[CALL TO ORDER]
          [00:00:06]
          ON JUNE 2ND, 2026 TO ORDER AT 3:00 PM. WELCOME TO THE WORK SESSION OF THE WACO CITY COUNCIL. APPRECIATE Y'ALL BEING HERE TODAY. WELCOME TO EVERYBODY GATHERED HERE IN THE BOSTON THEATER GALLERY IN BEAUTIFUL DOWNTOWN WACO. AND ALSO WELCOME TO ALL THE VIEWERS AT HOME WATCHING ON THE WACO CITY CABLE CHANNEL. THANK YOU FOR JOINING US HERE TODAY. WE GOT A GREAT AGENDA OF OF ITEMS. I'M MAYOR JIM HOLMES. I'M JOINED ON THE DAIS HERE TODAY BY OUR COUNCIL MEMBERS UNDER YOUR BARE FIELD. DISTRICT ONE ISABEL LOZANO, DISTRICT TWO, JED COLE FROM DISTRICT THREE, DARIUS EWING FROM DISTRICT FOUR. AND OUR FRESHLY MINTED MAYOR PRO TEM NEXT TO ME HERE, GEORGE CHASE FROM DISTRICT FIVE. HE'S STILL SHINY. EXACTLY. LOOKING GOOD. ALSO JOINED ON THE ADJACENT DAIS OVER HERE BY SENIOR CITY STAFF CITY MANAGER RYAN HOLT, CITY ATTORNEY KRISTIN HAMILTON, AND OUR CITY SECRETARY MICHELLE HICKS. WE'RE GOING TO START THE MEETING TODAY WITH A MOMENT OF SILENCE. OKAY. WELL, THAT WAS SUPER SILENT. I COULD HEAR A PIN DROP THERE. THAT WAS THAT WAS MUCH RESPECT SHOWN THERE. OKAY, 
          [WORK SESSION]
FIRST ITEM OF BUSINESS TODAY IS RECOGNITION OF WORK SESSION SPEAKERS. MICHELLE, DO WE HAVE ANY SPEAKERS REGISTERED OR ANYBODY WANT TO. WE DO NOT HAVE ANY REGISTERED SPEAKERS, NO REGISTERED SPEAKERS. ANYBODY OUT THERE THAT WANT TO SAY ANYTHING ABOUT THE AGENDA TODAY, SEEING NO REQUESTS TO SPEAK, WILL NOW RECESS THE REGULAR SESSION AND CONVENE INTO WORK SESSION WITH THE REPORT FROM CITY MANAGER HOLT. CITY MANAGER HOLT, PLEASE. AFTERNOON, MAYOR AND COUNCIL, AND WELCOME TO THOSE JOINING US IN THE AUDIENCE AND ONLINE. WE HAVE NO CHANGES ON THE AGENDA TODAY UNDER EMPLOYEE RECOGNITIONS. YOU KNOW, EVERY YEAR OUR COMMUNICATIONS AND MARKETING TEAM COMPETE IN THE TELLY AWARDS. TELLY'S ARE CONSIDERED A RESPECTED BENCHMARK FOR PRODUCTION, VALUE AND CREATIVITY AMONG REGIONAL, CABLE AND DIGITAL VIDEO PROFESSIONALS. ENTRANCE RANGE FROM LARGE RENOWNED ADVERTISING AGENCIES AND TELEVISION NETWORKS TO SMALLER INDEPENDENT CREATORS, PRODUCTION COMPANIES AND IN-HOUSE CORPORATE VIDEO TEAMS. THIS YEAR, WE ARE PROUD TO ANNOUNCE THAT THE WACO COMMUNICATIONS AND MARKETING TEAM WON FOUR TELLY AWARDS. RIGHT. THEY RECEIVED. THEY RECEIVED A BRONZE STATUE IN SOCIAL MEDIA AND THE PEOPLE'S TELLY FOR FIND YOUR CRYPTO PET CIRCLE REGIONAL ANIMAL CENTER, A BRONZE STATUE FOR NATURE AND WILDLIFE. STEP INTO THE WILD FOR OUR BLACK FOOTED CAT, SILVER FOR HEALTH AND SAFETY. SUPERMAN PULLED TO THE RIGHT AND ALSO GOLD UNDER PETS AND ANIMALS. FIND YOUR KRYPTO PET CIRCLE REGIONAL ANIMAL CENTER AND I BELIEVE WE HAVE A VIDEO TO SHOW. OKAY. 
          SEE THEM, BUT THEY SEE YOU. A LOT OF PEOPLE, THEY THINK THAT THE ANIMAL IS NOT ON HABITAT OR THEY CANNOT SEE THEM JUST TO STIMULATE THEIR DAY. IT'S JUST GIVE THEM AN ENRICHMENT, GIVE THEM DIFFERENT SCENTS. WE HIDE THEIR FOOD THROUGHOUT THE EXHIBIT, EXPECTED THAT THERE'S PROBABLY AROUND AROUND 10,000. IF I GO CRAZY, THEN WILL YOU STILL CALL ME SUPERMAN? IF I'M ALIVE AND WELL, WILL YOU BE THERE HOLDING MY HAND. I'LL KEEP YOU BY MY SIDE. WITH MY SUPERHUMAN MIGHT. KRYPTONITE. SO CONGRATULATIONS TO OUR EXECUTIVE PRODUCER, KYLE MUSCARELLO, AND OUR VIDEO PRODUCTION SPECIALIST, CHRIS OLIVER AND BILL GOUDIE, AND OF COURSE, THE ENTIRE COMMUNICATIONS AND MARKETING TEAM AND MANY CITY STAFF AND COUNCIL MEMBERS WHO SUPPORT AND PARTICIPATE IN ALL OF OUR CITY VIDEOS. SO MUCH APPRECIATION. 
          THERE ARE 17 RESOLUTIONS ON TONIGHT'S CONSENT AGENDA. I'LL HIGHLIGHT A COUPLE. ITEM 2026 351 APPROVES A TWO YEAR CONTRACT FOR A TOTAL AMOUNT OF $264,000 WITH PROSPER WACO FOR PHASE TWO OF THE PARTNERSHIP FOR ACCESSIBLE CARE AND ECONOMIC SUSTAINABILITY INITIATIVE, ALSO KNOWN AS PACES. THIS INITIATIVE WAS LAUNCHED IN 2023 BY OUR LOCAL HEALTH CARE COMMUNITY PUBLIC SECTOR LEADERS, IN RESPONSE TO GROWING CONCERNS REGARDING THE LONG TERM SUSTAINABILITY OF THE HEALTH CARE SYSTEM IN WACO AND MCLENNAN COUNTY. PHASE ONE INVOLVED ASSESSMENT AND ISSUE IDENTIFICATION, AND PHASE TWO IS INTENDED TO TRANSITION THE INITIATIVE FROM ASSESSMENT TO LONG TERM STRATEGIC PLANNING. THERE ARE SEVEN ORDINANCES ON 
          [00:05:04]
INDIVIDUAL CONSIDERATION. HI. YES, MA'AM. I WAS JUST GOING TO COMMENT ON YOUR HIGHLIGHT. IF YOU DON'T MIND. I AM ESPECIALLY GRATEFUL FOR THIS COUNCIL AND STAFF FOR CONTINUING TO DO THE WORK AND SO INTO THE WORK OF PROSPER WACO, WHICH IS OUR COLLECTIVE IMPACT ORGANIZATION. 
          IT TAKES SO MANY VILLAGES TO UPLIFT THIS CITY IN A WAY, AND ESPECIALLY IN IN. AND AS WE LOOK AT HOW WE EXPAND THE HEALTH CARE SYSTEMS IN THIS CITY AND THIS COMMUNITY. SO THIS WORK CAN'T HAPPEN WITHOUT CITY SUPPORT, AND IT CAN'T HAPPEN WITHOUT THE DEDICATED STAFF AND LEADERSHIP OF PROSPER WACO AND ALL OF THE PEOPLE OF THE HOSPITALS, ALL OF THE. 
          OTHER ORGANIZATIONS THAT SOW INTO THIS WORK. SO I AM ESPECIALLY GRATEFUL THAT THIS IS ON THE AGENDA TODAY AND THAT THE WORK OF PROSPER WACO AND THE ORGANIZATIONS THAT STAND WITH IT FOR PACES WILL CONTINUE, AND WE'LL FIND A WAY TO UPLIFT OUR CITY AND IN OUR HEALTH CARE SYSTEM. SO THANK YOU. AND I'LL JUST ADD ON TO THAT AND ECHO EVERYTHING THAT COUNCILWOMAN BAREFIELD SAID. BUT NOTE THAT, YOU KNOW, THE REASON WHY THIS WAS STARTED IN 2023 WITH PHASE ONE AND PHASE TWO IS JUST STARTING IN 2026. IT'S NOT THE ENTIRE REASON, BUT PART OF IT IS AFTER PHASE ONE WAS COMPLETED, WE KIND OF LOOKED AROUND AND ASKED, WELL, WHO'S GOING TO CHAMPION THIS AND CARRY THIS BALL FORWARD? AS WE CONTINUE TO FIND OUT WHAT THE BEST NEXT STEPS ARE WITH WITH PACES. AND SO I WANTED TO SAY THANK YOU TO PROSPER WACO, JESSICA ADDIS, OBVIOUSLY, HE'S HERE IN THE CROWD TODAY. SO THANK YOU FOR STEPPING IN AND REALIZING THERE WAS A LOT OF ALIGNMENT IN WHAT YOUR ORGANIZATION DOES AND WHAT NEEDED TO HAPPEN WITH CONTINUING TO CONVENE OUR HOSPITAL SYSTEMS HERE IN TOWN AND MAKE SURE THAT WE'RE ON THE RIGHT FOOT GOING FORWARD. AND HOPEFULLY THE NEXT PHASE HAPPENS SOONER THAN THE NEXT THREE YEARS WITH WITH THE RIGHT FOLKS HERE IN PLACE. SO LOOKING FORWARD TO IT. THANKS. GREAT. JUST ECHO WHAT BOTH COUNCIL MEMBERS HAVE SAID. AND JESSICA, I SEE OUT THERE WITH THE HEAD OF PROSPER WACO THERE. AND I APPRECIATE Y'ALL STEPPING UP BECAUSE I SAID ON THE ON THE PACES BOARD AS WE TRIED TO FIGURE OUT OUR HEALTH, YOU KNOW, HEALTH CARE SITUATION HERE IN THE LAST COUPLE OF YEARS AND MADE SOME PRETTY GOOD PROGRESS. 
          AND MISSION WACO OR WACO FOUNDATION, I'M SORRY, WACO FOUNDATION WAS VERY USEFUL IN GETTING US GOING ON THAT WITH A LOT OF OTHER FOLKS IN THE COMMUNITY. SO INSTEAD OF JUST DROPPING WHERE WE'VE GOTTEN, WE NEED TO KEEP IT ALIVE AND FIGURE OUT SOME SOLUTIONS AND SOME PLANS AND SOME LONG RANGE PLANNING AND SHORT TERM PLANNING. SO THIS IS A GREAT INVESTMENT. GREAT. APPRECIATE THAT. THANKS, JESSICA, FOR JOINING US TODAY. THERE ARE SEVEN ORDINANCES ON INDIVIDUAL CONSIDERATION. ITEM 356 AMENDS WACO'S OPEN AIR VENDING ORDINANCE UNDER THE FOOD ESTABLISHMENT AND FOOD HANDLERS SECTION. THESE UPDATES WILL BRING LOCAL ORDINANCES INTO CONFORMANCE WITH TEXAS HOUSE BILL 2844 FROM THE MOST RECENT 89TH TEXAS LEGISLATIVE SESSION. THIS REVISION SERVES TO CLARIFY LOCAL LICENSING, PERMITTING AND INSPECTION REQUIREMENTS THAT CAN CONTINUE TO BE ENFORCED BY THE CITY, PRESERVES THE CITY'S AUTHORITY OVER APPLICABLE ZONING, FIRE AND LIFE SAFETY, PARKING AND TRAFFIC ENFORCEMENT, AND REMOVES OR MODIFIES THE PROVISIONS THAT HAVE BEEN PREEMPTED BY STATE LAW. AND IF THERE ARE NO QUESTIONS THAT WILL IN THE MANAGER'S REPORT, ANY QUESTIONS FOR CITY MANAGER HOLT ON THE OVERVIEW OF THE WORK SESSION ITEMS? OKAY. WE'LL NOW GO TO THE CONSENT AGENDA. 
          THE CONSENT AGENDA INCLUDES ITEM 2026-339 AND RESOLUTION 2026-340 THROUGH RESOLUTION 2026-355. ARE THERE ANY ITEMS THAT COUNCIL WOULD LIKE TO REMOVE FROM THE CONSENT AGENDA AND VOTE ON SEPARATELY? THERE BEING NONE, THERE'S NOTHING PULLED, SO WE'LL JUST GO STRAIGHT WITH 2026-339 AND THEN 2026-343355. NEXT ITEM ON THE AGENDA IS WORK SESSION ITEMS 2026 334 AND 2026-336. CITY MANAGER HOLT, WILL YOU PLEASE INTRODUCE THE FIRST WORK SESSION? THANK YOU, MAYOR AND COUNCIL FOR THE FIRST WORK SESSION. ITEM 334. WE WELCOME CHRIS MCGOWAN HERE ON BEHALF OF CREATIVE WACO, TO DISCUSS THE APPLICATION TO THE TEXAS COMMISSION ON THE ARTS AND A REQUEST TO. FOR SUPPORT TO EXPAND THE BOUNDARIES OF THE DOWNTOWN WACO CULTURAL DISTRICT. ITEM 350 IS ON. YOUR CONSENT AGENDA IS. WHICH IS A CORRESPONDING RESOLUTION ASSOCIATED WITH THIS PRESENTATION AND WILL BE DEPENDENT UPON COUNCIL'S APPROVAL AND SUPPORT OF THE APPROACH OUTLINED IN THIS AFTERNOON'S PRESENTATION. WELCOME, CHRIS. THANK YOU. GREETINGS, HONORABLE FRIENDS. 
          MAYOR, YOU CAN'T ALWAYS GET WHAT YOU WANT. AND TODAY YOU CAN'T GET THE MELLIFLUOUS RECITATIONS OF FIONA BOND. SHE IS. CAN YOU TRY AN ACCENT? NO, I WILL NOT. SHE IS OUT OF TOWN ACTUALLY, SPEAKING AT AN AMERICANS FOR THE ARTS CONFERENCE. BUT IN ANY CASE, MAYOR, I WILL TRY TO MAKE SURE THAT YOU GET WHAT YOU NEED. OKAY. MY NAME IS CHRIS MCGOWAN. 
          [00:10:01]
I'M ON THE BOARD OF CREATIVE WACO, AND I WANT TO TALK TO YOU GUYS ABOUT THE CULTURAL DISTRICT TEN YEARS AGO. IT'S HARD TO BELIEVE THAT TEN YEARS AGO, THE WACO DOWNTOWN CULTURAL DISTRICT WAS CREATED AND RECOGNIZED BY THE TEXAS COMMISSION ON THE ARTS, A STUDY THAT AMERICANS FOR THE ARTS DOES, I BELIEVE EVERY FIVE YEARS EXAMINING THE ECONOMIC IMPACT OF THE ARTS HAS. HAS DISCOVERED THAT THROUGH THE CULTURAL DISTRICT, WE'VE INCREASED ARTS FUNDING BY MORE THAN TEN TIMES. IN WACO, WE HAVE OUTPACED THE NATION IN TERMS OF LOCAL ARTS ECONOMIC OUTPUT. WHEN MOST OF THE NATION IS DECLINING, OURS HAS INCREASED BY 17%. THERE'S BEEN A TREMENDOUS RETURN ON CREATING THE DOWNTOWN CULTURAL ARTS DISTRICT. THIS WAS CREATED BY RESOLUTION NUMBER 2016 281, I BELIEVE IT WAS BACK IN APRIL. 
          THERE'S A PICTURE OF EVERYBODY SIGNING IT. REMEMBER THAT DAY? IT WAS A BEAUTIFUL DAY OUTSIDE. 
          WHY ARE WE HERE? WELL, EVERY TEN YEARS, THE STATE REQUIRES A CULTURAL DISTRICT TO BECOME RECERTIFIED. THEY WANT TO MAKE SURE THAT WE'RE DOING THE WORK THAT THE ARTS ARE GROWING IN OUR COMMUNITY. AND AND THAT IS EVERYTHING IS MEETING BOTH OURS AND THEIR EXPECTATIONS. SO NOW THAT WE'VE BEEN AROUND FOR TEN YEARS, IT'S TIME TO DO THAT. THE SECOND THING THAT WE ARE HERE FOR TODAY IS TO DISCUSS AN APPLICATION TO EXPAND THE WACO DOWNTOWN CULTURAL DISTRICT. WE HAVE A DEADLINE COMING UP ON THE RECERTIFICATION SUBMISSION HERE IN A WEEK OR TWO. SO WHY DO WE BELIEVE THAT THE CULTURAL DISTRICT SHOULD EXPAND? WELL, FOR A COUPLE OF REASONS. FIRST, WHEN WE WHEN WE WHEN WE CREATED THE ORIGINAL CULTURAL DISTRICT, WE SORT OF JUST GENERALLY SUBSCRIBED AND PLACED IT IN THE BOUNDARY OF THE PUBLIC IMPROVEMENT DISTRICT, SORT OF, YOU KNOW, WITHOUT ANY OTHER REASON. AS WE'VE GROWN AND SEEN TEN X, THE AMOUNT OF MONEY COMING INTO THIS COMMUNITY RELATED TO THE ARTS, WE THINK IT'S A GOOD TIME TO START CAPTURING ALL OF THE OTHER CULTURAL FACILITIES THAT WE HAVE IN AND AROUND THE DOWNTOWN AREA. YOU CAN SEE A LIST OF THEM ON YOUR ON THE SLIDE RIGHT THERE THAT WE CAN CAPTURE. THAT MEANS MORE POTENTIAL MONEY INTO THE COMMUNITY FROM OUTSIDE SOURCES THAT COULD UTILIZE SOME OF THESE FACILITIES FOR CULTURAL ACTIVITIES. THIS IS THE CURRENT AND PROPOSED EXPANSION OF THE DOWNTOWN CULTURAL DISTRICT. YOU CAN SEE, I MEAN, WE'RE TAKING IN ALL THOSE SPACES THAT YOU JUST SAW LISTED ON ON THE PREVIOUS SLIDE, CAPTURING ACTIVITY THAT'S HAPPENING ALONG OUR RIVERFRONT AND ALL OF THE WONDERFUL CULTURAL FACILITIES WE HAVE ON AND AROUND BAYLOR'S CAMPUS. SO OUR REQUEST TO YOU TODAY IS TO CONSIDER TO SUPPORT CREATIVE WACO'S APPLICATION TO TEXAS COMMISSION ON THE ARTS FOR THE RECERTIFICATION OF THE WACO DOWNTOWN CULTURAL DISTRICT. AND WE ALSO WOULD REQUEST THAT YOU SUPPORT AN EXPANSION OF THE BOUNDARIES OF THE WACO DOWNTOWN CULTURAL DISTRICT IN ORDER TO INCLUDE THOSE KEY CULTURAL ASSETS. I WOULD BE HAPPY TO ANSWER ANY QUESTIONS THAT I CAN. ANY QUESTIONS FOR CHRIS? NO QUESTIONS. JUST JUST HAPPY TO HAVE YOU HERE TODAY PRESENTING ON THIS. AND I, I, FOR ONE, AM IN AGREEMENT THAT THAT WE DO HAVE, ESPECIALLY SINCE THE INITIAL DISTRICT WAS ESTABLISHED, WE HAVE CONTINUED TO EXPAND THE REACH OF OF WHERE OUR HISTORIC AND CULTURAL FOOTPRINT SHOULD HAVE, YOU KNOW, HAS BEEN REINVESTED IN. AND I THINK WE'VE SEEN THE GROWTH THAT HAS COME FROM THAT. SO I WANTED TO CALL OUT, I'M LOOKING AT THE, YOU KNOW, ALL THE BULLET POINTS OF WHAT IT WOULD NOW INCLUDE. I COULDN'T AGREE MORE. THANK YOU. CHRIS. TEN YEARS IS IT HAS GONE BY REALLY QUICKLY. I HAD THE FIONA AND I DROVE THE APPLICATION DOWN TO AUSTIN FOR THE CULTURAL ARTS DISTRICT THE FIRST TIME. AND, YOU KNOW, AT THAT POINT WE WERE JUST IMAGINING WHAT COULD BE. AND IN THOSE TEN YEARS, YOU'VE SEEN THE IMPACT THAT PUBLIC ART AND THE WORK OF CREATIVE WACO HAS DONE FOR OUR COMMUNITY, NOT ONLY WITH STATIC PIECES, BUT WITH FLUID AND MOVEMENT AS WELL. AND IT IS DONE SOME AMAZING WORK JUST IN THE UPLIFTING OF OUR COMMUNITY AND, YOU KNOW, DONE SOME PRETTY FANTASTIC THINGS NATIONWIDE. SO, YOU KNOW, WITH THE LEVITT GRANT, WITH ALL THE THINGS THAT HAVE COME WITH US, HAVING THAT CULTURAL DISTRICT, BRINGING IN SOME AMAZING ARTISTS, THIS CHALK WALK THAT YOU'RE SEEING, WHICH I MEAN, I THINK THAT WAS THE LARGEST AMOUNT OF FOLKS IN DOWNTOWN. I MEAN, THIS IS TEXAS. 
          [00:15:07]
SO YOU SAY IT'S THE BIGGEST, LARGEST, OLDEST THAN IT IS THAT WE'VE SEEN AT LEAST. AND AND JUST THE LIST GOES ON AND ON. SO IT IS WITH EASE THAT I OFFER SUPPORT FOR THE RE-UPPING OF THIS APPLICATION AND HOPE THAT OUR CREATIVE ARTS COMMUNITY GROWS FOR SEVERAL DECADES TO COME. I'LL ECHO ANYTHING ELSE. I'LL ECHO THE COUNCIL MEMBERS COMMENTS. YEAH, THE ACTIVITY DOWNTOWN IS JUST EXPONENTIALLY JUST GROWN AND EXPLODED, IF YOU WILL, OVER THE LAST TEN YEARS, LIKE THE PLACEMAKING, VERY INTENTIONAL AND THE INCREASE OF ARTS FUNDING, YOU KNOW, THESE ARE REAL NUMBERS. TEN X IS A GREAT ROI. SO DEFINITELY SUPPORT THE RECERTIFICATION. A COUPLE QUESTIONS AS WE LOOK FORWARD. I'M JUST LOOKING AT THIS MAP AS WE LOOK FORWARD TO MORE ACTIVITY AND EXPANSION DOWNTOWN ALONG THE RIVERFRONT, DOES IT MAKE SENSE TO PUSH IT ON OVER TO WACO DRIVE THAT TAKES IN ALL OF OUR ALL OF THE NEWLY ACQUIRED LAND THAT THE CITY OF WACO IS HAS INVESTED IN? AND I DON'T KNOW IF IT MAKES THAT BIG A DIFFERENCE IF YOU CATCH THE EDGE OF IT OR SOMETHING LIKE THAT. BUT I KNOW THAT WE'VE GOT A LOT OF PLANS FOR THAT. THE AREA JUST TO THE I WOULD SAY NORTHWEST. YEAH. BUT IF IT'S A. IS IT A PROBLEM TO PUSH IT OVER TO WACO DRIVE, OR IS THERE SOME LOGIC ON NOT PUSHING IT OVER? THERE IS SOME LOGIC BEHIND IT. I THINK EVENTUALLY, ONCE THOSE ASSETS ARE ON THE GROUND, WE CAN LOOK INTO EXPANDING THAT AREA. AND THERE'S NO THERE'S NOTHING THAT SAYS WE CAN'T EXPAND AT ANY TIME. YOU KNOW, CURRENTLY WE WANT TO WE WANT TO TO LEVERAGE THE, THE ASSETS THAT ARE ON THE GROUND AND THEN EXPAND AS WE AS WE AS WE CAN. I THINK, YOU KNOW, ULTIMATELY, I'D LOVE FOR, FOR, FOR WACO TO HAVE THE LARGEST CULTURAL DISTRICT IN THE STATE OF TEXAS. AND I THINK IT CAN DO THAT. BUT, BUT WE NEED TO GET THOSE THOSE ASSETS ON THE GROUND FIRST. GOT IT, GOT IT. 
          SEQUENCE. OKAY. YES, SIR. LOOKS GOOD. THANK YOU. APPRECIATE IT. ANY OTHER QUESTIONS FOR CHRIS? ALL RIGHT. THANKS A LOT, CHRIS. APPRECIATE YOU. YOU GOT US WHAT WE NEEDED. THANK YOU FOR THE ROLLING STONES ON THAT ONE. OKAY. THE NEXT ITEM IS WORK SESSION 2026-335. CITY MANAGER HOLT. THANK YOU, MAYOR COUNCIL. UP NEXT IS FOR 335 AS GALEN PRICE, DIRECTOR OF HOUSING AND COMMUNITY DEVELOPMENT, HE'LL PRESENT THE FUNDING RECOMMENDATION RECOMMENDATIONS FOR WACO'S COMMUNITY DEVELOPMENT BLOCK GRANT AND HOME INVESTMENT PARTNERSHIP PROGRAM AS PART OF THE DRAFT 2627 ANNUAL ACTION PLAN. THESE RECOMMENDATIONS REMAIN IN LINE WITH THE RECENT RECENT PRESENTATION MADE TO THE BUDGET AND AUDIT COMMITTEE ON MAY 12TH. 
          RIGHT. THANK YOU, CITY MANAGER. GOOD AFTERNOON, MAYOR AND COUNCIL. AS I MENTIONED, I WILL BE DISCUSSING THE ANNUAL ACTION PLAN PROCESS AND FUNDING RECOMMENDATIONS FOR THE DEVELOPMENT OF THE 2026 2027 CONSOLIDATED ANNUAL ACTION PLAN. NOW, THIS PRESENTATION WILL DEMONSTRATE AND DESCRIBE THE DEVELOPMENT AND IMPLEMENTATION PROCESS, ALONG WITH FUNDING ACTIVITIES FOR FUNDS GRANTED BY THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. IN ADDITION TO DESCRIBING THE DEVELOPMENT OF THE PLAN, I WILL BE DISCUSSING THE CDBG AND HOME FUNDING ALLOCATIONS AND RECOMMENDATIONS, ALONG WITH THE ACCOMPLISHMENTS AND THE NEXT STEPS. THE FIRST AND MOST CRITICAL PART OF THE PROCESS IS THE INVOLVEMENT OF THE COMMUNITY. SO IN ORDER TO PARTICIPATE, TO HAVE COMMUNITY PARTICIPATION IN THE PROCESS, WE DEVELOPED A SURVEY FOR THE ENGAGEMENT OF THE COMMUNITY. WE PLACED QR CODES ON FLIERS AND DISTRIBUTED THOSE FLIERS IN SEVERAL PLACES. IN ADDITION TO. WE MADE THE SURVEY AVAILABLE ON SOCIAL MEDIA AND PARTICIPATED IN SEVERAL PUBLIC MEETINGS FOR DIRECT COMMUNITY ENGAGEMENT. 
          BEFORE I GO ANY FURTHER, I WANT TO TALK ABOUT SOME OF THE ACCOMPLISHMENTS. FIRST, STARTING WITH PRIOR YEAR, WHERE WE ASSISTED 23 HOMES WITH HOME REHABILITATION ASSISTANCE, PROVIDED 25 HOMES WITH ROOF REPAIRS, CONSTRUCTED THREE HOMES IN ADDITION TO SERVING APPROXIMATELY 276 HOMELESS INDIVIDUALS WITH HOMELESS SERVICES, INCLUDING CASE MANAGEMENT AND SHELTER SERVICES. OUR ACCOMPLISHMENTS DURING THE CURRENT YEAR ARE OUTCOMES RATHER INCLUDE 55 PERSONS RECEIVING FREE HEALTH CARE FROM MISSION WACO. EIGHT YOUTH PARTICIPATING IN COMMUNITIES, COMMUNITY AND SCHOOLS INTERNSHIP PROGRAM, ALONG WITH 
          [00:20:07]
INSPIRATION PARTICIPANTS TO RECEIVING NEW JOBS. ONE ACTUALLY STARTED A BUSINESS WITH OUR BEHAVIORAL HEALTH NETWORK RENTAL ASSISTANCE PROGRAM. WE HAVE HAD THREE INDIVIDUALS ACHIEVE HOUSING STABILITY AND EIGHT HOUSEHOLDS SUCCESSFULLY EXIT THE PROGRAM. 
          DURING THIS CURRENT PROGRAM YEAR. NOW, THIS SLIDE HERE GIVES YOU AN OVERVIEW OF OUR FUNDING FOR THE THE LAST FIVE YEARS. NOW, WACO IS AN ENTITLEMENT COMMUNITY, SO OUR ALLOCATION IS NOT BASED ON A COMPETITIVE APPLICATION, BUT BASED ON A FORMULA WHICH INCLUDES SEVERAL FACTORS. NOW, AS YOU CAN SEE, WE'VE HAD A SIGNIFICANT DECLINE OVER THE LAST THREE YEARS IN OUR HOME FUNDS, BUT CDBG HAS NOT EXPERIENCED AS MUCH OF A DECLINE. HOWEVER, WE ARE GOING TO HAVE A DECLINE OF ABOUT $26,600 BETWEEN NEXT YEAR'S ALLOCATION AND OUR CURRENT YEAR'S ALLOCATION. DOCTOR PRICE, COULD YOU ELABORATE JUST AT A HIGH LEVEL, WHAT SOME OF THOSE FACTORS ARE THAT GO INTO OUR ENTITLEMENT FOR THE CDBG FUNDS? YES. THOSE INCLUDE OUR OUR NET PER CAPITA INCOME, AND IT'S CENTERED AROUND THE NUMBER OF FAMILIES AT OR BELOW THE POVERTY LEVEL. IT INCLUDES THE COST OF PRODUCING HOUSING UNITS HERE IN OUR CITY COMPARED TO THE COST OF PRODUCING HOUSING UNITS ACROSS THE NATION, AS WELL AS THE NUMBER OF HOUSING UNITS WHERE WE HAVE A PERSON OR PERSONS AT OR BELOW THE POVERTY LEVEL. SO THOSE ARE JUST A FEW OF THOSE FACTORS. AND SOME OF THOSE FACTORS ALSO GO INTO WHERE SOME OF THESE FUNDS CAN BE DISPERSED THROUGHOUT THE COMMUNITY. IS THAT CORRECT? YES, THAT IS CORRECT. THAT GOES INTO HOW THERE'S THE DEVELOPMENT OF THE CENSUS TRACKS FOR WHAT'S CONSIDERED OUR LOW AND MODERATE INCOME AREAS. SO IF WE'RE DOING AN ACTIVITY FOR AN AREA BENEFIT, IT MUST BE INCLUDED IN THAT PARTICULAR AREA THAT'S DESIGNATED AS A LOW CENSUS TRACT. THANK YOU. NOW, OUR CDBG FUNDS CAN BE USED TO SERVE A VARIETY OF COMMUNITY DEVELOPMENT NEEDS. THERE ARE LIMITATIONS PLACED ON CERTAIN CATEGORIES. FOR EXAMPLE, THERE'S A 20% CAP ON OUR ADMINISTRATIVE ACTIVITIES, AS WELL AS A 15% CAP ON OUR PUBLIC SERVICE ACTIVITIES. NOW, THE PUBLIC SERVICE CATEGORY IS WHERE WE TYPICALLY RECEIVE OUR LARGEST NUMBER OF REQUESTS FOR FUNDING. NOW, CDBG FUNDS MUST MEET A TWO PART TEST. THE FIRST PART IS THAT THOSE FUNDS MUST MEET A NATIONAL OBJECTIVE. NOW, THE NATIONAL OBJECTIVE WOULD BE EITHER BENEFITING LOW TO MODERATE INCOME PERSONS, ELIMINATING SLUMS OR BLIGHT, OR ADDRESSING AN URGENT COMMUNITY NEED. NOW, THE NEXT PART IS THAT IT MUST BE AN ELIGIBLE ACTIVITY. NOW. ELIGIBLE ACTIVITIES INCLUDE HOME REHABILITATION, PUBLIC SERVICES, PUBLIC FACILITIES AND IMPROVEMENTS, HOME OWNERSHIP ASSISTANCE AND ECONOMIC DEVELOPMENT ASSISTANCE, JUST TO NAME A FEW. NOW, THE ELIGIBLE ACTIVITY MUST MEET ONE OF THE NATIONAL OBJECTIVES THAT WAS MENTIONED ON THE PREVIOUS SLIDE. NOW, THIS SIDE WILL BEGIN A SERIES OF SLIDES WHICH SHOW THE REQUEST FOR FUNDING THAT WE RECEIVE FOR THE 2627 YEAR, AS WELL AS WHAT THE RECOMMENDATIONS ARE. NOW, THIS SLIDE SHOWS WHAT'S BEING RECOMMENDED UNDER THE HOUSING CATEGORY OF CDBG, WHICH IS A LITTLE BIT UNDER $888,000, WITH FUNDING RECOMMENDED FOR THE GRASSROOTS ROOF REPAIR PROGRAM, AS WELL AS THE CITY'S HOME REHABILITATION PROGRAM. NOW, UNDER THE ADMINISTRATIVE CATEGORY, WE ARE RECOMMENDING UTILIZATION OF THE FULL 20% ADMINISTRATIVE CAP. WE DID RECEIVE SEVEN REQUESTS UNDER THE PUBLIC SERVICE CATEGORY, AND WE ARE RECOMMENDING FUNDING FIVE OF THESE PROGRAMS NOW. THE GREATER WACO ADVANCED MANUFACTURING ACADEMY, OR GOURMET ITEM, IS A CARRYOVER ITEM FROM THIS CURRENT YEAR'S ALLOCATION, AS FUNDING WAS NOT EXPENDED DURING THE PROGRAM YEAR DUE TO A TIMING ASPECT. NOW, THIS WILL COUNT AGAINST THE 2627 PROGRAM YEARS PUBLIC SERVICE CAP. NOW THIS PROJECT WAS TO PROVIDE MATERIALS TO THE ACADEMY FOR THE CONSTRUCTION OF A TINY HOME IN SUPPORT OF MISSION WACO'S CREEKSIDE VILLAGE. NOW, THIS SLIDE 
          [00:25:04]
DEMONSTRATES THE INTENDED USE OF THE CDBG FUNDING REQUEST RECOMMENDED UNDER THE PUBLIC SERVICE CAP, ALONG WITH THE OVERALL DESCRIPTION OF THE PROGRAM BEING FUNDED NOW, THE USE OF CDBG FUNDS IN THIS PROGRAM PREDOMINANTLY CENTERS AROUND THE SUPPORT OF STAFFING COSTS AND SUPPLIES IN SUPPORT OF THE PROGRAM BEING FUNDED. NOW, EACH OF THE ACTIVITIES THAT YOU SEE HERE MEETS THE NATURAL OBJECTIVE BY BENEFITING OR ASSISTING LOW TO MODERATE INCOME PERSONS. NEXT, UNDER OUR HOME GRANT IS THE USE OF FUNDS TO ASSIST WITH THE DEVELOPMENT OF AFFORDABLE HOUSING OPPORTUNITIES FOR LOW TO MODERATE INCOME PERSONS. AS WITH CDBG, THERE ARE RESTRICTIONS ON CERTAIN CATEGORIES, INCLUDING A RESTRICTION OF 10% OF THOSE FUNDS USED FOR ADMINISTRATIVE SERVICES AND A MINIMUM OF 15% SET ASIDE FOR OUR CHODOS. NOW, ACTIVITIES ELIGIBLE UNDER THE HOME GRANT INCLUDE DOWN PAYMENT AND CLOSING COST ASSISTANCE, ACQUISITION FOR THE DEVELOPMENT OF VACANT LAND AND THE SUPPORT OF AFFORDABLE HOUSING, AS WELL AS TENANT BASED RENTAL ASSISTANCE, JUST TO NAME A FEW. 
          NOW, THIS SLIDE SHOWS WHAT'S BEING RECOMMENDED FOR FUNDING UNDER THE HOME GRANT, WE ARE SEEKING TO COMMIT THE ENTIRE TOTAL SET ASIDE ALLOCATION TO HABITAT FOR THE USE OF THE DEVELOPMENT OF AFFORDABLE HOUSING, SO THAT THIS YEAR'S ALLOCATION WOULD BE FULLY COMMITTED. IN ADDITION TO THAT, WE ARE ALSO RECOMMENDING ASSISTANCE TO MISSION WACO FOR THE DEVELOPMENT OF TWO DUPLEX UNITS AT THE CREEKSIDE VILLAGE. NOW, IF COUNCIL IS IN SUPPORT OF THESE RECOMMENDATIONS, WE WILL PROCEED WITH MOVING FORWARD WITH A PUBLIC COMMENT PERIOD BEGINNING JUNE 23RD AND ENDING JULY 23RD WITH A COUPLE OF PUBLIC HEARINGS ON JUNE 16TH, AS WELL AS AUGUST 4TH. AT THE AUGUST 4TH MEETING, WE WILL BRING FORTH A RESOLUTION ASKING COUNCIL TO CONSIDER ADOPTING THE ANNUAL ACTION PLAN, INCLUDING THESE FUNDING RECOMMENDATIONS, WITH THE PLAN BEING DUE TO HUD BY AUGUST 16TH. AND WITH THAT, I'LL ANSWER ANY QUESTIONS YOU MAY HAVE. THANK YOU. DIRECTOR PRICE, DO WE HAVE ANY QUESTIONS FOR GALEN ON THIS ONE OR ANY COMMENTS? OKAY. GREAT PRESENTATION. I JUST I LOVE WHAT YOU DO. AND WE GO THROUGH THIS EVERY YEAR ON THE CDBG BEING HOME OF FEDERAL DOLLARS COMING BACK TO WACO. 
          AND YOU'VE ALWAYS BEEN FANTASTIC ABOUT. HOUSING, ROOFING, HOMELESS PREVENTION, CHILD CARE SERVICES, HOME REHAB, DOWN PAYMENT ASSISTANCE, ALL, ALL THE THINGS. AND THE PARTNERSHIPS WITH OUR COMMUNITY PARTNERS AND THEN TRYING TO FIGURE OUT THE GUIDELINES AND WHAT FITS AND THEN TRYING TO QUALIFY FOLKS. AND IT'S A LOT OF WORK, AND I APPRECIATE WHAT YOU AND STAFF DO IN FIGURING OUT WHAT FITS. AND IT LOOKS LIKE A GOOD ROSTER OF, OF, OF BENEFICIARIES ON, ON THIS, ON THIS FUNDING. SO WE'LL TALK ABOUT IT AGAIN IN A COUPLE WEEKS. ALL RIGHT. THANK YOU. ALL RIGHT. THANKS, GALEN. NEXT ITEM IS WORK SESSION 2026-336. 
          CITY MANAGER HOLT. THANK YOU MAYOR. OUR THIRD WORK SESSION, ITEM 336 IS A TWO FOR COLLIN BOOTH, MANAGING DIRECTOR OF FINANCE, WILL PRESENT OUR Q2 FINANCIAL REPORT. FOLLOWING THE PRESENTATION BY OUR ASSISTANT CITY MANAGER AND CHIEF FINANCIAL OFFICER WILL PRESENT AN FY 27 BUDGET PREVIEW. ALL RIGHT. GOOD AFTERNOON, MAYOR AND CITY COUNCIL. THIS IS OUR THE FIRST HALF OF THIS PRESENTATION IS OUR SECOND QUARTER FINANCIAL REPORT. THESE ARE OUR REVENUES AND EXPENDITURES OF OUR TEN MAJOR FUNDS THROUGH MARCH 31ST OF 2026. AND THIS REPRESENTS 50% OF THE WAY THROUGH THE FISCAL YEAR. BECAUSE OUR FISCAL YEAR ENDS SEPTEMBER 30TH. I HAVE SOME OF THE SLIDES UPDATED FOR APRIL, AND ALSO JUST WANTED TO LET YOU KNOW, YOU'LL SEE YOUR APRIL MONTHLY MANAGEMENT REPORT AS AN IRR AT YOUR NEXT CITY COUNCIL MEETING. SO THIS COVERS FINANCIALS THROUGH MARCH 31ST. BUT I HAVE SOME DATA POINTS FOR APRIL IN HERE AS WELL. SO LOOKING AT THIS SLIDE THIS SLIDE COMPARES THIS IS OUR EXECUTIVE SUMMARY OF OUR REVENUES. IT COMPARES FY 25 REVENUES COLLECTED AS A PERCENTAGE OF BUDGET TO FY 26. REVENUES AS A PERCENTAGE OF BUDGET. SO YOU CAN SEE WE'VE 
          [00:30:02]
GOT ONE MAJOR VARIANCE HERE. IT'S THE PLUS 10% ON THE DRAINAGE FUND DUE TO DRAINAGE FEE COLLECTIONS AND MISCELLANEOUS FEES THAT ARE COLLECTED WITHIN THE DRAINAGE FUND. THE REVENUES THAT ARE WORTH WATCHING IN FY 26, BUT NO MAJOR PROBLEMS WITH FY 26 YEAR TO DATE REVENUES OF OUR MAJOR FUNDS. AS YOU CAN SEE BY THIS SLIDE HERE, OUR EXECUTIVE SUMMARY FOR OUR EXPENSES. SO THIS SLIDE COMPARES FY 25 EXPENSES SPENT AS A PERCENTAGE OF BUDGET COMPARED TO FY 26. EXPENSES SPENT AS A PERCENTAGE OF BUDGET. NOW THIS EXCLUDES ENCUMBRANCES. AND AS I'VE MENTIONED BEFORE, ENCUMBRANCES ARE THOSE PURCHASE ORDERS THAT RESERVE MONEY FOR THE REST OF THE FISCAL YEAR AS THOSE CONTRACTS ARE SPENT OUT. SO IT'S MAKING SURE THAT THAT MONEY IS RESERVED IN THE BUDGET. SO WE'VE GOT SEVERAL MAJOR VARIANCES HERE. AS YOU CAN SEE, SOME OF THEM ARE ARE DOUBLE DIGIT, BUT THERE ARE NO STRUCTURAL BUDGETARY ISSUES OR PROBLEMS WITH THESE NUMBERS. THE WATER WASTEWATER, WMR, SOLID WASTE. THEY'RE ALL HIGHER THAN LAST FISCAL YEAR DUE TO THE TRANSFER OUT FOR DEBT SERVICE PAYMENTS. SO WE MADE THAT TRANSFER OUT IN THE SECOND QUARTER OF FY 26 FOR CASH FLOW PURPOSES, AS OPPOSED TO WAITING UNTIL THE THIRD QUARTER, WHICH WE DID IN FY 25. SO THAT'S WHAT'S DRIVEN SOME OF THOSE NUMBERS UP THERE. STANDARD DEBT SERVICE PAYMENTS AND THOSE TRANSFERS FOR THOSE. SO LOOKING AT OUR OPERATING FUNDS AND TRANSITIONING, LOOKING AT OUR GENERAL FUND, THESE ARE OUR REVENUES COMPARING YEAR TO DATE NUMBERS. SO WE'VE GOT A BUDGET FOR THE GENERAL FUND OF 208.188 MILLION. YEAR TO DATE REVENUES ARE 146.57 MILLION. THAT'S 70% OF BUDGET. OUR MAJOR FAVORABLE REVENUE ACCOUNTS ARE OUR MISCELLANEOUS REVENUES AT 65.2%, GROSS RECEIPTS TAX FOR WATER, WASTEWATER AND SOLID WASTE IS AT 57.2. THAT'S OFFSET BY SOME UNFAVORABLE ACCOUNTS. OUR BUILDING PERMIT REVENUES, WHICH I'M GOING TO DISCUSS SOME OF THE NUMBERS IN A LITTLE BIT. THOSE ARE AT 38.3%. OUR FRANCHISE TAX FEES FOR NATURAL GAS ARE AT 44.2%. SO THOSE ARE JUST UNDER THAT 50% BENCHMARK THAT WE'RE WATCHING. SLIDE SIX IS OUR GENERAL FUND EXPENDITURES. THE TOTAL BUDGETED EXPENSES ARE 217.755 MILLION A YEAR TO DATE ENCUMBERED EXPENSES. NOW THESE INCLUDE ENCUMBRANCES IN THESE NUMBERS HERE. SO WE CAN SHOW THE FULL PICTURE OF THE BUDGET. WE'RE AT 54% SPENT IN TOTAL. 
          WE'VE GOT ABOUT $6 MILLION WORTH OF ENCUMBRANCES. WHEN YOU REMOVE THOSE, WE'RE AT 52% OF BUDGET. SO WE'RE ABOVE THE 50% OF THE WAY THROUGH THE YEAR BECAUSE OF CAPITAL EXPENDITURES, TRANSFERS OUT, AND CONTRACTS WITH OTHER ORGANIZATIONS. THOSE ARE TYPICALLY SPENT ONE TIME AT THE BEGINNING OF THE FISCAL YEAR. SO THAT DRIVES THE PERCENTAGE UP HIGHER. LOOKING AT OUR BUILDING PERMIT ACTIVITY, YOU CAN SEE THE NUMBERS HERE. BUILDING PERMIT NUMBERS OVERALL ARE TRENDING DOWN FROM FY 25 AND RESEMBLE MORE OF THE FY 23 AND FY 24 NUMBERS. FIRST QUARTER STARTED OFF SLOW, BUT SECOND QUARTER AND THE START OF THE THIRD QUARTER NUMBERS HAVE BEEN STRONGER AND ARE TRENDING SIMILAR TO THE FY 25 NUMBERS. MARCH AND APRIL. NEW START SINGLE FAMILY PERMITS WERE THE HIGHEST MONTHLY TOTALS SINCE MAY OF 2025. SO YOU CAN SEE THOSE NUMBERS THERE. LOOKING AT THE VALUES THAT UNDERLIE THOSE BUILDING PERMIT ACTIVITIES. 
          MARCH OF 26 PERMIT VALUES WERE 16.877 MILLION. WENT SLIGHTLY DOWN IN APRIL OF FY 26, THE PERMIT VALUE WAS 15.441 MILLION. THAT AVERAGE THE ROLLING 12 MONTH AVERAGE DECREASED 5%. SO YOU CAN KIND OF TELL THAT TREND THERE FOR THOSE THOSE BUILDING PERMITS. LOOKING AT OUR MAJOR ENTERPRISE FUNDS, OUR WATER FUND REVENUES ARE AT 46% OF BUDGET. THAT PRIMARY DRIVER IS THOSE METERED WATER SALES, WHICH ARE SLIGHTLY LOWER THAN BUDGET. TYPICALLY, WHEN WE SEE THE SUMMER MONTHS, WE'LL START COLLECTING MORE REVENUE BECAUSE OF THE HOTTER, DRIER MONTHS IN THE SUMMER. THAT'S OFFSET BY BULK WATER SALES, WHICH ARE TRENDING ABOVE EXPECTATIONS. 
          WATER EXPENSES ARE 46.4 MILLION. THAT'S 68% OF BUDGET, AGAIN REFLECTING THE FRONT LOADED TRANSFER ACTIVITY FOR DEBT TRANSFERS AND CAPITAL EXPENDITURES. WASTEWATER FUND, INCLUDING W MARS, IS AT 49% OF ANNUAL BUDGET ON THEIR REVENUE COLLECTIONS. COLLECTION SERVICE CHARGES CONTINUE TO DRIVE MOST OF THE ACTIVITY LED BY THOSE WASTEWATER SERVICE CHARGES AND MARS CAPITAL RATE REVENUES, COMPARED TO FY 25 Q2. THOSE REVENUES ARE UP ABOUT 3%. 
          [00:35:04]
EXPENSES ARE AT 63% OF BUDGET. THAT'S CONSISTENT WITH HISTORICAL MID-YEAR PACING, INCLUDING THOSE DEBT SERVICE TRANSFERS THAT I MENTIONED. AND WE HAVE CHEMICAL AND LIFT STATION MAINTENANCE ACTUALS THAT ARE IN THOSE NUMBERS AS WELL. THE SOLID WASTE FUND REVENUES ARE AT 16.6 MILLION. THAT'S 47% OF BUDGET GENERALLY IN LINE WITH OUR EXPECTATIONS FOR THIS POINT OF THE FISCAL YEAR. OUR OPERATING EXPENDITURES ARE 55% OF BUDGET. 
          AND WHAT'S DRIVING SOME OF THOSE ARE THE PURCHASED PROPERTY AND PROFESSIONAL SERVICES, ENCUMBRANCES OTHER AND THE OTHER CONTRACTS EXPENDITURE CATEGORY. OUR METERED WATER SALES. OUR CURRENT WATER SALES BUDGET IS ABOUT 63 MILLION 62,961,000. 
          APRIL COLLECTIONS WERE BELOW BUDGET BY $176,000. OUR ACTUAL COLLECTIONS ARE 31.219 MILLION. 
          BUT AGAIN, AS I MENTIONED, WE ANTICIPATE THE AMOUNT CATCHING BACK UP IN THE LAST PART OF THE FISCAL YEAR DUE TO THOSE HOTTER SUMMER MONTHS. IN TERMS OF METERED WATER SALES, THIS GRAPH SHOWS WE'VE GOT OUR FY 26 WATER SALES AT 4,557,000 $852,000. AGAIN, WATER SALES ARE HIGHLY DEPENDENT UPON PRECIPITATION. MARCH AND APRIL PRECIP. PRECIPITATION WAS PRETTY CONSISTENT COMPARED WITH MARCH AND APRIL OF 2025. SO THAT CORRESPONDS WITH OUR WATER SALES. AND WE ALWAYS MONITOR THOSE WASTEWATER SERVICE CHARGES. THE WASTEWATER SERVICE CHARGES BUDGET IS 50.367 MILLION. APRIL COLLECTIONS WERE ABOVE BUDGET BY $145,700. 
          ACTUAL COLLECTIONS ARE AT 30.298 MILLION, WHICH IS 1.9%, TRENDING UP 1.9 MILLION TRENDING ABOVE BUDGET. OUR SOLID WASTE TONS COLLECTED BY CUSTOMER TYPE. SO WE FULLY OPENED THE MSW 2400 LANDFILL AND TONNAGE INCREASED. EXCUSE ME, THAT WAS IN MARCH AND TONNAGE HAS INCREASED AROUND THAT TIME. WE'VE ALSO HAD INCREASED TONNAGE FOR FRANCHISE HAULERS STARTING IN DECEMBER, WHICH IS AROUND THE START OF A RECENT PUT OR PAY CONTRACT THAT WE HAD WITH THE PRIVATE HAULER. SO THAT'S DRIVEN SOME OF THOSE NUMBERS UP. WE SAW SIGNIFICANT DECREASE IN TONNAGE OVER THE LAST COUPLE OF YEARS, BUT NEW FACILITIES AND CONTRACTS ARE HELPING TO BRING SOME OF THAT BACK. LOOKING AT SOME OF OUR OTHER ENTERPRISE FUNDS, OUR DRAINAGE FUND CONTINUES TO PERFORM STRONGLY THROUGH THE SECOND QUARTER OF 26. DRAINAGE FEE REVENUES ARE AT 7.8 MILLION, VERSUS 4.4 MILLION IN COLLECTIONS. THAT MAJOR REVENUE SOURCE LINE IS AT 56%. IT'S 59% ON YOUR SLIDE, BECAUSE THAT'S DUE TO SOME OF THOSE OTHER REVENUES RECEIVED IN THAT FUND. EXPENSES ARE AT 34% OF BUDGET. CAMERON PARK ZOO FUND REVENUES, EXCLUDING TRANSFERS FROM SURPLUS, ARE 7.2 MILLION VERSUS COLLECTIONS OF 2.9 MILLION. 
          ADMISSIONS REVENUES THROUGH MARCH 31ST ARE AT ABOUT 40% OF BUDGET, BUT WE HAD ABOUT $50,000 OF REVENUE THAT WE HAD BUDGETED FOR MARCH POSTED IN APRIL. SO THAT HELPS OUT THAT MARCH NUMBER. TOTAL BUDGETED EXPENDITURES ARE ABOUT 51% OF BUDGET FOR THE ZOO. THE COTTONWOOD CREEK GOLF COURSE FUND CHARGES FOR SERVICES AT THE GOLF COURSE ARE CURRENTLY 42%, WHICH IS EXPECTED FOR SEASONAL TRENDS AS THE COURSE IS ENTERING ITS HIGHER ACTIVITY MONTHS. OVERALL REVENUES AT THE COURSE ARE PERFORMING STRONGER COMPARED TO THE SAME PERIOD LAST YEAR. EXPENSES ARE AT 58% OF BUDGET, PRIMARILY DUE TO PROFESSIONAL AND TECHNICAL SERVICES. LOOKING AT CAMERON PARK ZOO ATTENDANCE, ATTENDANCE IN APRIL WAS ABOUT 30 WAS 35,124 VERSUS 40,765 IN APRIL OF 2025. THE FIRST WEEK OF SPRING BREAK WAS A RAIN OUT, FOLLOWED BY A WET COOL APRIL. AND NOW. SO WE'RE IN CATCH UP MODE FROM AN ATTENDANCE STANDPOINT AT THE ZOO, ZOO STAFF HAVE A PLAN TO INCREASE DAILY ATTENDANCE BY 170 PEOPLE PER DAY THROUGH THE REMAINDER OF THE FISCAL YEAR. COTTONWOOD CREEK GOLF COURSE ROUNDS PLAYED ACTUAL ROUNDS PLAYED IN APRIL 26TH WAS 4545, COMPARED TO 4084 IN APRIL, SO IT'S SLIGHTLY HIGHER FROM APRIL 25TH TO APRIL 26TH. YEAR TO DATE ROUNDS FOR FISCAL YEAR 26 COMPARED TO FISCAL YEAR 25, ARE 11% HIGHER. SO THAT'S GOOD NEWS FOR THE GOLF COURSE. SO FOR OUR NEXT FUNDS, WE'RE COVERING AIRPORT, TEXAS RANGER HALL OF FAME AND THE STREET MAINTENANCE FEE FUND. 
          SO THE AIRPORT REVENUES CHARGES FOR SERVICES AT THE AIRPORT ARE PERFORMING APPROXIMATELY 16% ABOVE EXPECTATIONS, PRIMARILY ATTRIBUTABLE TO HANGAR REVENUE, INCOME AND NEW PARKING REVENUES. 
          THE AIRPORT EXPENSES ARE. WE'VE GOT A PRIMARY AREA EXCEEDING BUDGET DUE TO PROFESSIONAL AND 
          [00:40:07]
TECHNICAL SERVICES AND MAINTENANCE RELATED EXPENSES AS WELL OUT AT THE AIRPORT. TEXAS RANGER HALL OF FAME FUND REVENUES A YEAR TO DATE ARE 894,000. REVENUE ACTIVITY IS EXPECTED TO IMPROVE DURING THE SPRING AND SUMMER TOURISM SEASON, WHICH HISTORICALLY REPRESENTS THE FUND'S STRONGEST OPERATING PERIOD EXPENSES. TOTAL BUDGETED EXPENSES ARE 1.765 MILLION, COMPARED WITH ACTUAL EXPENSES OF 904,000. THAT'S 52% OF THE BUDGET SPENT. 
          FINALLY, STREET MAINTENANCE FEE FUND REVENUE ACTUAL REVENUE COLLECTIONS ARE AT 35% OF BUDGET FOR THE STREET MAINTENANCE FEE, THE BUDGETED EXPENDITURES ARE $35.2 MILLION WITH ACTUAL EXPENSES. THAT'S 18.6. THAT'S A 53% AMOUNT OF THE BUDGET EXPENDED OR ENCUMBERED. GOT A FEW SLIDES ON SOME MORE DATA POINTS LOOKING AT THE WACO REGIONAL AIRPORT PASSENGER ACTIVITY, LOOKING AT THAT ZONE FACTOR, THE LOAD FACTOR IS TRENDING LOWER. 
          THAT'S A PERCENTAGE OF SEATS FILLED PER FLIGHT. LOAD FACTOR IS DOWN DUE TO THE FEDERAL GOVERNMENT SHUTDOWN IN JANUARY, AND NOW TICKET PRICES ARE A LITTLE BIT HIGHER DUE TO OIL PRICES. SO THAT'S WHAT WE THINK IS DRIVING SOME OF THOSE NUMBERS DOWN. TEXAS RANGER HALL OF FAME ATTENDANCE HAS REBOUNDED STRONGLY IN MARCH AND APRIL, WITH BOTH MONTHS EXCEEDING THE MUSEUM'S ROLLING 12 MONTH AVERAGE. MARCH RECORDED MORE THAN 5300 VISITORS, REPRESENTING THE HIGHEST ATTENDANCE MONTH IN THE REPORTING PERIOD. THE MUSEUM IS ENTERING THE SUMMER TOURISM SEASON WITH POSITIVE ATTENDANCE MOMENTUM OF FOLLOWING TYPICAL SEASONAL DECLINES DURING THE WINTER MONTHS, AND THEN FINALLY, JUST GIVE YOU SOME HIGH LEVEL OVERVIEW OF THE CITY'S QUARTERLY INVESTMENT REPORT. NOW, THIS IS FOR THE FIRST QUARTER. SO THIS COVERS JANUARY 1ST OF 26 THROUGH MARCH 31ST OF 26. AND THIS REPORT WAS ALREADY PRESENTED AS AN INFORMAL REPORT TO COUNCIL. SO JUST WANTED TO POINT OUT THE BOOK VALUE IS $974,024,067. WE ARE FULLY COMPLIANT WITH THE TEXAS PUBLIC FUNDS INVESTMENT ACT AND THE CITY'S INVESTMENT POLICY DURING THIS TIME PERIOD. AND BEFORE I TURN IT OVER TO BLUE, I CAN ANSWER ANY QUESTIONS THAT YOU MIGHT HAVE AT THIS TIME. ANY QUESTIONS FOR COLIN? NO. I MAY HAVE ONE LATER. I GUESS I WANT TO WAIT UNTIL I HEAR BLUES TO KNOW WHO THE QUESTION GOES TO. 
          IS THAT FAIR? THAT IS FAIR, MA'AM. OKAY, MAYOR COUNCIL, GREAT TO BE WITH YOU. WE ARE GOING TO NOW TRANSITION INTO A PREVIEW OF OUR FY 27 OPERATING BUDGET. AND TODAY IS A CONVERSATION TO BE HAD. IT'S IT'S THE CONVERSATION THAT WILL START THIS PROCESS WITH THE CITY COUNCIL. FOR THE LAST ABOUT FIVE MONTHS, STAFF HAS BEEN WORKING BEHIND THE SCENES, DOING A LOT OF REVENUE AND EXPENSE PROJECTIONS TRENDING, LOOKING AT THE OVERALL ECONOMY, SEEING HOW FY 26 IS PLAYING OUT IN ORDER TO START SHAPING THIS MESSAGE. AND TODAY WE'RE WE'RE SNAPPING THE LINE AND SAYING, THIS IS WHERE WE ARE AS OF TODAY. YOU KNOW, THIS IS BY NO MEANS OUR PROPOSED BUDGET, BUT THIS IS WHAT WE'RE CONTINUING TO DEVELOP. AND NOW BRINGING YOU INTO THE FOLD WITH THIS CONVERSATION AND GETTING SOME DIRECTION FOR YOU AS WE GO FORWARD UNTIL WE PRESENT OUR PROPOSED BUDGET TO YOU. THE FULLY OFFICIAL PROPOSED BUDGET IN EARLY AUGUST. SO STILL A COUPLE OF MONTHS OUT, BUT THIS SHOULD SET THE STAGE FOR WHAT WE'RE GOING TO DISCUSS A LITTLE BIT FURTHER IN THE BUDGET RETREAT COMING UP LATER THIS MONTH ON JUNE 17TH. SO FIRST AND FOREMOST, WE HAVE TO UNDERSTAND THE THE ECONOMIC ENVIRONMENT THAT WE ARE OPERATING IN AND WHAT WE ANTICIPATE GOING FORWARD THAT HELPS US TO START SHAPING WHAT OUR REVENUES AND EXPENDITURES CAN LOOK LIKE. SO STARTING FIRST AND FOREMOST WITH THE INFLATION AND CONSUMER PRICES. CPI FOR APRIL OF 2026 DID JUMP UP A LITTLE BIT MORE THAN EXPECTED TO 3.8% YEAR OVER YEAR CORE CPI THAT'S TRYING TO EXCLUDE FOOD AND ENERGY. THAT'S THAT'S KIND OF YOUR MORE NONVOLATILE PRICES OUT THERE. 
          THAT DID RISE UP TO 2.5%. SO 2.53.8 ON THE ON THE OVERALL HEADLINE CPI NUMBER, SUBSTANTIALLY HIGHER THAN THE TWO 2% FED TARGET. NOT ONLY IS THAT HIGH. AND I WILL SAY THAT 
          [00:45:03]
THIS WHEN YOU WHEN YOU START HAVING THIS. THE WAY THIS REALLY AFFECTS US, YOU KNOW WHAT WHAT MATTERS TO US IN THIS. WHILE WE LOOK AT THIS. WHEN YOU HAVE HIGHER INFLATION, ESPECIALLY IN THOSE VOLATILE FOOD AND ENERGY CATEGORIES, YOU START TO SEE A LITTLE BIT OF TREND SHIFT IN YOUR CONSUMERS WITH WITH MORE MONEY BEING SPENT ON FUEL, ON GROCERIES, THERE IS LESS TO BE SPENT ON ANYTHING, JUST CONSUMER DISCRETIONARY ITEMS. SOME OF THE THINGS THAT OUR SALES TAX REBATES THAT COME TO THE CITY REALLY MATTER, YOU KNOW, WITH WITH YOUR RETAIL, WITH YOUR DINING OUT, SOME OF YOUR GENERAL SERVICES, A LOT OF THAT STARTS DECREASING AS PRESSURES GO UP ON YOUR CONSUMER. OKAY. SO A LOT LESS FOR THEM TO SPEND THAT, THAT IMPACTS US ON THE REVENUE SIDE, ON THE, ON THE EXPENSE SIDE, YOU CAN SEE THE MUNICIPAL COST INDEX, EVEN THOUGH THE CPI IS OUT THERE AT THAT 3.8, WHAT WE HIT ON THE MUNICIPAL COST INDEX IS 4.8%. SO WHAT IT COSTS US TO PROVIDE THE SERVICES IS EVEN HIGHER THAN THE NORMAL RATE OF INFLATION. SO WE'RE GETTING HIT FROM BOTH ENDS ON THIS. WE'RE GETTING LESS REVENUE FROM THE THE SALES TAX COLLECTIONS. WE'RE HAVING TO SPEND MORE ON JUST PROVIDING THE BASIC SERVICES THAT WE ARE TODAY. SO INFLATION WAS STARTING TO COOL. 
          THAT WAS A THAT WAS A GOOD HEADLINE, GOOD NEWS STORY UNTIL THE CONFLICT IN IRAN STARTED. 
          NOW THAT HAS JUMPED BACK UP AND WITH NO REAL END IN SIGHT FOR THIS, WE ARE PROJECTING A LITTLE BIT HIGHER AND WE WILL CONTINUE TO WATCH THAT. IF SOMETHING PROGRESSES IN THE THE MORE GLOBAL MACRO ECONOMY, WE CAN WE CAN LOOK AT THAT TREND AND SEE IF THERE'S SOME SOME RELIEF THAT WE CAN BE HAD IN OUR IN OUR BUDGET GOING FORWARD. BUT OVERALL INFLATION, WE'RE PROJECTING TO AVERAGE ABOUT 3.2 FOR FY 26, SLIGHTLY HIGHER FOR FY 27 AT 3.4%. OVERALL ECONOMY HERE, MORE LOCAL POPULATION STILL CONTINUES TO GROW. HOWEVER, WHAT YOU CAN SEE IS OUR FORECAST AS WE'RE LOOKING OUT IS STARTING TO SLOW SOME OF THOSE TRENDS. SO WHAT WE'RE PROJECTING GOING FORWARD IS A GROWTH OF LESS THAN 1%. THAT IS NOT AS MUCH AS WE'VE SEEN OVER THE LAST TEN YEARS. SO SOMETHING THAT WE'RE GOING TO BE WATCHING AND PAYING ATTENTION TO, THE MORE PEOPLE THAT ARE, THE LESS PEOPLE THAT ARE MOVING IN, THE MORE HOME SALES THE, THE, THE LESS DISCRETIONARY SPENDING OUT THERE IN THE ECONOMY. SO AGAIN, SOMETHING THAT WE'RE, WE'RE WATCHING CLOSELY, LABOR FORCE AND PARTICIPATION STILL CONTINUING TO RISE, WHICH IS GREAT OVERALL FOR THE ECONOMY. PEOPLE OUT THERE HAVE A GOOD JOBS, BUT JOBS ARE AVAILABLE HERE IN WACO. UNEMPLOYMENT GOES ALONG WITH THAT. STILL SITTING RIGHT THERE AT ABOUT THAT 3.9, 3.8%, STILL BELOW NATIONAL TRENDS, BELOW RIGHT AROUND THE TEXAS AVERAGE. SO STILL HEALTHY IN THAT THE WACO POVERTY RATE. THIS IS FOR ALL FAMILIES, ACCORDING TO THE AMERICAN COMMUNITY SURVEYS. SO ALL FAMILIES RATES STARTED AT ABOUT 20% BACK IN 2015. THAT HAS DECREASED DOWN TO ON THEIR LATEST SURVEY OF 2024 DATA DOWN TO 14.2%. SO YEAH, THAT'S A SUBSTANTIAL AMOUNT OF PROGRESS. IF YOU ADD IN ALL THOSE THAT ARE OUTSIDE THE LABOR FORCE, THE UNDER UNDER 16, THAT DOES RISE BACK UP A LOT BECAUSE. OF THE, THE EFFECTS OF, OF CHILDREN AND THE COLLEGE AGE STUDENTS. SO THAT WILL COME BACK UP A LITTLE BIT. BUT ALL FAMILIES LOOKING GOING DOWN FROM 20% DOWN TO 14.2%. 
          PRELIMINARY TAXABLE VALUES DID COME IN AT THE END OF APRIL. STARTING BEGINNING OF MAY, WE STARTED REVIEWING THAT DATA, AND THIS IS WHAT WE PRESENT TODAY. I KNOW THERE'S A LOT OF NUMBERS ON THIS THIS SCREEN. SO I'M NOT GOING TO GO THROUGH EVERY SINGLE ONE OF THESE. I'LL HAVE A SLIDE. AND THE NEXT SLIDE WILL MAKE IT A LITTLE BIT MORE DIGESTIBLE. BUT THE HIGHLIGHT HERE, IF YOU LOOK AT THAT TOTAL LINE AT THE BOTTOM, WE DID SEE SOME RAPID RISE IN FY 22, 23 UP TO 24. BUT SINCE 24, WE STARTED TO HAVE A LITTLE BIT OF A PEAK AND A LITTLE BIT OF A PLATEAU GOING UP FROM FY 24 TO 25 OF ABOUT 500 MILLION IN VALUATION, TAXABLE VALUATION, AND THEN ONLY ABOUT THAT $300,000 MARK GOING FROM FY 25 TO 26. BUT OUR PRELIMINARY VALUES FROM THE CAD SO FAR HAVE JUMPED $2 BILLION. SO 12.3% ON THAT BOTTOM LINE NUMBER. NOW, WHAT WE HAVE WARNED BEFORE AND CAUTIONED EVERYONE ABOUT IS THERE IS A DIFFERENCE BETWEEN YOUR PRELIMINARY AND YOUR CERTIFIED VALUES THAT COME IN, AND THOSE CERTIFIED VALUES 
          [00:50:03]
DON'T COME IN UNTIL THE END OF JULY. SO WE WE WILL NOT KNOW WHAT WHERE THIS ACTUALLY FALLS OUT UNTIL THEN, BUT WE TYPICALLY SEE AT LEAST A 6 TO 7, IF NOT GREATER PERCENT DECREASE IN, IN THAT VALUATION. SO THAT 18.6, WHILE IT LOOKS GOOD ON THE FACE, WE DO EXPECT THAT TO COME DOWN. TO A LOWER NUMBER BASED UPON HISTORICAL VALUES. WE'LL GET INTO THAT HERE IN A MINUTE. BUT IF YOU LOOK AS YOU AS YOU SUMMARIZE THESE AND PUT THESE ON A GRAPH, YOU CAN SEE A LITTLE BIT OF, OF TRENDS THAT THAT MAKE SENSE FOR THESE CERTIFIED VALUES. SO SINGLE FAMILY, IF YOU LOOK FROM 25 TO 26 TO THE 27, PRELIMINARY GOING SEVEN, 7.3 TO 7.6 LOGICALLY MAKES SENSE. HOWEVER, WHAT WE'VE BEEN TOLD IS THAT THAT WILL LIKELY COME DOWN TO THAT 1 TO 2% GROWTH RATE. SO EXPECT THAT 7.6 TO COME DOWN TO ABOUT A $7.4 BILLION MARK FOR SINGLE FAMILY RESIDENCES. MULTIFAMILY HAS STAYED AROUND THAT 1.8 TO 1.7. WE DO EXPECT THAT TO DROP BACK DOWN TO AROUND THAT 1.7 COMMERCIAL REAL PROPERTY. THIS IS ONE WHERE WE TYPICALLY SEE SOME GAIN. THEN DUE TO PROTESTS THROUGH THAT CERTIFICATION AND ARB PROCESS, THAT'S GOING TO COME DOWN TO AROUND THAT 4.5 TO 4.6. LUKE, COULD YOU QUICKLY REMIND ME WHAT WAS THE DELTA BETWEEN OUR INITIAL AND THEN THE THE FINAL VALUATION LAST YEAR THAT WE GOT FROM LAST YEAR? I THINK IT WAS AROUND 9%. SO IT WAS IT WAS MUCH LARGER THAN OUR NORMAL DECREASE. AND THIS YEAR WE'RE ANTICIPATING THIS YEAR WE'RE, WE'RE STILL ANTICIPATING SOMEWHERE AROUND THAT. I'M GOING TO SAY 7 TO 9, BUT PROBABLY CLOSER TO THAT 9%. THAT'S THAT'S THE INITIAL PLANNING. MARK. GREAT. I'M SURE YOU'LL COVER THAT. SORRY. WE WILL GET INTO OUR PROJECTIONS HERE. I THINK IT'S ON THE NEXT SLIDE. YES. THE ANSWER DARIUS'S QUESTION, I THINK SO THE INDUSTRIAL, REAL AND PERSONAL PROPERTY IS THE ONE THAT HAS INCREASED THE MOST OUT OF THIS. 
          I MEAN, YOU SEE GOING FROM 2.2 BILLION UP TO 3.6 BILLION, A LOT OF THAT IS GOING TO BE REAL. 
          SO WE DON'T KNOW HOW MUCH OF THAT WILL BE. BUT THERE WILL BE A PORTION OF THAT THAT IS THAT IS REAL DOLLARS REAL INCREASE COMING IN. THAT'S THE ADDITION OF GPI TO OUR TO OUR ROLES. 
          THEY HAVE FINISHED OUT THAT PROJECT. SO THEY WERE THEY WERE VALUED SOMEWHERE AROUND THAT 400 MILLION MARK IN THE PREVIOUS YEAR. THIS YEAR THEY'RE COMING IN AROUND THAT 930 TO $950 MILLION MARK. SO YOU ARE SEEING THAT THAT INCREASE. SO SOME OF THAT IS GOING TO BE REAL. HOW MUCH IS ACTUALLY PROTEST OUT OF THAT 1.4 BILLION IS WHAT WE'RE UNSURE OF AT THIS POINT. AND THEN AT SOME POINT WE'RE GOING TO ADD TOP LINE TOTAL ASSET VALUE FOR THE CITY AND KIND OF THE TREND LINE THERE BECAUSE WE'RE WE'RE RIGHT AT 25 BILLION NOW. AND WE'RE I THINK TEN YEARS AGO WE WERE AT UNDER TEN. SO I MEAN, THE TWO AND A HALF X FACTORS. YES, SIR. EVEN THOUGH IT'S NOT TAXABLE, I GET IT'S NOT BUDGETED, BUT I THINK IT'S A NICE REFERENCE POINT ON WHAT'S HAPPENING IN THE IN THE CITY. IT DOES SHOW WHAT THE OVERALL CITY IS DOING BECAUSE THERE ARE, YOU KNOW, OUT OF THAT, YOU DO HAVE SOME EXEMPTIONS AND EXEMPTIONS ARE A LARGE PART OF THAT. SO OUR EXEMPTIONS ARE ROUGHLY AROUND 6 TO $7 BILLION. SO WHEN YOU TAKE THAT 25 BILLION THAT YOU'RE TALKING ABOUT, REDUCE THAT DOWN FOR THOSE EXEMPTIONS THAT THAT WE HAVE PROVIDED, THAT DOES TAKE A SIGNIFICANT PORTION OF OUR OUR TOTAL VALUATION OUT OF WHAT WHAT IS ACTUALLY TAXABLE. EXACTLY. AND WE WILL HAVE THAT FOR YOU. WE'LL HAVE THAT IN THE BUDGET RETREAT. RIGHT. SO WE DO NEED TO HIGHLIGHT THAT BECAUSE THAT'S WE'RE GIVING UP NOT GIVING UP. WE'RE WE'RE WE'RE PASSING THAT BREAK ON TO THE TAXPAYER OVER 65 AND HOMEOWNERS IS A LOT OF THE EXEMPTION. BUT THE REASON WE MIGHT HAVE LOWER TAXABLE VALUES IS BECAUSE WE'RE GIVING UP THAT EXEMPTION BEFORE IT, BEFORE IT GETS THIS FAR, JUST TO NOT MISS AN OPPORTUNITY TO DO SO. MAYOR, COULD YOU REMIND ME, HOW OLD WERE YOU WHEN WE PASSED THE 65 AND OVER EXEMPTION? I DON'T RECALL. OKAY. JUST CURIOUS. MIGHT HAVE RUN THE SAME TIME. BOTH OF THOSE. AND BEFORE WE GO ON THE THE. THE ARE THE EXEMPTIONS AND INCENTIVES ALSO CONSIDERED IN WHAT LOOKS TO BE A CONSIDERABLE INCREASE, THOUGH IN THAT INDUSTRIAL AND REAL WHAT'S COMING ACTUALLY ONLINE WITH LIKE GRAPHIC PACKAGING AND ALL OF THAT, THE WHAT WHATEVER BENEFITS ARE FROM THAT OR THE OTHER, IT'S ALREADY INCLUDED IN THAT NUMBER, RIGHT? THAT'S THAT IS ALL IN RIGHT NOW. YES. OKAY. YEAH. WHEN WE GET TO THE NEXT 
          [00:55:01]
LAYER, I THINK I WAS LIKE TO SEE HOW THAT BREAKS DOWN FROM THE TOP AND WHERE IT'S GOING, BECAUSE IT'S GOING FOR THE BENEFIT OF TAXPAYERS, BUT WE'RE LOWERING OUR TAX BASE FOR THE BENEFIT OF THE EXEMPTIONS AND THE FROM THE HOMEOWNERS AND ALL THAT. I KNOW THIS IS FIRST, FIRST BLUNT, FIRST RUN THROUGH HERE. THIS IS GREAT. ALL RIGHT. SO GETTING GETTING BACK TO PROPERTY TAXES AND THE THE TAXABLE VALUE ESTIMATES THAT WE HAVE OUT THERE. COUNCILMAN EWING, WHAT WE'RE PROJECTING IS SOMEWHERE AROUND THAT $17.3 BILLION MARK IS WHAT WE ACTUALLY BASE OUR OUR PROPOSED BUDGET ON. AND THAT, AGAIN, IS BASED UPON THE THE TYPICAL DROPS THAT WE SEE. IT'S A LOT OF DIFFERENT CATEGORIES. SO WE WE CAN SAY THAT HIGH, HIGH LEVEL NUMBER PERCENTAGE DECREASE, BUT THERE'S SEVERAL DIFFERENT CATEGORIES IN THERE WHERE WE LOOK AT IT. BUT AGAIN, DROPPING FROM THAT 18.6 TO 17.3 BILLION, 17.3 IS WHAT WE START BASING OUR ACTUAL BUDGET ON. AND IF YOU LOOK ON THE RIGHT, YOU KNOW, REALLY WHAT MATTERS ABOUT THIS, BECAUSE WE CAN THROW OUT 18.6 BILLION, 17.3 BILLION. BUT WHAT MATTERS IS THE IMPACT THAT IT HAS ON OUR BUDGET, RIGHT? SO WHAT WE LOOK AT IS IN FISCAL YEAR 26, THAT TOP LINE GENERAL FUND REVENUE AT OUR CURRENT TAX RATE OF 75.5 IS $89.7 MILLION. THAT'S HOW MUCH COMES INTO THE GENERAL FUND ITSELF. IF WE TAKE MCCANN'S PRELIMINARY VALUES AT 18.6 BILLION, KEEPING OUR SAME TAX RATE, WHICH IS KIND OF TYPICAL OF WHAT YOU DO WHEN YOU START WITH YOUR PROPOSED BUDGET, YOU KEEP THAT TAX RATE STABLE FOR NOW AT THAT 75.5 CENTS, THAT BRINGS IN $99.4 MILLION TO OUR TO OUR GENERAL FUND. THAT WOULD BE A $9.7 MILLION INCREASE TO THE GENERAL FUND. HOWEVER, WE KNOW THAT THERE'S THAT. DROP IT. IT IS A DROP EVERY SINGLE YEAR BECAUSE OF THE CERTIFICATION PROCESS, BECAUSE OF THE PROTESTS THAT COMES DOWN. SO WHAT WE HAVE CALCULATED OUT TO THAT 17.3 BILLION AT OUR CURRENT TAX RATE OF 75.5 CENTS, THAT ONLY BRINGS IN 88.6 MILLION, WHICH IS A $1.1 MILLION DECREASE TO THE PREVIOUS YEAR. AND THERE ARE SEVERAL FACTORS FOR THAT THAT DECREASE. SOME OF THE THE INCREASES THAT WE'VE SEEN IN THIS GOING UP FROM THAT $16.6 BILLION MARK TO 17.3 BILLION THAT WE'RE PLANNING, A LOT OF THAT GROWTH IS IN IN, IN THE TIF ZONES, RIGHT? SO THAT DOES NOT IMPACT YOUR GENERAL FUND AT ALL. THAT THAT MONEY STAYS IN THE GENERAL FUND AT LEAST 70% INTO FOR 100% INTO F ONE. SO THAT GROWTH DOES NOT CONTRIBUTE TOWARDS THE GENERAL FUND. ALSO, WHEN YOU HAVE THE DEBT SERVICE ASPECT OF YOUR PROPERTY TAX RATE INCREASING, THAT SHIFTS DOWN WHAT YOU HAVE FOR MAINTENANCE AND OPERATIONS. SO EVEN THOUGH THE TAX RATE STAYS THE SAME, WHERE THOSE MONIES ARE SHIFTING GOES TOWARDS DEBT MORE SO THAN IT GOES TOWARDS MAINTENANCE, MAINTENANCE AND OPERATIONS. SO RIGHT NOW WITH THAT, THAT PROPOSED DROP THAT THAT PLAN DROP FROM 18.6 TO 17.3, WE'RE LOOKING AT REVENUES ON THE THE CURRENT TAX RATE OF $88.6 MILLION, A DROP OF $1.1 MILLION. SO AS I MENTIONED, TIP ONE, TAXABLE VALUES STARTING TO LOOK GOOD AFTER A COUPLE OF YEARS OF DECLINES COMING BACK UP TO THE HIGHEST LEVELS, IT'S IT'S HAD IN YEARS AT $8,877 MILLION HISTORICAL GROWTH RATE FROM FROM 2018 UP HAS BEEN 8.71%. BUT AS YOU CAN SEE OVER THE LAST THREE YEARS THAT HAD BEEN DECREASING, THAT IS BACK UP 4.05%, WHICH IS GREAT BECAUSE WE WE LOOK TO HAVE AT LEAST 3 TO 4% GROWTH IN THAT, IN THAT TIF ONE FOR, FOR OUR FORECASTING MODELS. SO GOOD, GOOD RESULTS RIGHT HERE ON THE TAXABLE VALUES SO FAR. AGAIN, WE'LL SEE WHAT COMES THROUGH AFTER CERTIFIED VALUES COME OUT TO FOR TAXABLE VALUES. THIS IS WHERE GPI COMES IN TO PLAY HEAVILY. THAT IS A $1 BILLION INCREASE. AND AGAIN SOMEWHERE AROUND THAT 500 $550 MILLION OF THAT IS GPI. SO SALES TAX IS ALSO A VERY IMPORTANT REVENUE STREAM, THE SECOND HIGHEST REVENUE STREAM FOR THE GENERAL FUND. SO AS THE SALES TAX GOES SO DOES OUR GENERAL FUND. AND WHAT WE'VE SEEN IS DEFINITELY NOT FULLY NEGATIVE BUT SOFTENING AND REALLY FLAT YEAR OVER YEAR. THIS GOES BACK TO WHAT WE WERE TALKING ABOUT. WITH INFLATION RISING. THERE'S THERE'S LESS JUST GENERAL SPENDING THAT CAN HAPPEN ON CONSUMER GOODS THAT THAT WE ACTUALLY GET REBATES FOR. THERE 
          [01:00:06]
IS A LOT A LOT OF PEOPLE DON'T UNDERSTAND THAT WHEN THERE'S A THERE IS A GAS TAX OUT THERE, BUT THE CITIES DO NOT HAVE ANY PORTION OF THAT GAS TAX. THAT'S PURELY A STATE REVENUE. SO WE DON'T GET ANYTHING FROM GAS SALES. SAME THING WITH LIKE AUTO SALES THINGS. THERE'S THERE ARE SO MANY THINGS THAT WE DON'T GET. SO RETAIL BEING ONE OF OUR BIGGEST AND FOOD AND BEVERAGE BEING OUR SECOND. WHEN INFLATION IS HIGH AGAIN, WE START TO SEE THESE TYPES OF RESULTS. AND COMPARED TO OUR OUR PEER CITIES LAST MONTH WAS ONE OF THE, THE SLOWEST PERFORMING. WE HAD A 1.7% DECREASE YEAR OVER YEAR FOR THE MONTH. AND THAT BROUGHT OUR FISCAL YEAR TO DATE RECEIPTS TO A TOTAL INCREASE OF 1.6%. SO VERY, VERY SLOW GROWTH AND GROWTH THAT IS BELOW THE RATE OF INFLATION. LOOKING AT TAX RATE MOMENTUM, SOMETHING THAT WE LOOK AT. DON'T EXPECT YOU TO UNDERSTAND THIS GRAPH AT ALL. WHAT WE WANT TO SEE IS THAT ON THAT TOP GRAPH THE DARK BLUE LINE WHICH IS THE VARIANCE BETWEEN YOUR 12 MONTH AND 36 MONTH MOVING AVERAGE. YOU WANT THAT TO STAY ABOVE YOUR SIX MONTH. IF IF THAT IS HAPPENING, YOUR MOMENTUM IS STILL GROWING WITHIN YOUR CITY. WHAT WE'VE SEEN OVER THE LAST FOUR MONTHS, YOU CAN SEE ON THAT LOWER, LOWER CHART IS THE RED BARS GOING DOWN. THAT IS THAT IS NEGATIVE TOWARDS THE THE MOMENTUM. AND THAT'S WHAT WE'VE BEEN SEEING IN THIS, THIS LITTLE SLOWDOWN THAT WE'VE HAD. SO CITY OF CITY OF WACO SALES TAX BY INDUSTRY, SOMETHING THAT WE LOOK AT HEAVILY BECAUSE WE HAVE TO UNDERSTAND WHERE OUR SALES TAX ARE COMING FROM, WHAT INDUSTRIES ARE BEING IMPACTED. NOT GOING TO EXPLAIN THIS ENTIRE SLIDE, BUT THE ON THE TOP RIGHT, THAT LIGHTER BLUE BOX IS WHAT I WANT TO FOCUS ON. AND AS WE LOOK THROUGH THE INDUSTRIES AND THE INDUSTRIES THAT REALLY IMPACT US, LIKE I'VE BEEN SAYING, THE RETAIL IS YOUR, YOUR LARGEST ONE, YOUR FISCAL YEAR TO DATE, 13.5 MILLION FOR FISCAL YEAR 26 AGAINST 13.4, ALMOST 13.5. THAT IS EXTREMELY FLAT, 0.8% GROWTH YEAR OVER YEAR AT $100,000 FOR THE ENTIRE FISCAL YEAR. SO HALF A YEAR IN, WE'RE EXTREMELY SLOW IN THAT THAT ASPECT. SAME THING IF YOU LOOK UP AT THE FOOD, 4.2 TO 4.2, 0.7% INCREASE, THE TWO THAT HAVE KIND OF FLIP FLOPPED, GENERAL SERVICES AND MANUFACTURING, WE DID GET A LARGE INCREASE LAST YEAR WHEN A LOT OF EQUIPMENT WAS BEING BROUGHT IN FOR THESE INDUSTRIAL AND MANUFACTURING SITES THAT ARE BEING DEVELOPED. SO WE GET ONE TIME USE TAX ON THOSE, THE EQUIPMENT THAT COMES IN, AND THEN THOSE ARE PUT INTO SERVICE. AND WHAT WE'RE SEEING IS GREAT BECAUSE THAT FLIPS OVER TO THE MANUFACTURING SIDE BECAUSE NOW WE'RE GETTING SALES TAX AND USE TAX ON WHAT THEIR THE OUTPUT IS OF THAT. SO GOING FROM 557,000 DOWN TO 608,000 UP WERE NET POSITIVE ON, ON THAT THOSE OPERATIONS. BUT OVERALL, LIKE I SAID, THE THE TWO THAT ARE DRIVING THIS REALLY IS THE, THE, THE RETAIL SECTOR AND THE, THE FOOD SECTOR BEING A LOT SLOWER THAN NORMAL. AND WE DO NOT ANTICIPATE THAT THAT IS GOING TO SUBSTANTIALLY JUMP UP OVER THE NEXT FEW MONTHS. I GOT A COMMENT ON THE SCATTER GRAPH THERE. I LOVE THAT AT THE BOTTOM, BESIDES THE GANTT CHART, SCATTER GRAPH IS WHAT I LIKE. SECOND BEST THERE. LOOKS GOOD. I'LL TRY TO THROW ONE EVERYONE EVERY ONCE IN A WHILE. HOTEL OCCUPANCY TAX. WHILE THIS IS NOT GENERAL FUND DOLLARS, THIS DOES RELATE DIRECTLY TO THE GENERAL FUND BECAUSE AS YOU HAVE PEOPLE COMING IN, THEY'RE EATING, THEY'RE SHOPPING, THEY'RE STAYING. SO WE WE DO PAY ATTENTION TO THIS BECAUSE IT, IT TIES IN DIRECTLY TO WHAT WE DO IN THE GENERAL FUND. SO YEAR TO DATE, WE ARE LOOKING VERY POSITIVE. $4.27 MILLION AGAINST A BUDGET OF 3.9 MILLION. SO WE'RE UP YEAR TO DATE TO BUDGET. IF WE PROJECT OUT BASED UPON THE THE AVERAGE STAYS PER MONTH FOR THE REST OF THE FISCAL YEAR, WE'RE LOOKING LIKE WE'LL BE ABOUT 5.5% OVER BUDGET. SO ONE OF THE, THE HIGHEST, HIGHEST GROSSING HOT TAX YEARS ON RECORD AT $7.6 MILLION. MOVING ON TO DEBT AND THEN LOOKING AT OUR OVERALL DEBT PROFILE, RIGHT NOW, WE ARE SITTING AT THAT $1.1 BILLION WORTH OF DEBT. AS YOU CAN SEE IN 2026, THE DARK BLUE AT 331 MILLION IS WHAT YOU'RE WHAT IS ACTUALLY SUPPORTED BY YOUR PROPERTY TAXES, 775 MILLION IS SUPPORTED BY USER FEES. SO 
          [01:05:07]
THINK YOUR WATER RATES, YOUR WASTEWATER RATES, YOUR DRAINAGE RATES, ALL OF THOSE FEE SUPPORTED DEBT IS IN THAT LIGHTER BLUE. YOU CARRY THAT FORWARD. AND THAT'S WHAT'S ACTUALLY ON OUR BOOKS TODAY. SO IN FISCAL YEAR 27, DROPPING DOWN TO 316 MILLION AND 740 MILLION, RESPECTIVELY. HOWEVER, WHAT WE'VE DONE IN THIS FOR VISUALIZATION IS TO BUILD IN WHAT IS ACTUALLY PLANNED OUT THERE AND WHAT WE CAN PROJECT GOING FORWARD TO GIVE A BETTER UNDERSTANDING OF WHAT OUR DEBT LOOKS LIKE OVER THE NEXT TEN YEARS. WE DO HAVE TWO PROJECTS OUT THERE BARONS BRANCH AND THE I-35 HIGHWAY SIX DEVELOPMENT. WE'VE GONE AHEAD AND PUT THOSE IN OVER THE NEXT TWO YEARS, 27 AND FISCAL YEAR 28 TO TO SHOW THE IMPACTS OF THAT. AND THEN WHAT WE'RE DOING IS WE'RE BUDGETING AT LEAST ABOUT $57 MILLION OF, OF ISSUANCE PER YEAR GOING OUT FOR THE NEXT TEN YEARS. AND AS, AS WE DO THAT, AND YOU SEE THE, THE FALL OFF OF THAT DEBT PER YEAR, YOU GO FROM A HIGH OF 1.2 BILLION DOWN TO ABOUT THAT 1.1 BILLION. SO IT STAYS PRETTY LEVEL AT THAT $57 MILLION PER YEAR ISSUANCE. SO WHAT DOES THIS MEAN WHEN WE LOOK AT AT THIS COMPARED TO OUR OUR PEERS AND AND HOW HOW ARE WE MANAGING OUR OUR DEBT LOAD? THERE'S TWO REAL METRICS THAT WE LOOK AT DEBT PER CAPITA BEING THE FIRST OF THOSE. SO WE'RE GOING TO LOOK AT OUR DEBT PER CAPITA VERSUS THE, THE AVERAGE OF OUR, OUR COMP CITIES. 
          AND YOU CAN SEE WE WENT FROM 2016 DOWN $627 PER CAPITA TO FISCAL YEAR 25, WHERE WE'RE AT $2,014 PER CAPITA ON OUR DEBT. THAT IS STILL BELOW OUR PEERS AT THAT. 2424 MARK. AND YOU CAN SEE ON THE RIGHT WHERE THAT FALLS OUT WITH OUR OUR COMPARABLE PEER CITIES. AND YOU CAN SEE IN THIS MAYOR, I THINK WE TALKED ABOUT THIS, IT'S REALLY THE I-35 CORRIDOR WHERE YOU'RE SEEING A LOT OF, OF GROWTH, A LOT OF EXPANSION. AND THAT RAPID GROWTH AND EXPANSION TYPICALLY REQUIRES A LOT MORE INFRASTRUCTURE THAN CITIES IN, IN SLOWER GROWTH AREAS. SO YOU CAN SEE THE DEBT PER CAPITA HAS COME UP IN THE CITIES ALONG THE I-35 CORRIDOR. AND YOU CAN ALSO SEE THAT ON YOUR DEBT FOR TAXABLE VALUE, WHICH IS THE SECOND WAY WE COMPARE THIS. 
          ESSENTIALLY, YOU'RE SAYING, HOW MUCH DEBT DO YOU HAVE COMPARED TO THE OVERALL VALUE OF WHAT YOU'RE BEING ABLE TO TAX FOR? PEER CITIES ARE REALLY STUCK AROUND THAT 2% A LITTLE SLIGHTLY OVER THAT 2% MARK. CITY OF WACO HAS GONE UP FROM JUST UNDER 1% TO 1.5%. SO STILL MANAGING OUR DEBT. WE HERE THE 1.1 BILLION. BUT WE ARE COMPARED TO OUR PEER CITIES STILL KEEPING OUR OUR DEBT IN CHECK. I'LL JUST COMMENT ON THIS SERIES OF THREE SLIDES I. 
          THIS IS MAYBE THE BEST ANALYSIS OF DEBT AND, YOU KNOW, CAPACITY AND TREND AND, AND PROJECTION. 
          I THINK THAT I'VE SEEN IN A LONG TIME BECAUSE WE USUALLY HAVE LIKE GOING BACK TO PAGE 41, HERE'S WHAT WE OWE. AND THEN IT DROPS OFF BECAUSE WE NEVER BORROW ANOTHER DIME, WHICH IS NOT REALISTIC BECAUSE WE GOT TO KEEP SIP, WE GOT TO FIX THE STREETS. WE'VE GOT TO FIX THE WATERLINES WASTEWATER LINES. THIS ONE ALLOWS FOR, I MEAN, OR JUST SHOWS IF, IF WE KEEP 57 MILLION IS THE NUMBER THAT WE KIND OF BAKE IN IN FUTURE YEARS AROUND THAT 57 LEVERAGE PROJECTS THAT WE ARE CONSCIOUS OF ABOUT 50 MILLION OF PRINCIPAL RUNNING OFF EVERY YEAR. AND THEN THE 50 MILLION THAT WE CAN KIND OF PUT ON TO KEEP OUR, OUR DEBT LEVEL AND STILL DO SOME, SOME PRETTY SPECIAL PROJECTS. AND, AND SO I LIKE SEEING WHAT I CONSIDER A FAIRLY ACCURATE AS LONG AS RATES STAY THE SAME AND ALL THAT STUFF. BUT GREAT SLIDE. 
          THEN THE NEXT TWO SLIDES AS WELL, AS WE TALKED ABOUT A FEW YEARS AGO, WE GOT TOGETHER, THE COUNCIL MANAGEMENT GOT TOGETHER. LET'S BUILD SOME GUIDE, SOME GUARDRAILS AND SOME SOME LIMITATIONS ON WHAT, WHAT OUR DEBT LEVEL SHOULD BE AND SAID, WHAT ARE OTHER CITIES DOING? AND THIS, THESE ARE INTERESTING, SUPER INTERESTING TO ME BECAUSE THE IT SHOWS THAT WE'RE STILL MANAGING OURS ON A PER CAPITA, ON A PER PERSON LEVEL. WE'RE UNDER PEER CITIES. AND AS YOU SAID, WE KIND OF DID TALK ABOUT THIS A LITTLE BIT. THE I-35, WHEN PEOPLE COME TO THEY WANT TO COME TO TEXAS TO DO BUSINESS AND THEY LOVE TO DO BUSINESS ON I-35. WE'RE KIND OF PRESSURED WITH HAVING TO FIX UP ALL OF OUR INFRASTRUCTURE TO, TO ATTRACT BUSINESSES AND CREATE MORE TAX BASE AND ALL THAT. BUT IT'S SUPER INTERESTING TO ME TO SEE DENTON, GEORGETOWN, ROUND ROCK TEMPLE, THE I-35 CITIES ARE THE ONES THAT HAVE THE ARE HAVING TO KIND OF BORROW MONEY 
          [01:10:06]
TO, TO KEEP UP WITH THE GROWTH. AND WE'RE STILL STAYING UNDER THOSE, THOSE PEER CITIES AND THE SAME THING ON THE DEBT FOR TAXABLE VALUE. YOU'RE SEEING THE SAME SORT OF STORY KIND OF COME THROUGH. SO I'M, I FEEL GOOD THAT WE'RE, THAT WE'RE THIS IS WHAT I DID FOR A LIVING FOR 40 YEARS IS, IS MANAGED, MANAGED DEBT AND, AND THE MIXTURE THAT WAS ALL LOGICAL AND CONSERVATIVE. I'LL SAY. SO THIS IS A GOOD SERIES OF SLIDES. GOOD JOB BLUE. THANK YOU MAYOR. 
          ALL RIGHT. MOVING INTO OUR GENERAL FUND BUDGET DISCUSSION. SO AS WE SAID THAT FISCAL YEAR 27 LANDSCAPE, YOU KNOW, WE DO HAVE A LOT OF UNCERTAINTY GOING FORWARD, A LOT OF HEADWINDS THAT WE'RE FACING. SO WE'RE GOING TO KEEP LOOKING AT THOSE. WE WILL KEEP MONITORING THE PRESSURES THAT WE SEE. AND IF THERE'S ANY RELIEF THEN, THEN WE WILL WE WILL NOTE THOSE IN THE PROPOSED BUDGET GOING FORWARD. THE LOCAL ECONOMIC INDICATORS CONTINUE OVER WHAT WE'VE SAID OVER THE LAST REALLY COUPLE OF YEARS WITH THAT, THAT SIGNALING OF A LITTLE BIT OF A PLATEAU. IT'S NOT A DECREASE. IT'S NO NO REASON FOR ALARM. BUT WE DO SEE IT. WE DO RECOGNIZE IT, WHICH CREATES AN OPPORTUNITY FOR US TO ADJUST OUR OPERATIONS TO, TO MEET THOSE, THOSE DEMANDS OF, OF THE, THE ECONOMIC INDICATORS GOING FORWARD. SO WE'RE ALSO MONITORING THE 2026 MIDTERMS, THE UPCOMING 90TH LEGISLATIVE SESSION. A LOT WITH POLITICS HAS A LOT TO DO WITH HOW WE ARE FUNDED, WHAT WE CAN DO. SO WE ARE MONITORING THAT AS WELL. 
          OUR KEY SOURCES OF REVENUE, AS WE SAID, YOU KNOW, CERTIFIED VALUES WILL LIKELY FALL SIGNIFICANTLY LOWER. SO WE'RE LOOKING FOR THAT DECREASE. WE'RE ALREADY BUDGETING FOR THAT. WE'RE ALREADY PLANNING FOR THAT. WHAT WE WILL DO IS HAVE OPTIONS IN PLACE. YOU KNOW, IF VALUATIONS COME IN BETTER. SOME OF THE THINGS THAT WE HAVE ALREADY CUT OUT, WE WILL LOOK TO PUT BACK IN SO THAT WE CAN CONTINUE TO OFFER THE SERVICES THAT THAT WE'VE BEEN PROVIDING, BUT THAT'S SOMETHING WE HAVE TO MONITOR AS WE GO FORWARD. SALES TAX COLLECTIONS, THOSE ARE DEFINITELY FLATTENING HEAVY RELIANCE ON OUR RETAIL SERVICES, FOOD THAT'S GOING TO DAMPEN UPWARD MOVEMENT, BECAUSE THE DISCRETIONARY SPENDING PULLED BACK FROM OUR CONSUMERS. AND OVERALL, JUST TO GIVE YOU A HIGHLIGHT BEFORE WE GO INTO THE ACTUAL NEXT SLIDE, WE'RE CURRENTLY SITTING AT A $224 MILLION GENERAL FUND BUDGET, WITH THE USE OF RESERVES RIGHT AROUND THAT $11 MILLION MARK. SO AS WE LOOK AT THAT, THE RESERVES IS THE PORTION THAT WE WANT TO SEE IF WE CAN ELIMINATE THROUGH THIS PROCESS. SO AS WE GO FORWARD WITH OUR CONVERSATION WITH YOU, WE'RE GOING TO HAVE A LOT OF OPTIONS. WE'RE GOING TO HAVE A DASHBOARD WITH A LOT OF OPTIONS FOR YOU TO BE ABLE TO, TO LOOK AT DIFFERENT WAYS THAT WE CAN BRING THAT $11 MILLION DOWN TO HOPEFULLY HAVING A STRUCTURALLY ALIGNED BUDGET BY THE, BY THE TIME WE GET TO THAT BUDGET RETREAT, WHAT'S THE PERCENTAGE THAT WE IS IT 28%? WHAT WHAT IS MY MIND THINKING ABOUT WHAT WE WANT TO. WHAT THE PERCENTAGE IS FOR RESERVE 27.5 IS OUR CURRENT POLICY RATE ON THE RESERVE POLICY 27.5%. OKAY. THANK YOU. BUT I HAVE THE SAME JUST GENERAL CONTEXT BECAUSE 10.9 IN THE CONTEXT OF HOW MUCH DO WE HAVE IN RESERVE, LIKE 12 OR IS IT 500 IN RESERVES? BUT TO PROVIDE BETTER CONTEXT FOR IN RESERVES RIGHT NOW AS A WHOLE, WHAT WE'RE WHAT WE'RE REQUIRED TO HOLD, WE HAVE ABOUT THAT $59 MILLION MARK. OUR RESERVE POLICY RIGHT NOW IS AROUND 57 MILLION. SO WE HAVE AN ADDITIONAL ABOUT $2 MILLION RIGHT NOW THAT WE'RE LOOKING AT AT THE 27, AT THE 27.5. EXCUSE ME. SO OVERALL, $224 MILLION BUDGET. AND WHAT THIS DOES INCLUDE RIGHT NOW ON THE GENERAL SALARY INCREASE, THE GSI IS A 3% NON-CIVIL SERVICE INCREASE AND A 4% CIVIL SERVICE INCREASE. WE ARE NOT BUDGETING FOR VACANCIES THIS YEAR. THAT'S BEEN A PRACTICE IN PREVIOUS YEARS, BUT OVER THE LAST TWO YEARS, WE HAVE NOT BEEN ABLE TO REALIZE THAT PEOPLE ARE STAYING IN THEIR JOBS AND STAYING LONGER. SO NOT ONLY ARE WE SPENDING THAT, WE'RE NOT GETTING TO TAKE CREDIT FOR IT. 
          SO WE'RE ELIMINATING THAT $3.7 MILLION OUT OF YOUR WAGES, WHICH IS GOING TO BE A LARGE REASON WHY YOU SEE A A BIG INCREASE IN THE SALARIES AND WAGES, 3.7 OF THAT IS GONE IMMEDIATELY. WE ARE ELIMINATING. SAY THAT AGAIN. SO MAKE SURE I UNDERSTOOD WHAT YOU'RE SAYING 
          [01:15:01]
THERE. RIGHT. IN OUR BUDGET, IN SALARIES AND WAGES WE WOULD ALWAYS HAVE THE FULL COST ALLOCATION FOR EVERY SINGLE EMPLOYEE. BUT WE KNOW THAT THERE WAS ALWAYS BEEN A LOT OF TURNOVER. SO WE WOULD ANALYZE THE TURNOVER YEAR OVER YEAR. AND THAT ALWAYS EQUATED TO A CERTAIN DOLLAR AMOUNT IN LAST YEAR. THAT EQUATED TO ABOUT $3.7 MILLION OF SALARY AND WAGES SAVINGS. HOWEVER, WE'RE NOT SEEING THAT AS PEOPLE ARE STAYING IN THEIR JOBS. WE DON'T GET TO RECOGNIZE ANY SALARY SAVINGS. SO THAT 3.7 IS NOT REALLY THERE ANYMORE. GOTCHA. 
          AND THEN SO THAT'S OKAY. I KNOW THIS IS FIRST GLANCE, YOU KNOW, I NEED TO I NEED TO STUDY THESE, BUT WE'RE, WE'RE, WE'RE SHOWING 9.6 AND 17% INCREASES FOR WAGES AND BENEFITS FOR SALARIES AND WAGES. WE'RE SHOWING A 10% INCREASE RIGHT NOW. THAT'S THAT'S $9.1 MILLION. 3.7 OF THAT IS FROM NOT BUDGETING FOR VACANCIES. OKAY. SO WILL WE SEE THAT EVENTUALLY DROP TO THE 4% THAT WE WERE TALKING ABOUT EARLIER, OR IN ONE A AND ONE B? YOU WON'T SEE THAT DROP TO TWO, 3 TO 4%. NO. SO WE WERE BUDGETING FOR IT. IT WASN'T IT WASN'T HAPPENING. SO WE'RE NOT GOING TO BUDGET FOR THAT GOING FORWARD. IF IT'S IF IT'S NOT REALISTIC AND IT'S NOT ACTUALLY HAPPENING, WE CAN'T BUDGET FOR IT AND REASONABLY EXPECT IT TO HAPPEN. SO WE NEED TO ALIGN OUR BUDGET TO WHAT'S ACTUALLY HAPPENING TODAY. SO WILL WE HAVE THE BENEFIT OF LOOKING AT ACTUALS FOR THE FOR THE YEAR END OF. I GUESS WE WON'T GO ALL THE WAY UP TO SEPTEMBER. WE'LL HAVE A FAIRLY GOOD IDEA OF WHAT ACTUALS ARE FOR THE END OF THE YEAR. AND WE'LL GO. SO I'M ASKING QUESTIONS BECAUSE I'M STILL. I'M FOCUSED ON THE THREE AND 4%, WHICH I LIKE. YEAH. 
          WHICH I THINK IS WHAT PEOPLE ARE DOING. AND THEN I'M TRYING TO RECONCILE THAT TO THE. TEN. 
          AND SO YOU. SO YOU HAVE THIS 3.7 MILLION IN. I NEED TO SAY THE. THERE WAS A GRANT FOR FOR PD THAT ALSO WENT AWAY IN THIS THIS FISCAL YEAR. SO THIS IS THE LAST YEAR WE'RE GOING TO HAVE THAT. THAT'S ANOTHER $1.3 MILLION THAT THAT IS ADDED TO SALARIES AND WAGES. SO WHICH ONE? WE'VE GOT A LOT OF HEADS. IT WAS THE COPS GRANT THAT WE GOT FOUR YEARS AGO. IT WAS A DECLINING CONTRIBUTION IN THIS. THIS YEAR 27, WE TAKE ON THE FULL 100% OF THE CONTRIBUTION FOR 12 OFFICERS. OKAY. YEAH. IN THIS BUDGET, WE WE DID ELIMINATE TWO VACANT POSITIONS. 
          SO OVERALL, ALL SPENDING, SALARY, WAGES, BENEFITS, ALL THE OPERATIONAL EXPENSES. FOR THOSE WE'RE ELIMINATING 517,000 RIGHT THERE. WE DID BUILD IN THE ADJUSTMENT TO THE 50% RETIREE COLA. THE CURRENT STATUS IS THE CITY IS AT THE 30% COLA. BUT BACK IN FEBRUARY, WE WERE DIRECTED TO TO SEE WHAT IT WOULD TAKE TO GET US TO THAT 30%. SO WE WENT AHEAD AND BUILT THAT INTO THIS BUDGET. THAT'S $4.2 MILLION IN THE GENERAL FUND RIGHT NOW IN YOUR BENEFITS TOTAL OF ABOUT $6.2 MILLION INCREASE. THOSE ARE ESTIMATES. AT THIS TIME LAST YEAR, IT WAS 6.1 TO $6.2 MILLION. SO WE KNOW THAT THAT WILL LIKELY INCREASE SOME, BUT IT SHOULD BE AROUND THAT 6.6 POINT $2 MILLION. SO THAT'S WHAT WE WENT AHEAD AND PLANNED FOR. BUT $4.2 MILLION GENERAL FUND INCREASE BECAUSE OF THAT 50%. RETIREE COLA. OUR CITY'S HEALTH PLAN INCREASES IN THIS ALMOST 12000 PER EMPLOYEE. THAT'S OUR CONTRIBUTION, UP FROM JUST OVER 11,000 PER EMPLOYEE LAST YEAR. AND THEN THERE WERE SEVERAL SUBSIDIES TO TO SOME ENTERPRISE FUNDS, THOSE ENTERPRISE FUNDS OUT THERE THAT HAVE FEES THAT SUPPORT THEM. IF THOSE FEES AREN'T COVERING COMPLETELY, THE GENERAL FUND DOES MAKE UP THE DIFFERENCE IN THOSE. WE REDUCE THAT BY ABOUT $5.1 MILLION BY USING SOME OF THE ENTERPRISE FUNDS FUND BALANCE. SO INSTEAD OF GIVING THE FULL AMOUNT TO THEM, PLUS A FUND BALANCE, WE'RE GOING TO PULL THAT BACK FOR ONE YEAR, $5.1 MILLION. YOU CAN SEE HOW THAT'S BROKEN OUT BETWEEN THE FIVE. AND WE WILL USE FUND BALANCE NEXT YEAR IN ORDER TO TO OFFSET THAT TRANSFER OF $5.1 MILLION. AND THEN OUR CASH 
          [01:20:02]
TRANSFER TO STREET MAINTENANCE WAS REDUCED BY $3.1 MILLION FOR THIS YEAR. WE WERE GIVING SOMEWHERE AROUND THAT $17.9 MILLION MARK 18, WE'RE DOWN TO ABOUT $14.9 MILLION TRANSFER OVER TO STREET MAINTENANCE FUND. SO THAT'S WHAT'S BUILT IN THE SEVEN FACTORS THAT ARE BUILT INTO THE BUDGET. AS WE SIT TODAY, WE'RE WE'RE CONTINUING TO DEVELOP SOME OPTIONS AGAIN, TO TO LOOK AT REDUCING THAT THAT TRANSFER FROM SURPLUS, THAT $10.9 MILLION. WE WOULD LIKE TO SEE IF WE CAN GET TO A PLACE WHERE WE CAN ELIMINATE THAT ALTOGETHER. SO WE'LL HAVE A MENU OF OPTIONS FOR YOU AT THE BUDGET RETREAT TO TO GO THROUGH THAT JUST WHILE WE'RE ON THAT ONE PAGE, WHAT WOULD THE DELTA, WHAT'S THE DELTA BETWEEN KEEPING NUMBER FOUR AT THE 30%, TWO FOR ONE MATCH AND 30%? IT'S IT'S $4.2 MILLION. TAKE THAT. $2 MILLION. OKAY. 
          AND ALL RIGHT. SO IF WE DID JUST WHAT WE DID LAST YEAR, WE WOULD SAVE $4.2 MILLION. THAT'S CORRECT. YES. YOU SAID SAVE 4.2 OR 2. WE JUST WOULDN'T SPEND. SO IT WOULD COME OFF OF OUR TRANSFER FROM SURPLUS OR OUR TRANSFER SURPLUS WOULD GO FROM THAT 10.9 DOWN BY 4.2 MILLION, PLUS THE TWO IN THE NON-GENERAL FUND, THE TWO IN THE NON-GENERAL FUND. YES, THAT WOULD THAT WOULD COME OUT OF THE WATER FUND, WASTEWATER FUND, ALL THE SEPARATE FUNDS WHERE EMPLOYEES ARE. IF WE JUST KEPT THE MONEY PACKAGE, IF WE KEPT THE 30% COLA. YES. OKAY. AGAIN, WE WILL WE WILL HAVE A WHOLE LIST OF OPTIONS TO WHERE IF YOU DO CHOOSE TO KEEP THIS IN PLACE, WE'RE TRYING TO DEVELOP ALL THE OPTIONS IN ORDER TO, TO SEE WHAT THE IMPACT TO THE CITY WOULD BE, WHETHER IT BE M AND O OR SERVICE LEVEL IMPACTS. WE'LL BE ABLE TO PRESENT ALL OF THAT TO YOU AT THE BUDGET RETREAT. I KNOW THAT YOU YOU KNOW, YOU'LL HAVE MORE AT THE BUDGET RETREAT, BUT STICKING ON NUMBER SEVEN THERE, I WOULD LOVE IF WE COULD WORK WITH THE OTHER DEPARTMENTS STREET SPECIFICALLY TO GET AN IDEA STREETS BECAUSE IT'S ON HERE, BUT ALSO JUST OTHER ONGOING CAPITAL IMPROVEMENTS TO GET AN IDEA OF, HEY, IF WE'RE NOT GOING TO BE INCREASING THE EXPENDITURE OR MAINTAINING THE EXPENDITURE THERE BY THIS AMOUNT. TO SAY THAT WE'RE WE'RE STILL GOING TO BE DOING A LOT OF WORK THERE, AND WE'RE FRANKLY STILL CATCHING UP ON A LOT OF WORK THAT WE'VE ALLOCATED FUNDING FOR. AND SO I JUST DON'T WANT THE PUBLIC TO SEE THAT, YOU KNOW, IF WE'RE REDUCING FUNDS TO ONE OF OUR LARGER CAPITAL IMPROVEMENT FUNDS LIKE STREETS THAT EVERYONE USES TO THINK THAT, OH, WELL, NOW THEY DON'T CARE ABOUT STREETS WHEN THE REALITY IS WE FRANKLY HAVE MORE STREET WORK TO DO THAN WE COULD GET DONE EVEN IF WE FUNDED IT. YOU KNOW, TWO X WHAT WE ARE PLANNING ON NEXT YEAR? VERY MUCH SO. WE'LL GET INTO CIP AT THE BUDGET RETREAT AS WELL. SO THAT'S WHERE SOME OF THIS WILL COME IN. 
          BUT YEAH, WE'LL WE'LL, WE'LL KEEP CHARLES BUSY FROM A FROM A PUBLIC DISCUSSION. THIS IS ACTUALLY IF YOU WERE GOING TO HAVE A DRAW DOWN, THIS IS AN OPTIMUM YEAR TO DO IT, GIVEN ALL OF THE, THE BACKLOG OF, OF WORK THAT WE NEED TO GET DONE. SO EVEN MAKING THIS REDUCTION AND BRINGING YOUR CIP DOWN TO THAT 57 MILLION MARK, WHICH WILL SEEM LIKE LESS THAN WE'VE HAD IN IN PREVIOUS YEARS. BUT THE REALITY IS WE NEED TO GET SOME WORK COMPLETED. AND, AND OUR CREWS ARE WORKING FERVENTLY TO, TO DO THAT. AND SO IF IT'S SORT OF THE SILVER LINING OF THE BUDGET PROCESS IS IF YOU PICKED A YEAR TO HAVE A SLOWDOWN FROM A FUNDING PERSPECTIVE OF NEW FUNDS, THIS WOULD BE THE YEAR TO DO IT. SO THERE IS SOME THERE IS A LITTLE BIT OF A SILVER LINING IN THERE. OKAY. THANKS, GUYS. ALL RIGHT. MOVING ON TO THE BUDGET SCHEDULE. SO JUNE 2ND, HERE WE ARE. AND JUNE 17TH, THE BUDGET RETREAT AFTER THE BUDGET RETREAT. ONCE WE TAKE YOUR FEEDBACK, ONCE WE TAKE YOUR INPUT, WE'RE GOING TO GO BACK AND WE'LL WE'LL GO TO THE DRAWING BOARD AND SEE WHAT WE CAN MAKE FIT. WE'LL BRING BACK ON AUGUST 4TH IN WORK SESSION, A FULLY PROPOSED BUDGET. BY THAT POINT, WE WILL HAVE OUR CERTIFIED VALUES. SO WE'LL HAVE A LITTLE BIT MORE CLARITY ON THAT AS WELL. AT THAT SAME MEETING, WE'RE GOING TO ADOPT OUR MAXIMUM TAX RATE. THAT'S NOT THE ACTUAL TAX RATE THAT WE WILL HAVE FOR THE FISCAL YEAR. THAT'S JUST THE MAXIMUM THAT STARTS THE LEGAL PROCESS OF ADOPTING AN ACTUAL TAX RATE. SO THAT HAS TO COME OUT THERE, BE OUT THERE SO THAT PEOPLE KNOW YOU CAN ALWAYS ADOPT ANYTHING LESS THAN THAT MAXIMUM. YOU JUST CAN'T EVER GO ABOVE THAT MAXIMUM THAT WE SET AT THAT ONE. WE'LL DO THE FIRST READING OF THE ORDINANCE, SETTING THE DEPARTMENTS. THAT'S A CITY CHARTER REQUIREMENT. AUGUST 11TH BUDGET AUDIT COMMITTEE MEETING. ANYTHING THAT COMES OUT OF AUGUST 4TH WILL WILL PRESENT AT AUGUST 11TH. AND THEN FOLLOWING THAT, AUGUST 18TH, ANOTHER WORK SESSION ON THE 27 BUDGET. SECOND READING OF THAT ORDINANCE SETTING. THE DEPARTMENTS WILL MOVE INTO SEPTEMBER 1ST IN THAT REGULAR CITY COUNCIL MEETING. THAT'S GOING TO BE ONE OF OUR KEY DATES THE BUDGET, BUDGET, 
          [01:25:02]
PUBLIC HEARING, AND THE BUDGET ADOPTION RESOLUTION. AT THAT MEETING, THE TAX RATE, PUBLIC HEARING, AND THE FIRST READING OF THAT TAX RATE ORDINANCE BY STATUTE. WE HAVE TO COME BACK SEVEN DAYS LATER. SO A SPECIAL MEETING ON SEPTEMBER 8TH FOR THE SECOND READING OF THE TAX RATE ORDINANCE. IF THE SCHEDULE HOLDS, YOUR BUDGET WILL BE ADOPTED BY SEPTEMBER 1ST. YOUR TAX RATE THAT SUPPORTS THAT BUDGET WILL BE ADOPTED BY SEPTEMBER 8TH. FISCAL YEAR ENDS SEPTEMBER 30TH, AND THIS NEW FISCAL YEAR 27TH BUDGET WILL START FISCAL YEAR 27 OR I'M SORRY, OCTOBER 1ST, 2020 2026. FOR THE FISCAL YEAR 27 BUDGET. QUICK QUESTION. I'LL PAUSE HERE FOR ANY QUESTIONS. GREAT REPORT. BLUE AND COLIN BOTH. ANY QUESTIONS OR COMMENTS? THERE ARE SEVERAL, HOWEVER SEMICOLON. I THINK THAT THE RETREAT WILL HAVE TO UNLOCK SOME OF THE LEVERS TO THE QUESTIONS THAT I HAVE. IN PROBABILITY OF. YOU KNOW, I'M. I'M CURIOUS AS TO. 
          WITH THE EXPECTED EXPECTED DECREASE IN OUR. THE REVENUES FROM FROM OUR FROM TAXES. TELL ME THAT PERCENTAGE AGAIN, WHAT YOU'RE EXPECTING IT TO BE, YOU KNOW, THE, THE, THE, THE DIFFERENCES THAT THAT TOP LINE IN THE TAXABLE VALUE FROM, FROM PRELIMINARY TO CERTIFIED, USUALLY ABOUT THAT 6 TO 7% DROP LAST YEAR, WE SAW CLOSER TO 9 TO 10%. YOU SAID, YEAH, BUT YOU'RE EXPECTING WE'RE EXPECTING THAT YOUR CRYSTAL BALL SAYS 6 TO 7%. IT'S A LITTLE CLOUDY AND A LITTLE BIT BROKEN, BUT YES. YEAH. AND SO WHAT WE'LL SEE AT THE RETREAT IS. BEST AND WORST CASE SCENARIO, IF WE GET THIS, THEN WE'LL SEE THIS. IF WE DON'T GET THIS THEN WE'LL SEE THIS. BUT WHAT YOU'RE ANTICIPATING IS THAT NO GENERAL SERVICES AT THIS POINT WILL BE WILL BE CUT IS WHAT YOU'RE SAYING. THERE MAY BE SOME ADJUSTMENTS THAT WE RECOMMEND TO SERVICES, BUT NOTHING FULLY CUT. NO. CORRECT. OKAY. AND LIKE AS AS COUNCIL MEMBER, YOU MENTIONED THE PROJECTS THAT WE HAVE CURRENTLY IN THE QUEUE HAVE ALREADY BEEN FUNDED. SO IT'S NOT NEW PROJECTS THAT WE'RE LOOKING AT. AND SO IF THERE WAS A SLOWING, THEN THIS IS THE RIGHT TIME TO DO THAT. BECAUSE, YOU KNOW, I DON'T KNOW THAT WE CAN CONTINUE TO DO THE THINGS THAT WE DON'T HAVE THE ABILITY TO DO. DO YOU KNOW OFFHAND YOU LISTED OUR UNEMPLOYMENT RATE. DO YOU KNOW OFFHAND WHAT THAT IS IN COMPARISON TO THE STATE'S THE STATE LAST I LOOKED. I NEED TO GET THAT FOR YOU. I'LL I'LL DO THAT COMPARISON FOR YOU. BUT THE LAST I LOOKED IT WAS, I THINK 3.6, 3.7%. OKAY. AND COLIN, IN YOUR PRESENTATION, IT WAS THE STREET MAINTENANCE FEES AND THOSE NUMBERS WERE DOWN. WHY? YEAH, THEY WERE DOWN A LITTLE BIT BECAUSE IN THE STREET MAINTENANCE FEE WE HAD ANTICIPATED, YOU KNOW, IT WENT UP IN FY 26 BY $2. AND SO WE HAD BAKED THAT IN FROM A BUDGETARY STANDPOINT FOR THE ENTIRE 12 MONTHS. THE ACTUAL INCREASE DID NOT GO INTO EFFECT UNTIL JANUARY 1ST. AND SO THAT DELTA THERE REALLY WAS FROM A TIMING STANDPOINT, BECAUSE WE HAD BAKED IN THE ENTIRE 12 MONTHS. SO IT'S COLLECTING AT THE CURRENT COLLECTION RATE THAT IT SHOULD BE. IT WAS JUST DELAYED THREE MONTHS. THAT'S WHY LOWER THAN THE THAN THE THAN, THAN WHERE IT SHOULD BE. 
          OKAY. OKAY. AND I THINK THE REST WILL HAVE TO JUST BE IN ORDER WHEN IT COMES. SO WHEN THE RETREAT HAPPENS, BECAUSE I THERE ARE THINGS THAT I, I CAN'T, I DON'T HAVE ANSWERS TO, AND I CAN'T ASK THOSE QUESTIONS RIGHT NOW BECAUSE YOU. THIS ISN'T THE TIME AND SPACE FOR THAT. BUT THE DEEP DIVE IS COMING. ANY OTHER QUESTIONS OR COMMENTS? YEAH. WHEN IS THE. 
          WHEN DO WE NORMALLY GET THE FINAL ARB CERTIFIED STATUTORY IS JULY 25TH JULY 20TH. OKAY. 
          WE ALWAYS GET RIGHT THEN OR WE GET IT ON JULY 25TH. YES. OKAY. SO IF NOT, IF NOT A DAY OR TWO BEFORE THEY DON'T LEAK OUT EARLY INFORMATION ON. OKAY. RIGHT. THEY DON'T WE HAVE A GOOD RELATIONSHIP WITH THEM AND THEY, THEY DO KIND OF TELL US WHAT, WHAT THEY'RE SEEING AS 
          [01:30:02]
FAR AS TRENDS, BUT NOT ACTUAL DOLLARS. OKAY. THAT WAS A GREAT REPORT. I MEAN, OUR FIRST LOOK AT THE BUDGET, AND AGAIN, AS COUNCILMEMBER FAIRFIELD MENTIONED, JUNE 17TH, RIGHT? LET'S ALL BE THERE FOR THAT. IT'S ON A WEDNESDAY. IT'S A DAY AFTER OUR NEXT COUNCIL MEETING, I THINK. BUT YEAH, GREAT START ON THE INFORMATION. ANYTHING ELSE? CITY MANAGER HOPE THAT CONCLUDES ALL OF OUR PRESENTATIONS. YES. THANKS. THANKS, BLUE AND COLIN, APPRECIATE YOU. ALL RIGHT. THE NEXT ITEM IS REQUEST FOR FUTURE AGENDA. AGENDA ITEMS TO BE DISCUSSED AND SCHEDULED FOR THE UPCOMING CITY COUNCIL MEETINGS. ARE THERE ANY REQUESTS FOR 
          [EXECUTIVE SESSION]
FUTURE AGENDA ITEMS? THERE BEING NONE, WE WILL NOW RECESS THE WORK SESSION AND RECONVENE THE REGULAR SESSION FOR EXECUTIVE SESSION, AS READ INTO THE RECORD BY CITY SECRETARY HICKS AT GIVE ME A TIME. 4:31 P.M. NOTICE IS HEREBY GIVEN THAT THE CITY COUNCIL WILL GO INTO EXECUTIVE SESSION IN ACCORDANCE WITH THE FOLLOWING PROVISIONS REAL PROPERTY TEXAS GOVERNMENT CODE, SECTION 551.072 ECONOMIC DEVELOPMENT, TEXAS GOVERNMENT CODE, SECTION 551.087 REAL PROPERTY TEXAS GOVERNMENT CODE SECTION 551.072 ECONOMIC DEVELOPMENT TEXAS GOVERNMENT CODE, SECTION 551.087 AND ATTORNEY BRIEFING. TEXAS GOVERNMENT CODE SECTION 551.071 DOWNTOWN DEVELOPMENT PROJECT BEING THE MIXED USE DEVELOPMENT ON CITY OWNED AND ADJACENT PROPERTIES NEAR CITY HALL. ATTORNEY BRIEFING. TEXAS GOVERNMENT CODE SECTION 551.071 CITY OF WACO VERSUS THE CAMERON COUNTY HOUSING FINANCE CORPORATION. CAUSE NUMBER 2025-3131-4. AND ATTORNEY BRIEFING. TEXAS GOVERNMENT CODE SECTION 551.07 1EO. SEE COMPLAINT NUMBER 450-2022-02707. JOHN CAS WE'LL NOW CALL THE BUSINESS SESSION OF THE JUNE 
          [BUSINESS SESSION 6:00 P.M. - WACO CONVENTION CENTER BOSQUE THEATER]
2ND, 2026, MEETING TO ORDER AT 6:05 P.M. SORRY, WE'RE RUNNING A LITTLE BIT LATE TONIGHT. WE GOT A BIG, BIG CROWD HERE TONIGHT. IT'S FANTASTIC. WE GOT A GRADUATION CEREMONY. 
          EVERYBODY'S PRETTY EXCITED ABOUT IT. ALL COUNCIL MEMBERS ARE PRESENT HERE TONIGHT, AND WE'RE GOING TO START THE MEETING BY SAYING THE PLEDGE OF ALLEGIANCE. I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS ONE NATION UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. GREAT. THE 
          [PROCLAMATIONS/PRESENTATIONS]
FIRST ITEM IS GOING TO BE THE SPECIAL PRESENTATION TO THE WACO CITY ACADEMY GRADUATES AND MILLET. ARE YOU GOING TO MEET ME DOWN FRONT? THERE YOU ARE. GREAT. NOW, I THINK THE PROCESS IS THE PROCESS IS GOING TO BE WHEN ALL COUNCIL MEMBERS NEED TO COME DOWN AS WELL, BECAUSE WE'RE GOING TO FORM A LITTLE LINE OF CONGRATULATIONS. AND I'M I'M FIRST OF ALL, GOING TO. 
          THIS IS SUCH A. FOR THOSE THAT DON'T KNOW, AND I'M SURE WE'LL TALK ABOUT IT A LITTLE BIT TOO. 
          THIS PROGRAM OF LEARNING ABOUT THE CITY AND HOW THE CITY WORKS IS A PRETTY RIGOROUS PROGRAM THAT THESE GUYS HAVE GONE THROUGH, HELPING THEM HELP US AND HELP THE CITY BECOME A BETTER CITY. AND WE LOOK FORWARD TO YOU VOLUNTEERING TO DO TO GET INVOLVED IN THE CITY THROUGH THROUGH YOUR NEIGHBORHOOD ASSOCIATIONS, THROUGH BOARDS AND COMMISSIONS, THROUGH COUNCIL MEMBERSHIP. ONE OF Y'ALL IS GOING TO BE MAYOR SOMEDAY TOO, SO I'M LOOKING FORWARD TO THAT. YEAH. NO PRESSURE. YOU KNOW, YOU PROBABLY KNOW THIS BETTER THAN A LOT OF US. SO ANYWAY, I'M GOING TO START THE WITH THE, THE WHEREASES HERE. AND THEN I'M GOING TO HAND THE MIC OFF OVER TO MILLET. AND SHE WILL GO ONE BY ONE. AND THEN AS YOU COME THROUGH HERE AND GET YOUR CERTIFICATE, COUNCIL MEMBERS WOULD LOVE TO EXPRESS THEIR CONGRATULATIONS. SO COME THROUGH THE LINE AND THEN LINE UP RIGHT OVER THERE. OKAY. 
          WHEREAS THE CITY OF WACO ENCOURAGES COMMUNITY INVOLVEMENT AND LIFELONG LEARNING OF ALL RESIDENTS. AND WHEREAS THE CITY OF WACO SEEKS TO PROMOTE VOLUNTEERISM AND LEADERSHIP DEVELOPMENT FOR THE HEALTHY GROWTH AND DEVELOPMENT OF WACO AND ALL ITS RESIDENTS. 
          AND WHEREAS, THE CITY OF WACO VALUES COMMUNITY LEADERS AND VOLUNTEERS WHO SEEK TO GET INVOLVED IN EFFORTS TO MAKE WACO A BETTER PLACE FOR ALL. AND WHEREAS, THE CITY OF WACO COMMENDS THE PERSONAL COMMITMENT OF THE WACO CITY ACADEMY GRADUATES FOR ATTENDING TEN WEEKS OF LEARNING SESSIONS AND THEIR INTEREST IN THE COMMUNITY OPERATIONS AND THEIR CITY. NOW, THEREFORE, I. JIM HOLMES, MAYOR OF THE CITY OF WACO, ALONG WITH MY FELLOW COUNCIL MEMBERS, DO HEREBY RECOGNIZE THESE GRADUATES AS GRADUATES OF WACO CITY ACADEMY THIS SECOND DAY OF JUNE 2026. SO LET'S HEAR IT FOR THEM ALL TOGETHER, AND THEN WE'LL DO A 
          [01:35:03]
TIME. SO THE MAYOR GAVE ME THE MIC, AND I WANT TO INDULGE JUST A SECOND, BECAUSE THERE'S A LOT OF PEOPLE I NEED TO THINK BEFORE WE GET ROLLING. BUT FIRST OF ALL, IF YOU ARE HERE SUPPORTING A GRADUATE, WILL YOU PLEASE STAND FOR JUST A SECOND OR RAISE YOUR HAND IF YOU DON'T WANT TO GET UP? THANK YOU, THANK YOU. THAT IS AN EXCELLENT SUPPORT SYSTEM THAT THESE FOLKS HAVE HAD, AND I KNOW THAT THEY APPRECIATE YOU VERY MUCH. AS THE MAYOR SAID, WACO CITY ACADEMY TEN WEEK COURSE, THAT SORT OF TEACHES THE PARTICIPANTS A LITTLE BIT OF INSIGHT BEHIND THE SCENES AND FRONT OF THE SCENES OF EVERYTHING THAT GOES ON IN THE CITY. SO WE HAD INTERACTION FROM ALL 27 CITY DEPARTMENTS, AND IT REALLY DID SHOW A LITTLE BIT OF JUST DAY TO DAY OPERATIONS. WE ALSO TRIED TO WORK IN SOME SORT OF FUN ACTIVITY OR TOUR OR ANY SORT OF THING THAT KIND OF GAVE YOU MORE THAN JUST THE TYPICAL LEARNING POINTS, BUT MADE YOU ENJOY IT A LITTLE BIT. SO ALL THE GRADUATES MUST HAVE ATTENDED EIGHT OUT OF TEN SESSIONS. WE HAVE TEN TOTAL SESSIONS. WE HAVE A FULL 20. 
          THE WHOLE CLASS IS GRADUATING. THAT'S EXCEPTIONAL. WE'VE NEVER HAD THAT BEFORE. SO THANK YOU FOR YOUR. SO A QUICK THANK YOU. CITY MANAGER'S OFFICE, CITY COUNCIL, CITY ATTORNEY, CITY SECRETARY, ALL THE 27 DEPARTMENTS WHO PUT TOGETHER PRESENTATIONS OR TOURS OR ACTIVITIES AND YOUR STAFF. THANK YOU ALL VERY MUCH FOR HELPING US TURN THIS INTO SOMETHING THAT THEY ALL FOUND QUITE VALUABLE. GOOD EVALUATIONS FOR EVERY SESSION. 
          ALSO DESPERATELY NEED TO THANK MARISSA ZUNIGA IN MY DEPARTMENT AND CRYSTAL ANTHONY DOWN HERE IN FRONT TAKING ALL THE PICTURES. AND THEN MOST IMPORTANTLY, I WANT TO THANK YOU ALL THE FOLKS WHO PUT IN THE TIME TO ATTEND EVERY CITY ACADEMY SESSION, OR AT LEAST EIGHT OUT OF TEN. THANK YOU FOR YOUR INTEREST IN THE CITY. THANK YOU FOR WANTING TO LEARN MORE ABOUT CITY GOVERNMENT AND WHY WE DO WHAT WE DO. AND THEN GENERALLY, JUST YOUR COMMITMENT TO LEARNING YOUR YOUR MINDS, HOW THEY THOUGHT ABOUT THINGS, ASKED QUESTIONS, LOTS OF GOOD QUESTIONS WITH THIS GROUP AND QUITE FRANKLY, GAVE US SOME NEW INSIGHT INTO DIFFERENT WAYS OF THINKING ABOUT SOME THINGS. SO HOPEFULLY WE CAN ALL DO OUR JOBS BETTER GOING FORWARD. SO ALL THAT TO SAY, IT WAS REALLY GREAT TO GET TO KNOW ALL OF Y'ALL. WE APPRECIATE THE TIME YOU PUT IN. WE REALLY ENJOY IT. WE HOPE YOU ALL DID, AND WE HOPE ANY OF YOU OUT THERE IN THE FUTURE WHO MIGHT BE INTERESTED IN SPEAKING TO COUNCIL, COME TO A MEETING. BUT MORE IMPORTANTLY, IF YOU'RE INTERESTED IN LEARNING A WHOLE BUNCH, COME TO CITY ACADEMY NEXT, NEXT SPRING, 2027. IT'LL START IN MARCH. APPLICATIONS WILL BE IN JANUARY. OKAY, SO NOW MAYOR HAS READ THE CERTIFICATE. I'M GOING TO READ YOU ONE BY ONE ALPHABETICALLY. 
          WE WILL COME. MARISSA CAN HAND THE CERTIFICATE TO THE MAYOR. SO HOW WE'RE DOING THIS AND THEN. AND THEN CHALLENGE COIN. I NEVER KNOW HOW THEY'RE GOING TO LINE UP. SO. ALL RIGHT. AND THEN JUST KIND OF GAGGLE OVER THERE. AND THEN WE'LL TAKE A GROUP PHOTO. ONCE EVERYBODY GETS THEIR CERTIFICATE. OKAY. FROM DISTRICT FIVE PATRICIA ADKINS. DISTRICT FOUR DAVID BROWN. DISTRICT FIVE STEPHEN DOLSON. DISTRICT ONE, LA VIDA GREEN. DISTRICT THREE BRENDA HERNANDEZ. DISTRICT ONE SHERRI L KING. DISTRICT ONE. KELLY LOVE. DISTRICT FOUR, MARY. 
          DISTRICT TWO HALEY MCNEIL. DISTRICT THREE MICHAEL NETTIS. DISTRICT TWO JC OLVERA PEREZ. 
          [01:40:05]
DISTRICT FOUR BRIAN PACE. DISTRICT FOUR WILLIAM RICHTER. DISTRICT FIVE. CARLOS RODARTE. 
          DISTRICT THREE. CARLOS LUIS ROSAS THE THIRD. DISTRICT FOUR, SKIP SORRELL. DISTRICT FIVE JASON SPIVEY. DISTRICT FIVE. KEVIN STEVENSON. DISTRICT FOUR DAVID VILLARREAL. AND DISTRICT TWO TERRY WILLIAMS. COUNCIL UP TOP. YEAH, YEAH. SO ALL Y'ALL COME BACK DOWN HERE, LET CRYSTAL BUNCH YOU UP FOR ONE LAST GROUP PHOTO. WE DO HAVE LOTS OF PRACTICE, BUT I'M STILL GOING TO SAY IT SHORT PEOPLE STAY IN THE FRONT. YEAH STAY DOWN HERE. GROUP PHOTO. NOW REMEMBER WE'RE FAMILY. WE LOVE EACH OTHER. SO YOU'RE GOING TO HAVE TO YEAH. YOU'RE GOING TO HAVE TO BUNCH IN AND BUNCH TOGETHER. SHORT PEOPLE STAGGER IN BETWEEN THE TALL PEOPLE KEEP ON COMING, KEEP ON COMING. CONGRATULATIONS, PATRICIA. DO YOU WANT DOWN HERE BY HIM? Y'ALL LET THEM BE SIDE BY SIDE OVER HERE. OKAY. HOLD ON. YEP, YEP. YEAH. Y'ALL LOOK GOOD. 
          OKAY. HERE WE GO, GUYS. 321321321. OKAY. FOR EVERYONE THAT WANTS TO ADJOURN BACK TO OUR RECEPTION. LET'S GO NOW. WHAT WAS THAT? EVERYBODY CAN GO BACK TO THE TO THE YEAH WE CAN WE CAN RECONVENE TO THE PARTY RECEPTION. WE MUST SIT HERE. LOOK. IS THERE A CAKE? JUST ASKING FOR A FRIEND. NO, BUT THERE'S SOME AMAZING BROWNIES HERE. OKAY. I WAS LIKE, IF THERE'S CAKE, I'M. RIGHT? YOU KNOW. 
          WE'LL JUST WAIT ONE MORE SECOND. JC WAS ONE OF MY YOUTH COUNCIL KIDS. HE WAS ONE OF MY YOUTH COUNCIL KIDS. HE DOESN'T HAVE WELL, HE DIDN'T HAVE TIME. AND HE I DON'T KNOW BECAUSE HE. 
          YEAH. CHECK NOW BECAUSE I KNOW HE. OKAY. WE'LL MOVE ON NOW THE THAT WAS FUN. THAT WAS FUN. THE 
          [CONSENT AGENDA]
NEXT ITEM IS TO CONSIDER THE CONSENT AGENDA. THE CONSENT. THE CONSENT AGENDA INCLUDES ITEMS 2026-339 AND RESOLUTION 2026-340 THROUGH RESOLUTION 2026-355. IS THERE A MOTION ON THE CONSENT AGENDA MOVE FOR APPROVAL? SECOND, WE HAVE A MOTION IN A SECOND. ANY DISCUSSION? CITY SECRETARY HICKS, WOULD YOU PLEASE PULL THE COUNCIL BENNEFIELD. YES. 
          YES. YES. YES. COLE. YES. EWING. YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM ON THE 
          [INDIVIDUAL CONSIDERATION]
AGENDA IS INDIVIDUAL CONSIDERATION. THE FIRST ITEM IN THIS SECTION IS ORDINANCE 2026-356. CITY ATTORNEY HAMILTON. THANK YOU. MAYOR. CONSIDER AN ORDINANCE AMENDING SECTION 13-170 OF DIVISION TWO FOOD ESTABLISHMENTS OF ARTICLE FOR FOOD SERVICE ESTABLISHMENTS 
          [01:45:05]
AND FOOD HANDLERS AND SECTIONS 13-4, ZERO FIVE AND 13-406 OF DIVISION TWO. OPEN AIR VENDING OF ARTICLE NINE PROHIBITED ACTIVITIES AND OUTDOOR VENDING. ALL OF CHAPTER 13 OF THE CODE OF ORDINANCES OF THE CITY OF WACO, TEXAS TO CONFORM TO THE TEXAS HOUSE BILL 2844 89TH REGULAR SESSION AND CHAPTER 437 B OF THE TEXAS HEALTH AND SAFETY CODE REGARDING STATE AND LOCAL AUTHORITY OVER THE LICENSING AND INSPECTION OF MOBILE FOOD VENDORS, PROVIDING FOR DEFINITIONS, LICENSING, INSPECTIONS AND ENFORCEMENT, PROVIDING FOR PENALTIES. AND THIS. THIS ORDINANCE COMES TO COUNCIL ON FIRST READING. THANK YOU, ATTORNEY HAMILTON. SO IS THERE A MOTION ON THE FIRST READING? MOVE TO APPROVE? SECOND, HAVE A MOTION AND A SECOND, ANY DISCUSSION? THIS ONE WAS FOR THE LICENSING AND INSPECTION OF MOBILE FOOD VENDORS TO CONFORM WITH SOME OF THE NEW STATE LEGISLATIVE MANDATES THAT WERE PUT OUT A FEW MONTHS AGO. ANY OTHER DISCUSSION? SECRETARY HICKS, PLEASE PULL THE COUNCIL. 
          MERRIFIELD. YES. LOZANO. YES. YES. YES. YES. EWING. YES. HOLMES. I THAT MOTION PASSES. 
          THE NEXT ITEM IS ORDINANCE 2026-357. ATTORNEY HAMILTON CRUM. CONSIDER AN ORDINANCE AMENDING SECTION TEN DASH 21 OF ARTICLE TWO FIRE CODES OF CHAPTER TEN FIRE PREVENTION AND PROTECTION OF THE CODE OF ORDINANCES OF THE CITY OF WACO TO ADDRESS REQUIREMENTS RELATED TO EMERGENCY RESPONDER COMMUNICATIONS ENHANCEMENT SYSTEMS AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. 
          IS THERE A MOTION ON SECOND READING MOVE FOR APPROVAL ON SECOND READING? OKAY. GOT A MOTION IN A SECOND. ANY DISCUSSION? THIS ONE IS. THAT'S COMMUNICATIONS ENHANCEMENT SYSTEMS IN HIGHER RISK BUILDINGS, LARGER BUILDINGS FOR IMPROVED SAFETY. SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? MERRIFIELD. YES. LOZANO. YES. CHASE. YES. COLE. 
          YES. EWING. YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM IS ORDINANCE 2026-358. ATTORNEY HAMILTON. CONSIDER AN ORDINANCE CHANGING THE LAND USE DESIGNATION DESIGNATION FROM URBAN RESIDENTIAL TO MIXED USE FLEX AND REZONING FROM R-2 TO PUD ZONING. IN ACCORDANCE WITH THE CONCEPT PUD PLAN FOR THE MCARTHUR STORAGE UNITS ON APPROXIMATELY 1.35 ACRES ADDRESSED AS 3001 MACARTHUR DRIVE AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. IS THERE A MOTION ON THIS SECOND READING MOVE FOR APPROVAL? MAYOR? SECOND MOTION A SECOND. THIS IS JUST A CONCEPT PD PLAN ON THE MACARTHUR DRIVE STORAGE UNIT. SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? FAIRFIELD. YES. LOZANO. YES. CHASE. YES. COLE. YES. EWING. 
          YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM IS ORDINANCE 2026-359. ATTORNEY CHROME. CONSIDER AN ORDINANCE TO REZONE FROM C2 COMMUNITY COMMERCIAL TO OH TWO OFFICE RESIDENTIAL DISTRICT ON APPROXIMATELY 2.32 ACRES. ADDRESSED AS 1704 SOUTH 18TH STREET AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. I'LL ENTERTAIN A MOTION ON SECOND READING MOVE FOR APPROVAL ON SECOND READING. SECOND, MOTION A SECOND. ANY DISCUSSION? THIS IS A ZONING CHANGE ON SOUTH 18TH STREET. SECRETARY HICKS, PLEASE PULL THE COUNCIL. MERRIFIELD. YES. 
          LOZANO. YES. CHASE. YES. COLE. YES. EWING. YES. HOLMES. I THAT MOTION PASSES. NEXT ITEM IS ORDINANCE 2026-36. OH. ATTORNEY HAMILTON, CONSIDER AN ORDINANCE REZONING FROM R1, B TO PUD ZONING FOR APPROXIMATELY 0.31 ACRES. AMENDING THE CONCEPT PUD PLAN FOR SEVEN OAKS VILLAGE BY ADDING APPROXIMATELY 0.31 ACRES TO THE CONCEPT PUD BOUNDARY, CHANGING THE OVERALL UNIT COUNT AND ON SITE LAYOUT. RENAMING SAID CONCEPT PUD TO HADLEY'S PLACE ON APPROXIMATELY 1.466 ACRES OF PROPERTY ADDRESSED AS 2712 SOUTH SECOND STREET AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. THANK YOU. 
          IS THERE A MOTION ON THIS SECOND READING MOVE APPROVAL ON SECOND READING, SECOND, A MOTION AND A SECOND. ANY DISCUSSION? THIS IS THE ZONING CHANGE AND PUD ADJUSTMENT ON SOUTH SECOND STREET. SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? FAIRFIELD. YES. LOZANO. 
          YES. CHASE. YES. YES. EWING. YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM CONSIDERS ORDINANCE 2026-361 ATTORNEY HAMILTON CRUM. CONSIDER AN ORDINANCE TO REZONE FROM C FIVE SERVICE COMMERCIAL TO OH TWO OFFICE RESIDENTIAL DISTRICT RESIDENCE DISTRICT ON 
          [01:50:04]
APPROXIMATELY 0.200 ACRES. ADDRESSED AS 1125 LASALLE AVENUE AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. 
          DO I HAVE A MOTION ON SECOND READING? ON SECOND READING? SECOND MOTION, AND A SECOND. 
          ANY DISCUSSION? THIS IS THE ZONING CHANGE ON THE SAW. SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? FAIRFIELD. YES. LOZANO. YES. CHASE. YES. COLE. YES. EWING. 
          YES. HOLMES. I THAT MOTION PASSES. THE NEXT ITEM IS ORDINANCE 2026-362. ATTORNEY HAMILTON. CONSIDER AN ORDINANCE AMENDING CHAPTER 20 ZONING OF ARTICLE FIVE DISTRICT REGULATIONS. DIVISION 5R1C SINGLE FAMILY RESIDENCE, RESIDENCE DISTRICT OF THE CODE OF ORDINANCES OF THE CITY OF WACO TO PROVIDE FOR AN ALTERNATIVE MINIMUM LOT AREA OF 2000FT■!S AND A MINIMUM LOT WIDH OF 40FT, AND SPECIFY CONDITIONS AND YARD REQUIREMENTS AND PROVIDING FOR PENALTIES. THIS ORDINANCE WAS APPROVED BY UNANIMOUS VOTE ON FIRST READING ON MAY 19TH, 2026. DO I HAVE A MOTION ON THIS SECOND READING MOVE TO APPROVE. SECOND. HAVE A MOTION. SECOND. ANY DISCUSSION? THIS IS THE ONE WHERE WE'RE REDUCING THE LOTS AREA SIZE AND THE FRONT BOTH DOWN TO TO 4000 SQUARE. WELL, NOT BOTH OF THEM, BUT UNTIL THE CITY GETS OVER 150 000 PEOPLE, WE HAVE TO THEN CONFORM TO LEGISLATIVE MANDATE. THAT PULLS IT DOWN TO 30 FOOT FRONTS AND 300 ZERO SQUARE FOOT, MUCH SMALLER. SO WE'RE TRYING TO STAY AHEAD OF IT A LITTLE BIT. CITY SECRETARY HICKS, WILL YOU PLEASE PULL THE COUNCIL? FAIRFIELD. YES. LOZANO. YES. 
          CHASE. YES. COLE. YES. EWING. YES. HOLMES. I THAT MOTION PASSES. THAT'S ALL OF THE 
          [HEARING OF VISITORS]
ORDINANCES FOR TONIGHT. AND SO WE'LL MOVE ON TO THE HEARING OF VISITORS. AND WE DO HAVE A COUPLE CARDS HERE TONIGHT. SO I'M GOING TO READ THE THE CAVEAT HERE ON THE VISITORS STUFF DURING HEARING AND VISITORS SECTION OF THE AGENDA, WE PROVIDE AN OPPORTUNITY TO THE PUBLIC TO PRESENT CONCERNS OR ADDRESS ISSUES THAT ARE NOT MATTERS FOR CONSIDERATION LISTED ON THE AGENDA TONIGHT. BUT THE COUNCIL IS UNABLE TO CONDUCT A DISCUSSION. BUT WE'LL LISTEN AND WE'LL ASK STAFF TO LOOK INTO CONCERNS AND WE'LL PROVIDE FOLLOW UP. PLEASE PROVIDE REGISTRATION INFORMATION SO THAT STAFF CAN CONTACT YOU IF NECESSARY. IF YOU HAVE HANDOUTS, PLEASE LET US KNOW AT THE BEGINNING OF YOUR PRESENTATION AND STAFF WILL DISTRIBUTE THOSE TO THE COUNCIL. IF YOU'RE UNABLE TO APPROACH THE PODIUM DUE TO PHYSICAL LIMITATIONS, A MICROPHONE IS AVAILABLE TO BE BROUGHT TO YOU. WE HAVE AGAIN THREE CARDS HERE. WHEN CALLED TO THE PODIUM, PLEASE STATE YOUR NAME AND ADDRESS FOR THE RECORD. EACH SPEAKER MUST LIMIT COMMENTS TO THREE MINUTES. IF YOU'RE SPEAKING ON BEHALF OF A GROUP OF TEN OR MORE INDIVIDUALS PRESENT, PLEASE HAVE THOSE PERSONS STAND AT THE BEGINNING OF YOUR COMMENTS AND YOU'LL BE GIVEN TEN MINUTES TO ADDRESS THE COUNCIL. PLEASE NOTE THAT IF YOU STAND IN SUPPORT OF A PERSON GETTING TEN MINUTES TO SPEAK, YOU ARE FORFEITING YOUR RIGHT TO SPEAK ON THAT ITEM. FOR ANY PERSON ADDRESSING THE COUNCIL TONIGHT THROUGH THE USE OF A TRANSLATOR, THE SPEAKING TIME WILL BE DOUBLED TO ACCOMMODATE THE TRANSLATION SERVICES. WHILE PUBLIC DISCOURSE IS VERY IMPORTANT TO THIS COUNCIL, WE HAVE TO MAINTAIN ORDER IN THE MEETING SO THAT ALL PERSONS MAY BE HEARD AND CITY BUSINESS MAY BE CONDUCTED. IF SO DIRECTED BY ME, THE SERGEANT AT ARMS WILL REMOVE FROM THE COUNCIL MEETING ANY PERSON WHO, WHILE ADDRESSING THE CITY COUNCIL OR WHILE ATTENDING THE CITY COUNCIL MEETING ANY PERSON WHO MAKES PERSONAL, IMPERTINENT OR SLANDEROUS REMARKS. ANY PERSON WHO BECOMES BOISTEROUS, ANY PERSON WHO MAKES UNAUTHORIZED REMARKS FROM THE AUDIENCE OR CLAPS THEIR HANDS OR STOMPS THEIR FEET, WHISTLES, YELLS, OR MAKES SIMILAR DEMONSTRATIONS. 
          OKAY, SO WE'VE GOT THREE CARDS TONIGHT. LET'S START WITH SHAWNA FINN. SHAWNA, WELCOME TO CITY COUNCIL HERE TONIGHT. AS YOU GET TO THE PODIUM, PLEASE STATE YOUR NAME AND ADDRESS FOR THE RECORD. YOU HAVE THREE MINUTES. HI, I'M SHAWNA FINN. I LIVE AT 104 GRAHAM CIRCLE, WACO, TEXAS, 76705. I AM JUST ONE OF MANY MEMBERS ON THE STOP THE DATA CENTER COMMITTEE. WE HAVE DONE A FANTASTIC JOB OF ORGANIZING AND ORGANIZING QUICKLY. AND BECAUSE OF THAT, WE HAVE ON OUR FACEBOOK PAGE, WE HAVE ALMOST 8000 MEMBERS NOW. WE HAVE NOT ONLY MADE LOCAL NEWS, WE'VE MADE TEXAS NEWS, WE'VE MADE NATIONAL NEWS, AND WE'VE ALSO MADE INTERNATIONAL NEWS BECAUSE OF WHAT IS HAPPENING IN OUR SMALL CITY OF ROSS. AND BECAUSE OF THAT, WACO REALLY IS UNDER A MICROSCOPE. AND THEY WANT TO KNOW WHAT LOCAL LEADERS WILL DO AND HOW THEY WILL ADDRESS THE INFLUX OF ALL OF THESE DATA CENTERS COMING IN. SO I, I DON'T KNOW IF YOU GUYS HAVE IT WITH YOU. I GAVE YOU A CARD. THIS IS OUR STOP THE DATA. THERE YOU GO. 
          [01:55:01]
OUR STOP THE DATA CENTER CARD. IT HAS A QR CODE ON THERE THAT HAS ALL OF OUR EVENTS. AND I REALLY JUST WANTED TO COME UP HERE JUST TO INVITE YOU TO ONE OF OUR ROSS COMMUNITY MEETINGS THAT IS GOING TO BE HELD THIS SUNDAY AT 6 P.M. AT THE ROSS VOLUNTEER FIRE DEPARTMENT. SO IF YOU ARE FREE, WE WOULD BE SO GRATEFUL. WE WOULD BE SO THANKFUL IF YOU GUYS CAME AND NOT JUST SAW US, BUT ACTUALLY SAT WITH, I DON'T KNOW IF THAT WOULD LIKE CREATE A QUORUM OR WHATEVER, BUT JUST SAT WITH US, TALKED TO US AND JUST HEAR US OUT ON WHAT WE ARE FACING AND WHAT WE'RE DEALING WITH. SO QR CODE, WACO DATA CENTER SLASH EVENTS. GO CHECK IT OUT. WE WOULD LOVE TO SEE YOU THERE THIS SUNDAY AT 6 P.M. THANK YOU, MISS FINN. APPRECIATE YOU BEING HERE TONIGHT. NEXT UP IS SARAH LEONARD. MISS LEONARD, PLEASE STATE YOUR NAME AND ADDRESS FOR THE RECORD, AND THEN YOU'LL HAVE THREE MINUTES TO ADDRESS COUNCIL. SARAH LEONARD, 27, 97 ROSS ROAD. THAT IS IN ROSS. YOU'LL HAVE TO FORGIVE ME, BUT I LIKE TO HAVE A LITTLE A FUN SIDE OR A STORY SIDE TO MY OPPOSITION. LAST MONTH I PRESENTED THE TALE OF TWO CITIES AND THESE TWO CITIES. WACO, WITH A BRIGHT FUTURE, WITH EXCELLENT PLANNING AND ALSO ESTABLISHING A FRAMEWORK FOR A POSITIVE GROWTH. THE OTHER CITY BEING LACY LAKEVIEW, LACKING PLANNING AND ALSO RELYING ON A PARTNERSHIP WITH KEY FOR THE PURPOSE OF BUILDING A DATA CENTER IN THE UNINCORPORATED RURAL AREA OF ROSS. LAST MONTH I ENCOURAGED MEMBERS OF THE COUNCIL AND ALSO CITY GOVERNMENT OFFICIALS NOT TO VEER OFF THE POSITIVE PATH THAT YOU'VE TAKEN FOR THE CITY OF WACO. TONIGHT, I WOULD LIKE TO PRESENT THE FABLE THE BOY WHO CRIED WOLF. NOW, I'M GOING TO TAKE SOME LIBERTIES HERE, BECAUSE MAYBE YOU HAVEN'T HEARD THIS STORY IN A WHILE, BUT IT SERVES AS A TIMELESS WARNING ABOUT THE CONSEQUENCES OF DECEIT AND THE IMPORTANCE OF HONESTY. SO HERE'S MY LIBERTY FOR THIS STORY. LET'S CONSIDER INFRA KEY AS THE BOY AND WATER AS WATER DEMANDS, AS THE WOLF. SO IN THIS STORY, INFRA KEY STATED IN THE MOU WITH LACY LAKEVIEW, THE NEED FOR 5 MILLION GALLONS OF WATER DAILY, 15 MILLION AT COMPLETE BUILD OUT IN DOCUMENTS THAT WERE SUBMITTED TO THE GREATER WACO CHAMBER OF COMMERCE, THE AMOUNT DROPPED TO 2 MILLION GALLONS OF WATER DAILY IN TEXT MESSAGES FOR COMMUNICATION WITH BRAZOS RIVER AUTHORITY. THE AMOUNT FLUCTUATED FROM 3 MILLION GALLONS DAILY TO 20 MILLION GALLONS DAILY AT BUILD OUT INFRA KEY CLAIMS, THEY WILL PUT IN A CLOSED LOOP SYSTEM FOR COOLING WHEN IT'S CONSTRUCTED. BUT IN A RECENT INTERVIEW WITH SHARON GOLDMAN WITH THE FORTUNE MAGAZINE, THE CLAIM WAS WE WILL ONLY DO THAT IF WE CAN'T GET THE WATER BECAUSE IT'S EXPENSIVE. SO HERE'S MY QUESTION, LITTLE BOY. OR SHOULD I SAY INFRA KEY? WHAT IS THE TRUTH? THE WATER QUANTITIES CHANGE BASED ON THE DEPARTMENT OR ENTITY REQUESTING THE INFORMATION. IN SUMMARY, PLEASE CONSIDER THE IMPACT OF DEALING WITH A DATA CENTER DEVELOPER WHO SEEMS TO BE DECEITFUL BASED ON INFORMATION THAT THEY ARE PRESENTING. ONCE AGAIN, I ASK THE MEMBERS OF THE COUNCIL AND THE CITY GOVERNMENT OFFICIALS STAY FOCUSED ON ACHIEVING THE CURRENT GOALS FOR WACO BECAUSE YOU ARE. YOU ARE ON A POSITIVE PATH FOR WACO. THANK YOU FOR YOUR TIME. THANK YOU, MISS LEONARD. OKAY, WE HAVE ONE MORE CARD. THAT'S CARLA GARCIA. MISS GARCIA, AS YOU APPROACH THE PODIUM, YOU'LL HAVE THREE MINUTES TO SPEAK. PLEASE STATE YOUR NAME AND ADDRESS FOR THE RECORD. MY NAME IS CARLA GARCIA. 
          I LIVE AT 2789 ROSS ROAD. THAT'S ALSO IN ROSS. I'M NOT SURE IF Y'ALL ARE AWARE ABOUT THE LOAN THAT WE'VE HAS GIVEN IN FOR KEY ON MARCH 30TH OF THIS YEAR IN FOR KEY'S PARENT COMPANY BORROWED $8 MILLION FROM CORE. WE'VE. AND PLEDGED ALL 526 ACRES OF THE PROJECT LAND AS COLLATERAL. THE LOAN WAS RECORDED IN MCLENNAN COUNTY ON APRIL 10TH, 2026, AND ON PAPER, THAT SOUNDS LIKE PROGRESS, BUT IT ISN'T HEALTHY. MULTIBILLION DOLLAR DATA CENTER PROJECTS DON'T GET FINANCED THIS WAY. HERE'S WHAT THIS LOAN ACTUALLY TELLS US. FOR CONTEXT, 
          [02:00:03]
THE DATA CENTERS IN LOUDOUN COUNTY, VIRGINIA, ROUTINELY COST 400 MILLION TO $1 BILLION EACH IN VERTICAL CONSTRUCTION ALONE, $8 MILLION IS WHAT A DEVELOPER BORROWS TO PLUG A CASH FLOW GAP, NOT TO BUILD A HYPERSCALE INFRASTRUCTURE, INFARCT SAYS THIS PROJECT WILL EVENTUALLY REPRESENT $10 BILLION IN PROPERTY VALUE. THEIR FIRST PIECE OF OUTSIDE FINANCING, SIX MONTHS AFTER THE MOU, IS LESS THAN ONE TENTH OF 1% OF THAT NUMBER. THE 526 ACRES OF FARMLAND NEAR NORTH KATY ROAD IS WORTH ROUGHLY 10 TO $15,000 PER ACRE, BASED ON MCLENNAN COUNTY AGRICULTURAL COMPS. THIS MAKES THE ENTIRE SITE WORTH 5 TO $8 MILLION AS RAW LAND ENTER KEY BORROWED $8 MILLION AGAINST IT. THAT'S NEAR 100% LOAN TO VALUE ON UNDEVELOPED FARMLAND. NO REAL ESTATE LENDER WILLINGLY STRETCHES THIS FAR. WE'VE ONLY DID IT BECAUSE THE LOAN STRUCTURE GIVES THEM STEP IN RIGHTS TO THE WHOLE PROJECT. IF ENTER KEY DEFAULTS. IF CORE WE'VE BELIEVED IN THIS PROJECT, THEY WOULD HAVE DONE WHAT THEY DO WITH OTHER DEVELOPERS. SIGN A BILL TO SUIT LEASE PRE-COMMIT MEGAWATT CAPACITY OR TAKE EQUITY CORE. WE'VE HAS PUBLICLY PARTNERED WITH CORE SCIENTIFIC, APPLIED DIGITAL LAND AND OTHERS. 
          THOSE ANNOUNCEMENTS INCLUDE LEASES, PREPAYMENTS, AND EQUITY POSITIONS, NOT JUST LIENS. WITH INFRA KEY CORE, WE'VE CHOSE DOWNSIDE PROTECTION OVER UPSIDE PARTICIPATION. THIS IS A VOTE OF NO CONFIDENCE DRESSED UP AS LOAN. WHEN CORE WE'VE SIGNS A REAL PARTNERSHIP, THEY ANNOUNCE IT. PRESS RELEASE SEC FILINGS. ANALYST CALLS. THE ENTER KEY LOAN WAS RECORDED QUIETLY AT THE MCLENNAN COUNTY CLERK'S OFFICE AND NEVER APPEARED IN ANY JOINT ANNOUNCEMENT, PRESS RELEASE OR SEC DISCLOSURE. STRATEGIC PARTNERSHIPS GET CELEBRATED DISTRESSED FINANCING GETS FILED IN A COURTHOUSE IN INFARCTS OWN APPLICATION TO THE GREATER WACO CHAMBER OF COMMERCE, SIGNED BY THEIR CEO, THEY WRAP IT UP. THEY REPORTED YEARS IN BUSINESS. ONE MOST RECENT NET INCOME N A MOST RECENT SALES N A FEDERAL TAX ID, BLANK CREDIT RATING. BLANK PROJECT IS FULLY FUNDED. CHECK BOX NOT CHECKED. U.S. EMPLOYEES 15 AUDITED. FINANCIALS ATTACHED. 
          NO, THIS DOES NOT SOUND LIKE A COMPANY. WACO, LACY, LAKEVIEW OR MCLENNAN. MCLENNAN COUNTY SHOULD BE COMFORTABLE SUPPORTING OR PARTNERING WITH. THANK YOU FOR YOUR TIME. THANK YOU, MISS GARCIA. THAT'S IT FOR THE CARDS. IS ANYONE ELSE PRESENT WHO'D LIKE TO SPEAK DURING HEARING VISITORS TONIGHT? SEEING. NO ONE WILL CLOSE THE HEARING OF VISITORS AND WE'RE GOING TO GO TO COUNCIL COMMENTS. ANY COUNCIL COMMENTS OF COMMUNITY INTEREST TONIGHT? ANYBODY GOT ANYTHING, GEORGE? NOTHING. NOTHING. GEORGE. JED. NEW GUY. YOU GOT ANYTHING? OKAY. 
          ALL RIGHT, NOW WE'VE GOT REQUEST FOR SCHEDULING, FUTURE AGENDA ITEMS, ANY FUTURE AGENDA ITEMS THAT WE WANT TO GET ON THE SCHEDULE. WE HAVE NONE. OKAY. THERE BEING NO FURTHER BUSINESS, THIS MEETING IS ADJOURNED AT
* This transcript was compiled from uncorrected Closed Captioning.