City Council - workshop

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I now declare that the Plano City Council is reconvened into open session, that all council members are present. At this time, we're going to ask if anyone would like to address the council regarding the budget and the CIP. I do think we have three speakers, so let's start with that.

The first speaker is Lisa Bloomer. He's the second speaker.

Well, he's on there, too.

Mr. Grady, go ahead.

Well, good evening. I'm Rick Grady, resident of 8413 Buxton Court 75025, and I'm here today to to speak on behalf of the Plano Flags of Honor and request that the grant amount be increased to nearly the same in the prior year. In my three minutes, let me consolidate the hours I could spend detailing the positive benefits of this event for the city of Plano, thousands of veterans, and our citizens. We have spent hours in front of cameras at Channel 4, 5, 8, and 11 extolling the great event and expressing our pride of the City of Plano's sponsorship. I can tell countless stories of veterans that have exited the field of flags with tears in their eyes just wanting someone to hear their story. I can tell of the pride that I have felt and the pride that I have seen in citizens from all over the state of Texas that have experienced the Plano Flags of Honor. We have created something quite special that has benefited thousands of veterans and veteran families across the Metroplex. As a Vietnam combat veteran, I can tell you that I came home, I didn't see any flags of honor. I didn't even see a parade of flags. In fact, for years, I hid the fact that I was a veteran. I spent decades coming to grips with my own experiences, and I can tell you that the things like the Plano flags of honor has done wonders for my well-being. I believe the same is true for thousands of others like me, and it would be a shame to be that this year, be the 10th and final year of the Plano Flags of Honor. Although many decisions have been made to reduce our budget by over 67%, let me detail just one. When we stated that the grant amount of $25,000 wouldn't cover even the cost of a tent rental, We were told that a tent was an optional expense, and it was our decision to rent the tent. In fact, the tent had been rented as an expense in the very first grant. The city covered it every year for nearly a decade. Also, it wasn't optional. Because there is the volatility of weather in mid-November, it is essential to be able to hold events regardless of scorching heat, torrential downpours, or high winds, all of which we have experienced. Members of the US Congress use this event to bestow the Congressional Veterans Commendation. Schools use it for their field trips, veteran groups have their monthly meetings there, and citizens come to enjoy the displays inside and out of the tent while honoring veterans. Finally, let me add this. In Vietnam, I lost 105 men in my company. They were killed in action while they were deployed with and by me. 28 are still missing in action. There are 28 flags in that field that bear the names and stories, summations of the letters that I wrote home to their loved ones. This plane of flags of honor isn't an event. It's a memorial, a monument to the men I lost and to the many veterans just like me. So please, restore the funding. Thank you very much.

Thank you, Rick.

Lisa, would you like to follow that?

Okay, I think we got that one, okay.

Darryl Rodenbaugh.

Good evening. To the mayor, city council members, my name is Darryl Rodenbaum. I'm a Plano resident at 3208 Ocala 75093. And I serve as a volunteer working on behalf of the largest youth theater organization in the country based here in Plano. Thank you first for your continued support of the North Texas Performing Arts and the arts community in Plano. Plano's process and the team that manages it is world-class and deserves our recognition and congratulations. As you know, with the support and encouragement of many people at this table, We executed a 10-year lease for a new home at 15th and Custer to allow us to continue our programs outside of the shops at Willow Bend Mall and make way so that we can make way for construction of a new home for the Dallas Stars. This incredible challenge to be out of there by the year end is not something we planned to do. It's not something we thought we would have to do, but we chose to leave early to cooperate with the city of Plano, the Stars, and our landlord, and we do so willingly. Tonight's plan for the future of the grant allocation process offers yet a new existential challenge. We understand and respect the city's regard and concern about the hotel and motel tax implications for its use and ensure it is properly accounted for. Our concern is that the proposed methodology to limit each organization to ten reimbursable events is all about ease of administration. It has nothing to do with compliance with the tax. This state statute does not favor a few big events. This time, the number of events, is completely arbitrary, and frankly, it eludes logic. We even suggested that we should consider breaking ourselves into smaller organizations to get around it. With your support, last year we brought in some 400,000 visits into our Plano spaces, 120,000 ticket buyers, of which 90% came from outside Plano. Our value and our efficiency is our model, and it's our breadth. We do a lot of programs, but we do them efficiently, and we are good stewards of the money that we receive and the support received from Plano. Applying this new methodology would have the effect over the next two years of reducing the city's support to NTPA to less than $75,000. And let me be clear, that is an 86% reduction in the dollars that we receive. That, together with the quarter of a million dollars, more that we're gonna be spending each year in new costs because of our new space. And frankly, this is a challenge for us that will likely close our doors into the next two years. To be direct, this short-term shift would have a devastating impact, not only on the Nortex Forming Arts, but also on the broader arts ecosystem that Plano has spent years building through this time. We only learned today that if you don't stop this train, The city administration will assume that this is approved and they will move forward with the adoption of these new rules. We are asking that you press pause, take a moment, please take the time to learn and understand the implications of this change before it's assumed to be approved. Thank you for your time.

Thank you very much. Any other comments? We'll close the public comments. And I'll ask Mark to present an overview.

Well, good evening, Mayor and Council. Appreciate the time this evening to lay out the budget a second time. We introduced the budget last meeting with the City Council. Again, this budget that we're presenting this year maintains the goals and priorities that we've had of managing our financial policies, continuing to invest in personnel, maintaining our quality infrastructure, and continuing to have high level of programs and services while maintaining a level of affordability that is reflective of the Plano being the lowest tax rate for our surrounding cities. So we are very proud of all that we have put into this budget. This is a budget that, again, this year, we are able to make work at the existing tax rate. So we would continue with our 4376 tax rate. We are forecasting that next year, due to the number of capital projects we have, as well as some of our previous commitments operationally, that we will have to focus on that, but that is for next year, so that we will be accurate with that. But with that, we feel that this budget will continue. Plano is the city of excellence, and we will be able to continue the level of service that our community expects. So with that, I'm happy to answer any questions, or we can move into the discussions with staff.

All right. I think let's move into the discussions with staff. We're ready for you to go. Okay.

Anyway, we're going to, I'm Karen Rhodes-Whitley. I'm the budget director. We're going to give you an update regarding our five-year financial forecast. When the physical roadmap, when we initiated that two years ago, we decided to move from a three-year forecast that we had done for years to a five-year. In addition, we hired on consultants, new gen strategies and solutions. Come on up, Matthew. This is Matthew Garrett. You have seen him before. They are building an economic financial forecast model for us. We're working hand in hand with them. Tonight, we're going to give you an update to what the financial forecast said in March, now that we've received in the final property tax appraisal roll. So, Matthew, I'm going to let you take it away. I will be right up here with you. Excellent. Okay, there you go. Wonderful.

Thank you, Karen. Again, good to be in front of you. Matthew Garrett, partner at Nugent Strategies and Solutions. I'm joined by Steve Duke. He'll talk about revenues, and then I'll come back here in a minute, and we'll talk about how it all fits together. But as we presented in the spring, right, we do have a five-year forecast. It's predicated on a lot of assumptions. We won't go too deep. Some of you have already seen it, and so at the same time should. I go to quickly please pause me and make sure I don't breeze over something you may have a question on. So again as we look at this different from the spring we now have a 27 proposed budget so we use that as our starting point right we now have a new anchor by which to project. With that in place we are looking at a forecast roughly 3.7% per annum average rate of growth over the next 5 years. That does include some one offs you see notably the fire shift impact. And we'll dig into those component parts that feed into the future on this slide. So, again, this is one expense is the change to the fire shift personnel to the 2472. That does have an impact into future years. Additionally, the staffing and equipping of a new fire station, number 14, is factored into our numbers. There's a blank on police meet and confer, so that's an anticipated but not yet known or quantifiable amount. So we just thought we'd bring it up. It's an important piece, probably in the future. And then a couple miscellaneous items there towards the bottom. Of course, these are all subject to further discussion and future appropriation, but that's what we have baked in today. Additionally, you have a lot of other items in your budget. And so we had to take that 27 base budget and we build on it. So we build on it with a few factors. Clearly, salaries and benefits make up a big component part of your budget. So we have an assumption there of 3% per year. on salaries, health insurance at 5%, a couple other small ones. General inflation applies to quite a few of your accounts, and we'll show you what that looks like. If you recall, we use another means than just CPI for that. So these are the component parts. Pretty straightforward. So again, we've looked at this before. This is sort of the visualization of a survey of professional forecasters. We do have data updated as of May 2026. What you're looking at now is sort of the, this is how we do it slide, right? For 26. And because we're using 27 as our basis, this 26 data point where the 75th percentile is notably 3.9% is partially irrelevant to our forecast. But long and short, there are a number of other, I believe 31 this time, professional forecasters that throw out their opinion as to how things are going to pan out. Each one of those represents one of these dots. You see that we strike a median, and from there we can get the quartiles. We've chosen, along with staff feedback, to use the 75th percentile as our go-by for assumed future inflation. Now, the way that pans out in the future... Pretty sharp decline from 26 to 27 in their mind's eye. And so in our proposed five-year, your general inflation factor runs in 28, or excuse me, 27 at 2.8% down to 2.5% in 2031. All right, maybe out of the details a bit, you also have a number of transfers. These make up a decent size of the portion of the budget. You can see capital maintenance fund is restored fully to the 20 million. We continue the economic development fund targeting that two cents, I believe is the measure. And we have a number of their fund adjustments here. But many of these stay the same. So your risk management fund, PTV, and then the one exception shown here, the rainy day fund is not anticipated in the future. With that, Steve's going to talk about various revenues.

Thank you. So when looking at revenues over the next five years, obviously we want to focus on the more significant revenue sources for the city of Plano. Today, these are property taxes and sales taxes, and these account for just over three quarters of current revenue. So we focus on these, and there are a lot of assumptions that go into these, particularly with property taxes. And two major assumptions we need to make with property taxes are, first of all, how Plano's tax base is gonna change over the next five years, and secondly, what the tax rate chosen by the city will be. So we're gonna talk about the tax rate later, but the next couple of slides, we just wanna talk about the assumptions that go into the property tax base and how this may change over the next five years. So house prices are a key indicator we look at when projecting property tax values in Plano. Here we're looking at changes in the Dallas, Plano, Irving area house prices over the last 25 years. October of last year was the first time house price growth has turned negative in 14 years. So the recent story is a sharp decline in house price growth. This has rebounded slightly in the latest quarter to 1.1%, but generally low house price growth overall. Now our model does not attempt to project year on year changes in house prices, but what we're assuming is a return to the long run growth average of 5.5% per year, and that's illustrated by the green line in this chart. So we find that house prices are highly correlated with changes in Plano's taxable value. We show here the correlation, house price growth on the horizontal axis, changes in market value on the vertical axis. Not quite a one for one relationship, but we find that historically every 1% increase in house prices translates to a .75% increase in market value. So overall what we've done is we take our projected house prices, apply that three quarters assumption, and use that to arrive at projected changes in market value. On top of the changes in existing property values, we also apply some assumptions about new market value growth. This is new construction taking place in Plano based on input from city staff. And right now we're assuming an average of around 850 million a year over the next five years. This pulls it all together. The bar, the top bar in this chart shows total market value. This is projected to increase at an average of 4.75% over five years. The dark orange bar at the top, that's anticipated new market value. And again, city staff are assuming this is gonna average around 850 million per year. But this new market value, this market value is not what is actually taxed. It's not what generates property tax. We have to subtract from this a number of exemptions, the impact of appeals, some appraisal caps, and that gets us down to this net taxable value, this blue line, light blue line. And that runs at about 78% of assessed market value. And then we further have to take off the impacts of the property tax freeze, which reduces the actual taxable value to only 64% of market values. So just zooming in a bit to FY26, this shows how the total market value of $85 billion is reduced down to only $55 billion of freeze-adjusted taxable value. The big impacts here are exemptions. That's $16.6 billion. That includes the 20% homestead exemption. We have appeals. We have the 10% increase cap. That caps annual increases on the taxable value of homesteads. Not so significant now that house prices are falling, but they used to be. And the other big one I want to call out is, again, the impact of frozen taxable values. Right now, these are reducing the tax base by $9.5 billion. And that has had an increasing impact on the revenue base for Plano over the last few years. And just to illustrate that impact, what we show here, the top blue bar is the notional tax of these frozen properties. And this is the tax that they would have paid were they not frozen. The dark blue line is the tax they actually paid. The difference between those two bars, that's the property tax revenue foregone by the city of Plano due to the property tax freeze program. And that delta, that foregone revenue, has increased from 5 million in 2020 up to 15 million in the most recent year. It's been increasing over time, so we project that to continue increasing and to level out in 2030 based on demographic assumptions. Second major revenue source is sales tax. Here, the blue line shows the budget that's actually set, the way the budget is actually set by the city of Plano. This is based on sales tax revenue for the past three years, plus 3% inflation. This is a conservative or prudential approach. You don't want to set a budget based on a peak sales tax revenue in any given year. The orange line at the top, that's what we're projecting sales tax revenue would be. We're adopting a method that's been used by Lewis McLean, a sales tax consultant who's worked with Plano before, which is based on inflation, population growth, and some real terms growth and revenue per capita. The difference between projected sales tax revenue and what's budgeted is contingent revenue, but again, the city is not banking on having that revenue available for its budget-setting process. And finally, for all the other revenue lines in the budget, we make some high-level assumptions based on inflation. Just a couple I'll call out here. We've got cable and telephone franchise fees falling as people continue to cut the cord. Building permits are not assumed to change. Most other fees and charges we assume increase with general inflation. And we do not assume any changes in the level of fees and charges, which may be applied in the future by the city of Plano. And with that, I'll hand it back to Matthew, who will talk about the overall picture for the next five years.

Thank you, Steve. So, Council, what does this mean? We showed you a lot of inputs, right? Your two critical revenue streams. We showed you your expense horizon, a couple big rocks that are coming in the future on the expense side, right, or future appropriations. To that end, we have then otherwise held constant the expenses and the revenue potential other than tax for this analysis. So now we're looking at a few slides that would say our one lever is property taxes. And we do that through the lens of the truth of taxation. They give us two means, the no new revenue rate. I saw Karen's presentation earlier this week. She did it better than I can. So I won't belabor all the points. But I will say that your no new revenue rate is beholden in total to and held year to year by the change in your INS rate because it's a total levy. And I believe that was discussed as well. And so I won't dig into that. But when your INS rate goes up in a given year, you now... have given up some portion available for M&O. As a result, we're showing you that your no new revenue rate with all the other assumptions Steve discussed for sales tax and other revenues would yield a 3.1% on average year-over-year change. So that falls short, if you recall, of our total year-over-year change in expenses. This revenue change does include the sales tax, but it uses a no new revenue rate as we would project according to the statutes today. So again, keynote here, for the time being, we've held the tax rate for INS at 12.4%. That's a really important assumption. I will show you at the end of the slide what it might mean if the INS rate changed. So if we did nothing but the no new revenue rate for year over year over year, we would bottom out. We would not only not hit our day's working capital, but we'd be in the red. And I know from hearing you speak and your team, that's probably not the path the city of Plano will take. But again, the new revenue rate is a mathematical formula from Austin. It's not a normative you ought to do number, right? So you have this other vehicle. called the voter approval rate. Also has limitations, like any good legislation does, but with the voter approval rate starting in the next fiscal year. So an important nuance here is we have assumed, I believe you published or agreed to publish the rate for the year in the last meeting, and so we've held that flat. So we did not use the total voter approval rate potential in the coming year. So for the next fiscal year and beyond, this chart shows you what your VAR might produce. So that is increases of 4.5% per year overall. However, because your operating expenses are growing, because day's working capital can't keep up, We can't just say we have more money year over year and it exceeds the cost of growth. The actual cost to operate day to day, as I showed on slide three, I believe, has gone up substantially, 29 million approximately by 2031. So with that, VAR or voter approval rate is a help, but it does not bridge the gap. And so again, you can see the two lines shown, right? Revenues versus appropriations. Maybe the more substantive chart here is your day's working capital falls below the targeted line of 60 days. Any questions about the resolve of those two calculated tax opportunities? Okay, very good. All right, so again, the outcomes to be redundant. NNR would not suffice, and even VAR falls short on its own. Steve alluded to other revenue opportunities, other fees. I know staff's looking at a number of things citywide. Those have not been assumed or changed in my model or current assumptions. But I would anticipate, as a council, you may need to move other revenue opportunities around to satisfy your level of service expectations, at least as I have them modeled today. My disclaimers are up there. I won't read them all to you. We're always, you know, we have a session starting up in a few months. So we'll see what they do. So we're beholden to that. Additionally, property values are an assumption today. We'll know better next year what next year looks like, frankly. So now again, the last note, all of these assumptions were an INS rate of 12.4 into the future. And with that, it kind of takes me to the segue to the debt service component. And I believe Jason and Karen and team have already presented this to you. So you have a plan. You have voter approval or bond authorization to my understanding. And if you were to use that as shown on screen under the bonds row, we would anticipate a rate change needed to your interest and sinking rate of that middle row. So 90 cents up to 12.40 this year. I think that's already been discussed. A half cent in the year following. Another 1.1, another 1.1, and 0.6. So we're up to 15.7 as we've projected today on the INS rate. And again, if we were subject to no new revenue alone, we would know that that actually would eat into our M&O portion over time. VAR doesn't have the same constraint or voter approval rate, but that said, there is a total tax rate and a headline rate that will have upward pressure in the city of Plano. That doesn't mean you've exhausted all other means at this point, but I did want to flag that up. All right. So again, long and short, the total published rate, the headline rate, is the sum of your INS and your M&O rate. You currently have cost pressures and bond authorization to do more in capital on the INS side. You have a plan to fund some personnel, some new programs, some items going forward, and one currently undetermined amount that you probably need to fill in the gap for the next five years. So in that way, you have pressure on both sides of your tax rate. not an easy task, but I'm not saying you have to go higher than the voter approval rate, but in a vacuum, that is one opportunity that may need to be explored in the future to meet these service levels. And then there are certainly a myriad of other opportunities, Karen and Mark and others, I'm sure we'll talk through, but... With that, I want to ask if you have any questions, or Mark, something to add there, sir?

So, Mayor and Council, as we talked about the budget, this is something that will need to be worked beginning next year, and it is something that we anticipate. As Matthew stated, there's a lot within the modeling that is subject to adjustment over time. There's also the legislature that is coming up, which may impact things as well. We realize it's a very sobering picture of what we need to do in the future, but again, we want to make sure council is fully informed and that we're prepared to do the work that we need to do in coming years. But with that, we feel like we're set with the budget this year, and we will begin the work immediately on what we need to start doing next year. Thank you, Mark. Mayor Pro Tem.

Yeah, Matthew, thank you. Thank you for the presentation. I want to go back to one of your slides where we were showing the rainy day fund, and as we projected out, that rainy day fund disappeared. Can you explain to me why we did not include that in the subsequent years?

So, Mayor Pro Tem, if you'll remember, we actually pushed funds into the rainy day fund this year from our sales tax policy. At the end of the year, if there was additional sales tax, We have done that, so we have just not projected that we will have that necessarily from sales tax on a year-to-year basis, which is a more conservative way to approach it. So it may still be there. We have just not projected it as a known expense.

Right, but if we do not use that, say we haven't used it this year, it would carry over to 2027, correct? Correct. It's a one-time transfer.

Yeah, this is a transfer account. It's not showing you what the fund balance is of the rainy day. All this is saying is last year we transferred in, I think it was like $7 million. So that's all this chart is saying.

So really we don't know yet from the 2027 sales tax. That's correct. If any money is going to be a surplus that we might be able to transfer in. To the rainy day fund.

Yes, and I'm about to have a presentation on sales tax. You are correct. Thank you.

All right. Deputy Mayor. Thank you, Mayor. I do have a question on slide 86 on the inflation adjustments. You look like it was a 1%, was it 1.3%. Is that accurate based on the percentages?

Yes, sir. So we look at the, for starters, the 27 is your basis. So last year we were talking 10%, right? Because the headline rate, the news, gas is going up, going up, going up, right? Hands-on question. Straight up removes. We assume staff has baked into the current rates forward looking into 27. And so again, this is only 28 and forward, right? And so that's back to sort of an annual energy outlook or report from the Energy Information Administration. Understood.

I just want to clarify that because the 1% and everything else was two or three. And then my other question is on slide 90 under other, there was about 11 million on there. What is that other? Anything over a million that's characterized as other to me, I'd like to kind of know. Sure.

So I don't have the drill down to the other, but you have just a lot of different departments and anything that flows to the general fund that isn't a large, we'll say more than three and a half million gets rolled into that, but that may show something else. Karen, anything to elaborate on this year?

Yeah, and the other, that should be our miscellaneous that comes through a bunch of different revenue sources. Also, I know another thing that's included in there is going to be, you know, how we have our intergovernmental relationship with PISD that we do like the school crossing guards, but we get money in. All that would go into other.

Much, much smaller cost centers.

Yeah, why don't I do this for y'all? Mm-hmm. will be done tonight, and then tomorrow I can come up with what is included in other.

No, I follow you. It's probably like library stuff or like... Oh, yeah.

Copy machine rentals. I mean, there's... We have several miscellaneous. That's correct.

Interest income, I'm sure, is a big one. Okay. Perfect. A bigger one. I love my questions. Council Member Kerr. Sorry.

Yes. Good afternoon. In your model, are you assuming that the property tax cap is still gonna have an impact on us for the next five years? Or we're gonna get pretty close to that?

Well, we're already close to it because it was on, he's talking about the homestead cap and I forgot what chart it's on. Yeah, and it's like I mentioned to y'all the other night, it was 0.618. See that 0.618? We are close. That number since COVID has been like $3 billion. Okay. So what's happening is, is the market value has been going up along with the average taxable value, but the average taxable value can only go up 10% per year. Anything over that 10% is that 0.618. So our home values just are not rising like they used to.

The projection really is that the tax cap is really no longer having an impact. The taxable value and actual value are going to be pretty close.

Yes, that is correct. Yes.

Yeah.

Council Member Levine.

Thank you, Mayor. You mentioned the impact of the freeze. and the fact that it would start to decline over time as the demographics change, how far out are you thinking that change is going to be where it doesn't keep going up?

Sure. So what we don't have is perfect information on your demographic, but we do have it sort of leveling off, not necessarily declining, right? But through some natural attrition and replacement of whoever owns the next property, there may or may not be leveling off. What we did not want to do is falsely assume a substantial continuing rate of loss. And so we thought this made more sense just knowing life expectancy, among other things, that this may or may not continue. So you're going to have some ebb and flow. But ultimately, you see on 2032, it's just a smidge more, right, overall, but it does level off. So we start to level off in slope on this slide 95. And Steve, if there's more to elaborate, feel free.

No, I just mentioned we have been, and Karen's been trying to get some data from the Central Appraisal District on the ages. It's actually coming. Oh, it's coming. Yeah, on the ages. So we want to get data on the ages of homeowners so we can start to model this in a little more detail. But right now we're just making the assumption that it peaks in 2030. But once we get the ages of different cohorts, we can actually model the likely percentages going forward.

Thank you. Thanks, gentlemen. Thank you, Karen.

Thank you.

So we did the overall view of the budget, the expenses, the revenues. Now I want to go back and do the grant funding requests, if you don't mind.

PTB, can you put us back to the grant stuff?

Yeah, thank you. Perfect, thank you. And then we'll finish off with the program. So let's start with the Buffington Community Service Grants. Curtis?

All right, good evening, Mayor, Council, Curtis Howard, Assistant City Manager, and normally we would have the Community Relations Commission Chair give this presentation, and unfortunately she had resigned, so I'm here before you tonight here. So just talk a little bit about the funding recommendations. So just a little bit, as we kind of give you charts, when we talk about the grant funding that we're getting through the federal government, through the state government, and then also through the city of Plano. And one of the things, especially when we talk about social services, is how easy it is to use that money. And it's just kind of a chart just detailing you know, the flexibility of these buckets of money. You talk about that home funding, and that's kind of our hammer nails, getting people into homes immediately. Not a lot of flexibility. The state funding that we get that we use for our rapid rehousing program, again, there's some constraints on that, but that goes to Salvation Army for our rapid rehousing program for both adults and children. And also the Community Services Block Grant, again that starts to get a little easier to use, especially in the social service setting. And then finally our Buffington Community Services Grant, which it does provide us a lot of flexibility in using this for the needs of the community. And again, just got a little bit to we talked about our state funding back in April And I've gone through the the federal grants a couple times and also the buffington grant kind of as to what was what's been going on it's gonna give you an overview of what we've been talking about during these different meetings and And so we have just generally the Community Relations Commission. And again, Chair Voyecu had to resign, but I just want to give props to the Community Relations Commission because this is, especially during the month of April when we are going through the grant funding process, it is a grind and they certainly have put a lot of time and effort into it. And I also like to acknowledge Vice Chair Davis over here and also Commissioner Grady here, who are both in this room and have been part of this process. And we certainly want to give thanks to everybody who's been part of this process. It's been wonderful to work with them. And so just the process itself. So we have this grant process. Applications are provided to nonprofits that have been operating at least three years. We want to see a history of nonprofits and make sure that they'll be around. They can apply for funding, and that application can be for program support or also kind of housing site improvement, which we've seen over the past couple meetings that I've talked about. The recommendations are based upon our community needs as identified in the consolidation plan and also the application guidelines and again CDBG, home funding and then Buffington community services grants are the three buckets of money. And just a little bit of history here. This comes from Robert Buffington, who worked for the city for 30 years, started in 1998. Historically, it's been funded at $2 per capita, and we'll talk about the increase that has been proposed. And again, this is the largest amount of money that we have for social services funding. Eligibility, the funds have to go to programs that provide public services and to those agencies that have short-term urgent economic assistance or care services. And that is going to be, examples of that will be kind of our domestic violence shelters and other shelters that provide that emergency need. And also immediate relief of crisis impacting the physical and mental health of residents, of Plano residents. And again, something like the Children's Advocacy Center, the Wellness Center for Older Adults, those are the type of nonprofits that meet those requirements. And it also must meet a consolidated plan goal. So just the timeline. We start this process in November. It opens up in January. Nonprofits have to get their applications in by March. In April, we schedule those presentations in front of the CRC. And so every Tuesday and Thursday night, we have our CRC members coming in, listening to all those presentations. And then we start presenting the recommendations starting in June and July and now August. Just a little bit about the funding here. We had 29 applications, over $2 million in requested funding. 27 eligible applications actually were funded during this process. You can see the numbers there. And just the breakdown of the grant funding into different categories. So counseling advocacy, over $200,000, all the way down to basic needs, which is $152,000. And then finally, a little bit on the nonprofits that we really work with in this community that help provide those services that Plano citizens need. And these are the nonprofits that are being funded by the Buffington Community Services Grant. And then finally, one of the things that came out of this was the proposed funding increase. That increase is going to provide an additional $75,000. And so what we'd like to do is if that goes through during this budget process, we will bring that back to the CRC for recommendations on how to best allocate that money to those that already applied. And with that, I will take any questions on the Buffington Community Service Grants.

All right. Thank you, Curtis. Any questions for Curtis?

Council, this is also the increase to the Buffington Grants was a council directive this year. And there was quite a bit of discussion about whether it's an inflationary aspect or it's new services in there. This would be also time that if there is direction for the committee that you have, this would be helpful to be able to provide staff to take back to the commission. So if you have a preference of having this be an inflationary factor for existing folks, recognizing that we have not adjusted the Buffington service grants in quite a while, or if you were looking to find additional partners to help provide funds to, that direction would be very helpful.

Council Member Downs.

Thank you, Mayor. I'd like to actually see it be allocated to the existing organizations who have applied and have been given dollars just as that inflationary mechanism with the expectation that as it continues that it opens the door for maybe additional organizations in the future to apply. And Curtis, I do have a question for you. I did notice two new applicants potentially on the list this year that got funding. Did I read that correctly? Health Services of North Texas?

Right.

And Light of Hope?

Yes.

Well, very well done to the commission for encouraging that and having some new people.

Okay, thank you. Council Member Levine. Thank you, Mayor.

I want to echo what Council Member Downs said. I think that this additional funding going to the existing grant recipients, I think, will be helpful to them, given that we haven't increased these in a long time. And with the caveat that I'm sure that the council has been looking at where the greater needs are and that if we can enhance helping out with where those greater needs are, that would be great. Thank you for that. Yes, sir.

Okay. You have something? Oh, go ahead.

I just have a thought. I mean, we're talking about increasing funding for those who have already been awarded the funds for inflationary reasons. But if we open it up, there's more money available, essentially, 75,000 more. Next year when the applications come through, I just want organizations to be aware that it's possible they will not reach the same amount of funding in the following years. even though there is an inflationary part of it, it may get awarded somewhere else. So please budget accordingly.

Yes, sir. Council, thank you very much for that direction. Curtis, if you'll go back to the commission and instruct them on the additional funds, we'll move forward. All right. Thank you very much.

Thanks, Curtis. Appreciate it. Our next presentation is the Heritage Commission.

Good afternoon, everyone. So first, let me introduce our team. Our Plano Heritage Commission consists of our seven commissioners, starting from me, Najir Ali Rasool, I'm the chair, Carol Rejdov, she's actually the vice chair, she's sitting right there, Debbie Berrios, Tim Bob, Mindy Mendez, Corey Reniker, and then Scott Goebbels. So those are our team members. So we'll continue with the slides. So first I would like to highlight a few of our accomplishments as a commission. So you can see major accomplishments included statewide recognition. In October 2025, the Texas pool received the 2025 Silver Award for Historic Preservation. from the American Planning Association, Texas chapter, and they are also here today. For the regional leadership in September 2025, the Heritage Commission partnered with the Preservation Texas, Austin, to host the Northeastern Texas Regional Preservation Summit. We also brought together about 50 plus preservation professionals, local government reps, and advocacy organizations. So some of those accomplishments which we covered. As you know, one of our biggest tasks as commission is to review the certificates of appropriateness applications for our exterior work on historical buildings. And as you can see over here, the 27 certificates that were issued in 2025, 58% were approved at the staff level. And with 74% of staff level approvals, they were completed in a day or less. So the staff did an awesome job over here. Commission training. So over the past years, we have had several training opportunities, as you can see over here, from the National Park Service, the Texas Historical Commission, and National Alliance of Preservation Commissions, NAPC. The picture you see here is about the most recent staff and heritage commission attendance. I was there myself with the vice chair. We attended the forum, 2026. This was in Minneapolis. This was a conference that was hosted once in two years. I think we had a great experience over there. We learned a few things which we were not aware of, how Minneapolis and the team and the city are proceeding with their preservation efforts. Maybe we could apply some of them over here. We can review them at a later stage. Additionally, in September 2025, the Heritage Commission also collaborated with the Preservation Texas Northeast Texas region. Those are some of the things which we are continuing, and we continue with the training as we go forward. This is important. What are our goals? What are our criteria for the heritage preservation grants? So as you can see over here, the goal is to preserve and promote the city of Plano's heritage, thereby supporting and stimulating local business and strengthening the culture prosperity and the welfare of Plano citizens. You can see some of the pictures over there. Our criteria, heritage tourism, public education, that's about 50%. Heritage preservation merit about 25% and then the administration and fiscal responsibility about 25% over there as well. Here is the timeline for the physical year 2026, 2027 grants. The grant process began with the application going live on April the 1st. It was followed by an in-person workshop that was hosted by the planning staff on 15th of April. Details are over there. We can go through them if needed. So today or tonight, I don't know. Okay, evening. I present the Heritage Commission recommendations for the 2026-2027 grants. So that's, we're going to follow with that. So the grant program continues to use the four grant categories established last year to better align funding with preservation and heritage tourism goals. So those are over here. The major heritage grant, it supports the substantial preservation projects, programs, and requires quarterly reporting. Then we have the Minor Heritage Grant. We offer up to about $2,500 for small-scale initiatives by tax-exempt nonprofit organizations. Then we have, this is pretty good, we have the Downtown Events Heritage Grant. It supports the community-led heritage remnants held in the historic downtown. We also have some members here as well for that. And last but not least, the Emergency Heritage Grant Fund. This actually is reserved for urgent unforeseen damage to designated heritage resources that may be caused by natural disasters. So this is available year-round as needed. And Texas pool, that picture you see over there, to me that's my favorite. Okay, Heritage Preservation Grants and Operation and Maintenance. So this year, these grants actually are funded, they have funded many great projects over the years, as well as the operations and maintenance of such organizations as Heritage Farmstead Museum, which most of you have been, I'm assuming, and the Plano Conservancy for Historic Preservation. a place where most of the Plano people have at least gone once. The Farmstead and Conservancy has both requested funds for operation and management costs. During the 2009-2010 Heritage Grant Program, a cap was set on the amount for each agency receiving the operation and maintenance expenses. The amount awarded for O&M that year served as the maximum request for this budget item, considered for future grants that were requested. So in 2024, the city council set aside these O&M funds for the farmstead and conservancy. We'll follow those in the next slides. So here are our Heritage Presidency Grant projects and events during our fiscal year 2024-25. I think the pictures probably tell a lot of things over here, but let me go through these. The grant recipient organizations brought more than 90,000 visitors in fiscal year 2024-25. and the first two quarters of fiscal year 2025 and 2026, so that was a good accomplishment. The Farmstead Museum also hosted summer camps, special events as the light on the farm, and completed the site improvements. This was a phase two project. The Plano Conservancy completed a cemetery restoration project, also several exhibits and events. The Texas pool completed the deck replacement project and marketing program. We had the pictures in the past. I think there's the deck over here as well. The Masonic Lodge completed the Morehouse refreshment area project. The Plano African American Museum hosted events and completed the accessible ramp project. And the Plano International Festival and Asia Fest brought thousands of visitors to our historic downtown. So that was a good accomplishment for us. Now the numbers, okay. The commission received five applications, as you can see over here. under the Major Heritage Grant Category, two applications under the Downtown Events Grant Category, and a City-Initiated Grant Application from the City of Plano Special Project Department, totaling $1,426,400. with $1,376,492 available for the grant award, so that was one of our balancing act we had to do. The request include the set aside the O&M for Farmstead, which we discussed earlier, that was $330,000, and the Conservancy, which was $145,000, which do not require a recommendation from the commission. So no applications were received under the minor heritage grant, so we don't have this over here category. To make up for the $49,908, which you see over here, these were the shortfalls. The commission had asked applicants to prioritize their needs and They were awesome about it. Those projects with a lower priority received a reduced amount to keep requests within the bounds of the available funds. So we balanced the whole thing.

Okay.

So as noted in the memo you guys have, the fiscal year 2026, 2027, the total funding requested by all applicants is $1,426,400. And the recommended funding for all applicants is $1,376,042. It's an increase from the previous years and reflects the addition of eligible downtown events to the grant program. So I'll go through these one by one quickly. So these slides will summarize projects requested by the eight applicants under the major heritage, the downtown, events heritage, and the city-initiated grants categories. Projects for the Heritage Farmstead Museum include, you can see marketing, special events, site improvements, Amy Wilson House improvements, and the administrative cost. associated. The total amount of funds recommended for the farmstead is $757,800, which includes the side-to-side O&M funding, which we mentioned earlier. It is worth noting that the farmstead events like Light on the Farm, Homeschool Days, and seasonal festivals, they attract more than close to about 48,000 visitors in the fiscal year 24, 25. So that was great, thanks. The next one is the Plano Conservancy for Historic Preservation. So here you can see the summary of the project for the Plano Conservancy. The Heritage Commission recommended complete funding for marketing, the archaeological fair, museum updates, and education projects, and then partial funding for the cemeteries and the associated administrative costs. The total amount of funds recommended for the conservancy is about $241,792. which includes the Cesar Side O&M Conservancy events, and activities attracted more than about 11,500 visitors in fiscal year 2024-25, so we had a pretty decent turnout. The Texas Pool Foundation. This is a summary of the projects you can see for the Texas Pool Foundation. The Heritage Commission recommended complete funding for the significant pool resurfacing project and partial funding for marketing. educational programs and events and the associated member, associated administrative costs as well. The total amounts of funds recommended here as you can see is $217,062 for fiscal year 2024-25 and the pool activities and events attracted close to about 15,000 visitors. Okay. The North Texas Masonic Historical Museum and Library. Summary, as you can see over here, of the projects for this particular one. The Heritage Commission recommends complete funding for the Masonic Lodge's first floor chamber preservation and printing pamphlets, and partial funding for publishing paino, masonry, and associated administrative costs. The total amount of funding recommended for the Masonic Lodge is 62,970. So you can see the requested versus the recommended fundings over there. Plano African American Museum. So this is a summary over here. The Heritage Commission recommended complete funding for the exterior restoration. You can see how it is right now. and painting project and associated administrative costs. The total amount of the funds that were requested were 22,800 and the recommended was the full amount over here, the 22,800 as well. The Plano International Festival Corp, so as you can see over here, the commission is now also recommending the complete funding to the Plano International Festival in the amount of 36,200 for the 22nd Plano International Festival. It is planned for October the 17th. Hopefully you all will be there this year. It is worth noting that more than 10,000 visitors attended the festival in 2025, so that is the plan. The Asian American Heritage Foundation, for this one, the commission also recommends complete funding to celebrate Asian American Heritage Foundation. in the amount of $10,168 for the Plano Asia Fest. And this is now scheduled for May, 2027. And hopefully you can all be there as well. It is worth noting that more than 6,000 visitors attended this year festival in May of this year. And this is for the special projects for the city of Plano. I was one of the guinea pigs, I was one of the first people who attended this as well. The City of Plano Special Project Department is requesting funds to continue the recently launched Once Upon a Plano tour program, which received grant funding in year 25, 26. The program consists of a 90 minute historical fiction walking tour of downtown Plano. that combines authentic downtown plain of history with original stories written by the community members. The Heritage Commission recommends complete funding as requested for $27,700. So now the summary. So in summary, the Heritage Commission is recommending a total of $1,376,492 for the major heritage grants, the downtown events, a heritage grant, and the city-initiated heritage projects, as you can see over there. So that's the summary, that's our recommendation. And this pretty much concludes my presentation.

Thank you. Thank you very much. Any questions? Maria.

Yes, I'm not sure whether or not this question is actually for the Heritage, but first of all I want to say I wish I was at Minneapolis with y'all because I was planning on going. I am so proud of the Heritage Commission because of all the things that we are able to be the leaders in almost the entire United States as well as worldwide in doing preservation. So I always want to be gloat in the glory of our preservation. But one question I do have, and I'm not sure whether or not Ashley fits in here, but the former Councilman Grady was talking about the veterans, I guess, tent, and I'm not sure whether or not that fits into the Heritage Foundation, or is it at a different?

Flags of Honor is funded out of a different fund, not the Heritage Fund.

Okay. All right. I appreciate you. Thank you.

I appreciate your kind words, and like I said, we all want you to be there when we have these festivals, so that would be important.

Thank you.

Thank you.

Okay, presentation of Cultural Arts Commission. Diane Goble.

Good evening, Honorable Mayor, City Council, and City Executives. Hang on a second. I've got to adjust here. Okay, is that better? All right. I'm Diane Goebel, Chair of the Cultural Arts Commission, here to present our recommendations for 26-27 Arts and Events grant funding. Cultural Arts is made up of seven commissioners. They are myself, Vice Chair Toby Todd, Rita Cosgrove, Sherry Levine, Marvelee Chin, Johnny Sang, and Sandra Wolf. And we work closely with two incredible staff liaisons, Karen Davis and Katie Suarez. And then we also appreciate the support and presence of our council liaisons, council members Downs and Levine. So this fiscal year, our goals were to promote innovation, to elevate Plano's recognition as an arts and culture destination, encourage new grant applicants, and also support the arts plan implementation. As accomplishments this year, we fulfilled those goals with focus on actively supporting and advocating for the arts plan implementation. We also engaged with city council to ensure their understanding of the grant program. We supported the grant recipients. And in fact, as commissioners, we collectively attended more than 160 performances over the past 10 months of this fiscal year, an average of 23.4 events per commissioner over a 10 month period each. We streamlined the commission meetings and aligned the format with other city boards and commissions. This year's goals will carry over to the next fiscal year with emphasis on supporting the implementation of the new grant program. So next, let's look at an overview of the grant programs. There are three available grant types, small arts, major arts, and events. A small arts grant award can be up to $2,500. Major arts and events applicants are eligible for 25% of expenses as reported on their 990. Small and major arts grants fit into a specified funding budget, whereas events are not subject to a specific funding budget. There's a two-part application process that consists of a written application and an oral presentation to the commission. Our timeline is The grant process begins in February when the application opens in ZoomGrants for about five weeks and closes in May. In April, the applicants deliver their presentations and the commissioners individually score each application. In May, the scores are finalized and the commission approves the overall scores. Then in July, the city determines the fiscal year funding budget. In August, we calculate the awards and we present our recommendations during today's budget work session. So the application questions evaluate three key areas. 50% focuses on what the applicant is doing to bring people to Plano and meet HOT guidelines. 30% is based on the organization's operations. And 20% is based on grant program performance milestones over the past fiscal year. For scoring for the application, an application can score a maximum of 100 points. A total combined score of 70 points is required for funding. So next, I'll explain the commission's process for determining our grant funding recommendations. So first, there's a lot of terminology. It can get a little bit of confusing, so I'll walk through this quickly. The funding request is the amount that the applicant requests, with a maximum allowed of 25% of their expenses. The overall score is the average of the individual commissioner's scores. The award by score is the adjusted award amount based on the applicant's overall score. And then the total of city provided grant funds is the total dollars set aside by the city for major and small arts award funding. The actual award, because total funding requests are typically greater than the total city provided grant funds, the major arts award by score is reduced to fit the amount that the city has provided in grant funds. And then also no major arts grant can exceed 35% of the total city provided funds. Now we'll walk through an example of how the small arts and special events awards are calculated. For this example, we're using 2,500. That is the amount that a small arts applicant can ask for, whereas events applicants can request a percentage of their budget. So after averaging the scores, this applicant's score was 81.57%. Then 2,500 is multiplied by the score to get the actual award amount of $2,039. Now for major arts, this applicant has requested $68,995. Their overall combined score was 93%. So we multiplied the funding request by their score to get $64,165, their award by score. We take the city provided grant fund total of 1.5 million and subtract the small arts awards. In this case, there were, in this example from last year, there were two, so 4386 was subtracted from 1.5 million to get $1,495,614. And then the award by score is reduced proportionately along with all other major grant awardees to fit the remaining funding budget. So this actual award is adjusted to $58,804. So now we'll get into the commission's funding recommendations. Excuse me, allergies. All right, so for small arts, there was one, There was one applicant versus three from the last year. One reapplied, one moved to major arts, and another did not reapply. So this applicant requested $2,500, and based on their score, they're recommended for 2386, and that will be subtracted off the top of the available 1.5 million of available major arts funding. So the major arts funding overview, we had 14 applicants. The same number as last year, while three from last year did not reapply, three were added. One was a previous applicant, one moved up from small arts, and one is a new applicant. So a total of $2,385,732 was requested. So after scoring, $2,210,832 is recommended based on score. But since this year's city provided grant fund budget is 1.5 million, which is the same as last year, the small arts award is subtracted from that. And then our recommended funding for major arts is 1,497,614. For special events, we had three applicants. One is a new one over last year and for a total request of $523,318 and a recommended award total of 505,900 after the amounts were adjusted based on scores. So in summary, the commission received 18 applications and we recommend funding for all of them. So here's a historical overview for the past five years. The blue represents small and major arts, and the green represents events. You see a jump in 24-25, that's the year that major arts funding went from 1 million to 1.5 million. And then there's been a slight increase since then. So looking at this chart, you can see that we have a variety of different art disciplines that receive grant funding. Of the 18 organizations, starting with the kind of bright blue at the top right, we have two choral, three orchestra and band, two dance, five theater, two visual arts, three events, and one that's a collaboration. So next we'll look at the commission's funding recommendation for small and major arts. So for small arts, going from the gray column at the left, those numbers are the 25, 26 awards. The next column is the amount the organization is eligible to request. Next is the amount requested. The next column is the score. And then based on the score, this applicant is recommended for $22,386. The blue column at the right. Major arts, there's a lot on this sheet, so hopefully you can see your handout clearer than this. But the major arts recommendation is as follows. Starting at the left, the gray column is the 2526 awards. Next, the 26, 27 amounts that applicants are eligible for. Their requests are maximum allowed based on 25% of their expenses. Then the next column is their scores. And then next the award amount by score. So since this amount is larger than the total amount of city provided funds to calculate their actual recommended award. First, the small arts grant of 2386 is subtracted from the 1.5 million and we get 1,497,614. One applicant was reduced due to exceeding 35% of the funding maximum, and then the others were reduced proportionately to fit the total city provided funds. So on this page you will see the combined major and small arts and you'll see that they add up to the $1.5 million that the city has recommended for funding. Now moving on to events. Beginning on the left, again, you see in gray last year's funding amounts. Then the next column, the amount eligible to request, the actual request, then the application scores, and then toward the right you see where the award amounts are adjusted based on the score. And then since events do not have to fit into a budget cap, their actual award is the same. So those two columns to the right, the numbers are the same. So a total recommended events award of $505,900. Next I'd like to show you testimonials from grant recipients and patrons highlighting the impact of local arts and how city funding has strengthened our creative community. City of Plano funding led Plano Civic Chorus to experiencing a 40% increase in attendance last season. Grant funding allowed NTPA to invest in new innovative arts initiatives that bring people to Plano. Partnering with the city is helping position Plano as the home of one of the premier comedy festivals in Texas. As a result of the city's support, Plano is identified as the balloon capital of Texas. Support from the city has helped many arts organizations thrive and collaborate with each other. A parent professes that DAO, the Dallas American Asian Youth Orchestra, is cultivating the next generation of musicians while enriching the cultural life of Plano. MOCVA's gallery gives people another reason to spend time in downtown Plano. A former Dallas Symphony patron is subscribing to PSO season now instead of going to Dallas after attending a concert in Plano. So these are just a few of numerous testimonials supporting Plano's vibrant arts community and the benefits of arts funding. So in closing, to recap, The commission recommends $1.5 million for small and major arts awards, 15 of those, and 505,900 recommended for three special events awards for a recommended award total of 2,005,900 to 18 applicants for the 26-27 arts and events grants. Are there any questions?

Okay. Thank you, Diane. Any questions for Diane? Maria?

Hi, Diane. Thank you so much for that detailed, I guess, breakdown. And I really appreciate the fact that now that we have a special category for small and not major issues, I guess, events being carved out. But my question is this 35% cap. So my understanding, of course, my math is horrible. You take the total amount of money and then you subtract the small art events out of the funds. Then after you subtract it, then you provide the 35% cap. Right. So why is that? Is there a reason why we don't use the entire amount for the 35% cap?

Well, it's always, even before we had that 35% funding maximum, the small arts grants have always come off the top of the total city provided funds for small and major arts. So we continue doing it that way with... when we are calculating a 35% maximum.

So if there are more small events coming up, then, forgive my math, but wouldn't the 35%, after you minus all those small events, would actually increase the size of the grant to major events?

So let's say we had three applicants And they, you know, at $2,500. So then we would subtract 7,500 from the 1.5 million. And then we would calculate the 35% after doing that. So it, so their amount is protected because they are so small and they're getting a small amount. We, you know, we don't, put them in the pool with the larger groups that get reduced proportionately with the 1.5 million. I hope that makes sense. I appreciate your answering.

Thank you. Of course.

Council Member Kerr.

Hi, Diane. Thanks very much for all the work that the group does. The amount of effort that goes into this and the thought and everything is much appreciated. We had a speaker earlier today who spoke about a change in the funding. The NTPA. So it looks like the funding is the same this year. Is there going to be a change for next year? Yes.

So this will be the 26-27 grant year that I'm requesting funding for now. So that will begin October 1st. 26 through September 27, and then the next grant year is when the proposed new program that Andrew Fortune will be presenting about later, then that would take effect a year from now.

Okay, I'll hold my question for that. Thank you.

Councilman, part of the reason why it's brought up now is to give organizations a year to understand what's coming in that. This is trying to work towards communication of potential changes.

And we began, I guess, the last few years when we revised the questions in the application, and you saw the little pie chart that showed the focus. Fifty percent of our questions now focus on meeting the HUD guidelines. And so that is really, you know, one of the main reasons for moving toward that event based grant that you'll hear about later.

Okay, thank you very much.

So before I close, I want to give a plug, if it's okay. On Saturday, Celebrate the Arts will be at the Courtyard Theater, and it's produced by Collaborative Arts of Plano. Just about every grant recipient is a member, and it's a performance by about 20 different arts groups all on one stage, and so it's a great opportunity for you all and all. all of you to learn more about the Arts in Plano. So come see Celebrate the Arts. And thank you, Council, for hearing our recommendation request and we look forward to your decision on the grant funding and the proposed new grant program. Thank you.

Mayor, I think now is the appropriate time since we just got through with the grants to have the discussion.

You beat me to it. So I'm going to bring Andrew up about the Arts Subcommittee update.

Well, good evening, Mayor and Council. Andrew Fortune, Director of Policy and Government Relations. I wanted to provide a brief update. You've heard a few times now from me on our Arts Subcommittee and the work that we've been doing since you first tasked us with a few goals. So as a review, the charge and scope of this subcommittee really took two of our council members, Council Member Levine and Council Member Downs, and paired them with a cross-section of staff across the organization. And so we were tasked with looking at the existing process and migrating that to more of an events-based program. And so, you know, we've come before you with those recommendations in the past and received your policy direction on that. And we have now moved forward, as you may recall in your email, we have sent those changes out to the arts groups, to the Cultural Arts Commission. We've also posted those online. Staff is going to continue to work diligently with some of the forms and criteria, et cetera, as we move towards the next event-based award year. Coming out of the council retreat, we also received feedback that there was an interest in looking at facility space and a needs assessment, really, of where we would like to have our arts groups perform. In just a quick review for both you and everyone here, we do have those guidelines published. As I mentioned, we're updating those forms. The applications for the new process will not be until FY27-28. We also, as a reminder, implemented a plus or minus 25% cap to help mitigate even further. So in addition to the full year before this takes effect, the first year that it does have an effect, no organization will be impacted more Or less in a cut or increase to funding by 25% to give an extra runway of time And so switching over briefly to the facility needs assessment and gap analysis We received that policy direction in the retreat staff will now take that direction and will develop a scope for a contractor Consultant to come in with really looking at quantitative data With space both in the city owned realm but also privately owned facilities and so several of our council members Over the months have talked about you know repurposing spaces and what opportunities there may be for those but also looking at our existing arts plan this Consultant would not be redoing that plan really would be building on onto that focusing in on those facility needs I'm looking at that gap analysis reaching out to some of our groups to make sure that we clearly understand their needs now and going forward and ultimately building on that plan. And so I'm sure Council has a few questions, but I want to pause and first, if either of our Council liaisons have any comments coming out of our work, I'm happy to turn it over to you or answer questions.

And I will just add, Council, that if Council does approve and gives direction to move forward with the facility study, we'll be funding that out of convention and tourism.

Mayor Brotton.

Yes, thanks. Really, just to touch base on his facility needs, earlier on in the year, Councilman Levine was bringing up the point about having a visual arts facilities needs. Are we looking at just that for facilities needs, or are we looking at performing arts facility needs?

Can you provide some clarity for that? Actually, that chart that you just saw in the previous presentation that showed all the different facilities Elements of art that would be something we'd be working with a consultant to make sure that we didn't miss any of our different whether performing arts visual arts Gallery space whatever that may be we want to make sure that all of that is is looked at and encompassed in the facilities assessments need I know some may gravitate to Stage space, but we want to make sure that we have enough Captured in plain of what we have what we're using and what may be available that's untapped by our groups today. I

Yeah, I agree that we need to do an assessment of what we have today. But with regards to looking at the two different natures of the arts, the performing arts in itself is a huge endeavor. And of course, it's all dependent on size of the audience, but also keeping the space full most of the year. Whereas the visual arts, that was a whole separate needs here in that there was studio space for teaching, studio space for galleries, those type of things. And that could be a much smaller facility, but the requirements are different with regards to lighting and temperature. So that's kind of where I had the question here because when we start looking at, as we do our assessment, if we keep those two separate things in mind as to how we can fill the needs, That's something I think we need to look at to consult and, again, have some type of direction on how we move forward with that. Absolutely. All right. Thank you.

Council Member Levine.

Thank you, Mayor. Andrew, as you know, we've had a lot of conversations about this. There's a couple of things I wanted to mention. One of the Bits of feedback that the Cultural Arts Commission has received from some organizations is that the application process is a bit onerous for them. This is true of some of the smaller organizations that don't have a lot of volunteer or professional staff. I would just like to make the point that as we apply the new rules for event-based to the forms and such, that we try to make it as reasonable for these smaller organizations that we possibly can. And to the deputy, I'm sorry, to the Mayor Pro Temp's comment, one of the things that the arts subcommittee has done is to really look at the visual arts in terms of the artists themselves not just the display of the artwork and looking for ways that we can provide not just studio space but possibly even maker space for them to have the various different kinds of equipment kilns and other things that they might use to actually make the art in one place where they can work. But performing arts is the one area where we need to apply some math to find out how many evenings and weekends of performance are not being covered here in Plano. Some arts organizations in Plano are going Outside of the city because they can't get the dates they need in a theater of the right size So that's going to be a key factor in the the study All right, I Have another question sorry go ahead

Can you walk through the guidelines of how we spend our hot taxes and the implications of how we're awarding and how we're doing things like that?

With the caveat that I'm not an attorney, and so if I'm off base, Michelle can absolutely keep me in check. chiefly it's heads and beds and so what we're looking at with that is you know is this activity this is art show this performance is it bringing in someone outside from outside of Plano who's going to spend money in Plano ultimately that replenishes and feeds that fund so staying in our hotels you know spending money at our venues making sure that it is a true tourism emphasis and really is growing that tourism space and so you know I'm we will continue to provide guidance to groups to simplify the process as we look to shift to that but also to look at some of those quantitative measures. Zip codes is one that is commonly looked at to see when you have Survey information you can gather zip codes to help measure some of those things and it ensures that we as staff Are remaining in compliance when we carry out those?

Policy visions and a large part of it is actually how many hotel nights there are as opposed to eating in a restaurant Yes, sir Okay Oh Councilmember Thomas

So the hot tax is what we're speaking of.

Yes, ma'am.

What about the groups who have concerns that they don't bring that to the city? Because I hear that. Our group doesn't bring tourists or anyone to the city. We're more of a local group. So what are we doing about that? Well, and I think...

Respectfully, I think that there are local groups even though they may be smaller that do bring in people from outside of Plano you know examples would be artists who come in with their specific craft that may lead a master class on pottery work or portrait work. Those things, I still think there are opportunities for groups, and really our discussions have focused around this idea that groups, now with such a long runway, a year plus with an additional year with that, plus or minus 25%, would have an opportunity to Reimagine some of their programming to ensure that they are falling into that compliance category And again, we are we're looking at more than just just that element, but that is a critical element given the funding source Thank you for clarifying.

Yes, ma'am Okay, so I think we just need to give direction to To mark regarding the consultant and moving forward with Policy change. Policy change and the consultant.

Some of this stuff will certainly involve capital, so we'll need to strategize for that for the upcoming year, particularly if we're looking at facilities. I mean, that takes some, I hate to say this, some long-range planning. and of course with the funding required for that. But I think the assessment itself will take quite a bit of time because there's a lot of property throughout the 72 square miles that can be used. But we certainly look at where we need to go forward with that. So I think my opinion is I think we need to move forward with getting the consultant on board to get that type of facility assessment. Okay.

Everybody okay with that?

Council, the policy change is also, because again, this would be the time that a year from now, this would be going into place and just making sure that everybody's comfortable moving forward. Okay. All right. Thank you.

Okay. We're going to go back to the operating budget, so all you... So real quick. Division heads.

Real quick, Mayor and Council. Not off the hook. Yeah, not off the hook. But real quick, let's have the discussion on the Flags of Honor, if you don't mind. That is a grant. So Karen Davis, can you tell us what the amount was last year? This is Karen Davis, who helps us with a number of our arts and grants. But since that was a request that came forward.

Well, not just last year, but the year before. Or at least that's what I was hearing, right?

Yeah.

Okay.

Yes, so to give you a little bit, hello everyone, I'm Karen Davis, Cultural Arts Grants Administrator. As they said, this event has been going on for 10 years. They came to this city about five years ago to request assistance with the funding. That was in 22-23 and at that time they requested $36,850. So each year it has grown a little bit until this year their request was $98,391. Excuse me. Last year, we did fund them at, the last two years, we have funded them at $71,835. So the application this year went through a committee review. And as the committee was reviewing in all of the other applicants that came in, They were looking at things to be even to compare all of the groups equally. They were looking at funding things that were direct city expenses, such as the police or EMS, the field rental, things like that, and expenses that were pertinent to the actual event, the days of the event itself. things like doing a barricade rental, the bleachers, portable toilets, hand washing stations, printing of banners, things like that, replacing the flags that are needed there. Things that the committee thought might not be as pertinent to this event for expense by the city where things like administrative expenses of paying employees to be there or contract labor to be there, annual website maintenance, annual fees for software programs, database development type things, things like those. The committee decided we're not pertinent to actually producing the event physically on those days. So that was where the determination came from the committee and the recommendation.

So the difference is it went from 71,835, can you remind us how much is recommended for next year?

The recommendation was for 25,615. And the requested was 90? 98,391. Okay. So to give a recap of the last five years, if that would be helpful, they started off in 22-23 with 36,850. And I think that was at, when I looked at the application, that was at 100% of funding of the event. And then in 23-24, it went to 42,387. And then the next year was 71,835. And then they requested, I believe 90 something thousand the next year. And we asked for an update as to why the increase in funds, but they weren't able to get it to us before we needed to do the budget. So we opted to fund them at the same amount that next year, which was 71,835. And then this year they've requested 98,391.

Thank you, Karen. Council, this is, obviously there was a recommendation and there was a request to reconsider that. What questions do you have?

Mayor Pro Tem. Wait, hold on, Maria.

Sorry, you... I know.

Sorry, you gave it up this year. You're next.

Yeah, you were going to coast the rest of this year. Thank you very little.

Really, I, you know, I'm...

I've been part of the fields of honor. I went out and set stakes. I helped hold stakes. I've gone out there and every time I go out there, I shed a tear. I really do. It's such a noble event. But I gotta be honest with you guys. I'm a little concerned about this scope creep here. I mean, I don't know if a cost of a tent and porta-potties went up that much. You know, when we're talking about doing web services, I'm a little concerned about this. There's a part of it. There's a volunteerism and also funding that you get from corporate sponsors. I do not deny the importance of this that we do to reflect to honor our veterans. I cannot deny that. But we are in tough fiscal times here. And you can see what we have been presented with through both the arts and through historical. And heck, look what we're even doing with our just normal budgets that we're dealing with. So I'm really concerned about this scope creep that we see here, that the request of 98,000, when just two years ago it was 70, and before that was 42. I guess I'm just saying that I'm all for covering the cost of the tent, covering the cost of the port-a-potties that are needed, and the in-kind services that the parks provides and probably part of our security. But I think we need to take a little bit more control of these costs here and look at what you're requesting from the city to help you provide for this great event. So I think that's something we need to look at. Maria.

Here's my take. We started out at $36,000 from the initial grant. And then instead of going up with the cost of inflation as well as the cost of goods, this time we're actually cutting everything off to $25,000, which basically is a reduction of the grant. I personally believe that if we are going to consider making sure that all the money goes to the event itself, then we at least need to start at the original basis, which was $36,000. And then perhaps, if we can, add the inflation rate or the increase in cost of goods on top of that 36 as our basis. Instead of just going right back to 25, I don't even know how we came to that number. That's my take. And I would like to see it going back to 100% of the grants going towards the event itself, and then we'll go from there.

Okay. Bob?

I have a question. First of all, where does the grant money come from?

Is it general fund? This is general fund.

Okay. And what was the idea around how the funding works? It's like the operational cost at the time of the event, or how does that... determination made?

They were funded at 100% starting in that 22-23 year, and so that has just been carried forward each year.

100% of what?

100% of the cost of the event.

Of the cost of the event. Okay. And this event is a 10-day event, something like that?

Eight days.

Eight-day event? Okay. And the determination this time for that other value, remind me how we got to 25?

The committee looked at each line item that was requested. We ask in the application that they divide out exactly what their anticipated expenses are for each very specified cost. And just by eliminating things that they felt was not pertinent to that eight days is where that came from.

Can you give some clarity on how something like the tent, this seems to be the theme here, the tent was included in the original years, but not this time. How does this look different this time?

I think that it had to do with that the event goes on for eight days and the tent isn't, guess needed continuously for eight days so it was kind of a determination of trying to figure out well the flags are there the whole time and what are the event costs of things that needed to be there the entire time and what was the scope of this event when it originally started and so it was kind of looking at that you do you feel that the kinds of services the the

The different things that happen over the course of eight days, has that changed over the last eight days and the last few years?

Yes, I do believe that they have increased their activities in doing things. I don't know that it is a full eight days. I'll have to defer to them that it's a full eight days of activities because what we're looking at is actually the expenses. And they tell us the activities, but I don't know what happens when and on what day.

Okay.

Deputy Mayor.

Thank you, Mayor. Here's my take and input on this is that this is a committee recommendation, and I'm not usually a fan of going against necessarily what the committee recommends because we've assigned them to recommend those recommendations. But I'm not opposed to what Maria 2 is recommending about going back to the $36,000. But overall, I usually want to follow what the committee recommends when we assign them to do that.

Who's the committee again one more time?

It's staff comprised of staff members who have worked with this event or have produced events or have some knowledge of what's going on with the art side.

Okay. I want to agree with Deputy Mayor that I'm not a fan of going against the committee. I think they put a lot of time and effort and historical knowledge into that. But I also, I feel like this flags of honor is such a big impact on our city, our citizens, and our neighbors that I'd like to see more than the 25K.

So, Mayor and Council, if you'll allow me to interject a little bit. Heard you loud and clear on going back to the original amount. I do think there's been some inflationary side of things beyond that original 36 in that timeline, so. I would actually look at this, and if council's going, yeah, I feel like when you were at the 42, looking at the history, looking at the 42 is probably an even better number than the 36, looking at what's happened over the years. Um, but I, I want to make sure that it, you know, I've heard council loud and clear. The tent needs to happen, um, within that, that amount. And so that's, that's what I, I would be looking at is something probably closer to the 42 to ensure that the, um, the, uh, the tent can happen, uh, along those lines and understanding the impact to this. Um, But I feel like that's a historical number that we've used as well. And I think that within the funds that we have, we can make that happen if that's the council direction.

I'd also like to say to the folks at the Flag of Honor, I really appreciate what you do. And I think that the additional things like having the service dogs, et cetera, these are all very good. But I think planning for the future, I think you should not expect the 71,098, whatever those numbers are. Where we are right now is probably more in line of what to expect for the future. So please keep that in mind as you go forward.

If I can, just real quick. Okay. We're just guessing here. I don't know what the cost of the tent rental is. And of course, they'll need to have the porta potty facilities there because we're going to have people. There's people there in the morning. There's people there during the day and there's people at night. And the activities that are going on, that tent's used to showcase elements within the veterans through all the wars that needs to be protected. So I think that those are elements that we need to look at, and we need to, again, assess what that cost is. I don't want to put a number on it, but I don't know what the cost of a tenant is. I don't know what the port-a-potty is. So I think that those are something that we need to look at before we put a firm number on it.

Well, we need a little bit of that direction this evening. So, Karen, do we have that listed out as far as an expense? Can you go ahead and share what the tenant and port-a-potty expenses are?

Yes, the porta-potties were included in that $25,000. We did agree that porta-potties were needed. So the tent, they have listed it's tent, heaters, lights, tables, chairs, stage, flooring, chair movers at a cost of $27,044. So that's...

that's essentially $52,000 would be the 25 plus the 27. It's 52.

Is everybody okay with 52?

I would be more comfortable with that number if you just take the original 100% funded event in the beginning. And then all you have to do is just transfer all the activities and all the things that are funded from that original 100% funded. and then see how the cost of goods have increased, or whatever has increased, and add on top of that. I think you come up with the same 100% funded, and that's where I'm going. It doesn't have to be, you don't have to add all the additional funding that they're requesting, but the original 100% funding, those core items needs to be transferred over to current. And it shouldn't go, I mean, I cannot imagine it going down, but at least we should give something that's comparable to what we originally funded.

That's what I'm suggesting, okay.

Council Member Levine.

I don't know whether this is actionable or not, but this event is in the shadow of the Red Tail Pavilion, and I'm wondering if moving some of this to the Red Tail Pavilion could cut our costs so that we've got the seating there, we've got the stage, we've got a variety of other accoutrements, bathrooms, etc., and this seems to make a lot of sense to me. Now, I realize that the flags are out in a field, but perhaps there is some other way to bring these two facilities together.

We'll be happy to approach that for future years. This year, however, I think we need a grant.

Yeah, we're pretty much there.

$52,000 for this year, and...

reassess some opportunity ideas around that same area. Is everybody okay with that? Okay. We have our direction. Thank you.

Thank you.

Okay. Karen, we're back to operating budget revenues.

Okay.

Sales tax.

Sales tax. Okay. Okay. Y'all all know that we live under a sales tax cap policy where we do an average of our actual sales tax. that collected and then we add on an inflationary rate. For this year, 2526, we are, what's wrong? Oh, sorry. Can you hear me now? Okay. Anyway, you all know that we go underneath that sales tax cap policy where we average the last three years. For this year, we are estimating $133 million to be collected. We did receive our August sales tax payment yesterday. It came in 8% down. But not to worry, I know I had mentioned to y'all when we did the recommended budget that last year at this time, we had collected from a business, it was like $2.5 million. We figured it was a one-time payment, so we took it out. So even though we're down for this month, your projection's still okay. So I really feel very confident in the $133 million. If for some reason we have two more months left, we get anything over that, then we'll be coming back to council in the fall, and y'all can decide where you want to put that extra, whether it be in the rainy day fund, capital maintenance, one-time expenditures. So now for next year, once again, we do the policy and we have it at $129.7 million. So according to all this, we're only going to be up this year 1% on sales tax. However, we're very lucky. A lot of the other cities in the area have seen significant declines in their sales tax numbers. So we have not. So I think we're going to be okay with that. Just looking at this chart, sales tax is always very volatile. It comes and goes with what the economy is doing. And, of course, we're very diversified here at the city of Plano. As far as businesses and retails, you can see on this chart, nearly 70% of your sales tax is coming in from non-retailers, meaning businesses. Only 31% is coming in that I'm going over to Target or Costco or Walmart or wherever you're shopping. So we are heavily reliant on the business side of the equation. This is a look over the last two years of who your top sales taxpayers are on the business-to-business side. The green line has been doing fantastic. That is your computer-related services. This also includes like database centers. are also included in here so anyway we just wanted market asked us a couple of weeks ago who who's bringing in all the sales tax and that's who's bringing in all the sales tax on your business side These are your major retailers, your general merchandise, of course, going to be Walmart, all them. Your second one, though, is your non-store retailers. So that's like your Amazons, okay? They have really come up over the last couple of years. As far as your non-retailers, professional and other services, and then followed by telecom and information services are bringing in your sales tax. We do have one of the leading sales tax cap Per capita, we lead at 441.53 cents is spent by everybody here at the city of Plano per year. And a lot of the other cities is like 200 and something. So we are a leader in that area. Mark, did you want to say something? Oh, okay. I saw you move your thing. Okay. Okay. Factors impacting sales tax, of course, is competition from surrounding cities, economic conditions. If we ever go into an economic recession again, the first thing that does fall off that both Mark and I have witnessed being here for so long is the non-retailer, your business sales tax. It will quickly die. So that's one of the great things about the three-year cap. that we have going on, we're able to shield ourselves from those disruptions. Did I have any questions on sales tax? Okay. Okay. Come on up, Matthew. I've asked Matthew here on water and sewer. Back in 2024, there was a major change in our water and sewer rates and the way we did them here at the city of Plano. Most of y'all were not on the city council at that time. This is gonna be the last of the three-year phase-in program. We used to, what we called it was a senior, water rate it was the lowest tier and at the end of the day all the other water rates were subsidizing this lower tier the decision was made in 2024 by the council at that time to bring them up to the full cost of the water and matthew if you will go ahead and yeah we'll do

Howdy again, council. So this is brief, much briefer than the prior presentation. I hope that's welcome news. So the council before you made the decision at the advice of staff and certainly a recommendation from Nugent to do away with that highly subsidized rate tier. At the time, your rate for that first build tier was roughly 90 cents to my recollection, 89 perhaps. Exactly. Exactly. And the current rate at that point was right around $3, maybe $3.25 for the water you were purchasing. So you were losing $2.25 plus on every unit used in that first tier. And so that seemed pretty obvious, but we also didn't want to rip the Band-Aid and do it all in one year. So we have revised the projections, sort of congruent with the North Texas Municipal Water District's published rates for this coming year. So our prior study envisioned, I believe it was 464, but instead it's come down to about 450. But this is, as Karen suggested, the phase-in. And so we just wanted to bring you up to speed on a couple things. First, we took this in steps. It's impacting your residents, it's impacting most users, because most users have water consumption in that first build tier. And so we worked from really subsidized to some subsidy to a little less subsidy to let's stop subsidizing. So that first build unit going forward is planned to be charged in 2627, you can see on the top row, at the full cost of water. Now practitioners like me know there's loss and other things not factored in that, but the stated rate of 450 is where we want to start. Again, the full rate study did envision a number of increases. The balance of those increases are assumed and baked in to your rate plan for 27. So again, visualized in more detail, and I won't read this slide to you, but in 24-25 we took a step on that first 1,000 to 5,000 build tier. Yet again, in the next year, we weren't quite getting the North Texas rate. And now in 26-27, we're proposing that first tier would be at 450. All the other rates, just as the study had suggested, are moving up 8% as proposed. Questions on the design? This is my best slide, so I'm going to... No, forgive me. Oh, thank you, thank you. It's the red lines that really get us. Okay. Okay. So what does this really mean, right? Ultimately, this is impacting residents. And so going from 26, you see the D mark there, the left side being the current and projected to the right. The current bill for 10,000 gallons of water consumption, 5,000 sewer winter average assumption. A current bill is 125 going up to 138, 65. So that's $13 increase on a monthly charge to this three quarter inch customer with that volume of consumption. future years again are still slated for additional increases to keep up with the rising cost not only of our own workforce but also projections that north texas municipal water district publishes to a strategic financial plan so we know there are other increases coming on both sides so Again, we have an impact for a commercial bill payer. This is much larger, 50,000 gallons of water and sewer, since they don't have the winter average. A $1,000 bill today turns into $1,094. So roughly $82 change to this commercial customer, as an example. Now, where does that put you relative to others? A keynote at the top right. We may know what some of these folks are publishing or planning to do, but none have adopted yet. And so I can't put it on a slide and say the rate in Anna, Texas or the rate for Wiley is this or that. And so currently you're in that bottom quartile for a residential customer with 5,000 gallons of water and 5,000 build sewer moving up to about the midpoint. I do assume you're going to be South of the average again by the end of the fiscal year planning.

Yeah. I just wanted to mention, even though this is not updated regarding what they're doing in the future, we did make some calls. And some of these cities are going up 10 to 12%. So even though right now, 2027 for our residential, all these other cities, they're all planning increases. So most likely we're going to end up back at the bottom again, but we need them to adopt their budgets and totally align where your apples to apples.

And mayor and council, these are the other member cities with North Texas municipal water district. So their wholesale cost of water is the same. But the distribution costs and the other administrative costs are different for each city. So infrastructure distribution and all that. That's why you see differences in some of those rates. But those are the other water district member cities.

Yeah, another observation while we're on this slide is just the variation in the sewer bill versus the water bill. More and more, the wastewater costs are just getting, not out of control, but rising at a faster clip than water. And so you'll see a lot of communities where the green is larger than the blue, and that's kind of been flipped on its head in the last four years. Again, a 10,000-gallon customer today, bottom quartile, actually because of your tiered system and because the way that compares to others in the comparison group, they are charging more for those higher units. And so they have a little bit higher bill even after the increase, and you're not even breaching the midpoint at a 10,000-gallon water customer for a residential. Again, this is August. So 30,000 gallons might be real or maybe low for some. But so for your peak month or one of your peak months, 30,000 gallons of consumption today is $277. You see the effect of that winter average. We're not billing as if it's sewer flow when we put it on the yard because you have a winter quarter average. And then moving up to 302 with next year's rate increase. All right, past that, I think after tonight, this will all be considered by council as a part of the budget, but I'm happy to answer any questions you may have relative to what I can help with.

Only other thing I'll share, council, is in 2028, we are shifting our methodology for the water district. We will be starting our move to a five-year rolling average for total consumption. So beginning in 27, both Rachel and Abby are going to start working on some more aggressive conservation and water management programs that we can have because it will be in our interest to drive down that overall take that we have with the water district as low as we possibly can. So that is coming, and it is, believe it or not, only two years away, so we're moving quickly towards that. So just be aware that in the next couple years we'll be bringing that back too.

Yeah, and under the fiscal roadmap plan, we update the enterprise funds rate models every three years. So the big update will start in January of 2027. We'll be using new gen again. And once again, Mark, as Mark mentioned, all that will go into the brand new rate model. So I will be bringing all these back at the end of September for y'all to adopt and they go into effect on October 1st.

All right. Thank you guys. Abby, tell us about solid waste.

Yeah, I wanted to mention something before Abby. Come on up, Abby. We right now, we're undergoing a solid waste rate model update. NewGen, once again, did theirs three years ago. We had a couple of things that happened the last couple of months, so we're not done yet. But we do know this. We're going to need a dollar extra on the bill. Abby's going to go for that here in a minute. But we'll be bringing back more details as the new budget year begins.

I'm done. A dollar. That's it. So we're going to continue to follow with our 2023 rate model update. And the recommendation at that time was to continue at a dollar each year for the foreseeable five years. And that's still our recommendation. The dollar is applied to the 95 gallon cart, which is the majority of our carts in the city. And then we apply percentage wise what historically had been the percentage difference to our 68 gallon cart, which is smaller, and then the extra cart as well. So just so you can kind of see those percentage breakdowns. This is comparison against the solid waste member cities if you remember a little bit earlier in the year the district had a proposal to allow City of Melissa to join the solid waste member cities group and we said that we didn't have any comments against that and so they are I'm going to now start including them in the future that being said they do not have a proposed rate prepared yet for what their solid waste might be the rest of these are based on what the published budgets are so far for these other cities. if you take the city of melissa out there the actual rate across all five of them is closer to 30 or 23 59 and so i just wanted to make sure that i started including them moving forward i will say also for the city melissa this will be their first time having a dedicated solid waste fund so they're trying to figure out what that number is going to look like starting october 1. One of the biggest changes that we wanted to kind of cover and Karen alluded to it during the previous budget presentation is there are new diesel standard emissions that are coming out that are effective the end of 2026 and any chassis that is manufactured after that date would have to meet these new standards. in the early 2000' s when this occurred all of the testing is done on normal on the road vehicles not anything had been done testing on cities that did stop and go we actually had a lot of pauses in our equipment to the point where it actually hurt some of our operations at the time. And so we wanted to get ahead of this and avoid this. And so our fleet manager, who is very well respected throughout not just North Texas but nationally, has been talking with a lot of manufacturers. And in order to prevent that, what we wanted to do is go ahead and pre-purchase any of the chassis for vehicles that we were planning to replace in we did the math to try to figure out what that would look like And as of right now, it would require a prepayment from the equipment replacement fund, about $2.4 million, and the solid waste fund would continue to pay that back in capital outlay just like we would any of our other vehicles. And then this will also allow us time to evaluate alternative fuel options and if there's other grant opportunities out there and what those alternatives might look like. And then come 29-30, we can start resuming what our purchases would normally look like at that point. That's a lot of information on chassis. Do you have any questions at this time?

Hey.

And I always like to kind of summarize the solid waste fund balance. We historically had a goal of 45 days, but we have actually started actually holding to that. And so this year, we're projected to be at the 40 working days and then 46 working days moving forward to next year. I will say that does still include the seven-year repayment back to the water and sewer fund that we took back in 2023. And then it also does assume the rate increase being funded this year for the $1 for the 95-gallon carts. Any questions?

So Mayor and Council, as a reminder, solid waste is an enterprise fund like water and sewer and drainage, so we charge as much as we need in rates to pay for the entire service. So this has no ad valorem tax impact whatsoever, and it does not take sales tax. It's completely funded through the fees.

Okay. Thanks, Abby. Next item, cost recovery overview.

All right. Good evening. I'm Elizabeth Johnson, the organizational performance manager, and I work extensively on fiscal roadmap initiative and tonight going to be discussing cost recovery. and a fee study overview for two of our departments that went through that this year, one being the Environmental Health and Sustainability Department, the other being Parks and Rec. So I'm gonna kick it off on cost recovery and then I'm gonna be handing it over to Rachel Patterson and then Ron Smith to go through their specific recommended proposed targets on their department fees. So really the main focus right now is to look at the current and proposed cost recovery percentages based on the completed fee studies that were done by a consultant, MGT, and then to look at the proposed cost recovery targets based on the city's cost recovery model. So we really want to get, we'll be presenting those cost recovery recommendation targets, and then we'll just wanna be hearing council's feedback on those proposed cost recovery targets. So a little bit of background of the timeline. March of 25 this body adopted a new citywide cost recovery policy and Then that kicked off year one of the implementation that started with doing some formal fee studies with planning engineering and building inspections departments They worked with our consultant MGT that summer went into fall Brought those recommendations to y'all and you guys provide direction on their proposed targets. We came back subsequently to and y'all approved some fee adjustments to go get their fees in line with those then targets. So then we're now in year two. And so this summer we completed the fee studies with both Environmental Health and Sustainability and Parks and Rec. And so we are here to do the targets. A little bit about just high level on the cost recovery review process. There's two paths that go in parallel. that departments can do annually. One, every four years departments are on a rotation to go do an in-depth fee study and really understand the full cost to deliver services, so it's a cost of service study. And that includes both the direct and indirect cost of those programs. And then if a department's not doing their in-depth fee study that year, they are doing an annual fee review that's internal to ensure that their targets are being met during the budget process. So both of those paths can really come out to having proposed fee adjustments that then come through the budget cycle. And either way, those proposed fee adjustments are then planned on a subsequent council meeting coming up. for your consideration. Something new this year versus past year is we are also going to, where we're legally able to, for public transparency and ease, consolidate fee schedules that are in different resolutions and ordinances and consolidate them into one. So that should be easier just for ease and access. I did want to note... The cost recovery policy we do have and the process we have is a National Government Finance Officers Association best practice. And something that was really cool the budget team learned this year was GFOA actually highlights Plano as a best practice in action that they highlight in their training. So that was something that we thought was pretty cool when we came about. So to talk a little bit about the model, Really, that top part is just a great visual representation of the policy. Targets are based on the benefit that they're providing. And so when you look at the five tiers and the colored blocks from left to right, it's how heavy weighted it is from a community benefit to an individual benefit. And so if you look at tier one, that is a primary community benefit, and that has an associated level of cost recovery that's expected from the fees that are charged. So for primary community benefit, that's going to be your zero to 10%, meaning it's going to be heavily tax supported. Then as you go to the right, tier two is mostly community benefit with some individual, and that's going to be falling in your Expected eleven to forty percent recovery then you move to tier three Which is going to be balanced between your community and individual benefit. So your fees are going to be Hopefully recovering forty one to sixty percent of those full costs Then as you go right to your four is mostly individual benefit with some community at your sixty one to ninety percent and then rounding it out to tier five is primarily individual benefit meaning a the fees are targeted to recover 91 to 100% plus in some cases of those costs to deliver those programs or services. And so I'm gonna be having Rachel come up and when both of the department heads come up and talk, the first thing you'll see is the tiers then with fee categories showing their proposed targets. So that's where each of them are gonna be kicking off.

Good evening. Let's see. Oh, you already got me. OK. Rachel Patterson, Director of Environmental Health and Sustainability. So we have just one or two things in tier two, our classes and field trips, which are mainly offered by our sustainability division. And then food service permits are in tier four. I'm going to talk about that in just a moment. And then swimming pool inspections, grease traps and haulers, and then our environmental education center rentals are in tier five. So you'll note food service permits. Normally we would have those in tier five with these other permits. But due to legislation last session, we're limited on how much we can charge per permit. And so that basically keeps us there in tier four. We have some legislative caps. Basically, we cannot charge more than what the State Department of Health Services charges for a food service establishment permit. So we have caps there. And so unless they increase their fees, we will be unable to increase ours beyond the cap. Okay, so our total cost of service at the time of this study was just under 2.4 million with revenue of just over 1 million for about a 45% cost recovery. Our goal in year one is to gain 11% in our cost recovery rate with plans to phase phase the fees in through year three, and we're hoping for a 70% cost recovery at that point overall. This is the cost of service and revenue just for our fee generating activities. The 70% is not exactly where we would like to be, but because 80% of our revenue is from food service permits, we're very limited. And so we would be pretty happy with a 70% based on the limitations that we have currently in place. I also wanna note that revenue from food service establishments and I want to say this because it is such a large part of our revenues, can be very volatile and it can be very fluid. There's a lot of change of ownerships that go on in restaurants. A lot of restaurants don't make it. They close. New places open. New builds come along. Economic factors are involved. Legislative factors are involved, clearly. So there are a lot of considerations there. So we will aim for the 70%, but that's just a goal. So I want to go over some examples of some fee increases that you'll see when these fees come back for approval. Our food retail store type 3, what that is, is it's a very large grocery store with multiple departments. The current fee is $750. The proposed fee is $773, and that's in red because that is the highest that we can charge under the legislation that passed in 2025. Just to give context, that's about 65% of the total cost recovery that we should be going for. So you can see where we're going to lose some profit or some revenue, I should say, there. And then we did a benchmark against other cities. Other cities are benchmarking at 773 as well. Obviously, they're also dealing with the same thing we are. Food establishment type two, this is a restaurant. It would be something like a fast food chain. Current fee is 430, the proposed fee is 480, and the benchmark is at 500. Swimming pools, the current fee is 270, proposed fee is 310, and the benchmark is 225. Waste generators, this is for your grease traps. Current fee is $60. The proposed fee is $75, and the benchmark is at $50. I'll note that we started at $50 in 2017 when we first put this program into place, so this tells me that the other cities just haven't increased their fees since 2017, nine years. Our reinspection fees, this would be for the food establishments and for the swimming pools. The current fee is $80. The proposed fee is $100, and the benchmark there is actually $125. And that's all I've got.

Mayor and council, I'll just add in real quick. I meet with other area city managers. We talk about our budgets as we're all going through the process. And our fee recovery model is something that every city in North Texas is watching. They are all evaluating that. And what I would say is they are a year behind. So whatever we adjust this year, they will be adjusting. whether it's this year or next, but they will be adjusting because they are noticing what we're doing. They're copying the model. They all find the tiers fascinating. And so the work that we're doing is, while it's a GFOA best practice, it is something that is actually being operationalized throughout the region. So kudos to the fiscal roadmap folks and the budget folks for putting that together.

Good evening, Council. Good to see you again. Ron Smith, your Parks and Recreation Director. in the interest of time i want to let you all know these are we have more fees that were looked at by the consultant than sustainability we will review all these tonight i want you to know that the proposed changes to our fees will put all of these different uh... service areas within the proposed tier a few of them are going to be uh... one year change some are going to be a two-year phased approach but all of them will hit the specific tier and percentage cost recovery that they're supposed to just want to say that in the interest of time. So our total department cost recovery. This is just the fee generating services currently is at 51% with the proposed changes in our fees that will jump to 58% over the next year to 2 years so 58% cost recovery for all fees associated with parks and recreation. It should have been said at the start when we were looking at that big chart that, yes, we have lots of services that are a Tier 1. We were talking about special events today, the Christmas tree lighting, the Fourth of July, a fireworks show. There is no charge. We have 50,000, 60,000 people that come to that Fourth of July. We have huge numbers. That doesn't cost a thing, but it is major community impact and benefit. And then we have all the way to the other end of tier five, someone that takes a private piano lesson at one of our facilities, very individualized. So there's 100% cost recovery there. Our athletic league fees. Currently, we're at 30%. It needs to be somewhere between 11% and 40%, so we're already there. But in working with the consultant, we recognize, and when we do our benchmarking, that there is room for a little bit of an increase there, which will bring us up to a 38% cost recovery squarely in that Tier 2 category. Tournament fees, same thing. We're just shy of where we want to be in tier three. With some modest increases, that will be a 43% cost recovery. Something I wanted to note about tournaments, we were talking about hotel occupancy tax fund earlier this evening. We have a goal in the department of 20 million or more in economic impact. We work very closely with Visit Plano to make sure that we are targeting tournaments that are multi-day and that bring people from outside the region specifically to stay in hotels. And so we offer or host fewer tournaments with a much bigger economic impact. Last year, our economic impact through CVB was 29 million for sports tourism. Park division, so some proposed fee increases. This is what we were just talking about, league fees. We're wanting to move from what you see in the current fee, some very modest increases, Phase 1 for 26-27, Phase 2 in 27-28. Tournament fee from 10 to 20, then to 25 for the team fee, league hourly fee, non-resident team fee, just some very modest increases to get us into those tiers that we're looking for. plano event center also in parks and recreation this is a. Feed generated facility and it's also supported by the hotel occupancy tax funds so this is not general fund dollars but we still have responsibility in making sure we're in our proper tier which is 60 to 90 61 to 90%. Currently Plano Event Center is at the bottom of that tier at exactly 61% with some modest increases that the consultant helped us identify that will jump us to 64% in that tier 4. some examples of those fees for Plano event center that we're considering the current fee for $5,000 for the whole facility. Raising that by $500 the weekend fee which is currently 7500 also increasing that by 500. Some of the benchmark cities that we used for... Elizabeth showed what the benchmark cities were. For some of the programs and facilities that we had, we had to reach a little bit outside of that to find like for like. But as far as square footage is concerned, Waxahachie, Allen, Waco, Arlington, you can see that this is... The Plano Event Center is not the lowest, it's not the highest. We strive on doing things the Plano way, which is being the best value. Same information shown in a bar graph that just shows where Plano in the blue, not the highest, not the lowest. Pecan Hollow Golf Course. currently at 77% so we' ve talked a lot about the golf course and how it is an enterprise what you see here the 77% that' s after the consultant included all non-departmental and city fees that are not directly related to the golf course but support the golf course that dropped us down to 77 the consultant helped us identify some really clear areas where we could raise fees that hadn' t been raised in the near past that' s going to bring us up to 102% cost recovery. Anything over that 100% that doesn't get spent goes into the golf fund, that enterprise fund, and stays right there and can be used if we have a bad year when there's lots of rain or we've got a lot of maintenance that we have to do and shut down holes. But that's where that money would sit and how we would use it. Incidentally, the month of July, 2026, most rounds ever in a month at Pecan Hollow, over 7,000 rounds in the month of July this year. This is, again, an example. These are the fees. So greens fees for weekdays, currently at 46 over a two-year period, raising it very modestly, $49. Weekend greens fees going from 66 over two years to 72. You'll see that that just puts us in proper range with the benchmark golf courses. Not the highest, not the lowest, but certainly when you're golfing at Pecan Hollow, You're golfing in a top 10 municipal course in the state of Texas, and you're getting a great value. Same information shown in a bar graph. Plano is the dark blue on the far left of each of those graphs. Community events, this is a tier 1, 0 to 10%. We have a very modest cost recovery. Mostly that is when someone wants to have a booth, a vendor booth at one of our events like the downtown Christmas tree lighting. They want to sell a funnel cake, so we charge them a fee to be able to sell. But we don't want to overcharge because we know the funnel cake is part of the experience, and so we want them there. Our arts venues, currently at 31%, so some work to do there. We have, I think, let's see here. I have some notes on this one. Let's find that. Yes. Cost recovery... For The these arts. Yes currently at 31% Projected to reach 44 percent cost recovery after two phases of new rates are and I think we talked about that tonight with this new Philosophy that we're going to implement and for courtyard theater these fees are were raised in october of twenty twenty five therefore six hour block thursday through sunday and these proposed fees would go into effect not until january of twenty twenty eight as the booking for twenty twenty seven are already in process and the same thing is going to be uh... for the nature and retreat center we booked those about a year out so if you're wanting to have a wedding at the nature retreat center at oak point park you'll have to schedule that for 2028 or 2029. So fees that went into place last year, we're starting to see the revenue for those this year and any increases we won't see until all of those bookings that are on the books right now have cleared off. Courtyard Theater raising some of the commercial and nonprofit rates to get us to that proposed tier. Recreation centers. So this is our membership fees If you are a member of our recreation centers, you can go to any of the pools any of the rec centers with your one membership These fees were raised last year. So we're seeing some of this cost recovery Increase as we go. We're currently at 41% with increases over the next year and second year we're going to be up at 51% for our membership sales and Here are some examples of those rates that are going to increase. Our resident adult annual is currently at 171, proposing to raise that to 188. Adult monthly fee, $22 right now, raise it to 24. These are our benchmark cities showing where we, this is a range of some of the other cities that it's interesting to note that some of those that are larger amounts like the 600 to 800 or the 264 to 404, those facilities in some other cities that I think shows here on this, we have McKinney, Frisco, compared to Plano. Some of those facilities were originally built as a 100% cost recovery. They have one facility that has the same amenities that we have in our four different larger recreation centers. So again, not wanting to be the highest or the lowest, wanting to provide the best value for our citizens. Here's the nature and retreat center. I mentioned that it's already at 36%. With some modest increases, we'll get to tier three at 41%. This is how we're going to reach that by raising our Monday through Thursday rate to 140 and our weekend rate from 2,200 to 2,500. Some benchmark cities for something similar to what we have at Oak Point Park at the Nature Retreat Center. And again, shown in bar graph, there is Plano in the blue, not the lowest and not the highest, but certainly if you've ever been out there, it's the most beautiful and it's the best value. We're almost done. High Point Tennis Center. This is our tennis center that we have at Alma and Spring Creek Parkway. Currently at 61%, which is Tier 4. No increases necessary because you just raised those rates. We see that the trend is going to get us to 63% with just the fees that we initiated last year. And finally, our recreation programs, I think it's final, that these are the classes that we don't run a program or offer a class unless it is going to be 100% cost recovery. We'll cancel the class if we don't have enough people registering to make sure that we're always at 100% cost recovery for these courses. And the 93% is just lagging behind because we redo the price of classes every time we have a program session fall, spring, and summer. This is I think our last slide that just things that Elizabeth already talked about in October we come back to you with our to adopt the rates we will then make sure that we're talking with our stakeholders to know what these increases are going to look like then in December we're finalizing the deliverable and then all these fees would be effective in January of next year. And I'm sure Rachel's available to answer any questions.

Okay. Maria, who do you want to ask a question to?

I do want to. I want to ask Ron. So I had some resident came up and asked, why is it that with golf courses and tennis courts that there is no discount for Plano residents, but it's like charge... you know, flat for everyone. So they're looking for potentially some way of giving the Plano residents a little bit more advantage and or a better fee structure.

So... For specifically golf and tennis, I would think that what we would do, since we've already... Verified that we're a great value at a high point tennis center and the cost for a course for a court at high point is It's like less than five bucks. I mean it is very very affordable And the the greens fees at pecan hollow for an award-winning course it's a great value what we could look at is keeping those resident fees where they are and Creating a non-resident fee so that way the Plano resident feels extra special because they're not paying that non-resident rate We're happy to look at that.

Yeah Councilmember Levine

Thank you. Ron, question for you too. You mentioned in the, I guess it's one of the last classes, our last slide you had about the classes that you cancel them if you don't get 100%. But do you also have classes where you get more than 100%? I mean, you would think with the instructor being a set cost and the facility being a set cost, you may have classes that are oversubscribed or whatever.

Sure, what we have is like a break even point where we have to have say six people register for us to run the class. And that is the break even point. And then if we have 12 people that sign up, depending upon capacity, yes, there are some classes that we offer that are really generating a lot of revenue. And some other classes, since it's an enterprise fund, there's a little bit of float. There may be a course that's not quite as financially impactful, but it still provides an opportunity for a specific skill or a specific demographic to take classes knowing that other classes are going to make up more than the difference.

So are you saying that some classes you're not getting 100% and other classes you're getting more than 100%?

Sure, what I'm saying is that we have a model that we follow to make sure that when we are offering a class, it is a class that is gonna be financially viable. There are some that make more per session or per student than others.

Thank you. Mayor Pro Tem.

You're on. Yeah, thanks. Again, I think I was on Councilwoman Two's remark there. I mean, our Pecan Hollow is one of the best golf courses that's in the state, and when you go over to our neighboring cities, if you're not a resident, they're charging you more. Simple as that. So maybe that's something down the line we may want to look at. I love the fact that we had that many rounds in July. It's probably because our other sister course was down with temporary greens, but This is something golf is exploding again back in North Texas. Tennis is exploding. Pickleball is taking in courts. So anything that we can do to help increase some of that revenue, if they're non-residents, I think that's something we need to start looking at. But thanks.

You'll look at that?

Happy to.

So, Mayor and Council, that's a lot of fees. We'll be bringing those back to you for formal adoption, but we felt like, With all the work that's gone into it, we wanted to make sure that we were public in updating those and sharing with what the methodology and the philosophy was for why they were. So appreciate all the work by staff, and we can move on. Thank you, guys. Appreciate it.

All right, we're getting to an end. Community Investment Program. Karen and Mark.

Monday night. We're provided all the details regarding the Community Investment Program and this is just a time in case you didn't understand something or if you wanted us to come back with any more explanation. If not, no biggie. The total is $290 million for your CIP.

Got it. Any questions for that? Well, I think we understand it.

Okay.

Let's move on to proposed ad valorem tax.

Okay. Monday night, the tax ceiling or the cap was set at 43.76 cents. It has gone on to the Dallas Morning News. So when you come to adopt the tax rate September 14th at 7 p.m., you can go down. You just can't go up. So anyway, that pretty much is set. Mark, did you want to say anything about the tax rate?

No, Mayor and Council, appreciate all the work this evening. The budget at this point is pretty well set. You have kind of the full picture. If you have any questions, any concerns, do not hesitate to reach out to me, Shelley, Karen, whoever you need to, to get answers. We appreciate all the work and the additional time this week, and I don't want to take up any more of it. So, Mayor, I think we're done.

Okay. With no further business, we're adjourned.