City Council - workshop

Okay, if I can get everybody's attention, we'll go ahead and bring this budget workshop to order. Okay, we do have a quorum, so we'll go ahead and bring this budget workshop to order at 5.31. We're gonna go ahead and start with opening prayer, Pledge of Allegiance to the United States and to the state of Texas. Everybody please stand. Heavenly Father, we come before you this evening grateful for the opportunity and responsibility to serve our community. As we gather to discuss the city's budget and the use of the resources entrusted to us, we ask your wisdom and guidance help us to be good stewards, recognizing that the discussion that the discussions we make involve resources provided by the hardworking residents and the businesses of our community. Give us the wisdom to distinguish between our wants and our needs. while never losing sight of the essential services, infrastructure, public safety, and the quality of life our residents depend upon. Guide us to make decisions that are physically responsible today while preparing wisely for tomorrow. Help us balance the needs of a growing city with our responsibility to respect those who ultimately bear the cost. May our discussions be thoughtful, respectful, and productive. Give each member of this council and our city staff the courage to ask the difficult questions, the patience to listen to one another, the wisdom to seek common ground. Above all, remind us that the numbers we discussed tonight represent more than dollars on a spreadsheet. They represent people, families, neighborhoods, businesses, and the future of our community. May the decisions we make honor the trust that has been placed in us and strengthen our city for generations to come. We ask for your guidance and blessing upon our council, our city staff, our residents, and all those who serve our community. In your holy name we pray, amen. Now the Pledge of Allegiance. Pledge of Allegiance to the flag of the United States of America and to the Republic for which it stands one nation, under God, indivisible, with liberty and justice for all. Honor the Texas flag. Our pleasure leads us to thee, Texas, one state, under God, one and indivisible. All right, we're going to move on to a hearing.

Thank you, Mayor. So I actually passed out a supplemental piece of paper to y'all. There was a question asked by Councilman McAloosa that if you cut X amount out of the tax rate, what would we remove from the supplemental list and what would that look like? So I actually drew out three different options. I'll be happy to explain that in a little bit. But just to lead off, this is the third opportunity for us to talk about the budget and the proposed budget as we did on the, go ahead and bring this page up real quick, the budget retreat on August 11th. And since then, we had an opportunity on the 18th to discuss it again. And now here we are on the 25th. And we'll have one more opportunity on the first if you need to go over things in the budget again before we adopt. But that is the opportunity where we would talk about it on the fourth time and then adopt the budget and the tax rate and the capital improvement program or the capital budget rather. So we're approaching this a little more free-flowing, and we're kind of more inclined to answer questions than to give you a presentation that you've already seen three times. So I see everybody's got their budget books and the PowerPoint presentation printout from the 11th. And so James and I are here to answer questions. And I guess I could start off with a question that was asked earlier today and by Councilman Macaluso of, if you've got this sheet of paper in front of you, he asked, what would it look like if we kept the current tax rate, what would we need to cut? Is that a good summation, close enough? So if you look at the tax rates at the top, We have the current rate, which is $51.18. And then we have the no new revenue rate, which is what's included in the proposed budget. That's $52.96. And the delta between those two is $1.78. So in order to look at if we were to do a reduction, what would that look like? So if you look at where it says total revenue reduction, and you have the $1. the 1.78 cents reduction, it would reduce general fund revenues by 997,868. So roughly a million dollars. And it all comes out of the O&M side. It doesn't come out of the INS side of the tax rate. And just doing a little math to kind of see where we'd need to end up, If you looked at the total general fund revenues of $55.2 million and then the total expenditures of $82.7 million, that's kind of a big difference, right? But there are a lot of one-time items in there that really, when we evaluate something like this, we want to evaluate what are the ongoing revenues versus the ongoing expenditures. So if you less out capital items and transfers, and honestly there are actually a couple more one-time items that aren't necessarily capital items and transfers, you come up with a number of roughly $55 million. So there's a little bit of overage built in on the revenues over the expenditures of $250,000. So if you reduced by a million, you got that $250,000 buffer. So it's about 750 that you need to cover at that point. And if you go down to the bottom and you look at the four things that are on the bottom of the list for the supplemental requests, it's four police officers and then four communication officers. So when you look at those numbers in your budget book, it, shows the total amount for the current year. So you got to net out the one-time stuff that goes with that, like patrol cars and things like that. What's the true ongoing cost? What would you save by eliminating those supplemental requests? So in the case of the communication officers, it's pretty close, $232,000 of ongoing expenditures. And then for the police officers, it's quite a bit different than the $900,000 you see in there, and it would save 392,000 ongoing. So for a total savings of 624,708. Now, taking the 997, add back the 250, add back the 624, there's a delta of about $122,000. In terms of a $55 million general fund budget, That's essentially balanced, in my opinion. And there are things in there that we could go back and evaluate further. There are other one-time costs that are built into things that aren't in the capital line items that truly shouldn't be calculated in this equation. But I didn't have enough time to scour every line item of the budget book. We could also re-evaluate things like our sales tax revenue and see whether the last couple of months have been good. We'd need to go back and net out the big one-time payer and reevaluate our trajectory. I feel like we're in a pretty good spot there. We might have a little bit of gain that we could tweak on the revenue side. So essentially, 122,986 would be balanced. The option to the right of that is, let's say you didn't go up by the full 178. You just went up by 0.78 from the current rate. You would reduce by $560,000. So you have the current net ongoing revenues over ongoing expenditures, $250. And then if you were to reduce two police officers and two communications officers, you're pretty much flat. It's $2,000 in the positive. And then out to the right, if you cut that $1. 0.78 back to you know by half a penny and it was 1.28 over the current rate you wouldn't necessarily have to cut anything because we already have a little bit of buffer built in to the general fund i know that's a little bit confusing it's a lot of numbers but I tried my best to lay it out so everybody could digest it. But that kind of gives you three different looks of what it would look like if you were to, say, not necessarily go all the way up to the no new revenue rate. So that's question number one. What other questions can I answer for you or James?

I'll go ahead and open it up to Council Member McAloosa.

Yes, sir.

Well, I got a lot to add here, which I'm not expecting you guys to have answers to everything.

But I think it's our responsibility to look at how can we make it work at the current tax rate. You know, I'm a true believer that when our housing values go up and down, we should benefit from that. I don't think that when our housing value goes down, our tax rate will go up so that we're paying the same amount of property tax. So I asked you that question, and I appreciate you getting this out for me, but I think that When I evaluate the list and it's not something that obviously I'm educated enough to know the importance of all of these, but I'm not just going to say that it should be just the four police officers and communication officers. I mean, I don't know if those are, I know that the communication officers are pretty needed. You know, I don't see the inclusion of like the vehicles that were, you know, wanting to be purchased for these four police officers, which is a significant expense. I think that, If we started at that point, we could find a way to make it work and not just put it towards the police. With that being said, I also want to review the excess fund balance because I do think that while I think you guys came out with a good strategy, I think it was pretty conservative. I do think that we have an opportunity to to add savings to the homeowners as well. And just by changing them a little bit, instead of adding money just to an investment fund, if we were to move that out to future debt, I think the savings is more significant than if we just had a 2% interest on that money. So that's why I'd ask for you guys to come up with those numbers. And I think between James and yourself, off of a 20-year typical note, If we had the 10 million, you're looking at over $1,000 potentially that homeowners will be able to save over that time period. To me, if we can make it work, I would prefer to do that for the residents than find an alternative for it. And so I would prefer that we start from what our previous rate was. And if we can't make it work, you can't make it work. But at least start there. So that's essentially what I wanted to say.

So in the simplest terms, if you want to keep the current rate, you're going to have to cut ongoing expenditures. So things like patrol cars, those get cut as well because you're not adding the officers, right? That's why it's not shown as a savings per se. It would just be more revenues over expenditures. But if you truly want to evaluate a structurally balanced budget, which we've had a lot of discussion over the last six months about structurally balanced budgets, You want to make sure that your ongoing revenues support your ongoing expenditures. So my recommendation would be if you want to cut the tax rate, that's going to reduce an ongoing revenue. That's fine. That's your decision. But my recommendation would be that you reduce ongoing expenditures. Now, the debt possibility of the debt, right? We were in two different scenarios, $5 million and $10 million. You could save the taxpayer money by excluding those from the, by cash funding part of a project down the road, right? Like next year. And when we issue debt, we won't actually issue debt next year. That's general government. It'll be the next year. And then you would make the debt service payment the next year. So yes, you could save that taxpayer. If you lowered it down, I think we calculated the 5 million saves you about a half penny. Is that right, James? I don't have it in front of me. It's about a half penny, and then the $10 million was a full penny. Add that up over the 20 years, and it's a significant amount of savings in some regards. But you would reduce that tax rate down and keep it there, right? So if you took the $5 million that we were setting aside just as an additional reserve, okay, that's – you know, that's finding a purpose for money that doesn't otherwise have a purpose. If you went to the $10 million, we'd have to reduce one of the other things, like the VRF or the street maintenance fund. So if you wanted to perform at the same levels that it's being proposed in those, you'd have to find the money somewhere as an ongoing revenue, rather than using that one-time money to help fund those programs for a five-year period, and then for an ongoing period for the VRF. So if you wanted to go that direction, I would recommend $5 million goes to a CIP project in the future, and the taxpayer will start feeling the benefit in two years. And they'll feel that benefit for 20, right? So it is an ongoing savings. But if we're going to reduce the O&M tax rate, which is what is affected when you reduce the, if we were to not do the no new revenue rate and we did some number less, you're only affecting the O&M side of the tax rate. So it would be my recommendation that you cut ongoing expense to match that reduction. And ongoing expense are things like salaries, things like that. And what I've told to each of you when we've met individually and in the meetings is it's better just to not add than to have to go back and cut. So we'd be putting ourselves in a position where we just don't add these new officers or don't add these new communication officers rather than having to go back and endure pain somewhere else. But that's a policy decision. So that's why my recommendation would be Those supplemental requests are listed in priority order, and that's my recommended priority to you guys. And my recommendation would be to start working your way up the list. And that means the things on the bottom of the list go first. Unfortunately, there's not a lot of ongoing things in it, because when you look at the list, do you have the page, James, or somebody? You look at page 61, Go to the actual budget parts, first tab, second tab.

Did you say 61?

Yes, sir, but of the budget book, yeah. I guess I can pull the budget book too.

Yeah, sure.

So page 61 is a list of all the supplementals that are included. And then behind that is everything that got cut. If you look at that table, James is gonna pull it up on the screen too. The column on the left is... Okay. The column that says initial cost, that's what would be included in the budget. But a good chunk of that is one time expense. You got to go out to the far right hand column to start seeing annually recurring items. So everything above that is all one time. And then you get way down the list to your annually recurring stuff. And that's where we would start my recommendation would be where you start to cut it. And you start at the very bottom of the list. So if you didn't want to do the no new revenue rate, which understand your point completely about yes, you should benefit when it goes down, benefit when it goes up, go by how the state defines it. The state does not define that as a tax rate increase. They see that as the tax rate staying the same. Because that rate, when your values are going up, unfortunately ours are going down. But when the values are going up, that rate is going down. And so people tend to adopt down to that no new revenue rate. Some number less than 3.5% of excess. But if you wanted to look at a number that's less, that's why it's proposed to you the way it is. And really, we would need to be looking at things in the right-hand column. We could go back and evaluate the rest of the budget, but I would not recommend eliminating any existing positions that we have now. Don't want to have to lay anybody off. I'd rather not add a position and hire somebody new and lay somebody else off.

I don't think, I mean, I know I'm not proposing laying off any current staff.

No, I'm not suggesting that.

And when you say that sales tax could be a little bit higher than what you anticipated, what does that look like?

So we've gotten the last two months receipts from the controller's office. It looks pretty good, but what we need to do is we can take a deeper dive. We have a We have a company that we utilize where we can evaluate every single taxpayer, and we need to make sure that big taxpayer that was giving us all that extra money is not included in that number and take the net, like the normal receipts that we'd be getting, and reevaluate that trend line. On the outside, it looks pretty good.

I was just taking a look at August. We're at almost not quite 20% growth over our normal fiscal year. So there's a chance there's still some residual payments from that company in that situation in there. And I should be able in a couple days to get in there and make sure that that's the case and that's not just HEB having a stellar month or something like that, or RDO selling a bunch of stuff. Previously, when I looked at it and evaluated the timeline to remove that, those responsible for those high sales taxes, we were still averaging about our long-term average 7%, which is what I put into the budget for next year.

Actually, I was going to ask about that, if you could. I saw that the projection was kind of in line with what the previous years were. Is that... not including Home Depot, or is that not given that much of a consideration? Because I would think that it would maybe be a higher growth rate than what's projected on there.

It's included because you've got to consider Home Depot's a partial year, come online in the spring, get about half the year, and then the next year will be a full. That's primarily what will drive our 7% growth. But we can go back and look at it again and see if it's any better.

In the previous two years, when I take out the additional sales taxes, we were growing more just like 1% to 3% level below our long-term average. So this year is looking good at the long-term average, so back to 7%. So we'll just have to see with the overall economy and everything shaking up, how lucky do we feel? That's what we're doing. We're projecting out. We're guessing based on expert opinions. We look at the Federal Reserve and other experts, and they kind of look at the economy. It's always, if you look back, it's 100% guaranteed. If you look forward, there's always a chance that you'll miss the mark and have to do some sort of cuts mid-year.

I know you guys are in a difficult position because I understand that DVHS is making it more and more difficult. And that ends up putting more responsibility on the homeowners. But at the same time, I think that trend is just going to continue where we're going to get less and less revenue. And if we just continue with our expenses on the path that we are... we're going to end up being in bad shape down the road.

Well, we agree.

Without having to just continue to increase the property tax every single year.

Right. We're hoping that we won't see a continued downward trend and that it'll at least level off. Again, By the state's definition, the no new revenue rate is not a tax rate increase. I know it's not seen that way. It is a higher rate that's applied to your home value from year to year. Some people are going down, some people are going up. It's according to the average, right? There'll be some that their values went down significantly, and then they're going to see actually a reduction if you did the no new revenue rate. I'm sorry. I protested. I was successful in my protest. But your point is well taken, and we are very mindful of the future. That's why we do the five-year forecast that we present to you all, that we've taken into consideration the flatness of the property tax growth. I don't even think we're projecting one to two percent. In terms of growth?

Yeah, I cut it from five and a half to four. A bit of inflation, and then the new homes and values go up 4% on new growth, but it's tempered with a loss on property, so... Low the no new revenue rate.

So you've got to remember also... that the property tax revenues do not exclusively come from homes and homesteaded properties. We have rental properties that are not homesteaded. We also have commercial and industrial. So in our community, a good chunk is that commercial and industrial. About 40% of the revenues are derived from commercial and industrial. So just bear that in mind when we're talking about this situation.

I mean, you know, just kind of recap. I just wanted us to at least evaluate the ability to maybe remove up to a million dollars so that we remain the same property tax rate, but also have a long-term plan on lowering the INS with putting some of that money towards future debt. So that was what I think we should at least consider and evaluate.

And like I said, everything's on the table. You guys are the policymakers. I would say this about lowering the INS rate. Finding a purpose for that $5 million, it's out there. I would not recommend changing the street maintenance program or the VRF program because if you shortchange those, I feel like you're going to have to come up with the money anyway. And it's not a savings if you save over here, but then you've got to increase over here or short it. The Vehicle and Equipment Replacement Fund, like we talked about, I don't know if you guys had an opportunity to read that article or watch the news story that I sent to you about another city in East Texas that's having to replace 12 trucks. They're doing it all with debt because they bought them all with debt. So they're caught in that debt loop. They can't afford to replace their trucks. And some of the videos... You know, you got torn up seats and all in the video. So we are trying to not let our fleet get in that state and keep it in as, you know, top working condition and not get caught into the debt loop and where you're going to end up paying significantly more. They're using COs. So COs for the, I think it's, I think it was $12 million. You're going to end up paying 30, 40% of that. It's going to be interest on top of that. when they get done paying the CEOs after 20 years. So I don't want our residents to have to do that because that more than wipes out anything that we would save on the other end. So I would recommend you maintain the VRF program as proposed and maintain the street maintenance as proposed. The $5 million, that's discretionary. Yes, sir.

So, Mayor, so you've already, you keep saying we're the policy makers. How much of that, of this list right here on page 61, would you like for us to cut in order to give you direction in order for the tax rate to remain the same? What are we talking about? You said start at the bottom, so are you looking for direction from us about what we would like to cut from here?

Well, no, I think that, first of all, I guess what I'd like to hear is there a consensus on a tax rate you'd like to target? And is it to keep it the same, or is it as proposed in the no new revenue rate, or is it something other than that? I think that's where we'd need to start and maybe work our way backwards at this point. And I would like to hear from all of y'all and kind of what your perspective is and where you would like to be policy-wise.

Steve.

Yes.

I'm kind of on the same page as Councilman McAloosa is in regards to trying to keep the rate at the same, you know, and I saw your, these numbers here and is there another analysis that we can utilize? You know, you know, we need our first responders, you know, these cuts, Is there, was there another picture that we painted or can we paint to show, you know, maybe some reallocations of positions or something like that. I'm just throwing some stuff out there. I'm not saying, I don't know, I'm sure you're trying to understand what I'm trying to get at, but these are, I think they're required or needed positions between the communication office, the police and the EMS. I think these are definitely needed positions. Now I think that trying to keep the tax rate at the same number, is there another way that we can dive in, analyze, look for some efficiencies within the departments to where we can still support our same rate and still obtain these positions?

Well, I want to be very clear. These are not positions that we have currently. These are ads. right so we can go back to if we were doing what you were suggesting we would go back and we would evaluate what people are doing now which actually we do on a daily basis annual basis to try and become more efficient we would have to when you're talking about a million dollars it's not just becoming more efficient it is cutting and with 70 percent of the cost in the general fund being salaries it's likely going to have to be salary related now we could We could cut fuel. You know, we're adding money for fuel because the cost of fuel is going up. But then that means they're going to need to drive less. Or, I mean, there are things that we could cut, but it will affect operations at a million dollars. So my recommendation is you just don't add new, and then we just suffer that workload as it is now.

Yeah, but I don't want to suffer that workload. Those are needed positions for the safety of our citizens and our community. I personally don't want to see a cut there, or I would like to see more bodies there. From my understanding and the discussions that I've had with chief of all departments, I think they're They're really being tasked. And I think that we need to definitely support those positions that they're asking for. I just want to make sure that long term that we're not putting ourselves in debt, further debt. I know CEOs and DOs, my analysis that we're currently about $250 million already in debt service. And to me, that numbers, I guess it is what it is. I want to make sure that we can kind of control that in a sense. But again, back to what Macaluso was saying earlier, I think I want to see these positions, you know, for me personally, I would like to see these positions, you know, new added positions, but again, see how we can work that in. However, maintain the same rate if possible. That's just my opinion.

The no new tax rate would generate more income, but it would raise the tax rate a little bit as opposed to just not raising the tax rate at all. Is that?

So the no new revenue, the way you calculate the no new revenue rate is you take the properties that were on the roll in 25 and you compare it to those same properties in 26 and And so it's tax base times tax rate equals yield or the revenue. So you've got to keep the revenue number the same. So if those properties that are on both years, if it goes up, then your no new revenue rate has to go down to calculate the same revenue number. If they go down like ours did, your rate goes up to generate that same amount of revenue. So what's being proposed is to, since those values went down, is to keep that rate the same, which would mean that that yield would go down.

Okay. So we're focusing on no new tax rate. And I get it, and I think that's... I think that's legitimate. I think that sounds good. But at what point in time do you, how many years do you go with no new tax rate before the quality of life in the city of Shorts starts to diminish? At some point in time, we need new officers. We need new vehicles. We need half the stuff on that list. So sooner or later, we're going to have to raise the tax rate. Maybe not this year. Maybe not next year. But I don't think we can continue indefinitely just sort of saying I don't want to raise taxes.

Okay. Correct. So at some point, yes. I mean, you can address it through growth if your property values are growing. Remember, in the general fund, property tax revenue is about 40% of total revenues. What our efforts are concentrating on is diversifying, adding more commercial, adding more industrial, and retail. So if we can generate more sales tax, that can help boost up that revenue source, kind of more evenly distribute revenue. And consider it like a stool, right? Ideally, you'd want three broad-based tax revenues, but we only have two in Texas. Got the sales tax and the property tax. So if we can boost up that sales tax and do a little better, then we can help offset some of that lack of growth in the property tax. But to your point, if you want to continue to add things, right now we're not outgrowing it. Like we were five or six years ago where values were growing and we're adding value every year. Unfortunately, the value that we're adding, a lot of those are homesteads, and they're able to go back and get the DVHS 100%. So we actually had over a million dollars in refunds of people who – counted on that growth revenue, but then the next year they qualified, so retroactively we had to pay back five years' worth. So it is a new environment that we're living in and that we're having to adjust to. We've adjusted our long-range forecast. We've adjusted the things that we're doing to match that trend line. I recommended the no new revenue rate.

Why don't we do this? Just based upon what I'm hearing, maybe. I don't think there's a heavy desire for anybody to raise tax rates. So why don't we just go with your proposed no new tax rate? I'm hearing about three or four of us probably. Just in this room, not anything, please. There's no new tax rate. So I don't know. Unless there is any interest on this council to do anything other than no new tax rate, why don't we start at that point?

Sounds good. So I know Councilman McAluso has already made it clear that he wants to do the current rate, which is lower than the no new revenue rate. And Councilman Sheridan wants to do something lower than the no new revenue rate. So maybe we can hear from everybody else.

I'll go ahead. Obviously, nobody wants to sit there and raise taxes, but I'm interested maybe in 0.5252, and that will retain the officers and then dispatch in the positions.

So essentially...

If we have to, that's where I would be at that number.

So on this sheet... Could you say the number again?

I apologize. 0.5252.

5252.

Okay. And that secures the officers and dispatch and...

So... There would be 44.44 of a penny backed off from the no new revenue rate. And that actually would add all of the police officers and all of the dispatch positions. Yes. Anyone else?

Yes, question.

Yes, sir.

So with the current tax rate, Do we get those additional personnel?

That would not be my recommendation would be to not add people. It would be to kind of keep our operating expenses the way they are. Because you're adding operating expense and you're taking away operating revenue.

What is the total revenue that we've had? for the past year?

I'm sorry?

Total revenue.

The total proposed revenue for next year is 55, 290, 550 in the general fund. And that includes if we used the no new revenue rate. So then if you reduced the tax rate by some amount, then we would take that out of that 55, 290, 550.

And what is the total expenditures?

Well, the total expenditures is 82,780,185, but there's 27,747,809 of that, that's one time. So that's transfers out, that's capital items, things like that. So really you wanna evaluate it on the net basis and that's 55,040,376.

So what would be your recommendation or what is the city doing to minimize the difference?

So my recommendation is to adopt the no new revenue rate, which would be $52.96. It is higher than the current rate by 1.78 cents. And that's what I included in the proposed budget. If we do that, we're able to add the four dispatch officers and the four police officers. But if you were to adopt some rate lower than that, my recommendation, since those were essentially the bottom of the list to be added, would be you start from the bottom and you work your way up without affecting current operations. If we were to go back and evaluate, if we kept those in and cut somewhere else, we would be affecting current operations in other areas.

Yeah. Well, I'm also in favor of not letting anybody go But I am in favor of, if we need more officers, more first responders, I'm in favor of that. But I don't want to put the burden solely on the residents. But we got to figure out a way to support our first responders at the same time, keep the tax rate low for our residents, and minimize the difference of the total expenditures versus total revenue.

So here's a possibility. I can throw this out there and maybe get... feedback from the council. If we kept the current rate and we need to reduce general fund revenues by a million dollars, we don't add the police officers and we don't add the dispatchers and we evaluate, say, midway through the year, towards the end of the year, and then we come back next year and add those positions. That's the top of the list next year to be added. I prefer the cautious approach of not adding those new expenditures And then seeing how it goes.

And if we don't add them, how would it affect our city?

If you don't add them, we would be shouldering the current load as it is. But I'm not necessarily going to recommend to you to address a need in one department but then create problems in other departments, which is what we'll do. Because I've got other departments like the streets department that are understaffed. I've got other departments that have a hard time filling positions now. I've got a lot, and I don't want to have to go rob Peter to pay Paul. I don't think that's a good policy. I don't think we gain anything by that. So if you, again, my recommendation would be if you want to keep a lower tax rate, if you want to keep the current tax rate for that matter, We take the four positions out, and then we evaluate this year, see how we're going, and those are top of the list next year. We could even do a mid-year evaluation if you'd like. I see a lot of red lights.

I would like to hear from the other council members before I comment more. Okay.

So right now, when I'm hearing some of the council members, they'd like to see if what we can do to keep, take advantage of the current tax rate, which would drop it to 0.5118, correct? And then if we go to the no new revenue rate, which is the 0.5296, that's bringing back the same amount of money that we brought in this fiscal year, correct?

Correct.

Although it looks like it's an increase, it really isn't. We should be bringing the same money back. By doing so, are you saying we're still able to keep the four communications officers and four police officers?

Yes. If you accept the proposed budget as it is, we keep everything that's proposed in there, which includes four police officers and four communications officers. Now, to be clear, we are going to receive more property tax revenue than we did last year. And that's because of growth. New construction that was just added this year.

What is the percentage of the growth?

4.2%. Put it up on there as conversations. This is the general fund and the INS. So the budget at the no new revenue rate would raise $1.2 million or 4.4% more in total property taxes than the year prior of that amount. 1.2 million, 4,000 difference. The tax revenues be raised from new property. So there's a couple of ways the state has us calculated. They don't put in new property added when they're telling us like, hey, this is the no new revenue rate. This is how much you bring in to bring out the same amount. The new property, these are new homes, these are new businesses that all need new services. So that's where that need for new officers come from or more parks or additional street maintenance. It's from these properties being added, that $1.2 million. The no new revenue rate, one thing it doesn't address is inflation. It costs more to provide the same level of service that it did in the years prior. That's where that that voter approval rate. They say, hey, you can get, you can go up to three and a half percent, which is our limiting inflation factor to provide for inflation on existing services. That's where that top rate kind of comes in. So if you want to look at it this way, we're bringing in the same amount of money, doesn't really kind of address a whole lot of inflation, and then we have these new properties that need new people to help service, and that's where that new officers come from and the need for the new officers and new dispatchers. It comes out of that $1.2 million, that new property being added. Just kind of give another way to look at it.

So question, with that new growth that's coming, why couldn't we just rely on that versus raising the tax rate when we're going to be getting more money and some more revenue than we did this past, this previous year? Couldn't we rely on that? You can rely on it.

No, it's a good question. You can rely on it for a certain amount of time. But again, what it doesn't address is inflation. Right. So as the city keeps growing, more services are demanded. Hey, we have more police officers needed to be out there to patrol and keep those increasing populations safe. But then where's the money to cover the extra fuel costs, to cover the health insurance, to cover just all the service contracts that we have that go up 4% to 5% every year? Then that money would never address those things.

So yeah, we are gaining a little bit of property tax revenue, but it's like James said, it addresses inflation. It also adds, that was an ad, right? Those were added properties, added residents, added service needs. And quite frankly, it's not growing that fast. And we're having to give a good chunk back as people are, receiving their 100% disabled veterans exemption, we end up having to give the money back the next year. So we're not really, we're trying to not count on that money so much.

But also our population is growing, correct?

Yes, sir.

What is the percentage per year?

I don't know. Brian, do you know off the top of your head? Two to three, 2%?

Yeah, if you give me a sec, let me look back and calculate.

And I would add this in terms of if we wanted to keep them in and keep the current tax rate and you ask me to go back and evaluate somewhere else in the budget to cut. if you're telling me that police is off the table to cut and fires off the table to cut in the general fund, that's half of the money right there. So then I got to go spread a million dollars among less than half of the general fund. And it not, it's not a 2% cut there. Now it's a four or 5% cut. And I'm having to deal with cutting personnel or positions more likely would, you know, cut something somewhere in terms of a vacant position or attrition type thing. But I don't think that's helpful for our organization. I think that takes us in the wrong direction. And I feel like services would suffer in those other areas. And we need to provide services for the entire community.

Either way, either tax rate, is the step rate, the step included?

Yes, the step and the merit are included, yes.

Included no matter what tax rate we have?

Say it again.

No matter whether we have the 0.51 or the 0.52. Correct. Okay. Correct, sir.

So, Councilman Guerrero, so we grew 9.1% in terms of population between 2020 and 2025, essentially, so we're growing just under 2% a year.

Thank you.

Yes, sir.

Mr. Williams. Yes. So with either the tax, the no new revenue tax rate or the current tax rate, our first responders are getting their merit pay, our staff is, or their step pay, and our staff is getting their merit pay? Correct. Correct.

So what would it put the tax rate, you have that center column right there where it says that you could bring on half now, but you would have to cut like, right now you have eight positions that you'd like to bring on, four communications officers, four police officers. What would the tax rate be at if you do that middle column?

So you would reduce the 1.78 by a penny. So it would be 0.78 on top of the 51.18. So quick math. What is that, James?

Okay.

So 51.18 plus 0.78. Okay.

And so that's, um, is that something we could consider with also like a midterm review to see if we could bring on the other four, uh, two communications officers and two police officers if, uh, if we're doing well and, and our sales tax was up and those kinds of things.

So it would, you wouldn't be able to change your tax rate mid-year because once you set it, it's for the whole year. But we could do a review and see how other revenue sources are performing and sales tax and some others and see about bringing them on mid-year. And that's a viable option as well, so.

I'm with Councilman McAloosa. I really would like to hear from Councilmember Davis and Councilmember Dietz. It seems like we're in a stalemate here, and we sort of need some different opinions.

Without going into specifics, because I don't think it's worth it at this point, we're on a downhill slide between the revenue that we lose from the veterans exemption and the lack of support from the state of Texas. This is problematic. I can't see just keep on raising the tax rate. I understand we need certain positions in the department or in the city, but I think there are cost savings to have across the city. And I'm just not convinced that we're looking across the city thoroughly to look at where we can save money. So I don't think raising the tax rate, it's a bandaid. You raise it by a penny, it's gonna be a Band-Aid. And if we're not gonna look at this seriously for the long term, we do a five-year budget. But at the rate we're going, I was just looking at the impact of the veterans exemption. And you did a great job of showing the impact of that over the past five years. The impact on lost revenue to the city of Church is going up significantly every year. And the reimbursement from the state of Texas is going down significantly every year. So to me, you've got two options. You either just go ahead and slap more money on whatever the max we can raise it to. Because if we put it before the voters, I can tell you how that's going to work. If we go above the level and it goes out to the voters, it's going to fail. If it didn't fail, I'd be utterly amazed. but I would bet that it would fail. So if you turn around and go up to the max that we could do without doing a voter referendum, well, then the path that we're on, we might as well start doing that every year. Just go to the max rate every year and just keep on adding money because we've got a significant problem in the city of shirts. And we've had some great conversations here, but it ain't fixing it. Not fixing it. Adding a penny this year, adding a penny and a half this year is not fixing the problems that we have. And I think we all need to maybe seriously look at a lot of things in the city and look at where we can save money. And I'll let it go with that. But I'm not in favor of just going ahead and increasing the tax rate, throw a Band-Aid on it.

So to the no new revenue rate, you're not in favor?

Okay.

I tend to echo council members Sheridan and Davis and what they were saying and maybe we can take a deep dive into some of the other areas of the city because you know I agree I'm not willing to give up the four communication officers and the four police officers I think that could be a detriment to our city and continue to lower housing rates if people deem it unsafe. So I think definitely maybe taking a little look around. This is quite a pickle that we're in, and clearly raising rates is not great in this economy right now. But maybe if we could, I don't know what to look at, but if we could look at something else, because I'm not willing to give up the police and communications.

Other options are we could eliminate the step and the merit at 600,000. That's kind of next up on the list, but I don't recommend that because that affects every position in the organization. But it only gets you about 600,000 of the way there. Again, my preference would be to not add new positions to one department and then take away step and merit from the entire organization. Because we would go back and we would remove it from the water and sewer fund, the drainage fund, so it affects all 500 employees. So that's not necessarily something I'd recommend. There are always ways to go and find money in the budget. We can cut things like training and just the things that are easy, obvious things to not invest in as an organization. But that would need to come from the entire organization. So you've got police department and a fire department. Hopefully you wouldn't tell me that that's off limits to cut from as well. Because I don't know that I could shoulder all that without eliminating people in parks and library and all the other departments. I would have to eliminate people or positions. Because again, 70% of what makes up the general fund is salaries.

So why don't we concentrate on increasing our revenue instead of, if we cut here, or if we boost up here, we're going to have to cut here. How about raising our revenue, increasing it, increasing profit? That way we can make sure everybody gets paid, whether it's staff, first responders, they're all getting their steps, their merits, and we keep the tax rate low for the residents. Increase our profits, increase our revenue.

That's what you were referring to, right? There's two buckets. There's the 40% from the housing bucket, right, more or less? That's what you said, Ned?

From property tax.

From property tax. It's from revenue. And so we only have two buckets here. 40% are homeowners. And what I'm hearing is nobody wants to raise it above the 0.51. So now it goes back to the commercial side or the EDC side. How do we increase revenue? Do they hear it to that point? Right.

And we are working very hard to do that. It just takes time, and you've got to build. I think maybe as a fair compromise, kind of maybe what the mayor had said, if you reduced it by a penny and you didn't necessarily go up to the $51.96, you went to $52.96, you go to $51.96, and you add two positions... Or if you really wanted the dispatchers, you could probably add three dispatchers or all four dispatchers and no officers. Maybe we could hear from the chief.

Jim Lahr, your police chief. If it's up to me, I would rather have four dispatchers and forego the police officers. My dispatch is the area that I need more assistance in right now than patrol.

Is there... So I'm in favor. If you want to split the baby, I'm fine with that one. I think last year we split the baby, didn't we? I think there was like a back and forward between the promos. So I'm willing to go down and somebody's willing to go up and you'll sort of have general direction.

And if the commitment is to the current tax rate and we don't want to go up to the no new revenue rate and say the next budget cycle, we'll work towards that. I'll build the budget that way. If that's the direction y'all are going to give me, I'll do that and we'll – I'll figure out ways to cut it. It's, it's, um, it's not impossible to do, but it, you know, it comes with a little bit of pain here and there.

I thought I recall us going above the no new rep, no new revenue rate last year. If I remember right. Yeah. Yes. So I know that since I've been here every year, we've gone up and up. Okay. It hasn't gone down at all. Um, I have, um, police chief has been very, very vocal about the need for dispatchers and I've, wouldn't disagree that they're needed so i think if there was anything not to to get rid of it would probably be that um and i know that their pay increases are included in here as well which i don't think anybody's interested in removing that i know for one i have zero interest in messing with current staff or even their merit or step increase opportunities I just, I don't like the trajectory that we're on since I've been on council because every year it's an increase. And I don't see why that would change unless we actually do something from our side. And so maybe there's a balance here. To me, the balance could be that in the future with lowering the INS can maybe offset some of that. But that's where I stand.

Now, to put it into perspective, if you just did the four dispatchers and only increased by 0.78, you're essentially flush. You could add the dispatchers. You're going to be a penny lower than the no new revenue rate. So you're somewhat in the middle. You're actually a little bit less than in the middle, right? You're not necessarily splitting the baby. You're cutting two-thirds of the baby.

Quick question, Chief. What's your staffing level for dispatchers currently?

So I have authorized 75 commissioned officers, a total of 129. Again, we are, for the first time in over seven years, I am at 100% for commissioned personnel. But with that said, nine of them are in training or just hired, so it can be anywhere based off of their experience and some just going to the academy. It could be six to nine months before we actually have them boots on the ground.

Okay. But at that point, that does give you the opportunity to add more patrol officers?

That's my intent, is to fill patrol first with those that are coming online.

But I'm saying excluding these four officers with your officers in training. Essentially, they're not currently out on the beat on their own.

No, I'm carrying vacancies like in CID and traffic so that I can keep patrol filled right now.

Okay, I just don't want the perception that like, you know, hey, we're removing this, so we're in the need of having four more officers on the street right now, and because we don't do this, we're making our city less safe. I think that's not a valid view of it.

I would agree with you, and I would also fall back on some earlier comments that said that we may need to reevaluate this. And even as I'm hiring people, again, I was telling you six to nine months before even I come to full staffing. So if you told me four officers, it would still be nine to 12 months before I go through the hiring process to fill them. It may just be a little delay if we were to look at that down the road. But I do have plans in place, and I can carry vacancies to keep the patrol officers on the street. Okay.

So removing these four officers is not going to make the streets more unsafe?

No, sir.

Okay. Second to that, on the dispatchers, I know that you've had an issue because of the pay. What's the staffing level that you're trying to be at, and what's your current staffing level?

So right now we have a minimum staffing of two per shift, and remember – Dispatch falls under PD. However, I am working across all three disciplines, which includes fire and EMS. And EMS, there are 11 entities and 235 square miles. And we also dispatch for Cibolo. So really, we're dispatching for a city of about 85,000. So I'm working to the point where I can have three to four dispatchers there. Because when you dispatch a fire call, and you dispatch a hot police call, you need to have a dedicated dispatcher, and we don't have that capability right now. Or we're going to lose some safety issues that are mandated.

Like you said, you're more in need of the communication officers. In my professional opinion, yes, sir.

And four is what you need, Chief?

Yes, sir.

Do you get the four dispatchers at .511?

Stating it at 51.18?

At the current rate, at the .5118, yes. Do you get the four dispatchers that are needed?

No, sir. We would be a little bit short.

Probably about another half penny, like 5175. I'm looking at the revenue it would generate. That would be about what we would need for Steve's calculation on the sheet.

What's the minimum we need to raise it to to get to the four dispatchers?

I know you just said it's like five ones. Okay. Which would effectively lower tax bills by 2.3%. Yeah.

I was just rounding it to the 0.78 because that's easy math.

Okay. So at least a starting point in order to get the four dispatchers needed for safety and communication at a minimum, we're at the one, one, seven, five or one, seven, five, right? 5175?

5175. At a minimum, we're at 5175. Yes, sir.

Question. Again, I want to go back to the new growth. With the new growth revenue that we're going to receive, now, maybe you answered this earlier, but how can we not utilize that to support the, you know, with the additions of the... you know, the police officers and the communications. Why couldn't we utilize that $1.2 million worth of new growth to support this versus raising the rate?

So if you look at page 68, James, where is it on here? Is it 68 in the budget book? The supplemental list? Sixty-one. Sixty-one, thank you. So that growth, the dollars that are adding to that or added from the growth are going to increase in fuel costs, increase in IT, the step program, the merit program. So that's getting used along with the increases in the sales tax. So we are experiencing some revenue growth, but it's being used for those other items that are higher up on the list than that. So we could look at that list and see about cutting those items, but that just means you can drive less. or it just means that we can do less things.

But again, using the rationale that you guys just pointed to me, here you have the four communications dispatchers and the four police officers staffing here as part of that.

Right, yeah, so this proposed budget includes the no new revenue rate. So what we're talking about is backing that off. So we're going to lose X amount of money. If we back it off by, say, that penny, it's about $650,000. So we've got to find $650,000 somewhere. So we remove the four police officers. That gets us to a point where we can essentially add the... If we increase the tax rate from the current rate from $51.18 to $51.75... then we can add the four dispatchers, but we can't add the police officers. And like Chief said, he'd much rather would have the dispatchers than the police officers. And James, how much is that increase on the average home? Can you calculate that real quick if we went up? Yeah, from 51.18 to 51.75. Is it 51.75 or 51.96? I think James said $5,175, we should be able to add the dispatchers, the four dispatchers, but no police officers.

Yeah, so effectively a 2.3% decrease in the taxes. It would drop the tax bill about $39.44 annually. About $3.29 per month. So a savings of $3.29 per month and how much total per year? $39.44. $39.44 per year.

So, yeah, it eats into the savings a little bit.

Okay, so on page 51 over here, in 2020, our tax rate was 0.5121.

On the slide show, slide presentation?

Yeah, it was on page 51. Okay. No, it's on the... This one, sir? It was on the PowerPoint. It was on the very front of the budget PPT.

Is that the one? The historical rates?

Oh, yes, yes. Okay. And so in 2020, it was 0.5121. And then in 21, it remained the same. It dropped in 2022, dropped again in 2023. went back up 2024, went up again in 2025, and then again in 2026. So, I mean, and I understand what everybody's saying, but being up on the dais and also hearing the residents to be heard when they come up to speak about wanting to see more police traffic, wanting fixed roadways, wanting sidewalks. We can't do that if we just keep lowering everything. And I understand that there's growth, but we do have property owners that move in that do not pay because of unfunded mandates. So just because there's growth doesn't mean that there's that money coming in. And I mean, if we go to the 0.5175, I mean, I feel like that's taking advantage of both worlds. We're still trying to keep up with our infrastructure, our personnel, still allowing our staff to be able to get their raises, their merit raises and such, as well as trying to keep up with some of the infrastructure that we got to do. So... And that's just trying to, I mean, that would be my recommendation. It wouldn't be to adopt the lowest rate and then kind of start going backwards because then we're going to be climbing a mountain again as we continue down the road.

I think if you compounded that with if you took $5 million and cash-funded a general government CIP project, the savings that you might see there would be roughly the equivalent of not going up to the no new revenue rate. But they wouldn't realize that for a couple of years, but you would realize it forever.

Okay. So there may be one or two, and so I'm not – Who could not live with 5175? 5175 seems to be the minimum for a safety issue in order to get to four dispatchers.

Well, it requires five votes, correct, James?

No, any of the amounts below the 5296 is just simple majority. Simple majority. So only if you go over the no new revenue rate would you need a super majority. Okay. Staying corrected.

So I guess maybe this would be an appropriate time to poll the council and see if the council is agreeable to 5175?

Well, last year it took us several votes, didn't it?

Yeah.

If I recall right, it took us several votes one of the years, so I don't...

I think the hope is maybe we could come to a consensus tonight, but if that's not possible, then I guess it would be down to next week, so...

I would ask the mayor to poll the council... and sort of see where we're at. That'll give us some direction, because we're going back and forth.

I'm in agreeance. I definitely want to give the police department what they need. But also, us as council, we're relying on you and... Mr. James and Sarah, James, to increase our revenue, increase our profit. I want shirts to prosper. I want us to increase that revenue so we don't have to raise the tax rate and our first responders can be fully equipped to provide quality service to our city. We were the safest city last year. That says a lot right there. So we're relying on you, Mr. Williams and your staff, come up with some way to increase our profits and make the city prosperous. That's my take.

So, well, You are heard very loudly and clear, sir. One thing that we're going to do is Crystal and I will be at the Municipal Policy Summit at TML this week, and we'll be contributing to the TML platform, and we're going to do everything we can, which includes trying to get legislation introduced to fully fund the DBHS program. And hopefully we can gain some ground there. That's one of our efforts. We're putting a lot of effort into doing that. We are... We're going to do everything we can to make sure that pans out. Aside from that, we're going to continue with our economic development efforts, Amy and her team, as well as attracting new retail. I think we'll see some good benefit from Shirt Station. Retail tends to build a synergy where you gain more retail. So hopefully we're going to gain some momentum there, but we're going to keep working hard. We're working on the south side as well. because 10 and 1518 is fertile ground, as well as 1604 and 10. So we're hoping to see some expansion there as well. It just takes time, and you've got to stay at it, and you've got to stay diligent on building that up.

I'm good with the additions.

You're good with 5175? Yes. Okay.

Council Member McAlisha?

I haven't heard anybody else mention the excess fund balance. I don't know where people's thoughts are on that. Because that could make me more comfortable with it if I knew that others were more interested in putting it towards future debt than just putting it in the bank with very little to no interest.

Well, just to clarify, it will be spent. It's going to be spent on vehicle replacements and repairing.

No, I'm talking about the, well, you had proposed $5 million for the reserve.

Yeah, and $5 million is discretionary. It doesn't have a home. So, yeah.

That's what I'm saying. I have an interest in using some of that so that we lower that future debt so that actual homeowners see a benefit to it.

So to clarify, you mean the $5 million, not necessarily all $32 million?

Yeah, no, no, not all.

Okay.

Council Member Davis?

Yeah, I'm a no. So what would you prefer to see, the current tax rate?

Mayor Pro Tems, what?

I ANSWERED IT EARLIER, SO I'M FINE WITH 5175 BECAUSE I SAID 5252, SO. OKAY.

COUNCILMEMBER DETZ.

I WOULD BE INTERESTED IN LOOKING AT WHAT MACALUSO WAS SPEAKING ABOUT USING THAT 5 MILLION, AND I UNDERSTAND THEY WON'T SEE IT FOR A COUPLE YEARS NOW, BUT I THINK IT'S SOMETHING TO LOOK INTO.

SO JUST TO CLARIFY, IF WE USE EXCESS FUND BALANCE FOR CAPITAL PROJECTS, IT DOESN'T AFFECT THE 26-27 TAX YEAR. or fiscal year so it doesn't affect this tax rate at all it would affect future tax rates so as we adopt next year's budget we could take it into consideration so then if we wouldn't be able to stay at the 5118 and get the dispatchers if we did that is that what you're saying correct it so if you lower the tax rate from where it is now so the debt rate you have to you have to adopt a debt rate to support your existing debt service. That's what we're doing.

So it's 1681.

So what Councilman Macaluso is suggesting that in the future, instead of issuing as much debt and keeping it at 1681, it goes down to say 1631. And then you have that savings out for 20 years because you didn't issue that half penny worth of debt. But you can't do that until next year because you'll support the existing debt then.

So the only way we can get those four dispatch officers for this budget year is to go up to 5175.

Well, I wouldn't say that's the only way. We could cut somewhere else, but I don't recommend doing that.

Then I would go with the 5175 so we can get the dispatch officers and not cut any other positions.

Okay.

Council Member Sheridan.

I am a proponent of having... giving the chief all the resources he needs to include the police officers and the communication officers. I've been there, I've seen what the dispatchers, the lack of resources that they have and they're doing a tough job over there and I've seen it. I think there's, again, ways that we can work efficiencies to keep the rate at the same level. and still offer these and still increase the manpower that we need. So at this time, I'm going to say no. I want to keep the rate at 5118.

So right now, we're at 5-2. Yeah. 5-2? 5-2.

If it's worth the exercise over the next week, I will go back and look at where we need to cut. But bear in mind, if you're telling me police and fire are hands off, that means it's engineering, library, parks, streets. Okay, so those are the departments I'm going to go look to make cuts in. Okay.

Sure.

Sure. So, yeah, and if the feedback is personnel in those departments, because it wouldn't make sense to go cut personnel in those departments to add personnel in those departments. I'm gonna have to cut training dollars. I'm gonna have to cut supplies, materials aggressively to get to a million dollars.

Mayor, I wouldn't say hands off, but in our strategic plan, it was clear I think in that survey we got from our residents, it was clear we wanted to concentrate on police department. We were supposed to concentrate on law enforcement. That was our goal and quality of life. And so now to sort of say, well, we're going to sort of backtrack and sort of maybe start messing with their budget seems counterintuitive to what our strategic plan and what the residents wanted us to have. So it may not be hands off, but they It very well should be towards the bottom if we do have to affect them. I mean, it's counter to it. We already have our marching plans with the strategic plan that we've all voted on.

And if you don't know what he's referencing, y'all, he's talking about the strategic plan where – well, you're talking about the resident survey, I believe. So the resident satisfaction survey identified – police services as the top priority. But I'll remind you, second below that was parks, trails, and so just FYI.

I'm with Council Member Davis. I don't know how we can cut any positions all the way around the board because, I mean, parks are needed just as much as any other position that we have. So I would just try to – I would run the numbers to see what things would look like and how the cards fall. We did, if we just kept the no new revenue rate, well, the 0.5118 is what they're recommending, and then also the 0.575. Let's see what that look like. I mean, the 0.5175.

Steve, can you clarify again on the total ongoing revenues over expenditures? You had the $250,000 on there on the sheet that you handed us.

So if you look at the sheet, it's got $55,295.50 as the total revenues, right? That includes property tax revenues at the $52,096. So... The total expenditures are 82.7 million. But you've really got to take out, to do a fair evaluation, you take out the one-time stuff. That's the 27.7. So your net is really 55.40. It's actually probably a little lower than that because there's some other one-times that I didn't have time to scour the budget to go plug out.

But that doesn't offset it enough to add the dispatchers?

It offsets it by 250. But if we cut out 560... Right, so if you cut out 560 in revenue, you reduce it by the 250. So you're at 310. And so if you got the dispatchers, so I gotta come up with 310 more to cut. So if I cut, well, yeah, I guess, wait a minute.

Right, 560, add back that, 232.

Yeah, I think that would get us there, wouldn't it? That's why we're at the 5175. Don't necessarily have to be at 5178.

No, I'm just, the way I'm reading it is that if it was at the 5118, the revenues over expenditures would offset the cost of the communication officers.

The sheet that he handed out, the $55,290,000, that is at the no new revenue rate, the 5296. You take a million off of that. take a million off of that to be 54,290, and then that positive 250 becomes a negative 750.

Yeah, so now you're underwater 750, you gotta make back that 750. So you take 400 away, you're still 300 or so short. I DIDN'T KNOW WHAT YOU WERE ASKING ME.

ANY OTHER QUESTIONS?

MAYOR, I WAS GOING TO OFFER SOME PERSPECTIVE ON WHERE THE MONEY IS, RIGHT, FOR THE GENERAL FUND.

MM-HMM.

It's a little distorted because of the high level of transfers this year, but it says 34%. It's usually closer to 47, 50%. And if you look at personnel, it's 39.7 million of the 55 million that we're talking about. So... It's the largest, it's the lion's share of what makes up your general fund. So if we were to go back and cut other things like operating, there's 15 million in there, right? So if I got to find a million there, it's somewhat significant. And if you look at the capital outlay and transfers, that doesn't really help you because those are one time and we've got plenty of fund balance to cover those. So that's not necessarily an issue. It needs to come out of this $15 million. Oh, that's $15 million. So of that 15 million, call half of that police and fire. So now I'm down to seven. So unless I'm cutting it out of police and fires, operating money as well, then I got to cut seven down to six. And that's painful for the rest of the general fund departments. It becomes significant cuts. So what we can do is we can come back. I can evaluate some of those cuts might be, what they might be. I don't know how I can do it without cutting into the personnel. So it might be some combination of from operating and from personnel, from various departments, I guess, to add the other personnel.

We're kind of robbing Peter to pay Paul at that point.

That would be my perspective, yes, sir.

Is there anything that council would like to see from the city manager and the staff going forward?

I just think, you know, some options here. You know, just give us a good picture, some options that we can look at. And if, you know, if we can't keep the rate at 5118, we have to go up to the new revenue rate, then I think for me, this is the reason why. You gotta give me the good why of why we can't do with this rate and we have to go up this rate. It's just my concern, just all the way around us, the economy is just, everything is going up. Our gas price is going up, grocery bill is going up. And to me, you know, I hate to see that our, you know, our rate, you know, everything else, this goes up as well. So, you know, where is that balance, you know? But, yeah, just give us, you know, I want to see the pictures, the options that we will have. That way we can make a good informed decision. And if the point is where we have to go up to get our police officers and the communication officers, then it is what it is, right? But we just want to make sure that we're given the information to make that good, informed decision. So give me the options and the why.

Mr. Williams, I want to add to that. Give us options where we don't have to lay anybody off. I don't want to cut anybody. We need people in all departments, and it's not fair to cut somebody off. But if you can give us options where we can cut without laying people off, now we're talking.

So my original recommendation was to not add personnel if we wanted to stay at the 5118. So if we stay at the 5118, we just simply don't add new positions. But if the decision is that we want to add new positions and we want to stay at the 5118, I just need to make room somewhere else. And just laying it out there for you. We can lay it out a bunch of different ways. We can bring a bunch of different options back. But we'll... Fair warning, I'm going to need to consider all departments in the general fund to make those cuts. It can't just be limited to everybody except police and fire because there's not enough money left to do that without laying people off. I guess you kind of look at it this way. You got a pie. You take away half the pie, you're left with that. And if you take a personal off the table, I'm left with this much to try and find a million dollars. And as a percentage, it becomes really difficult to find a million dollars.

I could see myself supporting the 51.75 just to make sure that the dispatchers are ended. But like I said, I'd like to see that we commit to taking down the future debt so that we can see the benefit here in a couple years and kind of what offset that current increase.

Fair enough. And if the consensus of the council is that we don't raise from the current tax rate where it is, we'll go into next budget season with that frame of reference and say regardless of what the no new revenue rate is, we will stick to what the current rate is.

I think that that should be at the beginning, that that should be one of the considerations.

There's a lot that goes into putting in that 600 page book in front of you. So we would need to start in the spring with that mentality and build it from the beginning that way. And we can do that. And that is, it's been done before. It can be done again.

Any other guidance from any of the council members?

Can you, can Steve just summarize what we're in process moving forward?

So from what I understand, my marching orders are bring back. What does it look like with four dispatchers included at 5175? And then what are some other areas that we could cut rather than raising it by the difference between 5118 and 5175? Is that fair?

Well, I think some wanted you to show how you can keep the rate the same, but add the four officers and the communication officers, which is 624,000, which I think you said at that point you'd have to find cuts in other departments. I know I don't support that, but I think that's fine.

It would be a million total. I'd have to cut a million total to add the four police officers and the four communications officers. to keep it at 51-18.

Yeah, I would... Just to kind of clear up the waters a little bit, I would do the 0.5118. We're trying to bring on the personnel, but also showing us what we're going to also miss out on, or as far as what services you're going to have to cut back or positions that you might have to do away with in order to make that work. and then what it looks like with 0.5175.

Okay, so let me make sure I'm understanding what you just said. So 5118 without adding personnel?

No, with adding the personnel.

So adding the personnel.

Taking a deeper dive into the budget to see how we can make that happen, if at all possible. And if so, what are we going to have to give up in order to make that happen to keep that rate or to go to the other rate and bringing on the four dispatchers? And if we can, officers, but at minimum the four dispatchers.

Okay, so if, all right, so three different options. One is 51-18 and bring on all eight positions. So finding a million dollars in cuts, what does that look like? And then 51-18 and bringing on the four dispatchers and making cuts, or raising to 51-75 and adding the four dispatchers?

Yeah, raising it to the 51-75 and adding the four dispatchers. Okay.

At that point, I think the only thing that would happen is that the four police officers wouldn't be added, but everything else would just stay the same.

Everything, correct. That's correct. So yes, you would essentially add the four dispatchers. The rate would go to $51.75, and then everything else stays the same. And we can line that on a piece of paper so you can see it.

Any other council member would like to say anything different?

I'd like to see how we can increase our revenue.

Well, at this point in time, the only way to increase revenue would be to increase the tax rate. And it doesn't sound like there's an appetite for that. Or some appetite, maybe, to raise it a little bit. To be quite frank, I mean, we could raise other fees, but in the position we're at right now where our fees are, I think we're comfortably in the market. We just had a discussion last week about impact fees and where those are. I wouldn't recommend shifting it away from the tax rate over to other fees.

Yeah, I know another way kind of like leading to what Council Member Guerrero is saying is if we can see what we can do to bring more retail in, that definitely helps offset, takes the burden off our taxpayers. But if we're going to be doing that, then we also need to see what we can do to kind of help those businesses get going because I know there's a lot of businesses that have reached out to me that have stated that it's very hard to get things moving and going forward as they're trying to build insurance. So whatever we can do to streamline that, not so much to cut back or give up money, making sure that they build good buildings, but just making sure that they're not going through a very difficult, painstaking process trying to get things done.

All right, so was that a sufficient recap of what we need to bring back to you guys? Yes, sir.

I agree.

Okay. Okay.

Does no, the council member has any other questions and then we'll go ahead and in the workshop, unless you have one.

So when we bring back the agenda item, since there seemed to be a majority in favor of 51 75, we'll go ahead and plug it into the items like that. If it changes from there, it changes in the meeting. You can do something different in the meeting.

That sounds good.

All right.

Sounds good. We'll go ahead and if there are no other questions, we'll adjourn the meeting at 7-11.