Aug 05, 2025 City Council

[I. CALL TO ORDER]

[00:00:08]

MAY 25TH. TO ORDER AT 3:02 P.M. WELCOME TO THE WORK SESSION OF THE WACO CITY COUNCIL. WELCOME TO ALL THE PEOPLE GATHERED HERE IN THE THEATER GALLERY IN BEAUTIFUL DOWNTOWN WACO TODAY.

GREAT CROWD HERE TODAY. IT LOOKS LIKE A NEARLY FULL. YOU ALL CAN MOVE TO THE FRONT IF YOU LIKE.

THERE'S SOME SEATS UP HERE. ANYWAY, WELCOME TO ALL THE VIEWERS AT HOME WATCHING ON THE WACO CITY CABLE CHANNEL. AND THANK YOU FOR JOINING US HERE TODAY IN OUR IN OUR PROCEEDINGS, I'M MAYOR JIM HOLMES. I'M JOINED ON THE DAIS HERE TODAY BY OUR COUNCIL MEMBERS, ISABEL LOZANO FROM DISTRICT TWO OVER THERE. JOSH. DISTRICT THREE DARIUS EWING DISTRICT FOUR. AND GEORGE CHASE, DISTRICT FIVE. OUR MAYOR PRO TEM ANDRE BARFIELD, IS NOT WITH US TODAY. I'M ALSO JOINED ON THE ADJACENT DAIS OVER THERE BY SENIOR CITY STAFF, CITY MANAGER BRADLEY FORD, CITY ATTORNEY KRISTIN HAMILTON AND CITY SECRETARY MICHELLE HICKS. AND WELCOME BACK MICHELLE HICKS.

AFTER AN ABSENCE. WE'RE GOOD TO HAVE YOU BACK. LET'S GIVE MICHELLE. WE WILL START THE MEETING TODAY WITH A MOMENT OF SILENCE. THE FIRST ITEM OF BUSINESS TODAY IS RECOGNITION OF

[II. WORK SESSION]

WE'VE AS YOU NOTICED IN THE PACKET, IT'S QUITE A LONG AGENDA. THANKS TO OUR SUMMER BREAK. WE TAKE JULY OFF FOR COUNCIL AND WE COME BACK TO WORK READY TO GO. I DON'T HAVE ANY CHANGES ON THE AGENDA TODAY, BUT I WOULD LIKE TO START OFF WITH A FEW EMPLOYEE RECOGNITIONS AS WELL AS A COUPLE INTRODUCTIONS. FIRST, IF YOU'VE NOTICED, THERE'S A GIANT PIPE IN THE ROOM AND 16IN, BUT I WANT TO ACKNOWLEDGE OUR PUBLIC WORKS AND INFRASTRUCTURE TEAMS FOR A MOMENT IN JULY. JUST A COUPLE WEEKS AGO, WE EXPERIENCED A COUPLE OF LARGE BREAKS IN OUR WATER AND WASTEWATER SYSTEMS, AND THESE TEAMS REALLY HUSTLED TO ISOLATE THE ISSUES AS WELL AS RESTORE SERVICES TO AFFECTED AREAS. SO WHAT YOU SEE UP FRONT HERE IS ONE OF THE BROKEN SECTIONS THAT WE BROUGHT IN. SO WATER MAIN FAILED CLOSE IN CLOSE PROXIMITY TO THE BRAZOS RIVER.

AND THROUGH COORDINATION WITH THE CORPS OF ENGINEERS, WE WERE ABLE TO FACILITATE THE LOWERING OF LAKE BRAZOS OR BRAZOS RIVER AND STAFF, AS YOU SEE IN THE PICTURE, WORKED IN A IN A PIT OF ABOUT 20FT DEEP NEXT TO THE RAILROAD NEXT TO THE RIVER. TO RESOLVE THIS ISSUE. AND THE REPAIR IS NEARLY COMPLETE. AND I JUST WANTED TO BRING UP THE TEAM THAT WORKED ON IT. WE'RE REAL PROUD OF THEM. A LOT OF INGENUITY AND GET IT DONE ATTITUDE PARTICULARLY, YOU KNOW, THEY MAY SEE IT AS ROUTINE BUSINESS, BUT I SEE IT AS SOMETHING WORTH CELEBRATING. YOU KNOW, THEY WENT OUT IN A DIFFICULT LOCATION, USED THEIR INGENUITY, USE THE PARTS THEY HAD, USE THE LABOR THEY HAD, AND DID IT ALL IN HOUSE, SAVING OUR RESIDENTS AND RATEPAYERS HUNDREDS OF THOUSANDS OF DOLLARS, NO DOUBT. SO, CODY, IF YOU DON'T MIND, AND CHARLES, Y'ALL COME UP AND BRING THE TEAM UP. LET'S INTRODUCE THEM. AND I'D LOVE TO GET A PICTURE WITH THE COUNCIL BEHIND THIS BEHIND THIS PIPE. LET'S GET UP THERE, GUYS.

YEAH. CODY, WHY DON'T YOU INTRODUCE THEM FROM THE PODIUM AND LET'S GET THE TEAM UP WITH THE COUNCIL BY THE BY THE PIPE. GO UP THERE. THANK YOU FOR THAT. CITY MANAGER FORD. THANK YOU, MAYOR AND COUNCIL. THANK YOU ALL. I'M HERE WITH CHARLES LEE'S INFRASTRUCTURE SERVICES DIRECTOR. JOHN. THANK YOU. ANY CLOSER? YEAH. YEAH. Y'ALL. Y'ALL GET CLOSE. IT'S NINE FEET LONG. SURELY WE CAN FIT EVERYBODY IN THERE. YEAH, THAT WAS CLIMB INSIDE IT. THAT'D BE GOOD. ALL RIGHT, EVERYBODY READY? ONE. TWO. THREE. GREAT. THANKS. CODY. DO YOU MIND INTRODUCING THE TEAM? YEAH. SO UP HERE WE HAVE DANA JOHNSON, OUR SUPERINTENDENT OVER THE

[00:05:02]

ALL RIGHT. NEXT UP WE GOT A FEW NEW STAFF INTRODUCTIONS. COUNCIL I WANT TO START WITH ACTUALLY STILL IN THE DEPARTMENT OF PUBLIC WORKS. WE'VE GOT A NEW ASSISTANT DIRECTOR TO WELCOME.

NAME IS ERVIN PATTIERA ERVIN. WHERE ARE WE? THERE HE IS. SORRY YOU'RE BLOCKED FROM MY VIEW.

ERVIN STARTING OVER AS OUR ASSISTANT DIRECTOR IN PUBLIC WORKS. JUST IN THE LAST COUPLE OF WEEKS, OVERSEEING OUR STREETS DIVISION, OUR UTILITIES DIVISION, AS WELL AS PUBLIC WORKS MAINTENANCE DIVISION, SUPPORTING ALL SORTS OF IMPROVEMENTS TO OUR INFRASTRUCTURE AS WELL AS COMMUNITY PARTNERSHIPS. HE'S GOT ABOUT TWO DECADES OF EXPERIENCE.

HE'S VERY EXPERIENCED IN BOTH PUBLIC WORKS AND UTILITIES, STARTED HIS CAREER AS ELECTRICIAN, WORKED IN A LEADERSHIP ROLE IN WORKING FOR CITIES AS WELL AS WATER AUTHORITIES OUT IN CALIFORNIA. WE'RE GOING TO WORK ON THAT. IT'S OKAY. WE'VE GOT SOME GOOD CALIFORNIANS THAT HAVE COME TO TEXAS, GOT SOME GOOD ROLE MODELS FOR THAT. IN 2016, HE EARNED HIS BACHELOR'S DEGREE, CAL STATE, AND CONTINUED HIS CAREER, RELOCATED TO TEXAS IN 2020 AND HAS BEEN WORKING FOR THE TRINITY RIVER AUTHORITY SINCE THEN. REAL EXCITED FOR HIM TO BE HERE. HE WAS RAISED ON A DAIRY IN OREGON, GOT SOME DAIRIES AROUND HERE IN TEXAS, ENJOYS HIKING AND FISHING. I THINK HE'LL MAKE A GREAT ADDITION TO OUR TEAM, IF YOU DON'T MIND. WELCOME. ERVIN IS OUR ASSISTANT DIRECTOR OF PUBLIC WORKS. THAT STREETS THAT STREETS DIVISION HAS A LOT OF RESOURCES TO GET DEPLOYED AND A LOT OF WORK TO DO OVER THE NEXT DECADES. SO YOUR WORK IS CUT OUT FOR YOU. NEXT INTRO I WANTED TO DO IS FOR OUR NEW CONTROLLER IN THE FINANCIAL SERVICES DEPARTMENT. SHE'S NEW TO THE CITY, BUT NOT TO WACO. IT'S AN WISWALL. AND DO YOU MIND? AND A DOUBLE BEAR. SHE'S GOT A BACHELOR'S DEGREE AND MASTER'S DEGREE FROM BAYLOR, AND HAS BEEN LIVING IN WACO FOR A LITTLE WHILE, SERVING OVER AT PILGRIM'S PRIDE IN A IN ACCOUNTING ROLE.

WE'RE EXCITED FOR HER TO BE HERE. SHE'S A CERTIFIED CPA. SHE GREW UP IN WACO AND FAMILIAR, OBVIOUSLY, WITH OUR HISTORY. AS A YOUNG GIRL, SHE USED TO BICYCLE TO THE ZOO. I KNOW WE GOT OUR ZOO TEAM HERE. LOVES THE ZOO. IT WAS ACTUALLY WHEN IT WAS AT THE AIRPORT, SO I BET SHE LIKES IT EVEN MORE NOW. ITS CURRENT LOCATION. I ATTENDED WACO HIGH, ACTUALLY WAS THE VALEDICTORIAN AT WACO HIGH, SO WACO HIGH PRODUCING SOME GREAT TALENT THAT'S NOW SITTING HERE IN CITY OF WACO SERVING OUR RESIDENTS AND LOOKING FORWARD TO SERVING WITH YOU. AND THANK YOU FOR BEING HERE. AND LAST BUT CERTAINLY NOT LEAST, WE'VE GOT SOME FAMILIAR FACES IN THE ROOM FROM WACO FIRE THAT HAVE JUST RECENTLY BEEN PROMOTED. OF COURSE, OUR NEW CHIEF WENT THROUGH A PROCESS TO SELECT HIS DEPUTY CHIEFS, AND HE'S MADE THE ANNOUNCEMENT JUST RECENTLY THAT MAX BREEZE AND PHILLIP BURNETT WILL BE STEPPING INTO THOSE DEPUTY CHIEF ROLES. MAX IS GOING TO BE OVER EMERGENCY SERVICES. MAX HAS BEEN WITH US FOR 28 YEARS, VETERAN IN MANY POSITIONS. HE SERVED AS DEPARTMENT VERY WELL. HE INITIATED THE FIRST OFFICER CANDIDATE SCHOOL IN OUR DEPARTMENT'S HISTORY, AS WELL AS SERVED AS CHIEF OF EMERGENCY OPERATIONS, DEPUTY INTERIM CHIEF, AND SERVES ON OUR RESCUE TASK FORCE AND MODERNIZED OUR INVENTORY SYSTEMS. MAX IS A RECIPIENT OF OUR FIRE DEPARTMENT'S COMMUNITY SERVICE AND CAREER ACHIEVEMENT AWARD, AND I'M EXCITED TO SERVE WITH YOU, MAX. I'VE HEARD GREAT THINGS FROM FOLKS THAT ARE WORKING WITH YOU AND AROUND YOU, SO CONGRATS ON THIS NEW ROLE. IF YOU DON'T MIND STANDING UP REAL QUICK SO PEOPLE GET AN EYE ON YOU. AND THEN OF COURSE, PHILLIP BURNETT HAS OVER 20 YEARS IN OUR DEPARTMENT SERVING AS FIREFIGHTER, ENGINEER, LIEUTENANT AND CAPTAIN. MOST RECENTLY, HE'S BEEN LEADING AS CAPTAIN OVER TRAINING AND LOGISTICS AND HAS COORDINATED SUBSTANTIALLY WITH ME AND PEOPLE IN MY OFFICE, AS WHEN HE WAS IN THE ROLE OF PRESIDENT OF THE LOCAL ASSOCIATION. SO PHILLIP WAS THE GUY SITTING ACROSS THE TABLE FROM ME AND OTHERS AS WE NEGOTIATE BARGAINING AGREEMENTS. HE ALWAYS HAS DONE THAT IN GOOD

[00:10:05]

I'M GOING TO HIGHLIGHT JUST A COUPLE OF THEM FOR YOU. THE FIRST ONE IS RESOLUTION 523 AUTHORIZES THE PURCHASE OF AN ADOPTION AND RESCUE TRANSPORT TRAILER FOR THE ANIMAL SERVICES DEPARTMENT. THIS TRAILER WILL ALLOW FOR ANIMALS TO BE SAFELY HOUSED IN A CLIMATE CONTROLLED ENVIRONMENT AND TRANSPORTED, AS WELL AS WITH VIEWING WINDOWS, SO THEY'LL BE ABLE TO SEE OUT HAVE A COMFORTABLE EXPERIENCE DURING ADOPTION EVENTS. CURRENTLY, YOU KNOW, OUR STAFF IS ONLY ABLE TO TRANSPORT 2 TO 3 ANIMALS AT A TIME, AND THE TRAILER WILL GIVE US THE OPTION TO TRANSPORT 22 ANIMALS AT A TIME, WHICH IS GOING TO BE VERY HELPFUL AS WE TRY AND GET OUR ADOPTION NUMBERS UP. I WANTED TO MAKE A POINT HERE. YOU KNOW, OUR STAFF AT THE ANIMAL SHELTER ARE DOING A GREAT JOB, BUT THEIR WORK IS REALLY CUT OUT FOR THEM SINCE SEPTEMBER OF 2021, COMING UP ON FOUR YEARS NOW STRAIGHT, WE'VE BEEN OPERATING ABOVE OUR CAPACITIES, ABOVE OUR DESIGN CAPACITY AT THE SHELTER FOR ADULT DOGS. THAT PLACES A SIGNIFICANT STRAIN ON THE STAFF AND THE ANIMALS. SO I'M EXCITED TO BRING THIS TRAILER AS AN OPTION TO INCREASE OUR ADOPTIONS. OBVIOUSLY, THAT'S A NATIONWIDE TREND IN TERMS OF WHAT SHELTERS ARE GOING THROUGH, BUT VERY PROUD OF OUR STAFF TRYING TO MANAGE THROUGH THIS SITUATION. THEY'VE RETAINED OUR LIVE EXIT RATE 92% OR HIGHER EACH MONTH, BUT WE NEED THE COMMUNITY'S HELP TO GET ADOPTIONS GOING. AND SO THANKS, COUNCIL, FOR YOUR SUPPORT OF THIS ITEM, THIS TRAILER. NEXT ONE I WANTED TO HIGHLIGHT IS RESOLUTION 527 AUTHORIZES THE PURCHASE OF 126 SELF-CONTAINED BREATHING APPARATUS SYSTEMS. THE SYSTEMS THAT OUR FIREFIGHTERS RELY UPON TO SAFELY ENTER BUILDINGS AND STRUCTURES THAT ARE THAT HAVE FIRE GOING ON. SMOKE. OBVIOUSLY, WE ARE REPLACING THIS. IT'S QUITE A COST, $1.7 MILLION, BUT THEY WERE PLACED IN A TEN YEAR OLD SET OF SCBA SYSTEMS, WHICH ALLOWS THE FIREFIGHTERS TO OPERATE IN REALLY HAZARDOUS ENVIRONMENTS AND ISOLATES TOXINS FROM THEM. IT'S VERY HELPFUL, OBVIOUSLY, AS AS THE NATIONAL FIRE PROTECTION STANDARDS HAVE CHANGED OVER THE LAST DECADE, THERE IS A NEED FOR US TO MAKE THIS MOVE, SO WE ENSURE THAT WE'RE STILL COMPLIANT WITH THOSE NFPA STANDARDS. OBVIOUSLY, THIS IS A CORE PIECE OF WHAT KEEPS OUR FIREFIGHTERS SAFE AND HAS MY STRONG RECOMMENDATION FOR YOUR APPROVAL. RESOLUTION 540 LAST ONE I WANTED TO HIGHLIGHT, I BELIEVE TODAY AUTHORIZES AN APPLICATION TO TAKE FOR AN AMENDMENT TO OUR WATER RIGHT, CERTIFICATION OF A JUST ADJUDICATION FOR SMITH RANCH TO ADD A DIVERSION POINT ALONG LAKE BRAZOS. ALL THAT TO SAY, YOU MIGHT REMEMBER THAT WE BOUGHT SOME WATER RIGHTS BACK IN 2022. SOME OF THE MEMBERS WERE ON THE COUNCIL AT THAT POINT. REAL STRATEGIC ACQUISITION OF WATER RIGHTS ON THE BRAZOS RIVER PRETTY FAR UPRIVER AT SMITH BEND. THE WATER RIGHTS WE PURCHASED ARE 1921 WATER RIGHTS. THEY WERE ACTUALLY THE 57TH OLDEST WATER RIGHTS IN THE BRAZOS RIVER, WHICH GIVES US GREAT PRIORITY STANDING WHEN WATER RIGHTS GET CALLED. WE'RE MOVING THE TAKE POINT ON THE RED DOT WAY UPRIVER DOWN TO THE YELLOW STAR THAT WILL ALLOW US TO ACCESS THE WATER RIGHTS WE PURCHASED CLOSER INTO TOWN AND ALLOW US TO OBVIOUSLY MOVE FORWARD TOWARDS OUR INTEGRATED WATER RESOURCES PLAN, WHICH CALLS FOR COUNCIL FAMILIAR ACCESSING BRAZOS RIVER RIGHTS TO ENSURE WE DON'T HAVE A SHORTFALL OF WATER IN OUR 100 YEAR PLANNING HORIZON. ALL RIGHT, LET'S SEE. I HAD ONE MORE MANAGER FORD, I REALLY APPRECIATE THAT MOVE. I THINK THAT'S A VERY STRATEGIC MOVE. I THINK THIS COUNCIL AND YOUR OFFICE HAS BEEN INCREDIBLY FORWARD THINKING ON BOTH WATER SUPPLY, LOOKING AHEAD AND ALSO WATER QUALITY. AND I THINK SOME OF THE AGENDA ITEMS HERE TODAY REFLECT THAT. SO I'M GRATEFUL TO OUR CITY STAFF FOR MAKING THIS HAPPEN. WATER IS OUR MOST PRECIOUS RESOURCE, AND I THINK WACOANS UNDERSTAND THAT. WE KNOW THAT. AND WE'RE LOOKING AHEAD DECADES AHEAD TO ENSURE ITS CONTINUED FLOW. DEFINITELY HOMES HERE, I'LL ECHO COUNCIL MEMBER

[00:15:04]

PEOPLE WERE ABLE TO CONTINUE THEIR USAGE. AND IT'S ALL THANKS TO THE TEAMS WE HAD WORKING ON THIS DAY AND NIGHT. YEAH, I CAN'T GET OVER THE I YOU GUYS GETTING THIS IN HERE REALLY ON TO THE STAGE. I DON'T KNOW HOW THAT HAPPENED, BUT YEAH, I DID NOT WANT TO MOVE ON FROM THIS WITHOUT HIGHLIGHTING THAT ONE LAST TIME. THANKS, PRO TEM. I KNOW IT MEANS A LOT TO THE TEAM AND IT REALLY SHOWS. YOU KNOW, WACO IS IN A UNIQUE POSITION. A LOT OF CITIES OF OUR SIZE DON'T HAVE A ZOO, DON'T HAVE AN AIRPORT, DON'T HAVE A CONVENTION CENTER, DON'T EVEN TREAT OR MAKE THEIR OWN WATER. AND WE SIT AS A FULL SERVICE CITY. AND IT TAKES A GREAT TEAM LIKE THOSE THAT WERE IN THE AUDIENCE TO MAKE THAT HAPPEN. SO REAL PROUD OF THEM. THANK YOU FOR THOSE COMMENTS. I DID WANT TO BACK UP. I HAD ONE MORE ITEM I WANTED TO HIGHLIGHT AND IT'S THIS IS FOR COUNCILMEMBER BORDERED MAINLY. WE'RE GOING TO COVER IT ON PUBLIC HEARING FOR 97. WE'RE ACTUALLY CONSIDERING THE CHANGE OF THE NAME OF THE SECTION OF 42ND STREET NEAREST TO WACO HIG, CHANGING 42ND STREET TO LIONS WAY IN HONOR OF THE NEW WACO HIGH. WE'RE GOING TO WAIT TO IMPLEMENT ON THIS AFTER YOUR ACTION, WE'RE GOING TO WAIT TILL AROUND HOMECOMING AT THE REQUEST OF THE SCHOOL DISTRICT. THEY'D LIKE TO KIND OF HAVE A PARTY OUT THERE AROUND HOMECOMING AND KIND OF UNVEIL THE NEW STREET SIGNS. AND SO APPRECIATE THE LEADERSHIP THAT YOU ALL HAVE SHOWN TO CHANGE THAT AND LOOKING FORWARD TO IMPLEMENTING THAT AROUND OCTOBER. I'M JUST PROUD TO SHARE THE DAIS WITH WACO, WACO HIGH LION PROUD ALUM, I THINK CLASS OF 1999, GEORGE CHASE UP HERE.

UNFORTUNATELY, IT WAS 88. OKAY. ALL RIGHT, ALL RIGHT. MY BAD. I WAS ALSO NOT THE VALEDICTORIAN.

MAYOR. THAT'S THE LAST UPDATE I HAD FOR THE COUNCIL TODAY. I'LL TAKE ANY QUESTIONS Y'ALL HAVE AT THIS TIME. ANY QUESTIONS FOR CITY MANAGER FORD ON THE AGENDA TODAY? THERE BEING NONE, WE'LL MOVE TO THE CONSENT AGENDA. THE CONSENT AGENDA INCLUDES RESOLUTION 2020 5-503 THROUGH RESOLUTION 2025. DASH 546 43 OF THEM TODAY. ARE THERE ANY OTHER ITEMS THE COUNCIL WOULD LIKE TO REMOVE FROM THIS CONSENT AGENDA AS PRESENTED? THERE ARE NO AFFIDAVITS OF SUBSTANTIAL INTEREST TODAY, SO WE'RE GOING TO VOTE ON ALL OF THEM. IT INCLUDES ALL THOSE 2020 5-503 THROUGH FIVE, FOUR SIX. THE NEXT ITEM ON THE AGENDA IS WORK SESSION ITEMS 20, 25, 45 THROUGH 49. CITY MANAGER FORD, WOULD YOU PLEASE INTRODUCE THE FIRST WORK SESSION? THANKS, MAYOR I WILL I AM FOR 85 IS A DISCUSSION OF OUR THIRD QUARTER FINANCIAL REPORT INVITING COLIN BOOTH UP. HE'S OUR MANAGING DIRECTOR OF FINANCE. HE'S GOING TO PRESENTING THE PRESENTING OUR

[00:20:01]

IT'S THE FASTEST. IT'S BEEN DONE SINCE I'VE BEEN HERE SINCE 2017, AND I THINK IT WAS REALLY IMPORTANT FOR US TO GET IT TO YOU BEFORE OUR BUDGET PRESENTATION, WHICH FOLLOWS. SO, COLIN, THANK YOU TO YOU AND YOUR TEAM. LOOK FORWARD TO THE PRESENTATION. THANK YOU, CITY MANAGER FORD, REALLY APPRECIATE THOSE COMMENTS AND REALLY APPRECIATE MY TEAM. THAT'S IN THE FINANCE DEPARTMENT. THE FISCAL MANAGEMENT SERVICES DEPARTMENT, AND THE OFFICE OF MANAGEMENT AND BUDGET. THEY DO OUTSTANDING WORK. GOOD AFTERNOON, MAYOR AND CITY COUNCIL AGAIN. MY NAME IS COLIN BOOTH, THE MANAGING DIRECTOR OF FINANCE. IT'S A PLEASURE TO BE HERE. SO THIS IS THE THIRD QUARTER FINANCIAL REPORT. AND WE'RE GOING TO COVER TEN FUNDS.

OUR LARGEST FUND IS THE GENERAL FUND. WE'RE GOING TO COVER OUR MAJOR ENTERPRISE FUNDS, SOME OF OUR MINOR ENTERPRISE FUNDS, AS WELL AS THE STREET MAINTENANCE FEE FUND. SO I WILL JUMP INTO THE GENERAL FUND. THIS IS THE GENERAL FUND BY CATEGORY. THESE ARE REVENUES AND EXPENSES THROUGH JUNE 30TH. AND THIS IS 75% OF THE YEAR HAS GONE BY. SO THAT'S KIND OF OUR BENCHMARK THAT WE USE. AND LOOK AT THESE NUMBERS AT THIS TIME. ALTHOUGH SOME OF OUR REVENUES AND EXPENSES VARY AS THEY'RE COLLECTED DURING THE MONTHS OF THE FISCAL YEAR. SO JUMPING INTO THE GENERAL FUND, I'LL CIRCLE BACK TO PROPERTY TAXES IN A LATER SLIDE. BUT JUST WANTED TO HIGHLIGHT SOME OF THE NUMBERS HERE ON THE REVENUES. WE'VE HAD CHARGES FOR SERVICES IN THE GENERAL FUND. THOSE HAVE EXCEEDED BUDGET THROUGH JUNE 30TH BY $350,000, OR 135%. SO THAT'S POSITIVE NEWS THERE. INTERGOVERNMENTAL REVENUES HAVE ALSO EXCEEDED BUDGET. THOSE ARE OUR GENERALLY OUR PAYMENTS THAT WE RECEIVE FROM OTHER GOVERNMENTS, AS WELL AS MOSTLY GRANT FUNDS THAT WE GET IN. THAT'S AT 105% OF BUDGET, AND THAT IS OFFSET BY 63% COLLECTIONS IN FINES AND FEES AND 77% COLLECTIONS IN LICENSES AND PERMITS. OVERALL, OUR TOTAL REVENUE BUDGET FOR THE GENERAL FUND IS 217.6 MILLION. WE'VE COLLECTED 178.2 MILLION, SO THAT'S GOOD FOR 82% OF COLLECTIONS THROUGHOUT THE YEAR. WHEN YOU LOOK AT EXPENSES BY CATEGORY, GENERALLY WHAT I LIKE TO ZONE IN ON ARE OUR SALARIES AND WAGES AND EMPLOYEE BENEFITS.

THOSE ARE AT 73 AND 72% RESPECTIVELY. SO JUST UNDER THAT 75% BENCHMARK, THOSE ARE OUR LARGEST CATEGORIES OF EXPENSES. OTHER THAN THE TRANSFERS OUT THAT YOU SEE DOWN BELOW, CONTRACTS WITH OTHERS IS A LITTLE BIT HIGHER. IT'S AT 105%. AND SO OUR TOTAL EXPENSES FOR THE GENERAL FUND ARE 154.74 MILLION. THAT'S 69% OF BUDGET. I DO WANT TO MENTION ONE THING ABOUT TRANSFERS OUT. YOU'LL SEE ON THAT LINE IT'S AT SEVEN. IT'S AT 53% OF BUDGET. WE HAVE A LARGE ANNUAL ONE TIME TRANSFER OUT TO CASH CIP FUNDS. THOSE ARE IN THESE FUNDS HERE, THE GENERAL FUND AND THE WATER, WASTEWATER AND SOME OF THESE OTHER FUNDS THAT YOU'RE GOING TO SEE. THAT'S A ONE TIME CASH TRANSFER OUT FOR CIP PROJECTS THAT HAS NOT BEEN PROCESSED YET, AND IT WILL BE PROCESSED IN JULY. SO YOU'LL SEE ON THE TRANSFERS OUT GENERALLY THAT'S LAGGING LOWER THAN THE 75%. SO THAT'S ONE OF MY MAIN COMMENTS YOU'LL SEE THROUGHOUT THIS PRESENTATION. IF YOU LOOK AT THE NEXT SLIDE. SLIDE FOUR. THESE ARE OUR REVENUES BY DEPARTMENT. AND WHAT WE TRY TO DO IN THE GENERAL FUND IS IF WE HAVE A COST CENTER OR A DEPARTMENT THAT WE CAN ASSIGN THE REVENUES TO, WE WILL TAG THAT AND ASSOCIATE IT WITH THAT PARTICULAR DEPARTMENT. THAT'S PRIMARILY RESPONSIBLE FOR THE COLLECTION OF THAT REVENUE, AS WELL AS THE SERVICE PROVISION OF THAT SERVICE. UNDEFINED IS THE LARGEST REVENUE SOURCE. THOSE ARE REVENUES THAT ARE NOT DEFINED TO ANY PARTICULAR DEPARTMENT. THOSE ARE GOING TO BE PRIMARILY PROPERTY TAXES AND SALES TAX COLLECTIONS. THE BUDGET IS 211.1 MILLION. THE YEAR TO DATE COLLECTIONS ARE 172.395 MILLION. THAT'S GOOD FOR 82% OF COLLECTIONS. THERE A COUPLE OF DEPARTMENT REVENUES THAT HAVE EXCEEDED BUDGET. ANIMAL SERVICES IS AT 140% OF REVENUE BUDGET THROUGH JUNE 30TH, AS WELL AS FIRE SERVICES, IS AT 246% OF BUDGET THERE. THAT'S OFFSET BY LOWER

[00:25:02]

AND THEN WE ACTUALLY HAD A CORRECTION FROM A PRIOR YEAR THAT WAS POSTED IN THIS YEAR.

THAT'S OFFSET BY LOWER THAN ANTICIPATED COLLECTIONS FOR CABLE TV FRANCHISE FEES. I WOULD ASSUME THAT PEOPLE ARE CONTINUING TO SWITCH OVER TO STREAMING SERVICES AND THINGS LIKE THAT. SO THE CABLE TV FRANCHISE COLLECTIONS ARE LOWER THAN ANTICIPATED. THE INSPECTIONS ON THE EXPENSE SIDE. AND AGAIN, THESE ARE EXPENSES INCLUDING ENCUMBRANCES. BUT AS WE'VE GONE THROUGH JUNE, JUNE 30TH, WE ONLY HAVE THREE MORE MONTHS LEFT OF THE FISCAL YEAR.

SO OUR ENCUMBRANCES ARE LESS THAN THEY WERE AT THE BEGINNING OF THE FISCAL YEAR. BUT WHEN WE DRILL INTO SOME OF THESE ACCOUNTS, A COUPLE I WANTED TO HIGHLIGHT. SO THE SPECIAL SERVICES ACCOUNT FOR INSPECTIONS. THAT'S YOUR CONTRACT EXPENSES FOR INSPECTIONS THAT SPENT OR ENCUMBERED $147,000 DUE TO THIRD PARTY INSPECTIONS. OUR CONTRACT ACCOUNT FOR OUR PAYMENTS TO THE MCLENNAN CENTRAL APPRAISAL DISTRICT FOR OUR APPRAISALS.

THAT'S OVER BUDGET BY $293,000. THAT'S A SET AMOUNT THAT WE PAY PER YEAR BASED ON THE NUMBER OF THE DISTRIBUTION THAT WE RECEIVE OF THEIR BUDGET FROM THE APPRAISAL DISTRICT, SO THAT ONE IS HIGHER THAN BUDGET. WHEN WE DRILL INTO PROPERTY REVENUES. COUPLE OF COLUMNS I WANT TO HIGHLIGHT ON HERE THE FY 25 BUDGETED AMOUNT AT THE BOTTOM IS $90.5 MILLION. OUR ACTUAL COLLECTIONS FOR PROPERTY TAX YEAR TO DATE ARE. $89,267,713. THIS IS OFF PACE, AND IT'S ONE THING THAT WE'RE LOOKING AT ON A MONTHLY BASIS. AND SO YOU CAN SEE HOW WE'RE OFF PACE. THE DIFFERENCE BETWEEN OUR MONTHLY BUDGETED COLLECTIONS AND ACTUAL BUDGETED COLLECTIONS BY $515,000. I DON'T KNOW IF WE'RE GOING TO CATCH UP BACK TO THIS NUMBER, BUT WE ARE GOING TO LOOK AT IT. BUT WE ARE RUNNING OUT OF MONTHS IN THE FISCAL YEAR. SO IF WE DO A FLAT LINE PROJECTION MEETING THE BUDGET FOR JULY, AUGUST AND SEPTEMBER, WE'RE GOING TO PROJECT OUT TO $89,984,523. SO WE'RE GOING TO BE WATCHING THIS ONE MONTHLY. BUT FOR RIGHT NOW, IT LOOKS LIKE IT'S TRENDING LOWER THAN BUDGET. WHEN WE HAD A QUICK QUESTION ON THIS, BEFORE WE GET ON TO THE OTHER, ON GENERAL, YES. AND SPECIFICALLY BACK ONE WHERE WE GO TO THAT 2020. NO, GO BACK TO THE OTHER ONE. NO, THE FORWARD ON THE ON THE. YEAH. TAX LAYOUT. YES SIR. LOOK AT THAT MIDDLE COLUMN 2025 BUDGETED WHERE YOU'VE GOT THE TOTAL TO 90,500. YES. I WAS TRYING TO GET THE ABERRATION BACK ON. NOW FLIP TO FIRST OF ALL COUNT UP THE YEAR TO DATE THERE IS ROUGHLY 80 SOME MILLION IN 2025 BUDGETED. AND GO BACK TO THE FIRST PAGE OF THE BUDGET. YES, SIR. YEAH. RIGHT.

THE SECOND. YEAH. WHERE YOU GO TO PROPERTY TAXES, MONTHLY BUDGET 2025, YEAR TO DATE. WE'RE ONLY SHOWING 68.8, WHICH SEEMS LOW 68.8. YEAH. ON THE MONTHLY BUDGET. YES, SIR. SO 68,797,500 IS SIMPLY JUST 91,000,007 30 DIVIDED BY NINE, WHICH IS THE NINE MONTHS IN THE FISCAL YEAR,

[00:30:02]

AND SO TO YOUR POINT IT'S NOT WEIGHTED ON THAT PREVIOUS SLIDE. BUT THAT'S SOMETHING THAT WE CAN TAKE A LOOK AT FOR SURE. GOT IT. JUST GOING BACK TO THE OTHER ONE. GREAT LAYOUT I LOVE THE COLOR CODING. YOU CAN SEE WHAT OUR ACTUAL IS. YOU CAN SEE WHAT LAST YEAR'S WAS, WHAT OUR BUDGET IS. AND TO ME EVERYTHING IS HERE. IT LOOKS GREAT. ABSOLUTELY. CONGRATULATIONS ON PUTTING A GREAT REPORT TOGETHER. AND ALSO CONGRATS ON THE 30 DAY CLOSE. DID WE SAY OR WAS IT SHORTER THAN THAT? 30? I MEAN THERE'S A LOT OF MOVING PARTS TO THIS. I KNOW EVERYBODY IN THIS ROOM UNDERSTANDS THAT THEY'RE A LITTLE THEY'RE COST CENTER KIND OF HAS TO GET RECONCILED AND ROLLED UP INTO ALL THESE OTHER MOVING PARTS. SO GETTING A 30 DAY CLOSE AND GETTING IT TO COUNCIL THIS QUICK, I THINK IS A RECORD AS AS CITY MANAGER FOR MENTIONED THE ONE THING THAT TWO THINGS I WANT TO SAY ON THE GENERAL, ONE OF THEM IS ALWAYS THE NUMBER THAT WE ESTIMATE AS CLOSELY AS WE CAN EVERY YEAR IS THE SALES TAXES. AND IT LOOKS LIKE YEAR TO DATE WE WERE ESTIMATING THAT WAS IS THIS ONE SIMPLY DIVIDED BY 12 ALSO? OR DO WE DO A CURVE ON THIS ONE. THAT ONE IS SIMPLY DIVIDED BY 12 MULTIPLIED BY NINE TO GET THE 42,000,370 OKAY, FOR THE NEXT YEAR'S BUDGET, LET'S PUT A LITTLE MORE SCIENCE INTO IT AS TO WHEN THE SEASONALITY SO WE CAN GET A BETTER FEEL FOR IF WE'RE KEEPING UP WITH LAST YEAR. ABSOLUTELY. IN MY MIND, I WAS THINKING WE WERE AT 42, WE BUDGETED 42 AND WE'RE ACTUALLY AT 45, WHICH IS AHEAD. BUT IF IT'S A SIMPLE TIMES 12, MAYBE IT'S NOT AS MEANINGFUL AS I THOUGHT. THE OTHER THING I WANT TO POINT OUT IS, AND THIS GOES ACROSS THE BOARD ON ALL OF THE, ALL OF THE COST CENTERS OR PROFIT CENTERS. WE'RE DOING A GREAT JOB ON MANAGING THE COST OF OUR SALARIES AND WAGES AND BENEFITS. WE BUDGET TO A CERTAIN AMOUNT, I THINK IN EVERY COST CENTER. YOU'RE GOING TO SEE SOME SAVINGS THERE. AND I KNOW THAT WE LOOKED TO THIS AS WE SET NEXT YEAR'S BUDGET AS WELL. BUT I JUST WANT TO COMMEND ALL THE COST CENTER MANAGERS AND THE MIDDLE MANAGERS MAKE THIS ALL WORK ON COST CONSCIOUSNESS AND OVERHEAD CONSCIOUSNESS AND MAKING SURE THAT WE'RE CONTROLLING EXPENSES. GREAT JOB. I'LL LET YOU PROCEED WITH THE OTHER WITH THE OTHER COST CENTERS. NOW THE OTHER FUNDS. THANK YOU. MAYOR. TURNING OVER TO OUR WATER FUND. AND I DO WANT TO MENTION GOING BACK TO SALES TAX. BLUE'S GOING TO GO A LITTLE BIT MORE INTO THE SALES TAX NUMBER WHEN WE GET INTO OUR BUDGET PRESENTATION. SO THANK YOU FOR THOSE COMMENTS. SO SWITCHING GEARS OVER TO OUR WATER FUND, WHEN WE LOOK AT CHARGES FOR SERVICES, WHICH IS OUR LARGEST REVENUE SOURCE, THOSE ARE OUR VARIOUS CHARGES FOR THE WATER SERVICE THAT WE'VE GOT TO DIFFERENT CUSTOMERS. WE'VE GOT A $67.4 MILLION BUDGET, 45.366 MILLION IN COLLECTIONS. THAT'S GOOD FOR 67% OF BUDGET, PROBABLY A LITTLE BIT LOWER THAN WE WOULD ANTICIPATE, BECAUSE ALL ALL OF THE RAIN EARLIER IN THE SUMMER. BUT AS YOU KNOW, IT'S GOTTEN HOTTER.

AND SO WE ANTICIPATE ADDITIONAL COLLECTIONS AND ADDITIONAL WATER SALES IN JULY, AUGUST AND SEPTEMBER. ALSO FURTHER DOWN IS INTEREST EARNINGS. WE'RE AT 134% OF BUDGET THERE. WE HAD A $1.2 MILLION BUDGET, $1.6 MILLION IN INTEREST. TOTAL REVENUE FOR THE WATER FUND IS AT 62% OF BUDGET.

AGAIN, LOOKING DOWN AT YOUR EXPENSE CATEGORIES, THE SALARIES AND WAGES AND EMPLOYEE BENEFITS ARE AT 69% AND 68%, RESPECTIVELY. MOST OF THAT'S DUE TO TURNOVER WITHIN THE FUND, AND THAT'S TRACKING LOWER THAN THE 75% OF BUDGET WE'VE GOT. PURCHASE PROPERTY SERVICES CATEGORY IS AT 117%, AND THAT'S OFFSET BY A LITTLE BIT LOWER EXPENSES IN THE OTHER PURCHASE SERVICES CATEGORY. THE EXPENSE EXPENSES FOR THE WATER FUND ARE AT 57,182,000. THAT'S GOOD FOR 70% SPENT OR ENCUMBERED FOR THE YEAR. DRILLING IN A LITTLE BIT MORE ON THE REVENUES AND THE EXPENSES. OUR LARGEST ACCOUNT FOR REVENUES ARE METERED WATER SALES. THAT'S $39.4 MILLION, COLLECTED 64.4% OF BUDGET. I LOOKED AT THE PROJECTION OF THIS EARLIER TODAY, AND I'M PROJECTING SLIGHTLY UNDER REVENUES IN THIS PARTICULAR ACCOUNT BY ABOUT $250,000. THAT

[00:35:06]

THE WATER TREATMENT SPECIAL SERVICES ACCOUNT THAT'S FOR OUR CONTRACT SERVICES, HAS SPENT OR ENCUMBERED 1.3 MILLION OR 100 AND 11.8 OR 111.8%. WATER TREATMENT FOR SUPPLIES AND CHEMICALS IS AT 3.9 MILLION, OR 111.8%. AND WE DO HAVE SUPPLIES AND CHEMICAL ACCOUNTS IN SEVERAL FUNDS GOING OVER BUDGET. YOU'RE GOING TO HEAR THAT COMMENT A COUPLE OF MORE TIMES IN THE PRESENTATION. ARE THOSE OVER BUDGET THROUGH NINE MONTHS OR OVER BUDGET THROUGH ON AN ANNUAL BASIS, OVER OVER BUDGET FOR THE YEAR. AND THAT DOES INCLUDE THOSE ENCUMBRANCES. SO THERE MIGHT BE SOME MONEY ENCUMBERED IN THOSE ACCOUNTS THAT ARE ALSO CAUSING IT TO GO OVER BUDGET.

THOSE OVERAGES ARE OFFSET GENERALLY BY SAVINGS IN OTHER ACCOUNTS AS THE DEPARTMENTS MANAGE THEIR BUDGETS. OUR WASTEWATER FUND CHARGES FOR SERVICES. THIS INCLUDES THE WASTEWATER FUND PLUS THE W MARS FUND, AND OUR CHARGES FOR SERVICES ARE AT 76% OF BUDGET, $52.2 MILLION COLLECTIONS YEAR TO DATE. OUR INTEREST EARNINGS IN THIS FUND ARE DOING WELL.

ALSO, AT 1.349 MILLION, OR 124% OF BUDGET, TOTAL REVENUE IS AT 69% OF BUDGET. WHEN WE LOOK AT THE EXPENSE CATEGORIES, OUR SALARIES AND WAGES ACCOUNTS ARE AT 67 AND 65%, RESPECTIVELY.

CAPITAL EXPENDITURES ARE LAGGING A LITTLE BIT BEHIND. THOSE ARE AT 55% OF BUDGET AND THEN TRANSFERS OUT ARE AT 56% OF BUDGET. AGAIN, LIKE I MENTIONED, THE TRANSFERS OUT TO OUR CAPITAL PROJECT CASH CIP FUNDS TOTAL EXPENSES ARE AT 69% OF BUDGET FOR THE WASTEWATER AND MARS FUND. THE MARS CAPACITY CHARGE. JUST DIGGING INTO THESE NUMBERS A LITTLE BIT MORE IS AT 4 MILLION OR 73.5% OF BUDGET. THAT'S RIGHT. ON ON TRACK. WE HAVE A TRANSFER IN FROM THE TIF FOR FUND THAT HAS NOT BEEN COMPLETED. SO THAT'S DRAWING REVENUES DOWN A LITTLE BIT OR MAKING REVENUES LAG. SO THAT TRANSFER HAS NOT BEEN COMPLETED. THAT'S THE TIF FOR TRANSFER THAT'S USED TO PAY SOME WASTEWATER DEBT AND OFFSET THOSE EXPENSES. AND THEN THE W MARS CHARGES FOR SERVICES FOR OUTSIDE CUSTOMERS ARE AT 845,000 OR 105.7% EXPENSES, INCLUDING ENCUMBRANCES FOR THE CENTRAL PLANT. AGAIN, THAT'S CHEMICAL SUPPLIES ARE EXCEEDING BUDGET THERE. AND THEN OUR WASTEWATER COLLECTION FOR THE ROAD AND STREETS MAINTENANCE ACCOUNT THAT HAS SPENT OR ENCUMBERED 1.5 MILLION OR 109.4% OF BUDGET. AND YOU MIGHT ASK, WHY DO WE HAVE STREET AND ROAD EXPENSE IN THE WASTEWATER FUND? IF THEY DO A REPAIR LIKE A LINE REPAIR LIKE YOU SEE IN FRONT OF YOU, WHEN THEY GO BACK TO REPAIR THE STREET, THEY CHARGE THOSE SUPPLIES TO REPAIR THAT STREET FOR A LINE BREAK. BACK TO THAT ACCOUNT, OUR SOLID WASTE FUND IS AT 58% OF TOTAL BUDGETED REVENUES. DIGGING INTO THE CHARGES FOR SERVICES, THEY'RE AT 66%. THE LARGEST CHARGES FOR SERVICES ARE FOR RESIDENTIAL SERVICE AND COMMERCIAL SERVICES FOR SOLID WASTE COLLECTIONS. THOSE ARE DOING WELL AT 76 AND 80%, RESPECTIVELY. THOSE ARE OUR TWO LARGEST ACCOUNTS THERE IN THE SOLID WASTE FUND. THOSE ARE OFFSET BY TRANSFER STATION REVENUES THAT WE HAD ANTICIPATED RECEIVING THIS FISCAL YEAR THAT WE'RE NOT GOING TO RECEIVE UNTIL NEXT FISCAL YEAR BECAUSE OF THE TRANSFER STATION OPENING IN OCTOBER. SO THAT HAS PUSHED THOSE REVENUES BACK. LANDFILL REVENUES ARE ALSO LAGGING A LITTLE BIT AS WELL. LOOKING AT EXPENSES, THE SALARIES AND WAGES AND EMPLOYEE BENEFITS BECAUSE OF TURNOVER, THOSE ARE LOWER THAN BUDGETED AMOUNTS THERE AT 58% AND 64% RESPECTIVELY. THAT'S OFFSET BY EXPENSES AND

[00:40:08]

SO THAT'S GOOD I THINK I REMEMBER NANCY LACEY PROMISES PROMISING US IF WE GOT PENGUINS,

[00:45:06]

IMAGINE THAT. THANKS, NANCY. IT'S ALL COMING TRUE. AND SPECIFICALLY DRILLING INTO THE ADMISSIONS ACCOUNT, IT'S AT 2.4 MILLION OR 84.2% OF BUDGET. SO YOU CAN SEE HOW HIGHER TRENDED THAT IS COMPARED TO BUDGET. ON THE EXPENSE SIDE, THE UTILITY SERVICES ACCOUNT FOR WATER HAS SPENT OR ENCUMBERED 143,000 OR 27.5% OF BUDGET. SO THAT'S LOW COMPARED TO THE BUDGETED AMOUNT.

LOOKS LIKE THE BUDGET WAS SET A BIT HIGH BASED ON PRIOR YEAR'S SPENDING, BUT WE'LL TAKE THAT SAVINGS IN THAT ACCOUNT. THE ZOO SPECIAL SERVICES ACCOUNT IS SPENT OR ENCUMBERED 382,000 OR 141.9. SO AGAIN, THE ZOO IS MANAGING THOSE EXPENSES WITHIN WITHIN THEIR BUDGET. WHEN WE LOOK AT THE COTTONWOOD CREEK GOLF COURSE FUND, OUR CHARGES FOR SERVICES OF THE DIFFERENT CHARGES THAT THEY'VE GOT OUT THERE IN TERMS OF GREEN FEES AND CART FEES, ETC, THAT'S AT 78% OF BUDGET FOR REVENUES. AND OUR INTEREST EARNINGS FOR THE GOLF COURSE FUND ARE AT $73,000, OR 184% OF BUDGET. AND NET MERCHANDISE SALES FOR THE GOLF COURSE ARE AT 70% OF BUDGET THERE. SO TOTAL REVENUES FOR THE GOLF COURSE FUND ARE AT 75% OF BUDGET. WHEN YOU LOOK AT THE SALARIES AND EMPLOYEE SALARIES AND WAGES AND EMPLOYEE BENEFITS, THOSE ARE AT 73% AND 75%, RESPECTIVELY. MAINTENANCE HAS SPENT OR ENCUMBERED 102%. AND YOU CAN SEE THAT IT'S BEING OFFSET BY THE LOWER EXPENSES AND ENCUMBRANCES IN THE ACCOUNT CATEGORY FOR, LIKE OTHER OPERATING EXPENSES AND SUPPLIES AS WELL, CAPITAL EXPENDITURES ARE ONLY $48,000 BUDGET, BUT THEY HAVE SPENT OR ENCUMBERED 100% OF THAT. TOTAL EXPENSES ARE AT 78% OF BUDGET. WHEN YOU LOOK AT THE NEXT SLIDE, OUR GREEN FEES AND OUR CART FEES ARE AT 80.1% OF BUDGET, AND THE GOLF COURSE CART FEES ARE AT 71.4% OF BUDGET. SO I WANTED TO ZONE IN ON A COUPLE OF THE MAJOR REVENUE SOURCES THERE FOR THE GOLF COURSE AND THEN THE EXPENSES, INCLUDING ENCUMBRANCES FOR CUSTOMER SERVICE, SPECIAL SERVICES, CONTRACT ACCOUNT HAS SPENT OR ENCUMBERED $43,000 OR 93.2% OF BUDGET. THAT'S FOR THINGS LIKE CUSTODIAL CHARGES AND PEST CONTROL. AND AGAIN, OUR MAINTENANCE AND CHEMICAL SUPPLIES ACCOUNT IS 48,000 OR 85.5% SPENT OR ENCUMBERED A BUDGET. BASED ON WHAT I HAD SAID EARLIER ABOUT SUPPLIES, EXCUSE ME? CHEMICALS AND THINGS COSTING MORE THERE. WHEN WE LOOK AT OUR AIRPORT FUND, OUR CHARGES FOR SERVICES ARE AT 80% OF BUDGET, $742,000. THERE'S MULTIPLE REVENUE ACCOUNTS HERE HANGAR FEES, FLOWAGE FEES, ARRIVAL FEES. BUT THOSE ARE AT 80% OF BUDGET, A LITTLE BIT HIGHER THAN THAT 75% BENCHMARK THROUGH THE YEAR. OUR OTHER REVENUES, WHICH ARE PRIMARILY CONCESSIONS, ARE AT 74% OF BUDGET. AND WHEN YOU LOOK DOWN AT THE EXPENSES, WE'VE GOT LOWER THAN ANTICIPATED EXPENSES FOR SALARIES AND WAGES AND EMPLOYEE BENEFITS. THAT'S OFFSET BY HIGHER EXPENSES, 157% FOR PROFESSIONAL AND TECHNICAL SERVICES. THAT'S FOR THE CONTRACT FOR THE INTERIM AIRPORT MANAGER EXPENSES, AS WELL AS THE CONTRACT FOR THE EXECUTIVE RECRUITMENT THERE. AND SO THAT'S OFFSET BY THE SAVINGS IN SALARIES AND BENEFITS. CAPITAL EXPENDITURES ARE $63,525. THERE'S NO BUDGET THERE, BUT WE ARE DOING A BUDGET AMENDMENT LATER ON IN THIS COUNCIL MEETING. SO A LOT OF THESE ITEMS WILL BE CLEANED UP HERE. TOTAL EXPENSES SPENT OR ENCUMBERED ARE 90% OF BUDGET. AND DRILLING A LITTLE BIT MORE ON THESE REVENUES FOR THE AIRPORT ARRIVAL AREA REVENUE. THAT'S AT $99,000 OR 114.9% OF BUDGET. SO THAT'S GOOD NEWS THERE. ABOVE BUDGET AIRPORT PASSENGER FACILITY FEES ARE AT 0% THROUGH JUNE. BUT I DID LOOK AT THESE NUMBERS TODAY. WE ARE CAUGHT UP IN JULY. THAT'S A QUARTERLY PAYMENT. AND SO THOSE ARE ARE CAUGHT UP TO $159,000. AND THOSE ARE GOING TO BE POSTED IN JULY. SO THEY'LL BE REFLECTED IN THE NEXT REPORT THAT YOU SEE. AND AIRPORT LANDING FEES ARE AT 179.3% OF BUDGET. AND AGAIN, I MENTIONED THE EXPENSES, INCLUDING ENCUMBRANCES FOR THE AIRPORT, SPECIAL SERVICES FOR THE AIRPORT MANAGER SEARCH. THAT'S AT 169.4% IN THAT BUDGET ACCOUNT. AND AGAIN, THAT INCLUDES A LOT OF THEIR CONTRACT SERVICES, MONEY, AIRPORT MACHINERY AND EQUIPMENT, AGAIN, HAS SPENT OR ENCUMBERED $63,000 OR 100% OF BUDGET FOR

[00:50:07]

MAINTENANCE AND SUPPLIES ARE LAGGING A LITTLE BIT BEHIND AT 72% AND 61%, RESPECTIVELY. SO THE TOTAL BUDGET IS ON TRACK AT 74%, OR 17,000,003 $231,028 SPENT OR ENCUMBERED THROUGH JUNE 30TH. DRILLING IN A LITTLE BIT MORE ON THESE EXPENSES, THE STREET MAINTENANCE, CONSTRUCTION EXPENSES, THEY'RE AT 22% OR $194,000. IN THAT ACCOUNT, THE STREET, ROADWAY AND MAINTENANCE ACCOUNT IS SPENT OR ENCUMBERED 67.4% OR $412,000. THE STREET MAINTENANCE SPECIAL SERVICES ACCOUNT HAS SPENT OR ENCUMBERED 592,000, OR 81.6% OF BUDGET. SO BEFORE I PIVOT OVER TO OUR QUARTERLY INVESTMENT REPORT, I'LL STOP THERE AND SEE IF YOU HAVE ANY QUESTIONS ON ANY OF THE NUMBERS THAT I REVIEWED PREVIOUSLY. AND IF YOU DON'T, THEN I'LL JUST GIVE YOU A HIGH LEVEL OVERVIEW OF OUR QUARTERLY INVESTMENT REPORT. I HAD A QUICK QUESTION. EXCUSE ME A QUICK COMMENT. GOING BACK TO THE VERY FIRST SLIDE, CAN YOU REMIND ME THE CONTRACTS WITH OTHERS? WHAT SORTS OF THINGS GO INTO THAT. YES, SIR. SO OUR CONTRACTS WITH OTHERS IS GOING TO INCLUDE THINGS LIKE PAYMENTS TO THE APPRAISAL DISTRICT. THEY'RE GOING TO INCLUDE AND, YOU KNOW, THE APPRAISAL DISTRICTS BASICALLY. I MEAN, IT'S A SET CONTRACT BECAUSE THEY'RE THE ONLY APPRAISAL DISTRICT THAT'S GOING TO BE HANDLING THAT FOR US. CONTRACTS WITH OTHERS WOULD ALSO INCLUDE THINGS LIKE OUR AUDIT SERVICES CONTRACT AND PAYMENTS TO OTHER COMPANIES OR EVEN OTHER ENTITIES THAT WE HAVE A CONTRACT WITH TO PROVIDE SERVICES. OKAY. THANKS. AND THEN I'LL JUST I WOULD ECHO THE MAYOR'S SENTIMENTS EARLIER THAT BY AND LARGE, YOUR EXPENSES ARE RIGHT ON TRACK, WHICH IS TESTAMENT TO GOOD BUDGETING AND GOOD MANAGEMENT. YES, ABSOLUTELY. AND THAT'S A AND THAT'S A TESTAMENT TO OUR, OUR DEPARTMENT DIRECTORS WHO ARE LOOKING AT THESE NUMBERS AND MANAGING IT, AS WELL AS OUR BUDGET ANALYSTS AS WELL. OKAY.

SO OUR QUARTERLY INVESTMENT REPORT JUST WANTED TO GO OVER THIS ON A HIGH LEVEL SUMMARY VIEW. SO AS YOU CAN SEE OUR PAR VALUE I'M AT THE TOP LEFT OF THIS SLIDE. OUR PAR VALUE. MARCH 31ST IT WAS $889.656 MILLION. IT'S GROWN TO $973.351 MILLION. AND THE PRIMARY DRIVER FOR THAT INCREASE ARE THE 2025 CERTIFICATES OF OBLIGATION THAT WE RECEIVED BACK IN MAY, I BELIEVE. AND THEN WE TURNED AROUND AND WE INVESTED THAT MONEY BASED ON THE SPEND OF THOSE CIP PROJECTS. SO THAT'S WHY YOU'VE SEEN THE TOTAL GROWTH OF OUR INVESTMENT PORTFOLIO GROW

[00:55:03]

THERE ARE SOME RESERVES AND THEN WE HAVE PRETTY STRONG RESERVES. I'M SURE WE'LL GET INTO THAT HERE IN OUR IN OUR NEW BUDGET DISCUSSION, BUT GREAT REPORT OVERALL. THANK YOU MAYOR.

BRADLEY, DO YOU WANT ME TO YOU JUST ROAMING AROUND THE BUILDING HERE OR WHAT. YEAH I THOUGHT I WOULD. SIT WITH BLUE AND COLIN ON THIS NEXT WORK SESSION AND THEY'LL COVER THE MAJORITY OF THE PRESENTATION OBVIOUSLY. BUT I WANT TO PROVIDE A FEW INTRODUCTORY COMMENTS ON THIS NEXT WORK SESSION, WHICH IS OUR PRESENTATION OF THE FY 26 PROPOSED BUDGET. THE CHARTER REQUIRES A FEW THINGS OUT OF THE CITY MANAGER, BUT THE PRIMARY ONE I LOOK TO EVERY YEAR ON THE CALENDAR IS THE FILING OF A BUDGET. AND THIS PRESENTATION REALLY SYMBOLIZES THE PASSING OF THE OF THE TORCH, SO TO SPEAK, FROM THE MANAGER'S PROPOSED BUDGET INTO THE COUNCIL'S HANDS, WHERE YOU WANT TO GO WITH THE BUDGET LEADING INTO ADOPTION. AND SO I WANTED TO KIND OF GIVE YOU THE CONTEXT OF WHERE WHERE WE STARTED THIS BUDGET SEASON, AND BLUE WILL BE ADDING ADDITIONAL DETAILS TO THIS, BUT ACTUALLY, IT WAS IN THIS ROOM, I GATHERED ABOUT 100 OF OUR EMPLOYEES, DEPARTMENT HEADS, OUR BUDGET ANALYSTS, ANYBODY INVOLVED IN EXPENDITURES AND REVENUES IN THE CITY. AND I SAT WITH THEM FOR ABOUT A YEAR, OR IT FELT LIKE A YEAR. PROBABLY ENJOYED THAT. I SAT WITH THEM FOR ABOUT AN HOUR WITH A WHITEBOARD AND KIND OF DOCUMENTED IN MY MIND WHAT THE CHALLENGES OF THIS BUDGET SEASON WERE GOING TO BE, AND TALKED ABOUT INFLATION, TALKED ABOUT TARIFFS, TALKED ABOUT STATE AND FEDERAL DOLLARS THAT WERE EVAPORATING OUT OF OUR BUDGET, TALKED ABOUT SLOWING REVENUE GROWTH, TALKED ABOUT EXPENDITURES THAT WERE INCREASING BEYOND OUR MEANS, AND PAINTED A PICTURE OF A BUDGET SEASON THAT WAS GOING TO BE DIFFICULT. AND WHAT YOU'LL SEE IN THE PROPOSED BUDGET TODAY IS THAT THAT TEAM, I PUT A CALL OUT TO THEM. I SAID, I WANT TO PRODUCE $24 MILLION OF SAVINGS ACROSS ALL FUNDS, ABOUT HALF OF IT. I WANTED IT IN THE GENERAL FUND AND THE OTHER HALF AMONGST THE OTHER FUNDS. AND BLUE AND COLIN WILL TELL YOU IN A MINUTE. WE'RE NORTH OF $30 MILLION THAT THE DEPARTMENTS AND THE BUDGET TEAM PRODUCED IN SAVINGS, MOST OF THAT BEING IN RECURRING EXPENDITURES, WHICH MEANS THEY WILL BE BENEFICIAL TO US IN FUTURE YEARS. BECAUSE ONE OF THE MESSAGES I THINK IS IMPORTANT FOR EVERYBODY TO RECOGNIZE IS THIS IS NOT A ONE YEAR DILEMMA.

IT'S PROBABLY GOT A COUPLE MORE YEARS TO IT. THE PRESSURES THAT ARE ON OUR BUDGET ARE NOT GOING

[01:00:03]

BALANCING OUR FINANCIAL POSITION ALONG WITH THE GOALS, THE OBJECTIVES AND DIRECTIVES THAT THIS COUNCIL HAS GIVEN US. YOU KNOW, IT'S STRUCTURALLY BALANCE. BUDGET COMPLIES WITH ALL STATE LAWS, ALL CITY CHARTER. LAWS THAT WE HAVE TO DO ORDINANCES, RESOLUTIONS, EVERYTHING THAT WE HAVE TO DO ON THAT. I WAS LOST FOR WORDS THERE FOR A SECOND, BUT GENERALLY IT'S PRETTY LEGAL IS WHAT YOU'RE SAYING. IT IS PRETTY LEGAL. PRETTY LEGIT. IT'S PRETTY LEGIT. SO THIS BUDGET REALLY REPRESENTS WHAT WE BELIEVE ARE THE NEEDS OF NOT ONLY THE CITY, BUT THIS ORGANIZATION, ULTIMATELY COUNCIL, THIS IS YOUR BUDGET. AS CITY MANAGER, FORD SAID. THIS IS YOURS. WE ARE GOING TO, AT THIS TIME, TRANSITION THIS OVER TO YOU AS WE PRESENT. SO IF THERE ARE ANY QUESTIONS, COMMENTS, ANY CHANGES THAT YOU WOULD LIKE TO SEE, ANYTHING THAT YOU WOULD LIKE US TO DIVE DEEPER INTO, PLEASE LET US KNOW. AS WE GO THROUGH THIS. THERE WILL BE SOME ACTIONS RELATED TO THIS BUDGET ON TODAY'S AGENDA. FIRST, YOU'RE GOING TO HAVE A RESOLUTION 2020 5-508. THAT'S GOING TO SET THE PUBLIC HEARING FOR OUR BUDGET FOR SEPTEMBER 2ND. SO WE DO HAVE TO HAVE THAT THAT PUBLIC HEARING BEFORE WE ADOPT A BUDGET RESOLUTION. 2020 5-509 SETS THE MAXIMUM TAX RATE. THIS ALLOWS US TO START THE LEGAL PROCESS OF THE ADOPTION PROCESS GOING FORWARD, DOING ALL OF THE REQUIRED PUBLICATIONS AND NOTIFICATIONS THAT WE HAVE TO DO. ALSO IN THAT RESOLUTION IS SETTING THE PUBLIC HEARING AGAIN FOR SEPTEMBER 2ND HERE IN THE COUNCIL CHAMBERS FOR THE TAX RATE. WE DO HAVE TO HAVE A SEPARATE PUBLIC HEARING FOR BOTH THE BUDGET AND THE TAX RATE WILL DO BOTH OF THOSE ON SEPTEMBER 2ND, AND THEN WE'LL COME BACK ON SEPTEMBER 9TH FOR A SPECIAL COUNCIL MEETING FOR THE SECOND READING OF THAT ORDINANCE, SETTING THE TAX RATE. ULTIMATELY, AT THAT POINT, YOUR BUDGET WILL BE ADOPTED. ALSO, ORDINANCE 2020 5-550 IS PART OF THE CHARTER REQUIREMENTS. THIS IS THE FIRST READING TODAY TO SET THE DEPARTMENTS FOR THIS FOR THIS BUDGET CYCLE. SO COUNCIL. LET'S LET'S DIVE RIGHT INTO IT.

OVERALL AGENDA. TODAY I'M GOING TO GIVE YOU A LITTLE BIT OF WHERE WE ARE. WHAT KIND OF DROVE US INTO THIS DIRECTION. CITY MANAGER FORD HAS ALREADY GONE INTO THIS A LITTLE BIT. BUT THE BUDGET DEVELOPMENT ITSELF, INCLUDING ALL THE FUND SUMMARIES, MODELS AND RATE PLANS WILL GO INTO CIP. JUST AN OVERVIEW OF THAT. THE FUNDING PACKAGES THAT WERE APPROVED, THE REMAINING CALENDAR. AND THEN WE'LL WE WILL TAKE ANY QUESTIONS THAT YOU HAVE. BUT FIRST AND FOREMOST JUST A LITTLE BIT OF AN EXECUTIVE OVERVIEW ON ON THIS BUDGET. WHAT WE'RE LOOKING AT OVERALL THE KEY HIGHLIGHTS THAT WE'VE WE'VE GIVEN YOU, WE'VE DONE A LOT OF GROUNDWORK BEFORE THIS MEETING, GIVING YOU A LOT OF THE BACKSTORY, A LOT OF THE FISCAL YEAR 25 AND REVIEW. COLIN JUST DID A GREAT JOB GOING OVER OUR CURRENT FINANCIAL POSITION. SO WE WILL WE WILL LOOK REALLY AT FISCAL YEAR 26 AND GOING FORWARD IN THIS PRESENTATION, THIS HALF OF THE PRESENTATION.

BUT OVERALL BUDGET $649.8 MILLION. THIS IS ONLY A $0.8 MILLION INCREASE FROM FISCAL YEAR 25, BECAUSE A LOT OF THE THINGS THAT WE HAVE DONE THROUGH THIS BUDGET CYCLE, THE WAY THAT

[01:05:05]

THAT'S ONE OF THE BIGGEST THINGS THAT WE HAVE IN OUR BUDGET THAT COULD GO UP JUST AS FAST AS IT COULD GO DOWN. SO WE WILL LOOK INTO THAT. WHAT WE'RE RECOMMENDING ON SALES TAX, PROPERTY TAX. WE'LL DIVE INTO THAT ONE AS WELL. SO REALLY WHAT WE'RE GOING TO LOOK AT ARE SOME OF THE MITIGATION STRATEGIES THAT WE HAVE TO OFFSET SOME OF THESE OPERATIONAL AND ECONOMIC RISKS THAT ARE LISTED ABOVE THAT YOU CAN READ. MAINTAINING A HEALTHY FUND BALANCE IS ALWAYS NUMBER ONE. WE'VE GOT TO MAKE SURE THAT WE HAVE THE POSITION TO ABSORB ANY ANY DOWNTURN IN THE ECONOMY THAT WE HAVE. WE'RE ALSO GOING TO BE CONSERVATIVE IN OUR REVENUE PROJECTIONS, BUT WE'RE ALSO GOING TO BE REALISTIC IN THOSE. WE DON'T WE DON'T WANT TO UNDERCUT OURSELVES TOO MUCH TO WHERE WE CAN'T PROVIDE THE SERVICES THAT WE NEED, BUT ALSO WE CAN'T BE TOO AGGRESSIVE TO BE SITTING ON THE OTHER SIDE OF THAT FENCE. THERE ARE COMPREHENSIVE EFFICIENCY INITIATIVES IN THIS BUDGET. WE'VE MENTIONED IT A COUPLE OF TIMES ALREADY. IT'S A BIG PORTION, BUT IT REALLY RESET OUR BASE FOR OUR EXPENDITURES. AND THEN THAT DELIBERATE CAPITAL PLANNING PROCESS TO MAKE SURE THAT WE'RE ATTACKING AND APPROACHING EXACTLY WHAT IS NEEDED IN THIS CITY. SO THE ENVIRONMENT THAT WE'RE IN, JUST A VERY QUICK OVERVIEW, INFLATION AND CONSUMER PRICES. INFLATION IS MODERATED SOME OVER THE LAST FEW MONTHS, BUT STILL STARTING WELL ABOVE THE 2.0% TARGET THAT THE FED HAS. HEADLINE CPI CPI IS AT 2.7% YEAR OVER YEAR AS OF JUNE. THE CORE PCE INFLATION IS STILL HOLDING AT AROUND THAT 2.9%. INFLATION IS JUST REALLY STICKY RIGHT NOW. WE EXPECT TO END THE YEAR AT 2.8 DEPENDING ON WHAT WHAT HAPPENS IN THE IN THE ECONOMY AS A WHOLE, PROJECTIONS ARE ARE WIDE. AT THIS POINT, WE'RE PROJECTING ABOUT 3.2% FOR 2026, THERE ARE SEVERAL PROJECTIONS, PROJECTIONS THAT ARE MUCH HIGHER THAN THAT, A FEW THAT ARE A LITTLE BIT LOWER THAN THAT. SO 3.2 IS KIND OF WHERE WE SEE INFLATION HEADING FOR THE NEXT YEAR THAT WE'RE IN ON GROSS DOMESTIC PRODUCT, Q1 OF THE CALENDAR YEAR 2025 CONTRACTED BY ABOUT 0.5%. Q2 ESTIMATES FOR REAL GDP GROWTH ARE ABOUT 2.4%. REALLY, THAT'S THAT'S GOING TO BE A LOT OF IMPORTS. THERE WAS A SURGE ON IMPORTS TO TRY TO GET AHEAD OF ALL THE TARIFF

[01:10:06]

OVERALL. WHAT IS THE IMPACT ON THE AVERAGE TAXPAYER OUT THERE? YOU KNOW, WE WANT TO SHOW THIS OVERALL TAXPAYER IMPACT. SO ALL OF THIS, HOW DOES THAT AFFECT OUR RESIDENTS ON A DAILY BASIS

[01:15:03]

[01:20:05]

[01:25:06]

SO OVERALL, IF YOU'RE COMBINING THE EXISTING PROPERTIES, OUR OVERALL REVENUE FOR EXISTING PROPERTIES IS ACTUALLY GOING DOWN SLIGHTLY AND SLIGHTLY OFFSET BY THE $2.6 MILLION, WHICH MAKES UP ALMOST THE ENTIRE BIT OF THE TOTAL REVENUE THAT'S COMING IN TO THE CITY OF WACO.

THAT LEVERAGE ON THAT PAGE VIEW, THAT 4 MILLION IS JUST THE GENERAL FUND. IT DOESN'T INCLUDE ALL THE. UTILITY FUNDS, RIGHT. THE 4 MILLION FOR THE DEBT SERVICE. THAT'S JUST THE DEBT THAT IS NOT INCLUDED. THE UTILITY DEBT. RIGHT. THANKS. SO LET'S LOOK AT THE AVERAGE HOME.

THE AVERAGE HOME IN IN WACO ON THE STRAIGHT VALUATION SIZE SINGLE FAMILY AVERAGE TAXABLE VALUE INCREASED FROM 225,000 UP TO 235,000. THAT'S A 4.3% INCREASE. SO FROM FISCAL YEAR 25 TO FISCAL YEAR 26, YOU SEE THAT TOTAL TOTAL CHANGE IN THE PROPERTY TAX BILL IS $62.08 PER YEAR. THAT IS THE APPRAISAL IMPACT. SINCE WE DO NOT HAVE A TAX RATE CHANGE IMPLEMENTED FOR THIS YEAR OR PROGRAMED IN FOR THIS YEAR. WE HAVE A TAX RATE OVERVIEW. AGAIN, YOU SEE, WACO HAS MAINTAINED THIS 75.5 CENTS FOR THE LAST TWO YEARS. AND WHAT WE'RE WHAT WE ARE RECOMMENDING FOR FISCAL YEAR 26, THAT IS DOWN SLIGHTLY FROM THE FROM THE YEAR PRIOR AT $0.76. AND THEN YOU CAN SEE THE PRIOR YEARS OUT TO 2017. SO AGAIN MODERATE DECREASES OVER THE LAST TEN YEARS, THE AND THE INS SPLITS REALLY GOING FROM THAT 8515 DOWN TO A 7723 RATIO. MAYOR, I KNOW WE'VE TALKED ABOUT THIS COUNCIL OVERALL WHERE WACO WAS IN FISCAL YEAR 25 IS ON THAT LEFT SIDE, 80% GOING TO O&M, ABOUT THAT, 20% GOING TO DEBT. HOW DOES THAT COMPARE TO OUR COMPARABLE CITIES? YOU KNOW, IF YOU LOOK AT THE AVERAGE WITHOUT WACO, THE AVERAGE WAS ABOUT 65%, NO, 35% DEBT. THE MEDIAN TRAINING ALONG THAT SAME LINES, WE PUT IN WACO FISCAL YEAR 26, WHERE WE ARE BECAUSE WE ARE INCREASING OUR DEBT. THE INS RATE, EVEN EVEN WITH WHAT WE ARE PROGRAMING IN FOR FISCAL YEAR 26, WE ARE STILL WELL ABOVE THE AVERAGE IN THE MEDIAN ON OUR RATE. SO INSTEAD OF 65, 62.2, WE WILL BE AT THAT 77.4%. AND ON THE INS RATE 22.6, AS OPPOSED TO 35 TO 37.8% ON THE COMPARABLE CITIES. THAT'S A GREAT SLIDE. I KNOW IT'S KIND OF A NEW ONE THAT WE'VE LOOKED AT, BUT FANTASTIC MOVING INTO TO SALES TAX. OVERALL SALES TAX HAS BEEN SURPRISINGLY GREAT THIS YEAR.

WE'VE BEEN WE'VE BEEN SURPRISED FOR SEVERAL SEVERAL MONTHS IN A ROW. SO RIGHT NOW ON THE CURRENT MONTH THAT WE HAVE THE PERCENT OF PRIOR YEAR ACTUALS IS UP ABOUT 13.5%, 9.4% ON THE YEAR TO DATE, FISCAL YEAR TO DATE BUDGET. SO EXCEEDING EXPECTATIONS THAT THAT CONTINUES TO RISE. OVERALL COLLECTIONS. WE HAD BUDGETED AT 56.5 MILLION. OUR FORECASTED COLLECTIONS ARE COMING IN CLOSE TO THAT $60.5 MILLION MARK, ABOUT $4 MILLION OVER BUDGET, 7.1% OVER BUDGET.

THIS IS GREAT NEWS FOR US. WE HAVE FISCAL YEAR 26 BUDGETED AT $60.5 MILLION. WE'RE KEEPING THAT STABLE BECAUSE WE'RE GOING TO GO INTO A LITTLE BIT OF WHY, YOU KNOW, WHAT WE WHAT WE NOTICED, LIKE I SAID, OVER THE LAST FEW YEARS OR THE LAST FEW MONTHS, IS ALMOST THOSE DOUBLE DIGIT INCREASES. WE'VE HAD SEVERAL INCREASES. WE HAVEN'T HAD A SINGLE MONTH THAT'S BEEN BELOW OUR BUDGETED NUMBER, WHICH HAS BEEN SHOCKING TO US A LITTLE BIT BECAUSE OF THE ENVIRONMENT THAT WE'RE IN. SO WE STARTED DOING A LITTLE BIT OF A DEEPER DIVE AND A LITTLE BIT DEEPER ANALYSIS ON THIS. LOOKING AT THE TEN INDUSTRIES THAT WE HAVE HERE IN WACO, A COMBINATION AG FOOD, GENERAL MANUFACTURING, MISCELLANEOUS PROFESSIONAL SERVICES, RETAIL AND WHOLESALE.

AND WHAT YOU SEE ON THE RIGHT SIDE IS WHAT I WANT TO KIND OF PAY ATTENTION TO IN THE BLUE,

[01:30:05]

SO WE KIND OF FELT LIKE WE NEED TO KNOW EXACTLY WHAT'S GOING ON. SO AGAIN WE'RE USING THE MOMENTUM AND SIGNAL. SO IT'S A IT'S A 12 OVER 36 VARIANCE TO GET YOUR MOMENTUM. AND THAT SIX MONTH MOVING AVERAGE IS YOUR SIGNAL LINE. YOU ALWAYS WANT THAT MOMENTUM LIKE WE TALKED ABOUT LAST TIME THAT MOMENTUM TO STAY ABOVE YOUR SIGNAL. AND YOU CAN SEE WE'RE TRENDING RIGHT THERE WITH OUR SIGNAL LINE THE ENTIRE TIME OVER THE LAST SEVERAL SEVERAL MONTHS. BUT THAT DECEMBER, JANUARY, FEBRUARY REALLY POPPED AND STOOD OUT TO US THAT THAT'S AN ABNORMALITY THAT WE WANTED TO LOOK FURTHER INTO AND FIGURE OUT WHAT WAS GOING ON IN OUR ECONOMY THAT COULD HAVE BEEN CAUSING THAT, THAT TYPE OF BUMP. AND AS WE LOOK THROUGH THOSE TEN SUB INDUSTRIES, I'M NOT GOING TO GO THROUGH EVERY SINGLE ONE OF THEM. BUT THIS IS THE ONE THAT REALLY STOOD OUT TO US. AND IT'S EVERYTHING RELATED TO THE CONSTRUCTION ACTIVITY THAT WE'VE SEEN HERE IN WACO. THE TREND NOT ONLY ON THE 12 AND 36 MOVING AVERAGES, BUT ALSO THE MOMENTUM AND THE SIGNAL ARE LINING UP. SO WHAT THIS IS, IS WHEN A LOT OF THESE, THESE DEVELOPMENTS START TAKING PLACE, ESPECIALLY IN THE INDUSTRIAL AND COMMERCIAL SPHERES, IS WE GET WHAT IS CALLED THE USE TAX ON ON ALL OF THE EQUIPMENT THAT THOSE COMPANIES ARE BRINGING IN AND SETTING UP INSIDE THEIR BUSINESSES. SO THE EVERYTHING THAT THEY'RE BUYING, WE GET A PORTION OF THAT AS USE TAX THAT GOES INTO THIS. SO WHAT WE'RE SAYING IS THIS IS LIKELY THE REASON THAT SEVERAL MONTHS FOR THE PAST SEVERAL MONTHS, WE'VE BEEN SEEING A GREATER THAN EXPECTED BUMP IN OUR SALES TAX. GREAT NEWS FOR US, BUT ALSO LEADS US TO BE A LITTLE BIT MORE CAUTIOUS FOR THE FUTURE. THE REASON THAT WE'RE KEEPING IT AT 60.5, WHICH IS WHERE WE EXPECT TO END THE YEAR, IS AS WE'RE LOOKING AT THOSE OTHER TOP TEN SUBCATEGORIES, THOSE ARE ALL TRENDING RIGHT ALONG WHERE WE EXPECT THEM TO. SO THERE'S NOT THEY'RE NOT SHOWING ANY WEAKNESS TO WHERE WE EXPECT THEM TO GO TO THE WAY THAT THEY'RE TRENDING. WE EXPECT THOSE TO CONTINUE ON IN THAT SAME AMOUNT, THAT SAME TREND, WHICH WOULD LEAD US TO ABOUT THAT $60.5 MILLION MARK FOR NEXT YEAR. SO, PUT SIMPLY, AND I THINK IT'S WELL POINT WELL MADE OBVIOUSLY. BUT BUT SIMPLY WE'RE NOT BETTING ON THAT TREND TO CONTINUE BECAUSE WE KNOW WE'RE IN A LITTLE BIT OF A BUBBLE FROM AN INDUSTRIAL STANDPOINT. WE'VE HAD A GREAT COUPLE OF YEARS, A COUPLE OF REALLY MAJOR PLANTS UNDER CONSTRUCTION NOW IS WHERE THAT GREEN SHOWS UP. THE IN THE SUBCATEGORIES. WE HAD RESTAURANTS LEADING THE WAY THERE BY BY A GOOD MARGIN, I'VE GOT TO SAY IS A BIT SURPRISING WHEN YOU THINK ABOUT KIND OF YOU TALKED ABOUT CONSUMER SENTIMENT AND THINGS LIKE THAT. TYPICALLY, YOU KNOW, ONE OF THE FIRST THINGS TO GO IS EXCESS SPENDING, EATING OUT AND THINGS LIKE THAT. SO I'M CURIOUS IF YOU HAVE ANY INSIGHT INTO KIND OF WHY THAT'S NUMBER ONE WITH A BULLET ON THIS. IT'S AN INTERESTING ONE. AND COUNCILMAN, IT'S ONE THAT I'VE SEEN. USUALLY. I KNOW THE SENTIMENT ANALYSIS IS OUT THERE THAT, THAT THAT'S ONE OF THE PLACES PEOPLE PULL BACK, BUT IT'S NOT ONE THAT I TYPICALLY SEE. PULL BACK FIRST. OKAY.

YEAH. IT TYPICALLY STAYS PRETTY HIGH. PEOPLE CONTINUE TO EAT OUT. THIS THIS DOES HAVE A LOT TO DO WITH NOT JUST RESTAURANTS BUT FAST CASUAL AND FAST FOOD RESTAURANTS. YEAH, YEAH. I THINK WHEN YOU THINK ABOUT IT FROM THE STANDPOINT OF, YOU KNOW, DRIVE THRUS AND THINGS LIKE THAT, WHEN WEIGHED AGAINST, YOU KNOW, THE, THE TALK OF REALLY HIGH GROCERY PRICES AND NOT TALK, MY H-E-B ORDERS ARE ARE MUCH LARGER NOW AND PRICE THAN THEY HAVE BEEN. IT'S A LOT EASIER TO JUSTIFY THE QUICK TRIP TO THE DRIVE THROUGH THAN GOING TO THE GROCERY STORE SOMETIMES. SO SIR, GREAT. THANKS FOR THAT GREAT ANALYSIS. ALL RIGHT, MAYOR, COUNCIL MOVING INTO A LITTLE BIT OF THE BUDGET DEVELOPMENT CONTINUING FORWARD. AGAIN, I'M JUST GOING TO HIGHLIGHT A LITTLE BIT ON THIS.

WE'VE TALKED ABOUT THIS IN DEPTH A COUPLE OF TIMES, BUT I THINK IT'S WORTH NOTING BECAUSE THIS

[01:35:02]

AND THAT IS THE EFFICIENCY EFFORTS THAT REALLY RESET OUR BASE SPENDING. SO, YOU KNOW, THE STRATEGIC CONTEXT. CITY MANAGER FORD OUTLINED THAT. AND WHAT OUR OBJECTIVES WERE WERE $24 MILLION IN TOTAL OPERATIONAL ENHANCEMENTS. SO 12 MILLION FROM GENERAL FUND, 12 MILLION FROM THE OTHER FUNDS. THIS WAS A CITYWIDE INITIATIVE. ALL ALL DEPARTMENTS COLLABORATED TO PROVIDE THE EFFICIENCIES THAT WE NEEDED. SO IMPLEMENTATION FRAMEWORK THAT WE LAID OUT WAS FIRST AND FOREMOST THE WORKFORCE OPTIMIZATION. LOOKING AT THE VACANT POSITIONS THAT WE HAVE, THE POSITIONS THAT WE HAD FROZEN, AND REALLY WERE WE ABLE TO GET OUR JOB DONE WITHOUT THOSE POSITIONS ACTUALLY PROGRAMED INTO OUR BUDGET. SOME OF THAT WAS, YES, SOME OF THAT WAS NO. BUT IF WE COULD ELIMINATE SOME VACANCIES, HISTORIC VACANCIES, THEN THAT IS ONE OF THE PLACES THAT WE DID LOOK TOWARDS OTHER. OTHERWISE IT WAS IT WAS YOUR EXPENDITURE MANAGEMENT. A LOT OF THESE DEPARTMENTS WENT THROUGH AND SAID, CAN CAN WE DO WHAT WE'RE DOING IN A MORE EFFICIENT AND BETTER WAY? SO THEY LOOK FOR ANY OPERATIONAL EXPENDITURES THAT THEY COULD ELIMINATE. WE LOOKED AT SOME OF OUR OUR CONTRACTS THAT WE HAVE OUT THERE, ESPECIALLY WHEN IT COMES TO IT. IT IS A HUGE EXPENSE FOR US ALL. THE SOFTWARE CONTINUES TO BE A LARGE DRIVER IN IN EVERY BUDGET OUT THERE. OUR IT DEPARTMENT WENT BACK AND LOOKED AT THOSE AND SCRUBBED TO SEE WHICH ONES WERE BEING EITHER NOT USED OR UNDERUTILIZED. THEY ALSO WENT BACK TO SOME OF THOSE AND SAID, HEY, WE NEED TO, WE NEED TO SEE IF WE CAN, WE CAN RENEGOTIATE THESE FOR BETTER PRICES. AND THEY ACHIEVED SOME RESULTS IN THAT. SO GREAT WORK BY EVERYONE WHO WAS A PART OF THAT, THAT PORTION OF THE EFFICIENCIES. SO TOTAL RESULTS ACHIEVED $32.1 MILLION IN TOTAL SAVINGS. 12.4 OF THAT WAS WAS FROM THE GENERAL FUND, WITH 11.7 OF THAT IS RECURRING 19.8 MILLION IN NON-GENERAL FUND, 15.4 MILLION OF THAT RECURRING SAVINGS. SO WE DID SET THOSE RECURRING SAVINGS THAT BASE AS A REDUCTION OF 20.7, $27.1 MILLION ANNUALLY. SO GREAT WORK BY THE DEPARTMENTS. THESE ARE IN HERE FOR REFERENCE. YOU'VE SEEN THESE BEFORE. BUT JUST TO SHOW THAT ALL DEPARTMENTS PARTICIPATED IN THIS AND TO THE DEGREE THAT THEY PARTICIPATED. ANOTHER PORTION OF OUR OUR BUDGET DEVELOPMENT THIS YEAR WAS THE OUTSIDE AGENCIES.

WE'VE HAD SEVERAL DISCUSSIONS ON THIS. I KNOW MAYOR COUNCIL WHEN WE WERE HERE SITTING SITTING HERE ABOUT A YEAR AGO, WE TALKED ABOUT A PLAN TO REDUCE OUTSIDE AGENCIES OVER A FIVE YEAR PHASE OUT BY 20% PER YEAR. WE HAVE GONE IN A LITTLE BIT DIFFERENT DIRECTION ON THAT, BASED UPON THE NEEDS OF THE COMMUNITY AND THE NEEDS OF AND THE DESIRE OF THIS COUNCIL TO SUPPORT SOME OF THE ACTIVITIES THAT ARE GOING ON THAT REALLY ALIGN WITH WHAT WE ARE DOING, BUT THAT, YOU KNOW, WE AS A CITY AREN'T DOING. THEY ARE THESE OUTSIDE AGENCIES ARE SUPPLEMENTING FOR US. SO LOOKING AT THESE MORE ON A GRANULAR LEVEL, LOOKING AT THE SERVICES THAT THAT THEY PROVIDED IN THIS AS WELL, MAYOR COUNCIL, YOU'RE GOING TO SEE THE AWARDED AMOUNT AND THE ACTUAL PAYMENTS OR THE PROJECTED PAYMENTS. THIS IS TO SHOW THAT COUNCIL, EVEN THOUGH THAT WE DO AWARD A CERTAIN AMOUNT. THERE ARE TIMES WHEN PROJECTS, PROJECTS COME THROUGH FROM THESE AGENCIES THAT ARE IN LINE WITH STRATEGIC OBJECTIVES OF THIS COUNCIL AND THE CITY AS A WHOLE. SO WE WILL PARTICIPATE IN SOME OF THOSE. SO EVEN THOUGH LIKE IN IN FISCAL YEAR 24, WE AWARDED IN THE GENERAL FUND $3.3 MILLION. OUR TOTAL PAYMENTS TO THESE OUTSIDE AGENCIES ENDED UP BEING ABOUT 5 MILLION TOTAL OUTSIDE AGENCIES DOWN ON THE BOTTOM LINE, 3.4 WITH ABOUT 5.1 $5.2 MILLION ACTUALLY SPENT.

SAME THING WITH WITH FISCAL YEAR 25. $3.3 MILLION AWARDED OUT OF GENERAL FUND. LOOKING LIKE WE WILL END THE YEAR AT ABOUT 4.3. SO STILL ABOUT $700,000 LOWER IN FISCAL YEAR 25. IN FISCAL YEAR 26, WE DID ASK FOR A 20% 20% REDUCTION IN OFF THE BAT. SOME OF THOSE FISCAL YEAR 26 OUTSIDE AGENCY REQUESTS CAME BACK RIGHT IN LINE WITH WITH WHERE WE WERE EXPECTING TO BE THAT 2.6, $2.7 MILLION MARK. BUT SOME OF THOSE IF WE COULD FIND A DIFFERENT FUNDING SOURCE FOR THOSE OUTSIDE OF THE GENERAL FUND TO RELIEVE SOME OF THE PRESSURE ON THE GENERAL FUND, YOU'RE GOING TO SEE THAT WE HAVE MOVED SOME OF THOSE. SO DOWN AT THE BOTTOM, THE CREATIVE WACO IS ELIGIBLE

[01:40:04]

GREATER WACO CHAMBER WILL COME OUT OF WEDEMARK, PARTIALLY OUT OF WEMG 321,500. EXCUSE ME, $321,500. THIS YEAR WE'RE KEEPING WACO BEAUTIFUL OUT OF SOLID WASTE. SO THAT WILL BE $100,000. BUT OVERALL, YOU CAN SEE WHERE WE ARE RECOMMENDING SUPPORT FOR THESE OUTSIDE AGENCIES OUT OF THE GENERAL FUND AT $3.2 MILLION. I DO WANT TO CALL OUT ONE MORE ITEM THERE IS IN THIS YEAR WHAT WE ARE, WHAT WE ARE CREATING AS AN OUTSIDE AGENCY PROJECT RESERVE FUND. SO A LITTLE BIT OF A CHANGE IN THE SCOPE OF WHAT WE'RE WHAT WE'RE TRYING TO DO WITH OUTSIDE AGENCIES. INSTEAD OF FUNDING MORE ADMINISTRATIVE, WE'RE LOOKING AT WAYS THAT WE CAN SUPPORT THE PROJECTS AS A WHOLE. SO SPECIFIC PROJECTS THAT HAVE A DEFINED BEGINNING AND DEFINED END TO THEM, THAT'S WHAT WE'RE LOOKING AT. SETTING UP A SPECIAL PROJECT FUND FOR THESE TYPES OF PROJECTS. SO WE ARE GOING TO INITIALLY SEED THAT WITH $1 MILLION OUT OF THE GENERAL FUND.

AND WE WILL HAVE OUTSIDE AGENCIES APPLY FOR THAT. AND MAYOR AND COUNCIL, THIS IS THIS IS A PIVOT IN DIRECTION HERE. AND, YOU KNOW, IN ALL THESE CONVERSATIONS RELATIVE TO OUTSIDE AGENCIES, I'M LISTENING TO YOUR INDIVIDUAL FEEDBACK AS WELL AS THE FEEDBACK OF THE AGENCIES AND TRYING TO CRAFT A PLAN THAT'S RESPECTFUL TO THE AGENCIES, AS WELL AS ENSURES DELIVERY OF IMPORTANT PROJECTS AND ACTIVITIES BY THE AGENCIES. THIS MILLION DOLLARS FOR THE FIRST YEAR, I'M PROPOSING THAT ACTUALLY ONLY ONE AGENCY CAN APPLY FOR THESE RESOURCES, AND THAT'S PROSPER WACO, SO THAT WE CAN STAND UP AN APPLICATION PROCESS SIMILAR TO WHAT OUR COMMUNITY FOUNDATIONS DO OVER TIME AND ALLOW FOR AGENCIES ON THIS LIST, OR PERHAPS AGENCIES THAT ARE NOT ON THIS LIST, TO APPROACH US WITH IDEAS FOR PROJECTS. THEY'D BE TIME LIMITED AND THEY'D BE PERFORMANCE BASED. SO HEY, WE'VE GOT THIS IDEA WE WANT TO IMPACT A HOUSING INITIATIVE FOR TWO YEARS. WE WANT YOU TO HELP US STAND IT UP AND THEN GIVE US TWO YEARS OF FUNDING, AND WE'LL GO FIGURE IT OUT PAST THEN. THAT'S THE MODEL. BECAUSE I THINK ONE THING THAT ALL THE AGENCIES RECOGNIZE AND WE RECOGNIZE IS THAT WACO, ON A PER CAPITA BASIS, IS BENEVOLENT TO THESE AGENCIES. AND THAT'S IMPORTANT AS A CITY TO FUND OUR NONPROFITS. BUT WE'RE FUNDING AT ABOUT TWO X WHAT OUR PEER CITIES ARE. AND SO WE NEED TO PIVOT OUT OF WHAT I'LL CALL OPERATIONAL SUPPORT AND PIVOT INTO PROJECT SUPPORT. THAT'S GOING TO BE GOOD FOR THE AGENCIES LONG TERM, AND IT'S FRANKLY GOING TO BE GOOD FOR OUR BUDGET SITUATION SHORT TERM. SO IT IS A PIVOT. I WOULD LOVE ANY FEEDBACK YOU HAVE ON IF YOU FEEL LIKE THAT DIRECTION IS HEADED IN ALIGNMENT WITH WHAT FEEDBACK YOU ALL HAVE FOR ME, BECAUSE I WOULD INTEND OVER THE YEARS FOR THAT NUMBER TO GROW AND OUR OPERATIONAL SUPPORT TO AGENCIES TO DECLINE. I'LL GO AHEAD, GEORGE. SO I THINK I HEAR WHAT YOU'RE SAYING IN SUBSEQUENT YEARS, WOULD YOU SEE THIS AS BEING DRIVEN MORE BY CITY IDENTIFYING NEEDS AND THEN SORT OF GOING TO OUTSIDE ORGANIZATIONS OR OUTSIDE ORGANIZATIONS COMING TO AND APPLYING, OR SOME COMBINATION THEREOF? I WOULD SAY THAT AGENCIES A FEW YEARS AGO, AGENCIES WERE ABLE TO APPLY FOR RESOURCES, AND IT WOULD GO TO PAY FOR THEIR STAFF AND THEIR RENT AND THEIR EXISTENCE. AND THERE MAY BE SOMETHING IN THE APPLICATION THAT SAYS, HEY, WE'RE GOING TO TRY AND BRING MORE EVENTS TO YOUR DOWNTOWN.

BUT THE DOLLARS WERE FLOWING IN TO PAY FOR PEOPLE, NOT PROJECTS. AND OVER WHAT THE WHAT THAT'S RESULTED IN, IN SOME CASES, LIMITED CASES, AGENCIES BEING VERY DEPENDENT UPON THE DOLLARS THAT WE PROVIDE. AND I DON'T THINK I, I FEEL LIKE I'VE HEARD THAT THAT'S NOT HEALTHY FOR THOSE AGENCIES LONG TERM. THEY NEED TO BE GATHERING RESOURCES FOR THEIR OPERATIONAL SUPPORT.

AND WE WOULD LIKE TO FUND PROJECTS OVER THE LONG TERM SO THAT OUR INVESTMENTS ARE ABLE TO PAY. WE PAID FOR A PROJECT TO IMPACT HOUSING OR HEALTH OR WHATEVER YOUR PRIORITIES ARE, BECAUSE ONE THING THAT'S HAPPENED OVER THE YEARS IS WE'VE HAD A VERY CLOSED SYSTEM. THE

[01:45:05]

SO I THINK THAT DIRECTION IS STILL CONSISTENT WITH WHAT WE'RE DOING HERE AS WELL AS IS HELPING THE, YOU KNOW, KEEPING. I DO BELIEVE THAT IT DOES MAKE SENSE FOR THE TAXPAYERS AND THE CITY AS A WHOLE TO SUPPORT SOME OF THESE VERY BASIC ENTITIES. AND AGAIN, PICKING AND CHOOSING IS VERY HARD. BUT I ALSO LIKE THE IDEA OF CREATING THIS KIND OF PROJECT FUND WHERE WE CAN, YOU KNOW, KIND OF GEAR IT TO IF YOU HAVE A SPECIFIC PROJECT THAT NEEDS FUNDING, WE'LL HAVE A POOL THERE FOR YOU. AND SOME OF IT COULD VERY WELL COME FROM THESE, THESE ON THIS LIST OR PEOPLE THAT AREN'T ON THIS LIST. SO THIS ONE'S ALWAYS A HARD ONE AND A TOUGH ONE. BUT AGAIN, IT'S A TINY PART OF THE DEAL. BUT WE'RE I THINK WE'RE LANDING IN KIND OF A SPACE THAT YOU'RE RIGHT. CITY MANAGER FORD I THINK YOU'VE I'VE HEARD FROM CONSTITUENTS. I THINK ALL OF OUR COUNCIL MEMBERS PROBABLY HAVE AS WELL. AND YOU'VE KIND OF LANDED IN PLACE HERE. WE'RE JUST SHIFTING DIRECTION A LITTLE BIT, WHICH I THINK MAKES SENSE. I JUST HAVE A PROBING QUESTION, A WONDERING QUESTION. SO WHAT METRICS ARE BEING USED TO EVALUATE THE IMPACT AND EFFECTIVENESS OF THESE FUNDS ALLOCATED TO THESE AGENCIES? IN OTHER WORDS, WHAT VALUE ARE THEY BRINGING TO THE CITY OF WACO? SO EACH EACH YEAR IN THEIR APPLICATION PROCESS, THE AGENCIES PROPOSE PERFORMANCE METRICS. IN SOME CASES, YOU'LL RECOGNIZE THIS BECAUSE OF YOUR YOUR DAY JOB, THEIR OUTPUTS. SO LIKE MEASURING HOW MANY BUSINESS RETENTION VISITS PERHAPS AN AGENCY DID RATHER THAN OUTCOMES WHICH ARE HOW DID WE CHANGE THE NATURE OF WACO TO BENEFIT WHATEVER AIM THE AGENCY HAS? AND SO THEY DO DOCUMENT THOSE THROUGHOUT THE YEAR. BUT I THINK THERE'S AN OPPORTUNITY FOR GROWTH TO MOVE FROM OUTPUTS TO OUTCOMES. AND I THINK THE FOCUS ON PROJECTS INSTEAD OF THE BASE OPERATIONS WILL BE HELPFUL IN THAT REGARD. BE HAPPY TO DO A WORK SESSION OR EITHER IN COUNCIL OR BUDGET AND AUDIT TO JUST TO MORE FURTHER DESCRIBE WHAT EACH AGENCY TRACKS. I THINK THAT WOULD BE ILLUSTRATIVE OF THE OPPORTUNITY THAT EXISTS TO BE MORE METHODICAL TOWARDS OUTCOMES. THANK YOU. DO WE COUNCIL, WOULD IT BE OKAY IF WE TOOK LIKE A FIVE MINUTE RECESS? I NEED TO A THAT GIVES YOU ALL A CHANCE TO FRESHEN UP. BUT WE NEED TO STRATEGIZE ON THE REMAINDER OF THE WORK SESSION AND MAKE SURE WE'RE MAKING GOOD USE OF YOUR TIME. IT'S ALL RIGHT. WE'LL TAKE A FIVE MINUTE RECESS. TAKE A FIVE MINUTE RECESS AT 4:51 P.M. 4:51 P.M.

FIVE MINUT RECONVENE AT 5:00, AND WE ARE GOING TO CALL AN AUDIBLE HERE ON THE TEMPORARILY LEAVING, SUSPENDING THE FASCINATING BUDGET DISCUSSION THAT WE'RE HAVING, WHICH I REALLY ENJOY,

[01:50:01]

THE SHORT ANSWER IS YES. THERE'S SOME QUICK STATS ON THIS SLIDE. THERE'S ROUGHLY 246 AZA ACCREDITED MEMBERS. WE ONLY EVALUATED GOVERNANCE STYLES OF THE 225 THAT OPERATE WITHIN THE UNITED STATES. ONLY 22 ZOOS ARE STILL MUNICIPALLY OWNED AND OPERATED. AND IF YOU LOOK AT TEXAS, OF THE 17 AZA MEMBER ZOOS AND AQUARIUMS, THERE ARE ONLY TWO THAT ARE MUNICIPALLY OPERATED. THAT'S THE CAMERON PARK ZOO HERE IN WACO AND THE ABILENE ZOOLOGICAL PARK IN ABILENE. THE MOST COMMON STYLE OF GOVERNANCE IS NONPROFIT. SO THEN WE GET TO THAT QUESTION OF WHY DO ZOOS DO THAT? GO AHEAD. AND. TYPICALLY IT RELATES ONE WAY OR ANOTHER TO FUNDING BECAUSE FUNDING IS SO TIED TO PERFORMANCE AND EFFECTIVENESS. WHENEVER THIS QUESTION COMES UP, USUALLY FUNDING IS SOMEHOW RELATED. AND ZACH WILL GET TO THAT. IN THE LAST BULLET OF HIS PRESENTATION. SO, LIKE DEPUTY CITY MANAGER EMERSON MENTIONED, THIS TOPIC REALLY REPRESENTS A

[01:55:04]

WE HAVE ALL THE DATA FOR STEP THREE. BUT TONIGHT WE'RE JUST FOCUSED ON STEP TWO. SO WITH THAT I WOULD LIKE TO INTRODUCE AGAIN ZACH WINFIELD, SENIOR VICE PRESIDENT OF CANOPY STRATEGIC PARTNERS, WHO IS GOING TO SHARE THE FINDINGS OF THIS FIRST ROUND OF EVALUATION. THANK YOU, BRANDON. MAYOR AND COUNCIL, THANK YOU FOR HAVING ME DOWN HERE TO SPEAK WITH YOU. MY NAME IS ZACHARY WINFIELD. I'M SENIOR VICE PRESIDENT AT CANOPY STRATEGIC PARTNERS. WE ARE BASED OUT OF PHILADELPHIA. CANOPY IS A CONSULTANCY SERVING PRIMARILY ZOOS, AQUARIUMS, BOTANICAL GARDENS AND OTHER SORTS OF ODDS AND ENDS. ORGANIZATIONS THAT ALSO HAVE LIVING COLLECTIONS.

WE'VE BEEN ENGAGED ABOUT 200 TIMES BY ORGANIZATIONS ACROSS THE UNITED STATES AND AROUND THE WORLD. I PERSONALLY HAVE WORKED WITH SOME AROUND 120 DIFFERENT ZOOS, INCLUDING MOST OF THE ZOOS HERE IN TEXAS. AND I DO LOVE COMING TO TEXAS BECAUSE IT MEANS I GET TO WEAR MY COWBOY BOOTS TO A BUSINESS MEETING. SO THANK YOU FOR THAT PRIVILEGE. BUT TODAY I'M HERE TO SHARE OUR ASSESSMENT AND RECOMMENDATION PURSUANT TO THE TOPIC OF THE GOVERNANCE OF CAMERON PARK ZOO. FIRST THING I WANT TO DO IS JUST TALK YOU VERY QUICKLY AT A 30,000 FOOT LEVEL THROUGH OUR PROCESS. AND JUST TO SIMPLIFY IT DOWN TO THE BARE BRASS TACKS, IT REALLY TOOK PLACE IN TWO PHASES. FIRST PHASE WAS OUR DISCOVERY PHASE WHEN WE ASKED THE ZOO AND THE SOCIETY FOR A WHOLE BOATLOAD OF HISTORICAL OPERATING DATA. AND THAT'S FINANCIAL DATA, ATTENDANCE DATA, MEMBERSHIP DATA, AND ALL SORTS OF INFORMATION FROM VARIOUS CORNERS OF THE OPERATION. AND WHAT WE DID WITH THAT IS WE PUT TOGETHER WHAT WE CALL A HISTORICAL MODEL, WHICH IN PLAIN ENGLISH, IS OUR ATTEMPT TO REDUCE THE EXTREMELY COMPLICATED OPERATIONS OF THE ZOO INTO A MATH PROBLEM. AND WHAT THAT DOES IS IT ALLOWS US TO KIND OF UNCOVER CORRELATIONS BETWEEN OPERATING AREAS AND REALLY KIND OF CREATE A QUALITATIVE AND QUANTITATIVE UNDERSTANDING OF HOW THE ZOO EARNS AND SPENDS MONEY. AND THEN AN OUTGROWTH OF THAT IS AN EVALUATION OF WHAT THE OPPORTUNITIES ARE, WHAT THE KEY REVENUE LEVERS ARE, AND HOW THE ZOO CAN BE CONTINUE TO BE A THRIVING ZOO FOR THE WACO COMMUNITY IN THE FUTURE. THE SECOND PHASE IS OUR MODELING PHASE, RIGHT WHERE WE LOOK TOWARDS TWO POTENTIAL FUTURES, REALLY A BASELINE FUTURE AND A PRIVATIZATION FUTURE. AND WE CREATE TWO PROJECTION MODELS. THE BASELINE PROJECTION MODEL IS MEANT TO ARTICULATE WHAT THE FINANCIAL OPERATIONS OF THE ZOO ARE LIKELY TO LOOK LIKE, IF IT MAINTAINS THE STATUS QUO. THE CURRENT PUBLIC GOVERNANCE STRUCTURE. AND THEN WE COMPARE THAT TO A PRIVATIZATION MODEL WHEREIN WE ARE ASSESSING WHAT THE ZOO'S FINANCIAL OPERATIONS MIGHT LOOK LIKE UNDER THIS NEW REVISED GOVERNANCE FORMAT. AND LIKE ANY MODEL, THERE ARE A LOT OF ASSUMPTIONS UNDER THE HOOD. BUT I WANTED TO TAKE YOU THROUGH A COUPLE OF THE KEY ONES. THE FIRST IS THAT BOTH OF THESE MODELS ASSUME THAT A COMPREHENSIVE MASTER PLAN OR A SITE PLAN TAKES PLACE SOMETIME IN THE NEXT 12 TO 24 MONTHS. YOU KNOW, ZOOS EARN MONEY IN A LOT OF DIFFERENT WAYS, BUT NOTHING IS AS IMPORTANT AS HOW MANY GUESTS CAN BE DRIVEN THROUGH THE GATE. AND LIKE YOU WERE EXPERIENCING THIS YEAR, YOU KNOW, YOU ADD PENGUINS, YOU SEE A BIG JUMP IN ATTENDANCE. WE'VE SEEN THAT PLAY OUT OVER AND OVER AND OVER AT ALL THE ZOOS THAT WE WORKED AT. SO IT'S CRITICALLY IMPORTANT THAT THERE IS A PLAN IN PLACE TO CONTINUE TO BUILD ON WHAT IS ALREADY AN EXCELLENT ZOO. BOTH MODELS ALSO INCLUDE AN ASSUMPTION OF ABOUT 30 NEW PERSONNEL BEING GRADUALLY ADDED INTO THE STAFFING MODEL OF THE ZOO. AND I KNOW THAT SOUNDS LIKE A LOT OF FOLKS, BUT THAT IS WHAT'S GOING TO BE NECESSARY TO MAINTAIN AZA ACCREDITATION AND JUST ENSURE THAT THE ZOO REMAINS BEST IN CLASS AND REALLY AT THE TOP OF ITS GAME. FOR THE COMMUNITY HERE, BOTH MODELS ALSO ASSUME ROUGHLY A $3 MILLION ANNUAL OPERATING SUBSIDY FROM THE CITY. WHAT A LOT OF PEOPLE DON'T KNOW ABOUT ZOOS IS THAT THEY ARE TREMENDOUSLY DIFFICULT BUSINESSES, RIGHT? IT'S REALLY HARD TO TURN A PROFIT OPERATING A ZOO. AND OF THE 200 AND SOME ODD ZOOS IN THE US IN AZA, SOMEWHERE AROUND 95% OF THEM RECEIVE SOME VERSION OF PUBLIC SUBSIDY, EITHER A DIRECT BUDGETARY ALLOCATION, SOMETIMES A TAX MILLAGE OR PROPERTY MILLAGE. THIS IS ALL TO SAY THAT IT'S VERY DIFFICULT TO MAKE ENDS MEET WITHOUT THAT PUBLIC SUPPORT. SO BOTH OF THESE MODELS ASSUME THAT SOME VERSION OF THAT SUPPORT CONTINUES ON FOURTH ASSUMPTION, THIS IS LESS OF AN ASSUMPTION AND MORE OF A SORT OF A DETAIL. BUT BOTH OF THESE MODELS ARE OPERATING MODELS. WE'RE JUST THINKING ABOUT THE BASIC BLOCKING AND TACKLING OF WHAT IT TAKES TO STAFF THE ZOO, THE CARE AND FEEDING OF THE ANIMALS AND THE GUESTS AND ALL THAT SORT OF DAY TO DAY STUFF. THESE ARE NOT CAPITAL MODELS. THERE'S NO INDICATION TOWARDS KIND OF DEFERRED MAINTENANCE OR INFRASTRUCTURE ISSUES RIGHT NOW. LIKE BRANDON MENTIONED, THOSE

[02:00:05]

WHEREAS THE BASELINE MODEL SHOWS THE CONTINUED STATUS QUO OF THE PERSONNEL MODEL AND ALL THE THINGS THAT ARE DOWNSTREAM OF THAT BENEFITS, PAYROLL, TAXES, ETC. SO I WANT TO TAKE YOU THROUGH THE HIGHEST POSSIBLE LEVEL FINDINGS OF WHAT WE SEE AS THE MOST LIKELY FUTURE UNDER THESE TWO SCENARIOS. FIRST, WE'RE GOING TO LOOK AT THE BASELINE MODEL. WE'VE JUST WE'RE LOOKING AT A HYPOTHETICAL PRIVATIZATION YEAR OF 2028. AND IN THE BASELINE MODEL, OF COURSE, THIS ASSUMES THAT THE ZOO DOES NOT PRIVATIZED. BUT BETWEEN 2028 AND 20 FISCAL YEAR 2035, OUR BEST ASSESSMENT IS THAT THE ZOO IS LIKELY TO RUN A DEFICIT OF ABOUT $2.3 MILLION ACROSS THAT TIME PERIOD IN THE BASELINE MODEL, SO. SO JUST TO BE CLEAR, BASELINE IS CONTINUE THE GOVERNANCE STRUCTURE AND NOT NECESSARILY THE OPERATIONS, BUT KEEP THE GOVERNANCE STRUCTURE WE HAVE. NOW. WHAT WOULD THAT LOOK LIKE FINANCIALLY PROJECTED OUT TEN YEARS. CORRECT. RIGHT OKAY.

UNDER THE CONDITIONS OF THE ASSUMPTIONS THAT I SORT OF DEFINED BEFORE. RIGHT. THERE'S A MASTER PLAN IN THERE. THERE'S STILL CITY SUPPORT, BUT OTHERWISE EVERYTHING ELSE KIND OF STAYS AS IT IS TODAY. AND THE RECOMMENDATION THAT'S BUILT INTO IS THAT 30 PLUS FULL TIME EMPLOYEES WOULD BE NEEDED TO BE ADDED, WHETHER PRIVATIZED OR KEPT. CURRENT GOVERNANCE STRUCTURE I DON'T I DON'T BELIEVE THEY'RE ALL FULL TIME, BUT I THINK MOST OF THEM ARE.

MAYBE IT IS 30 FTE. YEAH. EITHER WAY, ZOO IS 30. NEW PEOPLE WOULD HAVE NEW BODIES. YES, SIR. OKAY.

THANK YOU. I'M GOING TO ADD ONE MORE QUESTION TO THE 3 MILLION THAT IS BAKED INTO EACH ONE OF THESE. THE SUBSIDIES BAKED INTO THE REVENUES. YES, SIR. OKAY. SO WHEN IT SAYS THAT FIRST YEAR 2028 IS ALMOST 10 MILLION, IS 1 MILLION PLUS 3 MILLION, RIGHT? YES, SIR. YES. OKAY. GOT IT. AND THIS MAY BE SOMETHING YOU'RE GOING TO TOUCH ON BUT IS THERE WHAT'S THE RATIONALE. YOU COULD CONTINUE ON THE SAME MODEL BUT IMPLEMENT BEST PRACTICES WITH THE BEST OPERATED ZOOS. I AM GOING TO TOUCH ON THAT LATER. AND YOU ABSOLUTELY COULD. BUT IT BECOMES PERHAPS PROHIBITIVELY EXPENSIVE. OR AT LEAST IT DOES PUT A CHALLENGING FINANCIAL BURDEN, ESPECIALLY ON THE PERSONNEL MODEL. OKAY. SO THE SECOND MODEL, THE REVISED P MODEL, THIS IS THE PRIVATE PRIVATIZATION MODEL UNDER ALL THOSE SAME ASSUMPTIONS, BUT WITH THE PRIVATIZED MODEL IN PLACE, WE ASSESS THAT THE ZOO IS MOST LIKELY TO TURN A SURPLUS OF ABOUT $2.5 MILLION. SO THAT'S A $2.3 MILLION DEFICIT VERSUS A TWO POINT APPROXIMATELY $5 MILLION SURPLUS. SO IT'S A BOGEY OF ABOUT $5 MILLION BETWEEN THE TWO MODELS. JUST TO DRILL DOWN A LITTLE BIT AND GO A LITTLE BIT FURTHER UNDER THE HOOD, DIVE INTO SOME OF THE KEY CONSIDERATIONS THAT ARE UNDERLYING THIS. YOU KNOW, I MENTIONED THE IMPORTANCE OF PURSUING A MASTER PLAN. I WANT TO JUST MENTION IT ONE MORE TIME IN SORT OF A DIFFERENT WAY. I TALKED ABOUT HOW IMPORTANT IT IS FOR A SUCCESSFUL ZOOLOGICAL ENTITY TO DRIVE GATE. IT'S OUR ASSESSMENT THAT THIS ZOO, IN ITS CURRENT SORT OF FINANCIAL AND OPERATING ARCHITECTURE, WILL REALLY START TO THRIVE AT SOMEWHERE AROUND 400 TO 450,000 VISITORS. AND SO YOU SAY, OKAY, HOW DO WE GET THERE FROM WHERE WE ARE TODAY? RIGHT TODAY, YOU KNOW, LAST YEAR WE WERE AT 330,000. THIS YEAR MAYBE WE'RE AT 360, 380,000 VISITORS. HOW DO YOU GET TO 400, 450,000 VISITORS? AND THE ANSWER IS THAT YOU BUILD COOL STUFF. AND THAT IS ESSENTIALLY WHAT WE'RE RECOMMENDING IN TERMS OF PURSUING A MASTER PLAN, IS PUTTING TOGETHER A SITE PLAN THAT IDENTIFIES OVER THE NEXT, YOU KNOW, TEN, 15, 20 YEARS. WHAT ARE THE IMPROVEMENTS THAT ARE GOING TO BE MADE TO THE ZOO TO CONTINUE TO DRIVE THAT GATE, BECAUSE WE BELIEVE THAT THE MARKET CAN ABSOLUTELY SUPPORT VISITATION AT THIS LEVEL, PARTICULARLY WHEN YOU TAKE INTO ACCOUNT THE POPULATION GROWTH THAT'S HAPPENING HERE. SO HERE ON THE SLIDE, WHAT WE'RE SHOWING IS A HYPOTHETICAL VERSION OF A MASTER PLAN, THE BLUE BARS AGAINST A HYPOTHETICAL WHERE NO MASTER PLAN IS PUT INTO PLACE AND NO IMPROVEMENTS, NO SIGNIFICANT CAPITAL IMPROVEMENTS ARE MADE IN THE ZOO. AND WHAT WE SEE OVER AND OVER AND OVER IN ZOOS THAT DON'T INVEST IN THEIR IN THEIR EXPERIENCE, IS THAT ATTENDANCE WILL STAGNATE FOR A WHILE AND THEN EVENTUALLY START TO DECLINE. SO IF WE TAKE ONE THING AWAY FROM THIS DISCUSSION, I HOPE IT'S THAT IT'S THE IMPORTANCE OF INVESTING IN THE GUEST EXPERIENCE AND REALLY COMMITTING TO DOING THAT MASTER PLAN. SECOND THING IS JUST GETTING A LITTLE BIT MORE INTO THE DETAILS ON THE PERSONNEL MODEL, RIGHT? PEOPLE THINK THE ZOO BUSINESS IS AN ANIMAL BUSINESS, BUT IT'S ACTUALLY NOT. IT'S A PEOPLE BUSINESS. ABOUT USUALLY MOST ZOOS IS ABOUT 55 TO 65% OF THE TOTAL EXPENSES IS SPENT ON PERSONNEL. AND SO CHANGES IN PERSONNEL MODEL HAVE A REALLY BIG IMPACT. IMPACT ON THE BOTTOM LINE. THE BASELINE

[02:05:04]

BUT IF YOU ELECT NOT TO PRIVATIZE, WE RECOMMEND IN THE STRONGEST POSSIBLE TERMS THAT IT'S STILL INCREDIBLY IMPORTANT THAT YOU THAT YOU PURSUE THIS MASTER PLAN. WE NEED TO FIGURE OUT WHAT THE FUTURE VISION FOR THE ZOO LOOKS LIKE, TO MAKE SURE THAT IT IS VIBRANT AND THRIVING AND GROWING AND INTERESTING TO THE COMMUNITY AND FAMILIES HERE IN WACO. IF THE PRIVATIZATION IS PURSUED, THERE'S SORT OF A SET OF NEXT STEPS THAT YOU MIGHT LOOK AT IN PHASE TWO AND BEYOND.

THE FIRST IS TO HAVE JUST LIKE A REALLY GOOD FAITH, OPEN, TRANSPARENT CONVERSATION BETWEEN THE CITY AND THE SOCIETY ABOUT WHAT EVERYBODY WANTS TO COME OUT OF THIS, WHAT THEIR PRIORITIES ARE. AND HOPEFULLY EVERYBODY AGREES THAT THE ULTIMATE GOAL FOR THIS PROCESS IS TO HAVE THE BEST POSSIBLE CAMERON PARK ZOO FOR THE WACO COMMUNITY. NEXT IS GETTING A LITTLE BIT FURTHER ONTO THE UNDER THE HOOD TO FIND WHAT WE CALL KIND OF HIDDEN COSTS, RIGHT? IF YOU REALLY WANT TO KNOW WHAT IT COSTS TO OPERATE THE ZOO, YOU CAN'T JUST LOOK AT ITS BUDGET. THERE ARE LOTS OF EXPENSES THAT ARE PART OF THAT OPERATION THAT THAT DON'T FALL WITHIN THE ZOO BUDGET, RIGHT? THERE'S HR SERVICES AND ADMINISTRATIVE SERVICES AND LEGAL AND, YOU KNOW, SNOWPLOWING AND SOME OTHER ZOOS. I KNOW THAT'S NOT A BIG COST HERE. AND I BELIEVE THAT WE'VE SURFACED PROBABLY ALL OF THOSE COSTS IN THIS PROCESS. BUT IT'S REALLY IMPORTANT TO MAKE SURE THAT WE FULLY UNDERSTAND. AS DETAILED OF YOU AS POSSIBLE, WHAT SOME OF THOSE HIDDEN COSTS ARE, SO THAT BOTH PARTIES CAN REALLY HAVE EYES WIDE OPEN ON WHAT TRULY COSTS TO OPERATE THE ZOO. AND THEN AS YOU MOVE TOWARDS SORT OF FIGURING OUT WHAT THIS AGREEMENT WILL ULTIMATELY LOOK LIKE, THERE NEEDS TO BE A CONVERSATION ABOUT THAT MANAGEMENT FEE, RIGHT? DOES IT STAY AT A $3 MILLION LEVEL? IS IT MODIFIED IN THE FUTURE? DOES IT STAY FLAT? A LOT OF TIMES, THE INCENTIVE FOR THE PUBLIC ENTITY IS TO FLATTEN OUT THEIR OBLIGATIONS OVER THE LONG TERM SO THEY KNOW THAT IT'S GOING TO STAY FIXED. AND THE ONUS FOR MANAGING THE GROWTH OF THE ZOO FALLS ON THE PRIVATE ENTITY, ULTIMATELY, THE KIND OF LAST STEP IN THE PROCESS, WHICH IS, YOU KNOW, A FEW STEPS AHEAD OF WHERE WE ARE TODAY, IS TO REALLY FORMALIZE AND CODIFY THAT AGREEMENT BETWEEN THE TWO PARTIES, THE CITY AND THE NONPROFIT ENTITY, THE SOCIETY WHO WILL ULTIMATELY BE TAKING OVER OPERATIONS OF THE ZOO. SO OUR RECOMMENDATIONS. I'LL LEAVE YOU WITH THIS. THIS FIRST ONE IS SOMETHING THAT WE DIDN'T ACTUALLY I HAVEN'T TALKED ABOUT HERE TODAY, BUT IT DID COME UP IN OUR IN OUR EVALUATION OF THE ZOO. I KNOW THAT THE ZOO IS EVALUATING OUTSOURCING THE FOOD AND RETAIL SERVICES TO A THIRD PARTY VENDOR, WHICH IS EXTREMELY COMMON WITHIN THE INDUSTRY, AND WE RECOMMEND THAT YOU CONTINUE TO PURSUE THAT EVALUATION. IT'S OUR ASSESSMENT ASSESSMENT THAT

[02:10:05]

[02:15:02]

THAT IS THIS INCREASE THAT WE'RE TALKING ABOUT IS GETTING AFTER THE LIABILITIES THAT WE HAVE. SO WE ARE FUNDING WHAT WHAT WE ANTICIPATE WE WILL OWE. I THINK IT WILL BE A IT WILL BE SOMETHING WE CHASE FOR A COUPLE OF YEARS THOUGH. COUNCIL MEMBER. WE'RE STARTING THIS YEAR IN THE RIGHT DIRECTION. GOTCHA. MAYOR. COUNCIL ALWAYS LOOKING AT THE EMPLOYEES AND WHAT THAT 6% IS GOING TO DO. SO WE LOOK AT THE LOWEST PAY GRADE THAT WE HAVE IS $16 AND 99.5 CENTS PER HOUR.

WITH THAT 3.5% GSI, THAT'S A TOTAL ANNUAL INCREASE, JUST OVER $1,200. THE EMPLOYEE ONLY SIDE WITH THAT 6% INCREASE OUT OF THAT 12 $1,237 INCREASE ON THE ANNUAL SIDE, AFTER HEALTH INSURANCE INCREASE, THE EMPLOYEE ONLY WITH THE WELLNESS WOULD NET $1,210. OF THAT 1237 ON THE EMPLOYEE PLUS FAMILY, THAT THAT NET PAY GOES DOWN TO $843 ON THE YEAR. LOOKING AT TMRS ANOTHER BIG TOPIC THAT WE HAVE ANOTHER BIG EXPENSE FOR THE CITY AS A WHOLE. THIS PROPOSED BUDGET MAINTAINS OUR CURRENT RETIREMENT BENEFIT STRUCTURE. THAT'S THE 30% REPEATING NON RETROACTIVE COLA THAT WAS ADOPTED IN 2023, EFFECTIVE FOR THE CALENDAR YEAR 2024. THE EMPLOYEE CONTRIBUTIONS UNDER THIS THIS RATE PLAN ARE GOING TO TOTAL $9 MILLION. THAT'S A 7% CONTRIBUTION ON THE CITY SIDE. THE CONTRIBUTIONS ARE GOING TO BE $23.3 MILLION. AND IF YOU THINK ABOUT THAT, THAT LEVEL OF EXPENSE THAT WE HAVE ON THE CITY'S CONTRIBUTION, THAT'S GOING TO BE MORE THAN OUR STREET MAINTENANCE CASH FUNDING, WHICH IS $17.9 MILLION. IT'S GOING TO BE MORE THAN OUR EMPLOYEE HEALTH INSURANCE, WHICH IS $19.1 MILLION, AND THAT THAT 23.3 MILLION IS GREATER THAN THE COMBINED GENERAL FUND ADMINISTRATIVE DEPARTMENTS, WHICH ARE CITY MANAGER, CITY COUNCIL, CITY SECRETARY, LEGAL AND FINANCE, ECONOMIC DEVELOPMENT AND MORE THAN CULTURAL ENRICHMENT. ALONG WITH THAT AT $19.2 MILLION. SO QUITE A QUITE A INVESTMENT BY THE CITY INTO TMRS ON THE CITY'S CONTRIBUTION. OUR 2 TO 1 EMPLOYER MATCH MEANS THAT TWO THIRDS OF THE RETIREES MONTHLY BENEFIT PAYMENT COMES FROM THE CITY. SO WHAT WE HAVE IS THE CURRENT PLAN AND THE FIVE OPTIONS THAT TMRS HAS TO ENHANCE THE COLA OPTIONS FOR THIS YEAR.

MAYOR, COUNCIL. WHAT WE HAVE IS A REQUIRED CONTRIBUTION OF 18.13% FROM THE CITY ON THIS, SO 7% FROM THE EMPLOYEES, 18.13% FROM THE CITY. THAT GIVES A TOTAL CONTRIBUTION OF $32.3 MILLION. NOW, IF YOU'RE LOOKING AT ANY OF THE OPTIONS, THE DIFFERENT OPTIONS, YOU HAVE TWO OPTIONS. OPTION ONE AND TWO THAT GO UP TO 50%. COLA ONE IS GOING TO BE RETROACTIVE, ONE IS GOING TO BE RETROACTIVE. YOU HAVE OPTIONS THREE AND FOUR THAT ARE THE SAME WITH 70% RETROACTIVE AND RETROACTIVE. AND YOU CAN SEE HOW THE REQUIRED CONTRIBUTIONS ARE CHANGING BASED UPON THOSE.

AND THAT THAT INCREASE COMES DIRECTLY FROM THE EMPLOYER CONTRIBUTION, THE CITY'S CONTRIBUTION. SO DOWN IN THAT THAT BLUE LINE AT THE VERY BOTTOM, THAT'S THE INCREASE OVER THAT, THAT 23 MILLION THAT IS REQUIRED BY THE CITY TO MAKE AND TO FUND ANY ONE OF THOSE OPTIONS THAT WERE PROVIDED BY TMRS TO ENHANCE OUR OUR COLA OPTIONS FOR TMRS. ONE THING TO KEEP IN MIND, COUNCIL. A FEW YEARS BACK, THE LEGISLATURE CREATED AN OPTION FOR NON RETROACTIVE COLAS TO BE ADOPTED, AND IN THAT BILL THEY SAID THAT ANY ELECTIONS WOULD HAVE TO BE DONE BY 2025. SO IF YOU LOOK AT OPTION TWO AND OPTION FOUR YOU'LL NOTICE THAT THEY'RE NON RETROACTIVE. THEY HAPPEN TO ALSO BE A COUPLE OF THE CHEAPER OPTIONS. THOSE AFTER THIS BUDGET YEAR WILL GO AWAY AS OPTIONS FOR YOU TO CONSIDER. AND BARRING ANY NEW LEGISLATION, YOU'LL BE LEFT WITH OPTIONS LIKE

[02:20:06]

I THINK BLUE IS GOING TO COVER THAT LATER, SO I MIGHT HAVE GOT OUT AHEAD OF HIM. BUT I THINK IT'S IMPORTANT FOR EVERYBODY TO KNOW. OPTION TWO AND FOUR ARE ARE TIME LIMITED TO, YOU KNOW, THE NEXT FEW WEEKS? YES. SO BUT THE SO THE RETROACTIVE PORTION IS LIMITED BY LAW. BUT THE COLA PERCENTAGE IS TOTALLY UP TO US. IS THAT CORRECT? CAN YOU SAY THAT AGAIN? I COULDN'T HEAR THAT. SO WHAT WHAT COLA PERCENTAGE WAS IS CHOSEN WOULD BE UP TO. THAT'S NOT MANDATED BY THE LEGISLATURE. THAT'S THAT'S NOT THAT'S WHY YOU CAN HAVE 30, 50 OR 70 I GOTCHA OKAY. ALL RIGHT. A LITTLE BIT ABOUT HOW THOSE CONTRIBUTION RATES ARE DETERMINED. AND THERE'S TWO THERE'S GOING TO BE A LITTLE BIT IN THE WEEDS, BUT I'LL TRY TO HIT IT AT A HIGH LEVEL AND TAKE ANY QUESTIONS THAT YOU HAVE REALLY ON THE ON THE ASSET SIDE, THERE'S ONLY TWO WAYS OF PUTTING MONEY INTO THIS FUND, REALLY. YOU'VE GOT YOUR CONTRIBUTIONS FLOWING IN. THAT'S FROM YOUR EMPLOYEES AND YOUR YOUR CITY CONTRIBUTIONS. AND THEN YOU HAVE INVESTMENT EARNINGS. SO A LOT OF TIMES WE'LL SAY OR HEAR THIS NOTION THAT THAT INVESTMENT EARNINGS PAY FOR THE COLAS THAT ARE BEING GIVEN. AND I'LL EXPLAIN THAT THAT'S NOT EXACTLY TRUE, ESPECIALLY IN WACO'S CASE.

SO ON THE INVESTMENT EARNINGS, ANYTIME YOU HAVE EARNINGS OF, SAY, $10 MILLION IN ONE YEAR, YOU DO NOT GET TO TAKE CREDIT FOR THAT FULL $10 MILLION IN ANY GIVEN YEAR. THEY SMOOTH THOSE THOSE EARNINGS OUT. THEY ALSO SMOOTH OUT LOSSES OVER FIVE YEARS. SO OUT OF THAT $10 MILLION GAIN OR LOSS, YOU ONLY GET TO TAKE CREDIT OR TAKE THE OPPOSITE OF THE CREDIT OF $2 MILLION PER YEAR OVER THOSE FIVE YEARS. SO JUST A LITTLE BIT OF WAY THAT THEY THEY KEEP THE RATES STABLE RATHER THAN HAVING LARGE SWINGS. ON THE OPPOSITE SIDE OF THAT BALANCE SHEET, YOU HAVE YOUR LIABILITIES. SO THE CURRENT RETIREES, EVERYTHING THAT'S ALREADY BEEN EARNED, HAS TO BE PAID OUT OVER THE LIFE OF THE RETIREE. THAT'S THAT'S FACTORED INTO OUR LIABILITIES.

THEN YOU HAVE ACTUALLY THE FUTURE BENEFIT ACCRUALS. SO ACTIVE EMPLOYEES, AS YOU WORK THROUGH YOUR YEARS, YOU'RE ACCRUING MORE AND MORE BENEFITS THAT GO INTO THE LIABILITY SIDE OF THIS. NOW, IN A PERFECT WORLD, YOUR ASSETS ARE GOING TO GOING TO 100% MATCH YOUR LIABILITIES. THAT'S A FULLY FUNDED PLAN IN MOST CASES, ESPECIALLY WHEN YOU HAVE DEFINED BENEFIT DEFINED CONTRIBUTION HYBRID PLANS LIKE TMRS, YOU'RE GOING TO HAVE AN UNFUNDED ACTUARIAL LIABILITY THAT YOU. THAT IS WHEN YOUR YOUR ASSETS ARE LESS THAN YOUR LIABILITIES.

YOUR LIABILITIES EXCEED. IN THAT CASE, WHAT YOU HAVE IS AN ADDITIONAL RATE ON TOP OF YOUR NORMAL RATE, WHICH IS CALLED YOUR PRIOR SERVICE COST RATE. SO THAT THAT LIABILITY THAT YOU'RE GOING TO HAVE IS AMORTIZED OVER 20 YEARS TO GET TO THAT PRIOR SERVICE COST RATE. SO LET'S LOOK A LITTLE BIT MORE AT THAT PRIOR SERVICE COST RATE. FACTORS THAT INCREASE MAKE THE CITY CONTRIBUTION HIGHER ON THE PSR, INVESTMENTS THAT ARE THAT ARE BELOW ASSUMPTIONS. SO IF OUR INVESTMENT EARNINGS ARE LESS THAN THAN WHAT TMR IS SHOOTING FOR, THAT'S GOING TO INCREASE OUR PRIOR SERVICE COST RATE. ANY EXPERIENCE LOSSES. SO EMPLOYEES RETIRING EARLIER THAN PROJECTED RETIREES, RETIREES LIVING LONGER THAN PREDICTED. THERE'S ALL THESE MORTALITY TABLES THAT TELL THE ACTUARIES HOW TO CALCULATE THESE RATES OVER THE LIFE OF A RETIREE. SO ANYTIME THOSE ASSUMPTIONS CHANGE, YOU'RE GOING TO HAVE THE EXPERIENCE LOSS. OR ON THE OPPOSITE SIDE, THE EXPERIENCE GAIN. ANY PLANNED BENEFIT ENHANCEMENTS COLA INCREASES. THAT'S EXACTLY WHERE THIS GOES INTO THE ENHANCED EARLY RETIREMENT PROVISIONS. ANY RETROACTIVE BENEFIT IMPROVEMENTS THAT ARE GOING TO INCREASE THE LIABILITIES THAT HAVE ALREADY BEEN ACCRUED, THOSE WILL ALL INCREASE YOUR PRIOR SERVICE COST RATE ON THE FACTORS THAT REDUCE YOUR PRIOR SERVICE COST RATES.

WHEN YOUR INVESTMENTS COME IN HIGHER THAN ASSUMPTIONS, AGAIN, THOSE EXPERIENCE GAINS. AND IF THE CITY WERE TO BE ABLE TO MAKE EXTRA CONTRIBUTIONS, THAT WOULD ALL PAY DOWN ON THAT PRIOR SERVICE COST RATE THAT WOULD EVENTUALLY DRIVE DOWN OUR TOTAL CONTRIBUTION RATE. BUT HERE WE ARE, MAYOR COUNCIL ON OUR ON OUR TEXAS MUNICIPAL RETIREMENT SYSTEM, THE WACO PLAN. WE ARE FUNDED RIGHT NOW AT 84.5%. THAT MEANS THAT WE HAVE THAT UNFUNDED LIABILITY. OUR OUR ACTUAL LIABILITIES ARE 710 BILLION AGAINST ASSETS OF 600. I'M SORRY, 710 MILLION AGAINST ASSETS OF 600 MILLION. SO WE HAVE THAT $110 MILLION GAP THAT'S SMOOTHED OUT OVER 20

[02:25:06]

AMARILLO ELECTED FIRST INTO THE 30% NON RETROACTIVE FOR 2024. AND IN 2025 THEY ELECTED INTO 50. AND I WILL SAY THEIR PLAN RIGHT NOW IS TO TRY TO GO TO 70% NON RETROACTIVE FOR 2026. BUT THAT HAS NOT BEEN MADE OFFICIAL. COLLEGE STATION IS AT 70% NON RETRO. THEY THEY MOVED TO THAT LAST YEAR. BUT THE REST OF THOSE CITIES MOST OF THEM YOU WILL SEE ARE AT 70% RETROACTIVE. BUT THESE ARE LEGACY PLANS THAT HAVE BEEN IN PLACE FOR MANY MANY YEARS. SO THEY HAVE BEEN PAYING THIS AMOUNT FOR SEVERAL YEARS TO BE ABLE TO BUILD INTO THOSE PRIOR SERVICE COST RATES THAT THAT THE 70% RETROACTIVE COLAS HAVE ACCRUED. SO THOSE PLANS HAVE HAD A LOT MORE TIME TO REACT, WHICH IS WHY YOU'RE GOING TO SEE A LITTLE BIT BETTER FUNDING RATIO AND A LITTLE BIT LESS OR THE SAME CONTRIBUTION RATE AS THE CITY OF WACO RIGHT NOW WITH OUR 30% NON RETROACTIVE THAT WAS ADOPTED FOR THE 2024 YEAR. AND THEN AGAIN FROM TMRS, THOSE WACO OPTIONS ONE THROUGH FOUR, WHETHER WE GO 50%, 70% RETROACTIVE NON RETROACTIVE. THAT'S HOW OUR FUND RATIO AND OUR CURRENT CONTRIBUTION RATE WOULD CHANGE BASED UPON ANY PLAN CHANGE THAT WE HAVE FROM FROM COUNCIL. AND IF WE KEEP OUR CURRENT 30% NATURAL NON RETROACTIVE THAT IS ALSO AN OPTION. IS THAT RIGHT THAT THAT IS AN OPTION. YOU CAN ALWAYS KEEP EXACTLY WHAT YOU HAVE TODAY OKAY. THESE ARE JUST EXPLORING. IF WE WANTED TO CHANGE WHAT WE DID IN 2024 IS THAT OR IS STAFF RECOMMENDING WE CHANGE THE PLAN? NOT WE'RE NOT RECOMMENDING WE HAVE IN THE BUDGET RIGHT NOW JUST THE 30%. THE CURRENT PLAN THAT WE HAVE IS WHAT WE'VE CARRIED FORWARD INTO THIS. BUT AGAIN, IF THAT'S THE WILL OF THE COUNCIL, WE CAN LOOK AT OPTIONS TO PROVIDE YOU TO BE ABLE TO MAKE UP FOR THOSE DIFFERENCES THAT WE SAW. SO WE IF YOU IF YOU WANTED TO ELECT IN ONE OF THOSE,

[02:30:01]

AND IT WOULD HAVE A CORRESPONDING GO BACK TO YOUR YOUR ONE MORE FORWARD. SORRY. GO FORWARD TO THAT. THAT ONE. IF YOU WERE INCLINED TO DO THAT. WHEN YOU SEE THE FUNDED RATIO AND CONTRIBUTION RATES, YOU KNOW DROPPING THE FUNDED RATIOS AND INCREASING CONTRIBUTION RATES AS EFFECTIVE IN ACTION THERE. IS. ARE MAYOR COUNCIL. WE HAVE A FULL DETAILED FUND SUMMARIES FOR YOU. WE'VE EMAILED THOSE OUT TO YOU FOR TIME. AT THIS POINT, WE'RE GOING TO KIND OF SKIP THROUGH THAT PORTION OF IT, GET TO A LITTLE BIT OF OUR MITIGATION STRATEGIES THAT WE WERE TALKING ABOUT IN ORDER TO BE ABLE TO APPROACH THIS BUDGET CYCLE. WE'RE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE ON ANY OF THOSE SPECIFIC FUNDS AND WHAT THOSE BUDGETS ARE, BUT WE CAN ALSO BRING THOSE BACK TO YOU AT A AT A LATER COUNCIL MEETING. SO AGAIN, ON OUR ON OUR RESERVE POSITIONS, THERE'S, THERE'S GOING TO BE POLICY RESERVES. AND THINK OF THAT AS YOUR KIND OF YOUR RAINY DAY FUNDS. THAT'S THE MONEY WE MUST KEEP IN SAVINGS TO MEET BOTH LEGAL AND FINANCIAL OBLIGATIONS. THAT'S THAT'S BASED UPON YOUR, YOUR FUTURE REVENUES THAT YOU'RE GOING TO GET. SO IF WE'RE SAYING IN THE GENERAL FUND WE NEED, WE'RE GOING TO HAVE $210 MILLION NEXT YEAR, WE HAVE TO SET ASIDE 27.5% OF THAT FUTURE DOLLAR. THE CASH AVAILABLE FOR BUDGET REALLOCATION IS OUR FLEXIBILITY MONEY. YOU KNOW, THAT'S THAT'S THE CASH THAT WE HAVE IN HAND RIGHT NOW THAT'S ABOVE AND BEYOND THAT RESERVE POLICY THAT WE CAN PUT FORWARD. IT'S NOT FUTURE DOLLARS. IT'S DOLLARS THAT WE HAVE RIGHT NOW IN OUR IN OUR IN OUR HANDS. SO AGAIN, THESE ARE THESE ARE NOT FOR, YOU KNOW, TEMPORARY SLOWDOWNS IN THE ECONOMY LATER ON THAT THAT WE NEED TO KIND OF SMOOTH THINGS OUT WITH OUR OPERATIONS OUT WITH THESE ARE THESE ARE LIKE ONE TIME CAPITAL PROJECT DOLLARS. SO RIGHT NOW WHERE WE SIT IN THE GENERAL FUND AND THE MAJOR AND MINOR ENTERPRISE FUND SPECIAL REVENUE FUNDS, YOU CAN SEE AS YOU WALK THROUGH THE MATH, REALLY WHAT IT COMES DOWN TO IS THE LAST TWO COLUMNS, WHAT WE'RE PLANNING TO USE ALREADY IN THE PROPOSED BUDGET, AND THEN WHAT WE HAVE AFTER THAT PROPOSED ADDITION OR USE OF RESERVES. SO IN THE GENERAL FUND RIGHT NOW, WE'VE COME DOWN TO ABOUT $2.8 MILLION OF EXTRA FUNDS AVAILABLE FOR REALLOCATION. WATER AND WASTEWATER HAVE A LITTLE BIT MORE AT ALMOST 20,000,012.2 MILLION, 12.3 MILLION DRAINAGE AT 700,000. AIRPORT AT 581,000, AND CAMERON PARK ZOO AT ALMOST 2 MILLION. PUBLIC HEALTH COMING IN AT 1.2 AND STREET MAINTENANCE COMING AT $5.5 MILLION. SO THAT'S THAT'S WHERE WE SIT AS EXTRA DOLLARS ABOVE AND BEYOND THE POLICY RESERVES THAT WE HAVE. RIGHT? QUICKLY, THOSE EXCESS FUNDS WOULD BE USED WITHIN THE IT'S IN THE UTILITY.

THEY HAVE TO BE USED FOR WHATEVER FUND THEY ARE IN. YES, MAYOR AND COUNCIL, KIND OF DIRECTIONALLY SPEAKING, I WOULD LIKE TO EXPLORE THAT. MANAGE RESERVE PERCENTAGE DECREASING NEXT YEAR TO 25. I THINK THAT'S IN ALIGNMENT WITH WITH GOOD PRACTICES RELATIVE TO OUR BOND

[02:35:02]

PUBLIC SAFETY WE HAVE PRECONSTRUCTION FUNDING FOR FIRE STATION EIGHT FACILITY PLANNING FOR THE POLICE CRIME LAB PROPERTY ROOM THAT THAT WORK IS STILL CONTINUING. THAT WAS THE $1.5 MILLION FROM FISCAL YEAR 25 THAT WE PUT IN. THAT WORK WILL CONTINUE ON, AND WE EXPECT AN ACTUAL PROJECT BUDGET TO COME IN NEXT FISCAL YEAR, FISCAL YEAR 27. AND AGAIN, THE QUALITY OF LIFE, ECONOMIC DEVELOPMENT. SO THE AIRPORT RUNWAY IS A $12 MILLION PROJECT, BUT THAT IS 95% GRANT FUNDED. SO WE WERE ONLY GOING TO BE RESPONSIBLE FOR THE ACTUAL ONE 5%, BUT THAT 12 FULL 12 MILLION HAS TO SHOW UP IN YOUR BUDGET. BUT AGAIN, WE'RE ONLY RESPONSIBLE FOR 5% OF THAT DOWNTOWN REDEVELOPMENT. THE PREP WORK ON THAT, ABOUT $7 MILLION IS WHAT WE'RE PLANNING. CAMERON PARK ZOO HAS $768 MILLION FOR SOME OF THEIR. THEIR JAGUAR EXHIBIT EXPANSION, COTTONWOOD CREEK. WE'VE GOT A LOT OF DRAINAGE ISSUES THAT WE'VE TALKED ABOUT, $2.9 MILLION IN THAT AND THE PARKS AND REC JUST FACILITY UPGRADES, ABOUT $15 MILLION. AND THAT'S IN FISCAL YEAR 28 THROUGH 29. SO FUTURE PLANNING FOR THOSE THERE ARE TWO PROJECTS THAT THAT ARE NOT FULLY FUNDED AT THIS POINT. BUT I DO WANT TO MAKE SURE THAT WE POINT OUT THAT ARE STILL CONTINUING FORWARD. THAT'S THE DOWNTOWN PHASE ONE A AND THE RECONSTRUCTION OF THE JOINT OPERATIONS CENTER, THE BUILDING WHERE WE ARE GOING TO TRY TO CONSOLIDATE A LOT OF OUR FIELD OPERATIONS. WE HAVE COME UP WITH A PLAN THAT WE WILL WE WILL SHARE LATER AT A AT A LATER MEETING. BUT OVERALL, WE'RE WORKING WITH FINANCIAL ADVISOR, BOND COUNSEL AND THE AG'S OFFICE TO WORK ON HOW WE CAN ACTUALLY FUND THESE PROJECTS. SO WE'RE LOOKING AT SOME TYPE OF DIRECT NOTE PROGRAM, GETTING THAT APPROVED AND AUTHORIZED SO THAT WE CAN MOVE FORWARD WITH THESE THESE PROJECTS, DRAW DOWN ON THOSE NOTES AND THEN FIX OUT THE DEBT SERVICE AT THE END OF CONSTRUCTION PERIOD. ULTIMATELY, THAT'S GOING TO SAVE US QUITE A BIT OF MONEY RATHER THAN JUST SITTING ON THE DOLLARS THROUGH THE CONSTRUCTION PERIOD AND HAVE TO PAY BACK PRINCIPAL AND INTEREST DURING THAT CONSTRUCTION. MAYOR AND COUNCIL, I THINK THAT'S A GREAT SPOT TO PAUSE FOR THE EVENING, AND WE'LL COME BACK WITH FUNDING PACKAGES ON THE 19TH AND THE REMAINING SLIDES AS WELL. THAT WAY YOU HAVE A CHANCE FOR A BREAK BEFORE BUSINESS SESSION. OKAY. SO WITH THAT WE WILL THAT'S THAT'S IT FOR THE. YEAH. THE ONLY THE ONLY ASTERISK I'LL PUT ON THAT.

MAYOR, I THINK WE HAVE A CHANGE TO THE CONSENT AGENDA. IS NOW THE APPROPRIATE TIME CITY ATTORNEY TO ADDRESS THAT? ABSOLUTELY. MAYOR, WE'RE RECOMMENDING THAT WE READ RESOLUTION 2025 505 SEPARATELY AND PULL THAT ONE OUT OF THE CONSENT AGENDA FOR A SLIGHT AMENDMENT. WHAT WAS WHAT IS THE AMENDMENT? WE DO HAVE A MOTION RECOMMENDED MOTION. OKAY.

SPECIAL LANGUAGE FOR THAT ONE. MAYOR, I'LL GET WITH YOU DURING THE BREAK AND GIVE YOU EVERYTHING THAT YOU NEED. NOT FOR THIS. I'LL WORRY ABOUT THAT IN THE SECOND SESSION. OKAY. IS THERE ANYTHING ELSE, BRADLEY? OKAY. YOU HAVE TO SAY I NEED TO GO TO WORK SESSION FOR 90 COUNCIL REQUEST FOR SCHEDULING AND FUTURE AGENDA ITEMS. ANY REQUESTS FOR FUTURE AGENDA

[02:40:03]

[IV. BUSINESS SESSION 6:00 P.M.]

[VI. MINUTES]

[VII. PROCLAMATIONS/PRESENTATIONS/SPECIAL RECOGNITION]

IT'S SUCH AN HONOR FOR ME TO BE NEXT TO THIS GUY RIGHT HERE. I MEAN, THIS IS COOL. WE GOT A CHAMPION HERE RIGHT NOW. RIGHT HERE. LET'S HEAR IT. AND WACO IS THE CITY OF CHAMPIONS. WE LIKE TO SAY AND THANK YOU FOR REPRESENTING THIS CITY SO WELL. CONGRATULATIONS ON YOUR CHAMPIONSHIP. AND WACO HAS BEEN WATCHING YOU FOR A LONG TIME AS YOU'VE SUCCEEDED AT UNIVERSITY HIGH, YOU'VE SUCCEEDED AT TEXAS CHRISTIAN UNIVERSITY, YOU'VE SUCCEEDED IN THE NBA AND WAS SO MUCH FUN WATCHING YOU GOING THROUGH THE TOURNAMENT AND IN THE FINALS AND BEATING THE PACERS THERE. IT WAS FUN TO WATCH YOU ON ■TV. YOU HAVE ACHIEVED A LOT AND YOU'RE THE BEST OF THE BEST, AND WE APPRECIATE YOUR COMMITMENT TO HARD WORK, TO PERSEVERANCE AND TO EXCELLENCE, AND YOU'RE A GREAT INSPIRATION TO ALL OF US HERE IN WACO. AND I APPRECIATE YOU, KENRICH, AND YOU DEFINITELY EXEMPLIFY THE SPIRIT OF WACO. SO, SO MANY. WE'RE SO HAPPY WHEN YOU COME TO WACO. WE WERE TALKING A LITTLE BIT AGO ABOUT YOU COME BACK AND YOU GIVE BACK TO THE COMMUNITY, WHICH IS REALLY, REALLY COOL TO SEE. YOU NURTURE THE KIDS IN THE CITY OF WACO, AND WE LOVE TO HAVE YOU COME BACK WHENEVER YOU WANT TO. AND YOUR BEAUTIFUL FAMILY HERE IN THE FRONT ROW, TOO. FANTASTIC. AND YOUR MOTHER, WHO'S A GREAT VOTER AS WELL. AND WE APPRECIATE THAT. SO ANYWAY, WE WILL. NOW THIS IS THE FIRST KEY I'VE GIVEN AWAY TO. OH, NICE. SO THIS IS LIKE COOL. SO IT'S A IT'S KIND OF A DOUBLE DEAL HERE TODAY WE HAVE A CANDACE WILLIAMS DAY AND WE GET THE KEY TO. SO I'M GOING TO READ THE PROCLAMATION FIRST. AND WE'LL PRESENT THIS HERE IN ONE SECOND. I JIM HOLMES, BY THE VIRTUE OF THE AUTHORITY VESTED IN ME AS THE MAYOR OF THE CITY OF WACO, TEXAS, DO HEREBY PROCLAIM AUGUST 5TH, 2005, AS KENRICH WILLIAMS DAY IN THE CITY OF WACO IS KENRICH WILLIAMS DAY TODAY. LET'S HEAR IT. LET'S CELEBRATE IT. I URGE ALL CITIZENS TO JOIN THE CITY COUNCIL, CITY STAFF AND ME IN RECOGNIZING AND HONORING KENRICH WILLIAMS ON BECOMING THE FIRST WACO TO WIN AN NBA CHAMPIONSHIP.

KENRICH WILLIAMS, BORN AND RAISED IN WACO, REPRESENTS HIS HOMETOWN WITH PERSEVERANCE, GRIT AND TIRELESS WORK ETHIC. EVENTUALLY AFFECTIONATELY KNOWN AS KENNY HUSTLE, HIS RELENTLESS DETERMINATION AND COMMITMENT TO EXCELLENCE HAVE BEEN ON DISPLAY SINCE HIS TIME PLAYING FOR UNIVERSITY HIGH SCHOOL TROJANS, WHERE HE EARNED DISTRICT DEFENSIVE PLAYER OF THE YEAR HONORS. WILLIAMS MADE HISTORY AS A TCU HORNED FROG WITH RECORD SETTING PERFORMANCES AND ALL BIG 12 HONORS, CULMINATING IN THE RETIREMENT OF HIS NUMBER 34 JERSEY IN 2024. IN THE NBA, HE PLAYED FOR THE NEW ORLEANS PELICANS BEFORE JOINING THE OKLAHOMA CITY THUNDER IN 2020

[02:45:04]

KENDRICK IS GOING TO SAY. A FEW WORDS. WOW. WE GOT WE GOT. THIS IS FANTASTIC. LET ME LIFT THE MIC UP A LITTLE BIT. FIRST OF ALL, I WANT TO THANK. FIRST OF ALL, I WANT TO THANK GOD FOR THIS TREMENDOUS HONOR RIGHT HERE. I WOULD LIKE TO THANK MY FAMILY WHO KIND OF JUST STEPPED OUT. ALL MY FRIENDS HERE TODAY. AND THEN LASTLY, I WOULD LIKE TO THANK THE CITY OF WACO FOR HELPING ME WITH THIS AND JUST GIVING ME THE KEY TO THE CITY. IT REALLY MEANS A LOT TO ME. YOU KNOW, I TRY MY HARDEST TO COME BACK AND GIVE BACK AS MUCH AS I CAN, AND FOR ME TO RECEIVE SOMETHING LIKE THIS IS A TRUE HONOR AND A BLESSING. SO THANK YOU GUYS. THANK YOU, THANK YOU.

THANK YOU. MR. ONE MORE QUESTION. ALL RIGHT. THANKS. THANK YOU. OKAY. THE WE HAVE ANOTHER. PROCLAMATION TODAY. AND IS CAROLYN BRUICH. HERE WE ARE CAROLYN AND KEISHA MAYS. Y'ALL NEED TO COME UP AND ELSA TAURUS. OH ALL THREE ARE HERE. FANTASTIC. OKAY, THIS IS THIS PROCLAMATION IS RELATIVE TO GOTTA BRING THIS MIC BACK DOWN. HEALTHY INFANT DEVELOPMENT AND RAISING HEALTHY AND THRIVING CHILDREN. I APPRECIATE ALL YOU GUYS DO TO MAKE SURE THAT IS A HIGH PRIORITY HERE IN THE CITY OF WACO. SO I, JIM HOLMES, BY VIRTUE OF THE AUTHORITY VESTED IN ME AS MAYOR OF THE CITY OF WACO, DO HEREBY PROCLAIM AUGUST 2025 AS NATIONAL BREASTFEEDING MONTH IN THE CITY OF WACO, AND WE URGE ALL CITIZENS TO JOIN THE CITY COUNCIL, CITY STAFF, AND ME IN RECOGNIZING THAT THROUGH A SUPPORTIVE AND WELCOMING ENVIRONMENT, OUR COMMUNITY CAN ENCOURAGE THE HEALTHY DEVELOPMENT OF ALL INFANTS AND FAMILIES OF ALL RACES, ETHNICITIES, AND FAMILY STRUCTURES. BREASTFEEDING IS A VITAL EVIDENCE BASED PRACTICE THAT PROTECTS THE HEALTH OF BOTH INFANTS AND MOTHERS, REDUCING THE RISK OF NUMEROUS CHRONIC AND ACUTE ILLNESSES, AND LAYING THE GROUNDWORK FOR A LIFETIME OF WELL-BEING. BREASTFEEDING NURTURES A STRONG, LASTING EMOTIONAL BOND BETWEEN MOTHER AND CHILD THAT BENEFITS BOTH WELL BEYOND INFANCY. THE THEME OF THE 2025 CAMPAIGN IS NOURISH, SUSTAIN AND THRIVE, AND IT CALLS ON COMMUNITIES TO WORK TOGETHER IN PROMOTING POLICIES THAT PRIORITIZE BREASTFEEDING AS AN ESSENTIAL COMPONENT OF PUBLIC AND FAMILY HEALTH. THE WACO MCLENNAN COUNTY PUBLIC HEALTH DISTRICT, THROUGH ITS WOMEN, INFANTS, AND CHILDREN PROGRAM, PROVIDES CRITICAL BREASTFEEDING EDUCATION SUPPORT AND RESOURCES TO HELP NEW MOTHERS MEET THE NEEDS OF THEIR GROWING INFANTS.

THIS MONTH SERVES TO CELEBRATE THE EFFORTS OF ORGANIZATIONS, ADVOCATES, AND POLICY MAKERS WHO WORK TIRELESSLY TO CREATE A SOCIETY THAT WELCOMES AND EMPOWERS BREASTFEEDING FAMILIES.

THE CITY OF WACO VALUES ITS FAMILIES AND IS COMMITTED TO FOSTERING A SUPPORTIVE COMMUNITY WHERE ALL PARENTS HAVE THE TOOLS AND ENCOURAGEMENT THEY NEED TO RAISE HEALTHY, THRIVING CHILDREN. AND THAT'S SIGNED IN TESTIMONY HERE OF WITNESS MY HAND AND THE SEAL OF THE CITY OF WACO THIS FIFTH DAY OF AUGUST 2025, SIGNED BY ALL THE COUNCIL MEMBERS RIGHT HERE. SO CONGRATULATIONS. THANK YOU, THANK YOU. THANK YOU, THANK YOU VERY MUCH. PLEASE. MR. MAYOR, COUNCIL MEMBERS, COLLEAGUES AND COMMUNITY MEMBERS, IT IS WITH GREAT HONOR THAT I ACCEPT THE PROCLAMATION FOR NATIONAL BREASTFEEDING MONTH. I AM CAROLYN BROOKE, INTERNATIONAL BOARD CERTIFIED LACTATION CONSULTANT AND REGISTERED NURSE WITH THE WOMEN'S INFANTS AND CHILDREN PROGRAM. AND THIS IS KEISHA AND ELSA, WHO ARE OUR PEER COUNSELORS AT WICK, HELPING OUR BREASTFEEDING MOMS AS WELL. WE APPRECIATE THE CITY'S ENDORSEMENT AND SUPPORT TO THE

[02:50:06]

THE LOCAL WICK AGENCY AND OUR COMMUNITY PARTNERS REPRESENTED HERE WORK TO PROVIDE NUTRITION AND EDUCATION AND SUPPORT FOR MOTHERS AND BABIES, OPTIMIZING BREASTFEEDING AMONG OUR MOTHERS AND BABIES HELPS TO REDUCE RISK OF CHRONIC DISEASES, IMPROVE IMMUNITY, AND PROVIDES THE FOUNDATION FOR LONG, HEALTHY LIVES. WE DO NOT DO THIS WORK ALONE. IT TAKES A SMALL ARMY, SO I WOULD LIKE TO ACKNOWLEDGE OUR COMMUNITY PARTNERS REPRESENTED HERE TODAY. Y'ALL WANT TO STAND UP. THESE ARE ALL OUR LADIES WHO WORK WITH THE HEALTH DISTRICT. FINALLY, WE WOULD LIKE TO INVITE THE COMMUNITY TO OUR BREASTFEEDING EDUCATION FAIR THAT WE WILL HAVE ON FRIDAY, AUGUST 8TH. THIS FRIDAY, 9 TO 3 AT CAMERON PARK CLUBHOUSE FOR OUR CELEBRATION FOR BREASTFEEDING MONTH. THANK YOU VERY MUCH. THANK YOU, THANK YOU. OKAY. THANK YOU EVERYBODY FOR

[VIII. PUBLIC HEARINGS]

PREVIOUSLY, A PUBLIC HEARING WAS HELD ON JUNE 17TH AT THE CITY COUNCIL MEETING, WHICH OCCURRED DURING THE 30 DAY COMMENT PERIOD. HARD COPIES WERE MADE AVAILABLE FOR THE PUBLIC'S VIEWING IN THE CITY SECRETARY'S OFFICE, THE HOUSING OFFICE AND THE PUBLIC LIBRARIES. THE NOTICE FOR THIS PUBLIC HEARING WAS PUBLISHED IN THE NON-LEGAL SECTION OF THE WACO TRIBUNE-HERALD NEWSPAPER, POSTED ON THE CITY'S WEBSITE, POSTED AT THE CITY'S LIBRARIES AND ON THE CITY'S BULLETIN BOARDS. THERE IS A RESOLUTION ON THE AGENDA FOR YOUR CONSIDERATION TONIGHT.

THANK YOU, DIRECTOR PRICE. ARE THERE ANY QUESTIONS FOR STAFF? I WILL NOW OPEN A PUBLIC HEARING FOR COMMENTS. IS ANYONE PRESENT WHO WOULD LIKE TO SPEAK REGARDING THIS ITEM? SEEING NO SPEAKERS, WE WILL CLOSE THE PUBLIC HEARING. IS THERE A MOTION? MOVE FOR APPROVAL? A SECOND SECOND HAVE A MOTION AND A SECOND. RELUCTANT. HEAR ANY DISCUSSION ON THIS ITEM. ON THERE BEING NO DISCUSSION. CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES.

EWING. YES. CHASE. YES. HOLMES I THAT MOTION PASSES. THE NEXT ITEM TO CONSIDER IS THE PUBLIC HEARING 2025 DASH 496, DIRECTOR PETERS. HONORABLE MAYOR, MEMBERS OF THE COUNCIL. THIS IS A PUBLIC HEARING TO CONSIDER A REQUEST FOR THE WITHDRAWAL OF AN APPLICATION FOR AN ORDINANCE CHANGING THE LAND USE DESIGNATION FROM URBAN, RESIDENTIAL TO MEDIUM DENSITY RESIDENTIAL, OFFICE, FLEX AND REZONING FROM R-1. B SINGLE FAMILY RESIDENTIAL DISTRICT TO R3. B MULTI FAMILY RESIDENTIAL DISTRICT ON APPROXIMATELY 2.763 ACRES. DESCRIBED AS LOT 59, BLOCK 63, THE PARK MEADOW SOUTH PHASE TWO ADDITION, LOCATED SOUTHWEST OF RIDGE ROAD AND WARREN ROAD INTERSECTION. IF THE REQUEST FOR WITHDRAWAL IS DENIED, THEN THE COUNCIL WILL CONDUCT A PUBLIC HEARING ON THE LAND USE AND ORDINANCE CHANGE, AND STAFF DOES RECOMMEND

[02:55:04]

ORDERUD. YES. EWING. YES. CHASE. HOLMES I THAT MOTION PASSES. THE NEXT ITEM IS PUBLIC HEARING 2025 DASH 497, DIRECTOR PETERS. HONORABLE MAYOR, MEMBERS OF THE COUNCIL. THIS IS A PUBLIC HEARING TO CONSIDER AN ORDINANCE OF THE CITY OF WACO, CHANGING THE STREET NAME FOR A PORTION OF 42ND STREET BETWEEN CONCORD AVENUE AND BOSQUE BOULEVARD IN THE CITY OF WACO, MCLENNAN COUNTY, TEXAS, TO LIONS WAY, AUTHORIZING THE CHANGE CHANGING IN THE CITY PLAN TO REFLECT THE NAME AUTHORIZING THE CHANGE. CHANGING OF THE WACO CITY OF WACO MAPS AND PROVIDING FOR NEW STREET SIGNS. PROVIDING CLAUSE AND FINDING. DETERMINING THE MEANING OF WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. BY A VOTE OF 8 TO 0. PLANNING COMMISSION RECOMMENDED APPROVAL THE NAME CHANGE AS PROPOSED. THANK YOU, DIRECTOR PETERS. ANY QUESTIONS FOR STAFF? THERE BEING NONE, I WILL NOW OPEN THE PUBLIC HEARING FOR COMMENTS. DOES ANYONE PRESENT WHO WOULD LIKE TO SPEAK REGARDING THIS REQUEST? SEEING NO SPEAKERS, WE WILL CLOSE THE PUBLIC HEARING. DO I HEAR A MOTION? MAYOR, I THINK THIS CONVERSATION STARTED WITH SOME FRUITFUL DISCUSSIONS THAT WE HAD WITH WACO ISD'S ADMINISTRATION, THEIR SUPERINTENDENT, AND THEIR SCHOOL BOARD. I APPRECIATE BRADLEY FORD, APPRECIATE TRUSTEE ANGELO OCHOA AND OTHERS IN SUPPORT OF THIS, BUT DEFINITELY WILL DEFER TO OUR WACO HIGH LION ALUM FROM THE RONALD REAGAN ERA FOR ANY MOTION ON THIS MATTER. MOVE TO APPROVE. HAVE A MOTION. SECOND, HAVE A MOTION A SECOND.

WE HAVE SOME TIME FOR DISCUSSION ON THIS. IT'S KIND OF A COOL DEAL. AND GEORGE SHIRLEY, AS A AS AN ALUMNI, IS THERE ANYTHING THAT'S FANTASTIC? I CAN'T BELIEVE IT WASN'T DONE BEFORE. I KNOW IT TOOK YOU GETTING ON THE COUNCIL TO ACTUALLY GET LIONS WAY. WHAT DO YOU KNOW. ALL RIGHT. SO THERE BEING NO FURTHER DISCUSSION, CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. YES. EWING. YES. CHASE. YES. HOLMES I THAT MOTION PASSES. THE NEXT ITEM IS PUBLIC HEARING 2020 5-4 98, DIRECTOR PETERS. HONORABLE MAYOR, MEMBERS OF THE COUNCIL.

THIS IS A PUBLIC HEARING TO CONSIDER AN ORDINANCE AMENDING CHAPTER 28 ZONING. ARTICLE FOUR.

DISTRICT 31 SPECIAL DISTRICT RIVERWAY OVERLAY DISTRICT FOR THE CITY OF WACO, BY AMENDING THE ORDINANCE TO INCLUDE THE DEFINITION OF A COTTAGE RESIDENTIAL AND PROVIDING REFERENCE TO THE MOST RECENTLY ADOPTED RIVERWAY DESIGN BOOK AND AMENDING THE RIVERWAY DESIGN BOOK BY ADDING THE COTTAGE RESIDENTIAL PRODUCT AS AN ALLOWABLE HOUSING TYPE AND REVISING THE CONCEPT PLAN. STREET LAYOUT. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH AND PROVIDING SEVERABILITY CLAUSE. PROVIDING FOR INCLUSION IN THE CODE, PROVIDING FOR PENALTIES AND FINDING. DETERMINING THE MEANING IN WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. BY A VOTE OF SEVEN ZERO.

PLANNING COMMISSION RECOMMENDED APPROVAL OF THE REVISIONS AS PROPOSED. A LITTLE BIT MORE INFORMATION ON THE COTTAGE RESIDENTIAL OR COTTAGE COURT RESIDENTIAL. THIS IS A TYPE OF RESIDENTIAL DEVELOPMENT THAT CONSISTS OF A GROUP OF SMALL, USUALLY SMALLER THAN A TYPICAL SINGLE FAMILY HOME. DETACHED AROUND A SHARED CENTER, COURTYARD OR COMMON AREA OR GREEN SPACE, AND FOR THE PURPOSE OF CREATING A LITTLE BIT MORE DENSITY, BUT KEEPING THE SAME CHARACTERISTICS THAT YOU WOULD HAVE IN A SINGLE FAMILY NEIGHBORHOOD. AND TYPICALLY AND THERE'S A THERE'S A GRAPH ON THE TOP, THERE'S THEY HAVE A SHARED PARKING FOR THE SITE, AND THEY ARE EITHER A CONDO REGIME OR CAN BE BROKEN OUT INTO LOTS. THE SECOND CHANGE IS DEALING WITH THE REVISION TO THE COLLECTOR STREET NETWORK THROUGH THE DEVELOPMENT. THE ORIGINAL PLAN HAD A LOOP STREET THROUGH THE WHOLE DEVELOPMENT, EAST WEST ALONG THE RIVER AND THEN CLOSER TO LAKE SHORE. AS THE DEVELOPER HAS BEEN REFINING THEIR PLANS AND LOOKING AT THE DIFFERENT HOUSING TYPES AND PODS, HAVING THAT COLLECTOR GO THROUGH THAT DID CREATE SOME ISSUES WITH ONE

[03:00:08]

ADMINISTRATION, AND SECTION 28 151 OF DIVISION SEVEN. PUBLIC HEARINGS OF ARTICLE TWO ADMINISTRATION TO MAKE AMENDMENTS RELATED TO THE PROTESTS AND PROCEDURES FOR CHANGES TO ZONING REGULATIONS OR DISTRICT BOUNDARIES, AND COMPLIANCE WITH REVISIONS TO TEXAS LOCAL GOVERNMENT CODE, CHAPTER 211. HOUSE BILL NUMBER 24 OF THE 89TH REGULAR LEGISLATIVE SESSION, AND REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH AND PROVIDING FOR PENALTIES. PROVIDING SAVINGS CLAUSE. PROVIDING A SEVERABILITY CLAUSE, PROVIDING FOR AN EFFECTIVE DATE, AND FINDING DETERMINED. THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW, BY A VOTE OF NINE ZERO.

PLAN COMMISSION DID RECOMMEND THESE CHANGES. THE GIST OF THESE IT DOES CREATE NEW CRITERIA FOR COUNCIL VOTE REQUIREMENTS ON ZONE CHANGES. CURRENTLY, THERE ARE SOME THRESHOLDS THAT HAVE TO BE MET TO TRIGGER THE SUPERMAJORITY REQUIREMENT. THOSE ARE CHANGING. THERE'S GOING TO BE LESS TRIGGERS FOR SUPERMAJORITY. THERE ARE GOING TO BE NEW NOTICE REQUIREMENTS FOR PUBLIC HEARINGS ON THE WEBSITE, AND THEN NEW REQUIREMENTS FOR REPLACEMENTS OF NOTICE SIGNS ON THE PROPERTY TO NOTIFY OF THE ZONING CHANGE. SO YOU'LL YOU'LL SEE THOSE CHANGES IN THE ORDINANCE. AND THE STATE LAW DOES GO INTO EFFECT SEPTEMBER 1ST. THIS IS ALONG WITH THE NEXT TWO PUBLIC HEARINGS. THESE ARE ALL THE PLANNING SERVICES DEPARTMENTS EFFORTS TO GET OUR CITY ORDINANCES IN COMPLIANCE WITH THE BRAND NEW STATE LAW THAT WAS JUST PASSED IN THE LAST SESSION. THAT'S CORRECT. YEAH, TWO OF THEM ARE EFFECTIVE SEPTEMBER 1ST, INCLUDING THIS ONE. AND THEN ONE OF THEM IS ALREADY EFFECTIVE. THANK YOU. ANY OTHER QUESTIONS FOR CLINT. AND THESE ARE LEGISLATIVE CHANGES THAT WE'RE REACTING TO. AS COUNCIL MEMBER BOYD MENTIONED. AND WE HAVE TO VOTE ON HERE TOO. WE CAN'T WE CAN'T GO TO CHICAGO.

IT'S TOO LATE TO MAKE THE. OKAY. I'LL NOW OPEN A PUBLIC HEARING FOR COMMENTS. IS ANYONE PRESENT WHO'D LIKE TO SPEAK REGARDING THIS REQUEST? SEEING NO SPEAKERS, WE WILL CLOSE THE PUBLIC HEARING. IS THERE A MOTION FOR APPROVAL? SECOND, HAVE A MOTION. AND SECOND, ANY FURTHER DISCUSSION? SEEING NONE. CITY SECRETARY, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES.

[03:05:08]

THIS IS A PUBLIC HEARING TO CONSIDER AN ORDINANCE REVISING CHAPTER 28 ZONING OF THE WACO CODE OF ORDINANCES. SECTION 20 8-1 OF ARTICLE ONE IN GENERAL AND SECTIONS 2928 OF DIVISION THREE ACCESSORY STRUCTURES AND USES OF ARTICLE FIVE SUPPLEMENTARY DISTRICT REGULATIONS TO MAKE AMENDMENTS RELATED TO HOME OCCUPATIONS AND COMPLIANCE. REVISIONS TO THE TEXAS LOCAL GOVERNMENT CODE, CHAPTER 211 PER HOUSE BILL NUMBER 2464 OF THE 89TH REGULAR LEGISLATIVE SESSION. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT. HEREWITH PROVIDING FOR INCLUSION IN THE CODE. PROVIDING FOR PENALTIES, PROVIDING SAVING CAUSE, PROVIDING SEVERABILITY CLAUSE, PROVIDING FOR EFFECTIVE DATE AND FINDING A TERM. THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW, BY A VOTE OF NINE ZERO. PLANNING COMMISSION DID RECOMMEND APPROVAL OF THE AMENDMENTS AS PROPOSED. THIS ORDINANCE CHANGES DEALING WITH HOME BUSINESSES. THE NEW STATE LAW DOES SAY THAT CITIES CANNOT PROHIBIT HOME BUSINESSES OR REQUIRE ZONE CHANGES OR SPECIAL PERMITS FOR HOME BUSINESSES, WHICH ARE ORDINANCES ALREADY IN COMPLIANCE WITH THAT SECTION OF IT. BUT THERE ARE SOME CHANGES TO OUR ORDINANCE THAT WE NEED TO MAKE AS WELL TO COMPLY. ONE OF THEM IS THAT THE OCCUPATION MUST BE CONDUCTED AS A SECONDARY USE TO THE RESIDENTIAL DWELLING, IN A MANNER IN WHICH NONE OF THE ACTIVITIES ARE VISIBLE FROM THE STREET. THE OCCUPATION BUSINESS CANNOT BE OPERATED BY A TOTAL NUMBER OF EMPLOYEES OR PATRONS IN EXCESS OF THE OCCUPANCY LIMITS AS DEFINED BY THE RESIDENTIAL DWELLING UNIT PER CODE. THIS IS A PRETTY BIG CHANGE. CURRENTLY, OUR ORDINANCE REQUIRES THAT THE PERSON OPERATING THE BUSINESS LIVE AT THE HOME SO THAT THAT WILL NO LONGER BE REQUIRED. AND THEN THE LAST ONE IS DEALING WITH SUBSTANTIAL INCREASE IN TRAFFIC.

THAT'S PART OF THE STATE LAW. SO WE'RE ACTUALLY GOING TO DEFINE WHAT A SUBSTANTIAL INCREASE IN TRAFFIC IS, WHICH IS GOING TO BE 50% INCREASE IN THE DAILY TRIPS GENERATED AT A RESIDENTIAL HOME, AS ESTIMATED BY THE INSTITUTE OF TRANSPORTATION ENGINEERS, WHICH IS APPROXIMATELY TEN TRIPS A DAY. SO AN INCREASE OF 50% OF THAT WOULD BE PROHIBITED. DOES THIS AFFECT SHORT TERM RENTALS? IT DOES NOT. THAT'S A VERY GOOD POINT. AND IT'S SPECIFIC IN STATE LAW THAT THIS DOES NOT IMPACT REGULATION OF SHORT TERM RENTALS. GOOD QUESTION. ANY OTHER QUESTIONS FOR STAFF? I'LL NOW OPEN A PUBLIC HEARING FOR COMMENTS. IS ANYONE PRESENT WHO'D LIKE TO SPEAK REGARDING THIS ITEM? SEEING NO SPEAKERS WILL CLOSE THE PUBLIC HEARING. IS THERE A MOTION MOVE FOR APPROVAL? SECOND. MOTION AND SECOND. ANY FURTHER DISCUSSION ON THIS ONE? CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. PORTER ROAD. YES. EWING. YES. CHASE.

YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM IS PUBLIC HEARING 2020 5-501, DIRECTOR PETERS. HONORABLE MAYOR, MEMBERS OF THE COUNCIL. THIS IS A PUBLIC HEARING TO CONSIDER AN ORDINANCE REVISING CHAPTER 28 ZONING OF THE CODE OF ORDINANCES. SECTION 28 ONE OF ARTICLE ONE IN GENERAL AND ADDING SECTION 20 8-9 70 .6.1 AS NEW DIVISION TEN DWELLING UNIT OCCUPANCY REQUIREMENTS OF ARTICLE FIVE SUPPLEMENT DISTRICT REGULATIONS TO MAKE AMENDMENTS TO RELATED TO THE OCCUPANCY OF DWELLING UNITS IN COMPLIANCE WITH REVISIONS TO THE TEXAS LOCAL GOVERNMENT CODE, CHAPTER 211 PER SENATE BILL NUMBER 1567 OF THE 89TH REGULAR LEGISLATIVE SESSION, REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT. HEREWITH PROVIDING FOR INCLUSION IN THE CODE. PROVIDING FOR PENALTIES, PROVIDING SAVINGS CLAUSE. PROVIDING SEVERABILITY CLAUSE, PROVIDING FOR AN EFFECTIVE DATE, AND FINDING. DETERMINED THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW. THE PLANNING COMMISSION ALSO RECOMMENDED APPROVAL OF THIS BY A VOTE OF NINE ZERO. THIS IS DEALING WITH THE WHAT A WHAT A DWELLING UNIT IS DEFINED AS. THIS ACTUALLY ONLY IMPACTS CITIES WITH A POPULATION UNDER 250,000 THAT HAS A UNIVERSITY OVER 20,000 ENROLLMENT. SO IT ONLY IMPACTS ABOUT SIX CITIES IN TEXAS, INCLUDING US. BUT BASICALLY IT PROHIBITS CITIES FROM REGULATING OR REGULATING A DWELLING UNIT OR

[03:10:02]

HOLMES I THAT MOTION PASSES. THE NEXT ITEM TO CONSIDER IS THE PUBLIC HEARING 2020 5-502 DIRECTOR PETERS. HONORABLE MAYOR, MEMBERS OF THE COUNCIL. THIS IS A PUBLIC HEARING TO CONSIDER AN ORDINANCE REVISING CHAPTER 28 ZONING OF THE WACO CODE OF ORDINANCES. SECTION 21 OF ARTICLE ONE IN GENERAL AND SECTION 28 206 24 OF DIVISION 16 C2 REGULATION OR C2 COMMUNITY COMMERCIAL DISTRICT OF ARTICLE FOUR DISTRICT REGULATIONS TO ADD A DEFINITION FOR WHOLESALE BUYING CLUB AND TO ALLOW A WHOLESALE BUYING CLUB AS A SPECIAL PERMITTED USE IN C2 COMMUNITY COMMERCIAL DISTRICT. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT.

HEREWITH PROVIDING FOR INCLUSION IN THE CODE. PROVIDING FOR PENALTIES, PROVIDING A SAVINGS CLAUSE. PROVIDING SEVERABILITY CLAUSE, PROVIDING FOR AN EFFECTIVE DATE, AND FINDING AND DETERMINING THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW. THE PLANNING COMMISSION DID RECOMMEND APPROVAL OF THIS BY A VOTE OF 9 TO 0. THIS IS NOT RELATED TO A STATE BILL, BUT SOMETHING THAT WE WERE LOOKING AT DOING IN OUR ZONING ORDINANCE. A LOT OF OUR NEWER DEVELOPING COMMERCIAL AREAS ARE ZONED C2 AND WHOLESALE. BUYING CLUBS RIGHT NOW IN OUR ORDINANCE ARE ONLY ALLOWED IN C3 ZONING. SO WE WANTED TO BE ABLE TO ALLOW THOSE IN THOSE NEWLY DEVELOPED AREAS. SO WE'RE ADDING ADDING THAT AS A SPECIAL USE IN C2. AND THEN ALSO ADDING A DEFINITION, BECAUSE CURRENTLY WE DIDN'T HAVE A DEFINITION ORDINANCE WITH WHOLESALE BUYING CLUB INCLUDE LIKE SAM'S CLUB OR COSTCO. YEAH, EXACTLY. YEAH. ANY OTHER QUESTIONS FOR STAFF? I'LL OPEN THE PUBLIC HEARING FOR COMMENTS. IS ANYONE PRESENT WHO'D LIKE TO SPEAK REGARDING THIS REQUEST? SEEING NO SPEAKERS WILL CLOSE THAT PUBLIC HEARING. IS THERE A MOTION? WE'LL MOVE FOR APPROVAL? SECOND, YOU HAVE A MOTION AND WE DO HAVE AN APPROVAL. ANY DISCUSSION? THERE BEING NO FURTHER DISCUSSION, CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. BORDER. YES. EWING. YES. CHASE. YES. HOLMES I THAT MOTION

[X.3. RES-2025-505 ]

IN KEEPING WITH THE EFFECTIVE DATE OF ALL OTHER RATES CONTEMPLATED IN THE FISCAL YEAR 20 2526 PROPOSED BUDGET, I MOVE TO AMEND THE PROPOSED RESOLUTION ATTACHED TO RESOLUTION NUMBER

[03:15:06]

[IX. CONSENT AGENDA]

CONSENT AGENDA INCLUDES RESOLUTION 2020 5-503 THROUGH RESOLUTION 2025 546. EXCEPT FOR THE RESOLUTION. RESOLUTION WE JUST HEARD 2025 505. IS THERE A MOTION ON THE CONSENT AGENDA MOVE FOR APPROVAL OF THE CONSENT AGENDA? SECOND, HAVE A MOTION AND A SECOND, ANY DISCUSSION? CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. BORDER. YES. EWING. YES.

[XI. ORDINANCES]

IS THERE A MOTION? FOR APPROVAL? SECOND MOTION IN A SECOND. ANY DISCUSSION? CITY SECRETARY HICKS, PLEASE PULL THE COUNCIL. LOZANO. BORDER. RUUD. EWING. YES. CHASE. YES. HOLMES. I THAT MOTION PASSES. NEXT ITEM TO CONSIDER IS ORDINANCE 2020 5-5 48 CITY ATTORNEY HAMILTON KARAM.

AN ORDINANCE OF THE CITY OF WACO, TEXAS, AMENDING SECTION 1883. IN CHAPTER 18, PERSONNEL OF SAID CODE PROVIDING THE NUMBER OF POLICE OFFICERS, POLICE SERGEANTS, POLICE COMMANDERS AND ASSISTANT POLICE CHIEFS AUTHORIZED BY THE CITY COUNCIL, PROVIDING A SAVINGS CLAUSE, PROVIDING FOR INCLUSION IN THE CODE, AND FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. THIS ORDINANCE COMES TO YOU. COUNCIL ON FIRST READING YOUR MOTION, I MOTION TO APPROVE. SECOND, HAVE A MOTION AND A SECOND ANY DISCUSSION. THERE BEING NO FURTHER DISCUSSION. CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. WATER. YES. EWING. YES. CHASE. YES, HOMES, I THAT MOTION PASSES. THE NEXT ITEM TO CONSIDER IS ORDINANCE 2025 549. CITY ATTORNEY. HAMILTON KAREN. AN ORDINANCE ESTABLISHING ADMINISTRATIVE DEPARTMENTS OF THE CITY OF WACO, TEXAS. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT.

HEREWITH PROVIDING A SAVINGS CLAUSE, PROVIDING FOR AN EFFECTIVE DATE AND FUNDING, AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. THIS ORDINANCE COMES TO COUNCIL ON FIRST READING. IS THERE A MOTION? MOTION FOR APPROVAL? SECOND MOTION A SECOND. ANY DISCUSSION? CITY SECRETARY HICKS, PLEASE PULL THE COUNCIL. LOZANO. YES. YES. EWING. YES. CHASE. YES. HOLMES I THAT MOTION PASSES. THE NEXT ITEM TO CONSIDER IS ORDINANCE 2020 5-550. CITY ATTORNEY. HAMILTON KAREN. AN ORDINANCE AMENDING SECTION 20 4-1 27 OF ARTICLE SIX FINANCIAL MATTERS OF CHAPTER 24 TAXATION AND FINANCE OF THE CODE OF ORDINANCES OF THE CITY OF WACO, TEXAS. TO INCREASE THE CITY MANAGER'S AUTHORITY TO MAKE PURCHASES NOT EXCEEDING $100,000 AND TO INCREASE TO $50,000. THE EXPENDITURES THAT ARE REPORTED QUARTERLY TO THE CITY COUNCIL. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT, HEREWITH PROVIDING FOR INCLUSION IN THE CODE, PROVIDING FOR AN EFFECTIVE DATE, AND FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. THIS ORDINANCE COMES TO COUNCIL ON FIRST READING. DO I HEAR A MOTION? I'LL MOVE FOR APPROVAL. SECOND MOTION AND A SECOND. ANY DISCUSSION? CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? LOZANO. YES. EWING.

YES. CHASE. YES. HOLMES. AYE. MOTION PASSES. WE'LL NOW GO TO THE NEXT ITEM, WHICH IS ORDINANCE 2020 5-551 CITY ATTORNEY HAMILTON CARROLL. AN ORDINANCE OF THE CITY OF WACO, TEXAS, CREATING A PLANNED UNIT DEVELOPMENT PUD CHANGING THE ZONING CLASSIFICATION FROM R1B

[03:20:06]

SITUATED ON THE THOMAS DE LA VEGA SURVEY. ABSTRACT 42, MCLENNAN COUNTY, TEXAS.

EMBRACING ALL, EMBRACING ALL OF A TRACT OF LAND CONVEYED TO. WARRANT WACO H H LLC IN CLERK'S FILE NUMBER 2013 036033. OFFICIAL PUBLIC RECORDS OF MCLENNAN COUNTY, TEXAS, OPEN AND DESCRIBED AS 0.8.05 ACRES IN CLERK'S FILE NUMBER 2006 0106 13, AND A 2.664 ACRE TRACT OF LAND SITUATED IN THE THOMAS THOMAS DE LA VEGA SURVEY. ABSTRACT 42, MCLENNAN COUNTY, TEXAS. EMBRACING ALL OF THE CALLED 2.666 ACRE TRACT CONVEYED TO WARRANT. CORSICANA LLC, A TEXAS LIMITED LIABILITY COMPANY AND CLERK'S FILE NUMBER 2022 0220 5:06 P.M. CT. PROPERTY ID 413635 AND 124200 APPROVING THE CONCEPT PLAN FOR THE PUD. REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH. PROVIDING FOR PENALTIES. PROVIDING A SAVINGS CLAUSE. PROVIDING A SEVERABILITY CLAUSE. FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC, AS REQUIRED BY LAW. THIS ORDINANCE WAS APPROVED BY A60 VOTE OF COUNCIL ON FIRST READING ON JUNE 17TH, 2025. DO I HEAR A MOTION ON SECOND READING MOVE FOR APPROVAL ON SECOND READING SECOND HAVE A MOTION AND A SECOND ANY DISCUSSION? CITY SECRETARY HICKS, PLEASE PULL THE COUNCIL. LOZANO. YES. BORDER. YES. EWING. YES. CHASE. YES.

[XII. HEARING OF ANY VISITOR CONCERNING CITY BUSINESS]

[03:25:02]

FOURTH, THE CITY SHOULD LAUNCH OR SUPPORT AN LGBTQ COMMUNITY RESOURCE CENTER, A PHYSICAL HUB WHERE PEOPLE OF ALL AGES CAN ACCESS SUPPORT, CAN ACCESS SUPPORT SERVICES, ADVOCACY AND SAFETY. WACO'S LGBT COMMUNITY DESERVES TO BE PROTECTED, SEEN AND HEARD NOT JUST IN PRIVATE SPACES BUT IN PUBLIC POLICY. LASTLY, BUT EQUALLY IMPORTANT AND TANGIBLE, THE CITY NEEDS TO TAKE ILLEGAL HANDICAP PARKING VIOLATIONS MORE SERIOUSLY. THIS IS SOMETHING I WITNESS ON A DAILY BASIS AND THIS PROBLEM WILL CONTINUE TO GROW. IF NON-HANDICAPPED PEOPLE BELIEVE THEY CAN PARK IN THESE SPOTS WITHOUT REPERCUSSIONS. IN CLOSING, WACO IS KNOWN FOR ITS CHARMING CHARACTER. PUBLIC FIGURES LIKE CHIP AND JOANNA GAINES HAVE HELPED OUT THIS CITY AND PUT IT ON THE MAP. I BELIEVE THAT KIND OF INFLUENCE AND VISIBILITY COMES WITH RESPONSIBILITY TO HELP UPLIFT EVERYONE WHO CALLS WACO HOME. THIS ISN'T JUST ABOUT HOUSING, IT'S ABOUT JUSTICE. IT'S ABOUT DISABILITY RIGHTS. IT'S ABOUT LGBTQ PLUS INCLUSION. IT'S ABOUT WHETHER WE BUILD A CITY THAT WORKS FOR EVERYONE OR ONLY FOR SOME. THANK YOU ALL FOR YOUR TIME. I'LL KEEP SHOWING UP AND WORKING WITH YOU GUYS TO BUILD A CITY WHERE EVERYONE IS SEEN, SUPPORTED AND VALUED. THANK YOU. THANK YOU, MR. HALL. VERY COMPREHENSIVE PLAN HERE. IS THERE ANYONE ELSE PRESENT WHO WOULD LIKE TO SPEAK DURING THE HEARING OF VISITORS? SEEING NO

[XIII. COUNCIL COMMENTS ON ITEMS OF COMMUNITY INTEREST]

[III. EXECUTIVE SESSION]

OKAY. I'M SORRY I SAID IT'S WRONG. WE WILL NOW RECESS. EXECUTIVE. LET ME START OVER ON THAT. THERE BEING NO FURTHER BUSINESS THAT WE JUST SAID, THE BUSINESS SESSION OF THE AUGUST 5TH, 2025 IS WILL NOW GO INTO RECESS, INTO THE EXECUTIVE SESSION AND AS READ INTO THE RECORD BY THE CITY SECRETARY AT 6:54 P.M. THANKS. NOTICE IS HEREBY GIVEN THAT THE CITY COUNCIL WILL GO INTO EXECUTIVE SESSION IN ACCORDANCE WITH THE FOLLOWING PROVISIONS. PERSONNEL TEXAS OPEN MEETINGS ACT, SECTION 551.074. CITY MANAGER BRADLEY FORD, REAL ESTATE, TEXAS OPEN MEETING, REAL PROPERTY TEXAS OPEN MEETINGS ACT, SECTION 551.072 ECONOMIC DEVELOPMENT

[03:30:02]