May 06, 2026 City Council B Session

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>> MAYOR JONES: GOOD AFTERNOON. THE TIME IS NOW 2:03 P.M.

ON WEDNESDAY, MAY SIXTH AND THE CITY OF SAN ANTONIO B SESSION IS NOW CALLED TO ORDER. MADAM CLERK, PLEASE CALL ROLL.

>> CLERK: BRABT ROLL CALL . MAYOR, WE HAVE QUORUM.

[ BRIEFING ONLY  ]

>> MAYOR JONES: GREAT. THANK YOU. THIS MEETING WE'LL HEAR A BRIEFING ON THE FY '26 FINANCIAL REPORT. AN UPDATE ON THE COMPREHENSIVE BUDGET REVIEWS. ERIK, OVER TO YOU.

>> WALSH: THANK YOU, MAYOR. GOOD AFTERNOON, MAYOR AND COUNCIL. SO, YES, WE ARE THIS AFTERNOON WE'LL BE WALKING THE COUNCIL THROUGH THE FIVE-YEAR FINANCIAL FORECAST, AS WELL AS AN UPDATE ON WHERE WE SIT RIGHT NOW FINANCIALLY HALFWAY THROUGH FISCAL YEAR '26. FREDDY'S ALSO GOING TO TALK A LITTLE BIT ABOUT SOME OF THE PREP THAT WE WILL BE DOING WITH YOU ALL IN ADVANCE OF THE MAY 22ND GOAL-SETTING SESSION, AND THEN FINALLY, FREDDY WILL ALSO TALK ABOUT THE TAXPAYER IMPACT STATEMENT. I KNOW THERE HAVE BEEN SEVERAL CONVERSATIONS AT GOVERNANCE, AS WELL AS THE FULL COUNCIL.

THAT ITEM IS SCHEDULED TO BE APPROVED BY ORDINANCE BY YOU ALL NEXT WEEK ON THE AGENDA TENTATIVELY. SO OVER TO FREDDY TO BEGIN.

THANK YOU. >> MARTINEZ: I'M ALFREDO FREDDY MARTINEZ.

I'M THE INTERIM BUDGET DIRECTOR FOR THE CITY OF SAN ANTONIO. TODAY WE'LL COVER THE FY '26 FINANCIAL STATUS REPORT.

WE ALSO PROVIDE AN OVERVIEW OF THE FIVE-YEAR FINANCIAL FORECAST FOR THE GENERAL FUND, THE HOTEL OCCUPANCY TAX FUND, THE DEVELOPMENT SERVICES FUND AND THE SOLID WASTE MANAGEMENT FUND. AS ERIK MENTIONED, WE'LL ALSO HAVE A BRIEF UPDATE ON COMPREHENSIVE BUDGET REVIEWS AND THE NEXT STEPS IN THE BUDGET PROCESS. BEFORE GETTING TO THE PRESENTATION, I WANT TO CALL YOUR ATTENTION TO THE BINDER THAT YOU HAVE THAT PROVIDES HARD COPIES TO THE MATERIALS THAT WERE SENT TO YOU THIS WEEK, THE PRESENTATIONS, THE SIX PLUS SIX FINANCIAL REPORT, A MARCH STATUS REPORT ON BUDGET INITIATIVES AND THE 24/7 PERFORMANCE REPORT, AS WELL AS A FINANCIAL FORECAST DOCUMENT. FIRST WE'LL START OFF WITH AN ECONOMIC UPDATE OF WHAT'S GOING ON AROUND THE COUNTRY AND AS WELL WHAT'S GOING ON LOCALLY. FOR THE U.S., WE'RE SEEING MODERATE GROWTH; HOWEVER, THERE'S STILL HIGH UNCERTAINTY AS U.S. ECONOMY GROWTH HAS SLOWED TO ABOUT HALF A PERCENT DURING THE FIRST QUARTER.

WITH U.S. UNEMPLOYMENT AT ABOUT 4.3% WHICH IS SLIGHTLY HIGHER COMPARED TO MARCH OF LAST YEAR 4.2%. AS YOU'RE PROBABLY AWARE, THERE ARE GEOPOLITICAL TENSION SUCH AS THE CONFLICT WITH IRAN, WHICH IS PUSHING OIL AND GAS PRICES HIGHER. WE STILL HAVE INFLATIONARY ISSUES. ON A LOCAL LEVEL, LOCAL UNEMPLOYMENT FOR MARCH IS 4.0%, WHICH IS SLIGHTLY HIGHER THAN LAST YEAR, BUT WE'RE STILL SEEING A SLIGHTLY -- A SLIGHT INCREASE IN THE LABOR MARKET GROWTH OF ABOUT .3% AS COMPARED TO MARCH OF LAST YEAR. WE ARE SEEING SOME CONTINUED DOWNTURNS IN SOME OF OUR HOUSING MARKETS, SUCH AS OUR RESIDENTIAL PERMITTING WITH OUR DEVELOPMENT SERVICES DEPARTMENT, WHICH WE'LL TALK ABOUT LATER IN THE PRESENTATION, BUT WE'RE ANTICIPATING THAT TO BE DOWN ABOUT 23.5% THIS YEAR.

MEETING HOME PRICES ARE SLIGHTLY LOWER THAN LAST YEAR AND HOMES ARE ON THE MARKET LONGER, SO THESE ARE SOME OF THE THEMES WHEN WE TALK ABOUT SOME OF THE COMING SLIDES THAT WE'LL REFER BACK TO. UP FIRST WILL BE THE SIX PLUS SIX BUDGET UPDATE. MOST MAJOR REVENUES ARE SEEING SLOWER GROWTH THAN PROJECTED INTO MARCH OF 2026. SALES TAX IS GROWING, BUT AT A SLOWER PACE. WE ARE SEEING A DECLINE IN AIRPORT PASSENGERS AT

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THERE'S DISCUSSION WITH AIRLINES ON HOW TO MAKE THE AIRPLANE WHOLE IN TERMS OF THEIR REVENUES. THE HOTEL OCCUPANCY TAX REVENUE IS LOWER, ESPECIALLY IN THE FIRST QUARTER, AS WE SAW LOWER OCCUPANCY RATES AND AVERAGE DAILY RATES. BUILDING PERMIT ACTIVITIES IN RESIDENTIAL CONTINUES TO SLOW AND WE'LL TALK ABOUT THAT WHEN WE GET TO THE DEVELOPMENT SERVICES DEPARTMENT. AS A REMINDER, THIS IS OUR FY '26 ADOPTED BUDGET OF THE CITY, A LITTLE OVER 4 BILLION, 4.06 TO BE EXACT AND YOU'LL RECALL THIS IS MADE UP OF THREE COMPONENTS, THE LARGEST BEING THE GENERAL FUND. WE HAVE 1.2 BILLION IN RESTRICTED FUNDS, THE AIRPORT, DEVELOPMENT SERVICES AND HOTEL OCCUPANCY TAX AND FINALLY OUR CAPITAL BUDGET IS A LITTLE OVER ONE BILL, COVERING OUR AIRPORT PROJECT AND OTHERS. FOR THE GENERAL FUND FOR THE FIRST SIX MONTHS, REVENUES ARE OVER BY ABOUT $21.5 MILLION ABOVE BUDGET, AND WE'RE PROJECTED TO END THE YEAR ABOUT 50.9 MILLION ABOVE BUDGET OR 3.1% PRIMARILY DUE TO CPS ENERGY REVENUES WHICH IS ANTICIPATED TO BE ABOUT $54 MILLION ABOVE THE BUDGET DUE TO ADDITIONAL OFFSYSTEM SALES THAT WE'VE SEEN THAT WE EXPECT TO CONTINUE THROUGHOUT THE SUMMER. PROPERTY TAX IS SLIGHTLY ABOVE BUDGET BY ABOUT A MILLION; HOWEVER, OUR SALES TAX IS GOING TO BE ABOUT 2.6 MILLION BELOW THE ADOPTED BUDGET. WE'RE STILL SEEING GROWTH IN OUR SALES TAX, BUT IT'S NOT HITTING THE BUDGET EXPECTATION. OTHER REVENUES ARE PROJECTED TO BE ABOUT 2 MILLION BELOW BUDGET. AND OVERALL, OUR GENERAL FUND DEPARTMENTS, THEIR EXPENDITURES ARE PROJECTED TO END THE YEAR SLIGHTLY BELOW BUDGET, A LITTLE OVER $2 MILLION IN SAVINGS ON THE GENERAL FUND ON THE EXPENSE SIDE. SO THIS NEXT SLIDE ILLUSTRATES THE OVERALL IMPACT OF OUR REVENUES TO THE GENERAL FUND.

FOR THE GENERAL FUND TOTAL REVENUES ARE ABOUT -- AUDIO] -- OF THAT AMOUNT WE HAD PLANNED TO RECEIVE A LITTLE OVER 1 BILLION THROUGH THE SECOND QUARTER, AND AS I MENTIONED DUE TO STRONGER CPS REVENUE OUR TOTAL COLLECTION IS $21.5 MILLION MORE.

FOR THE YEAR, WE PROJECT TO BE ABOVE BUDGET BY 50.9 MILLION AND THAT'S DRIVEN PRIMARILY BY MORE CPS REVENUES, MOST OF THAT WOULD BE OFFSYSTEM SALES, ABOUT $38.8 MILLION. AS I MENTIONED, SALES TAX IS STILL GROWING BUT AT A SLOWER PACE. OUR PROJECTION FOR THE END OF THE YEAR ANTICIPATES BEING ABOUT 1.7% HIGHER THAN LAST YEAR, AND YOU MAY RECALL THAT THE BUDGET ASSUMED THE GROWTH RATE OF 2% OVER LAST YEAR'S ESTIMATE. OTHER REVENUES ARE PROJECTED TO BE $2 MILLION BELOW BUDGET DUE TO LESS RIVER BARGE TICKET REVENUE AND LESS IMPOUND AND VEHICLE AUCTION REVENUES.

SO FOR FY '26, OVERALL, THE GENERAL FUND FINANCIAL POSITION IS $62.3 MILLION MORE THAN ANTICIPATED, THIS IS PRIMARILY DUE TO A BETTER BEGINNING BALANCE THAT WE ENDED UP FY '25 WITH, MORE IN REVENUE DRIVEN BY CPS AND SLIGHTLY LOWER EXPENDITURES. AS PART OF OUR FINANCIAL MANAGEMENT PRACTICES WE CONTINUE TO MONITOR ON A MONTHLY BASIS AND WE'LL UPDATE PROJECTIONS AS ADDITIONAL DATA AND INFORMATION IS RECEIVED.

WE'LL PROVIDE MORE -- AN UPDATED REVENUE AND EXPENSE ESTIMATE FOR '26 WITH THE FY '27 TRIAL BUDGET WHICH WE'LL PRESENT TO THE COUNCIL ON JUNE 17TH. NOW ONTO THE FY '26 BUDGET UPDATE FOR SOME OF OUR RESTRICTED FUNDS. HOTEL OCCUPANCY TAX THROUGH SIX MONTHS, WE'RE UNDER BUDGET BY ABOUT 1.8 MILLION AND THAT'S DUE TO SLIGHTLY LOWER OCCUPANCY RATES AND AVERAGE DAILY RATES.

FOR THE AIRPORTS, REVENUES ARE BELOW BUDGET AT THE END OF THE YEAR DUE -- AT THE AIRPORT. BECAUSE OF THAT, THERE'S LESS NEED FOR OPERATING EXPENSES AND THE AIRPORT'S ON A COST RECOVERY MODEL SO THERE WILL BE LESS REVENUES BECAUSE OF THAT. FOR DEVELOPMENT SERVICES FOR THE FIRST SIX MONTHS WE'VE COLLECTED MORE REVENUES BECAUSE OF PERMIT ACTIVITY RELATED TO THE AIRPORT TERMINAL DEVELOPMENT PROJECT BUT DUE TO LOWER COMMERCIAL EVALUATION, THAT FAVORABLE VARIANCE IS AND PAINTED TO DECLINE BY ABOUT 500,000 BY YEAR END.

THEN SOLID WASTE, AS A PERCENT IS VERY CLOSE TO BUDGET, BUT OVERALL WE'RE ANTICIPATING TO BE ABOUT $1 MILLION UNDER THE REVENUE BUDGET, AND THAT'S PRIMARILY DUE TO -- RECEIVES. THE REVENUE THAT WE SEE FOR RECYCLING PRODUCTS IS ABOUT $20 LESS THAN WE HAD ANTICIPATED IN THE BUDGET.

AND OVERALL IN THESE DEPARTMENTS, THEIR EXPENDITURES ARE WITHIN

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I WANTED TO HIGHLIGHT THE EMPLOYEE BENEFITS FUND. AS YOU MAY RECALL DURING THE THREE PLUS NINE PRESENTATION BACK IN FEBRUARY, WE DISCUSSED WE WERE BEGINNING TO HAVE CHALLENGES IN THE HEALTH KIR OR EMPLOYEE BENEFITS FUND, AND THAT CONTINUES THROUGH THE SECOND QUARTER.

MEDICAL AND PHARMACY CLAIMS ARE THE COST DRIVERS.

FOR THE SECOND QUARTER, WE'RE ABOUT $19.4 MILLION OVERBUDGET, AND OUR FINAL FY '26 PROJECTION, WE'RE ESTIMATING TO BE $45.4 MILLION OVERBUDGET. AS YOU CAN SEE THERE, IT'S DRIVEN BY UNIFORM CLAIMS AND ALSO CLAIMS BEING NOT OVER THE '26 BUDGET BUT OVER

'25 ACTUALS HIGHER THAN WE HAD ANTICIPATED. >> WALSH: MAYOR AND COUNCIL, LET ME JUMP IN HERE. THIS IS SOMETHING AS FREDDY MENTIONED WE HIGHLIGHTED IN THE THREE PLUS NINE FINANCIAL PRESENTATION. WE ARE ACTIVELY WORKING THIS ISSUE, AND WE ARE SEEING A TREMENDOUS AMOUNT OF PRESSURE FROM SPECIFICALLY FREE-STANDING EMERGENCY ROOMS. OF THE 51 EMERGENCY ROOMS IN OUR CITY, FOUR OF THEM MAKE UP OVER HALF OF THE CLAIMS THAT WE ARE SEEING, AND MANY OF THOSE CLAIMS ARE NOT FOR EMERGENCY CARE.

SO AS WE'VE -- AS WE'VE SPOKEN WITH YOU ALL, WE ARE INITIATING A TARGETED FOCUS, AS WELL AS A CONVERSATION WITH EMPLOYEES TO UNDERSTAND THE IMPACT THAT THIS HAS ON US AS AN EMPLOYER AND WILL BE SOMETHING THAT WE WILL BE CONTINUING TO PRESS DOWN ON OVER THE NEXT COUPLE OF WEEKS, BUT WE WILL KEEP YOU UPDATED. OBVIOUSLY, THIS IS -- EMPLOYEE BENEFITS IS AN IMPORTANT ASPECT. WE COVER 27,000, ONLY 28,000 LIVES WITH OUR EMPLOYEE BENEFITS SYSTEM, WITH ALL EMPLOYEES AND DEPENDENTS, SO THIS IS CRITICAL. SO MAKING SURE THAT EMPLOYEES HAVE THE RIGHT INFORMATION AND THAT PROVIDERS ARE CHARGING CORRECTLY IS A VERY TARGETED FOCUS OF OURS RIGHT NOW.

>> MARTINEZ: SO NEXT WE'LL MOVE ON THE FIVE-YEAR FINANCIAL FORECAST. AND SO JUST A COUPLE THINGS ABOUT THE FORECAST, THE FORECAST IS AN EARLY FINANCIAL OUTLOOK FOR THE CITY'S MAJOR FUNDS AN IT IS NOT A BUDGET. IT SETS A FRAMEWORK FOR UP COMING DISCUSSIONS ON THE ANNUAL BUDGET DEVELOP LTP.

YOU'LL SEE THAT THE FORECAST IS NOT STRUCK CHAR STRUCTURALLY BALANCED. PROPERTY TAX REVENUES HAVE DECLINED -- IN AUDIO] -- AND THE WORSENING HOUSING MARKET AND BALANCE FY '28 TO '31 WE'LL HAVE TO MAKE SOME REVENUE CHANGES AND SPENDING CUTS AS THOSE ARE NEEDED TO ALIGN EXPENSE GROWTH WITH REVENUE GROWTH.

SO STARTING WITH OUR REVENUE ASSUMPTIONS INCLUDED IN THE FIVE-YEAR FORECAST, THIS NEXT SLIDE ILLUSTRATES THE CHANGE IN OUR MAJOR REVENUE SOURCES. OVERALL, REVENUES ARE DECLINING BY ABOUT 9.9 MILLION OR .6% OVER THE FY '26 ESTIMATE. LOOKING AT PROPERTY TAXES BASED ON CURRENT INFORMATION FROM THE APPRAISAL DISTRICT, WE ARE PROJECTING THAT OUR BASE PROPERTY VALUES WITH DECLINE RESULTING IN AN $8.2 MILLION OR 1.7% REDUCTION IN PROPERTY TAX REVENUE.

THIS ASSUMES NO CHANGE TO THE PROPERTY TAX RATE. FOR SALES TAX, WE ARE PROJECTING THAT GROWTH REMAINS AT 2% IN THE BUDGET AND WE'LL HAVE A SLIDE HERE IN A SECOND ABOUT THE FIVE-YEAR GROWTH ON SALES TAX.

FOR CPS, THE FORECAST PROJECTED A 2% REDUCTION IN REVENUE AS COMPARED TO THE '26 ESTIMATE. THIS IS DUE TO THE ANTICIPATION OF HAVING LESS OFFSYSTEM SALES; HOWEVER, THE BASE REV FEW DOES GROW ABOUT 2.5% COMPARED TO THE FY '26 ESTIMATE. FOR OUR OTHER REVENUES, WE'RE ANTICIPATING A SLIGHT INCREASE OF .4% OR ABOUT 1.1 MILLION, WHICH IS DUE PRIMARILY TO IMPLEMENTING $3.1 MILLION IN NEW REVENUES AS PART OF THE FY '27 BUDGET THAT WE INTRODUCED IN THE '26 BUDGET AS PART OF THE PLAN, AND AS I MENTIONED, WE'LL CONTINUE TO UPDATE THESE REVENUES AS ADDITIONAL INFORMATION AND DATA IS RECEIVED AND WE'LL PROVIDED UPDATED PROJECTIONS DURING THE TRIAL BUDGET IN JUNE. MOVING ON TO OUR PROPERTY TAX FORECAST, THIS SLIDE ILLUSTRATES THE IMPACT OF THE TAXABLE VALUE IN FY '26 AND OUR CURRENT ASSUMPTIONS FOR FY '27. FOR FY '26, OUR BASE VALUE DECLINED BY ABOUT .9% WITH NEW VALUES RISING AT 1.76% OF AN OVERALL GROWTH RATE OF ABOUT .86%. WE'RE ASSUMING A 3.54% REDUCTION IN BASE VALUES AND A GROWTH OF 1.41% ON NEW VALUES FOR AN OVERALL DECLINE OF 2.13%. THE PRELIMINARY ROLLS INDICATES A DECLINE IN

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BUDGET IN JUNE. >> WALSH: ONE THING I'LL POINT OUT HERE, MAYOR AND COUNCIL, IS THAT THE LAST TIME THE CITY OF SAN ANTONIO HAD NEGATIVE TAXABLE VALUE GROWTH WAS IN 2011 AFTER THE RECESSION, SO WE'VE NOT BEEN IN THIS POSITION FOR SOME TIME. AS FREDDY MENTIONED, THIS IS PRELIMINARY INFORMATION THAT WORKS ITS WAY THROUGH THE PROCESS TO EVENTUALLY A CERTIFIED ROLL THAT WE RECEIVE FROM THE APPRAISAL DISTRICT AT THE END OF JULY. US AND EVERY OTHER TAXING ENTITY, SO THAT ENTITIES CAN SET THEIR BUDGETS. WE'RE GOING TO CONTINUE TO WORK WITH THE APPRAISAL DISTRICT AND -- AND EITHER AT THE GOAL-SETTING SESSION OR AS PART OF THE TRIAL BUDGET, SHOW YOU A LITTLE BIT MORE INFORMATION THAT WE HOPE TO GET FROM THE APPRAISAL DISTRICT AROUND WHAT'S HAPPENING FOR RESIDENTIAL, MULTIFAMILY, INDUSTRIAL, COMMERCIAL, AND WHAT'S REALLY DRIVING THE NEGATIVE GROWTH. AS FREDDY MENTIONED AT THE VERY BEGINNING, THE HOUSING MARKET ISN'T ANY BETTER OR WORSE THAN IT WAS THIS TIME LAST YEAR. WE'RE STILL CONTINUING TO GROW AS A CITY, BUT TO SEE TAXABLE VALUES, BASE VALUES DECLINE AT THAT MUCH OF A CLIP IS -- WE NEED TO BETTER UNDERSTAND THAT. AND THEN LIKEWISE, SHARE

THAT INFORMATION WITH YOU ALL AS WE MOVE FORWARD. >> MARTINEZ: THIS SLIDE SHOWS THE HISTORICAL DATA FOR PROPERTY VALUES. SENATE BILL 2, EFFECTIVE IN 2021, CAPS ANNUAL PROPERTY TAX REVENUE INCREASES FOR CITIES AND COUNTIES AT 3.5% ON BASE VALUES WITHOUT VOTER APPROVAL DOWN FROM THE PREVIOUS 8% CAP. FOR THE YEARS BEFORE PASSAGE, THE AVERAGE GROWTH WAS ABOUT 8.2%. THAT AVERAGE GROWTH NOW HAS BEEN ABOUT 4.9%, HOWEVER WITH THE DECLINE IN BASE VALUE THAT I JUST SPOKE ABOUT THE FY '27 TOTAL VALUATION IS ANTICIPATED TO DECLINE BY 2.1% OVERALL.

FOR THE FORECAST PERIOD, THERE'S ONLY MODEST GROWTH OF ABOUT 1.5% ON AVERAGE FROM FY '28 THROUGH FY '31. KEEP IN MIND, THE COUNCIL DOES HAVE THE CAPACITY TO ADJUST ITS TAX RATE TO THE STATE-ALLOWED REVENUE GROWTH OF 3.5%. SO THAT'S PROPERTY VALUES.

THIS IS WHAT OUR PROPERTY TAX HISTORICAL AND OUTLOOK LOOKS LIKE.

THIS IS FROM FY '20 THROUGH FY '25 AND THE AMOUNT PROJECTED THROUGH FY '26 THROUGH FY '31. THE FIRST GROWTH AVERAGED ABOUT SIX%. FOR THE FORECAST BETWEEN FY '27 AND '31 WE'RE INCLUDING AN AVERAGE GROWTH WAIT OF POINT 7%. AND YOU CAN SEE FOR FY '27, WE ALSO HAVE A DECLINE OF 1.7%. AND JUST KEEP IN MIND WITH IMPLEMENTATION OF SB 2, PROPERTY TAX REVENUES ON BASE VALUES CANNOT GROW MORE THAN 3.5%. WE COULD ADJUST THE PROPERTY TAX RATE TO THE STATE-ALLOWED TAX RATE UP TO 3.5%, AND AS MENTIONED AS WE RECEIVE MORE INTO FROM THE APPRAISAL DISTRICT, WE'LL BE PREPARED TO SHARE THIS WITH CITY COUNCIL DURING THE TRIAL BUDGET IN JUNE.

ONTO OUR SALES TAX, IN TERMS OF SALES TAX, THIS GRAPH ILLUSTRATES SALES TAX ACTUAL COLLECTIONS FROM FY '20 THROUGH '25, ESTIMATES FOR 2026 AS WELL AS THE PROJECTIONS FOR THE FIVE-YEAR FORECAST.

INCLUDING SIGNIFICANT INCREASE IN '21 AND '22 AS WE RECOVERED FROM THE COVID PANDEMIC. WE STARTED TO SEE MUCH MORE MODERATE GROWTH OR SLOWING OF THE GROWTH IN '23 OR '24 WHERE WE AVERAGED ABOUT 2.5% FOR THOSE TWO YEARS. THIS GROWTH HAS CONTINUED TO SLOW IN FY '25 AND FOR THE '26 ESTIMATE FOR THOSE TWO YEARS TO AN AVERAGE OF ABOUT 1.8%.

WITH THE CONTINUED UNCERTAINTY IN THE ECONOMY, WE ANTICIPATE THAT SALES TAX GROWTH WILL CONTINUE TO SHOW MODERATE GROWTH AND WE'RE PROJECTING THAT TO REMAIN AT ABOUT 2 PERSZ GROWTH FOR FY '27 AND GROW BETWEEN 2.5 AND 3% IN FY '28 AND '31. NEXT IS CPS ENERGY.

FOR THE FY '27 PROJECTION, WE'RE ESTIMATING THE CPS PAYMENT TO BE ABOUT 2% BELOW THE '26 ESTIMATE AND THAT'S DRIVEN BY LESS OFFSYSTEM SALES. THI DID WANT TO NOTE THIS SLIDE DOES INCLUDE THE NUMBERS WITH OFFSYSTEM SALES INCLUDED.

ALSO KEEP IN MIND THAT THE FORECAST, WHEN WE DO THIS, WE ANTICIPATE

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AS I MENTIONED, THE DECREASE IN FY '27 OVERALL IS DUE TO THE OFFSYSTEM SALES. JUST A REMINDER, THAT OFFSYSTEM SALES ARE NOT PAID BY THE CITY OF SAN ANTONIO RESIDENTS, AND AS I MENTIONED, THE BASE GROWS IN OUTER YEARS BECAUSE OF THE LOAD PROJECTS COMING ONLINE.

SO AS FAR GENERAL FUND EXPENDITURES THAT WE USE TO MAKE OUR ASSUMPTIONS FOR THE FORECAST, SO WE FULLY FUND INITIATIVES THAT ARE ADDED IN FY '26. AND THE FORECAST REFLECTS TODAY'S LEVEL OF CITY SERVICES. WE ALSO REMOVE ANY ONE-TIME EXPENSES AND ADD IN OPERATING COST FOR COMPLETED CAPITAL PROJECTS.

FORECAST INCLUDES PROJECTED INCREASE FOR CONTRACTS, HEALTHCARE BENEFITS AND INFLATION. THERE'S ALSO FUNDING FOR EMPLOYEE COMPENSATION AND BENEFITS FOR CIVILIAN, POLICE AND FIRE, HOWEVER THE FORECAST DOES NOT INCLUDE ANY NEW IMPROVEMENTS OR CHANGES TO EXISTING SERVICES.

AND AS A REMINDER FOR THE '27 BUDGET PLAN, WE INCLUDED A $10.7 MILLION REDUCTION AS PART OF THAT PLAN, AND THAT CONTINUES WITH THE FORECAST WE'RE PRESENTING TODAY. AND FINALLY, WE MAINTAIN THE GENERAL FUND ENDING BALANCE WITH A MINIMUM OF AT LEAST 15%. SO TO SHOW THE INCREASE FROM THE FY '26 ADOPTED BUDGET OF 1.696 MILLION TO OUR PROJECTED '27 FORECAST NUMBER OF A LITTLE OVER 1.8 BILLION, YOU CAN SEE THAT THE MAIN DRIVERS HERE ARE GOING TO BE THE COMPENSATION AND EMPLOYEE BENEFIT COSTS.

WE ALSO HAVE ABOUT $10.8 MILLION IN MANDATED COSTS AND THESE ARE GOING TO BE MANDATED COSTS THAT WE DO -- THAT WE'RE MANDATED TO DO FOR COMPLETED BOND PROJECTS, OUR PARKS AND LINEAR CREEK EXPANSION THAT ARE COMING ONLINE IN THE FUTURE, AS WELL AS GRANT MATCHES THAT WE HAVE OUT OF THE GENERAL FUND. THERE'S ABOUT 20.4 MILLION IN INCREASES FOR SUPPORT SERVICES SUCH AS TECHNOLOGY, EQUIPMENT, AS WELL AS SOME CONTRACTUAL AND INFLATIONARY INCREASES. WE DO HAVE A SMALL AMOUNT FOR THE NET INCREASE FOR REMOVING ONE-TIMES AND ADDING THE SECOND-YEAR COST FOR FY '26 IMPROVEMENTS, AND THEN AS I MENTIONED, WE'RE STILL HOLDING THE PLAN REDUCTIONS FOR '27. AMONGST THIS 10.7 MILLION, THE FY '27 PLAN INCLUDED ABOUT $4 MILLION TO BE IDENTIFIED AS PART OF THIS YEAR'S COMPREHENSIVE BUDGET REVIEW.

THERE'S ABOUT $2.8 MILLION IN POTENTIAL CIVILIAN POSITIONS THAT COULD BE REDUCED ACROSS SEVERAL GENERAL FUND DEPARTMENTS.

THERE'S ALSO A PROPOSAL IN THIS PLAN TO REDUCE SPENDING FOR THE -- TO FUND INNER CITY INCENTIVE FUND AND MINOR HOME REPAIR BY TWO AND A HALF MILLION DOLLARS AND OTHER SPAWL ADJUSTMENTS -- SMALL ADJUSTMENTS THAT ARE INCLUDED IN THIS 10.7 MILLION. SO TO SUM UP THE GENERAL FUND FORECAST, BASED OFF OUR ASSUMPTIONS, YOU CAN SEE OUR PROJECTED REVENUES AND EXPENSES INCLUDED IN THE FIVE-YEAR FORECAST.

THE SLIDE ON THE LEFT MAINTAINS OUR PROPERTY TAX RATE OF 54.159 CENTS PER $100 OF EVALUATION. THE SLIDE ON THE RIGHT ASSUMES PROPERTY TAX GROWTH TO THE STATE-ALLOWED PROPERTY TAX GROWTH RATE TO MAINTAIN OUR OPERATIONS. FOR BOTH SLIDES, I WANTED TO MENTION THAT THIS IS JUST A SUMMARY, AND THE ACTUAL SCHEDULE WAS INCLUDED IN THE FORECAST BOOK THAT'S INCLUDED IN YOUR BINDER SO YOU CAN SEE SOME OF THE DETAILS BEHIND THESE NUMBERS. AND AS YOU CAN SEE, WE'RE NOT STRUCTURALLY BALANCED IN THESE SCENARIOS. WHEN YOU COMBINE TOTAL REVENUES AND RESOURCES AND EXPENDITURES, WE'RE FACING ABOUT $130 MILLION DEFICIT IN FY '28, WHICH GROWS OVER THE NEXT THREE YEARS TO 264 MILLION. IF WE GROW THE PROPERTY TAX REVENUE BY THE STATE-ALLOWED PROPERTY TAX GROWTH RATE, THE GENERAL FUND IS STILL NOT STRUCTURALLY BALANCED BUT THE DEFICIT REDUCES TO 70.3 MILLION AND GROWS TO ABOUT 196 MILLION IN FY '31.

THERE'S THE TABLE THAT SHOWS THOSE NUMBERS. YOU CAN SEE BEGINNING IN FY '28 THAT THE PROJECTED EXPENSES AND FINANCIAL RESERVES ARE HIGHER THAN THE PROJECTED RESOURCES FOR EACH YEAR GOING FORWARD.

IN THE MAINTAIN CURRENT PROPERTY TAX SCENARIO, THE AVERAGE REVENUE GROWTH OVER THE FORECAST IS ABOUT 1.5% WHILE THE AVERAGE EXPENSE GROWTH IS ABOUT 4.3%. UNDER THE STATE-ALLOWED REVENUE GROWTH RATE, THE

[00:25:01]

SO WE MUST ALIGN AND BEGIN THE WORK TO ALIGN OUR EXPENSES TO OUR REVENUES. SO FOR THE TERM OF THE FORECAST, THE GENERAL FUND IS NOT STRUCTURALLY BALANCED. WE'LL NEED TO REDUCE SPENDING IF FY '27 AND FY '28 TO ALIGN REVENUE AND EXPENSE GROWTH.

PROJECTED TO DECLINE BY .6% IN '27 AND GROW OVER THE OUTER YEARS WHILE EXPENSES ARE EXPECTED TO GROW AT 3.8% IN THE OUTER YEARS.

WE HAVE SOME STRATEGIES FOR DISCUSSION AND AMONG THOSE ARE TO SET THE PROPERTY TAX RATE TO THE STATE-ALLOWED PROPERTY GROWTH RATE TO MAINTAIN OUR OPERATIONS, WE CAN ADJUST FEES AND CHARGES, AND WE CAN ALSO REDUCE EXPENDITURES THROUGH TARGETED REDUCTIONS, TO NONCORE, NONMANDATED SERVICES TO ENSURE THAT WE MINIMIZE IMPACT TO OUR VULNERABLE POPULATIONS.

ON JUNE 17TH, WE'LL PRESENT THE FY '27 TRIAL BUDGET WHICH WILL INCLUDE UPDATED REVENUE ASSUMPTIONS AND WE'LL PROVIDE ANOTHER UPDATE AT THAT TIME. SO HERE ARE TWO SCENARIOS TO STRUCTURALLY BALANCE THE GENERAL FUND. SO YOU SEE SCENARIO NUMBER 1 ON THE LEFT OF THE SLIDE, WE WOULD HAVE TO REDUCE ABOUT 137 MILLION IN RECURRING EXPENDITURES OR REDUCTIONS OVER THE NEXT TWO YEARS.

BUT HOWEVER THAT SCENARIO 2, WHICH IS OUR RECOMMENDED SCENARIO, WE WOULD USE THE STATE-ALLOWED REVENUE GROWTH TO MAINTAIN OUR OPERATIONS OF 3.5%, AND THAT WOULD GENERATE 24.7 MILLION IN FY '27 AND ANOTHER 42 MILLION IN '28. AND BY DOING THAT, WE WOULD ONLY HAVE TO REDUCE OUR EXPENDITURES BY ABOUT 70 MILLION OVER THE TWO YEARS TO ACHIEVE THE BALANCED TWO-YEAR PLAN FOR FY '28.

NEXT I'D LIKE TO MOVE ON TO SOME OF OUR RESTRICTED FUNDS.

SO THIS SLIDE SHOWS THE HOTEL PROPERTY TAX FIVE-YEAR FORECAST.

THE ZERO CURRENT HOTEL OCCUPANCY TAX RATE IS 17% AND IT'S ON ELIGIBLE HOTEL ROOM NIGHTS. OF THAT 17%, 9% GOES TO THIS FUND, OF WHICH 7% SUPPORTS THE CONVENTION CENTER AND ALAMODOME, VISIT SAN ANTONIO, ARTS AND CULTURE AND HISTORY AND PRESERVATION. THE OTHER 2% IS A RESTRICTED SOURCE OF REVENUE FOR THE CONVENTION CENTER EXPANSION DEBT AND FUTURE CONVENTION CENTER PROJECT.

FOR THE FORECAST PERIOD, WE'RE ASSUMING ANOTHER 2.1% INCREASE IN FY '27, AND THEN 2.6% IN THE OUTER YEARS FROM FY '28 THROUGH FY '31. SO THIS SHOWS THE FORECAST FOR THE HOTEL OCCUPANCY TAX FUND.

I JUST WANT TO MENTION THAT THIS SLIDE IS JUST A SUMMARY AND THERE'S AN ACTUAL SCHEDULE IN THE DOCUMENT THAT YOU HAVE IN FRONT OF YOU, THE BINDER, THE FORECAST DOCUMENT. THE HOTEL OCCUPANCY TAX FUND IS STRUCTURALLY BALANCED IN FY '27, HOWEVER SMALL DEFICITS EXIST OVER THE REMAINING YEARS OF THE FORECAST GROWING TO 3.1 MILLION IN FY '31.

WE'LL CONTINUE TO WORK IN THE COMING MONTHS TO IDENTIFY MEASURES TO ALIGN OUR EXPENSES TO RESOURCES TO ENSURE A BALANCED BUDGET IN THE FUTURE YEARS. ONTO DEVELOPMENT SERVICES, THIS IS ROUGHLY A $49 MILLION FUND THAT IS UP SUPPORTED BY FEES PAID BY DEVELOPERS FOR REVIEWS AND EXPANSIONS. THIS SHOWS THIS FUND SINCE FY 2020.

IN FY '23 REVENUE GROWTH STARTED TO SLOW AND SINCE THEN MAKING THIS FUND UNINSTRUCT CHEURLLY BALANCED. THERE HAVE BEEN NO FEE ADJUSTMENTS SINCE 2008 AND EXPENSES HAVE GROWN OVER THE PAST FEW YEARS DUE TO EMPLOYEE COMPENSATION, TECHNOLOGY, BUILDING AND EQUIPMENT COST. SO WE'RE NOW AT A POINT NOW WITH THE DEVELOPMENT SERVICES FUND WHERE WE'RE NO LONGER STRUCTURALLY BALANCED.

SO HERE ARE A COUPLE SLIDES OR A COUPLE OF EXHIBITS TO SHOW YOU WHY WE'RE NOT THAT WAY. THE SLIDE ON THE LEFT ILLUSTRATES THE PERMIT ACTIVITY OVER THE PAST SIX YEARS AND AN ESTIMATE FOR FY '26.

FOR FY TWIECH RESIDENTIAL PERMITTED DECLINED BY ABOUT 19%.

AND THE FY '26 ESTIMATES ASSUMES THESE PERMITS DECLINE BY 23% COMPARED TO FY '25. COMMERCIAL PERMITS ARE DOING A BIT BETTER BUT THEY'RE STILL DECLINING ABOUT 9.9% COMPARED TO '25.

THIS IS THE -- 9.9% IS FY '25 COMPARED TO FY '24 AND WE'RE PROJECTING A SLIGHT 2% INCREASE IN THE FY '26 ESTIMATE. FOR FY '27, IT ASSUMES IT DECLINES SLIGHTLY FROM THIS YEAR, AND FOR REMAINING YEARS WE'RE

[00:30:01]

WE DON'T ASSUME ANY FEE INCREASES IN THIS EXHIBIT, SO YOU WOULD SEE THAT THE BUDGET DEFICIT OR THE FUND DEFICIT WOULD BE $6.4 MILLION IN FY '27 AND GROW TO ABOUT $17.6 MILLION IN FY '31. SO THERE ARE A COUPLE OF THINGS THAT WE CAN DO TO ADDRESS THIS DEFICIT. SO HERE'S A COUPLE POTENTIAL STRATEGIES. WE COULD DO TARGETED FEE ADJUSTMENTS TO DEVELOPMENT SERVICES FEE, AND ACTUALLY THE DEVELOPMENT SERVICES DEPARTMENT HAS STARTED DISCUSSION WITH STAKEHOLDER GROUPS THIS PAST MONTH, AND THOSE THINGS ARE CONTINUING TO GO ON THROUGH THE NEXT COUPLE OF MONTHS AND WE'LL BE PREPARED TO COME BACK WITH A RECOMMENDATION DURING THE PROPOSED BUDGET ON WHAT TO DO WITH THE FEES.

WE COULD ALSO DO TARGETED REDUCTIONS WHICH COULD IMPACT SERVICES TO CUSTCUSTOMERS. AS YOU'RE AWARE, THE DEVELOPMENT SERVICES DEPARTMENT DOES TURN AROUND THEIR PERMITS AT VERY GOOD PERFORMANCE METRICS. IF WE WERE TO DO SOME TARGETED REDUCTIONS, IT COULD IMPACT THOSE METRICS AND LEAD TO DELAY IN SOME OF THOSE PERFORMANCES THAT WE PROVIDE TO OUR DEVELOPERS.

THE FORECAST I SHOULD ALSO MENTION THAT, BECAUSE OF THE DECLINE IN PERMITTING ACTIVITY, WE'RE HOLDING ABOUT 40 VACANT POSITION AS KIND OF A FREEZE UNTIL WE SEE THOSE REVENUES COME BACK UP AND THE DEMAND IS THERE TO JUSTIFY FILLING THOSE POSITIONS. FOR THE SOLID WASTE MANAGEMENT FUND, THIS IS WHAT THEIR FORECAST LOOKS LIKE.

THIS FORECAST DOES ASSUME FEE INCREASES ANNUALLY, AND THAT'S DUE TO THE RISING EXPENSE GROWTH OF 3.7% THAT WE AVERAGE OVER THE LIFE OF THE FORECAST, AND THAT'S DUE TO INCREASES IN PERSONNEL AND HEALTHCARE COSTS, DISPOSAL COST, EQUIPMENT AND FUEL FOR THE TRUCKS THAT WE HAVE IN THIS FUND, AS WELL AS IMPROVEMENTS TO KEEP UP WITH THE CUSTOMER GROWTH IN OUR CITY. THE FORECAST ASSUMES RATE INCREASES EACH YEAR FOR THE FOLLOWING RANGES. SO IT'S 56 -- 50 CENTS TO A DOLLAR ON ALL CARS FROM FY '27 THROUGH '31. AND IT ASSUMES A 25 CENT INCREASE TO THE ENVIRONMENTAL FEE FOR FY '27 AND THEN ANOTHER 25 CENTS IN FY '28.

BY ACCOMPLISHING THOSE, YOU CAN SEE HERE THAT THE FUND WOULD BECOME STRUCTURALLY BALANCED AND WE'D HAVE ABOUT A 5% FINANCIAL STABLE SAITIONZ RESERVE SO AT THE END OF THE FIVE-YEAR FORECAST, THAT WOULD BE ABOUT 9.8 MILLION. WE'LL CONTINUE TO MONITOR THE EXPENSES AND REVENUE IN THIS FUND, AND IF WE DON'T HAVE TO DO REVENUE OR FEE INCREASES, WE CAN CERTAINLY HOLD OFF ON THOSE OR NOT RECOMMEND THEM, DEPENDING ON THE STATE OF THE FUND AS WE MOVE ALONG. SO TO SUMMARIZE THE '27 AND '31 FORECAST, THE GENERAL FUND IS NOT STRUCTURALLY BALANCED, ALTHOUGH WE SHOW A POSITIVE ENDING BALANCE IN FY '27, WE STILL NEED TO REDUCE SPENDING IN '27 AND '28 SO WE CAN BETTER ALIGN OUR REVENUE AND EXPENSE GROWTH FOR JUNE '28. WE'LL INCLUDE ADDITIONAL DATA THAT WE RECEIVE OVER THE COMING WEEKS AND WE'LL ALSO TALK ABOUT IN THE TRIAL BUDGET SOME TARGETED REDUCTIONS FOR '27 AND '28.

DURING NEXT YEAR -- EXCUSE ME, NEXT WEEKS, COUNCIL AGENDA ON MAY THE 14TH, THE CITY COUNCIL WILL CONSIDER THE FY '26 MIDYEAR BUDGET ADJUSTMENTS, AND WHAT THAT DOES, IT ADJUSTS -- OR RIGHT SIZES THE REVENUES AND EXPENSES THAT ARE INCLUDED IN THE SIX BY SIX FINANCIAL REPORT THAT YOU HAVE IN YOUR BINDER. WE'LL ALSO HAVE AN ORDINANCE TO ADOPT A TAXPAYER IMPACT STATEMENT.

AND A LITTLE BIT MORE ON THE TAXPAYER IMPACT STATEMENT, YOU MAY RECALL THAT THIS IS ORIGINALLY A CCR THAT WAS INTRODUCED LAST YEAR.

IT'S GONE TO GOVERNANCE COMMITTEE, WE TALKED ABOUT IT IN THE THREE PLUS NINE PRESENTATION AND IT'S RECOMMENDED TO BRING IT BACK WHICH WE'RE DOING NOW. THE TAXPAYER IMPACT STATEMENT WILL SHOW THE AVERAGE PROPERTY TAX BILL FOR OUR COMMUNITY AS WELL AS SOME OF OUR FEES, SUCH AS THE SOLID WASTE FEE, OUR ENVIRONMENTAL SERVICES FEE AND OUR STORMWATER FEE. AND YOU CAN ALSO SEE THERE ON THE SLIDE THAT IT LISTS THE EXEMPTIONS THAT ARE AVAILABLE TO OUR HOMEOWNERS IN OUR COMMUNITY. WE WANTED TO PROVIDE AN UPDATE ON THE MEDICAID 115 WAIVER. THIS WAIVER STARTED IN FY '13, AND IT FUNDS SERVICES SUCH AS ORAL HEALTH, VIOLENCE PREVENTION, DISEASE PREVENTION, CONTROLLED PROGRAMS AND DIABETES. OVER THE PAST MONTHS THE

[00:35:04]

WE'RE GOING TO DEVELOP A RECOMMENDATION AND WE'LL PRESENT THAT AS PART OF THE FY '27 PROPOSED BUDGET. SOME OF OUR NEXT STEPS IN THE BUDGET PROCESS, AS I MENTIONED THE MIDYEAR ADJUSTMENT AND TAXPAYER IMPACT STATEMENT WILL BE -- CONDUCT THE BUDGET GOAL-SETTING SESSION, WHERE THERE WILL BE A PRESENTATION ON THE RESULTS OF THE COMMUNITY BUDGET SURVEY WHICH CLOSED AT THE BEGINNING OF THIS MONTH. WE'LL ALSO COME BACK FOR THE TRIAL BUDGET ON THE 17TH, AND WE'LL INCORPORATE SOME OF THE FEEDBACK THAT WE GET FROM THE GOAL-SETTING SESSION AND INPUT FROM THE COMMUNITY SURVEY FOR THE TRIAL BUDGET, AND ALSO TO INCLUDE THAT INPUT INTO THE PROPOSED BUDGET, W WHICH WILL BE PRESENTED TO THE CITY COUNCIL ON AUGUST THE 13TH. ONCE THE BUDGET IS PROPOSED, AGAIN, WE'LL HOLD SEVERAL BUDGET WORK SESSIONS WITH COUNCIL AND WE'LL ALSO GATHER ADDITIONAL COMMITTEE INPUT THROUGH CONDUCTING A BUDGET TOWN HALL IN EACH OF YOUR COUNCIL DISTRICTS. AND FINALLY THE '27 BUDGET IS SCHEDULED TO BE ADOPTED ON SEPTEMBER 17TH.

I WANTED TO GIVE YOU A LITTLE UPDATE ON COMPREHENSIVE BUDGET REVIEWS. SO AS A REMINDER, THE CITY MANAGER REINSTATED THE COMPREHENSIVE BUDGET REVIEW PROCESS IN FY '25, IN WHICH A TOTAL OF $17.1 MILLION OVER TWO YEARS IN REDUCED SPENDING WAS IDENTIFIED AND INCLUDED IN THE FY '26 ADOPTED BUDGET. THE CBR STRUCTURE IS SYSTEMATIC, DATA-DRIVEN AND COLLABORATIVE AND IT'S TO IDENTIFY SAVINGS AND PERFORMANCE INVOLVEMENT. THIS IS LED BY THE INNOVATION AND BUDGET OFFICE IN COLLABORATION WITH THE CITY DEPARTMENTS. AND FOR FY '26, COMPREHENSIVE BUDGET REVIEWS ARE CURRENTLY TAKING PLACE WITH POLICE, FIRE, LIBRARY, MUNICIPAL COURT AND HUMAN RESOURCES. THE GOAL OF THE COMPREHENSIVE BUDGET REVIEWS IS TO LOOK AT THE OVERALL DEPARTMENT BUDGET OR PERSONNEL GROWTH, ORGANIZATIONAL STRUCTURE ANALYSIS AND ALSO COMPARE THEIR OPERATIONS WITH OTHER CITIES AND DO RESEARCH TO COMPARE.

WE ALSO REVIEW DEPARTMENT'S PROGRAM SERVICES TO DETERMINE WHAT IS REQUIRED BY CITY CHARTER, STATE OR FEDERAL LAW, CONSTITUTION, OR VOTER-APPROVED BOND OR A REFERENDUM. DURING THESE REVIEWS, THE TEAM WILL SELECT IN CONJUNCTION WITH THE DEPARTMENTS A SET OF PROGRAMS TO REVIEW, AND THOSE ARE PRESENTED ON THE NEXT SLIDE.

THESE ARE THE PROGRAMS THAT ARE BEING REVIEWED IN THE FIVE DEPARTMENTS DURING THIS FISCAL YEAR. THE REVIEWS A IDENTIFIED 23 AREAS FOR DEEPER ANALYSIS, OF WHICH 13 ARE ANTICIPATED TO BE COMPLETED BY EACH YEAR.

YOU CAN SEE THEM ON THE SLIDE. I WON'T GO THROUGH EACH ONE. BUT THESE WILL BE COMPLETED -- THERE WILL BE 13 THAT WILL BE COMPLETED BY THE END OF FY '26, AND THE REMAINDERS WILL BE DONE IN FY '27. MAYOR AND CITY COUNCIL, THAT CONCLUDES MY PRESENTATION. HAPPY TO ANSWER ANY QUESTIONS. AND WE ALSO HAVE REPRESENTATIVES FROM DEPARTMENTS PRESENTED TODAY TO ASSIST AS WELL. THANK YOU.

>> WALSH: MAYOR, JUST ONE -- JUST TWO PARTS. ONE, YOU KNOW, WE HAVE -- AT LEAST THE STAFF HAS BEEN CLOSELY WATCHING WHAT OTHER PARTICULAR TEXAS CITIES ARE GOING THROUGH IN TERMS OF THE CURRENT FINANCIAL CLIMATE, AND ONE OF THE THINGS -- TRY TO END THIS PRESENTATION ON A GOOD NOTE. ONE OF THE THINGS THAT I THINK WHEN I LOOK AT WHAT OTHER MAJOR TEXAS CITIES ARE DEALING WITH IS THAT HELPS US IS THAT WE BALANCE OUR BUDGET OVER TWO YEARS, AND SO WE'VE GOT -- WE EAF GOT A LITTLE BIT OF LEG ROOM AS WE PLAN APPROPRIATELY. AND I THINK THAT HELPS US MANAGE NOT ONLY IN THE SHORT-TERM, BUT OVER THE LONG-TERM.

SO THAT'S A GOOD THING FOR US, AND I THINK IF WE DIDN'T HAVE THAT, WE'D BE IN A MUCH DIFFERENT POSITION LIKE SOME OF THE OTHER CITIES.

SECONDLY, IT IS NOT LOST UPON ME AS CITY MANAGER THE RECOMMENDATION THAT WE LAID OUT IN THE FORECAST, IT'S NOT THE BUDGET.

WE'RE DEALING WITH PRELIMINARY VALUE -- TAXABLE VALUE INFORMATION, BUT IT'S NOT LOST UPON ME THAT THE CITY HASN'T INCREASED IN TAX RATE IN 33 YEARS. AS FREDDY LAID OUT, IF THE VALUES DON'T CHANGE AS WE GET CLOSER TO THE CERTIFIED ROLL AT THE END OF JULY, THEN A 3.5 PERCENTAGE JUSTMENT WOULD GENERATE ABOUT $25 MILLION.

AND GIVEN THE GROWTH IN OUR BUDGET, AND YOU SAW IN ONE OF THE SLIDES JUST THE NORMAL GROWTH WE HAVE IN OUR BUDGET FOR EMPLOYEES, MORE LABOR

[00:40:02]

AND SO THE 3.5% AS LAID OUT UNDER STATE LAW IS FOR CITIES AND COUNTIES TO SUSTAIN MUNICIPAL OPERATIONS. AND SO THAT'S HOW I VIEW IT. AND I KNOW THAT'S SOMETHING YOU ALL WILL PROBABLY HAVE A LOT OF CONVERSATION TODAY, AND IN THE FUTURE BUDGET SESSIONS, BUT WE FELT LIKE -- I FELT LIKE WE NEEDED TO BE ABLE TO LAY OUT THAT OPTION, GIVEN THE POSITION WE'RE IN AND WHERE WE THINK WE'RE

HEADED. THANKS, MAYOR. >> MAYOR JONES: THANKS, ERIK. THANKS, FREDDY, FOR THE VERY COMPREHENSIVE BRIEFING. WHAT JUMPED OUT AT ME AS I REMEMBER THE FIVE-YEAR OUTLOOK WE HAD LAST YEAR, IF WE LOOKED OUT FIVE YEARS, THAT YEAR THEN BEING 2030, OUR GAP, IF WE DID NOT HELP OURSELVES, WAS 224 MILLION. RIGHT? AND NOW, IF WE DO OUR FIVE-YEAR GAP -- OUR FIVE-YEAR OUTLOOK GOING OUT TO 2031, THAT GAP IS NOW -- TAKE SIGNIFICANT STEPS TO HELP OURSELVES. AND 2030, AS MENTIONED LAST -- WHEN WE GO FIVE YEARS FROM LAST YEAR, 2030 GETS US TO 24.

2030 NOW ONLY GETS US TO 237 MILLION. SO ALL THAT TO SAY WHILE WE ARE TRYING TO SOLVE FOR THIS EVERY TWO YEARS, WE'RE NOT HELPING OURSELVES IN THE LONG TERM, IT'S ONLY GROWING. AND AS MENTIONED, BY 17% JUST OVER THE FIVE-YEAR OUTLOOK LAST YEAR. I THINK WE'RE ALSO -- ALL OF US ARE COGNIZANT OF THE POTENTIAL RATE INCREASES, RIGHT, WITH SAWS AND WITH CPS AS WELL AS WHAT MAY ALSO BE NEEDED TO DO INCREASE CAPACITY ON THE BOND SIDE, SO IT'S VERY HELPFUL TO UNDERSTAND KIND OF WHAT WE UNDERSTAND NOW, HOW CRITICAL, FRANKLY, CPS'S OFFSYSTEM SALES HAVE BEEN TO ENSURING THAT WE HAVE THE POSITION THAT WE'RE IN, BUT CLEARLY -- I DON'T KNOW HOW MANY TIMES IT'S ON YOUR SLIDE DECK, WE ARE STRUCTURALLY UNSOUND, RIGHT, SO WE NEED TO TAKE SOME SIGNIFICANT STEPS TO HELP OURSELVES. GOOD NEWS AND BAD NEWS STORY IT SOUNDS LIKE ON THE PUBLIC HEALTH PIECE, SO I'D LIKE TO REVISIT THAT. BECAUSE THEY DO JUMP OUT, AND FOR THOSE LISTENING, WANT TO HELP FURTHER ELABORATE WHAT MAY BE GOING ON THERE.

SO IF WE'RE ANTICIPATING THE $45 MILLION -- THIS IS ON THE HEALTHCARE PIECE, ERIK, CAN YOU HELP US UNDERSTAND HOW WE MIGHT SOLVE FOR THAT? I KNOW THAT'S THE FULL YEAR, BUT KIND OF HOW ARE WE ALREADY THINKING ABOUT -- IF THAT'S WORST-CASE -- AND IF YOU WANT TO TAKE IT SIX MONTHS AT A TIME, THAT'S FINE. BUT IF WE'RE LOOKING AT KIND OF WORST-CASE SCENARIO, THAT THAT GOES TO 45, HOW ARE WE

THINKING ABOUT SOLVING FOR THAT? >> VILLAGOMEZ: SURE.

AND GOOD AFTERNOON, MAYOR AND COUNCIL. AS THE CITY MANAGER MENTIONED, WE HAVE BEEN DOING A LOT OF ANALYSIS ON THE MEDICAL CLAIMS AND THE COST DRIVERS ASSOCIATED WITH THAT COST.

AND ONE OF THE LARGEST COST DRIVERS IS FREE-STANDING EMERGENCY ROOMS. SO OVER THE NEXT COUPLE OF WEEKS, WE'RE GOING TO CONTINUE TO FOCUS AND TARGET THOSE PARTICULAR PROVIDERS OF THAT PARTICULAR SERVICE. ALSO EDUCATING OUR EMPLOYEES AND WORKING WITH THEM TO MAKE SURE THAT WE ARE BEING GOOD USERS OF THE HEALTHCARE SYSTEM. SO THAT'S WHAT WE PLAN TO DO IMMEDIATELY.

WE HOPE TO CHANGE THAT CURVE PRETTY IN SHORT ORDER TO ENSURE THAT WE DON'T GROW TO THOSE NUMBERS THAT WE SHOW IN THE PROJECTIONS FOR THE END OF THE FISCAL YEAR, BUT FOR THE FIRST SIX MONTHS, WE'RE ALREADY AT $20 MILLION OVER OUR BUDGETED AMOUNT, WHICH IS A PRETTY BIG CONCERN OF

OURS. >> WALSH: AND I THINK, MAYOR, THE -- YOU KNOW, I'M GOING TO HOST A TOWN HALL WITH THE EMPLOYEES AND WE'VE HAD SOME CONVERSATIONS WITH SOME OF THE EMPLOYEE ASSOCIATIONS, BUT, YOU KNOW, THE MAJORITY OF CLAIMS THAT WE'RE SEEING FROM A HANDFUL OF FREE-STANDING EMERGENCY ROOMS ARE NOT EMERGENCY ROOM CLAIMS. NOW, THEY MAY BE URGENT, THEY'RE MEDICAL IN NATURE, OBVIOUSLY, BUT THEY'RE NOT EMERGENCY ROOM CLAIMS, AND SO MAKING SURE THAT THE EMPLOYEES UNDERSTAND -- CERTAINLY, WE WANT THEM TO GET THE CARE THAT THEY OR THEIR FAMILIES WANT, BUT THERE ARE RAMIFICATIONS ABOUT GOING TO SOME PLACES, AS MARIA JUST MENTIONED, THERE'S A VERY TARGETED APPROACH WE'RE GOING TO TAKE WITH ABLE TO STOP THAT IMMEDIATELY.

AND -- AND FRANKLY, I THINK, PROBABLY THE LARGER CONVERSATION WITH ALL 13 AND A HALF THOUSAND EMPLOYEES WHO WE HAVE A GENERALLY -- AT

[00:45:02]

>> MAYOR JONES: YEAH. THANKS, ERIK. AND FOR THOSE THAT MAY BE LISTENING AND JUST SIMILARLY WONDERING, GIVEN THE SIGNIFICANT GROWTH OVER THE SHORT AMOUNT OF TIME, IS THERE ANYTHING WE CAN DO TO KIND OF HELP OURSELVES, I.E. ENCOURAGE EMPLOYEES TO POTENTIALLY USE ANOTHER PROVIDER. ANDY, IF YOU WANT TO SPEAK TO THE LEGALITY OF THAT, WE WANT TO HELP PEOPLE UNDERSTAND HOW WE'RE TRYING TO AVOID

POTENTIALLY $40 MILLION BILL, IF WE CAN. >> SEGOVIA: WE TALKED A LITTLE BIT ABOUT THAT IN EXEC LAST TIME, MAYOR, AND PROBABLY IF WE WANT TO GET INTO MORE DETAILS, I RECOMMEND WE DO THAT. BUT CERTAINLY ONE OF THE OPTIONS HAS TO BE LOOKED AT IS HOW THAT WE CAN GUIDE EMPLOYEES, GIVEN THE HEALTHCARE THAT'S REQUIRED, WHETHER IT BE URGENT, MEDICAL OR MORE ROUTINE, THAT WE PROVIDE THE EDUCATION SO THEY CAN READILY IDENTIFY WHERE

THEY OUGHT TO BE GOING. >> MAYOR JONES: YEAH. AND I APPRECIATE THE -- OF COURSE, THE CONVERSATION IN THE EXEC, AND AS WE'RE TRYING TO, AGAIN, HELP THE PUBLIC UNDERSTAND WHERE WE ARE, HOW WE GOT HERE, BUT HOW WE'RE TRYING TO SOLVE FOR IT, APPRECIATE YOUR SHARING WHAT IS LEGALLY AVAILABLE TO SHARE. OKAY. THE GOOD NEWS PIECE, THOUGH, WAS THE DEEP DIVE ON THE MEDICAID 1115 WAIVER.

SO $20 MILLION THAT WAS FOUND IS NOT INSIGNIFICANT, AND THAT'S A NICE CHUNK OF CHANGE, AND SO I'D WELCOME ANYTHING THAT MIGHT BE ABLE TO SHARED HERE ABOUT HOW WE CAN, ONE, ARE THERE OTHER DEEP DIVES THAT WE'RE LOOKING AT THAT CAN SIMILARLY IDENTIFY $20 MILLION, BUT HOW ARE WE -- GIVEN THAT'S SUCH A CRITICAL SEGMENT, THE PUBLIC HEALTH SPACE, HOW ARE WE ACCOUNTING FOR THAT NOW THAT WE HAVE KIND OF THIS

WINDFALL? >> TATE: THANK YOU, JUSTINA TATE, INTERIM ASSISTANT CITY MANAGER. SO WE DID A FULL ANALYSIS OF OUR MEDICAID WAIVER.

WE ARE STILL FINALIZING THAT, SO THAT'S WHY WE, AS PART OF THE PRESENTATION, WE ARE CONTINUING THAT ANALYSIS.

WE WILL HAVE A FINAL RECOMMENDATION TO CITY COUNCIL AS PART OF THE FISCAL YEAR 2027 BUDGET. BUT THOSE NUMBERS ARE STILL FLUCTUATING AND

COULD CHANGE. >> MAYOR JONES: YEAH. >>

>> WALSH: THE 1115 PROGRAM WHEN IT WAS CREATED IS A REIMBURSEMENT MECHANISM THAT IS HUGELY COMPLICATED.

AND SO IT'S NOT AS SIMPLE AS OUR ANNUAL BUDGET AND CURRENT YEAR SPEND.

AND SO PART OF WHAT THE BUDGET OFFICE AND THE FINANCE DEPARTMENT AND THE HEALTH DEPARTMENT DID WAS GO BACK IN THERE AND MAKE SURE WE ARE PROPERLY MAPPING OUT IN THE FUTURE THE SPEND AND THE REIMBURSEMENT POSSIBILITY. AND SO WHAT THAT MEANS IS, AND THE SLIDE FREDDY TALKED ABOUT IT, THE 1115 PROGRAMS ARE AT RISK AT SOME POINT.

AND SO I THINK WHAT CLAUDE AND DR. JACOB AND HIS TEAM -- AUDIO] -- IS HOW DO WE MAINTAIN THOSE CORE FUNCTIONS, BECAUSE AS WE TALKED ABOUT IN LAST YEAR'S BUDGET PRESENTATION, 1115 DOES -- DOES A LOT OF IMPORTANT THINGS FOR OUR COMMUNITY, AND WE WANT TO MAKE SURE THAT WE ARE PROPERLY FORECASTING THOSE REIMBURSEMENTS AND THOSE AVAILABLE FUNDS TO BE ABLE TO TARGET. AND I THINK -- YOU KNOW, I THINK IT'S -- IT'S A VERY COMPLICATED PROCESS, AND I'M THANKFUL THAT THE HEALTH DEPARTMENT AND JUSTINA AND TROY AND HIS TEAM KIND OF REALLY WENT OUT AND FORECASTED THAT AMOUNT, BECAUSE AS WE WERE TALKING ABOUT IT AS PART OF THE BUDGET LAST YEAR, IT WAS WE'VE GOT $9 MILLION LEFT, RIGHT, AND IT'S GOING TO GO AWAY. BUT THINGS ARE IN ARREARS. I DO THINK THAT -- AND THIS WILL BE HELPFUL FOR US MAYBE DURING THE GOAL-SETTING SESSION FROM YOU ALL, WE ARE GOING TO HAVE TO HAVE -- I THINK THE HEALTH DEPARTMENT WILL LOOK FOR SOME ASSISTANCE AND GUIDANCE ON WHAT ARE THOSE CORE FUNCTIONS, BECAUSE WE MAY BE ABLE TO STRETCH AND FUND THINGS LONGER THAN ANTICIPATED, IF WE -- IF WE GET FOCUSED. AND THERE ARE -- AND WE'RE PREPARED -- WE'LL PREPARE A SMALL PART OF THAT AS PART OF THE MAY 22ND CONVERSATION AND GET SOME FEEDBACK FROM YOU ALL, THAT WILL BE HELPFUL FOR US AS WE DO

THE '27 BUDGET. >> MAYOR JONES: IT SOUNDS LIKE WE'RE ALSO LUCKY

[00:50:03]

I WOULD ASK, AS WE'RE THINKING ABOUT WHAT THAT MENU OR THOSE OPTIONS ARE IN TERMS OF HOW WE FUND THAT, THAT WE DO USE, AS A SOURCE OF INPUT, THE TABLETOP RESULTS, WHICH HELPED US UNDERSTAND, AGAIN -- WE'RE SEEING THE CUTS AT THE FEDERAL LEVEL, WE NOW HAVE THIS WINDFALL, HOW ARE WE BEST SHORING UP WHERE WE THINK WE MAY SEE SOME RISK BASED ON CUTS AT THE FEDERAL LEVEL. YEAH. ON THE DEVELOPMENT SERVICES PIECE, FREDDY, HELP ME UNDERSTAND. FOR EXAMPLE, WHEN WE -- WE JUST HAD THIS CONVERSATION, RIGHT, ABOUT MARKET SQUARE AND FIESTA AND HOW WE SUBSIDIZED ONE FIESTA EVENT WITH $600,000, RIGHT? BETWEEN COPS AND TRASH, WHERE IS THAT BUDGETED

INTO THE DEVELOPMENT SERVICES PLAN? >> MARTINEZ: SO THE DEVELOPMENT SERVICES FUND IS AN ENTERPRISE FUND SO IT DOES NOT COVER ANYTHING THAT'S RELATED TO MARKET SQUARE. MARKET SQUARE IS ITS OWN ENTERPRISE FUND. THERE ARE SOME COSTS COVERED IN THERE, BUT TO YOUR QUESTION ABOUT FIESTA, THE GENERAL FUNDUS COVER A LOT OF THE COST, LIKE POLIC POLICE OVERTIME. SOLID WASTE WILL COLLECT THE TRASH. IT'S A VARIETY OF FUNDING SOURCES FOR THE FIESTA

EVENTS. >> MAYOR JONES: WE HAD A COUPLE OF AUDITS THAT WERE CHALLENGING, IN PARTICULAR FOR THE FIRE DEPARTMENT, AND SO I WANT TO MAKE SURE, AS WE ARE -- I RECOGNIZED IN THE -- IN THE SIX BY SIX, SOME OF THE CHALLENGES WITH OUR COSTS HAD TO DO WITH CERTAINLY THE COST OF FUEL WHEN WE ANTICIPATED THE BUDGET, THAT HAS INCREASED.

I DO, THOUGH, WANT TO MAKE SURE -- AND MAYBE MAMARIA, YOU CAN SPEAK TO THIS, THAT THE FINDING AND RECOMMENDATIONS OF SOME OF THESE AUDIT RESULTS ALSO HAVE SUFFICIENTLY BEEN IMPLEMENTED.

I MEAN, WHEN WE LOOK AT, FOR EXAMPLE, THE FLEET AUDIT, RIGHT, OR THE INVENTORY AUDIT, WHEN I READ SOMETHING LIKE -- ON THE INVENTORY AUDIT A LACK OF POLICIES AND PROCEDURES MAY INCREASE THE RISK FOR MISAPPROPRIATION OF INVENTORY AND MAY RESULT IN A FINANCIAL LOSS TO THE CITY, AND THEN ON THE FUEL CARD STUFF, SIMILARLY PROBLEMATIC FINDINGS ABOUT LACK OF POLICIES AND CONTROLS THAT MAY FOSTER AN ENVIRONMENT SUSCEPTIBLE TO WASTE AND ABUSE, SO WHEN WE'RE TALKING ABOUT INCREASING COSTS AND POTENTIALLY MAKING SOME SIGNIFICANT CUTS, I WANT TO MAKE SURE THAT THOSE THAT ARE THE BIGGEST CHUNKS OF OUR BUDGET ARE NOT NEEDLESSLY EXPENDING RESOURCES, AND THAT WE HAVE SUFFICIENTLY ACCOUNTED FOR ALL THE CORRECTIONS THAT NEED TO BE MADE SO THAT WE'RE GOOD STEWARDS OF THE PEOPLE'S MONEY. IS THERE ANY WAY THAT WE CAN HAVE THAT VERIFIED AS PART OF THE RECOMMENDATION, THE TRIAL

BUDGET? >> VILLAGOMEZ: YES, MAYOR.

SO THE RECOMMENDATIONS MADE BY THE CITY AUDITOR'S OFFICE RELATED TO THE FIRE AUDITS HAVE EITHER BEEN IMPLEMENTED OR IN THE PROCESS OF BEING IMPLEMENTED. AND WITH THE RESPECTIVE MONITORING PROCESSES IN PLACE TO ENSURE THAT THOSE CHANGES ARE BEING CARRIED OUT BY THE

DEPARTMENT. >> MAYOR JONES: OKAY. THANK YOU.

LET ME GO TO MY COLLEAGUES HERE. COUNCILMEMBER ALDARETE

GAVITO? >> GAVITO: THANK YOU, MAYOR.

THANK YOU, FREDDY, FOR THIS PRESENTATION. I THINK IT'S A STARK REMINDER THAT WE AS COUNCIL NEED TO START PRIORITIZING OUR CORE SERVICES WITH OUR FIXED DOLLARS, CORE SERVICES, CORE FUNCTIONS OF THE CITY. THEY NEED TO BE AT THE FOREFRONT OF WHERE WE -- OF WHAT WE SPEND. TO ME, RESIDENTS ARE EXPECTING THAT THEIR TAXPAYER DOLLARS GO TO THEIR STREETS, THEY'RE EXPECTING THEIR TAXPAYER DOLLARS TO GO TO POLICE OFFICERS RESPONDING, THEY'RE EXPECTING THEIR TAX DOLLARS TO GO TO FIREFIGHTERS RESPONDING, TO ANIMAL CARE SERVICES RESPONDING, TO THEIR TRASH BEING COLLECTED -- WE SPEND OUR MONEY ON. I THINK COUNCILMAN WHYTE PROBABLY SAID IT BEST, WHEN WAS IT LAST YEAR OR THE YEAR BEFORE, IT'S NOT THAT WE HAVE A REVENUE PROBLEM, WE HAVE A SPENDING PROBLEM. AND SO I DO THINK THAT THESE TIMES CALL FOR US TO TIGHTEN OUR BELT. I'D ALSO REALLY LIKE FOR US TO LOOK AT WHICH PROGRAMS -- WE'RE GETTING OUR BIGGEST BANG FOR OUR BUCK ON AND WHICH ONE AREN'T PROVIDING AS MUCH BENEFIT AS WE'D LIKE TO SEE. I KNOW THAT IT'S NEVER EASY TO MAKE CUTS, BUT,

[00:55:02]

TO ME, IT SEEMS ODD THAT WE'RE CONSIDERING RAISING TAXES ON OUR END BECAUSE OF THE REVENUE LOSS ON THE BCAD SIDE, SO IT KIND OF DEFEATS THE PURPOSE.

IS THERE AN OPPORTUNITY FOR BCAD TO TAKE THE LESSONS LEARNED FROM THE RECENT CHANGES AND POTENTIALLY COURSE CORRECT, OR HOW ARE WE

HANDLING THOSE CONVERSATIONS? >> WALSH: I'LL START.

TROY, WHY DON'T YOU MAKE YOURSELF -- WAY TO THE PODIUM, BUT THAT APAPPRAISAL L PROCESS ALREADY BEGAN FOR THE YEAR.

>> GAVITO: UH-HUH. >> WALSH: NOTICES, IF YOU WERE OVER $1,000 CHANGE IN VALUE, THOSE PROPERTY OWNERS ARE ALREADY RECEIVING.

I THINK -- AND TROY AND HIS TEAM HAVE HAD SEVERAL CONVERSATIONS WITH ROY AND THE APPRAISAL DISTRICT STAFF, BUT IN ADVANCE OF THE NEXT TWO CONVERSATIONS WITH THE COUNCIL ON THIS PRELIMINARY INFORMATION,& I'D LIKE TO BE ABLE TO SHOW YOU HOW THAT 3.54 IS BROKEN OUT BETWEEN INDUSTRIAL, COMMERCIAL, MULTIFAMILY AND RESIDENTIAL, AND THERE IS -- SOMETHING HAS -- THERE'S SOMETHING ADJUSTING, THE HOUSING MARKET SPT ISN'T ANY WORSE OR BETTER THAN IT WAS THIS TIME LAST YEAR.

MORTGAGE RATES ARE STILL OVER 6. AND SO IT'S STILL A BUYER'S MARKET, RIGHT? THE INVENTORY HAS GONE UP, AND SO I'M NOT SURE -- I'M NOT SURE THEY CAN STOP THE PROCESS THEY'RE UNDER.

THEY DO HAVE TO FOLLOW THEIR OWN PORTIONS OF THE STATE LAW, BUT I DON'T KNOW IF YOU WANT TO ADD TO THAT, TROY, YOUR CONVERSATIONS WITH ROY?

>> ELLIOTT: NO, I THINK ERIK'S EXACTLY ON POINT. I MEAN, THEY APPRAISED VALUES ON JANUARY 1ST. NOTICES WENT OUT IN APRIL.

SO THAT PROCESS HAS ALREADY STARTED TO BEGUN.

WE HAD THAT FIRST PIECE OF INFORMATION. NOW, ME AND MY TEAM WERE THE COURSE OF NOW -- BETWEEN NOW AND JULY 25TH, AND WE CERTIFY VALUES, WE NEED TO DIG DOWN AND KIND OF DISSECT THAT INFORMATION, GET AN UNDERSTANDING WHAT SOME OF THE ROOT CAUSES ARE. AND THAT WILL TAKE SEVERAL CONVERSATIONS BETWEEN US AND BCAD BETWEEN NOW AND THEN.

>> GAVITO: YEAH. >> WALSH: AND LET ME JUST ALSO ECHO THAT EVERY -- YOU ALL MAY HAVE SEEN THE REPORTING -- BEXAR COUNTY HAD A SIMILAR PRESENTATION LAST WEEK. I THINK EVERY TAXING ENTITY RIGHT NOW IN BEXAR COUNTY IS GOING THROUGH THE SAME PROCESS TO UNDERSTAND WHY THESE ARE MOVING IN THE DIRECTION THEY'RE MOVING.

>> GAVITO: RIGHT. YEAH, AND THAT'S WHAT MAKES ME, YOU KNOW, ALSO -- YOU KNOW, I THINK ALL OF OUR SPIDEY SENSE NEEDS TO GO UP ABOUT THIS. IF WE OR ALL FACING THE SAME NEGATIVE IMPACT AND WHICH KNOW SOMETHING'S CHANGED -- YES, I UNDERSTAND WHAT YOU'RE SAYING, TROY, THE PROCESS HAS ALREADY STARTED FOR THE YEAR, BUT I DO THINK IT'S WORTH US PUSHING BACK ON THEM A LITTLE BIT AND SAYING, YOU KNOW, LET'S REVIEW THIS PROCESS AGAIN TO SEE WHERE WE'RE FEELING NEGATIVE IMPACTS FROM IT, RIGHT? US AND OTHERS, SO WE HAVE TO DO SOMETHING DIFFERENTLY ABOUT THAT. BUT THANK YOU FOR THAT INSIGHT.

I HAD A QUICK QUESTION ON SLIDE NUMBER 3. HOW MUCH MONEY DOES THE PROJECTED 23.5% DECREASE IN RESIDENTIAL PERMITS EQUATE TO?

>> ARE YOU TALKING ABOUT THE REVENUE IMPACT TO THAT?

>> GAVITO: UH-HUH. YES. WHERE IT SAYS RESIDENTIAL

PERMITS PROJECTED TO BE DOWN 23.5. >> I THINK WE'LL HAVE TO

GET THAT NUMBER FOR YOU, COUNCILWOMAN. >> GAVITO: OKAY.

>> [INDISCERNIBLE] HERE. HE CAN TALK ABOUT WHY IT'S GOING DOWN.

>> GAVITO: OKAY. >> WE'LL GET IT FOR YOU. >> GAVITO: I'M LOOKING FORWARD TO THAT NUMBER. I KNOW SOMETIMES PERCENTAGES CAN BE DECEIVING. ALSO ON SLIDE 33, WHEN WE'RE LOOKING AT POTENTIAL FEE INCREASES, WHAT HAS THE FEEDBACK FROM STAKEHOLDER GROUPS

BEEN ABOUT DSD FEE ADJUSTMENTS? >> MARTINEZ: I'LL LET AMIN CHIME IN, THEY'RE AMENABLE TO FEE ADJUSTMENTS BUT I'LL LET AMIN TALK ABOUT THE DISCUSSIONS HE'S HAD WITH THEM.

>> HI, MAYOR, COUNCIL. WE STARTED TALKING WITH THE STAKEHOLDERS AND WE PRESENTED TO THEM OUR STAND WITH THE MONEY AND THEY WERE TOTALLY OPEN-MINDED ABOUT IT. THEY UNDERSTAND THAT THE FEES DID NOT INCREASE SINCE 2008, AND I GUESS THEY WERE EXPECTING THAT, I MEAN, THROUGHOUT THE LAST COUPLE OF YEARS, WE DID MENTION IT IN EVERY MEETING THAT WE ARE SHORT ON MONEY, BUT WE WANT TO SEE WHAT HAPPENS. HOPEFULLY THE ECONOMY

[01:00:04]

CHANGES AND WE GET BACK TO NORMAL. >> GAVITO: UH-HUH.

>> SO THEY TOTALLY UNDERSTAND. WHICH ARE WORKING WITH THEM RIGHT NOW. WE'RE GOING TO START NEXT WEEK MEETING WITH THEIR BOARD OF DIRECTORS TO DISCUSS IT FURTHER AND COME UP WITH A GAME PLAN THAT WORKS FOR THEM AND FOR US, BUT ONE OF THE THINGS THEY MENTIONED IS THEY'RE HAPPY WITH OUR PERFORMANCE AND THEY DON'T WANT TO REDUCE ANY OF OUR ACTIVITY, SO THEY WILL WORK WITH US TO GET US BACK TO FINANCIALLY

BALANCED AND MAINTAIN OUR SERVICES. >> GAVITO: THANK YOU.

AND I'M GLAD THAT Y'ALL ARE MEETING WITH THE STAKEHOLDERS.

REALLY, MY INTENT WITH ASKING THAT QUESTION IS I JUST WANT TO MAKE SURE THAT WE'RE NOT GOING TO HAVE ANY UNINTENDED NEGATIVE IMPACT ON OUR LOCAL ECONOMY BY RAISING PRICES FOR OUR BUILDERS. SO...

>> YEAH, AGAIN, WE'RE GOING TO WORK WITH THEM TO ENSURE THAT DOESN'T HAPPEN. THEY MENTIONED TO US THAT THROUGHOUT THE YEARS FROM 2008 TO NOW, THEY DID INCREASE THEIR FEES -- I GUESS THEIR FEES TO DO THE WORK, RIGHT, MATERIAL INCREASED, LABOR INCREASED AND ALL THAT.

AND, AGAIN, AS I SAID, THEY UNDERSTAND WE DID NOT INCREASE OUR FEES AT ALL. AND WE ARE STILL ONE OF THE LOWEST FEES IN THE

STATE OF TEXAS. >> GAVITO: ACTUALLY, THAT WAS MY NEXT QUESTION.

YEAH, IT WOULD BE INTERESTING TO SEE WHERE WE RANK IN TERMS OF THE FEES THAT WE CHARGE COMPARED TO THE OTHER MAIRNLMAJOR CITIES

IN TEXAS, TOO. >> ON RESIDENTIAL, WE'RE ALMOST THE LOWEST ONE.

ON COMMERCIAL, WE'RE ABOUT 30% ON THE BOTTOM, SO WE ARE NOT THE LOWEST,

BUT WE ARE ONE OF THE LOWEST. >> GAVITO: OKAY.

THANK YOU. >> YES, MA'AM. >> GAVITO: REALLY QUICK ON SLIDE 25, THE CORE SERVICES, I'M ON BOARD WITH THE TARGETED REDUCTIONS FOR NONMANDATED PROGRAMS. OBVIOUSLY WE NEED TO DO THIS WITH AN EQUITY LENS AND MAKE SURE THAT, AGAIN, THAT WE AVOID LAYOFFS, BUT WE REALLY NEED TO FOCUS OUR SPENDING, IF WE'RE GOING TO BALANCE OUR BUDGET, WE NEED TO BALANCE OUR BUDGET.

DURING THE TRIAL BUDGET, I'D LIKE TO SEE CLEAR INFORMATION ON WHERE THE CUTS ARE GOING TO HAPPEN -- OR WHERE THE PROPOSED CUTS ARE GOING TO HAPPEN, SO THAT WAY IT'S CRYSTAL CLEAR FOR MY COLLEAGUES AND I.

MY PRIORITY DEPARTMENTS TO AVOID CUTS -- TO AVOID CUTS OBVIOUSLY WOULD BE FOR OUR POLICE OFFICERS, FIREFIGHTERS, ANIMAL CARE SERVICES, PUBLIC WORKS, BECAUSE, AGAIN, A LOT OF OUR CALLS ARE QUESTIONS ABOUT POLICE RESPONSE, FIREFIGHTERS, STREETS. I MEAN, AGAIN, RESIDENTS EXPECT THEIR TAXPAYER DOLLARS TO GO TOWARDS SIDEWALKS AND ROADS AND POLICE RESPONDING AND FIREFIGHTERS RESPONDING AND LOOSE DOGS GETTING PICKED UP.

THAT'S THEIR EXPECTATION AND I THINK THAT THEY HAVE EVERY RIGHT TO EXPECT THAT AND WE NEED TO MEET THAT. AND UNFORTUNATELY, HAVE TO CUT SOME OF THE NICE-TO-HAVES AND FOCUS ON THE NEED-TO-HAVES.

I ALSO THINK THAT WE NEED TO BE BULLISH ABOUT LOOKING FOR GRANTS, YOU KNOW, ESPECIALLY ANIMAL CARE SERVICES. WE NEED TO START DIVERSIFYING OUR PORTFOLIO. I MEAN, THE CITY BUDGET, YOU KNOW, IT LOOKS BLEAK FOR THE NEXT COMING YEARS, AND SO WE NEED TO START THINKING OUT OF THE BOX AND SEEING HOW WE CAN SECURE ADDITIONAL FUNDING SOURCES TO HELP EASE THE BURDEN. ON SLIDE 26 ON THE DIFFERENT SCENARIOS, I'M SUPPORTIVE OF SCENARIO 1.

TO ME, I CANNOT BE SUPPORTIVE OF RAISING TAXES UNTIL WE'VE DONE EVERYTHING IN OUR POWER TO TIGHTEN OUR BELT AND REDUCE SPENDING ONION CORE AREAS. TO ME -- ON NON-CORE AREAS.

TO ME, IF WE'RE NOT DOING OUR PART TO MAKE REDUCTIONS, IT'S NOT FAIR TO ASK THE TAXPAYERS TO TAKE THE HIT TO SUPPORT OUR OVERSPENDING.

I HATE TO CLASSIFY IT THAT WAY, BUT, AGAIN, THIS IS -- THIS IS WHERE THE RUBBER MEETS THE ROAD AND WE HAVE TO FOCUS ON OUR CORE SERVICES.

IT'S ALSO A REALLY TOUGH SELL TO RAISE PROPERTY TAXES WHEN PEOPLE ARE ALSO LOOKING AT, YOU KNOW, AS MENTIONED EARLIER, POTENTIAL SAWS INCREASE, CPS RATE INCREASE AND SO EVERYONE IS REALLY FEELING THE

PINCH RIGHT NOW. >> IF I MAY, I JUST WANTED TO ANSWER YOUR QUESTION ON THE 29.5% FOR SERVICES, THAT EQUATES TO ABOUT A MILLION DOLLARS

IN REVENUE. >> WALSH: MAYOR, BEFORE WE GO TO THE NEXT ONE, CAN WE PULL UP SLIDE 46, WHICH IS A BACKUP SLIDE. MAYBE TO YOUR APPRAISAL QUESTION, AND MAYBE OTHER COUNCILMEMBERS MAY FIND THIS INTERESTING, THIS IS THE AVERAGE RESIDENTIAL SALES PRICE BY COUNTY, BACK TO 2014.

AND THE SOURCE OF THIS INFORMATION WAS COLLECTED THROUGH THE APPRAISAL DISTRICT. AND SO OF PARTICULAR INTEREST TO ME IS THAT BOTH BEXAR COUNTY AND T TARRANT SEEM TO BE IN A MUCH DIFFERENT POSITION IN TERMS OF CHANGE IN PRICE FROM DALLAS, HARRIS AND TRAVIS COUNTY. THAT DOESN'T HELP US FIGURE OUT WHAT'S HAPPENING HERE, BUT FORT WORTH IS IN A SIMILAR POSITION IN TERMS

[01:05:01]

I'LL BE TALKING TO THEM AND WHAT THEY'RE SEEING AS WELL.

BUT I THOUGHT THIS INFORMATION WAS INTERESTING, AND THAT IT SHOWS THAT GENERALLY SPEAKING, TEXAS IS A GROWTH STATE.

ALL THOSE CITIES ARE SEEING INCREASES IN POPULATION, BUT US AND TARRANT COUNTY SEEM TO BE IN A DIFFERENT POSITION THAN THE OTHER THREE.

>> GAVITO: YEAH, AND REALLY QUICK, I KNOW THAT SOME OF THE TIME IS SPENT ON ANSWERS, I'LL JUST CLOSE OUT BY SAYING THIS.

I MEAN, YES, IT'S REALLY TOUGH TIMES, BUT THIS IS ACTUALLY THE TIMES WHEREIN NOVATION AND INNOVATIVE THINKING REALLY HAPPEN.

SO WE HAVE TO THINK DIFFERENTLY AND CREATIVELY ABOUT SOLVING THESE CHALLENGE, AND IT IS AN OPPORTUNITY FOR US COLLECTIVELY AS A CITY TO BE INNOVATIVE AND TO THINK OF NEW WAYS TO FACE OPPORTUNITY AHEAD OF US.

SO THANK YOU. >> MAYOR JONES: GREAT. THANK YOU.

COUNCILMAN GALVAN. >> GALVAN: THANK YOU, MAYOR.

THANK YOU FOR THE PRESENTATION. A COUPLE QUICK QUESTIONS, I GUESS ON THE LARGE OVERARCHING POINTS HERE, LOOKING AT SLIDE 17, IN THE INCREASE IN PROPERTY TAX REVENUE PAST 2028, WHAT'S THE -- WHAT ARE WE ANTICIPATING THERE? WHAT'S THE AS ASSUMPTION THERE, THIS IS NOT LOOKING AT A PROPERTY TAX RATE INCREASE, WHAT'S DRIVING THAT THE 2% AND

THE .5% GOING FORWARD? >> SO JUST AS A REMINDER, THIS GRAPH IS NOT MAINTAINING THE PUNTER PROPERTY TAX RATE SO THIS IS JUST THE GROWTH OF THE BASE VALUES AND THE NEW VALUES, SO IT GOES -- WE TALKED ABOUT THE NEGATIVE GROWTH. AND THEN NO GROWTH IN '28 AND THEN THERE'S SOME

MODEST GROWTH ENTWINE TO '31. >> GALVAN: UNDERSTOOD, BUT I GUESS WHAT'S DRIVING THAT GROWTH OR WHAT'S THE ASSUMPTIONS OF WHERE THAT'S COMING FROM, IF WE SEE RESIDENTIAL DROPPING DOWN,

COMMERCIAL'S BEEN STAGNANT -- >> I'LL LET TROY CHIME

IN, BUT IT COULD CHANGE AS WE GO FORWARD. >> ELLIOTT: AS FAR AS THE SPECIFICS, AS FAR AS THE RESIDENTIAL, INDUSTRIAL, COMMERCIAL, WE DON'T HAVE SOME OF THOSE DETAILS YET. WE'LL BE DIGGING DOWN INTO THAT. IN TERMS OF AS FAR AS THE GROWTH PRESENTED ON THAT SLIDE, WE BASICALLY -- I MEAN, NEXT JANUARY 1ST IS JUST AROUND THE CORNER IN TERMS OF WHAT THE NEXT APPRAISAL IS GOING TO BE, SO WE DON'T EXPECT MUCH CHANGE IN THE MARKET FROM NOW TOIN TERMS OF THE FUTURE GROWTH, I WENT BACK AUDIO]

WE BASICALLY MODELED THAT TO PREDICT THE FUTURE. >> GALVAN: OKAY.

THAT LEADS TO MY OTHER QUESTION ON SALES TAX AND HOT AS WELL AND UNDERSTANDING WHERE THAT BUMP WOULD COME FROM. SERIOUSLY, TWO YEARS, THREE YEARS OUT FROM A RECESSION CAN LOOK SIMILAR TO WHAT WE'RE CURRENTLY IN TODAY.

NOT SAYING WE'RE IN A RECESSION. >> ELLIOTT: WE MODEL THAT

BASED ON PAST HISTORY. >> GALVAN: GOT IT. THANK YOU.

I GUESS A LITTLE BIT MORE INTO THAT TOO. I KNOW WE WERE TALKING ABOUT DSD AND THIS MAY BE A LITTLE OUT OF THE SCOPE BUT THINKING ABOUT ANY UNPRODUCTIVE LAND OR BUILDINGS THAT WE HAVE. DO WE HAVE ANY DATA ON THE FOREGONE TAX REVENUE WE WOULD BE RECEIVING FOR VACANT LOTS WITHIN OUR URBAN

CORE OR ANYTHING LIKE THAT? . >> TO BREAK IT OUT IN THE WAY YOU ASKED IT, I HAVE TO FOLLOW UP ON THAT. WE HAVE TO TOTAL WHAT WE

FOREGO. WE'LL FOLLOW UP. >> GALVAN: I GUESS MY --

GO AHEAD, JUSTINA. >> I DON'T THINK WE CAN BREAK IT OUT LIKE THAT.

BUT JUST TO GIVE YOU A LITTLE BIT OF CONTEXT, THE EXEMPTIONS THAT WE HAVE IMPLEMENTED -- I KNOW THIS ISN'T YOUR QUESTION. WE FOREGO ABOUT $150 MILLION BECAUSE OF THOSE EXEMPTIONS. THAT DOESN'T ACCOUNT FOR THE VACANT.

>> GALVAN: I APPRECIATE THEN. I CAN FOLLOW UP A LITTLE BIT LATER TOO. I HAVE SEEN SOME OTHER CITIES -- THEY ARE MAYBE A LITTLE BIT DIFFERENT THERE -- WHO LOOK AT WHAT TYPE OF LAND USE IS DONE AND WHAT KIND OF STRATEGY INCENTIVES ARE POSSIBLE AND THEREFORE COMPARE THE COST BENEFIT ANALYSIS OF DOING WHAT WE'RE CURRENTLY DOING TO HOPEFULLY ENCOURAGE SOME DEVELOPMENT SITE THERE TO BETTER UNDERSTAND THAT . AND SEE WHAT PROPERTY TAX REVENUE WE CAN GET FROM THAT AS WELL. I THINK SIMILARLY, FOR PARKING LOTS AS WELL. STANDALONE PARKING LOTS, PARTICULARLY DOWNTOWN, THINK ABOUT THEIR QUOTE, UNQUOTE USE AND NON-PRODUCTIVE USE AND HOW IT WOULD IMPACT THE GENERAL FUND. I DON'T KNOW IF WE CAN GET THAT FOR THIS BUDGET BUT OVERALL IF WE'RE ABLE TO LOOK AT THE ANALYSIS, I THINK IT WOULD BE HELPFUL TO SHAPE SOME OF OUR STRATEGIES FOR NOT ONLY DOWNTOWN BUT DEVELOPMENT HERE IN OUR CITY. FOR SLIDE 25, CAN WE GET A BREAKDOWN OF WHAT SERVICES ARE CONSIDERED NON-CORE, NON-MANDATED CATEGORY AS WELL AS THE SERVICES THAT DO

[01:10:05]

DIRECTLY IMPACT VULNERABLE POPULATIONS. >> PROVIDING THAT BREAKDOWN OF THE PUBLIC-FACING GENERAL FUND DEPARTMENTS OF WHAT ARE

THEIR CORE SERVICES AND WHAT ARE THEIR NON-CORE SERVICES. >> GALVAN: GREAT.

I GUESS SIMILAR TO THAT ONE WITH SLIDE 26 -- LET ME MAKE SURE I HAVE IT RIGHT HERE.

FOR SLIDE 26, THERE WERE DEPARTMENT REDUCTIONS LISTED HERE AND THE DOLLAR AMOUNT THERE. WHAT ARE WE LOOKING AT WITHIN THOSE?

YOU DON'T HAVE THOSE ONES YET? >> WALSH: NO, COUNCILMAN.

WE HAVE NOT GONE THROUGH ANY SORT OF PROGRAM REDUCTION. >> GALVAN: THIS IS A

GENERAL NUMBER? >> WALSH: THESE ARE AMOUNTS AND TARGETS TO

BALANCE OUR BUDGET OVER TWO YEARS. >> GALVAN: GOT IT.

THANK YOU. THAT'S HELPFUL. I WILL MOVE TO THE MEDICAID 1115 WAIVER. I KNOW IT'S NOT EASY TO DIVE INTO WHAT CAN BE DONE THERE.

I'M LOOKING FOR THE EXACT LANGUAGE HERE ON IT. IT SOUNDED TO ME LIKE THERE'S SOME PROGRAMS BEING FUNDED BY THE RESERVES. YOU CAN CORRECT ME IF I'M WRONG ON THAT ONE. I GUESS I WANTED TO KNOW WHAT NORMALLY -- ARE THERE OTHER PROGRAMS THAT HAVE BEEN FUNDED THROUGH RESERVES?

>> THIS IS PART OF THE MEDICAID WAIVER PROGRAM. SO WE HAVE DONE OUR BALANCE PREVENTION, STAND-UP SA. OUR ORAL HEALTH IS ONE OF OUR BIGGER PROGRAMS FUNDED

OUT OF THIS PROGRAM. >> GALVAN: THANK YOU FOR THAT.

THIS, I'M ASSUMING, IS A ONE-YEAR SOLUTION, NOT A LONG-TERM SOLUTION.

>> THIS HAS BEEN IN PLACE SINCE 2013. WE WILL BE DEVELOPING A PLAN TO COME BACK TO YOU AS PART OF THE FISCAL YEAR 2027 BUDGET TO SEE WHAT PROGRAMS

WOULD CONTINUE THROUGH THIS MEDICAID WAIVER. >> WALSH: AND THE PLAN

WOULD BE A MULTI-YEAR PLAN. >> GALVAN: THANK YOU. THAT'S HELPFUL.

WITHIN THE PERFORMANCE MEASURE REPORT IT TALKS ABOUT THE ENERGY COST SAVINGS FROM OUR ENERGY CONSERVATION PROGRAMS OR PROJECTS FROM OUR MUNICIPAL BUILDINGS. I THINK IT EQUATED TO $1.9 MILLION YEAR OVER YEAR.

DO WE HAVE A LIST OF UPCOMING PROJECTS OR HOW MANY BUILDINGS CAN STILL USE THAT ENERGY CONSERVATION RESERVATION AND NOT ONLY WHAT THE COSTS WOULD LOOK

LIKE BUT THE SAVINGS WOULD LOOK LIKE YEAR OVER YEAR? >> WALSH: WE CAN GET YOU

THAT. >> GALVAN: I KNOW THIS MONTH -- BUT I THINK I MENTIONED IT NOT BEING RELEASED UNTIL THE FALL. IS THAT BEFORE OR AFTER

BUDGET? >> ART REINHART PUBLIC WORKS.

OUR SIDEWALK ASSISTANCE WAS A THREE-PHASE PROCESS. WE COLLECTED ALL THE DATA CITYWIDE AND WE'RE PROCESSING THE LAST 100 MILES OR SO, FINALIZING THE CONDITION INDEX. OUR PLAN WAS TO PRESENT THE FINDINGS FROM THAT AND

POTENTIAL NEXT STEPS. >> GALVAN: GREAT. THANK YOU FOR THAT INFORMATION. IT'S REALLY HELPFUL. I THINK A COUPLE DIFFERENT THINGS OVERALL LOOKING AT OUR BUDGET. I KNOW WE'RE GOING TO TALK ABOUT THIS MORE DURING OUR TRIAL BUDGET OVERALL. BUT IT'S GOING TO BE TOUGH AS WE'RE LOOKING AT THIS. I'M EAGER TO SEE WHAT INNOVATION WE CAN DO TO CONTINUE OUR SERVICE LEVELS AT THE PACE THAT OUR RESIDENTS ARE ASKING FOR WITHOUT HAVING TO RAISE TAXES AND WITHOUT HAVING TO MAKE MAJOR CUTS TO SIGNIFICANT DEPARTMENTS HERE. SO I'M LOOKING FORWARD TO SEEING WHAT THAT LOOKS LIKE. I APPRECIATE OF COURSE THE SPECIFIC FOCUS ON HEALTH AND EXCITED TO SEE WHAT COMES THERE. I WOULD LIKE TO SEE A BIT MORE -- FROM WHAT THE DEPARTMENT STRUCTURES ARE GOING TO LOOK LIKE.

I KNOW THERE'S SOME CONVERSATION ABOUT SHIFTING OF THE ORGANIZATIONAL STRUCTURE WITH THE COMPREHENSIVE BUDGET REVIEWS.

I KNOW THAT WILL COME LATER ON TO SHOWCASE BUT I'M HOPEFUL WE'LL SEE SOME OF THE GOOD THINGS THERE AND HAPPY TO BE HELPFUL WHEREVER I CAN.

THANK YOU, MAYOR. >> MAYOR JONES: THANK YOU. COUNCILMAN MUNGIA.

>> MUNGIA: CAN YOU GO TO SLIDE 15, PLEASE? ERIK, I KNOW WE TALKED ABOUT THIS BRIEFLY YESTERDAY BUT I DON'T QUITE UNDERSTAND THIS -- AND I KNOW IT PROBABLY HAS TO DO WITH THE VALUATION AND POLICIES THAT BCAD HAS PASSED IN THE PRIOR YEARS. BUT I JUST DON'T UNDERSTAND THE NEGATIVE GROWTH WHEN WE'RE BUILDING SO MUCH IN THE CITY. YOU KNOW, ESPECIALLY ON OUR SIDES OF TOWN. THERE'S SO MUCH DEVELOPMENT HAPPENING.

AND OBVIOUSLY WITH THE AFFORDABLE HOUSING MARKET, YOU KNOW, THAT'S GOING TO TYPICALLY HAVE A WAIVER ON PROPERTY TAX. SO WE OBVIOUSLY KNOW THAT

[01:15:04]

TIME THAT HAPPENED IN SAN ANTONIO/BEXAR COUNTY? >> WALSH: 2011.

>> MUNGIA: BUT THAT WAS KIND OF AN ANOMALY BECAUSE OF THE MARKET AND THE ECONOMY AT THE TIME, RIGHT? WAS THERE A TIME BEFORE 2011 THAT THAT WAS HAPPENING?

>> WALSH: WE'LL FIND OUT. THAT'S THE LAST ONE WE HAVE EXPERIENCED BUT WE'LL GO

FURTHER BACK. >> MUNGIA: YEAH. I REALIZE THAT MIGHT HAVE BEEN THE HOUSING MARKET NATIONALLY AND ALL THAT HOW THAT HAPPENED.

BUT JUST WONDERING IF IT'S A PRODUCT OF THE CURRENT NATIONAL AND GLOBAL ECONOMIC SITUATION WE HAVE OR IF IT'S TELLING OF SOMETHING LOCALLY THAT'S HAPPENING THAT'S PREVENTING US FROM GROWING AND GETTING A GREATER TAX BASE.

ON THE TOPIC OF THE TAX INCREASE, I DON'T SUPPORT A TAX INCREASE AT THIS TIME.

BUT QUESTION: COULD YOU, IN APPROVING THE TAX INCREASE THAT WE'RE ABLE TO DO, COULD YOU DEDICATE THAT EXTRA GROWTH INTO SOMETHING IN PARTICULAR?

>> WALSH: YES. ABSOLUTELY. YEAH.

ABSOLUTELY. MAYBE I DIDN'T DO A GOOD JOB SAYING THAT TOWARDS THE END BUT IF THE VALUES STICK WHERE THEY'RE AT TOWARDS THE CERTIFIED ROLL, IT'S ABOUT $25 MILLION. YOU KNOW, FREDDIE HAD A SLIDE ON THERE THAT SAID JUST THE -- SOME OF OUR NORMAL PUBLIC SAFETY EXPENSES ARE GOING TO GO UP BY MORE THAN THAT NEXT YEAR. SO WE COULD DEFINITELY, AS WE STRUCTURE THIS, SAY THAT INCREMENT IS TO PAY FOR THAT THING. IT'S NOT JUST GOING INTO THE GENERAL POT. BUT CERTAINLY WE COULD ASSOCIATE WITH THAT.

>> MUNGIA: A 3% INCREASE ON TAX AND JUST SIMPLY DEDICATE THAT TO FIRE AND POLICE DEPARTMENTS?

>> WALSH: YES, SIR. >> MUNGIA: FOR AS LONG AS WE WANT TO DO THAT.

>> WALSH: YES, SIR. >> MUNGIA: GOOD TO KNOW THAT.

ANOTHER QUESTION -- THIS IS RELATED TO CPS. IF THEY DO GET INCREASES ON THEIR RATE ADJUSTMENTS, DOES THAT NECESSARILY MEAN DOWN THE LINE GREATER REVENUES TO

THE CITY, BASED ON THAT? >> WALSH: IT COULD, COUNCILMAN, BUT WE DON'T ASSUME IN EITHER SAWS OR CPS THAT THE COUNCIL EVER APPROVES A RATE INCREASE.

SO THE FORECAST DOES NOT INCLUDE ANY ASSUMPTION IN THE NEXT FIVE YEARS ON ANY

ADDITIONAL REVENUE BECAUSE OF ANY RATE ADJUSTMENTS. >> MUNGIA: SURE.

OKAY. >> WALSH: THE REAL IMPACT IS YES, IT DOES HAVE AN

IMPACT ON US. >> MUNGIA: AND I THINK -- I'M NOT SURE IF YOU'RE GOING TO HAVE THIS FOR OUR NEXT BUDGET MEETING BUT I THINK HAVING A LINE GRAPH OR BAR GRAPH OF THE EXPENSES OVER TIME WITH THE REVENUE OVER TIME WOULD BE HELPFUL FOR US. BECAUSE I'M HEARING A COUPLE OF TIMES ALREADY -- AND I IMAGINE WE'LL HEAR MORE OF IT TODAY AND IN THE COMING FUTURE -- THAT THE CITY HAS A SPENDING PROBLEM. I WORRY ABOUT THAT RHETORIC WHEN WE'VE PASSED, BY LAW, YOU KNOW, BUDGETS THAT ARE BALANCED. I DON'T KNOW WHY YOU WOULD HAVE A SPENDING PROBLEM WHEN YOU'RE NOT OVERSPENDING MONEY.

AND WHEN YOU'RE SPENDING MONEY THAT YOU'RE GETTING IN THROUGH TAX BASE.

YOU KNOW, I JUST WORRY ABOUT WHAT THAT MEANS FOR FOLKS TO SAY THAT WE HAVE A SPENDING PROBLEM. AND FOR YOU, COULD YOU TELL ME RIGHT NOW WHAT DEPARTMENT YOU CONSIDER TO BE, YOU KNOW, A NON-CORE SERVICE. WITHOUT US GETTING INTO THAT DISCUSSION, ARE YOU ABLE TO TELL ME WHICH DEPARTMENT OR PROGRAMS ARE NON-CORE

SERVICES? >> WALSH: YEAH, I CAN. YOU WANT ME TO GIVE YOU AN

EXAMPLE? >> MUNGIA: YEAH. >> WALSH: THE CITY CLERK'S OFFICE IS A CORE SERVICE BECAUSE IT'S REQUIRED UNDER THE CITY CHARTER.

OUR ECONOMIC DEVELOPMENT DEPARTMENT AND, YOU KNOW, IS A NON-CORE ISSUE UNDER THE DEFINITIONS OF THE CONSTITUTION, STATE LAW, OR THE CHARTER.

IT DOESN'T MEAN IT'S NOT IMPORTANT TO ACCOMPLISH THE THINGS THAT WE NEED TO ACCOMPLISH AS A COMMUNITY. AND FRANKLY, WE HAD, AT THE LAST DEPARTMENT HEAD

[01:20:05]

I TOLD THE DEPARTMENT HEADS THAT DOESN'T MEAN ANYBODY'S LESS IMPORTANT WITH WHAT WE DO, WE'RE JUST TRYING TO CATEGORIZE IT TO FRAME UP A CONVERSATION FOR YOU ALL TO HAVE. THERE ARE -- SO THAT'S ONE WAY TO LOOK AT IT BUT THOSE

ARE TWO EXAMPLES FOR YOU. >> MUNGIA:

>> WALSH: IT'S NOT SUBJECTIVE IN WE'RE BOUNCING UP STATE LAW IN THE CHARTER, IT'S SUBJECTIVE IN -- I SUSPECT THE CONVERSATION YOU ALL WILL HAVE AS POLICYMAKERS, WHETHER THEY'RE CORE OR NON-CORE, THEY ARE IMPORTANT.

>> MUNGIA: WHAT IS, BY LAW, BY STATE STATUTE, BY THE FEDERAL GOVERNMENT REQUIRED, WHICH IS CORE. AND I IMAGINE, YOU KNOW, A LOT OF WHAT WE DO AT THE CITY IS NOT CORE. IT'S STILL IMPORTANT BUT NOT CORE.

SO I THINK WE NEED TO START HAVING -- USING THE SAME DEFINITIONS THAT WE'RE HAVING THIS DISCUSSION UP HERE. I THINK YOU COULD HELP US WITH THAT BY SHOWING, YOU KNOW, SURE. MAYBE 50% OF THE DEPARTMENTS WE HAVE ARE NOT TECHNICALLY CORE BUT WE CONSIDER THEM IMPORTANT.

I THINK THAT WOULD BE IMPORTANT. >> WALSH: THAT'S EXACTLY

WHAT WE'RE PREPARING FOR YOU GUYS ON THE 22. >> MUNGIA: JUST SOME CLARITY FOR ALL OF US UP HERE. ARE THESE THE HIGHEST

DRIVERS IN SPENDING AT THE CITY? >> YES.

IN COMPARISON TO WHERE WE'RE AT COMPARED TO WHAT WE'RE PROJECTING FOR NEXT YEAR.

>> MUNGIA: FOR ALL THE LINE ITEMS WE HAVE, THESE ARE THE ONES THAT ARE

DRIVING EXPENSES HIGHER. >> CORRECT. >> MUNGIA: COULD YOU PLEASE DO THE SAME CHART FOR THE LAST SEVERAL YEARS AS FAR AS WHAT HAVE BEEN THE GREATER DRIVERS FOR THE PAST SEVERAL YEARS? WHEN WE SAY WE HAVE A SPENDING PROBLEM, WE HAVE TO LOOK AT WHAT'S BEEN DRIVING THE COST.

SOME OF IT IS FINE. THE NUMBER ONE THING -- THAT'S THE NUMBER ONE THING IN OUR CITY IS MAKING SURE WE HAVE POLICE AND FIREFIGHTERS.

THAT MAKES SENSE WHY THAT'S A HIGH DRIVER OF COST. WE ALL GET THAT.

EMPLOYEE PENSION COMPENSATION. WE GET THAT.

CIVILIAN COMPENSATION. WE GET THAT. IF WE WANT TO TALK ABOUT WHAT WE'RE SPENDING MORE AND MORE ON, WE NEED TO BE HONEST WITH OURSELVES ABOUT WHAT THAT IS AND SO MUCH OF OUR BUDGET IS PERSONNEL. HOW MUCH OF THE BUDGET -- OF THE GENERAL FUND BUDGET GOES TO PAY PEOPLE, WHETHER THAT'S CBA OR CIVILIAN?

>> I'LL HAVE TO GET THAT EXACT PERCENTAGE. WE CAN GET THAT FOR YOU.

>> MUNGIA: I THINK JUSTINA KNOWS. >> TATE: COUNCILMAN, IT'S

RIGHT AROUND 70%. >> MUNGIA: 70% OF THE GENERAL FUND PAYS PEOPLE.

>> TATE: CORRECT. >> MUNGIA: WHEN WE LOOK AT CORE, NON-CORE, IMPORTANT, NOT IMPORTANT, 70% OF OUR GENERAL FUND IS PAYING PEOPLE'S SALARIES.

I THINK THAT'S A VERY IMPORTANT CONTEXT WHEN WE'RE TRYING TO CUT DEPARTMENTS AND PROGRAMS. THOSE ARE THE QUESTIONS I HAVE FOR NOW.

THANK YOU. >> WALSH: BRENDA AND HER TEAM DO A REALLY GOOD JOB AND THEY JUST HAVE TO BE THE EXAMPLE. I JUST WANT IT TO BE KNOWN TO BRENDA AND WHAT THEY DO IS REALLY IMPORTANT. AND MY EXAMPLE WASN'T MEANT TO MINIMIZE IT BUT I THINK WE'RE GOING TO HAVE THAT CONVERSATION ON MAY 22 ABOUT NON-CORE. BRENDA, YOU DO A GREAT JOB. THANK YOU.

>> MUNGIA: I WANT TO SAY, BRENDA, I DIDN'T SAY THAT. ERIK WALSH SAID THAT.

[LAUGHTER] I THINK YOU DO A VERY IMPORTANT JOB.

THANK YOU. >> MAYOR JONES: IT'S NOT LOST ON ME, WHEN WE LOOK AT THE CUTS FROM FY26, IT'S TWO EDD POSITIONS. I SAY ALL THAT BECAUSE IT'S NOT -- THE POINT THAT YOU MAKE IS REALLY IMPORTANT, KIND OF WHAT IS CORE, WHAT IS NOT CORE. BUT HOW MUCH OF THE CORE DO YOU NEED AT THE EXPENSE OF EVERYTHING ELSE? THAT'S REALLY THE DISCUSSION WE'RE GOING TO HAVE HERE IN LIGHT OF AS WELL THE CUMULATIVE CUTS THAT WE HAVE MADE.

$114 MILLION, WAS IT LAST YEAR, FY26? IF I REMEMBER CORRECTLY.

>> TATE: YES. $114 MILLION IS OVER THREE YEARS.

IT WAS '25, '26, AND ASSUME THE $10 MILLION IN '27. >> WALSH: WHEN YOU AND I WERE SPEAKING YESTERDAY WITH JUSTINA, IT WILL BE HELPFUL -- AND WE'LL DO THIS FOR THE 22ND -- TO CATEGORIZE LOOKING BACK OVER THREE YEARS SO YOU ALL CAN

SEE KIND OF WHAT WE'VE DONE UP TO THIS POINT. >> MAYOR JONES: YEP.

[01:25:02]

THANK YOU. COUNCILWOMAN MEZA GONZALEZ. >> GONZALEZ: THANK YOU, MAYOR. THANK YOU, FREDDIE AND EVERYONE ON THE PRESENTATION, GETTING US HERE TODAY. I HAD A COUPLE OF QUESTIONS ON -- JUST WANTED TO REITERATE THE POINT ON SLIDE 15 ON THE BREAKDOWN OF THOSE VALUES ON COMMERCIAL, INDUSTRIAL, AND RESIDENTIAL. I THINK YOU SAID YOU WERE GOING TO PRESENT THAT AT THE GOAL SETTING, IS THAT CORRECT?

>> WALSH: THAT'S INFORMATION THAT WE'RE GOING TO ASK FOR THE APPRAISAL

DISTRICT TO GIVE US SO WE CAN SHARE THAT. >> GONZALEZ: OKAY.

AND THEN ON SLIDE 20, THIS IS PROBABLY AT LEAST THE SECOND YEAR IN A ROW THAT WE HAVE SEEN THE SURPLUS OVER THE BUDGETED ESTIMATE. JUST WANTED TO UNDERSTAND MORE. THOSE DOLLARS ARE BEING USED TO -- THEY'RE NOT IN THE

RESERVE, CORRECT? >> WALSH: NO, MA'AM. THEY'RE BEING UTILIZED

TOWARDS THE OPERATIONS OF THE GENERAL FUND. >> GONZALEZ: THANK YOU.

AND THEN I THINK JUST BASED ON THE PRIOR DISCUSSION WE HAD ON OUR DEBT CAPACITY, KIND OF -- AND WE TALKED ABOUT AN INCREASE ON THE TAX SIDE THERE AS WELL.

AND SO IF THERE'S A DISTINCTION THAT CAN BE SHARED OR EXPLAINED MORE ON THE O&M SIDE VERSUS THE BOND CAPACITY SIDE -- I'M SORRY. AND WHAT THAT INCREASE MEANT, THE CONVERSATION WE HAD -- THIS IS MAYBE TWO OR THREE MONTHS AGO ON OUR BOND CAPACITY. WE TALKED ABOUT AN INCREASE THERE.

ON THIS SLIDE WE'RE TALKING ABOUT ON SCENARIO 2, AN INCREASE.

IF YOU CAN JUST DISTINGUISH BETWEEN THOSE TWO. >> THE CURRENT TAX RATE IS 54 CENTS PER $100 OF VALUATION. SO THE 54 CENTS IS BROKEN INTO TWO COMPONENTS. ONE IS GOING TO BE OUR MAINTENANCE AND OPERATIONS TAX RATE, WHICH IS 33 CENTS. THAT'S GOING TO SUPPORT OUR GENERAL FUND OPERATIONS.

YOU ALSO HAVE THE DEBT SERVICE TAX RATE, WHICH IS 22 CENTS, WHICH IS GOING TO SUPPORT OUR BOND PROGRAMS AND THE CAPACITY ANALYSIS THAT WE TALKED ABOUT.

I THINK THE MAYOR LED OFFABOUT E GROWTH. THAT WOULD BE ON THE TAX RATE FOR THE 33 CENTS FOR OUR GENERAL FUND ON THE DEBT SERVICE SIDE, THAT WOULD BE SEPARATE AND DISTINCT, ABOVE AND BEYOND THE 3.5. THAT WOULD INCREASE THE OVERALL TAX RATE.

SO TWO SEPARATE TAX RATES, TWO SEPARATE DISCUSSIONS THAT WE'RE HAVING.

>> GONZALEZ: DOES THE STATE HAVE A RESTRICTION ON THE INCREASE ON THE DEBT

SERVICE SIDE? >> ELLIOTT: NO, MA'AM. THE STATE REGULATES THE MAINTENANCE AND OPERATION SIDE TO THE 3.5. ON THE DEBT SERVICE SIDE, THERE IS NO CEILING OR CAP IN PLACE. ALSO, THAT DISCRETION OF RAISING THE TAX RATE IS LEFT TO YOU AND THE COUNCIL ON THE DEBT SERVICE SIDE.

>> GONZALEZ: THANK YOU FOR THAT. I WANT TO KIND OF REITERATE THE POINTS TOO THAT MY COLLEAGUE MADE, COUNCILMEMBER MUNGIA, ON DEFINING WHAT THOSE CORE SERVICES ARE AND THOSE IMPORTANT SERVICES WITHIN THE CORE SERVICES. SO I WOULD APPRECIATE A BREAKDOWN OF THOSE AS WELL.

I'M NOT COMFORTABLE AT THE MOMENT ON SLIDE 26 WITH ANYTHING PAST SCENARIO 1.

I REALLY THINK WE NEED THAT GOAL SETTING CONVERSATION IS IMPORTANT.

BUT AT THE MOMENT RIGHT NOW, I DON'T THINK THAT'S AN OPTION FOR ME.

BUT THANK YOU AGAIN FOR ALL THE WORK YOU'VE DONE TO GET US HERE.

THESE ARE DIFFICULT TIMES BUT I'M CONFIDENT IN THE TEAM THAT WE HAVE IN LEADING

US. THANK YOU SO MUCH. >> MAYOR JONES: THANK YOU.

COUNCILMEMBER MCKEE-RODRIGUEZ. >> MCKEE-RODRIGUEZ: SO, THERE IS A LEVEL OF HONESTY I EXPECT WHEN I COME UP HERE AND IT'S FRUSTRATING THAT I DON'T THINK THAT BY THE END OF THIS WE'RE GOING TO SOLVE THIS PROBLEM IN A WAY THAT IS BOTH LONG TERM AND JUST. AND WE'RE ASKED TO ANSWER -- I THINK SOME OF WHAT I HEARD AT THE BEGINNING OF THIS DISCUSSION -- WE'RE ASKED TO ANSWER QUESTIONS FROM VARYING POINTS OF VIEW. I EXPECT THAT -- AND IT'S SAD THAT INSTEAD, RATHER THAN DO BASIC MATH, WE REGURGITATE MAGA POINTS ABOUT THE GOVERNMENT HELPING POOR PEOPLE. YOU HEAR WHY ARE YOU INCENTIVIZING PRIVATE CORPORATIONS TO MOVE HERE BUT WHY DON'T WE HAVE AS MANY HEADQUARTERS AS OTHER CITIES? WHY IS THE CITY INCENTIVIZING AFFORDABLE HOUSING DEVELOPMENT? WHY DO WE HAVE HOMELESS PEOPLE ON THE STREET AND WHY ARE WE SPENDING SO MUCH MONEY ON ASSISTANCE PROGRAMS TO PREVENT PEOPLE FROM BECOMING HOMELESS? I HATE TO HEAR MAGA TALKING POINTS ABOUT THE CITY HAVING

[01:30:04]

I WOULD ASK MY COLLEAGUES, WHICH DEPARTMENTS ARE THE FRIVOLOUS ONES.

WHICH PROGRAMS ARE THE FRIVOLOUS ONES? ANY DEPARTMENT THAT COMES BEFORE US WHEN THEY'RE COMING TO B SESSION OR TO OUR COMMITTEES, WE ARE PRAISING THEIR WORK AND WE'RE ASKING THEM TO DO MUCH, MUCH MORE BUT GET HERE AND SAY WE EXPECT YOU TO SPEND LESS. WHEN AN ORGANIZATION IN YOUR DISTRICT COMES BEFORE US AT PUBLIC COMMENT, YOU'RE GOING TO PROPOSE A MILLION DOLLAR BUDGET AMENDMENT TO GIVE YOUR BUDDIES SOME MONEY. YOU WANT TO WHINE AND COMPLAIN ABOUT HOMELESS PEOPLE SLEEPING IN DRAINAGE DITCHES AS THOUGH IT'S LUXURY HOUSING. AND YOU WANT TO WHINE AND COMPLAIN ABOUT LITTLE OLD LADIES NOT MOWING THEIR GRASS BUT HATE TO SEE US FUND PROGRAMS TO HELP THEM MOW IT. EARLIER THIS YEAR I HEARD SOME OF MY COLLEAGUES TALK ABOUT HOW OUR UTILITIES NEED RATE INCREASES BECAUSE PREVIOUS COUNCILS KICKED THE CAN DOWN THE ROAD. SO RIGHT NOW, AS WE'RE TALKING ABOUT THIS ISSUE, WE ARE GOING TO BE KICKING THE CAN DOWN THE ROAD AND LEAVING A MULTI-HUNDRED MILLION DOLLAR DEFICIT FOR A COUNCIL 5 TO 10 TO 15 YEARS FROM NOW WHILE ALSO NAVIGATING A HOUSING CRISIS. POVERTY AND HUMAN NEED THAT IS UNMATCHABLE.

A PANDEMIC, NATURAL DISASTERS, OR ANY OTHER EMERGENCY THAT THEY WON'T BE ABLE TO AFFORD BECAUSE OF THE $100 MILLION WE'RE LEAVING BEHIND.

AND WE AREN'T GOING TO SIMULTANEOUSLY NOT RAISE THE PROPERTY TAX RATE AND ALSO NOT SIGNIFICANTLY REDUCE THE SERVICES OUR COMMUNITY RELIES ON.

WE'RE ALSO NOT GOING TO DO IT IF WE DON'T INCREASE WAGES FOR OUR EMPLOYEES AND THEN THEY END UP QUITTING AND WE CAN'T FIND PEOPLE TO DO THOSE SERVICES.

I WOULD ASK MY COLLEAGUES TO BE REAL FOR A LITTLE MOMENT. I'M GOING TO GIVE AN EXAMPLE --G TO BE THE TWO POLICE AND FIRE. IF WE RAISE OUR POLICE AND FIRE BUDGETS BY AN AVERAGE OF 3% FROM THIS YEAR, THAT'S AN INCREASE OF $32 MILLION NEXT FISCAL YEAR. WE'RE GOING TO BE DOING THAT LIKELY BECAUSE OF CBAS AND WHATNOT, JUST ON AVERAGE. 3%. LET'S USE A SMALL AMOUNT.

I KNOW IT COULD CHANGE. BUT WHERE ARE WE GOING TO CUT THAT FROM? AND THEN WE'RE GOING TO ADD MORE BECAUSE OUR COMMUNITY IS ASKING FOR IT.

BUT THEN WE CAN'T BECAUSE WE DON'T HAVE MONEY BECAUSE WE HAVE A SPENDING PROBLEM, RIGHT? THE BUDGET DEFICIT IS NOT BECAUSE WE HAVE A SPENDING PROBLEM WHEN 64% OF THAT BUDGET IS POLICE AND FIRE. WE WANT POLICE AND FIRE TO BE FUNDED, RIGHT? YOU WORK YOUR WAY FROM POLICE AND FIRE, PUBLIC WORKS, PARKS, LIBRARIES, HEALTH, HUMAN SERVICES, ANIMAL CARE SERVICES, NEIGHBORHOOD AND HOUSING SERVICES, AND CODE ENFORCEMENT.

THAT'S 86% OF OUR BUDGET. GO DOWN THE LIST. OPEN THE BUDGET DOCUMENT.

GO DOWN THE LIST OF DEPARTMENTS. TELL ME WHO IS OVERSPENDING.

WHICH ONE OF THESE DEPARTMENTS? AND YOU'RE NOT GOING TO TELL ME THAT. AND SO UNLESS WE'RE GOING TO DO SOMETHING LIKE EVERY DEPARTMENT CUT THEIR BUDGET BY 2%, 2.5%, AND JUST LEAVE IT AT THAT.

EVERY DEPARTMENT. NO EXCEPTIONS. IF EVERY DEPARTMENT WERE TO CUT THEIR BUDGET BY 2.5% AND WE JUST LEAVE IT LIKE THAT FOR SEVERAL YEARS, IS THAT GOING TO SOLVE OUR PROBLEM? I'LL LEAVE Y'ALL WITH THAT. I'M NOT GOING TO -- YOU'RE NOT GOING TO HEAR A REAL SOLUTION HERE TODAY. I DON'T THINK YOU WILL AND I DON'T THINK YOU'RE GOING TO HEAR ANYTHING THAT'S -- THIS IS POLITICAL.

IT'S GOING TO BE POLITICAL. PEOPLE DON'T WANT TO PAY HIGHER PROPERTY TAXES.

THEY DON'T WANT US TO CUT THEIR SERVICES. AND SO WHERE DO WE GO FROM

HERE? THANK YOU. >> MAYOR JONES: THANK YOU.

COUNCILWOMAN SPEARS. >> SPEARS: THANK YOU, MAYOR.

CAN WE GO TO SLIDE 11, PLEASE? THANK YOU FOR THE BRIEFING.

I KNOW THAT WAS A LOT OF HARD WORK. I JUST WANTED TO ASK, YOU KNOW, WE TALKED ABOUT THE NEED FOR GENERAL PRACTITIONERS -- AND I MENTIONED THIS BEFORE -- AT POSSIBLY LOOKING AT US HAVING SOMEONE WITHIN IN-HOUSE TO HELP OUR EMPLOYEES. BECAUSE WE HAD THAT AT THE COUNTY AND THAT MAY BE A COST SAVINGS. THAT WOULD BE A WAY TO BRING IN COST SAVINGS. IF WE COULD LOOK AT WHAT THAT WOULD LOOK LIKE SO THAT EMPLOYEES CAN GO REAL QUICK, SEE THE DOCTOR, GET THEIR ANTIBIOTIC, AND REDUCE USE OF URGENT CARE. IT HELPED US A LOT AT THE COUNTY.

THAT WAS JUST ONE LITTLE THING I WANTED TO BRING UP. AND IT SHOULD PRODUCE A COST BENEFIT. OKAY. SLIDE 15.

WAIT. SLIDE 17. WHAT IF THIS ISN'T RIGHT?

[01:35:04]

RIGHT? >> MENTIONED, WE'RE UTILIZING SOME HISTORICAL DATA TO PROJECT, BUT THEY ARE JUST PROJECTIONS IN OUTER YEARS. IF THAT DOESN'T HAPPEN OR IF WHAT'S HAPPENING IN '27 HAPPENS FOR THE NEXT THREE YEARS, THEN OUR PROBLEM IS BIGGER THAN WE'RE PROJECTING TODAY. I MEAN, BUT AGAIN WE'RE BASING IT ON A HISTORICAL PERSPECTIVE AND THAT INFORMATION WE HAVE FROM THE APPRAISAL DISTRICT.

>> SPEARS: SO WE HAVE TO SEE OUR PROPERTY VALUES INCREASE TO MAKE ANY OF THIS

WORK, RIGHT? >> WALSH: WELL, YEAH. WE DO.

BUT MARKET VALUES AND THE HOUSING -- THE CURRENT HOUSING CONDITIONS ARE IN A CYCLE. AND AT SOME POINT THEY'LL RECOVER.

AND THE TRICK IS EVERY CITY THAT'S IN THIS POSITION IS TRYING TO ESTIMATE AND PROJECT WHERE THE RECOVERY'S AT. BUT IT WILL RECOVER AT SOME

POINT. THERE'S NO DOUBT ABOUT THAT. >> SPEARS: OKAY.

ON 21, CAN Y'ALL PROVIDE AGAIN -- AND MAYBE YOU CAN DIRECT ME TO IT -- THE

BREAKDOWN OF THE REDUCTIONS FROM OUR 2027 PLAN? >> TATE: YES, COUNCIL MEMBER. THAT IS PART OF OUR 2026 BUDGET.

WE INCLUDED ALL OF THE REDUCTIONS -- OR THE PLANNED REDUCTIONS LISTED OUT IN OUR

'26 ADOPTED BUDGET. >> SPEARS: CAN Y'ALL JUST SEND THAT OVER?

>> TATE: WE CAN GET THA OVER. >> WALSH: WE'LL E-MAIL YOU

THE PAGES THAT ARE IN THE BUDGET DOCUMENT. >> SPEARS: I JUST WANT TO POINT OUT ON SLIDE 25 IT DOES SAY WE WILL NEED TO LOOK AT OUR NON-CORE, NON-MANDATED SERVICES. I'M READY TO CUT BACK ON THINGS.

I'M REAL READY. I'VE ALREADY LOOKED AT OTHER CITIES AND WHERE THEY CUT BACK ON. AND THERE'S SOME DANGEROUS PLACES YOU JUST CAN'T GET 2% ACROSS THE BOARD. I'LL GET INTO THAT IN JUST A SECOND.

ON SLIDE 26, I WANTED TO SEE JUST A SCENARIO IF WE DON'T USE OUR RESERVE AND JUST CUT, WHAT THAT LOOKS LIKE. AND THEN ALSO IF WE USE OUR RESERVE, A PLAN TO REPLENISH THAT RESERVE. THAT'S SOMETHING I JUST WANT TO SEE.

I KNOW YOU DON'T HAVE THAT TODAY. >> WALSH: WHAT'S THE FIRST

SCENARIO? >> SPEARS: WHAT ARE WE LOOKING AT? SO WE'RE JUST LOOKING AT CUTTING $130 MILLION FROM OUR BUDGET IF WE DON'T USE

OUR RESERVES, RIGHT? >> WALSH: CORRECT. >> SPEARS: OKAY.

AND THEN HOW DO WE REPLENISH OUR RESERVES IF WE USE THE RESERVES?

OR DO YOU ALREADY HAVE A PLAN FOR THAT? >> TATE: I JUST WANTED TO CLARIFY ONE THING. THROUGHOUT THE FORECAST, OUR RESERVES ARE MAINTAINED AT 15%. SO WE'RE NOT DIPPING INTO THAT 15%.

WHAT THIS IS TO BALANCE THE TWO-YEAR BUDGET. WE ACTUALLY HAVE MORE THAN

THAT 15% REQUIRED. THAT WILL HELP BALANCE 2028. >> SPEARS: SO

AUDIO] CONCERNED ABOUT REPLENISHING THAT? >> TATE: WE ARE NOT DIPPING INTO THAT 15% RESERVES. THIS IS PART OF OUR BUDGET

STRATEGY THAT HELPS US BALANCE OVER THE TWO YEARS. >> SPEARS: OKAY.

AS PRESENTED RIGHT NOW, I'M LOOKING AT SCENARIO 1 AS BEING THE MOST VIABLE OPTION. ON 31 -- ARE WE SEEING THIS DECLINE IN THE PERMIT ACTIVITY BECAUSE OF REDUCED DEVELOPMENT OR ARE WE NEEDING TO ALSO STREAMLINE

OUR PERMITTING PROCESS? >> IT'S DUE TO THE NUMBER OF PERMITS COMING IN, A REDUCED

AMOUNT OF DEVELOPMENT. >> SPEARS: IT'S BOTH. >> JUST BASICALLY DUE TO THE NUMBER OF PERMITS COMING IN, NOT DUE TO THE PROCESS OR ANYTHING.

>> SPEARS: OKAY. DO YOU FEEL GOOD ABOUT OUR PROCESS OR DO YOU HAVE

SUGGESTIONS? >> AS I STATED, WHEN WE TALKED TO THE DEVELOPMENT COMMUNITY, THEY STATED THAT THEY ARE REALLY HAPPY WITH THE PERFORMANCE WE HAVE.

[01:40:04]

THE REASON WHY OUR NUMBERS WENT DOWN OR OUR BUDGET IS GOING DOWN DECREASING IS DUE TO THE NUMBER OF PERMITS COMING IN. SO THE DEVELOPERS ARE NOT

PRODUCING OR DEVELOPING AS MUCH AS BEFORE. >> SPEARS: OKAY.

THANK YOU. I THINK OVERALL, JUST ONE POINT I WOULD LIKE TO SAY IS THAT I THINK IT'S TIME WE DO SERIOUSLY LOOK AT HOW WE'RE GOING TO COLLABORATE WITH OTHER SUBURBAN CITIES IN OUR COUNTY AND OUR COUNTY. AND USE THE DOLLARS TOGETHER, COMBINE EFFORT, REDUCE OR ELIMINATE REDUNDANCIES.

YOU KNOW, SAVE OUR TAXPAYERS AND REALLY STRETCH THE TAXPAYER DOLLAR.

THIS IS GOING TO BE PAINFUL. IT IS GOING TO HURT. I'M READY TO LOOK AND CUT BACK -- AND WE HAVE EXAMPLES OF THAT. I WILL REMIND YOU ALL THAT DALLAS IS -- DO YOU HAVE THAT RESIDENTIAL HOUSING PRICES SLIDE?

>> WALSH: SLIDE 46? >> SPEARS: I SEE THAT NUMBER THERE BUT IF YOU HAVE BEEN LOOKING AT HEADLINES, DALLAS IS IN TROUBLE. THEY CAN'T BALANCE THEIR BUDGET. THEY HAVE HAD TO STOP HIRING.

THEY HAVE HAD TO ONLY SPEND MONEY ON POLICE AND FIRE. BUT THAT'S BECAUSE THAT'S THE CORE SERVICE YOU CAN'T CUT. THAT'S THE ONE.

YOU CAN'T CUT BACK ON POLICE AND FIRE AND DISPATCH BECAUSE THEN IF YOU DON'T HAVE PUBLIC SAFETY AND THEN PEOPLE LEAVE AND THEN YOU DON'T HAVE DEVELOPMENT.

IT'S NOT THAT WE DON'T WANT TO PROVIDE ALL OF THESE THINGS, IT IS ABSOLUTELY TRUE THAT WE WANT TO DO AS MUCH FOR OUR COMMUNITY. WE ALL DO.

WE ALL HAVE BIG HEARTS. WE ALL CARE ABOUT EVERYONE IN OUR COMMUNITY.

WE WOULDN'T BE SITTING IN THESE SEATS IF WE DIDN'T. BECAUSE THIS IS A MONUMENTAL TASK. BUT YOU HAVE TO LOOK AT CORE SERVICES.

I AGREE WITH COUNCILMAN MUNGIA ABOUT HOW WE'RE SPENDING IN THOSE CORE SERVICES. THAT'S A BIG, IMPORTANT PART OF THAT.

BUT I WANTED TO ASK ON SLIDE 15 IN 2011, WHAT DID YOU DO WHEN WE HIT THAT DEFICIT?

WAS ANYBODY HERE IN 2011? >> WALSH: YOUR QUESTION AGAIN, COUNCILWOMAN?

>> SPEARS: WHAT DID WE DO IN 2011 WHEN WE HIT THAT DEFICIT?

>> WALSH: WE CUT. WE REDUCED. >> SPEARS: WHAT DID WE DO

ON THE TAX RATE? >> WALSH: WELL, WE DIDN'T INCREASE IT.

WE DID NOT. WE CUT. WE REDUCED.

>> SPEARS: WHAT ABOUT PROJECTS AND HIRING? >> WALSH: WE'LL HAVE TO GO

BACK AND SEE THE COMPONENTS OF WHAT WE REDUCED IN 2011. >> SPEARS: WHEN I WENT BACK AND LOOKED, IT SAID THAT WE WERE LOOKING AT CORE SERVICES, POLICE, FIRE, AND INFRASTRUCTURE. AND OPERATIONAL EFFICIENCIES ACROSS ALL DEPARTMENTS.

BUT WE WERE MAGICALLY ABLE -- I WANT TO GIVE CREDIT HERE -- THAT WE DIDN'T HAVE A LOT OF FURLOUGHING AND LAYOFFS. THAT'S AMAZING.

AND I REALLY APPLAUD THAT. I THINK THAT'S WONDERFUL. BUT I THINK THAT WE CAN MOVE FORWARD HERE. BUT ONE IMPORTANT THING WE HAVE TO DO IS IMPROVE OUR PROPERTY VALUES. IN ORDER TO DO THAT, YOU HAVE TO STIMULATE PROPERTY VALUES, COLLECT ALL OF OUR PROPERTY TAXES AND HAVE ECONOMIC EXPANSION.

YOU ALSO HAVE TO HAVE GOOD SCHOOLS, PUBLIC SAFETY, AND INFRASTRUCTURE.

BUT DON'T MISS THAT ECONOMIC GROWTH PIECE. THAT'S THE KEY PIECE THERE.

AND TO DO THAT, YOU HAVE TO HAVE A SAFE COMMUNITY AND INFRASTRUCTURE AND STABLE GOVERNANCE. STABILITY IN YOUR GOVERNANCE.

SO WE ALSO NEED TO LOOK AT THINGS LIKE SMART INVESTMENT , SMART REDEVELOPMENT, REVITALIZE WHAT WE'VE GOT. INVEST IN WHAT WE'RE GOOD AT.

AND WE'RE DOING THOSE THINGS, WHICH IS VERY EXCITING.

WE ARE REVITALIZING OUR AIRPORT AND WE'RE ALSO ENTERING INTO THE PROJECT

MARVEL AND CREATING MORE ATTRACTIVE PUBLIC SPACES. >> MAYOR JONES: YOU CAN COME BACK ON THE SECOND ROUND. COUNCILWOMAN CASTILLO.

>> CASTILLO: THANK YOU. THANK YOU, ALFRED FOR THE PRESENTATION.

IN TERMS OF THE DEVELOPMENT SERVICES AND POTENTIAL STRATEGIES TO BALANCE THE BUDGET, I'M PLEASED TO HEAR THAT THE DEVELOPMENT COMMUNITY IS LOOKING AND WILLING TO PARTICIPATE IN TERMS OF WHAT THOSE INCREASED FEES CAN LOOK LIKE. BECAUSE A PRIORITY FOR US IS ENSURING THE STABILITY WITH DEVELOPMENT SERVICES BUT ALSO ENSURING THAT THE WORKLOAD FOR CITY EMPLOYEES IS BALANCED AND FOLKS AREN'T TAKING ON ADDITIONAL ROLES AND RESPONSIBILITIES.

SO I'M CURIOUS TO SEE WHAT THOSE DISCUSSIONS, AS THEY EVOLVE.

BUT IN ADDITION TO THAT, I WOULD LIKE AN OFFLINE BRIEFING IN TERMS OF WHAT

[01:45:02]

BUT AGAIN, I WOULD LIKE TO UNDERSTAND IN TERMS OF HOW MANY OF THESE VACANT BUILDINGS AND PROPERTIES ARE OWNED BY OUT OF STATE PROPERTY OWNERS AND IS THERE OPPORTUNITY FOR POTENTIALLY US INCREASING THE FEE TO RECOUP THE COST OF

ENFORCEMENT? >> I WILL DEFINITELY BRIEF YOU ON THE OUTCOME OF THE DISCUSSION WITH THE DEVELOPMENT COMMUNITY. I'LL BE HAPPY TO DO THAT.

NOW, IN REGARDS TO THE VACANT BUILDING PROGRAM AND ABSENTEE PROGRAM, THOSE TWO PROGRAMS ARE IN CODE ENFORCEMENT, WHICH IS GENERAL FUND.

IT'S NOT THE DEVELOPMENT SIDE. THAT INCREASE WILL NOT AFFECT THE BUDGET AND THE RESTRICTED FUND THAT WE JUST TALKED ABOUT.

>> CASTILLO: I BELIEVE OVERALL IN TERMS OF IF WE CAN INCREASE THOSE FEES, THERE WOULD BE VALUE IN TERMS OF THE GENERAL FUND. IN ADDITION TO THAT, I WOULD LIKE FOR US TO EXPLORE WITH AUTO METAL RECYCLERS, INCREASING THOSE PERMIT FEES AS WELL AS FOR CITATIONS THAT ARE ISSUED. WHAT ARE THE CURRENT -- THE AMOUNT FOR AN ISSUED CITATION AND IS THERE AN OPPORTUNITY FOR US TO INCREASE THOSE FINES TO ENSURE THERE'S ACCOUNTABILITY WITH BAD ACTORS? YOU KNOW, I'M THINKING ABOUT --O RELATED TO DEVELOPMENT SERVICES. I'M THINKING ABOUT THE CONVERSATION THAT WE HAD WITH VISIT SA AND THE HOTEL OCCUPANCY AND KNOWING THAT THE CITY OF SAN ANTONIO HAS ONE OF THE LOWEST RATES FOR SHORT-TERM RENTALS TYPE 2. IS THERE VALUE IN US EXPLORING INCREASING THOSE FEES AS WELL BECAUSE IT RIPPLES INTO HOUSING AFFORDABILITY AND ACCESSIBLE UNITS THAT ARE BEING REMOVED OFF THE MARKET FOR SHORT-TERM USE. SO THOSE ARE A COUPLE OF EXAMPLES THAT I WOULD LIKE FOR US TO EXPLORE. AGAIN, I UNDERSTAND GENERAL FUND, IT WOULD POTENTIALLY INCREASE THERE BUT I THINK THE OVERALL GOAL IS HOW CAN WE POTENTIALLY GET ACCOUNTABILITY WHERE WE'RE SEEING BAD ACTORS WHERE IT'S HAVING A NEGATIVE IMPACT WITH OVERALL HOUSING ECOSYSTEM AND OF COURSE INCREASING REVENUE.

THOSE ARE ALL MY COMMENTS FOR DEVELOPMENT SERVICES. >> THANK YOU.

WE WILL REVIEW ALL OF THAT AND BRING THAT BACK TO YOU. >> CASTILLO: WONDERFUL.

THANK YOU THOSE WERE PRIMARILY MY COMMENTS. I THINK RIGHT NOW WE'RE HAVING CONVERSATIONS ABOUT SAWS' RATE ADJUSTMENTS, CPS ENERGY RATE ADJUSTMENT, A TAX TO SUPPORT VIA AND I THINK WE CONTINUE TO NICKEL AND DIME SAN ANTONIO/BEXAR COUNTY RESIDENTS. MY CONCERN IS THE COSTS ASSOCIATED WITH THAT.

BUT ALSO WHAT I WOULD LIKE TO CLOSE WITH IS ANY RECOMMENDATION IN TERMS OF -- I UNDERSTAND THAT THERE'S LAID OUT TO FREEZE POSITIONS BUT I DON'T WANT THAT TO UNINTENTIONALLY IMPACT THE WORKLOAD OF A CITY EMPLOYEE WHERE THEY'RE TAKING ON ADDITIONAL ROLES AND RESPONSIBILITIES AND THEN WE HAVE BURN OUT, IMPACT TO SERVICES, SO ON AND SO FORTH. THOSE ARE ALL MY COMMENTS.

THANK YOU. >> MAYOR JONES: COUNCILMAN WHYTE.

>> WHYTE: THANKS, MAYOR. YEAH, I'M GOING TO SAY STRAIGHT OFF THE JUMP THAT PROPERTY TAX HIKE SHOULD BE ABSOLUTELY OFF THE TABLE. WHAT SHOULD BE ON THE TABLE IS A LINE BY LINE EXAMINATION OF HOW THIS CITY SPENDS ITS $1.8 BILLION AND WHETHER EVERY PROGRAM, EVERY POSITION, AND EVERY CONTRACT HAS EARNED ITS PLACE IN THIS BUDGET. AS COUNCILWOMAN CASTILLO JUST SAID, WE'RE GOING TO BE TALKING ABOUT SAWS RATE HIKES, CPS ENERGY RATE HIKES, TELECOM TAXES, AND NOW A PROPERTY TAX HIKE. IT IS JUST NOT RIGHT TO CONTINUE TO PUT THE COST FOR THIS GOVERNMENT TO OPERATE ON THE BACKS OF THE PEOPLE. IT'S WRONG AND I GUESS THAT'S WHY WE'RE UP HERE BECAUSE SOMEBODY HAS TO STAND UP FOR THE PEOPLE AND SAY ENOUGH IS ENOUGH. AND WE NEED TO DO THE HARD WORK IN THIS BODY WITH THIS STAFF TO DISCOVER WHERE WE CAN MAKE THESE CUTS. AND THERE ARE PLACES TO DO IT. JUST IN THE COMPREHENSIVE BUDGET REVIEWS THAT WE DID LAST YEAR, WE FOUND MILLIONS OF DOLLARS THAT WE COULD REDIRECT TOWARDS COUNCIL PRIORITIES. THE HYBRID ZERO-BASED BUDGETING MODEL THAT WE'RE GOING TO PUT INTO PLACE WILL ALLOW US TO DO EVEN MORE OF THAT.

[01:50:01]

$500,000 TO MAINTAIN 13 PIECES OF ART. OVER $100,000 ON ZUMBA CLASSES IN PARKS THAT NOT ONE SINGLE PERSON ATTENDED. THERE IS MONEY THERE.

WE MUST DO THE WORK WITHIN OURSELVES TO FIND REDUNDANCIES, TO FIND MONEY THAT'S NOT BEING SPENT EFFICIENTLY, AND REDIRECT THAT MONEY TO THE COUNCIL'S PRIORITIES. AND THEN YES, WE ARE GOING TO HAVE TO CUT FROM SOME OTHER AREAS AND IT'S GOING TO BE DIFFICULT. BUT THAT'S WHAT WE ARE CALLED TO DO. TO MAKE THOSE TOUGH DECISIONS.

IN TERMS OF THE WHAT'S CORE AND WHAT'S NOT, I WOULD SAY YOU LOOK AT THE CITY CHARTER. YOU LOOK AT WHAT IS REQUIRED BY STATE AND FEDERAL LAW.

AND YOU LOOK AT WHAT HAS BEEN VOTER APPROVED. THOSE ARE WHAT IS CORE TO THIS CITY GOVERNMENT AND THAT'S WHERE OUR DOLLARS SHOULD BE GOING.

SLIDE 13 WAS THE MOST INTERESTING SLIDE IN THE DECK -- BY THE WAY, I VERY MUCH APPRECIATE THE PRESENTATION. A LOT OF HARD WORK WENT INTO THAT. THANK YOU. BUT AGAIN, SLIDE 13, WE'VE GOT REVENUE GROWTH 2.1%. BUT OUR EXPENSES, 3.8%. WHAT'S DRIVING THAT? WHY ARE WE HAVING TO SPEND SO MUCH MONEY? I DON'T BELIEVE WE HAVE A REVENUE PROBLEM, AS IT'S BEEN SAID. THIS IS A SPENDING PROBLEM THAT WE HAVE TO GET A HANDLE ON AND GET A HANDLE ON IT NOW.

I'M PLEASED WE'RE GOING TO BE DOING THE TAXPAYER IMPACT STATEMENT.

I APPRECIATE MY COLLEAGUES' SUPPORT ON THAT, GETTING IT ON TO THE DAIS NEXT WEEK.

I WILL SAY -- AND WHAT IT LOOKED LIKE -- IT DIDN'T LOOK LIKE CPS OR SAWS' RATES WERE GOING TO BE ON THERE. WE HAD TALKED ABOUT IF WE COULD PUT THOSE RATES ON THE TAXPAYER IMPACT STATEMENT AS WELL. DID WE DECIDE WE COULDN'T DO

THAT FOR SOME REASON? >>

AS WELL. >> WHYTE: I THINK THE PUBLIC VIEWS SAWS, CPS, AND US SORT OF AS ONE BIG GOVERNMENT AND SO I THINK TO THE EXTENT WE CAN PUT SAWS AND CPS ON THE TAXPAYER IMPACT STATEMENT, WE CERTAINLY SHOULD.

I HAD THE SAME QUESTION ON THE $65 MILLION IN REDUCTIONS.

WHERE WOULD THAT COME FROM. I GUESS AS WE MOVE ALONG IN BUDGET TALKS, WE CAN TALK ABOUT WHERE STAFF THINKS WE CAN BEST MAKE THOSE REDUCTIONS.

I WANT TO ECHO A COUPLE OF THINGS MY COLLEAGUE, COUNCILWOMAN SPEARS SAID, IN TERMS OF COUNTY COLLABORATION, COLLABORATION WITH OTHER MUNICIPALITIES.

I TALKED WITH SOME FOLKS OVER AT THE COUNTY AND THEY ARE DEFINITELY INTERESTED IN DOING THAT AS WELL. THAT IS ANOTHER AREA WHERE LIBRARIES, ACS SERVICES, WHERE I THINK THERE'S OVERLAP AND WE CAN COMBINE RESOURCES TO SAVE THE TAXPAYERS MONEY. I ALSO AGREED WITH WHAT THE COUNCILWOMAN SAID IN TERMS OF ECONOMIC DEVELOPMENT. WE'RE NOT GOING TO SOLVE THE PROBLEM LONG TERM WITHOUT SUSTAINED ECONOMIC DEVELOPMENT FOR OUR COMMUNITY.

BRINGING MORE JOBS HERE, BRINGING BETTER-PAYING JOBS HERE SO THAT PEOPLE CAN THEN GO OUT, SPEND MORE MONEY IN THE COMMUNITY, BECOME HOMEOWNERS, ET CETERA.

ALL OF THAT IS IMPORTANT TO THE LONG-TERM HEALTH OF OUR CITY SO THAT WE'RE NOT HAVING THESE BUDGET PROBLEMS YEAR AFTER YEAR OR A DECADE INTO THE FUTURE.

ON THE PERMITTING FEES THAT COUNCILMEMBER ALDERETE GAVITO BROUGHT UP, I'M GLAD TO HEAR THAT OUR FEES ARE SOMEWHERE NEAR THE LOW END. I DO THINK WE NEED TO LOOK AT POTENTIALLY WHICH FEES MAY BE OUTDATED THAT WE DON'T NEED ANYMORE.

I ALSO THINK WE NEED TO LOOK AT WHEN THE FEES ARE ASSESSED.

BECAUSE I'VE HEARD FROM A LOT OF DEVELOPERS IN THE COMMUNITY TO THE EXTENT SOME OF THESE FEES COULD BE ASSESSED LATER IN THE PROCESS SO THAT THE MONEY

[01:55:04]

WHEN WE TALK ABOUT AFFORDABLE HOUSING, WE WANT THESE HOMES AND THINGS TO BE AS AFFORDABLE AS POSSIBLE. AND I THINK THERE ARE THINGS WE CAN DO ON THE CITY SIDE TO HELP THAT. THAT'S ALL I'VE GOT. THANKS, MAYOR.

>> MAYOR JONES: COUNCILWOMAN VIAGRAN. >> VIAGRAN: THANK YOU, MAYOR. RESPONSIBLE FISCAL POLICY IS A TYPE PRIORITY OF MINE.

I BELIEVE IT'S BEEN A TOP PRIORITY OF DISTRICT 3 SINCE PROBABLY COUNCILMAN GUTIERREZ, COUNCILWOMAN JENNIFER RAMOS. COUNCILWOMAN LETICIA ZUNA AND COUNCILWOMAN REBECCA VIAGRAN. AGAIN, TODAY WHAT WE SIT AND WE HAVE HERE IS SOMETHING THAT I'M NOT SURPRISED AT. I BELIEVE, MARIA, IT WAS SHORTLY AFTER THE PANDEMIC, 2022 OR 2023 THAT WE KNEW THIS DAY WOULD COME.

SOME OF US HAVE SAT HERE YEAR AFTER YEAR AND UNDERSTOOD THAT WE WOULD HAVE TO MAKE DECISIONS THAT MY PREDECESSORS, INCLUDING COUNCILWOMAN REBECCA VIAGRAN, PUSHED DOWN TO OTHER COUNCILS. I BELIEVE THIS IS THE COUNCIL THAT MAKES THE TOUGH DECISIONS. BECAUSE OF WHERE WE ARE IN THIS CURRENT ENVIRONMENT. YOU CAN CALL IT MILITARY CONFLICT, YOU CAN CALL IT WAR BUT FROM WHAT I HAVE SEEN -- AND IF YOU TRAVEL OVERSEAS, THIS HAS A GLOBAL IMPACT ON THE GLOBAL ECONOMY. SO OF COURSE WE WOULD FACE IT HERE IN THE UNITED STATES AND IN THE CITY OF SAN ANTONIO.

AND I'M IN AGREEMENT WITH MY COUNCIL COLLEAGUE MCKEE-RODRIGUEZ THAT ANY TERMS, ANY EUPHEMISMS THROWING AWAY ABOUT OVERSPENDING AND THINGS LIKE THIS IS JUST RHETORIC, AT BEST. YOU HAVE HAD TWO YEARS AND YOU HAVEN'T FOUND WHY THE CITY IS OVERSPENDING OR ABUSING, THEY'RE NOT.

AND I APPRECIATE ALL THE DIRECTORS THAT ARE HERE, THE ASSISTANT DIRECTORS AND THOSE THAT ARE WORKING. I KNOW YOU ARE WORKING DILIGENTLY TO MAKE AND CONTINUE TO MOVE THIS CITY FORWARD. BEFORE WE GO ON AND WE CONTINUE TO WAX ON NOSTALGICALLY ABOUT WHAT WE DID IN 2011, I WAS AN EMPLOYEE WITH THE CITY OF SAN ANTONIO IN 2011. AND I CAN TELL YOU THAT CITY MANAGER HAD NO PROBLEM LAYING PEOPLE OFF. SO, IF WE ARE GOING TO TALK ABOUT WHERE OUR BUDGET CUTS COME, YOU BETTER BE PREPARED TO LAY STAFF OFF.

AND I DON'T THINK ANY OF US HAVE THAT APPETITE. SO WHEN IT COMES TO SLIDE 26 AND SCENARIO 1 AND 2, I THINK IT SHOULD BE ON THE TABLE.

I THINK WE NEED TO HAVE DEEPER CONVERSATIONS. THE OTHER THING I WANT TO ADDRESS IS THAT -- ANDY, IS CORE PART OF THE TEXAS CONSTITUTION OR THE CITY

CONSTITUTION WHEN IT COMES TO SERVICES? >> SEGOVIA: THERE'S NO DEFINITION OF CORE, COUNCILWOMAN, AS FAR AS I KNOW THE TEXAS CONSTITUTION OR ANY LEGISLATION OR IN THE CITY CHARTER. THAT'S SOMETHING THE COUNCIL CAME UP WITH AS A FRAMEWORK TO HELP THE COUNCIL MANAGE THE BUDGET.

>> VIAGRAN: AS WE CONTINUE IN OUR DISCUSSION, I AM GOING TO TAKE THE STANCE OF MY COUNCIL COLLEAGUE, COUNCILMAN MUNGIA, IN TERMS OF REALLY BEING DETAILED IN WHAT I TALK ABOUT WHAT WE CUT, WHAT WE PRIORITIZE, WHAT SERVICES AND DEPARTMENTS WE NEED. BECAUSE IF WE ARE USING TERMS LIKE "CORE" AND YOUR CORE IS BASIC, THAT'S NOT WHO SAN ANTONIO IS. IT'S ARTISTIC.

IT'S DIVERSE. IT'S COMMUNITY ORIENTED. IT IS THERE AND IT SHOWS UP FOR YOUR NEIGHBOR. AND THAT IS WHAT I THINK IS AT THE CORE OF WHO WE ARE.

SO I REALLY WANT TO CHALLENGE MY COUNCIL COLLEAGUES TO REALLY BE SPECIFIC WHEN THEY'RE TALKING. AT THIS POINT IN TIME, I KNOW THAT WE NEED TO TIGHTEN UP THE BUDGET, BUT ANY CONVERSATION ABOUT

[02:00:06]

WE KNEW IN THE PANDEMIC IF THE ARPA DOLLARS DIDN'T COME, THAT WE WOULD BE FACING SEVERE CUTS. NOBODY WOULD BE GETTING RAISES.

WE DON'T KNOW WHAT OUR PUBLIC SAFETY WOULD HAVE LOOKED LIKE.

ARPA CAME THROUGH. THIS IS LIFE AFTER ARPA. SAN ANTONIO CONTINUES TO DO A GOOD JOB TO TRY AND ATTRACT NEW BUSINESSES, NEW DEVELOPMENT, NEW GROWTH, BUT AS WAS REPORTED BY DEVELOPMENT SERVICES AND THE LACK OF PERMITTING, IT IS SLOWING DOWN BECAUSE OF THE CURRENT ECONOMIC STATUS. I THINK AS WE MOVE FORWARD WE NEED TO LOOK AT COUNCILWOMAN CASTILLO'S IDEAS OF LOOKING AT MORE ORDINANCES, MORE PERMITTING, SEE HOW WE CAN DO THIS. I'M NOT GOING TO DEBATE WHILE WE'RE IN NEGOTIATIONS, BUT THERE IS AN ABILITY TO REDUCE OUR PUBLIC SAFETY BUT I WANT TO GET THROUGH NEGOTIATIONS AND I BELIEVE OUR UNION IS IN SUPPORT OF MOVING THIS CITY FORWARD AND GETTING US THERE TO WHERE WE NEED TO BE WITHOUT SAYING THAT HUMAN SERVICES OR PROGRAMS ARE SOME QUESTIONS I WANT ANSWERED. ONE IS BEFORE THE BUDGET WE CAN GET THE PERCENTAGE OF COMPLETED PROJECTS RELATED TO THE 2022 BOND PROJECTS AND WHAT THAT ANTICIPATED COST LOOKS LIKE. THE OTHER THING IS IF WE COULD LOOK AT THE CURRENT ORDINANCES WE HAVE AND BEST PRACTICES IN OTHER CITIES THAT WE COULD POSSIBLY LOOK AT REDUCING WHAT WE SAID IN THE VACANT BUILDINGS.

I DO APPLAUD THE EFFORTS BECAUSE I THINK IT WAS HELPFUL TO LOOK AT THE TRAFFIC TICKETS AND TRY AND COLLECT THOSE AND SEE HOW WE ARE MOVING FORWARD WITH THAT. BECAUSE ANY EXTRA WORK IN TERMS OF ORDINANCES OR CDCS THESE DANGEROUS PROPERTIES OR SOME OF THESE LANDLORDS THAT WE HAVE OUTSTANDING DEBT, WHAT WOULD THAT MEAN TO THE WORKLOAD FOR OUR CITY ATTORNEY OFFICE.

I WANT TO THANK YOU FOR THE PRESENTATION. IT IS JUST A FORECAST.

I THINK THE REAL WORK BEGINS WHEN YOU BRING US THE PROJECTED BUDGET.

I DO THINK A LOT OF THIS COULD BE AN E-MAIL OR ONE-ON-ONE PRESENTATIONS.

BUT THANK YOU FOR THE OPPORTUNITY TO SHARE AND I REALLY WANT TO THANK YOU FOR YOUR CONTINUED WORK. I APPRECIATE THAT. THANK YOU, MAYOR.

>> MAYOR JONES: THANK YOU. COUNCILWOMAN KAUR. >> KAUR: THANK YOU, MAYOR.

THANK YOU FOR THIS PRESENTATION AND FOR ALL OF YOU ALL WHO ARE SITTING HERE SPENDING YOUR AFTERNOON WITH US ON WEDNESDAY. I KNOW THERE'S A LOT YOU COULD BE TACKLING BUT WE APPRECIATE YOU BEING HERE AND THE WORK THAT YOU DO DAY IN AND DAY OUT FOR OUR RESIDENTS. I THINK IT'S IMPORTANT THAT WE THINK ABOUT HOW THE CITY GOVERNMENT IS FUNDED IN GENERAL.

EVERY SINGLE ONE OF US IN THIS ROOM IS FUNDED BY OUR RESIDENTS.

OUR GENERAL FUND IS FUNDED BY PROPERTY TAX AND SALES TAX.

THAT'S WHAT OUR RESIDENTS PAY US. WE ARE BEING PAID TO PROVIDE A SERVICE AND IT'S IMPORTANT FOR US TO DETERMINE WHAT LEVEL OF SERVICE THAT WE WANT TO PROVIDE AND WHICH SERVICES ARE WE WILLING TO PUT MORE EMPHASIS AND SUPPORT ON TO MAKE SURE THAT WE ARE ADDRESSING THE ISSUES THAT OUR RESIDENTS ARE FACING. I WILL SAY OUR MOST UNDERSERVED RESIDENTS.

THERE'S A NEW YORK TIMES ARTICLE THAT CAME OUT ABOUT HOW WE STILL HAVE ONE OF THE HIGHEST POVERTY RATES AND WHY WE'RE NOT REALLY ADDRESSING THAT.

SO WE DECIDE -- IF WE DECIDE TO CUT SERVICES, THERE'S NO WAY TO DO THAT IN AN EQUITABLE WAY WHERE OUR MOST UNDERSERVED COMMUNITY MEMBERS AREN'T THE MOST HURT. BECAUSE WHAT ARE THE SERVICES THAT WE ARE GOING TO CUT? DO WE CUT OUR MAJOR/MINOR HOME REHAB PROGRAM THAT'S

[02:05:03]

BECAUSE OTHER PEOPLE WILL FIGURE OUT A WAY TO GET WHAT THEY NEED TO GET.

AND SO I THINK THAT'S THE ONE -- THE MOST IMPORTANT THING THAT WE HAVE TO THINK ABOUT IS WHO ARE WE IMPACTING THE MOST. AS FAR AS THE AMOUNT THAT WE HAVE TO RECOVER, CAN SOMEONE REMIND ME HOW MUCH WE HAD TO CUT BACK IN LAST YEAR'S

BUDGET FOR FISCAL YEAR '26? >> TATE: LAST YEAR, OVER TWO YEARS IS ABOUT

$170 MILLION. >> KAUR: HOW MUCH DID WE CUT LAST YEAR?

>> TATE: IT WAS $114 MILLION OVER THREE YEARS.

>> KAUR: HOW MUCH DID WE REDUCE DEPARTMENT CUTS LAST YEAR?

>> TATE: SO OF THAT IS ABOUT $27 MILLION. >> KAUR: YEAH.

SO WE CUT $27 MILLION LAST YEAR AND I FELT LIKE THAT WAS THE MOST PAINFUL PROCESS THAT WE HAD EVER BEEN THROUGH. I REMEMBER THE DEPARTMENT CHAIRS WERE TASKED WITH FIGURING OUT WHERE YOUR DEADWEIGHT IS.

I TALKED TO SO MANY PEOPLE. LIKE, I KEEP ASKING FOLKS FOR MORE EMPLOYEES.

I'VE ASKED ART TO RAISE SALARIES FOR TRAFFIC ENGINEERS.

I HAVE ASKED ALANNA TO GET MORE FOLKS AT C&E AND I'M LIKE JUST LAST WEEK WE SAW PRE-K 4 SA'S BUDGET AND THEY DIDN'T HAVE ANY INCREASE BECAUSE SALES TAX IS NOT INCREASING. OF COURSE THEY'RE NOT GOING TO BE ABLE TO INCREASE TEACHERS OR SUPPORT SERVICES FOR KIDS.

SO ALL THAT TO BE SAID, LOOKING AT SCENARIO 1 AND TRYING TO CUT $65 MILLION, I DON'T KNOW WHERE THAT'S COMING FROM AND I HAVE NOT HEARD AN IDEA YET TODAY THAT WOULD COVER $65 MILLION. I'M HAVING FLASHBACKS TO THESE CONVERSATIONS AND IF I'M SAYING TOO MUCH ABOUT EXEC, CUT ME OFF, ANDY. WE USED TO DISCUSS FOR THE FIRE DEPARTMENT, WHEN THEY'RE TRYING TO NEGOTIATE WHAT THEY WANT TO BE ABLE TO GET PAID, WE HAD A BUDGET ALREADY SET AND THEY WERE ASKING FOR A SIGNIFICANT AMOUNT OF RAISE. AND WE HAD TO SIT THERE AND DEBATE WHAT DO WE CUT? AND NO ONE REALLY CAME UP WITH IDEAS. DO YOU KNOW WHAT GOT CUT? REES FUNDING. I WAS LIKE, WHY DON'T WE HAVE MONEY TO FUND OUR COMMUNITY-BASED RESILIENCY PROGRAMS ANYMORE? IT GOT CUT WITH REES.

IF YOU THINK ABOUT WHEN WE DO MAKE THOSE DECISIONS, WHAT ARE THE THINGS THAT ARE GETTING CUT ARE THE THINGS WE WANT TEN YEARS FROM NOW TO CREATE IMPACT FOR OUR KIDS TO MAKE THIS COMMUNITY SAFER AND HEALTHIER FOR THEM.

CUTTING IS EASIER SAID THAN DONE AND IT'S DEFINITELY EASIER SAID FOR US BECAUSE WE'RE NOT HAVING THE ONES TO MAKE THOSE DECISIONS ON A DAY-TO-DAY BASIS.

YES, IT IS POLITICAL COVER. MY RESIDENTS ARE GOING TO BE PISSED AT ME WHEN WE HAVE TO INCREASE YOUR TAX RATE. WHOSE RESIDENT IS GOING TO SAY THANK YOU.

I'M SO EXCITED TO PAY -- I GUESS THE AVERAGE IS $17 MORE SO MAYBE I CANNOT SEE MY SIDEWALK DONE FOR ANOTHER 20 YEARS. IF WE DON'T INCREASE THAT, THE LIKELIHOOD THAT THEY'RE GOING TO GET THEIR SIDEWALK REPAIRED IS GOING TO GO DOWN MR. COUNCILMAN GALVAN TALKED ABOUT THE SIDEWALK INDEX AND I'M EXCITED TO SEE THE RESULTS. I THINK IT'S GOING TO SHOW US WE HAVE A LOT MORE AREAS OF CHALLENGE THAN WE THOUGHT.

THERE ARE SO MANY BARRIERS TO SIDEWALKS AND PREVIOUSLY WE HAVE BEEN FOCUSING THE MAJORITY OF OUR EFFORTS ON JUST FILLS. SO I THINK WE CONTINUOUSLY SEE MORE AND MORE WORK THAT WE NEED TO DO. YESTERDAY AT TRANSPORTATION AND INFRASTRUCTURE, WE'RE TALKING ABOUT SPEED LIMITS AND WHAT HOLISTIC SOLUTIONS LOOK LIKE FOR FOLKS THAT ARE SPEEDING IN NEIGHBORHOODS. THOSE INCLUDED INFRASTRUCTURE AND I DON'T SEE A WAY IN WHICH WE MOVE FORWARD WITHOUT BEING ABLE TO -- WITH BEING ABLE TO COVER $130 MILLION OF CUTS IN THE NEXT TWO YEARS WITHOUT SEEING A REAL TANGIBLE LOSS TO EVEN CORE SERVICES.

BECAUSE I TRULY BELIEVE THAT SIDEWALKS IS A CORE SERVICE, EVEN THOUGH IT'S THE RESPONSIBILITY OF THE HOMEOWNER. I DON'T THINK ANYONE SHOULD HAVE TO WALK ON THE STREET IN A DANGEROUS INTERSECTION, PARTICULARLY NOT OUR STUDENTS OR OUR ELDERLY. SO ALL OF THAT TO BE SAID, I DON'T KNOW HOW WE MOVE FORWARD WITHOUT SCENARIO 2. I WILL GO AHEAD AND BE BOLD AND SAY I WILL EXPLAIN TO MY

[02:10:06]

>> MAYOR JONES: THANK YOU. COUNCILWOMAN GAVITO. >> GAVITO: THANK YOU.

JUST A COUPLE OF QUICK THINGS TO ADD. I DO THINK THAT THE CONVERSATION OF WHAT'S CORE SERVICES AND WHAT'S IMPORTANT SERVICES IS A GOOD ONE. AGAIN, I GO BACK TO WHAT RESIDENTS ARE CALLING US ABOUT AND THEIR EXPECTATIONS OF WHAT THEIR TAXPAYER DOLLARS ARE BEING SPENT ON.

THEIR TAXPAYER -- I THINK RESIDENTS SHOULD HAVE THE EXPECTATION THAT THEIR TAXPAYER DOLLARS BE SPENT ON THEIR STREETS SO THAT WE'RE NOT ALL DRIVING ON BUMPY STREETS. THAT THEIR EXPECTATIONS ARE THAT WHEN THERE IS A CAR ACCIDENT, POLICE ARE RESPONDING, A FIREFIGHTER IS RESPONDING.

THAT THEY'RE NOT GETTING ATTACKED BY LOOSE AND DANGEROUS DOGS.

THOSE ARE BASIC EXPECTATIONS THAT OUR RESIDENTS CALL US ABOUT ALL THE TIME.

I AM LOOKING FORWARD TO CONTINUING THAT CONVERSATION SO THAT ALL OF US HAVE A VERY CLEAR MANDATE OF WHERE OUR RESIDENTS' EXPECTATIONS OF OUR DOLLARS SHOULD GO.

I DID WANT TO JUST QUICKLY ADD ON TO A COUPLE OF ITEMS OF WHAT I MENTIONED EARLIER.

ON SLIDE 43, I AM GLAD THAT WE'RE CONTINUING A COMPREHENSION BUDGET REVIEW.

I WOULD LOVE TO SEE AN ANALYSIS OF HOW MANY ADDITIONAL POLICE OFFICERS WOULD CREATE A COST SAVINGS IN OVERTIME. WE KNOW THAT POLICE OVERTIME IS HIGH AND WHILE I THINK SOME OF THAT IS UNAVOIDABLE, I DO THINK WE SHOULD DIG IN THERE AND SEE HOW COULD WE BETTER BALANCE THAT WITH ADDITIONAL STAFFING.

SO I'M LOOKING FORWARD TO LOOKING INTO THAT. I ALSO AM GLAD Y'ALL HAVE NOTED THAT WE'RE GOING TO BE LOOKING AT THE MAGISTRATION PROCESS.

I THINK IT'S VERY -- MAYBE IT'S SOMETHING WE CAN AGREE ON THAT THE DOUBLE MAGISTRATION PROCESS NEEDS TO GO. ERIK, DO WE HAVE ANY SOLID DATA ON HOW MUCH CUTTING THE DOUBLE MAGISTRATION PROCESS WOULD SAVE US?

>> WALSH: NO, MA'AM. WE DO NOT DOUBLE MAGISTRATE BUT I'M HAPPY TO SHARE A LARGER CONVERSATION. NO, I DON'T KNOW. WE DO NOT DOUBLE MAGISTRATE.

>> GAVITO: OKAY. YOU KNOW, IT WOULD BE INTERESTING TO SEE WHAT EFFICIENCIES COULD BE GAINED THERE. I DO AGREE WITH MY COLLEAGUES. I THINK THIS IS TIME FOR PARTNERSHIP WITH THE COUNTY.

IT'S ALSO TIME FOR PARTNERSHIP WITH THE PRIVATE SECTOR.

AS WAS MENTIONED BY SEVERAL COLLEAGUES, ALL OF US HAVE HEARTS UP HERE.

ALL OF US WANT TO HELP OUR MOST VULNERABLE RESIDENTS. WE HAVE OUR SERVICES THAT WE NEED TO PROVIDE TO RESIDENTS ALL OVER THE CITY. OUR VULNERABLE RESIDENTS AND OUR NOT VULNERABLE RESIDENTS. EVERYBODY EXPECTS SAFE STREETS. EVERYBODY EXPECTS POLICE TOP RESPOND.

EVERYBODY EXPECTS FIREFIGHTERS TO RESPOND. I KNOW THAT THIS IS BLEAK AND THE CONVERSATIONS ARE HARD BUT, AGAIN, I DO WANT TO JUST CLOSE OUT AND SAY IN HARD TIMES THIS IS WHERE INNOVATION HAPPENS. AND THIS IS WHERE WE HAVE TO THINK CREATIVELY, WE HAVE TO DO THINGS DIFFERENTLY, AND WE SHOULD POTENTIALLY SURPRISE OURSELVES. I JUST CHALLENGE ALL OF US TO THINK DIFFERENTLY, CREATIVELY, AND PUT OUR INNOVATION HAT ON TO SOLVE THIS PROBLEM IN FRONT OF US.

THANK YOU. >> MAYOR JONES: THANK YOU. COUNCILMAN MCKEE-RODRIGUEZ.

>> MCKEE-RODRIGUEZ: IT GOT QUIET. I GUESS ONE POINT I'LL START OFF WITH IN RESPONSE TO COUNCILWOMAN SPEARS. I'M NOT GOING TO BE SUPPORTING ACROSS THE BOARD BUDGET CUTS IF ANY DEPARTMENTS ARE EXEMPT FROM THAT. I DID SEE THAT COMING, BUT NO DEAL.

IN RESPONSE TO COUNCILMAN WHYTE'S REMARKS, YOU CAN PENNY PITCH AND SHAKE THE PIGGY BANK AND FIND 100K HERE AND THERE BUT YOU'RE NOT GOING TO FIND MUCH MORE THAN A FEW MILLION DOLLARS IN SAVINGS ACROSS DEPARTMENTS.

YOU'RE NOT GOING TO FIND $130 MILLION CUTS WITHIN DEPARTMENTS WHOSE BUDGETS ARE $10 MILLION. WE HAVE A REVENUE PROBLEM BECAUSE WE HAVE ABANDONED MILLIONS AND MILLIONS OF DOLLARS IN TAXES TO ATTRACT BUSINESSES.

THEY SOMEHOW HAVEN'T GOTTEN OUR COMMUNITY OUT OF POVERTY.

I CAN'T WAIT TO HEAR MY COLLEAGUES EXPLAIN HOW WE'RE GOING TO ATTRACT BUSINESSES WITHOUT ABATING TAXES FOR THOSE COMPANIES. I'LL GIVE AN EXAMPLE THAT

[02:15:03]

HOW ARE WE GOING TO BE ATTRACTING BUSINESSES AND GROWING OUR SALES TAXES? HOW ARE WE GOING TO BE DOING ALL THESE THINGS WITHOUT SPENDING THE MONEY TO MAKE OUR CITY VIBRANT AND BEAUTIFUL AND WITHOUT HELPING PEOPLE WHO NEED IT THE MOST? WE'RE NOT HERE. THANK YOU, MAYOR.

>> MAYOR JONES: THANK YOU. COUNCILMAN GALVAN. >> GALVAN: THANK YOU, MAYOR. JUST A COUPLE QUICK THINGS JUST FOR CONTEXT.

OF COURSE, WE'RE GOING TO HAVE TO GET INTO THIS POLICY CONVERSATION AND WHAT OUR PERSPECTIVE IS HERE. I THINK JUST A COUPLE OF THINGS THAT I THINK WOULD BE IMPORTANT FOR CONTEXT. I HEARD A LOT OF ECONOMIC DEVELOPMENT BEING CRUCIAL TO THIS CONVERSATION. IT'S A SOMEWHAT CORE SERVICE.

I CAN AGREE WITH THAT FOR SURE BECAUSE I THINK IT'S HOW WE LOOK AT BUILDING OUR CITY A BIT MORE BEYOND THE BASIC SERVICES. I GUESS I WANT TO ASK OR POSE THE QUESTION TO FOLKS ABOUT WHAT COMPANY WANTS TO COME TO A CITY WHEN THEIR RETIREES CAN'T GO TO A SENIOR CENTER BY THEM? WHAT COMPANY WANTS TO GO TO A NEW CITY WHERE THERE'S NOT A QUALITY PARK OR LIBRARY BECAUSE THE CITY HAD TO CUT SO MANY SERVICES THAT THERE'S NO QUALITY OF LIFE THERE BEYOND THE BASIC SERVICES. WE'VE GOT THE INFRASTRUCTURE.

WE'VE GOT TO DO PUBLIC SAFETY, NO QUESTION ABOUT IT.

IT'S EASY TO SAY WE WON'T CUT THOSE. THOSE WILL STAY.

LET'S DO SOME QUICK MATH HERE. ALL THE OTHER DEPARTMENTS IN OUR GENERAL FUND LAST YEAR WERE $428 MILLION. IF YOU WANTED TO CUT ALL OF THEM OUTRIGHT OR JUST THE MINIMUM TO GET TO THE DEFICIT WE'RE SEEING IN 2030, $264 MILLION, WE CAN DO THAT BY CUTTING ALL THE LIBRARIES, ALL THE HEALTH, ALL ANIMAL CARE SERVICES, ALL HUMAN SERVICES, ALL HOMELESS SERVICES, NEIGHBORHOOD HOUSING SERVICES, THE CITY MANAGER'S OFFICE, I DON'T THINK IT'S GOING TO HAPPEN. LET'S GO TO CORE. WHAT DO WE NEED BY THE CHARTER? TOO, EVEN BY STATE LAW. MAYOR AND COUNCIL, I WOULD ASSUME.

SOME FINANCE HERE SO WE CAN HAVE THESE CONVERSATIONS. HR, CLERK SO WE CAN KEEP OUR RECORDS. WE CAN HEAR CONCERNS FROM THE COMMUNITY.

MUNICIPAL COURTS, STATE LAW HAS THOSE PROCESSES THERE. THAT'S $106 MILLION REMOVED FROM THAT BIG CHUNK THERE IF YOU'RE JUST LOOKING AT WHAT WE NEED.

NOW WE NEED ANOTHER SEVERAL HUNDRED MORE MILLION DOLLARS.

THAT MEANS WE'RE GOING TO HAVE TO CUT INTO LIBRARIES, HEALTH, HOMELESS SERVICES, PUBLIC WORKS, AND PARKS IN SOME FORM. PLAIN AND SIMPLE.

I THINK IT'S EASY TO CONTINUE TO SAY WE'VE GOT TO CUT IT.

WE'LL MAKE SOMETHING HAPPEN. IT'S JUST NOT TRUE. AND SO I THINK WE'RE GOING TO HAVE TO SAY IT OUT LOUD WHAT'S GOING TO HAPPEN HERE. WHEN WE TALK ABOUT, OKAY, WE'RE GOING TO HAVE TO MAKE THESE CUTS HERE AND THERE. I WONDER IF WE SAW ONE OF OUR LARGEST COMPANIES HERE IN THE CITY SHRINK IN SIZE SIGNIFICANTLY, WOULD WE THINK THAT'S GOOD OR POVERTY IS GOING TO BE ANY BETTER FROM THAT? NO, PROBABLY NOT. BUT WE SAY IT'S OKAY FOR ONE OF THE LARGEST EMPLOYERS IN OUR CITY, US. WE'RE ONE OF THE LARGEST EMPLOYERS.

HOW MANY PEOPLE ARE STRUGGLING TO AFFORD HOUSING BECAUSE THEY DON'T HAVE A JOB HERE? IT'S JUST A LITTLE PERSPECTIVE I THINK WE NEED TO HAVE. THAT'S NOT TO SAY WE CAN'T ACCOMPLISH THIS IN SOME

[02:20:03]

WE CAN'T DO ANY OF THOSE THINGS BECAUSE WE'RE ONLY FOCUSED ON DEVELOPMENT AND WE'RE NOT GETTING THOSE COMPANIES TO COME THIS DIRECTION.

IT JUST SEEMS DISINGENUOUS. ONE LAST THING, WE SHOULD ONLY FOCUS ON THE CHARTER, ONLY WHAT'S SPECIFICALLY SAID IN THERE. FIRST SENTENCE, CHARTER SHALL BE NEEDED FOR THE GOVERNMENT INTEREST, WELFARE, AND GOOD ORDER OF THE CITY IN THE INTEREST, WELFARE, HEALTH, MORALS, COMFORT, SAFETY, AND CONVENIENCE OF ITS INHABITANTS. THERE'S A LOT OF LOADED THINGS IN THERE AND I THINK WHEN WE TALK ABOUT, OH, IT'S ONLY SAFETY AND INFRASTRUCTURE, I DIDN'T SEE INFRASTRUCTURE IN HERE. I SAW WELFARE.

I SAW HEALTH. I SAW COMFORT AND CONVENIENCE.

SO I THINK IT'S JUST, AGAIN, I WOULD RATHER HEAR THE SPECIFICS OF WHAT YOU'RE LOOKING TO DO, NOT JUST KIND OF QUICK STATEMENTS TO MAKE HERE.

IT'S GOING TO BE A TOUGH SUMMER. IT'S GOING TO BE A TOUGH YEAR. IT'S GOING TO BE A TOUGH NEXT SEVERAL YEARS BUT [INDISCERNIBLE] WHEN WE SAY OH WE TRIMMED SOME SERVICES HERE AND THERE AND WE ALSO FAILED OUR CONSTITUENTS WHEN THEY CALL AND ASK US FOR SOMETHING.

I WANT TO BE HONEST TO SAY WE'RE OKAY WITH NOT DOING THAT ANYMORE FOR THE

COMMUNITY THAT'S PAYING THESE TAXES ANYWAY. >> MAYOR JONES: THANK YOU.

COUNCILWOMAN SPEARS. >> SPEARS: THANK YOU, MAYOR.

>> SPEARS: I THINK IT'S IMPORTANT TO REMEMBER HOW THE COUNTRY CLUB TENNIS PLAYER IS ALSO DONATING MONEY TO NONPROFITS, CREATING SCHOLARSHIPS AND FOUNDATIONS, DONATING TO THEIR CHURCHES AND VOLUNTEERING ALL OVER THIS CITY. I KNOW EVERYONE UP HERE CARES ABOUT EVERY SINGLE PERSON -- I THINK WE NEED TO THINK ABOUT, TOO, THAT WHAT WE DO TODAY IS NOT A FOREVER MOVE. WE CAN MAKE DECISIONS TODAY AND THEN WHEN WE RECOVER, ADD BACK THE THINGS THAT WE HAVE TO CUT.

WITH LESSONS LEARNED AND FEN EFFICIENCIES ADDED.

I THINK OF THIS AS A HOUSEHOLD. MAYBE IT'S THE MOM IN ME, BUT I THINK IT OF AS A HOUSEHOLD. LET'S PRETEND, WE LOST OUR JOB OR GOT DEMOTED SOMETHING HORRIBLE HAPPENS IN YOUR HOUSEHOLD. WHAT DO YOU DO? YOU MEET YOUR BASIC NEEDS, YOU COLLECT ON ANY DEBTS THAT MAY BE OUTSTANDING, YOU YOU MAINTAIN WHAT YOU'VE GOT. WE HAVE A LOT OF THINGS IN THIS CITY. WE HAVE A BEAUTIFUL CITY.

AND THEN YOU ALSO TRY TO LOOK AND SEE WHERE YOU CAN IMPROVE, GAIN MORE INCOME, GET A BETTER JOB, AND THOSE ARE THE THINGS THAT WE NEED TO DO HERE.

I AGREE WITH -- I WANT TO SAY THAT WHEN WE TALK ABOUT PUBLIC SAFETY, WHEN YOU DECREASE INVESTMENT IN PUBLIC SAFETY, IT DOES A LOT OF THINGS, AND I BROUGHT THIS UP AT BUDGET LAST YEAR ABOUT OVERTIME.

WHEN YOU -- AND IT'S HERE ALSO IN OUR SIX-SIX, ON PAGE 6 AND IT TALKS ABOUT THE PARK POLICE, THE UNFAVORABLE VARIANCE IS OVERTIME DUE TO VACANCIES -- WHEN WE AREN'T ADEQUATELY COVERING OUR POLICE AND FIRE NEEDS.

IT CREATES PROBLEMS WITH RETENTION, RECRUITING. IT INCREASES BURNOUT, AND IT WILL REDUCE INVESTMENT IN OUR COMMUNITY AND ECONOMIC DEVELOPMENT.

AS FAR AS COLLABORATING -- I THINK WE ABSOLUTELY HAVE TO CONTINUE TALKING ABOUT COLLABORATION WITH THE COUNTY.

WE ARE INEXTRICABLY ALIGNED ON SO MANY THINGS.

OUR JAIL SYSTEM NEEDS IT -- I FORGOT TO MENTION THAT, THE STRAIN ON OUR JAILS. OUR JAIL IS IN BAD SHAPE, Y'ALL.

WE CAN'T LIVE IN A SILO THINKING THIS DOESN'T AFFECT US.

WHAT HAPPENS AT THE COUNTY TOTALLY AFFECTS US, SO WE HAVE TO BE TALKING TO THEM AND WE HAVE TO BE WORKING ON HOW WE CAN -- BECAUSE THEY HAVE REDUCED BUDGETS. HOW DO WE WORK BETTER TOGETHER ON THE THINGS THAT WE HAVE IN COMMON? I WOULD ASK, THE MAYOR BROUGHT UP A GOOD POINT

[02:25:08]

I WANT TO SEE EVERY SUBSIDY WE DO IN THE CITY.

FOR ANYTHING. I WOULD ASK IF WE COULD DO THAT, PLEASE.

YEAH? OKAY. THANK Y'ALL SO MUCH.

>> MAYOR JONES: OKAY. HAS EVERYONE SPOKEN WHO'D LIKE TO SPEAK ON THIS ISSUE? WE HAVE ONE MORE. OKAY.

COUNCILWOMAN KAUR? >> KAUR: THANKS, MAYOR. JUST ONE MORE THING ON THE COMPREHENSIVE BUDGET REVIEW PROCESS. WE SAID WE'RE GOING TO HAVE 13 COMPLETED BY THE END OF THIS YEAR. DO WE KNOW WHEN WE'RE GOING TO BE ABLE TO KNOW WHAT THE RESULTS OF THOSE ARE AND HOW MUCH MONEY WE

COULD BE ABLE TO SAVE FROM THOSE? >> YES, COUNCILWOMAN,

THOSE WILL BE PART OF THE 2027 PROPOSED BUDGET. >> KAUR: OKAY.

SO WE WON'T SEE THEM UNTIL WE SEE THE PROPOSED BUDGET.

>> TATE: CORRECT. >> KAUR: ARE WE ALSO LOOKING AT -- TO COUNCILWOMAN CASTILLO'S POINT, WHEN ARE WE GOING TO BE ABLE TO SEE ABOUT INCREASING FINES FOR VACANT HOMEOWNERS OR ESCAPEEE RESIDENTS OR

OTHER THINGS LIKE THAT FOR CODE ENFORCEMENTS. >> WALSH: POTENTIALLY

ROLLED INTO THE TR TRIAL BUDGET. >> KAUR: OKAY.

THANKS. THANKS, MAYOR. >> MAYOR JONES: CERTAINLY APPRECIATE THE WILLINGNESS BY MY COLLEAGUES TO THINK DIFFERENTLY ABOUT SOME OF THESE THINGS, AND I ALSO WOULD LIKE TO MAKE SURE THAT WE UNDERSTAND WHAT WE ARE -- WHAT WE ARE SUBSIDIZING.

AND ERIK, TO THE EXTENT WE CAN ALSO UNDERSTAND, I THINK ALL OF US READ THE ARTICLE ABOUT, FOR EXAMPLE, UNFORTUNATELY THE CONTINUED LEAK ISSUE ON CARSON STREET, HOW WE UNFORTUNATELY HAD TO SUBSIDIZE THAT, POTENTIALLY BY $300,000, A DEVELOPER THAT RECEIVED TIRZ MONEY AND UNFORTUNATELY WAS DROPPING MONEY INTO OUR SYSTEM WITHOUT PERMISSION TO DO SO. $300,000 THE CITY HAD TO COUGH UP TO DO THAT.

IN MY MIND, THAT IS A SUBSIDY. SO I WANT TO MAKE SURE THAT WHEN WE ARE IDENTIFYING THOSE KINDS OF THINGS, THAT WE AR CAPTURING THOSE AND IDENTIFYING IT AS SUCH. DOES THE SIX-SIX, DOES THIS ACCOUNT FOR -- OR MAYBE THE YEAR END NUMBER, DOES THAT ALSO ACCOUNT -- WHAT ASSUMPTIONS DO WE MAKE ABOUT THE OUTSTANDING DEBTS OWED TO US BY PRIVATE ENTITIES? DOES IT ASSUME WE COLLECT ALL OF THOSE BY THE END OF THE YEAR? I'M TALKING ABOUT THE MLS DEAL, I'M TALKING ABOUT OTHER PLANNING ASSUMPTIONS WE MIGHT

HAVE, FOR EXAMPLE, AROUND CIVIL FINES. >> WALSH: YEAH, IF YOU

RECALL -- NO, IT DOES NOT. >> MAYOR JONES: IT DOES

NOT. >> WALSH: BECAUSE THE GENERAL FUND, WE JUST SHOWED YOU. THE MLS ISSUE THAT WE'VE DISCUSSED IMPACT THE CITY AND THE COUNTY'S PFC FOR THE SOCCER STADIUM. THE OTHER ONE THAT WE'VE HAD SOME CONVERSATIONS ABOUT, AND IT WOULD PROBABLY BE INCLUDED, SOME ASSUMPTIONS ON HOTEL OCCUPANCY TAX DELINQUENCY, AND THEN GENERALLY SPEAKING IN THE GENERAL FUND, WE WOULD HAVE DETINGE WENT PROPERTY TAX ASSUMPTIONS BUILT IN. THE DETAILS AROUND DELINQUENT PROPERTY TAXES WE WOULD NAIL DOWN AS PART OF THE CERTIFIED

ROLL IN JULY. >> MAYOR JONES: OKAY. THAT'S HELPFUL.

I KNOW IN OUR DISCUSSION, WE -- WE -- IN THERE IS AN OPPORTUNITY FOR SOME OF THESE FUNDS TO COME INTO THE GENERAL FUND IF WE SO DECIDED, UNDERSTANDING WE'RE IN DIRE STRAITS, AND SO WE WANT TO CONSIDER WHERE ALL OF OUR OPTIONS MIGHTS BE, EVEN IF IT IS 2.1 MILLION, 2.1 MILLION HELPS US NOT CUT SOMEPLACE ELSE THAT WE WOULD RATHER NOT.

ADDITIONALLY, I LOOK FORWARD TO THE CONVERSATION, WE'VE TALKED ABOUT IT A COUPLE OF TIMES AND IT'S BEEN BROUGHT UP BY MY COLLEAGUES, APPRECIATES AND UNDERSTANDING WHERE WE ARE FOREGOING, AND A KEY PART OF THAT EQUATION ARE THE TIRZ, UNDERSTANDING WHERE WE MIGHT BE ABLE TO SUNSET SOME OF THOSE -- OR AT LEAST LOOK AT IT SIDE BY SIDE, RIGHT? WHEN WE LOOK AT, AGAIN, GORILLA PROJECT OR GENERAL FUND, WE, AS A COUNCIL, NEED TO HAVE A STRATEGIC CONVERSATION ABOUT WHAT'S IN THE BEST INTEREST OF THE COMMUNITY.

SO WELCOME HOW WE'RE GOING TO TEE UP THAT CONVERSATION SO WE CAN LOOK -- FOR THE EDIFICATION OF EVERYBODY, ERIK, HOW DO YOU ANTICIPATE TEEING

THAT PART UP AS A PART OF THE BUDGET CONVERSATION? >> WALSH: I'LL HAVE TO GIVE IT SOME THOUGHT, MAYOR. WE HAD A CONVERSATION WITH THE COUNCIL, YOU ALL, AT PART OF THE BUDGET LAST YEAR IN AUGUST WHERE WE LAID OUT ALL THE CITY-INITIATED TIRZ.

[02:30:04]

USE OF THOSE FUNDS WOULD BE HELPFUL. >> MAYOR JONES: MY LAST -- MY LAST MEMORY, 24 MILLION, IS THAT ABOUT ANNUALLY WHAT WE FOREGO

IN TIRZ ON THE CITY SIDE? >> WALSH: I'M NOT

REMEMBERING THAT, MAYOR. I DON'T REMEMBER. >> MAYOR JONES: OKAY.

THANK YOU. OKAY. YEAH, APPRECIATE, AS I HAVE SHARED WITH SOME OF YOU , I'VE HAD CONVERSATIONS WITH THE JUDGE, JUDGE SAKAI ABOUT WHERE WE MAY BE ABLE TO IDENTIFY SOME EFFICIENCIES -- FRANKLY, EFFICIENCIES THAT ARE GOOD AT ALL TIMES, NOT ONLY WHEN WE'RE EXPERIENCING BUDGET DIFFICULTIES LIKE WE ARE NOW, BUT JUST IN THE INTEREST OF BEING GOOD STEWARDS, SO LOOK FORWARD TO SHARING MORE ABOUT THAT CONVERSATION. AND, YES, OF COURSE, AS COUNCILMAN MCKEE-RODRIGUEZ, WE HAVE AN OPPORTUNITY TO ASK FOR MORE, BASED ON WHAT OUR COMMUNITY NEEDS AND DESERVES, SO MORE TO FOLLOW THERE AS WELL. OKAY. ANY OTHER ADDITIONAL COMMENTS? OKAY. WE DO HAVE PUBLIC COMMENT THIS AFTERNOON. THE TIME IS NOW 4:34 AND THIS MEETING IS

* This transcript was compiled from uncorrected Closed Captioning.