City Council - Special Meeting

All right. Good morning, Councilman. Good to have you with us. Are we all good in the back? Everything's up and going. Okay. All right. I'll go ahead and officially recognize a quorum this morning. Welcome to September 14th, 11 o'clock council meeting here to discuss a tax rate. So we're going to call ourselves into order. We'll open with public comment. We basically have item 2.1 to go over today, and that is it. So at this time, I'm going to see if I think the city secretary just stepped out to the back. so we'll wait one more minute and then we'll do public comment. Do I have anybody here who's already signed up for public comment? Yes, you're in the back, okay. You didn't sign up? If you guys would, raise your hand if you're here to give public comment, please. Okay, great. We'll walk through that here in just a minute then. Thank you. Ms. City Secretary, I think we're ready for item one. If you don't mind to take us into public comment, please.

Thank you. Give me one moment. Thank you for participating in today's City Council meeting. We value your input and appreciate you taking the time to share your thoughts today. Each speaker will have three minutes to address the Council during public comment. At two and a half minutes, a single beep will signal 30 seconds remaining. When time is up, the timer will beep continuously. Please stay within your allotted time. We'll be using both podiums today. We do not have anybody signed up at this point, so we'll welcome individuals up one at a time. For topics not on today's agenda, the Texas Open Meetings Act limits how council may respond. Council may provide factual statements, ask for the issue to be added to a future agenda, or refer you to the city manager so staff can visit with you about your concern. At this time, I would invite anybody here to speak to please raise your hand. Go ahead. And if you will, as you come up, state your name, and then we'll get you into the record.

My name's Charles Little.

I live in the city of Amarillo.

If you've all been watching the ads on TV and stuff, the governor of the great state of Texas decides that cities need to raise their own property tax, but they need to do it by a public vote, with a two-thirds majority approving that. And I think if you're going to do that today, let's get in the cycle. Let's get it on a special election. I know it costs money, but it costs money to do these audits and all that good stuff too. There's nothing cheap in here, in the world anymore, as we all know. Everybody's struggling to make a buy. The governor finds it necessary to give billions of dollars to billionaires to build data centers when that money could go to the cities and counties to work on their infrastructure. You know, we have problems here. We've got water lines leaking. We just had a big major sewage spill this weekend. So why are we giving billions of dollars to billionaires when we need it for the people? I mean, you guys know it. You had all those water problems on Bell Street just not too long ago. Water spewing up out of the ground. The reservoir has got water leaks for the line feeding that. We need to fix all this stuff up. We need the money to do that. But the people are taxed to death. Everybody's living paycheck to paycheck just to keep food on the table, shoes on the kids, and a roof over their head. So if you're going to raise the property tax, we need to know how much you want to raise it, what it's going to cost us, because everybody's tapped out. I'm 70 years old. I'm on the homestead deal. So my taxes pretty much are supposed to be bottomed out, go to when I went on the homestead, but they raised the evaluation so it goes up. There's a project out in the Hereford area where they gave Google billion dollars or whatever they gave them, but they're asking for property tax, not rebates, I can't think of what you call, abatements out there, when the citizens out in that area, one person that lives in the San Jose area that flooded in 23, her property taxes went up $500 last year. They said she called them and said, why? Well, your evaluation went up. She said nobody's going to buy this property. It's in a floodplain for God's sakes. So let's get some common sense going here. Let's not be given billionaires billions and trying to make the people make up the rest when they can't make it on what they're making now. you know a minimum wage job in the state of texas 7.25 an hour could you live on 7.25 an hour i know i couldn't i don't think anybody can't i know nobody can so let's get real about it let's put this to a vote to a vote of the citizens thank you mr little do i have anyone else here who'd like to offer public comment before we start our meeting

Alright, seeing nobody, we're going to go ahead and move into our non-consent agenda. Item 2.1, discuss and consider proposed tax rate. Mr. City Manager, who do you have running this?

Yes, so we're going to have Andrew run us through the presentation here. So since our last workshop, staff have done a great job. We've teamed up with Potter County, Randall County, our consultants, and so We feel we've got a good product to bring you today. And so with this, we talked about looking at the property tax. Again, the goal today is to talk about setting a ceiling for our publications. And so we had to set that ceiling per law. And then we'll have our meetings and public hearings on the 22nd and 29th. So again, our big goal today is to get direction from the council as to what property tax rate you're seeking, whether it's no new revenue, whether it's VATER, something in between. whatever the council is looking to do. And then from there, that then gives us some direction on expenses to associate with that rate, whether it's pay, sub-mentals, those kind of things. And so we're going to walk through that today. So with this, I'm going to turn it over to Andrew and let him run the slideshow.

Morning City Council. So our first slide is our certified Randall County tax information. So first we want to thank Ms. McMurray and Mr. Warren and their teams both at Randall and Potter County for working with us last week. They worked on Wednesday and into Thursday to get our final numbers processed and complete. So what we have here is our certified information from Ms. McMurray's office. What you'll see is our no new revenue rate did not change. It's still .42170. What you will notice as we continue over the next couple of slides is our excess debt collection. That number came down significantly. It was previously SLAYED IN AT 3.9 MILLION COMPARED TO THE 1.9 MILLION. A PART OF THAT IS WHAT WE DISCUSSED DURING OUR LAST MEETING IS THE RATIO THAT WAS IN THE POTTER COUNTY SOFTWARE HAD A LARGER SPLIT OF THE 4307 TAX RATE OR CURRENT TAX RATE BEING SPLIT BETWEEN O&M AND INS WHICH IMPACTED THE DATA THAT FED INTO RANDALL COUNTY AND ULTIMATELY INTO OUR TRUTH IN TAXATION FORM. uh and then on the bottom line you've got the 2026 voter approval tax rate that is now increased up to 0.45252 we were previously discussing 0.44728 so basically about a five cent increase and that is in large part due to the change in calculations in the excess because the way the calculation works is you deduct the you've got your debt schedule, and it plugs in what you need to produce to make your debt service payments. So it all feeds together as we work through these numbers. On this next slide, it's property tax previous calculation. These will look familiar based on our previous meetings. This was our 2025-2026 budget final, and then we had a couple of examples in here of the previous VADR at .44744, and then our previous calculations for the no new revenue rate of .42170. So as we work through the conversation last meeting, continue to work through with Randall County in determining our numbers and just overall discussions, the more we looked at it, the TEF values that Mayor brought up, one of the items that we realized was an issue is that we were deducting our TIF captured value of 291 million from our tax base, but then from our reduced tax base at the bottom, we were still paying or planning to pay and showing tiers taxes of 1.2 million. So we were basically taking it and showing it like it was coming from our O&M side versus an in and out. Tiers produces it and then it gets paid into the tiers. So that is something we've corrected in the calculation that I'll show you here on the next slide. Next, you'll see the M&O INS. It's a split of 75%, 24%, and you'll see in that interest and sinking category is 20.9 million. That is one of the numbers that was incorrect based on a couple of factors. One is our debt schedule. We did have a debt item for fleet that should have been left off the tax rate calculation. It's actually funded by just fees paid into fleet through operational. So it's basically already covered. It's not on the INS side of the tax rate. So that's 1.1 million. And then as you go down, you ultimately end up with the 57 million, which is where we WHERE WE DISCUSSED LAST TIME THAT WE WERE LOSING MONEY COMPARED TO PREVIOUS YEAR BECAUSE OUR PREVIOUS BUDGET YEAR WAS 60 MILLION. WITH THAT 57 MILLION, THAT IS WHERE WE ARE SHOWING THE NEGATIVE 3.4 THAT STARTED ALL THIS CONVERSATION OF WHY ARE WE LOSING MONEY AT THE NO NEW REVENUE RATE. So on this next screen, this is the updated calculation that you can see. I've pulled over the old no new revenue rate based on the miscalculations that end with the $57 million down at the bottom. If you look on the right, we've done an updated version of our spreadsheet to further tie it in to the truth in taxation. So you've got your net taxable value that stayed the same. You subtract out the $291 million captured value. Then you subtract out the $3.9 billion of captured value for the tax limit. We added back in to show the full calculation to get the taxable value of the $8.7 million, which is values under protest. Gets you a current year total taxable value of $16.7 billion, And then what we've done to reflect the tiers correctly so we can show it paying in and out is we've added back in the TIF capture value of the 291 million that we subtracted up above. That gets us a taxable value of 16.9, almost 17 billion. As you go down, the next section is just calculating at 100% rate what the levies would bring in. That's 81 million. But as you go down, this is where the tax rate changes based on our calculations. One thing to point out is when you have our county calculations, theirs is based strictly on the taxable value. What we have to do is add back in that 10 million in frozen taxes, which is actually about a million increase. So while someone has taken, new people have taken advantage of the 65 and up tax freeze, they move to a different category if we capture their existing in a different bucket now. And then we take it times the 98.5% collection rate, gets us 80,473,788 as collections. That's compared to on the other side of 79 million. But what you'll see when you get down to the maintenance and operation and interest is sinking, is that the split has changed. We have now reflected more appropriately the excess debt collections. So we are only collecting what we need for the INS side, which is 22% or 9.3% tax rate for a total 17,807,559. What that ends up doing is that you can take the rest and have it on your O&M side, which brings it to 62,666,000. for the total of $80,473,788 in overall collections. And then as you go down to the next, you subtract out the tiers taxes, but we went ahead and showed it up above, so it's an in and out. You subtract the interest in sinking of $17.8 million, which ends up with a new general fund collections of $61,437,041, which compared to our previous discussions of the $4.3 million swing in the other direction. If you take it compared to current budget, which is what we built our proposed budget on, it's a difference of $843,437 increase. So no new revenue rate. Ultimately, with the new calculations that we believe are accurate and correct, we have $843,437 in new revenue on top of the no new revenue rate, which is based on we had $300 million in new construction growth, so that gets covered at the full amount. Again, we had frozen taxes increase because they moved off of new tax freezes, and that brings us to the new value. Any questions on that for keep going?

Yeah, I think if we can pause real quick council, let's take this bite at a time. So questions on. The proposal so far.

Yes, sir. So walk me through. So you covered a lot and spoken really fast in a very short period of time. Go. So from where we were. A week ago or whatever it is. Walk me through what we had wrong very slowly and simply so that I can make sure that I understand it.

Number one, we had an extra debt payment on our debt schedule around a million dollars. It should not have been there. So that debt schedule is provided to the county as what we owe and is factored into the calculations. So that was number one. Shouldn't have been there.

Okay.

That was a mistake. Okay. Number two, TIF captured value. Historically, we've always deducted from the tax base, but we still show us paying it for whatever reason. It ends up being very conservative because if you show it that way, you would ultimately end up with an extra million or so for one-time capital the following year instead of showing as recurring revenue. So that was the second one. The third is how we adjusted the interest in sinking after calculating for excess debt and frozen taxes to make sure we're not over-calculating or over-collecting on the INS side of the rate. So just looking back at last year, we took the INS rate from the county form. and showed that we would be collecting the full debt payment, even though we should have been showing that we had about 1,900,000 to buy down our rate, so to speak, because we had that excess debt collections. Part of what we discussed is the questionnaire we fill out looks at a 930, September 30th number, which we showed that we did not have any excess. And talking to the counties, it's really, they look at it in around the June timeframe and it's based on their software, what they're collecting, what they're distributing out. So there was a disconnect between what staff had used in years prior versus the county software.

And so to begin with, were we using the same calculations that we've always used before we got into this?

We were using the same spreadsheet and basically kind of flow of how you would progress through our budget calculations.

So have our TAP calculations always been wrong?

I don't know if the rate was wrong, the distribution between M&O and INS.

But to go into this, to begin with, we were using the same structure, philosophy, and then now that we began to look at it, we say we did something, it wasn't correct. So we don't have the right debt number. Have we always double dipped on the TIF?

The TIF, it does look like in past practice it showed, and the number's grown over the years. It was 500,000, 800,000, a million as those zones grew. So it's exposed itself more than maybe it did in the past. But yes, it did show that we had deducted for the tax base, but still paid it out.

And part of this, too, I think in the past, we've taken a more conservative result, ultimately. And so by some of these issues that happened, we got more conservative numbers than we probably needed to have had in the past. Would you agree, Andrew? Yes. Yeah.

And it ultimately is a snapshot in time because, for example, we know the old United Artists Theater is now going to a church nonprofit, so it'll have a prorate amount of taxes. They won't pay the full year, but these numbers were most likely based on a full year of that business property paying into it. So it's not going to be exact. It trues up ultimately as people pay their taxes, but this was the past practice of how it was budgeted, was showing it that way. Okay.

And then, so in our original budget, we had 20 million going towards INS? Correct. 20.35? Yes, sir. And after we've gone back and figured all this out, where are we on what that INS actually is?

So the INS is actually... It's a little over 19 million.

Because I'm looking on this, on number three, it says INS is 17.8 million.

That's because we, that's after deducting for the excess reserves that we have showing as will be in the bank account so we can buy down our rate.

Okay.

But our payment itself is in the 19 million range. Let me get that for you. Okay. 19,789,933. Okay. But we deduct the 1,982,374 to get to the 17,807,000 payment. Okay. Yes, sir.

Then can you tell me, so what was the amount of property tax in our budget for 25-26?

For 25-26, that was a 60 million, on the O&M side, that was a 60,593,604 after tiers was factored into that.

And then total, if we combine M&O and INS for this year? For current year? Yes.

Be around $79,916,843 is what we showed in our original budgeted numbers. Okay.

Then can you give me this number? If we take the maximum... The voter-approved tax rate, if we say we're going to have that, what would be the total property tax income if we take advantage of the full?

Of the full evader?

Yes. How much more property tax revenue will we get? What will be the total amount that we'll receive if we do the maximum tax that we're allowed without a vote?

One second. A total we would receive is budget estimate of $85,600,000. Just the M&O side. Oh, just the M&O. $67,826,928 at the beta rate, the 45252. Okay. And if we do the no new tax revenue rate, what will that give us? That would give us $62,666,229. Okay.

So we go on the no new revenue, we're actually getting some new revenue.

Yes. And that's this next slide here. We had already accounted for 763,586 on the old VADR rate calculations. So that was kind of already built in. So the additional on top of that, 79,851. So you're basically increasing at no new revenue a little over 800,000. 843,437.

So if we take the maximum rate, that's $7 million more in property tax in this upcoming year than we got the previous year.

Let's see. Hold on just a second.

Because we're saying we got 60.5 million.

Should be 5,914,300,000. Because that's after deducting the tiers taxes. That number I gave you was prior to the tiers payment.

Okay.

So if I give you the after tiers payment, the VADER rate is 66,507,904. And the no new revenue rate is 61,437,041.

And in the no new revenue rate, again, I know that it has a misnomer of that, but the $61,437, does that include new property? It does. And do we know what the value of the new property is?

$300 million, I believe. One second. $300,830,056 was the new property taxable value.

Okay. Yes, sir. So if we take the full voter approved tax rate, Even if you subtract the $300,000 out, just for numbers sake, $60,000 compared to $66,000, somebody's paying $6 million more in property taxes.

Right, spread out across the community, yes, sir.

Right now, that's looking at about a 10% increase. Okay, thank you.

Are you sure you're done? No, but I'll reserve the right. It seems like you're thinking. Councilman Prescott, how are you doing over there? You got anything you need to add? Blink twice if you can hear us there, David. I just saw the one. Maybe there's a delay. Okay, let me jump in. I don't see anybody lit up, so if David has anything, just wave at us, sir. Okay, let's go back to the TIF, which is tiers, pulled out 291 million, then you put it back in to get to the 16.9 million. The reason that jumps off the page is we've been working on that 16.9, I'm sorry, billion, that 16.9 billion in tax property the whole time. That hadn't changed, right?

16.9 presentation to present yes uh yes well uh before it was shown as 16.6 oh is that right now we've added back in the tiers that brings it to almost 17 billion to reflect that we are paying from the full base okay um and then your

You're capturing the total tax and then you're paying it out 1.2 million. Correct. Yes, sir.

And then 1.2 would show up differently to pound which rate you pick, but this is at the no new revenue rate 1.2. Okay.

And I got my two tax assessors out there. So just want to make sure that both Potter and Randall County seen all this, like the structure, according to the tax code, everything's in the right box.

WELL, WE TOOK THE BOXES FROM THEIR TRUTH AND TAXATION FORM, BUT THIS IS OUR BUDGETING SPREADSHEET, SO THEY DO NOT MESS WITH THE REVENUE SIDE. AT LEAST THAT'S WHAT MS. MCMURRAY TOLD US. THERE ARE MANY DIFFERENT WAYS TO SHOW HOW THE REVENUE WORKS, BRINGING IN THE FROZEN TAXES, SO NO, THEY HAVE NOT RECEIVED THIS PRIOR TO THIS MEETING.

OKAY. I'm following along then on the tiers and kind of see what we're doing there. Are we budgeting based on a 98.5% collection rate?

Yes, that's what we're showing here is 98.5%. The truth in taxation form shows 100%, but we budget a little more conservatively at 98.5% knowing we don't always get it in that first year. Okay.

And then typically we collect, what, 99.8% of taxes?

Correct. And ultimately we'll eventually get the full 100%.

Do those monies eventually end up in that available fund calculation? They end up in our reserve?

And they'll show up in our budget as prior year collections. There's a line item for that that we track it in.

Okay. Yes, sir. Let's go to your revenues here. Well, before we do that, let's go to your debt. Okay, so you guys got the email from Bond Council that I hit him up on last week. And so I was trying to run the total payments for everything. And so beforehand, you guys had in our budget, if you go back to the The very, well, the back section, it's like a page 1,034, 1,035, something like that. You had our total debt service, 66.3 million. And so bond council has our total debt service, 62.01 million on his updated report. And then that doesn't account for what could be coming that's proposed in 27. So this is what we've already voted for. We've already passed. This is payments owed. Yeah, so we've got that $4 million net difference. Here's my curiosity. We're saying that, well, we didn't plug this, we didn't have that, we calculated these other things. I have sewer and water that supports a large amount of this debt. Have you guys gone through and looked at the sewer and water numbers to see if they're being budgeted appropriately, or are we expecting to make a higher payment out of that enterprise fund than we're actually going to?

I would have to ask a trainer a lot of that. I was focused on the tax rate side of it.

So then in walking this budget forward, I want to make sure that we have a good principle of, you know, we found an error, we've gone back through, we've recalculated, we've figured this out, but we're applying it to just one little area of our budget. We're not applying it to the other enterprises. And then specifically, like we have transfers that I still can't see the transfers that are going back and forth. And so, Mr. Freeman, I'll ask you in a minute, but Mr. Path, I saw your light.

I would say that, yeah, we could go back and double check that. Again, the goal today is to set a property tax rate, but yeah, so we have a little bit more time. We could bring back the water and sewer verification for you at the next meeting. So we still have some time for that one if we need to.

That's great. I think my biggest hesitancy is with these large water and sewer increases that are proposed. And I get that we've got monies that we're going to need for wastewater treatment plant, but we really need to be considerate in everything when it comes to that enterprise. And so I still feel like that enterprise is very healthy. I also feel like we're going to see more volume in sales based on the way that we're metering now and so I would like to go back through water and sewer and pull all that let's make sure those transfers aren't shifting going anywhere they don't need to we had a couple of these that were double booked so we literally had fleet paying for something out of a fee at the same time we were showing it on our general fund and so very important that we state it like it is and take the accountability that's need for that Just revenues, how much revenue are we bringing in? 61.4 million in no new revenue on the M&O side. Yes, sir. Total is 80.5, 80.6, what's the total?

80.4.

80.4. At the no new revenue. Okay. So we're now doing a good job of separating our revenues out from our expenditures. Are we done with revenues, like in analyzing those?

Yes, sir.

Okay. Would we be willing to take another look at our revenues council? I still feel like our licenses and business fees are under projected and then we see these sales tax numbers continuing to push.

I do have on the screen. We have our latest September numbers, so we are reflecting another 800,000 available just based on our previous direction of actuals plus 3% growth for the next budget year.

So before we get into the expenditure side and trying to figure out where the money goes, what are you projecting when you're taking into account the total now with these new numbers for NNR and Vader?

As far as revenue available?

Yes, sir.

So NNR is the $61.4 million we discussed, and then the Vader would be $66.5 million.

That's just property tax.

That's just property tax.

Yeah, what are you looking at on the sales tax?

ON THE SALES TAX IS A LITTLE OVER 90 MILLION.

90.5, 91, OKAY. Council, I'm going to ask one more time for direction. You have roughly a $1.2 million deduct from what you've ran consistently in business and licensing fees that would contribute to this. So does anybody have an appetite for projecting that number back up to what the actuals are that have come in before?

And I believe Justin did adjust that some, but one of the major factors we took out PROJECTION WISE, PRODUCER OWNED BEEF HAD A VERY LARGE, I THINK, $1.4 MILLION PAYMENT ON THEIR PERMIT. SO THAT WAS A LITTLE BIT OF AN ANOMALY IN THE BUILDING PERMIT PAYMENTS.

OKAY. SO THAT HAD PUSHED.

WE WERE TRYING TO FACTOR THAT IN, BUT WE STILL SHOWED SOLID NUMBERS OVERALL.

SO WHAT WAS THE ADJUSTMENT? WHAT DID WE ADJUST IT UP TO?

PLUS ANOTHER 300K THAT THEY HAD IN THE PIPELINE THEY KNEW ABOUT. OKAY. SO FLAT PLUS 300K. OKAY.

SO YOU ADJUSTED OUT THE POV PERMIT AMOUNT, THEN YOU TOOK THAT AS YOUR FLAT NUMBER, YOU ADDED BACK IN 300,000 FOR GROWTH.

JUST BASED ON THE DATA THEY HAVE FROM PREAPPLICATION CONFERENCES AND KNOWING WHICH PROJECTS ARE COMING DOWN THE PIPELINE.

At this time, can you roll that together and give us the 287 number? So general fund went from 281, 287. What is the total if you take into account the additional numbers? All these changes? Is that Miss Lola?

Or Justin.

While she's looking, the reason that this is important for anybody who's watching or paying attention, we're fixing to discuss like, which which rate are we looking at here? Well, if you don't have a comprehensive understanding of the total amount of revenues that you're pulling in, it's really hard to just lean into property tax alone. And as you know, property taxes. They don't support 22% of our total budget, they're more than that, but we're not running the city on property taxes alone. So I'd like to see exactly where we're at on the total for the NNR and the total for the Vader, including the additional 300,000 businesses license fees, the additional 800 in sales tax.

As we were originally, the original budget presentation was a proposed 280.8 million in general fund revenue. And so we would add the additional sales tax, and then at Vader we'd add an additional $5.1 million. So you're in the almost $286 million range.

Yeah, so really more like $287 almost. It was like $286.6, right? Yes, sir. So gentlemen, we're getting really close to where we've got a good revenue source right there to cover everything that we're looking at. And then we still have an opportunity to move some of these monies around. So before we go on the expenditure side and move on with the calculations, does council have anything else they'd like to cover?

So sales tax revenue. So where are we forecasting to finish this year?

So we are no longer forecasting. We are finished. So we came in at 89,613,914. So we're projecting 92,302,331 with a 3% growth. And so we're going to finish at 89.6? Yes, sir.

against a budget of 81.4, I think?

We've got shown on the spreadsheet Justin provided 81.17. Okay.

And so the original budget that came to us, what was the, I have 83.8 million originally when we started this.

Go back through our slides here. We had significant change of sales tax, $9.3 million built in from the August presentation.

Okay, but the original budget was $90 million?

Yes, I believe it was $90 million. Sales tax, we were showing $90,500,000. Yes, sir. Variance of $9.3 million.

And we had the budget all put together, raises, all that. And then now we have another $2.5 million.

Correct. And in between this budget book, we had added because we had August numbers. And now we're adding again because we have September numbers. So that's why it's changed a little bit.

OK.

Yes, sir.

And then you said that we are looking at about $61.4 million of no new tax revenue, property tax if it comes in.

Yes, sir.

And then how much did we have budgeted in the budget to receive?

$61,294,457. That was the VADR rate, though. The NNR was $50,000. That's what we have built, so now it's covered by the NNR.

But what we have built, and then we factor in sales tax. So the good news is for taxpayers is... This no new tax rate can pay for what we've got in the budget.

Yes, everything we've already built in plus a little more with the 800,000 sales tax and 79,000 in property tax.

Okay, so that sales tax putting it over and then this new calculation of the no new tax revenue rate means the budget that we proposed can be completely covered. Yes, sir. And keeping the no new tax revenue rate on property tax.

Yes, that's correct.

Okay. Council, anything further? All right. Mr. Freeman, will you keep going?

Okay.

Nicole, can you hear me? Yes, sir. Mr. Prescott.

I don't have any. I just wanted to make sure you could hear me. I don't have any comments at this time. Thank you.

We'll check back in with you. Thank you.

So on the next slide we've got, it's the same additional property tax data, but also adding the sales tax so you can see the full amount. At the no new revenue, you have an additional $879,851 that could be allocated, and then it goes on up. These are just different examples I pulled to kind of show a million dollar separation between rates to the ultimately vader that could have additional 5.1 in property tax 800 000 sales tax for total available revenues that could go to new expenses of 5.9 million Next slide is our comparison of tax rates. I did go ahead and update this just so you could see further where things have played out with our Potter and Randall County other taxing entity partners. This has changed quite a bit in Potter County. Now it's depending on which rate you show. This one has the Vader rate adjusted, the existing no new revenue rates, and our current tax rate of 4307 in Potter County. IT WOULD BE A FOUR TO SEVEN CENT INCREASE. FOUR CENTS WOULD BE IF YOU CHOSE A NO NEW REVENUE RATE. AND THEN IN RANDALL COUNTY, IT WOULD BE A HALF CENT UP TO A THREE CENT INCREASE ON THE OVERALL TAX BILL. THE HALF CENT BEING IF YOU WENT WITH THE NO NEW REVENUE RATE. THIS IS TO PROVIDE SOME CONTEXT ON THE OVERALL TAX BILL AND HOW YOUR OTHER PARTNERS ARE SHOWING UP. Then the next slide is again the property tax relief due to the sales tax. We talked about that previously, but the 2026 27 associated rate due to that half cent sales tax equals a little over 17 cents tax rate, which would be if you combine it with the Vader rate in this example. It'd bring you up to a 62 cent tax rate if you did not have the sales tax making up that piece. So basically provides a 27% decrease on property taxes due to our sales tax growth. Not as high as it has been in just this snapshot back in 22, 23. It was a 30% increase in the property tax rate due to the sales tax. Moving forward, these are gonna be much more similar slides. All I've changed in the highlights at the top is this is now covered by the no new revenue rate. So again, we focused our resources in this proposal for potential raises and additional services, a much continuing funding of street maintenance, street reconstruction. We've got the low interest loan for wastewater treatment facility and then continuing fleet purchases and fire apparatus replacement and heavy equipment replacement program. and then continue to address rising costs in vital areas, including IT software, supplies, materials. Next is our general fund personnel increases, now covered by the no new revenue rate. So this is approximately 5.7 million. This covers 55% allocated to police and fire. You've got police and fire both at 3% raises across the board. We've got police certificate pay, fire certificate pay adjustments. There's 100,000 towards reclass positions due to the CHALLENGES THEY FACE WITH RIGHT NOW THEY'RE CURRENTLY PAYING FOR BUMP UP WHEN THERE'S NOT AN AVAILABLE RANK INVOLVED. SO THIS WILL ALLOW THEM TO REDUCE THAT CHALLENGE. AND THEN ON THE CIVILIAN SIDE YOU'VE GOT 2% PROPOSED AS COST OF LIVING ADJUSTMENT AND THEN A 1% TOTAL AMOUNT THAT WOULD BE USED AS A MERIT PAY FUND TOWARD HIGH PERFORMERS.

Real quick, sir. Yes, sir. So on the police side, this does include the additional steps that they ask? It does not. It does not.

I'll show you that on another screen coming up. But it did include the cert pay. It does include cert pay. Which was asked to be preferred. Which was one of their requests.

So that's for the cert pay, the step raises, or the steps, and then the increase, yes?

Well, no. What they asked for was adding five new steps to the officer rank. That is not included in here. But I'll show you that on the next slides coming up on what the other outstanding asks were. But the cert pay was included in both. Cert pay is included. And then fire reclass of their existing positions is included.

Yeah, and Andrew, pause for a sec. You know, we had the list, and I'm sure you still got it somewhere, the list of asks across the department. Yeah, I've got it on my mind. Oh, it's coming? Yes, sir. Okay. Sorry. I read your mind.

Right. We'd already built in the existing plan steps that any officer that's going from step one to step two, that's already built into the current budget.

But they're looking at getting rid of the corporal. Yes, exactly. That is not built in. Right.

Okay.

That's the one that we're not addressing. Correct. Okay. Yes. And the cost of it was like $604,000?

A little over $600,000. Yes, sir. So this is a snapshot just so you can see the original proposals we showed, just a different spread of one to 3% based on category. I've highlighted in red the ones that are now covered by the no new revenue rate. And of course you got the 2%, 1% split on the civilians. And then down below I also show that we've covered the next phase of the civilian compensation study, phase two is covered there.

And real quick, just to make sure it's clear, what this is showing here is that we are proposing a 3% COLA for police and fire. Then we give you a 2% COLA for civilians and a 1% MERIT. So we just want to give you the numbers. So MERIT is $711,000, then $1.4 for COLA for civilians, then of course the $1.4 and $1.0 is the COLA for police and fire.

Okay, so this next slide, this is the original police meet, confer, ask. So did the same thing. We got all of police's requests. They only requested the 3% amongst all ranks. That's covered by the no new revenue rate, 1.4 million. WE COVERED 1 MILLION OF THE FIRE RAISE ASK AT THE 3% AMOUNT. THAT LEAVES A DEFICIT IN THEIR REQUEST OF 4.9 MILLION. I WILL SAY THEY DID REQUEST THAT THE 6 MILLION BE SPLIT BETWEEN TWO YEARS. SO IF YOU WERE LOOKING AT THE FIRST YEAR, THAT WOULD BE 3 MILLION, 27,000 OR A DELTA OF 1.93 MILLION. The first year you'd be, if you assumed everybody would get the same percentage, which the way they shared at different ranks would get different percentages and we'd have to make sure we didn't have compression issues between ranks. But if you just allocated $3 million, the first half of that 6 million, it'd be around 8.29% increase for everyone in the fire ranks, just as an example. Moving on down, the police, this is the additional five steps to officer rank to replace the corporal rank. So the total amount for that with 3% built in is $630,046. The fire reclass of the six drivers and six lieutenants was originally shown at $458,000. It is now recalculated down to $100,000 because they are currently paying bump-up pay in most scenarios, as it were. So this just covers the delta to just make it permanent. And then we do have the certificate pay, police is 305, fire we've actually recalculated down to 258,800 based on our recent meetings with the fire association. Any questions on that slide? Next up is the supplemental that's built into the budget. This is the $2,092,000 that's already covered by the new revenue rate. In my email to council on Friday, there was one that we were lacking on here for the coming home. Fleet cost increase to the general fund, that's $38,458 a year. That we would recommend adding and then we did have an outstanding request for council feedback on the center city main street contract, which I emailed you bet dukes request. We currently pay 126,788, which contributes to the administration of the main street program on behalf of the city. They did request a 5% adjustment or 6340 dollars. So I wanted to bring that forward to as well. Next up is our one-time cash purchases, CIP. So we currently have built in 13,922,000, and this shows the whole list and the split between the various areas, public safety, streets, parks and rec, and so forth. As we mentioned, with the revised estimate of sales tax, there is an additional potential to allocate 536,000 towards some additional one-time projects that we could bring forward on the 22nd. And then the last slide, before we get to the tax rate discussion, is just a reminder on the proposed debt schedule. I'll kind of work from bottom up. The fleet fund is covered by O&M charges to departments, so that's a debt issuance of $8.5 million, does not impact the tax rate. The drainage fund fee impact proposed was for $9.5 million to go toward the Osage and Coulter arterial reconstruction projects, proposed to be issued over two years due to the the extent of those projects taking up to 24 months. The utilities fund fee impact in the proposed budget was for the 60 million TWDB loan. And then moving forward to the general fund tax rate impact, the fire apparatus continues to have the rolling debt to continue to replace equipment and trucks, currently proposed at 6.2. This one is that we built up in previously the INS rate to really stabilize and continue to fund that. THE BIGGER DISCUSSION THAT WILL NEED TO BE FURTHER DISCUSSED AT THE TIME IN THE SPRING WHEN IT COMES TIME TO ACTUALLY CONSIDER A DEBT ISSUANCE, BUT WE PROPOSED $42,500,000 COMPARED TO THE $20 MILLION RANGE THAT WE'VE DONE IN THE PREVIOUS COUPLE OF YEARS BECAUSE THIS WOULD INCLUDE THE REGULAR SUMMER MAINTENANCE AND THE $12 MILLION AMOUNT AND THEN TWO RTA RECONSTRUCTIONS, BUT THAT WOULD BE ISSUED OVER TWO YEARS AS WELL THAT GOES CONCURRENTLY WITH THE DRAINAGE FUND. We previously discussed that we were gonna try and have a low impact to the tax rate due to, we thought we had a good amount of excess debt that could buy down the rate. Now that we know the excess debt is two million less than originally projected, that's something we'll have to recalculate and see WHAT IMPACT THAT HAS, BUT DEPENDING ON WHAT RATE YOU CHOOSE, IF YOU GO WITH A NO NEW REVENUE RATE, THIS MAY ADD A COUPLE OF PENNIES THAT YOU WOULD STILL BE AROUND WHERE OUR CURRENT RATE IS OR SOMEWHERE IN THERE THAT WOULD STILL BE LESS THAN THE VADER RATE. SO THAT'S SOMETHING JUST TO KEEP IN MIND WHEN WE WORK TOWARD THE FUTURE OF BRINGING THOSE DEBT ISSUANCES BACK. And then the last slide is just consideration of the proposed tax rate by City Council. Here's the action item today. I've got listed the potential rate examples that were shared on previous slides. This is just setting the ceiling at the rate, so you could just set the VATER rate, you could set somewhere below, just whatever you set today will be your max, and then you have to come in at that rate or below when it comes time for adoption, which first reading would be September 22nd. Second reading and public hearings will be on September 29th. So that completes the presentation. We're happy to discuss or answer any questions related to the tax rate or what's being proposed or get any feedback on what you'd like us to bring back into the budget on September 22nd.

Okay, thank you for the presentation.

Let's go back a half a step.

Mrs. McMurray, you're here. Mr. Warren, you're here. So really appreciate you guys participating in our meetings and then participating in the homework. We just need confidence that our numbers are plugged in the correct way where they go. I don't know that we have a complete understanding of how the numbers get conveyed to you guys. So here's what I would like to make sure. Do you have documentation? So you certify these numbers when you sign them. And so do we send you data? Do you have paperwork? Is there a paper trail of everything that we've done so far? So start with Mrs. McMurray, if you don't mind coming up. What I'm looking for is confidence that our protocol and our procedures are in line and that we don't have anything else we need to change. Yeah, come on up, Thomas.

I'll let you go first since you do the main calculation.

Okay. For the record, my name is Christina McMurray. I'm the tax assessor collector for Randall County. Mayor, as far as the answer to your question is yes. We have backup paperwork on the certified values that we get from the appraisal district and also the questionnaire that we get from the city of Amarillo that we plug into the tax rate calculation form. which is not a county form, it is a state comptroller form that we follow.

Okay, that's good to hear. So, Mr. Warren, do you have everything as well on your side? I'm assuming we feed you data, you feed that over to Randall County?

Yes, yes, Mayor. Basically, we put things in our software system and then it generates a report that we send to Ms. McMurray's office for that part of the calculation. What we kind of have discovered was the number that was in there incorrectly, it looks like, based on our internal research, it looks like it was provided by city staff. And so what we're going to do this year is we have a form developed that's an internal form we're going to send to the taxing units just to certify, to make sure those numbers are correct for each individually, the MNO and the INS, before they go into our system. Because it didn't impact your collections on the Potter County side, but going forward it would impact our internal reporting, which slows down this McMurray.

Okay, yeah, I think that's really where I'm drilling in is, you know, if you were given a number of, say, 20.9 million, right, we're having a hard time going back through to see where did that number come to you, like, how did we get it wrong?

That schedule would go to Randall County in the questionnaire.

In the questionnaire? Yes. Okay, so there's a paper trail. So we can go back through that questionnaire. We can see that that 20.9 was placed on that, and then you just worked from that number. So if we find the error on our side, then we do what we've done. We come to you, and we have you adjust that.

That's correct.

Okay, and then the number that you are now working on lines up with, and this is a city staff question, lines up exactly with Bond Council's statement. Is that correct, Mrs. O? There we go. Thank you. yes sir okay um good well so council do do you guys have confidence that everything has been taken care of double checked documented so let me let me follow up on this so tell me again what went wrong here you want me to go

go ahead and fill in on the potter county side yeah so on the potter county side so the kind of the high level overview of this is randall county does the uh calculation for the city and one number that was incorrect came from potter county off of an internal report we had so we have we have the ins and the mno in in our system so it generates a report saying basically what was collected on those One of the numbers, the INS was a little bit high this year, and that's why the city staff believed that there was going to be an excess debt collection. And like I said, it looks like from what we were – we understand we were provided a number that was a little bit off, and so this year it's going to be corrected with a form. We're going to make sure that we have that certified. But that report went to Randall County, and that's where that number came from.

And on the Randall County side, when we send the questionnaire to the city of Amarillo, especially for their debt schedule, their debt payments, we just take that total number that we receive from city staff and plug it into the tax rate calculation. So if there's a mistake on that debt or anything like that, it's going to change the numbers. But as far as the revenue side, Randall County knows nothing of the City of Amarillo's revenue. So all the certified numbers that we get, if any one of them is incorrect, then the calculation is going to be incorrect.

So in this truth and taxation form, we have to give you a number. and then you do some computations, and then you give us a number back that goes in the Truth in Taxation form?

Yes. Have you seen a Truth in Taxation form? Unfortunately, I have. Okay. So, yes. Have you attended a workshop for T&T?

Fortunately, I have not. Okay. Go ahead. Okay.

So, basically, yes, you're correct. Whenever we get a number from the appraisal district and a number from the city of Amarillo, we go in and we plug it into this 82 PAGE SHEET CALCULATION. AND THEN AFTER WE COME UP WITH YOUR CALCULATIONS, BASICALLY YOUR NNR AND BADER, WE SEND IT BACK TO THE CITY OF AMARILLO. to the CFO and make sure that everybody agrees on those numbers. And once everybody agrees, then we move forward with it.

Okay. So basically there's a line 43 that's our adjusted debt that comes from our debt schedule. Now it shows $19,708,933. Then line 44 is a certified prior year excess debt collections. That's the 1.9 that we subtract to get us the new line 47 of $17,807,559.

that shows what the ins rate could be to make that payment and so is there any part of your role to verify any numbers any part of our role yes or is just you take whatever is given by whatever taxing entity correct we take whatever is given by any taxing entity because as a tax assessor collector it is not our job to certify the entity's numbers so we just take what is given to us and calculate it

Have you encountered anything like this before with other taxing entities or having to verify? We have.

During our tax rate calculations, you know, they may come back and say, well, we disagree with a number. We'll go back and look at it and determine, you know, where it happened. If we have to include the appraisal district, we include the appraisal district. It's not a common practice, but if it does happen, you know, we can easily sit down and meet like we did and get it figured out.

So I guess when you're doing your computations, you may say, hey, this is what it looks like, and they want more money or whatever. There's a disagreement on what the figure is.

We don't ever, that comment you just made is something we don't ever say in the tax office that they want more money. So no, we basically, the easiest way for me to explain it is we take numbers based from the appraisal district and the taxing entity. We plug it in to the TNT form and we, now we furnish numbers as far as refunds go, excess debt collections and all that stuff. But we plug it in and whatever the numbers run, they run.

Can I jump in? Absolutely. I will mention, so Potter County, we do calculations for four different taxing units, so we don't do the city's calculation. That's one of the things Randall County does. But I will say going forward, something the legislature added this year that I'm sure Randall County had to deal with was we have to hyperlink taxing. the evidence for our internal calculations and a lot of our math now. So if there is an issue with a number that the county provided on these forms, most of the time now the units will be able to go and see where those numbers came from, what the documentation was for it, and what caused that to be in the calculation.

And that'll be a big asset for us going forward because we'll be able to, as we have instances in the future where we question a number, we can go back to the math and then maybe zero it in before we meet and so identify the problem faster.

Right. And I guess, and has the city ever come before in a kind of a, I mean, maybe a discrepancy before to try to resolve with you? Or is this kind of the first time that this has happened as far as you remember?

I think I'll be safe to say this is probably the first time that this has happened. It's gotten this far. Normally, in the first step of the process, it's been caught if any numbers are in disagreement.

Would this particular issue be a one-time mistake, or could there have been some issues that we had previously that we just never followed up on?

I can't answer that I don't feel say I don't I I honestly can answer that because I don't see the city of Amarillo's numbers. What I will say is you know Randall County in Potter County in the city of Amarillo we've always had a great working relationship and we work with them. year after year to produce these tax rates. And we have that open line of communication that if the city of Amarillo feels that we've made a mistake or vice versa, we pick up the phone, email, call, and we get it figured out.

So really the mistake this year was just the miscalculation of the debt.

The debt schedule and then the excess reserves factored into it. Those are kind of the two major. The rest was really on the budget revenue side of how we did the TIF funds.

And then just walk me through one more time how the error occurred on the debt part of it.

It was really just an overlook as far as a fleet debt service payment that should have stayed in the fleet side, not on the tax rate side.

Because we don't collect the INS for fleet.

Yeah, it comes from the O&M and other charges to other departments. So it just should not have been on the list.

Okay. All right. Thank you. Councilman. Just have a question. I mean, if these mistakes weren't, I mean, I've had these questions asked. If these mistakes weren't caught, what would have happened?

We would have kept growing our excess debt reserves, and it would have ultimately kept ballooning until we caught it. Yeah.

And with that fleet as well, same?

We would have ultimately caught that. We wouldn't have made a payment on it, but that would have also shown us why do we have so much excess INS collections for debt if we've already covered that payment through fleet. Yeah. Okay. Thank you.

Yes, sir. I'm still trying to figure this rate out. Because if you take a simple calculation of 0.4307 times the 3.5, it doesn't get you to the 445252. So what is the difference in the way they calculate? What are they putting in there? Which also means that the increase is more than 3.5%.

That really comes down to the Truth in Taxation form and how the calculation plays out. It's not as simple as a 3.5%.

Yeah, Christina, could you speak a little bit to that about, I know there's exemptions, there's growth, there's tiers, things that go into that factor in the 3.5. I know Sydney watches through a lot of that.

She's going to kill me. I'm going to have my Truth in Taxation expert come up and explain that to you, Mr. Reed. Sydney?

Good afternoon. I'm Cindy Norton, I'm the Chief Deputy at Randall County Tax Office. So yes, so the tax rate calculation is, when y'all are setting your budgets and everything, you're looking at your revenue, you're looking at different numbers. Tax rate calculations only takes into account values. And so there are different things that you do to take adjustments for, like he said, for TERS, for new exemptions that were granted. I know one big new exemption this year was the $125,000 for business personal. That made a big difference on some numbers. And so we do adjust. And basically what you're trying to do with your no new revenue rate is you're trying to compare apples to apples. Your no new revenue rate should net you approximately the same amount of money that you collected last year if you tax the same properties. So you have to make all of these adjustments to get that down to where you're looking at the exact same properties for last year with the exact same properties for this year. And so that's the view of the tax rate calculation, which of course is different than when you're looking at revenue.

Can I add something? And a lot of that actually is going to be evidence now in the hyperlinking too.

Councilman, I know the 3.5 doesn't equate just to the pennies. It'd be nice if the state of Texas maybe had considered the communication piece of this more so than the computation, right? Because it's very difficult to communicate to the taxpayer what the actual is that can be approved on this side of the dais. That's only relevant if we're trying to push all the way up to that number, right? If we believe there's a chance we can take care of staff, continue to invest in the organization, and take care of our taxpayer down at a lower rate, then whether it's .447 or .5 or 452 doesn't necessarily have to be relevant here today. So I think it's good to know how we got here. What I was looking for is confidence that we're not going to get here again. I've heard both of you say, you know, that's not my role, that's not my job to double check your numbers.

Well, it's not my job.

And so, you know, I'd say the warning flags that we sent up here were not minded. And so, what I would like is just to know that there's some sort of double check out there. that a future mayor and council aren't gonna sit in the position of trying to figure that out. So I think bond council and the debt schedule, I think audit committee, places like that would be really good for people to be able to sit that have the time to double check that. And then just looking at the rates and the calculations, I think it's a good one that we caught it. So I'm thankful that we've got a really good problem. And at the same time, I want to make sure we don't create a problem moving forward. Just because we got fortunate to catch it doesn't mean we want to blow through it. And I'm not real sure what happened previously. So when you talk about excess debt collections and where that money sits and how it's being factored, there is a great deal of trust. We're just going to trust that these numbers are correct and move forward. but I believe that I have the confidence at this point in knowing that I know I've done all I can do. I think you guys are doing your very best, and I think staff has definitely moved this back to where it needed to be on the correct fund. So, Councilman, I see your light up. Do you have one more thing? If you don't mind.

This is a simple question, but I think since I've got... Your tax rate, whether it goes up or down, that's not the way to figure out if people are paying more taxes. Is that correct? So tax rates can go up, but your property taxes could go down. So would you say a tax rate would be the best way to determine whether we're collecting enough tax or not enough tax? I mean, there's another factor that goes into it, correct? Which is the values of the property. So if you're trying to do, I'm seeing this comparison being made, but we've had several years where we've gone down on our tax rate, but your taxes have gone up. So to say that it's, you know, and we see this tax rate thing a lot, but there's another important factor that comes into how much taxes you pay other than tax rate. It's the value of the property. And values went way up in recent years. Now they seem to be settling down and some are going up and down. So the tax rate in and of itself is not necessarily 100% indicator of whether you're going up or down in taxes, correct? Correct. Okay, thank you. I appreciate that.

Councilman Prescott, we can't see you, but we still can hear you. Do you have anything you'd like to add, sir?

Mayor, he's not actually on there right now. He's restarting right now.

Okay, so he logged out. Did he text anybody that he has something to contribute before we move forward? No, not right now. We'll come back to him to make sure that there's nothing we skipped over. Thank you guys for speaking. Appreciate you. Thank you, Mayor. Okay, we've got a task in front of us here. Discuss and consider proposed tax rate. As you know, it can be the highest tax rate that you could pass, and then you could always consider something else. But I think with the painstakingly slow process that we've gone through here, I'd like to arrive at a rate that we know we're comfortable on voting for. That would be my goal. I will settle with less than that if we cannot come to that term today, but that's the task before us. Councilman?

Well, I do have one more question about the budget, if I may. I wanted to ask, kind of focusing on reserves. So I was looking at our employee health insurance reserve, which is $6 million. And the last four, so a reserve just for education's sake, we have reserves. What are those reserves for?

Did we get Mitch?

I think Lola's been working on it. The reserves are basically if you exceed your expected claims that you'd have to dip in if it's the health insurance that you're speaking on. But general fund reserve is if some disaster happens that we would have to dip into our reserves to help cover day-to-day expenses.

But for a variety, I mean, we probably have 8 or 10 or 12 different funds that have reserves. And then we have ways that we determine how much reserve we should put back in each of these.

Yes, sir.

I guess we have... Are these all policies? Is it staff determination? How do we determine what the reserves are?

I believe they are historical amounts that we have established through the years for the different funds, depending on the experience for the funds.

It's going to depend on the fund. Like general fund, it's an operating day's reserve. But if it's risk insurance or medical related, it's a little different.

Specifically to medical, Councilmember Simpson, the target reserve is three months average claims paid, or about $6 million on the cash flow that you're looking at for this next budget. And that is identified in assistance from our health care consultants.

Yeah. But basically, the reserve is set back for emergency purposes. Yes. Correct. And across the board, we have 60, 90, 100, and there's formulas. So my question is, when I go back and look at our health care claims, I've got, according to the budget, and you can tell me if I'm wrong, health care increase over the last four or so years has increased about 33%. It may be 32% or 31%, but would you disagree that we've seen significant increases in our health care costs over the last three years?

Claims or premiums?

I'm talking about what we have budgeted and to pay out in the budget. For claims. Health care expenses, yes. A third would probably bid. So I guess my question is, why has the reserve for health care stayed at $6 million? In fact, I think this year, we're budgeting less than $6 million, $5.76 million, when it would seem to me that as health care costs increase, would not our reserve increase?

Yes, sir. We can certainly revisit the reserve policy. We did communicate with a consultant who seemed to think that we were at appropriate levels for this year, but it's something we can revisit either now or in the future.

Well, yeah, because I got that information as well that you sent to me, and I think what our consultant said is generally a reserve target is 60 to 75 days. Yes, sir. And I think I was told that we are 48 days.

Yes, sir.

So is our reserve just something that we go off a consultant telling us? Or is there not a city policy or a council policy on those health care reserves?

I'll have to go back and look at our financial policy. I don't think it specifically speaks to health insurance reserves. I think it's the operating for water and wastewater and general fund that council voted on in that policy specifically.

Yeah, well, and it looked like we ended up this year with about, I mean, when I look at, let me see here, when I look at what I was, you know, if we were to go to, I don't know, 60 days, we're about 1.7 million shy. I mean, at 48 days, if you take 6 million, divide it by 48, and you add those additional 12 days, much less if you add another 25 days of that. So my concern is, do we have enough setback for that. I know it's a reserve. We hope not to use it, but it seems like it's a little lower than it, than it should be.

And I think, so we were projecting here in that we'd have available funds of 8.6 million. I think instead of increasing reserves, we just plugged it into our medical claims line item. Um, but I think you could plug it in, in reserves, basically the same way you could increase that to seven plus million dollars instead of having it under claims.

Okay.

Yes, sir.

Well, it just seemed to me, again, are we going off with the consultant? To me, I could see where, okay, as costs increase, our reserve needs to increase.

Yes, sir. Yes, sir. Yeah, we can look at that before the 22nd to see if there's a shift we should make there.

Yeah, we can revisit the cash flow sheet.

I would say that. Here's the other thing is, and again, this is just me looking at it, so I could be wrong, and most likely hopefully I am, but I'm looking at fleet service, and I'm just taking off what's in the budget and kind of what we're stating in the budget where we're where targets are, but it looks like fleet services may be below its stated target reserve. Risk management could be below after transferring, I think, about $3.7 million out of that fund. So I guess what I would like to see maybe hopefully on the 22nd, before we adopt this budget, can we get kind of a simple schedule for every major fund? that shows what our policy is, the target, the beginning reserve, where we're going to end, just so that we can feel comfortable in what these reserves are. Because what I don't think we want to do is take money out of the reserves to pay for recurring expenses. And so I'd just like to see, because when I went across, I mean, each department doesn't seem to be a whole lot, but it just seems you add all of them up together. The math I'm looking at is it could be between $4 and $5 million under reserve. Now, not all of the general fund, but I would feel really comfortable if we could kind of, before we finally approve the budget, kind of go back through that and kind of see where we are on each of our reserves to make sure that we're adequately reserved on those things.

I think we would feel more comfortable to start a process of moving those reserves up a little bit. We've been trying to be conservative based on prior comment, but I think we would like to see a process where we can start building those reserves back up towards where we feel comfortable at.

Yeah, because I just don't think we need to be depleting our reserves. I mean, that trend could wind up being a real problem. So if we could kind of just get an update on where we are, whether we would need to change anything in this budget. or at least look at changing something in future budgets to make sure we have the appropriate amount of reserves set aside.

Councilman Prescott, we got you back.

I don't have anything mayor.

Okay. Um, really good. Well, I love the reserve questions. Um, I think we need to continue to dig in. I know. We were previously reserving too much because we were reserving a total. Uh, in the general fund to run the city, and then we had independent, um, we call them what inner. departmental or intergovernmental, interlocal, what do you call interdepartmental transfers? So with those, they were reserving on top of reserves. And so I think I have a lot of confidence in knowing we have our general fund reserve that's healthy. And now each one of these independent departments that are set up internally are reserved as well. But I think that's a great discussion. I think some of these transfers back and forth is still important as well. But for this discussion here today, we need to go back. So Mr. Freeman, probably what I'd like to do is I'd like to go back. Did somebody have anything before we before? Okay. I thought I heard something. I'M LOOKING AT A PROPOSED BUDGET THAT I UNDERSTAND SOME OF TO BE WHAT YOU BUILT OUT TO INCLUDE LIKE WHAT YOU WERE ANTICIPATING THE VATER RATE TO BE. SO THE TOTAL REVENUES OF 280.8 MILLION ON PAGE 11 OF THE, I GUESS THIS MIGHT HAVE BEEN THE ORIGINAL DOCUMENT YOU PROPOSED, GIVE ME THE TOTAL FOR THE NNR WITH THE ADDITIONAL SALES TAX, THE ADDITIONAL BUSINESS FEES What is the total revenues, please?

I don't have the exact number. I don't know if anyone's calculated yet. It's around $287 million.

Okay. I'll take the 287 because I had it at 286.6. And so I think if we could say 287, what does that get us to here? If you're looking down the line, you guys are prepared to pull roughly 6.6 or 6.7 million over from reserves to balance that budget and keep us at our minimum or I'd say above our minimum. Is that correct? Okay, great. So what's not included in that in council, I'm going to attempt with, unless you guys want to pull the reins in, I'm going to attempt to try to negotiate a few things that we don't have included in this. One thing that would be helpful would be $600,000 for pay increases for positions on the PD side.

Those steps, those five additional steps.

The other thing would be to just take a small amount of money and put it into what we could call a senior citizen's account. And when I say small amount of money, I mean just even $100,000, not even $500,000, but just to put it into an account, create something there that could be, I don't know if it goes through, parks and rec, if it goes through community development. However, we have good entities around town that provide services for seniors and they could apply to that. That money then could be able to get out into, you know, I hate to say it, but I mean, it's great organization, but like, meals on wheels, something like that. So senior services, I would love to see if we could push a little money that direction. The other thing is, I'd love to entertain maybe an additional personnel increase. And so Mr Freeman, I'm curious. Do I have.

six million dollars to work with or do i have two million dollars to work with um as far as what you can adjust if you go with the beta rate plus the sales tax you have 5.9 million i assume you're talking about in in excess to what's already been proposed correct that's correct 5.95 million with sales tax and property tax if you go the beta rate

Okay, so the beta rate would bring in $6 million more than what's been proposed with the 800,000 sales tax. Okay. I would say that if we took all of our pay increases, and this is very important to talk about the people that aren't in the room right now are our boots on the ground. And so if we want to continue to get, you know. mainline repairs at 2 AM and stay healthy in our core services and infrastructure growth and build out the city. I want to say it was somewhere around, was it another $400,000 to get an additional 1% increase?

For civilians, 711,000.

711. So between the PD and the fire department, it was another 800 or so.

Yeah, so 1.55 million would be another 1%.

1.55 million. Across the board? Across the board.

Yeah, sworn and civilian. So it would be 4% for sworn and 3% plus 1% merit for civilian.

And if we look at another 600K for the positional increases. We're at 2.1 million. And then my only other ask is just to start going down the senior citizens road. So that's 2.2 if you did 100,000. Yeah.

So you'd be looking at basically our current tax rate, 0.4307, somewhere in there.

Well, I'm curious if I am looking at that. So I've always disagreed. I feel like we run a budget once a year and I feel like we have always communicated that we have annualized expenditures that are every year expenditures and then we have one time expenditures. And though I want to kind of, you know, drift that way and say, yes, a project that we go and do for a million dollars once that project is over, then, yes, we don't need that million dollars there anymore. But I believe the entire budget is a one time expenditure. We make one time decisions once a year and the healthier they are, the easier they are next year. And so in learning, as always, that we were given an extra half a cent of sales tax to keep our tax rate low, I think we can say sales tax for a while wasn't even counted on as a dependable revenue source like we would say our property tax was. And we were always trying to tackle, do we tie pay raises for PD and fire to just property taxes, or can we dip into the sales taxes? So in looking at all of this, I WANT TO GO BACK TO THE GENERAL CONSTRUCTION FUND OF 5.5 MILLION THAT WE'VE BUDGETED THERE. YOU GUYS ARE SAYING THAT'S A ONE-TIME SPEND ON THIS BUDGET. SO BACK TO PAGE 11, MR. FREEMAN. TELL ME THAT 5.5 MILLION, WHAT DOES THAT LOOK LIKE IF IT'S 4.5 AND WE TRY TO STICK TO THAT NNR RATE? On which page 11 are you talking about? Page 11 on the budget, sorry. Oh, page 11 on the budget. So if you go to your budget book for me, I'm running that $287 million general fund, transfers, all that stuff's already calculated. And we've got general construction of 5.5 million. I also believe that our CIP is very healthy and that we have money sitting over in our portfolio, our investments, and that we're not going to fall short on some of these CIPs that we need. We have adopted an understanding that a fire truck is too expensive to pay cash for anymore. So $1.8 million now is something we're solving through a debt mechanism. And so I'm not as concerned with the philosophies that we have in place. So I would like to say the adjustment, Mr. Freeman, what do we do if we go from 5.5 to 4.5 and we leave that additional million up in the... General Fund, M&O.

I'd need Lola or one of the finance staff to remind us what's built into that 5.5 before we can make a decision on that.

Okay. Another one, while they're working on that debt service, 802, 925, right below that. What is that? We just spent an inordinate amount of time talking about debt service, and it's all built in on a whole other page. So why do I have $800,000 for debt service on this page?

That's a transfer that's going into your debt service fund, I believe, for the City Hall tax notes.

Yeah, but they're covered already under INS. So, like, why am I double-dipping it, deducting it out of here? The INS goes straight into that debt. The INS is already calculated.

I'm sorry, is that for the solid waste? So, that's coming from your solid waste rates that are transferred into that INS fund.

802 solid waste?

I WOULD LOOK TO FINANCE TO CONFIRM THAT FOR US.

CAN WE LOOK AT THAT, STAFF, AND SEE WHAT THAT IS AND WHAT THE 5.5 IS? WE'VE GOT A COUPLE WEEKS BEFORE WE'VE GOT TO ARRIVE AT THIS. I PERSONALLY FEEL LIKE WE COULD PRODUCE A BALANCED BUDGET AND STILL STRETCH ABOUT $2 MILLION, PUSH FOR 4% PAY INCREASES ACROSS THE BOARD.

I THINK WE'VE GOT SOME INFORMATION. CAN WE TAKE A QUICK BREAK REAL QUICK? SURE. WE'VE GOT SOME NOTES UP HERE.

I actually have the answer for that. We have $456,462 for landfill debt service and then $350,000 for MPEV debt service, M-P-E-V, from the team. That makes up $802,000. Okay.

And Mrs. O, that is not already factored for transfers out of those budgets? Because, go ahead, I'm sorry.

Yes, those are specific debt service amounts that get transferred, that are deducted in here.

Because those are built into your general fund. Hot tax and solid waste revenues come into your general fund, so this is transferring them out to make the payments.

Yeah, I think we're going to have to dig into these transfers quite a bit deeper because that goes back to the $8 million in transfers where we're seeing some of that that's hot tax, some of that's M&O funded. It's all special revenue related. Yeah. Super difficult to track the way we break it down on this, but then let's take a break and let's come back. Let's take 10 minutes. We'll regroup, and then, Council, I'll be quiet and listen to you guys tell me what your plans are. Okay, we'll go ahead and call ourselves back into session here. Councilman Prescott texted me that he's got to jump off at 1. And so, Councilman Prescott, can we start with you before we go back to staff? I know staff was doing a little research, but just based on the presentation that you've been given and kind of what all you see that the needs are here at the city, what do you feel is the best direction that you want to see the city go?

Is that question directed at me, Mayor?

Yes, sir. So councilman, I wanted to give you a minute to kind of weigh in on what you'd like to see council do as far as a potential rate and any budget priorities that you're still pushing for.

You know, I think that, um. You know, the critical things to me are making sure that everything is covered that we've listed, but I definitely want to make sure that all staff sees a strong increase in pay. You know, I liked a lot of the things that you were talking about earlier. I don't know which rate that is because there's so many options that we have. You know, from the VADER all the way to the NNR, there's many options in there. You know, it's, I'm gonna have to lean on you and the rest of the council on the exact number. I like the direction we're going right now. I do, Amarillo Public Health needs a small amount for some additional help, and I'd pass that on to Andrew, so I'd like to talk about that maybe when I get back. About $10,000 they were needing, but overall, It's been a challenging budget season. As these numbers have moved around, I'm very thankful for what you've done in pushing forward and the questions and the work that staff has put in to get us to this point. But to tell you an exact number, I can't do that because there's so many different options. So I'm going to continue to listen and I'll have further information as we move forward.

Real good, Councilman, appreciate that. Thank you. Mr. Path or Mr. Freeman, if I can go back to you guys, I think you guys wanted to clear up just a few things that I had asked, and then we can move back over to Council on what direction they want to go.

Yeah, we had confirmed the 287 and some change, and so it's like 286 and some change. Okay, good.

Yeah, we confirmed that. Total revenues.

Yeah, total revenues, yeah.

And that's 287, right? And that is the NNR or VADR rate, just for the record.

That is the VADR rate, correct. That's my understanding of the VADR rate. Yeah, that's what the VADR rate.

So let me go back. That's the NNR rate, I believe.

It's the NNR rate.

No, yeah, yeah, yeah. That's not. So let me make sure we're saying it clearly. Let's say 286. and some change. We'll get the exact number. 287 may be optimistic, but 286 is our NNR rate total revenues. Right now you have a budget proposal that is 280.8. Then we add in the additional grants and transfers, general construction, which y'all are calling one-time expenditures to get to our 287.9 budget as presented. So Mr. Freeman, do you want to double check me and make sure I'm not miscommunicating that? That's an essential point here of what we're getting done. Yeah, I'm double checking right now. Okay, so he's gonna double check that. I'm gonna take a minute just to let council kinda talk through. Keep your revenues separate from your expenditures. Where you get hung up in budget is where we start working all this stuff back and forth on two different sides of the ledger. That total revenue will change when we bring in the one-time expenditures or when we take money out of existing reserves. Mr. Freeman, did you want to jump back?

It's the old Vader rate that we built the budget. Now it's a no new revenue rate.

So, the no new revenue rate gentlemen is somewhere around 286 and then we still have a few additional monies that we can plug in. And so, Mr. Freeman, you had 800,000 that you were comfortable with in sales tax and then we had like another. $300,000 from licensing.

So we're $800,000 from sales tax is the new amount. On the property tax side, it was at the no new revenue, $79,000 additional on top of the $760,000 we already had built in.

Yeah, that's where I'll get lost. If we go back and we try to say, well, it'll bring this plus that. Let's just keep our revenues totally separate. So no new revenue rate. brings in M&O, INS, and then when we go back through our projected sales tax and everything else that we've got in there, we're over the 287, I believe. I'm not going to say a million and a half, but that's roughly what I've heard when we are taking licensing and business sales tax as they're no longer projected, but they're actuals and what we're comfortable with. And there might have been an additional AMOUNT THAT WE WERE LOOKING AT AS WELL.

JUST BETWEEN SALES TAX AND PROPERTY TAX IS 153.7 MILLION.

YEAH, SO BREAK THAT DOWN I GUESS IN THE ADDITIONAL OPERATING INCOME THAT COMES IN FROM ALL OF OUR OTHER SOURCES And if you need a minute, let's make sure we get this number right before we communicate it out. But what I'm looking for specifically is the gross revenues that we would take from the existing budget that we're not messing with, but then considering the additional things that we're bringing in. I think we're over the 287. I'd just like to know by how much. From all sources, correct? Yes. General fund. Increase in sales. Yeah, all general fund. Mm-hmm. Yeah. So, Council, let's go back. Anybody want to start with maybe some preferences, priorities that you're trying to get worked into this year's budget?

I think Lola's got it, the correct number.

Okay.

So if you're looking at the no new revenue rates, we will generate 61,437,041 for MNO general fund revenues at the no new revenue rates. What's the total? And the previous budget had us at $61,294,457. So that difference is $843,437 between the revenue generated at the new revenue rate and what we had in the previous budget. So if we add the difference in sales taxes to it, of about and other taxes other fee increases of about a million dollars roughly that will bring us about 1.8 million dollars in total additional revenues that's great at the no new revenue rate roughly so let me let me go back to the way mr freeman his presentation said it and this will be more clear

Mr. Freeman presented that everything that was kind of given in the budget as asks and priorities would be covered under the old Vader rate, right? That's what we were looking at. Now the no new revenue rate we now know is equal to all that. It'll cover all of those proposed expenditures plus $1.8 million is what I heard.

Between the sales tax and a little bit of smidgen of property tax. Fantastic. Yes.

So I think that's really good news. So whether that's 280.5 or 287 or however we get there once we walk the rest of the grant monies and all the other stuff that comes in. But that is what I'm looking to hear. So thank you for doing that. Council, it's almost 1 o'clock, and I've got to get you moving. So somebody needs to jump in here with some opinions. How do you want to spend this money, folks?

Well, I would go alongside with you. Some information that I would like, if possible, is the pay survey that we did. Find out where we are across the organization. I know we've talked about it a little bit, but I'd like to see that when we're talking about budget. Also, for each... For each rate that you have here for additional revenue scenarios for allocation, where you have each rate, what I would like to see is a breakdown to the average taxpayer, what that means to the average taxpayer monthly. I think, you know, to Les's point, you know, a rate really doesn't mean much of anything. It's going to be based on the value in that type deal. So in Potter and Randall County, I think we have a median residents, you know, that's there, if we can figure that off. I know, you know, if your home's larger than that, or then it's going to be more, if it's going to be significantly smaller, then we can adjust from there. But the impact to the average taxpayer for each rate would be great. I agree on the Again, the PACE study I think is gonna be good information, but if we could push for a 4% raise for everybody, and I mean, divide it up like you talked about, a 3% and a 1% merit, and then go that way. Include the steps, removing the corporal rank for APD. IF WE CAN DO THAT. THE CENTER CITY ASK I THINK WAS $37,000. I THINK THAT'S A NO-BRAINER.

6,000 INCREASE.

THE OTHER ONE WAS COMMUNITY DEVELOPMENT LEASE PAYMENT.

BUT THOSE TO ME ARE THE PRIORITIES, YOU KNOW, AND AGAIN, INCLUDED WITH THE ASKS THAT WE ALREADY HAVE HERE AT THE LIST.

AND WE DO HAVE BUILT IN PHASE TWO OF THE COMP STUDY. THAT'S THE 444,000. THE ENTIRE COMP STUDY WOULD BE 1.96 MILLION. SO ANY ADDITIONAL YOU WANT TO PUT THROUGH THAT, WE COULD recalculate, but we basically have phase two at $444,000, the rest of it combined, if you did it all at one time, $1.96 million.

Yeah, and what I would ask, though, is the results of that, the ones that we did find, where is everybody? I know we've discussed that a little bit, but I mean, I think that will help just put it in perspective of the increase, so we're taking care of the organization, both sworn and non-sworn personnel. The $100,000 on the The seniors, I think that that is not a bad idea, if we can get that. And then I think based on those requests, I think that we look at, OK, what rate would take care of those? And then I think we can go from there.

Thank you, Councilman. Councilman Reed, do you have anything you'd like to offer?

As we look at the no new tax rate, that's generating us $1.8 million more.

When you factor in the sales tax. Sales tax and everything else.

So should we be looking at ways to spend that? Or should we be a little bit more conservative? Is there any debt that we can write off? Because it is the taxpayers' dollars. And I agree with putting some money into the senior citizens. I know that we need a fire training facility, a new facility. I mean, that would be something that serves the public that I think if we're going to spend some money, that's probably where I would like to see it. You know, over the last few years, I think the courts have been looking for monies to renovate and do some things in the courthouse. There may be some other options rather than renovating that building. But, I mean, those are the things that I think I would look at and whether or not there's debt that we should be paying off with that extra money.

Okay. Thank you, sir. Councilman Prescott, it's almost 1 o'clock. I know you said you had to jump off soon. Do you have anything else you'd like to offer?

I don't, not at this time, Mayor.

Okay, thank you. Councilman Simpson, would love to hear your thoughts.

So our goal today is, today is our deadline to vote on a not to exceed. Correct. I would say this, because I've been hearing a lot of discussion going around the community, and people say, boy, our tax rates are low. And look how they compare. But I asked this question earlier today because the tax rate is only a portion of the equation. Property values are the other part. And what really matters and why I wanted to focus on this, what matters is how many dollars are we taking in? Because when we take in more dollars than we did before, that's a tax increase. Somebody's got to pay for it. Some people may have to pay more, have to pay less. But this thing about our taxes being so low, I went back to 2021 budget. When you look at the total property tax revenue increase since the 2021 budget, 52.1 million to 81.6, that's a 57% increase. When you look at property tax used to pay for day-to-day operations, that's increased about 36%. That's the M&O, the 45.1 million to 61.3 or whatever we're going to wind up with here. property taxes used to pay debt from $7 million to $20 million. That's going to be $19, apparently, so that shaves a few percentage points off of it. But that's almost triple of what we were paying several years ago, from $7 to $19, not quite. So, I mean, I just want to sink in that just for a little bit because I'm hearing, boy, we're just not charging enough taxes. It needs to be more. We're charging plenty of taxes. And the other thing is, but the issues that we had to catch up with, even if we take the Vader rate or whatever, are not going to catch up with the problems that we have. So there's a lot more, you know, when we talk about having a low tax rate, I think there's a lot more that goes into that. To me, the right question is how, you know, isn't just simply how does our tax rate compare? The better question is how much more are we asking taxpayers to pay and are we doing everything we can to protect their pocketbook? And for me, the bad news is we didn't complete these forms correctly. The good news is we didn't complete them correctly. And now we can pay for the budget that we just looked at. All that that we had in there with all those things using this no new revenue rate. We don't have to just, you know, there's one other group of people that are not in this room, and I appreciate that, are taxpayers, property taxpayers, or not many of them. So I would just say, you know, instead of automatically thinking, boy, we've got extra money, we've got to go spend it. And I think we are, you know, I want to be as healthy, but I think, you know, 2%, 3% raises several years ago. We gave 9% or 8% raises just two years ago. You know, many people in this community have jobs where they don't get raises. They don't get 2% or 3% raises. I'm saying we should give them. I think we need to be competitive. But I just think what we're proposing in this budget is very adequate. So I would make a motion that we adopt the no new tax revenue rate as our maximum not to exceed rate.

Thank you for jumping in there and kind of telling us where you'd like to land.

That is in the form of a motion, if you don't mind, and then we can second, and then we can have discussion, and then maybe determine where we're going.

Yeah, so we do have a motion. I'll ask for a second right now. Okay, I don't hear a second. Let's continue with our discussion. We'll come back to that because I don't think that's an incorrect motion. I don't know that it's the best yet.

And that's my concern. I think it's a good motion. It may be where we land, but right now we want to make sure that we don't put ourselves in a bind. I think that's what we're being asked to do today is what's the ceiling that we won't go above? And I just don't think it would be prudent to say let's set that as the ceiling because the only place we can go then is lower, which we may want to do anyway. But where that number falls, I don't know. it's uh that's going to be a tough question you know if we kept the rate where we are this year at the 4307 that generates a little bit more income also but setting that at the ceiling may be the prudent thing to do because we can go lower we can't go higher So that's my only concern. I don't want to put us someplace. And we find out next week that there was, and I'm not going to say that this would happen, but let's say there was a miscalculation somewhere and it's caught. And now all of a sudden, and I'm not saying that's going to happen. I feel good with the numbers, but let's say it does happen. And then all of a sudden we're at that low rate and there's nothing we can do. That's my concern, understood.

I would agree. I like, can you hear me, Mayor?

Yes, sir, go right ahead, Councilman.

I like that idea of setting the ceiling and then identifying if any additional data comes in. And if it is the proposal that Councilman Simpson said, then that would be good, but give us a little bit of room on the ceiling.

So let me clarify the statement. It's very specific the way I'm going to state it. This would be a proposal to keep the tax rate flat and still increase revenues onto the organization based on, I'd say, some of the financial health in the community. So that's a proposal to keep the tax rate flat. The NNR rate is how far below that? Can we get the exact? Is it one penny?

A little less than one penny.

Close to a penny low.

About .9, it looks like, roughly.

Yeah, so Councilman Simpson would be in favor of lowering your tax rate one penny to the NNR, and I may be as well. But then today, I think if what I'm hearing is I have a council that doesn't want to go to a Vader and go to a .5, .45 plus, then I still feel like we can accomplish everything that we're trying to accomplish, prioritizing some of the personnel needs that we have. And as much as I'd love to say, like, we lowered taxes, right? We have raised your taxes every year. We've just done it in the smallest amounts, you know, incrementally possible to still keep everything going. And I know that's very unpopular, but the good news is if you stay up here long enough, you'll become very unpopular with a lot of people. And so it's not the main concern. Popularity is not the concern here. I'd say it's performance for the organization. And so I would be in favor of passing that as a ceiling if we can limit it to that. And then I would also be in favor of trying to find this 1.8 million and see what exactly that would cover included in that NNR. So that means the no new revenue rate does, in fact, bring an additional 1.8 million. What could we do with that as a as an option? Maybe we.

only do three percent increase um but we still get the positional uh increases for uh police yeah i think if you were to do the let's just say that i'm gonna call the 25 26 rate i want to call it that which is the current rate if you're to do that when we factor in the sales tax i think we can then bring back to you all the next meeting that looking at the apd and step adjustments the senior citizens that the pay study adjustments senate We can bring those things back to you all and see what all fit within there. And you all then have the room to work with that.

For me, I mean, I think that that's what I need to see. And that's why I requested the information I requested is to be able to see what is the impact of the taxpayer on this. I mean, and again, this didn't make any comment like Reed just said, too. Not that I expected anything to come back different, but we have been thrown a couple curveballs on this not knowing. To set that rate and then come back and go, well, gosh, maybe we can't do these things that we prioritize to set that ceiling rate today. I don't see any problem setting a higher ceiling rate because we can always come down. That's not this. This number really means nothing except gives us a variance that we can work in. so if other priorities come up if we if we identify that extra 1.8 if we identify extra monies that's great then maybe that gives us more that we can move down i think we are uh mayor you put it well we can become unpopular because we have raised you know your taxes but we also uh owe a duty to take care of our organization and sometimes it's difficult so um We have 2,500 employees in the organization, give or take. Those are also citizens. So we've got to take care of them. And Les, you said some people don't get raises, and that's correct. But we're not in charge of those people. We are in charge of these people in this organization. And the last thing I want to do is for us to stay so low that we can attract good employees. We've had some pretty big frustrations lately. We want good employees in this organization, and we can't do that by continuing to pay as little as possible. So I think that's where that pay study comes in. I think that that's where we look at the average impact to each tax rate that it has on each citizen. I think we need to take all that into account, and I don't think we have those numbers. so i think i think to accommodate for you i think it would it would be the vader as the highest then coming down from there no i get that yeah i understand that i understand the vader's the highest i mean i and i'm not saying that i would necessarily want to take the vader i'm just saying that number means nothing so i would say take the vader and then let's get this information the data see how much uh revenue we can find and then that will dictate where we are i don't think there's any reason to go ahead and set the rate i think we can have an idea but I think the ceiling needs to be the ceiling, then we can work within that. And it may be the no new revenue rate. That would be great if we can take care of our personnel and we can do those things. For me, that's priority. And until I have those numbers, I'm not comfortable setting a lower rate until I know that we can come in under that.

I don't want anybody to imply that I'm not in favor of giving raises. I'm supporting a budget right now that does exactly that. But I'm just saying there's other factors that come into play on this. I don't want anybody coming out and saying, oh, Les, don't want to give anybody raises. I do. I realize that. But now we're talking, you know, it's like we found out last week at our Tuesday meeting, wow, we could get some more money. And instead of saying, wow, it's like, oh, can we go spend it? Well, this budget that we all agree to could be now funded without having to increase property taxes. And one question I've got, you say that no new revenue rate generates $1.8 million. I see $80,000 on here. Help me.

Yeah, let's go back through that real quick. No new revenue rate accomplishes everything as proposed in your previous budget proposals, plus it generates $1.8 million based on the revised sales tax component projection.

But the sales tax doesn't factor into the tax rate. No. That's a whole separate rate. I'm just saying the property taxes, I mean, let's just go to property taxes first.

It's 79,000 more than the budget that's been built because we already allocated 763,000 in the proposed budget.

so when we do the no new tax revenue rate that's an additional eight hundred thousand dollars and eight hundred forty three thousand four hundred thirty seven that majority has been built in already that some property tax owners are going to have to pay yes so yeah okay so it's eighty thousand and then but just in last week we found and this is what i brought up before you know when we went into this budget now we're now we're finishing much better on sales tax My whole issue is why can't we provide more property tax relief and we could still be able to do this budget.

What would you propose? Councilman Simpson?

Oh, I've made my proposal. I mean, I understand that. some things can come up, but I'm just focusing on a budget. We've got the opportunity with this robust sales tax with $43 million of money that's been freed up. I'm thinking, man, at least one time we could look at the potential of being able to do this. I think the budget, it is what it is. I understand we have other needs, but at some point we're going to... That's probably one of the reasons why the governor wants to get involved in this. It's just being able to look at it. Because, you know, a property tax is, I mean, I don't have the option to not pay my property taxes if I want to keep my house. And so I just think the more, and not saying that we're not, but just thinking about that part of it. I mean, for us standing up here, of course, you know, I'm getting older to retirement, so I can't wait to get my taxes frozen. But, you know, between, no offense, your homeowner's insurance, no offense intended, And your taxes, you know, even when you're retired, you look at the amount of expenses that that is for a lot of people. And so I'm just saying, you know, at a chance where, you know, we've got an opportunity to help alleviate that. Now, the truth is somebody could come back in next year. You could elect somebody that could just actually raise it this and more next year. That's what the law allows. I have no control over that, but I'm thinking we've got an opportunity to now fund a budget that we we said last week was a really good budget that did some of the things and provide properties actually and you know if we find something we find something we can figure it out i can't believe in a in a budget this large if we need an extra hundred thousands of dollars or whatever it may be we couldn't find it somewhere but i'm i'm i really like the idea somebody's gonna have i i was hoping that we could look you know in the previous part of it we had seven hundred thousand dollars over with with our previous vader we got in a million dollars of new sales tax revenue i was hoping we could do could do 1.7 million less in property taxes next year this is putting us at 80 over i wish we could have saved more but i'm willing to meet at the 80 000 with the no new revenue rate

And I would agree with you, but we're not here to make that final decision today. And that's the issue that I have. If we were a week away at the end of the month, what is it, the 28th? 22nd is first reading. Right. Would agree with you that's where I think that's where we should be but right now As we look at this and trying to figure out what that ceiling should be that we cannot exceed that I just think it would it would be It wouldn't be prudent on our part to adopt that low rate right now the no new rate and then find out that we needed something and I'm not seeing this.

I'd like to make it, I would like to make a motion that we accept the VADR rate for the ceiling and get the additional data and on the 22nd at the next meeting set the, I guess that's when we'll set the final one. I would like to make the motion to accept the VADR rate now.

I'll second it. Okay, I have a motion and a second for the ceiling to be at .45252 otherwise stated as the VADR rate. I HAVE A QUESTION FOR LEGAL COUNSEL. LEGAL, WHAT IS THE VOTING REQUIREMENT OF THIS? IS IT A 3-2 VOTE THAT'S NEEDED, 4-1? HOW DOES THIS ONE WORK, SIR? Just a majority vote. Thank you. I will entertain further discussion. I would start by saying I don't think we're moving up to that. I feel like we have been around this mountain so many times. We've double, triple checked numbers. Everything's come back like it should, I believe. I think the most we would be trying to spend would be what the revenues would bring in at the existing rate, the .4307. But I understand the caution in trying to push it all the way up to the very highest ceiling. I just don't think that those extra two pennies are needed. And I would rather not communicate that we might go to that if we have no intention. So if you have an intention of voting for the Vader and you would bring back a proposal of here's why we need these monies, then I think we vote for that. Um, if you have an intention of a point 4307, being the maximum that you would go to, I would still entertain that rate. So, counsel any further discussion on this one.

No, I just, I agree with councilman read. I just don't think it's prudent to make that decision until we come back with that information. We've seen how this budget is gone. I don't foresee anything else coming, but. You know, I think it'd be bad to hamstring ourselves in that because, again, to communicate that's just the ceiling that we could go to, I don't think any of us have that intention. But I think with everything else that's come forward, I think it's crazy not to.

I don't think we're hamstringing ourselves. We're just taking one option off the table. There are other options.

But without all the information that we requested, I just don't know that it's a good decision to make. Just my opinion.

But this would not be the only option. There could be other options if we wind up, if something comes up.

We're just saying the ceiling. This means really nothing other than we just can't go above that. That's all this means.

So if problems come up, we could seek somewhere else other than the taxpayers to solve the problem.

Good discussion. Do we have anything further? Okay. All in favor of adopting the ceiling at the .45252, otherwise known as the Vader rate, please say aye. Aye. Aye. All opposed? No. No. No. Okay, motion fix. I love this council. We have got to be one of the best and strangest councils of all time.

Can I get a quick clarification for minutes? Yes, ma'am. Who were my no's?

So you had a nays from mayor, place four, place one.

Thank you.

Okay.

Do I hear another motion? I would make a motion that we set the ceiling rate at the 2526 rate at 0.4307.

Second. We have a motion and a second to set the ceiling rate at 0.4307. Otherwise, the existing rate from 2526. Any discussion? Hearing none, all in favor, please say aye. Aye. Any opposed?

No. No. Motion fails.

Dang it, we already used our recess. Okay. All right, council.

Mayor, since I don't have the data in front of me, what was that second proposal? How far below the Vader is that?

How about I make a motion? I don't know if it's going to pass, but I'm going to make a motion. We'll just, I guess, knock every one of these out until we land on one of them. So I make a motion to accept the .44600 rate as the ceiling.

Thank you. Thank you. Go scoot back over right there point four four six is what you're proposing done, correct?

Okay So I made a motion I second Okay, I have a motion in a second on point four four six. Do I hear any discussion? I I would like to volunteer a very little discussion. If we are intending on moving up to that rate, then we should accept it and put the ceiling out there. Do we have circus music we play? But if we know that we have plenty of monies within the existing tax rate and you can keep the tax rate flat, what is the caution that we're exercising?

What do you need the money for? To me, we don't. I'm just telling you, I'm not comfortable making that. I don't know that we have the monies there. I mean, we've been given numbers before, and they weren't right. So to me, the caution is, let's just keep it. It makes no sense not to just put a ceiling that is just arbitrary to just move forward. That's what I don't understand. I mean, you're not sending a message by saying, well, I'm not going to take that. But it's just a ceiling. That's all it is.

Well, all I'm saying is I'm not approving a ceiling above the no-due tax revenue rate. Not now, not in the future. Well, that one's already been burned. If we need it, we can find it somewhere else. So for me, I don't see how it doesn't make sense. But that's just me.

So we've got a motion.

We got a motion in a second. Any further discussion? All in favor, please say aye. Aye. Any opposed? No. No. Same as last time, Ms. City Secretary.

Thank you.

Okay. I'd like to make a motion that we accept. 0.4307, keeping the tax rate flat as our ceiling.

Have we not already had this motion?

Yeah, but I mean, there's nothing says I can't make this motion again. Are you sure? Well, I'm pretty sure Robert's Rules of Order doesn't limit me from making a motion. Do I have a second?

I would second that.

I have a second. All in favor, please say aye. Aye. Any opposed?

No.

Okay, I'm going to call the vote. Okay, I didn't hear from somebody. I don't know if we've lost audio. All in favor of accepting the tax rate at .4307, please say aye. Pause. I'm sorry, not accepting. Approving the ceiling. I apologize. Say aye. Aye. Any opposed? No.

No.

Motion passes with a 3-2 vote. Ms. City Secretary, let's double check those. Voting for the flat tax rate of 0.4307 as the ceiling was Mayor place two and place one. Voting against was place three and four. Okay, great. Wonderful discussion, gentlemen. Really appreciate that. And thank you guys for working towards a good, acceptable rate. Mr. City Manager, do you have anything before we get out of here today?

No, sir.

Okay. Does staff have good clarity on what we're trying to accomplish over the next two weeks?

The notes I took and Andrew compared the notes as well.

Yeah, some more research on the transfers, reserves, some of that conversation, but I think we've gotten enough feedback we can bring a proposal that addresses the pay increases, step increases, and those concerns.

Yes. Yeah. Plus a little bit senior citizen increase there and the community development coming home. The center city because yes. And APD step adjustments. Yes.

Okay. Because we've had council that would like to see what can be, um, One, what can be taken care of within the no new revenue rate, right? And with our ceiling of 0.4307, the existing rate, we would like to see if you guys can bring those back and help prioritize that and propose more or less just two different looks at it. Yes, sir.

Okay. Thank you. Mayor, would you please think about Amarillo Public Health, please?

Yes, sir. We can definitely put that one in there. Yeah, I think we've got that covered.

It was a net neutral adjustment from what I recall. I think we've got that covered.

We've got some other requests that we'll make sure we pay attention to. Yes, sir. Councilman Prescott, you got anything further?

Good job.

Okay. Appreciate you being on. Thank you guys for attending today. You guys have a good one. You're adjourned. Thank you.