5.1. Consideration of a public hearing and possible action on Ordinance No. O-2022- levying Ad Valorem taxes for the use and support of the municipal government for the City of Hutto for the Tax Year 2022. (First Reading) (Angie Rios) (Part 1 of 2)

[5.1. Consideration of a public hearing and possible action on Ordinance No. O-2022- levying Ad Valorem taxes for the use and support of the municipal government for the City of Hutto for the Tax Year 2022. (First Reading) (Angie Rios) (Part 1 of 2)]

(APPLAUSE) >> ALL RIGHT THAT BRINGS US TO ITEM 51. CONSIDERATION OF A PUBLIC HEARING AND POSSIBLE ACTION ON ORDINANCE NUMBER 0-22-AD VALOREM

TAXES FOR THE TAX YEAR 2022. >> I'M GOING TO HAND OUT SOME...

[00:20:07]

SO YOU HAVE PAPER TO LOOK AT. IF YOU WILL HAND THAT TO THE COUNCIL MEMBERS. THIS IS GABE.

OUR BUDGET ANALYST. HE DOES THE WORK.

I JUST STAND UP HERE AND DO THE PRESENTATIONS.

>> THANK YOU. >> THANK YOU, SIR.

>> THANK YOU, SIR. >> SO DO YOU WANT TO GO TO THE INFORMATION FIRST? I KNOW WE HAVE TO HAVE A PUBLIC HEARING AT SOME POINT. I DON'T KNOW HOW YOU WANT TO DO

THIS >> WE WILL GET THE INFORMATION.

THEN THE PUBLIC HEARING. >> OKAY.

SURE. FOR THE $25 MILLION GENERAL DEBT, STANDARD & POOR'S ISSUED A DOUBLE A-RATING AN CONFIRMED THE RATING FOR ALL OF OUR EXISTING DEBT.

WHAT WE DID LEARN FROM THE FA THIS WEEK IS THEY PUT TOGETHER THIS INFORMATION, THE INTEREST RATES ARE RISING VERY QUICKLY.

SO AT 8:31, THE 25-YEAR RATE WAS 3.25.

YESTERDAY, THE RATE WAS 3.46. I DON'T KNOW IF YOU NOTICED.

WHAT WAS SENT OUT YESTERDAY. I BELIEVE WE SENT OUT THE PAYMENT SCHEDULES. I DON'T KNOW IF YOU NOTICED AT THE TOP, THE PROJECTED RATE FOR THE DEBT IS NOW 4.2.

FOR NEXT... WHEN THEY BRING IT BACK NEXT WEEK.

PART OF THAT, IF YOU WILL REMEMBER... BECAUSE OF THE RATE BEING DOUBLE A. WE WILL PAY MORE.

A HALF A BASIS POINT MORE. WE WOULD BE AT 3.9.

THEY ARE ANTICIPATING IT WOULD BE HIGHER THAN THAT.

INTEREST RATES ARE CHANGING SO FAST.

FROM 8-1, RATES WERE AT 2.8. THAT TELLS YOU HOW QUICKLY THINGS ARE MOVING. THAT IS GOING TO AFFECT SOME OF WHAT WE ARE SEEING TONIGHT. SO THE FA-PROVIDED THREE OPTIONS TO US. THE FIRST ONE IN BLUE ON YOUR SHEET AND UP HERE IS TO THE EXISTING INS RATE.

TO STAY WITH THE 2.56. ... 1.56.

YOU HAVE SEEN THESE OPTIONS. WE TALKED ABOUT THEM.

NONE OF THESE NUMBERS ARE NEW OR DIFFERENT.

THE NO NEW REVENUE RATES. THE APPROVAL.

WE GAVE SOME DIFFERENT OPTIONS TO KIND OF SHOW YOU THE DIFFERENT LEVELS OF THAT. BUT THIS IS TO STAY WHERE WE ARE AT. THE 1.56.

THE NEXT OPTION IS A LEVEL DEBT SERVICE.

WHAT THIS WOULD BE, IF YOU LOOKED AT THE PAYMENT SCHEDULES WAS THE PAYMENT WOULD BE LEVEL OVER THE NEXT 25 YEARS.

IT WOULD BE FAIRLY CONSISTENT AROUND THE 1.6 MILLION, I BELIEVE. OVER THE NEXT, YOU KNOW, SEVERAL YEARS. WELL, FOR THE LIFE OF THE DEBT THAT WE HAVE OUTSTANDING. THAT INS RATE FOR THAT WOULD BE 1.481. NOT A WHOLE LOT LOWER.

THAN WHERE WE ARE RIGHT NOW. THIS GIVES YOU THE OPTIONS.

IF YOU CHOSE THE NO NEW REVENUE. WHAT THAT WOULD LOOK LIKE FOR THE MNO PIECE. ANY MONEYS GENERATED.

WHAT THAT WOULD BE. THAT TOP NUMBER IS NEVER GOING TO CHANGE. THAT IS THE MAX WE CAN DO.

THE MAX RATE. THAT IS THE NO NEW REVENUE VOTER APPROVAL RATE WITH THE 3.5%. WE CAN'T GO OVER THAT RATE.

THAT IS THE TOP. YOU WILL SEE THAT THE LAST TWO LINES ON EVERY OPTION ARE IS THE SAME.

YOU HAVE YOUR YOUR VOTER APPROVAL.

THEN THE VOTER APPROVAL WITH THE UNUSED INCREMENT.

YOU CAN GO ANYWHERE BELOW THAT. THAT IS WHY THEY ARE LISTING SEVERAL OPTIONS. YOU HAVE THIS LEVEL DEBT SERVICE OPTION AT THE 1.481. THE EXISTING RATE.

THEN THE LOWEST RATE, THE MINIMUM INS RATE THEY CAN GET WITH THE $25 MILLION IS 1.298. THAT IS MAKING NO PRINCIPAL PAYMENT IN THE FIRST YEAR. THAT IS JUST PAYING INTEREST.

SO... AND SO THESE ARE THE OPTIONS.

IF YOU WERE TO GO WITH THAT... WITH THE MINIMUM INS RATE.

ON THE DEBT. YOU CAN SEE THE DIFFERENT... YOU KNOW, IT WOULD BE .29 AT THE NO NEW REVENUE RATE FOR THE MNO PIECE OF THAT. ALL THE WAY... OF COURSE, YOU HAVE THE OPTION UP TO THE 32. THAT SHOWS YOU THE DIFFERENT AREAS. YOU KNOW, THE 31, WHAT THAT MEANS FOR THE GENERAL FUND. FOR THE MNO.

SO IT IS NOT... YOU WOULD STILL BE AT THE NO NEW REVENUE RATE, GENERATING THE SAME $10 MILLION AS LAST YEAR.

IT IS BECAUSE WE WOULD LOWER THE INS RATE.

MORE OF THAT MONEY, WHAT YOU ARE SEEING OF THAT MILLION DOLLARS, WOULD BE ADDITIONAL MONEY INTO THE GENERAL FUND FOR OPERATIONS.

IT IS NOT ANY MORE REVENUE TO THE CITY.

JUST MORE REVENUE BECAUSE WE ARE SHIFTING THAT INS RATE FROM WHAT YOU SEE AT THE TOP THERE. THE 156 DOWN TO THE 128.

THAT PUTS MORE INTO THE MNO. THOSE ARE THE THREE OPTIONS WE HAVE FROM THE FINANCIAL ADVISOR. THAT IS WHERE WE ARE AT.

[00:25:05]

ON THOSE. SO THAT IS... IF YOU HAVE QUESTIONS, THAT IS REALLY WHAT WE HAVE FOR YOU TO KIND OF TALK

THROUGH. >> ALL RIGHT.

QUESTIONS FOR COUNCIL? >> SO WHEN I LOOKED AT THE DIFFERENT THE DIFFERENCES, WE HAVE THE FULL SPREADSHEET FROM THE FA THAT SHOWED US FROM EACH OF THESE DIFFERENT OPTIONS WHAT THE TOTAL OBLIGATION WOULD BE WITH DEBT SERVICE AND

EVERYTHING. >> YES

>> IT LOOKED LIKE IT WASN'T A HUGE DIFFERENCE BETWEEN THE

THREE? >> NO.

>> WHETHER WE DO THE FRONT-LOADING OR BACK-LOADING OR KEEP IT LEVEL. RIGHT?

>> RIGHT. THE DIFFERENCE, I THINK, BETWEEN... I'M SORRY THEY ARE VERY SMALL.

I HAVE THEM. BETWEEN THE HIGHEST RATE, YOU KNOW, OUR EXISTING RATES, YOU CAN SEE THAT, YOU KNOW, THE INTEREST THAT WE WOULD PAY THERE IN THE TOTAL, THE $40 MILLION IS NOT MUCH DIFFERENT THAN THE MINIMUM RATE.

WHICH IS AT $41. THERE IS NOT A HUGE DIFFERENCE IN THE THREE OPTIONS. THEY ARE ALL VERY CLOSE.

>> YEAH. AND TO ME, IT LOOKED LIKE... I MEAN, THE BENEFIT OF GETTING AN INTS RATE DOWN TO 12.9 CENTS VERSUS 15 CENTS, THAT IS ALMOST A THREE-CENT DIFFERENCE TO THE CITIZENS. IT ONLY COMES OUT TO BE... I MEAN, THE DIFFERENCE BETWEEN $40 MILLION AND $41 MILLION.

>> THE OTHER IMPORTANT PART, THOUGH, OF THE SHEETS, I DON'T KNOW IF YOU NOTICED, IS THE LAST COLUMN.

WHICH IS SHOWING YOU BASED ON THE PROJECTIONS WE HAVE FOR THE TAX VALUES, GOING FORWARD, AT THE 1.298, YOU WOULD HAVE NO ADDITIONAL ROOM IN THE COMING YEARS TO ISSUE DEBT WITHOUT

RAISING THAT RATE >> FOR WHICH ONE?

>> IF YOU LOOK AT THE FOR A COLUMN.

I'M SORRY IT IS VERY SMALL.

YOU WILL SEE THAT LAST COLUMN SHOWS THAT IF THE VALUES GO NEXT YEAR, YOUR RATE IS STILL GOING TO BE 1.298.

THE NEXT YEAR, 1.298. EVEN WITH THE... YOU KNOW, WITH THIS MODERATE GROWTH WE'VE GOT. IF YOU LOOK AT THE OTHER OPTIONS, YOU WOULD HAVE A LITTLE ROOM.

IF YOU WERE TO... WE NEED TO ISSUE ADDITIONAL DEBT NEXT YEAR FOR THE ROADS, YOU WILL HAVE TO RAISE THAT INS RATE.

THAT IS WHAT THAT CHART IS SAYING.

BASED ON THE VALUES WE ARE USING THERE.

>> OKAY >> THE OTHERS, THERE WILL BE A LITTLE BIT OF DECREASE, SO YOU COULD STAY AT THE RATE THAT YOU SET IT AT. WHETHER THAT IS THE 1.4 OR 1.5.

THEY WANTED ME TO MAKE SURE I POINTED THAT OUT TO YOU SO YOU

UNDERSTOOD THAT PART, TOO >> THAT IS WHY WE WERE SAYING THE ORIGINAL PLAN OF $45 MILLION, $44.5, WHATEVER THAT WAS, THAT WOULD HAVE BEEN AT THE 15 CENTS.

THAT IS WHY WE WOULD HAVE BEEN ABLE TO KEEP IT STABLE.

WE WOULDN'T HAVE NEEDED TO TAKE OUT MORE DEBT FOR MULTIPLE YEARS. WE WERE ASSUMING TWO TO THREE

YEARS WORTH OF DEBT >> CORRECT.

EVEN AT THAT RATE... >> PIECEMEAL, 20 MILLION AT A TIME, THAT IS GOING TO AFFECT OUR ABILITY TO BE ABLE TO TAKE

OUT MORE DEBT >> IT IS JUST GOING TO AFFECT

THE TAX RATE. >> YEAH

>> HE WANTED TO MAKE SURE YOU SAW THAT PART AND UNDERSTOOD THAT. THAT IS ANOTHER PIECE OF IT.

BECAUSE EVEN AT THE $4, WHEN WE SHOWED YOU THAT, AT THE 15 CENTS, YOU WOULD HAVE ROOM IN THE FUTURE YEARS TO STAY AT THE 15 BUT ADD ADDITIONAL DEBT IF WE NEEDED TO FOR PARKS OR WHATEVER.

WHATEVER MAY COME UP. THAT IS THE ONLY OTHER... THAT IS THE IMPORTANT PART THERE. OTHER THAN THAT, YOU CAN SEE THE DIFFERENT OPTIONS. THE LEVEL AND THE COST.

LIKE I SAID, THE TOTAL COST BETWEEN THE THREE IS NOT EXTREME. STILL 25 YEARS FOR ALL OF THEM.

WHETHER YOU DO THE LEVEL PAYMENTS, THE SMALLER UP-FRONT,

WHATEVER THAT IS. >> OKAY.

>> THE OTHER PART, I DON'T KNOW IF YOU NOTICED.

THIS IS WHY I WANT TO MAKE SURE AT THE TOP.

YOU CAN SEE IN THE BOX, RIGHT UNDER, IT HAS THE 4.2.

THAT IS WHAT THEY ARE PREDICTING.

THAT THE BIDS WILL COME BACK NEXT YEAR.

>> YEAH, OKAY. I'M SORRY ONE MORE THOUGHT. I MEAN, THE 12-CENT LOOKED GOOD TO ME AT FIRST. I I THOUGHT, THAT IS ANOTHER THREE CENTS WE CAN TAKE OFF AND PASS ON TO THE CITIZENS THE OTHER THING I WANTED TO AVOID IS THIS YO-YO I EFFECT OF TAKING IT DOWN SO MUCH IN ONE YEAR, THEN NEXT YEAR, I MEAN, IF WE BLOW THROUGH THIS MONEY AND WE DO GREAT AND WE GET THESE PROJECTS GOING AND AS WE TALKED ABOUT LAST WEEK, OKAY, WE CAN ISSUE MORE DEBT NEXT YEAR, WELL, IF WE DO, THAT WILL RAISE THE INS RATE. POTENTIALLY RAISE THE RATE NEXT YEAR. WHICH I DON'T WANT TO DO I WOULD HAVE WOULD RATHER HAVE A SLOW, STEADY DECREASE FOR THE CITIZENS THAN TO DO THIS MASSIVE DECREASE AND HAVE TO INCREASE NEXT YEAR AND THEN AN A DECREASE AND INCREASE.

THAT IS WHAT I HAVE BEEN TRYING TO AVOID

>> AND THE FA HAS USED VERY CONSERVATIVE PROJECTIONS FOR THE AD VALOREM VALUES IN THE CHANCE THAT, YOU KNOW, OF A RECESSION OR ANYTHING... YOU KNOW, WE WANT TO MAKE SURE THOSE ARE NOT... WE HAVE DON THIS YEAR.

WE DON'T KNOW THAT'S WHAT WILL HAPPEN GOING FORWARD.

>> OKAY. >> THOSE ARE CONSERVATIVE ALSO.

[00:30:01]

>> THANK YOU. >> I'M NEXT.

I WANT TO SAY THANK YOU TO THE STAFF.

I KNOW THERE IS A LOT OF WORK AND AS COUNCIL, AT EVERY MEETING, WE HAVE COME BACK AND SAID "CAN WE SEE IT THIS WAY? CAN WE SEE IT THAT WAY?" SITTING UP HERE, WE HAVE BEEN TRYING TO FIND THAT COMPROMISE. OBVIOUSLY, IT WOULD BE GREAT FOR THE GENERAL FUND, IF WE GO WITH THE ABSOLUTE HIGHEST.

SO WE DON'T HAVE A LOT OF EXTRA MONEY.

OBVIOUSLY, THEN THE CITIZENS WOULD GET THE HIGHEST INCREASE.

THE NEW REVENUE OBVIOUSLY IS THE MOST POPULAR OPTION.

ALL BEING HUTTO RESIDENTS. YOURSELF INCLUDED.

OBVIOUSLY, NONE OF US WANT OUR TAXES TO GO UP.

ANOTHER THING I HAVE BEEN HEARING FREQUENTLY, BY ALMOST EVERYONE THAT HAS COME UP IS HOW BAD THE ROADS ARE.

HOW BAD TRAFFIC IS. HOW WE HAVE HAD A LOT OF TRAGIC ACCIDENTS HAPPEN, AND THEY ARE GOING UP WITH MORE AND MORE FREQUENCY. I THINK FOR ME PERSONALLY AS A COUNCIL MEMBER, IT IS REALLY TRYING TO FIND THAT MIDDLE GROUND OF DOING WHAT'S RIGHT. I THINK THAT THAT'S SOMETHING THAT COUNCIL MEMBER SUTTON SAID WONDERFULFULLY IN THE LAST MEETING. HAVING THAT FORWARD THINKING.

I UNDERSTAND THAT WE ARE ONLY LOOKING AT THIS YEAR'S BUDGET.

HOWEVER, THIS YEAR'S BUDGET WILL AFFECT LIKE COUNCIL MEMBER GORDON SAID, IT WILL BE A YO-YO EFFECT.

IT IS A BALANCING ACT THAT WE ARE TRYING TO DO.

ONLY LOOKING AT ONE YEAR AT A TIME.

IT IS IN MY OPINION, PART OF THE REASON WHY HUTTO IS SO FAR BEHIND ON INFRASTRUCTURE. OBVIOUSLY, I KNOW OTHER THINGS WERE IN PLAY. COVID, MISMANAGEMENT, THING LIKE THAT. AS A CITY, WE ARE STARTING TO BOUNCE BACK FROM THAT. SO FOR ME AS A COUNCIL MEMBER, I UNDERSTAND THAT THE REVENUE OBVIOUSLY, EVEN FOR ME, IT IS MY TAXES, TOO, SOUNDS THE ABSOLUTE BEST.

OBVIOUSLY, I DON'T THINK WE ARE GOING TO GO WITH THE HIGHEST ONE EITHER. NOT SPEAKING FOR EVERYBODY.

I'M GIVING MY THOUGHT PROCESS AND WHERE I AM.

I KNOW THAT WE ARE NOT ALWAYS GOING TO VOTE THE SAME WAY.

I THINK THAT IT IS GOOD THAT WE AT LEAST HEAR EACH OTHER AND UNDERSTAND WHERE THEY ARE COMING FROM AND WHY THEY ARE COMING FROM THAT WAY. WE ARE TRYING TO BALANCE THE BUDGET TO THE NEEDS OF COMMUNITY AND THEN HEARING CONFLICTING THINGS AND GIVING THE INPUT FROM THE CITIZENS, IT IS DEFINITELY NOT EASY TRYING TO WEIGH THOSE OPTIONS.

I DO THINK THAT, YOU KNOW, COUNCIL MEMBERS THAT HAVE BEEN UP HERE MORE THAN JUST THIS YEAR DO SHARE THEIR PART OF THE BURDEN: IT IS NOT SIMPLY JUST ON CITY STAFF.

WE HAVE CONTINUED TO APPROVE ALL OF THESE HOMES AND ALL OF THESE DEVELOPMENTS. THAT HAS MADE TRAFFIC WORSE THAT HAS MADE ROADS DETERIORATE FASTER.

TO DISTANCE OURSELVES BECAUSE WE ARE COUNCIL MEMBERS AND WE ARE NOT STAFF I DON'T FEEL IS A FAIR ASSUMPTION.

IT REALLY IS A GIVE-AND-TAKE RELATIONSHIP.

COUNCIL DEFINITELY HAS ATTRIBUTED TO SOME OF THESE THINGS AND CONTINUING TO PASS THE NO NEW REVENUE IS NOT GOING TO EVER PUT MORE MONEY IN OUR GENERAL FUND.

IF WE DON'T EVER HAVE MORE MONEY IN OUR GENERAL FUND, WE ARE GOING TO HAVE TO CONTINUALLY GO OUT FOR BONDS.

AND ANOTHER THING TO NOTE ABOUT THAT, IN THE GENERAL FUND, WE HAVE A LOT OF OPEN POSITIONS AND VACANCIES THAT HAVEN'T BEEN ACCOUNTED FOR. THAT RESERVOIR... I'M GETTING INTO BUDGETS. I'LL SAVE THIS FOR LATER.

SORRY ABOUT THAT. THOSE ARE JUST KIND OF MY THOUGHTS. I AM PERSONALLY IN FAVOR OF LANDING SOMEWHERE IN THE MIDDLE. WE NEED TO SET THE CITY UP FOR THE BEST FUTURE WITH THE MNO AND HAVING THAT ADDITIONAL MONEY GO TOWARDS THE GENERAL FUND, WHEN WE ISSUE THE MORE DEBT, INS WILL HAVE TO GO UP. I THINK THAT WE SHOULD DO OUR BEST TO TRY AND PROTECT THAT MNO AS MUCH AS WE CAN NOW.

AND VERY MUCH AVOID KIND OF WHAT COUNCIL MEMBER GORDON IS SAYING.

THAT YO-YO EFFECT WITH THE LOOMING RECESSION, PEOPLE DEFINITELY NEED CONSISTENCY AND TO FEEL LIKE THEY HAVE A CONSTANT OR THEY KNOW. HAVING THAT DIP THIS YEAR AND I DOUBT THE RECESSION WILL BE OVER IN, YOU KNOW, THE NEXT SIX MONTHS. THEN HAVING A SHARP INCREASE THE NEXT YEAR WOULD HURT ALMOST TWICE AS BAD.

SO FOR ME, THAT'S WHERE I'M COMING FROM.

AND MY POINTS ON IT. I'M HAPPY TO HEAR OTHERS: JUST MOVING FORWARD, I PERSONALLY FEEL LIKE MAKING THE ARGUMENT OF LANDING SOMEWHERE IN THE MIDDLE IS REALLY THE BEST OPTION FOR

FORWARD-THINKING FOR HUTTO. >> I DO WANT TO SAY THAT THE FA DOES NEED DIRECTION ON THE INS PIECE TONIGHT.

[00:35:03]

OBVIOUSLY, THE FINAL VOTE ON THE TOTAL RATE WILL BE NEXT WEEK.

YOU CAN HAVE THE FIRST VOTE TONIGHT.

BUT IN ORDER TO GET THE BIDS AND COME BACK TO YOU NEXT THURSDAY SO WE CAN ISSUE THAT DEBT, THEY NEED TO KNOW WHICH SELECTION BECAUSE IT HAS TO GO OUT IN THE BIDS.

AND THE OFFICIAL STATEMENTS AND THE OFFERINGS.

>> I WILL KEEP MY COMMENTS JUST TO THIS.

WHAT WE HAVE SEEN HERE ON THE SLIDES.

TO ME, THE DIFFERENCE BETWEEN THE MINIMUM INS TO LEVEL DEBT AND EXISTING INS FROM A TOTAL... A LOOK AT THE TOTAL DEBT SERVICE OVER THE NEXT 25 YEARS IS MINIMUM.

41.6 THE LEVEL DEBT IS SO CLOSE TO 41.0 MILLION. IT IS 41.

AND THE EXISTING INS IS 40.8. THEN I LOOKED AT THE DEBT SERVICE LEVELS. WHAT WE PAY IN TOTAL DEBT SERVICE THROUGH 25 YEARS, WE WOULD BE PAYING EACH MONTH.

PART OF THE THING I DISLIKE ON OUR CURRENT BONDS, IT IS... THEY GOT MONKEYED WITH. WHERE YOU HAVE $1.2 MILLION FOR FOUR YEARS. THEN IT DROPS TO $800,000.

THEN IT JUMPS UP. ALL IN AN EFFORT TO, IN MY MIND, BORROW A BUNCH OF MONEY AND GET IT OUT TO WHERE THE PUBLIC DOESN'T KNOW WHAT'S GOING ON UNTIL FIVE YEARS LATER.

I LIKED IT WHERE EVERYTHING HERE IS PRETTY MUCH LEVEL.

THE EXISTING INS IS 1.6 MILLION ALL THE WAY THROUGH THE LEVEL DEBT WAS $1.6 MILLION ALL THE WAY THROUGH THE MINIMUM INS IS $1.7. WE PAY $100,000 MORE A YEAR ON THE MINIMUM RATE THE ADDITIONAL REVENUE IN ONE YEAR, JUST THE FIRST YEAR IS TEN YEARS.

BASICALLY, A MILLION DOLLARS. THAT IS TEN YEARS.

YEAH. WE PAY AN EXTRA $100,000 FOR TEN YEARS. WE ARE GETTING IT FRONT-LOADED.

SO I APPRECIATE THE ISSUE WITH THE MNO.

WHEN I FIRST MET WITH THE CITY MANAGER, I SAID MY GOAL WAS TO MAX OUT THE MNO. TO DO THAT, YOU HAVE TO LIMIT THE INS. SO FOR ME, I'M COMPLETELY COMFORTABLE WITH THE MINIMUM INS RATE.

IT BUMPS THE MNO AS MUCH AS WE CAN.

I WILL NEVER SUPPORT THE NO NEW REVENUE UNLESS THERE IS A GIANT REASON WHY WE NEED TO DO THAT WHICH MAY HAPPEN ONE DAY.

I DON'T THINK THAT IS THIS YEAR. I CAN APPRECIATE THE FUTURE IMPACTS OF THE MNO. BASED ON OUR CURRENT BALANCE SHEET, AND BASED ON OUR PROJECTED PROJECTS, ALL OTHER THINGS BEING EQUAL, WE COULD BORROW LESS AND HAVE MORE MONEY FOR MNO. WE CHOSE THE SAFE ROUTE.

THERE IS ALWAYS AN IMPACT. LAST THING I'LL SAY ABOUT NO NEW REVENUE IS THIS. YOU KNOW, AND THIS ISN'T JUST HUTTO. THIS IS EVERY CITY IN CENTRAL TEXAS THAT I HAVE SEEN. AND PROBABLY MOST CITIES IN THE COUNTRY AND DEFINITELY THE STATE.

THE FEDERAL GOVERNMENT. EVERYBODY IS BUILDING THE BUDGET ON THE MOST THEY CAN TAKE. I WANT TO SEE A BUDGET GOING FORWARD... AND THIS IS NEW TO YOU, BUT NOT NEW TO EVERYBODY ELSE. I HAVE BEEN AROUND ON THIS FOR THREE YEARS. I WANT TO SEE A BUDGET MADE WITH THE BARE NECESSITIES PUT IN. LIKE YOU GUYS NEED THIS ROAD DONE. THAT IS IT.

YOU NEED THIS PART. SWING-SET.

THAT IS DONE THE NECESSITIES THE NEEDS. AND THEN FROM THERE, WHAT IS LEFT AFTER NO NEW REVENUE. THEN OKAY, NOW WE CAN START WORKING TOGETHER AND WE HAVE A CIP PROGRAM AND A ONCE LIST, WE CAN START FACTORING SOME THINGS IN WE CAN GET UP HERE, HAVE A CIRCUS AND FIGURE OUT WHAT WE WANT.

THEN WE CAN DECIDE, WELL, MAYBE WE GO A LITTLE BIT ABOVE THIS YEAR. BECAUSE WE HAVE A WHOLE LIST OF NEEDS. I ALWAYS FEEL LIKE IN GENERAL, GOVERNMENT, AGAIN, NOT JUST HUTTO, WE LOOK AT IT BACKWARDS.

WHAT IS THE MOST WE CAN TAKE, AND HOW DO WE SPEND IT.

I'M ALWAYS GOING TO PUSH FOR WHAT IS THE BARE MINIMUM WE CAN LIVE OFF OF AND THEN HOW DO WE IMPROVE THE LIBRARY PROGRAM? HOW CAN WE IMPROVE THE PARKS PROGRAM? HOW CAN WE IMPROVE THE ROADS? IF WE DO IT THAT WAY, YOU GET A LOT MORE SUPPORT FROM THE PUBLIC BECAUSE THEY ARE SEEING ALL THESE CHANGES VERSUS WE JUST COLLECT THE MONEY AND FIGURE OUT HOW TO SPEND IT. THEN YOU CAN ASK YOURSELVES, US AS A COUNCIL, THE PUBLIC DO, WE NEED THIS POSITION OVER HERE? DO WE REALLY NEED THIS ONE OVER HERE? WHAT WOULD WE RATHER HAVE? IT IS JUST A DIFFERENT WAY OF LOOKING AT IT. I USED TO HAVE A CODE... I LOST IT SOMEWHERE. I'M A FIRM BELIEVER.

TAKE YOUR SUBJECT PRONTS PROPERTIES FROM LAST YEAR.

COMPARE IT TO THIS YEAR. LET'S SAY THE TAX COMING IN IS $1 MILLION. WHAT DOES THE RATE HAVE TO BE FOR HUTTO TO GET THE EXACT $1 MILLION FOR THE EXACT PROPERTIES. IN MY MIND, IF IT IS ONE DOLLAR MORE, THAT IS A TAX INCREASE. IT MAY BE MINUSCULE.

IT IS A TAX INCREASE. I DON'T THINK WE ARE HAND-STRINGING THE CITY. WE HAVE, I THINK, IT IS 30% MORE MONEY COMING IN THIS YEAR REVENUE-WISE.

SOME OF THAT IS WITH THE VOTER-APPROVED RATES.

THEY GO DOWN A LITTLE BIT. EACH OF THE TWO YEARS I HAVE

[00:40:03]

BEEN UP HERE, THREE YEARS WE HAVE DONE THE BUDGET, EACH YEAR WE HAVE, LIKE, $2 MILLION IN NEW REVENUE.

WE DON'T HIRE ANYBODY NEW. WE ARE NOT BILLING ANYTHING NEW.

WE COLLECT IT. THEN IT IS BEEN GOING TO THE BOTTOM LINE. GOOD PLANS ARE COMING.

I HAVE NO DOUBT. AS WE FOCUS MORE.

FOR ME, THE NO NEW REVENUE RATE WILL ALWAYS BE THE RATE AND THE NEXT TIME NEXT YEAR, HOPEFULLY, THERE IS HARD DECISIONS.

WE CAN FIGURE OUT HOW WE KEEP DOING NO NEW REVENUE.

WE CAN LOOK AT IT NOT AS A PAIN IN THE REAR TO BE NO NEW REV NEUVMENT IT CAN BE A BADGE OF HONOR.

THAT WE ARE A CITY THAT FIGURES OUT THE WAY TO BRING IN MORE VALUE AT CHEAPER PRICES AND PROVIDE MORE SERVICES TO OUR RESIDENTS, AND PEOPLE WANT TO LIVE HERE BECAUSE THE MANTRA IS THEY TAKE LESS EVERY YEAR AND THEY PROVIDE MORE SERVICES.

NOT THAT IT HASN'T BEEN GOOD THE PAST COUPLE YEARS.

MAYBE IT COULD BE BETTER. BUT THAT IS ALL I GOT THERE FOR

DEBT SERVICE. >> IF I MAY ADDRESS SOME OF THE THINGS THAT YOU POINTED OUT. JUST OFFER A DIFFERENT PERSPECTIVE. I UNDERSTAND WHAT YOU ARE SAYING ABOUT BARE MINIMUM AND DOING PARKS ONE YEAR, LIBRARY THE NEXT YEAR. UNFORTUNATELY, AT THE RATE THAT THE CITY IS GROWING, I DON'T KNOW IF THAT REALLY IS A WISE CHOICE TO DO THE BARE MINIMUM AND THEN FOCUS ON ONE THING SLOWLY AT A TIME. AS WE KNOW, THIS IS SLOW UP HERE. THIS IS SLOW.

THIS IS WHY THE ROADS LOOK THIS WAY.

THAT IS WHY OUR PARKS LOOK THIS WAY.

THEY ARE GOING TO CONTINUE TO LOOK THAT WAY IF WE DO IT THAT WAY. AND JUST DO THE BARE MINIMUM AND ONLY DO LIBRARY, AND THEN DO ROADS THIS YEAR.

I MEAN, IT IS GOING TO BE ANOTHER THREE OR FOUR YEARS BEFORE WE GET TO THE PARKS I'M SORRY I DISAGREE WITH THAT POINT. WE HAVE A TON OF PROJECTS COMING. THERE IS DEFINITELY PLACES WHERE ALL OF US UP HERE CAN SAY THAT MONEY CAN GO TO.

IT IS NOT JUST A BLANK CHECK THAT WE ARE WRITING AND HOPING THAT WE HAVE PROJECTS THAT COME UP.

THESE, I BELIEVE, IT IS 12 OR 13 ITEMS THAT WERE DEEMED CRITICAL.

BEFORE WE EVEN DID OUR OWN CAPITAL IMPROVEMENT PLAN.

THE PNZ HAD A HUGE DISCUSSION ABOUT IT ON TUESDAY.

CLOSE TO TWO HOURS OF THEIR IDEAS.

SO I DON'T THINK THAT IT IS JUST A BLANK CHECK THAT NONE OF US HAVED NO NO IDEA WHERE THOSE ARE GOING.

I'M LOOKING FORWARD TO THAT DISCUSSION SO EACH COUNCIL MEMBER CAN PRIORITIZE IN THEIR MIND, WHAT IS IMPORTANT.

AS OF RIGHT NOW, THERE IS NOT A STRATEGIC PLAN FROM THE CITY COUNCIL. WE DON'T REALLY HAVE A PARK PLAN UP HERE THAT WE HAVE TALKED ABOUT.

WE HAVE OUR ROAD PLANS THAT WERE DEEMED CRITICAL.

WE ARE WAITING FOR OUR GIS STUDY TO COME BACK.

OCTOBER-NOVEMBER TIME FRAME, TO OBJECTIVELY TELL US WHICH ROADS ARE ACTUALLY IN THE WORST CONDITION AND WHICH ROADS WE NEED TO ADDRESS FIRST I'M SURE EVERY PERSON IN THIS ROOM CAN STAND UP AND TELL SOMEBODY ABOUT A HORRIBLE STREET IN THEIR CORNER OF HUTTO. IT IS ON EVERY SIDE, IN EVERY CORNER. AND THE REASON WHY A LOT OF THAT MONEY HAS BEEN GOING TO THE BOTTOM LINE, I THINK, PARTIALLY IS ALSO CITY COUNCIL'S FAULT. MAYBE NOT ENTIRELY JUST ON US.

BUT WE HAVE PRETTY MUCH HIRED A NEW CITY MANAGER FOR, ON AVERAGE, ABOUT EVERY SIX MONTHS FOR THE LAST TWO YEARS.

WHAT DOES THAT DO TO STAFF IN THAT IS BRAIN-DRAIN.

WHERE IS THE CARRY-OVER? THAT IS WHAT'S HAPPENING.

I DON'T THINK THAT IT IS LACK OF WANT OR TRY FROM THE STAFF.

IT IS TRYING TO PICK UP THE PIECES WHERE THEY ARE.

THAT IS THE REASON WHY MONEY IS GOING TO THE BOTTOM LINE.

I'M GLAD THAT THE MONEY IS THERE.

I'M GLAD THAT NOW WE ARE AT A POINT WHERE OUR CFO CAN GET UP HERE AND ANSWER A QUESTION AFTER QUESTION AND AS SHE DID LAST YEAR, LINE BY LINE BY LINE. SHE HAS ALWAYS BEEN... I E-MAILED HER 15 QUESTIONS. E-MAILED ME BACK.

I DON'T THINK MAYBE TWO HOURS LATER.

I FEEL VERY CONFIDENT IN THE WAY THAT THE CITY IS MOVING.

OUR CFO CAN ANSWER ALL THOSE QUESTIONS.

AND THAT WAS NOT THE CASE BEFORE.

I FEEL LIKE WE HAVE A REALLY GREAT STAFF THAT IS GENUINELY TRYING, AND WE CAN SEE IT HERE. WE HAVE CARRY-OVER.

THEY FINALLY POSTED THE SIGN, THE LAKESIDE ESTATE SIDEWALKS, AT LEAST PHASE ONE, WILL FINALLY START GETTING DONE.

THIS IS CARRY-OVER FROM 2013. THAT HAS BEEN PROMISED TO THEM FOR ALMOST TEN YEARS. SO I UNDERSTAND YOUR POINTS I THINK IF YOU LOOK AT IT FROM A DIFFERENT PERSPECTIVE, GOVERNMENT IS SLOW. WE NEED TO DO SOMETHING NOW I UNDERSTAND THE YEAR THAT IS AHEAD OF US IS JUST THIS YEAR.

WE NEED TO START LOOKING ABOUT AND THINKING ABOUT WHAT IS OUR STRATEGIC PLAN. HOW DO WE WANT HUTTO TO LOOK? AND DOING THE BARE MINIMUM AND PIECING EACH PROJECT TOGETHER BY THE TIME WE GET BACK AROUND TO LIBRARY OR BACK AROUND TO PARKS, IT WOULD PROBABLY BE TEN YEARS. AT THE RATE THAT WE ARE GROWING AND GOING TO CONTINUE TO GROW, I JUST DON'T SEE THAT THAT IS THE BEST POSSIBLE OUTLOOK FOR THIS CITY AS A WHOLE.

[00:45:05]

I, UNFORTUNATELY, CANNOT SUPPORT NO NEW REVENUE.

>> THANK YOU. JUST ONE THING.

MAYBE I NEED TO ARTICULATE BETTER.

I'M NOT SUGGESTING THAT WE DO NO NEW REVENUE AND NEXT YEAR WE ONLY DO LIBRARY AND THE THEN FOLLOWING YEAR WE ONLY DO PARKS.

I'M SUGGESTING YOU BUILD A BUDGET JUST LIKE YOU DO AT HOME, ON WHAT YOU MAKE, YOU CAN'T GO TO YOUR BOSTON AND SAY "I NEED 8% MORE THIS YEAR " IT DOESN'T WORK THAT WAY.

YOU BUILD THE BUDGET BASED ON THAT THEN WE HAVE A DECISION TO MAKE. WHAT DO WE WANT TO ADD FROM THE LIBRARY? DO WE WANT TO PARKS ADD PARKS? YOU CAN GO THROUGH THE WHOLE THING.

IF WE GO LINE BY LINE THIS YEAR, THERE IS MILLIONS THAT WE CAN SPEND ON ANYTHING WE WANT. IT IS ALL... JUST LIKE YOUR HOME. IF I NEED TO ARTICULATE BETTER, I'M NOT SUGGESTING WE JUST DO, LIKE, 2022 IS PARKS.

MAKE A DECISION NOW. THAT WON'T HAPPEN UNTIL 2032.

THAT IS NOT WHAT F I'M TRYING TO SAY

>> I APOLOGIZE IF I MUS UNDERSTOOD YOU.

THAT IS DEFINITELY HOW IT SOUNDED TO ME.

AS A KUHN SILL, WE HAVEN'T HAD THOSE WORK SESSIONS TO SAY, WHAT DO WE WANT TO DO WITH PARKS? THAT IS PART OF WHAT I WAS SAYING. THERE IS NO STRATEGIC PLAN.

THERE IS NO PARK PLAN. THERE IS NO ROAD PLAN.

THESE ARE DEFINITELY THINGS THAT RIGHT NOW, PRETTY MUCH ALL OF THE CITY AND ALL OF THE BUDGET IS HYPOTHETICAL.

WE HAVEN'T HAD THOSE WORK SESSIONS.

WE HAVEN'T HAD THOSE SIT-DOWNS AND DECIDED WHAT ARE THOSE PROJECTS GOING TO BE. SO IN ESSENCE, YES, WE CAN GO THROUGH THE BUDGET AND SAY, THIS MILLION IS FOR THIS.

THIS IS FOR THAT WE HAVEN'T DECIDED THAT AND PRIORITIZED THAT. UNTIL WE CAN GET TO THAT POINT, I THINK IT MAKES ME FEEL BETTER TO KNOW THAT WE AT LEAST HAVE THE MONEY THAT ONCE WE DECIDE TO EXECUTE AND HOPEFULLY, ONCE WE HAVE OUR CITY MANAGERS STAY IN PLACE AND OUR STAFF STAYS IN PLACE AND WE DON'T CONSTANTLY HAVE THIS CYCLE OF DRAINING INFORMATION AND PICKING UP THE PIECES AGAIN, THAT IS WHEN THE TAXPAYERS ARE GOING TO REALLY SEE THAT THE PARKS ARE GETTING FIXED. THE ROADS ARE GETTING FIXED.

I THINK WE ARE ON THE RIGHT PATH.

WE NEED TO CONTINUE TO BUILD THAT AS FAST AS WE ARE APPROVING

MENT >> YEAH.

I WAS WONDERING CAN WE GET THIS REPORT THAT WE RECEIVED, OUR S&P RATINGS REPORT SO THAT THE CITY CAN SEE IT? THAT IS PUBLIC INFORMATION. THIS REALLY HELPED ME.

WHEN WE GOT THIS. WHERE I'M GOING TO GO WITH MY QUESTIONS AND MY QURNS. AND MY CONCERNS.

I KNOW NOW WE HAVEN'T... WE HAVE AN A-RATING WHICH IS STABLE.

CAN YOU REMIND ME WHERE WE WERE BEFORE?

>> A NEGATIVE OUTLOOK. DOUBLE AMINUTES RATING.

THEY JUST UPDATED THAT. >> YOU READ ABOUT THE STABLE OUTLOOK. THE DOWN SIDE SCENARIO.

OF THE STABLE... OF OUR RATING AS WE... OUR RATING COULD BE LOWERED IF OUR RESERVES FALL BECAUSE OF CAPITAL PLANS.

COST OR OTHERWISE. AND MY UNDERSTANDING IS FROM THIS, THE FACT THAT WE HAVE KEPT OUR RESERVE BALANCE SO HIGH, IT HAS HELPED OUR RATING. AM I MISUNDERSTANDING THAT?

IS THAT CORRECT? >> BECAUSE WE ARE ONLY A COUPLE OF YEARS REMOVED FROM BEING BELOW THE 10%, THAT IS VERY IMPORTANT TO THEM RIGHT NOW. TO SEE THAT STABILITY.

AND THAT CONTINUE. I BELIEVE THEY SAID IN COMBINATION, THE RESERVES, IN BEGIN NATION WITH THE FINANCIAL ... I DON'T HAVE IT IN FRONT OF ME.

I APOLOGIZE. THE PERFORMANCE.

HOW WE BUDGET. HOW WE ARE DOING THAT AND HOW IS THAT ENDING UP EACH YEAR? IT IS BOTH.

THEY WILL BE LOOKING AT THAT GOING FORWARD AND CONTINUING TO MAKE SURE THAT WE ARE DOING THOSE THINGS.

>> SO IT IS IMPORTANT THAT WE MAINTAIN THAT RATING AND IMPROVE THAT RATING MOVING FORWARD. AS A CITY.

IN GENERAL. FOR FUTURE BOND USES.

TO SHOW THAT WE ARE FINANCIALLY STABLE.

I'M FALLING, AGAIN, IN THE MIDDLE AREA.

I'M HAPPY THAT WE WERE ABLE TO LOWER THE BOND AMOUNT TO $25 MILLION. AND TO SEE WHAT WE CAN DO WITH THAT. MOVING FORWARD.

TO GET SOME THESE PROJECTS DONE. WE ARE KIND OF DUCK-TAICHED TOGETHER FOR THE LAST THREE YEARS.

CITY HALL HAS BEEN. NOW THAT WE HAVE A NEW MANAGER.

CONGRATULATIONS ON A CONTRACT ON YOUR HOUSE.

YOU AND HUTTO. WHAT? SORRY. ANYWAY, WE ARE LOOSHING AT SOME STABILITY... WE ARE LOOKING AT STABILITY NOW.

THAT IS WHAT'S IMPORTANT. THAT WE NEED TO LOOK AT MOVING FORWARD. WE DIDN'T HAVE A REAL PLAN

[00:50:02]

MOVING FORWARD FOR THE LAST SEVERAL YEARS AS COUNCIL MEMBER KINSEY SPOKE TO. WE HAVEN'T DONE A TRUE STA TEENAGIC... STRATEGIC PLAN I WOULD SAY, YOU KNOW, BEFORE 2019. DOES ANYONE REMEMBER, PETER? IF THERE WAS A STRATEGIC PLAN WITH COUNCIL?

>> WE TRIED TO DO ONE IN JUNE. >> OKAY.

SO I'M JUST SAYING, I STILL WANT TO LOWER THE RATE.

I DON'T KNOW THAT IF I WANT TO GO AS LOW AS THE MINIMUM.

I STILL WANT TO MAKE SURE THAT WE ARE ABLE TO HAVE THE FUNDS AVAILABLE IN CASE OF EMERGENCIES.

I KNOW THAT THE CITY MANAGER HAS HIS OWN IDEAS.

WHAT A SAFE, FISCALLY RESPONSIBLE RESERVE SHOULD LOOK LIKE. A 2.5 IS KIND OF A RISKY RESERVE

BALANCE. >> MAYOR, COUNCILORS FOR THE RECORD, THE CITY MANAGER, CURRENTLY, THE CITY'S ADOPTED POLICY IS A 20% RESERVE BALANCE. WHAT THAT EQUATES TO IS BASICALLY, MEANING THAT AT THE MINIMUM AMOUNT OF MONEY IN THE BANK THAT WE COULD HAVE, WE WOULD HAVE ENOUGH MONEY, SHOULD NO NEW REVENUE COME IN AT ALL TO THE CITY.

TO BE ABLE TO KEEP THE CITY DOORS OPEN AND THE POLICE OPERATING FOR APPROXIMATELY 2.4 MONTHS.

F THAT IS WHAT 20% IS. GENERALLY SPEAKING, AS A PERSON WHO HAS WATCHED NATURAL DISASTERS OCCUR IN CITIES, I PERSONALLY FEEL THAT 20% IS TOO LOW.

TO HAVE AS A SAFETY NET. AS A RESERVE.

USUALLY, YOU SEE THAT CLOSER TO SOMEWHERE BETWEEN THREE TO SIX MONTHS. THAT WOULD BE 25% TO 50%.

THAT IS BASICALLY WHAT THOSE PERCENTAGES EQUATE TO IS HOW MANY DAYS, WEEKS, OR MONTHS, COULD THE CITY CONTINUE TO OPERATE IF SOME SORT OF ECONOMIC DISASTER, ECOLOGICAL DISASTER, GEOGRAPHIC DISASTER OCCURRED, YOU KNOW, AND EFFECTIVELY, THE CITY WOULD NEED TO REBUILD.

THE OTHER THING ABOUT THE RESERVES, TRADITIONALLY SPEAKING, FORGIVE ME FOR PONTIFICATING A LITTLE BIT, BUT I'M DOING THIS FOR THE BENEFIT OF EVERYONE THAT IS LISTENING, TOO, THE RESERVES ALSO HELP CITIES BALANCE THEIR CASH FLOW.

BECAUSE THE CASH FLOW OF A CITY AND THE EXPENDITURES OF THE CITY DON'T NECESSARILY EQUAL EACH OTHER.

THAT MEANS WE GET TYPICALLY A CITY GETS A LOT OF ITS MONEY AT THE BEGINNING OF THE YEAR WHEN TAXES ARE PAID.

AND THEN THEY GET SALES TAX SPREAD THROUGHOUT THE YEAR.

A RESERVE HELPS THIS TIME OF YEAR WHENEVER YOU ARE THE FURTHEST REMOVED FROM THE LUMP SUM OF PROPERTY TAXES THAT WERE PAID, BUT YET YOUR NEW BUDGET YEAR IS STARTING IN OCTOBER, AND YOU ARE NOT LIABLE TO GET YOUR NEW PROPERTY TAXES UNTIL JANUARY , UNTIL THE SECOND QUARTER OF THE FISCAL YEAR, ALTHOUGH IT IS THE FIRST PART OF THE CALENDAR YEAR.

SO THAT IS WHERE THE CASH RESERVES COME INTO PLAY.

YOU KNOW, DESPITE... I MEAN NOT DESPITE BUT IN ADDITION TO THE RATINGS. THAT IS WHY I PERSONALLY THINK THAT 20% IS A VERY AGGRESSIVE NUMBER.

A MORE CONSERVATIVE NUMBER WOULD BE CLOSER TO THE SIX MONTHS, YOU KNOW, ON THE SPECTRUM. SOMETHING TO THAT EFFECT.

>> OKAY. SO I'M GLAD YOU BROUGHT UP THE CREDIT RATING. THAT WAS A COUPLE OF THINGS ON THERE ONE WAS THAT THE RESERVE WAS MENTIONED. IT WASN'T QUANTIFIED, I THINK.

WE NEED TO HAVE A DISCUSSION ON SETTING A DIFFERENT GOAL THAN 20%. I DON'T KNOW THAT WE ARE NOT ALREADY AT A LEVEL THAT WOULD BE ACCEPTABLE.

WE NEED TO DIG INTO THAT. AND SET THAT POLICY.

THEN WE NEED TO ALSO RUN IT BY THE FA AND MAKE SURE IT IS OKAY, THAT THAT IS NOT GOING TO HAVE ANY IMPACT ON THE FUTURE RATING.

IT IS OTHER THING THAT I NOTICED IN THE RATING LETTER WAS THEY MENTIONED THAT OUR DEBT PROFILE IS WEAK.

THEY MENTIONED THAT SOME DOWN-SIDE RISK WAS BORROWING TOO FAR IN ADVANCE OF THE GROWTH. SO KEEPING OUR BORROWING CLOSE TO OUR GROWTH, OBVIOUSLY, YOU CAN'T WAIT... YOU CAN'T ALWAYS WAIT. YOU CAN'T GET TOO FAR AHEAD EITHER. THIS CITY HAS GOTTEN TOO FAR AHEAD IN THE PAST. WE DON'T WANT TO BE BEHIND.

THERE IS A SWEET SPOT IN THE MIDDLE THAT WE NEED TO HIT.

WHERE WE HAVE ENOUGH MONEY TO DO THE NEXT YEAR'S WORTH PROJECTS.

WITH A BUFFER. AND KEEP GOING DOWN THE ROAD.

I DON'T THINK WE NEED TO BORROW MULTIPLE YEARS IN ADVANCE.

I'M GLAD WE CUT BACK TO 25. THAT WAS A GOOD COMPROMISE.

WHEN I LOOK AT THE TAX RATE OPTIONS AND THE INS OPTIONS, THE NO NEW REVENUE WITH KEEPING THE INS AT THE 15.6 CENTS IS VERY

[00:55:01]

DIFFICULT. AND DOES NOT GROW THE MNO FOR THE EXISTING HOMES AT ALL. BUT WHEN YOU GO DOWN TO KEEPING THE INS RATE LOW, THE 12.9 CENTS, SO... I'M SORRY GOING BACK UP TO THE HIGH INS RATE WITH THE VAR AND THE UNUSED INCREMENT, YOU GET $2 MILLION INTO THE MNO.

A GOOD AMOUNT OF MONEY. IF YOU KEEP THE LOW INS RATE WITH THE NO NEW REVENUE, YOU STILL GET A MILLION DOLLARS PUMPED INTO THE MNO. IT IS STILL A SIGNIFICANT INCREASE WITH THAT RATE WHILE MAINTAINING A NO NEW REVENUE RATE FOR THE TAXPAYERS. I MEAN, FIRST OF ALL, THE RECESSION IS AN UNKNOWN. WE DON'T KNOW HOW GROWTH WILL BE IMPACTED. WE HAVE HEARD COMMENTS WE WILL CONTINUE TO GROW. IF WE CONTINUE TO GROW, THEN OUR ABILITY TO BORROW IS GOING TO CONTINUE TO GROW WIT.

IF WE DON'T GROW, OBVIOUSLY, WE GET STUCK AND CAN'T BORROW MORE WITHOUT RAISING RATES. THAT IS AN UNKNOWN.

WE DON'T KNOW EXACTLY WHERE THAT IS GOING TO LAND.

WE HAVEN'T DONE ANY OF THE WORK OF LOOKING AT OUR NEW COMMERCIAL COMING IN AND THE EDC AND HOW THEY ARE GOING TO FUND SOME OF THESE INFRASTRUCTURE IMPROVEMENTS.

WE NEED TO FIGURE THAT OUT BETWEEN NOW AND THE NEXT BUDGET CYCLE AND GET THOSE STRUCTURES IN PLACE.

THOSE STRUCTURES ARE GOING TO IMPACT OUR ABILITY TO BORROW AND GIVE US A LITTLE BIT MORE LEEWAY ON SOME OF THESE POTENTIALLY SIGNIFICANTLY, DEPENDING ON WHAT WE CAN FIGURE OUT AND WHAT WE CAN GET DONE. WE WILL KNOW MORE BY THEN.

WE WILL KNOW MORE ABOUT HOW FAST SOME OF THESE... YOU KNOW, DEVELOPMENTS WHERE LAND HAS BEEN PURCHASED NOW... WE WILL KNOW A YEAR FROM NOW HOW MUCH WORK THEY HAVE ACTUALLY DONE.

WE DON'T KNOW HOW THE RECESSION IS GOING TO IMPACT SOME OF THAT.

THERE IS FEDERAL TAX DOLLARS PUMPED INTO THE SEMICONDUCTOR INDUSTRY. AND THAT IS... THAT MONEY IS GOING TO GET SPENT. SOME OF THAT IS PROBABLY GOING TO HAPPEN REGARDLESS OF A RECESSION.

IT IS A LOT OF UNKNOWN. IT IS HARD TO FIGURE OUT WHERE WE ARE GOING TO BE A YEAR FROM NOW.

WE STILL HAVE A LOT OF WORK WE CAN DO TO HELP IMPROVE THE SITUATION HERE FROM NOW AND WITH AN OPTION IN FRONT OF US, TO MAINTAIN A NO NEW REVENUE WHILE GETTING A MILLION DOLLARS MORE INTO MNO. I DON'T SEE HOW THAT IS NOT THE

RIGHT ANSWER TODAY. >> SO I HAVE A LITTLE BIT DIFFERENT TAKE. I DON'T WANT TO... A DECISION WE DO TODAY FOREVER HANDCUFFS US FOR THE NEXT TEN YEARS.

AT THE MINIMUM INS RATE, EVEN IF YOU LOOK AT THE CHART WE WERE GIVEN, WE WON'T DROP BELOW THE 12 UNTIL... ONE PENNY UNTIL 2032. FOR EVERY ONE PENNY YOU GO DOWN OR WE RAISE, IS ABOUT $7 MILLION TO THE BOTTOM LINE OF A DEBT.

LIKE, THAT WE COULD TAKE. WE WOULD GET $7 MILLION FROM THAT BOND. SO DROPPING TO 12.9, I CAN GET $1 MILLION SEEMS KIND OF SHORT-SIDED.

IF WE WENT WITH THE LEVEL DEBT SERVICE RATING.

IF YOU LOOK AT THAT, EVERY YEAR, WE ARE DROPPING BY A PENNY WHICH MEANS THAT IF WE ARE ABLE TO SUCCEED AS WE ARE PLANNING ON WITH THE 14 PROJECTS AND THE $25 MILLION AND WE SPEND EVERYTHING AND WE NEED TO GO DO ANOTHER $7 MILLION OR $14 MILLION TO FINISH OUT THAT STUFF BECAUSE THE PROJECTS MAYBE HAVEN'T BEEN FULLY BUILT OUT AND WE ARE NOT GETTING THE TAX REVENUE YET FROM THE PLACES LIKE THE MEGA-SITE AND WE HAVE TO ISSUE THAT DEBT BECAUSE OF THE GROWTH, WE WILL BE ABLE TO.

WE WON'T BE RAISING A RATE. WE WILL BE GOING UP A PENNY FOR $7 MILLION. WHEREAS IF WE GO HERE, WE ARE GETTING A MILLION DOLLARS TO OUR MNO, BUT I THINK FOR US WITH THE UNKNOWNS, HAVING THE ABILITY TO, IF WE NEED TO ISSUE THAT AND GO STAY AT THE 14.81 EACH YEAR. YOU THE DROP BY A PENNY THAT IS $7 MILLION. THAT IS MUCH MORE THAN THE MILLION DOLLARS YOU WOULD GET EACH YEAR FOR THE NEXT FIVE YEARS. WE ARE PAYING OFF THE DEBT AT HIGHER INTEREST RATE. YOU KNOW, LIKE I SAID, IT IS NOT SAVING THAT MUCH MONEY. IT IS 40 VERSUS 41, I THINK, ON THE MINL MUM. THE DIFFERENCE IS YOU ARE SAVING ALMOST A MILLION... LET'S SEE. $700,000 SAVINGS.

SO THE ABILITY THAT NEXT YEAR WE WOULD HAVE A PENNY MORE THAT WE WOULD BE ABLE TO DROP IT BECAUSE IT WOULD GO ON THE LEVEL SERVICE. FROM 14 TO 13.7, TO 12.8.

SO YOU KNOW, IF WE THINK THAT WITH THE RECESSION IS GOING TO DELAY TWO YEARS, THEN WE ARE STILL PAYING DOWN THAT DEBT.

NOW WE HAVE TO EXPAND AGAIN. WE HAVE LOWERED OUR DEBT SERVICE. AND WE HAVE GROWN SOME.

THAT MEANS IT WOULD BE NOT JUST THAT BUT EVEN MORE.

THEN WE WOULD BE ABLE TO BE AT A NO NEW REVENUE RATE.

IF YOU ALSO LOOK, YOU ARE GENERATING AT THE NO NEW REVENUE RATE. WITH A $25 MILLION DEBT.

YOU ARE STILL GETTING $300 IN ALMOST ADDITIONAL REVENUE THIS

[01:00:06]

YEAR. YOU ARE TALKING $700,000 MORE NOW RELATIVE TO THE TWO PLANS. I HAVE THE ABILITY THAT NEXT YEAR, IF WE NEED TO ISSUE $P 7 MILLION IN DEBT, WE COULD DO THAT WITH THE SAME THING. THAT IS A MUCH BETTER USE.

ANOTHER WAY OF LOOKING AT IT, TO GIVE US MORE FLEXIBILITY.

I NEVER VOTED FOR A PARTICULAR RATE.

I VOTED FOR US TO HAVE THIS DISCUSSION.

WE HAVE ALL THE OPTION ON THE TABLE AND NOT JUST VOAING FOR A PARTICULAR NUMBER AND NOT BE ABLE TO TALK ABOUT IT.

YOU KNOW, I THINK WE CAN GET THERE.

THAT IS GENERATING MORE REVENUE FOR THE CITY THAN WHAT OUR BUDGET IS BUILT TO. IT GIVES US THE FLEBLTIONABILITY IN A YEAR. ... THE FLEXIBILITY IN A YEAR.

WE ARE GOING TO HAVE $18 MILLION.

WE KNOW THERE IS $44 MILLION THAT IS GOING TO HAVE TO BE SPENT OVER THE NEXT TWO YEARS THE DEBATE WAS HOW ARE WE GOING TO PAY FOR IT? WE ISSUED $25 NOW.

THE IDEA WAS HOPEFULLY, THE EDC AND WE DON'T HAVE A RECESSION THAT STOPS IT, CAN PAY FOR THAT DIFFERENCE.

BETWEEN THE 25 AND THE 44. IF THAT DOESN'T HAPPEN, THIS IS A WAY WE CAN GET THERE. AND WE ARE PAYING OFF OUR DEBT

FASTER >> ARE YOU ADVOCATING THE NO NEW

REVENUE RATE AT THE LEVEL INS? >> YES.

YES. THAT IS WHAT I'M SAYING.

>> YOU ARE SAYING THE TOP ROW OF THE PINK?

AT 42 CENTS. >> YES.

>> IF WE ARE TALKING NO NEW REVENUE, I CAN DEFINITELY BE FLEXIBLE ON WHICH INS OPTION WE ARE LOOKING AT.

>> THAT SEEMS RISKY TO ME. BECAUSE IF WE WANT TO CHANGE OUR RESERVES FROM 20% TO 33%, THAT TAKES IT FROM $5 MILLION TO $8.5 MILLION. IF WE GET CLOSER TO THE SIX MONTHS, EVEN GOING AT 50% WOULD GET US SHORT OF THAT IT WOULD BE FIVE MONTHS WORTH.

THAT MEANS WE WOULD HAVE TO HOLD IN RESERVING $12.87 MILLION.

CURRENTLY, IT SAYS THAT WE HAVE $9 MILLION ABOVE THE $5.

THAT IS $14 MILLION. IF WE WANTED TO DO THE RESERVES AT THE SIX-MONTH RATE, WE WOULD ONLY HAVE A COUPLE OF MILLION DOLLARS LEFT. TO BE ABLE TO DO ALL THOSE PROJECTS WE WANT TO BE ABLE TO DO.

IN ADDITION TO THE ONES THAT WE HAVE NAMED.

RIGHT? SO WE HAVE NAMED ALL THE SPECIFIC... THE 14 PROJECTS FOR THE ROADS THAT WE NEED TO DO.

PLUS, WE WANT TO GET IN... WE HAVE TALKED ABOUT POSSIBLY ADDING A LIGHT AT EXCHANGE AND LIMBER.

AND THE DRAINAGE WHICH GOES FROM $1 MILLION TO $4 MILLION.

WE HAVE TALKED ABOUT A LOT OF THESE THINGS.

THEN IF WE... YOU KNOW, AGAIN, IF WE TRY TO HIT THAT NO NEW REVENUE RATE TO TRY TO KEEP EVERYTHING AS LOW AS POSSIBLE, WE ONLY HAVE $300,000 TO WORK WITH.

TO BE ABLE TO DO ALL THESE EXTRA PROJECTS THAT WE WANT TO RIGHT NOW. THERE IS AN ARGUMENT, CAN YOU DO THEM ALL? CAN YOU DO THEM ALL THIS YEAR? THAT STILL REMAINS TO BE SEEN. I THINK A LOT OF THE REASON WHY WE HAVEN'T DONE THINGS IS BECAUSE WE HAVEN'T HAD THE MONEY. BECAUSE OF THE CONCERNS WITH THE A.G. MY CONCERN IS I DON'T WANT TO DRAW DOWN THE FUND BALANCE TO TOO LOW.

I DON'T LIKE TALKING ABOUT IT IN TERMS OF PERCENTAGE.

I PREFER TO TALK ABOUT IT IN TERMS OF HOW I THINK AND HOW I THINK MOST CITIZENS THINK. WE ALL BUDGET ON A MONTHLY BASIS. I DON'T KNOW ANYONE WHO DOESN'T BUDGET ON A MONTHLY BASIS. IF WE TALK ABOUT IT.

OKAY, WHAT DO WE NEED TO HAVE A FOUR-MONTH RESERVE OR A SIX-MONTH RESERVE, THAT, TO ME, MAKES A LOT MORE SENSE.

AS TO, YOU KNOW... I THINK 50%, THAT IS A TON OF MONEY.

IF I THINK IT IS ONLY SIX MONTHS WORTH OF MONEY, AGAIN, YOU KNOW, I WAS TALKING TO MY WIFE ABOUT THIS TODAY.

I'M DOING THIS BUDGET. I SAID HOW MUCH RESERVE DO WE HAVE? HOW MANY MONTHS DO WE HAVE? WE DON'T HAVE SIX MONTHS. BUT WE HAVE A GOOD CHUNK OF MONEY IN OUR SAVINGS. I WAS, THINKING, WELL, WE HAVE A LOT OF MONEY. WHEN WE STARTED TO ADD IT UP, WE WERE, LIKE, OKAY, WE NEED TO BUMP THAT UP.

YOU OUR RESERVES ARE CLOSER TO THE 20%,S NO THE 50%.

I GUESS THAT WORRIES ME A LITTLE BIT.

BECAUSE AGAIN, IT KIND OF... I THINK LIMITS OUR ABILITY TO BE ABLE TO DO MORE OF WHAT WE WANT TO DO.

AND WHAT THE CITIZENS HAVE BEEN ASKING FOR.

AND I MEAN, PERSONALLY, I'M LOOKING AT THE PINK BOX.

I'M NOT... I THINK THE YELLOW IS TOO LOW.

IT DOESN'T GIVE US THE FREEDOM AND FLEXIBILITY TO BE ABLE TO TAKE OUT MORE DEBT IF WE NEED TO NEXT YEAR.

LIKE RANDAL SAID, IT DOESN'T GIVE US THE ABILITY TO DROP THE

[01:05:04]

RATE WHICH I HAVE BEEN AN ADVOCATE FOR FOR A LONG TIME.

STEADY, CONSISTENT DECREASES. THE BLUE ONE, I DON'T THINK WE SHOULD KEEP THE INS RATE AT THE MAXED-OUT.

WE CAN GIVE SOME OF THAT THAT BACK TO CITIZENS NOW.

I'M AT THE LEVEL DEBT SERVICE. WHERE IN THE MIDDLE, I'M

STRUGGLING. >> JUST TO ADDRESS THE RESERVE.

RIGHT? >> I'M SORRY TO INTERRUPT.

THE IS THERE ANY WAY WE CAN GET THIS UPON THE SCREEN SO PEOPLE HERE KNOW WHAT WE ARE TALKING ABOUT? WE ARE TALKING ABOUT THE COLORS AND WHICH ONE WE ARE LOOKING AT.

>> WELL, THEY ARE ON EACH OF THESE SLIDES.

IF THERE IS A CERTAIN ONE YOU WANT THE PUBLIC TO SEE, WE CAN

SHOW THAT >> IS THERE ANY WAY TO SHOW THE ONE WE HAVE? WE ARE TALKING ABOUT THAT.

>> I CAN'T. IT IS PROBABLY GOING TO BE SMALL FOR THE PUBLIC. I CAN SEND IT TO... I MEAN, WE

CAN UPDATE. >> MY CONCERN WOULD BE IT WOULD

BE TOO SMALL. >> OKAY.

>> RIGHT. >> YEAH.

>> BUT WE HAVE THEM INDIVIDUALLY.

THAT IS THEPICK. THAT IS THE PINK

THE BLUE. >> IF YOU WANT TO TALK PINK, WE CAN PUT THAT ONE UP. IF YOU WANT TO SWITCH TO BLUE.

>> I JUST WANTED EVERYBODY HERE TO BE ABLE TO FOLLOW ALONG.

WHEN WE ARE SAYING WHICH LINE WE ARE ON.

>> THE RESERVE, WE MIGHT SAY WE HAVE A GOAL OF SIX MONTHS.

THAT DOESN'T MEAN WE CAN ACHIEVE THE WITH THIS BUDGET.

WE CAN SET A TIMELINE. WE CAN DO THAT ON A STRATEGIC PLANNING DISCUSSION. IT SOUNDS LIKE A GOOD IDEA.

WE HAVEN'T HAD A DISCUSSION ON THE POLICY.

THAT SHOULD BE ITS OWN SEPARATE DISCUSSION.

WHAT WE WANT TO DO. I AGREE.

WE SHOULD INCREASE IT. YOU KNOW, WE NEED TO PLAN THAT

>> WHAT DOES IT NEED TO BE AND HOW SOON...

>> AND HOW QUICKLY WE SHOULD TRY TO GET THERE.

VERSUS THE REALITY OF WHAT WE NEED TO SPEND MONEY ON TODAY AND

WHERE WE SIT. >> YEAH.

I THINK WE NEED KIND OF TO HONE IT IN AND FOCUS ON THE INS PORTION OF THIS LIKE, THE COLOR BOXES.

WHAT PROPORTION WE WANT TO DO. I CAN GET BEHIND SUPPORTING THE EXISTING INS RATE OPTION OR THE LEVEL DEBT SERVICE OPTION.

OF COURSE, LAST WEEK WE ALL APPROVED $25 MILLION IN BONDS.

IN A 7-0 VOTE. WITH THAT, IT IS GOING TO COME WITH A COST TO TAXPAYERS. NOW WE JUST NEED TO FIGURE OUT THE PROPORTION OF MNO VERSUS INS.

RIGHT? THAT IS WHAT WE NEED TO COME TO AN AGREEMENT ABOUT. THAT TOPIC.

I DO FORESEE IN THE FUTURE, US TALKING ABOUT MORE TRANSPORTATION BONDS, BUT AT LEAST WE ARE TAKING IT UP RIGHT NOW TO SEE HOW THINGS GO. AND HOPEFULLY, PUT THOSE TAXPAYER DOLLARS TO USE SO THAT RESIDENTS CAN SEE THEIR TAX MONEY AT WORK. RIGHT? SO THIS MIGHT BE A LITTLE TRIAL RUN FOR US.

FOR THE FUTURE. I DO FORESEE US, YOU KNOW, HAVING LAST WEEK'S CONVERSATION AGAIN AND THEN OBVIOUSLY, THAT DOES IMPACT THE INS RATE. RIGHT? THAT WILL DRIVE IT UP. I CAN GET BEHIND THE EXISTING AND THE LEVEL DEBT SERVICE BECAUSE... JUST KIND OF THINK ABOUT THE FUTURE. WHENEVER YOU BUY A HOME, THE AMORTIZATION CHARTS YOU GET, YOU PAY HEAVY INTEREST UP FRONT.

AS YOU PAY DOWN, THEN, OF COURSE, YOU ARE PAYING YOUR PRINCIPAL. RIGHT? IT IS OUR DUTY, IF WE APPROVE THIS, THAT WE NEED TO PAY FOR THE INTEREST UP-FRONT. SO THAT IN THE FUTURE, FUTURE COUNCILS WELL BEYOND OUR YEARS AND TIME HERE, THAT THAT RATE CONTINUES TO BE DRIVEN DOWN SO THAT THEY HAVE THAT CAPABILITY OF TAKING OUT MONEY IN ORDER TO DO PROJECTS.

ANYTHING THAT THEY DESIRE. THAT IS KIND OF MY GENERAL VIEWPOINT ON THAT. SO YEAH, YOU KNOW, I CAN GET BEHIND THOSE, TOO. AND ALSO, WITH INS RATES BEING AT THOSE TWO RATES... THE CURRENT 15 CENTS AND THEN IN THE PINK, IT IS ALMOST 50 CENTS SO 14 CENTS.

WITH THAT, IT KIND OF... I FEEL LIKE IT WILL STABILIZE THE MNO.

IT WON'T JACK IT UP TOO MUCH. IT WILL KIND OF CAPTURE IT SO THAT THE CITY'S BUDGET GET DOESN'T GET EXPANDED TOO MUCH.

RIGHT? SO WHAT'S HAPPENING IS WITH ALL THESE... ALL THIS EXTRA MONEY IN THE BUDGET THAT IS COMING OUT EVERY YEAR, IT IS, LIKE, WE HAVE AN EXPENDED $5.7 MILLION.

WITH THAT, IT IS GOING TO STOP THAT HUGE GROWTH.

OF COURSE, LIKE COUNCIL MEMBER KINSEY SAID, A LOT OF THAT IS STAFF. WE ARE NOT FULLY STAFFED AS A CITY. I DO HAVE FULL FAITH IN OUR CITY

[01:10:03]

MANAGER THAT HE CAN RECRUIT AND HIRE PEOPLE AND WE CAN PAY THEM WELL IN THE CITY OF HUTTO, THAT THEY WILL DO GOOD WORK.

THAT WILL KIND OF KEEP THE MNO PORTION, AS LONG AS WE CAN MAINTAIN A GOOD INS PORTION AND PAY OUR DEBT, THAT THE MNO CAN STAY WHERE IT IS RIGHT NOW. ABOUT.

FROM THERE, WE CAN GROW THE CITY, DEPENDING ON WHAT'S NEEDED. IF THAT MAKES SENSE.

THANK YOU. >> I KNOW THERE WERE QUESTIONS LAST WEEK ABOUT THE PROJECTS AND HOW THEY SHOULD BE FUNDED.

ALL OF THAT. (INAUDIBLE)

>> WILL HAVE WE OPEN THIS UP TO PUBLIC COMMENT, I DID WANT TO ASK A CLARIFYING QUESTION FROM THE CITY MANAGER ABOUT THE GOALS FOR THE FUND RESERVE. ON PAGE 16 OF THE BUDGET... I DON'T KNOW WHAT VERSION. HOW YOU WOULD KNOW THE VERSION.

IT IS THE ONE THAT WAS SENT OUT LAST WEDNESDAY.

SO AUGUST 31. IF I'M READING IT RIGHT, NOT AUGUST. ACTUAL 2020.

WE FINISHED THE YEAR AT 3.74. DO YOU HAVE THAT UP? OKAY. WE FINISHED THE YEAR AT 3.7 MILLION. MINUS RESERVE REQUIREMENTS OF $2.9 MILLION. LEFT US $800,000 OVER 20%.

I DON'T KNOW WHAT PERCENT THAT WOULD HAVE BEEN.

IN 2021, THE ACTUAL, IF I'M READING THIS RIGHT, THE FUND BALANCE WAS $9.5 MILLION MINUS $2.18 FOR 20%.

LEFT IN RESERVES FOR 6.6. IF I WAS USING HARD MATH, I WOULD SAY $3 MILLION EQUALS 20%. $6 MILLION ONE WOULD BE 40%.

$9 MILLION WOULD BE 60%. ONE MIGHT SAY THAT IN 2021, WE WERE AT 60% OF RESERVES. DOES THAT SOUND ABOUT RIGHT?

>> IN 2021, IT LOOKS LIKE YOU ARE AT 60%.

>> OKAY. THEN WE BUDGETED 2022.

$10.7 MILLION FUND BALANCE. 2.8RY EVERYBODY ISES.

WE FINISHED AT $6.9 MILLION OVER THE 20%.

AGAIN, $#.8 AND $3.8 IS $7.6. LOOKS LIKE # 5% FUND RESERVE.

ABOVE 50%, RIGHT? >> WE ARE ESTIMATING.

THAT WAS THE BUDGET. >> WHAT PAGE ARE WE ON? I'M HAVING A HARD TIME. OH, IT SAYS 16 ON THE...

IT SAYS 16 AT THE BOTTOM OF THE PAGE

>> I THINK IT IS 25. >> PAGE 19 OF THE PACKET.

THAT SAYS 16. >> SO WE ARE ESTIMATING THIS YEAR, AND OBVIOUSLY, THINGS COULD CHANGE.

BECAUSE WE HAVE FOUR WEEKS TO GO.

WE ARE ESTIMATING THE TOTAL FUND BALANCE IS $17.8 MILLION NOW WITH THE 20% BEING $3.3 MILLION. AND $14.5 EXTRA.

THEN 60% WOULD BE ROUGHLY $10 MILLION $200,000.

IF I'M RIGHT. IT LOOKS LIKE THIS YEAR, WE ARE ESTIMATED TO BE OVER 100% RESERVE.

AM I READING ALL THAT RIGHT? I AGREE THAT IT'S GOT TO COME UP. WE ALWAYS TALK ABOUT THINGS...

I'M READING THIS. IT SEEMS LIKE OUR FUND BALANCE IS GROWING. AND OUR RESERVES ARE GROWING.

>> OBVIOUSLY, I CAN'T ANSWER FOR WHAT HE IS GOING TO SAY.

I WOULD SAY THAT THERE IS A BIG JUMP.

43 PEOPLE GOT LAID OFF BETWEEN '20 AND '21.

BETWEEN '21 AND '22, WE HAVEN'T GAINED 43 PEOPLE.

A HUGE CHUNK OF THAT IS NEW HIRES, BENEFITS, X, Y, AND Z.

IF YOU LOOK AT OUR BUDGET, PERSONNEL EQUATES FOR A VERY REALLY LARGE QUANTITY FOR THAT PIECE OF THE PIE, IF YOU WILL.

IF YOU GO BACK TO OUR TRANSPORTATION AND DRAINAGE PROJECTS, OF THOSE 14, I WOULD SAY THREE WE HAVE BEING FULLY FUNDED BY THAT AS WELL. I JUST...

>> I DON'T UNDERSTAND WHAT... I DON'T MEAN THIS TO BE RUDE.

I DON'T KNOW WHAT THAT HAS ANYTHING TO DO WITH THE

UNRESERVED FUND BALANCE GROWING >> THE 43 PEOPLE BEING LAID OFF?

>> I WAS HERE FOR THAT THEY WERE LAID OFF BECAUSE WE JUST FLAT-OUT RAN OUT OF MONEY.

>> RIGHT. I WAS HERE IN THE AUDIENCE.

>> WE HAVE DIDN'T LAY THEM OFF AND GAIN $6 MILLION.

>> NO. I UNDERSTAND.

AND THEN HOW WE ARE GETTING FROM $800 TO $6.9, TO $14.

I DON'T KNOW WHAT THAT HAS TO DO WITH THE CIP PROJECTS OR

[01:15:03]

ANYTHING ELSE. WE ARE BUDGETING.

WE ARE BUDGETING FOR MASSIVE FUND RESERVES, AND WE ARE ALL TALKING ABOUT WE NEED TO BE ABOVE 20.

I'M JUST SAYING IT LOOKS LIKE WE HAVE WE HAVEN'T BEEN BELOW 55% FOR THE PAST THREE YEARS. WE MAY BE TALKING ABOUT A FUND RESERVE BALANCE WE HAVEN'T SEEN SINCE WE RAN OUT.

I JUST WANT TO KNOW IF I LOOK AT THE NUMBERS RIGHT, BECAUSE AS WE START TO GO VOTE ON WHERE WE ARE GOING TO GO AND HOW MUCH MONEY WE NEED TO GET, IF WE ARE AT 140% OF OUR FUND RESERVE BALANCE, I WOULD HATE TO BE MAKING A VOTE, THINKING I WAS AT

20% AND I'M AT 120%. >> FOR THE PUBLIC, TOO, CURRENTLY, THE PROPOSED BUDGET WE HAVE ISEST MATTING ESTIMATING THAT WE WOULD HAVE APPROXIMATELY $15 MILLION... RIGHT.

I'M SORRY I'M NOT TALKING ABOUT PROPOSED FOR THIS BUDGET. I'M TALKING ABOUT THE ESTIMATED AT THE END OF THE YEAR. THE ONLY REASON I SAY THAT IS WHEN WE GET TO THE BUDGET, THERE IS A LOT OF BIG NUMBERS IN THERE. I DON'T KNOW WHAT THEY ARE FOR.

SO MAYBE THIS BUDGET CHANGES. AM I RIGHT IN THAT THE ESTIMATE FOR THE END OF THE FISCAL YEAR THAT ENDS HERE AT THE END OF THIS MONTH, WE ARE GOING TO HAVE $17.8 MILLION IN FUND BALANCE? AFTER THAT 20% RESERVES, $3.3 MILLION, WE WILL HAVE ESTIMATED $.5 MILLION EXTRA ABOVE AND BEYOND THE 20%

>> YOU ARE CORRECT THE ONLY CAVEAT TO THAT IS YOU DO HAVE THE $2.7 MILLION CARRYOVER.

THAT IS REFLECTED IN THAT FUND BALANCE.

>> SURE. >> THAT IS THE ONLY THING THAT IS THE ISSUE. (INAUDIBLE)

>> YEAH. TOTALLY FINE.

I'M TRYING TO UNDERSTAND THIS. BECAUSE AGAIN, WE ARE MAKING DECISIONS ON THIS. SHOULD WE BE AT 20% OR 30%? MAYBE I HAVE TO... IF 1.2 MONTHS IS 10%.

60% IS FIVE MONTHS? I'M SORRY

50% IS SIX MONTHS RESERVE? >> I'M SORRY WE ARE GETTING FEEDBACK FROM THE AUDIENCE.

WATCHING ON-LINE. >> AND THANK YOU FOR WATCHING ON-LINE. WE APPRECIATE THAT.

>> MAYOR, COULD YOU RE-ASK THE QUESTION FOR ME, PLEASE?

>> I WANTED TO VERIFY. WE WERE TALKING ABOUT... YOU KNOW, SHOULD WE BE AT 20% RESERVES? 30%? 40%? YOU ARE SAYING THAT THREE TO SIX MONTH IS WHAT YOU FEEL IS GOOD WHICH I'M A VERY CONSERVATIVE PERSON.

IF YOU WANTED THE SIX MONTHS? >> THAT IS CORRECT.

>> THAT IS 50%. IF YOU WANTED SIX MONTHS WORTH OF EXPENSES, YOU NEED A 50% RESERVE?

>> THAT IS CORRECT. >> OKAY.

ROUGHLY, THAT WOULD BE FOR THIS YEAR FINISHING UP, IF WE HAD $7 MILLION IN RESERVES, THAT WOULD BE ROUGHLY MAYBE $8 MILLION

WOULD BE 50%. >> THAT IS CORRECT.

>> OKAY. WE ARE AT 17.8.

ESTIMATED. >> I SEE $9 MILLION

>> I'M NOT GOING BY PROPOSED BUDGET

>> YEAH THE FISCAL YEAR ESTIMATE, 2022, 20%. THAT NUMBER IS ON THERE FOR YOU.

THAT IS $3.3 MILLION. THAT TELLS YOU THAT HALF OF THAT

IS 10%. >> RIGHT.

40%. $6.6 MILLION.

>> THERE YOU GO >> I WANTED TO VERIFY I WAS READING THAT RIGHT. I DON'T.

>> I KNOW. IT IS A LOT OF NUMBERS.

>> I CAN TELL YOU WHEN WE RAN OUT OF MONEY, THAT WAS THE WORST DAY OF MY LIFE IN GOVERNMENT. HOW LONG WERE WE HERE FOR?

NINE MONTHS? >> ABOUT THAT, YEAH.

>> IT HAD NEVER GOTTEN WORSE THAN THAT

>> WE NEED TO CIRCLE BACK AND HAVE THAT DISCUSSION ABOUT UNRESERVED FUND BALANCE. FOR SURE.

DEFINITELY WE WILL HAVE AN AGENDA ITEM.

>> SO FOR THE COUNCIL'S PERSPECTIVE AND ALSO FOR THE PUBLIC'S BENEFIT, IF YOU JUST MAINTAIN THE 20% CURRENTLY TODAY, AND YOU STILL HAVE FUND BALANCE, THAT IS ACCOUNTED FOR IN THE BUDGET BY BEING IN FUND BALANCE AND THEN YOU CAN COME BACK IN THE FUTURE AND SAY OKAY, BUT WE DON'T WANT TO GO BELOW THIS NUMBER. THAT THEN, IN TURN, IS YOUR STRATEGIC DISCUSSION. FROM THERE FORWARD, WHENEVER YOU BUDGET NEXT TIME, YOU KNOW, OKAY, WE CAN'T DIP BELOW THAT NUMBER, AT MINIMUM. RIGHT? WE WOULD PREFER TO HAVE MORE THAN THAT, IF WE CAN.

MINIMUM, WE DON'T WANT TO GO BELOW THAT NUMBER.

THAT DOESN'T MEAN THAT YOU HAVE TO TRY TO DECIDE TODAY WHILE YOU ARE HAVING YOUR CONVERSATIONS WHAT THAT IS.

YOU CAN CERTAINLY DELAY THAT BECAUSE THE MONEY WILL BE IN THE RESERVES. THEN YOU CAN CHANGE THAT SLIDING

PERCENTAGE AT ANY TIME. >> IFS TO DAY WITH COUNCIL, WE WILL OPEN UP THE PUBLIC HEARING. NO OBJECTIONS.

WE WILL OPEN THE PUBLIC HEARING AT 8:20 P.M

[01:20:03]

ANY RESIDENTS THAT WOULD LIKE TO COME UP AND SPEAK REGARDING, I GUESS, WHAT WE WERE TALKING ABOUT.

THESE TWO ITEMS LOOK VERY SIMILAR.

SO WHAT IS IT THAT THEY CAN SPEAK ABOUT?

ARE WE TALKING THE TAX RATE? >> THE PUBLIC HEARING IS FOR THE TAX RATE. THE PUBLIC HEARING FOR THE

BUDGET IS SEPTEMBER 1. >> ALL RIGHT.

IF ANYBODY WOULD LIKE TO COME UP AND TALK ABOUT THE TAX RATE.

THAT HASN'T BEFORE. OR WOULD LIKE TO ADD, YOU CAN

COME UP NOW. >> PLEASE STATE YOUR NAME.

YOU WILL HAVE THREE MINUTES. >> OKAY.

>> NICOLE CALLED RON. HUTTO RESIDENT SINCE 2006.

WHAT I'M ABOUT TO SAY HAS NOTHING TO DO WITH YOU PERSONALLY, JAMES. WELCOME TO HUTTO.

IN THE HISTORY, THIS COUNCIL HAS NOT DONE A VERY GOOD JOB WITH MANAGING THE CITY MANAGER. WE HAVE SEEN THAT HISTORICALLY, HALF OF YOU, I DON'T KNOW WHERE YOU WERE IN 2019 WHEN THAT WAS GOING ON. BUT SEEING THAT, TALKING RESERVES, IT FRIGHTENS ME THAT YOU ARE SO WILLING TO OPEN THE CHECKBOOK FOR A BRAND NEW EMPLOYEE AFTER WE HAVE JUST RECOVERED FROM THAT FINANCIAL SITUATION.

SO I WOULD IMPLORE YOU TO WORK WITH THE COMP 40 PLAN TO WORK TOGETHER WITH THE CIP TO GET A COMPREHENSIVE PLAN BEFORE YOU BORROW A BUNCH OF MONEY YOU DON'T KNOW WHAT YOU ARE GOING TO DO WITH. THE PARKS HAS MONEY IN THEBACK, BUT IT IS NOT MOVING FORWARD. IT HAS NOTHING TO DO WITH MONEY.

IT HAS TO DO WITH TAKING ACTION AND PLANS.

I WOULD LIKE TO SEE YOU MAKE YOUR DECISIONS BASED ON WHAT'S BEST FOR HUTTO AND TAKE YOUR FEET FEELINGS OUT OF IT AND WHAT YOU WANT. YOU NEED TO BE LISTENING TO THE CITIZENS. SOME OF YOU HAVE SAID THAT YOU ARE WILLING TO COMPROMISE. WELL, FROM WHAT I HAVE SEEN HERE IS THAT THE PEOPLE ON THIS SIDE WANT TAX RELIEF, SO IF YOU ARE COMPROMISING, WHO IS ON THE OTHER SIDE? ARE YOU ADVOCATING FOR STAFF? WHO ARE YOU SPEAKING FOR WHEN YOU SAY PEOPLE WANT THESE ROAD PROJECTS TAKEN KIER OF? WE NEED MAINTENANCE. NOT MAJOR IMPROVEMENTS.

WE WERE STALLED AND NOW THAT WE HAVE THE OPPORTUNITY, WE SHOULD BE GROWING RESPONSIBLY AND SUSTAINABLY.

AND IF YOU ARE MAKING A ONE-YEAR PLAN NOW, YOU DON'T NEED TO BE BORROWING MONEY FOR FIVE YEARS OR FOR A LONGER PLAN.

IF THAT IS SOMETHING YOU WANT TO DO, THEN COMPLETE THAT STRATEGIC PLAN. THAT IS ALL.

THANKS. >> THANK YOU.

>> I SEE NO OTHER RESIDENTS COME UP.

>> WE GOT ONE. >> SORRY.

>> GOOD EVENING. RICK HUDSON.

HUTTO RESIDENT. JUST WANTED TO PUT A LITTLE INFORMATION OUT THERE. AND POSSIBLY GET AN ANSWER.

THERE HAS BEEN A LOT OF TALK ABOUT 14 ROAD PROJECTS.

THERE IS ALSO TEN WASTEWATER PROJECTS AND 16 WATER PROJECTS.

COMING UP. 2022, I GOT THESE NUMBERS, A COUPLE NIGHTS AFGHANISTAN IT WAS PRESENTED TO US.

2022, IT IS A TOTAL OF $4 MILLION.

NOT TOO BAD. SOMETHING WE CAN HANDLE WITH THE RESERVE FUND OR PROBABLY WITH A NO NEW REVENUE RATE.

2023, IT IS $63 MILLION. 2024, $129 MILLION.

2025, $85 MILLION. 2026, $66 MILLION.

WHAT RATE CAN WE ADOPT NOW AND FOR THE NEXT FIVE YEARS TO PAY FOR THAT? THAT IS MY QUESTION.

AND THAT IS THE RATE WE SHOULD BE GOING WITH.

>> THOSE TOTALS ARE WATER AND WASTEWATER?

>> WATER, WASTEWATER? >> THOSE COME OUT OF THE UTILITY

FUND AND NOT THE PROPERTY TAX >> THE CITY STILL PAYS FOR THEM,

YES? >> RIGHT THE PROPERTY TAX RATE DOESN'T HAVE A BEARING ON FUNDING THOSE PROJECTS. THEY COME OUT OF UTILITY RATES

AND UTILITY FUNDS >> CAN YOU EXPLAIN TO ALL OF US HOW EACH EITHER WATER... HOW THE DEBT IS PAID FOR?

>> MY QUESTION IS WHAT RATE WILL ALLOW US TO DO ALL OF THAT?

>> RIGHT. I THINK IT MAY HELP IF YOU HEAR

IT... >> RICK, ARE I HAVE THE TOTALS FOR YOU FOR JUST THE ROAD PROJECTS.

>> YEAH I HAVE THEM, TOO

>> I CAN TAKE OUT FOR COUNCIL CLARITY, WHAT'S COVERED BY THE CO BONDS AND GO BONDS. THE GO BONDS FOR 2023 IS $13 MILLION. 24 IS $28 MILLION.

'25 IS $19 MILLION. $6:00 IS $17 MILLION

>> YES. I HAVE THE SAME NUMBERS.

>> JUST TO CLARIFY. >> SO THAT... WHAT RATE FOR THE

[01:25:03]

TRANSPORTATION, THEN, WHAT RATE WILL ALLOW US TO DO THAT? THAT IS THE RATE WE SHOULD BE DISCUSSING.

>> YOU ARE NOT WORRIED ABOUT THE WATER AND WASTEWATER ANYMORE

>> I UNDERSTAND THAT THE WATER... I'M JUST SAYING THERE IS A LOT OF MONEY THAT NEEDS TO BE DONE IN THE NEXT FIVE YEARS, AND WE HAVEN'T HAD THESE PROJECTS DONE.

WHAT RATE DO WE NEED TO CONSIDER TO GET IT DONE?

>> THANK YOU, SIR. JUST FOR CLARIFICATION, WATER AND WASTEWATER PROJECTS, IF I REMEMBER CORRECTLY, ALL THOSE PROJECTS, WE WERE TOLD THAT THE DEBT WE ARE SAYING WE ARE GOING TO BORROW AT $55 MILLION WILL BE PAID FOR WITH NO RATE INCREASE.

IT IS ALREADY FACTORED IN WITH THE IMPACT FEES.

>> FOR THIS YEAR, YES. FOR THIS FIRST PIECE OF THE DEBT. THAT $55 MILLION WILL NOT MEAN INCREASING THE RATES. WE DID PLAN FOR THE IMPACT FEES TO HELP PAY FOR SOME OF THAT DEBT.

>> ALL RIGHT. ANY OTHER CITIZENS WISH TO SPEAK? OKAY.

WE ARE CLOSED TO PUBLIC HEARING. AT 8:26.

ANY LAST COMMENTS FROM COUNCIL? OR DO WE HAVE ACTION? I GUESS WHAT YOU ARE LOOKING FOR, CITY MANAGER, IS TO SIMPLIFY IT. BLUE, PINK, YELLOW, AND THEN WHAT A TOTAL VOTE... WHAT BOX AND WHAT LINE IN THE BOX IS WHAT

YOU ARE ULTIMATELY LOOKING FOR >> THAT IS CORRECT.

WE HAVE PROVIDED YOU A MENU OF ALL OPTIONS ON THE TABLE.

THAT WAY YOU CAN HAVE YOUR DISCUSSIONS.

ULTIMATELY, YOU GET TO PICK ONE OF THE COLORS.

WHICH IS A PHILOSOPHY ON THE INS.

ONCE YOU DECIDE ON THE PHILOSOPHY, YOU NEED TO PICK ONE OF THE BOX THERE IS. THAT EFFECTIVELY SETS YOUR MNO AND INS RATE. THAT WOULD BE THE MOTION THAT WOULD BE PUT FORWARD TONIGHT FOR APPROVAL

>> SO MAYOR, CAN I MAKE THE... >> SURE.

>> SO I THINK RIGHT NOW WE HAVE A PRETTY CLEAR UNDERSTANDING OR AT LEAST I DO, OF KIND OF WRITE WANT TO BE ON THE INS.

FOR THE MNO, I THINK WE NEED TO HAVE A BUDGET DISCUSSION FIRST.

TO SEE IF WE ARE GOING TO CUT ANYTHING OUT OF THE BUDGET.

SOUND LIKE YOU HAVE A LOT OF QUESTIONS ON THE BUDGET.

WE HAVE SOME... I HAVE SOME ADDITIONAL QUESTIONS ON THE BUDGET. IF WE ARE GOING TO CUT OUT OF THE BUDGET, THAT IS GOING TO AFFECT WHERE I LAND, WHICH ROW

I'M GOING TO LAND ON FOR THE MNO >> I DO LIKE THAT BUT NOT THE PINK, BLUE, OR YELLOW COLOR.

THAT WE CAN DECIDE NOW. >> OH, WELL... I WOULD SAY THIS.

YELLOW IS... I UNDERSTAND THAT SEEMS LIKE MORE PEOPLE WERE INTO THE LEVEL DEBT SERVICE RATE THE REASON THAT I BROUGHT MYSELF TO THE MINIMUM RATE IS BECAUSE I ADDED TWO CENTS TO MNO.

IT WAS SINCE MNO CAN ONLY GROW 3.5% A YEAR, I FELT LIKE IF WE HIT WITH THE BOX, IT IS NOT LIKE THAT WE ARE POTENTIALLY HURTING OURSELF EXPONENTIALLY. TEN YEARS AT 3.5%.

OF COURSE, WE ARE TALKING A HUNDREDTH OR THOUSANDTH OF A CENT TO START OFF WITH. AT THE END OF THE DAY...

>> IF YOU ARE NEVER WILLING TO ADOPT ANYTHING OTHER THAN NO NEW REVENUE, THEN IT DOESN'T MATTER. IT IS NOT GOING TO GROW.

YOU DON'T WANT TO GIVE UP THAT MONEY FOREVER.

WHAT IS THE REASON TO DO THE MINIMUM RATE? THE WHOLE POINT IS TO PROTECT THE MNO.

IT IS A BIG DROP OF 3.5. AND IT IS FOREVER GONE.

IF YOU ARE NEVER GOING TO ADOPT ANYTHING WITH NO NEW RATE WITH NO DISCUSSION, THEN WHAT... I WOULD SAY PAY OFF THE DEBT AS QUICK AS POSSIBLE. YOU ARE NEVER GOING TO LET...

YOU ARE NEVER GOING TO... BECAUSE TIME VALUE OF MONEY DOES MATTER. I MEAN, HISTORICALLY, FOR THE LAST 40 YEARS, WE HAVE BEEN AT 2% OR LESS INFLATION.

NO NEW REVENUE, 100%, ALWAYS MAKES SENSE AND YOU SHOULD ALWAYS BE ABLE TO DO IT, IN MY OPINION, WHEN YOU ARE AT A SUB-2% INFLATION RATE FOR THE, FOR THE GOVERNMENT.

WE ARE AT, WHAT, 8.5 THIS YEAR? IF WE GO INTO A MULTI-YEAR, MULTI-INFLATION RATE, THE VALUE OF THE DOLLAR, IT IS NOT A NO NEW REVENUE RATE. NO NEW REVENUE ISN'T TAKING INTO ACCOUNT INFLATION. WHAT YOU CAN BUY FOR THAT DOLLAR SO THAT IS WHY THE GOVERNMENT, THE STATE OF TEXAS PUT IN THAT YOU COULD DO UP TO 3.5 WITHOUT GOING BACK TO THE VOTERS.

THE CITY NEEDED TO GROW THEIR REVENUE, THEY COULD GROW GREATER THAN THE TYPICAL US HISTORICAL 2% RATE OF THE UNITED STATES, SO YOU COULD INCREASE REVENUES WITHOUT HAVING TO GO BACK FOR A VOTE ELECTION. I'M NOT SAYING THAT IS WHAT WE DO I'M JUST EXPLAINING WHY THE NUMBER IS WHAT IT IS. SO, YOU KNOW, IF YOU ARE SAYINGE RATE, WELL, YOU KNOW, WHEN I WAS A IN HIGH SCHOOL, I COULD BUY A

[01:30:02]

TACO AT TACO BELL FOR 29 CENTS. GOOD LUCK WITH THAT NOW.

YOU CAN'T BUY A TACO OR WHATEVER YOU NEED TO BUY FOR A CITY, IT WON'T WORK. YOU KNOW, IT WORKS... AND HUTTO HAS WORKED BECAUSE WE HAVE HAD RAPID GROWTH TO OFF-SET NOT HAVING... AND WE HAVE BEEN LESS THAN 2% AND DURING COVID, WE HAD NEGATIVE... WE HAD DEFLATION. RIGHT? THAT IS FINE AS LONG AS WE STAY THERE.

SO I MEAN, IF YOU... YOU KNOW, WHAT I'M SAYING IS, WE GO FOUR YEARS OF 8% INFLATION A YEAR. NO NEW REVENUE RATE IS NOT GOING TO WORK. THEN THAT WOULD BE A HUGE REDUCTION IN WHAT YOU CAN BUY IN THE CITY.

THAT SUCKS FOR EVERYBODY. THAT IS WHY THE FED IS RAISING RATES LIKE THEY ARE. THEY ARE TRYING TO STOP INFLATION. I HOPE THEY ARE SUCCESSFUL.

LIKE I SAID, I'M NOT ARGUING FOR TODAY.

I TOLD YOU WHERE I THOUGHT WE HAD TO BE.

YOU KNOW, I'M JUST... I THINK HAVING THE ABILITY TO HAVE DEBT BE PAID DOWN QUICKER IS A BETTER THING.

THAT IS WHY I'M MORE ON THE PINK SIDE THAN THE YELLOW.

I DO GET, YOU KNOW, PROTECTING THE MNO.

I MEAN, IF YOU SAID IT IS 29 AND THEN YOU NEVER WANT TO CHANGE IT, YOU ARE NOT PROTECTING THE MNO.

YOU ARE LETTING IT GO EVERY YEAR.

>> THERE IS ONE THING I DON'T THINK WE ARE UNDERSTANDING.

YOU CAN ADOPT NO NEW REVENUE EVERY YEAR AND GROW YOUR MNO.

TO SAY THAT YOU SET THE RATE AT 29 CENTS AND IF YOU ARE HERE FOR THE NEXT TEN YEARS, THAT IS JUST WRONG.

THAT IS NOT HOW THE SYSTEM WORKS.

IT IS A COMBINATION. IF YOU HAVE MORE DEBT AND HOWEVER YOU GO, YOU RAISE YOUR INS, YOU SPEAK IN ABSOLUTE TERMS. AND 29 CENTS IS NEVER GOING TO CHANGE. INFLATION AT 8%.

THAT STUFF SOUNDS GREAT. THIS IS NOT... THIS IS, LIKE, AN EIGHT-PAGE FORM. I SAID IT LAST WEEK.

EVERYBODY ON THE COUNCIL SHOULD FILL OUT THIS FORM BY HAND AND SEE WHAT YOUR DECISIONS ARE DOING TO NEXT YEAR.

EVERYBODY KEEPS SAYING WE HAVE TO THINK FORWARD.

THINK FORWARD. I'LL BE HONEST.

THAT IS WHAT DAN AND I HAVE BEEN PUSHING.

IF YOU ARE NOT THINKING FORWARD, ANY REDUCTION IN LAND VALUES THIS YEAR ARE GOING TO NEGATIVELY AFFECT HOMESTEADED PROPERTIES PROPERTIES NEXT YEAR. IT WILL HAPPEN.

THE ONLY WAY A HOMESTEAD PERSON DOES NOT GET NEGATIVELY AFFECTED NEXT YEAR IS IF THE VALUE OF PROPERTY INCREASES 10%.

ANY YEAR IT GOES BELOW 10%, HOMESTEAD PEOPLE WILL BE NEGATIVELY IMPACTED AND IN THIS SCENARIO, NON-HOMESTEADED PEOPLE

GET THE TAX CUT. >> ONLY UNTIL THE HOMESTEADED PERSON'S VALUE REACHES THE MARKET RATE.

AND THAT IS NOT TRUE ANYMORE. >> MINE IS 40% TO 50% HIGHER.

IT WOULD TAKE SEVERAL YEARS FOR ME TO GET TO THE POINT WHERE...

>> RIGHT. >> IN THIS SNARE JOE, IF FROM THE... IN THIS SCENARIO, IF PROPERTY LEVELS STAY LEVEL, ANYBODY WHO OWNS A HOUSE CAN EXPECT A TAX INCREASE ON THEIR

BILL. >> 10%.

>> NOT 10%. I DON'T KNOW WHAT IT IS.

YOU HAVE TO FILL OUT THE THING. YOU CAN'T JUST THROW OUT NUMBERS. YOU WOULD HAVE A TAX BILL INCREASE FOR THREE STRAIGHT YEARS.

THE NON-HOMESTEADED PEOPLE WOULD GET A TAX BILL DECREASED FOR THREE STRAIGHT YEARS. THAT IS WHAT I'M SUGGESTING.

WE ARE DOING ALL THESE THINGS. THE THING ABOUT NO NEW REVENUE, NEXT YEAR, YOU CAN ALMOST GUARANTEE OUR PRICES WERE GOING TO DROP 10%. IF IT CONTINUES THAT WAY, YOU CAN GUARANTEE THAT A HOMESTEADED PERSON WILL SEE AN INCREASE NEXT YEAR IN THE TAX BILL. AND NON-HOMESTEADED PERSON GETS THE DECREASE. IF YOU TAKE ADVANTAGE OF THE SYSTEM, THE WAY IT IS FOR ONE YEAR, THIS ONE YEAR ABNORMAL SYSTEM, AND YOU START GOING, WELL, WE ARE GOING TO GET A DECREASE, IT IS JUST A BIGGER INCREASE NEXT YEAR.

AND SO WE ALL, BUT BY NEXT YEAR, ... BY NEXT WEEK, PLEASE, GO THROUGH THE FORM. FILL IT OUT.

THE 29 CENTS. I DON'T CARE IF WE DO THE YELLOW OR NOT. I'M TRYING TO GIVE JAMES TWO MORE CENTS. IT COULD BE 27 THIS YEAR.

IF WE ADOPT THE PINK NO NEW REVENUE AND THEN BASED ON NEXT YEAR, WITH ALL THE COMPUTATION THAT IS GO INTO THIS EIGHT-PAGE THING, HE MAY SEE AN MNO THAT HE IS TRYING TO GROW AT 3.5%.

HE MAY COME BACK AND PROBABLY SAY FOLKS, WE CAN ONLY GROW AT 3.5%. AND THE REASON YOU NEED TO BORROW MONEY THIS YEAR IS BECAUSE OTHERWISE, THE RATE WILL DROP TOO FAST. SO NEXT YEAR, I ANTICIPATE THE CITY MANAGER GOING, YOU NEED TO BORROW MONEY.

WHETHER YOU NEED IT OR NOT. BECAUSE WE HAVE TO KEEP THE RATES, AGAIN... IF YOU GUYS WANT A STEADY DECREASE.

EVEN THOUGH IN DOING SO, THE HOMESTEADED PERSON WILL STILL GET AN INCREASE IN TAXES. BECAUSE IT IS AN ABNORMAL YEAR.

I MEAN, THIS IS THE FIRST YEAR, I THINK IN RECORDED TEXAS HISTORY, THAT LARRY CAN REMEMBER , AND HE HAS BEEN DOING THIS 20-SOMETHING YEARS. THAT YOU HAVE HAD THIS DIKER HAVE GENT THING HAPPEN. ... DIKER HAVE GENT EVERYBODY

[01:35:05]

SAID INFLATION IS GOING TO HAPPEN.

NOPE, WE GOT IT FIGURED OUT. IT BLEW UP.

WHO KNOWS WHAT IS GOING TO HAPPEN NEXT YEAR? WE DON'T KNOW. I DO LIKE YOUR IDEA, MAYOR PRO TEM. GO THROUGH THE BUDGET, COME BACK , AND THEN WE WILL BE ABLE TO SAY, DO WE NEED MONEY? DO WE NOT? WHO KNOWS? I MAY FIND OUT WE NEED TO DO THE VOTER-APPROVED RATE.

I DON'T THINK IT WILL HAPPEN. YOU NEVER KNOW.

WE WILL GO THROUGH THE BUDGET. IS THERE ANY OBJECTIONS? WE WILL COME BACK AND DETERMINE WHAT RATE WE WANT TO HAVE?

[5.2. Consideration and possible action on Ordinance No. O-2022-045 approving and adopting a budget for the City of Hutto for the Fiscal Year beginning October 1, 2022 and ending September 30, 2023. (Angie Rios)]

>> ALL RIGHT. CONSIDERATION POSSIBLE ACTION ON ORDINANCE NUMBER 0-22-045. APPROVING AND ADOPTING A BUDGET FOR THE CITY OF HUTTO FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2022. ENDING SEPTEMBER 30, 2023.

>> HOW COUNCIL WANTS TO HANDLE THE BUDGET.

IN A DISCUSSION. ARE THERE ANY SUGGESTIONS?

>> I PERSONALLY THINK WE HAVE LOOKED AT IT SINCE JULY.

I BELIEVE IT WAS WHEN WE GOT THE FIRST ROUGH DRAFT.

I THINK IF THERE IS STILL EXISTING OR OUTSTANDING QUESTIONS THAT HAVEN'T BEEN ASKED, THEN BY ALL MEANS, WE SHOULD, YOU KNOW, GO THROUGH THOSE SPECIFIC QUESTIONS.

I KNOW WE HAVE ALL BEEN ASKED TO GIVE FEEDBACK.

ASK QUESTIONS OVER THE LAST TWO AND A HALF MONTHS.

SO HOPEFULLY, WE ALL USED OUR TIME WISELY AND DID OUR HOMEWORK BEFORE TONIGHT. SO IF THERE ARE ANY OUTSTANDING QUESTIONS, PERSONALLY, I THINK THAT THOSE SHOULD BE DIRECTED.

THAT IS JUST MY OPINION. THAT WE DON'T NEED TO GO LINE BY LINE. WE HAVE HAD SO MANY DRAFTS AND AMPLE OPPORTUNITY TO ASK QUESTIONS.

A LOT OF THOSE HAVE ALREADY BEEN ASKED THROUGHOUT THIS PROCESS OVER THE LAST TWO MONTH. THAT IS JUST MY PERSONAL TAKE ON IT. BUT I MEAN...

>> MAYOR, COUNCIL, ONE OF THE THINGS THAT WAS PRESENTED TO YOU BEHIND THE TAX RATE IS WHAT WE ARE CALLING THE ENHANCEMENTS.