Apr 17, 2024 City Council B Session

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>> MAYOR NIRENBERG: ALL RIGHT. GOOD AFTERNOON, EARN.

I BELIEVE WE HAVE A QUORUM. SO THE TIME IS 2:03 P.M.

ON THE 17TH DAY OF APRIL. ARE WE BROADCASTING? TIME IS 2:03 P.M. ON APRIL 17, 2024. WE'LL CALL OUR B SESSION TO ORDER. MADAM CLERK, COULD YOU READ THE ROLL?

>> CLERK: RIGHT. TODAY WE'RE GETTING A SUBSTANTIAL FINANCIAL UPDATE WHICH WILL BE A GOOD PRELUDE TO OUR GOAL-SETTING SESSION.

WE DO HAVE AN EXEC SESSION AFTER THIS TODAY AS WELL.

I'LL TURN IT OVER TO YOU, ERIK. >> WALSH: THANK YOU, MAYOR. GOOD AFTERNOON, MAYOR AND COUNCIL.

YES, TODAY IS A PRESENTATION ON A COUPLE THINGS, OUR SECOND QUARTER FINANCIAL UPDATE FOR THE YEAR, AS WELL AS OUR FIVE-YEAR FINANCIAL FORECAST FOR THE YEARS FY 2025 THROUGH 2029 FOR THE GENERAL FUND AND SOME OF OUR RESTRICTED FUNDS WE'LL GO THROUGH. LET ME TALK ABOUT SOME OF THE KEY TAKEAWAYS IN BOTH THOSE AREAS. WE'RE HALFWAY THROUGH THE FISCAL YEAR, AND YOU'LL HEAR FROM JUSTINA THAT GENERALLY OUR PROPERTY AND SALES TAX REVENUE'S A LITTLE BIT DOWN BELOW BUDGET.

OUR CPS REVENUE IS SLIGHTLY HIGHER. AFTER SIX MONTHS, WE'RE -- OUR REVENUE IS ABOUT 1.75% ABOVE OUR REVENUE BUDGET, SO ALMOST 2%, AND WE ARE SLIGHTLY OVERBUDGET. SO THAT'S JUST LIKE WHERE WE'RE STANDING IN TERMS OF THE GENERAL FUND SO FAR AFTER THE FIRST SIX MONTHS. THE OTHER ASPECT OF THE SIX PLUS SIX IS WE'RE GOING TO WALK THROUGH A RECOMMENDATION OF A NEW REVENUE POLICY TO DIRECT ONE-TIME CPS REVENUE THAT WE ARE ANTICIPATING NOW BASED ON THE ACQUISITION OF ADDITIONAL POWER CAPACITY THAT CPS HAS UNDERGONE THAT -- THAT WE DIRECT THAT ONE-TIME CPS REVENUE TO MITIGATING POTENTIAL FUTURE RATE INCREASES. AND SO BEN IS GOING TO WALK THROUGH THAT ELEMENT OF THAT POLICY. THE SECOND PART, THE KEY TAKEAWAYS OF THE SECOND PART OF THE PRESENTATION OF OUR GENERAL FUND FORECAST, THE FORECAST IS NOT OUR BUDGET. THE FORECAST IS ONLY AN EARLY LOOK AT THE CITY'S FINANCIAL POSITION OF WHAT WE KNOW NOW, WHAT WE'RE PROJECTING FOR BOTH OUR GENERAL FUND AS WELL AS SOME OF OUR RESTRICTED FUNDS.

AND IT'S BASED ON A SET OF ASSUMPTIONS THAT WE MAKE, SOME OF IT ECONOMIC, SOME OF IT BASED ON ACTIVITY AND COMMITMENTS THAT WE KNOW WE HAVE OVER THE NEXT FIVE YEARS, BUT -- BUT I WANTED TO PROVIDE THE CONTEXT -- A LITTLE BIT MORE CONTEXT TO THE COUNCIL BEFORE WE GET INTO THE FORECAST IN THIS AREA IS THAT SINCE 2019, OWR REVENUE -- I'M TALKING ABOUT THE GENERAL FUND, OUR REVENUE HAS GROWN AT 24.8% SINCE 2019. OUR EXPENDITURE GROWTH HAS BEEN 27%, SO WE ARE A LITTLE BIT MISALIGNED FROM THAT STANDPOINT. NOW, A LOT HAS HAPPENED SINCE 2019, AND JUST THE RECAP FOR YOU AND ANYBODY MAYBE WATCHING, 2020 AND 2021, FOR THOSE OF YOU THAT WERE ON THE COUNCIL WILL REMEMBER, THOSE WERE PRETTY DRASTIC YEARS WHERE WE MADE MASSIVE CUTS TO THIS ORGANIZATION. WE HAD TO. 2022, 2023, AND I WOULD EVEN ARGUE 2024, WAS ABOUT REBUILDING DEPARTMENTAL BUDGETS, REINVESTING AND REPRIORITIZING IN AREAS THAT THE COUNCIL SAID TO INVEST IN. AND SO WE WENT THROUGH A PERIOD OF CONTRACTION OUT OF NEED, AND HAVE BEEN BACK ON A ROAD OF EXPANDING.

GIGIVEN WHERE WE THINK WE ARE SO FAR THIS YEAR AND WHAT WE'RE PROJECTING, YOU KNOW, WE'RE GOING TO NEED TO ALIGN OUR REVENUES AND EXPENSES. AND YOU'LL SEE WHY IN THE PRESENTATION.

THE FORECAST FOR FISCAL YEAR '25 AND '26 RELY PRETTY HEAVILY, ESPECIALLY '25, ON OUR TWO-YEAR BUDGET RESERVE, WHICH IS WHY WE HAVE A

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BUT -- BUT STARTING TO MAKE -- STARTING TO REALIZE THAT THERE'S AN ALIGNMENT THAT NEEDS TO HAPPEN. AND AS WE DO IT INCREMENTALLY, THAT HELPS SOLVE WHERE WE SEE POPO 10 SHALL DEFICITS IN '27, '28 AND '29. IT'S STRICTLY AN EARLY INDICATOR ON HOW WE MANAGE THAT. THERE'S GOING TO BE A LOT MORE CONVERSATION ABOUT THIS AS WE GO THROUGHOUT THE SUMMER, I'M SURE, FROM OUR STANDPOINT.

THE LAST THING, AND IT'S REALLY INDICATIVE OF WHAT I JUST EXPLAINED, WHAT HAPPENED SINCE 2019, SINCE 2020, WE'RE GOING -- WE'RE REINSTITUTING -- THIS SUMMER, ACTUALLY, IT'SARD BEEN REINSTITUTED, COMPREHENSIVE BUDGET REVIEWS OF DEPARTMENTS. AND WHAT THOSE ARE -- WE USED TO DO THEM PRIOR TO COVID. I PUT ALL THAT ON HOLD DURING 2020 AND 2021 BECAUSE, FRANKLY, WE JUST NEEDED THE CUT.

AND THEN AS WE'VE BUILT BUDGETS BACK UP IN THE DEPARTMENTS AND IN THE FOCUS AREAS THAT THE CITY'S HAD, BUT -- BUT WHAT I LOOK AT WHEN I SEE THE PROJECTIONS FOR REVENUE AND THE REALITY, IS THAT IT'S ALMOST WHAT I WOULD TERM A BACK-TO-NORMAL IN 2019. AND BACK-TO-NORMAL ALSO MEANS THAT WE'RE TOO BIG OF AN ORGANIZATION NOT TO ANNUALLY GO THROUGH THAT EXERCISE TO FIGURE OUT HOW WE CAN POTENTIALLY CONSOLIDATE, REALLOCATE, REDUCE, REDIRECT FUNDING IN AREAS AS ANY OTHER LARGE ORGANIZATION SHOULD DO. AND SO THAT STARTED, AND WE ARE GOING TO BE DOING THAT PRETTY INTENSIVE WORK OVER THE SUMMER AND WE'LL HAVE THAT INCORPORATED WITHIN THE PROPOSED BUDGET. BUT THERE'S A LOT OF WORK TO DO BETWEEN NOW AND THEN. SO HIGH LEVEL, THOSE ARE THE BIG TAKEAWAYS OF TODAY'S PRESENTATION. WE HAVE OUR GOAL-SETTING SESSION TOMORROW. WE HAVE AN AGENDA. I KIND OF HELD ONTO IT AND WAITED TO SEE IF THERE WAS ANYTHING THAT CAME OUT OF TODAY'S CONVERSATION THAT WE NEEDED TO MAKE ANY LAST-MINUTE ADJUSTMENTS BUT AS SOON AS THE B SESSION'S OVER, WE'LL GET THE AGENDA OUT TO YOU

GUYS. JUSTINA? >> TATE: THANK YOU.

GOOD AFTERNOON, MAYOR AND CITY COUNCIL. MY NAME'S JUSTINA TATE.

I'M THE BUDGET DIRECTOR FOR THE CITY OF SAN ANTONIO.

OUR PRESENTATION TODAY WILL FOCUS ON THE FISCAL YEAR 2024 SIX PLUS SIX FINANCIAL REPORT AND THE FIVE-YEAR FINANCIAL FORECAST.

THE SIX PLUS SIX FINANCIAL REPORT IS A SECOND QUARTER FINANCIAL STATUS REPORT, AS WELL AS PROJECTIONS FOR EXPENSES AND REVENUES FOR 2024.

THE FIVE-YEAR FINANCIAL FORECAST WILL INCLUDE THE GENERAL FUND, SOLID WASTE, HOTEL OCCUPANCY TAX, DEVELOPMENT SERVICES AND -- AND DEVELOPMENT SERVICES. AND FINALLY, WE WILL GO OVER THE NEXT STEPS IN OUR BUDGET PROCESS. BUT BEFORE I GET INTO THE POWERPOINT PRESENTATION, I WANTED TO DRAW YOUR ATTENTION TO THE BINDERS THAT ARE IN FRONT OF YOU. THIS INCLUDES A COPY OF THIS PRESENTATION.

THE FULL SIX PLUS SIX FINANCIAL REPORT, THE MARCH STATUS OF OUR BUDGET INITIATIVES FOR 2024, THE 24/7 SECOND QUARTER PERFORMANCE REPORT AND FINALLY THE FULL DOCUMENT FOR THE FIVE-YEAR FINANCIAL FORECAST. SO MOVING ON TO OUR SECOND QUARTER REPORT, THE SECOND QUARTER REPORT PROVIDES A FINANCIAL UPDATE TO CITY COUNCIL.

IT REPRESENTS UNAUDITED ACTUALS FROM OCTOBER TO MARCH AND COMPARES THESE RESULTS TO OUR 2024 PLAN. IN THIS PRESENTATION, WE WILL HIGHLIGHT THE GENERAL FUND AS WELL AS SELECTED RESTRICTED FUNDS. NOW, THE REPORT THAT IS INCLUDED IN YOUR BINDER, IT WILL BE AVAILABLE ONLINE, INCLUDES OTHER RESTRICTED FUNDS AS WELL. SO THIS NEXT SLIDE HIGHLIGHTS -- OR ILLUSTRATES SOME OF OUR HIGHLIGHTS FROM THE SECOND QUARTER.

OUR GENERAL FUND RESULTS FOR THE SECOND QUARTER ARE FAVORABLE.

PROPERTY TAX AND SALES TAX ARE SLIGHTLY BELOW BUDGET; HOWEVER, OUR REVENUES FROM CPS AND INTEREST EARNINGS CONTINUE -- ARE OUTPERFORMING THE BUDGET. CPS REVENUES ARE SLIGHTLY HIGHER, DUE MAINLY TO OUR OFFSYSTEMS SALES. FOR OUR RESTRICTED FUNDS, HOTEL OCCUPANCY TAX, SOLID WASTE AND DEVELOPMENT SERVICES ARE PERFORMING WITHIN BUDGET, AND OUR AIRPORT REVENUES ARE OUTPACING OUR REVENUE PROJECTIONS. SO I'LL QUICKLY GO OVER OUR TOTAL 2024 ADOPTED BUDGET. THE TOTAL 2024 ADOPTED BUDGET IS $3.7 BILLION,

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THE GENERAL FUND PROVIDES FOR THE CITY'S CORE SERVICES TO INCLUDE PUBLIC SAFETY, INFRASTRUCTURE, PARK MAINTENANCE AND ANIMAL CARE SERVICES. NOW, THIS NEXT SLIDE PROVIDES SOME MORE DETAILS ABOUT OUR GENERAL FUND. THE GENERAL FUND IS FUNDED THROUGH FOUR MAIN REVENUE SOURCES. THE FIRST -- AUDIO] -- FOLLOWED BY CPS BUDGETED AT $421 MILLION.

AS A REMINDER, THE CITY RECEIVES 14% OF ALL CPS GAS AND ELECTRIC GROSS REVENUES AS A RETURN ON INVESTMENT AND A PAYMENT IN LIEU OF TAXES.

OUR NEXT LARGEST REVENUE SOURCE IS OUR SALES TAX, BUDGETED AT $412 MILLION. THE FINAL COMPONENT OF OUR OTHER REVENUES IS OUR OTHER RESOURCES. THIS INCLUDES REVENUES SUCH AS OUR EM S-TRANS PORT FEES, TELECOMMUNICATION AND USER FEES.

NOW, ALL THESE REVENUES COMBINED FUND THE BASIC SERVICES PROVIDED BE I THE CITY. AS YOU CAN SEE FROM THE GRAPH, PUBLIC SAFETY IS ABOUT 60% OF THE GENERAL FUND. WE ALSO FUND STREETS AND INFRASTRUCTURE AND PARKS. THE REMAINING FUNDS SERVICES SUCH AS LIBRARIES, ANIMAL CARE SERVICES AND CODE ENFORCEMENT. NOW, I'LL START WITH OUR GENERAL FUND SECOND QUARTER PERFORMANCE. THROUGH THE SECOND QUARTER, REVENUES ARE AHEAD OF BUDGET BY $17.3 MILLION. THIS IS A COMBINATION OF BETTER THAN ANTICIPATED REVENUES FROM CPS AND INTEREST EARNINGS.

ALL SAID, BY LOWER THAN ANTICIPATED REVENUES FROM OUR PROPERTY TAX AND OUR SALES TAX. FOR PROPERTY TAX, WE ARE UNDERBUDGET AS MORE RESIDENTS HAVE APPLIED FOR EXEMPTIONS AND VALUES HAVE DECREASED FROM APPEALS AND LITIGATIONS. FOR SALES TAX, OUR COLLECTIONS FOR THE FIRST SIX MONTHS ARE AHEAD OF LAST YEAR'S COLLECTIONS; HOWEVER, AS YOU WILL SEE IN THE NEXT SLIDE, WE HAVE MISSED OUR BUDGETED AMOUNT FOR FIVE OF THE LAST SIX MONTHS. WITH CPS, WE ARE AHEAD OF BUDGET FOR THE SECOND QUARTER. AND THIS -- BY ABOUT $18.5 MILLION, AND THIS IS MAINLY DUE TO OFFSYSTEM SALES. WITH REGARDS TO OTHER REVENUES, THIS IS DUE TO OUR INTEREST EARNINGS, WHICH IS ABOUT $6 MILLION HIGHER THAN WHAT WE HAD ANTICIPATED. WE HAD PROJECTED INTEREST RATE FOR THE FIRST SIX MONTHS OF ABOUT 3.25%, HOWEVER WE HAVE REALIZED INTEREST RATES OF ABOUT 4.4%. IN TERMS OF EXPENSES, WE'RE ABOUT $850,000 BELOW BUDGET FOR THE SECOND QUARTER.

SO LET ME GO INTO MORE DETAIL ABOUT OUR SALES TAX.

BUT FIRST, LET ME ORIENT YOU TO THE SLIDE. ON YOUR LEFT, THE GRAPH ON YOUR LEFT, ILLUSTRATES OUR SALES TAX COLLECTIONS PERCENT YEAR OVER YEAR.

IN 2019, YOU CAN SEE OUR GROWTH FOR SALES TAX WAS ABOUT 5.1%.

AND IN 2020, THAT DECLINED, WE ACTUALLY RECEIVED LESS REVENUES MY ABOUT 1.9% AS YOU COMPARE THEM TO 2020, AS THE PANDEMIC HIT.

HOWEVER, YOU CAN SEE FROM OUR -- FROM THE GRAPH THAT WE QUICKLY RECOVERED AND WE SAW A GROWTH OF 12.5% AND 14.2% IN '21 AND '22.

NOW, THAT REVENUE GROWTH HAS SLOWED, AND IN 2023, OUR REVENUE GROWTH WAS 2.6%. THE TABLE ON YOUR RIGHT ILLUSTRATES OUR ACTUAL SALES TAX COLLECTIONS FROM OCTOBER THROUGH MARCH.

AND AS THEY COMPARE TO OUR 2023 ACTUALS AND THE 2024 BUDGET.

FOR 2023, WE'RE ABOUT $3.2 MILLION AHEAD OF WHERE WE WERE LAST YEAR AT THIS TIME, OR 1.6%. BUT AS I MENTIONED, WE ARE BELOW OUR BUDGET BY ABOUT $5 MILLION, OR 2.5% FOR SALES TAX, AND WE'VE MISSED FIVE OF THE LAST SIX MONTHS. NEXT WE WANT TO TAKE SOME TIME TO DISCUSS CPS

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AS COMPARED TO 2023, WE ARE AHEAD OF LAST YEAR'S COLLECTIONS BY ABOUT 9.1 MILLION, OR 4.6%. WE ARE AHEAD OF THE BUDGET BY 18.5 MILLION, OR 9.8%. I'LL TAKE THE OPPORTUNITY NOW TO HAND THIS OVER TO BEN GORZELL, OUR CHIEF FINANCIAL OFFICER, TO DISCUSS CPS IN MORE

DETAIL. >> GORZELL: THANK YOU, JUSTINA.

GOOD AFTERNOON, MAYOR AND COUNCILMEMBERS. SO IN THIS PART OF THE PRESENTATION, I'LL BE COVERING A PROPOSED FINANCIAL POLICY ON THE CITY'S PAYMENT FROM CPS ENERGY, AND WE HAVE BUILT THAT POLICY INTO THE FIVE-YEAR FINANCIAL FORECAST THAT JUSTINA WILL COVER IN JUST A FEW MINUTES. THE PROPOSED POLICY IS RELATED TO THE CITY'S PAYMENT FROM CPS ENERGY FROM OFFSYSTEM SALES. YOU RECALL THAT OFFSYSTEM SALES ARE ESSENTIALLY REVENUE GENERATED FROM THE SALE OF EXCESS POWER INTO THE ERCOT MARKET. BEFORE I DESCRIBE THE PROPOSED POLICY, I'M GOING TO TAKE A LITTLE BIT OF TIME TO GO ORE SOME BACKGROUND ON OUR CITY PAYMENT FROM OFFSYSTEM SALES AND SOME OF THE FACTORS THAT WE CONSIDERED AS WE PUT THIS PROPOSED POLICY TOGETHER.

SO ON SLIDE 11 IS OUR HISTORICAL CITY PAYMENT FROM CPS ENERGY'S OFFSYSTEM SALES GOING BACK TO MAY OF 2008. YOU CAN SEE HERE ON THE GRAPH THAT TYPICALLY, THAT RANGE OF MONTHLY CITY PAYMENT FROM OFFSYSTEM SALES IS BETWEEN 0 AND MAYBE TWO AND A HALF MILLION DOLLARS. YOU'LL SEE A COUPLE OF SPIKES, AS WE GO TO THE RIGHT THAT TYPICALLY HAPPENED IN SUMMER MONTHS.

THEY STARTED IN JULY OF 2018 WITH $6.3 MILLION. AGAIN, IN 2019, IN AUGUST, OF 10. JULY OF '23 AND AUGUST OF '23 WITH SIGNIFICANT INCREASES AS WELL. THE SPIKES IN THE SUMMER ARE TYPICALLY GOING TO BE RELATED TO WHAT'S REFERRED TO AS SCARCITY PRICING IN THE ERCOT MARKET. THAT ESSENTIALLY IS WHEN YOU HAVE CONDITIONS IN THE ERCOT MARKET WHERE YOU HAVE PLANNED RESOURCES THAT CAN'T MEET THE GENERATION DEMAND OR THE DEMAND FOR POWER AT THAT POINT IN TIME.

IT COULD HAPPEN FOR A VARIETY OF REASONS. YOU COULD HAVE GENERATION PLANTS THAT -- A GAP. YOU MAY RECALL LAST YEAR ACROSS THE SUMMER THERE WERE A COUPLE OF CONSERVATION NOTICES THAT CAME OUT FROM ERCOT, A LOT OF THAT HAD TO DO WITH THERE WASN'T AS MUCH EXPECTED WIND POWER COMING OUT OF WEST TEXAS, SO THERE WAS A GAP. VERY HOT DAYS, SO THERE WAS A CALL FOR CONSERVATION AND UTILITIES TO DISPATCH AS MUCH GENERATION AS THEY COULD. LOOKING AT THE FAR RIGHT, YOU CAN SEE LAST SUMMER, AND I KNOW WE ALL REMEMBER LAST SUMMER AND AUGUST, WE GOT $16.9 MILLION IN ONE MONTH OF CITY PAYMENT FROM OFFSYSTEM SALES. IF YOU FOLLOW THE TREND FROM AUGUST, YOU CAN SEE, AND IT'S A LITTLE HARD TO TELL ON THE GRAPH, BUT OCTOBER, NOVEMBER, DECEMBER, JANUARY HAVE ALL BEEN TRENDING A LITTLE BIT HIGHER.

AND THEN I'LL POINT OUT JANUARY OF THIS YEAR WAS AT $6.1 MILLION.

WE DON'T TYPICALLY SEE THAT IN THE WINTER. YOU WOULD TYPICALLY SEE THAT OFFSYSTEM SALES NUMBER JUMPING IN THE SUMMER, BUT WE SAW THAT IN JANUARY, SO THE CONDITIONS WERE PRESENT THAT THERE WAS A GAP THERE, THE PRICING WAS SUCH THAT CPS WAS ABLE TO SELL POWER AND GENERATE, IN OUR CASE, A CITY PAYMENT OF $6.1 MILLION. WHEN YOU LOOK AT THE ERCOT MARKET, THE OUTLOOK IS THAT THAT MARKET WILL CONTINUE TO BE TIGHT OVER THE NEXT SEVERAL YEARS, PROBABLY THREE TO FIVE YEARS.

WHEN WE LOOK AT CPS'S EXISTING GENERATION FLEET, THAT'S WHAT GENERATED AND WAS ABLE TO GENERATE THIS -- THESE OFFSYSTEM SALES REVENUES AND THEN, OF COURSE, CITY PAYMENT ON THAT. A FEW WEEKS AGO, CPS ENERGY ANNOUNCED THAT THEY HAD ACQUIRED OR IN THE PROCESS OF ACQUIRING SEVERAL NATURAL GAS PLANTS, SO THEY WILL HAVE MORE GENERATION CAPACITY AS WE GO INTO THIS SUMMER. SO THE TAKEAWAY FROM THE SLIDE IS THAT THERE'S GOING TO BE AN OPPORTUNITY FOR MORE OFFSYSTEM SALES REVENUES, BOTH BECAUSE OF THE FACT THAT THE ERCOT MARKET CONTINUES TO LOOK VERY TIGHT, BUT ALSO THE FACT THAT CPS HAS GOT SOME ADDITIONAL GENERATION CAPACITY AS WE HEAD INTO THE SUMMER.

THAT ALSO MEANS THERE'S A POTENTIAL FOR THIS REVENUE STREAM ON OUR SIDE TO BE MORE VOLATILE THAN EVEN WHAT WE'RE LOOKING AT HERE ON SLIDE

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I GIVE YOU A LITTLE BIT OF AN EXAMPLE. GOING BACK AND LOOKING AT '22 AND '23, IF YOU RECALL, THE SUMMER OF '22 WAS VERY HOT.

DEMAND WAS HIGH. TEMPERATURES WERE VERY HOT, AND YET THERE WERE PRETTY TYPICAL OFFSYSTEM SALES REVENUES, WE MADE $8.2 MILLION IN THAT YEAR. CONTRAST THAT WITH LAST YEAR, AGAIN, VERY HOT TEMPERATURES, BUT WE MADE $27.7 MILLION OFF OF OFFSYSTEM SALES REVENUE.

SO IT JUST SHOWS YOU HOW MUCH THAT NUMBER CAN MOVE FROM YEAR TO YEAR.

SLIDE 13 OUTLINES THE PROPOSED FINANCIAL POLICY AS IT RELATES TO OUR CITY PAYMENT FROM OFFSYSTEM SALES. BEFORE I WALK THROUGH THE POLICY ITSELF, THESE ARE SOME OF THE FACTORS THAT WE CONSIDERED AS WE DEVELOPED THIS POLICY -- THIS PROPOSED POLICY. ONE, THERE'S CERTAINLY GOING TO BE AN OPPORTUNITY FOR INCREASED OFFSYSTEM SALES REVENUE WE NEED TO TAKE INTO CONSIDERATION THE TIGHT ERCOT MARKET AND CPS ENERGY'S GENERATION CAPACITY. THAT WILL LIKELY LEAD TO POTENTIALLY MORE INCREASED VOLATILITY IN THAT COMPONENT OF OUR CITY PAYMENT FROM CPS ENERGY. CPS ENERGY IS GOING THROUGH A VERY HIGH PERIOD OF CAPITAL INVESTMENT, WE'VE TALKED ABOUT THAT. WE TALKED ABOUT THAT DURING THEIR LAST RATE CASE LAST FALL, SO THEY'VE GOT A HIGH PERIOD OF VERY HIGH CAPITAL INVESTMENT AS THEY CONTINUE TO INVEST IN THE SYSTEM.

AND THEN LASTLY, IT ALSO TAKES INTO CONSIDERATION OF THE SEVERAL CONVERSATIONS THAT WE HAD LAST FALL ABOUT POTENTIALLY REINVISING SOME PORTION OF CITY PAYMENT INTO CPS ENERGY TO MITIGATE FUTURE CPS ENERGY RATE INCREASES. SO WITH THAT, I'LL WALK THROUGH A LITTLE BIT OF THIS OUTLINE AND HOW THIS POLICY WOULD WORK. SO ON THE FAR LEFT, YOU KNOW, WHEN WE TALK ABOUT CITY PAYMENT FROM OFFSYSTEM SALES, THAT COMPONENT OOS ALWAYS BUILT INTO OUR BUDGET. IT'S ONE OF THOSE FACTORS WE LOOK AT. IT'S BUILT INTO THAT TOTAL BUDGET THAT YOU SEE EVERY YEAR. WHAT WE'RE TALKING ABOUT DOING IS SPLITTING THAT OUT SEPARATELY, AND WE WOULD HAVE OUR CITY PAYMENT FROM OFFSYSTEM SALES, AND THEN WE WOULD HAVE OUR CITY PAYMENT FROM WHAT WE'RE CALLING THE BASE, THAT'S EVERYTHING ELSE. YOU RECALL ALSO THAT WE HAVE A CURRENT FINANCIAL POLICY IN PLACE THAT YOU ALL ADOPTED WITH THIS BUDGET THAT SAYS WHEN WE'RE MORE THAN 10% OVER THE ADOPTED BUDGET, WHICH IS GOING TO BE NOW IN THIS CASE THE BASE PART, THE AMOUNT OVER 10%, WE HOLD IT UNTIL WE HAVE A CONVERSATION WITH YOU ALL, GET YOUR INPUT, AND THEN WE MAKE OUR RECOMMENDATION. WE HAD A COUPLE OF CONVERSATIONS ABOUT THAT LAST YEAR. THAT WILL BE A TOPIC OF CONVERSATION AT TOMORROW'S GOAL-SETTING SESSION.

SO WE'LL PICK THAT UP TOMORROW. THIS PART RELATES SPECIFICALLY TO OFFSYSTEMS SALES. AND WHAT WE'RE PROPOSING IS THAT WE'RE GOING TO CAP CITY PAYMENT FROM OFFSYSTEM SAMES AT $10 MILLION. ANYTHING ABOVE $10 MILLION WOULD GO INTO A FUND THAT WE WOULD HOLD, IN THIS CASE WE'RE CALLING IT A CPS ENERGY CAPITAL RESERVE FUND, WE WOULD HOLD THOSE DOLLARS UNTIL WE GET TO THE END OF OUR FISCAL YEAR. WE WOULD THEN LOOK TO SEE AND ENSURE THAT WE HAVE MADE BUDGET ON THE CITY PAYMENT BASE. IF THERE WERE A SHORTFALL AND WE DIDN'T MAKE BUDGET ON THAT CITY PAYMENT BASE REVENUE LINE ITEM, WE WOULD TAKE THAT SHORTFALL FROM THIS FUND. IF THERE'S NO SHORTFALL, WE WOULD TAKE NOTHING FROM THE FUND. SO WHATEVER THE BALANCE IS THEN LEFT AFTER WE GO THROUGH THAT PROCESS, WE WOULD SEND THAT OVER TO CPS ENERGY AND THEY WOULD USE THAT TO MITIGATE FUTURE RATE INCREASES.

AND, REMEMBER, THAT WHATEVER'S IN THIS BUCKET ON OUR SIDE, THIS CAPITAL RESERVE FUND, REPRESENTS 14% OR 14 CENTS OF A DOLLAR.

THE OTHER 86 CENTS OF THE DOLLAR ARE AT CPS ENERGY.

SO I THINK THE POLICY WORKING HAND-IN-HAND WITH THE OPPORTUNITY THAT EXISTS WITHIN THE WHOLESALE MARKET, WHEN YOU COUPLE WHAT WE WOULD

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IT WILL, OF COURSE, DEPEND ON HOW THOSE MARKET CONDITIONS EVOLVE OVER THE NEXT -- OVER THE NEXT COUPLE OF YEARS. ON THIS SLIDE 14, JUST SUMMARIZES THE IMPACT -- OR WHAT IT WOULD LOOK LIKE WHEN WE APPLY THIS TO FY 2024. SO ON THE LEFT-HAND SIDE, THE THREE PLUS NINE PROJECTION THAT YOU SAW BACK IN FEBRUARY WAS -- AND WE SPLIT THIS APART.

YOU DIDN'T SEE IT THIS WAY, BECAUSE WE DIDN'T HAVE THIS POLICY DEVELOPED AT THAT POINT IN TIME. BUT IT WAS ESSENTIALLY $421.4 MILLION ON THE BASE, PLUS $14.9 MILLION IN OFFSYSTEM SALES.

WHEN BEA WE APPLY THE POLICY, BECAUSE WE'RE ALREADY OVER THE 10 MILLION, I'M ESSENTIALLY PUSHING $4.9 MILLION OF THAT OFFSYSTEM SALES INTO THAT FUND THAT WE'VE JUST TALKED ABOUT, AND WE WOULD HOLD THAT UNTIL THE END OF THE FISCAL YEAR. AND, OF COURSE, WHATEVER OFFSYSTEM SALES GET GENERATED BETWEEN NOW AND SEPTEMBER WOULD CONTINUE TO GO IN THAT FUND AS WELL. SO THE SIX PLUS SIX PROJECTION ON THE BASE WENT UP TO 430.4 MILLION, AN INCREASE OF 9 MILLION. AND, AGAIN, THE OFFSYSTEM SALES PIECE IS CAPPED AT 10. THE TABLE ON THE FAR RIGHT JUST KIND OF SHOWS YOU -- THE LAST TWO COLUMNS SHOW YOU WHAT'S HAPPENING WITH OFFSYSTEM SALES. SO WE HIT THAT $10 MILLION NUMBER IN JANUARY. AND, YOU KNOW, THE BUDGET FOR THE WHOLE YEAR WAS ABOUT 11.5 FOR OFFSYSTEM SALES. SO IT IS RUNNING MUCH HIGHER THAN ANTICIPATED. SO ANYTHING THAT WE EARN ON OFFSYSTEM SALES FOR THE REST OF THE YEAR WILL CONTINUE TO ADD TO THIS. WE THINK THAT BY THE END OF THE YEAR, THIS FISCAL YEAR, THAT THERE WILL PROBABLY BE BETWEEN 15 AND $20 MILLION IN THIS FUND AT THE END OF THE FISCAL YEAR.

THAT DOES NOT INCLUDE ANYTHING THAT HAPPENS WITH SQUA ZONING ZONINSCARCITY PRICING OVER THE NEXT COUPLE MONTHS OR OVER THE SUMMER. AGAIN, IT'S DIFFICULT TO EVEN TRY TO PROJECT WHAT THAT MIGHT LOOK LIKE, BECAUSE THAT'S GOING TO BE RELATED TO A NUMBER OF FACTORS THAT HAPPEN WITHIN THE ERCOT MARKET. THERE'S A GOING TO BE A GAP IN NEEDED POWER, CPS GENERATION FLEET HAS TO BE OPERATING, THERE'S A LOT OF THINGS THAT HAVE TO COME INTO PLAY IN ORDER TO TAKE ADVANTAGE OF THAT SCARCITY PRICING, AS IT HAPPENS IN THE MARKET, BUT I THINK CPS ENERGY IS CERTAINLY POISED TO BE ABLE TO DO POSTFY '24, WORKING WITH CPS, I BELIEVE THAT THEY'LL PROBABLY BE SOMEWHERE AT LEAST FIVE TO 10 MILLION ABOVE THE $10 MILLION BASE THAT WE'RE SETTING HERE, THAT WOULD BE IN THAT FUND, AND, AGAIN, THAT WOULD BE OUTSIDE OF SCARCITY PRICING. SO WITH THAT, LET ME TURN IT BACK OVER TO JUSTINA TO CONTINUE WITH THE REST OF THE FORECAST PRESENTATION.

>> TATE: THANK YOU, BEN. SO TO CONCLUDE ON OUR GENERAL FUND SIX PLUS SIX, WE ARE PROJECTING BASED ON OUR SIX MONTHS OF ACTUALS, WE'RE PROJECTING THAT REVENUES WILL END ABOUT $27 MILLION AHEAD OF BUDGET OR 1.75%. AND SPENDING FOR THE GENERAL FUND WILL BE ABOUT $73,000 OVERBUDGET. AND AS BEN MENTIONED, THE CPS ENERGY VARIANCE OF ABOUT $9.4 MILLION IN ADDITIONAL REVENUE TAKES INTO ACCOUNT THIS OFFSYSTEMS SALE FINANCIAL POLICY.

NOW, I WANTED TO MOVE ON TO SOME OF OUR RESTRICTED FUNDS.

I'LL START OFF WITH OUR HOTEL OCCUPANCY TAX. THE CURRENT HOTEL OCCUPANCY TAX RATE IS 16.75%, AND THIS IS LEVIED ON ALL ELIGIBLE HOTEL ROOM NIGHTS. OF THAT RATE, 9% GOES TO THE CITY.

7% SUPPORTS OUR CONVENTION AND ALAMODOME.

VISIT SAN ANTONIO, ARTS AND CULTURE AND OUR HISTORY AND PRESERVATION. THE REMAINING 2% IS A RESTRICTED SOURCE OF REVENUE FOR THE CONVENTION CENTER EXPANSION DEBT, AS WELL AS FUTURE CONVENTION CENTER PROJECTS. SO THIS SLIDE ILLUSTRATES THE PERFORMANCE OF OUR HOTEL OCCUPANCY TAX, AS WELL AS RELATED REVENUES AND THE PERFORMANCE OF OUR DEPARTMENTS THAT ARE FUNDED BY OUR HOTEL OCCUPANCY TAX. THE TOTAL BUDGET FOR OUR HOT TAX IS ABOUT $108 MILLION. FOR THE SECOND QUARTER, WE ARE SLIGHTLY BELOW BUDGET BY ABOUT $500,000, AND THIS IS DRIVEN BY OUR OCCUPANCY RATES BEING LESS THAN WHAT WE HAD ANTICIPATED. BUT BY THE END OF THE YEAR, WE ARE PROJECTED TO BE AT BUDGET. WITH REGARD TO OUR OTHER

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THE NEXT IS OUR AIRPORT FUND. SO THE AIRPORT FUND PROVIDES FUNDING FOR AVIATION SERVICES AT BOTH SAN ANTONIO INTERNATIONAL AIRPORT AS WELL AS STINSON. AIRPORT REVENUES THROUGH THE FIRST QUARTER ARE AHEAD OF BUDGET BY ABOUT 3.7 MILLION, AND WE ARE PROJECTING TO END THE YEAR ABOUT $8.5 MILLION AHEAD OF BUDGET.

AND THIS IS DUE MAINLY TO OUR AIRLINE REVENUES THAT ARE OUTPERFORMING OUR BUDGET DUE TO TERMINAL DEVELOPMENT RENTAL, BAGGAGE HANDLING AND INTEREST EARNINGS. FOR EXPENDITURES, WE'RE SPENDING SLIGHTLY FASTER THAN WE HAD PLANNED DUE TO AN INCREASE IN THE CONTRACT WITH SAN ANTONIO AIRLINE CONSORTIUM. NEXT IS OUR DEVELOPMENT SERVICES ENTERPRISE FUND. SO THIS IS A $52 MILLION FUND THAT IS SUPPORTED BY THE FEES PAID FOR BY DEVELOPERS FOR PLAN REVIEWS AND INSPECTIONS.

REVENUES ARE SLIGHTLY BELOW BUDGET AS A RESULT OF LESS COMMERCIAL ACTIVITY AND LESS COMMERCIAL VALUATION. HOWEVER, OUR EXPENSES ARE WITHIN OUR BUDGET FOR THE SIX MONTHS, AS WELL AS BEING PROJECTED FOR THE YEAR. AND FINALLY, OUR SOLID WASTE FUND.

THIS IS ROUGHLY $149 MILLION FUND THAT IS SUPPORTED BY OUR SOLID WASTE AND ENVIRONMENTAL FEES. REVENUES ARE AHEAD OF BUDGET FOR THE FIRST SIX MONTHS, BUT WE ARE ANTICIPATED TO BE SLIGHTLY BELOW BUDGET AS A RESULT OF SOME UNCOLLECTIBLE SOLID WASTE FEES. DEPARTMENT SPENDING FOR THE SECOND QUARTER IS AHEAD OF BUDGET. WE ARE PROJECTED TO BE AHEAD OF BUDGET BY THE END OF THE YEAR, AND THIS IS DRIVEN BY ADDITIONAL COSTS TO MAINTAIN OUR AUTOMATED SIDE LOADERS AS WE HAVE EXPERIENCED A DELAY IN DELIVERY OF THOSE VEHICLES AS A RESULT OF SUPPLY CHAIN ISSUES.

SO BEFORE I MOVE INTO THE FIVE-YEAR FINANCIAL FORECAST, I WANTED TO PROVIDE SOME CONTEXT ON THE GROWTH WE HAVE SEEN IN THE GENERAL FUND IN THE PAST COUPLE YEARS. AS THE CITY MANAGER MENTIONED, OUR REVENUE GROWTH SINCE 2019 IS ABOUT 25%, WHILE EXPENDITURE GROWTH IS 27%. AS YOU KNOW, THE PANDEMIC EXPOSED VULNERABILITIES IN OUR COMMUNITY, AND THE CITY TOOK ACTION TO ADDRESS THE IMMEDIATE NEEDS. PRIMARILY THROUGH THE USE OF FEDERAL FUNDS, THE CITY INFUSED ALMOST $1.3 BILLION TO ADDRESS COMMUNITY NEEDS THAT WERE IDENTIFIED. THESE INCLUDE HOUSING, HOMELESS, DOMESTIC VIOLENCE, SMALL BUSINESS, AND EMERGENCY PREPAREDNESS.

THESE FUNDS -- THESE FEDERAL FUNDS WILL BE EXHAUSTED IN THE NEXT TWO YEARS. WHILE THESE FUNDS WILL BE EXHAUSTED, SOME OF THE TOP PRIORITY AREAS HAVE BEEN ABSORBED INTO THE GENERAL FUND TO INCLUDE HOUSING, HOMELESS, HEALTH SA FORWARD PLAN AND SAN ANTOIS A CORE PROGRAM. WE CAN NO LONGER GROW THE GENERAL FUND OVER THE SAME PACE THAT WE HAVE GROWN OVER THE PAST TWO YEARS.

WHAT I'M SHARING WITH YOU ON THIS NEXT SLIDE IS THE CHANGE IN REVENUE YEAR OVER YEAR FROM 2014 TO 2024. THIS REFLECTS ALL OPERATING REVENUES TO INCLUDE SALES TAX, CPS, PROPERTY TAX, AS WELL AS OUR OTHER OPERATING REVENUES. FROM 2019 -- I'M SORRY, FROM 2014 TO 2019, OUR AVERAGE REVENUE GROWTH IS ABOUT 5%.

AS A RESULT OF THE PANDEMIC IN 2020, YOU CAN SEE THAT OUR REVENUES ACTUALLY DECLINE BY 2.3%. AFTER 2020, OUR REVENUES REBOUNDED QUICKER THAN WE HAD ANTICIPATED, BUT SINCE THAT TIME, OUR REVENUES CONTINUE TO GROW, BUT AT A SLOWER PACE.

SO OUR GOAL FOR THE GENERAL FUND IS TO MAINTAIN STRUCTURAL BALANCE WITH REVENUES AND EXPENSES GROWING AT A SIMILAR PACE.

SO IN ORDER TO ILLUSTRATE THIS, THE NEXT LINE I WILL LAYER IN SHOWS THE

[00:35:02]

IN 2019, WE ANTICIPATED THE REDUCTION IN REVENUES AS A RESULT OF THE PANDEMIC AND THE CITY TOOK ACTION TO REDUCE THE BUDGET TO ALIGN EXPENSES WITH REVENUES. FOR 2021, OUR REVENUE AND EXPENSE GROWTH WERE IN ALIGNMENT; HOWEVER, IN 2022, YOU CAN SEE THE SHARP INCREASE IN REVENUES WHILE OUR -- COMPARED TO OUR EXPENSES FOR 2022.

THE ADDITIONAL FUNDS THAT WE RECEIVED IN 2022 ALLOWED US TO INCREASE EXPENSES, EVEN THOUGH OUR REVENUE GROWTH SLOWED. NOW, OUR GOAL IN THE FIVE-YEAR FORECAST IS TO ALIGN REVENUE AND EXPENSE GROWTH.

SO WITH THIS CONTEXT, I WANTED TO MOVE INTO THE GENERAL FUND FIVE-YEAR FORECAST. AS THE CITY MANAGER MENTIONED, THE FORECAST IS NO NOT A BUDGET. IT'S AN EARLY FINANCIAL OUTLOOK FOR THE CITY AS WE BEGIN DEVELOPMENT OF THE 2025 BUDGET. IT IS JUST WHAT WE KNOW IN TERMS OF REVENUE AND EXPENDITURES BASED ON A SET OF ASSUMPTIONS.

AND IT SETS THE FRAMEWORK FOR UPCOMING DISCUSSIONS ON THE ANNUAL BUDGET DEVELOPMENT. SO A COUPLE THINGS THAT I WANTED TO HIGHLIGHT IN THE GENERAL FUND FORECAST: OUR FORECAST CONTINUES CITY COUNCIL PRIORITIES THAT WERE IDENTIFIED IN 2022 AND 20 TWIEF -- I'M SORRY, 2024 AND 2025 TWO-YEAR BUDGET PLAN. FOR THE FIRST TWO YEARS OF THE FORECAST, WE ARE BALANCED WITH THE USE OF THE TWO-YEAR RESERVES; HOWEVER, WE ARE PROJECTING DEFICITS IN THE LAST THREE YEARS.

TO MITIGATE THESE DEFICITS IN THE OUTER YEAR, WE MUST ALIGN SPENDING AND REVENUE GROWTH. OVER THE NEXT SEVERAL SLIDES, I WILL WALK YOU THROUGH THE ASSUMPTIONS THAT WE HAVE INCLUDED IN THE FIVE-YEAR FORECAST, AND I WILL START WITH OUR REVENUES.

SO OUR PROPERTY TAX REVENUES ARE BASED ON THE PROPERTY VALUATION FOR BOTH BASE VALUE AND NEW IMPROVEMENTS. SO THIS GRAPH ON YOUR RIGHT SHOWS YEAR OVER YEAR PERCENT CHANGE IN CHEIN CHECK SHUNS FROM 2014 TO 2023 ESTIMATE BETWEEN 2014 AND 2023, OUR AVERAGE GROWTH WAS ABOUT 5.9%, BUT AS YOU CAN SEE, THAT GROWTH DOES NOT HAPPEN EVENLY EVERY YEAR. WITH THE IMPLEMENTATION OF SB 2, PROPERTY TAX REVENUES ON OUR BASE VALUES CANNOT GROW MORE THAN 3.5%.

WHILE VALUES MAY GROW HIGHER THAN THAT, THE CITY IS CAPPED AT THAT 3.5%. WE ARE NOW REALIZING THE IMPACT OF SB 2 ON OUR PROPERTY TAX REVENUES. SO FOR THE PURPOSE OF OUR FIVE-YEAR FORECAST, WE ARE ANTICIPATING AN AVERAGE GROWTH OF ABOUT 5.5%, WHICH REFLECTS 3.5% ON OUR BASE VALUE, AND 2% ON NEW IMPROVEMENTS. IN TERMS OF SALES TAX, THIS CHART ALSO SHOWS THE CHANGE -- THE PERCENT CHANGE FROM PRIOR YEAR COLLECTIONS FOR OUR SALES TAX FROM 2014 TO 2023, OUR SALES TAX GREW ON AVERAGE BY ABOUT 5.5%; HOWEVER, YOU CAN SEE IN 2023, OUR GROWTH WAS AT 2.6%. SO WE SAW STRONG GROWTH AS WE RECOVERED FROM THE PANDEMIC IN '21 AND '22, WHERE WE SAW 12.5% AND 14.2%.

BUT THAT GROWTH HAS STARTED TO SLOW. ADDITIONALLY AS I MENTIONED AS PART OF THE SECOND QUARTER FINANCIAL REPORT, WE ARE CONTINUING TO SEE THAT SLOW IN GROWTH IN OUR SALES TAX. SO FOR THE FIVE-YEAR FORECAST, WE ARE ASSUMING A FOUR% 4% GROWTH ANNUALLY FOR THE LIFE OF THE FORECAST. NOW, OUR NEXT SLIDE IS OUR CPS ENERGY PAYMENT, SO THIS SHOWS THE ACTUAL COLLECTIONS IN CPS FROM 2014 TO 2023 AND OUR PROJECTION FOR 2024. THIS ALSO SHOWS WHAT WE ARE PROJECTING FROM 2025

[00:40:01]

BUT THE REVENUES THAT WE HAVE INCLUDED IN THE FIVE-YEAR FORECAST DO INCORPORATE THE OFFSYSTEM SALES FINANCIAL POLICY THAT BEN MENTIONED EARLIER. NOW, I WANTED TO TAKE AN OPPORTUNITY TO GO OVER SOME OF OUR ASSUMPTIONS AS THEY RELATE TO OUR EXPENSES THAT ARE INCLUDED IN OUR FIVE-YEAR FORECAST. THE FIVE-YEAR FORECAST REFLECTS FUNDING TO PROVIDE TODAY'S LEVEL OF CITY SERVICES.

THE FORECAST ALSO REMOVES ANY ONE-TIME EXPENSES THAT WERE INCLUDED IN THE 2024 BUDGET AND FULLY FUNDS THOSE INITIATIVES THAT WERE PARTIALLY FUNDED IN 2024. THE FIVE-YEAR FORECAST EXPENSES INCLUDES MANDATES THAT WE MUST ADDRESS FOR THE LIFE OF THE FORECAST AND IT INCLUDES INCREASES FOR CONTRACTS, HEALTHCARE BENEFITS AND INFLATION.

FINALLY, OUR FORECAST MAINTAINS A GENERAL FUND ENDING BALANCE AT A MINIMUM OF AT LEAST 15%. THE NEXT TWO SLIDES PROVIDE AN OVERVIEW OF OUR MANDATES THAT ARE INCLUDED IN THE FORECAST.

THIS SLIDE REFLECTS OPERATING AND MAINTENANCE COSTS FOR OUR 2022 BOND PROJECTS THAT WILL COME ONLINE THROUGHOUT THE FORECAST.

IN THE FIRST YEAR OF THE FORECAST, A TOTAL OF ALMOST $1.1 MILLION IS INCLUDED FOR PARKS DEVELOPMENT MAINTENANCE AND THE LAS PALMAS LIBRARY, WHICH IS DEVELOPING A LEARN CENTER.

FOR THE LIFE OF THE FORECAST, IT INCLUDES OPERATION AND MAINTENANCE COSTS FOR FACILITIES THAT WILL COME ONLINE BETWEEN 2026 AND 2029.

THIS INCLUDES THE D1 MULTIGENERATIONAL CENTER, ELLA AUSTIN COMMUNITY CENTER, ANIMAL CARE SERVICES VETERINARIAN HOSPITAL, DISTRICT THREE SUBSTATION, AS WELL AS THE CARVER BRANCH LIBRARY. OUR NEXT SLIDE ILLUSTRATES THE OTHER MANDATES THAT ARE INCLUDED IN OUR FIVE-YEAR FORECAST AND THIS INCLUDES THE POLICE COLLECTIVE BARGAINING CONTRACT, THE 2023 COPS GRANT, WHICH FUNDED 50 POLICE OFFICERS IN 2024, AS WELL AS OUR STATE LEGISLATIVE CONTRACTS THAT WE HAVE EVERY YEAR THAT THE STATE LEGISLATURE IS IN SESSION, AND OUR HIGH VOLUME PET PARTNERS.

NOW, AS YOU COMBINE ALL THE ASSUMPTIONS THAT I MENTIONED, THE FIVE-YEAR FORECAST IS DEVELOPED. THIS SLIDE ILLUSTRATES OUR PROJECTED REVENUES AND EXPENSES INCLUDED IN OUR FIVE-YEAR FORECAST. I WANT TO MENTION THAT THIS SLIDE IS JUST A SUMMARY. THE FULL DETAIL AND THE ACTUAL SCHEDULE ARE INCLUDED IN THE FORECAST DOCUMENT THAT WAS PROVIDED ON MONDAY AND IS INCLUDED IN YOUR BINDER TODAY.

THE REVENUES REFLECT THE CITY OPERATING REVENUE SOURCES TO INCLUDE CPS, SALES TAX, PROPERTY TAX AND OUR OTHER REVENUES, HOWEVER IT DOES NOT INCLUDE OUR BEGINNING BALANCES. OUR EXPENSES ARE DIVIDED INTO TWO CATEGORIES. THE FIRST BEING OUR CURRENT SERVICES, WHICH PROVIDE FUNDING NEEDED TO MAINTAIN THE CITY'S SAME LEVEL OF SERVICES AND THE ASSUMPTIONS THAT I REVIEWED WITH YOU IN THE PREVIOUS SLIDES.

THE SECOND CATEGORY IS NEW EXPENSES THAT CONTINUE CITY COUNCIL PRIORITIES IDENTIFIED IN THE 2024 AND 2025 TWO-YEAR BUDGET PLAN.

THESE INCLUDE 260 POLICE OFFICERS -- ADDING 260 POLICE OFFICERS OVER FOUR YEARS, FIRE ENHANCEMENTS TO ADDRESS MEDICAL CALLS.

THE SECOND YEAR STRATEGIC PLAN IMPLEMENTATION FOR ANIMAL CARE SERVICES, THE CITY'S PROPOSAL TO -- FOR FIRE COLLECTIVE BARGAINING AND CIVILIAN COMPENSATION. WHEN YOU COMBINE TOTAL REVENUES AND TOTAL EXPENDITURES, WE ARE BALANCED FOR THE FIRST TWO YEARS OF THE FORECAST AS THE SLIDE SHOWS. HOWEVER, WE ARE PROJECTING DEFICITS BEGINNING IN 2027. ALSO I WANT TO HEIGHT THAT OUR RESERVE FOR TWO-YEAR PLAN IN 2025 IS ALMOST $145 MILLION; HOWEVER, THAT DECLINES AS WE BALANCE '25 AND 2026, AND IT REDUCES TO 87 MILLION BY 2027.

FINALLY, AS PART OF THIS FORECAST AS I MENTIONED, WE ARE MAINTAINING A 15% RESERVE, BUT WE HAVE DEFICITS THAT WILL -- THAT WE NEED TO ADDRESS

[00:45:01]

AS WE START THIS PROCESS, THE BUDGET OFFICE AND THE OFFICE OF INNOVATION WILL CONDUCT INTERNAL REVIEWS OF DEPARTMENTS' BUDGETS, SERVICES AND PROCESSES IN 2025. COMPREHENSIVE BUDGET REVIEWS WERE A PAST PRACTICE, AND THESE LOOK IN DETAIL AT THE BUDGET WITH THE GOAL OF IDENTIFYING OPERATIONAL EFFICIENCIES, IMPLEMENTING OUTCOME-BASED PERFORMANCE MEASURES AND BEST PRACTICE RESEARCH, SO THESE COMPREHENSIVE BUDGET REVIEWS WILL BEGIN IN 2025.

SO THAT CONCLUDES OUR GENERAL FUND PORTION OF THE FIVE-YEAR FORECAST, SO I'LL MOVE INTO OUR RESTRICTED FUNDS. FIRST, I'LL START OFF WITH OUR SOLID WASTE FUND. THIS SLIDE ILLUSTRATES OUR ASSUMPTIONS THAT ARE INCLUDED IN OUR FIVE-YEAR FORECAST FOR SOLID WASTE. SO AS PART OF THE FORECAST, WE DO REFLECT TODAY'S LEVEL OF SERVICES, AND WE INCORPORATE THE NEW RECYCLING CONTRACTS AND LAND PHIL CO LANDFILL CONTRACTS THAT WILL BE IN EFFECT IN 2025 AND 2026. THE FORECAST ALSO INCLUDES INFLATIONARY INCREASES FOR OUR COMMODITIES AND SERVICES. THIS NEXT SLIDE SHOWS THE FIVE-YEAR FORECAST FOR THE SOLID WASTE FUND. AS YOU CAN SEE IN 2025, WE ARE BALANCED; HOWEVER, IN 2026 THROUGH 2029, WE DO FACE DEFICITS AS A RESULT OF INCREASED IN LABOR, DISPOSAL AND EQUIPMENT COST. WE ARE NOT ASSUMING ANY FEE INCREASES WITH THIS FIVE-YEAR FORECAST; HOWEVER, OVER THE SUMMER, WE WILL DEVELOP A PLAN THAT WILL INCLUDE RATE INCREASES EVERY OTHER YEAR. NEXT IS OUR HOTEL OCCUPANCY TAX, AND JUST AS A REMINDER, THE -- OF THE 16.75%, 7% GOES TO FUND CONVENTION FACILITIES, VISIT SAN ANTONIO, HISTORY AND PRESERVATION AND ARTS.

THIS NEXT SLIDE ILLUSTRATES THE PROJECTED HOT REVENUES FOR THE FIVE-YEAR FORECAST. SO PRIOR TO 2020, OUR GROWTH -- OUR AVERAGE GROWTH RATE IN THE HOT TAX WAS ABOUT 4%. THE FORECAST DOES ASSUME AN AVERAGE GROWTH OF ABOUT 3.7% OVER THE FIVE YEARS, RANGING FROM ABOUT 5.2% IN 2025 BASED ON ANTICIPATED GROWTH AS A RESULT OF THE NCA FINAL FOUR BEING HELD IN SAN ANTONIO TO ABOUT 3.4% IN THE OUTER YEARS.

THESE GROWTH ASSUMPTION FOR THE HOTEL OCCUPANCY TAX REVENUES ARE BASED ON LONG-TERM TRENDS IN HOTEL SUPPLY, DEMAND, PRICES AND OCCUPANCY LEVELS.

THIS NEXT SLIDE ILLUSTRATES OUR HOTEL OCCUPANCY TAX FIVE-YEAR FORECAST, AND AS YOU CAN SEE OVERALL, THE HOTEL OCCUPANCY TAX IS BALANCED FOR THE LIFE OF THE FORECAST. FINALLY, I WANTED TO SHARE OUR DEVELOPMENT SERVICES FIVE-YEAR FORECAST.

THE DEVELOPMENT SERVICES FORECAST DOES NOT INCLUDE ANY FEE INCREASES OR RATE INCREASES OVER THE FIVE YEARS, AND IS BALANCED FOR ALL BUT THE FINAL YEAR, WHICH IS A MANAGEABLE DEFICIT. IT ALSO MAINTAINS THE FINANCIAL RESERVES TO ASSIST SMOOTHLY FLUCTUATES IN THE DEVELOPMENT COMMUNITY. SO THE NEXT STEPS AS PART OF THIS PROCESS ON THURSDAY MAY 2ND, CITY COUNCIL WILL CONSIDER THE FISCAL YEAR 2024 MIDYEAR BUDGET -- SIZE BUDGETS REFLECTED IN THE SIX BY SIX FINANCIAL REPORT.

SO OUR NEXT STEPS IN THE 2025 BUDGET PROCESS, OUR GOAL-SETTING SESSION WILL BE HELD TOMORROW, APRIL 18TH. AND THIS WILL BE FOLLOWED BY OUR MIDYEAR BUDGET ADJUSTMENT ON MAY 2ND, WHICH I JUST MENTIONED.

THE CONVERSATION TOMORROW WILL GUIDE THE DEVELOPMENT OF THE TRIAL BUDGET, WHICH WILL BE PRESENTED TO CITY COUNCIL ON MAY 8TH.

FOLLOWING THE TRIAL BUDGET, WE WILL HOLD COMMUNITY INPUT, AND THE RESULTS OF THAT COMMUNITY INPUT WILL BE PRESENTED TO CITY COUNCIL ON JUNE 20TH. THE CITY MANAGER WILL PROPOSE THE BUDGET ON AUGUST 15TH. AFTER WHICH WE'LL HOLD BUDGET WORK SESSIONS AS WELL AS TOWN HALLS TO GAIN FEEDBACK ON THE PROPOSED BUDGET.

IT IS ANTICIPATED THAT THE BUDGET WILL BE ADOPTED ON

[00:50:01]

AND I'D BE HAPPY TO TAKE ANY QUESTIONS. >> MAYOR NIRENBERG: THANK YOU VERY MUCH, J JUSTINA, FOR THE PRESENTATION.

VERY COMPREHENSIVE AND GREAT LOOK AT WHERE WE ARE.

BECAUSE OUR GOAL-SETTING SESSION IS TOMORROW, WHAT I WOULD SUGGEST FOR THE DISCUSSION PURPOSES IS THAT WE TRY TO KEEP OUR CONVERSATION AS MUCH AS WE CAN FOCUSED ON MORE OF A BACKWARD-LOOKING DIAGNOSTIC DISCUSSION, I GUESS, BECAUSE SO MUCH OF THE DISCUSSION TOMORROW WILL BE ABOUT WHERE ARE WE GOING FORWARD AND HOW DO WE SET OUR PRIORITIES FOR THE UPCOMING BUDGET AND SO FORTH. WITH THE EXCEPTION OF THE MIDYEAR BUDGET ADJUSTMENT THAT'S ARE COMING FORWARD ON MAY 2ND. SO A MUCH MORE COMPREHENSIVE DISCUSSION TOMORROW ABOUT THE FUTURE OF SAN ANTONIO AS IT RELATES TO OUR BUDGET. THAT BEING SAID, BECAUSE SO MUCH TIME WAS SPENT UP FRONT TALKING ABOUT THE VOLATILITY A IN THE ENERGY REVENUES, I DO HAVE TO REMIND FOR CONTEXT THAT THE ADDITIONAL CAPACITY THAT'S COMING ONLINE IS IN THE REALITY THAT WE'RE ALSO BRINGING A TREMENDOUS AMOUNT OF CAPACITY OFFLINE OVER THE NEXT 10 YEARS AT CPS ENERGY, COUPLED WITH THE AMOUNT OF GROWTH THAT'S OCCURRING AND DEMAND FOR ELECTRICITY, THE VOLATILITY THAT YOU'RE DESCRIBING -- OR I SHOULDN'T SAY VOLATILITY. THE ADDITIONAL REVENUES THAT YOU'RE DESCRIBING, JUSTINA, AND YOU CAN CORRECT ME IF I'M NOT SAYING THIS ACCURATELY, THE ADDITIONAL REVENUES THAT WE EXPECT TO SEE AS A RESULT OF THE NEW PLANTS ARE REALLY MORE OF A TEMPORARY CAPACITY BUMP THAT WILL LIKELY RESULT IN OFFSYSTEM SALES. BEN, IS THAT APPROPRIATE

CHARACTERIZATION? >> GORZELL: YES, SIR, THAT WOULD BE AN ACCURATE DESCRIPTION. AGAIN, THE ERCOT MARKET'S PROJECTED TO BE TIGHT OVER THE NEXT THREE TO FIVE YEARS, BUT AS YOU SAID, WE'RE ALSO ACQUIRING GENERATION THAT WE -- OUR CPS ENERGY PLAN TO BUILD IN THE NEXT FIVE, SIX YEARS OUT IN THE CAPITAL PLAN. SO YOU'RE ADVANCING THAT, BUT AS OUR POPULATION GROWS, AS WE CONTINUE TO GROW, WE'RE GOING TO GROW

INTO THAT LOAD OVER TIME AS WELL. >> MAYOR NIRENBERG: YEAH.

AND THE ADDITIONAL BENEFIT OF THE ACQUISITION, I WILL SAY, WITHOUT -- AND ANDY, JUST LET ME KNOW IF I'M GOING TOO FAR INTO THIS, BUT THE BENEFIT OF US ACQUIRING THOSE PLANTS NOW IS THAT WE'RE ALSO AT THIS POINT IN OUR GENERATION PLAN GOING TO BE VERY CLOSE TO MAKING DECISIONS ABOUT BUILDING NEW PLANTS. SO THIS WILL HELP US NOT HAVE TO DO THAT. ADDITIONAL CAPACITY WITHOUT HAVING TO BUILD

NEW, ACQUIRING EXISTING ASSETS. >> GORZELL: THAT IS CORRECT, MAYOR. SO AS CPS UPDATES THEIR CAPITAL PLAN, THEY WILL ADJUST FOR WHAT THEY HAVE BEEN ABLE TO ACQUIRE WITH THE ACQUISITION OF THESE NATURAL GAS PLANTS, MEANING WE WON'T BUILD SOME OF WHAT WE TALKED

ABOUT LAST FALL. >> MAYOR NIRENBERG: GREAT. NOW, THAT'S DIFFERENT THAN THE VOLATILITY, THOUGH, BECAUSE WE DON'T EXPECT THE VOLATILITY IN THOSE REVENUES TO BE TEMPORARY BECAUSE OF THE NATURE OF ERCOT AND WHAT WE'VE SEEN WITH EXTREME WEATHER, ET CETERA. SO I THINK IT'S VERY APPROPRIATE FOR YOU ALL TO PUT FORWARD FOR CONSIDERATION THIS NEW CRF FUND, WHICH SHOWS THAT WE'RE BEING CONSIDERATE OF THE FACT THAT THOSE OFFSYSTEM SALES ARE COMING FROM, YOU KNOW, FOLKS OUT IN ALL PARTS OF TEXAS, AND WE HAVE TO BE GOOD STEWARDS OF OUR RESOURCES HERE. SO I'M IN SUPPORT OF THAT, AND I EXPECT THAT THAT CONVERSATION WILL HAPPEN IN DEPTH TOMORROW, BUT, AGAIN, JUST A LITTLE BIT OF CONTEXT ON THOSE ADDITIONAL REVENUES. ERIK AND JUSTINA, THANK YOU VERY MUCH FOR THE PRESENTATION. I'M ANXIOUS TO HEAR THE CONVERSATION. I WOULD SAY THAT YOU KE SCRIBE THIS AS GOING INTO A MORE NORMAL PERIOD, ERIK. YOU KNOW, WITH THE -- WITH THE NOW SPENDING DOWN OF THE ADDITIONAL ARPA FUNDS, I WOULD SAY WE ARE NORMALIZING, SO WITH THE ADDITIONAL OPERATIONS THAT HAVE BEEN IN PLACE, WHETHER THAT'S PUBLIC SAFETY OR ACS OR ANY OF THE OTHER SERVICES THAT YOU PUT IN THIS PRESENTATION, YOU KNOW, I THINK WE HAVE BEEN GOOD STEWARDS AND BEEN RESPONSIVE OF THE RESPONSES THAT WE GET -- OR THE INPUT WE GET FROM CITIZENS WHEN WE GO OUT TO THE BUDGET SURVEYS.

SO MY LAST QUESTION IS, YOU'RE GOING OUT FOR THE BUDGET SURVEY AGAIN THIS YEAR, JUST LIKE WE DO EVERY SINGLE YEAR. IS ANYTHING GOING TO BE DIFFERENT IN TERMS OF HOW WE'RE APPROACHING THIS CONVERSATION WITH THE COMMUNITY, KNOWING THAT OUR FISCAL REALITY IS A LITTLE BIT LESS FLEXIBLE THAN IT HAS BEEN PROBABLY THE LAST FOUR OR FIVE YEARS.

>> WALSH: SO MAYOR, WE'RE ACTUALLY GOING TO TALK ABOUT THAT TOMORROW.

THAT'S ON THE AGENDA. WE'RE GOING TO GO THROUGH THAT EXERCISE WITH THE ENTIRE COUNCIL, SO WE'LL TALK ABOUT THAT TOMORROW.

>> MAYOR NIRENBERG: OKAY. I'LL PUT A BOOKMARK IN THAT.

[00:55:03]

GARCIA. >> GARCIA: THANK YOU, MAYOR, AND I'LL START OFF BY THANKING BEN AND JUSTINA AND TROY AND THE WHOLE BUDGET TEAM FOR YOUR WORK. THANK YOU FOR THE PREPARE.

I FEEL LIKE YOU ALWAYS SHINE DURING THESE TIMES, AND SO I APPRECIATE ALL THE WORK THAT YOU ALL DO. I ALSO APPRECIATE THE CONSERVATIVE OUTLOOK IN THE PROJECTIONS THAT YOU ALL PRODUCE, BECAUSE IT HELPS US KEEP KIND OF TABS ON THAT. AND I KNOW MY COLLEAGUES IN D10 AND D2 REALLY APPRECIATE THAT AS WELL. BUT IT'S GOOD TO SEE OUR PROJECTIONS ARE HIGHER THAN ANTICIPATED AND THAT THEY'RE ON PAR.

I WAS WONDERING ABOUT THE SOLID WASTE FUND SPECIFICALLY AND HOW WE'RE ANTICIPATING THE EXPENSES TO BE OVERBUDGET.

HAS ANYTHING TO DO WITH ILLEGAL DUMPING SPECIFICALLY OR CLEANUP

EFFORTS FOR ENCAMPMENTS. >> WALSH: JUSTINA, YOU CAN PROBABLY FILL IN MORE DETHDETAIL THAN I CAN, BUT GENERALLY SPEAKING, WE HAVE A LOT OF TRUCKS THAT HAVE NOT COME IN YET SO WE'RE SPEND AG LOT MORE MONEY MAINTAINING THE TRUCKS WE HAVE. WE'VE GOT THREE ORDERS OF TRUCKS, THEY'RE BIG ORDERS T FIRST GROUP SHOULD COME IN BEGINNING OF THE SUMMER. THEY'VE ALL BEEN DELAYED.

AND SO WE'RE HAVING TO SPEND MORE IN TERMS OF MAINTENANCE OF VEHICLES BECAUSE WE HAVE TO MAINTAIN THOSE VEHICLES. SO THAT -- THAT SHOULD NORMALIZE AS WE GET NEW VEHICLES. THE -- WHAT GOT POINTED OUT IN THE FORECAST IS WE STILL HAVE -- YOU KNOW, YOU HAVE THE COST OF LABOR, THE COST OF EQUIPMENT AND THE COST OF DISPOSAL, BOTH AT THE LANDFILL AND RECYCLING. THOSE PRESSURES CONTINUE THROUGHOUT THE FIVE YEAR,

BUT OUR IMMEDIATE ISSUE IS VEHICLES. >> GARCIA: GOT IT.

I SAW THAT FLEET WAS ALSO BEHIND. I'M ASSUMING THAT'S WHY AS WELL. SO I SEE SOME (MOVING HEAD FROM SIDE TO SIDE)S OVER THERE. THAT'S OKAY. AND THEN THEN ANTICIPATION OF [INDISCERNIBLE] THERE. ARE WE GOOD?

>> WALSH: I SUSPECT WE'LL TALK ABOUT THIS AGAIN TOMORROW.

IF WE CAN GO TO THAT SLIDE ON THE SOLID WASTE FORECAST, SO THERE IS GOING TO BE INCREASING COSTS THAT WE KNOW WE'RE GOING TO DEAL WITH IN THREE MAIN AREAS. VEHICLES, PEOPLE AND DISPOSAL.

AND SO WHAT WE'RE CONTEMPLATING AND WHAT WE'RE SAYING IN THE FORECAST, IS WE THINK WE SHOULD WORK ON SOMETHING IN 24-MONTH INCREMENTS AND DEVELOP A PLAN THAT BRINGS RATE INCREASES EVERY OTHER YEAR.

THAT MAY OR MAY NOT BE PALATABLE, AND WE HAVEN'T DONE THAT WORK.

THAT'S WORK WE NEED TO DO THIS SUMMER. THE ALTERNATIVE IS THAT WE DO A LITTLE BIT EVERY YEAR, BUT I DON'T THINK -- THAT SEEMS TO BE NOT A BEST PRACTICE FROM MY STABBE STANDPOINT TO JUST CONSTANTLY -- WE'VE GOT TO GO THROUGH THE EFFORT OF BEING EFFICIENT IN THAT AREA, BUT LONG TERM, NO CHANGE TO REVENUE YOU SEE WHERE WE'RE PROJECTING THOSE THREE THINGS ARE GOING TO CONTINUE TO INCREASE.

>> GARCIA: GOT IT. THANK YOU. AND THINKING ABOUT CARES AND ARPA FUNDING AND WE KNOW THAT WE -- WE SAW HOW THE NONPROFITS ARE IMPORTANT TO US, I'M STILL SO WORRIED ABOUT THE LONG-TERM IMPLICATIONS OF -- YOU KNOW, OF THEIR NEEDS TOTALLY NOT BEING RESOLVED STILL, RIGHT? AND SO I'M IN HOPE THAT WE CAN TALK A LITTLE BIT MORE ABOUT EFFORTS TOMORROW. IS THAT ON THE AGENDA, LIKE SPECIFICALLY FOR MAYBE RENTAL, UTILITY ASSISTANCE, EVERYTHING THAT WE KIND OF SAW DURING THE PANDEMIC AND --

>> WALSH: SO YOU'VE GOT A QUICK ARPA UPDATE TOMORROW.

>> GARCIA: OKAY. GOOD. >> WALSH: JUST TO SHOW THAT IT'S 90-SOME-ODD MILLION DOLLARS IN ARPA WE'RE SCHEDULED TO SPEND NEXT YEAR IN A VARIETY OF DIFFERENT AREAS, BUT I THINK YOU HIT THE NAIL ON THE HEAD. WE ARE NOT GOING TO BE ABLE TO REPLACE A BILLION DOLLARS WORTH OF FEDERAL FUNDS, NO WAY NO HOW. AND SO REALLY IT'S GOING TO BE BASED ON WHAT ARE OUR PRIORITIES. I THINK IT'S GOING TO BE VERY DIFFICULT. AND I'LL TELL YOU I SPENT SOME TIME WITH SOME OTHER CITIES ON FRIDAY. EVERY CITY, EVERY BIG CITY IS -- IS IN THE POSITION WHERE THEY'RE ON THE BACK END OF ARPA AND THEY'RE HAVING THESE CONVERSATIONS ABOUT WHAT DO WE DO ABOUT X. BUT THERE'S NO WAY WE'LL

BE ABLE TO REPLACE THAT. >> GARCIA: WELL, SO I'M LOOKING FORWARD TO THAT CONVERSATION. AND I APPRECIATE THE TRACKING AND I'LL GO TO THAT TRACKING. I LOVE THE TRACKING AGAIN, I'D LOVE TO SEE HOW SUCCESSFUL SOME OF THOSE THINGS ARE, BUT I'LL START ACTUALLY ON SLIDE 9, AND I WAS WONDERING, WE JUST DO THE PERCENTAGE CHANGE INSTEAD OF THE TOTAL. CAN WE SEE A SLIDE THAT HAS THE TOTAL SALES TAX COLLECTED AS WELL? AND THAT'S JUST LIKE FOR FUTURE.

BY THE WAY, I LIKE THE BACKGROUND WITH THE SHOPPING CARTS, THAT WAS CUTE. AND I LOVE THE BACKGROUND ON SLIDE 11 AS WELL.

I JUST HAVE TO GIVE Y'ALL A SHOUTOUT. SO I LOVE THE PROPOSAL THAT BEN WAS TALKING ABOUT WITH THE CPS ENERGY, THE -- AND MAKING SURE THAT IT'S OVER ONLY AFTER WE COVER OUR EXPENSES IF WE'RE UNDER,

[01:00:02]

THE ACCESS TO HEALTHCARE IN THE SOUTH SIDE. >> WALSH: SURE, YEAH, WE CAN DO THAT. WE HAVE THAT NEW EMS UNIT COMING ONLINE, AND THEN WE'RE MOVING A FULL TIME PEAK UNIT DOWN TO FIRE STATION 21 TO COVER THE SOUTH SIDE. SO, YEAH, WE CAN SEE GEOGRAPHICALLY WHERE

THEY'RE AT. >> GARCIA: YES, PLEASE, THANK YOU.

ON PAGE 22, I NOTICE THAT WE'RE UNDER AS WELL ON SPAY AND NEUTER, AND SO -- AND THAT WORRIES ME. OBVIOUSLY THERE WAS A GREAT CONVERSATION YESTERDAY, BUT I'M -- I WAS HOPING THAT MAYBE WE CAN CONSIDER SOME ADDITIONAL -- I JUST HAD A BIG FIX EVENT IN D4.

I'D HOPE THAT WE CAN CONSIDER SOME ADDITIONAL ONES TO GET OUR NUMBERS BACK UP TO MAYBE IN THE PAST FOUR YEARS. IT LOOKS LIKE WE'RE AT THE LOWEST THIS YEAR WHEN WE NEED A WHOLE LOT. SO JUST FY I THERE.

AND THEN ON THE BUDGET INITIATIVES THERE ON PAGE 19, I NOTICE THAT THE PSYCHOLOGIST FOR FIRE, IT SAID NO SELECTION.

WAS IT PAY RELATED? COUNCILWOMAN, THE DEPARTMENT CONDUCTED INTERVIEWS AND WE DID NOT HAVE SUITABLE APPLICANTS TO MAKE AN OFFER SO THE POSITION WAS READVERTISED AND WE SHOULD BE DOING INTERVIEWS -- WE JUST COMPLETED ONE INTERVIEW. SO WE ARE DOING INTERVIEWS.

>> GARCIA: I WAS JUST WONDERING THAT WE WEREN'T OFFERING MARKET RATE OR SOMETHING, SO I WAS TRYING TO FIGURE OUT WHY THEY DIDN'T ACCEPT -- WHY WE DIDN'T OFFER IT. ON PAGE 433, I APPRECIATE THE SA-CORE EXPANSION, SO WE ARE DOING REALLY WELL THERE. IT LOOKS LIKE, AND ON PAGE 47, ALSO THE PAVEMENT -- THE MARKINGS, I REICH THAT WE'RE AT 51% OF THAT AS WELL AND THEN ON SLIDE 32, IF YOU CAN HELP ME UNDERSTAND, BECAUSE IT'S A LITTLE BIT DIFFERENT THAN YOUR OVERVIEW AND SUMMARY THAT YOU PROVIDED, THE FIVE-YEAR FINANCIAL FORECAST THAT YOU PROVIDED, ON PAGE 1, IT SAYS THAT THE REVENUE GROWTH FOR FISCAL YEAR 2025 IS FORECASTED AT 3.5 AND 2026, 3.7. AND 2028, 3.7.

AND THEN 2029, 3.8. AND SO -- IN GROWTH. BUT WE'RE ALSO -- BUT YOU MENTIONED A DEFICIT. SO CAN YOU HELP ME UNDERSTAND A LITTLE BIT

MORE WHAT THE DIFFERENCE IS. >> TATE: SURE.

SO THE DIFFERENCE BETWEEN THIS SLIDE AND WHAT'S INCLUDED IN YOUR DOCUMENT, THIS IS A SUMMARY THAT IS JUST SHOWING OUR REVENUES AND EXPENSES. AND AS I MENTIONED, THE PROJECTED REVENUES DOES

NOT INCLUDE OUR BEGINNING BALANCE. >> GARCIA: GOT IT.

>> TATE: SO THAT'S THE DIFFERENCE. >> GARCIA: THANK YOU.

>> TATE: SO THE FUND SCHEDULE THAT WE HAVE IN THE DOCUMENT IS THE

FULL FUND SCHEDULE WITH ALL THE DETAILS. >> GARCIA: GOT IT.

THANK YOU SO MUCH. THANK YOU, MAYOR, THOSE ARE MY ONLY QUESTIONS.

>> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER ROCHA GARCIA.

COUNCILMEMBER WHYTE? >> WHYTE: THANKS, MAYOR. WELL, I JUST WANT TO START BY SAYING THAT I'M THRILLED ABOUT WHAT WE'RE LOOKING TO DO HERE WITH RESPECT TO REINVESTING SOME OF OUR CPS MONEY BACK INTO CPS.

THIS IS SOMETHING THAT A FEW OF US TALKED ABOUT AT THE END OF LAST YEAR WHEN WE RAISED RATES ON THE CITIZENS FOR THE SECOND TIME IN THREE YEARS.

CPS NEEDS THE MONEY, WE NEED A VIBRANT, HEALTHY, CPS ENERGY GOING FORWARD, OF COURSE, BUT AS I SAID BACK THEN, AND I'LL SAY AGAIN, IT'S SIMPLY NOT RIGHT TO CONTINUE TO PUT IT ALL ON THE BACKS OF OUR CITIZENS.

AND YOU'LL RECALL AT THE RATE HIKE MEETING, I PROPOSED AN AMENDMENT THAT I APPRECIATE THOSE HERE THAT SUPPORTED IT TO TRY TO FUND CPS IN A DIFFERENT MANNER. AND HERE WE ARE TODAY AND I'M REALLY PLEASED THAT WE'RE LOOKING AT DOING THAT, IN ORDER TO OFFSET FUTURE RATE HIKES.

[01:05:03]

I'D STILL LIKE TO SEE A DEFINITIVE LINE ITEM IN THE BUDGET FOR CPS ENERGY. THE WAY THIS IS SET UP HERE WHERE IT'S EVERYTHING OVER $10 MILLION ON THESE OUT-OF-MARKET SALES, THAT'S GOOD, BUT IT DOESN'T PROVIDE A LEVEL OF CERTAINTY, I DON'T THINK, FOR CPS. SO I'D LIKE TO SEE SOMETHING LIKE WE GUARANTEE A -- PERHAPS, AND I'M JUST USING THIS NUMBER, IT'S NOTHING THAT WE'VE THOUGHT THROUGH TOO MUCH, BUT MAYBE A $5 MILLION LINE ITEM FOR CPS AND THEN WE PUT THIS FORMULA INTO PLACE. AND SO IF THERE'S ANYTHING OVER 10 MILLION, WE ADD THAT TO THE 5 MILLION THAT WE'RE ALREADY GUARANTEEING GOING BACK INTO CPS. SO THAT WE AT LEAST PROVIDE CPS WITH SOME CERTAINTY THAT WE'RE REINVESTING IN THEM.

AS WE ALWAYS SAY, THEY ARE AN IMPORTANT ASSET TO THE CITY, AND I'D LIKE TO SEE US SUPPORTING CPS AGAIN SO THAT WE CAN OFFSET FUTURE RATE HIKES. AND WE NEED TO BE REALLY CLEAR TODAY, THAT IF WE'RE -- WHATEVER PROPOSAL WE ADOPT HERE, WE NEED TO REMEMBER THAT WE ARE DOING THIS TO OFFSET FUTURE RATE HIKES, RIGHT? BEN, BECAUSE WE CAN'T -- WE CAN'T GUARANTEE THAT CPS IS GOING TO COME BACK TO US, YOU KNOW, REGARDLESS OF WHAT WE REINVESTS IN THEM, THEY CAN STILL COME BACK TO US AND REQUEST A RATE HIKE, RIGHT?

>> GORZELL: IS YOUR QUESTION IF WE DO THIS POLICY, THEY STILL HAVE

THE ABILITY TO COME BACK AND ASK -- ABSOLUTELY. >> WHYTE: SURE.

>> GORZELL: BECAUSE THEY HAVE TO RUN THE UTILITY& AT THE END OF THE DAY.

I DON'T KNOW WHAT THIS IS GOING TO GENERATE. THEY HAVE TO UPDATE THEIR PLAN, THEY GO THROUGH THAT PLANNING PROCESS, AND IF THEY BELIEVE THEY NEED ONE, THEN THEY'VE GOT TO COME HERE AND MAKE THAT BUSINESS CASE, SO

THAT'S STILL PART OF THE PROCESS. >> WHYTE: THAT'S RIGHT.

AND I APPRECIATE THAT. AND THAT'S REALLY MY POINT IS THAT AT THE END OF THE DAY, IT'S GOING TO BE UP TO THIS CITY COUNCIL TO LOOK BACK ON THIS MOMENT, IF THAT REQUEST FOR A RATE HIKE COMES, AND SAY, WAIT A MINUTE, YOU KNOW, WE HAVE BEEN REIN REINVESTING BACK IN CPS, AND YET DESPITE THAT, HERE WE GO AGAIN ASKING THE CITIZENS TO ONCE AGAIN PAY MORE, AND WE NEED TO REMEMBER THIS DAY.

AND THEN REALLY QUESTION WHETHER OR NOT WE'RE GOING TO DO ANYTHING WITH

RESPECT TO A FUTURE RATE HIKE. >> GORZELL: COUNCILMAN, I WANT TO CLARIFY A LITTLE BIT OF WHAT -- JUST TO MAKE SURE I'M CLEAR ON

WHAT WE'RE SAYING. >> WHYTE: SURE. >> GORZELL: SO IF YOU ADOPT THIS POLICY THAT WE PRESENTED, THAT POLICY WILL BE TIED TO -- AGAIN, WE GET TO THE END OF THE YEAR, THERE'S DOLLARS THERE, WE'RE GOING TO SEND THAT TO CPS ENERGY, WITH THE PURPOSE OF MITIGATING A FUTURE RATE

INCREASE. >> WHYTE: I UNDERSTAND. >> GORZELL: SO WHATEVER DOLLARS ARE IN THAT FUND, PLUS WHATEVER THEY GENERATE, WE'LL BE WORKING WITH THEM, WITH THE GOAL OF TRYING TO DRIVE DOWN THAT NEXT RATE INCREASE. SO THAT WILL BE -- I WANT TO MAKE SURE THOSE TWO THINGS ARE TIED. IT ISN'T JUST SENDING MONEY OVER, IT'S WITH THE INTENT FOR THAT PURPOSE, I JUST WANT TO BE CLEAR ABOUT THAT.

>> WHYTE: I'M 100% HEARING YOU ON THAT, RIGHT? BUT MONEY'S SPONGEABLE. SO THEY'RE GOING TO USE THAT MONEY IN SOME CERTAIN WAY, RIGHT, AND PRESUMABLY THEM HAVING THOSE FUNDS WILL OFFSET THE NEED FOR A FUTURE RATE HIKE, OR AT LEAST MINIMIZE IT.

THAT'S MY POINT. IS THAT -- IS THAT THIS BODY IS GOING TO HAVE TO, YOU KNOW, DEAL WITH THAT IF IT COMES AND WE'RE GOING TO HAVE TO REALLY REMIND CPS ABOUT ALL THE MONEY THAT WE'RE SENDING BACK TO THEM AND DOUBLY

THAT'S SIMPLY MY POINT ON THAT. >> GORZELL: YES. AND WE WOULD STILL GO THROUGH

OUR DUE DILIGENCE AND MAKE RECOMMENDATIONS. >> WHYTE: SURE.

I WOULD EXPECT NOTHING LESS. >> MAYOR NIRENBERG: ANDY? >>

>> SEGOVIA: THIS IS NOT ADOPTING ANYTHING TODAY. THERE'S NO ACTION BEING TAKEN.

THAT COMES LATER AS PART OF THE PROCESS WHERE YOU ADOPT ALL THE FINANCIAL POLICIES, CORRECT?

>> GORZELL: YES. TYPICALLY YOU WOULD ADOPT OUR COMPREHENSIVE SET OF FINANCIAL

POLICIES WITH THE NEXT ADOPTED BUDGET. >> WHYTE: IF WE CAN MOVE TO SLIDE 22 WITH REGARD TO THE NEED TO SLOW SPENDING IN THE GENERAL FUND TO ALIGN WITH REVENUE

GROWTH, WHAT'S OUR PLAN IN THAT REGARD? >> WALSH: WELL, WHAT DO YOU WANT TO DO? THAT'S THE CONVERSATION TOMORROW ABOUT COUNCIL PRIORITIES AND

[01:10:06]

BUT A LOT OF THAT RESTS ON HOW WHERE THE COUNCIL IS AT IN TERMS OF PRIORITIES AND INVESTMENT.

AND TIMING. BECAUSE IN THE FORECAST WE'RE ASSUMING -- WE HAVE ANOTHER 260 OFFICERS OVER A FOUR-YEAR PERIOD. YOU GUYS MAY SAY LET'S DO IT OVER FIVE YEARS, AND SPREAD THAT EXPENSE OUT A LITTLE BIT. REALLY, I THINK THE QUESTION IS, FROM THE COUNCIL'S STANDPOINT -- NOT YOURS. THE COUNCIL'S STANDPOINT, WHAT ARE THE COUNCIL'S PRIORITIES. WE'LL BALANCE THE BUDGET. THE BUDGET WILL BE BALANCED IN AUGUST. AND THAT'S WHAT MAKES TOMORROW A CRITICAL PART, THE BEGINNING OF

THAT SAUSAGE MAKING. >> WHYTE: SO STAFF HASN'T IDENTIFIED ANY AREAS, AS WE SIT

HERE TODAY, WHERE WE THINK WE CAN SLOW THE SPENDING? >> WALSH:

I'VE ASKED THE DEPARTMENTS TO START WORKING ON IT. >> WHYTE: ALL RIGHT.

>> WALSH: AND SO THE CONTEXT IS LAST MONTHLY EXECUTIVE MEETING WE HAD, I TALKED TO ALL THE CITY EXECUTIVES ABOUT RETURNING TO NORMAL. REMEMBER, WE USED TO GO THROUGH THIS. WE CUT EVERYBODY'S BUDGET TWO YEARS.

WE GREW EVERYBODY'S BUDGET. NOW IT'S TIME TO GET BACK TO NORMAL.

WE NEED TO START EXERCISING THOSE MUSCLES WE HAVEN'T USED OVER THE LAST COUPLE OF YEARS.

>> WHYTE: OKAY. I LOOK FORWARD TO THE CONVERSATION TOMORROW ON THAT.

ON SLIDE 32, LOOKING AT THE GENERAL FUND, THE FIVE-YEAR FORECAST AND PRIORITIES, REALLY JUST A COMMENT HERE THAT TO ME WE NEED TO CONTINUE TO PRIORITIZE OUR LAW ENFORCEMENT AND OUR FIREFIGHTERS. AND SO, YOU KNOW, WHAT YOU'LL HEAR FROM ME TOMORROW, WITHOUT QUESTION, IS THAT WE NEED TO MAKE SURE THAT OUR FOLKS ARE WELL TAKEN CARE OF.

I THINK WE ALL AGREE WE HAVE THE BEST FIRE DEPARTMENT AND THE BEST POLICE DEPARTMENT IN THE COUNTRY. AND SO I WANT TO CONTINUE TO MAKE SURE THERE.

AND THAT LEADS ME TO SLIDE 33. I WANT TO THANK CITY STAFF FOR THIS, THE COMPREHENSIVE DEPARTMENT BUDGET REVIEWS. THIS IS REALLY A GOOD STEP IN THE RIGHT DIRECTION, SOMETHING THAT OF COURSE ERIK, AS YOU KNOW I'VE BEEN MENTIONING TO YOU FOR A WHILE.

BUT I DO WANT TO NOTE THAT THIS I HOPE NOBODY IS CONFUSING WITH THE PROPOSAL THAT A FEW OF US SIGNED LAST WEEK WITH RESPECT TO ZERO-BASED BUDGETING.

THIS IS GOOD. WE DO NEED COMPREHENSIVE BUDGET REVIEWS.

WE DO NEED TO LOOK AT OPERATIONAL EFFICIENCIES AND HAVE OUTCOME-BASED PERFORMANCE MANAGEMENT. WE DO NEED ALL OF THAT. BUT IN NO WAY SHOULD WE THINK THAT THIS WOULD BE A SUBSTITUTE FOR A ZERO-BASED BUDGET THAT I REALLY BELIEVE WOULD BE OF GREAT VALUE TO THE CITY OF SAN ANTONIO MOVING FORWARD.

THANKS, MAYOR. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER WHYTE.

COUNCILMEMBER ALDERETE GAVITO. >> GAVITO: THANK YOU, MAYOR. I WANT TO THANK JUSTINA AND BEN FOR ALL Y'ALL'S HELP IN PREPARING THE PRESENTATION TODAY.

I THINK WE HAVE BEEN FORTUNATE TO RECEIVE ARPA FUNDING, WHICH I DO THINK HAS SET THE BAR HIGH FOR SERVICES THAT WE OFFER AS A CITY. BUT I REALIZE THAT WE NEED TO START THINKING TOWARDS THE FUTURE AND PLANNING FOR WHEN THAT FUNDING RUNS OUT.

COUNCILMAN WHYTE, I AGREE WITH YOU. I THINK THIS HIGHLIGHTS THE USEFULNESS FOR IMPLEMENTING THE ZERO-BASED BUDGET THAT WE HAVE BEEN TALKING ABOUT AND YOU HAVE SPEARHEADED. IT'S TIMELY, YOU KNOW, BECAUSE WE'RE GOING TO NEED TO START BUCKLING DOWN. ERIK, AS YOU WERE MENTIONING, IT IS A GOOD TIME TO RESET AND SEE WHERE WE NEED TO KIND OF GET MORE OPERATIONALLY EFFICIENT AND EFFECTIVE.

AND, FOR ME, THAT MEANS FOCUSING AS A CITY ON OUR CORE FUNCTIONS, WHICH IS POLICE, WHICH IS FIRE, WHICH IS INFRASTRUCTURE, ROADS, AND OTHER CITY SERVICES.

I'D LIKE TO TALK ABOUT SOME OF THE OTHER ITEMS THAT WE RECEIVED TODAY.

SO, BEN, REALLY QUICK. I KNOW THAT WE'RE KIND OF GOING BACK AND FORTH.

ON THE CPS SURPLUS, ON -- I THINK IT WAS SLIDE 13 -- WOULD ANY REVENUE THAT WE SET ASIDE,

[01:15:09]

>> GORZELL: WELL, THE GOAL HERE WOULD BE TO TRY TO MITIGATE FUTURE RATE INCREASE.

IT WOULD BE TAKING, WHAT ESSENTIALLY IS OUR 14%, COMBINING IT WITH THE 86% THAT THEY CONTINUE TO RETAIN. ASSUME THIS IS ALL ADDITIONAL REVENUE THAT NEITHER OF US PLANNED FOR. AND THEN DEPLOYING THAT IN A WAY, YOU KNOW, EITHER LESS DEBT FINANCING OR FINDING TARGETED KEY AREAS TO INVEST IN.

LOWER THAT REQUIREMENT OVER TIME. THE GOAL I WOULD SAY IS PROBABLY MITIGATION. UNLESS THESE NUMBERS GET REAL BIG.

>> GAVITO: AND I THINK THAT'S MY CONCERN. EVEN THOUGH WE'RE GOING TO TAKE STEPS TO PUSH OFF A RATE HIKE INCREASE, THAT THEY CAN COME BACK TO US NEXT YEAR AND, OH, WE STILL NEED IT. THAT'S WHERE I'M CONCERNED. AND MAYBE WE COULD -- I DON'T KNOW. I KNOW CPS IS REALLY HARD TO FORECAST OUT BUT I'M WONDERING WHAT WE COULD DO TO KIND OF GIVE THIS COUNCIL MORE PEACE OF MIND TO SAY IF WE'RE SETTING ASIDE THIS FUNDING TO PUSH OFF RATE HIKE INCREASES, HOW DO WE KNOW THAT THAT'S

GOING TO HAPPEN. >> GORZELL: THE PLAN WOULD BE TO WORK WITH CPS TO DEPLOY THOSE DOLLARS IN A WAY AS EFFECTIVE AS WE CAN, BOTH THEIR DOLLARS AND OUR DOLLARS.

SAME GOAL, TRYING TO MEET CPS ENERGY'S NEEDS BUT TRYING TO MITIGATE THAT RATE INCREASE.

BUT IT'S JUST GOING TO DEPEND ON WHERE THEY'RE AT TWO YEARS FROM NOW.

WHAT HAPPENS OVER THE NEXT TWO YEARS AS WE UPDATE ALL OF THAT.

AND THEN, YOU KNOW, AT THE END OF THE DAY, THEY'VE GOT TO BRING THAT BUSINESS CASE TO US, HAVING USED THESE DOLLARS, THEIR DOLLARS, WHATEVER IS THERE.

THEY HAVE TO MAKE THAT BUSINESS CASE TO US AND TO Y'ALL.

AT THE END OF THE DAY THEY'RE GOING TO HAVE TO DEMONSTRATE THAT THEY STILL NEED WHATEVER LEVEL OF RATE INCREASE THEY'RE ASKING FOR, IF THEY'RE ASKING FOR ONE.

>> WALSH: AND I THINK THE EXPECTATION, ESPECIALLY GIVEN THE RECENT COUNCIL CONVERSATION AND THE FACT THAT WE'RE TALKING ABOUT CAPTURING THIS WITHIN A NEW POLICY.

THE TRANSPARENCY EXPECTATION FOR, I'M ASSUMING FOR THE COUNCIL.

CERTAINLY FOR THE CITY AND THE RATE UTILITY, SUPERVISOR BEN GORZELL, AND CPS IS GOING TO BE ON A DIFFERENT LEVEL. WHEN I SAY "WE," I MEAN THE BIG WE.

HOW WE REPORT THAT AND WHAT'S HAPPENING WITH THAT I THINK IS GOING TO BE CRITICAL IN PART OF THAT ANALYSIS AS WELL. IT'S NOT, YOU KNOW, IT HAPPENS AND THEN NOBODY LOOKS AT IT UNTIL THEY SHOW UP FOR ANOTHER RATE INCREASE. THERE'S GOING TO HAVE TO BE INTERIM STEPS, INTERIM REPORTING. BEN AND I HAVE TALKED TO RUDY AND CORY ABOUT THE POLICY AND ABOUT CERTAIN EXPECTATIONS. I THINK WE NEED TO FINISH THAT CONVERSATION. BUT I'M CERTAIN THAT FROM OUR STANDPOINT THE STAFF, WE'RE GOING TO WANT TO BE ABLE TO SNEAK PEEK THAT. CERTAINLY THE COUNCIL IS GOING

TO WANT TO SEE THAT AS WELL. >> GAVITO: DEFINITELY. AND COUNCILMAN WHYTE, I THINK THAT'S WHAT YOU WERE SAYING. WE'RE GOING TO NEED SOME SORT OF ASSURANCE THAT WE'RE TAKING THE STEPS AND REPORTING THAT BACK. I DO HAVE SOME BUDGET INITIATIVE QUESTIONS BUT I THINK WE CAN SAVE THOSE FOR DIGGING IN TOMORROW.

THANK YOU FOR MENTIONING THE SA CORE. OUR TEAM JUST SPENT SOME TIME WITH THEM AND I'M GLAD WE'RE STAFFING THAT UP. TO WRAP THINGS UP, I DO WANT TO DOUBLE DOWN ON MY BELIEF IN THE ZERO-BASED BUDGETING APPROACH.

I THINK THIS IS TIMELY AND ALSO OUR SPENDING PRIORITIES. TO ENHANCE PUBLIC SAFETY, IMPROVE INFRASTRUCTURE, ADDRESS HOMELESSNESS, AND ASSISTING ACS AS A PUBLIC SAFETY ISSUE. I'M LOOKING FORWARD TO THE DISCUSSIONS TOMORROW.

THANKS SO MUCH, MAYOR. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER ALDERETE GAVITO. JUST A REMINDER, AGAIN, THE PRIORITIES CONVERSATION IS GOING TO TAKE PLACE TOMORROW SO DON'T FEEL LIKE YOU NEED TO USE YOUR TEN MINUTES ON SAYING WHAT YOU WANT IN THE NEXT BUDGET. THAT WILL BE FULL DAY

TOMORROW. COUNCILMEMBER VIAGRAN. >> VIAGRAN: THANK YOU, MAYOR. I AM JUST GOING TO START WITH THE PROPOSED FINANCIAL POLICY ON THE CPS PAYMENT. WE'RE GOING TO HAVE TO HAVE MORE CONVERSATION ON THAT.

I DON'T THINK -- I'M NOT IN FAVOR OF THIS AND I THINK ANY SORT OF TALK ABOUT A LINE ITEM FOR CPS WE WOULD NEED TO GO OUT TO THE VOTERS. THEY WERE OVERWHELMINGLY NOT HAPPY WITH THE REBATE. SO LET'S -- WHERE THAT'S CONCERNED, WE CAN PUT A PIN ON THAT. THE OTHER THING I WANTED TO TALK ABOUT -- AND THIS IS ON THE SIX FIVE SIX ANNUAL REPORT. I KNOW YOU HAD A SLIDE SHOW

[01:20:07]

IN PARTS OF THE EAST SIDE, ONE OPTION FOR INTERNET SERVICE PROVIDERS.

MAYBE WE WOULD GET A FEW MORE DOLLARS IF THEY DECIDED TO MOVE IN THOSE DIRECTIONS.

WE DO HAVE PEOPLE THAT NEED THE INTERNET AND WE NEED TO DO THAT.

SO THAT'S MY CONCERN THERE. AND I DO AGREE WITH COUNCILWOMAN ROCHA GARCIA THAT WE DO NEED TO LOOK AT THE SOUTHSIDE AND THE HOSPITALS AND WHAT WE'RE SEEING THERE AS WE MOVE FORWARD AND WHERE THERE MIGHT BE ROOM FOR OPPORTUNITY.

AND THEN ALSO ON PAGE 7 OF SIX BY SIX REPORT, AS WE ARE GETTING MISSING SERVICES WITH MEALS, I'D LIKE TO SEE HOW WE CAN USE ANY ADDITIONAL FUNDS TO SUPPLEMENT THAT AND ANY ARPA DOLLARS, WE COULD POSSIBLY SUPPLEMENT THAT IF WE HAVE ANY LEFTOVER MONEY.

AND THEN ALSO PROVIDING -- RIGHT-SIZING OUR POLICE DEPARTMENT AND GETTING THE RIGHT NUMBER OF OFFICERS THERE. THE ONE THING I BELIEVE, IN TERMS OF AS WE MOVE FORWARD, IS THAT SUSTAINABILITY, RESILIENCY IN THE HOMES AND ENERGY EFFICIENCY IS THE BEST WAY TO LOWER YOUR UTILITY BILL.

THAT TAKES A LOT FOR HOMES ON THE SOUTHSIDE. WITH THAT, I ALSO WANT TO MOVE ON TO TALK ABOUT THE NEXT SECTION, WHICH WAS THE GENERAL FUND FORECAST.

JUSTINA AND TEAM, BEN, THANK YOU FOR ALL YOUR WORK. I SEE THAT WE'RE BALANCED FOR 2025 AND 2026 BUT WE SEE A DEFICIT PROJECTED. AND I THINK WHAT SHOULD BE CONCERNING TO ALL OF THE COUNCIL IS THE SALES TAX CHANGE FROM PRIOR YEAR COLLECTIONS. WE NEED TO TAKE A LOOK AT THAT BECAUSE THAT IS DIRECTLY WHAT IS HAPPENING TO OUR SMALL BUSINESSES AND IN OUR SMALL BUSINESSES' CORRIDOR.

I'M NOT SURE IF WE CAN DO A DEEPER DIVE INTO WHERE WE SEE THIS SALES TAX LOWERING.

IF WE SEE OUR MAJOR COMMERCIAL CORRIDORS, WHAT'S HAPPENING THERE.

BUT I KNOW FOR DISTRICT 3 WE HAVE GEVERS. WE HAD GOLIAD.

WE HAD BUSINESSES SHUT DOWN ON BROADWAY AND SO AND THAT WAS SLIDE 27. AND I KNOW WE WILL GET A BOOST BECAUSE OF THE FINAL FOUR, BUT I REALLY THINK WE NEED TO SEE HOW WE CAN HELP THAT ALONG. AND IF WE DON'T ADDRESS IT NOW, I THINK WE'RE GOING TO SEE THAT DEFICIT GROW FOR THE LAST THREE YEARS.

IT WAS A LOT THAT Y'ALL GAVE US AND MOST OF WHAT WE HAD WAS IN THE REPORT WHERE MY QUESTIONS COME FROM. THE LAST THING IS I LOOK FORWARD TO TOMORROW'S DISCUSSION TOMORROW. I THINK WE HAVE DONE A GOOD JOB AT THIS POINT TO KEEP A BALANCED BUDGET. I REMEMBER THE DAYS, ERIK, WHEN I USED TO ACTUALLY BE AN EMPLOYEE WITH THE CITY OF SAN ANTONIO AND WOULD WATCH THESE BUDGET SESSIONS THAT WERE NOT IN APRIL BUT FURTHER DOWN IN DIFFERENT MONTHS. THE DISCUSSION WAS LONGER THAN TEN MINUTES BUT VERY ACTIVE PRIORITIES WERE MADE. AND I THINK WHAT WE NEED TO UNDERSTAND IS WE WILL GET WHERE WE NEED TO GET TO BUT ANY BACKWARDS LOOK AT A ZERO-BASED BUDGET IS OUTDATED AND IS CONTRARY TO ANYTHING THAT WE'VE DONE WHERE WE'VE -- THAT HAS GOTTEN US THIS FAR IN TERMS OF OUR EQUITY.

I LOOK FORWARD TO THE CONVERSATION TOMORROW. THANK YOU FOR THE PRESENTATION. I THINK THERE'S CONCERNS HERE WHERE THE SALES TAX AND THE

[01:25:01]

>> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER VIAGRAN. COUNCILMEMBER CABELLO HAVRDA.

>> HAVRDA: THANK YOU, MAYOR. THANK YOU FOR THE PRESENTATION.

I WANT TO START WITH THE AIRPORT EXPANSION. I'M JUST ENCOURAGED FOR THE PROJECTIONS. CONGRATULATIONS TO JESUS AND JEFF AND TO THEIR TEAMS FOR DELIVERING ON THE AIRPORT EXPANSION FUNDING PLAN. I'M THANKFUL THAT'S A PRETTY SOLID BUDGET ITEM THAT WE DON'T MESS WITH A LOT BUT I'M GLAD WE DON'T.

I'M JUST MAKING THAT POINT. I WANT TO ALSO -- I THINK IT WAS SLIDE 32 -- EXPRESS SUPPORT FOR OUR PUBLIC SAFETY DEPARTMENTS, POLICE, FIRE, AND I'M ALSO GOING TO INCLUDE ACS IN THAT. I HEAR CONSISTENTLY FROM MY CITY THAT PUBLIC SAFETY IS ONE OF THEIR PRIORITIES, ALONG WITH HOUSING, POSITIVE HEALTHCARE OUTCOMES AND I ASK THAT WE ENSURE PUBLIC SAFETY CONTINUES TO BE A PRIORITY. AGAIN, ANOTHER SOLID ITEM IN OUR BUDGET, LIKE THE AIRPORT. JUST WANTED TO POINT THAT OUT. GOING OVER TO CPS, THE PROJECTED CPS ENERGY SURPLUS. UP UNTIL NOW IT WAS HOW MUCH FOR THE FIRST SIX MONTHS?

OR FOUR MONTHS. I'M SORRY. >> TATE: FOR THE FIRST SIX

MONTHS WE HAVE $18.5 MILLION MORE. >> HAVRDA: WHAT IS PROJECTED

FOR THE REST OF THE YEAR. >> TATE: $19 MILLION BUT THAT INCLUDES THE CAP OF THE OFF-SYSTEM SALES OF $10 MILLION, WHICH WE ALREADY HIT.

WE HIT THAT BACK IN JANUARY. >> HAVRDA: OKAY. SO IT'S -- THE PROJECTION OF

THE EXTRA MILLION IS BECAUSE IT'S OVER THE $10 MILLION? >> GORZELL: SLIDE 13.

SO, COUNCILWOMAN, THIS ONE -- YOU CAN SEE THE THREE PLUS NINE PROJECTION.

AND THEN 14.9 WITH OFF SYSTEM SALES. WE'RE APPLYING THE NEW FINANCIAL POLICY SO THAT'S LIMITING THE SALES AT $10 MILLION BUT WE'VE

INCREASED THE BASE FROM 421 TO 430. >> HAVRDA: OKAY.

UNDERSTOOD. WITH REGARD TO THE POTENTIAL REBATE TO CPS -- I'M CALLING IT A REBATE. OF COURSE WE'RE GOING TO TALK ABOUT THIS TOMORROW.

I JUST WANT TO, AS WE GO INTO ANOTHER BUDGET SEASON, WE HAVE TO BE ABLE TO SAY THAT WE'VE DONE EVERYTHING WE CAN TO MITIGATE A RATE INCREASE. I LOOK FORWARD TO THE CONVERSATION TOMORROW. I AM JUST SORT OF CURIOUS, ON SLIDE 39, EVERYTHING TRENDED UP AS FAR AS BUDGET INCREASES THROUGH 2029, EXCEPT FOR CONVENTION FACILITIES.

WHY IS THERE A DECREASE? >> TATE: SO FOR CONVENTION FACILITIES, THE 2025 PROJECTION INCLUDES ABOUT $2.5 MILLION TO PUT ON THE FINAL FOUR.

AND SO THAT IS JUST A ONE-TIME EXPENSE THAT WE'LL SEE IN '25 AND IT GOES AWAY IN 2026.

AND THEY ARE ALSO GETTING ADDITIONAL REVENUE IN THE CONVENTION CENTER OVER THE

YEARS SO IT REQUIRES LESS FROM THE HOT TAX TRANSFER. >> HAVRDA: OKAY.

AND ALL OF THIS I'M SURE INCLUDES MAINTENANCE OF THE FACILITIES AND I KNOW THEY'RE GETTING OLDER AND WE'VE DONE A LOT OF WORK ON THEM RECENTLY. I WAS JUST CURIOUS WHY IT WAS GOING DOWN. BUT I UNDERSTAND THAT. THAT'S REALLY ALL I HAD,

MAYOR. SORRY, MAYOR PRO TEM. >> GARCIA: THANK YOU,

COUNCILWOMAN HAVRDA. COUNCILWOMAN CASTILLO. >> CASTILLO: TH THANK YOU, BEN AND JUSTINA. IN LOOKING AT THE MARCH STATUS REPORT, I'M PLEASED TO SEE WITH THE ANIMAL CARE SERVICES THAT WE'RE AHEAD OF SCHEDULE WITH ENHANCED RESPONSE TO DANGEROUS DOG BITES AND INVESTIGATIONS. FURTHER, I'M EXCITED TO SEE THAT YOU ARE EXPLORING THE WEST SIDE OF SAN ANTONIO. AND OFFLINE I WOULD LIKE TO GET BRIEFED ON WHAT THE REAL ESTATE LOOKS LIKE THAT YOU ALL MAY BE CONSIDERING.

TWO ADDITIONAL PIECES THAT I'M REALLY EXCITED TO SEE THAT ARE ON SCHEDULE ARE RELATING TO OPPORTUNITY HOME, THE MAINTENANCE FUND. I SEE THAT CASSIANO HOMES HAS BEEN IDENTIFIED. THEY WILL BE VERY PLEASED TO SEE THAT'S IN THE QUEUE AND READY TO GET EXECUTED. WITH THE SAN ANTONIO VOLUNTEER EXEMPTION FOR SENIORS PILOT PROGRAM, WHEN CAN WE HAVE AN OPPORTUNITY TO RECALIBRATE AND EXPAND THE PROGRAM? FOR EXAMPLE, WHAT I LEARNED FROM A SENIOR IS THAT SINCE SHE HAS A MORTGAGE, SHE DOESN'T QUALIFY FOR THE PILOT. I UNDERSTAND SINCE IT'S NOT TECHNICALLY HER HOME BUT IT'S STILL A WAY TO KEEP FOLKS IN THEIR HOMES. AT WHAT POINT CAN WE HAVE A DISCUSSION ON REVISITING THE PILOT AND POTENTIALLY EXPANDING THE PARAMETERS FOR

MORE PARTICIPATION? > >> WALSH: YOU SAID YOU

[01:30:08]

WANTED TO BE BRIEFED ON WHAT ASPECT OF THE ACS? >> CASTILLO: ON WHERE IN THE

WEST SIDE -- >> WALSH: OH, WHERE IN THE WEST SIDE.

>> YES, MA'AM. ONCE WE ACTUALLY COMPLETE THIS YEAR, WE'LL GO BACK AND LOOK AT HOW SUCCESSFUL THE PROGRAM WAS. I AM AWARE THAT THERE IS AN ISSUE WITH MORTGAGES RIGHT NOW. WE'RE STRUGGLING WITH HOW TO ACTUALLY REMEDY THAT. THAT'S SOMETHING WE'RE CURRENTLY LOOKING AT.

IT GIVES US AN OPPORTUNITY TO GET THROUGH THE AIR AND LOOK AT IT AND COME BACK WITH

RECOMMENDATIONS. >> CASTILLO: THAT'S HELPFUL. WHEN VISITING THE SENIOR CENTER THERE'S FOLKS WHO WERE EAGER TO APPLY. I AM GRATEFUL TO SEE THERE'S GOING TO BE ABOUT $6,000 LOOKING TO BE REDUCED FROM SENIOR'S PROPERTY TAXES.

THANK YOU FOR AN INITIATIVE ON THAT PROGRAM. THOSE ARE ALL MY QUESTIONS ON THAT ITEM. WITH THE GOOD NEIGHBOR AND THE DANGEROUS PROGRAM, THE REMAINING TWO POSITIONS, WHAT ARE THOSE TWO POSITIONS FOR FOR THE GOOD NEIGHBOR PROGRAM.

THAT'S ON PAGE 32 OF THE MARCH STATUS REPORT. >> VILLAGOMEZ: THOSE ARE

DATA AN ANALYSTS THAT WE ARE IN THE PROCESS OF HIRING. >> CASTILLO: WHAT'S THE

EXPECTED TIMELINE? >> VILLAGOMEZ: IT SHOULD BE IN THE NEXT FEW WEEKS.

WE WERE CONDUCTING INTERVIEWS AND WE ARE MAKING OFFERS TO THE INDIVIDUALS WE SELECTED.

WE'RE JUST GOING THROUGH THE PROCESS. ONE OF THE THINGS WE HAVE FOUND OUT, PHYSICIANS WHO HAVE THE SKILL TO DO THE DATA ANALYST, IT'S A VERY COMPETITIVE MARKET RIGHT NOW. SO WE ARE WORKING ON THOSE OFFERS.

>> CASTILLO: THANK YOU, MARIA. I APPRECIATE THAT.

IN REGARDS TO THE CONVERSATION ON CPS ENERGY, MY CONCERN IS THAT THERE'S NOT NECESSARILY A GUARANTEE. I UNDERSTAND THAT IT'S VOLATILE SO WE CAN'T REALLY ANTICIPATE OR PROJECT. BUT WHAT I HEAR FROM, YOU KNOW, MY COMMUNITY AND CONSTITUENCY IS THAT THEY'RE TIRED OF PLATITUDES AND WHAT I'M HEARING IS HOW CAN WE MITIGATE. THE BEST WAY TO MITIGATE THAT IS TO VOTE NO ON A RATE INCREASE. THE CITY COUNCIL AND THIS BODY.

THAT'S AN ACTION WE CAN TAKE TO MATERIALLY IMPROVE THEIR LIVES.

BUT WITH THAT, MY CONCERN IS THAT THERE'S NO GUARANTEE. I UNDERSTAND WHY THERE CAN'T BE ONE BUT WHAT TYPE OF ASSURANCES CAN CPS ENERGY PROVIDE TO THIS COUNCIL SO THAT WAY WE HAVE A GUARANTEE THAT A RATE INCREASE WILL BE MITIGATED.

AND I UNDERSTAND PROJECTIONS AND THAT THEY MAY COME BACK AND THEY HAVE TO MAKE THEIR CASE BUT I WANT TO HIGHLIGHT THEY'RE OUR PUBLIC UTILITY. WE PROVIDE GUIDANCE TO THEM AS WELL. I DON'T WANT US TO FEEL THAT WE HAVE TO FOLD TO CPS IN

ORDER TO MITIGATE A RATE INCREASE. >> WALSH: SO I THINK WE NEED TO REDUCE THIS TO WRITING, FIRST STEP. WE HAVEN'T DONE ANY OF THAT.

WE'VE TALKED TO CPS ABOUT IT BUT OBVIOUSLY, BASED ON AT LEAST SOME OF THE CONVERSATION THIS AFTERNOON, WORDS LIKE ASSURANCES AND MITIGATION AND GUARANTEE AND USE OF FUNDS AND REPORTING AND TRANSPARENCY, THAT'S A LOGICAL FIRST STEP FOR US.

WE NEED TO DO THAT ANYWAY BECAUSE IT'S OUR FINANCIAL POLICY.

THAT'S A STEP WE NEED TO TAKE. AND THEN AT SOME POINT REVIEW THAT WITH THE COUNCIL TO SEE

WHAT YOUR FEEDBACK IS ON THAT. >> SEGOVIA: IF I MAY, ERIK, AND COUNCILWOMAN, BECAUSE IT'S CITY FUNDS THAT WOULD GO BACK TO CPS, WE CAN, AS ERIK SAID, DOCUMENT SOME PRETTY DETAILED OBLIGATIONS THEY WOULD HAVE IN TERMS OF SPENDING SO THAT IT WOULD TRULY MITIGATE ANY RATE

INCREASE. >> CASTILLO: THANK YOU FOR THAT.

WHEN I LOOK AT THE PROPOSAL AND THEN I LOOK AT SLIDE 32 FOR THE CITY'S FIRE COLLECTIVE BARGAINING PROPOSAL, I SEE A RESPONSIBILITY FOR US TO MEET THE FIRE ASSOCIATION'S DEMAND AT NOT LOOKING AT FIVE YEARS BUT COMING TO THREE YEARS. I JUST SEE A RESPONSIBILITY FOR US TO ENSURE THAT WE'RE MEETING THOSE DEMANDS WITH INCREASING BASE PAY AND WAGES.

I KNOW THAT'S A CONVERSATION THAT'S TAKING PLACE AND THEY'RE ASKING FOR THINGS THAT THEY NEED, LIKE STAND-BY PAY AND AN INCREASE TO CERT PAY. I SEE A RESPONSIBILITY FOR US TO ACT TO ENSURE WE'RE SUPPORTING THE FIRE ASSOCIATION'S COLLECTIVE BARGAINING PROPOSAL. PLEASED TO SEE IT'S INTEGRATED IN HERE BUT I ALSO SEE A RESPONSIBILITY FOR US TO TACKLE THAT. THANK YOU, MAYOR.

THOSE ARE ALL MY COMMENTS. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER CASTILLO.

COUNCILMEMBER KAUR. >> KAUR: THANK YOU, MAYOR. THANK YOU SO MUCH TO THE TEAM FOR THE PRESENTATION AND FOR ALL YOUR WORK PUTTING THIS TOGETHER.

IT WAS AGREED WITH COUNCILWOMAN VIAGRAN, IT WAS A LOT OF INFORMATION AND A LOT TO DIGEST WITHIN JUST A FEW DAYS. JUST A REQUEST THAT MAYBE FOR THE NINE OVER 12 REPORT THAT WE GET IT A WEEK IN ADVANCE INSTEAD OF A MONDAY .

>> WALSH: NO, I REALLY DON'T WANT TO SET UP EXPECTATIONS THAT WE'LL NOT BE ABLE TO

[01:35:04]

BUT WE TRY TO GET IT ON MONDAY. I JUST DON'T THINK I CAN GET IT TO YOU ANY SOONER. IF I TOLD YOU YES THEN I DON'T THINK I WOULD BE ABLE TO DO

IT. >> KAUR: I APPRECIATE THE TRANSPARENCY.

SO AT A MACRO LEVEL, I DO THINK IT'S EXCITING TO SEE ALL THE REVENUE POTENTIAL.

THAT'S NOT SOMETHING WE NORMALLY GET TO DISCUSS. I ECHO SOME OF MY COUNCIL COLLEAGUES' CONCERNS ABOUT WHERE THOSE CPS DOLLARS GO. I THINK IN THE LAST CONVERSATION WE HEARD A LOT ABOUT DOLLARS THAT NEED TO GO FOR THEIR CAPITAL PROJECTS, FOR THEIR I.T. INFRASTRUCTURE. WE NEED TO MAKE SURE THAT WE GET THOSE ASSURANCES IN WRITING SO THAT WE DO, AT THE END OF THE DAY, SUPPORT THE FOLKS THAT WE KNOW THAT NEED IT MOST IN OUR COMMUNITIES, WHICH IS OUR MOST UNDERSERVED RATEPAYERS, I WOULD SAY.

FROM THE FIVE-YEAR FINANCIALS, I HAVE A COUPLE OF QUESTIONS ON THE ASSUMPTIONS MADE FOR PROPERTY TAX RATES AND SALES TAX RATES. ARE THOSE TAX RATES -- I'M ASSUMING THAT THE RATES ARE KEPT THE SAME OVER THE NEXT FIVE YEARS BUT IT'S JUST THE AMOUNT OF HOUSEHOLDS THAT YOU'RE INCLUDING? OR IS IT VALUATION OR IS IT PRODUCT VALUES THAT ARE INCREASING? WHAT ARE THE ASSUMPTIONS THAT ARE MADE FOR THOSE INCREASES IN PROPERTY TAX AND SALES TAX RATES?

>> FOR PROPERTY TAXES, EVERY YEAR WE'RE WORKING CLOSELY WITH THE BEXAR COUNTY APPRAISAL DISTRICT AND WE HAVE OUR BASE. AS JUSTINA MENTIONED EVERY YEAR WITH THE STATE STATUTE, WE ARE CAPPED AT HOW MUCH WE ARE GROW FROM THE BASE ON OUR MAINTENANCE AND OPERATIONS SITES. WE'RE CAPPED AT 3.5%.

ABOVE THAT 3.5%, HISTORICALLY THERE'S ACT 2% IN NEW IMPROVEMENTS AND THAT'S KIND

OF WHAT PROJECTS THE 5.5% OVER THE FUTURE. >> KAUR: GOT IT.

I GUESS MY QUESTION WAS MORE SO ARE WE INCLUDING THE AMOUNT OF HOUSEHOLDS THAT MIGHT BE

ADDED TO OUR POPULATION IN THOSE ASSUMPTIONS? >>

>> KAUR: SO IT'S A COMBINATION OF BOTH. >> IT IS.

>> KAUR: IF WE'RE JUST ASSUMING THAT VALUATION NG OR JUST MAKING THE COST OF LIVING HIGHER FOR THE RESIDENTS AND I WANT TO MAKE SURE TO CALL THAT OUT.

OKAY. SPECIFIC QUESTION ON THE HOT TAX FOR SLIDE 39.

I DON'T REMEMBER. CAN SOMEONE REMIND ME HOW THAT 7% IS SPLIT OUT IN THE

DIFFERENT COMPONENTS THERE? >> TATE: SO SLIDE 36 WILL SHOW -- GOODNESS.

SORRY. 37. SO THIS SLIDE SHOWS THE 7% AND HOW THAT 7% IS ALLOCATED TO THE DIFFERENT COMPONENTS. SO 35% TO CONVENTION FACILITIES. 35% VISIT SAN ANTONIO. 15% FOR BOTH HISTORY AND PRESERVATION AND ARTS. ONE THING I DO WANT TO NOTE THAT WE TAKE THE DEBT -- WHAT WE NEED TO FUND THE DEBT FROM THE 7%. SO THIS ALLOCATION IS NET OF

THAT DEBT PAYMENT. >> KAUR: GOT IT. IS THIS ALLOCATION, IS THIS

STATE POLICY, CITY POLICY? >> TATE: THE ART IS STATE POLICY.

THE VISIT SAN ANTONIO -- AND HISTORY AND PRESERVATION. VISIT SAN ANTONIO IS PART OF

AN AGREEMENT THAT WE HAVE WITH VISIT SAN ANTONIO. >> KAUR: AND WE JUST KEEP

THE REST FOR THE CONVENTION? >> THE CONVENTION FACILITIES, WHAT THEY NEED IN ORDER TO

MAINTAIN THEIR EXPENSE LEVEL. >> KAUR: GOT IT. >> WALSH:

>> KAUR: UNDERSTOOD. THANK YOU FOR THAT BREAKDOWN. AND THEN SPECIFICALLY ON THE SIX OVER SIX REPORT , I HAVE A PROCESS QUESTION. HOW DO WE DETERMINE THE PERCENTAGE OF COMPLETION? SO, FOR EXAMPLE, THERE WAS AN ACS REPORT ON THE SEVEN DANGEROUS DOG OFFICERS THAT WERE ALREADY HIRED. AND THE TIME FROM REPORT WENT FROM 30 HOURS TO 27.5 HOURS. THE GOAL IS 16 HOURS BUT IT WAS REPORTED AT 45% COMPLETION. SO LIKE DO THE DEPARTMENTS REPORT BACK TO US WHAT THEY THINK THEIR PERCENTAGE COMPLETION IS OR DO YOU LOOK AT THE METRIC AND THEN MAKE A

DETERMINATION ON PERCENTAGE COMPLETION? >> TATE: IT'S A COMBINATION OF BOTH. THE DEPARTMENT REPORTS WHAT THEIR STATUS IS AND THEN WE LOOK AT IT. FOR ACS OR FOR THEIR IMPLEMENTATION PLAN, THEY'RE NOT GOING TO HIT THE 16 HOURS RIGHT AWAY SO WHAT THEY'RE LOOKING AT IS WHAT SHOULD HAVE

[01:40:05]

END OF THE YEAR. >> KAUR: OBVIOUSLY IT DIFFERS FOR EACH DEPARTMENT ON HOW PERCENTAGE OF COMPLETION I'M SURE IS CALCULATED. SOMETIMES IF IT'S 22,000 OF THE 44,000 SPAY AND NEUTERS, THAT'S EASY TO CALCULATE. I WAS HAVING A HARD TIME

MEASURING SUCCESS IN CERTAIN AREAS VERSUS OTHERS. >> WALSH: THAT'S A COMMON ISSUE FOR REPORTING. TO -- AND IT'S PROBABLY SOMETHING WE NEED TO DO A BETTER JOB OF IT NEXT YEAR. EVERY DEPARTMENT -- THE BUDGET APPROVES THIS ISSUE.

THE DEPARTMENT HAS AN IMPLEMENTATION PLAN AND SO WE NEED TO DO PROBABLY A BETTER JOB ON THE FRONT END FOR THE COUNCIL TO SAY HERE'S THE IMPLEMENTATION PLAN OF THIS ISSUE. THAT WAY YOU SEE WHAT THE SCHEDULE IS.

>> KAUR: I WOULD LOVE THAT BECAUSE THEN THAT WOULD MAKE IT MORE -- WHEN I'M SEEING THESE NUMBERS, IT WOULD MAKE THINGS MATCH UP A LITTLE BIT MORE.

I'M REALLY EXCITED FOR THE NINE OVER 12 REPORT BECAUSE WE'RE GOING TO SEE A LOT OF GROWTH, I'M ASSUMING THERE. JUST A COUPLE OF SHOUT OUTS ON THE SPECIFIC WORK BEING DONE.

IT WAS EXCITING TO SEE THE ENHANCED LIBRARY CARD PROGRAM BEING SUPER SUCCESSFUL.

WE'RE ALMOST HALFWAY TO OUR GOAL THERE. AND THE PUBLIC INFORMATION CAMPAIGN, ALSO ABOUT THE SHIP. THE HOUSING EVENT WAS REALLY SUCCESSFUL AND I KNOW THOSE ARE TWO PROJECTS THAT I THINK HAVE GONE REALLY WELL. WE HAVE A HUGE LIST FOR THE SENIOR ASSISTANCE PILOT PROGRAM FOR THE TREE REMOVAL. I KNOW THAT'S LIKE OVERCOMMITTED ALREADY BUT THE WORK ISN'T HAPPENING AS FAST, SO I WOULD LIKE TO SEE THAT BEING PUSHED A LITTLE BIT FURTHER FORWARD. I KNOW WE'LL TALK ABOUT RESOURCING ANOTHER TIME. I ALSO WANT TO SHOUT OUT OHP FOR THEIR WORK WITH THE VFW POST PROJECT. WE WERE ABLE TO FIND THEM SUPPORT IN THAT AREA.

THE GREEN SPACE ACTIVATION AND THREE THINGS ON THE GREEN SPACE ACTIVATION, PLAYGROUND, SHADEWORK, I KNOW IT'S SUPPOSED TO BE DONE BY OCTOBER BUT OUR TWO NEIGHBORHOODS WHO ARE GETTING THEM, THEY'RE LIKE THAT'S UNFORTUNATE BECAUSE THEY REALLY WANTED THEM BEFORE THE SUMMER. I DON'T KNOW IF THERE'S A WAY TO PRIORITIZE.

THE LOW-INCOME WEATHERIZATION PROGRAM TOO , WANTING TO SEE HOW WE CAN PUSH THOSE TWO PROJECTS FORWARD. THOSE ARE SOME OF THE THINGS I WANTED TO CALL OUT ON THE SIX OVER SIX. I REALLY ENJOYED READING THE 24/7 REPORT BECAUSE IT HAD REALLY STRONG TARGET METRICS. I WAS CURIOUS. HOW DID WE COME UP WITH THOSE METRICS IN TERMS OF WE WANT 2022 BOND PROJECTS 25% PREDESIGNED, ET CETERA.

>> VILLAGOMEZ: COUNCILWOMAN, SIMILAR TO THE BUDGET INITIATIVES, THAT IS SOMETHING THAT WE WORK WITH THE CITY DEPARTMENTS. IN THIS CASE, WITH PUBLIC WORKS. AND THEY DEVELOP THOSE METRICS FOR THE ENTIRE PROGRAM.

SO WHAT YOU SEE ON THE 24/7 IS THEIR PROGRESS OVER THE NEXT FIVE YEARS.

>> KAUR: GOT IT. I WOULD LOVE TO SEE IF WE COULD PLAY A ROLE -- THIS INFRASTRUCTURE ONE IS THE ONE I GOT REALLY EXCITED ABOUT BECAUSE I SAW A LOT OF BOND PROJECT GOALS FOR '17 AND '22. I WOULD LOVE TO SEE THOSE TARGETS BE MORE AGGRESSIVE BUT I UNDERSTAND WHY SOME OF THE PROJECTS ARE LACKING BUT THERE'S OTHER GOALS IN INFRASTRUCTURE THAT I THINK WE COULD LIST. SO I WANT TO REALLY DIG INTO A LITTLE BIT MORE ABOUT HOW WE ASSESS OUR BOND PROJECTS AND HOW WE'RE RESOURCING AND

TRACKING GOALS. I WANTED TO SHARE IT OUT LOUD. >> WALSH: I WOULD WELCOME -- AND AS YOU'VE HAD A CHANCE TO LOOK AT IT AT OUR REGULARLY-SCHEDULED MEETINGS, IF YOU HAVE FEEDBACK, TO ME THE 24/7 REPORT IS THE 20 OR 25 THINGS THAT I NEED TO KNOW IN A HEARTBEAT OF HOW WE'RE DOING. IT'S NOT EVERYTHING BUT THEY ARE THE SIGNIFICANT THINGS. IF YOU LOOK AT THAT, WHEN WE HAVE OUR NEXT REGULAR MEETINGS INDIVIDUALLY, GIVE ME SOME FEEDBACK. BECAUSE SOME OF THOSE MEASURES HAVE BEEN THE SAME FOR A WHILE. OTHERS ARE NEW.

AND IT DOES NEED TO BE CONSTANTLY REFRESHED BECAUSE IT'S MEANT TO BE A PULSE CHECK

ON MAJOR ISSUES. >> KAUR: I AGREE. AND I THINK THE WAY IT WAS INVITATION. OKAY. THANK YOU, MAYOR.

>> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER KAUR. COUNCILMEMBER COURAGE.

>> COURAGE: THANK YOU, MAYOR. AND I WANT TO COMMEND THE STAFF. AS USUAL, I THINK YOU'VE DONE A GREAT JOB OF GIVING US SOME OF THE INFORMATION WE NEED TO HELP MAKE DECISIONS HERE. BUT THIS IS AN OPPORTUNITY FOR US TO I GUESS KIND OF FURTHER DELVE INTO IT SO WE HAVE A BETTER INDIVIDUAL UNDERSTANDING AS WELL AS A COLLECTIVE ONE. I'M REMINDED THAT WHEN WE LOOK

[01:45:01]

OR THREE OR FOUR BUDGET CYCLES? >> TATE: YES, WE HAVE USED OUR TWO-YEAR RESERVE OVER THE PAST COUPLE OF BUDGET CYCLES. ON THE SLIDE WHERE IT SHOWED THE GROWTH AND EXPENSES AND REVENUES. YOU SAW THAT OUR REVENUES IN 2022 SPIKED WHERE OUR GROWTH WAS LOWER. BUT WE USED THOSE REVENUES

THEN IN 2023 AND 2024 WHEN WE HAD EXPENDITURE GROWTH. >> COURAGE: SO THOSE

RESERVES PRETTY MUCH WERE SPENT? >> WE ALWAYS HAVE A 15% RESERVE BUT ANY ADDITIONAL MONEY WE CAN SPEND AND WE CAN APPROPRIATE IN THE SUBSEQUENT

YEAR. >> COURAGE: I GUESS THAT'S WHAT I MEAN.

HAVE WE HAVE EVER HAD TO SPEND ANY OF THE 15% RESERVES THAT WE ALWAYS HOLD?

>> YOU KNOW, BECAUSE I'M WORRIED WHEN I LOOK AT THE BUDGET ITEMS ON PAGES 30, 31, 32 -- AND PARTICULARLY 32. WE ARE PROJECTING BUDGET DEFICITS IN '27 AND '28, AND '29. IF THOSE HELD TRUE AND WE WEREN'T ABLE TO MITIGATE THEM IN ANY WAY, I PRESUME THAT WOULD BE AN OCCASION WHERE WE MIGHT HAVE TO USE THOSE

RESERVES TO MAKE UP THE DIFFERENCE, RIGHT? >> WALSH: NO, SIR.

WE WOULD MAKE REDUCTIONS IN SPENDING. THAT RESERVE WOULD BE -- WE DIDN'T EVEN USE THE RESERVE WHEN THE WHEELS FELL OFF DURING THE COVID.

THE RESERVE IS THERE IN CASE WE CAN'T MAKE A DEBT PAYMENT. IN CASE WE CAN'T MAKE A PAYROLL. IF WE WERE IN THAT SITUATION, I THINK WE WOULD ALL WORK COLLECTIVELY TO FIGURE OUT HOW WE WOULD REDUCE SPENDING TO GET BACK WITHIN LINE.

IF WE HAD A MAJOR CALAMITY. >> COURAGE: OKAY. NOW, I KNOW A LOT OF THE EXPENDITURES WE'VE HAD THAT ARE DISAPPEARING ARE BECAUSE WE HAD FEDERAL MONEY, ARPA FUNDS, THINGS OF THAT NATURE. AND WE TRIED TO USE ALL OF THAT MONEY FOR NON-RECURRING SERVICES. AND WE INVESTED THEM IN THINGS LIKE MENTAL HEALTH AND HOUSING AND RENTAL ASSISTANCE AND SMALL BUSINESS ASSISTANCE. BUT IT LOOKS LIKE ALL THAT MONEY'S BEEN SPENT. AND SO ARE WE FORECASTING THAT IF WE'RE GOING TO CONTINUE ANY OF THOSE SERVICES THAT HAD THAT ONE KIND OF ONE-TIME FEDERAL FUNDING, THAT THAT

CONTINUATION IS GOING TO HAVE TO COME OUT OF GENERAL FUNDS? >> TATE: SO THERE ARE SEVERAL AREAS WHERE WE HAVE CONTINUED FUNDING THROUGH THE GENERAL FUND AND IS INCLUDED IN THE FIVE-YEAR FORECAST. THAT INCLUDES HOUSING, HOMELESS, OUR SA FORWARD PLAN FOR HEALTH AND THE IMPLEMENTATION OF THAT, AS WELL AS OUR SA CORE.

>> COURAGE: WHAT PERCENTAGE ARE WE GIVING IN GENERAL FUND COMPARED TO WHAT WE'RE ABLE TO

USE BEFORE? MAYBE 5%, 10%? >> TATE: I'M NOT SURE I

UNDERSTAND YOUR QUESTION. >> COURAGE: WELL, FOR EXAMPLE, WE GOT X AMOUNT OF DOLLARS FOR SMALL BUSINESSES AND WE SPENT $30 MILLION HELPING SMALL BUSINESSES.

HOW MUCH DO WE HAVE AVAILABLE NOW TO CONTINUE THAT KIND OF A SERVICE?

>> WALSH: IN ARPA OR THE GENERAL FUND? >> COURAGE: IN WHAT WE'RE

BUDGETING. >> WALSH: IN THE GENERAL FUND?

>> COURAGE: YEAH. >> WALSH: I THINK WHAT WE NEED TO DO IS PROBABLY GIVE YOU A REPORT, COUNCILMAN. YOU AND THE COUNCIL. THERE ARE A COUPLE OF DIFFERENT ASPECTS. THERE HAVE BEEN REALLY BIG INCREASES TWO YEARS AGO IN DOMESTIC VIOLENCE SPENDING. AND WE SEATED IT WITH ARPA AND THEN THE GENERAL FUND TOOK IT OVER . THERE'S A HANDFUL OF AREAS WHERE THE GENERAL FUND STARTED PICKING UP THOSE HIGH-PRIORITY SERVICES. WE CAN PREPARE A QUICK UPDATE TO THE COUNCIL TO SEE WHERE THAT'S AT. THERE HAVE NOT BEEN THAT MANY IN THE GRAND SCHEME OF THINGS. BUT THERE'S BEEN SOME HOUSING ELEMENTS, DOMESTIC VIOLENCE, METRO HEALTH, THE NAVIGATOR PROGRAM, SOME OF OUR HOMELESS PROGRAMS. BOTH OUTREACH. BUT WE CAN PULL THAT TOGETHER SO YOU SEE WHAT WE'VE INCLUDED

IN TERMS OF ASSUMPTIONS IN THE FORECAST. >> COURAGE: OKAY, GOOD.

I THINK THAT WOULD BE HELPFUL TO KNOW HOW MANY OF THESE PROGRAMS THAT WE INITIATED IN A FEW YEARS AND YOU SAID, WELL, SOMETIMES WE MAY HAVE TO HAVE CUTS, YOU KNOW, I'D LIKE

[01:50:02]

WE HAVE, RIGHT NOW, TWO NUMBERS IN THIS PLAN. $17 MILLION RIGHT NOW IS WHAT WE'VE ANTICIPATED IN REVENUE OVER THE BUDGET. AND THEN WE'RE SAYING BY THE END OF THIS FISCAL YEAR, IT COULD BE I THINK $27 MILLION. AND I KNOW THOSE ARE JUST ESTIMATES AND WE'RE NOT THERE YET. BUT WHEN DO YOU TAKE THOSE ESTIMATES, THOSE NUMBERS AND START FIGURING OUT HOW THEY'RE GOING TO FIT INTO THE NEXT BUDGET YEAR? FOR EXAMPLE, ARE YOU SAYING, OKAY, THAT $17 MILLION WE'RE GOING TO START FIGURING HOW TO BUDGET THAT. OR THE $27 MILLION, WE'RE GOING TO START THINKING, OKAY, WE'RE GOING TO HAVE $27 MILLION.

HOW CAN WE BUDGET THAT. WHEN DO YOU START PLANNING ON BUDGETING THOSE FUNDS?

>> TATE: SO THIS IS THE START OF OUR 2025 BUDGET DEVELOPMENT.

SO ANY ADDITIONAL REVENUES WOULD FALL INTO OUR RESERVES. AND AS WE DEVELOP THE 2025 BUDGET, THAT WOULD BE WHEN WE WOULD LOOK AT SPENDING AS PART OF THE 2025.

WHAT'S PRESENTED TO CITY COUNCIL IN AUGUST. >> COURAGE: OKAY.

SO PROBABLY WHEN -- WELL, I'LL PUT IT THIS WAY. WE'RE GOING TO BE TALKING IN MAY ABOUT A BUDGET ADJUSTMENT. SO IF THERE'S $17 MILLION RIGHT NOW ON THE TABLE THAT'S REVENUE OVER EXPENSES AND COUNCIL MEMBERS WOULD LIKE TO GO AHEAD AND SAY, WELL, WE'VE GOT PROJECTS WE'D LIKE TO INITIATIVE USING PART OF THAT MONEY.

AND WE CAN, OF COURSE, JUSTIFY THAT TO THE COUNCIL TO DO SO. THEN THAT MONEY WOULD BE IN

PLACE, SO TO SPEAK, IS THAT RIGHT? >> WALSH: COUNCILMAN, LET ME BE A LITTLE BIT MORE DIRECT THAN WHAT JUSTINA WAS. THAT BALANCE THAT WE'RE ESTIMATING IS IN THE FORECAST FOR '25 ALREADY. WE ARE NOT -- WE'RE RECOMMENDING HOLDING ON TO THAT FOR THOSE KEY PRIORITY AREAS OF THE SECOND YEAR OF ACS, THE POLICE OFFICERS, THE CIVILIAN COMPENSATION. THAT IS BUILT INTO THE FORECAST. IT IS NOT AVAILABLE. THE COUNCIL, TO YOUR POINT,

CAN MAKE ANOTHER DECISION BUT WE'RE NOT RECOMMENDING THAT. >> COURAGE: OKAY.

THAT'S WHAT I WANTED TO KNOW. OKAY. I HAVE NO MORE QUESTIONS.

THANK YOU, MAYOR. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER COURAGE.

COUNCILMEMBER MCKEE-RODRIGUEZ. >> MCKEE-RODRIGUEZ: I THINK THIS IS NEWS BUT SUNDANCE FILM FESTIVAL WILL BE LOOKING FOR NEW SPACE TO HOST STARTING IN 2027, SO THAT MAY BE AN OPPORTUNITY FOR US. I'M GOING TO FOCUS TODAY ON THE INITIATIVES THAT WERE FUNDED IN THE MARCH BUDGET REPORTS. I WILL HAVE A FEW QUESTIONS FOR -- ABOUT THE SIX PLUS SIX REPORT AND THE VARIANCES AND I'M GOING TO USE THE TREE MITIGATION FUND AS AN EXAMPLE. IF YOU COULD BE READY FOR THAT ONCE I'M DONE WITH MY GENERAL REFLECTION. I'LL AVOID SPEAKING TOO MUCH ON THE FIRE DEPARTMENT AND THE ASSOCIATION'S REQUEST AND WHATNOT. I'LL SAVE WHAT I HAVE TO SAY FOR EXEC. BUT MY ASSUMPTION OF WHAT I'M LOOKING AT IS MAYBE WE CAN BE A LITTLE BIT MORE SUPPORTIVE OF THE FIRE DEPARTMENT. THAT BEING SAID, I'LL MOVE TO SOME OTHERS. ACS, BASED ON WHAT I'M READING, WERE BEHIND ON ENHANCING THE CAMPUS ADOPTION INITIATIVES. WE'RE NOT WHERE WE EXPECTED FOR THE CUSTOMER SERVICE POSITIONS OR THE BEHAVIORAL ASSESSMENTS OR THE ADOPTIONS.

OBVIOUSLY WANT TO SEE GROWTH THERE. GOOD NEWS AND THINGS WE'RE CELEBRATING WERE THE IMPROVEMENT TO BIKE CALLS, WE'RE AT 83% WHEN WE EXPECTED 60% SO MY HOPE IS WITH THE ADDITIONAL ROLES WE'LL SEE OURSELVES AT 100% A LOT QUICKER. WE'RE AHEAD OF SCHEDULE ON THE NEIGHBORHOOD CLINICS AND THE NUMBER OF PETS MICROCHIPPED. SOMETHING IMPORTANT IS THE ACS EAST SIDE AND WEST SIDE SPAY AND NEUTER HUBS. I DON'T WANT LACK OF FUNDING TO BE AN ISSUE IN GETTING THESE UP AND RUNNING. IN LOOKING AT THE POTENTIAL EAST SIDE LOCATIONS I GOT TO SEE WHAT THEY LOOKED LIKE AND THE 750K AND 800K SPLIT WON'T BE ENOUGH AND SO IF THERE IS ANY ADDITIONAL FUNDING OR ANY OF THAT $17 MILLION THAT IS FORECASTED, I BELIEVE THIS COUNCIL ALREADY EXPRESSED THESE TWO FACILITIES BE A PRIORITY AND SO I DON'T WANT A SHORTAGE OF FUNDS TO BE A PROBLEM, SO I WOULD LIKE TO SEE US ADDRESS THAT, USING THOSE FUNDS, IF NECESSARY. THAT'S EVEN MORE PERTINENT WHEN LOOKING AT THE ACTUALS FOR SPAY AND NEUTER. WE EXPECTED TO ACHIEVE OVER 22,000 SURGERIES BUT WE HAVE ONLY HIT 16,000. IF THE TWO LOCATIONS ARE LIVE SOONER, MY HOPE IS WE WILL BE ABLE TO PERFORM AN ADDITIONAL 13,000 SURGERIES ANNUALLY. THAT'S A HUGE PRIORITY FOR

[01:55:02]

I WAS HOPEFUL THIS PROCESS WOULDN'T TAKE AS LONG AS IT IS BUT I'M GRATEFUL IT'S IN THE PIPELINE. REGARDING HUMAN SERVICES, SAISD APPROVED THE SALE OF PROPERTY TO US THIS WEEK. I HAVE RECEIVED THE CONCEPTUAL RENDERINGS ALREADY.

I'M EXCITED AND I LOOK FORWARD TO THE NEXT STEPS, WHICH INCLUDE FINDING FUNDING FOR THE ARCHITECT AND DESIGN AND ENGAGEMENT WITH SENIORS. THIS WILL PROBABLY BE ONE OF MY TOP PRIORITIES. THE OFFICE OF [INDISCERNIBLE] WE HAVE MET THE PUBLIC SAFETY OUTCOMES COORDINATOR AND IT SEEMS LIKE INTERVIEWS FOR THE GRANT COORDINATOR POSITION ALREADY HAPPENED AND WE'RE MAKING PROGRESS AND WE MAY BE CHOOSING SOMEONE SOON.

>> VILLAGOMEZ: YES. WE MADE AN OFFER ON THAT POSITION SO THAT SHOULD BE

COMING UP SOON. >> MCKEE-RODRIGUEZ: THE CEMETERIES HAVE BEEN A PRIORITY FOR ME AS WELL AND I'VE DRIVEN -- ON THE WAY TO MY FIELD OFFICE I PASS THE CEMETERIES AND I HAVE SEEN HOW MUCH BETTER THEY LOOK WITH THE FENCES AND I'M EXCITED FOR THE FUTURE OF OUR CEMETERIES, INCLUDING THE POSSIBILITY OF CREATING A HISTORIC CEMETERY MASTER PLAN. SA CORE, I ECHO COUNCILWOMAN KAUR'S EXCITEMENT THAT IT SEEMS LIKE IT'S OVERPERFORMING AND I THINK IT'S A DEMONSTRATION THAT THE PROGRAM WORKS AND IS ACHIEVING RESULTS AND I WOULD LIKE TO SEE IT PROSPER.

I LOOK FORWARD TO THE 24 HOUR COVERAGE BEING MET THIS SUMMER AND I THINK THAT'S AN OPPORTUNITY FOR US TO SET SOME HIGHER GOALS THIS UPCOMING BUDGET CYCLE.

REGARDING PUBLIC WORKS, NAMP AND CIP ARE DOING THEIR THING. WE HAVE BEEN ABLE TO, IN DISTRICT 2, WE HAVE BEEN ABLE TO PURCHASE LAND, CREATE A BRAND-NEW PARK FROM SCRATCH.

WE REPLACING THE NORTH NEW BRAUNFELS BRIDGE MURAL. WE'RE RENOVATING A PARK AND WE'VE ALSO GOTTEN TO DO THE BASIC INFRASTRUCTURE IMPROVEMENTS AS WELL WITH THAT. WE ARE ACCOMPLISHING A LOT AND FOR THE FUTURE WE'RE LOOKING AT RESTROOMS IN SOME OF OUR PARKS, DEVELOPMENT OF CITY-OWNED PROPERTIES TO BE EVEN MORE PARKS. WE'RE LOOKING AT THE POSSIBILITY OF WORKING WITH VIA TO IMPROVE SOME OF OUR BUS STOPS TO ADD SHELTER AND SHADE.

SO I WANT TO STRESS ALL OF THESE THINGS ARE POSSIBLE WITH THESE TWO FUNDS AND I WILL CONTINUE TO SUPPORT THEM AND HOPE THAT WE CAN GET EVEN MORE IN THE COMING YEARS.

SO THANK YOU TO PUBLIC WORKS FOR ALWAYS WORKING WITH US TO GET THESE PROJECTS HANDLED QUICKLY. SUSTAINABILITY. REGARDING THE COMMUNITY-BASED ORGANIZATION'S RESILIENCY HUB GRANT PROGRAM, I WOULD LIKE TO GET SOME SUPPORT FOR THE EAST SIDE. WE CURRENTLY DON'T HAVE A HUB, DESPITE BEING ONE OF THE DISTRICTS IMPACTED. GREATER LOVE COMMUNITY CENTER HAD THEIR RIBBON CUTTING AND I WANT TO VOLUNTEER THEM TO SERVE AS AN ORGANIZATION, SHOULD THEY BE WILLING TO PARTICIPATE. IF YOU NEED ANY HELP GETTING THEM, I CAN ASK THE PASTOR.

I WANT TO GET TO THE VARIANCE QUESTION SO REGARDING THE TREE CANOPY FUND.

SO THE REASON THAT WE HAVE THE FAVORABLE VARIANCE IS THERE ARE FIVE DEVELOPMENTS THAT

PAID $300,000. IS THAT CUMULATIVE? >> TATE: THOSE FIVE DEVELOPMENTS PAID AT LEAST OVER $300,000. THAT'S EACH.

>> MCKEE-RODRIGUEZ: AND SO THE 18 DEVELOPMENTS PAID 25K EACH? SO THAT HELPS ME UNDERSTAND SOME OF THE EXPLANATIONS IN THE BINDER.

I JUST WANTED TO USE THAT AS AN EXAMPLE. A GREATER POLICY CONCERN FOR COUNCIL TO DISCUSS IS WHY ARE WE APPROVING SO MANY AT THIS SCALE.

THAT'S VERY CONCERNING TO ME. BUT WE'LL HAVE THAT CONVERSATION WHEN THE TIME COMES. I WANT TO GO TO SLIDE 22 BECAUSE I JUST HAVE A PROBLEM WITH THE WAY THIS DATA WAS PRESENTED. IT LOOKS PROBLEMATIC IN THAT IT LOOKS LIKE WE ARE -- LIKE IN 2020, FOR EXAMPLE, IT LOOKS LIKE THE BUDGET -- LET'S SAY 22 TO 24, IT LOOKS LIKE THE BUDGET IS INCREASING. I'M GOING TO GIVE AN EXAMPLE OF WHAT THE GRAPH SHOULD HAVE LOOKED LIKE. THE SLOPE OF EACH YEAR SHOULD BE SLIGHTLY CHANGED . SOME YEARS IT WOULD BE STEEPER.

SOME YEARS IT WOULD BE MORE NARROW. I LOST MY SCREEN, SO LOSING MY NOTES A LITTLE BIT I'M GOING TO GO TO SLIDE 11, PLEASE. ALSO JUST WANT TO MAKE SURE

THAT JULY 2023 IS MEANT TO BE JULY 2022. >> GORZELL: THAT SHOULD BE JULY OF -- I WILL DOUBLE CHECK THAT. I THINK IT'S JULY OF 2023 BUT

I WILL DOUBLE CHECK. >> MCKEE-RODRIGUEZ: IT LOOKS WEIRDLY PLACED OR IT TELLS TWO DIFFERENT STORIES, I THINK. DEPENDING ON WHICH YEAR IT IS. I'LL GO TO THE ISSUE OF CPS.

[02:00:07]

THEY WILL. THAT BEING SAID -- >> COUNCILMAN, IT IS JULY OF '23. I JUST CHECKED. I THINK IT'S JUST THE MONTHS ON THE BOTTOM, WE HAVE SO MANY MONTHS PLOTTED THERE THAT IT LOOKS LIKE THAT ON THE SCALE.

BUT THAT IS JULY OF 2023. >> MCKEE-RODRIGUEZ: I GUESS JUST THINKING ABOUT THE POLICY THAT WE WERE JUST TALKING ABOUT REGARDING WHERE ANY OVERAGES GO.

OBVIOUSLY I SUPPORT COVERING ANY SHORTAGES, IF WE'RE LOOKING AT A POTENTIAL DEFICIT IN THE FUTURE, THEN WE'RE GOING TO NEED SOME FUNDING THERE.

I ALSO WANT TO THROW OUT THE IDEA THAT POTENTIALLY A WAY THAT WE CAN SUPPORT FIRE IS INCLUDING A BUCKET THAT DIRECTLY SUPPORTS FACILITY IMPROVEMENTS OR ONE-TIME EXPENSES. SO IF IT'S A FUND THAT IS GENERATED THROUGH ONE-TIME SURPLUSES THEN PERHAPS WE CAN MEET A REALLY SUBSTANTIAL NEED THERE.

I REMEMBER THE BOND DISCUSSIONS AND LOOKING AT SOME FACILITIES THAT FIRE HAS.

THAT'S A HUGE MESS. I WOULD ALSO SUPPORT DIRECTLY -- I DON'T WANT TO JUST HAND CPS MONEY. AS I SAID, I DON'T KNOW THAT THE TRUST IS ALL THE WAY THERE YET. I WOULD MUCH PREFER WE DECIDE WHAT PROJECTS, WHAT SUSTAINABILITY EFFORTS WE'RE GOING TO INVEST IN AND DO THAT.

THAT IS ALL OF MY COMMENTS. THANK YOU VERY MUCH. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER MCKEE-RODRIGUEZ. COUNCILMEMBER WHYTE.

>> WHYTE: QUICK QUESTION FOR ANDY. IT WAS MENTIONED EARLIER THAT MAYBE IF WE BUDGETED MONEY FOR CPS OR DID THIS NEW PLAN WE'RE TALKING ABOUT THAT WE WOULD HAVE TO GET VOTER APPROVAL IN ORDER TO DO THAT. IS THAT ACCURATE?

>> SEGOVIA: I THINK YOU'RE REFERRING TO COUNCILWOMAN VIAGRAN.

I THINK SHE WAS SUGGESTING THAT THE COUNCIL DO THAT BUT IT'S NOT A LEGAL REQUIREMENT, COUNCILMAN. THE COUNCIL CAN DECIDE WHAT THE AMOUNT OF MONEY AND WHAT

IT'S USED FOR, IF IT GOES BACK TO CPS. >> WHYTE: OKAY.

GOOD. SO THAT WAS ONE THING. I JUST WANT TO ECHO AGAIN THE COMMENTS THAT WE HEARD HERE. GREAT NOBLE GOAL TO TRY TO MITIGATE OR ELIMINATE THE FUTURE RATE INCREASES. AND I'M ALL FOR IT AND I THINK IT'S THE RIGHT THING TO DO.

BUT THERE IS A TRUST DEFICIT HERE, WITHOUT QUESTION. AND WE -- WHATEVER WE DO HERE IN THIS REGARD, WHICH AGAIN I AM IN FAVOR OF, WE'VE GOT TO PIN DOWN AS BEST WE CAN, CPS ON HOW THE MONEY'S GOING TO BE USED AND WHAT THEY WOULD COME BACK FOR IN A FUTURE RATE

REQUEST. I'LL LEAVE IT AT THAT. >> MAYOR NIRENBERG: THANK YOU, COUNCILMEMBER WHYTE. ALL RIGHT. BEFORE WE GO TO EXECUTIVE SESSION, THERE WAS ONE -- SO WE DO NEED SOME TIME WITH THESE BECAUSE THIS IS THE FIRST TIME WE'RE SEEING SOME OF THE SIX PLUS SIX MEASURES. BUT THERE IS ONE THAT STICKS OUT TO ME I WANTED TO PUT IN FRONT OF YOU, ERIK, WHERE WE ARE FALLING BEHIND.

AND IT'S IN OUR SUSTAINABILITY GOAL OF RECYCLING RATE. I'M SURE THIS IS SOMETHING THAT THE DEPARTMENT HAS DISCUSSED. DO WE HAVE SOME EARLY INDICATION OF WHETHER OR NOT WE'RE GOING TO ADJUST THAT GOAL, IF IT'S UNREALISTIC? THAT WAS A GOAL THAT WAS SET A LONG, LONG TIME AGO. AND CLEARLY THAT HAS A LOT OF FACTORS INTO IT. ARE WE LOOKING TO UPDATE WHAT THAT GOAL IS TO BE MORE REALISTIC OR ARE WE TAKING MITIGATING MEASURES TO TRY TO GET US CLOSER THERE?

WE'RE NOT MOVING IN THE RIGHT DIRECTION ON THAT ONE. >> WALSH: AT THIS POINT -- YOU'RE RIGHT. THAT'S AN OLD GOAL. THAT HAS BEEN STAGNANT FOR A LONG TIME. WE HAVE, IN RECENT YEARS, STRUGGLED WITH OUR RECYCLING CONTRACTOR. WE HAVE A NEW RECYCLING CONTRACTOR WHO IS COMING ON

BOARD NEXT YEAR? >> YEAR. WHO HAS COMMITTED -- AND YOU GUYS HAVE APPROVED THAT CONTRACT. THAT FACILITY ISN'T IN USE YET.

WE'RE HOPING WE CAN START MAKING MEASURABLE PROGRESS ON THAT.

THAT BEING SAID, YOU KNOW, THE ENTIRE OVERALL GOAL PROBABLY NEEDS TO BE REVISITED.

WE'VE BEEN A LITTLE BIT AWAITING HOLD BECAUSE WE'VE STRUGGLED WITH OUR EXISTING CONTRACTOR. WE THINK THERE'S AN UPSIDE WITH THE NEW ONE BUT NOT

CERTAIN YET. >> MAYOR NIRENBERG: I THINK IT WOULD MAKE SENSE FOR US TO TAKE A LOOK AT PEER CITIES, WHERE THEY ARE. AND ALSO IF THERE'S SOMETHING TO MEASURE IN OUR SURVEY ABOUT PEOPLE'S INTENTIONS AND USES OF RECYCLING OPPORTUNITIES.

[02:05:03]

[EXECUTIVE SESSION At any time during the meeting, the City Council may recess into executive session in the Presidio Conference Room to consult with the City Attorney's Office (Texas Government Code Section 551.071) and deliberate or discuss any of the following:  ]

PURCHASE, EXCHANGE, LEASE OR VALUE OF REAL PROPERTY PURSUANT TO SECTION 551.072.

AND THE LEGAL ISSUES RELATED TO THE LITIGATION INVOLVING THE CITY, EMERGENCY PREPAREDNESS, AND COLLECTIVE

* This transcript was compiled from uncorrected Closed Captioning.