City Council - Special Meeting

This prime, I think we're ready.

Yes, sir. Good evening. This is a special meeting of the El Paso City Council for Tuesday, June 23rd, 2026. It is 731 p.m. Mayor Johnson is present and presiding in council chambers along with Mayor Pro Tem Chavez, Representative Nino, Representative Limon, and Representative Canales. Item number one is presentation and discussion on the fiscal year 2025-2026 third quarter financial report.

Okay, is there a motion? Hang on, Ms. Bryden.

There's no action on this one, sir.

Robert. Good evening. Good evening, Mayor and City Council. Take your time, please. Yes, sir. Why is everyone laughing? We all had dinner already. I was being sincere, Robert.

I told the mayor I had a bag of chips. I'm good for another few hours.

That's all I had, too. Take your time, Robert.

All right, so this item is the third quarter financial report. So this is covering our current fiscal year from the start of September through the end of May. So the first nine months of this current fiscal year. So overall, pretty much everything is trending as expected. So overall revenue right now is $29.2 million higher than FY 2025. Again, for that time period that I mentioned, that first nine months, we're about 5.8%. A lot of that is being driven by property tax and sales tax. Primarily sales tax which well, I'll show you a few slides here in just a minute on how well sales tax is performing on the expenditure side right now overall increase of 20 million or about 5.1% again and a big driver that as you will see is Our biggest cost driver is going to be in the form of our salaries benefits and taxes for our city employees As well as some contractual items we had in the budget for this current fiscal year So key takeaway is on this slide here. So overall revenue and expenses, you'll see overall revenue right now projected at, on that far right hand column, 625.3 million. Slightly under budget, expenses at 625.1. Again, under budget by about 600,000. So as you look to those projections, though, I think the important thing to point out is that that's less than about a tenth of a percent difference from projections, here in projections, to the budgeted amount for both revenues and expenses. But again, the key takeaway here is that you all, as you look at that bottom of the slide, is that when you adopted the budget last year, and you've heard us talk a lot about this, you adopted a budget with a use of fund balance plugged in of 3.25 million into the budget for this year. So happy to report that included in this of what you're seeing today and this projection is no use of fund balance and a slight surplus of about $185,000 so again revenues performing pretty much on target expenditures. We've been able to hold the line but again right now projecting when we finish this fiscal year with right now about $185,000 surplus So you'll see our overall starting fund balance, and this is total restricted and unrestricted fund balance, will remain in that $154 million amount. As we look to revenue comparison by categories here, you will see, again, similar format that we've used for the last couple of years. So in the blue there, this is the current fiscal year. And then you get on the far right-hand side there, those two columns, comparisons to the prior fiscal year. just to provide some comparison data. Overall property taxes you'll see at 98.8% compared to prior year at 99.4, so slightly down, but again, pretty much in line with what we expect to see this time of year. Really, if I draw your attention to that bottom line, total revenue for this current fiscal year at 85.2, compared to last year at 84.1. And the two big drivers of that are going to be in the sales tax category and the operating transfers end. So sales taxes you'll see right now, we're at 113.2 million, again, September through May, about 77% of the total budgeted amount. Compared to last year at this time. We were at 105 million or at about seventy four point nine million So sales tax is really performing extremely well now again I'll show you those slides here in just a minute on the operating transfers in one of the things that's helping that particular category down at the bottom you'll see again those percentages seventy three percent so far this year compared to 62 last year and International bridges so international bridges transfer to the general fund is up about 17% So far for the first nine months compared to last year And so one of the fee increases that was built into the FY 26 budget was the increase in the empty cargo That 50 cents so that's really helping come in a little bit more than we expected and so that's helping again the overall revenue and for this year as we look to the projections for these categories you'll see some pluses and minuses but at the end of the day we'll have a little bit of discussion about this when we get to not only expenditures for this current fiscal year but when we get into looking at fy 2027 you'll see some pluses and minuses so some categories are projected to be over budget on the revenues so collecting more than we expected and you'll see some unfortunately right now are projected to come in lower than what we budgeted so But if you look to overall, again, at that bottom line right now, we're projecting, again, $625.3 million or to come in around $457,000 under budget for this year. Sales tax, again, right now, we're projecting about $4 million over what we budgeted. Franchise fees, unfortunately, are, again, very, very difficult to project out. And right now, we are projecting to be about $3.1 million under on that franchise fees category. One of the big drivers of that is El Paso Electric. So, so far, they're about $1.2 million down compared to where they were in the prior fiscal year. Time Warner, our telecommunications franchise fee built in there continues to decline. But with that, we've incorporated that in the FY2027 budget. Again, we continue to make those auto corrections to bring those more down in line with what we were seeing as far as actual collections. If you go down to the again the very bottom the operating transfers in aside from the bridges You'll see again overall projected 1.89 million. However, this is where we have our use of fund balance plugged in as well So that three point two five million use of fund balance is plugged into the budget And so you'll see again that looks like it's under but it's actually performing better than expected. So again overall Takeaway here is that revenue is performing pretty much right in line with the budget. So I WON'T SPEND A WHOLE LOT OF TIME GOING THROUGH THESE, BUT I DO PROVIDE YOU ALL TWO GRAPHS FOR EACH OF THE DIFFERENT CATEGORIES. SO ON THE LEFT-HAND SIDE YOU'LL SEE COMPARISONS TO THE PRIOR FISCAL YEAR FOR EACH OF THOSE QUARTERS. ON THE RIGHT-HAND SIDE YOU'LL SEE THE PERCENTAGE OF THE BUDGET OR THE ACTUAL COLLECTED. SO FOR PROPERTY TAXES, AGAIN, The red portion, that's the second quarter. It's pretty much the dominant quarter that we have. That's when sales taxes are primarily paid. And the second quarter, you'll see so far again for this current fiscal year, we're up about $22.3 million overall compared to the prior year. Sales taxes, one of the points here that I'll point out is that if you look from FY24 to 25 on that left-hand graph, from FY24 to 25, that's about a $3.6 million increase. So again, positive growth in sales tax is always encouraging. You all know that it's the second largest source of revenue for the general fund. But if you look to FY25 to FY26, that $105.4 million up to $113.3 million, that's a $7.9 million increase. So $7.9 million increase compared to 3.6 last year, more than double what we saw in the prior year. So again, sales tax is performing extremely well so far this fiscal year. And we showed you all this when we did your budget briefings, but you all asked at the last quarterly update To get some more information on really what's driving our our sales tax growth and it's really two things so far for this fiscal year One of them is a not so good thing and the other one is a really good thing So one of them is that retail trade category up at the very top you'll see overall increase from FY 25 to FY 26 of about 2.4 million and However, FY25 includes a negative adjustment amount from a company that was paying sales taxes to the city of El Paso that should not have been paid to the city of El Paso. So the state does audits, not only on El Paso, but all throughout the state. And essentially, this company was remitting sales tax that did not belong to the city. And so when they did this audit, it gets remitted back to the company, but then gets remitted back to where it belongs. So it was a negative adjustment in that fiscal year. So it makes FY26 look a little bit better than it really was, or than it really is so far this current fiscal year. But we still have positive growth in that retail trade category. The other one that's really helping this current fiscal year is the utility category. So it's eight or nine rows down. You'll see we're at $2 million last year. And so far for this fiscal year, we're at $4.5 million. It's about a $2.5 million increase in that particular category in utilities. That's all El Paso Electric. So El Paso Electric is significantly investing in all of the infrastructure and the substations that they're investing. So all of that investment that they're making has a direct correlation on the sales tax revenue that we're collecting here in the city of El Paso. And I should have pointed out that this data here is through March. So remember we had that two-month lag of real-time information On the actual collection amount, this detailed information is actually a three-month lag, and so we only have through March so far with this detailed information. Franchise fees here, again, you'll see pretty much flat on the left-hand side there. We're at $40.1 million compared to $38.8. So we've collected a little bit more compared to the prior fiscal year, but because we had assumed a little bit more on the collections on the franchise fee revenue categories, Right now we're projecting again for them to come in a little bit under budget, but I will say that we will not see the impact of the rate increases that took effect for El Paso Electric and El Paso Water until we get our next quarterly payment. And so these franchise payments that you'll see here are reflecting only through March. so these are paid quarterly so that people may in june uh... quarterly payment that we get forty five days at the end of the quarter so we don't get that until middle of august so revenue projections particularly for sales tax and franchise fee very very important categories but very very difficult to project out because it's not just the twelve months in the next fiscal year it's really the remaining five months that we have in the current fiscal year plus the 12 months in the coming fiscal year as well. But I will say again, and you all saw that during the presentation we did back at the end of May, we did bring those franchise fee revenues down to be more in line with what we're seeing so far in this fiscal year. The remaining categories pretty flat not a whole lot of growth in our charges for services, which is primarily our ambulance service revenue Fines and forfeitures again a pretty flat revenue source as well about 5.4 million this year compared to 5.6 last year Licenses and permits again. It's kind of fluctuated throughout this year so far. We've seen some positive in the last couple of months get us back to a little bit above where we were in the prior fiscal year and Rents another has a decrease compared to the prior year. You'll see a seven point two million this year compared to eight point three million last year You all may remember when we adopted the budget for FY 26. So back last year We did a decrease and what we transfer from our capital improvement department for project manager costs related to capital projects So we charge their time to capital projects, and we transfer that to the general fund as a source of revenue. We did some changes on how we do that calculation, and so that had an impact on the budget, and you'll see that reflected here in the actual revenues. The bridge transfer, as I mentioned, as well. And so again, you'll see that comparison, FY24 to 25, only about a $600,000 increase. But from FY25 to 26, you'll see that $2.1 million increase. So again, international bridges continues to perform really well in the collections that we're receiving through pedestrians and our vehicle crossings. On the expenditure side, overall you'll see again similar format. You'll see overall expenditures through end of May, 415.5 million compared to the prior year at 395.3. And so again, overall expenditures, we've spent about 66.4%, which is pretty much right in line with where we should be through the third quarter. And FY 2025, we're at 65.2%. We look to the expenditures by category on the actual projections one of the things I'll point out here is one I mentioned it right now on the revenue side, but And you're gonna hear me say this a couple of times particularly not only in this presentation, but in the next one as well Is that the budget office puts a lot of work into developing the budget working very very closely with city departments But we're never going to be a hundred percent accurate. I Never. We'd be 100% accurate. But what we do is we use all of the data that we have. We use all of the historical information we have. We use upcoming contracts that are expiring. We put together all the position data. We put together essentially an estimate, a forecast when we develop the budget. So you'll see personal services right now, we're actually projected to be slightly over budget on personal services. That's the salaries, benefits, and wages for our city employees. And so one of the big drivers of that is the fire department. So the fire department right now is projected to be over budget. But we utilize savings or projected savings in these other categories to help offset that. And so it's really managing the entire budget Yes, closely monitoring each of the different categories and the accounts and working very closely with the departments, but it really is about managing the entire budget as a whole. So as I mentioned, if you look to the bottom line there, you'll see again, total expenditures right now, we are projected when we finish this fiscal year to be under budget by $643,394. So still projected to be overall under budget with all of these different categories. So again, similar format that I showed you all on the revenue side. So personal services here, again, you'll see this is the big driver every year, no surprise here. You'll see from FY25 to FY2026, about a $15 million increase. You'll remember when I started, I said we had a $20 million increase overall compared to last year. This is 15 million out of that 20 million. So again, we know that our workforce is the largest cost driver that we have. The other big one, contractual services, which you all have heard us talk about this year and last year. We've seen some IT contracts with significant increases. That public safety P25 radio maintenance contract for next year is impacting us. We had similar increases for some other contracts in our IT department. So you'll see this particular category up from 38.3 up to 41.9 million. Materials and supplies, about a $600,000 increase. And so one of the big things in this particular category is fuel. We've seen about a $340,000 increase so far in the price of fuel. Fortunately, we've seen that price come down a little bit in the last couple of weeks. But fuel prices have been a little bit higher this year than they were compared to last year. On operating expenditures, again, this one right now is at about an $800,000 increase compared to the prior year. And this category is everything from property insurance, liability insurance, utilities, communications, and you'll see, again, about an $800,000 increase compared to the prior year. Our transfers out, so this is the amount that we transfer out for animal services and the pay go. Pretty flat, I will say though that we do hold on to actually doing those transfers, moving the cash out of the general fund. Reverend Canales asked a lot of the questions about the transfers. So we transfer out of the general fund into our internal capital project fund for the vehicles and the street projects and all of those other projects went into the pay go. The reason why we do that is because we can generate investment interest for the general fund by holding on to that cash until the very end of the fiscal year. So at the end of the fiscal year, we'll do all of those transfers to actually move the cash into those funds, but it helps with the investment interest revenue for the general fund. So again, as I started and as I will finish this presentation again, projected overall surplus, so again, surplus of about 185,000 projected when we finish this fiscal year. Again, very encouraging that we'll be able to preserve our fund balance at the end of this fiscal year. Again, no actions being requested. We will continue to monitor over the next couple of months until we close out this fiscal year. Again, nothing dramatic that really stood out as far as needing to make adjustments to the FY2027 budget. So again, as I mentioned, the key takeaways here is, again, a projected surplus for FY2026.

Did you guys see that? He looks at his watch. OK. Representative Chavez.

Thank you Mayor. Thank you Robert.

Wow.

I think your presentations are one of the ones I enjoy the most. I love it. I always say the numbers don't lie. And I really appreciate the fact that you're always keeping us on track and accountable. I think that's really important. And transparent, right? Making sure that the public also knows what we know so that we're all on the same page. So going back to slide number nine, when you talk about sales tax, I wanted to give you an update because last time you presented this, or we were talking about this subject, I asked about the Amazon distribution center in my district that was opening, and I asked if the sales tax revenue generated from that distribution center, if it would stay in El Paso. And I believe you told me that it would stay in El Paso so long as the end user was in El Paso.

Correct.

So I went to the ribbon cutting, and I asked. who they will be distributing to. And right now it's 100 percent El Paso. In the future and I'm not sure at what point in the future they might consider distributing to customers in New Mexico. But I'm very happy to know that at least in regards to that business in my district we will be increasing our sales tax revenue. So update on that. Yeah, it's important. I'm asking because this is, I'm super hyper-focused on getting our sales taxes up.

And it is Amazon Prime Days, so.

It is Prime Day today. Everybody in District 1.

I had a list and I forgot.

Order. You know, the higher ups were there from Amazon. They had flown in from who knows where. And I got into this whole conversation about our sales tax revenue. And they were like, yes, it's El Paso. So I was very excited about that. And I hadn't had the opportunity to share it with you. So it's exciting. Slide, okay, yes. The last one that you talked about, our fund balance. Could you just quickly go over where we started and where we are and where we're projected to be?

Bless you.

Bless you.

So the amount you'll see here, the $154.27 million up at the top starting fund balance, that's total. So that's restricted and unrestricted. So of that, because it's broken down into different categories. So we started the fiscal year with $28.9 million in our restricted. So that's the cash reserve. We're required to have 5% of the prior year budget in that restricted amount. In the committed, we had $96.9 million assigned $3.25, which is the use of fund balance, and then the unassigned $25.3. So the 154.3 million we started with, 28.9 million of that was restricted. And so the rest is essentially unrestricted. So as you may recall, one of the things that we talked about during the budget process is That restricted requirement that we maintain in the restricted fund balance in our cash reserves, that 5% of the prior year budget. So we know our budget's been going up every year. So that means that requirement amount goes up every year. So at the end of the fiscal year right now, we're expecting about $1.1 million to come from the unrestricted and move into the restricted category. So again, because we have to fulfill that 5% requirement. However, the number of days will go down slightly, but not as much as we were originally with that 3.25 originally anticipating. So again, overall maintaining the overall fund balance at the 154 million. The unrestricted will come down slightly, but again, pretty close to what it is when we started this fiscal year.

OK so in terms of our rainy day fund how many days do we have.

We started the year with 73 and right now we're expected to finish at 70 maybe a little bit higher but 70 days. So again that's accounting for because the unrestricted is going to go down the restricted goes up and also because the budget grows and so that amount is going to continue to increase every year. So representative Oswego made a really good point about that. So we'll look at that potential charter change in the future looking at how what we want to include as far as that calculation or that requirement.

And once we adopt the budget in August will we start off with those 70 days as well or will there be any adjustments needed to be made.

It will all depend on how we actually finish the fiscal year. So what you're seeing here is projections. We don't anticipate the numbers being dramatically different, but we'll come back probably in early December and show you all where we actually finish the fiscal year. So we'll know at that point in time where we actually finish. Again, I don't anticipate too much fluctuation, so we're probably gonna be somewhere close to what you're seeing here today.

Okay, thank you, Robert, I appreciate it.

Any additional questions for Robert? You sure? He has plenty of time.

Thank you, Mayor.

Good job. Thank you, Mayor. We got a couple questions there. Representative Fierro?

No, not really.

Anyone else? Robert, good presentation. Thank you.

We have one more.

One more, yep.

And for the record, Representatives Acevedo, Rocha, Trejo, and Fierro join the meeting at 734, 737, 732, and 734, respectively. Can we contest that? Would you like me to read item two?

Please.

This is a presentation, discussion, and action on the second round of FY2026-2027 budget workshops.

Robert, you back up? Yes, sir.

So before I start one not only thinking everybody that's here all the departments but the I.T. people in the back that are doing everything behind the scenes just want to say thank you because nobody really sees and appreciates what they do. I.T.

used to be one of my departments no longer but I like how they cut to the room so everybody could they could see everybody apply.

Okay, so this presentation is going to cover several items. And so I'll make sure to go through each of them pretty thoroughly because there's key information from each of the different sections we're going to cover. So one, we'll do a recap on what we discussed on May 27th and 28th. The second part of the presentation will give you a little bit of feedback of what we heard from the community meetings that Ms. Mack and I did, as well as through the budget simulator. And then we will go through what the council's motion was when we ended on May 28th. And then we will finish with a request that we received to go through the mayor and council's budget. And then we'll talk about next steps of what's still to come forward. One of the things that's not included in this presentation, we pushed to get it done. Unfortunately, we weren't able to get it done, so we'll have to bring that back at a later date, was the fee study that we're working on. Unfortunately, that is not finished or finalized yet. We don't have a date yet. We're pushing to try to get that for the July 6th meeting. So that is still something that we're working on. So this Mac's been pushing us to get that done I believe parks is almost done. The planning inspection department right now is still kind of finalizing their their reports And so that is something that we still owe you all So we'll bring that back and as well we will also bring an update from each of the department that do have changes to their fees already built into the budget and so we've got we've provided you all the red line fee schedule as well as some narrative on the slides on what was changing for each of those departments, but Each of the departments will present that as well at a future council date. So timeline, you all have seen this a few times. The next key dates after this is July 25th. Again, we'll get our certified values. We will come and present that information to you all on August the 3rd, as well as do an introduction of the tax rate on that day as well. That's an important day, that August 3rd, because that sets forth the requirement for different publications we're required to do for public hearings on the budget and the tax rate. Then we're required again to do that public hearing on August 17th on the tax rate and then the budget will be adopted on the 18th of August just to recap on what you all heard on May 27th and I won't spend a whole lot of time going through these because you all have heard that multiple times but again I think it's important to touch on some of the key points so the community meetings although not I mean some of the attendances were a little bit low but for the most part it's a really good opportunity anytime we can go out and really present and show what the challenges are in front of the city it really does serve an excellent purpose and I think really really good feedback this year from the people that did attend and so again really focusing on the existing programs not looking to add anything new no new programs not expanding anything it's really focusing on what we have the long-term financial sustainability which we know the situation that a lot of other entities are facing right now just showed you all where we're expected to finish our fiscal year and again keeping that long-term financial sustainability in mind because we don't know what Next year is gonna bring let alone next month or next week. And so again, it's important that we position ourselves as best we can You all saw this information presented to you all as well, so all of the different departments presented. You got to hear their programs and how they aligned to the strategic plan that you all adopted back in February. What we're facing, so again, this was presented back at the overview presentation we did on May 27th. Again, so it's the double whammy. It's the loss of revenue from property tax exemptions and taking out that one-time revenue through the fund balance. Use as well as increasing costs for a variety of things whether it's fixed costs or different contractual obligations. So We have the election in November, which is not free That's 1.5 million in the budget for next year that we did not have in the current year I talked a little bit about that IT contract for the public safety radio system that increases over three million dollars we were able to fortunately use some RP dollars to help offset some of that impact and The debt service. So we did have, actually did issue debt back on June 4th, I believe. That's $70 million. We also did the refunding. I'll talk about the refunding here in just a minute, but we did issue $70 million for the community progress projects, which were approved by the voters back in 2022. So that does have an impact on the tax rate for FY2027. We ended up shifting almost 37 positions from police and fire and to the general fund that was coming from Grant funding and other restricted funding that was used in FY 26 We have the wage increases built in our public safety bar civilians as well We talked about animal services and you heard during public comment this morning a comment about animal services we do have that 1.5 million dollar increase from the general fund plugged in and Then utilities as well. So you'll see these sort of fixed costs and contractual increases that we have built into the budget for next year, which are really Impacting the impact or having an impact on the tax rate So what have we done? We have these challenges of the impact on the available revenue as well as the increase in these different costs So we talked a lot about what we did of looking at our vacancies essentially unfunding or deleting three-quarters of the available vacant positions and The most important thing, which again, we just talked about it on the last item, was the use of fund balance. So the budget for FY 2027 does not include any use of fund balance. And so again, that's something we've been pushing for of using recurring revenues to fund ongoing cost and not having to rely upon fund balance to balance the budget. The debt refunding. So when I presented to you all back in April, that refunding opportunity that we had showed you all we're expecting net present value savings of about $13 million. When we priced those bonds, it came in better than we expected. So we actually ended up saving about $15.7 million instead of that $13 million. But with that though, it's important to note you'll see the my parentheses there total growth savings of 17 million That savings doesn't at all reflect in one year. And so we structure it in multiple years So we structured about 1.9 million in FY 2027. So we're able to keep our debt service tax rate flat and And then a majority of that savings we structured into FY2028 and 2029. So that, again, long-term sort of outlook. Because we do have additional debt issuances planned for FY2028 and 2029, we still have over $400 million of bonds to issue over the next few years for public safety and for community progress. So by structuring it that way, it helps minimize the impact on the debt service rate for the next three years. Again, I mentioned about using the federal funding. And then the budget office, so I think people were surprised when we did these community meetings and we explained to them what the budget office does and how we're doing the budget development process. They really do work very closely with each of the departments. They're reviewing not only during the budget process time, but all throughout the year. They're reviewing budgets to actuals and looking at how departments are spending. Are they spending more than they expected? Are they spending less? And can we make some reallocations as we move into the next fiscal year? So a lot of that work has already happened. And we'll talk about the council motion on May 28th here in a minute. But a lot of that work takes place all throughout the year, not just during the budget process. One of the things that we did as well, again, working very closely with Chupacias, was we adjusted down the police cadets. And so we know if we're shooting for 40, we're lucky to get 30. And so we don't want to be overly optimistic and say that we're going to get more than we expect. But we're still on target and still following what we showed you all for next year to have a net increase of 23. And so I believe we're still projecting about 100 graduates in FY 2027. Again the safer and the cops grant again for both police and fire again That's going to help offset some of the impact those are again three-year grants. And so that does help over the next three years The I talked a little bit about the fees Again, we'll bring that presentation back at a future council meeting One of the things we didn't talk a whole lot about but that we did do with the budget for FY 2027 is we reduced our salary reserve so we do have amount in addition to the contingency that we budget and so that salary reserve can cover a variety of things but particularly what it covers is sick leave payout so we have employees who leave all throughout the year so when employees leave the city they're built up sick leave they can cash out and they actually get paid out for their sick leave so on average in the last couple of years on average it's about seven hundred and ninety one thousand dollars to the general fund that we're paying on vacation payout We never know who's going to leave. We never know when they're going to leave. We don't know how much they're going to get paid out. But we do know that that occurs. And so in the FY26 budget, we budgeted $958,000. We lowered that for next year down to $500,000. So that doesn't even fully cover, again, what we've seen in the last couple of years. But we did, again, in order to balance the budget, in order to try to identify as much savings as we can, we did lower that salary reserve for next year. We talked about this again overall. And this was, again, a slide that we used. And so we explained during these community meetings that the $1.4 billion amount that people hear is not all unrestricted. That 53% of that amount, or $750 million, is actually restricted for specific purposes. And it's about 47% of that $655 million for next year that is in that general fund category where we have the most flexibility to be able to allocate those dollars for city services. So having that breakdown was very helpful and really just an educational opportunity for the public that attended those meetings. We showed this slide as well. And so we showed the breakdown on the left hand side. This is very eye opening as well. And so when you hear us talk about property taxes on the right hand side, $320 million does not even fully cover our two largest city departments, police and fire, which comes in at 371 million. A lot of people weren't aware of that. And so when they saw this, you're going to see when I get to the budget simulator, people were listening. People were paying attention during these community meetings that we did. We talked about, again, I mentioned this already, our largest cost drivers, our workforce, about 71%, again. And so those costs will continue to go up, not only through our collective writing agreements with police and fire, but also through, again, the push to get to that living wage. And so we do have that minimum wage increase built in for next year, or at least a 2.5% increase for our civilian employees. provided this we didn't show going back this far during that may 27th presentation but i provided it here because somebody asked or made a comment about it during one of the meetings during the community meetings and so looking at where we were at the peak going back to 2022 the city was almost at 91 cents on the tax rate and with what's built in for next year we're just going to be just a little bit over 78 cents so still about a 12 cent reduction from where we were The peak again some of that's due to the increase in the property values But again overall still about 12 cents lower than where we were at the peak This slide we spent a lot of time again during those community meetings explaining the impact on what it's being recommended And so this takes into account From this slide it takes into account the change in the tax rate and the change in the average value home And so with what's recommended, again, with the tax rate and with that change in the average value home, those that have the homestead exemption, it's about $105 increase, or on a monthly average, about $8.78. So then we did also include the two lines below, the over 65 and disabled and the disabled veteran exemptions, because those provide additional tax relief or lowers the tax burden for these particular groups. For the over 65 and disabled exemptions, which is 41% of our total homesteads, it's almost 58,000 homes that have that exemption. It's a $45,000 reduction on the value of your home, and then that's what you pay taxes on. So their impact would be just under $95 or $7.91. And then on the disabled veteran, again, their exemption is based on their disability rank, but on average, their overall annual impact is only $7.81 or $0.65 a month, which is just under 28,000 homes that have that disabled veteran exemption. So 28,000 homes have that disabled veteran, which is about 20% of our total homesteads. So we talked a lot about this, the impact from the business personal property exemption. Again, this was approved by the voters back in November. That increased the exemption amount from $2,500 up to $125,000. Resulted in a loss of property tax revenue of about $7.2 million. We talked about this one. So this one is really eye-opening when you look at it this way. So this is the state program. So the state, I mentioned during that meeting in May that the state has a program called the Local Governments Disproportionately Impacted by Disabled Veterans Exemption. Problem is is that the state only allocates currently 9.5 million for the entire state to this program. And so there's a process. You submit your reimbursement. You'll see we've requested over the last three years it's increased from 6.7 up to 11.5 this past March. I want to point out though that that requested amount is not the full impact, and this is only for 100% disabled veterans, 100% disabled veterans. That is not the full impact of our 100% disabled veterans. The full impact for FY2026 is over $17 million, but the state and their formula and the way the calculation is done is you take that 17 million and you subtract 1% of your general fund amount for that fiscal year, and then that's the amount that you get to submit for reimbursement. We're gonna do some research to figure out why they do that reduction of the 1% doesn't make any sense but we have a very smart legislative team that we're working with to try to get state to allocate more dollars towards this program because as you can see a Requested amount is going up, but the amount we're getting from the state is going down So it has an impact on the available property tax revenue that we have to be able to fund city services and so This is something, again, going back to that long-term financial sustainability, is that we have, I mentioned, 28,000 total homesteads that have the disabled veteran exemption. We have about 12,000 that are in the 70% to 100%, so they're very close to moving into that fully disabled, which means they pay no property taxes. And so as we're looking to the future of the available revenue that we have for property taxes, this is something that we're closely monitoring. And we're really going to make a, we did it the last session, but we'll see what we can do to be even more aggressive about getting the state to allocate more dollars towards this particular program. So this slide shows you the impact from just three items. So I showed you that $105 impact amount. If you take the impact of the loss from the business personal property tax exemption, Just the additional the additional increase from the disabled veteran exemption so not the full amount to change from last year to this year and And then you add in the impact from issuing that debt amount. It's $65 out of that $105. So over 60% of it is from these three items alone. So again, that's how I started. It's a loss of revenue, and then it's increasing cost. And so these particular items you'll see, again, that business person property, disabled veterans, that's $11 million less revenue. And then the impact from the debt service was about $5 million in the budget for next year. So the next section is the feedback we've received. And so again, just talking a little bit about again, our budget process changes this year, which we did quite a few. And so not only presenting the information sooner, which we're at June 23rd. And so typically we wouldn't have even started this discussion until two weeks from now. So we've already had quite a bit of discussion. We've already done eight community meetings So we've done a lot in the last several weeks well ahead of where we've done in the past We did it again those eight community meetings with smack and myself from June 1st to June 11th and then we did launch that budget simulator tool, which Was a learning experience for everybody So the key themes by pillars, from what we heard, really no surprises. And what we will do is, Sasha Andronovsky, he has sent you all a link to a SharePoint site. We'll add a summary of everything that they, because they took notes during each of those meetings. And they did a really good job of summarizing all the feedback that we got from those meetings. So we'll supply or give that to you all As well as a budget similar as well the comments that we got from the budget simulator And we'll send an email out with the link to that again that SharePoint again So you have access to go through and read all of that But it was really more of an educational opportunity for the public to really just ask questions of the city manager or myself so a lot of questions about economic incentives and how that works a lot of discussion about public safety and what are we doing to make sure we're keeping our police officers and firefighters and A lot of discussion about streets and what we're doing with the available funding for street projects. Quite of life which we're going to talk a little bit about on the on the budget simulator here in just a minute But the quality of life again People pointed to specific amenities in their particular area animal services was a big topic of discussion Obviously property taxes and affordability was probably at the top of the list that came up at just about every meeting and then a lot of it was What is the city doing to collect the money that's owed to them? I think I heard that at every meeting I did I'm sure miss Mac probably did as well and So it was a good opportunity, and we had a little bit of discussion with the hotel occupancy tax item, and so I explained that process and what we're doing, and the people started shaking their head, okay, now it makes sense, I understand. So it was, again, a good opportunity to educate during these meetings. So moving into the budget simulator tool. So as I mentioned, it was a good learning experience. So this is the first year we've used this type of tool and we're going to have our after action meeting here very, very soon because there's obviously things that we've learned along the way and what we can do better for next year. We did not get I wouldn't say low participation, but the actual submission was very, very low. We only received 74 submissions. So in order to submit, you had to finish the job. You had to balance the budget. So there was only 74 submissions that accomplished that. There was about 1,400 total page views. So about 1,400 people went on the system and started using it, but didn't actually finish the exercise. So you see a breakdown here by district and then by age ranks, by demographic. On this slide, it's a little hard to see on the slide, but key takeaway on this slide, I was actually very, very surprised. So as I mentioned, only about 74 submissions. There were 24 submissions on property taxes, so 24 adjustments related to property taxes. And you may or may not be very surprised that of those 24 adjustments that people made to property taxes, 15 out of the 24 actually increased property taxes. and only nine decreased property taxes. So again, this isn't a scientific survey. And there's a lot of flaws with it. We learned that, but particularly with the dollar amount of adjustments that people were making. But if you just look at the number of adjustments that were made to these categories, there is some information that you can take away from not only the revenues, but on the expenditure side as well, which I'll show here in just a minute. But that property tax item was very surprising that, again, 15 out of the 24 actually increased property taxes. Then on the fees because again We can assume it's more than likely the people who attended the community meetings are the ones that participated and did their submissions that there were 19 adjustments to increase the permitting fees and 14 adjustments to increase the park fees so again people were listening that that was the study that we're doing on the fees for Next year's budget on the expenditure side. I Again, this is comparing what they started with. So that's the blue portion. And the orange portion is taking into account the adjustments that were made on the dollar amounts. So the dollar amounts, and this is one of the things that we learned, it's hard to take those adjustments and put some weight behind it because we had some submissions who wanted to decrease. Sorry, chief. Wanted to decrease the police department by 154 men. Basically wanted to zero fund the police department.

Well.

So that skews, it skews a lot of the data. And so what we've been looking at is the number of adjustments. And so not clicks because it takes, if you want to the system and you have to click a lot of times to either add or decrease any particular category, but looking at the total number of adjustments. And so the takeaways from this was police was by far and away on the adjustment side, the one that most people wanted to decrease was the police department. Unfortunately even if we wanted to we can't because the state does not allow you to defund the police. You can't have a lower police department general fund budget from one year to the next. So we would never do that because we love police and fire. And so that was one of the things that we learned. And so we need to figure out a way to put some of those. We did a lot of controls on the app, but there are some things that we need to work on in the future. So that's one. The other thing that you may be surprised, and so it's, again, a little hard to see, but as you go through this, one of the things that we saw was several of these categories, people actually wanted to put more dollars towards. And so animal services was one of them. Community development was one of them. Parks was one of them. Park facilities was one of them, where they actually identified that they wanted, based on the number of adjustments, right? And so there was more positive adjustments than there were negatives. So that's how I'm taking away that information. And so it really does speak to Balancing the budget is very difficult because it comes out. What is it that you want to decrease and so You know we joked during the community means you get to be city manager You get to play City Council and figure out what you're gonna do to balance the budget Unfortunately, some people I don't think took it very seriously and just you know picked and chose what they what they decreased by amounts that don't make a whole lot of sense, but I mean if we take away As I mentioned, some of those adjustments, there was some good information that we were able to take away from this. And we will share, as I mentioned, there were some comments, I believe there was about 40 comments or so that people did leave open-ended comments. We'll compile that and we'll provide that to you as well. Onto the next section. So the council's motion for a May 28th SS to conduct this review. Again, basically go back and do a double check. Is there any additional savings that we can take from these three particular categories? So looking at our outside contracts, professional services and materials and supplies. Again, I talked a little bit about this already. And so it was a good exercise. The budget office did do that, worked with all of the departments. But a lot of that work had already been done, quite frankly. And so looking at when we developed the budget, they did a lot of that review. Doing the line-by-line social did a fantastic job this year. I mean, he actually had departments submit all of the contracts, everything that's in those accounts that makes up those amounts. And so we've got a lot of detailed information that we've not had easily accessible in the past. And so we can review. One of the challenging things with this review is that we have unknown things that are going to happen next year. And so really trying to focus on how we're going to present this is not easy. It's challenging because, as I mentioned, $655 million is the total budget. But you have thousands of accounts and thousands of things that are going to occur that you can't account for or you can't expect or things you can expect and you may be wrong. So for example, contracts. We have contracts that expire all the time. And so I'll give you an example. Library has a janitorial contract that's about to get awarded. It's a new contract. When they built the budget, they built in a little bit of an increase based on what they thought was going to happen. That may or may not be enough to cover what the actual award amount is going to be in next fiscal year. So then should departments be penalized because they didn't add enough into the budget? So those type of things we need to try to account for. So that's one situation. The police and fire departments, I'm never gonna tell police chief or fire chief, no, you can't have an academy, or no, you can't. I'm sorry, Chief Collins, you're projected to be able to budget. I'm gonna put a stop to what you're doing. No, we find a way to work with them. We utilize other savings within their department, or we know that we're gonna have additional savings in another department to help offset. So it really is about managing the complexity of the entire budget and not just focusing on one account. So that being said, also in these three particular categories, again, we did already identify, these are just the accounts that we actually have a decrease in, and so there were some other reductions that we incorporated as well, but just in the accounts that have reductions, about 337,000, almost 338,000 that was already built in to these particular categories as far as reductions, so from FY26 to FY27. And again, the departments were fantastic. I mean, they were more than willing to, actually agree with the budget office when the budget office say listen we're looking at your budget actuals comparison and we think we can lower this account they worked very very well with the budget office and were able to or willing to make those adjustments so the next couple of slides again i won't go into all of this but again most of the departments are here if you've got particular questions but pretty much every department does not only during the budget process but throughout the year whether they're looking at new contracts or how they operate they're always looking to see how they can do more with less The IT department's been looking at how they utilize these multi-year negotiations to basically lock in those prices The type of alternatives that are available as far as technology and so they do that all throughout the year and the police chief meets with all of his regional commands to identify their needs in the coming fiscal year and The fire department, heavy use of technology and how they use drones, looking at how they do in-house maintenance to really help offset some of these cost increases. The grants is a big piece again of how they're leveraging federal or state funding to help offset some of their impacts. streets and maintenance department how they utilize those co-ops and then bulk purchases and really trying to standardize the type of equipment or vehicles that we're buying If you can standardize that you can help hopefully cut down on some of those costs and not have 20 different types of vehicles where you're having to buy 20 different types of parts so really focusing on that and then Again, really focusing on make sure that we've got the staff to be able to take care of the vehicles and equipment that we currently have So breaking down those three categories that you all asked us to look at, again, materials and supplies, professional services, and outside contracts, equates to about $78.7 million, 12%, again, of the overall FY27 budget. On the right-hand side, that's basically a majority of it. And so as you look down that list, the biggest portion of that is going to be in the IT contracts. It's almost $20 million out of the $78.7 million total. And again, that's the 167 different contracts that are listed on that Schedule E on the IT contracts that we have for next year. And then you have other things. The Central Appraisal District. Next year we have $7.3 million budgeted for what the city has to pay the Central Appraisal District for the appraisal services that they provide the city. That's a fixed cost. We have to pay the Appraisal District. Security janitorial you'll see that that's a large amount seven point one million dollars total for those two I Will say going back to what I just said about things change and we don't always know what's going to happen. I Don't know they may I don't think that they factored in though because we won't know what the amounts are going to be we had the items on the regular agenda this morning to terminate that contract for the armored car services that armored car services rolls up into that security contracts account and We have the temporary contract in place, so we know what that cost is, but we're gonna re-bid that and we're gonna get a new contract. We don't know what that new contract cost is going to come in at. So those departments that had those contracts terminated this morning may face a situation where we're going to have to hopefully identify some savings in other accounts. And so, as I mentioned, we're not 100% accurate, but we utilize all of the information that we have available to develop the budget. You can see the list here again. I mentioned the election. A lot of it you're going to see on these next couple of slides here. Just trying to break it down and really just to provide you all some more content and the public of really what's in these categories and what's in these different accounts. So again, this is the total general fund budget. You'll see the pink portion there, that's three categories at 78 million. And again, really just to highlight that a majority of the budget, that 71% is in that top line in the salaries and benefits. But as you look to these three categories, again, here's the breakout. So the largest portions in outside contracts, followed by materials and supplies and professional services. And so what we provided you all was a breakdown by department. And then we're going to go through and kind of show you some examples of what's in each of these categories. So as I mentioned, if you take IT, police, and fire, that's over 50% of this total amount that we reviewed. Over 50%, just in those three departments. And so IT technology is an area that we've had a lot of discussions on how they do their reviews. The IT department does, they're reviewing the number of licenses to try to reduce where we can. Police and fire, a lot of that we'll cover here in just a minute, but a lot of that is uniforms and the healthcare provider services, their background checks, drug screening, all of those different things. Non-departmental, the majority of that is appraisal services that I mentioned. And again, we're gonna go through these here in just a minute. But professional services, again, a lot of this is, again, it's exactly that. It's professional services. Majority of this particular category is gonna be for that appraisal services. That management consulting and health care related expenses. So what's that management health care? I'll show you the management consult. I'll show you in just a minute This is a breakdown by department because we also wanted to show you Again a reminder on the variances. So what's driving the increase for next year? So that non-departmental that 234,000 that's the increase in the appraisal district amount. We have to pay next year on the fire department You'll see that $282,000 increase there. So overall increase of $632,000. And these are some of those major account types. So out of that 13.6 million in this category, 7.3 is just for appraisal services. So more than half of this category. That management consulting services account, 2.6 million. 2.5 of that is the city's portion for the new bay operating cost. That's a contractual agreement that we have with the community foundation. That's the city's portion of the operating cost. Health care provider services is $2.3 million out of this category. And you'll see, again, a lot of that is for public safety departments for those pre-employment and annual physicals and drug screenings. Offsite contracts, again, this is about 60% of the total amount. And again, the largest expenditure out of this category is going to be in IT. You'll see almost $20 million out of the $48 million in this category, and they had the largest increase of that $2.3 million. And again, you'll see the largest increase in police and streets and maintenance, a decrease in parks and recreation. Thank you, Pablo. City clerk, $1.5 million increase for the election, and then all of the other city departments, about $675,000. So out of that $6.2 million increase, again, a large majority of that's in those IT contracts and the election for this November. Provide you some more information on on what's in these categories or what is in this category? Again 20 million roughly for those IT contracts Janitorial security contracts is in this category over 7 million our billing and collection contracts with ambulance transport billing and our property tax delinquent collections over 3 million and then public assets maintenance, that's a lot of street contracts that they have for Basically everything that they do on a daily basis with this lane striping Wall maintenance which you all know through they'll see our request you run into calls every day where something needs to be fixed whether it's a wall a Knockdown streetlight and so they utilize this account to help fund those purchases So this outside contracts account, a little bit more information. Again, a lot of it is police department contracts. So they do have a contract for prisoner transport services. We talked about the Emergency Health Network contract that they have as part of the CIT. That $1.2 million is just one of the expenditures out of this category because IT has contractual costs in multiple categories in this review. The materials and supplies, again, is only about 20% of the total review that we did. Again, an increase of about $800,000. And you see, again, police and fire have an increase there of $482,000. Library, we increased the library allocation for next year by $100,000 for more publications and books for their accreditation. So again, overall, about $800,000 increase from the prior year. And you can see examples of what's included in these categories. So a lot of land maintenance supplies, fire and police, clinical type supplies, uniforms and apparel for most of our public safety positions, $1.7 million for library books and publications, Then finally wanted to show you all because I started with the third quarter presentation of showing you the projection so this shows you the last full fiscal year or current fiscal year in the next year, so we budgeted and FY 2026 71.1 million in these categories and right now we're projecting to come in at sixty nine point eight so you could say about ninety eight percent roughly is going to be spent and So we talk a lot about when we do revenue projections, we tend to want to be not too conservative, but we also don't want to be too optimistic. We kind of want to be right in the middle. This is the position I'd rather be in as opposed to not having enough to be able to do the services that we need to do and being over budget. So having a little bit of cushion to be able to do those things that happen throughout the year that we may not anticipate to be able to absorb contractual increases that may occur throughout the year provides us a little bit of flexibility with this coming fiscal year. So additionally for the coming fiscal year as well. So again, I know a lot of the emphasis has been on what are we doing, right? How are we trying to stay ahead? How are we trying to manage all of the challenges that are coming our way? You all approved us doing that procurement assessment, which is underway. We'll do that. We're also going to utilize our consultant that we utilize. We have a healthcare consultant to look at our benefits in healthcare. We did have some discussion about that this year, but we didn't feel that the time was right. We want to make sure that if we are going to do changes for employee benefits or incentives or anything to that, that we have a full discussion with our employees and that we don't just bring it on them at the last minute. Talked a little bit about the state legislative session. This is just one example There's a couple of other things that we're working on as well the project finance zone was an item that you all approved as part of the legislative agenda and a few other things and then always looking at how we can identify new revenues, so we've Terminated multiple tax increment reinvestment zones and transportation reinvestment zones over the last several years We'll continue to review those current tax increment finance zones that we have for potential elimination or termination So all that being said, so we did the review. The budget office worked very closely with all the departments. So of the review of going back and looking at budget actuals and what they felt the departments could take, we identified about $243,000 of potential adjustments. That being said, as I mentioned, this doesn't account for a lot of those unknowns. And so while we identified this as potential adjustments, Can't stand here and say that I would definitely positively recommend taking those adjustments because Water may come in higher next year than what parks imagined I mentioned the issue with the library Unfortunately, we just don't know everything so having a little bit of flexibility in the budget as I mentioned we've already done a review as part of the development of the budget we were able to reduce multiple accounts Right really attempted to right-size them to the budget and I know the discussion Because obviously we saw the and we'll go through the council budget requests or adjustments of wanting to look more I guess citywide and more operational efficiency type review Which is a much larger discussion than what this motion was again. This was back on May 20th. So it's been just a short amount of time that we've had to do this review and Additionally, though, when we went back, we were really trying to focus and try to identify additional efficiencies and additional funding. We do have one-time revenue available to us through the American Rescue Plan Act, our ARPA funding. We used some of it last year, but we do still have right now about $430,000 in investment interest that we've already accumulated. Don't anticipate that amount becoming much larger because we've spent pretty much all of our ARPA funding, so we're not generating much investment interest anymore. But we do have available to us that $430,000 that we could allocate to To a project and so one of the things that we heard just a little while ago from the coal The Welcome Center we know is something that we've heard a lot about we have two council adjustments that Refer to the Welcome Center And so I believe that they were working to identify how much this could find the original amount that they had identified I think was 600,000 was the number that was thrown out a while back and The request or the amount that we got from community development as far as the funding needed was about seven hundred and fifty thousand But this four hundred thirty thousand could go a long way not only a few months but then also we already have as was mentioned we've already utilized arpa for this project and so there's some limitations in how we can utilize the arpa funding and so this would tie really nicely into again if that were again the decision of city council we could allocate it towards at least funding i believe that they estimated about seven months that this could fund and then trying to identify how they could come up with the gap going forward to get this the welcome center funded So on the last section here, sorry, second to the last section, we've got this and then the mayor and council budget. So we did get nine council budget adjustments. Again, those were submitted on June 12th and 15th. We're still pending some information on two of them, but we would ask, because there's some of these that are asking for additional funding or for review, some direction so that we know what the council's desire is. So these are the list of the nine and they're a little bit small but you all have had access to these on that monday.com through that link so you all have access to be able to view these. You'll see just the brief description of what these items are. Towards the end of the presentation, after the last couple of slides, actually list out the full description of what these items are. So we have a couple from District 1, a few from District 2, one from District 7, and one from District 8. As I mentioned, some of them we have dollar amounts for. Some of them we do not. So the first one there, the operational and efficiency review, looking at consultants and some different items there. No cost because the item specifically states to do it in-house, but that would require substantial staff time to be able to do that item. The Mary Frances Kiesling item, that master plan, a couple of different amounts that we've talked about, but Yvette and her team are here. If there's a question on that one, I believe that the first phase was about 1.8 million for the first portion of that, but the overall project is much larger. The community center in District 1 is something that we'll speak with Pablo and the team because that may or I'm not sure if it is. I don't know if Matt can mention. It's part of the Parks Master Plan that's underway, so that may be an opportunity. The Northwestern Drive and Northern Pass traffic signal improvements, we're estimating that at $750,000. Community funding for the opportunity, again, the Welcome Center. You'll see that on District 2 and District 8. REQUESTED FOR THE WELCOME CENTER. DISTRICT TWO REQUESTED SOME ADDITIONAL FUNDING FOR STAFFING ON THE COUNCIL BUDGET. AND THEN REPRESENTATIVE LIMONA, DISTRICT SEVEN, LOOKING AT WANTING TO REDUCE THE COUNCIL SALARIES. SO WE'LL HAVE SOME DISCUSSION. WE'LL SEND ANOTHER ITEM IN ADDITION TO THE THINGS I'VE ALREADY MENTIONED. So city attorney has provided us a letter or an opinion Essentially saying that the council cannot take action to reduce your salaries that was set by the voters The voters approved that at the city start city charter Amendment that was approved by the voters. So your actual salaries cannot be reduced. I But you can collect your paycheck and donate if you choose to donate that portion of your salary. Yes, ma'am. And so you'll see there's no dollar amount for that as well. And then some solar streetlights from Memorial Park from District 2 as well, which we listed it at $40,000. And we need to update that because now we believe that it's going to be about $120,000 for those solar lights. So I'll go to the next section so you all can think about this and we can have some discussion about how we want to take action or not take action. But those were the nine council budget adjustments that we did receive. As we look to the mayor and council, you see the overall change in the budget here, increase of about $234,000. I'm just looking for the actual salary changes because I don't remember. So the city representative salaries are going from $63,183 up to $72,800. The mayor's salary is going from $94,774 up to $109,200. And again, that's based on what the voters approved during that review, and so again, City Council cannot take action to reduce that amount. So that's what, again, is what's driving that variance amount is incorporating those salary changes into the budget for next year. Yes, ma'am.

Representative Lamont.

Yes. Sir Robert, you gave us the budget salary increase as a proposed. What percentage is that salary increase?

15.2%.

15.2%. And other years, it's been minus one. It's been 15 point something. It fluctuates.

It's all over the place. And so we know what next year's is going to be. And I think next year's is about a $600 increase, which is much less. And I don't have the percentage in front of me. But it's a much smaller increase that the mayor and council will receive next year. So again, it fluctuates. Yeah, unfortunately, this is just one of the years where, based on that index, it's a 15% increase.

And I'm really concerned because when you were talking about our hourly employees got a 2.5%. That was on page 12. That's where you were stating that, wrote that down. And then we come to this page, page 52, and we're looking at a 15.5%. to 2%. I'm hoping that my colleagues will come to reason and fully understand how outrageous that salary increase and that we would certainly take a much lower scale than that. And then going through the attorney's office, how we can make a return on that fund. But it's criminal that as a city representative or a mayor, we would be looking at a 15.22 increase in our salaries.

You can visit with me. I'll show you how to give it all away.

I agree, Mayor. And I think I've done the vast majority of mine as well. But I think it would be nice if our whole group, as what's good for one is good for all, that this would be a good incentive to give back to our community. And I value that. I saw that when Mayor Leaser did it without fanfare and it was really good for the community and so I do follow that as well. No photo ops.

So that is the end of the presentation. I'll be happy to answer any questions. And so as I mentioned, we posted this for action if the council would like to take action or give some direction. I believe the biggest thing that we would like to have some decision about are these adjustments, because some of these do involve adding additional funds that are not identified. And you'll see the funding source identification was one time revenue, which to me is fund balance.

Representative Canales. Thank you, Mayor.

You teed that one up, Robert. Can we go to slide 48, please? Back two. So another potential source of one-time revenue, that is the $430,000 in investment interest from ARPA. Both District 2 and I requested significantly more than that, close to double that amount. for sustainment of the Welcome Center, which is the kind of single intake facility and triage facility for homelessness. Pardon me, I'm losing my voice. Because that was already an ARPA-funded program, I think it makes a lot of sense to continue the use of that ARPA investment interest to fund that program. Obviously, it doesn't fund it 100%. I think there are opportunities out there potentially for additional either grant funding or other cooperation through partnerships with other local entities who might be able to help us sustain that. Obviously not forever, but at least for a year while we identify other opportunities for taking care of that specific need. Again, $430,000 would not fund the operation to the level that it exists right now, but I think it would help us to sustain for several months while seeking out those other sources. And so I'd move that we use that one time one-time available funding from the American Rescue Plan Act investment interest revenue, the amount of $430,000 to fund at least partial sustainment of the Welcome Center.

There was a motion and a second. I have a question. Okay.

Representative Nino. Thank you, Mayor. Ms. Mack, I don't know if Nicole's still here. I know that she mentioned during the presentation, during the regular meeting, that there was a transition plan when I talked about the Welcome Center. Can we kind of touch a little bit into that to see what that plan might be, if that's okay, if I may get some... And the only reason, I think it's extremely important to fund the Welcome Center. I just wanna ensure that there's opportunities to just ensure that there's other essential services that we could fund as well. If there's already a plan for that or not, I don't know. Additionally, what can ARPA funds be used for? I think I would like to also understand what it could potentially be used for, not just for one specific expenditure, right? So maybe we could get clarification on that.

So this particular source, it is ARPA investment interest. However, the benefit of this is that it's flexible. You can use it basically for anything. There's no restrictions. The ARPA regulations do not apply to the use of the investment interest. So there is flexibility with those funds.

Thank you for that. And if you may, Nicole, just so I could get background on what?

On the transition plan?

Yeah, the transition plan and if there was a plan to continue services or starting August 1st.

August 1st, should we not identify funding, August 1st will be the last day that we will operate the Welcome Center and that's ran by the Opportunity Center. The last day will be August 1st. The plan is that we would notify agencies and the El Paso Helps and all of the collaborative that work together on homelessness initiatives, they'd be notified starting July 1st. that we will be scaling operations down so that August 1st, everyone understands that Welcome Center won't be accepting clients. And so, Just to put that in perspective, think of the Welcome Center as a triage room for you to get a hospital bed. And so what it does is it serves about 50 people per day. 50 people are in there, and they're waiting to get their bed from another shelter. And so that's how it operates. what the transition plan addresses is that we'll just start working with the surrounding agencies that accept those beds. They just, we won't have a hospital triage room for them at the time. They will wait until they get the bed open. Does that make sense? Yeah, that makes perfect sense. And so the El Paso Helps partners will be notified starting July 1st. And then, like I mentioned earlier, the partnerships already exist. Everyone in this collaborative want to work to ensure. The positive part is that if we do have to scale down the operations or shut the welcome center down on August 1st, we have the framework. If we identify funding in the future, we already know how to get things rolling and start this program again. It was born during COVID when people were asked to shelter in a place that they didn't have shelter in. And so this has adapted over time to meet the needs of our community. Now, if we have to scale back, we're prepared to. And then if we find additional funding later, then we have the framework ready to go. We have the playbook.

No, this is great. And I know that we had a conversation about that. I know that when I met with Robert last week or when I saw him, I talked about how we could possibly figure out funding for the Welcome Center. I didn't submit any request specifically because my initial request was to try to find cost savings and identify what is it that we could potentially ensure that we provide other essential services such as. Now, you said that currently the Welcome Center provides services for about 50 people a night? Per day, yes. Per day, okay. Now, in regards of $430,000 of the investment interest with the ARPA, about approximately, do you know how much that would?

That's about seven months. Seven months. But that gives us time to identify. Since this is ARPA, this is... This program was funded by ARPA and the fund account that we had allocated for them is exhausting. The benefit there is that we already have the reporting mechanisms in place. We understand how to issue federal funding and we know how to ensure that it's compliant.

Okay. And then the great thing about the investment interest from ARPA is there's not that deadline of December 31st as well. So we don't have that. That deadline does not apply to that investment interest as well. So flexibility plus you have that extended time as well.

Okay. Now, essentially, we're still going to continue trying to find means of how to get additional funding to essentially extend it or even not have to use that funding in case we get some sort of grant or some sort of funding that gives it that opportunity to further expand the program.

Certainly, but the goal would be to find additional grant funding separate and aside from the general fund and continue the Welcome Center, whether it's through this initiative, through this location, or in a future sense.

Okay. Now, Robert, a quick question for you. In regards of the additional 243,000 of operating efficiencies, currently is that savings for essentially what council wishes to use it for? Or what are we, for slide 48, I'm trying to understand the 430,000 of the ARPA and then the additional 240 of operating efficiencies.

It's an additional amount that the department's identified that they could take. if the council took action for them to take those reductions. But as I mentioned, it really does cut that fine line of working within what you have. It basically provides them very limited flexibility to address things that happen, particularly, I mean, both of them, but Parks and Recreation, we know things happen all throughout the year that they're facing that they didn't expect or anticipate, always having to make adjustments. budget transfers happen all throughout the year where they're having to use money from one account to help offset something on another account. And so this would really limit their flexibility to be able to address in the given year. That being said, again, as we did the review, just like we did when we started the budget process, We do a budget to actuals, and just based on that, we did identify that based on your historical spending, you could make this reduction for these two departments.

OK. And I'm grateful for all the work that has taken into account, right? And I think that families are struggling overall. Families don't get to decide if there's inflation. Even if it's three-point inflation index, they don't get to say, oh, well, that's the cost. Now they have to start finding where to reduce their expenditures. And I think that's extremely important for us to think about any expenditure that we do, that we think about it like if it's our own money. And I know I've mentioned this ever since even the previous budget cycle of finding those opportunities to find cost savings. Even if it's not specifically in this budget, I think that it'll be good practice to continue finding the best cost on anything. And I know OMB has been meeting with all the department heads and looking at all those options as well. which I'm very grateful for. But I just wanted to get that clarification and see what the transition plan and just get the whole picture so I could understand on this one. Thank you.

So the technology contracts is probably the biggest area. And so, I mean, I know there's some limitations with that. Obviously, we need to have access to all of the systems and All of the different things that we utilize as far as technology But you'll see that 20 million dollars that we have and this is an area that every year for the last three or four years now goes up two to three million dollars every year as we're renewing contracts or Something's being added something new So that's an area the technology piece is something that in my opinion that we need to continue to look at Representative Chavez

Thank you Mayor and thank you Robert. I have questions on your presentation but I'm going to speak right now about the item that's up right now for vote. And it's my questions are more for Nicole and Miss Mack. Thank you Nicole. Can you walk back. I was very happy to get a briefing from you recently. And I was very impressed by one of your slides, which indicated a 20% decrease in grant funding in the last few years, and how you and your department have had to be very resilient and creative in finding ways to operate even with that decrease. We had a long conversation about that. I'm very supportive of the Welcome Center of the Heart Initiative and other things that the community is doing. But I do know that they came and presented and we talked about their operating costs being around 60 to $80,000. The last time we had a budget discussion, we asked the city staff, Ms. Mack and your staff to find budget savings. Where I'm going with this is, How do how do we know that the Welcome Center is operating as efficiently as possible before committing to sustaining their operations at that level specifically. How do we know that.

anecdotally, I can speak from managing a nonprofit myself. The resources are finite. The money that you get is the money that you get. And I would say that When we allocate, I know that when we allocate those dollars in the contract, it's written not to exceed a certain amount. And so we manage the contracts based off of that language. So if the direction today were to take that ARPA interest, the contract would be written in a way that it wouldn't exceed so that we don't go over that amount.

Nicole, can you speak a little bit about how we structured that contract, how you're tracking and holding them accountable for the spending and what our internal controls are against those contracts? Right.

So we have an in-house compliance team that reviews all of our contracts. So if they say they're gonna serve 60 people, we ensure that we get the information for those 60 people. Everything that they say that they're going to do, it's reflected in the contract, and then we go in and do a monitoring to ensure that they're conducting that. The second piece that I wanna kinda talk to is the, When we write the contracts, we have them tell us what they're going to do. What our nonprofits have done consistently and time and time again is when there are fluctuations or things that happen that we can't account for, they absorb those things because they wanna be good partners for the city. For example, when we do those heart initiatives or when we did the outreach initiatives, that's a big strain on their resources that they weren't planning for, but they did it anyway. And another thing, too, when the migrant crisis happened, they can't utilize the federal funds to work and pay for migrants. But in this case, all of our nonprofits absorbed those costs outside of the federal funding and showed up for us in those ways.

Had you previously identified what this four hundred and thirty thousand dollars could be of use for your specific department for.

it would go 100% to serve the Welcome Center. We wouldn't take any admin. Typically, we do a 15% admin on our administration.

My question is, so was this your intention the whole time? Because Representative Canales proposed it right now, or was this what you were planning to do initially with the money anyway? It was an offer to her.

So a conversation I had with Robert as they were going through their review, we were looking at what was being submitted by council. And so it just happened to be that because this program was ARPA funded, we wanted to have a discussion with you all because it is aligned to one of the nine items that was requested by council.

Okay. So it was listed there with the intent of it going to the Welcome Center.

Yes, and one more comment that I want to make is everything is on a reimbursement basis. No, that's what I just understood.

I just proposed it.

No, I know, but Ms. Mack made it seem like they had identified it for that specific reason.

No, I asked a question like today. Okay. I asked a question today. So we had the presentation and we've been looking at all the requests that were there, trying to get all the numbers ready for you all today to look at how we might be able to cover some of these programs today. and so because that program had previously been funded by arpa i asked a question um this morning how many months could it cover just to know i mean we didn't bring it as a presentation to you all we don't know where the rest of the dollars are going to come from we wanted to make sure we put that out there for you all because it would be something If you're asking us to look at one-time funding, this would be the type of funding that we will look at because I would rather not look at fund balance for any of the items that are listed.

And I understand that. I'm trying to get a sense of Nicole's needs with her department specifically because of the conversation we had in my office, the decrease in her budget in the last few years. And because we have this interest earned, I'm just wondering if there was a need that you identified ON WORK THAT YOU'RE DOING SPECIFICALLY ASIDE FROM THE WELCOME CENTER THAT YOU COULD USE THIS FUND FOR, THIS MONEY FOR?

THE MONEY WOULD GO TO THE WELCOME CENTER. WE WOULDN'T TAKE ANY ADMIN. AND I WANT TO TOUCH ON THE CONTROLS PIECE THAT MS. MACK WANTED ME TO TALK TO YOU ABOUT. WE DO EVERYTHING ON A 100% REIMBURSEMENT BASIS. SO THEY UPFRONT THE MONEY AND THEN THEY APPROVE THEIR EXPENSES AND THEN WE VERIFY. And that's what gets audited on a yearly basis. Okay.

Thank you. And the Welcome Center was also her only item, I think, for her budget request, too. Yes, ma'am. So when departments can tell us what their needs are beyond the scope of their budget. So this was, I think it was like $600,000 when you submitted it.

Okay. And everyone will tell you if I had $600,000 in my budget, I would have made it happen.

Thank you.

Is that it, Representative? Okay, Representative Nino.

Thank you, Mayor. Ms. Mack or Robert, have all ARPA funding expenditures been exhausted? Are they all accounted for?

They're all accounted for. They have not all been spent. And so we are now meeting weekly to keep up with the departments to make sure that every dollar, every cent is spent prior to the deadline.

Are we expected to fully exhaust it, do you know?

It's a fantastic question. So at this point, yes. But like I said, we're meeting weekly to begin to identify where we may run into issues where we may not be able to spend. We may be able to identify additional funding, but I don't hold me to that yet.

Okay. I would like to know, I mean, it doesn't have to be right now, right? But maybe in a briefing or when I meet with Ms. Mack, I want to know the balance of the ARPA funds that we have, what it's currently allocated for, just so I could get a better idea. I know that we talked about it previously, but I can't recall.

Send it to the entire council. We'll send it out to everybody.

Okay. Mayor, I have another question.

Representative Lumon.

Thank you, Mayor. Robert, the cost for the federal lobbyist, is that in the legislative department, or where is that funding?

It's multiple departments. So I believe that airport bridges and economic development are also assisting to pay for that.

So they all sort of, there's the same.

So the full impact isn't on the general fund.

In the budget, does there still exist a $6,000 allocation per district?

For travel, yes ma'am. For travel?

Yes ma'am. Okay. But if we have a federal lobbyist now, I think that that lobbyist or lobbyist group would be most capable of doing the lobbying for the city. And so with that in mind, If we look at that at six thousand dollars that's forty eight thousand dollars savings that we could have. And so potentially I'd like to make a motion that we reallocate that travel budget of forty eight thousand dollars and move it over into the Welcome Center. It will be a little bit. It'll put us almost at five hundred thousand dollars. That's my motion mayor.

There's a motion. Is there a second. Second. Okay, there's a motion and a second. Any discussion on this item?

Is that an amendment to the original motion? No, it's just an allocation of a different funding service.

Okay, Ms. Bryan?

Oh, well, but we still have a motion. Yeah, we have a motion.

You do have a motion right now on the floor that was made by Representative Canales.

So I'll come back.

Okay.

I'll come back. Think about it, everybody.

Representative Acevedo.

Thank you, Mayor. Overall, the 430,000 that has been identified from ARPA I think would go a really long way for this. And with the meeting kind of shifting from yesterday to today, I think just scheduling-wise it didn't work for John Martin to be here, but I know the last conversation that I had with him, he was gonna bring a one-pager to council just to kind of identify how the Welcome Center really helps the city in many different ways, especially when it comes to budget costs. So if you look at police, they would probably be spending a little bit more without the Welcome Center in place, because they're gonna have to be transporting people. You get into recidivism, then you get into the county and the hospital and how long some people might be in the hospital, and that goes back to the taxpayers. The advantages of having the Welcome Center really outweigh a lot of budgetary reasons in the sense that we're gonna have to pay for this in one way or another through other city departments that might be affected. And so I think that's what's really important to consider here. I know that nonprofits are always doing what they can with shoestring budgets. And like Nicole said earlier, I think that's really important to note. If they had $750,000 the year before and now there's potentially $430,000, they're going to do what they can with that. and at the same time Mr. Martin also shared that there's other funding that they're looking at to sustain it but just ending this in August which is a month and a half from now would really kill them and this would give them some runway to get to the next source of funding that will hopefully come in. So I just wanted to throw that in there based on the motion at hand and then I have overall comments on the presentation so I'll come in a little later.

Okay, Representative Rocha.

Thank you, Mayor. Ms. Mack, was the exercise when we were putting in budget requests to offset the cost of what we were requesting, was that not the expectation?

Yes, ma'am, it was.

So where is this additional money from the Welcome Center coming from?

So there was a category pull down that you could choose one-time funding as a source so that wasn't a write-in so that was they followed the instructions in terms of the cost but then council has to decide whether you want to identify those funding sources and utilize them a couple of items that are listed would consider capital of course we don't have capital funds for those and so you would need to figure out how council would like to approach those additional dollars for those items that wasn't a requirement for each of us to go through that exercise at the time of the expense to identify that funding source right So in some cases.

Similar to the budget simulation, right? We're taking from this fund in order to fund this.

Yes, ma'am.

That was not part of our requirement?

That was the intention of how we wanted to approach this.

That's what I understood. And so I know that there are people, colleagues on this dais that will probably vote no on the budget. And I understand that. That is our absolute right to be able to do that. However, I understood the assignment as when we come in and we say we want a certain amount to come in or to fund a certain project, that we should also come and say we are going to be taking it from a certain fund. That's how I understood the project. And that's how I understood what the actual public was supposed to do as well. was to provide that information. And so with that said, I can definitely understand how some of us may vote against the budget. And that's definitely our right. And that's fine. However, I think as a champion of fiscal responsibility, I think we also need to make that determination that we continue that throughout the year and not ask for any additional funds in any of the projects that we support. That's just my personal opinion, but I personally feel like that was the intention of the budget request this year. That's what I understood, is to say that we were coming with a budget request and this was it, and we were supposed to provide the additional fund of where that funding was supposed to come from. Thank you, Ms. Mack.

Representative Chejo.

Thank you, Mayor. Robert, a question on slide 16 and the state program. You had mentioned that there's a 1% that goes back to the general fund, or you submit for reimbursement, and that this was, I think, legislative affairs has gone to try to see if that could be increased. Now that we have a lobbyist, is that something that is in the agenda to do that?

Yes, and so we're actually in the process of going after a new state lobbyist as well. So once they come on board, we'll engage them as well to help. So to be clear, it's not 1% that comes into the general fund. Essentially what the state does with their calculation on their worksheet is they reduced the amount that we're able to, or the amount that we're impacted by. So for example, in the most recent year in FY26, it was $17 million, and the state's formula is you take that $17 million, you minus or subtract 1% of your general fund budget, and then, so in this case, about $6 million, and then that's the amount that you get to request. Why the state asked you to reduce your requests from the impact amount? I don't have an answer. And so we'll do some research to figure that out. But really the simple solution is the state just needs to allocate more money to the programs. So obviously we know the city's right now requesting more than what the state has allocated for the entire state. Thank you.

Representative Canales.

After the vote, okay.

Ms. Bryan, there's a motion and a second.

Yes, Mayor, the motion was made by Representative Canales, seconded by Representative Acevedo, and this is to allocate one-time funding of $430,000 from ARPA Investment Interest Revenue for the Welcome Center. On that motion, call for the vote. And the voting session. And the motion passes 6 to 2 representatives mother not that our chat and Peter voting need the remainder of Council voting by the motion does carry.

Can present can Alice.

Thank you, Mayor. This is, again, related to the budget. Different topic than the Welcome Center. And Council, I'll deliver this to you momentarily by email. The Animal Shelter Advisory Committee separately, this is not necessarily a message exactly for me. The Animal Shelter Advisory Committee met last week, Wednesday, June 10th, a week and a half ago. and voted unanimously to make a recommendation to the council regarding the budget and directed myself and Tess as the chair and Tess Passero as the vice chair to deliver a message to the council on the budget. And so I'll read that into the record if I can. And then I'm not making any particular motion or request with regard to the budget today, but just making the council aware of this and putting it in the public record. So again, I'm the messenger as the chair, but this is a message from the committee. Members of the El Paso City Council, We write to you today as chair and vice chair of the City of El Paso's Animal Shelter Advisory Committee, ASAC. At the committee's meeting on Wednesday, June 10th, 2026, the members voted unanimously to approve agenda item number four, which reads as follows. Discussion and action on a recommendation to the city council that additional funding for free public spay-neuter programming be included in the city budget. Expanding the availability of public spay-neuter services is a topic that has consistently been among the ASAC's top priorities. Doing so has been a recommendation made to the city council in the ASAC's last two annual reports. The committee feels that the city budget and development for fiscal year 2027 should contain additional funding for spay-neuter services, and we believe there is an opportunity to deploy that funding more efficiently to ensure maximum benefit to the public. Over the course of the Borderland Rescue Fund's separate work with Greater Good Charities on the pet pantries programming, the city's support of which we are immensely grateful for, we have been connected with their veterinary program, through which the organization deploys high-volume, low-cost spay-neuter clinics to cities around the country and around the world. Greater Good Charities has expressed the desire to bring these services to El Paso in the near future, as soon as early 2027. We recently received communication from Dr. Ruth Parkin, Executive Vice President of Veterinary Services at Greater Good Charities. Dr. Parkin provided an estimated budget for large spay-neuter events in El Paso targeting 1,000 plus surgeries per event at a cost of $119,000 to $128,000 per event. The price tag may sound large on its face, but the value for the number of surgeries is aligned with what El Paso Animal Services pays per surgery for its own spay-a-thon events and they would be able to achieve significantly higher volume, potentially serving both owned pets and trap-neuter-return animals. As directed by the vote of the Animal Shelter Advisory Committee, we formally request that the City Council consider adding funding for these services to the City budget for fiscal year 2027, This is a significant opportunity to increase available services. We are available to answer any questions you may have. Sincerely, Chris Canales, Chair, and Tess Passereau, Vice Chair of the Animal Shelter Advisory Committee. So, and copied our Ms. Mack, Deputy City Manager Richard Bristol, Deputy City Manager Robert Cortinas and Michael Wachsman of animal services. So we'll transmit that letter as well. But just wanted to make sure the council was aware of the requests coming from the animal shelter advisory committee. And again that was a unanimous vote by the committee. That's all. Thank you.

Representative Chavez.

Thank you Mayor. Are we speaking on the presentation now. Yeah.

OK. Representative LeBron's motion I believe.

She has to bring it back.

I'd like to speak on my request on efficiencies. And I know I brought it up during my budget review with you and Ms. Mack. And I don't know if in your presentation, Robert, you've identified specifically consultants per department, or if maybe you've already done the exercise independently of that. I know that there are a lot of consultants that are very much needed. I think I've spoken on this before in the past because consultants bring expertise to the table that sometimes either we don't have or are needed to kind of get that outside view for other reasons. But I initially had this idea because in the city of Austin, and I know I shared an article with you and I spoke about it with Ms. Mack and you during our budget review, that the city of Austin during an audit, it was reported that they had spent $279 million on consulting services within two fiscal years. And the audit determined that some of these consultants Didn't have clear KPIs deliverables for the city and the consultants that they had also hired Many times didn't really provide a service that couldn't be done in-house right and that is why I have this budget request I don't know what the cost would be. I don't necessarily think that we could even maybe probably conduct it between now and when we adopt the budget in August, but I do definitely want to put it on the record that this is something that's in the back of my mind. I think, I'm not sure if every single department has consultants that they hire, I have known and we voted actually on some on the dais for several departments. Like I said I do think that they're important in some cases for the reasons I've already stated. But I also believe that we need to really take a deep dive into this practice and make sure that there isn't something that we're not being very diligent about in both hiring these consultants, ensuring that they're actually delivering a service that we can't do in-house, and ensuring that we are holding them accountable to the work that they should be providing us. It's very easy to call or to say that you are gonna provide a service, a consulting service, but again, in our efforts to be fiscally responsible and try to find savings. And because of this article that I read and this audit that that found this in Austin specifically I have to bring it up and I and I do want to make sure that that we we keep that in mind as a council that there there might be an opportunity here for some savings.

So we had some discussion about that. And so going forward, definitely, we've been talking about implementing a process to identify that upfront, to basically standardize or have a process in place to identify the purpose, the expected result, or the deliverable from hiring that consultant. So that going forward, I mean, I think we can have more discussions about what that looks like about going back and looking at what we have currently in place. I mean, I think for the most part, I want to say they're one-offs. I mean, there's things that come up occasionally where we'll utilize a consultant. Obviously, CID uses for a wide range, not necessarily consultants, but it's a part of getting their job done, delivering the project in that particular example.

And our thinking on this item was, you know, Austin is basically hiring outside consultants to come in to do operation efficiency. And, you know, of course, I don't believe that the intent of the item is to make further investments to do this analysis. I see the item says here that, you know, you wanted to deliver it within 120 days. I certainly think that with existing staffing, these type of management reports would typically come out of our Office of Management and Budget. I think it can be done over a year. It can be done in phases, which is something that Robert and I talked about. But I certainly couldn't engage that team until we got through the full budget process. And that probably won't be until October there. I mean, it's a small team. And then we could figure out how we do it in phases. And maybe it's not every department. I would say because most of what you're considering here is very much focused on the general fund.

that we start there and then we can look at the other departments who you know have funding sources as well that are tied to this do we have a dollar amount that we know that we're paying for consultants for outside consultants as a city like the audit in austin determined it was 279 million over the period of two fiscal years i'm assuming it's i think it would matter how you define outside consultant so is it

Consultant that's helping provide a service that we have to do. So for example arbitrage calculations in the comptroller's office We don't do that in-house. It's a very technical Calculation that needs to be done. We'll hire a consultant to help do that arbitrage calculation So I think we'd have to first define or come up with some agreement on how are you defining? outside consultant that work has to be done we're required to do it annually and That's just one example that I can think of. I mean I'm sure there's going to be plenty of examples like that where departments are using them for a specialized purpose.

I think I think it's worth the exercise maybe even identifying the different categories and then and then starting from there. But but I'll speak to you further about it Miss Mack. If it takes future council action I'll bring it back. Thank you.

Representative Lamont.

Thank you, Mayor. Let me begin, first of all, by totally agreeing with Representative Rocha regarding this exercise that we did here, that it was specifically to submit budget adjustments but to do the process by finding the fundings for it. The one adjustment that I did, it's become obvious that This council cannot make a recommendation or determination on that. I did notice when I reviewed this was that there were two representatives who submitted funding for or sustainment of the welcome center. I truly truly believe in it. And so therefore I think now that's the time like to make a motion. that we do a reallocation of the travel budget that was instituted last year of $6,000 per district, totaling $48,000, that that money be redirected to support the Welcome Center.

OK. There's a motion. Is there a second? Second. OK. Ms. Bryant?

Yes, Mayor, the motion was made by Representative Limon, seconded by Representative Canales. And this is to reallocate $48,000 of travel funds from $6,000 per district to support the Welcome Center. So to reallocate $6,000 of the travel budget in each district, totaling $48,000 to support the Welcome Center.

On that motion, call for the vote.

And the voting session. And that motion fails 3 to 5 representatives need to be more canada's voting, I represent it to show this has to be a total check to a whole and Peter only need the motion to.

Represent us that.

Thank you Mayor and I think that was good intent and the reason that I didn't support it is that next year is going to be a very important legislative session here in Texas and the team has been doing an incredible job and We have been kind of discussing how we can get out there to testify on important city issues. And so I think that budget is going to be just really important. So I just wanted to throw that out there on on the previous motion. Robert I have a few questions on the vacancy reduction initiative cost. How, can you give us maybe like an Excel sheet on how you determined that you could eliminate all those positions and how much each one of those positions was worth?

We posted it last meeting. Did you?

Yes. Okay, I need to look through it. I'm running low on.

Basically, we looked at every vacancy that every department had and basically started from there. So basically, we're going to take everything. And then we made the departments basically tell us, oh, no, no, you can't take that one because I'm about to hire next week. Okay. And so we started essentially backtracking from there. But the starting point was basically to look at every vacant position.

And with that, that helped us balance the budget to just eliminate those, not carry them over.

So we're in the process right now, the budget office is right now working with them. So we've used two words, is either unfund or delete. Our preference is to delete as many as possible. There's no point carrying vacant positions on the staffing table that aren't funded. But there are situations where department needs some flexibility just on position titles to keep those on the staffing table. But they're in the process right now of working with each of the departments to identify what could actually be deleted off of the staffing table.

And then my notes are all over the place here. I was going to kind of speak to the council office on slide 53 where you said that in administration we have two hundred and eighty six one fifty six per district and that's basically for our salaries right for for the rep and the staff salaries in each office. Yes. And what percentage would you say is like insurance and just benefits in general? How can we calculate that?

Yeah, I don't have it. I'll have to get that for you. Okay.

I'd appreciate that. And this 286 is an increase because of the council salaries going up, right? Correct. Okay.

And so it's also your staff as well. So the increases we have built in for civilians, we also built in increases for your staffing as well.

Okay. Um, I kind of wanted to explain the logic behind the council adjustments that I submitted. One of them is Memorial Park. I'm a little surprised that it went up but that was also kind of a big project that took about a year to get the adequate historical lights on the grant side and what's missing is the copper side so that's why i submitted this request there's a lot of public safety issues that are happening on the copper side at one house there's been a murder a few years ago and it took about a year to get the person and it was a pretty horrific murder and i think a lot of that contributed to the darkness in that area on the copper side So I understand where we're at budget-wise, but I wanted to explain why I was asking for this, because there are many public safety concerns that people in that area are having over and over again. And then on the city council staff salaries and wages, This is something I brought up last year and it was more in conversation when we were talking through the budget and then when we had the first budget presentation for this year's budget I brought this up with Miss Mack and Miss Mack said that within the next year we could do some sort of Study with HR to understand what other cities are paying their council staffs just down the street at the county they're paying a lot more and I feel like we have a very talented group of people that work for us in in the City Council offices and I feel that they're severely severely underpaid and so when I saw that the council was gonna get such a large raise and We were gonna have Certain council staff members really kind of left behind with with this phrase. I was looking for Bringing that up and being as equal as possible and everybody uses their their their salaries as they wish. Some council offices have part-time, some have two full-time, some have one. Like, it just depends on what the rep wants to do, right? But I think we do have a very qualified group of individuals there with different abilities, and so... I kind of made some napkin math on what I thought would be what salaries and wages would be to give everyone a significant raise in the budget, and that's kind of why I put that forward. I do want to try to see if we could make this a reality this year to kind of hold us over for next year, just because our staffs really do a lot. So I'm gonna I'm gonna give this a shot and see if we could give each council office $35,000 in their administration budgets for staff and salaries. So I moved to allocate $315,000 to the mayor and city council staff salaries and wages budget from, sorry, I lost it. I'm all over the place. from the Professional Services Outside Contracts and Materials and Supplies Fund. And I got this idea based on how you illustrated it on page 46 on the presentation. So that's my motion.

Okay, there's a motion. Is there a second? That motion dies. Representative Lamont.

Robert I just want to confirm you gave us the salaries for mayor and council I just wanted to highlight representative salary increase is going to total the increase will be about $12,000

No, ma'am. For the salaries, it's going to be $9,617. $9,617 for the council representatives. And to your question, Representative Acevedo, the council's budget's primarily all staff. So 96% of your budget is staff. salaries and benefits.

Representative Kanellis. Is there a motion on this item now? We're done?

No, no motion on the floor.

Okay.

Sure.

Thank you, Mayor. Representative Nino.

Thank you, Mayor. Robert, can you clarify what is the total dollar amount of funded vacancies that are proposed for deletion for this upcoming fiscal year?

Total amount of savings from the vacancies? Correct.

The ones that are proposed for deletion?

$26.2 million. $26.2 million? $26.2 million.

And question for you, how is that reflected in the budget? I'm trying to understand that.

It's going to be in the salaries and benefit accounts. And so where they could delete of what's in the preliminary budget that's posted of what you've seen, there has been some positions that were deleted when we did that, put that book together. Otherwise, essentially what they're doing is either doing lump sum attrition or unfunding positions. And so they're going through the exercise right now. Let's say a department took $100,000 of vacancy savings. They're going through right now and identifying those specific positions that equate to that $100,000 and either deleting them or making sure they're unfunded to get to that amount. So it's a good opportunity. So Ms. Mack has talked a lot about sort of right-sizing that staffing table because we've heard a lot ever since COVID of having hundreds and hundreds of vacancies. Well, a lot of them have been unfunded for years and we've just never deleted them off the staffing table. So this is a good time for us to go ahead and do that now.

Okay. Well, I'm looking forward to further budget conversations and seeing where we come to. So thank you for all your hard work.

Representative Chavez.

Thank you, Mayor. Robert, regarding the budget that you presented earlier today, are the hot tax for short-term rentals included in those projections? No, they are not. No. So when will we have those projections ready?

So I would recommend probably not adjusting the budget. And so what I've mentioned when we approved that item is we have estimates on what those are going to be. But until we start collecting, we don't know for certain. So it's better to probably let a year go by and then we can see what the actual collections are and then we can make that budget adjustment next year. If there's something that we desperately need and we see that revenue coming in right away in the first couple of months, we can come back to council and do a budget adjustment if we need to. But just because it's, again, we're pretty good at doing estimates, but we're not always 100% accurate. I would hate to add $4 million of hot use, and then it ends up being $2 million, just because we have nothing to look back on from short-term rentals.

Miss Mack I'd like to request that if you do have those budget adjustments next year that you bring them back to council for discussion prior to making a decision on where to allocate the funding so that maybe we could revisit some of these budget requests.

And so to be clear also on that use of hot. So we showed you all that there's restrictions on how the hotel like this could be used. So there are certain categories that it's already allocated to.

Yes.

But absolutely and tell me we can come back and show you all what amounts are available for each of the different categories.

Thank you.

That or other extra you know revenue that might come from EP water sales or whatever that might be. Thank you.

Representative Lamont.

Yes Robert. Page 50 or slide 50. Are we done with this now as far as staff time trying to figure out estimated cost and things like that or is that something that's going to continue or are we done because obviously we don't have money 2.605, 2,605,000. Are we done? I would say that we're done for now.

So you all took action on the Welcome Center, so we'll implement that. But we will come back, as I mentioned when I started and I showed you all the timeline, on August the 3rd, we will present the certified values that we received from the Appraisal District. We will show you how that certified value compares to what we've estimated. So essentially right now, everything that's built in has been an estimate. At that point in time, we'll show you is it a plus or a minus on the adjustment side of what we need to make into the budget. And so at that point in time, there may be discussion about revisiting some of these items if there is additional funding from those certified values.

So we're gonna continue using staff time to find out these estimated costs. when that was a process that we had to submit that information. And now we're putting it back on staff.

So we have costs for just about everything. The only two that we don't is the, and we do have an estimate on Mary Frances Kiesling. It's just I didn't want to put a number on there and have a different number come about. So we have an estimate on what that number is on the facility in District 1. Again, our recommendation is let's finish the Parks Master Plan first and then use that as the guide to determine whether or not an additional facility is necessary or needed. So there will be no additional staff time going into these requests.

Okay, but now these budget adjustments, do they become like a priority list or do they, is this something that takes preference or how does this work?

Council members can always bring these back up at any time.

OK, bring it up. But it's not automatically. Just because it was on a budget adjustment or a budget request, it's not necessarily going to come up.

No, ma'am. OK, thank you very much. Yeah, it would take an action of council.

All right, thank you.

Representative Rocha?

Thank you, Mayor. So right now, Robert, we're sitting at about a 2.9% proposed tax rate increase. Is that correct?

2.8 cent increase on the tax rate.

Yeah, on the tax rate. So with the adjustments that we've made tonight, that passed tonight, are we closer to that 3%?

No, we've not made any adjustments to impact the general fund. And so the only thing that's been approved is the use of that ARPA investment interest, which is non-general fund, doesn't have any, no impact on the tax rate.

And what's the rest of that ARPA fund balance?

I will send you all the update on all of the programs and where we are at to date.

So will that be able to fund any other items that we have out there?

At this time, no. But like I said, we're continuing to monitoring. And so we're working very closely with all of the departments that have ARPA allocations to make sure that they're on the right trajectory and that they're going to spend by those deadlines. If we get to a point over the next several weeks or maybe two months that we don't want to go too far, because we need to have time. If we need to reallocate, we need to have time to reallocate and get the money spent. So I can't tell you what that timeline is like. And so we're meeting weekly. It's myself, our grant administrator, Sasha, our budget director, and Margarita. And so we're meeting with departments weekly right now.

So we're sitting still at that 2.8% tax rate increase proposed at this time? Yes. Is that correct? Yes. So there's no increase as a result of any changes that took place tonight? No, ma'am. Okay, but there was no decrease also?

Correct.

Okay, thank you, Robert.

Okay, any, Representative Kanellis?

Thank you, Mayor. Just to clarify, it's a 2.8 penny cent, not percent. Yeah, not percent. And then the general fund can't have decreased based on ARPA allocation, correct? Because it's non-general fund. I'm sorry, what was that? The general fund, the tax rate couldn't have changed tonight with an allocation of the ARPA investment interest because it's non-general fund, correct?

Correct.

And the revenue from property taxes goes into the general fund.

Correct.

Okay. Yeah, just so it's clear for anybody watching, there was no allocation of that ARPA interest investment that, sorry, it's late, ARPA investment interest that could have made any change up or down on the tax rate. Is that correct?

Yes, that's correct.

Thank you. Representative Nino. Thank you, Mayor. So Robert, earlier when I asked what the ARPA interest could be used for, it couldn't have been used to help pay the debt service rate?

Yes, I believe so.

Okay, so it could have had a potential impact on the tax rate, is that correct?

Sure and it could have gone to supplement any other expenditure in the general fund but I will say on the slide when I presented it and what's indicated on the slide is that that's one-time revenue and so we're all very clear that once that $430,000 is spent then obviously we need to identify additional funding for in this case the Welcome Center. And so we were very clear on listing that as one-time revenue. Once it's gone, it's gone, right? And so if we were to use it for debt service, yes, it would help us. In your situation, it would help, yes, one year. But then the following year, you have to make it up because you still have your debt service amount that you have to make.

But like, for example, last year, we had the TERS, which helped reduce the debt service rate, which helped us decrease the property tax rate that the council adopted, correct?

So we transferred the TERS, that amount, into the general fund.

But we helped with the debt service rate.

Is that correct? No. No, it came to the general fund. The $2 million was transferred to the general fund.

OK. OK. Thank you. Representative Chavez.

Mayor, I'd like to reconsider my vote on the amendment for the ARPA funds.

OK.

Thank you. I'd like to. Thank you.

Motion and a second to reconsider.

There's a motion and a second to reconsider the amendment related to the ARPA funding. All in favor? Aye. Anyone opposed?

No.

No. Let me do a roll call. Representative Chavez? Aye. Acevedo?

No.

Rocha? This is to reconsider the motion to. Aye.

Thank you.

Trejo? Aye. Nino? Aye. Fierro? Aye. Lemon. No. Canales. No. The motion does pass to reconsider the motion, the amendment.

OK. Do you have that amendment handy, Ms. Prine, to read it?

Yes, and so the motion was made by Representative Canales, seconded by Representative Acevedo, and this is to allocate one-time funding of $430,000 from ARPA Investment Interest Revenue for the Welcome Center.

Okay. Call for that vote.

On that motion, call for the vote. Mayor there's a tie in the voting session. And that motion fails with the mayor breaking the tie. Representatives Chavez Rocha Nino Fierro voting nay. Representatives Acevedo Trejo Limon Canales voting aye. The motion fails with the mayor breaking the tie by voting nay.

Any other questions for Robert. Representing them all.

So now what happens with that 430. It just sits out there for a while until we make a designation for it. Is that what would happen to it.

So we'll continue monitoring the expenditures out of the entire ARPA funding that we have available. If there is additional funding we'll package together and bring forth the recommendation for council's consideration.

And so at this point in time on Nicole is at August 1st. We close down the doors to the Welcome Center. Thank you folks.

Represent Canales.

Thank you Mayor. Nicole do you mind repeating how many people the Welcome Center serves daily.

On average the Welcome Center serves approximately 50 individuals per day. Over 2,500 individuals have gone through those doors, awaiting a shelter bed at some point in time.

And so without the Welcome Center on August 2nd, those folks will have no option for the immediate shelter?

That's correct.

And those people will be on the street, in front of businesses, in front of homes?

There will definitely be a more visible effect.

Okay, thank you.

Any other questions for Robert?

Comment. Robert, budget time is always difficult. I have never gone through something like this before. All I can say is thank you to you and to Ms. Mack for putting this together. I'm dismayed, I'm disappointed, brokenhearted by this vote today. It sends a really clear message where our priorities are in this city. And you worked many, many hours to get us to this point. And to the staff that's here so late in the evening, thank you all for being here. We really appreciate all that you have done. And I hope that at some point in time, this feeling that I'm feeling right now goes away and that we go back to where we were when we first started off. You've done a fabulous job, Robert, and answered every question and certainly want to thank you for it. And Ms. Mack, thank you very much.

Representative Acevedo.

Yeah, so this is this is kind of wild you know, I think there was a short-lived celebration that the Welcome Center was going to continue operating and we I guess what I'm kind of piecing together is some members of council heard you say that we could pay down the debt and now they're going to ask you to go spend four hundred and thirty thousand dollars to pay down the debt which isn't really going to be a significant dent, right?

That's a point well taken. So let me just add something out there. So for every $1 million of a reduction would equate to about a $4 decrease on that tax bill that I showed. So in this case, $430,000, you just round it up to half a million, would reduce that $105 increase by $2.

On an average tax bill?

On the average tax bill, average homeowner tax bill.

I'm sure that people would be okay using that money to fund this important operation, especially because now other departments in the city are going to have to show face for this in terms of dollars, and I think that's what's going to really piss off the people. It's it's another sad day with this council honestly it's this council is not for the people and they show it again and again. That's why we saw what happened last council meeting.

Representative Canales.

Thank you, Mayor. Yeah, I worry about the impact this has on the police department as well and the role that they have to play in you know, their interactions with unhoused people. The Welcome Center, I think, has provided a lot of respite from that work that the police department has been saddled with for quite a long time. You know, calls involving unhoused individuals are not easy calls for police officers, and they've told me that again and again. And so... Yeah, I worry, again, an additional 50 people who they may have to encounter on any given day is a lot. And I worry about the impact that will have on them, obviously on other departments, Parks and Recreation, who have to deal with the additional impact. AND SO I JUST WANTED TO ASK A COUPLE OF OTHER CLARIFYING QUESTIONS BECAUSE I THINK IT'S IMPORTANT TO POINT OUT AND I TALKED ABOUT IT IN THE LAST BUDGET WORKSHOP AS WELL, BUT ROBERT OR NICOLE PERHAPS CAN ANSWER. I THINK YOU CAN PROBABLY ANSWER ROBERT. HOW MUCH FUNDING DO WE HAVE FOR HOMELESSNESS IN THE GENERAL FUND?

Zero dollars in the general fund for homelessness.

And so we have some outside funding that comes from federal and state sources that the city administers and passes through. But our own local taxpayer money we have zero dollars that go toward homelessness.

That's correct.

OK. And this would have been a one time opportunity to fund the program for a short time to sustain a program to fund a program for a short time while we looked for alternative funding source. Obviously still non-general fund, but would have at least been a way to tide over that program until some identified source came along. But we will instead choose to remain with $0 for homelessness in the local portion of our budget. Is that correct?

That's correct.

OK. Again, I just I really worry. I think we're going to end up spending this money anyway via the police department and other entities that now have to pick up the slack for this for the loss of this program. It's really been transformative. I mean, I remember the situation pre COVID before the Welcome Center and have seen how the Welcome Center transformed both met an incredible need during the pandemic and then transitioned post pandemic to pick up a lot of the difficult cases, people who needed immediate shelter. I think importantly, it's basically the only place where someone with a pet can shelter. It's become the flexible option for meeting immediate needs, and I'm very worried about where we'll be without it. So I don't want us to go back to the situation we were in pre-pandemic. That was a lot worse. And I mean, I just remember District 8 in particular, but all the districts receiving way more, way more complaints from the public about their interactions with unhoused people. So, I mean, Council, buckle up for a lot more complaints.

Representative Nino. Thank you, Mayor. The Welcome Center is an extremely important program that we have. I also think it's important to note that we're still not allocating the $430,000 to something specific. There's still opportunity to even navigate if there's additional funding where we could continue funding the Welcome Center. This is the first time that we're having this conversation of seeing the cost savings or the additional cost or funding that's available to potentially even fund any of the requests that were done by any of the council members. I met with Nicole, I met with Robert, and I talked about how important it is to fund the Welcome Center. I do think that we're elected to make very difficult decisions. I don't think this is the end of the conversation. I think that Again, it's extremely important to fund the Welcome Center and create strategies of how is it that we do that, right? We have until August 1st. We're going to meet again July 6th and 7th. We're still going to have other budget conversations. Is that correct?

Right now, the only item that we plan to bring back between now and August 3rd is the fee presentation.

August 3rd?

So August 3rd will be the day we bring certified values from the prison district, and you will be introducing the tax rate on that day.

Okay, so currently there is no motion to allocate this $430,000 to anything.

That's correct.

Correct. So I would like to make a motion to direct the city manager to come back to the next council meeting with a presentation inviting the Opportunity of Homeless Center to give us that presentation that Representative Acevedo mentioned as well. But also to talk about further strategies of how is it that we're gonna continue providing support for the Opportunity Center for the Welcome Center. Again, I don't think the conversation ends today. We're gonna figure out ways to fund this welcome center and provide this important service for our community. So my motion would be to direct the city manager to come back to the next council meeting, because again, we were making a decision that is extremely important, but even in the conversations that we had, I think we have to, you know, have the Opportunity Center to come into that presentation as well. But then there's gonna be other, there could be other strategies in the next two weeks that come forward of how do we find more funding to make it even more successful. So that would be my motion, Mayor.

Okay, there's a motion, is there a second? Ms. Ryan, that motion dies. Representative Acevedo?

I I don't know. I just continue to be left speechless. I mean it it's a very easy thing to understand. I don't think we need another presentation. And the council voted for it and then took it away an hour later. And Robert just gave us clarification that it was over two dollars that people would be saving when this is such a big public need. And so I don't know where we go from here. If there's just a sense of regret, if there's backlash, what it is. But this is completely dysfunctional. And it's really sad that this is where we're at as an organization.

All right. Any other questions? Okay. So thank you, the 32 departments that are here this evening. Thank you, City Council, and I will tell you, just because, Representative Chavez.

Sorry to interrupt you. Go ahead. I apologize for interrupting you. But before we adjourn, I do want to make something clear to everyone and the people. I think that there's plenty of people also online still listening, people that are here in the audience. I don't think it's correct for anyone to question someone else's integrity on this dais. I also do not think it's correct for anyone to pose as the one savior of our community. I think we were all elected respectfully from our districts because we were chosen to represent the people that we have meetings with, speak with and are in constant contact with and people have entrusted us with our voice. Something that I've mentioned many times in my life is that the older I get, the less impulsive I am and the more intentional I become. Yes, it is very difficult to make decisions sometimes on this dais, but decisions are made out of the information that's been presented to us at the time that we're making them. And to pass judgment on another council member I think is beneath us. So I would respectfully like to ensure that it doesn't happen again. Thank you, Mayor.

Thank you. And I don't disagree. This is a democracy, and this is how it works. If one individual doesn't like the way others vote, then I don't know what to say. I mean, this is eight people that are voting. So to start throwing and casting stones at others is completely inappropriate. So with that said, thank you, staff, for being here this evening. We really appreciate it. We appreciate all the work that has gone into the budget, and there's a lot more work to still be done. But we will call it a day, but thank you guys so much.

Mayor, a special shout out to the city TV team that's also been working all day on the cameras.

Is there a motion to adjourn?

Motion to adjourn. Second.

There's a motion and a second to adjourn the special meeting. All in favor? Anyone opposed? And the special city council meeting for Tuesday, June 23rd, 2026 is adjourned at 9.59 p.m. Thank you, council.