City Council - Special Meeting

I call this special meeting of the New Braunfels City Council to order. Today's date is September 8, 2026, and the time is 5 o'clock p.m. We request that all cell phones and other devices be on silent except emergency on-call personnel. Madam Secretary, could you please call roll? Yes, sir.

Council Member Carter. Here. Mayor Pro Tem Capizzi.

Here.

Council Member Edwards.

Here.

Here.

Council Members Bradley.

Here.

Council Member Lebowski. Here. Council Member Shaw. Here. And Mayor French.

I'm present and we have a quorum. We will now proceed. Please join me in the invocation brought to you by Council Member Edwards, followed by the Pledges of Allegiance. Thank you.

Almighty God. We come before you with grateful hearts, asking for a voice of understanding in this council and throughout our city. Guide our words, steady our thoughts, and help us listen with humility so that every decision we make may serve the good of our neighbors. Lord, teach us patience when the work is difficult, courage when the path is unclear, and wisdom when choices carry great responsibility. Let our mission as a city be achieved with integrity, diligence, and a spirit that seeks what is right rather than what is easy. Help us make no unnecessary sacrifice, bear no unneeded expense, but instead steward every resource with care. May we seek counsel, weigh our actions wisely, and complete the task before us with clear purpose and faithful resolve. Keep our hearts tuned toward every resident, young and old, strong and vulnerable, long established and newly arrived. May our labor reflect compassion, fairness, and sincere desire to build a city where all may flourish. We ask for unity without complacency, progress without pride, and confidence rooted in truth. Please bless this council, this city, and our citizens in all we do. Thank you and amen.

Thank you everyone for showing up today. We're gonna start off with a workshop and this is item A. Discuss, consider, and provide possible direction for the FY2027 Operating Budget and Plan of Municipal Services. Mr. Robert Camerino.

Thank you, Mayor, members of council. Today will be our fifth budget workshop. And today was sort of an all hands on deck. Calendars were cleared, doctor appointment rescheduled to try to work all day on trying to address the questions that have been posed before us. And so we're going to be addressing those. And well, let me first say that I want to thank the team for essentially doing that, clearing everything off their calendar today to try to work on the questions that have been submitted to us. We try our very best to try to address each and every one of those, and we will do that this evening. For those that we don't have information or actually we're requesting some additional time to analyze, you'll hear that from us as well. That's my place here. We also will include, actually at the request of Council Member Carter, we'll include a discussion about retiree health insurance premiums. So we'll cover that at the end of the presentation as well. And then what we would like to do then is to wrap it up with a discussion about the scenarios and maybe finalizing that scenario, I'll go through a timeline with you here very shortly here. Let me just do that. First off, kind of a really brief highlight of where we are at right now. This has actually been updated based on the feedback that we have received from council thus far. The proposed tax rate is now equal to the no new revenue rate prior to this. It was at the current tax rate, the FY2026 tax rate, and was below the new revenue rate. Again, as a reminder, we've experienced the lowest property value growth in 15 years, since fiscal year 2011, so the growth that we are experiencing is driven entirely by new construction. In fact, existing values, existing taxable values have declined, as many cities across the state of Texas is experiencing the very same thing. Currently, approximately 13 million in strategic initiatives align with the city's strategic plan. Previous to this, it was 12.1 million. 3% cost of living adjustment for all employees, plus step increases for eligible sworn personnel prior to the feedback provided from council was 2.5%. And again, the first health insurance contribution and premium increases in nine years. And so certainly that is an accomplishment, but unfortunately we're at a point in time where we just can't go another year without those. 25 positions added. 23.5 FTEs prior to the feedback received from council. That was at 19 positions, 17 and a half FTEs. And then of course, continued funding for 12 firefighters following the expiration on a federal grant. But again, as I mentioned before, working closely with the fire department, the ESD-7, we've actually been able to cover most, if not all of those costs. And of course, even with the scenario that we last spoke of that includes the 3% cost of living, our fund balance reserves have been maintained in the general fund and we have spoken to you about how important that is to maintain our fund balances because then that then dictates our bond rating or credit rating. In fact, recently S&P rated us a AA and so we sustained that AA bond rating. And that's very important because the better your bond rating, the lower the interest rates you receive when you are actually issuing debt as a city. Before I move on, I just kind of want to put this conversation into perspective. You've heard me say before that several communities across the state of Texas are experiencing budget deficits, some very significant budget deficits. And the conversations they are having is about what programs to cut, which employees to lay off, vacant positions to eliminate. property tax rate increases, increases on fees across the board. The conversation we are having or have been having is about adding more to the budget. I certainly don't want to lose sight of that. And certainly want to reiterate what we have said before, which is I think next fiscal year's budget, fiscal year 28, may be an even more challenging budget. So please keep that in mind, because we don't want to get overly aggressive in adding to recurring costs in the budget, okay? Just real quickly, again, five budget workshops, starting with the initial budget presentation on August 11th, the 17th, the 18th, the 19th, and then again this evening. And again, the goal is to address the follow-up questions received, particularly from the mayor, and we'll go through each one of those, Mayor, for you this evening, go through all of those with you all this evening. And then maybe make some final adjustments to the tax rate scenario. The tax rate and budget adoption timeline. The notice on the public hearing for the tax rate and the budget was published in the local newspaper on August the 11th. We are scheduled for the first reading of the ordinances to adopt the budget and the tax rate on September the 10th, followed by the second and final reading on September the 14th of each one of those, including ratification of the property tax revenue increase. With that, I'm gonna turn it over to Jared and he and I will sort of tag team on going through each one of the questions or information requested. Yes, sir.

I was wondering if you could just explain what reoccurring costs are.

Sure. Reoccurring costs are things such as salaries and benefits, O&M costs. Those are reoccurring costs, costs that you have to budget for every year. Okay.

Thank you, Robert. And Mayor, if it's okay with you, what I've done here is transpose your questions directly. And so I'll just move through the presentation. But if there's some certain points that you want to emphasize prior to us responding to your questions, please feel free to just stop me and we'll pause for that. Is that okay? Yeah, that's fine. Okay, thank you, sir. Thanks. So the first question was, is there a full list of non-discretionary spending items that you can provide that did not make it to this list for the budget. And so, as we discussed during the budget workshops, the City of New Braunfels has always presented and published in our document an actual list of unfunded resource requests. That's on pages 271 and 273. However though, as City Manager Camerino said, you all have made some adjustments to the list of funded and unfunded through scenario number one. and the proposal of the no new revenue rate. And so what we did for these next several slide is we've updated the funded and the unfunded list, not only based on scenario number one, so moving those initiatives over to the funded list, but you may remember that Robert sent an email last week that our fire chief was successful in establishing additional funding from ESD-7, which they committed to fund majority of the one-time unfunded requests that were still on their list. And so those have also been moved over to the funded list. And so I can go as fast or as quickly through these tables, but what again, I mean, we can also come back to it at the end of the presentation if you'd like, but again, what we've done here again is just update the funded and the unfunded list. based on what was originally included in the proposed budget as well as scenario one as well as that additional funding from esd7 that would be the only adjustments that we've made So you can see the funded list here, still there with the funding, or with the funded list. And in the next several slides, just she'll show you those unfunded resource requests. Again, kind of reiterating something that Robert said, he's been budgeting for 30 years. This is my 16th year, we've never been able to fully fund every single request that a department's requested. And I think this is Robert's fifth city that he's worked for, I don't think he's ever. put forth a budget in which every single request was funded. I'm pretty sure that's pretty standard across all municipal organizations, but we still think it's important to publish that every year in the budget and we'll continue to do so. So moving on to question number two, as we refine and finish our budget discussions for fiscal year 2027, the mayor would like staff to prepare a detailed scenario modeling a 3.5% cost of living adjustment for non-public safety city staff. You may remember as we were finalizing scenarios, we were trying to find a way to fit as, well, let me back up even further. And the slide suggests this, right? That the proposed budget originally included a two and a half percent cost of living adjustment for all city team members. In addition, public safety sworn employees would receive their step increase on top of that if they were eligible. The discussions that you all had during those budget workshops was trying to push that up to three or three and a half percent. Remember scenario one does accomplish getting it to three percent. We did look at an alternative scenario that took it to three and a half, but it eliminated a lot of those other initiatives that the council was interested in funding. So we kind of informally arrived at the 3%. So what the mayor is suggesting here is looking at a tiered structure that looks to fit within the current funding included in the budget. And mayor, what you sent in your email was looking at something that fits within the 2.5% and the tier one, tier two, tier three, but I think you may have meant what's currently included even at the 3%. At the 3%, the tier one, tier two, and tier three, we can pencil that in and I'll go through that in a little bit of detail, but If you'd like, you certainly can provide that clarification to me. And so again, that's essentially what the mayor wanted us to look at today was, would a tier one at zero to 80,000 at 3 1⁄2%, a tier two at 80,001 to 110 at 3%, and then a tier three at 110,000 and up at 2 1⁄2%, would that fit within the budget? And so you can see there's four specific questions that he requested. What's the net budget impact? We'll get into that. What's the headcount distribution? We have that information. The average dollar increase. and then enforce the compressional analysis for those employees that may be right around the top of tier one, bottom of tier two, so on, so forth. Before I get into that though, I think it's worth looking back at our investment in compensation and it really has been a journey. For the most part, we've committed to doing market compensation studies every two years, right? So we look at establishing pay scales and ensuring that all of our team members are placed in that pay scale appropriately based on what the average data is across those 26 benchmark cities. That provides equity across the entire pay scale to ensure that team members are earning and they're in a pay scale that's reflective of what the market bears for that role. Last fiscal year you can see we were able to fully fund the 2025 market compensation study as well as fund a cost of living adjustment on top of that and so one thing that to consider as we just for the very first time kind of begin to have a conversation about a tiered compensation approach because again this would be the first time that we've ever done this as we begin that conversation is what would be the unintended consequences to your market compensation study that we're slated to do in 2027 if we did move forward with a tiered approach okay that's just something to consider So now I wanna go through answering the question specifically that the mayor posed, right? So at this tier one, tier two, and tier three tiered approach, the first question is a simple one is, does the total annual fund, general fund, and enterprise fund cost difference between this tiered scenario versus the baseline flat 2.5% cost proposal? And so at the 2.5% cost proposal, that strategy is not financially feasible. However, though, when looking at scenario one, which is where I would be focused, once you added the additional funding to go up to 3%, This scenario that's proposed would fit within the funding. That's not speaking at all to the considerations or potential consequences, but it would fit. It would fit within the funding that's been allocated at the 3% level. Some additional things to consider is that the Tier 1 uniformed team members or non-uniformed team members would be receiving a higher cost of living adjustment in comparison to uniformed team members. That's just something to consider. They'd be receiving 3.5% versus 3% for uniformed police and fire, so that's just something that we thought is worth consideration and potential conversation. The second question is about headcount distribution. So based on these tiers that the mayor suggested, how many employees would fall within tier one, which is zero to 80,000. That's 514 team members. That includes full-time and part-time. And as you know, at DOSREC and the library, our parks and recreation departments, they do have a pretty large number of part-time employees. So 514 team members within tier one. Tier two, which would be 80,000 to 110,000. is 38, and then tier three, 110,000 and up, is 37. Next question is the average dollar increase. So the average annual and bi-weekly, and we received 26 pay periods here at the City of New Braunfels, so this is each pay period, if you will. The average annual and bi-weekly dollar change per employee within each tier. And again, this does not include uniform positions. So again, tier one would be $1,924 annually. are $74 biweekly. Tier two, $3,636 annually and $140 biweekly. And then tier three would be $5,346 annually and $206 biweekly. And then the compressional analysis. Again, this is kind of anecdotal. What our HR team did is they went in, looked at all team members, looked for folks that would be basically right around that 79,500 up to like 80,500. They're looking for folks that are right on the upper end of each tier lower end to see if there'd be any compressional considerations. And I think this is the point of the question, right? Meaning, would somebody that's in a lower tier receive a pay increase, and then now be making more than somebody that they were previously making less than, right? Anecdotally, we didn't see any concerns there, but again, that didn't really have the time to do a comprehensive analysis on that, and if we did, we'd probably have to evaluate those on a case-by-case basis. So I wanna pause here. I know Robert's got some comments, and it's probably good, Mayor, if we pause after each of these questions and maybe take any thoughts or considerations from council.

Thank you, Jared. Certainly, I have some thoughts about this. As Jared mentioned, we've never done a tiered COLA system here at the City of New Braunfels. In fact, as Jared mentioned, I've worked for five cities and neither one of those cities did we do a tiered COLA structure, compensation strategy. And so I know that there are some unintended consequences to looking at that, right? One of those being... Does it impact the city's ability to retain, but then also attract talent to the organization? Does it cause morale issues in the organization? Does it impact internal equity within the organization? Does it then jeopardize what has been in place for some time, which is a compensation classification and plan that has been based on market compensation studies that we have done. You saw how many of those that we have actually completed. Does it somehow jeopardize that plan that has been established after several market compensation studies? There have been cities that have done it, so it certainly has been done, but I would frankly like to learn from those cities what lessons were learned. Because I know that this would be an impact to an organization. What were the lessons learned? What would you do differently? Would you do it? If you had to do it all over again, would you do it? And certainly that is a concern of mine. One of the other concerns I have is does it disincentivize staff members from pursuing promotions, right? Because you may feel, and I certainly can't control how people feel about things, you may feel like you're not as valued as others in the organization if you get to one of those other tiers. So those are things that very much concern me as a city manager, because every team member in this organization is important. Every single one of them provides a vital service to not only this organization, but to our community, and I certainly don't want to disrupt what I believe is a really good culture within this organization, one that has been developed over time. And one that I think has focused heavily on what is our greatest asset, which is the people in this organization. It's not the technology, it's not the vehicles, it's the people that show up every day to do the work and to serve our great community. And so I've got some real concern about this. So if the council does want us to pursue this, I would recommend not implementing it. for fiscal year 27, but actually studying it and coming back to you with some feedback that we've learned because I can see some, there's some blind spots for us. There's some unintended consequences that I'm very concerned about.

Okay. Yeah, I wanna thank everyone for doing all this work today. I had no idea it was gonna be this much. I had about 50 questions. I narrowed it down to 12. But even if you guys look at the please provide, the middle section where it says tier one all the way to three, is this after the 3.5 and three, then 2.5 projections, the tier three at 2.5, 5,346? Or is this all 3.5? No, sir, this would be at your proposed. So even if we went to all 3.5, tier one would still be at the same spot. And tier two and three would be a lot higher. I do understand where you guys are coming from. But where I come from in the military or the government where I work, we do have this. And I don't understand why we don't hear. This right here directly correlates all the way down. Ma'am, I'm trying to talk here. So when we, all these questions I asked today was trying to find more money for the non-discretionary items, okay, that did not make the list. And it was about 200 things, okay? But I am seeing a big discrepancy in pay from the tier one to tier three. And I already know that tier three, believe it or not, they make a lot of money. I'm not here to take money away from people, but we started off basically in the very beginning at tier two, 2.5, right? So I'm simply considering 3.5 for tier one, because it's the highest we're gonna go. Now, 2.5 was what we were about to go to earlier on, but if we did that to tier one, you wouldn't see 74 biweekly. This is something I'm looking at. And if people here on the council don't see what I'm seeing, then that's fine, that's fine with them. I just had 12 questions, and would there be enough to where we can get some more of that non-discretionary items from the 200 list that did not make the cut?

Chairing doesn't have a lot of effect year one. But tearing, if it maintains long term, compression becomes inevitable because of certain things. That forces into what we call mandatory resets, or necessitated resets. Job averaging, when you look across the system, all of a sudden says this position is now either the lower position's higher than it because of the tearing, or you get a situation where we're out of kilter and that breaks how we do it with the COLA situation. And that's one of my concerns. The other thing, and this is just a side comment about government in general. I would never use the federal government for a description of anything considering it runs a deficit all the time. And we've been very successful of not running deficit. So we have to look at those two entities differently and solve our issues based upon our mission. and what we're trying to accomplish. Whether we tear or not, the issue is at the end of the day, what's our mission to the public and to the city, and to do the best we can for the staff and the city.

Yeah, thank you. Yeah, you're right about the government. I'm only saying that if those numbers right there in the middle were all at 3.5, the two and three would be a lot higher. All I'm trying to do today is trying to figure out if I can make sure the tier one gets to 3.5. Now, the two and three, they're still gonna get a raise, but we need more non-discretionary spending. That's where I'm trying to scrape and find money. That's the whole mission today. That's why, and so when I see this, it makes sense to me. I still see, I still see 5,300 for, someone that's making over 110 or higher than that. To me, that's good. That's a big, good raise for me. But I just need to make sure that we have a duty and responsibility, the power of the purse for the people, to make sure we invest the money in the right places at the right time. And you said, City Manager, next year's gonna be much, much harder. Now, I'm gonna start much, much more earlier, and I hope we have more budget workshops just to get an idea of what to spend money on. You know what I mean? But I truly understand and see what's going on here. And if this looks like it's saving money, then to me this looks like we can put more money. If you see one that has a 3.5 for every one of them, you can see how much difference it might be and where can we spend that money for non-discretionary items. Thank you.

I personally am categorically opposed to the tiered system. To kind of boil it down, and I do agree with Council Member Edwards too, I think using the federal government as a fiscal model is probably not a great idea, but essentially what this boils down to is social equity through compensation policy, and I just do not support this in any way, shape, or form whatsoever, so.

Go ahead, I'm sorry.

So COLA is cost of living adjustment, right? And so that's generally across the board. I was in the military 27 years. Everybody got the same COLA, whether you're a general or private first class. There wasn't extra money for me because I was a private, right? It didn't happen. And that was a statement that you made. But essentially, if you're reducing the COLA for a higher pay, essentially what you're doing is lowering their salary, right? Their salary is designed with COLA to keep up with inflation, right? We didn't make inflation, federal government made inflation. And so this is not even keeping up with inflation at 3%. probably not even 3.5%, but if you're getting paid, let's just say $100,000 a year, right, and inflation is 3%, you need to get paid that 3% more to make up the difference of what you've lost because of inflation. whether you're making $50 or $100,000, to me it's irrelevant, right? So anyway, I'm not for the tiered system. What I do believe that I think you're searching for is a market study for the people that we have working for the city, where is it their pay falls within other cities across our region, right? If a refuse worker with a CDL is getting paid X amount of dollars here, what is that person getting paid in other cities across our region, right? That's where it needs to be looked at, and that's a market compensation study that's pretty in-depth, right? And I think y'all been doing that for a long time. I don't think it's abnormal to do that, but I appreciate you looking out for the smaller salaries, but I just don't think this is the right approach.

Well, thank you, Councilman Bradley. The one thing that I want to bring up is very important. The 110 base salary is still at 3.0. That was my projection. Anybody making over 110 and above was a 2.5. Now, anyone below is the 3.5 or the 80 and below. You know what I mean? So you're still getting a 3% even if you're making 110. And in my whole purpose here, yeah. And if you put the projection, if you have a calculator, tier one and three and two, make those all 3.5, you're gonna see a big, big, big number. And so the tier one will not change. You'll still be at 1,900 while the others will be pretty close to what, 7,000, 8,000? No, I'm just, that's what I was getting at. But anyone have any more comments on this question? Go ahead, Councilwoman Lebowski.

Well, I'm not for the tier and I think that if you wanna propose something like this, I think that we should do more research on it before we jump into something like this because we should be approaching other cities that do it and see if it's successful for them or not. I just don't wanna do something that we've never done before. So I oppose it.

You finished? Go ahead, Councilmember Edwards.

How many positions are contract positions?

Contract positions?

Yes. In other words, they're not subject to COLA. We have a direct contract with city manager or the judge or whatever. We set the salary independent of the COLA. Just the three?

Yes, sir. Three.

Okay, and a lot of times when we start to look at tiering, I'm not saying this is the case, I don't know the whole story, but a lot of times we want to talk about tiering or offset because we're looking at the very upper echelon and going, wow, that distance is getting there, and so there's a public perceptive of it. that we got the bulk of the people are here and then we got a few. You see it in the school district, some school districts have a clause in there that the superintendent has to make 20,000 more than the athletic director because they want a winning season, a winning team. So I think we have to make sure when we're looking at this consideration, we're not looking at those three as why we've set the tier three at a certain location, because those are independent of the consideration. Does that make sense?

Thank you. Anyone else? Councilwoman Carter?

Sure, I'll go ahead and comment on this. First of all, thank you all for all the work that you did today. I understand that these questions came in late from the mayor. I saw them yesterday, I think, as well. But I will tell you that this is a part of the budget process. Budget is two-way. We didn't see it in its totality, I believe, until what, mid-August? I don't know what all the spear throwing has been, and some of you have seen the email that I'm talking about, but the mayor has a right to ask a question. And I appreciate that you are unfettered, y'all are answering these questions. but it is a two-way process, right? And I think if anything should be learned is that maybe next year we address what could be coming in that two-way earlier versus at end game, right?

I mean, it's lessons learned. Thank you. And we've actually said that, that we want to start the process earlier, particularly when we get very preliminary tax values. I think that's when we should start having the discussion about what might the next budget year look like because then it'll give us some more time to sort of plan and project what's possible or what isn't possible.

I mean, the good news is, is we have time. I mean, budgets are not arrived at in major corporations. I worked for one GE. I didn't just work for the feds. And I can tell you, we were there burning the midnight oil when it had to go to the board of directors. So this is not unusual. I know it doesn't feel great. So I do appreciate the questions. I thought they were actually very good questions. The other thing is on these COLAs, they are indeed a cost of living increase, but COLAs are not mandatory. COLAs are certainly elective. Raises are not mandatory, right? So I appreciate that the mayor actually gave an alternative. And I think we should look at the glass a little more half full than half empty. It could be zero. And we're still talking a number. So that's good. But I do appreciate that we're trying to look for money. Not that you all didn't, but we should be a less emotional group because we're not tied to the daily operations. And I get it. I manage people all the time. It's not easy to say, hey, I need to take a 10% cut. in your budget, right? It happens to me. I don't get any COLA this year. And I didn't get a Kleenex box with that news. This is not something that we should be at odds over. We should just take it like it is, and we're all paid a salary in our jobs. I'm not paid a salary here. But we'll just start this a little bit different maybe next year. I appreciate you getting me the unfunded, because I'm still looking at those. I'm still dialing on what it is that you all need and city operations and where can we find the money? And I believe that that's the whole exercise that the mayor was going through. So I do appreciate that factor along with you all doing all this work. So we will... get to it, but I just wanna correct, supply and demand is what drives inflation, right? It's not any government body. It's supply and demand. And right now the whole country is experiencing very expensive, I mean, I think our fire trucks are probably the most lighted up on the board type of example of that. Due to the supply, due to the demand, and all of the parts that go along with that, that's excruciating. So we need some help from a higher level to resolve that. But I know there's pressures on every department out here to get through that. So that's all I have. I did have one more thing. Oh, I'm sorry. One more thing, I forgot my question. On the salaries, do folks get an annual salary increase like within their tier increase on an annualized basis?

Only police and fire, sworn, because they're on an actual step plan. So if they're not maxed out in their range on their anniversary date, they move up in the scale. Okay. Non-uniform, whether salary, hourly, seasonal, do not receive that.

So they only rely on the COLA?

Yes, ma'am.

Okay, very good, thank you.

Right, or other non-uniform staff. It's either COLA or a market compensation, a market adjustment, if there is a market adjustment that's coming. And I certainly do appreciate the conversation about wanting to provide more. Again, I try to put this conversation in perspective. Other cities would love to be having this conversation that we're having today. Other cities would love to have seen, to have been able to provide a scenario one that reflects more included in the budget. They're having the opposite discussion and discussing what programs to cut. Don't like that one. No, don't cut that one. I love that program. Cut that one. No, wait a minute. I love that program. And it's, so it's back and forth, right? And I certainly, I feel for them. And I really wish that they weren't going through these issues. But very fortunately, we are not in that situation. But there are, Again, I think there could be long-term implications of a tiered COLA structure that I'm not sure that we're aware of. And that's why I caution the council that if you do want us to do this, we should research it before we implement it.

Well, thank you for this presentation here.

We have more.

Yeah, I know. I guess you can go on to the next question. I do believe this was just to show everyone that we could do something like this. And it seems like this table is not really wanting to do it. It's just an idea to get some more money for non-discretionary items.

Mayor, can I add two more things though? Because I do think it's really relevant to the conversation. And so, because again, as you said, kind of the intent behind this is to try and focus more of the compensation funding on this tier one, those making zero to 80,000. And I just, I really want to go on record that our HR team and city manager's office have done a lot of things creatively to try and find ways for those operational folks to progress in the timeline. and I'm happy to come back with a more in-depth conversation about this, but if you were to go on our website and look at our pay scales, you will see refuse collector one, two, and three, solid waste operator one, two, and three, accounting technician one and two. We have created stratification opportunities for the folks that fit within tier one that do not exist within tier three, where folks, through hitting certain tenure requirements, performance requirements can automatically move to a higher pay scale. Because we're mindful of the fact that not only the importance of those folks in the organization, but the difficulty in recruiting and retaining. So we have done some things proactively, specifically on the compensation side. And Robert just said it, but I think it's worth reiterating too, that yeah, given the fact that we've never done this, it's definitely worth doing some research. We have implemented some compensation strategies in the past. that did have some unintended cost consequences and had to eat those. And so again, it's worth doing some research on those. And then lastly, I think it was a good recommendation by one of your colleagues. We are slated to do a market compensation study next year. Happy to bring back that data comprehensively and present it to the city council as part of our earlier budget discussion so you can see that as well.

So those are the things that I wanted to add. I think that's it for this question, thanks.

So moving on to question number three, this is about non-essential or discretionary spending. From the mayors, in our budgeting, non-essential or discretionary spending, support services, non-emergency operations, or one-time capital transfers are areas where our expenditures can be adjusted without directly interrupting essential core services like police, fire, EMS, or primary road repairs. So the mayor's asking for percentage scenarios for clear options to evaluate small manageable spending adjustments across departments rather than forcing major cuts to entire programs. You can see what we're gonna focus on are one, two, and 3% adjustments. And the mayor specifically identified several departments and we did not go beyond those departments because as an entire governing body, you all could have seven different opinions about what you deem non-essential or discretionary, right? So this is to stick with what the mayor had suggested, which is... city manager's office, communications and community engagement, human resources, finance, and IT, focusing specifically on non-personnel reductions. And so I've got two graphs here for you to illustrate that. So the bottom left is the total fiscal year 27 operating budget, so non-personnel for city manager's office, communications and community engagement, human resources, finance, and IT. And then the graph on the right illustrates what those reductions would be from each of those groups at a 1%, 2%, 3%. So if you were to, say, Let's go ahead and make a 1% reduction. It'd be $22,165. That's cumulative of city manager, communications, human resources, finance, and IT, all the way up to 66,494 at a 3% cut across all, I guess, four of those departments. I think I'm kind of, I'd like to kind of, as we were kind of going down to the department level, I'd like to just come up to maybe the 30,000 foot view though and just illustrate the general fund budget in a way that we haven't shown it before, which is instead of just showing it by expenditure category, looking at it literally by every single department. That way you can see fiscal year 27 proposed budget by department, which department, which equals what percentage of overall spending. And then I think, And the Mayor, you hit right on it, right, that when you exclude employee expenses, right, it leaves little on the table, because looking at the general funds, 76% of all costs are employee expenditures, salary and benefits, with operating expenditures being the next largest category at 21%. But I wanted to, I thought these graphs were relevant to the conversation. staying kind of at a high level too. I think this is a relevant conversation for you all to have. I agree with you, Council Member Carter. It's a two-way conversation, not only between us, but also for our citizens about what are we budgeting and how much of the budget's being spent. I think what this graph illustrates here for you is ultimately how much are we spending of the amended budget every year as we go throughout the year. And what this illustrates is that there is little contingency left. you know, not to pat ourselves on the back, but I think what this illustrates is we do a pretty good job of trying to project what we need to provide services and programs across all general fund departments. The second part of the question of non-essential discretionary spending focused specifically on one-time agency contributions, civic event subsidies, and community partner contingency grants, which could be temporary funding pools or non-profit support funds and so in the general fund there really is there really in our opinion is only one thing that um fit this request which is there is a recurring contribution to the united way of come out county of fifteen thousand dollars that's been in our non-departmental division for i think over 15 years There are no one-time contingency grants or temporary funding pools included in the general fund for nonprofits. I wanted to go up beyond the general fund just to make sure I was comprehensively answering the question though. Many of you are aware that we do receive federal CDBG funds. We have the special revenue fund to account for those. However, as you know, those funds are restricted to certain federal uses, and the Community Development Advisory Committee, which you appoint, reviews those applications and makes a recommendation to city council, and you ultimately approve those on an annual basis. Anyone wanting to look into the CDBG fund in further detail, that's page 169 to 171 of the proposed budget. The Hotel Occupancy Tax Fund, our city ordinance mandates that 15% of actual hotel occupancy tax collections go towards the arts and heritage associations for the purpose of promoting cultural tourism. Again, a very similar process where you appoint the Arts and the Heritage Commission separately. They take applications for those funds, they make a recommendation, and ultimately those are approved by city council. The question also included reference to supporting, I believe the question was in reference to supporting nonprofits or external agency special events. We don't really have any funding in the general fund that fits that category. However, though, our special event funding is primarily centralized to the communications and community engagement department as they have a special events coordinator and are tasked with the responsibility of organizing and holding our special events. But that's funding for events that we as an organization are responsible for. And you've got some examples there, such as Sanger Fest, Spooktacular, Downtown Tree Lighting, Wassil Fest, and Through the Chute. Okay, moving on to question number four. This was in reference to funding for new positions. And so, yes, the original proposed budget did include 19 new positions. And then, of course, the scenario number one that you've added, or that you've kind of developed some consensus on, added some positions to that, as Robert originally alluded to. We agree with you, Mayor, that that is a, A STRATEGY GIVEN THE FACT THAT IT'S UNLIKELY THAT WE'RE GOING TO HAVE THOSE POSITIONS READY TO ON BOARD ON OCTOBER ONE AS YOU CAN SEE THERE FROM THE SLIDE ON AVERAGE IT TYPICALLY TAKES US 62 DAYS FROM POSTING DAY TO HIRE DATE THAT CONSIDERS AGAIN A PRETTY BROAD. spectrum of postings, right? You've got uniform positions that have a testing consideration. You've got seasonal positions that sometimes can be hired really quickly. And then, of course, as you can imagine, some of our highly complex technical roles, whether it's an engineer or a network administrator, we sometimes spend several months really trying to find the right fit technically and culture fit-wise. But on average, it takes 62 days from posting date to hire date. To answer your question, sir, all of the positions included in this year's budget including those in scenario one, are funded for nine months.

And Mayor, that's been our standard practice for a number of years is to fund new positions at nine months.

That makes sense. Thank you.

Chair, how do we handle overlap? So we put the posting in, but we still have somebody in position. So then we have transitional time. How's that factored in the budget?

It's not, sir. We'll actually get into that a little bit in this next question about our approach for funding employee expenditures. The only time we do overlap, sir, it's in a very unique situation where someone's given us a pretty long runway for their departure. That's pretty rare, though. Actually, yeah, city manager is probably one of the few opportunities. We've had some situations in the past, though, where maybe somebody is moving internally, and we've had some overlap there, but usually someone's not giving us the 60 to 90 days that we need before they exit the organization. Yeah. Yeah. So the next question was on vacancy factor and unfilled roles. And so this question focused on what would the cost savings be if we implemented, oh, that was, yeah. If we implemented a 90-day delayed start for, I'm sorry, I may have a little bit of a typo here, Mayor. What you were focused on here was whether or not we operated 100% staffing due to normal retirements and turnovers. So the question really is do we include a vacancy factor or a vacancy rate into our departments and divisional, Now the second part of the question was how many positions across the city are currently vacant and how long have they remained unfilled? So I'll come back to that. I'll come back to that first part of the question. Let me go ahead and answer this one. So this question about how many positions are currently vacant and how long have they remained unfilled? So right now we have 27 full-time positions across general fund and enterprise fund departments that are vacant. Nine of those are firefighters. We have an entry-level exam that is scheduled for October 2026. The average time that these positions have been open is about three to four months. Some of those, again, are filled relatively quickly, again, based on the skill set and how easy it is to retain those skills in that position in the market. Some of these positions, though, you'll see have a open position on our website almost in perpetuity. A good example is like our solid waste operator, right? And so for right now, there's been a solid waste operator position on our website that's been open for more than six months, but we lose one every several months. That's one of the highest kind of turnover rate positions in the organization. So sometimes even though the role's been open for six months, it's not for that particular spot. It's because another one opened up and then you backfilled it, right? And so, but on average, when I was looking at it today, it's about three to four months that those positions have been vacant. But it's more definitely a broad range that is circumstantial and situational. So here I'm gonna get back to that. Oh, I'm sorry Mayor.

No, I just had a question on that. Yeah. The three to four months Is that money for the empty three or four months? Is that in the 2027 budget? Or is that excluded from that?

I'm gonna answer that question. Okay.

Yeah.

So yeah, this really gets to that question, right? And it's a good one, right? Like, do we budget 100% of expended? Do we budget 100% of payroll? Or do we factor in some form of The short answer is, for the most part, we budget 100% of payroll. The exceptions to that are where you'd expect them. DOS Rec, for example, most of our seasonal operations at the pool, recreation, athletics, because again, we've got a lot of seasonal employees there, part-time employees there, and we feel we can really bank on that, on those vacancy savings that we're gonna generate. So we budget accordingly in those functions. But for the most part, we budget 100% employment. Really because of backfill, retirement payouts, especially PD and FIRE, and any overtime considerations, that eliminates any of the significant vacancy savings that we could see in the general fund. Similar to the graph that I showed you earlier on total expenditures, this graph is demonstrating the percent of the employee expenditure budget in the general fund, how much we spend each year. And so again, I think this also illustrates that our approach to how we budget for employee expenditures is working because we're spending 99.8% in fiscal year 22, 99.93% in fiscal year 23. Even this year in fiscal year 26, we're actually predicted to go slightly over are over our total payroll budget in the general fund, which means that we'll have to rely upon hopefully some savings in our operating budgets, maybe some of our capital budgets, maybe even some things in contingency and non-departmental. So I'll pause there because I wanna make sure I've answered your questions. Go ahead.

What do we do in the case of a market reset? So we're sitting here, everything's static and normal. But we had a situation here a few years ago with the planning department in certain areas where we weren't competitive anymore because the market shifted on us. Not just the free market, but even our neighboring sister cities We're having a hard time finding quality people. So how do you factor that in the budget to protect what you're going? Or is it something you just have to come back to us to break the budget?

Yeah, it's situational. I think just as good as an example is what happened in the solid waste fund a couple years ago. We were losing solid waste operators and refuse collectors to the private industry, and to that point, Council Member Edwards, we had to go and adjust pay scales mid-year. We had to create those promotional opportunities that I was referring to earlier for those employees, and it had a significant effect on the solid waste fund. Luckily, the solid waste fund at that time had the capacity to support it, but certainly, when the market shifts on us so quickly, and usually it's from threat from private industry, you know um we've had to come back to the city council and request modifications but that's again it does not happen that often but solid waste and then again your reference to planning in the past has happened as well thank you thank you for that this um i'm writing down the notes and i'm adding up everything and i'll tell you how much at the very end thank you Okay, so question number six was on high overtime spending. And so the first question specifically was which three departments had the highest overtime expenditures over the last 12 months? Mayor, what we reported here was the fiscal year 2026, so this would be October 1, September 25, through our projections for September 30th of this year, so the fiscal year. So you can see fire department, police department, and public works. If I'm guessing, this is probably the same three departments that it is every single year, top three. Second question there about what specific operational changes are being proposed in fiscal year 27 to curb recurring overtime dependencies. I first off wanna say that for the fire department, while that is a big number, a big chunk of that, specifically in fiscal year 26, was affected by deployments. You all receive emails from Robert from time to time where it shows we're deploying to California We have well-trained, well-qualified leaders in our fire department that across not only the state but the country are requested to help respond in emergencies. And so the good thing is while those do hit our budget, those costs are reimbursable and accounted for as reimbursement revenue in the general fund. So that's one thing I wanted to mention. Second thing is, and you may have seen it on that list that Robert sent last week, that the fire chief was successful in negotiating with the ESD to cover the cost of advanced paramedic training next year, and that actually includes the cost of overtime. So that'll be offset. And then they've done, and this is not an exhaustive list, just some highlights from what both chiefs sent us today. They've limited training absences to two members per shift. So that's an operational kind of control where they're looking at their training portfolio and making sure that it's not having an adverse effect on minimum staffing overtime. Because that's what typically can accumulate quickly if you have a number of folks that are out for either FMLA or injury or training. you only have so much control over those, obviously, and you have to maintain minimum staffing, that callback is where that overtime can accumulate quickly. The police department, they plan to work with our finance department and increase and enhance the budget and overtime analysis that they're doing. And kind of a similar approach, they'll look for trying to coordinate trainings on department overlap days. Again, that'll reduce overtime directly as well. So again, not an exhaustive list by any means, but just some examples there from the two largest and primary source of overtime in the general fund. Oh, I need to mention this. Yeah, so the police department, even though at $1.8 million, that is projected to be a couple hundred thousand dollars below budget for the police department, which is fantastic. I'm very proud of the efforts that have already, not looking forward to fiscal year 27, but efforts that have already been implemented to control overtime costs. So very proud of the fact they're predicted to be under budget in fiscal year 26.

And to add to that, Mayor and Council, the City Council back in April authorized the Police Department to do what's called an overhire. In other words, hire more officers than what is authorized in the budget. That also contributes to reducing overtime for minimum staffing requirements. That's been very beneficial.

So moving on to question number seven. I just have one question. I'm sorry, Jared. Yes, sir. No problem at all.

For Public Works, what exactly is that? Is that MBU? Is that...

No, sir, I should have addressed this. So the 91,000 in public works is coming primarily from our streets and drainage teams.

Streets and what? Streets and drainage.

Streets and drainage, okay. And so that specifically for fiscal year 26 is projected to go over budget. It's primarily due to a higher frequency of on-call. They attributed that to some of the ice storms in February. the high water events that occurred in July. So I guess a higher frequency of on-call requests. That could even include things such as a downed tree in the road in the middle of the night that needs to be removed. In addition, as our special events in downtown have increased, that requires efforts from our folks before the event, during the event, and after the event from streets and drainage. And again, so we're starting to see the number of hours, number of overtime hours for special events, specifically for Public Works going up. So that's something we're gonna keep an eye on as well. Go ahead, go ahead, sir.

In that regard, I think in conversation with the chief, rallies, special events, and others that require greater presence not only in fire, safety, paramedics, and police. Are we looking at new fees and charges in there to offset and at least pay for some of this over time and things?

Yeah, great question. We are in the process right now of a citywide working group where we have representatives from all departments throughout the city. to go over mass gathering policies, fees, and we eventually, the culmination of that effort will be coming forward to the city council with a mass gathering ordinance that will address all of those items to have a clear plan laid out with fees associated in order to achieve cost recovery for events like that. We're seeing more and more of those and on shorter and shorter timeframes. And so we wanna make sure that we're able to get ahead of that. That has been and will continue to be a very lengthy process. So we started, I believe three months ago, And at the time we projected, it'll probably take a year.

Thank you.

So moving on to question number seven. This is focused on, this is on cash inter-fund transfers for really one-time investments and equipment and capital, but I'm gonna address one-time and recurring transfers for this purpose, because I think it's, again, I think it's relevant to the conversation. So what this is focused on is evaluating whether or not one-time cash transfers from the general fund into capital funds really served as a primary balancing mechanism during the budget workshops, and so, I'm gonna break this into two components, the first of which talking specifically about the facilities maintenance fund transfer, the second one focusing on the equipment replacement fund transfer. So you may remember, especially during our tax rate scenario discussions, we did utilize the initiative of the one-time half a million dollar transfer from the general fund to the facilities maintenance fund specifically for any of the modifications and moving costs for the FM 306 facility and let's just take a step back and make sure we kinda are all on the same page for that project. So when the NBHQ project is done and they move out of their downtown offices and their FM 306 facility to their site off the highway, all of our folks that are currently downtown on Castell will move out to this facility for much needed facility improvements and much needed space improvements where they've been squeezing there for quite some time And so the plan is to make sure and address, make sure the furniture is up to date, make sure that there's signage, that the IT security and network infrastructure is compatible so that we can be effective in that building once we move in there. This will be a project that requires multiple funding sources. We rely on solid waste for a portion of that, as we talked about. during the retreat and in previous discussions because they'll be occupying 50 of the space within the building and the property and so we don't have any funding identified outside of solid waste for those improvements and so what our strategy has been is trying to set aside one-time funding into the facilities maintenance fund to be available for that project once it kicks off in fiscal year 28. And so the budget initially included $500,000 for that. However, though, as part of tax rate scenario number one, we utilize a portion of that to try and address more of the additional council priorities that you all had conveyed that you'd like to see included. So as a result, right now, there's $230,694 that remains for that initiative, right? So to answer the question, what would be the risk or impact if we reduce that transfer by 10 to 20%, all it does is it just pushes that funding requirement to fiscal year 28.

I have one question on that, sir. Yes, sir. So what if it wasn't 10 to 20%, maybe just 5%? Sure. Would that be something that you can work on?

Yes, sir.

And that number at 5%, would that be close to $100,000? Yes.

No, sir, at 5% of the 230,694, it'd be $11,500.

That's not much at all.

No, sir, but I mean, again, this is a project that last year and this year and in fiscal year 28, we're hoping to secure the funding that we need to pay for the non-solid waste components of those facility improvements and modifications.

So that 10% to 20%, is that 22,244? Right, so 20% of what's left

20% would be 46,138. And that would actually hurt if we did not fund that? It would reduce the amount that we're planning to transfer from the general fund into the facilities maintenance fund for that project. Again, that project is insulated to begin until the middle towards the end of fiscal year 28.

So the need for the funding doesn't go away. You still need that funding. to be able to make those improvements that Jared mentioned. It just pushes the need or the requirement to find that funding by another fiscal year, so it doesn't go away.

If you push the need to another fiscal year, would the cost of that also increase with inflation?

We have a project team that's working on this that is developing cost estimates that we'll take into consideration, escalations in cost.

What would be the consequence of not funding it at all? Just push it to fiscal year 28?

Again, it just increases the funding requirement for fiscal year 28. As the slide says, we do not have a final number for that project yet. We are working on trying to whittle it down as much as possible for that move to where it can still be a facility that we're proud of and that our team members are proud of. But that's something that we're working on right now.

And we've already pulled off, I think it was, about a quarter million bucks, roughly? I think it was a half a million.

Correct, it started at 500,000, the initiative for this year.

And that was just to get scenario one to get. Correct. To balance out to where we could get, have enough in our reserve and satisfy all the things that we were trying to get for. Correct.

basically in the budgeting cycle. These types of funds and so on are part of our protection period, and also if we come out a little ahead, we have some going toward the future with things that we have put off. Or during the year, if our revenue stream is better because of sales tax and fees, that we now open up the door to what we had unfunded so we can reset the category. Is that not right?

That's correct. Let me put it a different way. I was sitting here thinking about how best to consider something, consider an alternative. Let's say that we didn't transfer any money for this project last year or this year, and then in next year's budget we say, well, we've known this project is coming along for the past three to five years, and we haven't done anything to prepare for the costs that we know are incurred. I think y'all would have a pretty good complaint about that, right? So this is trying to be proactive and, again, set that money aside for several years for a project that we know is coming that we're still, again, doing our best to value engineer and limit the overall cost of the project.

Yeah, the way that we're approaching this is really consistent with how we approach our five-year forecast. We know things are coming, and so when we start to plan for and setting aside some funds to be able to meet that need when the need arises.

Thank you.

So the next component of this question focuses on the transfer from the general fund to the equipment replacement fund. And this funds our technology replacement. So laptops, monitors, PCs, some of our minor network infrastructure, right? And so the proposed budget includes a $200,000 recurring transfer from the general fund to the equipment replacement fund to replace that critical equipment. However though, you may remember from, our forecast discussion, our team has recently updated what the funding requirement is to replace that equipment on a set schedule. So laptops five years, PCs five years, monitors as they fail. And to do that, it takes roughly $375,000 per year. So that transfer is already underfunded and has been underfunded for quite some time. What our team does is they try and prioritize which equipment can be extended beyond that ideal replacement schedule. So we're already doing what the question suggests, which is can we defer some of these things beyond typical useful life? We already are doing that and we have been doing that for quite some time. The next component of the transfer to the Equipment Replacement Fund is an initiative new for fiscal year 27. It includes $705,000 as a one-time transfer. That's to replace approximately 40% of the city's network infrastructure. Again, you may remember us talking during the retreat and during our budget presentations that the city's network infrastructure is up for replacement this fiscal year. However, though, that project as a whole can cost anywhere from $1.5 to $2 million. What we did is we worked with our IT department and said, what if we did this in a phased approach and got to replacing roughly 20% of our network infrastructure every fiscal year, right? And so what the 27 budget does and includes the funding for the first two years or 40% of that effort. And so at the current strategy, in fiscal year 29, we'll have to come back and look to allocate either the remaining funding for this project or at least the next year. So at least the next 20% so we can stay on track with trying to replace our network infrastructure on a more set schedule, as opposed to having a significant financial challenge come up every five to seven years.

And this strategy also allows us to be able to address multiple projects versus just one very big project that we're phasing it out. And so nothing we do is all or nothing proposition. We phase many things because it helps us to, one, get the project initiated, and two, allows us to be able to address more than just one project at a time.

Go ahead, I'm sorry.

Go ahead.

School districts at one time looked at technology at some sources for leasing some of their tech because the obsolescence issues was getting ahead of their acquisition amortization. Do we do any leasing on some of our technology and is there any savings? I'm not sure there is.

I'd have to ask our IT director to verify whether or not there's any savings. We have not done that in quite some time. I will tell you that from a budget policy perspective, once you start leasing that equipment, those costs then are directly competing with all of your recurring costs in your budget, right? Because it's a recurring commitment that you have to make. Under the current strategy, we have the flexibility to say, hey, Your laptop's five years old. Is everything okay with it? Yes? Okay, you're keeping it. Which is what, it's working more or less under the current model. And again, we certainly want to keep that flexibility moving forward.

I got a question there, Jared. Yes, sir. So useful life, is that five years? Yes, sir. And most of all our equipment, $375,000 is over five years old?

No, sir, the annual requirement that we would need to replace all of our equipment every five years would be a $375,000 transfer. Right now we're only budgeting a $200,000 transfer.

Yeah, I'm seeing that. So we don't have laptops that work past five years?

No, we do, we do. I mean, you have to have a criteria, right, and an ideal replacement cycle that's based on industry standards. And five years is what we would replace our equipment if we were able to fund a $375,000 annual transfer. We're not, so we look for opportunities to prioritize and push where we can.

Yeah, I see a recurring 200,000, and that's every year is what I'm looking at. Yes. That's a lot of computers every year. And I'm just wondering... Are we, do we have that many computers that's worth over $200,000 a year to replace? Yes.

Yes, we do.

Because I will tell you what you may not be thinking of, Mayor, is our police and fires MDT. They're rugged laptops that are in every single police pursuit vehicle in many of our fire parades. Those things are roughly $5,000 to $7,000 a piece. I'm gonna turn around.

Okay, yep. Also, our inspectors are also utilizing devices out in the field, code compliance using devices out in the field, animal welfare, and so we have a lot of computers and devices across the organization. We rely heavily on technology.

Okay, I'm just curious to... Seems like a lot to me, but all right.

So are we replacing all of them straight across, or are we replacing them every year, different departments or sections of the city get replaced?

Yes.

Okay.

And prioritized.

Yes.

And again, and pushed where we can.

Okay. That's what I thought.

And so that priority is going to be given to police and fire and those ruggedized units as it should.

Right.

Thank you. Yes, sir. So the next question, I want to read this kind of verbatim because this is one that we struggled a little bit with. So this is on contracts, technology, and vendor spending on professional services and outside consultants. So consultant costs can creep up across multiple department line items over time. Rebidding longstanding contracts or utilizing existing city staff often yields significant contract savings. And so Mayor, it's a rather broad question and what we'd really like to do is we'd like to allow our teams to put together more of a comprehensive resource of all active contracts for external services because we spent quite a bit of time on is this restricted to just professional services and what we have in those line items. but then it references outside consultants, which could be funded in a different line item. We struggled on whether or not we should be including some of our special revenue funds that do provide some services that fit within these categories. And I'd rather our teams put together a comprehensive resource for you and your colleagues to really evaluate this.

This was something to where can the city actually do it itself, rather than hiring outside people to do any contracted items, especially technology. So that was the basis of that question. Are we always hiring outside help? Do we not have people in here to do the job? That's primarily what it was.

No, and it's a good question. And there is an example there at the bottom of the slide where Jordan and her team actually, this fiscal year, you all authorized a new engineer position midstream specifically focused on reducing our reliance on third party review. And so it's an example that when we have the opportunity and we feel like we can recruit and more importantly, retain that skill set, we certainly do so. But nine times out of 10, our reliance on an external third party is gonna be due to staff capacity and staff expertise. But I'd like to, again, provide you a more comprehensive resource that can speak to all of our contracts.

Okay, thank you.

Yes, sir.

Oh, Council Member Edwards, go ahead.

I think part of our issue when we start talking about these outside consultants becomes a situation of what we use them for. So council drives some of that. Fire or police want to substantiate, well, what's our call time? What's our response? What are we getting done? Where are we going? So we have to hire an outside consultant because we don't, I'm not saying we don't trust our leadership, but we want an independent party saying that we look good because the public wants us to look good so there's a cost that we add to our budget and then when we start to look i will just use the civic center and and the growth thing over there i mean we've studied the hotel thing three times i don't know how much we spent but those are where those get a little controllable that we don't have savings we just ran a study and then we set it on the bookshelf and then five years later we come back to it because we're resurrecting it again. So some of those are just not controllable in that extent. I think if we have those that aren't mandated by the state that we have to do them or we don't necessarily need them, I think it has to be a discussion in the future to say, normally we'd want to run a study on this, but if you're satisfied with the internal data, it's unnecessary. At least then it can be a discretionary item for council to take a risk and go, yeah, let's ride with the herd or not. Does that make sense?

Yes, sir. Anyone else from up here?

Nope.

Thank you, Jared.

So question nine focused on software licenses and IT subscriptions. And I understand the mayor's approach here is to just verify whether or not we don't have duplicate subscriptions, redundant platforms for duplicate functionality. I think my answer to your question about a citywide software audit kind of gets to that. So essentially every single time that we are renewing a software program or bringing on a new one, that really gives us the opportunity to audit the requirements and make sure that it's sized appropriately. From a policy perspective, what we make sure of is that any time a department is interested in bringing on a software, and that's anything from $1,000 a year, software as a service, very minor functionality, to a major ERP system that flows through our IT department, and they're doing exactly what you suggested, Mayor. They're making sure that there's not duplicate functionality across the organization, and they're making sure that the licensing that we're acquiring, whatever the methodology is, and you'll see in my next couple slides, there's several different methodologies for how software companies bill utilization and usage, but they're verifying that it's sized appropriately for the need. And so again, we feel pretty confident we're doing that at both onboarding of new and renewal of existing systems. This next question is gonna go into a little bit more detail about that, right? Because the next question is wanting a breakdown of active enterprise software subscriptions, any unused seat license, and any overlapping tools across departments. One of the biggest software programs that we have is, of course, our enterprise agreement with Microsoft. And it provides a whole host of programs that we rely on. And so you can see the approximate annual cost there. That's a seat-based licensing program. And again, every three years at a minimum, our team is going in and making sure that, because we use the word tiered again, there's actually tiered licenses, right? So what the requirement for a seasonal lifeguard may be compared to an emergency dispatcher or a department head is gonna be different. And so our IT team makes sure that the license fits the role as well. So we're doing that at least every three years and it establishes a set of standards to make sure that we're not overpaying for utilization for this program or any other program. And so the next couple slides just demonstrate, and our IT team basically looked at any IT budget or any software that was above $10,000 annually. So it doesn't capture any of the maybe smaller, like I referred to earlier, kind of basic functionality, small software as a service things that we may have. But we could provide that if the city council wanted to see that as well. But I think what this does is it illustrates, though, that there's a variety of licensing methodologies that software companies are utilizing to pay. And again, you can see that our team looks at what the need is. Once it's vetted, who needs it, why they need it, that then drives what the either cost per seat is or what the annual approximate cost is. And you can see these, what the functionality of these softwares as well. Same thing. The difference between these two slides is these are the costs that are centralized, meaning the IT department manages independently versus these are the ones that are department specific. Again, our IT team still plays a role in managing them, but the funding for them is decentralized because it's something that is really focused on a certain department's need. I'm sorry, Mary, did you have any questions there?

Oh yeah, so the main reason I did this is because our IT department spends a lot of money. And I wanted a breakdown of exactly what the heck are we spending on when it comes to software and our subscriptions. And this does a lot of, this looks like a lot of detail, and it's stuff you need. So I was just really curious to see why we spend so much in IT. Yes, sir. But when you break down stuff like this, it makes a lot of sense. And I would like to see a little more go into bandwidth when it comes to sending emails, when it comes to videos dropping when you're on something like this. We do have a lot of video just drop. And if we can work on that. That would be great. I'm not sure if that's going to cost like several hundred million more dollars.

No, sir.

No, sir. But this looks pretty good. Yeah. Thank you. Yes, sir. Thank you.

The last question that you had was specifically on fleet replacement. The question focuses on whether or not there's an opportunity to delay the purchase of any non-emergency staff vehicles, and I think that really means replacement vehicles, but you certainly can clarify that if I'm wrong, by a year or two with minimal impact on day-to-day operations. And so this is focused on whether or not that, for the example here, whether it be administrative pool cars, code enforcement sedans, or light duty staff trucks that are scheduled for replacement, is there any opportunity to extend those? And so you may remember that the funding in fiscal year 27 for replacement vehicles is limited entirely to the 2026 tax note. That was authorized by city council on August 24th. So it's $2 million, and again, scheduled to replace 22 vehicles, 20 of which are assigned to police and fire, and this is the first time that I'm showing you the actual list. So these are the actual vehicles that are scheduled for replacement, and it indicates what they're scheduled to be replaced with and what the individual cost and upfitting cost is of each of those vehicles. And so to answer your question more directly, Mayor, that as you can see, there's only two vehicles on this list that are non-public safety, one for construction inspections, one for building safety. And kind of similar to the conversation we were having on technology, it's the exact same thing for vehicles. We have criteria to replace police pursuit vehicles at roughly six years or 85,000 miles, whatever comes first. Criteria to replace non-police pursuit and non-sworn vehicles at 85,000 miles or eight years, whichever comes first. However, though, those first two on the list illustrate that we're seldomly able to do that. for vehicles that are non-public safety. We're replacing two vehicles that are 2015 models. So they're 11 years now, they'll be 12 years at the point in which that replacement vehicle arrives. And again, this strategy has worked. The strategy has worked, right? But looking at the list, it does demonstrate hopefully, Mayor, what you were looking for, which is how are we prioritizing those vehicle replacement, what opportunities may exist. Just for this year particularly, nearly all the funding is dedicated to public safety vehicles.

Now this looks good. If the year was 2020 for the 2015, I'd look at that, but... something over that old. My car's getting old, and that's used all the time. I understand this list. Thank you. Thank you, sir.

So, Mayor, up to you, sir. I've got just three more slides on retiree premiums, and then I end with the scenario one slide. So if you'd like, I can keep going through all these, and we can have all our discussion then. Does that work? Sure, that's fine. Thank you. So the question from Council Member Carter was just to revisit and have a discussion on the retiree premiums that are included in fiscal year 2027. So it's definitely, I think, necessary to just recap self-insurance fund overall. And so as we've talked about in the past, really beginning in the third quarter of fiscal year 25, we saw our costs kind of start skyrocketing, and you can see that illustrated there in the graph. From fiscal year 24 to fiscal year 27, overall self-insurance fund costs are projected to increase by about 46%. We've been on a profound run for managing this fund, so much so that we actually built up a $4 million reserve in the self-insurance fund. We're very grateful that we did because that is what got us through fiscal year 25. It's what will get us through fiscal year 26. We will probably go through more than half of that reserve in those two fiscal years alone, which is, that's why you have a reserve in a fund like this, right? However, though, with fiscal year 27, as we've been saying for several months now, we needed to increase not only employee premiums, but the employer contribution to ensure this fund stayed solvent. So how we did that was a 25% increase to the employee and a 25% increase to our employer contribution. So let's just put that in context a little bit, right? Our 25% employer contribution costs the organization around $1.85 million in additional funding going into this fund. That equates to us contributing $11,888 per budgeted FTE, the self-insurance fund. I say per budgeted FTE because we make that transfer regardless of whether or not every employee is actually enrolled in the plan. It's just simply that's how much the fund needs, so we make that transfer. The other kind of gut check for us is, even with those increases, how much is the city funding for healthcare versus how much is the employee funding, right? And at these levels, the city's funding around 85 to 87% of the overall cost, with the employees picking up the rest. That aligns with industry standard, right? I didn't want to go through every single example. As we've talked about in the past, we have three plans here at the city. We have two PPO plans, which is the gold plan and the silver plan. It's like a traditional health plan with co-pays and co-insurance and so on and so forth. And then the bronze plan is a high deductible health plan, so it's eligible for health savings accounts, right? The majority of our employees are enrolled in the silver plan, so that's where I try and direct the majority of your focus. On this slide, it's focused on, what I really wanna focus on is employee only and employee and spouse. for the silver plan. So for employee only, $3 increase. For employee and spouse, $43 increase. And that's bimonthly. So if you were to double those, if you wanted to look at it monthly, it'd be $6 for employee only for the silver plan and $86 employee and spouse for the silver plan. I wanted to tell you monthly because the next slide will illustrate why I'm doing that. So let's talk about retiree premiums, right? As we talked about, or as I alluded to in that email that I sent you, that retirees are predicted to cost approximately 54% more than active employees per employee per month. Would that gap continue to widen? We would expect that our retirees would cost more on a PEPM month basis, but that gap has widened during this sudden increase that we've seen over the past two years. When we were putting the budget together, and as you know, we work on this thing all the way up until August 11th. We're making final tweaks to it. Our approach was, given the fact that retirees are on a fixed income, that we should smooth the 25% increase over two years. So 12.5% in fiscal year 27, 12.5% in fiscal year 28. We felt that was defensible to our active employees that are paying 25% now, but also again, mindful of the fact that they are on a fixed income. And so that is our approach and we stand behind it. But again, I wanna respond to the question and I want to demonstrate what the impact would be if we went a different way. There are eight retirees that are on our health insurance plan still. I think we talked about this before when they turned 65, they transitioned to Medicare. And so if the city council wanted to direct staff to do something different, either reducing the premium increase or freezing them for fiscal year 27, what it would result in is just basically a broader subsidy from the employer contribution and the city premiums to cover that cost. I think the second consideration is if there was consensus to either reduce or defer that increase, we'd wanna know, are we deferring it entirely or are we pushing it all to fiscal year 28? So that's where I'd like some of the conversation to go as well, if that's the city council's desire to do so. So I'll pause there for any questions on this one.

Sorry, nevermind.

I appreciate you running all those numbers. It was brought to my attention by at least two retirees out of those eight.

Yes, ma'am.

I didn't know there was just that few. And I know it's from the time they retired to the time of 62 or 65. Okay, so there's a gap. And that's tough. I mean, it's tough to cover that, but it's also from a retiree standpoint, they're on a fixed income, no different than my grandma, grandpa type of thing, being on Social Security on a fixed income. So that $100 a month, I think, is really threatening to folks. So I appreciate you running that down for us.

Yes, ma'am. Yeah, that was my thought as well. That $100, too, for the silver, it's actually pretty... Pretty steep, and it's just a few handful of people. And I think maybe the city can cover that. You know what I mean? That's just what I'm thinking.

Yeah, I mean, again, it is only eight folks, right? And again, it just provides a slightly... it creates a slight more additional risk for fiscal year 27. I won't sit here and act as if it's insurmountable, right? My question to you is if the council did want us to defer that, would that mean that we would be proposing a 25% increase for retirees in fiscal year 28? That way they had time to prepare and there's that equity with employees in fiscal year 28. Again, that's, look to the direction for the council from that.

Are you saying there's a trend in the public side that people are staying on the company retirement insurance longer and avoiding Medicare, Medicaid or Medicare because the premiums less? than it is if they get A and B and Plan G. I know several people that says, I made a mistake taking my Medicare and going to that. I should have stayed in the company plan, which has an effect on us long term. Are you seeing that?

Are you saying from employees that try and, because you can't go on Medicare until you turn 65, right?

Well, so. What I'm saying is they'll stay on past 65.

Oh, stay on past 65?

Yeah. I don't think our policy requires them to go on to Medicare at 65.

I believe so. Yeah.

I've seen numbers where it's $200 or $300 a month difference by staying into the system instead of getting off of it, taking into the Fed system because the plan G is what gets them kicked because of whatever they're getting in a retirement check plus their Medicare and their Social Security benefit. So it'll be something we have to look at. I know several corporations we deal with on their retirement plans totally different now than what their regular staff deal is and that it's reduced services or so on. So it shifts into something that says, we want you to take your Medicare and we'll make this kind of like plan G. So it drops their costs down. and to the others. So, you know, there's other considerations. Everybody's getting creative because, I mean, we just looked at benefit source and for our people, we're a small company. And I mean, it's 11,000 ahead for the employee only without their contribution. And then, you know, now the second they add somebody, I mean, we're almost talking 20 grand a year or something. I mean, it's getting ridiculous.

Councilwoman Shaw, go ahead.

So I think we should probably be careful deferring because we'll set a new expectation. And when you talk about next year's budget being different or tighter or whatever, we don't know what the future's gonna be. If we start deferring those costs now, is that gonna be the new expectation and standard? And then I think it'd also be helpful to run the comparison if you went to just private compensation for your... just to see what that difference is. Because I think sometimes when people see them side by side, it is a little bit enlightening. But I think we need to be careful with starting the practice of deferring costs, because that will become the new expectation. Thank you.

Go ahead, Mayor Pro Temp.

I would agree with Council Member Shaw on that too. I think it's something we should be careful with and think about before we start to set that precedent.

Anyone else? All right, thanks.

Thank you. Yes, sir. So the last slide that I have is one that you're familiar with. This is the scenario one where there was, I would call it informal consensus, the last time that we met at what additional initiatives were included in the budget at the tax rate scenario, the no new revenue rate, as well as the recognition of some additional recurring and one-time revenue from our June sales taxes, which as we talked about came in higher than anticipated. And so, as some of you have asked, I think it's worth trying to finalize this list before we get to first readings and second readings of the budget. But of course, that is your prerogative as city council. And so, happy to, answer any questions you have on any of the mayor's questions, any of the information we provided, anything else on the proposed budget. But what we're looking for, I think, is trying to get to some broad consensus before Thursday and definitely before Monday.

Jared, was this... The scenario, was there a different one for 3.5% on COLA?

There was, but as you remember, it removed a lot of, it removed a good chunk of some of these other initiatives. Okay.

Yeah. Yeah, I thought we were hitting 3.5. So is this actually the last slide of your presentation?

Yes, sir.

Okay, so the main reason why, and I really appreciate everyone working all day on this. And don't think I don't appreciate that. I really, really do. And I knew that this budget thing, it's almost over. And I didn't want to ask all these questions on Thursday. But you've probably answered every one of them. And I took about, I took away about 40 different questions. The purpose of this was to scrounge money to find more non-discretionary money for items on that 200 list. And the one thing I could add up to, and I'll just email you the different questions that maybe I could ask in an email to see is it possible that you can scrounge money from some of these questions. And it was just three questions that actually, out of the 12. And that comes to about $187,000. And I'll just email it to you. That actually was from question three, And another one from question two and question seven. That leaves a little give if you guys can. And I'll make sure I email to every one of you two of my thought process and idea. But I really appreciate everyone putting this together.

Can I ask you one follow-up question? Go ahead. So on question number two, which was the tiered approach, the recommendation for that approach did not save any money. It was about $25,000 more than what we currently have here. And so I just wanted to make sure that if you were taking away that moving to that compensation strategy, generate savings, if I misspoke, I wanted to make sure to clarify that.

No, no, so I'm looking at 3.5%. Okay. And I thought that's what it was, but it's at three now. If you were to take away the 2.5%, Bring it down to 2.0 and 2.5, or 2.0 the lowest. The one thing I was looking at, wouldn't that leave more money than everyone just getting that 3.5? And so you have at least 30 to 40 people in the tier three and the tier two. So I was looking at how much money would we have extra to put onto something else? That calculated close to 65,000 in my brain. But if that doesn't work, then it doesn't work. That was just a question. Where can I find money? And one of these was the big things that maybe we could find money. So it only adds up to about 187,000. But I'll email you everything that I'm writing notes on. And it just pertained to three questions maybe we can get some money from. But it all looks pretty good to me. Appreciate that. Let's see. Does anyone else have any questions from up here? Oh, go ahead, Councilwoman Shaw, first.

First, I want to say thank you for your patience. I know I was the cause of some of the heartburn because I asked the same questions and took a lot of your time. And I'm really grateful and appreciative of your time. I'm a favor of the tiered. way of doing the COLA, but I'm also not one to do knee-jerk jump into something without the research. So I really think we should look at other cities that may have done that and look at their lessons learned and if it was successful and what the pros and cons of that approach was so that we don't make those same mistakes. I'm also a believer that just because we've never done it that way doesn't mean we can't do it that way. And I think keeping an open mind to finding new ways to resource and source our money and use it differently so that we can make it go further is important. So just because we haven't done it doesn't mean we can't try it or at least do the research to see if it's feasible. And then Mr. Warner and I talked about it last week. doing maybe a short brief on that middle Monday on the budget, a handful of slides, just to start getting the information out there sooner, not only to council, but also to the citizens, so that we just take a piece of the budget and do a brief synopsis on what that is and where that money is, so that we are talking about it sooner, and then the citizens are also informed as well, because it's a lot when you get that binder, and then now we're talking about it for five or six meetings in a row, but it's just so much information. I think if we started sooner with a brief presentation just to kind of keep the information current in our minds as well as educating the citizens and then again starting early every year there's the opportunity of new council members and most recently being one of them i can tell you it's like sipping water from a fire hydrant trying to absorb the information and then factoring questions in your mind to ask smart questions when you don't really know all the information is because there's just so much so starting earlier and praying there aren't runoffs would be great so that we have the information sooner and we can start asking these kinds of questions in May, June, July, not September. So I guess I wanna say thank you so much for the great information presentation and really being willing to dig into the weeds and lay the stuff out at a very understandable level. And again, your patience has been profound because I know I've asked a lot of the same questions. So thank you to you, Mr. Warner, and the whole team for being present and showing up and being engaged in this process. It really is important. Thank you.

Thank you. Councilwoman Lebowski.

Yes. I want to say the same thing on what Councilmember Schall said was thank you for all the hard work that y'all put into this. And I mean, I can only imagine. But one of the key things that I wanted to bring up was because Mayor French, you asked where can we save money and keep it local? And I was trying to remember, okay, what was that thing that they were bringing in? And it's the crack sealer, correct? That's the one that y'all used to, is that the one that you used to give to a different company or was it the street marker?

The striping crew. The striping crew. That's okay.

And I appreciate that y'all are trying to do that and I wanted to bring that up because of the fact that it just shows that you are looking at keeping money within the city and trying to focus on that. So I wanted to bring that up again. Thank you so much for putting that effort into that.

Anyone, go ahead Larry. Sorry, Councilman Spadley.

I'm gonna join my colleagues and thank y'all very much. You asked some pretty good questions. But you know, the city is the city. It's not a corporation. It's not the federal government. And the budget comes from within up to these three city managers here. And so when it gets to our level, it has already been, nickel and dimed out almost as much as possible, right? This is my fifth budget and you're right. The first one is it is 100% taking water from a fire hose is very complex, very complicated. And not only do I suggest that we start earlier, I suggest all y'all spend hours with these folks in the room behind in their office and trying to get your thought processes around what all this entails, right? It is a lot. And you can't get it all sitting here from the dais. You have to spend time. In college, you would call it burning midnight oil or whatever, but it's complex. And Mr. Warner has a left-handed calculator. That's how complex it is. Anyway, thank y'all so much.

Councilwoman Carter?

First of all, thank you again. All of you. I mean, all of you sitting out there, too. We see every one of you, and we know that you've been here late with us. It is a huge responsibility, but we have a responsibility, too. We were elected. And I am not going to... beg for forgiveness when I cast my vote on anything. I've weighed everything that you tell me, everything that you give me. But it is my responsibility to do my due diligence for the people that put me here. Because they put me here for a reason. So whether you like the lines of questioning or not, whether my peers do or not, I'm here representing a group of people. And it's a little different. But I know civilian work is not easy. You just can't please everybody. And there are days when we all wish that it wasn't our job. but because you do sacrifice to be a civil servant people don't understand that but you do because you could make money somewhere else more money um so i know it comes with its headaches and i appreciate your your efforts um things that i would recommend that just still glare to me um to look at for cost savings are studies. I've sat up here for a little over a year now, hearing about study after study after study, and I do believe that some of those could be brought inside. I do know that there are some that need to stay outside. But some of these studies are glorified surveys that cost $250,000 or $150,000. We really need to give our talent inside an opportunity to complete some of those. Just be selective is all I'm asking. The other thing that I think needs to be discussed is something that Jordan and I spoke about. At a point in time that's appropriate when y'all have had time to rest and really think this through, I think that council needs to consider all the TURs that are out there. Because ultimately, Those are funding sources that are kind of taken away from the city's pot. They're there, but they're sequestered to be used in a zone. And I think we should look at one, do we need to sunset some of them? Two, I'm sure that there are some that are gonna expire and we need an exit plan or an off route, an exit ramp to get out. and see if they have served their purpose. But I'm not asking this for next week, Robert, so don't be sending me emails tonight. And I promise I won't send you any either. But I do think it's something that's worthy of looking at and how those dollars would impact the overall general fund.

I agree with you. I think that's certainly a discussion that this council needs to have because, as you're right, the Creekside Tours, for example, is probably the one that is set to expire in a couple of years. And so if the desire of the council is not to renew it, then you're right. What is that strategy to be able to utilize those revenues as they come back into the general fund? And there are other tours. There's more than one tour. I have no idea what the plural of tours is. I don't know. And there are others, some that have been recently that have been created, right? And so, but I think an overall discussion, as mentioned, kind of taking that and maybe having that as a presentation on one of our presentation workshops, that'd be a good discussion.

I appreciate that because, you know, it's, we just have to look where money is that, may or may not be better served to be in one pot or the other. And that's the reason for an evaluation. So that's all I'm asking for. I don't have my eyes set on anyone. Some of them I don't even know what they're for, because I wasn't here when they were put in place. I just know they exist. So, you know, I think it's a worthy exercise.

Certainly. And I think you've probably heard us say it several times in that next fiscal year is probably going to be even more challenging than this fiscal year. However, We have legislative sessions that continually look to erode the city's authority, and those are certainly challenges that the city needs to keep in mind, because we may be forced into trying to find additional revenue sources that aren't limited by the legislature in some form or fashion into the future. So that's a real concern of mine, not only for this organization going forward, but for all municipalities in the state of Texas.

Go ahead, Councilman Edwards.

Just a couple of things. What breaks do you have in for the infamous federal fourth quarter flush? Meaning just before the end of the year, the last quarter, if they haven't spent their budget, they start spending rapidly and not necessarily in tune with what's going on. We see it in a lot of government contracts in certain areas. and what do we do to make sure our budgets don't all of a sudden spend because we didn't need it, but now we're gonna spend it so we don't hurt our budget for next year?

I'm not just saying this because I'm on TV, but I mean, I'm very proud of the culture in the team behind us. They really... they really do not, across the organization, look to try and spend every single dollar before September 30th. So culturally, that has not been an issue for us, fortunately. Because you are right, in a lot of organizations, yeah, there is a big run on September 30th, right? However though, even though it's not the case, we do have a variety of good policies in place that our finance team sends out well in advance of the fiscal year where they start limiting P-card utilization, they start restricting purchase order submissions for the fiscal year. So there's a variety of things that we do that basically purchase authority is somewhat reduced towards the end of the fiscal year to prevent that as well.

Last question from me is, have we identified departments that are having the hardest time filling positions because our scale may be on the brink of being out of sync?

Well, again, fortunately, right, doing market studies every two years prevents us from getting that far behind. Every two years, we're looking comprehensively at 215 to 220 position titles across 26 benchmark cities, thoroughly analyzing that, considering internal equity, considering positions that are unique to New Roffles, considering local competition, considering private sector competition. And again, as I said earlier, I'm happy to involve the city council more in that process of how we go through our market compensation studies every two years. But I would say confidently they don't have too much of a concern over that, Council Member Edwards, because we have a very good process that looks comprehensively across all those competitive factors every two years.

And I would add that as an organization, we try to be as flexible as we can to be able to adapt and react to situations where we may need to increase. Solid waste was a good example that Jared brought up earlier, where we may have to react because we are losing folks and therefore it's impacting our ability to provide services to this community. We've got to be able to react and adjust.

That's why it's so important for us to retain the reserves because if we have to make adjustments on it, we don't break our back with it because of it. And I know it gets competitive or we have a loss in a department. Now we're trying to fill against the free market and it just creates havoc for us. And so I want to thank you for all you did. Everything you did, there were no bad questions tonight. The presentation from the mayor, all of those were things that are reasonable, logical, straight down the line, timing. I've always felt that the budget process is very compressed. It's not on your side, you get some off. But if you're a new member of council, or a new mayor or whatever the situation is, it is overwhelmingly compressed that the first thing out of the gun within about 60 days is you're now eating budget, you know, and you haven't even got used to what's going on in the regular session. So any advanced things that we can get done and a Q&A. The other thing I noticed tonight was I think a lot of times the public doesn't understand what we really have from a discretionary standpoint and understanding the budgets. And the other thing that may be helpful is by the time you've brought the budget to us, what people may not have seen is what the budget requests from the departments have been. Because that's something we generally don't see. You're coming to us after you've already negotiated internally. But if we knew that, for example, Public Works had a request for 13 million and they got nine. What was the four that we cut out? And why was that? Why was that a smart move? Because it is a juggling act and sometimes we don't understand just how many balls were up in the air. So it's helpful a little bit for us to have an understanding of that. So again, thank you.

Anyone else? Go ahead, Councilwoman Shah.

We're not taking a vote tonight, right? It's not a vote. I think we have a general consensus and direction for the staff to move forward before we do the first read. That's kind of the way forward with scenario one.

Thank you for bringing that up. I was actually gonna ask that before we left is, a consensus on the scenario that you have in front of you. Mayor, we'll look for your email with any additional questions that you may have. But we're gonna be moving forward with this scenario on September the 10th. And then if there's any changes that we're able to make, then we'll need to change the budget order for the September 14th meeting. But we shouldn't be doing that on September the 14th is continuing to adjust the budget. So this is the scenario that we're gonna move forward with at this point. Thank you all very much. And it is, putting together a budget is very challenging. You wanna say yes to everything, but you can't. Like you all, we all have to live within our own means, within a budget, right? The city is no different. And we certainly have to consider the impact, not only to the organization itself, but then also to the community. Are we raising the property tax rates? Are we raising fees on the services we provide? So what's that impact, right? And it is very challenging. When the budget comes to me, there's already been a lot of work that's been done internally. In fact, we start our process in March of every year. And there's a lot of work that's done internally to project revenues, project expenditures throughout the remainder of the fiscal year, taking a look at the following fiscal year, and then submitting budget requests, prioritizing those budget requests, all that information is put together and it's just a big puzzle when it comes to me. And when it comes to the three of us, we then sit down and start to look at every request that comes our way. And I will say it again, I wish I could say yes to everything because most everything is justified. but there's only so much additional revenue, right? And I think it's only gonna get even more challenging for cities moving forward to be able to generate new revenue each fiscal year. And so that's gonna be a real challenge. But you've gotta try to strike a balance as best you can throughout the entire organization, because there's needs across the entire organization. Every department needs either more people, new equipment, new vehicles, new technology. We try our best to try to address those as best we possibly can by striking a balance across the organization.

Thank you. Thank you, Mr. Camerino. This whole main objective today, guys, was try to find money for your non-discretionary that we have on that list that we could not get money for. And again, thank you for everything, for all the numbers you guys put up and answering my questions very, very fast. And that's about it for me. Anyone else? I'm gonna open it up to the floor, to the citizens' comment time. If you can, just state your name. If you live in the city, if you don't live in the city, if you live in the ETJ, thank you.

David Warren for District 5. I wasn't quite sure what this meeting was gonna be, but this is one of the most interesting meetings I've been to. It's just full of data. and analysis and asking questions and getting wonderful responsive data. Really wonderful meeting. I've got two points. One of them is sort of a small point, detailed point. On slide 10, we're talking about the hot tax. And lately, I have been visiting every board meeting there is. I went to a hot tax grant meeting Friday, I think a week ago, about how to apply for a grant. And it is an extremely high bar. And essentially, unless you can prove somebody is staying in a hotel, you're not gonna get money from the hot tax, the money that's allocated to arts and heritage. And I was sort of surprised at that. You know, I'm involved in Music of the Redbird, there's this amazing thing happening here, very generic, and I think they've applied before and didn't fit, because you really have to show that people are staying in a hotel. And it's never written up like the hotel assistance. It's written up as arts and heritage, but it's really assisting the hotels with the arts and heritage doing it. My second point is I didn't bring the elephant, but it's the elephant in the room big picture thing. And I've been here before on the last slide. We've got a budget of about $120 million. And of that sales tax is about 25%, about $30 million. And money that is being diverted from TERS is about $2.6 million. And 4B sales tax money that was going in would be about $12 million. So that $30 million you could cut in half and essentially have the same funding you have now with a 20% tax rate as opposed to a 40% tax rate. It's a lot of money that's hidden there in those things, mainly in 4B, but that's something we really need to look at and think about and see the returns on it. I've gone to some meetings on the TURS III out at Creekside, wow. Soon we will have the first person there or first business there that is generating some funds. It'll be a 7-Eleven. You know, it's an interesting use of funds there. But thank you for a wonderful presentation. I really enjoyed the meeting. It's a shame there's only like half a dozen people here because it's really good stuff. Thank you. Thank you for those great answers and work.

Thank you, is there anyone else like to come up to the microphone?

Mayor, if I could, the hotel occupancy taxes do have limited uses. And so part of what he stated is the case because we are required to do so under our local code and under state law. So it needs to connect to certain uses connecting back to hotel stays.

Thank you. Thank you for that. All right. They're seeing none. No more comments from the public. There be no further business to come before New Braunfels City Council. This meeting is adjourned. Hey, Mayor. Mayor, sorry. If you could read the one last time for us. Oh, sorry. Okay. Thank you. The public hearing for the tax rate and proposed budget will be held at a meeting beginning at 6 p.m. Thursday, September 10, 2026 at 550 Landa Street. That's here in the council chambers. The FY 2027 proposed budget along with the 2026 tax rate will be adopted on Monday, September 14, 2026 at a meeting beginning at 6 p.m. here, 550 Landa Street here at city council. Thank you. and there being no further business to come before New Braunfels City Council, this meeting is adjourned at 7.03. Thank you.