You know, I think it was Prescott that said you could give us something back.

Well,

Three, four years from now, when Amarillo is much easier to travel to, kids' sporting events have grown, that facility south side of town has got a Topgolf next to it and 10 more hotels, right? You just have to throw this out in the ether if you speak it out. And so from there, what are we doing with our other four fields where, hey, Amarillo services, these really large convention style sporting events. And so now we need to go put 20 million dollars into the turf. But you've got hard facts and data over there to pull from. How can you grow your department from that? Tell us about like what we could do. and updates along the way?

Yeah, so I think when it comes to athletics, obviously we're seeing huge markets across the country for youth sports traveling, which is obviously the impetus behind that project. I think the challenge is when you start doing those bigger tournaments like when we work with kids Inc which was Texas Texas panel to use sports foundation which rolled under kids Inc when they do those bigger tournaments they're using every complex in town. So they're not just using John Stiff they're using Southeast they're using Martin Road they're using Rick Klein. They're using every available facility we have. And so if you're starting to look at hosting those bigger tournaments, those bigger regional tournaments, obviously turf plays an advantage. I think one of the things that we've seen is a lot of surrounding areas. Hobbs has turf. Midland has built a bunch of turf fields. A lot of teams are going to commit more to those types of tournaments because there's a less likelihood that those events are going to be canceled due to rain or other issues. Artificial turf. It rains, you're playing on it in 10 minutes, whereas natural grass, obviously it takes a little bit longer for that to absorb. I think there are some pros for keeping natural grass, but I also think from a playability, from a marketing standpoint, I think artificial turf is the way to go. It saves on obviously staff time, it saves on irrigation watering, AND AGAIN, I THINK IT CREATES MORE OF A CONSISTENT ENVIRONMENT WHERE PEOPLE KNOW WHAT TO EXPECT. I DO THINK THAT IF WE MOVE THAT DIRECTION, EVENTUALLY WE'RE GOING TO HAVE TO UPDATE OUR RESTROOM CONCESSION FACILITIES JUST BECAUSE THAT INFRASTRUCTURE IS OLD. THE EXAMPLE WE'LL USE IS THAT MARTIN ROAD WHEN YOU HAVE A They're lined up out the door. There's not enough facilities for people to use. So I think if that is the direction we go with the improved turf facilities, I think one of the things we'll have to eventually look at is how do you start to address those restroom buildings as well. But again, that could be the revenues that come in. from those tournaments. So again, I think it's a good thing. I think the challenge is the money that comes in is not necessarily going to show up in the city budget. It's not going to be a line item under parks where all the economic impact shows up. It's going to be in sales tax and other things that are going to be indirectly coming to the city. So yeah, we're happy to put that together. We've done a study a couple of years ago looking at athletic facilities, what the cost would be to update them and renovate those. And we'd be happy to share that with the council.

Okay. Let me catch just a few more before we jump. So seniors are in there in the back, like there's $111,000 that went out to those programs. I'm still an advocate for putting, you know, I think the city should budget a half million dollars a year for just seniors, right? And then I don't have a good mechanism to push that through. I wish we had kind of like a smaller community type feel somewhere where there wasn't a senior citizen center that had been there for 50 years and It would make it easy for the city to utilize that structure there. We don't have that. So we're trying to work through the Warford and services. And so we've got budgeted $100,000. Is that enough for the seniors to get anything? And then what are we doing with that $100,000? Or are we getting a lot of bang for our buck

I would say yes, we're getting a lot of bang for our buck. And I would say that those numbers continue to grow. I'd be happy to get those to council. We continue to see more and more people using the Warford. We also have started providing lunch through some partnerships at the facility. So that's not showing up as a cost to the city, but that's something we are providing out there. So we're doing lunches out at the facility. We've got a really excellent senior services coordinator who's really helped to not only do some more community engagement, but also to grow the membership. So we're starting to see more and more people. We're starting to see a lot of collaboration. we'll have events with the Wesley. So the seniors from Warford will go over and have a friendly competition with the folks over at Wesley and vice versa. So we're starting to see some of those relationships being formed between the different seniors organizations. The challenges for Warford, we've got that one area that used to be kind of the daycare area that's basically two classrooms that have been converted to the senior area. So there's going to be limitations with space when it comes to when we start hitting capacity, because each of those rooms can only hold 28 people at a time based off of a classroom. So there are some limitations there, but I would say that program is continuing to grow. We're starting to see more and more activity. And again, I think they've stretched that budget and beyond what's currently on paper. So those partnerships and other things. They also offer a lot of classrooms, so we'll bring in different teachers to kind of walk them through everything from financial stuff to health and wellness. I think one of the things Carrie's done really well is actually having some of those seniors start to lead some of the classes. So, I think it's a really, really great program and obviously 1, we would like to continue to grow.

So you've got a program in place where these, like, senior citizens associations, there's several right? They have a coordinator. They can reach out to can they utilize facilities? So, if we've got. You know, like, they wanted to have an outdoor event, but it needed to be covered in kind of the tennis center and whatnot. Can the city. Work that through those seniors benefits that are that are in your budget and so can they grow within what we already have? So. As much as I'd like to say, hey, let's put a half million dollars in the budget for the seniors. Maybe that's not this step. Maybe that's later. But then what does that program do in taking existing resources that we have, you know, and promoting events and culture and community and really the engagement?

Well, and again, I think some of that would be running through some of our different divisions. But I will say, over the last couple of years, we've really been promoting some of the programs that are offered through different individuals' health care programs. So there's silver sneakers programs. So a lot of people will qualify for that already. We've given them basically, if they have that membership, they can get free access to the tennis center they can get free access to warford so there's a few different programs like that that we are encouraging people to consider because obviously that's already something that they have provided to them that's not coming through the city budget so as a part of their health care program a lot of them have access to things like the tennis center and or Warford. But we're always looking at ways to partner. We're looking at ways to kind of overlap. We don't want to displace other organizations. We want to supplement and come alongside them. I think there's been, like I said, with Warford and Hilltop, there's been some really great collaborations and partnerships that we want to continue to grow as well.

I think that's what's so good on the ROI on our senior citizens. Like it doesn't take a lot of money to facilitate, you know, so even if we have that 100,000 budgeted every year, we need to be able to communicate what we're already doing. Can we get a list or really like what I would like is like an actuals. Of like, here's our deliverables, here's where we spent that money. Um, but we, we at least need to be able to communicate a list of, you know, here's how many meals that were provided. Um, here's here's the facilities that were that were opened up. Here's the events that they did. So, um, and then I do want to, you know, we've got a really good councilman, former councilman in the back that still, I think, serves on. one of our senior citizens committees might still be the president, but all the things they're doing as a community, we need to come alongside that. So I think that if we can continue to allow that engagement from your coordinator, find those things that we can push some resources over to. We say it and I think it's even better when we say it when we're not running for office. So, like, as a guy who intends to not run, like, these are our longest standing taxpayers, right? So, let's continue to invest the money in those who have invested the most in the community. There's $600 million worth of stuff we're going to do over the next year. And if any of it builds community, then we're doing our job right, right? So the ROI on 100K well spent there, and then come back next year and ask for 200, you know, and let's build that up over time. Maybe we don't get there. A 1M dollars at the time, maybe it's maybe it's small amounts, but we, we would need we want to see I want to see more engagement on that side.

Councilman, I just wanted to give a little more clarity on this 55 to 65 current numbers. It's about 10% of our population. 20,000 folks, 65 to 74. 70 or 18,000 individuals about 9% and 75 and older. uh 12 500 folks are 6.2 percent so 25 of our population or 40 000 individuals is 55 and above so i think that we should if we're going to be serious about the seniors and not that we're not serious about the seniors but we i think when you start looking at 40 000 individuals falling in that demographic and we break it down, what can we be doing better? What can we be doing better for those long-term employees? And so, or not employees, but citizens. And as we look at that, are we focusing on that? And I think that's something that we should be taking a look at.

Well, I want to do one thing first, though, because we're spending far, we're doing, when we put this list together, let's don't include just parts of the Parks and Recreation Department, because I've sat here and heard about things that the library is doing for that age group. I've heard things that Health and Human Services is doing. So there seems to be this misnomer out here that we're just ignoring seniors when I don't think that's true. I mean, and great, if we can find a way to serve them without it being a dollar in there. That doesn't mean just because we're not having to spend money on it, somebody else is, but we're helping facilitate that. So let's look at the whole picture. And I'm not saying that we don't need to look at it, but one of the biggest things that we're able to do for the seniors is not raise their taxes. I think that's doing a lot for our seniors. And so, but when we put this together, let's look holistically as not just what the Parks and Recreation Department is doing, but I think we have a lot of other departments that we've kind of heard piecemeal here that are also serving this. So not to say that we don't need to look at a further investment in it, but let's don't shortchange or let people think we're turning our backs on them because as I've sat here and heard what a lot of departments are doing, I think we are doing a pretty good job at serving that community. Could we do better? Well, we could do better in all areas, but I think we're not ignoring this group. I think we've done a lot and I think when we come over with that list, let's go holistically at what all we're doing throughout the city.

I think that's a great, great point. Is there any way that we have a do we have a seniors like advisory group or is there there's something that would be able to correlate all of that data and compare it?

We don't have an advisory group, but yeah, but we can bring back to you. In fact, we worked on that a few months ago. I know utility billing has a program that benefits senior citizens. And so, yeah, there's. There's, you know, we've identified these areas that are specific to senior citizens. And if you want, we can bring back to the mayor's point, I know a discussion on the senior service program. We can tie that part into that conversation with the council about this is what parks is doing for the senior services, but this is also what billing and what public health is doing and what library is doing. Yeah, we can tie that all together.

And let's also not forget, there are a lot of organizations in this community that are doing a lot for seniors as well. So, I mean, it's not just on us or the taxpayers to be able to do that. So, Hopefully we help facilitate that. If seniors are coming to us from our service, they need something, there's other places. But I think this community is investing. We're looking at various senior citizen centers. We have some that are up and operating. So it's healthy. I think we're doing a lot in our community. I know a lot of churches are looking to provide those types of programs. So anyway... What do you guys think?

Because what we're identifying is a communication issue in some instances. Even in just a short exchange here, it's easy to miscommunicate like, yes, I know library performs several things that the seniors engage in, and I definitely want to see that piece as well. anything that the city's doing but then what do you guys think like is is what's missing here like because we don't have a central we we have a we have the most caring and giving population that is always serving in our churches um faith-based uh non-profits out there doing everything they can right do we need as leaders to have some sort of facilitator some sort of liaison to that community that that can help us you know communicate and so if you think about boards and commissions a great deal of what they do is is help us to hear from the public at large on what do y'all need in parks and what do y'all want in rec do we want paddle ball or whatever so um if we've got 45 000 members of our community that are stakeholders long standing. How come we don't create a commission? You know, even if it's just ad hoc for a while to help us communicate and then here because if if you're trying to run $10 million worth of problem solving through parks and rec, I don't know that you're even at your director level getting a lot of the things that we could be doing. So Is there some low hanging fruit out there that if we just have better leadership and engagement with those organizations and then it's streamlined? Because I think the silo effect is probably what what I hear. They don't know what we do. They don't know where the resources are. And then I don't know what all the nonprofits are already doing. So the one thing about that age group is some of them do have a little bit more time to dedicate to meetings and coordination and leadership. Is it just a lack of our vision and we're not tapping those people like we should? Should we formalize it and give them an easier place to engage with us?

Well, there might already be some places in the community doing that. I mean, I know there's Area Agency on Aging. And so, you know, there could be, you know, I thought there was a Panhandle Aging and Disability Resource Center. There may be some things. 211 Texas, I knew the United Way has worked on that. So if there's a vacant, if there's something missing in there, then maybe we could fill it. identify where those are to make sure that that our seniors are educated on where to get those resources.

Well, Council, if we can get a report back on kind of all of the services that are that are offered, kind of the actuals that are going out into the community, then let's take a good hard look at that and let's see if we've got some public servants around that could help us communicate and coordinate. I think that's probably some of the stuff we're needing. So anything else for Mr. Kashuba?

Congratulations on getting put in charge of the senior citizens of Amarillo.

Yes. Hey, and great job on tennis and golf getting in the black. We didn't even have to use a golf ball, right?

I'm not using that anymore. I'm out. That's last year. That's so last year. That's so last year. But we didn't even need that. We didn't need $5. $2. Thank you.

All right. Next up, we've got Municipal Court third-party collections with Donna Knight.

morning mrs knight how are you um good morning living the dream and y'all good yeah it's friday we made it we did make it all right good morning council mayor um donna knight director at the municipal court i do have a presentation for you today because i've been working on putting some of this data together um I have to get used to this laptop. It's a little different than my normal one. So, oh, am I too quiet?

Sorry.

I want to take a moment to kind of describe what a debt is to a court as compared to a debt to the city. Because it's going to be a little different than what you probably think of. So when the city goes and mows the lawn for somebody who has high weeds and grass, and we send that notice to that person and they don't pay it, So when an officer issues you a citation, that's not automatically a debt because you're innocent until proven guilty. You can come in and dispute that citation and it can be dismissed. It can be found not guilty. All sorts of things happen because constitution. So for this to become a debt, the defendant has to be found guilty by a judge or jury and a judgment entered. This still doesn't become a bad debt. A bad debt would be when the defendant becomes non-compliant and it goes to warrant. Make sense? Pretty simple that way, right? Even after it goes to warrant with this judgment entered, statutorily, the judge still has to, at times, non-cash it for indigency. There are statutory requirements on that and statutory requirements on time served credit that judge just has to do. So if it did go to collections at that point, the judge is still dismissing it, or not dismissing it, but waiving the fines empties. next one thank you so yes all courts have warrants we have about 22 000 warrants right now as of august 9th and then a total of finding court costs on those warrants is about 7.6 million but again like i just explained not all those warrants are debt because they haven't been found guilty okay of those warrants 8 500 have a judgment enter they've been found guilty that's debt Of those 8,500, about 2.8 million is considered, would probably be considered bad debt in this conversation. Make sense?

Okay. So let me go back to that previous. So the 8,565, $2.9 million, they've been through the system. They found that they owe us the money. I mean, they're through determining whether that, so that is money that's owed to us, the $2.9 million.

Yes, a judgment's been entered, it's owed.

And how old is that debt? I mean, could some of this be going back years?

Oh, yeah. So statutorily, in the state of Texas, the judge can deem it non-collectible after a judgment's been entered, and there's been no activity on the case for 15 years. We do actively get rid of those, but we would have some up to 14 years at this point. We don't have a lot at 14 years old. I cannot answer the exact amount that are 14 years old, but we do have some.

So anybody from one day after they're finished to 14 years is in this $2.9 million? Yes. Okay.

Thank you. Thank you, Stephanie.

How long do they remain there, or when does it become bad debt and it's written off? I mean, how long do you keep it there?

So for the ones with judgments, 15 years, for the ones without judgments, our prosecutor has a standing motion, and after 10 years, unadjudicated, she will go through and put in a motion to dismiss those.

Okay, thank you. You're welcome. Can I just, I want to make sure I understand the... delineation that you're saying with a judgment, without a judgment. So if we say there's no judgment, does that mean there's no amount due or there's no amount owed? Or would there still be an incurred amount due? There just wasn't an issued judgment. And so what I'm asking about is collections, basically. Is there still a potential of me paying a fine even though I don't have a judgment that's issued?

Yes, there's still a potential of fine. The only thing is it's not actually set at this point because a judgment hasn't been entered. So 100%, we've had people overnight go online who had a warrant and paid it, and the judge will enter a judgment today. So warrants can be paid at any time, pre-judgment, post-judgment.

Can you give us the amounts again of totals? Because I think all I heard was the total judgments. So I guess what I would be curious about is what is the total potential?

Total in warrants is $7.6 million.

$7.6 is the total warrants, and of which you have $2.8 in judgments?

Yes.

Okay. And that includes all warrants, all amounts that could be due to the city for whatever reason?

All warrants, yes. So just active warrants, not all active cases, but yes.

What does that number look like?

The all active cases? I do not have that number off the top of my head. We have cases in all sorts of statuses right now. They are pending trial where they could be found not guilty. They are going through a docking process to be able to save up money to do something, maybe to keep it off their record. They're going through payment plans, community service.

So on active cases, we have staff that are working on those active cases? Yes. Okay.

And I do have a slide here in a little bit talking about what we do. Okay? You're welcome. Now, this is a... I reached out to all the courts on this graph and talked to them about their collection agency. Every single one of them have a collection agency. We are the only one without. As you can see... We're the, we clear about, we close about 79% of our cases. There's two courts on there that close more. They are Frisco, completely not representative of our population, and El Paso. The socioeconomics in Frisco are different than us. And El Paso definitely has a different population, and they only close one percentage point more than us, 80% of their cases. So we do a very good job of working with our citizens to ensure that they're compliant with judicial order and making those payments that maybe the judge has set for them. Okay? Thank you, Stephanie.

You may cover this in a minute, Donna, but why don't we use a collection agency?

We had a collection agency up until 2014. the relationship at that time was not the best. We did have issues also with citizens that were in the collection process that would call us, or maybe they weren't the citizen in the collection process, and maybe the name was similar, and they would call us and they're like, we got this notice. We've never been to Amarillo, Texas. And looking them up, sure enough, the collection agency had sent it to the wrong person. There's many similar names out there in the world. With the poor relationship, with those types of relationships with our citizens, we don't want a citizen sent a notice and saying, you need to pay this. Sometimes it goes to grandma, and you can't imagine how grandma feels when they think that their grandson's about to be put in jail for a warrant. They will pay it. We didn't want that type of... reputation with our citizens. I don't think y'all want your citizens going, they're just out after money and they're going to send it to whomever will pay. It's just a perception.

I would guess before we send those to that collection agency, we've tried.

Oh yeah. My next slide tells you all the stuff that we try and I will point out the things that they do. Here's my next slide. We send letters as required by law. That's something that the collection agency would do too. We send text messages. The collection agency won't do that. It's free through my software. We send emails. It takes minutes to get those emails and mass send them out. We take online payments, phone payments. The judges work with our defendants and assess that ability to pay. We talk with defendants in person and really talk about what can you pay. This is what the judge requires. Do we need a statute for an indigency hearing? We have time to pay citations. The judges really talk to those defendants and assess their ability to pay. And if they can't pay, taking that community service route, but if they can pay $50 a month, they do work with them to do that $50 a month, no matter how long that payment plan might last. And then we do skip tracing for free. We're on the APD's software, so we don't incur an extra cost. The things that the collection agency would do, letters, they would call. We don't normally call our defendants unless they're in that collection process, and we'll call them at that point. We'll make sure we have all their identifying information good, and we'll call them when they're past due and let them know, hey, you're past due. This is what you have to do to get compliant. But they'll call them, you know, just ad hoc. They will... take the payments online and on the phone. They do the skip tracing. But you know what the citizen gets charged for that? 30% on their citation. So the average fine, well, the max fine on most of our citations is $200. So if you're talking max fine and you're adding 30%, you're adding $60 on each violation. We've already discussed how our citizens are like feeling the pinch. Like 30%, that's a lot. And then when you start thinking about It is a lot for citizens. If they pay $60, that $60 goes to the collection agency first. The city sees nothing. So if they only pay $60 and they end up going to jail and getting time served for the rest, the city sees nothing.

so i would think that we would attempt we would do all these things for a certain period of time like give our citizens the opportunity to pay the ones that we're going to pay and then send the ones that don't over i mean is that with your 79 percent is that the that's the the on your previous slide that you're closing 79 so the ones that are issued that those are the ones we're getting paid so you're saying 21 are Like you said, bad debt, whatever. Not necessarily bad debt, remember. Not bad debt, but just not paid. just nothing but why wouldn't we want to send those because we've been nice and we've been giving everybody the opportunity to pay and probably probably quite a bit sounds like y'all are really gracious you have a good relationship which is great but those that don't pay it's like you still owe it why wouldn't we send those off uh to the collection agency at that point just those the ones that y'all attempted and spent however many hours trying to collect but we don't get

At that point, it becomes a burden on the staff to administer the contract. I am the only staff member who has ever worked with a collection agency. And so I will have to teach my staff how to do all that, which I can, 100% I can. But it does become a burden on staff. It's not as big a burden at the beginning of the contract. I started working at the court in 2012. And I worked with the assistant director back then and know that he spent 40 hours a month administering the contract. So 40 hours of the assistant director's time. I don't think it would be that way at the beginning. But as time goes on, you have so many cases with that collection agency and payments going back and forth and warrants that need to be cleared because it got paid at the collection agency. It's just a monitoring process. It becomes a monitoring nightmare, essentially. Or at least that's the way it was back then. Of course, we haven't worked with a collection agency in 12 years.

Do you think it's changed? Do you think technology's made it a lot less cumbersome?

I had the same exact software that I had back then.

Is the 21%, if we have 79% collection, 21%, what is the value of the 21%? It would be that $7 million. $7 million is in the 21%.

Yeah, that's the active warrants.

And historically with the collection service, what is their success rate?

The fun thing is I purge all my old records, so I don't have that.

50%, 40%, 30%?

So I was one of the ones that got to call the cases back, and we – We called thousands and thousands of cases back. Yes, they did close a lot of cases.

So north of 50%?

I'm going to say probably less than 50. Probably maybe between 10 and 20 would be my guess. That's a guess.

So 1.4 million at 20. Okay, thank you.

You're welcome.

I KNOW ONE OF THE THINGS I WOULD SAY IS OBVIOUSLY COMPARING OURSELVES TO OTHER COMMUNITIES THAT HAVE COLLECTION AID SERVICES, WE'RE DOING VERY WELL DOING OURSELVES AND PLUS WE HAVE THIS PERSONAL TOUCH THAT WE CAN OFFER OUR CITIZENS THAT I'VE WORKED WITH COLLECTION AID IN MY COMMUNITY. WE DIDN'T HAVE THE STAFF LIKE THIS SO WE WORKED WITH FIRMS AND And so I have experience with this. I mean, I think there could be a potential of that 21% maybe working with the collections, but I know from my experience working with agencies, I don't think they're going to want that they want the 79% that we're that we're being successful on because, again, working with past agencies, they told me that there's some debt we will not collect for various, there's a whole slew of reasons. And so we will working with them, 100% of the debt cannot be collected, because there's just issues with some of that. So I think we can try to attract one, try to get an entity to work with us. I think we may have a hard time, they're gonna want all the business. And so it's been my experience with these agencies in the past. And I think we're being successful right now with this, with our staff, and it does allow that personal touch that we can offer our citizens while saving them an extra fee. that the firms do charge, because there's a cost of that. And so that's how they don't charge us, they charge the person to do this. And so, but yeah.

I would agree. I mean, and I would say, y'all are doing a phenomenal job, a great job. Like, you're ranking above people that you're outsourcing it. So great job. But if we couldn't negotiate a contract with someone, like, you're only getting our stuff to, like, we're going to attempt, I don't know the time. I don't know about your 79%. How long do y'all work on those? I mean, a month, two months, six months?

Like what?

Typically, before you collect.

Typically, they're making small payments. And then at some point, something happens in their life. And they can't make that small payment. And a court is a scary environment for some, 100% a scary environment. And so when they get scared, they become noncompliant. We work really hard when we talk to them. judges work really hard when they talk to him, come back and talk to me. Sure. You lose your job, come back and talk to me. And some do.

But is there any way to, I mean, when you're actively collecting, that's great. And when they have hardship, you know, to me that you're still actively collecting, it's just something happened. Is there no way to just push all the rest? Like pick an age or, you know, if there's certain old or if you're actively collecting or, you know, even if it's in hardship, Give the others the rest of it. Because I think, again, we're in budget time. We're looking at how tight things are. I mean, even if we could recover a million dollars, And again, y'all have been very nice and very good with our citizens to try to work with them. And if they're just not paying, well, you're not going to be treated as nice. I mean, I hate to say that, but I mean, you attempted it. They didn't take the opportunity. But only if we could find a firm that would take. They don't get all of it. That's crazy, because I think that we would net less if we handed that off and you guys didn't have that. But then we have the negative experience. We're collecting less money. I had to lose loose. But if we could find somebody to say, listen, we'll give you our stuff that we're having a difficult time collecting. If y'all collect, great. It's money to you. If you don't collect, well, you don't get anything.

We have any idea of the 22,000. What percent aren't citizens of Amarillo or Potter Randall County?

I don't have that off the top of my head, but I could get that for you.

But since we see a lot of pass-through traffic here and everything, so there's going to be a percentage of that that aren't citizens of this area, right? Yes.

And that's part of the problem.

I'm trying to collect some of these. Yeah, because they're out of the area. Most could be out of state. And so that forms a problem. I know on the law enforcement end, It's a benefit to have those in the system for 15 years because when they are stopped, that gives them a reason to take them out of the vehicle. And so eventually you may get paid on those, but there is that percentage. All right. Thank you.

One of the things Judge Hamilton and I have discussed is if council, city management directed that we should go out for bid on this, it would, I'm sure it'd be a bid process, that we would send those that have that judgment entered. So those are what I've called in this bad debt.

I mean, I would agree. I mean, I think it's worth it. I mean, again, we're looking at a tight, tight budget and we've got depending on the percentage. I mean, a million is maybe on the low side, but if we could do it and y'all have attempted and you've done great to try to get it and if they're just unresponsive, let that firm go work for their 60 bucks. I mean, to go collect it where that burden is off of you guys and our numbers even get better. Y'all get to do what you do well and do a great job and then we just have a little bit of extra that y'all don't have to mess with and it's better for the city.

Of all the things that we've had in our place, this is one I've had in the back burner, but this one I've been thinking more towards because I like that approach. That's actually where I was going at with this as well. I don't want to give them everything because we've been very successful. What I asked Donna to do was prove to me that we are successful. She went out and found these cities, and that's been the last few weeks. To me, that tells me that we are successful, and I'm worried that we would go downwards if we were to do all of it. but so that me it reinforces the idea let's go after that that 21 with a firm let them have that if they kill kill what they eat and so if we get a little bit great if we don't that's fine we wouldn't got it anyways and so that's where i don't want to take this and so i i would agree yeah i mean generally and i mean a business best practice is yes you're you're spending your time and resources for a certain amount of time working debt

But at a certain point in time, it's not the highest and best use, I mean, to continue to spend that amount of time. And I look at this, I guess we're writing off $200,000 a year on bad debt that's 14, 15 years old. And we've got that much in it. So, I mean, if it's no cost to us and we figure out a timetable that's fair to us and also fair to the company, because they're not going to take it if it's not fair, I think it would be. And I would hope not all collection agencies do what you said ours previous one did. We'd certainly not want to use them again. But I do know there are a lot of good organizations out there, because I think we use people on the property tax side to do collection for us as well. And so I'm sure there are good ones out there, but it might be worth something taking a look at and see how it goes. And if it's a mutually beneficial relationship going forward to help us and to help them, I think it'd be worth seeing if we could make it work.

And one of our pillars is customer service. And the nice thing about controlling in-house is I can control the customer service aspect of this. From experience working with some previous firms, some of that is not there. Because whenever a person calls an attorney, they're talking to an attorney. And that's scary. And that's hard. And some of these firms that I've been around, This is, we're one of several clients. They don't really have an ownership. They don't really feel accountable to our citizens. Their staff does, and I hold them responsible that whenever you call our citizens, we're gonna do it right, and we're gonna treat them right. Because we know they have extenuating circumstance, but they still owe us something, but we're gonna work with them. And that creates a better, better feeling towards our court system in Amarillo versus kind of a cold attorney firm located in Houston or something like that or wherever it's at. So whoever would win that. I think that's one thing when we pursue a firm to do that 20%, I want to want some references and experience from other communities. How are your citizens being treated by these firms? Because again, from prior experience, There was a firm that my community had before, before I got there, that wasn't, services wasn't quite, wasn't ideal. So they made a change. And then I ended up with a firm that did excellent customer service. He's an individual that I'd hoped would pursue this, because I know him, he does very accountable, very sensitive take to our citizens. So they do exist, but there's some that don't.

So have we ever, not an all-out amnesty deal, but do we ever do any type where if they come, they get their fines discounted

So we don't do any amnesty. We do the court compliance campaign. And what the judges do during that month of the compliance campaign before law enforcement goes to serve the warrant is they do allow them the ability to go back on a payment plan. Most of the time, our judges, if they have been noncompliant and gone to a warrant with that judgment entered, they they are pretty straightforward and direct, you know, you need to pay this. Or you need to explain why you didn't pay this. And have that extenuating circumstance that would make them look at it differently. But during court compliance, they typically will allow them back into like a payment plan or some other alternative to resolve it, maybe community service.

Right. Is that pretty successful?

Oh, yes. During the compliance campaign, we do have many citizens who take advantage of that, but we also have many citizens who just go on and pay. They're like, oh, someone's going to come look for me and serve my warrant. And so it's typical for us to have $100,000 overnight paid online.

Thank you. sounds like we've got some direction here uh so i i i think you're hearing what what we're communicating we were in favor of going out for professional services agreement with some controls so that what is and is not accounted for as bad debt allows us still to internalize and and navigate all that and then once it becomes bad debt we just want to make sure that Whoever the firm is that you guys select is best quality one that we can and represents the city well. I think that's our only concern. You do need to communicate back to the court over there. The improvements over the last four or five years have been great. And so, like, we've seen lots of good things and appreciate all of our judges. You know, those bailiffs that you can't hire, that you just keep trying to come on, hang in there one more year, and four years later, they're still there, right? So, like, thank you all for everything you guys are doing.

Thank you. And I want to say Judge Hamilton sends her apology. She wanted to be here, but she had mandated training she had to go to. But I want to let you know that she would have been here otherwise. She had to go to training.

Well, we understand, and we appreciate you being here. Thanks. You want to keep going, do one more, or you want to take a recess?

We can do one more. It'll be pretty brief. Bring Mitch up just for a quick update on the health plan add-on request that we were kind of talking about yesterday.

Good morning, Mayor, Council, how are y'all? Mitch Norman, HR Director. So I appreciate y'all giving me the opportunity to speak to you regarding the supplemental plans that you inquired about the other day. I recognize that there are staff who's engaged in exercises, reviewing, supplemental plans and the potential benefits to the city. And based on our review, the different exercises that we engaged in, we were unable to identify the benefit, the projected savings. We couldn't materialize the projected savings. And we were determined that there wasn't a particular supplemental engagement, excuse me, arrangement that's appropriate for our city. Was not.

Okay. So, I'm not understanding what we're saying there. So, like, you guys have engaged in this.

Yes.

You've looked at it, and on two areas. One, you couldn't find a reason for a supplemental plan, and you couldn't find a realized savings if you implemented what was proposed.

definitively how those savings would be realized because these plans are driven by tax codes. The monies that you would achieve is through payroll taxes, but there are also costs associated with the program itself. It's not a net zero program because there are claims expenses that could be attributable. One of the biggest considerations during our review of the program is the intricacies associated with the IRS code, the application of these programs. If we were tasked to do a deeper dive into whether or not one of these programs is an appropriate fit for the city, we would recommend engaging with tax counsel, counsel specialized in tax and benefits, to ensure that we get the appropriate and necessary information to confirm the appropriateness.

I guess the PDF that I sent you guys today, I'm sure you've probably got it as well. Yeah. So that FICA tax savings, that's what it's all about. And then it puts about $1,000 in everybody, the employee's pocket. Their take-home pay increases by rough, depending on what they make, but about $1,000 a year. So what you said is you vetted that out, and that's not exactly true. And there's some expenses associated with administering this plan that that wasn't necessarily disclosed on that.

That's correct. Those are just projections. The program's actually driven by each individual's unique tax circumstances, your eligibility for certain tax, for that tax incentive. And there's information that we just don't have, you know, unfettered access to regarding every individual's tax circumstances.

the the documents that promote the information are estimations but would it be worth looking into i mean for 1.5 million dollars i think i mean based on 2500 employees i think is what it said uh it's one and a half million dollars and again You know, I just think if we're looking at being frugal and tightening everything up, and again, I don't want to put a burden on our employees either, but I think it's just extra. I mean, it's just their plan still works as their plan, right, that's administered through Aetna, but we... This would just be extra for prescriptions and those kinds of things. But I want to put an extra step for everybody because that's a pain. But if it saves us $1.5 million in FICA, I think we've got to weigh that. But like you said, we don't know everybody's tax situation. Is there a way to vet that and just see if it is accurate or not?

Yeah, I have a little context. We get lots of solicitations throughout the year. So staff, they do an initial dive, not too deep, and then they kind of test what are the initial hiccups. And we ran into a few when it came to the IRS that caused us, because I know Mitch met with the firm here recently. He did some training. He got some training on it from another entity. And there was some initial hiccups. IRS concerns that kind of caused the time just to pause and we thought, well, can we get some of these solicitations? We just kind of big pause. We don't do a deep dive, but if you would like for us to do a deep dive, we can. And so, and again, like I said, we get lots of these and we kind of just, we do an initial review, we run out of roadblock, we just move on. But if the council would like for us to do a deep dive, we certainly can.

Yeah, so let me recap and make sure we know what we're asking before we get there. So this is a bolt-on package, right? So it doesn't change Aetna, doesn't change Hub, doesn't change anything. So we don't have any disruption of our 2,800 employees, right?

I can't say that definitively. This plan functions independent of our current group plan that we have. And in order to exercise the benefits available to it, my understanding is that there are potential, there are considerations So we have to evaluate those considerations because it may impact member experience.

Is this not what we pay hub for already? Like, I mean, that's our consultant. They're getting paid for this. I think it's a prepaid expert that we should reach out to. So I think the 1st question we'd like answered is. Is this a bolt-on plan or does it come with strings that could cause complications? So the risk isn't worth the reward if we end up with a couple thousand employees that have complicated healthcare and we don't want to do that. So if we can improve You know, what really probably is around 4500 belly buttons in their, their ability to go get better health care. We want that. So essentially, I think what council's wanting is. We want every benefit that we can provide for every city employee. And I mean, even if it's a credit union benefit where you go get a low interest loan, I mean, just benefits or benefits, we want them all. So, in this, if this is a supplemental health care. THIS THING SAYS PAYS FOR PRIMARY CARE VISITS, URGENT CARE, PRESCRIPTION DRUGS, THINGS LIKE THAT THAT, YOU KNOW, IT'S NOT MAJOR MEDICAL. SO IF THIS PACKAGE IS SOMETHING THAT THEY CAN UTILIZE AS A BENEFIT AND THERE'S ZERO RISK IN IT AFFECTING AETNA AND SOME OF THE OTHER ONES, SO IF HUB CAN JUST GIVE AN ANSWER, YEAH, THEY CAN DO IT. YOUR EMPLOYEES CAN DO IT AND IT WON'T CHANGE ANY OF THE CONTRACTS THAT WE HAVE.

Yeah, we've engaged. I've even seen the correspondence on this myself as well.

Okay. I think the potential of realized savings for the employee, if we can save our employees, you know, $500 to $600 per year in their payroll tax, where that becomes their additional monies that they can keep, and we don't compromise any of our... Logistics right the way in which this is just a formula that is entered and it goes through and and we don't complicate everybody's I remember not too long ago. We had paychecks. That with a new system, we had to call and say, hey, we miscalculated. Can you bring us the money back? Right? So. I think council has a concern that we don't implement anything that's going to cause a payroll issue. So if you can identify that there's not going to be a payroll issue, that this is something, then I think your concern is just tax burden. And I think if it's legally allowed and it's a way to calculate the pre-tax versus post, then I think that's smart. We should utilize that. It will come back to the city with, I don't know, 2.2M is what this says, and major medical claims is the percentage. So the real thing here for the city is, is that we're offloading some of that care. So we're providing better health care for those employees in a preventative way. So it alleviates. You know, I guess this is their, their forecast of major medical claims, so that this would be something I'd hate for us to not take a better look at it when you're talking 2 to 3Million dollars. Plus, really, we're just talking about 2 phone calls. Hopefully we don't need a study. We don't want to hire anybody. Let's just go and get a tax professional that says, yep, you can do it. Or nope, not allowed. And so those are the three things that I'm hearing and kind of getting, I don't know if council has any other questions they'd want you to do, but then if you can just come back through city management, probably doesn't need to be an agenda item on a council meeting, just needs to be driven back through management of, yes, we can do this, yes, we can do that, and this one over here, we still have a concern or whatever it comes to.

Yeah, I very much recommend that route based off information that we've seen so far.

Real good. Yeah. All right. What other questions? Any other questions? Y'all had concerns on that?

All right.

Okay. Thank you, Mitch. Thank you. Hey, we're right at 10 o'clock. What do you have left on the...

So we're going to talk a little bit about the hot tax subsidy and the allocation. Then we'll dive into the recommended supplemental documents that we've provided. Touch a little bit on debt requests and present kind of the upcoming retiring debt. And then we'll circle back on cash flow, water, wastewater, calcs. And then it's open for questions and direction.

Man, real good. So we're making pretty good progress. Let's recess until 1015, and we'll come back in here then. Thank you all. Okay, we'll call ourselves back into session here at 1020. Move forward. Mr. Path, where do you want to start next?

I think we're going to start with the hot, but I think Andrew is busy coordinating. I think he stepped out real quick.

Can we come back maybe after lunch? We'll catch hot tax Civic Center briefly.

Sure, yeah, we can. We'll be ready to go once he's back, but he's had to step out real quick.

He's a busy bee. Do we want to go through?

The next items are also his as well. He's doing the CIP supplemental, so these are all his. Yeah, if we can maybe give a couple more minutes from your back.

Yeah, or if we want to transition over to sewer and water, we could talk about that.

Is that one that, who's working on that one?

I think that was Katrina and Lola.

Okay.

We've got slides that show you the crosswalk from the ACFER to the available funds calculation. Would you like to see that?

Oh, yeah. So this would be the available funds calculation, how you arrive at that, right? OK, great.

Give me just a moment to get that pulled up.

So we did decide Miss Katrina, I guess whenever you're ready.

We're just getting pulled up.

I got you.

Okay, available funds is the starting point for determining how much cash we'll have available to fill priorities. We pull page 32 from the ACFER. We're going to look at some cash and investments, receivables, takeout liabilities. and construction in progress. Now on the current assets, we had 19.2 in cash. We had investments of 57.6. That does already include the appreciation depreciation. That's why it's not in there twice. And then we have restricted cash. So every time you have a bond issue, it goes into restricted cash, that is 78.9, leaving a total of 155.8 for cash and investments. And we'll just go past depreciation because we already explained it. Assets converted to cash is your receivables. That entire area can be liquidated to cash. We have some receivables of 7.5. We have a lease payment to be paid or received of 93,000. Interest to be received of 6.6. Other departments owe us 11.7, and then some prepaid expenses could be converted at 4.2, leaving 30.3 in receivables for cash. Liabilities, we start at a total of 82.5 and then we have to back out what is already budgeted. So we'll back out software and we'll back out compensated absences. So 82.5 minus the 237 and the 159, that leaves us 84.2.

And one quick note in there on that bottom part, we're bringing back in your encumbrances. That box didn't end up where I wanted it to. If you look right above the red box to the left just a little bit, you'll see $2,069,276. Those are your purchase orders where we had something encumbered at year end, but we don't have an actual invoice for it yet. Thank you. I forgot about that piece.

And then the last or next slide is going to be your CIP. This is Note 12, the original note. And we had on water sewer 81.9. And that original box, go back to that page, was the fleet examples. And we just copied and pasted. So it needed to come down to the 89.9. And then the last slide. gives you the total we had 20 million available as your cash, your liquidity to start with your priorities for water sewer. What questions do you have, Mayor?

All right, so I like the preview. So can we go all the way back to slide one? Yes, slide one's good, so let's go back. So the calculation, go back one more. Let's just identify the components. So in general, on any fund, we do an available funds calculation, right? Yes. That is, you take a cash and investments number that is arrived at, what makes up that cash and investments?

Go to the next slide on that one. So in your ACFR, on their balance sheet, you'll have a cash and investments line, and you'll have an investments line, a restricted cash, which is your bonds. All of those together will be that cash and investments.

Okay, so if we're looking at that right there, you've got cash of $19 million. Investments, what makes up those investments?

That's not our assets, right?

Those are investments.

Those are your treasuries, your agencies. and your fidelities.

But not pipelines and things that are assets, right? No, that would be an asset. So in that investment, that is just money sitting in those fidelity account seeders. Right. Then you're counting what you still have to collect from people, right? Then you've got your accrued interest line item. Then what is due from other funds? Like what makes that $11 million up?

That's going to be your transfers. into water sewer. We'll have to dig in to get you the exact detail of what makes that number up.

Would that amount of money be part of the intergovernment transfers? It is. So when we look at this budget and it says 146 million of internal transfers, that's part of that, right? Some of it, yeah. entities or funds that are paying sewer and water. Right. For like what? What are they paying for?

For water use.

For water use? Yeah. That's not on a meter.

It would be metered.

Oh, it would be?

Yeah.

So like that's a transfer though. That's not a bill that gets paid. So we don't write a meter from parks or we don't write a check from parks and rec for all the water used to sewer and water.

It would be a transfer.

It transfers.

Yeah.

Okay. So you guys have the transfer number, then prepaid expenses. Okay, so restricted cash and equivalents down at the bottom, where does, and is that the total amount of borrowed funds?

That will be your total restricted, that for water, sewer, not everything altogether. So that's the dollars that have a purpose, that you cannot spend it other than for that purpose.

Okay, so my question, and then land, why is there a value for land? That's just a copy of the ACFER page.

Now, land is not in this calculation.

So you're not calculating it. That just shows up on the ACFER as an item. Right.

It is valid sheet, and it cannot be converted easily to cash. This is a liquidity calculation.

Can we go back to original page, front page? This is it. Go back one more. There we go. Okay, so your available funds calculation is you take everything that we just went through, that adds up to $155 million.

Right.

Then you also have assets to be converted to cash. What is that?

That's the AR, that box right there.

Those are those other current assets that we talked about. So if you look, everything that is boxed in red on the ACFR is everything that is picked up in your $30.3 million. And so those are things we could turn into cash in the short term if we needed to. So they go in.

SO GO BACK IF YOU WOULD. SO YOU HAVE THAT. SO REALLY WHAT WE'VE GOT IS WE'VE GOT A TOTAL AMOUNT OF EVERYTHING THAT THAT FUND HAS WITHIN A CERTAIN LEVEL OF LIQUIDITY.

RIGHT.

INCLUDING WHAT'S RESTRICTED. BUT THERE'S COMMITMENTS THAT ARE ALREADY MADE TO THAT, RIGHT? SO THAT COMMITMENT IS CONSTRUCTION IN PROGRESS DOWN THERE AT 81 MILLION. Yes, so that's your pull forward out of that fund still left to pay. So, at the end of 25, we had 81Million dollars left left to get completed in all committed for water sewer. Yes, for just for that fund.

And that's for note the original note 12.

Okay, so yeah, that confuses me. I guess that fleet services line item, that's not anything we should look at.

No, that was the original one. We had that example the other day. It just needed to pull down to the water sewer line. That was me not pulling that red box down.

If you look at the yellow highlighted line, $81,819,870, that's what we've pulled in for water and sewer.

Okay.

So, apologize for the confusion.

No, no problem. I appreciate you explaining it. So we have $81 million of work left to go pay for. And do we ever track what was appropriated for that?

That's it. That's the budgeted less already incurred.

If you look on your schedule too, that first column is your project authorizations of $264 million for water and sewer. That's your total that leads down to the $81 million that's still remaining committed. And so you'll see there are columns there for any expected revenue and funding received, but then completed at year end. So for the projects that we still have open that we have commitments on, the original authorizations on those projects, the budget's $264 million, if that helps.

No, I guess I'm trying to follow that. So you're saying, because we're only looking at the point in time of FY25, right? So there's $81 million worth of sewer and water projects that need to go get done. What is the outstanding debt at that time? Like what page does it show sewer and water debt?

It would still be on that same page. It's just in the liability area, the non-current page. So we don't have the full balance sheet displayed because we're just providing the liquidity calculation for you.

But if we owe more than that, right, like our debt balance, Stephanie, you may have it. You're saying page 101 is what you're at?

If you've got your ACFER, go to page 34 and 35 of your ACFER. This is your water and sewer.

Okay, I'm there.

It's statement and net position for proprietary funds. Water and sewer is the first column on there. So where Katrina was referencing on page 35 under non-current liabilities, you see your debt there. And there is a current piece. So there's 19.2 million of current bonded debt. And then the non-current is 236 million.

So current is what will we do this next fiscal year that we are required to pay?

So we owe 236 million.

Plus the 19.

Plus the 19 at the end of FY25 in that fund. Right. And... We only have 81 million that we need to go spend to fulfill all those commitments. So this is where I get lost.

But you're looking only at your available cash that you could prioritize. You need to not factor in your debt.

Right. We're talking apples to oranges a little bit. Because of that 81, it's not all debt either. Some of it might be cash funded.

So can you go back to the very first page again? This calculation has all your liabilities encumbrances, right? Right above that. So that $84 million, what is that?

Right. So it's your current liabilities, your obligations to pay within this next fiscal year. So you would have all of your payables outstanding, what you would expect to have in accrued deferred revenues coming in. what you pay to other departments. Now, you already budget for leases, your software, and your compensated absences, so you back that out of your calculation. And then we have to account for the POs that have not started the lifecycle just yet and end up in payables, and so we have to account for those as well, and that puts you at 84.2.

OK, so forgive me for getting lost right there. So we're at the end of the business year. We're not talking budget. We're just trying to get an available funds balance. So we're just trying to figure how we ended up cash, what's in the drawer, the till at the end of business day.

Right.

So that line item, 84 million, did you say that's for what you still have left to pay at the end of 25 or that's for next year?

That will be for the next year. That is what we'll pay during next year's fiscal year.

Okay, but we're not planning on prepaying all of that, so why is that a deduction in this calculation?

Because you owe it.

How do I owe that?

You're obligated to pay everything in that current liabilities.

Okay, so go back with me here. This is end of FY25, right? Right. This is all of the monies that are in that fund and we're calculating like how much is restricted and is going to get pulled forward. You're pulling in $84 million worth of bills that need to be paid in 26.

Right, because you can't spend that or you're spending it twice.

Okay, in running an enterprise, so help me on my private side. So like at the end of business day, I'm going to add up what was in the till, like what we started with and what we have left over. Now then the next business day, I'm going to take in revenues as I perform that service. But what you're saying is we pull out of that till for all of the expenses for the next year.

The IOUs that are in that till have to come out.

So keep in mind those expenses that led to these payments that are due were in 24-25. So we had vouchers payable. We received an invoice for $10,000. We owe that $10,000, but we didn't pay it by September 30th. We know we have to pay it, and that's why we back it out. And so where we're taking these current liabilities amounts, we know we will be paying in the next 12 months. That's the other side of this one right here where we've taken our current assets and said, these are amounts we know we will be receiving in the next 12 months. And so we add those in because we expect to have money available that we will be receiving, but at the same time, we recognize we have amounts that are due that we will be paying. Does that help?

Well, I mean, it's helping me understand why I can't understand. So I am trying to understand just what the enterprise did during that fiscal year of FY25. this calculation is considering everything that it did in 25 plus what it's going to do in 26 both in income that's going to come in and expenditures that are going to go out now if i had a left to pay meaning no no in fy 25 you had a bill that came due and it was in that fiscal year So you book it as an expense, even though you didn't pay it until the next year, right? I could understand that side of it, but is that what you're saying? You calculate all of those expenditures in 26, but you pull them out of what is in the end of 25?

The expenditures are hitting in 25. They are your expenditures in your audit for 24-25. So they're sitting in an expense account, and the other side of that is your liability account saying, we have this voucher payable. So we've expensed 20,000.

Give me an example of the voucher payable.

Absolutely. Let's say that we have purchased a fire truck and we've received that fire truck. We've received our invoice. We've got an invoice saying we owe a million dollars for this fire truck as of 930. but we didn't cut that check by 9 30. you've got your your expense for the fire truck of a million dollars and then you credit your vouchers payable for a million dollars because as of the end of the year we owe a million dollars for that fire truck well come into october in october we cut a check for a million dollars we debit that voucher payable it goes away our cash goes down a million dollars and so if we don't show that million dollars coming out of your available funds then you might think you have a million dollars, you really don't, because we need to pay that fire truck. And so if we don't account for it in that available funds, taking that million dollars out for that fire truck, you could overspend it. I know we're talking water and sewer on the slides, but... That's a good example.

So you have $84 million worth of payables that you expect to pay in 26, but you're deducting them in this calculation at the end of 25 for budget purposes, right? Right. Okay. And then those expenses are picked up during 26 or they're not considered, right? Because you've already deducted them out of your cash?

Correct. They would just come out of your current liabilities. So your liabilities, once we pay that, are going to go down, as will your cash. That's your two sides of that equation. Cash goes down when we pay it, but your liability also reduces because you don't owe it anymore. So nothing hits the income statement. You're not seeing any expense there. And one other note that might help ACFER is 9-30-2025, right? When we're thinking available funds, we're thinking 10-1-2025. So available funds is where are we starting our budget year?

And that's what's so important in this is, like, you've got to know where you're starting at. So if you go to page 36 in your ACFER, do I need to be on page 34?

looking at your 19 million cash and cash equivalents or can i go to page 36 and look at that depreciation line item you cannot why can i not because it is not part of the available funds okay so let's go with the million dollar fire uh-huh okay if we lower cash a million dollars we put it as a vehicle so it's in your capital assets so it's let's say it's a five-year property We take a million dollars divided by five, and then we take that and put it as one year over as depreciation. So you spent that dollar when you bought the fire truck. Depreciation is not an actual dollar. It's a journal entry on the depreciation of the vehicle.

Right.

So we can't spend the depreciation.

Okay. Well, I was definitely with you until then, right? So like the depreciation is you already spent the dollar. We did. And we already calculated for it, right? So I'm not trying to spend the depreciation again. I already spent the dollar. Right. Okay. So then I have a depreciation line item in that current year where I pick up all of that depreciation as a journal entry. Right. Okay. So if I back that depreciation out during that current year to just get a cash position or a net profit at the end of the business year, why do you think I'm saying I want to spend that depreciation?

Because I can't. I don't know what is it about depreciation that we need because we're dealing with available funds calculation.

I really appreciate the presentation and the walkthrough. I see where you're working from. Go with me. Take off your accounting hat and put on just a private business hat.

Yeah, we still have to observe GAAP. We still have to observe the rules.

Not for this paper, you know, example here, because it won't affect anything, right? So sewer and water, end of FY25, right? So it ran $100 million, $800,000 in total revenue. So page 36, if you would. There we go. So we agree that that business, that enterprise ran 100 million for the year in revenues. It did. Okay. Then you look down at salary wages, you've got supplies, you've got fuel power, all this. So this is cost of goods, right? Cost of doing business. So other charges, that $16 million, I'm going to assume that went to contractors and whatnot. Like let's not even look at that. But then down below that, you see that line item where it says your total is $89 million, right? Right. Okay, well, the only line I skipped over is that one for $17 million that says depreciation. So in your cost of doing business for $89 million, right? Because if I just showed that to my business partner and I said, hey, we did good this year. We brought in $100 million. I spent $89. We made $11. He would go, great. Cut me my check, right? But if he looked and he saw, well, you took out depreciation here of $17 million, he would know, well, we didn't really – Expense that that's not an actual expenditure. So we would back that out in private business and we wouldn't be at 89. We would be at 71,000,000 in total costs. So you actually spent 716. To do business in that enterprise for 25 correct.

Now, but that's not a part of the available funds calculation.

Well, and I don't know that. I don't know that that's my contention. Like, I don't know that I'm qualified or intelligent enough to say that it should be a part of your available funds calculation. What I'm trying to get to is how much money was left in that account at the end of the year. So, if we take that, we didn't have a profit, right, an income, right, over there of 11 million. We had an income of 29 million.

So again, it's apples to oranges. And I know, and I can tell you, let me, Let me sidebar here a little bit. I did securities and exchange reporting for Hastings Entertainment. I don't know if y'all ever shopped in their stores when they were here. That's what I did prior to coming to the city. And on our profit and loss statements, we showed depreciation because GASB, government accounting, or excuse me, that one it was FASB, Federal Accounting Standards Board, requires you to show depreciation. You have to show an accrual basis on this income statement. However, when you go to your cash flow, we always took depreciation out because you're right, you're not spending money on depreciation. No cash is going out the door. But for your profit and loss or your income statement or your statement of net position, you have to include that depreciation for meeting the standards that we have to meet on our reporting. But for cash basis, which we're looking at for our cash flow, which we want to look at for available funds because we know depreciation doesn't impact your available funds. So it's not even included anywhere in that calculation, you take it out. So that's why you can't necessarily look at page 36 to get to anything you want to get to on available funds.

Okay.

Just to throw in there like my private experience versus government experience, I've seen it that way both sides.

Okay, well let's go back to the 29 million. So that enterprise ran a net gain of 29 million during FY25. Is that true?

Without the depreciation and it would be true.

Okay. Okay. So like without the depreciation, which is not a cash item, you didn't write a check and we're not trying to spend the depreciation. We agree on this. I'm not trying to spend the line item that we have listed under an expense of 17 million. So we're not going to spend the depreciation and you said we can't and I'm not trying to. So if you don't factor the depreciation in, which is not an expenditure, FOR THIS PURPOSE OF ME TRYING TO UNDERSTAND HOW MUCH THE NET GAIN POSITION OF THAT COMPANY WAS FOR THE YEAR. WE CAN AGREE $29 MILLION WAS THE NET GAIN.

ON OPERATING INCOME, YES.

Okay, then you have the other expenditures below that. So you still have to factor those. You have interest and fiscal charges. Is that right?

Right.

And I thought that got adjusted, but I guess not. It seemed like that interest was crazy high. But whatever it is, right? if you take that down can you then go back to your example and show me that that 29 million is calculated to the 19. so so you're working from position it does not roll to cash

It rolls down to the bottom of the balance sheet, not the top.

But in your calculation, in order to go into the next year of 26, you take whatever the net position gain is plus the available funds calculation?

No.

OK, so your available funds calculation is totally separate from what the enterprise gained. It's just a budgetary tool.

Right. It's a budgetary tool only. It's not a required financial statement. It's just to tell you how much cash you have.

So in saying all this, sorry, I just don't want to get off topic here. So in saying all this, our job is to help appropriate budgets. And to say, well, this is more important than that. And then our job is to have some level of oversight. Right. And so, like, how how are we doing as a council and giving good direction if. the enterprise net gain isn't factored in its starting position. So when we sit down to look at your budget here, if you look back, it says revised estimate, you expect to finish the year down here at 19.6. On a cash basis. On a cash basis. So after doing business in 26.

On an accrual basis.

Okay, go ahead.

On an accrual basis, which is what the act for is. Right. So we're apples to oranges, because that depreciation is a cruel part. And the budget is a cash basis. So the available funds only gives you what your cash is to spend.

OK. And all this comes down to the CIP, right? How much you can go get done in additional projects, how much you can reinvest in that enterprise.

Right.

And we are asked to weigh in on that, right?

Yes, absolutely.

So we do need to know how much cash is available for one-time spends that are going to CIP.

Right.

And then we do need to know what the net gain position is. from like the end of the business year, right?

It doesn't roll into your available funds calculation.

So the reserves matter to us though, right?

For you, yes. But for your cash liquidity, what is available to spend for the year is not factored in the net position what happens on the income statement at the end of the year.

Okay. What did we start the net position with, the available funds calculation? What did we start with in 26? This number here is showing 22 million on my page 32 of my budget, right? Is that the number? Because when we voted this in, we said we started with 7 million. We had an adjustment back then. And council, I'll move it forward here. Give me a little bit more time.

Are we talking about cash flow? This one? You're talking that the original was 22.2, yes. When we started the year.

So we started sewer and water with $22 million.

That was the available funds calculation for the year before, yes. This is all just budget.

OK. So in 25, we finished, according to the ACFRA, with the $19 million?

So understand, on that 22.2, the ACFRA is not complete at that point in time. No, it would be complete at that point in time, then we budget. Sorry.

Just to provide some context to it, the numbers we're looking at are calculated numbers from the ACFER, and as we presented, we selected some accounts to add to it to come up with the available funds. And cycling back to the ACFAR, if you look on pages 38 and 39, you have the statement of cash flows. And that's what gives you your cash from the ACFAR. And if you look down to the reconciliation of operating income or loss to net cash, you notice that we add depreciation and amortization here to get to reconcile the net income part. So that's where that fits into your assessment. I just wanted to point that out.

Comprehensively, like overall, like big picture, All of the monies that are held within the COA are represented every year in the budget. Yes or no?

Available cash, yes, in the calculations. Well, you walked us through the calculations of... Now, we're on income statement on the budget. We do not budget the balance sheet where all of the investments in cash lie. That's the available fund calculation. We bring you what's available after...

But if you're working that calculation through to the budget, essentially you're bringing in that item, that component. So what we just said, and let's simplify this. So what we just said is we've got... investments, right, and commitments that aren't recognized in the budget book. They're calculated through an available funds calculation. Where you're picking up that $81 million worth of commitments, you still got to go do that work, right? Right. Okay. How does council ever provide any oversight to that? Like, I think for us, we hand this over to an audit firm, they audit it, and they should be looking at that number.

Not on that.

They're not. If I said that our budget doesn't represent all of the monies held within the COA, that would be more in line with your statement. Say that again. I want to keep it simple. You've got commitments in CIP that you're calculating. in the available funds balance so that we don't go and appropriate that money again.

Right. And note 12 as well.

So your available funds calculation is calculated using the numbers directly from your audited ACFR. And that's what we've walked you through today, right? So that is calculated based on the end of the year. These were our audited numbers. So we know this is your available funds. This is where you start. Then your budget is prepared for revenues and expenditures.

So then it does consider all of the monies that are held within the city.

Correct.

Okay, so the budget's totally comprehensive, and then when that audit gets done every year, that's a comprehensive audit, like your ACFA, right? So, we're changing Note 12 from 288 in commitments down to 207. We're stating that we overstated that commitment, right?

That's correct.

Okay. The oversight in is like, how do we know that right? You've already done all these calculations. You've pulled forward the cash. If we go from 288 down to 207, where does that ever line up with these numbers? Like, so are we adding the 81 million, you know, reconciling those together?

So the way that we identified that originally, Mayor, is once the available cash calculations were ran and we started looking at them, we thought, wait a minute, some of the balances, the way these are coming in, look off. And so we started to dig into that. We looked into CIP, and that's when we realized, wait a minute, there are projects on here that we know we've had expenditures for, but it's showing zero expenditures. And that's because they were capitalized. And so, perfect example, the City Hall project came in. It had a budget, but it didn't have any expenditure showing. So that's where we quickly identified that. We quickly went back and looked and said, wait a minute, JD Edwards reported it one way, Workday reported it another, and figured that out. And that's where the staff then went back, refigured that Note 12, proactively reached out to CLA to say, here's what we've got going on with this note. Advise us. Do we need to reissue it? What should we do? And we went from there. So that's where that was identified. And that's where you would find something like that is when you're looking at your numbers, you're saying, wait a minute, I'm not sure. And one great way is just to look at here's where we thought we were going to start the year in available funds. Here's where we really did. If those two numbers are off, then that's a little flashlight to us to say, hey, we need to dig into this and look further and ensure.

Okay. So if we just work through your available funds calculation, we don't see all that work. You perform all that. And you give us a number to start the year. And I know where this really got us kind of eyes open was you gave us the number of like negative $4 million out of fleet.

And that's because of Note 12, which started the whole conversation with CLA and working and correcting it.

Okay, so I know I'm not going to get any more clear in here, and I appreciate you being willing to show us that in here because I think it's good that people can see how complex all this is. I still would like some time just to sit down with you guys and be able to work the math problem and be able to take some time and look at the ACFER to see how that available funds is calculated. Then I'd like to see, like, where we do it in fleet and these others. And so I'm willing to just invest my time with you, not in here, not take up staff time, but just when you're available to understand more. Because if we have a net gain of 29 million coming out of 25, one would think you would take whatever your net starting position was, and then you would add 29 million to it. Well, let's not even do that.

Let's take off the- It doesn't roll to cash though. It rolls down to net position. It rolls down to the bottom.

I want to hear what you're saying, but in in the checkbook, right? The money was in the account at the end of the year.

We'll have to go through your financials and I help you close them for the year. That's all I can do.

Okay, so so. $100 million revenue, $71 million expenditure. Then we had interest and fees of $14 million. We ended the year with $15 million.

And it would roll to your equity on your financial statement.

Okay. And so with that $15 million, you pull that forward, it's being recognized as $19 million in your revised estimate because of previous balances that were there. And it incorporates all the roll-off of completed projects versus the borrowed monies that came in. And then, of course, there is no supporting documents for us on this. You guys have all those, but you go through and you validate all that, and the internal auditor does as well. he reviewed the work that was performed yes okay yeah i think i just want to learn a little bit more outside of this meeting did you have something just ready to move on probably so um thank you all for giving me a minute to try to understand that um it it is comprehensive though you are incorporating all of the cip monies through this budget in that calculation yes okay My last question, though, would be like in the purpose of a CIP audit, it'll go through and it'll pull each project and it'll give all of those supporting documents. So we would be able to see all those that are closed out and validate that those monies did carry through. Because I think that would be the other thing that. For us as representatives and for the citizens that are hearing this. We're closing all these projects out. We're expecting to bring lots of sewer and water monies back on savings and then we don't really realize it when we're looking at this because it's just a part of the available funds calculation.

Because you're taking it against your cash and investments as well. And so it's a total. So it's not itemized where you're going to see specifically the $43 million. We'll sit down and work through it with you.

Yeah, I'll try to get some time with you next week or week after.

I'm out next week. I finally get a vacation.

Week after. Sounds good. I'll welcome you back.

One of the things that I know coming to Amarillo I'm so grateful for is just the talent. we have in our finance team. So with the degrees, the experience, certifications, how the audits prove that, I'm always just amazed at the talent that we have with these individuals here. And so we have an excellent team. So it's complicated stuff. It's hard to understand. But at the same time, I didn't go to school for it. They did. And I'm just so grateful that we have Lola and Katrina and Justin and Stephanie and all those who work this stuff for us and do this. So I'm really appreciative of all of them.

Hypothetically, if we decided to spend $17 million more in depreciation, if we made that decision and we assumed that there was $17 million in the checking account, what would happen?

You would bust your reserves, so you would be out of compliance of your 90-day policy. And then what would happen? You wouldn't have enough to cover your expenses.

And then what would happen?

Payroll.

Depends on emergency situations, and then your credit rating would suffer, so all this debt.

And then what would happen? I mean, then what would happen?

Payroll.

And eventually you're not paying your bills.

And then the city would go bankrupt?

Our utilities goes bankrupt. And so, I mean, that was my first community in Jetmore. I had to turn them around because they were heading towards, they were spending reserves because they thought they had depreciating type thing to spend. I had to stop that. And we did a nick of time, and they were able to go back the other direction and develop reserves.

And then we've heard many times apples and oranges, that we're looking at two different things. So where is that $17 million? being recognized at. I mean, it's depreciated. I understand. Where's the $17 million?

Let me show you on the screen. So you have your $17 million in depreciation expense right here. If you go up to your balance sheet, and we're going to go to non-current assets. This is on page 34 if you're following along in your book. There is these accumulated depreciation accounts showing throughout here. So for every type of asset except for land, land does not depreciate. All your other assets, we have pipelines, for example, and then we have accumulated depreciation. So we are debiting depreciation for 17 million. The 17 million credit is getting added to these accounts. Now mind you, these accounts are cumulative because they're the assets. And so they get you down here to the bottom to say, we actually have a net capital assets of 770 million. And so it's going there.

So 17 is in here.

It is. It's reflected in there. The equation, there's two sides to it. And one other way that might help in describing the depreciation is, is you talk about, well, we're not spending that 17 because it's not cash, so it's not going anywhere. That 17 left your bank account years ago. When we originally purchased those assets, we had to pay the full amount. And so it left the bank account back then. and so that's why we use the balance sheet and the cash accounts to calculate your available funds and we don't pull in your revenue and expense accounts because even though depreciation is an expense and we have to show it in the period that that asset is being used so we do it out over however many years that cash has been out of the bank for a long time now let's expand on that because you can't use your capital assets in your available funds calculation

Because you can't easily convert that to cash.

Right.

Correct. Great. Great point. Katrina.

And easily converted to cash, can we get a definition on that? Just a very high level definition. Like within 30 days? You could sell it quickly.

You can't use your house unless you sell it or go get debt from extending a loan from it, which we use for our credit rating. That's how we got our TWDB loan, because our credit is so good and our assets show that. I understand.

Yeah. I might add to that. We spoke to the Texas Water Development Board last week, and that's one of the things that they pointed out to us when we were applying for a new $60 million was that it's because of your credit. Yes, apply for this. You have some of the best credit in the state.

Thank you. Does that make sense? Cool. I mean, a little bit.

Yeah, I think, you know, the $17 million gets line item moved over to that other middle or that other line item. What form is that? What form does it take?

I need more definition. Can you ask that again?

Well, Stephanie, you did a good job. You said that $17 million is depreciated off of this ledger. It shows up over on the other ledger. So you go up, it's part of the $770 million. Yeah, in what form is it captured there?

It's a journal entry.

Well, but I'm saying that's $17 million worth of cash in that account at the end of the year.

$17 million of expense, not cash. So the offset is in each of these accounts that you see as a negative on your balance sheet, accumulated depreciation. So we expense, for example, on that fire truck, let's say we're going to keep it for 10 years.

We don't have to go back through it. Sorry, let me change my term. I said cash, my mistake. So that's 17 million of an expenditure. So it shows up, you just did a good job. You said, where are we capturing that? Where does it come in? And so it shows up under, you know, accumulated depreciation. Is that the right line?

Yes. Any of these lines that are negative, there's a piece of that 17 and all of them.

So if it's an expenditure, what form was it expended in?

Through a journal entry.

Okay. And then if it's recognized in what form is it recognized?

It's recognized as that expense on your income statement and as a credit to the assets on your balance sheet.

So essentially what I have, and my issue is, it's just my issue, you don't have an expenditure that's a journal entry. You have an expenditure. Or you have a journal entry, right? So, like, this is not a tax evaluation. This isn't us figuring out our income tax where we're allowed to take certain deducts. It's in a enterprise as a expenditure of 17 million, so it never left the account.

You can't have an expenditure without a journal entry, and every journal entry requires two sides. They have to be balanced.

I understand. So, like, if it's, what value is it recognized at? Are those dollars? Is that 17 million dollars?

Well, your vehicle depreciates in value. So this is depreciating the value of those assets.

So if you bought that vehicle in 23, you paid for it in 23, right?

Mm-hmm.

As an expenditure.

You paid for it in 23 and you set it up as an asset, not an expenditure.

But you paid for it in 23 with what?

With cash. So asset goes up a million, cash comes down a million. That's your entry in 2023. In 2024, you have expense of depreciation for $100,000. You credit accumulated depreciation for $100,000. That's your entry. What that looks like on that 24 statement is I have depreciation expense of $100,000 and I have a net asset of $900,000.

Okay, I follow you 100% on like a balance sheet and things that we are saying, you know, GASB and all of the accounting practices. And my concern or my question is in looking at that enterprise that had a net cash position of, you know, say $29 million if you don't factor in the depreciation, IN CONVERSATIONS WITH CLA AND ASKING HIM, HEY, DOES THAT EVER COME OUT OF THE ACCOUNT? WHAT HE SAID, NO, THAT NEVER LEFT YOUR ACCOUNT. IT DOESN'T GO ANYWHERE. IT'S NOT AN ACTUAL EXPENDITURE. SO IT'S LISTED UNDER EXPENDITURES ON THAT PAGE. And so that's my difficulty with it. It's a journal entry. It's not an actual expenditure.

I think what we would say it is, it is an expenditure under GASB, under accounting. But where did it go? It's a non-cash expenditure. And so it hit your income statement as an expenditure. It hit your balance sheet. It just didn't hit cash. It hit the asset. It reduced the value of your asset for the use of that asset over the prior year.

Right. Is that making sense, counsel? It increased your net worth. But unless you're going to sell your water utilities, you're not making any money. You can't spend it again. Understood. So you're worth a billion dollars. Sell your utilities. We can then spend it somewhere else. But we can't. It's just on the books. It's a book value.

And if you were to try to go sell that fire truck after a year, you're not gonna get a million dollars for it. It might be worth the 900,000 then. That's why you have to recognize that depreciation expense to reduce the asset down to the net value.

I understand that in the way in which it's being booked. So I don't have any problem with the way it's booked, but like in what Prescott's saying is, well, what if we wanted to spend that $17 million on new pot water and sewer pipes? Like what happens? Well, our net value would come down. Our reserves wouldn't come down.

Well, and I think if I was just understanding his question, it was more if we spend that, we're going to overspend because we haven't included it in your available funds. We're not saying that depreciation is available to spend.

Which would be true if that was an expenditure that came out of the checking account, but you're saying it's a journal entry.

Yeah, as Stephanie mentioned earlier, it came out of your checking account years ago when the asset was purchased, so it's already money that's gone.

But it would have been recognized years ago in those expenditures.

Not as an expenditure, no, as an asset. It's not recognized as an expenditure until you start to depreciate it.

So the expenditure is delayed and recognized over the life of the asset while the cash is removed from your checking account immediately. Okay.

My intent with the question was if that money was available to spend, I think everyone in this would want to be able to utilize and free up that cash. We know if we use that cash now from the response or the perceived cash that we are going to kill our reserves and ultimately we are writing hot checks at that point because the cash is not there. That was my intent. Is that correct? That's correct. Yes.

Councilman, did you have anything? Well, Mayor, let me just kind of make sure. Your thinking is that somehow we're using incorrect accounting methods and we have more money available than is showing here because we're not using correct accounting.

Hmm. I think you'd have to say GASB. So my thinking is that we are using GASB accounting, which is correct for government purposes. And I was trying to apply an enterprise business eval to this enterprise. And I just wanted to know how much the net gain was for that enterprise. And we got hung up in this depreciation because it's much more clear now. The reason that's a factor is because you

incorporate that into your available fund balance calculation every year not depreciation oh well then i'm not clear so like the depreciation is not part of the available fund balance calculation it is not we don't use anything off of that income statement we just use balance sheet we just use your cash accounts your current liabilities your current uh assets

Yeah, so Councilman Simpson, let me tell you my struggle and what I am saying. What I'm saying is it's very difficult when you ask a simple question of how much did that enterprise have in the checking account day one of the current year? And you can't get that answer. And then you can't ask a question of how much does that enterprise have in the checking account LAST DAY OF THE END OF THE YEAR. YOU CAN'T GET THAT ANSWER. WHAT YOU GET IS THIS. AND THIS IS CORRECT ACCOUNTING ACCORDING TO GASB.

And again, your available funds is calculated off of the accounting off of this ACFR. So it's also correct.

My contention is I just don't understand why we can't look at it from a cash viewpoint, if that was my question. So if you had a mayor and council that said, I just want to know what's in the checking account day one, and I just want to know what's in the checking account day 365. And I just want to know that. Can I just know that? Like, that should be something you can deliver, but we haven't. And so, like, I get that this is the way it's done. I'm not arguing that. I've had a question of trying to go through the ACFER to learn, like, you know, what is the net gain position for the year? And so maybe you are telling me, and I'm not hearing you.