City Council - workshop

At this point, if you would please silence your cell phones, and if you so choose, please stand and remain standing for the prayer and the Pledge of Allegiance. Loving God, we give you thanks for this day, and we give you thanks for this city. and for the difference it makes for so many people. I give you thanks for this council and our administration and all our directors who've been working hard, and all the employees that work hard and sometimes really hard over the weekends. And Lord, we ask that you guide and direct our meetings today, and we ask all this in Jesus' name. Amen. I pledge allegiance to the flag of the United States, May I have roll call, please?

Mayor West. Present. Mayor Pro Tem Crenshaw, absent. Council Member Turner.

Here.

Hi, Council Member Crenshaw. Council Member Turner, absent. Council Member Durio. Here. Council Member Hilliard. Here.

Council member Williams and council member Sherwood absent All right, and now mr. City manager, I'll turn the meeting over to you Yes, sir.

Good morning mayor and council As you're aware, we're facing some budget challenges, so we appreciate the opportunity to have an additional work session to review and discuss the upcoming proposed FY27 budget. We're going to hear this morning from our transit group as well as our library group on some potential efficiencies and cost savings that may help us in the coming year. So we'll do that first on the agenda and then we'll go over kind of where we think we're going to end up in FY26 and then discuss FY27. Again, the hope today is that we get, staff get some clear direction on priorities what we want our fund balance to be in the general fund as well as our property tax rate and this is important because in a couple weeks we're going to present to you the actual formal draft budget and also we'll ask you to vote on a preliminary tax rate property tax rate and that will help us formulate what's going to be the final draft budget which will be presented for final consideration in mid-september so again about two weeks from now we'll present the draft fy 27 budget as well as ask you to vote on the property tax rate i will point out that you can when you set that rate on august 18th you can always go down but you can't go up so i just wanted to remind council of that so but again we appreciate the opportunity for today's additional workshop which should help us as we work to craft the FY27 budget. And I think with that, I will go ahead and ask Demi Engman, our Director of Planning and Community Development, and she is going to provide an overview of the transit system. And this is kind of a follow-up to some recent discussions we've had, an overview of the system, but also some potential efficiencies as we look towards the FY27 budget.

Good morning, Mayor and Council. Today I'll be presenting the transit's budget and proposed service changes aimed at improving efficiency and slightly reducing operating costs. Next slide, please. Oh, there we are. This shows transit incomes and expenses from fiscal year 2021 to present. The blue line shows the money coming in. The orange line shows the budget that was approved. And the green line shows what was actually spent each year, including major equipment and other capital purchases. Please note that fiscal year 26 figures are projected year-end estimates. 2026 revenues include approximately $3 million in expected federal grant funding that is still awaiting approval from the Federal Transit Administration. Next slide, please. This shows transit's yearly operating costs, which have remained fairly steady over the past five years. Spending was lower in 2021, likely because transit was still returning to normal operations following the COVID pandemic. These figures do not include major purchases, such as buses or large equipment. most operating costs are related to employee wages and benefits rolling stock maintenance and other expenses needed to provide daily transit service so in that same breath i would like to recognize that our recognize and thank our transit management team for doing an outstanding job OF KEEPING OPERATING COSTS RELATIVELY STABLE OVER THE PAST SEVERAL YEARS. THIS HAS BEEN ACCOMPLISHED DESPITE SIGNIFICANT INCREASES IN COST OF FUEL, PARTS, SUPPLIES AND OTHER GOODS AND SERVICES. THEIR CAREFUL MANAGEMENT HAS HELPED US MAINTAIN CURRENT LEVELS OF SERVICE. NEXT SLIDE, PLEASE. THIS CHART REPRESENTS THE SAME INFORMATION REGARDING TRANSIT OPERATING COSTS BY PERCENTAGE, EXCLUDING CAPITAL PURCHASES. SO THIS IS JUST THE OPERATING COST. NEXT SLIDE. Currently, ZIP operates 10 fixed routes Monday through Friday, 6 a.m. to 9.30 p.m., and on Saturdays from 7.15 a.m. to 9.30 p.m. Fixed routes use the large buses, and special transit services use the accessible vans. We are required to provide special transit services for eligible riders under FTA regulations. STS service is provided within three quarters of a mile of an existing fixed route. To ensure we remain in compliance with FTA requirements and that service is reserved for eligible riders, I do recommend implementing an annual recertification process for all STS users. Next slide, please. You've seen this map before. It shows all 10 of our ZIP routes, fixed routes serving the community. Next slide. In the 2021, or in 2025, Beaumont ZIP provided approximately 260,000 fixed route rides and 18,700 special transit service rides. So as this chart shows, our Parkdale, South 11th, South Park routes carried the most passengers, while the Pine, Laurel, and Refinery routes had the fewest. Next slide. As part of the FY2027 budget discussion, ZIPP staff and I have identified several opportunities to improve service by adjusting routes and schedules while reducing operating costs. These proposed changes are intended to make the most efficient use of our resources while continuing to provide the reliable service to the community. WE FIRST PRESENTED THESE IDEAS TO CITY MANAGEMENT IN JUNE OF 2026 AND TODAY WE ARE BRINGING THEM TO CITY COUNCIL FOR DISCUSSION AND FEEDBACK AS PART OF THE BUDGET PROCESS. IF COUNCIL SUPPORTS MOVING FORWARD, THE NEXT STEP WOULD BE A 30-DAY PUBLIC COMMENT PERIOD WITH PUBLIC NOTICES ISSUED NOT LATER THAN MID-AUGUST. AFTER THAT COMMENT PERIOD, A PUBLIC HEARING WOULD BE HELD BEFORE THE PROPOSAL RETURNS TO COUNCIL FOR CONSIDERATION IN SEPTEMBER. If approved, the service changes would take effect on October 1, aligning with the start of the new fiscal year. Next slide. So this slide is busy, but it compares our current bus routes with the proposed route changes. The map to the left shows the routes as they operate today. The Pine route, shown in red, and the Magnolia route, shown in orange, each operate as separate loop routes. The Laurel and North 11th routes currently turn around near French Road. The map on the right shows the proposed changes. So the Magnolia and Pine routes would be combined into one continuous loop, called the Magnolia Pine Route. Instead of it being separate infinity loops, they'll combine into one. The second change would be the Laurel and North 11th Routes would be extended along Delaware Street to Dowland Road, continue northeast on Dowland, and then travel along the southeast feeder road before reconnecting with the existing route near Harrison Avenue. This would be renamed as the North 11th Dowland Route. These changes would give riders better access to jobs, grocery stores, shopping, dining, and entertainment. They would also create more opportunities to transfer between routes without having to travel all the way back down to the downtown Dannenbaum Transfer Station. For some riders, this could reduce a two-trip journey to one trip, saving time and making the system easier to use. Next slide. So the proposed realignment, as just discussed, would result in an increase of mileage by 43.7 miles. This would negatively impact the budget by approximately $73,000. Next slide. This shows Saturday ridership in 2025 during the early morning between 7 a.m. to 8.15 a.m., sorry, 7 a.m. to 8.15 a.m., and the evening between 5.45 p.m. to 9.30 p.m. As mentioned earlier, ZIP provided approximately 260,000 rides in 2025. Of those, about 3,800 rides occurred during these said time periods on Saturdays. Next slide. Due to low performance during the morning and evening timeframes on Saturdays, we are proposing reducing operational hours on Saturday only from 7 a.m. to 6 p.m. This will reduce approximately 25,000 miles per year and may result in an annual savings of approximately $160,000. Next slide. So in summary, the proposed Magnolia Pine and Laurel route realignments would increase operating costs. However, when combined with the proposed Saturday service modifications, the overall service optimization plan is projected to reduce operating expenses by $91,000 in fiscal year 2027. The plan does improve efficiency of the transit system while enhancing connectivity and focusing on service during the times when it is used the most. Next slide. So before I conclude, I wanted to sincerely thank the entire ZIP team for their dedication and service to the residents of Beaumont. Their hard work, professionalism, and commitment to serving our community every day do not go unnoticed. So I wanted to send a heartfelt thank you to them.

Questions, comments? Thank you. Yes, Councilman Williams.

Thanks for that. On the magnolia pine, what... Being that it costs more, what's the thought process behind combining those?

This is our general manager, Claudia San Miguel.

If we can bring the map back. So a couple of things with that. If you can see on your current situation right now, those routes are very, very close together. And at some point in time, the buses are overlapping service within three, four blocks of distance. So this is something that we've been discussing. And based on the fact that the ridership is so low, we can provide almost the same exact same service. But combined. So that frees up some space, some time for that bus to be repositioned, but not the exact same bus. It's a different bus. It's the Laurel. So that time and effort is going to be invested into the Laurel. and stretch service, which is something that we keep hearing from some of the neighbors from that area where they have to take one or two buses to just go do grocery shopping. So it's two birds that we're trying to get with one stone. We're being more efficient by combining resources and maximizing what we're getting out of them, which is your pine and your magnolia, and being able to stretch service on the other side, which is your laurel.

So why does it cost more?

WELL, BECAUSE WE'RE EXTENDING WITH THE PROPOSED, YOU'RE EXTENDING MILEAGE, AND IF WE CAN GO TO THE OTHER SLIDE, IT SHOWS THE MILEAGE IS GOING TO BE RIGHT THERE. SO THE MILEAGE INCREASES, BUT ABOUT 43 MILES FOR THAT GIVEN DAY, RIGHT? AND THEN, YOU KNOW, DEPENDING ON THE DAY WE'RE RUNNING, IT'S GOING TO INCREASE. SO YOU INCREASE YOUR MILEAGE, THE OPERATING COST IS GOING TO INCREASE PRETTY MUCH.

Thank you.

Councilman Turner, then Councilman Durio. How much has fuel increased? Do you have a percentage or a rough estimate? Yes. Like kind of what we were compared to where we are currently?

So last year we spent about $432,000. This year we're projected to spend about $508,000. So it's increased by about $50,000 or so.

Yeah, so just that alone, we're looking at an increase, a yearly increase of almost $50,000 in fuel, correct? And you said it was projected to be how much this year, $500,000? About $508,000.

Councilman Duryea.

Yes, most of the folks that ride the bus, this is like their only means of transportation. These new routes, I want them to have as little impact on the people that use it as possible. I don't, they shouldn't be able, I don't want them to not be able to go to the doctor or not be able to go shopping. And also we got to inform them of the new routes. So is that correct?

Yeah, if you could go to... In the public notice, we would be circulating a notice through the newspaper that's required by FTA. City website, social media blasts. We would also be posting flyers, surveys on the buses, vans. We would engage SCTRPC, Southeast Texas Regional Planning Commission, and also posting flyers at high ridership bus shelter locations to try to get the word out. Also, of course, at headquarters in City Hall where they buy bus passes.

Okay, I just want to... Like I said, these folks, it's their only way. A lot of them, that's the only transportation that they have. So we don't want to push anybody away or not give them what they're used to, you know, give them a way to get around. So as long as we put that information out and it's not really going to affect the riders, then I'm good with that.

SO THE ROUTE REALIGNMENT AS DISCUSSED ON HERE WOULD ACTUALLY CONNECT MORE TO SHOPPING, DINING, ENTERTAINMENT AREAS, ALSO HEALTH CARE, FRESH FOOD ACCESS, THOSE KINDS OF THINGS WITH THE HEB PLUS ON DOWLIN AND WHATNOT. THE IMPACT OR THE MOST IMPACTFUL ONE WOULD LIKELY BE THE SATURDAY SERVICE REDUCTION. BUT AGAIN, OUT OF FOCUSING ON THE FIXED ROUTES, we provided about 260,000 fixed rides last year. Within those timeframes of the morning time, which I think was 6.15 to 8.30, and then 5.45 to 9.30, there was about 3,800 riders within that timeframe. So regarding impact, that would have an impact, but it would also produce a cost savings and operational costs.

Okay. And we still have the students being able to ride free in the summertime when school's out?

Yeah, that's still in effect. And then there's an item later today in the regular council agenda, item number nine.

Right. Councilman Hilliard? Thank you, Councilman.

Yeah, well, thank you. And again, I'm going to ask, where are we on the RAP program for the buses, the selling the buses? Are we moving forward? Because that could be a really big offset.

Every time we get in contact by an agency or a prospective vendor, we are letting them know what they need to do. There is this group that is very much committed to put a bus wrap on every vehicle. So they're working with our teams and coming up with the designs because I was a little concerned about... somebody being ready to put a wrap on every single bus. So I asked them to send that art to us so we can make sure we're not trying to engage in something that we're not interested in engaging with. But they're confident that it's going to be approved. So I'm just waiting for that one phone call. And they're pretty much ready to put in an advertisement on every single bus. So that's going to be great.

So if they do, what are we looking at as far as revenue?

I'll get those numbers and bring them for this afternoon because I don't have them with me right now.

And another question, have we thought about raising the bus fares?

I think there's going to be an initiative to be presented later on. There's opportunities. We are very competitive, I will say, for agencies our size, what we're charging right now. The opportunity might be or not in pet transit. FDA allows to charge up to twice the amount. We're about 50 cents shadow that. Some other agencies want to do different things, right? You know, they charge twice. BY MILE, THEY CHARGE BY AREAS, RIGHT? SO I UNDERSTAND WE'RE GOING TO BE BRINGING A FORMAL PRESENTATION ON THAT. THE OPPORTUNITY IS GOING TO BE THERE. AS FAR AS THE REGULAR FIXED ROAD BUS, WE'RE VERY COMPETITIVE WITH THE REST AGENCIES, COMMUNITIES OUR SIZE. SO I WILL NOT REALLY HAVE A RECOMMENDATION ON THAT. PAD TRANSIT, IT'S WHERE WE MIGHT HAVE AN OPPORTUNITY.

NEW SPEAKER THANK YOU.

And, Mayor, if I could add to that, it is important to point out that the revenues from fairs is a rather small proportion of the revenue to operate the system. And so there's always the risk if you raise fairs too much, as with anything, you decrease your ridership.

But you can decrease the amount of federal funding.

Yes, Councilman Crenshaw. All right. TINA CAN WE PLEASE PUT UP THE EXCEL SPREADSHEET THAT WAS PROVIDED TO ME WHEN I REQUESTED SOME BUDGET DOCUMENTS FROM TRANSIT. THERE'S AN ASSET PURCHASE FOR 2026 FOR OVER $3 MILLION. I'M ASSUMING THAT'S BUSES. CORRECT. WHEN DID THIS COUNCIL APPROVE $3 MILLION IN BUSES?

THAT WAS IN 2024. THERE WAS A RESOLUTION THAT WAS PRESENTED TO COUNCIL. IT WAS A MATCHING GRANT, I BELIEVE.

YEAH, WE RECEIVED A GRANT TO COVER THE BUSES, ESSENTIALLY THE CAPITAL PURCHASE.

OKAY. SO THAT HAPPENED PRIOR TO US.

YOU CAN GO BACK TO THE VERY FIRST SLIDE. I CAN SHOW THAT. BUSES USUALLY TAKE ABOUT 18 MONTHS TO BUILD. SO WHENEVER WE PLACE THE ORDER, THAT WAS IN, I THINK, APRIL OF 25. AND USUALLY WE ANTICIPATED THAT THIS WOULD IMPACT IN FISCAL YEAR 27. REGARDLESS, WE HAVE THE GRANT THERE. IT'S JUST WAITING FOR THE DRAWDOWN TO DO IT. ON THAT FIRST ONE, YOU CAN SEE THE REVENUES VERSUS THE ACTUALS. IN THAT VERY TOP LINE, 2026 END OF YEAR PROJECTION. ACTUALS SPENT, WE ESTIMATE 9.9 MILLION. REVENUES TAKEN IN IS 9.9. USUALLY WE WOULD TRY TO BUDGET THAT, THOUGH. BUT WE ANTICIPATED DELIVERY OF THE BUSES TO OCCUR IN FISCAL YEAR 27.

So I guess what I'm trying to figure out here is that it looks like we're fairly consistent every year with around a $6 million, $6.5 million budget, but all of a sudden for 2026, we're at 9.9 million. So let's just say 10 million. So we go from 6.5 million to 10 million this year, and it appears that it's just these asset purchase. Okay. So I want to then go back to where did the 1.3 million come from that we were told in a previous budget session that the city was over budget for 2026 and instead of the 4.5 million we were projected, we're now over budget 6.3 million, and that the reason why we're over budget is employee benefits and transit, and the transit portion of that was 1.3 million. How does that, what was the 1.3 million?

That was kind of a culmination of prior years just not transferring quite enough to cover, to make it up. So we're truing everything up is what it's doing.

So I just don't understand that. Of the 9.9 million, if we got revenues, why are we having to transfer 1.3 million out of the general fund to cover what you just said if we got 9.9 million in revenue to fully cover the budget?

Again, this isn't a question of current, it's a culmination of prior years. So it's really a fund balance question.

Yeah. Chris, can you help with that? Well, I mean, I think it's because if I'm confused, I'm just going to guess people at home are confused.

I think the best thing to do is look back over 10 years, which we can certainly get you those numbers to say. And Demi's broken it down between operating versus capital because it is a. It is a little bit more complex than a lot of the funds and activities that we deal with because it's a combination of fares, a combination of TxDOT dollars, a combination of FTA dollars, a combination of operating dollars, a combination of capital expenses, a combination of additional grants. And so it can lag from year to year. The best way to think about it, though, I think in terms is, all right, operational dollars, about right now we're at six and a half million and so what does that look like over ten years with the understanding that it's gonna it's gonna go up and down if you're including capital expenditures or grants in the in if you start looking at it the other thing is it's the funds we get from FTA are actually lagging so we get them later We get them basically after they've already been spent. So it's a very uneven thing. And that's one of the things is also if you look back at how much we transfer, we really need to transfer about $1.9 million a year roughly to make sure we're getting that, hitting the $6.5 million a year. And I understand the $1.9, but for 2026, we're going to be at $3.2, right?

Yeah. Tina, can we put up the budget document I was sent?

So after we've done, of course, these numbers are always changing. So after we went back to the drawing board, went with them, transit a couple more times, that additional transfer is down to $560,000 now. So we've been able to, they've got more grants in that we didn't have accounted for, so there's more grants that we're expecting to get in before the end of this fiscal year. And so with that being said, that additional transfer is $560,000, which makes it $2,460,000 that we'll end up transferring to transit this year. $27,000 is proposed as of right now. It's still the $1.9 million.

Okay.

Which will get them in a positive fund balance.

While that's good news, I wish we could have led with that. You know, because here I am trying to figure out Our fund balance for 2027 is projected to be below the 20%. And, you know, without cutting services, without, you know, hiring freeze and all these things, trying to figure out and make the numbers work so we get back above that 20%. You know, now Eureka, we have 800,000. So that's great. I still don't know. That 800,000 winner was going, and now it's back, so I guess that's good. Can we get the Excel up?

Mr. Crenshaw, I will say, too, also, that the projections that we've presented for the FY27 budget has always had just 1.9 transfer to transit. Now, 26 was different, correct? And we've been able, fortunately, to reduce that now, so that's great. But 27 has always been at the 1.9.

It's safe to say our budget shortfall for 2026 is now projected to be, it was 6.3, I think, the last number we saw. So 800 off of that, we're now at 5.5.

Well, Amy, the numbers have been updated, and the numbers that we're going to present later today have been updated.

Okay. So technically we're projecting 4.5.

All right. Moving in the right direction, it looks like. Am I not going to get that Excel up there?

Yeah. Which file were you requesting?

The one that was sent? The Excel spreadsheet I emailed you? That's not it. It was like it had it broken down.

All good.

I got a question while we wait. Chris, what I would like to know, I know we said 1.3 million in prior years. The three.

Time to scale that project down from five.

So the main thing that happened was in 24. So the main thing that happened was in 24. I'm saying transit did come out of 25. The answer to that, honestly, probably a little bit of both. We do have probably a little bit of both. We do have grants that, of course, that support that fund. Grants that, of course, that support that fund and support majority of the expenditures. But the general fund also supports that fund. So and that's what that transfers for. So we will always, the general fund will always transfer into the transit fund as long as we have it. And that number changes each year. So it depends on what those expenditures and revenues are each year. So that number will continuously change.

Okay. And later in this presentation, or later today, we're going to find out the details about what the $550,000 that increased 2026 from the $1.9 million to the $2.4 million, we're going to find out what that $500,000 was? Correct. Okay.

Yes. That's the hopes. Okay.

Well, I'll reserve my further questions about that until later in the presentation.

Thank you, Councilman Crenshaw. Anybody else right now? Thank you, Demi.

All right. Thank you, guys.

Mayor, are you ready? Yes. Okay. All right. So next, and again, these presentations are kind of in the spirit of trying to find efficiencies as we move into the next budget year. And these are just discussion points. Don't have to make decisions today. Just try to get some feedback. But presenting today are some possible efficiencies with our library system. And we have Paul Eady, our library administrator, who is going to present.

Mayor, Council, thank you for allowing us to be here. I also have Dr. Nathaniel Ramos with me today. And as Mr. Boone said, these are what he came to us and said, can you put together some possible service reductions for the libraries in 2027? And we wanted to be fair over all of those scenarios from minor to not major, but further up the chain, closing things on down line. So what you will see here today reflects those five scenarios that we've come up with. The first thing I wanted to say is that if you'll see this first slide here, you will see, go ahead. There you go. Our little logo down in the bottom right-hand corner. September 16th is our 100th anniversary year. So we're going to be having a small, hopefully larger, but a gathering at the Terrell Historical Library. But that is our logo for this 100th year starting in September. So I just wanted to start with that. Thank you. Next slide, please. A little bit of descriptive statistics for you. We do have five physical branches and a literacy program that we run for the library system. We have 51, it depends on the timeframe, but 51 total staff positions, 23 full-time and 28 part-time. Of those positions right now, we have three that are currently frozen. by the city. One is a full-time position and two are part-times. Those part-times actually are at one branch. So we are taking other part-timers from other branches to fill in at the Johns Library, actually, in the south part of town. The current library hours depend on the branch. Our main library and the Terrell Library are only open Monday through Friday. and we're only open from 9 to 6. The Miller, Willard, and Johns libraries are open from 9 in the morning until 8 at night, Monday through Thursday, and then 9 to 6 on Friday and Saturday. The Literacy Center, which is in the main library, you notice there are some 11-hour days in there. We have several classes that run at night, ESL, GED, those type of classes. So I put those in at 11. And like I said, the only three that are open on Saturday, Miller, Willard, and Johns. Next slide, please. Go back one. Can you go back one? Oh, there it is. Thank you. Just takes one. So our option one that we came up with is something that we felt would not impact as much. THE LIBRARY SYSTEM. THIS SUMMER, MAYOR AND I WERE TALKING THE OTHER DAY AND HE WAS REALLY COMPLIMENTING US ON WHAT WE'VE BEEN DOING. AND THE LIBRARY SYSTEM OVER THE SUMMER AND THE LAST SEVERAL MONTHS HAS REALLY PICKED UP ITS SERVICE TO THE COMMUNITY. OUR SUMMER PROGRAM JUST WAS PHENOMENAL. THE STAFF OF THE LIBRARIES DID A WONDERFUL JOB. So reducing library hours, close the libraries Willard, Miller, and Johns for two hours each day, opening at 10 and closing at 7. Talking to staff. those hours are the least used of the library system. Usually we do not have a lot of people walk through the door from 7 to 8 p.m. And some libraries even 6 to 8 p.m. But as a service-oriented part of the city, we do offer our services all throughout the time we're open. So current days, Monday through Friday for Maine, we would leave that as proposed hours. Miller, Willard, and Johns, we would change from 10 to 7, Monday through Thursday, and Friday 10 to 6, and Saturday half a day from 10 to 2. This would save monthly about 52 hours per branch. So we're looking at, if you can go to the next slide for me, please. Reducing those weekly hours 50 to a daily closure, about 1,560 hours per month, and these are based on part-time hours. That was the direction for Mr. Boone would be to work through the part-time hours. So about $18,720 a year in savings on part-time salaries. It equates basically to two part-time reductions per library. One of the things, like I said, we are moving a lot of our staff to cover at John's right now, so we are reduced to some of those branches already. Reduced hours would decrease expenditures for other costs such as electricity, water, things like that. WHAT I WANT TO EMPHASIZE IS THAT ANY OF THESE OPTIONS ARE VARIABLE. IT DOESN'T HAVE TO BE FROM 10 TO 7. IT CAN BE FROM 9 TO 7 OR AROUND. SO DEPENDING ON WHAT COUNCIL WOULD LIKE, IF THERE ARE ANY OF THESE OPTIONS TAKEN. There are variations to this that we can work through. Administrative staff consensus, and people have asked me, why Saturday? Well, I had a meeting the other day, and the consensus was that one library might really, really, really be busy on Tuesday. Another one may be really, really busy on Thursday. But everybody was in consensus that Saturday seemed to be a slow day. for us. So if we were thinking about closing half a day, the consensus of staff was Saturday. So that savings per month on our first option. If you want to go ahead. Any questions about that before I go on? Okay. Option two, facility reductions. These are a little harder because we're talking about taking away a service. Now, the very first option two here is retooling the Maureen Gray Literacy Center. If you know what the Maureen Gray Literacy Center is, we offer GED, ESL, ASVAB, citizenship, all different types of trainings to the public. In this facility right now, the full-time position for our literacy director, literacy manager is the frozen full-time position. We just had our director there retire right at the time for freezing positions. So the full-time, if we just retooled, what our idea is, we want to retool this Basically, and be closed for maybe six months or so and retool it. Our focus has been on adult literacy, ESL, GED, on down the line. Working with other staff members, we would like to increase this to family literacy, financial literacy, technology literacy on down the line. We would like to retool the Maureen Gray, leave the full-time position vacant until we can come back with a viable option here for a retooled literacy center. We retain excuse me, one part-time literacy instructor, we would actually like to raise that to $16 an hour from 12. And that way we retain some of that knowledge in the Literacy Center. The lady that's in the position now, she's very talented, very good, and we would like to retain her. We do also have a part-time position that would be eliminated. So the net anticipated savings for one year in retooling, if it took us one year, would be $107,232. So, as I said with the retirement, but if we came back in six months and said we have a plan, this is what we would like to do, then we would look at restoring literacy. Yes, ma'am.

What's the participation in the literacy program? Like, what's the participation?

Well, this is, right now, this is interesting to us, serve more people.

Thank you. Any other questions? Councilman Hilliard.

We raised it to 25. That's the cheapest you can get. Even moving from 10 to 25 is still the cheapest place in town that you can rent.

So do we want to be the cheapest place in town?

No, and we've talked about raising that again. I did, I think, present that.

Now, do we have a count? Like, which libraries are used the most? Would it be Miller?

The Miller Library is the most used. It really depends on the time and the date, the month, but it's usually Miller. What do you use? Sorry.

So the R.C. Miller Library, by circulation, is the busiest library in the city. It does probably two or three times what other libraries do. Then it's Theodore Johns, and then everyone for our Emma Willard and Maynard libraries. like neck and neck. But certain things like computer usage, while Miller is still at number one, downtown is right up there. So depending on what specifically we're looking at, there's different metrics to kind of say, oh, well, this library, like R.C. Miller in Maine, are a little bit more computers are a little bit busier. So, yeah, it just kind of depends on what we're looking at.

Well have we have we looked at reducing the hours at the slower libraries?

What we're trying to do is keep it consistent across the entire library system and that yes we could do that we could look at reducing the hours at the branches that are used at least but what we have seen in from my experience, is that if you have different library hours at all these different libraries, people are confused. Now, they'll learn eventually, but I'm always going to get a phone call, well, I was over at the Johns, and it was closed until 10 o'clock, but over here was open at 9 or on down lines.

I realize that change is hard, but sometimes change is necessary.

That is true. Yes, sir.

So if we've got libraries that are being used twice or three times as much as others, it would make sense to close the other ones down early rather than pay the electric and the water and the salaries or the pay at these libraries that aren't being used. And people will conform to whatever we do. It'll be hard at first, but people will conform.

Yes, sir. And we, like I said at the very first, all of this is variable. We can change. These are not locked in as options. We can change whatever we need to.

Or they can drive to the libraries that are open later.

I'll give you an example. When we renovated the Miller Library in 2012, all of the other branches really saw an increase in the amount of traffic at their libraries. So we did see movement to the other libraries.

Thank you.

Councilman Duryea. So if we do that, we're going to hear what I hear from my constituents all the time. I bet that library in the West is still open. That's how they're going to take it. If we have one library over there on Darling Road that's open more hours than the Johns or the Willard, That's my phone going to be blowing up because of that. And that's where they're going to take it because I hear that every day. I bet it's not happening in the West End. I bet it's not happening in the West End. So we're going to just have to be fair. And I don't think it would be a good idea to have different hours for different libraries. At least I don't think it would.

And that is the reason that I tried to keep it across the border. Yes, sir.

Councilman Turner? Yeah, I don't think the councilman and I was being disingenuous. He's looking at it from an efficiency standpoint. I do understand that, but I do also understand we've got to figure out a way to try to make it as equitable as possible without interruptions across the city because I do know I kind of grew up over there in the North End area, and I know a lot of people do walk to that library from Maida and Plymouth Village Apartments. So I just would be optimistic of just the efficiency to be across the board, even though I do understand that this is financially draining on us to figure out a way that we can kind of be efficient and seeing straight across the board equal with everybody. But I do totally understand why Councilman brought that up from a financial standpoint.

Yeah, and one thing that isn't necessarily reflected in statistics is, for example, our Elmo Willard Library, it has individual, like, offices or rooms that an individual can come in and study at, right? So they're almost always full. Now, for someone who maybe has telework or is doing job interviews or working on their resume or doing any of those things, which is deeply impactful, that may not be reflecting the statistics, but it also is something that is deeply impactful for for them, right? So if someone's trying to get a nursing degree and they need a sit-down study, that's one of the only libraries that has that particular service where you can go in and use it. So there's... Certainly from an efficiency standpoint, cutting hours is definitely one of those things that could be done, but also each one of these libraries has their own little contribution that it's very hard to replace because where are you going to go in the city to work on that? Well, maybe a coffee shop, but the trade-off is the library is the place where you can and you have all the resources you might need. Internet, we have all the books that you could need for any workforce development standpoint. We have all those resources in one place. And then those people, as they go up, they get better housing. They buy bigger properties. They invest in different businesses. So it's one of those things that it's hard to replicate once you reduce those services. So it's one of those things that generally we don't want to make those cuts. Obviously, though, we do everything we can to best serve the city.

All right. And the option two, I'm sorry, were there any other questions about that?

Doesn't appear to be. Thank you.

Okay. The option two that we're looking at is just really the reduction of and retooling of the Maureen Gray Literacy Center. If we go on to option three, what you'll see is we were asked to really look and see where we could cut. So we talked about a clean slate, full reduction of literacy. So the full-time literacy coordinator with a few benefits in there, 102,400, part-time position at 12, 18,000, part-time position 10,000, for a total of 130,896. But that is a full reduction of that particular part of the library system. Obviously, the Literacy Center has been a very important part of the libraries, but we are tasked with looking at from one level to the next. So this one yields approximately about $23,000 more than the second option.

I know I'd like to say, I know we have a poverty rate at 20%. So I think it's recognizing that we do have a literacy problem here in our community is something that's turning the blind eye to doesn't really help raise up our community to be more effective. So I hate, I hate to see cuts like this, but I understand these are things that can be looked at. And, uh, but, you know, I also think the people that need that, uh, literacy training, you know, if there's limited places to go.

And if you Google literacy or GED testing or GED training, you will see workforce development. You'll see the Maureen Gray Literacy Center and one more. But there's not a lot. this area other than those two or three that come through. And Lamar, LIT, none of those.

Councilwoman Sherwood?

Is this something that we've ever partnered with BISD on?

We have tried in the past. We are looking at right now, I'm trying to get in to talk to the new administrator to propose a few things that Mr. Boone has asked me to work with them on, and part of that would be if we could, the retooling would be for us to act more as an administrator of the program and bring in all of these other entities to help with the actual training and education. So, but we want to expand that to include so much more than what we have now. Yes, ma'am.

Yes, Councilman. I'll agree. I mean, the literacy is very important. I would hate to see a reduction in anything to do with literacy. We have a problem with that here, and so I have to agree. It'll make our city better. I would hate to see this type of cuts when it comes to that.

Right.

Just one of the options.

Yes, sir.

Any other questions? Any other?

That appear to be.

Option four. Sorry. One of the things that we've talked about is closing the main library to the public. The library, the main library is the largest collection. We do circulate among our libraries a lot of the materials that are in that library. We are also in interlibrary loan situation through the state, which we receive funding for. We wanted to at least put this out there as an option. It is something that obviously we would take away four main library part-time positions. This eliminates $38,400 a year. We would retain the rest of the staff, full staff, and two bilingual part-time that we could then move to other libraries if need be. We would need some staff to be there to work the collections and to get those items that are circulated. There are some times during the week that we transfer 200 or 300 books out of that library to some of the other libraries or more. This is just a... It gives us an ability because we have not only the main library there, but we have literacy there. We have the main library administration there. We have our technical services where we do all of our cataloging. So there would still be personnel at the library. This was just an idea to cut some of those part-time clerk positions. So it would be closed to the public and converted to an in-house circulation and technical services hub. And if we do expand, if we take that option two and expand the literacy department, we would probably utilize more of that main library footprint for those services.

Councilman Turner? So we couldn't... Positions that are unfilled, are we talking about cutting positions that people are in?

At this point in time, those four positions would be current employees, yes.

Yeah, I can't support cutting the current employee salary, so I just want that on the record. I don't support that.

Yes, sir. Anything else?

I don't believe so. Do you have any more?

I've got an option five.

Okay, well...

So this is just a combination of the literacy closure and main reduction at $169,296. And I put the very last note on here because one of the things through the state is that we do have to keep a certain amount of city financial service to the libraries And it's not there right now, but if we go below a certain amount, we would be at risk of losing our accreditation.

We certainly don't want to see that happen. No, sir.

Any other questions? Anything else?

Councilman?

Yes, sir. I didn't see anything about the terror historical library.

We did not include it in Terrell because it is only open Monday through Friday. Also, in this year, we have had reductions in staff already there. We lost three part-time positions. Those were actually funded through the Terrell Historical Library Association. So our staffing there is stretched to the nth degree right now. Okay.

Thank you, Councilman. Thank you, sir.

Thank you.

Now we'll move into fiscal year 2027 draft budget, projected budget.

Yeah, Marin, we'll have Amy Schmidt will present this.

ALL RIGHT.

GOOD MORNING, MAYOR, CITY COUNCIL. All right, so as we continue preparing the 27 budget, we are aware that we continue to face budget challenges as expenditures are increasing at a faster rate than our revenues. To address these challenges, we would like to share the cost reduction measures that we have implemented to date and discuss their impact on the budget. We will also present property tax rate information and provide an overview of how these rates affect the city's overall financial outlook. We would also like to take this time to thank all departments for their collaboration, understanding, and commitment throughout this process. Despite the budget challenges we face, departments have continued to identify deficiencies and prioritize essential services to help ensure the city remains fiscally responsible. So I really do appreciate all the departments. I've worked hard just as finance has worked hard on trying to come up with this proposed 27 budget. All right. Okay, so we're gonna re-go over the calendar just a little bit to kind of pinpoint some important dates. August the 18th will be the actual official date that the city manager will present the proposed FY27 budget. Today's just a budget workshop. We'll go over some key points that we're gonna do with the budget, but that will be the official date that we'll be proposing the 27 budget. And then adoption date would be that September 8th will be the public hearing on the budget tax rate and the adopting of the budget and accepting the appraised tax roll. So those are just two important dates to remember. This is a slide that we presented last time, just some key budget challenges that we continue to face, fluctuating economic challenges, inflationary pressures such as higher costs for goods and services and contracts. increased operating expenses, reducing available funds for new initiatives, personnel costs, rising health care and benefit expenses, additional transfer to that employee benefits fund having to be made each year, recruitment and retention challenges causing increases in overtime, contractual wage and certification increases for foreign personnel, and costing of living adjustments for civilians. Capital demands, we have aging facilities and equipment requiring replacement or repair. We have limited funding for these major capital improvements. As you know, the general fund has to transfer into the capital reserve to support these initiatives, and if we have limited funding, then there's less money for that transfer. We also have technology and cybersecurity needs that need to be made each year. System upgrades, software licensing. We are having to implement the new ERP system this year. The CityWorks software is end of life, so that's a big purchase that we're having to do at FY27. So just things to keep in mind that is causing a lot of these budget challenges. General fund supplementals. So for FY27, the approved supplementals thus far that are in the projected budget is that Enterprise, the ERP system of 726,000, the CityWorks software of 767,000, the sex offender registration software, 34,000, additional park cameras for 36,500, IT end-of-life system upgrades and licensing of 257,000, CDL training, $27,000. Additional clear demo costs, $30,000. Animal shelter overflow pilot program for $30,000. Other key supplementals that are not included in the projected numbers as of right now but are on the radar still that if funds are available, we would like to incorporate. Park camera phase three for $225,000. Washer and dryer for animal care, $12,000. Concessions cabinets at Jefferson for $15,000. Canine kennels for PD, $2,800. Just to kind of recap, you know, every department is at water utilities at 1.2, solid waste at 2.1 for a total of 6.4 for a reduction for the fleet. And again, if we are to consider water utilities, solid waste has the fund balance in their funds to be able to support those purchases. The general fund, we would have to consider an additional tax note for FY27 if we approve this just over $3 million fleet purchase. So just keep that in mind. Closing the gap. So in order to get our revenues more in line with our expenditures, things that we have implemented so far, salary freeze, decreasing operating supplies and equipment, we've asked every department to do that to go back and look at all their Their entire budget, again, revaluate it. Anywhere they can cut, please give us those numbers. They've given those numbers. I've made most of those adjustments. Cut travel budgets by 60%. Departments have been asked to do that for FY27. And then our increase in employee benefit contributions to 9%. Cost of living. So in FY27, our contractor wage increases are 5% for police, which is an estimated $1.2 million, 3% for fire, which is $727,000. Proposing a 2% COLA, civilian COLA increase is an estimated $818,000 to the general fund. So keep in mind the median salary for a City of Belmont civilian employee is $22.16 per hour or just over $46,000 a year. Giving a 2% COLA is an estimated gross increase of $76.82 per month. Proposing that 9% health benefits increase to the employees is an additional $40 a month on family coverage, which that reduces that 2% COLA to $36.82 per month. All right, so before we get into this next discussion, I just wanted to make a statement real quick. While property tax increases is not a preferred option, the reality is that expenses continue to outpace revenues. Contractor wages, rising cost of goods and services, and limited funding for infrastructure and fleet needs are placing significant pressures on the budget. As a result, we must evaluate options to bring our revenues more aligned with our growing expenses. So with that being said, I wanted to kind of go over how property tax rate calculations are done. So you have your M&O rate, and then you have your INS, which is your debt rate. So your M&O rate is your operating, maintenance and operations, just as it states. Your INS, your debt rate, is what supports any city's debt. So part of that property tax is that INS debt rate, which covers your debt payments for any of the debt that the cities went out for. Okay, just kind of an overview on that. So speaking of debt rate, we did go out for debt in FY27, number 26. So with adding that additional debt, your current fiscal year rate, our total tax rate right now is .659663. Okay? So, which makes our debt, and our current debt rate is .181035, which is your, and your MNO is .478628. So, adding those two together, that's what gives you your total tax rate. Okay? So, at our current rate right now, if we were to leave the current rate the same, at the total rate, .659663, our annual debt rate, our debt rate has to increase to support our debt that we went out for in FY26. It has to go to the .214174. We have no control over that.

Councilman Turner? Just, I know you said the debt we went out for, we're speaking in reference to the bond. So people who are following us, I want to make sure they totally understand where we're going and why.

That is for the GO bonds. I don't want to talk over their head. No, I understand. Yes, our debt that we incurred in 26 is the GO bond that we did on election. So that is while that debt is increased.

Just to clarify, that's $38,750,000 as a portion of Prop A. Prop A was $58 million. We only did a portion of that. Also a CO note for $11.69 million. And then the tax note that Amy referenced earlier is $3.1 million. So a total issuance of $53.6 million this year. So it's just important to talk about is, and Amy will cover it, is that debt rate portion of the 65.93, that 0.18 has to go up to 0.21 just to cover that. And if you keep your total at the same, then that's going to be, you're going to reduce your O&M, as Amy has pointed out, $3.7 million.

And Mr. Manager, there was something important to me because that's something that the voters decided to do. And I want to clarify that that's the way it took place versus council doing it. I think that's an important topic to actually highlight that's implemented.

And I will point out as we go into potential discussions. debt GO issues in the future if all propositions had passed within the total tax rate.

Since voters approve that, does that mean that we will increase our .659 to cover the cost of the GO?

You don't have to. If you said we're going to stay at the .659, that's fine, but you're going to have to reduce your M&O rate 3.7 million. So instead of a deficit...

But the voters technically approved that expenditure and the increase in our debt rate in order to satisfy that. So what of the increase in the debt rate is just that GO that we could increase the total tax rate to say this was voter approved?

If you just went with Prop A to cover the debt service, .0163.

Okay. And what is that dollar wise increasing our property taxes?

I would have to do that.

Yeah, we'd have to calculate that. We've got the total for the additional debt service, but we would have to calculate that.

And what would just that number increase our total tax rate to?

From our current rate?

Yes.

THE .659663 PLUS .0163.

AND IS THAT WITHIN THE VOTER APPROVED RATE OR WHATEVER WE CALL THAT? YES. SO IT WOULD NOT REQUIRE It's kind of confusing. It's because we told people if you vote in favor of these propositions, it's going to increase your property taxes. But in reality, it wasn't automatic. It's now requiring us to come along and increase the total tax rate in order to make up for those expenses, correct? That's right. which to me it seems like it would have been easier if this would have just been automatic.

But it gives us the flexibility of if we were in a different situation and we had a lot of extra revenue, we wouldn't have to. But we probably wouldn't have went out on the GEO to begin with. So you're right. The mere fact, it was put out that it will increase your property taxes by this for that reason. We had anticipated going up that amount.

So what I think would help with us would be if we had an additional line here under current rate that would say voter approved geo increase or whatever you want to call it with a .0163 or whatever it was. That way we can let people know, yes, your property taxes are increasing, but it's because Prop A passed and voters agreed to do that. It's not necessarily the council that just came along and decided, Well, we want more money to spend, so we've decided to increase your tax rate. Does that make sense?

I think some of that is addressed in some upcoming slides in terms of what this means.

I always ask questions that are the next slide.

But to that point, it is.

Yeah, you did.

To that point, I think the bond election was very clear that this will be additional taxes. It wasn't a situation like, oh, we'll cover it through O&M. It was pretty straightforward that it was.

Right, but it's not reflected so far in what we're talking about, and I just think that that's very important because I'm not in favor of increasing the tax rate at all, but if voters approve it, obviously we don't have any choice.

Right. So again, just to reiterate this slide, if you stay at the same total tax rate currently, then you would have to reduce that M&O rate in order to make up for that difference in that debt rate. 0.67596363. So this is just an overview of what our total, our breakdown of our tax rate has been since 2017 through this fiscal year. As you can see, in 18, 19, and 20, and 21, it was at .71. And then in 22, it dropped to that .05. And then in 24, or I'm going to say 23, we're at point, I need glasses apparently, 23, we're at .695. And then in 25 and 26, we've been at that .659663 for the past two years.

So just for the record, because we need to understand, if we're looking back at 17, 18, 19, 20, 21 years,

tax rate was high.

22. That's what, one, two, three, four, five, six years we paid more. And currently we reduced it. And I know people aren't in favor of raising taxes, but the norm over the last 10 years in line with normalcy, right, six years with, you know, generally, we've been paying 0.71, right? Okay. So I just want to be clear on that.

For those four years.

Over the past 10 years, typically, generally, it's been higher than it is now. And is there a real reason that you can give us that we reduced it? Why did we do that? Because when you take things away, it's hard to explain why. or you give an incentive, it's hard to explain. It's hard to justify going backward. Why? Why did we do it? For the record, do we have any answers?

It's a budgetary consideration, a decision, a recommendation by the manager, a decision of the council. It is important to point out that the rate is, of course, how much money we receive in revenue is a function of both the rate as well as the values. So the values are going up. And so if you have the ability, we always want the ability to reduce taxes if we can afford it. So, you know, you want to reduce that rate. However,

I got a question. If I could stop you right there. Can you repeat that? It's okay to reduce the rate when? When you can afford it. Okay. I just want to get clarification on that. When you can afford it.

Yes, ma'am. Councilman Williams.

So were those reductions likely to have something to do with values going up as well? I mean, surely property values have gone up since 2017.

Yes. I mean, they certainly have gone up since 2017.

So the rate might go down, but the actual reflected what's coming out of somebody's pocket might not have changed.

Correct. But, you know, in terms of the reasoning behind it, I don't have insight into that. Yeah.

So I'm sorry, I just I want to revisit this a little bit because we reduced it because we could afford to reduce it. And now that we're looking at these numbers, expenses have also gone up as well, right, from whatever we had going on prior to. the expenses that we spend or the cost of things to do business prior to this, when we paid more, expenses have gone up. Yes?

Correct. So all the factors Amy mentioned in the budget challenges, we kind of described it today in the prior couple budget work sessions. Inflation, the city is not immune from inflation, certainly. And all the reasons we've talked about in terms of how we're in the situation we're in.

Thank you.

Any more questions on that?

Comparison cities. So there are 249 cities in Texas with higher property tax rates than Beaumont. And looking at similar mature cities, Beaumont's in the middle of the range. So if you kind of look, these are some comparison cities that we did at our current rate and their current rate. 0.659663 is ours. As you can see, Mesquite is at 0.704692. Abilene is at 0.7542. Waco is at 0.755. San Angelo is at point seven nine four seven below us we have Odessa which is at point four seven oh seven all right so but if I could clarify on that that that may be misleading because

There can also be other taxes that are included in their property tax bill, such as emergency services districts and mud districts and things like that that are additional funding for services, and ours are all lumped together. We also have a port tax, and, you know, I guarantee you Odessa doesn't have a port tax, but Harlingen may. But anyway, you know... We don't know with those lower rates or those higher rates if there's additional service and taxing entities within those.

So these are only their city taxes. Correct. At that point, we could get you their total tax rate for each jurisdiction. Correct. Within reason.

Yeah, I'm just saying that this is just the city taxes, and there may be additional taxing entities within those municipalities that allow them to have a lower rate. So I just wanted to clarify that.

All right. So just let's discuss some potential revenue from O&M rates and revenues. So current adopted rate at the 0.659663 M&O would be the 49%. million debt rate is the $24,319,000. If we go to a no new revenue rate at .683976, that would be an MNO revenue of potential $51,744,000. The debt rate is going to stay the same because the debt rate is set. It has to be at that .21. Current rate plus additional debt that we've incurred would give us a total tax rate of 0.692802, which would be a potential revenue M&O of 52,716,000. And you can see in the other columns that it has it broken down with that debt rate and that M&O rate as well, what that M&O rate would be. You have a 23 adopted rate of 0.695, which is a potential M&O revenue of 52,958,000. And then from 2018 to 2021, that adopted rate of that 0.71 is a potential M&O revenue of $54,611,000. And then you have your voter approval rate. It's at 0.764867, which is a potential M&O revenue of $60,654,000.

Can I get some clarity? Are we going to have a slide? Because obviously one of the big things that gets us here is our reserve fund and what these tax increases would do, where it would anticipate putting our revenue fund.

Okay. Yes, sir. And when did we get this voter approval, right? How old is this voter approval?

These are our current rates that we've received. So these are 27. These are going to be our 27 certified rates.

If we were to go to voters and ask for an increase, it would require that if we went up to the .76, right? If we went over it.

If we went over it. Yeah, correct. Without a voter approval. This is based on that.

That's the maximum you can go to without having to go to the voters for a break. And that's set by state.

That's what I'm trying to say. Correct. This is current. We just can't go over that rate. That's the highest we can go. Right.

So I have a question. This may be more of a charade question. So with this being said, I know we discussed people have asked why we don't have EDCs and things to this magnitude. And we were at a tax rate where you couldn't have one. Does this still apply currently just out of curiosity?

THAT'S MORE OF A SALES TAX.

THAT'S A BETTER QUESTION FOR YOUR CITY MANAGER, BUT HONESTLY, THAT'S NOT REALLY, THAT'S NOT, THE QUESTION THAT YOU'RE ASKING ME CAN'T REALLY BE ANSWERED WITH A YES OR NO BECAUSE THERE'S SO MANY OTHER FACTORS AND VARIABLES THAT PLAY INTO THAT. SO I'LL JUST GO BACK TO YOU.

YEAH, THE QUARTER CENT FOR EDC'S ARE TYPICALLY THEY COME OUT OF THE SALES TAX AND BECAUSE WE'RE ALREADY AT EIGHT AND A QUARTER, WE DON'T REALLY HAVE THE OPTION TO GO TO EIGHT AND A HALF. And so it's more of a sales tax function.

And I'm glad you answered that because the last thing I want to do is people to see, we've said multiple times we can't because we're at the max tax rate. And we see on this slide today, it's the difference between sales tax and what we're talking about right now. So I'm glad. I just wanted to clarify that.

I think it's also important to add that voters... rejected and turned down an EDC, and that's not something that we came up with or doesn't mean that we don't want an EDC, but voters made that decision many moons ago, and we have to respect it.

Yeah, we asked about that all the time, so I'm glad we were able to address it because voters did reject it when it came up.

Is it later in a slide that we do the .675963 total tax rate, which would reflect our current adopted rate plus what voters approved for the infrastructure bond?

We didn't have that number, like, broken down that in depth. So this is including all debt. This is including all debt, the current rate plus all debt.

We have the total of the CO, the tax note, and the Prop A. We just don't have a line for Prop A.

For Prop A, correct.

Well, I would ask that we add that because, you know, I'm not trying to... You know, I just only thing in my mind that would make sense would be the current adopted rate plus what voters approved.

And I understand that. And we can get that for you for sure.

Thank you.

So I just wanted to point out as well, too, on this slide that going from your current adopted rate. to that current rate plus your additional debt to that 0.692802, that is a difference of roughly $3.6 million in your M&O. And then going from your current adopted rate to that 2018 to 21 adopted rate of that 0.71 is a difference of $5.5 million. So next slide is home values. So this takes, as you see, you have your home values on the left, on the far left, 150, 250, 350, 500, and a million-dollar home. Our current tax rate is that first column where we're at, and then we have the different scenarios of the rates and what that increase would be. So no new revenue rate at that .683976. The total tax would be just over $1,000. Annual increase would be $36.47. on a $150,000 home. You can go to the 23 adopted rate of that 0.695, and you can see that total tax is $1,042 annual increase of just over $53. The adopted rate of that .71 is $1,065 with an annual increase of $75.51. And then at a .72 would be that $1,080, an annual increase of $90.51. And then the voter approval would be $1,147 with an annual increase of $157.81. So... That would be, voter approval is the highest we can go, so that would be the highest rate, the increase. But those just kind of break it down what it would actually cost a citizen for their annual increase. And these are estimates, so. Okay. Okay. So based on a $150,000 home, At our current rate, no new revenue. This is the annual increases to the citizens based on each rate scenario. And then to the far right, you'll see the city revenue impact. It's considered at 97% collections, and this is the total annual increase on all properties. So I want to kind of pinpoint the highlighted, which is the current rate plus additional debt. That's kind of our baseline, I would like to say, because we at least have to be somewhat there to cover that additional debt. So that's that 0.692802 number. So that would be an additional annual increase on all properties of 3.6 roughly. And then that .71, which is that 2018 to 21 adopted rate, you can see on a monthly increase it would be about $6.29, and that would generate roughly around a 5.5 for the city in revenue. Additional.

Councilman Hilliard. So I have a question. So have we looked at... The unbilled money from the water department, from the water usage, I know we have 47,000, but I'm guessing that anywhere from 10 to probably 12,000 people are not being charged. Is this being figured in here? Because, I mean, it could possibly be $10, $12 million in water, also solid waste. We haven't done an increase. Have we looked at that? Have we looked at... landfill increases you know before we start going to the taxpayers we've got to be able to live within our means and so there's a lot of discrepancies that we could generate a lot more money by the services we already provide without increasing the tax rate on our if I can just add what you've talked about has nothing to do with these numbers because those are enterprise funds that's something we bill separately for so that that I

That money's not going towards this, our water bill and sewer bills, or anything unbilled. That would affect our enterprise funds there. It wouldn't affect these numbers here.

So they don't go into the general fund and aren't used for?

No. They would go into the water fund and the solid waste fund.

Yeah. Mayor, just to touch on that, though, since you brought it up, we are working to resolve that issue on the water billing. Right. Actively.

And so this is based on 97% collection. Where were we? I remember you all provided a number of where you thought we were currently on that. It was lower, wasn't it? The prior was 93.

93 was what prior was, yes.

And you feel comfortable being able to hit that 97?

I mean, that's the plan, hopefully. I mean, it depends on, you know, how many... they sometimes get appeals and stuff like that. So it kind of depends on that.

Okay. And the city's not, for clarification purposes, we're not responsible for the collection. That's not our 97% rate collection. Correct. That is.

Correct. That's the tax collector. We're working with them.

I just want to be clear because people may think that we're collecting the 97%. That's not our burden.

No, ma'am. Yeah, we do not. That's some number we can control.

Are we waiting for another slide that's going to have the total budget numbers? Yes, sir. Okay.

All right, so this kind of gives us an overview. So you can see our FY26 projections. We'll start there, and then we'll work into 27. So our revenues projections to coming out of FY26 is at 173 million, and then our expenses are projected right now at 178 million, which gives us that difference of that 4.5, which is ending fund balance, is at 36,892, which leaves us at a 21% fund balance.

Just for clarification, what percent are we supposed to have or did we agree to have? 20%. 20%. 20%. Correct.

That's what we're currently required.

This is based on what tax rate?

So 26 is the current tax rate. Right. And then 27 proposed, these numbers are at our current tax rate. Right. So 27 proposed or projected budget right now and are staying at our current tax rate. So that MNO reduced, that INS is increased. So we're at 174 on revenues and then expenses are at 180. So that gives us a difference of that 6.1, which leaves our fund balance at 30,724,000. So that's a 17% fund balance.

Right. But does that include things like the 2% COLA?

Yes, sir. It includes all contractual wages. It includes the 2% COLA. It includes the supplementals that are approved thus far. Yeah, everything that that we know is coming down the line is in these numbers.

Okay, and that already includes the savings from a hiring freeze?

Yes, these are including savings.

Cutting travel by 60%.

Cutting travel, operating. So we did, prior budget, we were at, our expenses were at 182, so we have gotten it down to 180. So we've cut about two point, it's about 2.4 is what we've cut so far. We've been able to not cut, reduce.

And Mayor, if I can just- and Amy stated some of this, but just for clarification, we're looking right now at taking into account where we need to be in terms of expenditures. So we talk about, you know, this is based on the current tax rate, 6.659. This includes the 5% for police at 1.2 million, fire 3%, 727,000. the proposed COLA for civilians at about $800,000, the transfers that we need for the employee benefits fund, as well as the stop loss increase on the employee benefits, capital reserve, fire pension increase, water and solid waste transfers, supplements, the essential supplements. So all these are essentially reflected in this. The next slide will go into some variables as to kind of where we want to end up in terms of the fund balance, but

right now with all those things at the current tax rate it would be 17% general fund fund balance so at the current tax rate it's not taken into account the increase from prop a because the numbers that we this is not taking that into account this is at the current tax rate I just want to

This is at the current tax rate.

Current tax rate.

Not us raising it up to the previous slide point to something.

So to your point, if you said no tax rate increase, absolutely. The deficit would go from $6.1 million to about $9.45 million.

Wait, what now?

If you stayed at the, if I'm stating that correctly, if we stayed at the current tax rate. The six point. And did not increase.

Increase the rate to compensate for the additional INS the debt service it would have to come out of the O&M Which means we would need to reduce the O&M or to cover that I'm just I won't I just want to clarify that that is not us taking the increase and Adding it to the text which the voters already approved because they approved prop a this is us keeping it current at what it is now and

So correct. So this is keeping our tax rate at that 0.659663. So with doing that, with us being able to keep that total tax rate the same, your M&O rate drops. because your debt service rate went up by that 3.3 cents. So that means your O&M projected revenue is just over 49 million. And that's what's included in this projected 27.

However, Karma, we have the ability to go back and capture that point to whatever the number is, because that should, if we don't increase it, but we could because voters approved this, the other.

And I think we'll see in the next slide that you'll see what happens when we add that.

Okay, but on another note, I got one more thing before we move on to the next slide. The state requires what percent to have in the fund balance? There's no requirement. There's no rule.

GFOA standards are two months.

Sixteen and a half, roughly, for GFOA standards. Okay, but we said that. The 20% is our policy.

What we have in our 26th budget right now.

How long has it been that? When did we set that? Did we set that recently, or has it always been that, or what's the metric on that?

I've been here for four years and it's been 20% for the four years I've been here. So I don't know before then.

There was talk about trying to increase it to 25. Like the water fund is 15. I think that's been, we're trying to increase it. But as far as I, as long as I can recall, it's been 20.

20%. Okay. Just the standard.

Why are, and this is a question about this slide. You'll be happy to hear. Why are industrial payments going down a million dollars in 2027? Because if anything on this chart, that should be going up.

We might have some abatements that dropped off. I'll have to look at it. But those are...

Dropped off.

That are out of their term. I'd have to look at it for sure to see. I wouldn't make them go up.

That was my question I've been asking about because if abatement drops off the book, that means the revenue should go up, not go down. We're talking about on the third. I know, but I've been asking this.

But that line item here would decrease. The actual industrial payments line item there would decrease.

Wow. Yeah, but I get it, but for some years we've been saying when these abatements fall off the books in 2027, more revenue will come to the city. Yeah. That's what I've been told multiple times.

An issue we have a lot. Some of these, though, are actually related to IDAs. And if you recall, there's a seven-year cycle. And so we're going into that final part of that seven-year cycle where those proceeds will drop.

Right. Well, that's unfortunate. What is that million? Where did that come from? The million that we're losing from 26 to 27.

We can get those.

I can get that, too. I'd have to look at each single line item that's made up in those industrial payments and look and see where it dropped off at.

Yeah. But I can do that. That's important.

Yes.

And we are sending bills to all these people. Correct.

Yes, sir. And what City Manager Boone is saying is because they, so at the last part of that seven-year cycle, it does go from 80% to 75%. By contract. Yeah, right.

I thought it was gradually going up so that we got more revenue towards the end of the contract.

Each new one can be negotiated differently as we move forward, but right now the majority of the ones that we have, they drop off in the final years. And many, many of them, if not most, are now dropping off.

So if I'm understanding correctly, what you're saying is after we... after that it drops off in 27, then it will increase? Is that what you're saying? Because it has a final, A clause or year, whatever it is, at 27, it'll drop off, but also it's decreasing. But after that point, it will go up. I think that's what people are trying to hear.

We'll need to renegotiate.

Oh, right. I got you. All of them. That hadn't happened yet. That hadn't happened yet. But basically, going from 80% to 70% is what we're saying is it's dropping off, but it's also being decreased because of the change in whatever it is. The next agreement or whatever could... potentially be better for us, but it's 27 that we're looking at that this is transpiring.

Most of these are up in 29.

But see, Mr. Manager, and I know this is not on you, but in 2021 when I first got on council, I was told in 2027 we would see increases because of this revenue fall off the books. And this is on the record. I can go back and find it.

Yeah, and to be clear, because I know it gets – there's a lot of agreements out there in the IDA section, which, again, are these seven years that drop off as you get towards the end of them. They're also abatement agreements. And when Amy mentioned dropping off, if the abatement drops off, yeah, that's definitely good news for us. But those are all different. And so we can certainly get you a list of basically what we're abating now and when those things end.

And so NatGas, their abatement dropped off this year, and that was an additional $3 million in revenue for the city. So what you're telling me is there are no, and I'm not talking about the other one, the IDAs, I'm talking about abatements. There are no abatements dropping off in 2027? Because I was under the impression that there was at least one.

I would have to look to see. I don't want to answer and give a wrong answer. I'd have to look and see for sure. But the NatGas for sure is not N27. So there's going to be a big difference there. And then it just kind of depends on the other ones. I'd have to look at each one and see exactly. And I did this months back, so I don't have it by memory. So I'd have to actually look and see.

Okay. Is there another slide? Mm-hmm. with the numbers, because I'm trying to figure out what, if we apply the rate that was approved by voters on Prop A of the .1675963, what our fund balance would be.

Okay, so on this slide, we have different tax rate options. So the current adopted rate of the 0.659663 with our projections of revenue and our expenditures, we give an ending fund balance of the 30,724,017% fund balance, as the previous slide showed. No new revenue rate is at the no new revenue rate. We would have a total increase revenue. The total revenue would be projected at 176,708. expenditures are going to remain the same on all these scenarios. Ending fund balance of that $33,402,000 for a 19% fund balance. That current rate property, the current rate plus the additional debt to keep us at that, plus the additional debt, which would put us at the 0.692802. Revenue is at $177,680,000, which would give us that $34,374,000 or the 19% fund balance. If we go to the 18 to 21 adopted rate of the 0.71, that would give projected revenue at 179,575,000 with a projected ending fund balance of 36,268,000 for a 20% fund balance, which is technically where we are required to be at this moment. So with that being said, these are the different scenarios. As you can see, the voter approval gets us to a 23% fund balance, but this kind of breaks it down so you can see where we would be at the different tax rates. And the point of that is to kind of guidance on our expenditures are obviously outgrowing our revenues. So in order to close that gap, what we need to do to get there. Again, like I said in the opening, raising tax rates is not a liked subject and I completely understand that. That's not, I get it. But when your expenses are continuing to grow, we have to do something as a city. And that's the first step that we need to start looking at and meet in the middle, you know, and just figure it out because otherwise it's going to take us six to nine years to get that gap closed. Do we want to do it in the next few years? You know, it depends on how long you want to push it out.

All right. On this on this last slide charges for services also has decreased exponentially why why is that what what services did we do a reduction, I mean why are we seeing a reduction in. Charge for services. It went from 7 million 384 and you're projected 27 is 6 million 9. 63 what what's going to change to reduce that.

So, again, I'd have to look at each single line item to see exactly where those reductions are at. But these are all projections that we went through that the departments have given us that for what, you know, and it's all an estimate. And it could be more. I mean, hopefully it is more. But these are all estimates. Right.

One thing about it, like our health department, we've lost a lot of fees because of state law. So I would assume that it would fall under some of the fees that went away.

We can get you some details on that because it could be EMS. It could be weed billing.

It could be vital stats.

I know we lost gaming. There's lots of things that we've lost.

$800,000. Yeah, we lost gaming.

So it adds up. I mean, even the small amounts, they end up, they add up. And then you're left with what you're left. I mean, your actuals for 27 was just 6.7.

They have not stopped playing. Sorry, we got distracted.

Oh, you're fine. Well, and my question is just how much Because I saw the decreases in freezes and travel and all the things, but there's been a lot of talk about increases on industry or what in any of this as far as IDAs or abatements or whatever. Is industry going to be additionally responsible for any taxes or this or that or whatever? Because there's been a big talk about industry helping pull us out of this situation or they're going to this and that and magical. I didn't see any of that. Is there something that we're supposed to...

So let me just say, as you know, we've been discussing updating our abatement policies, and I think we've talked about our IDA agreements. We've talked about future abatements. So a lot of these... potential revenues are only going to be realized moving forward. And we can't really, even though we're going to update our policy, um, we can't go back and renegotiate prior agreements. So we can't put it in the budget to say, you know what, we're going to go renegotiate all these ideas and get 80% instead of 70. So hopefully this time next year, you know, we'll have, um, We'll have a better bead on what that might look like. But because we just don't have them, we don't have new ones currently or renegotiated ones, we can't put that in the proposed budget. Okay.

I just, for clarity, because people keep insinuating that there's a... magic pill to this, and there's not, and it takes time. So just for the record and for people to hear that we're discussing, oh, well, we need to make this one do that or that one do this or this or that, and all of that doesn't happen out of thin air.

Right. And I know we're ready to break for lunch, but can I get the ending fund balance percentage if we do the point? Okay. Okay. Assuming it's going to be 18%. It may be. And then I'd also like to know, if it's not on a future slide, what we would need to cut that negative $6.1 million we're projecting for 2027, assuming we get the rate of the .765, what we need to cut that $6.1 million in order to get to a 20% fund balance.

So $1.8 million in expenses affects your fund balance 1%. We have to cut $1.8 million to change that by 1%.

Okay, so in order to, assuming it's going to be 18%, in order to get to 20%, we would be basically 3.6 million we're going to have to cut?

I'm sorry, I didn't hear any of that.

She said that you have to cut expenses $1.8 million to get the fund balance up 1%. So assuming the .675 whatever rate that voters approved on Prop A gets us to an 18% fund balance, we would have to cut $3.6 million from the 2027 budget to keep the fund balance at our own approved 20%.

Sounds about right.

Okay. And have you finished the numbers?

18%.

All right. Great. Thank you.

Great. So that's all actually that we have today. So now we would like to thank you for your time and your support while we're preparing. We continue to prepare the 27 budget. We appreciate everyone's efforts and partnership as we work together to develop a sustainable budget that supports the needs of our community while maintaining a sound financial stewardship. But we would like at this time to ask you to provide clear guidance and direction as we finalize the 27 proposed budget THAT WILL BE PRESENTED ON AUGUST 18TH.

YES. MR. MANAGER, I THINK IT'S IMPORTANT WE KIND OF TALK THROUGH SOME OF THE PAST, YOU KNOW, FUND BALANCES. CAN YOU SPEAK TO WHAT HAPPENS WHEN WE HAVE STORMS? I want to be transparent about how the fund balance got to that $51 million range and how many storms happened and what happened to the sales tax after those storms. I don't want people to think it just decreased. No, those storms, I know what it done. So I want you to speak to that.

I think it's a combination. When you have a storm, the concern is because generally they are followed with a lot of spending. And again, these are big storms. And there's no doubt it increases things like sales tax. There's no doubt we've benefited from that looking back to the mid-2000s. And I think the combination of a very fiscally conservative philosophy combined with the amount of money especially from sales tax that comes out of those storms. The combination of those two allowed us to really grow that fund balance. And so, again, we've talked about in here what is an ideal fund balance. I think it's quite proper to say too high of a fund balance is not ideal because we don't need to be sitting on taxpayers' dollars. But the flip side is, as you bring up, we have these storms. There's usually a lag between when those tax dollars start to hit. There's a lag between when we get assistance maybe from the state or the federal government. so again going back to the GFOA recommendation of you know reserves and again we think in terms of storms but you know we've had pandemics and you know they're ice storms there's all kinds of issues that can come along that that can be challenges. So in other words, I think a good way to think about it is terms of months. And so again, as we mentioned, I think 16.5% is about two months. And so at the end of the day, what are we comfortable with?

And my follow-up is, you know, every council is different. Just because one council chose to do something one way doesn't necessarily mean it has to be the standard for every council. But I just want to make it clear to this council, my colleagues, it's up to us as a group how we want to move forward. And maybe there's some things we may need to workshop and talk about because, you know, You know, when I first came on, we were actually coming off a big storm that jumped the fund balance. So, of course, you want to take care of public safety. You want to do the cost of living rates for everybody. You want to increase service. You want to invest more into infrastructure. But eventually, the more you do, the money has to come from somewhere. But at the same time, I think it's important to discuss infrastructure. Where do we want to go? And I know I only have a few more months, but you guys will be here in the future. You guys need to get on the same page about where you want to be financially because the 20% is something we could literally afford to do because I'm not going to sugarcoat it. We were fresh off a storm, and it was extremely high fund balance. Well, and some wanted to keep it higher. We're probably going to go to 25. We discussed that. That's right.

And it's different. It's important to know how you operate when you have money in the bank and how you operate when you don't have money in the bank. Because when you don't have money in the bank, then that changes the way that you do things. However, I think it's also important to, I heard yesterday that we're responsible for public safety contracts increases and all of these things, whether we have the money or not. And that matters when 50% or 60% or 65% of the budget is going to one place. So when we talk about numbers, we've got to talk about them realistically because that matters.

Well, and all these are very good conversations. I know what we're looking for now, and we got an hour to a council meeting, and they're going to need direction before we break, is at what tax rate. And I know from my stand, and I've certainly heard Councilman Crenshaw's has been Very clear on that, and I appreciate that. And I certainly, I know for me, looking at if we went to 71, our 20% rule to go to the 71 cents, which would be an increase above our voter, what was approved on by that. And that would allow us, you know, then we're going to be looking at it in March to see where we're at, because we could always go back down next year if we saw a need to do that. But this is something that has been. And when we look at neighboring cities, I know on social media, you know, People have said that we're the highest in the state. It's just, you know, that's absurd. I mean, you know, a lot of other cities currently are at a higher rate than we are. Cities that people like, you know, that gets referred to a lot, whether it's Baytown or Waco. I know those are cities people refer to me for because they drive down Interstate 10 and they see what's all going on over there. And their tax rate is higher than that. So certainly Waco's is at 75 cents. But that's my thought. So I know that they're wanting to hear from all of council on this. So this would be a time to weigh in because they're going to be working on a budget based on what they believe is going to be able to pass. And nobody likes to talk about, you know, tax increases. I get it. But I also think it's our responsibility. We're the ones that are going to do it. And if we're going to follow the 20% rule, then we would need to do it. If we're not going to follow the 20% rule, we need to look at even, you know, that'd be something I'd want us to look at about changing, reducing, because I hate to be making decisions where we know we're violating the city, you know, or our own ordinances that we passed.

Okay.

Yeah.

Yeah, I... I lean towards the current adopted with the addition of the bond, which I believe was the .675963. I don't come to that lightly. I think that we can make the books look good by going up and I don't know that people ever say, you know, if I give my government more money, I believe them to be more efficient with it now than they were in the past. And so I think, you know, you take these tough times, which they are, and you go, you know, what – is needed, what isn't, and you use it to get lean. And, you know, and then when things get better and the books look better, then you can do some of these, you know, services and things of that nature. But right now, I think that this is a, you know, a moment where we have to look in the mirror and say, you know, what's necessary, what isn't, and let's see what we can kind of come out of the fire looking like. And that's where I'm at.

Councilman Crenshaw.

And Mr. Mayor, you were correct earlier. You know where I stand, and I agree with Councilman Mike Williams. I think we stick with the current rate. We can talk all we want about it's only going to what the mayor is proposing at 71 cents per $100 valuation is only $150 a year increase on a $300,000 house, but What we don't take into account is that property values are going to increase, and so the tax bills are going to go up significantly. We saw this year land values in Beaumont by the tax assessor, or by JCAD, increase significantly, which led to a lot of frustrated voters. And so those increases in value allow us to have increases in revenue moving forward. I do want to get us to the 20%, but I'm sorry, I'm not in favor of doing that with tax increases. I'm in favor of doing that with spending cuts. I believe that we have just been spending... too much lately and that we can achieve that with some cuts. In particular, one item on the agenda today is $220,000 for a brand new concrete mixer. When, you know, if we're trying to find ways to cut and to be leaner in this budget, spending a quarter of a million dollars on a brand new concrete mixer is just one example of of what I think is not sending the right message to taxpayers. We should look at buying a used one. I found a used one online, a 2018 for around 70 grand. So there's $150,000 right there that we saved. So we can get to that 20% with some additional cuts, and we do not need to raise the tax rate other than what Councilman Williams said, which I completely agree, which is what voters already approved when they gave us the Prop A passing. So with that, I appreciate what you're saying there, Mr. Mayor, but I would have to respectfully disagree with that raising property taxes in Beaumont is absolutely the wrong thing to do at this time. Thank you, Councilman. Councilwoman Sherwood.

I'm more concerned. I'm not as concerned with keeping taxes the same or increasing taxes. I'm concerned about the plan. Is the plan that we have right now going to get us to 20%? Without raising taxes and do we have places that we have planned currently right now for 26 and 27 that gets us to 20%. Gets us to 20% without raising taxes.

Well, as you can see in the options, that first line at the current adopted, that's where we are now. So just everything that's projected right now in the budget gets us at 17% for 27. And that's taken into effect all the cuts that we've done, reduces that we've done so far. So the only thing from here would be to reduce more in expenditures. And what does that look like? Some hard decisions to be made at that point. Departments have done really, really well at working and looking at every single line item in their budget and really getting it to what they absolutely need operationally. And operations is only a small part of our budget. Wages is the bigger part of our budget. And 8% of that we have no control over.

So this is my issue. When we talk about cost of living increases, wages, expenses, overtime, you know, increasing public safety while hiring freezes in places where you've got vacancies. What does this look like impacting citizens to make further cuts when the price of things are still going up? I struggle with being somewhere between not raising taxes and being realistic about spending. And so my question is, what does these further cuts look like as to citizen services and what we provide and what this looks like on the back of our current employees and hiring freezes and in cuts? And you've got workers that are already leaving the city because we're not in the top echelon of wages and pay and all of the things. So now we've got to provide services on a A budget that's being cut and slashed and positions that's being cut and slashed and overworking our workers. I'm trying to figure out where does this, what does this look like in actuality to the citizens?

If I may, I think the first two presentations that you've heard is what it looks like. The city, I mean, because we are not immune to price increases. Like you've said, I think our property tax values increased about 1%. this year, our taxable value from last year to this year. And you do see that our expenses, so again, we are not immune to inflation. We already have those contractual increases that we have to do. And even with all that, having departments look at every line item of their budget, We have gone from $178 million in expenses projection 26 to $180 million. That's a very, I would say, especially considering that we have those contractual increases that are already built into these dollars, that less than 2% increase in expenses that we have there. There's that...

I think what she's trying to say, there's not a lot more wiggle room to, unless we start making really, really, really hard, which is reducing services is the next.

Well, just real quickly, because I know we're running short on time, a significant amount of savings built into this is the hiring freeze. And the reality is there's always room for efficiency, but the longer we operate under efficiency, that situation, it will start to affect service delivery. And so the three variables we've got today is the property tax, the fund balance percentage in the general fund, and then expenditures. And so on the expenditure side, again, we've done the hiring freeze. We are cutting discretionary spending. We've slashed travel and training. We are looking, we presented just two transit and libraries, just some preliminary ideas there. There are hundreds and hundreds of things that the city does on a daily basis that we can look at. But again, in terms of impact to the citizens, at some point it's going to be felt.

I want to just stay on because we need to get there so that we can get to our next meeting too. So I do want you... So I know you may not be finished yet.

Yeah, I'm finished.

Well, you need to give them some direct... They're looking at... So that if I'm saying this correctly, they're going to be presenting a budget to us based on an amount that they believe we will approve. So that's why they're wanting to know how much we want to go up on taxes, if any, so that they can prepare that budget that we're going to have to end up voting on. So... this is our chance to give them some very specific direction on where we would like to see the tax rate be. So that's what they're asking for, if I'm not mistaken.

Yes, correct. Thank you.

I'm somewhere near 0.69. So 69 cents?

Yes. Okay. Councilman Turner?

All right. First thing is, me personally, I'm more concerned about, we say we want to have a 20% because we said that's what our policies were, but I need to feel confident and comfortable to know what we need to have 20% for. What is it going for? What are you using it for? What would be the need? I can't just blankly rubber stamp it without knowing the specifics. That's something I'm not interested in. My second thing is we're at roughly... Roughly 20%, again, like I urged this council to strongly consider if you want to maybe meet in the middle at a 19% threshold versus a 20% threshold, and now we got an easier goal to reach. We do not have to keep it at 20%. We can make it more reasonable, something that we can attain within a year. I strongly consider us to think about that before raising. That's very logical. Another thing is we might need to revisit regulation of the new gaming machines. Again, it's still happening. We need to look at how can we regulate the new gaming machines, and that could possibly be that $800,000 to $1 million we're looking for. Another thing that we're not talking about is we're looking at fuel costs. Earlier I heard just with the bus transit system, we're up 25%. I can only imagine what it is straight across the board. Things are going up. Public safety, overtime, we're saying it's going to be reduced, but that's something that has consistently gone up for years. That's been an issue that's got us in this place. Not only public safety, water overtime as well, our three biggest departments. we have other increases that we're currently negotiating now that can be detrimental to what we're trying to get to with 19 to 20%. So all these things need to be strongly taken in consideration before we make any more moves moving forward. And I would ask staff respectfully, because I've asked this in the past when it came to contracts we are stuck in once we approve them, please do not bring a contract to city council that we cannot afford. because once you bring it to us, we don't do day-to-day operations. We don't do the financial projections. We don't see what the future look like. We need to see financial forecasts and analysis before we're brought any contract that we are contractually locked into for three to five years. what it would do to impact the future of the budget, because we're not being told that when these contracts are brought to us and this is a part of it. But me personally, I kind of would like to see more of a meat in the middle, maybe the 19% instead of the 20% and something realistically, I think we as a council can get to. And once we get there, we can possibly go back to the 20% in the future. But right now I think we need a realistic goal. We can reach.

I second. I think that maybe we need to look at 18 to 19%.

We're not going to vote today. So just for the record, but thank you. Okay. Especially if we only required to do 16.5, you know. And we're not required to do that. We're not required, but Chris said we need at least two and a half months, so 16.5. Councilman Hilliard.

I'm a big opponent. I don't agree with tax and spend. I think that we're overtaxed. And I'm going to agree with Councilman Williams, Councilman Crenshaw. I think we should keep the current adopted rate. We should learn to live within our means. I think there's a lot of things as far as how we collect our money. Those type of things need to be looked at. I mean, we just don't want to raise taxes and go business as usual because we're going to be in this place again. So in another three years, we'll be looking at upping the tax rate again because we haven't learned our lesson from the last time. And so, you know, I agree. I think the current adopted. I agree with both. Corey and my councilman's that we keep it at the current. We learn to live within our budget and we, we, we start collecting the money that is out there that we raise service rates. I mean, that's what businesses do. I mean, me and Mike aren't selling our goods or Corey or anybody else appear of what we did in 1960 or 1970. You've got to, When things go up, you've got increased pricing. And so, you know, from solid waste to the things that we do that are for free, that solid waste need to change. We need to collect the money out there from our water bill, even if it goes to the enterprise fund. If we have to use it for the water department or for solid waste, it's not coming out of our fund balance. And so, you know, I think there's a lot of things that we need to tighten our belt on. before we start going to the people and saying, hey, we can't live within our means, so we're going to tax you more. And we hope that in the next five years we do it right or we're going to tax you again. So I would like to see us raise our rates across the board on the services we offer and stay at the current adopted rate.

But you do understand raising rates on water and sewer have no impact on this.

It does. No, it doesn't. It does not. So when we have to buy a new pump truck, it doesn't come out of our budget?

It depends on which department it is, but water and sewer run through the enterprise funds. That is business that we do. The rest of the services that we're doing, our parks and all that, that is part of what your property tax and sales tax do.

By law, your enterprise fund has to be kept separate. separate so there there are times where council has approved it when the enterprise fund when rates were not Sufficing to cover expenses council did approve money to go from the general fund to the enterprise fund which is allowed by law But it's not allowed for the enterprise fund to transfer money into the general fund right so I don't want to have to transfer money to the enterprise fund I

I want to make sure the enterprise fund can run.

Not yet. Just one clarification. You can transfer. But that's limited. But I think what you're saying, though, is we don't want to raise rates just to transfer. But I think what you're saying is we certainly like, you know, the libraries talked about raising room rates and things like that within the general fund. We have. So a lot of those rate increases, some of those rate increases are built into what we're looking at today. And again, you know, we'll be massaging these numbers as we work over the next week, week and a half to get you the final draft. So August 18.

Thank you, Councilman Hilliard. Councilman Durio.

Could we raise rates? To me, that's the same as raising taxes. Somebody still has to pay. The citizens still going to have to pay for those services. And if they're going to have to pay more if we raise the rate. And as far as what cuts are necessary, all of them are because we already are short staffed. Right now, there is a house on Marie Street that council approved for demolition two years ago. And short staff, I know contractors do it, but it's still sitting there and it caught fire. It's still sitting there. So we already, the hiring freeze, we're already losing employees, you know, because we're not competitive salaries. And if we're already short staffed and we don't fill those positions, it's going to be called more and more and more because things are not going to be getting done. It's our responsibility. It's the city's responsibility to provide these services and find a way to pay for them. It's their responsibility. It's our responsibility. It's the whole city. It's the citizens' responsibility to be able to fund these things. That's what we're supposed to do. I see you looking at the clock, Mayor, but y'all made me go last, so this is important to me. No, it's fine. So... employees leaving. And I agree with Councilman Turner. If we don't have a required fund balance, then we need to change the ordinance and lower it. So we'll be in the, you know, have enough money or be where we want to be. But as far as more cuts, like I said, I think, I don't think we can cut it anymore. You guys already said what you cut. And as far as what services are needed, The citizens want all those services. And when we first started talking about the hiring freeze, you said you want to do as much as you can to make sure that the citizens don't even notice it. And then today you said they're going to be affected. And basically you said they will notice it. So that's not good. And I mean, for us sitting up here, We're going to hear about it. They're going to call us. They're going to call us if trash don't get picked up or they're going to call us if they got a water leak, you know, instead of 311. And if we already short-staffed, then who's going to do that? Who's going to do that work? You know, I don't, well, I know I'm hoping we don't come to the point where you have to lay people off. I would hate that. But I just don't, it's like you said, we got to meet somewhere in the middle. Lower the rate, the fund balance. And if we raise that rate to like Councilwoman Sherwood said to like 0.69 or 69 cents, then we could always lower it again. But if you lower it, you can't raise it. And even if we keep it the same, we can't raise it until the next budget year, correct?

You could always amend the budget, but... Can't amend the tax rate. Can't amend the tax rate. Right. So you could cut expenses.

I just really quickly wanted to add that this fund balance percent does directly impact our bond rating.

Mm-hmm.

And the no new revenue rate is point six eight three nine seven six City manager I have a question for you Do you have a recommendation on this? Do you have a recommendation?

I will submit that to y'all August 18, okay

This is a problem that has to be fixed. And as I said before, that's why we're up here to make these hard decisions. And everything we do, no matter how we vote up here, somebody gonna be mad at us and upset. And I said before, I didn't say you had to have courage to raise taxes. I said, you have to have courage to be on council to make these hard decisions. So you know which way I'm going?

Thank you. Thank you, Amy. You're very welcome. So have you all gotten clear enough instruction? Thank you.

Thank you.

It's clear as mud. Yeah. All right. With that, we're at council member comments. No, we're not. We got something else? Yeah, we're good. I think that's council discussion and direction to staff before. We good?

We're good.

All right. Would anybody like any comments before we break for lunch before our 1.30 meeting?