City Council - workshop

Okay, if I can get everybody's attention, we'll go ahead and bring this budget retreat meeting into session at 5.15. And I apologize for the late start, trying to make sure that everybody got settled in before we got going. So at this time, I'd like to take the time to welcome everybody in joining us, those that may be online and those that are present with us here today. I'll go ahead and turn it over to our city manager, Steve Williams.

Thank you, Mayor.

And I want to welcome everybody as well and just say thank you for coming and showing an interest in your city's budget. And this is the proposed budget meeting where we'll roll this out to y'all. I do want to offer for any of our members of the public, we have plenty of food back there, so help yourselves. You're more than welcome to. But I'll turn it back over to you, Mayor, for hearing of residents.

Thank you, sir. So this time is set aside for any person who wishes to address city council. Each person should fill out the speaker register prior to the meeting. Presentation should be limited to no more than three minutes. All remarks should be addressed to the council as a body and not to any individual member thereof. Any person making personal, impertinent, or slanderous remarks while addressing the council may be requested to leave the meeting. All handouts and or USB devices must be submitted to the city secretary no later than noon on the Monday preceding the meeting. Handouts will be provided to each council member prior to the start of the meeting by the city secretary. All USB devices will be vetted by the city IT staff to ensure city property is protected from malware. This time, we're gonna open up to hearing of the residents. When you come up, please state your name for the record and your address, please. First person coming up to speak will be Billy Lingus.

My name is Billy Langas. I am a Schurz resident. Good evening, mayor, council members, honored guests, and fellow citizens, and of course the staff. I'm here tonight to address a budget issue It seems we have a lot of them. Not too long ago, one was passed called the Green Valley Special Utility Systems District. That's it. It was passed, but it never went before the council. I didn't think anybody had the authority to spend our money unless the council says so. That's number one. How did that happen? Somebody needs to look into that seriously. That is a concern. Other things that happened due to input from one specific individual, whom I'm sure you have figured out by now who that may be, has happened again. and now this time we're spending $9 million to do something. I think that all of the money belongs to all of us, and we need to know where it's going, why it's going there, who is making this happen. We're not supposed to name anybody by name, but I would like to thank your newest member on the city council, for being concerned about residents who recently paid for a drainage system that the city is now saying, oh well, so be it. But in the meantime, we do other things with the money that should be for all of us when we have needs, such as feeding people on an occasion like this. Maybe it's okay because of the hour of the day and people do need to eat supper and I have a plate so I'm not ashamed of that because part of it was my money that was used to pay as well as yours and everybody else's. But these things are important and we really need to address them. Let us know what is happening to our money. Penny for penny. Where is it going? Why is it going there? Who's sanctioning it? You know, a motion is made and second before anybody can even finish saying motion. It's already second. No time to table. But in the Roberts Rules of Order, tabling is appropriate. And I'm sure our city attorney should understand that extremely well. Thank you. I have more to say, I'll be back later.

And that's all we have for hearing of the residents. So we'll go ahead and move on to item number one, which is fiscal year 2026, 2027 operating budget and capital improvement program workshop. This time I'll turn it over to Steve Williams, our city manager.

Thank you, mayor, and thank you, council. and staff, we're gonna get started. This is our workshop that we, we're gonna roll out the budget to you, the proposed budget, and we got a lot to talk about tonight, so I'll jump right into it. So the agenda for this evening is to give you an update and an overview of the, a general update and overview, as well as talk about the operating budget, and then we'll talk about the CIP, the Capital Improvement Program. And first, before we get started, I want to say thank you to James and his staff and public affairs and all the department heads and everybody else. They did a fantastic job working really hard. And as we go through, and as you can see in front of you, there's a lot of hard work and quality product put in front of you. There's a lot of detailed information. I've got 98 slides to go through, but I promise you I will go through them quickly. And that's not inclusive of the CIP itself, but we are going to cover a lot of details. But we're also going to give you the big picture. This is the opportunity to kind of roll it out and let you look at it. So just an overview. So one of the things I'm gonna, or the things I'm gonna talk about are, I'm gonna, first I'm gonna give you an explanation of the materials that are in front of you. So you should have a binder. It looks like this. And in that binder, you have a printout of the PowerPoint. You have the operating budget in its entirety. And then in the back section, you have the capital improvement program. And this is part of the kudos that goes to the staff and everybody involved in putting this together. Just to give you an example, the operating budget book, the budget book that you see that's printed, and that's our official budget book, is typically not done until about November. We have the entire thing put together for you tonight. So you'll have all the background, all the detailed information right in front of you. And that represents about a three month leap forward in the progress of getting things done and getting it to you and getting it out to the pub, making it available to the public early. And it's a great format. Public Affairs put a lot of work into making it look fancy. So great job to Crystal and her crew. And great job to James to make sure that all the numbers and everything are put together. We've also revamped the slide presentation that you've seen in the past. We've kind of retooled that to make it look a little bit different. But I think it will all be very helpful in understanding what it is that's being proposed to you tonight. So just to kind of go over the timeline, you are getting a ton of information set in front of you tonight. You're not being asked to make any decisions. You are just asked, I just would ask that you listen and absorb. And when we're done, take these materials back and look at them and develop any questions you might have. Submit those questions to me. We will all, today's the 11th. You see that right there in the middle of the slide. We'll have an opportunity on the 18th to discuss the budget again, and that's when we'll come to y'all and we'll set the time and the date and the place for the public hearings for the budget, as well as for the tax rate. And we'll also ask you to set the preliminary tax rate. And what that is, you're taking an action on that, but what that means is you'll be asked to set a tax rate that's the highest that you can go. When we get to September 1st and you actually adopt the tax rate, you can adopt something lower but not higher. You can only go up to what you set as a preliminary tax rate. It's a preliminary procedural step only. It doesn't mean that you're setting the tax rate on the 18th. And then on the 25th, that's a date that we have open. It's a Tuesday that we don't have a council meeting. So if you still have additional questions and you would like to schedule another special budget workshop like this, we can do it again on the 25th. That will give us a second opportunity to discuss the budget. And then we'll come back on the 1st of September for the adoption. And of course, there'll be an opportunity to discuss it again then. So I know we're giving you a lot. We're giving you a lot to try and absorb. But we've got several weeks and several meetings to take to have an opportunity to be all together and have a dialogue to go over that. All right. And so I've added this year a little bit of an overlook or an overview of the micro and macro economies. Had this discussion with Councilman Westbrook not too long ago. And really just to kind of paint the picture, because we look at things a lot of times that are going on with our country or the overall economy or the world economy. Yes, those absolutely have an effect on our local budget. But there are also a lot of things locally that impacted just as much or more. So we have to understand both. When we're putting a budget together and we're developing a spending and a financing plan, we need to understand what's going on at the micro level and the macro level. So the economy, we are still moderate. Overall, our GDP is clicking along at about 1.5%, 2%, modest and moderate expansion. The things that are driving that, we still have a good, strong consumer spending. It's not like it was in the past, but it's steady. We also have steady business investment. And the most robust part of our economy right now is investment in artificial intelligence, quite frankly, in the technology sector. Inflation is something that, of course, the Fed watches closely. And they're maintaining a very cautious monetary stance, right? Monetary policy stance to try and work towards that 2% goal of GDP. And we don't want, of inflation, excuse me. And we don't want hyperinflation. We don't want to grow too fast. But we also need, and the way they do that is they moderate it by raising interest rates. That's why we've seen this increase in interest rates over the last, couple years where it's what that does it restricts the supply of money that's out into the economy so it kind of suppresses inflation because it slows people's spending down but it also slows down investment in businesses expansions etc and home buying quite frankly so at the national level we are looking at about a 4.1 percent unemployment rate for july and in the So not too bad, but not great either. Kind of drilling down more to the micro level, our local economy is strong. We've seen a lot of things happen that are counterintuitive to what's going on nationally, or at least resistant to many of the factors that are affecting the state, as well as the national economy. as a whole, and a big part of that is the military. The military presence, the base being there, there's a lot of spending and income associated with that that spills over into our economy. The spending that folks do supports the businesses, they build homes, they do things of that nature that really pump money into our local economy, and it's offered a lot of stability that hasn't been seen in other parts of the state. So in the San Antonio-New Braunfels kind of statistical area that the BLS monitors is growing at about a 2.4% GDP, which is outpacing the rest of the state. And our unemployment is resting at around 5% in June. I suspect it's gone down a little bit. And I would caution to not panic at that number compared to the national number because they are measured a little bit differently. But it's in line with the rest of San Antonio. And the other thing... is you know that bleeds through it bleeds through and although it trickles all the way down into something like sales tax our sales tax and i'll talk about this later is growing at a good clip we've all heard and we've talked to you several times about the windfall coming from one particular company selling quite a bit that's impacted our sales tax but underlying growth is still very strong So just to kind of look at a recap, and how does that translate to the city? A metric that we look at is construction and growth, because we are a growth community. And is it accelerating? Is it planning? Is it declining? But no, it's actually picked up a little bit of speed in the last few years, because if you look at our single family permits that were issued in 24-25, we had 448 new homes. that were permitted. And then we had new single family building permits in 25-26, year to date, which is through today, is 400. So roughly a month and a half, a little more than a month and a half left, will probably rest somewhere in the 460 new homes range. you're pushing around 900 new single-family residences. And then also, we've had multifamily units that are CO, that have a certificate of occupancy. In fiscal 24-25, that was 282 units. And then year-to-date through 25-26 is 334. So you're looking at another 600-plus apartment units. And if you tally that up, 2.1 or so per household in the 900 homes and one to one and a half in the apartment units here, over 2,000 residents added in the last two years. We're also seeing a continuation of the retail expansion. we all know what's going on up at shirt station, 85% leased. So the, that is a really high absorption rate. We have home Depot that's going to come in, come online next spring. All of that adds sales tax to our tax base. And we have another retail center on, on, on FM three double Oh nine. And that is the forest Ridge retail center. And, um, Lastly, we've talked a bunch about what's going on with our industrial, but we're really bullish on the industrial sector and commercial sector. We've got 8 million square feet. Where's Amy? 8 million square feet are available or soon to be available in our city, which is a ton. And we have new businesses locating there, relocating from other places, starting up, and others that have interest. So that's a highly accelerated area. So budget priorities, kind of shift gears a little bit. In the past, you've seen a lot of our council members new. So some of y'all saw it last year, but to some of y'all, this is new. In March of 22, in the spring, at the spring meeting, pre-budget retreat, the council and staff got together and developed these five goals. And these are the goals that you've seen. This actually predates me by about 10 months or eight months, nine months, but it got carried forward each year in our planning efforts because there are logical goals, right? However, we're in 2026 now. And what staff has done is kind of realigned those strategic goals so they're essentially in alignment with our strategic plan, right? So our budget priorities should be in alignment with our strategic plan. So that's what we've done. And the new ones that we are proposing, and for reference, the strategic plan was adopted in July of 2024. So we want to, one, maintain essential services. Two, invest in our employees. Three, protect infrastructure. Four, preserve financial stability. And five, we added this one on because it's such a big part of this budget, proposed budget, is that use of one-time revenue, doing that responsibly. And over to the right, you see the different goals, the five different goals that we have as a city. And on this next slide, I've taken these and kind of aligned which goals go with each of the budget priorities. And you can see there are several that align with multiple goals. And I'll be happy to, at this point, if anybody wants to stop down, we can drill down a little further into the strategic plan. If not, I can keep going. Okay, great. So just a little bit of overview for some of our New York council members, kind of a one-on-one on the budget. And what is, when you hear city budget, a lot of times people think of one particular thing, like the general fund, for example. Well, the city budget is made up of a lot of different things, but primarily you have an operating budget and a capital budget. Okay. So the operating budget takes care of your day-to-day, your operating type things, and your capital budget is your larger your capital investments, your capital improvements, things of that nature. So in your operating budget, for us, we have a general fund. That's the largest fund. It's kind of the catch-all. I'll go into a little bit more detail of what it is here in a few minutes. And then we have the enterprise funds, and there's three funds there. And then we have the debt service fund, and then we have all the other funds. And then there over to the side, you see the capital budget. So in terms of a budget philosophy, there's been some talk about having a structurally balanced budget. Well, the way you do that is, and this slide is kind of a simplified example of that. You use recurring revenues for recurring expenses and one-time revenues for one-time expenses. I know that sounds elementary, but it's something that if you don't keep your eye on the ball, that's how you get into a structurally imbalanced budget. Now, the good news is Shirts has not adopted a structurally imbalanced budget, nor has it finished in a structural imbalance of the Many years. So we've been able to maintain that. And the plan that we're putting in front of you today maintains that as well. So things that are recurring are like your property, recurring revenues, property tax, sales tax, fees, and then recurring expenses, operations, salaries, utilities, keeping the lights on, things like that. One time is... For example, the sales tax windfall, the excess fund balance that we have, that was a one-time deal that's going away. Or bond proceeds, you issue bonds for a purpose to spend them on a project. And then the one-time expenses are like your, oops, excuse me, sorry guys, like your projects or fluid projects, money is accessible when you need it. So any questions? And y'all can stop me at any time and ask any questions if you like. operating budget so breaking down the operating budget three main components that we want to cover here the general fund the enterprise funds and then all the other funds all right like I said the general fund or the operating budget overall looking at the expenses as they are all together in the consolidated budget and this is a consolidated summary of operating expenditures by category so you can see the different categories there and And the largest being, so I will make this comment. It's $179 million expense budget for the city, for the city's overall operating budget. And that's a 27% increase over the prior year. And I'm going to explain that and dig down into details. But it's essentially that second one there, the 16% for transfer. That's way higher than usual because we experienced the sales tax windfall. And there's a plan for that. And so we have to transfer that to other funds. And that counts as an expenditure. So it's going to kind of distort the transfers line. But 31% personnel and 14% city-supported services And then 12% for debt service, operating expenditures, capital outlay, et cetera. Looking at it another way, same $179 million, you can kind of see where it breaks down between the different functions in the city. So 30% is public works related. 20% is general government related. And that general government number actually includes those transfers. So that's why it's so big this year. And then 17% public safety, 13% transfers, and you can see the rest. And then looking at the overall consolidated budget from a revenue perspective, it is $149 million overall. And that's less than you saw in the expenditure slide, right? And not to be alarmed, but the difference is because we have fund balance and other reserves in the enterprise funds that's extra money, like your savings account, that we can use and we will use for one-time purchases and one-time expenditures and expense. So breaking that down, the revenues, 39% comes from property tax and sales tax. 35% is from fees like water, sewer, garbage, et cetera. And 26% comes from a multitude of other sources that you can see listed on the chart. So diving down into our general funding, and you notice this little graph. Little org chart up at the top. That was a neat little addition. So the highlighted one is the one we're talking about. So in the general fund, this is our primary governmental operating fund. And the definition is essentially it's used to account for all your financial resources that can't otherwise be accounted for in a different fund, right, that has a specific purpose associated with it. It's kind of your catch-all fund. And it pays for your everyday services because like your police department, fire department, you can see them all listed there. Parks, streets, engineering, planning, IT, administration, maintenance, municipal court, etc. It all lumps into the general fund because there's no specific fund that it can go into. So on the expenditure side for the general fund, we are looking at $82.7 million dollars. And you can see it listed by the function. So we have 34% public safety. And then right below that, we have 29% transfers. In a typical budget, That public safety number is 47% for the general fund, and the transfers is zero. It's less than a percent, so it wouldn't show on the chart. But this is an unusual year where we have these extra sales tax dollars that we have a plan for, so that's showing up in that transfers number of $24 million. So the last thing I'd say about the general fund, it's a people-driven fund. It's roughly 70, typically 70% of what you spend in the general fund is for personnel related items because the functions that you saw on the previous page, well, those are things that people do. So looking at the general fund expenditures, the proposed budget is $82.7 million. This is actually a $28.3 million increase or 51.9% from last year's original budget and a $28.06 million increase over the amended budget. So the difference there being is we amended the budget already this fiscal year. So it's about $300,000 higher. That's why the difference is the actual gain on that second line is a little bit lower. But it includes $27 million in transfers of excess fund balance or that excess sales tax. And the way transfers work is when it goes from one fund to another, you account for it as an expenditure when it moves over to the other fund, and it gets received as a revenue in that other fund. So it actually gets counted twice, when it comes in, when it gets transferred, two times expenditure, and then when it gets received, and then when it gets spent. So we also have the full-year funding of positions. We added some positions last year. We also had the Merit and Step, which tends to gravitate to the middle of the year, so we're feeling the full-year impact of those, and some of those positions being the firefighters, I believe, and some other positions in water, sewer, and the drainage fund. And then we also have supplemental requests, and I'll show you guys that here in a minute. You want to take it? I'll just keep going. I'll just keep going. Keep going. Okay. So general fund expenditures, you guys are real familiar with these slides, but you can see how we're trucking along there. And this year it jumps way up in 2026, 27. And that's because of the transfers almost for the most part, almost all of it are exclusively because of the transfers. Personnel, it does inch up a little bit. You can see the 25-26 shows, each year has the budget and then the actual, and then you see the striped in 25-26, that's because that's a projected year end. And then next year, the 39.7 is the proposed. And then operating expenditures, that's things like contractual services, utilities, keeping the lights on, things like that. That is a little bit less than the projected for this year and right about the same, a little bit less than the budget from last year. And then capital outlays and transfers. Wow, here's the big number. Okay, so we have some capital outlay expenditures that are one time, and then we also have the transfers out that will be for the plan that I'm going to lay out for the excess fund balance. And then also our supplemental requests. Our supplemental requests, you guys are used to seeing this, there were actually 12.4 million in total requests made. We were able to include 7.4 million of that in the proposed budget. And 4.2 million of that is for one-time expenditures, and 3.2 is ongoing. But there are nearly $5 million in requests that did not get included. So the supplemental request in the general fund, I'm going to go ahead and click on this. And it's on page, the page number is on your, in your page 61. Thank you. So you can see here, the way this lays out, hopefully that's, pretty big up there but you can see this is the detail of what was included in the budget now the column on the left shows the departmental information and then the middle is what's being requested and then the initial cost and then you have a cumulative count as we go down And at the far right, there is an ongoing cost. So if you'll notice, there's really nothing in that far right column for all these at the top. That's because those are all one-time expenditures. And then when you get down to the bottom, bless you, you get down to the bottom, we have other items like utility and fuel rate increase, appraisal district increase, liability insurance increase. Those things have an annual ongoing cost with them. And then we actually have down here at the bottom a pay grade increase for the dispatchers that has an ongoing cost. And then one school resource officer and then the merit and step, and then four communications dispatchers, and four police officers. And that's where we get our $7.4 million. And out to the right, you can see the 2.886 in ongoing expenditures. Any questions on any of these supplementals? And you don't have to have questions now. If you've got questions later, like I said, we can talk about it at the next meeting or the next meeting, or you can email me or call me, and we can talk about it. But in essence, that's your total, 7.4. And then if you go to the next page, this is what's below the cut line. And aside from the positions that you saw on the first page, one of them is essentially paid for by the school district and then four are a critical need as in the ones for dispatch and as well as the police officers. We have not added police officers that are not SROs in a long time, six, seven years, six or seven years. There were a lot of personnel requests, but I characterize this budget, and I know I've talked to all y'all about the budget. We're in a situation where we need to be very careful. We're growing steadily, but we need to be careful about the growth of our ongoing expenditures and make sure that that's in line with the growth of our ongoing revenues. So that's why you see a lot of the ongoing stuff has been not included in the proposed budget. Best way to stay out of trouble is to not get yourself in trouble in the first place. All right, if there's no questions, I'll jump back. Any questions on supplementals? All right, I'll keep going. Okay, so the general fund excess fund balance. So this is one-time money, and we go back up to our little chart in the corner if you need that for reference, but one-time money that should be used for one-time investments or expenditures. We've actually received $32 million over the last 18 months that is in excess of our 26% requirement. So we have this extra fund balance, and we have a policy that reads we're going to keep a fund balance of 26%. So we're by policy to bring to you a plan to spend that money down or do something with that money rather than just have it sit there indefinitely. And what you should do, so we threw a little analogy. It's like we received an inheritance, right? And what do you do with an inheritance? Well, you spend it on one-time things. You know, pay off your credit card. Do some home repairs. Do a major purchase, right? But what you don't want to use it on is paying your mortgage or paying your rent or, you know, paying your monthly bills. Eventually that runs out and catches up to you. So the plan is, is to... This is a breakdown, then there's a slide on each one of these, is to take $10 million and augment our street preservation and maintenance program, affectionately known as SPAM around here. We'll take $10 million and put it into SPAM and plan to spend two million of that each year for the next five years. The other is to take $11 million and establish a vehicle and equipment replacement program through a vehicle and equipment replacement fund, which affectionately known as a VRF. You might hear me refer to it as that. And then four million for one-time expenditures that you saw on that supplemental request list. Two million to shore up our debt service fund, and then five million will be left in excess, gives us a little bit of cushion and flexibility for the following fiscal years. So, why is this recommendation being made? And the reason why I'm making this recommendation to you is because they're listed there, and I'm not going to read it all word for word, but essentially this is one-time money. And we should use one-time money to make one-time investments and expenditures. But spending on things, they're going to make a lasting value for our communities. And it also addresses multiple priorities, right? So there's discussion, you know, there's discussion about, and we've internally had a considerable amount of discussion of, well, should we just apply it to, say, Lower Seguin Road or a capital project? Well, if you spend it in one place, it helps that one project, you know, But instead of doing that, you can help a bunch of different areas and you can improve your streets, you can replace equipment, you can strengthen your reserves, you can promote tax stability. There's a lot of things that we can do spreading that money around within our budget that also save money. And it saves money over time, right? So if you invest in maintenance and replacements today, it helps you avoid higher costs in the future. It also keeps you from reaching that point where you reach a complete breakdown point, and you have to borrow in the future. And it benefits the entire community, right? If you just spend it on one road, for example, the rest of the community is not necessarily feeling the benefit of spending that money. And then also, it protects the future, so it maintains that flexibility in those reserves, and also if there's economic uncertainty, things start to shift, we see it over the next couple of years, we can make adjustments. First, street preservation and maintenance program. What it does, takes $10 million, spend $2 million over the next five years, and we're going to accelerate a lot of projects. And this is the stuff you guys see that John Nowak gets up and presents on and talks about how we're going and slurry sealing a whole neighborhood or we're resurfacing Schertz Parkway or slurring Schertz Parkway. or we're doing significant investment in one area that's more of a maintenance level, not a bond level or a capital improvement program type level, but more of a maintenance level. It accelerates those. It puts the money back to work in the whole community and several parts of the community all at one time. Or not all at one time, but over several years. It actually triples the amount of more triples that we're spending on that maintenance right now. And if maintenance, kind of like the chart that John shows you as well, if you defer the maintenance, the trajectory on a street drops off pretty fast if you don't take care of it. If you'll do some things to take care of it, you can actually extend it way out in its life and not have to make that major capital reinvestment. So after that's all spent in five years, we'll resume back at that level. Hopefully we can pump more than $650,000 back into the budget. But this is a good tangible way for our residents to see that money put to work. Yes, sir.

So just for the last one, you used $2 million in your first year. That leaves $8 million. $8 million is just a 2% rate of return. That's $160,000 a year. And then you're saving $650,000 because you're not using that money because it's coming from that one. So you have... Let's just say $700,000 plus. What is that money being used for?

We'll use it for that as well. You made a good point in an effort to not get off too far in the weeds to talk about the compounding of an interest accrual. We're going to put $10 million, but you're only spending... $2 million the first year, so you've got $8 million sitting for another, and then it's $6 million, et cetera, et cetera. Well, that money is going to earn interest as we invest it. So that's going to go back into the fund, and we'll spend it on those streets. So it'll be more money that we can even put into it.

All right, thank you.

But, yeah, but it does help. It helps to have that cash.

All right, thank you. Yes, sir.

Kind of the same thing applies to this next slide, by the way. So creating a vehicle and equipment replacement fund, you all have heard me talk about this before. We have, it's $11 million to get it started. We have $9.2 million, roughly half the value of our fleet of $18 million in unfunded depreciation. And on an ongoing basis, if we wanted to maintain a revolving fund that can afford to sustain itself, we would put in $1.8 million a year. So 9.2 plus next year's 1.8 is the million. And, you know, there's reasons that are listed there why you do that, and they're all super important. But one thing that I want to point out that's not really obvious, that $9.2 million in unfunded depreciation, we've got seven fire trucks. right? Seven fire trucks. Three were paid for with tax notes, which is a debt instrument. Two, no. Three were paid for with bond money, excess bond money or the bond money that came with the building of a station, station three and station four. And one that was bought with cash. So you use debt for six fire trucks and we haven't saved any, we haven't even paid off all those fire trucks. So when we get to when they need to replace those fire trucks, we're going to be in a position where we've got to borrow that money. So five of them are pumpers and two of them are ladders. Call a ladder a million and a half conservatively, not like ESD2 ladders, but conservatively a million and a half, a million for the pumpers. So you're talking $8 million. right there just for fire trucks that we don't have. This plan addresses that. It gets us caught up and then it puts us on a schedule to fund that going forward so we can afford things like that. And that's the most obvious example is the fire trucks, right? But we also have a bunch of police cars. You got a bunch of backhoes and other heavy equipment that's included in this fund that will be ready to be, we'll have the funds available, ready to replace it when time comes. So In addition to that, it does things like smooths out the expenditures in your general funds annual budget, right? Because the expenditure is now a $1.8 million contribution to the VRF. If you just pay cash like we've been doing, it goes up one year when you're buying a fire truck and it goes down and it goes up and it goes down and it goes down and up. And you have to be able to find that money in your budget each year. And if you don't have it, what do you do? You defer the replacement. You push it back. You push it back. You push it back, which is what happens in most cases. Or you get to a critical point and you borrow money to do it. What this plan does is gets us out of that pattern, gets us out of that and allows us to fund things on a cash basis and avoid that interest cost, keep our fleet fresh. And it puts us in a position where we can operate more efficiently, better fuel efficiency, newer features, all those things that go along with having a fleet. And it's, I've been in a situation before where you age your fleet so much that it, It costs you a lot in maintenance, but it also is just an inefficient way to operate because you have old equipment and old vehicles. Oops.

Sorry.

Okay. The other is to fund one-time capital purchases and improvements. So we have $4 million in supplemental requests. They include items that you can see there. Capital purchases for public safety, information technology. the senior center lobby. We need to renovate that. Installing cancer prevention equipment in fire stations one and two because they're older buildings. They don't have that. And we've learned a lot more about cancer and fighting fires that it's a different world now. Public safety equipment replacements. Putting a roof on the rec center. Putting a roof on the library. Where's Lizzie? How old is that building? 16 years old, I know it looks great, but it's 16 years old and the roof is 16 years old. The carpet in that library is also 16 years old and it's time to replace it. So as a reference, page 61 again, all of this highlighted stuff, this is what we're talking about. These are all of our one-time replacements. So in a lot of these things, to be quite frank, the reason why they've built up and the reason why we haven't done them over the years is because you didn't have the money. Right, now we have the money to address these things. And I can assure you the way budgets work typically and the way municipal budgets are always seem to be tight, we're not going to have the money to address some of these things. So some of these things are gonna give us, this additional money gives us an opportunity to address things that quite frankly have gone on a little bit too long and are not likely to be able to be addressed in the future.

The other is to support the debt service fund.

So, AKA the interest in sinking fund. This is what we use to pay our general government debt. And we propose to augment that fund with $2 million that'll level us out and not require us to increase the INS tax rate. And as we move forward, so there's things like the DVHS homestead exemption, and we're gonna go into that in a little more detail here in a little bit, that are really, if it's affecting the general fund, it also affects the INS fund because they're both funded with property tax. So we have a lower fund balance in that fund than we expected, and the one-time contribution will balance that back out, and then we'll be more conservative in future projections and balance going forward what we do with our capital improvement program. This reduces the pressure on our taxpayers and future taxpayers for that matter in terms of long-term debt financing. So lastly is about $5 million will be left over in additional fund balance. So the proposal is to keep that on top of our 26% for the time being, gives us flexibility in the future, in the next couple of years. Let's see how things are going, make sure we're on the right track and maintaining that fund balance. So there's a question, right? And we talked about a lot of things. Why not use it for a project? Why not use it to buy down the property tax rate? And yes, that would provide a benefit. It'd be a temporary benefit. But going back to our chart of the recurring revenues, recurring expenditures, if you adjust recurring revenue downward but maintain your ongoing expense, you put yourself in that imbalance situation. So it may work for a few years. Use the savings, use the savings, and then it's gone. And then you either got to cut service or you got to identify another revenue source or you've got to increase the tax rate back to where it was before. So it's a temporary thing. Temporary solution. Any questions? Okay. General fund, the revenue side, $55.2 million. So that's a significant decrease from the previous year because we got all that one-time money last year. 41% comes from property tax and 30% comes from sales tax. So the sales tax now represents a normalized year in terms of what the general fund would get So between those two, it's over 70% of the revenues that come in. And you can see the rest. We got permits, inter-fund charges, et cetera, as well as some small amount of grants and then investment income. So this is where we're going to kind of shift gears and talk a little bit about property values and property taxes. So essentially we are operating in a different environment than we were operating over, say, the last four years. We've seen this transition. And this is particularly true with property tax, right? And we talk a lot about the DVHS exemption. And to be clear, the city supports our disabled veterans and our senior citizens, but the state has placed on us a very, very significant unfunded mandate with the things you see listed below. This is not a problem that we created, and we don't necessarily, we support the giving that relief, but the state has put us in a position where they're not living up to or providing a way to support the programs they created. So the disabled veterans homestead exemption, for example, it continues to increase. Exempted values increased by another $75 million this year to bring us to a total of $1.2 billion in exempt property. The over 65 freeze, we had an additional $217 million frozen. So that is frozen where it is today, and it won't increase anymore in the future. And then we have existing properties in, I don't know if it was all three counties, but definitely in Guadalupe County, which is the bulk of the value, decreased. So that decreased by $88 million. And then there was a new state law put into place, another unfunded mandate, essentially, that tangible personal property used for business is exempt under HB 9, and that total exemption value is $75 million. But this is all at the same time. So this is a major constraint on the general fund and its largest revenue source. All of these things together. And we still have this, the community is still asking for things like more rec programs or more street maintenance, these types of things that we're still getting requests to increase service, but we're being completely restricted or severely restricted, not completely restricted by the state. So looking at our taxable value history, right now we are at about $5.6 billion total taxable assessed valuation. And we show you this slide to show you that you can see in 2023 how it levels off and it's kind of flattened out. That's all the while, over the last two years, we've added 900 new homes and a bunch of apartment units, which actually increased that value, and a lot of commercial development that adds to that value, but we're still playing because we're trailing in the wrong direction in terms of exemptions for single-family residential, homestead single-family. So this, I asked... James put this chart in here because if you look over the same years, 23 to 2016, and even if you go a little bit further, I mean, we've added roughly a thousand new utility accounts, right? So you added a thousand utility accounts, but then your property value didn't go up.

Mr. Williams.

Yes.

Now I know the state's, supposed to compensate us for the exemptions. What percentage have they given us?

So I've got actually about seven slides in a row to answer that question right after this one. But yes, sir, you're correct. Right. So the state has put us in a position. They created this program. And the largest one that affects us is that the 100 percent disabled veteran homestead program. So just to give you an update, this is all clipped from a flyer that Public Affairs put together. And Crystal and I will be doing a roadshow talking to our state reps and our state senators talking about the DVHS and how we need relief. I'm actually part of the Municipal Policy Forum in another week at TML where we'll go over all the legislative platform. for cities and one thing that we were successful in getting added last year was support for the funding of the DVHS program. And so that's in the platform again. I'll be prepared to speak on it again in front of all the other cities and it's something that we'll have advocacy from TML on our side again. So just an update. 25% of our homes, so one in every four homes is exempt from paying any property tax insurance. More than half of our homes have some sort of exemption. And you can just see across the state, it's not a big burden on the state, right? If you spread it around among the whole state, which is the intention of the way they created the program in the first place, less than 2% is lost. to this exemption. But in the City Assurance, we lose 21% of our total taxable assessed valuation. So it's concentrated into about 15 or 16 different communities in the state out of 1,200 cities and a bunch of 254 counties. It's concentrated in the ones that are in military, high population of military areas. So we've gone from in 2020, it was $400 million to 2026, it's $1.2 billion. And translating that into what do we lose? Back in 2020, it was 2.2 million, now it's 6.3 million. And that's roughly 11.3 cents of your tax rate. And this is just kind of a comparison. These are cities that get a reimbursement under this program. And you can see we're on there, but aside from Fair Oaks, our tax rate is towards the bottom of the list in comparing populations to the different cities. Some cities have really, like Killeen, have really had to increase their tax rate to make up the difference.

And Steve, sorry for that one. Cibolo is actually not receiving reimbursements.

Oh, yeah, thank you.

But it's because they are impacted, but they don't border a military base, so they're not eligible to receive reimbursements. But the other cities on the list do receive them. And that link there will take you and show you kind of the payments that have been made out.

Yeah, there's a link on here as well, y'all, that takes you to the controller's website that shows... the payment information. And yeah, we did include Cibolo on the list because they're our neighbor and they're actually in a worse off position than us. They get no reimbursement from the state. So this is the list of all the cities and what over time, the requests over time. And I think it actually scrolls out if you wanted to see the complete history. So we have – we've requested $4.6 million from the state last year, and we got $564,000, so roughly 12%. And under the original legislation, they said that they would reimburse us – is my time up? Is that what you're saying?

Yeah.

Okay. So they – the state – original program included a reimbursement of up to 99% of what you lose to the exemption itself. And we received 12% last year. So it's, you know, it's never been funded appropriately. And, you know, this next slide shows that in the last legislative session, the 89th session, the There was no change to the state aid funding amount, but they included three more entities who are eligible to apply. And you can see right there, in 2016, there were four entities that requested 3.2 million, and the state awarded 2.5 million, 78% funded. Last year, in 2026, 15 entities now have requested 78 million and 9.5 is budgeted, so 12%. So we can expect to get 12% or potentially less this year. And as a percentage, it'll probably be less because our dollar amount has gone up. Another thing that's hit us is those exemptions are made retroactive. So if you become, say, if your status changes to 100%, you're due what you've paid in the past. So that hit us. So last year it hit us at about $618,000. This year it hit us for $1.1 million. We had anticipated it hitting us for $600,000. We didn't account for the other 500,000 because we didn't think it would double in one year. So the 90th session, we're going to bring it again. We're going to go and do everything we can. to get the state to fully fund this program. And the legislative priority sheet or resolution is on the agenda for the 18th. It's essentially the same as it was last session. It'll be new for y'all. It has other priorities in terms of what interests the cities would like to protect. Again, I'm being timed out, no. But it has multiple priorities, but of course our top priority is getting this issue addressed And we've always supported the DVHS program. We just would like the state to fund it the way they said they were going to fund it. So property values. James, come on up. James is going to talk about property values.

All right. Good evening. My name is James Walters. I'm the finance director here for the city of Schertz. So Steve left me the fun portion. So he got to read all the words at you. I'm going to read a bunch of numbers at you. So it's going to be way more exciting. So as Steve has mentioned, the 2026 property values, we get these values from the different appraisal districts. They go through the Guadalupe County Tax Assessor Collector who we contract with to calculate tax bills and send them out to us. all the citizens and businesses. And so what they came up with this year was the 2025 taxable value, once we base the current year tax rates on, came back about $5.5 billion. Those same properties this year decreased about $5.3, $5.38 billion. So as you've mentioned, those existing properties, properties that were here last year, got evaluated in tax and properties the same ones this year dropped 88 million we were fairly fortunate we continue to have development and so we added 227 million of new development and a 600,000 worth of annexations to bring the overall taxable value up to 5.6 billion so that's why you saw on the previous chart last year we actually dropped overall even with the additions and We were mentioning, yeah, our property values decreased, but you could see that chart kind of tip back up a little bit. All that's from new development. So the properties existing in both overall decreased.

And James, just to point out that that new development, that new value added is subject to if more 100% exemptions are added or over 65, well, over 65 and 100%, that could go away. Yes.

Yes. So they pointed out a different way. We had $227 million in new development annexations. At the same time, we had $150 million in new exemptions. So even that kind of offset itself. So it's as if almost every property that we get ends up being exempt in some way from some property taxes. So we get those taxable values and the state comes up with these ways to calculate a tax rate. These are state mandated formulations. They have us calculate the no new revenue tax rate. So the tax rate, which will generate the same amount of revenue for the city from the properties from the previous year's tax rule. Basically, it's saying, hey, you got $5.5 billion last year, and this is how much money you raised. Those properties decreased to 5.3. So this tax rate will give you the same amount of taxes raised comparing only that. So we would have the same amount of taxable revenue. We actually get more in our budget because we have new properties added. But that's the rate that will raise the same amount of money off of last year's property values. And then we have the voter approval rate. So this is the highest rate council can adopt on its own without going to the voters. So council can say, hey, we want to go higher than that rate. That is your priority. We'll just go on the November election to get ratified by the citizens. And if it passes, hey, that's the new tax rate. If it doesn't, it drops back down to that voter approval rate. And then we have the current rate and then the proposed tax rate, which we balance the budget to. On the next Tuesday, we'll ask you, as Steve mentioned, to set a maximum preliminary tax rate. That's at our proposed rate. And council can adopt anything under that, no problem. But if you ever want to adopt something over that, We'd have to probably call some special sessions, republish notices in the paper, and hold another public hearing. So it's still possible, but there's more steps involved. So for the 26-27 tax rate, they came out like this. The no new revenue rate, which is actually what the budget's proposed at, is .5296. We've estimated a tax bill based on the average taxable home value here in the city of Schurz. The voter approval rate, the highest rate council could adopt is 0.5593. That would increase the estimated tax bill to $1,830 or about $97 annually, which would be about $8.12 a month. And then the current rate for reference is 0.5118. You see that's $1,658 decrease from the no new revenue rate. As we mentioned, the property values decreased over year over year. That's why we see the bill drop because property values decreased. If we stay at the same rate and property values decrease, then the tax bill would decrease. That would be a decrease of about $58.09 or about $4.84. So it kind of gives you a scope one penny on the tax rate, the .5296. is equal to about $560,000 of revenue for the city of Schertz, or about $32.72 annually on the average home. So you divide that by 12, it'd be under $4 a month. That's one penny. How's that break out? We have the M&O tax rate, which is the maintenance and operation. All taxes raised from that portion of the rate go into the general fund to fund the day-to-day operations of the city. That one will be proposed to go from 0.3437 to 3615. The INS, or interest in sinking, all the taxes raised from that portion of the tax rate go to pay the general fund's debt, the general city's debt. That was proposed to say at 1681, no change on that side. The overall would change from 0.5118 to 5296. How's that shape up over The past, since 2020, you can see the historic tax rates. The INS, the debt rate, the one we pay our debt with, has fluctuated for a lot as low as 14.8, and we've been about 16.1. We were proposed for two years in a row. Back in 2020, it was 16.51. And then the M&O has gone from the lowest-ish, about 33.25, up to about 36.15. And since about 2012, the lowest the tax rate the city of Shorts has seen is about 48 cents. So we've been between 48 and 51 up until through the actual adopted tax rates. I'll touch on the different revenue sources. So the sales tax is the other portion. Well, before I touch on the sales taxes, anyone have questions over property taxes, either how they're calculated, the impacts, where they go? Please, if you think something later, as we mentioned, send us an email or come talk to us after or just raise your hand and ask a question here in a little bit. More than happy to help answer some questions. Sales tax, again, is the second largest revenue source for the general fund, which we're talking about now. You can definitely see what happened the past couple of years we've been talking to you about. Both here and here are current proposed. Next year's budget, we have confirmed again, we've talked to those responsible for this increase. They have stated that by the end of the third quarter, all this extra monthly payments are gonna drop back down to where they were in the previous years. So we will not keep sending this huge increase trend line. That's why you see our proposed tax rate comes back down that low. Even without these increases in average, And we base next year's around that number. The franchise fees, people paying to use the right of way or either from our streets, the trucks, telecom or cables, companies they pay us a little bit of the proceeds every year in order to use the city property to channel their revenue streams through. Fairly stable throughout the years, not much change is expected. Permits, if you look at a longer time period, you can see that these can jump wildly based on what development comes in. If there's a large number of large commercial permits, that can greatly affect how much permit revenue we get. Like in this year, a couple of apartment complexes come in. In years prior, you could see big increases when they start building a bunch of schools. That's been another one. Amazon construction, those kind of large price developments will bump up permit revenue. Again, it's kind of a one-time thing, as we've been talking about before. We can kind of trend a little bit and anticipate some of these for annual operating expenses. But again, if something dries up, we could see this drop down. I said a couple years ago, just outside of this, new residential permits kind of dropped way low. But as we mentioned before, about 400, which is cooking pretty good currently. So we're to be about the same level going forward to next year. Fees and fines, one of the other ways we can raise money for the general fund, these go to offset specific services like using the community center or civic center. Those fees go, are raised directly for those purposes and try to offset down 100% pretty close to it. So then that targets those people actually using the service rather than just general for the community. Again, there's not much fluctuation. There's a couple of permit-related fees that can pop up every now and then. We've been fortunate the past couple years with higher fees than budget. We kind of popped the budget up last year, or the current year, as you see. We're on track to pretty much hit that level, and so we're going to maintain that for next year as well. So the general five-year forecast... This is our plan over for the next few years as well as the current year. So you can see our fund balance, as mentioned, is at 87%. It's that $35 million over our target. Our revenue, this blue line, popped way up related to those sales taxes. And next year, as proposed, we kind of itemized out what that big expense bar lays out for you is to use a big chunk of that revenue that came in and get us down to about 37%. And then we plan our out years to continue on. We have that, as mentioned, about $5 million. It's just kind of sitting extra in our fund balance during that time in case something comes up. We want to shift to a different priority. By the end of the fire, it should be about 33%, which is still higher than our 26% requirement. We want to see just how much this can come down over a year and how much we can spend as well as anything else that kind of pops up. it's good to have that cash hold on for a couple of years more. All right.

All right.

Any questions over sales taxes or river jump on revenue at all?

Okay. So enterprises, enterprise funds are another type of fund that we have in our annual budget. And we're going to kind of shift gears and talk about those. So Looking at our little chart there again, it's the second one underneath the operating budget. And enterprise funds, they're used to account for governmental activities that are like those found in a private business. So when you look at our enterprise funds, sometimes that's run by a private entity rather than by the city itself. Or in this case, vice versa. The major revenue sources for those funds are generated by the fees that they charge customers that use that service. And the expenses are paid for and the capital expenses, operating expenses, all that is covered by the fees that are charged. So we have three enterprise funds. We have the Water and Sewer Fund, the EMS Fund, and the Drainage Fund. So talking about the Water and Sewer Fund first, So the Water and Sewer Fund, of course, that tracks revenue and expenditures for the city's water, sewer, and solid waste functions, and it's managed by the Public Works Department. So 95% of the revenues that come into the Water and Sewer Fund are for water charges and sewer charges and solid waste, right? And then the rest comes from, 5% comes from a variety of other sources. We also include in the water and sewer fund capital recovery fees for water and sewer. So those are impact fees that we charge new development that comes into the community. They pay a capital recovery fee, also known as an impact fee, to address the expansion of the water system or the sewer system. And then we also have the capital improvement program. And that's our water and sewer CIP. And technically that all rolls up into the water and sewer fund if you look at our annual comprehensive financial report. But we split it out for budget purposes so you can clearly delineate and see the different aspects. And I've got SSLGC and CCMA listed down there. And those are two of the primary entities that we contract. Clear Creek Municipal Authority, or CCMA, they treat our sewer for the most part. And then SSLGC, or the Schertz-Sagin Local Government Corporation, is where we get our water from. So two main things, water production and water treatment, two main functions are outsourced, if you will, to other entities. So on the expense side, Water and Sewer, we have $35.3 million and 31% of it is operations, 27% debt service. So that operations includes things, excuse me, it includes things like making payments to SSLGC and CCMA. And then the debt service is to service the debt that we pay on bonds that we've issued to support our own system, as well as the other systems for CCMA and SSLGC. And as you can tell, compared to, say, the general fund, only 12% is spent on personnel. So supplemental requests for the Water and Sewer Fund, they requested $440,000, 241,000 were included, and 199,000 were not included. You can see that on page 162 in your book. I'll just click on it. Maybe, oh, I think I just opened it a few different times. But it's this page here. You can see the items that were funded and that weren't funded. There was essentially a position as the bulk of what was not funded. The rest up top, there is some ongoing expense. And just to note, the water and sewer fund is not necessarily facing the same challenges as the general fund. Okay. So on the revenue side, 34 million in revenues and 48% of that comes from the sale of water and 35 from sewer charges, 12% from garbage collection. That's that 95% I was talking about. And then fee updates. There is a proposed water rate increase. This is in alignment with the water rate studies that we've showed you in the past. And we're proposing 8% for the water and sewer rates. That equates to $5.02 a month on the water side and $2.16 per month on the sewer side. and there is a 3.8% rate increase for the garbage that's built into the contract. It's 73 cents a month. And the big things affecting that rate increase are the CCMA South plan expansion is the largest project that we have on the horizon, in the immediate horizon. It's an $86 million project that we're sharing with the city of Cibolo. Our share is gonna be 47.5 million. And what that does, This effectively opens up the southern part of town for development. Y'all already approved a $9 million bond issuance to do the design. So it's in design. And then we'll come back and ask for approval of the remainder. You didn't actually approve the bond sale. It's CCMA's bonds, but you approved the contract to allow them to issue the bonds, and we'll pay them back. It'll be the same thing when they come to us and ask us, for approval of the actual expansion. This is dire, very badly needed in the southern, bless you, in the southern part of Schertz, we've got around 2,000 homes that are planned in the relatively immediate future that need sewer, as well as businesses. I actually got an encouraging email yesterday. But we need to get that sewer done, and that's in large part what's driving that rate increase. On the water side, we've had several major projects and major projects with SSLGC, the parallel pipeline expansion, construction to deliver more water, more storage. We've got water projects in the future that are planned. So all that impacts our rates. So the five-year forecast, 25, 26, we ended pretty high on the fund balance. And then we'll draw that down to 29%. And then it'll rest at about 27, 26%. Same policy application as in the general fund. That 34, drawing it down, is for capital replacements, as well as a little bit of a contribution to a CIP project. The EMS fund. Better news this year than last year. So the EMS Fund, if you're not aware, Shirts EMS provides emergency management services and ambulance transportation to the greater Randolph region. What does that mean? It's 235 square miles, and it's 160,000 population that's served. So well beyond our 47,000 and our 35 square miles, 36 square miles. It's a much larger area that we serve. You can see the entities that are listed there, several cities as well as the county and the ESD and the JBSA Randolph. So 66% of the revenues for this fund, they come from the transport fees. And then 33% comes from the other agencies, really 32%, but there's some interest earnings in there. But on the expense side, it's $18.8 million. And you can see the breakdown. It's mostly personnel, right? It's $58,000 in personnel, 29,000 operations, which is effectively the bad debt. So this $18 million number you see there includes about $3.94 million in bad debt that we write off. You'll see that on the revenue side and the expenditure side. You've got to net that out. So supplemental request, they asked for $876,000 in supplementals. 807 were included and 69,000 were not included. And that's on page 195 in your book if you're interested to take a look. And here's the list. So essentially the item that wasn't included was ECI COLA. On the revenue side, $18.2 million in revenue, so 66% of that, like I mentioned, is ambulance mileage charges, and 33% is inter-jurisdictional, and then 1% is miscellaneous. They teach some classes, they earn some interest, So with that, that two-third comes from those transport fees and one-third from the entities, there is a fee increase that's proposed of $50 per ride. So that'll generate an additional $500,000 a year in revenue. Minus write-offs. Bad debt. And just to break it down for you a little bit further, that 33% that's interjurisdictional or contributions from other entities, the biggest partner is Guadalupe County, and then we're the second largest at 19%, and then Cibolo at 16%. You can see how it breaks down for all the rest. So we are roughly 19% of that 32%. Okay, so we're one fifth of that 32% of the total cost that the city's general fund pays. The financial forecast or the five year forecast, we brought this to you last year and it was a negative cash position and almost in a negative net position, which means like all of their assets, everything, we were getting pretty close. Chief Mabbitt went and renegotiated with all of our partners and effected an increase in each of their contracts. of I believe most of them selected the 2025. So 20% this year, 20% next year, and then 5% the next year. And that'll be the end of their contract. So essentially a 45% increase in the rate. Now that means we pay it as well, but we're only paying 19% of the 32%. And it's spread among all those other entities. Last enterprise fund is the drainage fund. So the drainage division, they maintain our drainage channels, our stormwater inlets, floodways, right-of-way, alleys, anything that's affected by drainage that's not necessarily, say, inside a subdivision. Limited portions of subdivisions are maintained by the HOA. and the rest is maintained by cities. So it's funded with fees that are charged to the owners of property. Then it's calculated based on the amount of impervious surface that caused that runoff that requires a drainage system. So any kind of manmade structure, buildings, parking lots, driveways, et cetera. And when you look at residential properties, they're assessed all the same fee. And then commercial is based on your total impervious surface. So how does that shake out on the expense side? 34% for personnel, 28% operations and support, and then which goes to the engineering department because engineering supports the drainage fund, and then 16% for capital, and then the rest, you can see their utilities, et cetera. Supplemental requests, they asked for $487,000 in requests. The 477,000 was included and 10,900 was not included. I'll click on that. That is on page 187 in your book if you're interested. So you can see the items that weren't included, a little bit of training money. A lot of this stuff is to maintain, et cetera. Keep moving if there's not any questions. So on the revenue side, you can see 98% of it comes from the drainage fees, a little bit of investment money, as well as fund transfers. Now, this is where we discuss the rates. Well, some of y'all weren't on the council, but last year, we implemented a rate increase. And you can see from 2002, it was at $2.10 a month per house. And until 2025, it had risen to $520 over that 20-year period of time. So cost increase, inflation, etc., expanded the city's larger and it had not gone up. So it was in a position where it wasn't really able to be effective. We continue to get more and more requests to maintain drainage, to mow, to improve drainage ditches. And there's a call for capital projects. We brought a list of $45 million in projects, $42 million in projects last year that are CIP projects that need to be supported by the drainage fund. And we asked for an increase and increased the rate to $8 a month. And that was implemented. That covers that initial part, that initial $42 million of the CIP as well as the staff that we added. And in the future, potentially... I'm sorry, we raised it to eight and what's being requested is to raise that to $11 per month. And in the future, the way the rate study Based on that, there were several million more in projects that could go as high as $18. We've taken the approach that we will evaluate it on a year-by-year basis and see if it needs to continue that way, and we're able to address the project. So we are asking to increase it from $8 to $11 per month. So the drainage fund, you can see there how expenditures have grown. The fund balance has rested at about 31%. We'll draw that down a little bit with some of the purchases that we're making this year or proposing to make next year and revenues and expenditures balance. So other funds, we have several other funds. The largest one being the Schertz Economic Development Corporation. And the mission of the SEDC is to basically to help build our local economy, right? Attract new businesses, invest in infrastructure, promote enhanced quality of life, promote and enhance quality of life. The primary revenue source for the SEDC is a half-cent sales tax. So the general fund gets a full penny, and then the EDC fund gets a half-cent. So the tax rate charged in the city of Shirts is 2% or 2 cents on a dollar. We get $1.50. penny to the general fund, half penny to the EDC fund, and then a half penny goes to Guadalupe County and to Comal County for property tax reduction. And then in Bexar County, it's actually just 1.5%. So in 26-27, revenues are projected to be $9.4 million and expenditures nearly $25 million. And why is that so out of whack? Well, because there's things that the EDC has committed to fund, like Community Circle Park right over here behind City Hall, the reconstruction of Lookout Road, which is up in the industrial park, and... Oh, and the incentive for Boom Connect, which is to construct a sewer line up in the northern part of Shirts to service that whole area to be a significant capital investment up there. So you can see that we've got Lookout Road and Community Circle Park there. That's $10 million of it. And then the Boom Connect incentive is part of it as well. So our other funds, special revenue funds, we have got tree mitigation fund, road impact fee fund, and hotel motel tax, et cetera, several of those. Those are in your book, pages 205, 213, and it gives detail on that. It's smaller dollar amounts, so I'm not going to spend a lot of time going over it. And then lastly, wanted to touch on the investment in employees that our city has made and the organization has made over the last several years, we've done quite a bit. So in 2023, the council fully funded our class, we did a classification and compensation study And it was fully funded in that next fiscal year. And since then, we've continued to augment that. We've included the STEP program and the MERIT program. And the STEP program is for uniform public safety positions. And the MERIT program is for everybody else. We've also tried to include a cost of living adjustment based on the ECI, which is produced by the Bureau of Labor Statistics. We haven't been able to fully fund it over the years. But we've tried and we're doing that in an effort to remain competitive in a marketplace. So in 2027, what's being proposed is to continue the step in the merit. And that is the first priority to keep people on that progression within the step process and then the merit progress based on their performance. But what is not included is a cost of living adjustment. And what I'd like to do is do a classification compensation study in the next fiscal year in 26, 27. So fund that. And it'll be $70,000 that's spread among all the funds that have personnel in it. And then as a result of that study, come back the next fiscal year and implement the results. And hopefully we've been able to maintain a good pace with the market, and we're in a position that we can fund that again. And so in the 28-29 budget would be when we would come back with those results and an implementation plan. So there is an exception to that, and it's for public safety dispatchers. This is an area where we've been hit really hard with turnover, and we've done some surveying of the market, and we're way out of the market in that one particular area. So some money has been included to address that position. If there are other hotspot areas that pop up, we'll address those as they come up. But we're not proposing a wholesale change right now. And there are nine positions that are included. And in the budget, four of them are for dispatch because we're short on dispatch as well. And like I mentioned during the general fund discussion, there's four police officers. We have not added a police officer for just the general policing of our community in six or seven years. And the last one is a school resource officer. And that's 83% by the school district. And just to put things in perspective, the city has done a great job of adding positions over the last five years. We've added 85 positions. And this is in all funds. So you can see the breakdown there. Each year, you know, 6 and 22, but then in 23, 30 were added. And then the next year, 11. And then the next year, 13. And then the last year, there were 25 added. And when you look at that streets number, just bear in mind that, I'm sorry, when you look at the public works number, none of those are in the streets department. So that's one area where we haven't been successful and we do have a need to add in the street maintenance division. And most of what you're seeing there is related to the water and sewer fund and the drainage fund for public works. Look at it another way, public safety. We've added 45 positions, and the next is public works, and then you can see the rest. And 21 of those are in EMS, 13 are in fire, and 11 in police. And seven of those police are SROs.

Steve.

Yes, sir.

The four police officers, are we talking patrolmen, or will some of them be a chief, a captain, a lieutenant? Are they all patrolmen?

I can answer them. Go ahead.

All positions will be line officers, police officers. Plan on putting one on each ship for patrol.

Thank you.

So... kind of looking at it another way on a percentage basis of the 85, how it spreads among the different funds. Most of them were in the general fund, 53%, but also in the EMS fund added 25%, and then water waste, water 16, and then drainage 5%. So when you look at the 53% of the general fund, 24 of those were for police and fire. So any questions on the positions we've added? So some other budget highlights. This is stuff that affects the overall budget, kind of all funds. Health insurance did go up by $513,000. That's a 10% increase. So I do want to comment on this a little bit. Three years ago, right, we were facing an 18% increase from Blue Cross Blue Shield. We bid out the health insurance and medical and dental, all of it. We were able to affect, instead of an 18% increase, we got a 10% decrease. So then we lowered our costs that year by one point, do you remember Jessica? $1.6 million. We saved $1.6 million by bidding and not really changing our plan all that much. And then the next year, they had a built-in rate increase, I think, of 15%. Blue Cross Blue Shield came back and wanted our business. So they said, we will match what you're paying now. So we had a second year in a row of paying that 10% less rate amount. So we had two years, so effectively 20% savings. Then the next year, they had a price cap of 10%, 15%. I'm sorry, for this year, they had a price cap of 15%. We negotiated with them, our Gallagher, our broker negotiated with them, and they came back. We were facing really, if we were looking at the market, anywhere from a 40% to 58% or 62% increase. They came back and are doing a 10% increase. So we are now back to zero where we were four years ago. At the end of this year, we'll be right back where we were four years ago. If any of y'all have to deal with health insurance in your business or in your company, that is unheard of. It's a gigantic win for the city of Shirts. And we've been able to maintain that cost and keep it effectively flat. It'll be flat for four years, with the exception of adding new bodies and positions. Of course, that comes with additional premiums when you add more people. But the rate itself has been the same. So we're coming to you with this. $500,000 that will be spread among all the funds that have personnel in them. So it has a light impact. We're proposing that the city absorb that. Next year, we're going to look at plan design changes, potential changes to mitigate any kind of increases. One thing that we're looking at as well is the creation of a self-funded program where we would actually self-fund our insurance. Some of you may be familiar with that. And then you have a third party administrator of your claims essentially. And it can be a way we're getting to the size where it might make sense for us to do. I already kind of talked about the class and comp study. That 70 grand will divvy it up among, yes sir. We'll divvy it up among the funds. I'm sorry, what were you gonna say?

I was waiting for you to get to your last merit.

Oh, okay. All right. And then merit and step $765,000. Of course that's spread among all the different funds as well. So the merit, it would be the same as last year based on your performance, zero to 4% for everybody who's not wearing a uniform public safety and then uniform public safety, excuse me, is 4%. At this point and having to request that we're going to go up to the, that the no new revenue rate is, is actually higher than our current rate, just to maintain or tread water, we're asking you to go up that. I'm not proposing that we do an ECI or COLA right now. Also, that's part of the impetus of doing the class and comp study, because the class and comp study will put us in a position of where we need to correct to the market in the next year. Yes, sir. What was your question?

Yes, sir. And I want to be careful. I don't want any division whatsoever, but just as a city manager, Was there any discussion or appetite for having a COLA or ECI for first responders? I know everybody's lumped together. We're all city employees, but sort of separating first responders out and allowing them to have a COLA?

Let me say it this way. You have to imagine we're a corporation, right? And we have a corporation that does a lot of different lines of business. And we have to be competitive in all those lines of business. And salary is part of the formula, and it affects all of the positions. And it's my belief that if we're going to adjust the organization, we adjust the entire organization. Because I don't want one area to remain competitive or remain at the market while others don't. And to be very honest, we've seen a slight tick up in vacancy rate, but we're still maintaining a very good vacancy rate. Turnover has accelerated a little bit, but quite frankly, we're at full employment. There's really just not... a lot right now to say we have to do something right now. That's why we would rather plan and do the study and do it the right way, because we wanna make sure that we address the right areas in the right way. Because if we do a blanket thing in one area, it may or may not be the right thing without actually studying the market and looking at competitiveness. Now, my suspicion is across the board, we've lost a little bit of ground. But we, you know, there are areas that have really jumped out, like I mentioned the dispatchers, that are clearly out of bounds, that are clearly out of the market. We've lost, I don't know how many, multiple people to other agencies at significant pay increases. And we just, that's an area, it's a hotspot. We got to address it this year. And I think in terms of taking that pragmatic and overall approach, to me is the more prudent way to do it. Yeah, and I mean, you know, I don't want to speak for everybody on the management team and the executive team. I think our leadership realizes that a rising tide raises all ships, and as an organization, we would all rather rise together.

I would agree with that. On some of the things that I've noticed is, one, we've had high turnover in public safety dispatchers as well as public works.

Yes, sir.

I feel that we need to take a look at everything as a whole.

Yes, sir. And I don't mean to ignore public works, especially in the streets and some of the places where they're outdoors in this 100 degree heat 40 hours a week. That's a tough area. We are experiencing a lot of turnover in that area as well. And I would really hate to adjust one area and then really we're not addressing a more critical need. All right, any other questions? And really quickly about the INS fund or debt service fund. So we have a five-year summary of our debt that we'll issue. So essentially the tax rate, the portion of our tax rate that's for INS is $1,681 right now. And that supports all of our existing debt. So over the next six years, you can see there we have planned another $115 million in debt. And this is all your general government related stuff that supports the general government CIP. General debt service fund, you can see the current obligations that we have, and then those different colors layer on those bond issues. And you can see it's pretty stable out for a number of years, doesn't necessarily jump the number up very quickly. All right. Now, are there any other questions on the operating budget? Essentially, I'm done with the operating budget. And we'll shift to the CIP. Mayor, do you want to take a quick break?

I would like to go ahead and recess at 6.59, take a 10-minute recess. Thank you.

I have it. If you click on this right here. Okay, I don't know if you were good. So you close out supplemental, supplemental, this one, this. So the one on the right, the CIP, I have it right here. So you can, the capital improvement, that's the big sheet. And then you click here are the different projects. Okay, cool.

In theory.

In theory, yes. But I have page numbers listed on this. Okay.

Okay, the time now is 7-11. We'll go ahead and resume the budget workshop.

Thank you, Mayor. Before we move on, I just want to make sure there's no other discussion we need to have on the operating budget. If we need to circle back and touch on ideas like the tax rate or if there's any feedback to give there or other issues, you know, open the door for that right now. If not, that's fine. We can totally move on. We're going to move through the CIP pretty quickly because it's somewhat of a regurgitation of what you guys see on the quarterly basis. But what I do want to point out is, so in your book, you've got all of what I'm going to show here on the screen. If you go to the CIP tab and flip to that, this is Basically what you have in your binder, you got the PowerPoint and then the first section, the operating budget, that's a book in itself. And then the CIP is a separate book. So it's got a bunch of projects in here. What we go through with you now is what we call the capital budget. So your capital improvement program is your capital improvement program is the 10-year look. It's the projects that have been identified and essentially a schedule of work and then a funding strategy to go with that. The first year of that is what you call the capital budget. And the capital budget is the only thing you're appropriating. When you go to approve the budget on September 1st, you're approving that first year or the capital budget, not the entire CIP. Those projects are subject to future approval. They get tweaked. They get moved around. Priorities shift up. Priorities shift out. We monitor it as the funding sources go. If there's a trajectory of, say, a major funding source like property tax revenues is either going up or going down, we either add or take away. Same thing with water and sewer. We do a rate study that projects out what our revenue streams are going to look like and match that to our projects. And really, on the water and sewer side, it tends to be a little bit more project-driven. So the CIP encapsulates that entire plan and it allows you to not only identify what it is that needs to be done and that plan of work and your funding strategy, it also identifies impacts on your operating budget. So for example, one of the things that's on there is a fire station, fire station four, and then way out in the future, 20 years from now, 30, no. Out in the future, we possibly will open another fire station. Well, at that point in time, that'll have about a $1.3, $1.4 million effect on the general fund. So when you're doing your long-term forecast for your five-year forecast for the general fund, if you're building a fire station in year five, you better be accounting for that $1.3 million to hire new firefighters and operate that station. All right, so jumping into the CIP. The general government CIP is everything that includes your streets, your parks, your facilities. There are 20 projects identified in next year's capital budget. And those total up to $42.1 million. So what we're going to do is we're going to go through these quickly. And in your book, so this sheet right here. Oh, I'm sorry. She already has them open. This is the operating. Okay, so capital improvement summaries, affectionately known as the big sheet. So this is these big schedules right here. That's in your book. That's kind of about, looks like about 10 pages in. Page 13 is where you get to the first one. And it's for water. And so this is the water projects. As we progress through the book, get past all of the summaries of the big sheets, we'll get into the water section. And Each, oh no, don't do that. Uh-oh, going crazy. Here, let me use this. So as we get into the water section, just as an illustration, you'll have the first page that looks like this, and this is, a summary, it has the project type, the title, what department's responsible, where it is, and then a written description. And then down below, it's got the funding sources and then the expenditures. And then on the next page, it would include a map. So we're gonna go through these one by one, and each department head's gonna come up and talk about those. So let me flip back to the slide presentation just real quick, and I'm gonna talk about the rest of these. So in the water and sewer CIP total, General government total is $42 million. And then water CIP, you can see the breakdown there, $47 million for water, so mostly water, and then $8 million for sewer for a total of $55 million. And then the drainage department, we've got eight projects at $4.4 million.

Question.

Yes, sir.

On your first page where it says 12 projects for the streets?

Yes, sir.

Old Widerstein Road, the widening of Old Widerstein Road, and the repair maintenance for Maskey Road, where do they fall in line?

Well, I'm glad you asked that question, sir. So if you'll refer to the big sheet on page 15. So this big long sheet, page 15, And I'll actually bring it up here as well. So this shows the projects where it says prior year expenditure. Those are ones that are currently in progress. And then you've got 26-27. Everything listed there is the capital budget for next year. Effectively, the capital budget is the prior and the current and the 26-27. And then you can see the out years from there. So maybe make that a little bigger. I'm sorry. I am on water. Yes, I am on water. Sorry. Looking at it on paper. Sorry. Okay. Okay. So you would go down to about, I think it's 10 lines down to old Widerstein, extension, and improvements. So in 26-27, there's $1.2 million programmed in. I assume that's for the design. But the actual construction is not included in the CIP until, well, it's actually not. Oh, yeah, I'm sorry. It's not included until 2030. And fiscal 31 and then a little bit remaining, I would presume it would be the next fiscal year in 32. So it's in that 2031 to 2036 range. Okay.

Working with engineering, a lot of the first steps will be acquiring different rights of way needed along the routes and potentially looking at the engineering portion of the study. And then the out years expenditures match up to the bond funding schedule that we saw back on the INS page. So we had the list of how much we could issue each year without raising the INS rate, the 1681. And so this project timeline you see here matches that funding schedule.

So in order to keep that tax rate level at 1681... we would follow what is proposed here. And it's not just streets, right? It's the other two categories that are in the general government CIP. You look at the bottom line. Now, if there is something on there that's in an out year, and as a group you say, you know what, we really should move that up to next year. That's okay. That's fine. That's part of this process. That's what we want to do. We want to make sure that we've got the prioritization correct. What we do is we shift that up, but then we shift something else out. And we just make that adjustment. And that's how you do CIPs. So as we go through this, if you look at this list and you see things that... I really think this project should be a higher priority than these projects, or I think it should move to this year. That's fine. We discuss it. If you guys decide to move it, we move it, and then we just figure out how to shift either something out to where that was or maybe shift collectively a few other items just so we can balance on that bottom line.

Thank you.

Yes, sir.

Is there any way that we could like have a little bit more detailed of what streets are going to be repaired versus just having a kind of like a catch-all where it says annual span project street preservation and maintenance? Is there streets that we can already have outlined that we know that we're going to work on so that way our residents can kind of have an idea of what we're doing?

I'm glad you asked that. I'm gonna ask, well, as we go through, and I assume you're looking at the spam page where it's all lumped together, we will have a plan. So we're not gonna have it mapped out for the next 10 years, right? We'll have next year and then maybe the next year. We've got things queued up and prioritized. So we do a street condition index that measures, you know, we hired a company, they come and they assess the condition of your streets. And if you've seen John do his quarterly presentation where he talked about the maintenance, you know, it's maybe not necessarily the oldest street that gets the most attention in the spam, right? Because sometimes if you take a newer street and you do it right, you maintain it right, it'll last, you know, longer. And so you get more value out of it that way by attacking the problem early. Well, there's streets, we've got a long list of streets, so you apply that concept to all of them. So I'm going to turn, oh, but... I'm sure when Kathy gets up here, you're going to talk about the spam. And so yes, on a year by year basis, we'll map that out, but we're not going to necessarily have it for the full 10 years.

Yeah. And thank you for that. And that's kind of more of what I'm looking for is like, what do we do in next fiscal year and lay those streets out? I'm not really worried about 27 and 28. I'm just looking, I'm just looking at the year that we're fixing to approve the budget for sure.

and we can certainly get that. I believe we already have that information, and we can certainly get that to you. Yes, sir. Okay, so first we're going to talk about streets. Oh, yeah, because we have general government listed first. So Kathy's going to come up, and she's going to go through and talk about the streets.

I'm afraid to touch that after I saw what happened.

Oh, shoot. I'm sorry. She has it. So we can go straight to it. How about that?

What I'm going to do is just... run down the list and give you a quick description of the project. Some of you have heard about these same projects year after year, so I'll try and go fairly quickly. But if you have any questions about any particular project, certainly ask that. So this is going to start with Lookout Road reconstruction. That's the reconstruction from Shirts Parkway to Dare Lane. It'll include a signal. Do you want to put it back on the... I don't think you can even... You want to go through the sheets, the actual sheets? Yes.

Okay. So, guys, those project sheets are in your book as well. So if you want to follow, and if maybe she goes past something, if maybe she goes past something that you still want to look at or you want to look ahead, she's going to go through that page by page. So it's on page, what page does it start? 132. It starts on page 132 in your book.

Right. 131 is the... The words and numbers, 132 is the map. All right. So lookout is from Schurz Parkway to Dare Lane. It includes signalization of Schurz Parkway intersection. And we are currently awaiting a right-of-way from Caterpillar. There's going to be some CPS pole relocations. We're redesigning and shifting Schurz Parkway alignment a little bit, but it should be underway hopefully soon. Main Street improvements, that's a long-term project. We're chipping away at things. Water and sewer replacements will be included with that project. We're coordinating with other utilities to put everything underground. Currently working with AT&T and Centerpoint, identifying some conflicts. And the project does also include some aesthetic improvements. So that's Main Street from Schurz Parkway down almost to its intersection with Curtis, hopefully making some improvements there at Aviation as well, and some improvements on Lindbergh. Everybody still trying to find the spot? So I'm up to page 135. Okay, 135. We're trying to find the spot in the book. So this is 135? Is that what, does he have that one? No.

No.

135 Lower Seguin, Lower Seguin Road reconstruction. Okay, are we good? Mayor? All right. So Lower Seguin Reconstruction runs from 1518 west to the city limits. The design is just about done. We're working on right-of-way acquisition. We've got a grant pending on that. You guys did authorize application for a couple different grants. If this one doesn't come through, we're going to continue to march along, but the project is funded in case we don't get a grant award, so we can go ahead and continue on with the project. Next is 2025 SPAM, and this is, Mayor, particularly what you were asking about. So this includes a slurry seal in a number of neighborhoods, the Village, Rio Vista, Woodbridge, and Jonas Woods. So those are the ones that are slated for our next batch of slurry seal projects. And we've got them shown on this location slide. Now, I will say that The funding for this fell short, so we're actually going to use the funding for the 26-27 SPAM in addition to what we have left over for 25 to get all of these neighborhoods. The intent is to complete all of those this year. So next up is Kramer Farms subdivision. We did split Kramer Farms into two sections. This one is going to be a rehabilitation of the streets in Kramer Farms. So Redburn Run, Wagon Wheel, and Tractor Pass, and then a portion of Planners Pass, and a portion of Rooster Run. Next is Banig down in Southern Shirts. This is a reconstruction of the road. And unfortunately, we have to make a little correction to the map. This work actually goes from where Seguin Road down to Graytown, not all the way down to Scenic Lake, but down to Graytown. This includes a widening 30-foot of roadway with curb and gutter, also a sidewalk on the shirt side, and a small swale for drainage on the converse side. NEXT IN YOUR BOOK TALKS ABOUT THE ANNUAL SPAM AND THIS IS WHERE IT KIND OF GIVES A FULL DESCRIPTION OF WHAT DIFFERENT PROJECTS CAN BE INCLUDED IN THE SPAM BUT IT DOESN'T IDENTIFY PARTICULARS FOR EACH YEAR. SO THIS YEAR'S FUNDING FOR SPAM WILL BE TO COMPLETE THE PROJECTS THAT I MENTIONED BEFORE, THE VILLAGE, RIO VISTA, WOOD BRIDGE AND JONAS WOODS. We will work to queue up the projects for the next year's SPAM. Next is Northcliff Country Club Estates. This is actually going to be water, wastewater replacements, and the street rehabilitation once those are done. So this is the neighborhood in Northcliff that's closest to I-35 over here on the west side of Country Club. Currently, we're working on some value engineering to try and get the street costs down and then possibly also waste water costs down Next is Savannah Drive mill and overlay. This is a mill and overlay of Savannah Concrete and base repairs included this is taking it basically from the shirt city limit line with Selma all the way to 3009 And we're looking to, from a construction perspective, we're going to bundle the Savannah Drive project along with the two SPAM projects, so that group of four neighborhoods that I talked about. And we're also putting in there the TSAC requested and recommended crosswalks, two of them in Homestead, and then some work on Savannah with some pedestrian improvements that will be coupled with a crosswalk that's part of the Dietz Trail project. So hopefully we'll get better bids with economies of scale when we bundle those projects together. Next is Live Oak Extension and Maskey Road. We're really excited. Steve mentioned the funding starting in 26-27, and then for Live Oak, we do have some bond funding over the next several years to get started and follow through with that project. We do need to acquire some right-of-way, do the design, and, of course, construction. This will include, if you look at the map, the extension of Live Oak from here by Binziel Farms, kind of close to Schertz Parkway. It will extend parallel to Dietz Creek until it meets up with Maskey. And then Maskey will be reconstructed as a collector class roadway out to 1518. And then the portion of Maskey back towards Church Parkway would just be reconstructed as a local road. Next on the streets project is Widerstein Road reconstruction and extension. We thought for a little while there that we weren't going to even be able to get started with this project because of the limitations to our bonding capacity over the next several years. But we have cobbled together enough roadway impact fees in this particular area of the city, 1.2 million, to get started with design and start identifying those places that we need right away. So part of project start is reconstruction of the existing old Widerstein Road from FM 1103 to Cibolo Valley Drive, which is about here. No, I'm lying. It's over here. Ultimately, this will extend over to 3009, which will be a tight fit, but we'll make it happen eventually. And the last project on the streets list is Robin Hood Way. That is in the Shirts Forest subdivision. We'll be doing some resurfacing and rehabilitation there. This is also a project that's coupled with a water project to increase some lines from 8-inch to 12-inch for fire flow requirements. And that is it for the proposed 26-27 streets projects. And I believe Parks is next. So if I'm gonna just keep scrolling, these next projects are just funded but out in further years. Come on, Lauren, I'm just trying to find your spot.

Kathy, it's page 229. Thank you. If you wanna type it in.

What, my scrolling isn't fast enough? 229. Thank you, sure. And I'm sorry, not just parks, but parks, recreation, and community service.

Thank you for that. Okay. So, yes. 230 now. Page 230. Hilltop Park. So that's the park property that the city has owned up in the North Cliff area for a couple years now. It's about eight acres. We are looking to... work with the HOAs to adjoin some of their properties into a 42-acre community park. And so we have a grant for this project, and we are also working with the South Texas Off-Road Mountain Bikers and some other community groups to design this park. Had a meeting recently with the consultant. We're very close to finalizing that proposal to be able to bring an agreement forward to start on this project. design process. So it is a 1.6 million project. And here's the map. It's adjacent to the homestead as well. So this is the homestead portion that we received through development. So phase one is already open. People can walk that two-mile trail loop. The pond is full. They can fish. Currently there's a fishing pier. But phase two will be bringing in a restroom facility, additional trails, an overlook. additional parking and playground units. On to page 232, this is the community circle park development. This is the development plan for the acreage here at the complex, sort of behind the animal adoption center and where the skate park is located. It'll be fully developing out the skate park plan that was developed through community groups many years ago. And then adding in some additional features such as sand volleyball court complex and sport courts and a hangout area known as The Box. We're theming this park to be teen programmed and activate the space accordingly because of the fact that we have a bunch of school kids walking to and from this area every day. And we don't have a lot of things geared towards teens in the community. This is a 10 point $35 million project. I'm at the point now where I have to take the glasses off to see up close. Need the bifocals, I guess. All right. Here's the map location right here behind this complex and boarding along Deeds Creek. And then next up is the West East Creek Trail Project. Kathy mentioned that where we're crossing Savannah Drive and working together on that crosswalk there. This is about 1.6 miles, I believe, trailway along West East Creek. It is funded through the MPO. We got a million dollar grant through the MPO and the rest of the money is coming from the parkland reserves. But it'll have some pedestrian crossings at Maskey and Savannah. lighted pedestrian crossings where you press the button to come across. It'll be 10 foot wide concrete all the way. So it'll be multi-use bicycle and pedestrian skateboards, dog walkers, moms with double strollers. And there'll be connections for all the neighborhoods along there to get on the trail and go a long distance. And then like they were saying, there's future trails and out years, Great Northern Trail. That's another one that we're going to go back for funding from TxDOT4 to try to get that going. But these are outlying years. So those three were just the 26, 27 projects.

Lauren, if you can, 244 is where facilities start.

Page 244. Thank you. Oh, what did I do?

Good evening, everyone. I'm Donisha, the Internal Services Director. I'm going to go over some of the facilities projects that we have going on for 26-27. First, we have Fire Station 4. The construction on Fire Station 4 is going on at Widerstein Road. It's progressing very well. The interior and exterior walls are up and the crews are remaining actively engaged on the site. And so far the project is currently on schedule and estimated to be completed March 2027. There's the map of the fire station. The next one is going to be the FM 78 build out for police department. Sorry. So due to space constraints, the police department plans on to relocate several of its divisions to the county building on FM 78. The initial build-out budget was $400,000, but the bids came in higher than we had anticipated, so the project was pushed to $3,136 due to funding constraints. However, with the assistance of our owner's rep, We have rebid the project in hopes of reducing costs, and if we can get the costs reduced, then we will move the project forward sooner. The next project is paving all of the city-owned grassy areas that are currently being used for operational purposes, and so we are currently refining the the scope of this project which will help us determine the appropriate approach and identify the best vendor for that project. And then the last, the fourth and fifth one are similar. It's replacing two critical generators here at the main campus that support emergency operations. And so that one, as well as we're currently refining the scope of work, which will allow us to finalize the project requirements and then determine the best vendors for those.

I think it's Kathy again.

What page?

It is page 18.

All right, we have quite a few water projects. First one I'll mention is the 1518 utility relocation. So we are just about done with the utility relocations that the city contracted out to do, and now what's being done is what was called the joint bid work, and so TxDOT's contractor is actually doing all this work. We had our consultant design it, and they're doing the work. We're inspecting our utilities, and that'll just be ongoing until the 1518 project is done. Presumably, the utility work will be done this year. We'll see. So this is, of course, the 1518 project from I-10 to 78.

And I'm gonna see if I can make it a little bit bigger.

Okay, next elevated storage tank replacement and tank painting. We got two tanks that we're replacing some piping that's in bad shape, fill piping, and three tanks, East Live Oak, North Clip elevated tanks, and we're sagging ground storage tank that will be painted. So in three different parts of the city. Next is the Weirsageen, Lowersageen, and Greytown to file loop lines. These are water mains to rectify the situation when we have dead end lines and so no redundancy. We're actually needing to split the project in two. The line along I-10 between File and Greytown will be bid if it hasn't been released yet. probably later this week or next week. We have some issues with some conservation easements along the line from Lower Seguin to Ware Seguin, and we'll probably be requesting authorization for eminent domain proceedings there just because the property owner's hands are tied. And so we can at least move something forward. We're going to go forward with one of these two lines. Shirts Parkway, 16-inch transmission main, a line that has experienced lots of breaks. Public Works spends a lot of time fixing this line. It's basically from Mareway up to in front of Jonas Woods. There we are working on easement acquisition and also looking at some alternative technologies to possibly help out with that project. Next is the I-35 Next North utility relocations. So these are actually utility relocations that we have contracted ourselves. It's under construction. These are wastewater lines that are parallel to 35 and also crossing 35, dealing with utility conflicts that weren't identified prior to the design and the bid. So it's an ongoing fairly large project. I-35 North utility relocations. Yes, okay, so that's what we talked about. Okay, Schwab to Eckert Road, 12-inch water line extension. This is, again, completing a loop in our system, and this is a project that actually is being constructed. It'll be constructed by a developer, and we'll be reimbursing them. We just recently were able to acquire the easement for the line, and this goes basically from the Ackerman subdivision over to Schwab Road in Homestead. 3009, 18-inch transmission main replacement, similar to the one on Schurz Parkway, about 7,600 linear feet from FM 2252 all the way up to just past corridor loop. So that one is in design. I-35 ground storage tank and pumping station. We recently completed the Corbett ground storage tank. We had an elevated tank there. A ground storage tank just provides, in fact, this one will be similar, 3 million gallon ground storage tank to provide that extra storage capacity. And this is at the, there's an elevated tank there now that you can see up on the hill. This is 35. This is Old Widerstein. This is Dean Road. if you can follow my cursor, so that's where this tank is. Next is Moonlight Meadow Drive and Lost Meadow Drive water line replacement. This is a subdivision that's actually outside the city limits, but they are customers of our water system. Their water lines are four inches, which is substandard. They need to be eight inches to provide fire flow and meet TCEQ requirements. So that is down in Southern Shirts off of Schaefer Road. So those will be upgraded. Robin Hood Way, we talked about it in the streets. We're going to REPLACE 6670 LINEAR FEET OF 8 INCH LINE WITH 12 INCH LINE IN ORDER TO PROVIDE THE REQUIRED FIRE FLOW. SO THIS IS ROBIN HOOD WAY DOWN HERE IN SHIRTS FOREST. AND THAT'S FOLLOWED UP THEN BY THE STREET RECONSTRUCTION OVER TOP OF THAT. NORTH CLIFF COUNTRY CLUB ESTATES, ANOTHER ONE THAT WE TALKED ABOUT WITH THE STREETS PROJECTS, WE'RE REPLACING 6 AND 8 INCH WATER DISTRIBUTION MANES AND 8 INCH WOIST WATER COLLECTION MANES THROUGHOUT. We did find out through televising the lines that we may be able to actually save some of the existing waste driving lines, not have to replace every single manhole in every single line. So we're looking through to make those judgment calls now before we bid the project. Next is, and again, that's this Northcliff Country Club Estates up here off Country Club Drive. Next is the I-35 dedicated water transmission main. This runs from the East Live Oak Water Station, an elevated tank to the IH-35 water tank. And you've seen this project a number of times. The project was kind of placed on hold. We're working with some property owners, some HOAs to mitigate some of their concerns regarding where this water main construction will be placed. And we did recently submit the grant application to have that project mostly funded with Texas Water Development Board funds. So we'll be moving forward with this project in the next fiscal year. Bubbling Springs Water Line Replacement. This is to replace and upsize a 6-inch water main with a 12-inch water main across Cibolo Creek, at the end of Bubbling Springs, across to the CCMA plant location. And that is, first of all, the line is undersized, but also it does have some leaks. And the last one on the list is Weirsageen Pump Station. There are actually a couple different phases of this. The first phase will just be to install some pressure reducing valves, but then we'll also look at expanding capacity, increasing the footprint of the water station, and some system improvements for improved operations. And that is it for our water and wastewater projects that are funded this next year.

So Kathy, the sewer ones start on page 71. 71, thank you, Sarah.

Sewer. Less sewer projects. Do I still have everybody with me? This is exciting stuff. Come on, everyone. All right, so the first one on the list is really exciting, the Riyada lift station relocation. The project is essentially done. What we have to do, we have our consultants still engaged to continue on getting reimbursements. It's fully reimbursable from TxDOT because it was relocated because of the IH35NEXT project. So it's 100% reimbursable, but it takes work to get those dollars reimbursed. So that's all we have left of that project. Decommissioned Corbett. lift station this one we won't actually be decommissioning the lift station itself I apologize for the we were rushing to get some of these maps created we'll make a better map for this but it's in the Rhine Valley subdivision and we need to run a gravity line from the essentially the lift station location over to a point where it will flow into the Saddlebrook subdivision so that we can take a little bit of capacity that we have in the Saddlebrook lift station and be able to not put that into the Corbett lift station and set things up for when one day, hopefully soon, we'll be able to decommission and get rid of that Corbett lift station. Cibola West wastewater trunk main. This is the second major trunk main in Southern Shirts. We had the woman hollering line. This is another one that will feed the CCMA South plant. So the goal is to have this main constructed and ready to go at the same time that the CCMA plant is expanded and can take more flow. There's huge development pressure in this area that will all flow into this line. We did do a route study, we'll be bringing that to present that to you shortly, followed up with a contract for a consulting engineer to do a preliminary engineering design EASEMENT ACQUISITION FOR THIS ONE. WEIDERSTEIN ROAD, 8-INCH GRAVITY LINE. THIS ACTUALLY WILL BE A SMALL PIECE OF A BIGGER PROJECT. THE BIGGER PROJECT IS THE UPSIZE OF A WASTE WATER LINE IN WEIDERSTEIN ROAD. THERE'S A DEVELOPMENT THAT'S GOING IN THAT KIND OF PUTS A LITTLE BIT OF THIS INTO QUESTION, BUT THEY WILL BE EXTENDING the wastewater line across Church Parkway, and we would reimburse for that. Aranda 8-inch gravity line, this would extend gravity across Lower Seguin Road, basically from the Crossvine Unit 4 subdivision across Lower Seguin to provide service to a small portion of residential area in Southern Shirts. We may actually work to add this to the Lower Seguin project if the timing and the funding works out. Northcliff lift station upgrade. This is our main lift station in the city. It actually, there are, I think, three or five other lift stations that pump together and end up pumping into this one. This is at the old GBRA treatment plant, if anyone remembers that. Northcliff Country Club Estates here. So the golf course is in this area here. and this lift station is here. It's near its capacity right now and it does need to be upsized to meet TCQ requirements and additional development. We're gonna get started on an initial study and we'll be bringing that to you for authorization fairly soon. Town Creek installation of wastewater gravity line phase four, sections one and two. These actually, Steve mentioned that EDC is actually responsible for funding these. if the developer does what they've agreed to do, and we're just on the precipice of finding out they have actually started construction, wait till they get a little bit further down the road before we're willing to say, okay, some of the funding for this may be able to move to another project. This is some wastewater lines. The first section goes by the railroad tracks from Abbey Road, to 2252. The next section of it, go down to the next map. Okay, the next section comes up 2252 a ways back and then up toward 35. A sneak peek of the next segment of that, which isn't actually included in our plan for funding this next year, but that runs from 2252 at the railroad tracks all the way up to FM 3009. That's actually another development that hopefully we'll be able to do that work with EDC also funding. But that line with gravity, you're always dependent on the line downstream. The downstream lines have to get built first so that the upstream lines can tie in. Phase by phase, hopefully we'll get there. But that is the end of the wastewater CIP for this year. And a little bit into the future.

You can go to 192 for drainage.

All right. Okay. In the home stretch. Drainage. All right. FM 78 South Channel, also known to some folks as the Selleys Channel. So if you go down here to the end of Shirts Parkway, Selleys is across the street. This channel is kind of to the right of Selleys, between Selleys and the Beck Landfill. There's a channel that you can see in there and it's really filled with silt, overgrown, that needs to be cleaned out. We're working to get the necessary easements for access and the channel itself. So hopefully that will get done shortly. So here's a picture of, here's Church Parkway here, here's 78. And this is the channel. Next, Wendy Swan drainage improvements. The design is essentially done on this. This is the removal of a retaining wall and above ground channel at the back of Wendy Swan Park and the installation of an underground drainage facility. We can't actually do the construction until the splash pad is closed and there's less use of the park, but that hopefully will happen fairly soon. I mean hopefully the construction will happen, not that the splash pad will close. That's just a little sad. But here's Wendy Swan Park and the drainage line. FM 1518 City Park underground drainage upgrade. I really don't need to talk about this because we did a study last year and we're not going to do anything else for this next year. We were looking at some elevations, but that one will just sort of be paused for this next year. All right, next, Kramer Farms Drainage Improvements. This is to clean out, reshape, replace and add some concrete riprap where necessary, maintenance access construction in the channel that runs through Kramer Farms and ultimately discharges to Dietz Creek. Woodbridge Drainage Improvements. Design and construction includes tree removal, trimming, silt removal, concrete riprap. construction. And this runs from Ashley Place down through to the Woodland Oaks detention basin. Next. These next two are very similar. They kind of work together. One is Portage Lane, culvert replacement and channel rehabilitation. This is Country Club Drive here. This is Portage. The next one is Morning Drive, similar project. Here, here's Morning, here was Portage. So dealing with the culverts and the channels in this location, we need to acquire some property in order to maintain these channels properly. And the culverts that are being replaced, you've heard a lot in the past few weeks about the culverts problems with the Scenic Hills subdivision. These two are of the same age, they're the same construction, these two culverts, and they're having some of the same issues. So we will replace those. And the last but not least, this is a very visible one, the Oak Forest Channel. This is along FM 3009 between Circle Oak and Crest Oak. You've passed it a million times on your drive. It's along TxDOT's right of way, but it is a property owned by the city and maintained by the city, and it needs some work. I think the culverts under the roads will be extended, and the channel itself will be rehabbed. And that is it. for drainage and I think concludes our CIP mission for the next fiscal year.

Well, thanks, Kathy. And council, I know that's a lot and it's kind of laborious, but I do want to point out a couple of things. If you, you know, when you look at your big sheets, if you, a couple of thing to point out, when you look at the big sheet, you look down at the bottom, there's kind of a funding schedule that tracks with each of the years. And that's what James was talking about, matching with what's on there. But what you just heard in the next fiscal year between all the three different CIPs is $93,707,465 in projects just next year. And then that's on top of already ongoing projects of 50,127,749. So it's big numbers. It's a lot. And honestly, we probably don't spend enough time talking about it, but this is the biggest spend part of our budget. And so we put a lot of focus on it internally. We try and plan it out accordingly. And when we talk about things like issuing debt, we have to do that judiciously because Because there's only so much to go around, and there's only so much strain financially your budget can take, and that your bases can take. But when we look at things like an 8% increase to water and sewer, you heard about all the water projects, right? And the sewer projects, that's why. And that's only part of the story. There's debt associated with CCMA, there's debt associated with SSLGC that we pay as well. All told, if you look at all of the CIPs over the 10 years, it's $784,978,594. So we're talking about a lot of money, more than three quarters of a billion dollars in expenditures over the next 10 years. Now, is it going to be exactly like that? No, because this is fluid, right? It's a plan. You adjust it as you go. Ten years is a long period of time. Priorities move up. Priorities move back. Things drop off the list. Things come onto the list. So it's a living, breathing plan, but it is big numbers, and it's a lot of projects. So we just sped through it to keep it short, but if you've got questions on any of them, obviously we're here to answer them. We're more than happy to answer them or to retrace ground or to cover projects. So any discussion on the CIP or any of the projects or prioritization or any of that, Kathy will be happy to answer. Going once, going twice. You can take it home. Yeah, and this is a lot, y'all. I mean, we're giving you a lot. This is a big rollout all at once. Like I said, there's no expectation that you're absorbing all of this. Please take a look at it. Ask questions. We're happy to answer. We're happy to go over it with you. Like I said, we'll have at a minimum two more opportunities to discuss it and three if you choose to set a meeting on the 25th. And we're happy to do that as well.

So first of all, I just want to thank you and your staff for all the hard work that y'all put into creating this budget workbook that we have. I think that'll allow us to take a deeper dive into the budget and to ask a little bit more detailed questions as we look through this at our next meeting. And I would like to schedule that one for the 25th. Okay.

We will go ahead and schedule that for the council. And starting at 6, okay? Does that work better than 5, or would the preference be of the group 5? 5.30? Do I hear 6?

Yeah, let's say we can't do 5.30, kind of buy some time for people to be able to get from work and get to the council meeting.

Yes, sir. We will schedule it 5.30 on the 25th. If there's no other questions, I mean, feel free to reach out to us at your discretion. We're here at your disposal.

Okay, thank you. I guess this time we'll go ahead and conclude the budget retreat meeting at 8.04. Thank you all. Thank you.