Sep 30, 2021 Board of Directors Special Meeting Agenda

[1. Invocation / Pledge of Allegiance;]

[00:00:09]

>> GAWE DON'T HAVE AN INVOCATION TODAY AND WE'LL START WITH OUR

PLEDGES TO THE FLAG. >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA, TO THE REPUBLIC FOR WHICH IT STANDS ONE NATION UNDER GOD? INDIVISIBLE, WITH LIBERTY AND UNDER GOD.

[2. Call meeting to order;]

>> FOR YOU TEXAS, ONE STATE UNDER GOD INDIVISIBLE.

>> ACCORDING TO STATE LAW THIS NOTICE WAS POSTED 72 HOURS IN ADVANCE. THE NOTICE WAS POSTED WITHIN THE BOUNDARIES OF THE TOWNSHIP. WE WERE AWARE THAT DIRECTOR

[3. Receive, consider and act upon adoption of the meeting agenda;]

WE HAVE SUFFICIENT NUMBER OF DIRECTORS TO PROCEED.

WE HAVE A MOTION TO APPROVE OUR AGENDA, ALL IN FAVOR SAY AYE, OPPOSED THAT WILL CARRY. WE HAVE NO PUBLIC OFFICIALS HERE

[5. Public comment;]

TODAY TO DATE WITH ANNA COSEO. >> GOOD EVENING, I PROMISE TO GIVE YOU SOME DAY OFF BUT I'M UP HERE.

MY NAME IS ANNA COSEO, I LIVE IN THE CITY OF VILLAGE PARK.

A DOCUMENT HAVING TO DO WITH THE MAP, I DON'T KNOW WHAT THE DOTS ARE, THAT'S THE WAY IT DOWNLOADED.

THE QUESTION THAT WAS ADDRESSED, SPEAKING OF I'M GOING TO CALL IT WOODLANDS PARKWAY EXTENSION FOR LACK OF A BETTER WORD, I DON'T KNOW WHAT IT WOULD BE CALLED, A JUNCTION TO TIE INTO OTHER ROADS AND HE SAID THAT PROJECT IS IT GOING TO BRING TRAFFIC INTO THE WOODLANDS? ABSOLUTELY.

BUT GUESS WHAT? THERE ARE A LOT OF THINGS THAT WE'RE GOING TO DO, TO BE DOING TO MAKE SURE WE MITIGATE THAT.

IF THAT ROAD OPPOS OPENS UP ANDE TRAFFIC COMING IN WE'RE GOING TO HAVE TO WIDEN WOODLANDS PARKWAY. WE ARE MAKING CHANGES TO OUR SIGNALIZATION NOW TO IMPROVE TRAFFIC SIGNALS.

THEY ARE PLANNING SOMETHING, THEY KNOW WHAT'S GOING OPEN.

I WANT WHATEVER THIS HOOK UP EXTENSION WILL BE CALLED, WILL BE CALLED, IT DOESN'T INVOLVE THE BOND, VOTERS DON'T MAKE A DECISION ON IT THE WAY IT WAS PREVIOUSLY MANY YEARS AGO THAT 80% OF THE RESIDENTS VOTED AGAINST IT.

SO I ENCOURAGE THOSE 80% OF THE RESIDENTS THAT VOTED AGAINST THAT TO GET INVOLVED. AS A CITY WE WOULD BE INVOLVED.

WE WOULD BE AT THE TABLE TO TALK ABOUT CONTROL OF OUR ROADS, THAT REALIZE THAT 2978 IS A TEX DOT ROAD, I'M NOT TALKING ABOUT THAT. HOW IT IMPACT $THE SUBDIVISION AND EVERYWHERE. I'M NOT AGAINST ROAD DEVELOPMENT, MAYBE IN THE FUTURE WE WILL HAVE TO DO THAT.

WE JUST WANT A SEAT AT THE TABLE AND MAKE OUR OWN DECISIONS.

AND THE SECOND THING THAT I WANT TO TALK ABOUT REAL QUICKLY BEFORE MY TIME RUNS OUT, DURING THAT SAME PRESENTATION, TRAFFIC WAS ADDRESSED, MR. NOWAC WAS THERE, YOU CAN'T BE TALKING ABOUT HOW TERRIBLE IT IS TO HAVE PEOPLE COMING INTO THE WOODLANDS WHEN YOU HAVE A DEPARTMENT THAT DOES NOTHING BUT BRING PEOPLE TO COME HERE AND I AM QUOTING. THESE ARE THE EXACT WORDS FROM THE VIDEO. I WOULD LIKE FOR PEOPLE TO KNOW THAT VISIT THE WOODLANDS DOES AN AMAZING JOB.

IF YOU HAVEN'T TUNED IN YOU NEED TO DID THAT ON THE REGULAR BASIS. IF I'M SPEAKING CORRECT THE PERCENTAGE, 60% OF THE REVENUE COMES FROM HOTEL TAX AND SALES TAXES VERSUS YOUR PROPERTY TAXES.

AND MANY OF THE ACTUAL BOARD MEMBERS WHO VISIT THE WOODLANDS ARE PART OF THE CHAMBER THEMSELVES.

I ENCOURAGE EACH PERSON TO VISIT, IT IS STREAMED AND RECORDED AND PLEASE GO AHEAD AND LOOK AT VISITTHEWOODLANDS.COM, IT IS AN AWESOME AWESOME WEBSITE THAT PUTS PEOPLE IN TOUCH WITH THE HOTELS. WALK AROUND, ACCESS THE RESTAURANTS, SHOPPING, THAT HELPS OUR TAXES TO KEEP DOWN BECAUSE OF THE REVENUE THAT'S COMING IN.

[00:05:01]

VISITTHEWHTHEWOODLANDS IS DOING. >> THANK YOU ANNA, NEXT WE HAVE

CHUCK HOFFHEISER. >> I WAS TRYING TO SNEAK IN.

THEY MADE ME SIGN THE SIGNUP SHEET AND I WAS GOING TO WEAR THE MASK. JUST REAL QUICKLY I APPRECIATE THE HARD WORK YOU GUYS HAVE DONE, BOTH THE FOLKS ON THE BOARD NOW AND IN THE PAST ON THE INCORPORATION STUDIES.

I COULDN'T BELIEVE SOME OF THE STATEMENTS THAT THE PUBLIC MADE, THAT WELL GEE, THERE HASN'T BEEN A WHOLE LOT OF COMMUNICATION, MY GOSH, I'VE GONE TO FOUR, FIVE MEETINGS ON THIS OVER THE LAST SIX OR SEVEN YEARS AND IT'S BEEN RIGHT OUT THERE WHERE PEOPLE CAN SEE WHAT IT IS SO PEOPLE CAN MAKE AN INFORMED DECISION.

I SHARE SOME OF THE CONCERNS OF THE PAST SPEAKER THAT BY INCORPORATING WE WOULD BE ABLE TO CONTROL DEVELOPMENT OF LOADS ROADSTHROUGH THE WHROONDZ. WOODLANDS, I DON'TBUY INTO THE X INCREASE ISSUE THAT HAS BEEN BROUGHT UP AND FRANKLY EVEN IF IT'S 20% OF WHAT I PAID AT THE TOWNSHIP, LET'S FACE IT MOST OF OUR TAXES GO TO THE SCHOOL DISTRICT THE COUNTY, 85, 90% OF OUR TAXES GO TO THOSE ENTITIES. SO FROM THAT STANDPOINT EVEN IF THERE WERE AN INCREASE FROM MY PERSONAL BUDGET, IT DOES NOT AFFECT ME THAT MUCH. NOW IT COULD AFFECT OTHERS, I UNDERSTAND THAT THAT HAVE DIFFERENT FINANCIAL SITUATIONS.

BUT I'M SATISFIED THAT THERE'S BEEN SUFFICIENT LEGWORK DONE THAT PEOPLE CAN MAKE AN INFORMED DECISION.

SO THANK YOU VERY MUCH FOR YOUR HARD WORK.

>> THANK YOU CHUCK. WE WELCOME YOU BACK ANY TIME.

IF THERE'S ANYONE ELSE WHO WANTED TO SPEAK, THERE IS NOT, WE WILL CLOSE PUBLIC COMMENT AND WE'LL MOVE TO AGENDA ITEM 6 WHICH I THINK WE ARE DEFERRING TONIGHT WHICH IS A PLACE HOLDER

[7. Receive, consider and act upon Incorporation Planning Study matters (as requested by Chairman Bunch); ]

REMINDER. >> YES, SIR.

AS YOU NOTED THIS IS MY REGULAR REMINDER THAT ON AUGUST 13TH THE TOWNSHIP BOARD OF DIRECTORS CALLED AN INCORPORATION ELECTION TO BE INCLUDED ON THE NOVEMBER 2ND BALLOT.

TWO PROPOSITIONS WILL APPEAR AND THE WORDING WAS DEVELOPED BY LEGAL COUNSEL, DEVELOPED ON STATE LAW AND THE STATE ENABLING PROPOSITION. PROPOSITION A CREATES THE CITY OF WOODLANDS, AND SETS ITS MAXIMUM TAX RATE.

THE WORDING IS TO AUTHORIZE THE TYPE A CITY INCORPORATION OF THE WOODLANDS TOWNSHIP DISTRICT AND THE ADOPTION OF AN INITIAL TAX RACE OF NOT MORE THAN 22.31 CENTS PER $100 VALUATION OF TAXABLE PROPERTY. PROPOSITION B DEPENDS ON PROPOSITION A PASSING. AND IT TRANSFERS THE TOWNSHIP'S RIGHTS, RESPONSIBILITIES AND AUTHORITIES FROM THE TOWNSHIP TO THE NEW CITY OF THE WOODLANDS, DISSOLVING THE TOWNSHIP AND RESIDENTS MAY VOTE FOR OR AGAINST THIS.

THAT PROPOSITION READS UPON INCORPORATION OF THE WOODLANDS TOWNSHIP DISTRICT INTO A TYPE A GENERAL LAW CITY TO BE CALLED THE CITY OF THE WOODLANDS, THE TRANSFER OF THE RIGHTS POWERS PRIVILEGES DUTIES, PURPOSES, RESPONSIBILITIES, THE AUTHORITY TO RELEASE BONDS AND TO TOWER OF TAXATION, TO THE TOWNSHIP OF THE WOODLANDS TO THE CITY OF THE WOODLANDS.

IF YOU ARE UNSURE OF YOUR REGISTRATIONS STATUS, YOU CAN CHECK THE WEBSITE TO FIND THAT INFORMATION.

THE FIRST DAY OF EARLY VOTING IS OCTOBER 18TH.

THE LAST DAY OF EARLY VOTING IS OCTOBER 29TH.

AND THE LAST DAY TO APPLY FOR A BALLOT BY MAIL IS OCTOBER 22ND.% THAT CAN ALSO BE HANDLED THROUGH YOUR COUNTY ELECTIONS OFFICE. NOVEMBER 2ND IS OF COURSE ELECTION DAY. IN ORDER TO BE ELIGIBLE TO VOTE IN THIS ELECTION YOU MUST BE A REGISTERED VOTER IN THE COUNTY OF YOUR RESIDENCE AND YOUR RESIDENCE MUST BE WITHIN THE

[00:10:01]

HERE AGAIN ARE THE WEBSITES WHERE YOU CAN CHECK YOUR VOTER REGISTRATIONS. YOU CAN ALSO FIND OUT WHAT PRECINCT YOU'RE IN AND YOU CAN ALSO REQUEST THE BALLOT BY MAIL.

INFORMATION ON THOSE THINGS. FOR MORE INFORMATION ON THE ELECTION IN GENERAL, INCLUDING NOT JUST THE INCORPORATION PROPOSITIONS BUT ALSO THE DIRECTOR'S ELECTION THAT IS BEING HELD ON THE SAME BALLOT, YOU CAN VISIT THE TOWNSHIP WEBSITE AT WWW.THEWOODLANDSUP TO-TX.GOV.

YOU CAN VISIT THE WOODLANDS INCORPORATION STUDY AT THE WEBSITE, LAST WEEK THE BOARD HELD ITS INFORMATIONAL SESSION ON SEPTEMBER 23RD. FOLLOWING THAT WE DID RECEIVE THE FINAL TRANSMITTAL LETTER AND REPORT FROM THE KNO NOVAC CONSUG GROUP WHICH IS POSTED ON THE WEBSITE.

WHICH SPLAIFNS THE PROCESS THAT HAPPENED FROM THE CONCLUSION OF THEIR WORK ON THE STUDY TO THE FINANCIAL INFORMATION THAT WAS PRESENTED ON AUGUST 13TH. THAT CONCLUDES MY PRESENTATION.

>> AND I THINK WE'RE STILL WORKING ON THE, I THINK WE HAVE ABOUT 115 Q&AS FROM LAST WEEK'S PUBLIC FORUM.

>> WE DID. WE RECEIVED OVER 104 INDIVIDUAL CARDS, SOME OF WHICH LISTED MULTI-PART QUESTIONS.

THE FIRST BATCH MUCH Q&A SHOULD GO UP I BELIEVE TOMORROW AND THEN WE WILL ADD THE RESPONSES IN BATCHES FROM THERE.

>> WE'RE GOING TO HAVE THAT AS AN IDENTIFIED FORUM Q&A SO THEY

KNOW IT'S THE NEWEST? >> YES, SIR.

>> OKAY AND THE VIDEOS FROM THE BREAKOUTS?

>> THOSE ARE ALSO AVAILABLE ONLINE YES.

>> ONLINE TOO. LOOK I CAME HERE TO LEARN.

THANK YOU KAREN AND NICK. >> WILL WE POST? I'VE HAD PEOPLE REACH OUT REGARDING LOCATION OF WHERE WE CAN VOTE AND THE TIMES, SOMETIMES WE'VE VOTED ON SUNDAY AFTERNOON IN ADDITION, AND I DID NOT SEE IT ON THE WEBSITE EARLIER BUT I ASSURED PEOPLE THAT THAT WOULD BE SOMETHING

THAT WE WOULD FOAS ALSO. >> YES.

SO RIGHT NOW THAT IS AVAILABLE IN THE ELECTION ORDER THAT IS

POSTED ONLINE. >> YES.

>> SOME OF THAT POLLING ENFOINFORMATION IS STILL SUBJECO CHANGE BUT ON MONDAY WE WILL BE POSTING FULL VOTER INFORMATION IN TERMS OF HOURS FOR EARLY VOTING AND THEN THE LOCATIONS AS WELL. IN HARRIS COUNTY BECAUSE THEY USE COUNTY WIDE POLLING SITES WE WILL LIST THE TWO THAT ARE CLOSEST IN PROXIMITY AND OF COURSE, THE ELECTION WEBSITES ARE ALWAYS THE EASIEST WAY TO ENSURE THAT IF ANY CHANGES, THAT EVERYTHING HAS CAUGHT UP TO CURRENT.

>> AND THERE IS ONE OTHER AT THE INFORMATIONAL SESSION THERE IS ONE ERROR WHERE THEY SAID THERE WAS A YUM VOT YUMS VOTE BY THE .

THE ASSUMPTION TO INCLUDE 1.25 MILLION PER YEAR FOR CONCRETE AND ASPHALT MAINTENANCE AND REPAIRS, PRESENTED TO THE BOARD.

A VOTE WAS TAKEN AND IT WAS NOT UNANIMOUS.

SO THE SLIDE DECK NEEDS TO REFLECT THAT.

>> THE NOVAK CONSULTING GROUP SENT UNITED STATES AN AMENDED PRESENTATION TODAY THAT DOES FOOTNOTE THAT.

>> THANK YOU. >> YOU'RE WELCOME.

>> KAREN I WOULD SUGGEST THAT ANYTHING BE PUT UP ABOUT POLLING PLACES AS A LINK TO THE APPROPRIATE ELECTION BOARDS.

>> YES, SIR. >> SHOULDN'T RELY ON INFORMATION THAT WE PUT UP. YOU KNOW, PEOPLE SHOULD BE CHECK BEING THE WEBSITE SO THE PEOPLE IN CHARGE OF THE ELECTIONS.

>> YES AND WE CONSISTENTLY DO THAT.

>> THANKS. >> THANK YOU KAREN AND NOW WE

WILL HAVE MONIQUE. >> OKAY, IT IS AT THE BOARD'S PLEASURE BUT I HAVE TWO PRESENTATIONS I CAN MAKE TONIGHT. ONE OF THEM IS ON THE LAW ENFORCEMENT INFORMATION, REGARDING INCORPORATION.

SO I'LL BE GLAD TO DO THAT. THE OTHER ONE IS ON THE REPORTS OF -- HOW WILL I PUT IT? FROM THE OUTSIDE DEVELOPER REPORT WHERE IT TALKS ABOUT RESERVES BEING BUILT UP AND SOME OF THE MISINFORMATION, AS MY WORD, THAT'S REGARDING ALL OF THAT. SO I CAN DO ONE, BOTH.

>> MIGHT AS WELL DO BOTH. >> OKAY.

I WILL START WITH THE LAW ENFORCEMENT.

[00:15:16]

>> OKAY, THANK YOU. AS YOU MAY BE AWARE, THERE IS INFORMATION THAT WE HAVE PRESENTED SEVERAL TIMES REGARDING THE LAW ENFORCEMENT COST IN OUR FINANCIAL MODEL AND THEN THERE HAS BEEN SOME INFORMATION PUT OUT BY OTHER PEOPLE THAT ARE -- THAT DISAGREE WITH THAT FINANCIAL INFORMATION.

SO WHAT I WANT TO DO TONIGHT IS AGAIN YOU'VE SEEN SOME OF THIS BUT I'VE SHORTENED THE PRESENTATION THAT WAS GIVEN PREVIOUSLY TO JUST FOCUS ON THOSE PARTICULAR AREAS.

AWAY I WANTED TO START OFF WITH IS WHAT I HAVE SAID BEFORE, AND WHY THIS IS IMPORTANT TO ME PERSONALLY AND I BELIEVE TO THE BOARD OF DIRECTORS FOR THE TOWNSHIP AS AN ORGANIZATION.ABOUT THE INFORMATION THAT WE PROVIDE IN OUR FINANCIALS AND IF OUR BUDGETING IS LOOKED AT BY OUTSIDE ENTITIES AND CLOSELY MONITORED.

SO AS I'VE SAID BEFORE THIS IS ABOUT MORE THAN JUST INCORPORATION ENFORCING. ENFORCINFORMATION, THISIS ABOUTD OTHER INFORMATION THAT PEOPLE RELY ON.

FOR INSTANCE I'M TALKING ABOUT CREDIT RATING AGENCIES, BOND DISCLOSURE FINANCIAL, OUR AUDITORS, WE HAVE ROUTINE CONVERSATIONS WITH GFOA THE GOVERNMENT FINANCE-O, THE TOWNSHIP WORKS VERY DILIGENTLY TO MAIRCHT MAINTAIN PRODUCTIVEG RELATIONSHIPS WITH EACH OF THESE.

WHAT I LISTED IS WHAT I ROUTINELY USE AND REPRESENT TO OTHERS THAT WE USE IN TERMS OF PREPARING OUR BUDGETING FORECASTING. YOU CAN SEE THERE THE GOVERNMENT ACCOUNTING STANDARDS BOARD, THE FINANCIAL ACCOUNT BEING STANDARDS BOARD, GFOA BEST PRACTICES AND RESOURCES AND STANDARD & POOR'S AND MOODY'S. REQUIRED TO SHARE INFORMATION IN SOME CASES WITH THESE ENTITIES THAT RELY ON US PROVIDING RIENL AND TRANSPARENT INFORMATION. JUST RECENTLY WE HAVE THE STAP GOSTANDARD & POOR'S RATING AGENY WHERE THEY UPGREATED FROM A DOUBLE A TO DOUBLE A PLUS. SOME OF THE THINGS THAT HAD LONG CONVERSATIONS WITH THE CREDIT AGENCIES, AGAIN THIS IS AN ANNUAL THING. SO I WANTED TO POINT OUT THAT THE CREDIT AGENCIES ARE AWARE THAT INCORPORATION IS UNDER CONSIDERATION AND THAT'S WHAT THAT FIRST PARAGRAPH RIGHT THERE SAYS. SO I DON'T WANT ANYONE TO THINK THAT WE HAVEN'T BEEN COMMUNICATING WITH THE CREDIT AGENCIES, THEY KNOW WHAT THIS IS, THEY HAVE LOOKED AT OUR INFORMATION, THEY SEE WHAT OUR FINANCIAL PROJECTIONS ARE, WE'VE TALKED TO THEM ABOUT THE INCREASED COSTS THAT COME WITH INCORPORATION, THE REVENUES THAT ARE BEING USED TO OFFSET THAT, THE TAX RATE. THEY'RE VERY AWARE OF EVERYTHING THAT'S GONE. I HAVE SEEN COMMENTS TO THE CONTRARY AND I WANT TO POINT THAT OUT.

KNOWING THAT, EVEN KNOWING THE INCORPORATION THEY DID FEEL VERY COMFORTABLE IN AWARDING US THAT UPGRADE TO THE DOUBLE A PLUS.

THEY ARE AWARE OF IT, KNOW WHAT'S GOING ON AND WE GOT THE UPGRADE IN OUR CREDIT RATING ANYWAY.

ONE OF THE THINGS THEY TALK ABOUT A LOT IN OUR REPORT AND I'VE DONE -- I'VE SNIPPED OUT A COUPLE OF THINGS HERE.

ONE OF THEM THEY TALK ALL ABOUT OUR STABLE FINANCES WITH VERY STRONG RESERVES. WHEN I TALK ABOUT HAVING STRONG RESERVES IS IMPORTANT TO MAINTAIN THAT CREDIT RATING, OVER AND OVER AND OVER THAT IS WHAT THEY TALK ABOUT.

THEY TALK ABOUT OUR CONSERVATIVE BUDGET ASSUMPTIONS, OUR PRUDENTLY DEBT USE AND CONSISTENT INCREASING REVENUE SOURCES. THEY ALSO LOOKED AT OUR INFORMATION REGARDING THE PANDEMIC AND CONTRARY I KNOW TO SOME COMMENTS THAT HAVE BEEN MADE WE DID AND THEY NOTICED THAT WE DID HAVE A DECREASE IN REVENUE.

SO I KNOW SOMETIMES IT SAID THAT WE REALLY WEREN'T IMPACTED BY THAT BUT THAT'S NOT TRUE AND THAT'S EVIDENT IN ALL OF OUR FINANCIALS THAT WE DID HAVE A LOSS IN REVENUE RELATED TO THE PANDEMIC. SO MOVING ON.

I JUST WANTED TO USE THAT AS A PREFACE OF EVERYTHING WE'RE TALKING ABOUT WHY THAT IS IMPORTANT THAT PEOPLE HAVE CONFIDENCE IN OUR FINANCIAL FORECAST THAT WE PROVIDE.

SO FIRST I WANT TO LOOK AT THE COMMISSION REPORT THAT WAS

[00:20:04]

THIS WAS ONE OF THE GROUPS, ONE OF THE CONSULTANTS THAT WAS COMMISSIONED BY THE HOWARD HUGHES ARE HUGHES CORPORATION AND ISSUED A REPORT. SPECIFICALLY THE LAW ENFORCEMENT MATTERS, CIRCLED, TOTALED $7.7 MILLION, THEY CLAIM WERE AN UNDERSTATEMENT OF EXPENSES RELATED TO OUR LAW ENFORCEMENT MODEL. THE REASON THAT THEY SAID THIS AGAIN, STARTING AT THE TOP, IS THAT THERE WAS AN EXPECTATION THAT THE NEW CITY WILL HAVE A FULL SERVICE POLICE FORCE.

AND SO THE EVIDENCE THAT THE CONSULTANT USED IN TERMS OF AN EXPECTATION WAS A STATEMENT WRITTEN BY STAFF, AND THE COMMUNITY MAGAZINE IN AUGUST, A STATEMENT MADE BY A BOARD MEMBER A COUPLE OF YEARS AGO AND THEY SAID THAT HYBRID MODEL WAS ONLY AN OPTION. SO THE CONSULTANT'S CONCLUSION, THESE ARE NOT MY WORDS, THESE ARE HIS WORDS THAT ARE LISTED HERE IS THIS LEAVES NO DOUBT THAT THE FULL SERVICE MODEL SHOULD BE USED IN THE FINANCIAL MODELS FOR INCORPORATION AND BECAUSE OF THIS INCONSISTENCY THERE IS A SIGNIFICANT UNDERSTATEMENT. SO THE INCORPORATION, I GUESS WHAT I WOULD SAY TO THAT IS TO DETERMINE THE INTENT OF THE TOWNSHIP BOARD OF DIRECTORS REGARDING THE COST TO INCLUDE ANY IMMIGRATION MODEL IS NOT A RANDOM STATEMENT IN A BOARD MEETING OR A MAGAZINE THAT MAY OR MAY NOT HAVE BEEN TAKEN OUT OF CONTEXT. SO IT IS CLEAR IN THE JANUARY 15, 2020 BOARD MEETINGS THAT THE BOARD DID APPROVE THE HYBRID MODEL. HERE IT IS RIGHT HERE, THIS IS A SCREEN SHOT FROM THE MINUTES. IT SHOWS THAT ACTUALLY RIESER MOVED TO APPROVE THE HYBRID OPERATING MODEL AND FULL SERVICE DEBT LOAD. WHAT THAT MEANS, WHAT THE BOARD DECIDED WAS THE FRAIGHT MODEL WAS THE HYBRID.

BUT IN TERMINATES OF THE COST OF THE POLICE STATION AND THE MUNICIPALITY THE BOARD WENT WITH THE HIGHER LEVEL, IT WOULD GIVE THE CITIZENS IN THE FUTURE IF THEY WANTED TO TRANSITION TO THAT THAT COST WOULD BE AVAILABLE IN TERMS OF THE CAPITAL SO THAT IS WHAT THAT MEANS.

AND THEN ALSO JUST WANT TO POINT OUT THAT THE OTHER CONSULTANTS COMMISSIONED BY HOWARD HUGHES CORPORATION AGREE WITH US THAT THE DIRECTOR, BOARD OF DIRECTORS DID APPROVE THE HYBRID APPROACH FOR LAW ENFORCEMENT AND THIS IS WHAT THEY LIST IN THEIR REPORT.

SO AGAIN, JUST WANT TO MAKE THAT CLEAR.

BECAUSE THIS CAME OUT YESTERDAY FROM PRESERVE THE WOODLANDS SAYING THAT THE TOWNSHIP FALSELY CLAIMS THAT THE CONSULTANTS CLAIM THAT LAW ENFORCEMENT AND CAPITAL WERE UNDERFUNDED BY 7.7 WHICH IS WHAT WE JUST TALKED ABOUT WAS BASED BY ANALYZING A DIFFERENTLY LAW ENFORCEMENT MODEL.

THEY'RE SAYING WHEN WE SAY THAT, THAT IS A FALSE STATEMENT.

OBVIOUSLY WE JUST SAW THAT IS NOT A FALSE STATEMENT.

IT IS IN THE MINUTES. AND THEN THEY GO ON TO SAY THAT THE TOTAL COSTS BEING IGNORED BY THE BOARD IS 7.65 MILLION IN YEAR 5, ANYTHING THAT THIS BOARD HAS EVER DISCUSSED AN THEN GO ON TO SAY THAT THAT WOULD REQUIRE 15.6 PROPERTY TAX.

SO THAT IS NOT ANY INFORMATION THAT IS BASED IN FACT OR IN ANY MOTION OR APPROVAL BY THIS BOARD OF DIRECTORS.

SO WE WANT TO POINT THAT OUT. NOW I'M GOING TO MOVE ON TO THIS REPORT. AGAIN THIS ANALYSIS AS CAN YOU SEE, I TOOK THIS DIRECTLY FROM THEIR REPORT WHERE THEY SAY THAT THEIR ANALYSIS WAS COMMISSIONED BY THE HOWARD HUGHES CORPORATION AND THIS WAS THEIR CRITIQUE OF THE N OVAK CONSULTING GROUP LAW ENFORCEMENT REPORT AND DATED SEPTEMBER 26TH, 2021.

SO I WANT TO SHOW HERE WHAT THE CONSULTANTS, THE INFORMATION THAT THEY RELIED ON FOR THEIR ANALYSIS.

SO DOWN AT THE BOTTOM HIGHLIGHTED IN YELLOW, YOU CAN SEE THAT IN TERMS OF THE REPORTS, AND THE VIDEOS THAT THEY LOOKED AT FROM THE BOARD OF DIRECTORS, STOPPED AT MAY 15TH OF 2020. SO ON THE NEXT PAGE THEY DO SAY THAT THEY LOOKED AT THE 2021 CONTRACT BUDGET WITH THE TOWNSHIP FOR LAW ENFORCEMENT AND THE 2021 AGREEMENT WITH HARRIS COUNTY. WE'RE GOING TO GET TO THAT IN JUST A SECOND WHY THAT'S IMPORTANT.

THEY MENTIONED JUNE 10TH, 2021, BEFORE THE BOARD HAD MADE A DECISION ON WHETHER OR NOT TO CALL THE ELECTION THAT THEY WERE INTERVIEWING, MONTGOMERY COUNTY OFFICIALS.

AND THEN THEY DO STATE THAT THEY BASED THEIR DECISION BASED ON THE DOCUMENTS AS INTERVIEW CITED ABOVE.

HERE IS A LIST OF THE MEETINGS AND THE DOCUMENTS THAT THEY DID

[00:25:01]

AND ALL OF THESE MEETINGS AND DOCUMENTATION PERTAINED IN SOME WAY TO THE INCORPORATION INITIATIVES OR THE BASE BUDGET WHERE ALL OF THESE LAW ENFORCEMENT COSTS ARE INCLUDED.

SO I'M NOT GOING TO READ THROUGH ALL OF THOSE BUT OBVIOUSLY MULTIPLE MEETINGS, MULTIPLE DOCUMENTATION, OUT THERE SUPPORTING THE UPDATES TO THE LAW ENFORCEMENT MODEL THAT WE MADE FROM THE REPORT THAT WAS ORIGINALLY ISSUED IN 2020.

SO I'M GOING TO GO THROUGH JUST VERY QUICKLY SOME OF THE THINGS.. THESE ARE AGAIN SCREEN SHOTS OF THE LAW ENFORCEMENT CONSULTANT'S REPORT.

THE FIRST PARAGRAPH THEY STATE SO THIS AGAIN IS WHAT THE PUBLIC IS READING THAT THE NOVAK REPORT IS A IMILINGS OF THE CURRENTLY STATUS OF LAW ENFORCEMENT AND ASSOCIATED COST.

THAT OF COURSE IS FALSE. THE COSTS IN THAT REPORT WERE COSTS AS OF OCTOBER 1ST, 2019. THEY ALSO STATE THAT IT DOES NOT, OUR MODEL DOES NOT BUT SHOULD INCLUDE REIMBURSEMENTS COST OF 718,000 FOR PATROL VEHICLES.

THAT IS A FALSE STATEMENT. WE DO HAVE ANNUAL FUNDING PROVIDED FOR THOSE VEHICLES. IN PARAGRAPH 2 THEY CLAIM WE DID NOT TAKE INTO ACCOUNT ANY INCREASE FOR SALARIES AND BENEFITS AND THAT WE DID NOT IN OUR FIVE YEAR PLAN USE ANY TYPE OF CPI INDEX TO GROW EXPENSES. AGAIN THAT IS A FALSE STATEMENT, WE'RE GOING TO LOOK AT THAT IN A SECOND, THAT IS OF COURSE ELEMENTARY FORECASTING AND BUDGETING AND OF COURSE WE PROVIDE THAT IN OUR MODEL. IN ORDER TO GET TO ONE OF THEIR SHORTFALLS THAT THEY CLAIM THAT IS IN THE CONSULTANT REPORT OF $7.2 MILLION WHAT THEY DID IS, THEY COMPARED COST, NON-INFLATED COST AS OF OCTOBER 1ST, 2019 TO INFLATED COST AS OF OCTOBER 1ST, 2021. THAT WAS THEIR COST.

SO OF COURSE IT IS NO SURPRISE THAT WHEN YOU DO SOMETHING LIKE THAT, THAT WOULD YOU COME UP WITH A SHORTFALL.

THE IMPORTANT POINT HERE IS THAT IS NOT AT ALL WHAT WAS DONE.

SO AS I MENTIONED EARLIER THEY DID HAVE ACCESS TO THE 2021 CONTRACT WITH MONTGOMERY COUNTY AND AS A MATTER OF FACT IT'S ATTACHED AS AN EXHIBIT TO THEIR REPORT.

SO THEY REVIEWED IT AND IN THAT THEY COULD CLEARLY SEE THAT THE SALARY AND ■COMPENSATIONCOSTIN THAT CONTRACT WHICH THE TOWNSHIP WAS OBLIGATED TO PROVIDE FOR SALARIES WAS $9 $9.4 MILLION.

ALL PAYMENTS FROM THAT AGREEMENT WERE BEING MADE FROM THE CURRENT YEAR BUDGET FUNDS. IN TERMS OF B THERE AGAIN IN THE CONTRACT WHERE YOU REMEMBER EARLIER THAT THEY SAID WE DID NOT USE THAT EXACT NUMBER, 718,432 FOR VEHICLES.

IT'S ACTUALLY IN THE CONTRACT THEY REVIEWED.

SO CLEARLY, CLEARLY, WE DID HAVE THAT FUNDING AVAILABLE.

AND THEN WE ALSO THERE IS NOT A DISPUTE ON THE FUEL BUT THOSE WERE THE THREE COSTS IN THERE. IF YOU ADD ALL THOSE UP IT IS 10.3 MILLION IN THE 2020 CONTRACT THAT WE WERE OBLIGATED TO PROVIDE. THEY ALSO LOOKED AT THE HARRIS COUNTY BUDGET AND SAW IN THERE A FUNDING OF 1.3 MILLION.

MY SLIDE NUMBERS ARE WRONG, I'M SORRY I DIDN'T UPDATE THOSE.

MONTGOMERY COUNTY CONTRACT, THERE WAS A COST OF 10.3 MILLION, FOR HARRIS COUNTY, 4.3 MILLION.

BY 2021 CONTRACTS THERE WAS 12.1 MILLION OF FUNDING AVAILABLE.

SO IN SPITE OF THE CONSULTANTS HAVING REVIEWED THOSE NUMBERS AND KNEW THAT THAT FUNDING WAS IN OUR BUDGET THEY CONTINUED TO USE THE $11.2 MILLION IN THEIR REPORT THAT WAS ISSUED TO THE PUBLIC IN SEPTEMBER OF 2021. AND SO I'M JUST SHOWING HERE AGAIN THE BIG CIRCLE IN RED IN THEIR CHART IS WHAT THEY CONTINUED TO USE, THE $11.2 MILLION AND THEY CARRIED THAT OUT THROUGH CLEAR 4 IN SPITE OF THE FACT OF WHAT WE JUST SAW.

SO THAT WAS 2021. NOW LET'S LOOK AT 2022.

AGAIN THIS IS INFORMATION THAT WAS ALL AVAILABLE IN MULTIPLE RESOURCES DOCUMENTS PRESENTATIONS VIDEOS ONLINE FOR THEM TO ACCESS PRIOR TO THE RELEASE OF THEIR REPORT.

SO YOU'LL RECALL AGAIN THAT THEY SAY WE DO NOT INCLUDE VEHICLES.

IN THE BUDGET ON THE TOP IS 718, BY THE TIME WE GET TO 2022, IS ACTUALLY 1.2 MILLION. THAT IS WHAT WE ARE CARRYING FORWARD IN VEHICLES. THEY CLAIM WE DID NOT USE THE 5%

[00:30:03]

THERE IT IS CIRCLED IN BLUE. WE USE HIGHER THAN 5%, 9.2%, INCREASES IN HEALTH INSURANCE RETIREMENT PLAN THEIR PENSION SO THAT A WAS THERE. IN TOTAL THE LAW ENFORCEMENT BUDGET FOR 2022 IS 13.2 MILLION, THAT IS QUITE A BIT DIFFERENT THAN 11.2 MILLION THAT THEY REPORTED WE HAD AVAILABLE.

YOU RECALL THEY SAID WE DID NOT USE A CPI INDEX IN OUR BUDGETING. HERE IS A PAGE FROM OUR BUDGET MODEL. WE HAVE CONSTANT DOLLARS, 13.7 MILLION, THEN OF COURSE WE HAVE A CPI INDEX TO GROW OUR EXPENSES OUT IN THE FIVE YEAR PLAN AND THAT IS WHAT YOU SEE DOWN THERE IN THE BLUE BOX LISTED BELOW. OUT IN 2025 YOU CAN SEE WHICH IS YEAR 4 WE HAVE BEEN FOCUSING ON WE HAVE THE $14.4 MILLION AVAILABLE FOR FUNDING FOR THE CURRENT LAW ENFORCEMENT.

SO LET ME STRESS THAT. THIS IS JUST FOR THE 92 CURRENT PATROL DEPUTIES AND THE HARRIS COUNTY DEPUTIES.

THIS IS JUST SHOWING WHAT IT GROWS TO.

SO THIS IS WHERE WE END UP. THE REPORT AND THE CONSULTANTS, THE CHART THAT THE CONSULTANTS USED, MAINTAINING THAT $11.2 MILLION FROM 2019, NOT INFLATING IT, THEY SAID OUR FOUR YEAR TOTAL WAS 44.6 MILLION. DOWN BELOW IN THE CHART BELOW IS THE AMOUNT THAT'S ACTUALLY IN OUR BUDGET WHICH IS $56 MILLION.

SO THE CONSULTANTS THAT WERE COMMISSIONED BY THE HOWARD HUGHES CORPORATION UNDERSTATED OUR FUNDING BY $11.4 MILLION.

IN FI SPITE OF THAT AND OBVIOUSY WHAT HAS BEEN PRESENTED BEFORE, THE WOODLANDS IN THE REPORT THAT WE RELEASED YESTERDAY THAT WE FALSELY CLAIM THAT THE CONSULTANTS UNDERSTATED FUNDING FOR OUR ALREADY CURRENT TOWNSHIP LAW ENFORCEMENT PERSONNEL BY 11.4 MILLION. SO CLEARLY WE ARE NOT FALSELY CLAIMING THAT. THAT IS SHOWN RIGHT THERE AND IS ALL AVAILABLE IN ANY PUBLIC DOCUMENT THAT ANYONE WOULD WANT

TO LOOK AT. >> THERE'S ACTUALLY SOMEONE WHO'S FALSE CLI CLAIMING IT IS THE PEOPLE THAT PUT THIS CRAP OUT THERE ON THE INTERNET. I DIDN'T MEAN TO INTERRUPT YOU, BUT DID YOU COULD BACK AND SHOW THE TWO PEOPLE WHO DID THIS

REPORT? >> SURE.

>> ONE MORE FORWARD WHEN IT SHOWS THE TWO NAMES?

ONE MORE -- >> DID I -- SORRY, THERE WE GO.

>> HERE IS WHAT CONFUSES ME. ONE OF THESE INDIVIDUALS HAS A PH.D. AND THEY ARE PRESENTING RESEARCH.

I TEACH AT AN R-2 RESEARCH INSTITUTION AND I ALSO DO WHAT IS CALLED IRB APPROVED RESEARCH. NO PERSON WOULD PUBLISH RESEARCH LIKE THIS THAT WAS COMPLETELY A MISREPRESENTATION OF FACTS.

REVIEW BOARD WOULD EVER APPROVE- RESEARCH LIKE THIS.

THIS IS ACTUALLY AN INSULT TO PEOPLE WHO HAVE PH.D.ES AND DOCTORATES. AND I'D LIKE TO MAKE SURE THE PUBLIC KNOWS THAT. THIS PERSON HAS NO BUSINESS PUBLISHING INFORMATION THAT IS COMPLETELY ERRONEOUS, A COMPLETE MISREPRESENTATION OF FACTS, AND NOT EVEN USING THE INFORMATION IN THE REPORTS THAT THEY SAY THEY USED.

I DON'T KNOW THIS PERSON. BUT I DON'T KNOW WHAT THEIR PH.D. IS IN, BUT IT'S NOT IN RESEARCH, I CAN TELL YOU THAT

MUCH. >> THE SECOND PIECE THAT THEY ARE CLAIMING THAT WE DID NOT ACCOUNT FOR WERE FOR THE NEW DIRECT PERSONNEL THAT WOULD COME ON, THE 19 POSITIONS.

SO THIS IS OUTSIDE OF WHAT WE'RE CURRENTLY FUNDING.

SHOWED THIS BEFORE AND I'M NOT GOING TO GO INTO AS GREAT OF DETAIL ON THIS ONE, IT'S THE SAME PRINCIPLES THAT WE TALKED ABOUT. INFORMATION WAS AVAILABLE, IT'S NOT REVIEWED, THE COSTS ARE UNDERSTAYEDED, AND IN ADDITION TO THAT THE REASON THAT I CORRECTED THEIR NUMBER WHICH I NORMALLY WOULDN'T IS THEY MISINTERPRETED THE TRANSITION AGREEMENT AND STARTED PICKING UP COSTS A YEAR EARLIER THAN WHAT IS PROVIDED FOR IN THE CONTRACT. SO THAT'S 80 CHANGED THEIR NUMBER. INSTEAD OF THE 9.7 TO 7.3.

WHAT WE HAVE INCLUDED IN OUR BUDGET IS THE 7.4 MILLION SO WE ACTUALLY ARE $65,000 MORE THAN WHAT THEY SAY.

SO AGAIN THERE IS NO FUDGED SHORTFALL RELATED TO THESE POSITIONS IN OUR BUDGET. IT IS FULLY ACCOUNTED FOR IN OUR BUDGET. SO WHEN WE LOOK AT THIS

[00:35:07]

SO THE TOM PART IS WHAT WE LOOKED AT PREVIOUSLY, THE 7.2 MILLION WHERE THEY SAID THAT THE SHORTFALL THAT THEY CLAIM WHERE THEY SAID THAT WE HAD -- WHAT WE SHOULD HAVE IS 51.8 MILLION, WE ACTUALLY DO HAVE $56 MILLION THAT WE SHOWED IN PREVIOUS SLIDE SO WE ACTUALLY HAVE 4.2 MILLION MORE IN FUNDING THAN WHAT THE LAW ENFORCEMENT CONSULTANTS ARE SAYING THAT WE SHOULD HAVE.

THE SECOND PART IS THE ADDITIONAL, THE 19 NEW POSITIONS WHICH I JUST TALKED ABOUT. SO AGAIN W ONCE YOU PUT THE CORRECTED NUMBERS IN THERE AND THE AMOUNTS IN OUR BUDGET AGAIN PUBLICLY AVAILABLE WE HAVE A FUNDING SURPLUS THERE.

SO THEY CAME UP WITH A $12 MILLION SHORTFALL AND IN REALITY WE HAVE A $4.3 MILLION SURPLUS FROM WHAT THEY ACTUALLY STATE THAT WE SHOULD HAVE. THIRD.

WE'VE TALKED ABOUT THIS ONE BEFORE SO I'M NOT GOING TO AGAIN GO OVER IT IN GREAT DETAIL. THEY CLAIM THAT WE DID NOT -- DID NOT ACCOUNT FOR $6.1 MILLION OF THE NEW VEHICLES.

SO IN THE ORIGINAL NOVAK REPORT AT THAT POINT IN TIME THERE WAS AN UNDERSTANDING OR AT LEAST ONGOING CONSIDERATION THAT THE MONTGOMERY COUNTY WOULD ALLOW US TO HAVE OWNERSHIP OF ALL THE VEHICLES THAT WE HAVE FUNDED OVER THE YEARS.

BUT THAT, IN THE SECOND TRANSITION AGREEMENT, IT WAS CLEAR THAT THAT WAS NOT GOING TO HAPPEN.

SO OBVIOUSLY WE HAD TO UPDATE THE MODEL TO ACCOUNT FOR THOSE ADDITIONAL EXPENSES, WHICH WE DID HERE.

SO WE DO HAVE THEM IN DIFFERENT SOURCES.

THERE IS SOME IN THE OPERATING BUDGET WHICH WE LOOKED AT A LIMB WHILE AGO, THAT $1.2 MILLION THAT I MENTIONED, THAT'S THE ONGOING. WE HAVE MONEY IN THE INCORPORATION RESERVE AND MONEY IN THE CAPITAL RESERVE.

SO IN TOTAL WE HAVE FUNDING FOR $9.8 MILLION IN VEHICLES.

BUT AGAIN PRESERVE THE WOODLANDS SAID WE FALSELY CLAIMED THAT THE CONSULTANTS UNDERSTATED AVAILABLE TOWNSHIP FUNDING FOR LAW ENFORCEMENT VEHICLES BY $6.1 MILLION SO THEY'RE SAYING THAT THAT WAS A FALSE CLAIM BY US WHICH CEREA CLEARLY IT IS NOT.

THIS IS THE LAST SLIDE. AGAIN IN THE GIST OF ALL OF THIS IS THE LAW ENFORCEMENT CRITIQUE THAT WAS COMMISSIONED BY THE HOWARD HUGHES CORPORATION IS BASED ON OUTDATED PROJECTIONS, THERE WAS UPDATED FORECAST AVAILABLE PRIOR TO THE RELEASE OF THE REPORT BUT NOT USED IN THEIR ANALYSIS AND THAT INFORMATION IN SUMMARY WAS INCLUDED IN ALL OF THOSE DOCUMENTS. SO THE TOTAL AMOUNT OF WHICH THE LAW ENFORCEMENT COMMISSION REPORT UNDERSTATES FUNDING AVAILABLE IN THE WOODLANDS INCORPORATION VALUE IS 22 TO 25

MILLION. >> MONIQUE, ON THIS SLIDE IT MAY BE BENEFICIAL TO REEMPHASIZE THAT HAD NO FUNDING SHORT FAULTS. A LAYPERSON PAY ONLY LOOK AT THE BOTTOM NUMBER AND GO CONFUSED. I THINK WE SHOULD 100% ALWAYS REINFORCE THE FACT THAT THEIR NUMBER IS WRONG.

>> THAT IS A GOOD POINT. I WILL UPDATE IT FOR THAT.

>> ONCE YOU'VE DONE THAT WOULD YOU SEND THIS OUT PLEASE?

>> YES, SIR I WILL, BE GLAD TO. >> I DON'T KNOW WHAT TO SAY.

YOU KNOW, WE HAD A DEBATE ON TUESDAY.

SHARED FACTS. SHARED THE PRIOR ANALYSIS WITH THESE FOLKS, WHO I GUESS A DAY LATER, BASIC WANT TO CONTINUE TO

PUSH OUT FALSE INFORMATION. >> I KNOW WHAT TO SAY: THEY DON'T CARE ABOUT THE TRUTH. THE ONLY WAY THEY CAN FULFILL THEIR FALSE NARRATIVE AND AGENDA IS TO CONTINUE TO PUT OUT INFORMATION THEY KNOW IS MISLEADING, INACCURATE, THEIR PROPAGANDA METHOD IS UNLIKE ANYTHING THAT'S BEEN SEEN FOR DECADES, OKAY? THEY ARE COMPLETELY PRESENTING A FALSE NARRATIVE TO THIS COMMUNITY.

AND I'LL SAY ONE THING: I JUST -- I'M GLAD THAT SOME OF THE PEOPLE ENGAGED IN THIS ACTUALLY WORK FOR A COMPANY WHO HAS PEOPLE WORKING ELSEWHERE WITHIN THEIR COMPANY THAT TRULY UNDERSTANDS FINANCIAL MODELING OR ELSE THEY WOULD NEVER BE ABLE TO GET TO THE POINT OF HAVING A 9.3% RETURN ON THEIR BECAUSE NO ONE LOCALLY HERE WHO DOES THIS STUFF WOULD BE ABLE TO RUN A BUSINESS AND ACHIEVE THAT. THIS IS AN INSULT NOT ONLY TO OUR RESIDENTS, AND TO THE PEOPLE THAT WORK IN THE TOWNSHIP.

THIS IS AN INSULT TO THE COMPANY THEY REPRESENT.

IF I WORKED FOR THIS COMPANY, I WOULD BE INSULTED BY IT.

[00:40:01]

>> THAT'S RIGHT. >> IT'S RIDICULOUS.

>> AND IT IS A KNOWINGLY WILLFULLY GROSSLY MISINFORMED INFORMATION. AND THEY KNOW IT.

AND THEY CONTINUE TO FIDUCIARY E STUFF OUT EVERY DAY.

PAPERS, E-MAILS. IT'S REALLY AND PUBLICLY, THOSE PEOPLE I KNOW WHO ARE LISTED ON THE BOARD OF THIS PRESERVE THE WOODLANDS AND SHOULD, IT'S A SHAME ON THEIR NAME AS WELL.

I WOULDN'T WANT MY NAME TO BE PART OF ANY OF THIS REALLY FALSE, GROSSLY FALSE INFORMATION.

IT'S REALLY UNACCEPTABLE. I MIGHT BE SHOWING MY AGE HERE.

BUT I DON'T KNOW IF ANYBODY'S EVER HEARD THE NATIONAL ENQUIRER, REMEMBER THEM? THEY USED TO GO AND USED TO HAVE ALIENS COME DOWN, SAVE PEOPLE, THAT'S WHAT THIS NEWSPAPER AND THIS INFORMATION HAS COME DOWN TO.

I MEAN IT IS A JOKE. AND THE ONLY THING GOOD THAT THAT PAPER PRESERVE THE WOODLANDS IS GOOD FOR IS FOR YOUR KITTY LITTER BOX AND THAT'S ABOUT IT.

>> THE OTHER THING THAT IS INSULTING IS TWO ELECTED OFFICIALS IN THE COUNTY MET WITH THE PEOPLE THAT PUT THIS CRAP TOGETHER, KNEW THEY WERE LOOKING AT INFORMATION THAT WASN'T EVEN IN THE AGREEMENT, THEY NEGOTIATED AND SIGNED WITH THE TOWNSHIP AND STILL DIDN'T CORRECT THEM, AND LET THEM PRINT THIS FALSE CRAP. SHAME ON THEM.

>> THEY NEGOTIATED IN BAD FAITH. THEY ACTUALLY MISREPRESENT THEIR

OWN CONTRACT. >> THEY DO.

>> THAT THEY ACTUALLY CONTRACTED.

>> IT'S DISGUSTING QUITE HONESTLY.

>> I DON'T NORMALLY ASK QUESTIONS OF THE PRESENTER, BUT IN THIS CASE, HAVING READ SOME INFORMATION ONLINE, MONIQUE, CAN YOU TELL ME WHETHER OR NOT THE REPORTS THAT YOU WERE INDICATING THAT YOU'VE BEEN DISCUSSING IN YOUR PRESENTATION, WHETHER OR NOT THEY WERE RELYING ON COLLECTIVE BARGAINING AND CIVIL SERVICE? BECAUSE BOTH OF THOSE THINGS MUST BE APPROVED UNDER TEXAS STATE LAW BY VOTERS.

>> I ACTUALLY DON'T KNOW. I'VE JUST BEEN CONCENTRATING ON WHAT I KNOW IS INACCURATE IN COMPARISON WITH WHAT IS ACTUALLY

IN OUR FINANCIAL MODEL. >> I DID READ THE REPORT.

THERE IS ASSERTION THAT THOSE THINGS WOULD BE IN ISSUE BUT THERE WERE NO DOLLAR AMOUNTS ASSOCIATED WITH IT.

AND TO YOUR POINT, THOSE AREN'T REAL ISSUES UNLESS VOTERS APPROVE ALLOWING COLLECTIVE BARGAINING.

>> EXACTLY, THAT'S CORRECT. I HAD SEEN SOME MISINFORMATION ONLINE BUT I HADN'T DELVED INTO THE SPECIFICS OF THESE REPORTS.

AND SO THAT'S WHY -- ANSWER MY QUESTION.

>> IT IS DISAPPOINTING BECAUSE MONIQUE ALMOST TWO WEEKS AGO WENT LINE ITEM BY LINE ITEM THROUGH THIS.

EITHER THE LOCAL MEDIA IS ABSENT, THE VILLAGER, CONROW COURIER, HOUSTON CHRONICAL, CRICKETS, AND WE HAVE A POPULATION OF 120 THOUSAND PEOPLE THAT YOU KNOW WHEN WE CALLED THEM OUT FOR THE MISINFORMATION, INSTEAD OF ACKNOWLEDGING OKAY, WE MADE A MISTAKE, THEY DOUBLED-DOWN ON WE'RE RIGHT YOU'RE WRONG AND WE'RE AUDITED.

NO ONE'S AUDITING THESE PACS, THEY CAN PUT ANYTHING THEY WANT INTO PRINT. AND LOOK YOU CAN BE FOR OR AGAINST INCORPORATION. BUT WE SHOULD ALL BE FOR THE TRUTH. AND AGAIN, APPRECIATE YOU HAVING TO GO THROUGH THIS ONE MORE TIME.

IT APPEARS THAT THE COMMITMENT TO MISINFORMATION IS STRONG.

BECAUSE THEY'RE NOT JUST PUTTING THIS OUT THERE.

THEY'RE FUNDING, BOOSTING IT. THEY ARE PAYING FOR IT TO BE PROMOTED TO THE POPULATION. WHICH IS DIFFERENT THAN JUST GOING OUT AND MISS -- YOU KNOW MAKING A MISSTATEMENT OR PUTTING OUT MISINFORMATION, THEY'RE PUTTING MONEY BEHIND IT.

>> RIGHT. >> AND TO THE ELECTED OFFICIALS WHO CUT THE VIDEOS BASED ON THESE REPORTS HAVE ANY OF THEM RETRACTED THE USE OF THEIR IMAGES OR THEIR VIDEOS? NO, NO. SO --

>> 25 YEARS AGO, I WORKED FOR A CEO OF A COMPANY WHO TOLD ME THE MOST IMPORTANT THING CAN YOU DO WHEN YOU'RE GOING TO REPRESENT INFORMATION YOU DIDN'T CREATE IS TO INSPECT AND VERIFY BEFORE YOU OPEN YOUR MOUTH. THAT'S VERY IMPORTANT.

>> I FIND IT VERY INTERESTING AND THANKS FOR POINTING OUT.

THEY HAD THESE CONVERSATIONS IN JUNE.

WE HADN'T EVEN GOTTEN TO THE POINT OF PUTTING THIS ON A

BALLOT. >> RIGHT.

>> IF RAND HENDERSON WAS AUTHENTICALLY CONCERNED ABOUT THE INADEQUACIES OF THE LAW ENFORCEMENT AGREEMENT THAT HE NEGOTIATED AND COMMISSIONER NOWAK APPROVED WHY IN THE HELL DIDN'T THEY TELL US SOMETHING BEFORE AUGUST 13TH? YOU CAN'T BE AUTHENTICALLY CONCERNED THAT YOU ARE GOING TO

[00:45:08]

>> YES, SIR. >> REALLY, THERE IS NO AUTHENTICITY IN THEIR CONTRACTS. WHETHER WE LIKE IT OR NOT IT SAYS WHAT URTARTE SAYS. THERE IS NO CHANGE IN LAW ENFORCEMENT THE DAY AFTER IF THIS PASSES OR IF IT FAILS.

WE ARE CONTRACTED. AND THEY CAN'T UNDO THE CONTRACT THAT THEY ALREADY VOTED FOR AND APPROVED LESS THAN 12 MONTHS AGO. SO 100% SAME FACES, SAME PEOPLE.

THE DAY AFTER, EITHER WAY. AND IT IS DISAPPOINTING AND BOB, I HOPE THAT SOMEBODY CAN IMPLORE THESE ELECTED OFFICIALS TO STAND UP AND SAY LOOK, I WAS WRONG. I DIDN'T KNOW THE INFORMATION I WAS SHARING WAS INACCURATE. AND AFTER BEING CORRECTED NOW MULTIPLE TIMES, RETRACT AND RESCIND, THEIR ASSERTIONS.

BECAUSE IT'S BASED ON THESE REPORTS.

>> I WOULD HOPE THAT THEY WOULD ALSO.

>> BUT DON'T YOU THINK I THINK WE STATED THIS LAST TIME, THAT THEY STILL HAD TO COME TO OUR STAFF AND ASK THESE QUESTIONS.

NOW WHEN YOU'RE DOING RESEARCH DON'T YOU THINK YOU SHOULD GO TO THE MOST ACCURATE INFORMATION TO GET -- YOU WOULD WANT TO GO TO

THE MOST ACCURATE -- >> IT IS A REQUIREMENT JOHN AND THEREFORE FOR A RESEARCH PROPOSAL TO BE APPROVED THAT IS

ONE OF THE REQUIREMENTS, OKAY? >> IT IS NOT JUST COMING UP WITH JUST DECIDING WHAT POINTS OF DATA YOU WISH TO RETRACT FROM A

REPORT AND JUST REALIZE -- >> THERE'S RULES REGARDING IT AND ETHICS REGARDING IT WHEN YOU CONDUCT RESEARCH THAT YOU PUBLISH, ESPECIALLY WHEN YOU ARE RECOGNIZED AS HAVING A PARTICULAR TERMINAL DEGREE THAT IS BASED ON RESEARCH YOU TAKE AN OATH TO APPLY, TO AGREE TO THE CODE OF ETHICS TO RESEARCH AND

THE WAY YOU PUBLISH MATERIAL. >> ABSOLUTELY.

>> ALL RIGHT, WELL WE WILL DO WHAT WE CAN TO HELP CORRECT THE AIRERRANT ORGANIZATIONS RESLL IN THE COMMUNITY, THE FACTS ARE WHAT THE FACTS ARE, WE WANT OUR RESIDENTS TO WEIGH IN AND MAKE THEIR DECISION BASED ON FACTUAL INFORMATION.

MONIQUE, WE'LL DO WHAT WE CAN. BRUCE.

>> ONE MORE QUESTION, SINCE YOU MENTIONED COLLECTIVE BARGAINING% WOULD HAVE TO BE APPROVED BY RESIDENTS OF THE WHRABDZ WHRANS.

SO WOULD CIVIL SERVICE IS THAT CORRECT?

>> THAT'S CORRECT, CIVIL SERVICE UNDER CHAPTER 143 SPECIFICALLY REQUIRES THAT THE VOTERS APPROVE CIVIL SERVICE.

JEFF HAS WORKED FOR CIVIL SERVICES CITIES, I THINK.

AND CHAPTER 174 ALSO REQUIRES AN ELECTION.

I BELIEVE MEET AND CONFER ALSO REQUIRES VOTER APPROVAL.

>> I WOULD SUGGEST ONE -- >> WE HAVE A MEET AND CONFER

CITY. >> I WOULD SUGGEST ONE SLIDE THAT MIGHT BE HELPFUL WITH THE LAW ENFORCEMENT PIECE.

>> YES, SIR. >> THE SLIDE FROM NOVAK'S PRESENTATION, IS A SLIDE FROM OUR FIVE YEAR LAW ENFORCEMENT PLAN. IT SHOWS THE ENTIRETY THAT THERE IS NOT A SINGLE REDUCTION IN LAW ENFORCEMENT SERVICES UNDER OUR PLAN. AND SLOWS THE GROWTH OF OUR -- SHOWS THE GROWTH OF OUR LAW ENFORCEMENT PERSONNEL AND SUPPORT STAFF OVER THAT FIVE YEAR PERIOD.

>> I WILL DO THAT. >> I THINK IT'S AN EXCELLENT SLIDE. WHEN I SHOW IT TO PEOPLE THEY'RE LIKE OH YOU'RE NOT REALLY CUTTING LAW ENFORCEMENT.

NO WE'RE NOT. >> I WOULD LIKE TO POINT OUT THERE IS A VIRAL CAMPAIGN TRYING TO JUSTIFY THAT WE WOULD HAVE THE INABILITY TO HIRE A QUALITY POLICE FORCE.

SO HOW I WOULD ANSWER THAT IS A, WE HAVE ONE OF THE HIGHEST RANKED FIRE DEPARTMENTS IN THE COUPLE AND WE DO THAT AS A TOWNSHIP. AND THE OTHER MISINFORMATION THAT'S OUT THERE IS THAT YOU DON'T WANT TO BE THE POLICE CHIEF IN A CITY LIKE THE WOODLANDS BECAUSE THE BOARD IS CHAOTIC AND THEY CAN'T AGREE ON ANYTHING.

SO WHAT I WOULD SAY TO THAT IS, ANYBODY WHO BELIEVES THAT I'M SURE CHIEF BUCK WOULD BE HAPPY TO TELL YOU ALL THE TIMES THE CHAOTIC BOARD HAS INSTIGATED THINGS WITH THE BOARD AND DISRUPTED HIS DEPARTMENT. I'M SURE HE WOULD BE HAPPY TO SIT DOWN AND DISCUSS THAT WITH ANYBODY.

WHAT I'M TRYING TO SAY IS WHAT'S REFLECTIVE OF WHAT THIS TOWNSHIP, NOT THIS BOARD BECAUSE IT'S BEEN HERE FOREVER, BUT THE TOWNSHIP HAS BUILD IN A WORLD-CLASS FIRE DEPARTMENT,

[00:50:02]

TEXAS. >> I AGREE 100% BOB.

>> ABSOLUTELY. >> IT'S AN INSULT TO THE PEOPLE THAT WORK FOR THIS TOWNSHIP TO SAY THAT IT WOULD BE OTHERWISE.

IT'S AN INSULT TO CHIEF BUCK TO SAY THAT IT'S ANY DIFFERENT.

>> IT'S ALSO AN INSULT TO LAW ENFORCEMENT PERSONNEL.

>> IT IS. >> TO FREE CONCLUDED THAT THEY WOULDN'T WANT TO BE EMPLOYED BY THE LOWEST CRIME RATE AREA OF OUR COUNTY, THAT OFFERS 52% OF THEIR PATROL TIME FOR COMMUNITY POLICING. WHICH MEANS THEY WOULD BE DEALING WITH LESS VIOLENT CRIME AND LESS ALTERCATIONS UNDERNEATH OUR COMMUNITY POLICING MODEL AT A LEVEL OF SERVICE THAT DOESN'T GET PROVIDED PROBABLY ANYWHERE ELSE.

AND THERE'S PLENTY OF PLACES AROUND THE COUNTRY THAT DON'T LIKE LAW ENFORCEMENT. AND THOSE LAW ENFORCEMENT PROFESSIONALS CHOSE THAT CAREER FOR THEIR LIFE.

THIS IS A VERY LAW ENFORCEMENT FRIENDLY COMMUNITY THAT WOULD BE WELCOMING TO THEM AND I THINK THERE WOULD BE A LOT OF PEOPLE HAPPY TO WORK HERE. JUST LIKE WHEN WE HAVE AN OPENING IN THE FIRE DEPARTMENT WE GET HUNDREDS OF APPLICATIONS.

AND WHEN WE GET TO THE POINT IF SOMETHING PASSES I AGREE WITH YOU BOB. EVERYTHING WE HAVE EVER DONE HAS ALWAYS BEEN TOP-NOTCH. PARKS, FIRE DEPARTMENT.

ADMINISTRATIONS, PARK AND RIDES, TROLLEYS, VISIT THE WOODLANDS.

WE EVEN DO TRASH RIGHT. SO I THINK WE HAVE THE RIGHT TALENT POOL IN OUR COMMUNITY TO MOVE ON BUT APPRECIATE YOU

MONIQUE. >> THANK YOU.

OKAY. HORROR IS THE NEXT PRESENTATION.

FROM NOW ON I'M GOING TO PUT THIS AT THE FRONT OF THE PRESENTATION, THIS IS IMPORTANT THAT PEOPLE BE ABLE TO RELY ON OUR, HAVE CONFIDENCE IN OUR INFORMATION AND THE TRANSPARENCY THAT HAS BEEN THE WAY, WAY BEFORE THE TOWNSHIP EVEN AND THE COMMUNITY ASSOCIATION DAYS THANKS TO THE POLICIES AND THE DEDICATION OF THE BOARD OF DIRECTORS AND STAFF RELATED TO

THAT. >> MOW SNEMONIQUE LET ME PUT A E CLARITY BEHIND THAT. ESSENTIALLY, THE PRESENTATIONS YOU'RE SEEING IS ESSENTIALLY THE TOWNSHIP'S K-1.

NO CORPORATION IN AMERICA AND NO MUNICIPALITY IN AMERICA WOULD MISREPRESENT THEIR FINANCIAL DATA BECAUSE THEY'D GET CALLED OUT IMMEDIATELY BY ALL OF THESE AGENCIES TO SAY, FOLKS?

THAT'S NOT TRUE. >> RIGHT.

>> THE FACT THAT MONIQUE AND YOUR STAFF HAVE DONE -- HAVE GOT NOTHING BUT AWARDS FOR EXCELLENCE, EVERY SINGLE BUDGET SINCE THE TOWNSHIP WAS FORM IN 2010, EXEMPLARY, FINANCIAL BUDGETING AND ALL OF THE AUDIT RECORDS, ALMOST -- I DON'T EVEN REMEMBER AN AUDIT REPORT WITH A SIGNIFICANT ITEM ON IT IN THE SIX YEARS I'VE BEEN ON THIS BOARD.

I JUST FIND IT INCREDIBLE THAT THE HOWARD HUGHES CORPORATION WOULD CALL INTO QUESTION THESE NUMBERS.

APPARENTLY MOODY'S AND GASB AND FASB AND ALL THESE CORPORATIONS OBVIOUSLY DON'T KNOW A DAMN THING ABOUT WHAT'S GOING ON.

IT'S PRETTY SHOCKING FRANKLY. ALL I CAN SAY TO THE RESIDENTS IS I THINK YOU CAN BELIEVE WHAT YOU SEE AND NO WHAT YOU'RE TOLD.

LOOK FOR YOURSELF GET THE FACTS. IF YOU WANT TO BE AGAINST INCORPORATION, THAT'S FINE. PLEASE DON'T DO IT BECAUSE

YOU'RE BEING LIED TO. >> THANK YOU.

AGAIN THAT'S 80 BROUGHT THIS UP. THIS IS HUGELY IMPORTANT TO ME THAT THESE ENTITIES AND OUR RESIDENTS BE ABLE TO RELY ON THE INFORMATION THAT WE PROVIDE. OKAY SO THE SOURCE FOR THE MAJORITIMAJORITY OF THIS REPORTS CALLED AN OUTSIDE DEVELOPERS ANALYSIS OF INCORPORATION. IN ORDER JUST SO WE WERE TALKING ABOUT TO MAKE SURE TO PRESENT THE FACTUAL INFORMATION, RELIABLE INFORMATION IS WHY I'M GOING THROUGH THIS.

SO THIS IS A PAGE OUT OF THE REPORT.

THESE FIRST PAGES ARE JUST SORT OF RANDOM BUT THIS AGAIN IS SORT OF THE SAME ISSUE THAT WE WERE JUST TALKING ABOUT WITH LAW

[00:55:01]

WANTED ALSO TO TALK ABOUT THIS. THIS IS INCLUDED IN THE SAME REPORT, TALKING ABOUT THE PROPERTY TAX FREEZE.

SO THE SLIDE ON THE LEFT LOOKS FAMILIAR.

THAT IS A SLIDE THAT I HAVE PRESENTED MULTIPLE TIMES.

BUT THIS SLIDE IS ALSO NOW IN THE ANALYSIS, AND IT TALKS ABOUT TAX HIKES INSTEAD OF MEANINGFUL TAX CUTS.

AND IT SAYS THE REAL PROBLEM HERE IS HIGHER TAX RATES.

SO IT'S GOING TO WIPE OUT ANY SAVINGS AND THEN SOME.

THAT'S BEING OFFERED BY THIS TAX TREES.

WELT, THAT'S JUST NOT AN UNDERSTANDING OF HOW A TAX FREEZE WORKS SO THE PROPERTY TAX CEILING FREEZES THE AMOUNT OF TAMPS PAID IN THE YEAR OF QUALIFICATION.

SO HIGHER TAX RATES OR INCREASES IN TAX VALUE HAVE NO EFFECT, THE RATE CAN GO UP A FE PENNY OR WHATEVER IT GOES UP, THAT IS NOT GOING TO IMPACT THE AMOUNT OF TAX PAY THE FIRST YEAR, UNLESS YOU MAKE A SIGNIFICANT INCREASE IN YOUR HOME.

INCREASES IN TAXABLE VALUE WILL DECREASE THE AMOUNT OF THE TAX LEVY. IF YOU EXPERIENCE THAT THE AMOUNT OF TAX WILL ACTUALLY GO DOWN.

AND THEN FINALLY THERE IS A LOT OF MISINFORMATION ABOUT THAT.

THE TAX FREEZE CANNOT BE RESCIND ID ONCE ENACTED.

SO JUST WANTED TO CLEAR THAT UP. >> WHILE WE'RE ON THAT, I THINK TODD IS GOING TO UPDATE A PREREQUISITES TO US, PERHAPS NEXT WEEK, COMMISSIONER NOVAK WILL PRESENT, IT'S GOING TO CREATE A MASSIVE INEQUITY TO THE YOUNGER POPULATION.

JUST DID A CURSORY DEMOGRAPHIC TEN-YEAR LOOK BACK.

WE'RE NOT GOING TO PRESENT IT TONIGHT BECAUSE TODD NEEDS TO GET A LITTLE MORE DATA POINTS. THE AVERAGE AGE OF A WOODLANDS RESIDENT WAS 38 AND A HALF AND IN 2020 IT'S 40.8 SOMETHING LIKE THAT. SO WE'RE NOT GOING TO HAVE, YOU KNOW, 30 TO 40% OF OUR HOMEOWNERS QUALIFIED FOR A

FREEZE IN THE NEXT DECADE. >> YOU MEAN WE'RE NOT GOING TO TURN INTO A GERIATRIC RETIREMENT COMMUNITY ALL OF A SUDDEN?

>> I MEANWH MEAN LOOK, HE'S SAYT AND I DON'T KNOW HOW WE AGE THAT FAST. YOU CAN'T GO FROM AN AVERAGE AGE OF 40 TO AN AVERAGE AGE OVER 65 IN A DECADE.

IT'S JUST MATH. WE HAVE MORE PEOPLE THAT AGE INTO THE TAX CREDIT BUT WE ALSO HAVE A LOT OF THOSE FOLKS WHO RELOCATE TO LIVE WHEREVER THEIR GRAND KIDS ARE OR WHEREVER THEIR

KIDS ARE. >> IT IS CYCLICAL.

>> BUT GORDY, WE HAVE PROVEN NOT EVERYONE IS GOOD AT MATH.

>> I UNDERSTAND THAT. THIS IS A BENEFIT TO THE SENIOR AND THE DISABLED NOT A DETRIMENT TO EVERYBODY ELSE.

>> YES, SIR. THIS IS SOMETHING ELSE THAT IS IN THIS REPORT. IT SAYS PER THE REFERENCED INCORPORATION STUDY WHICH IS THE ORIGINAL STUDY, WHICH HE'S REFERRING TO HERE, THE CONSULTANT RECOMMENDED AN INCREASE IN THE MAXIMUM TAX RATE TO 28.62 CENTS.

THE TOWNSHIP BOARD APPROVED THIS RECOMMENDATION IN FEBRUARY 2020.

WHICH THEN ALLOWS THE TOWNSHIP TO RAISE THE TAX RATE TO 28.62 CENTS WITHOUT YOUR VOTE. SO THAT IS OBVIOUSLY FALSE.

THAT WAS -- WHAT THE BOARD DID IN FEBRUARY OF 2020, THAT WAS THE PROVISIONAL, ACTUALLY THE BOARD MADE A -- EMPHASIZED THAT IT WAS A PROVISIONAL RATE BASED ON THE INFORMATION AVAILABLE AT THAT TIME. OBVIOUSLY AGAIN REFERRING BACK TO THREE-YEAR-OLD DATA INSTEAD OF USING THE CURRENT UPDATED MODEL WHICH AGAIN IS AVAILABLE. SO JUST TO MAKE CLEAR, AND KAREN DEMPLE SIR PROVIDED THIS A LITTLE WHILE AGO, THE BOARD OF DIRECTORS PRESENTED A LEVEL OF 28.2%, THIS IS THE MAXIMUM TAX RATE THAT CAN BE LEVIED IN 2022 IF VOTERS APPROVE NORNTION.

BY LAW IT CANNOT BE HIGHER. SO THERE IS NO ABILITY FOR THE TOWNSHIP BOARD OR NEW CITY COUNCICITYCOUNCIL OR ANYBODY ELO

[01:00:01]

WITHOUT A VOTE. >> IT WOULD TAKE MORE THAN A DECADE TO GO TO THAT RATE IF WE RAISE IT EVERY YEAR.

>> TEN YEARS YES, SIR. >> DOES THIS BOARD HAS THE AUTHORITY TO ESTABLISH WHAT THE TAX RATE WILL BE ON -- WHERE IS

THIS? >> NEXT YEAR?

>> YES, SAYS RECOMMENDING AN INCREASE OF 28 AT SOME TIME IN THE FUTURE. DO WE HAVE THE AUTHORITY TO SET

A CONTAMINATE RATE OTHER THAN -- >> NO, SIR.

>> -- WHAT WE'VE CURRENTLY SET?

>> TEXAS PROPERTY TAX LAWS ARE VERY, VERY CLEAR ON HOW THAT

PROCESS WORKS. >> IN THE END, YOU KNOW, ALL THIS IS, IS YOU TAKE -- YOU KNOW, YOU DO A STUDY.

YOU TAKE A LOOK AT THE ASSUMPTIONS THAT YOU HAD THREE YEARS AGO. YOU START TALKING ABOUT, YOU KNOW, THE FACT THAT OKAY YOU NEED ANOTHER $13 MILLION IN YEAR 5 ESSENTIALLY, M AND O EXPENSES. THIS IS WHERE WE MADE A MISTAKE, WE SHOULD NEVER HAVE LET THEM CONVERT THAT TO A PROPERTY TAX NUMBER. TO START WITH NUMBER 1 IN A CURRENT MODEL, 36% IS PROPERTY TAXES.

SO THAT NUMBER NEEDS TO BE REDUCED 64% BEFORE WE EVEN TALK ABOUT WHAT THAT NUMBER LOOKS LIKE.

SO WHAT THEY WERE JUST DOING IS SHOWING THAT YOU WOULD HAVE TO COME ONE THIS ADDITIONAL REVENUE.

WE ALSO DIDN'T KNOW THAT THE CHANGES IN THE INTERNET SALES TAXES WERE COMING. AND WERE COLLECTING CONSIDERABLY INTERNET SALES TAXES THAN WE EVER WERE PROJECTING PRIOR TO

THAT. >> RIGHT.

>> BUT YOU KNOW, THIS IDEA OF GOING WELL BECAUSE THEY PUT 28.62 CENTS IN THERE, THEN THERE'S A NEFARIOUS PLAN AFOOT.

>> RIGHT. >> I THINK THE OTHER --

>> IT'S NEFARIOUS ALL RIGHT. >> SURPRISES ME BUT QUITE FRANKLY ANYTHING THAT IS STATED WOULD SURPRISE ME.

MANY OF THE PEOPLE WHO PUT THIS INFORMATION OUT ARE IN REAL ESTATE AND SOME OF THEM ACTUALLY SERVE ON THE APPRAISAL DISTRICT BOARD. BUT SEEM TO HAVE NO UNDERSTANDING OF HOW PROPERTY TAX WORKS IN THE STATE OF TEXAS.

THAT WAS REALLY CONFUSING TO ME. >> I WOULD ALSO SAY I THINK ALL OF THEM HAVE OUR PHONE NUMBERS IF THEY HAD QUESTIONS.

>> WELL THEY CERTAINLY HAVE THEM WHEN THEY WANT TO YOU SUPPORT

SOMETHING. >> OKAY SO HERE IS ANOTHER CHART THAT IS IN THIS SAME REPORT. AND SO WHAT THIS IS SAYING, WHAT THIS IS -- WHAT THEY'RE ATTEMPTING TO SHOW HERE IS THAT WE HAVE A RAPIDLY GROWING TAX BASE THAT GENERATED A WINDFALL OF REVENUE. SO AGAIN THAT'S -- THIS PERSON'S WORDS, NOT OURS. AND SO WHAT THEY'RE ATTEMPTING TO SHOW HERE IN THE ORANGE BOXES IS THE NARRATIVE IS WE'VE HAD A 2.4 BILLION DOLLAR INCREASE IN THE TAX BASE.

THE TAX RATE HAS REMAINED F FLAT SO WE HAVE ACCUMULATED $107 MILLION IN RESERVES. AND WE HAVE -- THE TOWNSHIP

HAS -- >> GO BACK A SECOND.

>> SORRY. >> AN OUTSIDE DEVELOPER'S

ANALYSIS OF INCORPORATION. >> THIS IS DANNY SIGNORELLI, I'M GOING TO CALL IT AS IT IS. WHEN I BECAME CHAIRMAN, THE WORLD CAME TO AN END SO IT'S FINE.

WE KNOW HE'S OFF BY AT LEAST $20 MILLION IN 2016.

AND WHAT ALREADY EXISTED IN RESERVES.

BUT PLEASE, CONTINUE. >> WE'RE GOING TO GO THROUGH ALL THAT, YES. SO THIS IS THE FIRST PAGE, ONE OF THE FIRST PAGE AND SO THIS BUILDING THIS NARRATIVE THEN IT GOES INTO THIS LEADING INTO, SO THEN THAT HAS RESULTED IN BUILDING A WAR CHEST FOR INCORPORATION WITH OUR TAX DOLLARS. AGAIN THAT'S THE NARRATIVE THAT'S BEING PRESENTED HERE. AND WHAT IS BEING SAID IS THAT BY NOT INCORPORATING, WOULD ALLOW US TO REDUCE OUR TAX AND MAINTAIN HEALTHY RESERVES. AND WHAT HE IS SHOWING HERE IS THAT STARTING IN 2018, IF WE HAD LOWERED THE TAX RATE TO 17 CENTS, THEN WE COULD -- WE COULD HAVE MAINTAINED $56 MILLION IN RESERVES. SO AGAIN, THE CLAIM HERE IS THAT BECAUSE THE BOARD OF DIRECTORS WAS TRYING TO BUILD THIS WAR CHEST THAT THEY DIDN'T LOWER THE PROPERTY TAX RATE AND NOW WE'VE HAD ALL THIS BUILDUP IN CASH. NOW I'M GOING TO GO THROUGH THIS STEP BY STEP. SO HAS THE GROWTH IN PROPERTY TAXABLE VALUES CREATED A WINDFALL IN PROPERTY TAX REVENUES? I JUST RECREATED THE CHART THAT HE HAD. HERE IS WHAT HAS HAPPENED IN TERMS OF THE GREEN LINE IS THE PROPERTY TAX VALUES, THE BLUE LINE ACCOUNT ADOPTED TAX R IS T. WHAT WAS NOT PROVIDED IN THE ANALYSIS IS THE AMOUNT SHOWING THE NO NEW REVENUE TAX RATE.

SO THAT TAX RATE IS THE RATE THAT PRODUCES THE SAME AMOUNT OF

[01:05:03]

SO THAT IS WHAT YOU SHOW, THAT IS WHAT IS LIMITING YOUR GROWTH IN PROPERTY TAX REVENUE. SO HERE IT IS WITH THE BLACK LINE AS SHOWING THE NO NEW REVENUE RATE IMPOSED ON THE BLUE LINE WHICH IS THE ADOPTED TAX RATE.

SO YOU CAN SEE THERE THAT THE BOARD OF DIRECTORS, IN SPITE OF HIM SAYING THAT THE CONTAMINATE RATAX RATE HASREMAINED FLAT, ITD TO THE NO NEW REVENUE RATE. THOSE RATE CHANGES ARE MUCH SMALLER IN THE LAST FIVE YEARS THAN THEY WERE IN THE FIRST PART OF THIS CHART. THAT HAS NOTHING TO DO WITH THE TOWNSHIP BOARD OF DIRECTORS OR ANYBODY ELSE.

THAT IS HOW THAT TAX RATE IN BLACK IS CALCULATED BY THE TAX ASSESSOR. IT IS NOT CALCULATED BY ME OR ANYBODY ON STAFF. BY LAW THAT COMES STRAIGHT FROM THE TAX ASSESSOR. AGAIN THIS THING ABOUT HAVING A WINDFALL IN PROPERTY TAX REVENUE BECAUSE THE TOX RATE REMAINED FLAT WHILE PROPERTY TAX VALUE GROWTH, IT'S JUST KNOT ANNAL

ACCURATE STATEMENT. >> IT ALSO IGNORES THAT OKAY IN 2010 WE HAD A POPULATION OF X. WE HAD SO MANY HOMES WE HAD TO SERVE. THAT ALMOST DOUBLED.

>> RIGHT. >> SO WE HAVE TO PROVIDE TRASH SERVICE. WE HAVE TO ADD PARKS.

WE HAD TO DO THINGS IN THAT DECADE.

IT WASN'T A STATIC EXPENSE FROM 2010 AND A WINDFALL OF PROPERTY TAX REVENUES COMING IN. NO, EVERY TIME WE ADD A NEW FACILITY LIKE THE EIGHT APARTMENTS WE'RE GOING TO TALK ABOUT NEXT WEEK THAT BRING IN ADDITIONAL TRASH COSTS, RIGHT THAT HAS TO BE ACCOUNTED FOR. AND NOT ONLY THAT WE TALKED ABOUT IN THE LAST PRESENTATION. MONTGOMERY COUNTY DECIDES TO DO A 5% INCREASE, THEY JUST INCREASED OUR BUDGET.

WE DIDN'T HAVE ANYTHING TO DID WITH THAT, AN EXTERNAL ENTITY INCREASED OUR COST AND WE HAVE ESCALATED COST IN OUR TRASH SERVICE CONTRACTS. WE EVENTUALLY NEED TO SHOW HEY LOOK HERE'S WHAT IT COST TO SERVE THE COMMUNITY.

IT DOESN'T GO DOWN JUST BECAUSE THE APPRAISALS WENT UP.

>> TO YOUR POINT YOU CAN ALSO SEE HERE THE GREEN LINE WHICH IS THE GROWTH IN TAXABLE VALUE, WHILE WE WERE HAVING THAT RAPID GROWTH IN POPULATION, SEE HOW MUCH THAT GROWS BETWEEN 2010 AND 2017. THESE DON'T HAVE ANYTHING TO DO WITH US. THESE ARE NUMBERS COMING FROM SOMEWHERE ELSE AND IT'S JUST THE REALITY OF THE DEVELOPMENT OF THE COMMUNITY. SO THE OTHER THING I WANTED TO SHOW IN RELATION TO THE EARLIER PART OF THIS YEAR.

ANOTHER REASON THAT THE BOARD WAS ABLE TO LOWER THE TAX RATE AND SOMETIMES BELOW THE NO NEW REVENUE RATE WAS BECAUSE OF ALL THE SALES TAX GROWTH. AS WE HAD THAT GROWTH IN THE COMMUNITY, WE HAD THE SALES TAX THAT WENT ALONG WITH THAT.

AND THIS BOARD HAS TAKEN EVERY OPPORTUNITY AS WAS MENTIONED EARLIER TO USE THAT, ANY TYPE OF OTHER REVENUE SOURCES TO OFFSET WHAT IS REQUIRED FROM PROPERTY TAX REVENUE WHICH IS WHY WE ONLY USE 36% OF OUR FUNDING COMES FROM PROPERTY TAX.

AND HERE IS A LOOK AT PROPERTY TAX REVENUES PER CAPITA.

VERY, VERY CONSISTENT. ACTUALLY THE SAME AMOUNT IN TWEANTWEAN2013AS WE HAVE IN 202. THIS IS NOT USED TO FUND ANYTHING MUCH LESS INCORPORATION.

>> AND AGAIN THESE ARE NON-INFLATION ADJUSTED NUMBERS.

>> THAT'S CORRECT. >> WHEN YOU PUT THE INFLATION NUMBER IN THE LINE GOES DOWN EVEN FURTHER ON PER CAP SANTA

BASIS. >> YOU MENTIONED THAT BEFORE AND

I DIDN'T HAVE A CHANCE -- >> THAT'S ALL RIGHT MONIQUE I

JUST WANTED TO REMIND YOU. >> OKAY.

SO ANOTHER STATEMENT THAT WAS MADE IN THE ANALYSIS, AS THE TOWNSHIP HAS ACCUMULATED 107 MILLION DOLLARS IN RESERVES FOR INCORPORATION AND THEN THERE'S SOMETIMES I ALSO HEAR OUT THERE, NO, IT'S NOT 107, IT'S 50. BUT REGARDLESS OF WHICH NUMBER YOU WANT TO USE, THE ANSWER THE NO.

WE HAVE NOT ACCUMULATED THAT AMOUNT.

ALSO I SHOULD HAVE -- WELL, THE CHART DOWN BELOW SHOWS THAT WHATEVER THE CHART TOP FROM OUTSIDE DEVELOPER, THOSE NUMBERS ARE INCORRECT IN TERMS OF WHAT WE ACTUALLY HAVE IN OUR RESERVES. I HAVE TRIED TO FIGURE OUT WHERE THEY MAY HAVE COME FROM. I CANNOT SO I GAVE UP.

BUT OUR NUMBERS ARE SHOWN DOWN AT THE BOTTOM AND THEY TIE TO OUR AUDITED FINANCIAL STATEMENTS.

SO THAT'S THE AMOUNT THAT'S IN OUR RESERVES.

AND CAN YOU SEE OUT OF THE $105 MILLION IN RESERVES THAT WE HAVE CURRENTLY, $20.8 MILLION IS RELATED TO NORNTION RESERVE.

RELRELRELATED TO INCORPORTION RESERVE.

>> I THINK THIS NEEDS TO BE AMPLIFIED.

[01:10:03]

NUMBERS OUT. >> RIGHT.

>> SO THE $20.8 MILLION, 17.9 OF THAT WAS ACTUALLY GENERATED FROM NONDISCRETIONARY OTHER RESERVES THAT HAVE BEEN FLOATING AROUND THE TOWNSHIP FOR A DECADE. SO THERE IDEA THAT SUDDENLY WE JUST STOLE EVERYBODY'S MONEY, I'M SORRY, THIS IS SO RUDIMENTARY, THIS IS SO BASIC MATH 101 IT'S INCREDIBLE TO ME THAT PEOPLE WHO ARE REALLY SMART AND BELIEVE ME THERE'S A LOT OF REALLY SMART PEOPLE OUT THERE THAT ARE ABSOLUTELY

MISINTERPRETING THIS DATA. >> YES, SIR.

>> IT IS ABSOLUTELY SHOCKING. >> YES, SIR.

SO WE'VE SEEN THESE BEFORE, I'M GOING TO GO THROUGH THESE REALITY QUICKLY, CAN YOU STOP ME IF YOU HAVE A QUESTION.

THESE ARE THE COMPONENTS OF IT, ONLY $21 MILLION IS RELATED TO INCORPORATION. THE OPERATING RESERVE IS BASICALLY A REQUIRED RESERVE. WITHOUT IT YOU CAN'T BORROW MONEY, EXCEPT FOR AT RIDICULOUSLY HIGH THINGS.

THIS IS HUGELY IMPORTANT TO THE POSITIVE CREDIT RATING THAT WE HAVE. IT IS CRITICAL TO OPERATIONS, REPRESENTS TWO MONTHS OF GENERAL OPERATIONS IN CASE OF SUCH

EMERGENCY. >> AND IT ALSO HIGHLIGHTS THERE IS NO IMMINENT RISK TO THE ABILITY FOR OUR COMMUNITY TO GET

THE SERVICES THAT IT NEEDS. >> RIGHT.

>> I MEAN, WE ARE, WHEN YOU GET THROUGH ALL YOUR RESERVE CATEGORIES, ENSURING THAT ALL THE SERVICES OUR COMMUNITY EXPECTS, THEIR QUALITY OF LIFE. IS BEING TAKEN CARE OF.

IT'S FUNDED. IT IS IN THE BANK, IT'S AUDITED.

>> EXACTLY BY BOARD POLICY IT IS FUNDED.

BELIEVE ME WHEN I SAY THIS IS THE NUMBER 1 QUESTION IN FOCUS OF THE CREDIT AGENCIES. SO IF YOU DON'T HAVE AN OPERATING RESERVE, YOU CAN'T SURVIVE.

IT'S EXTREMELY IMPORTANT. WE ALSO HAVE A CAPITAL REPLACEMENT RESERVE WHICH IS CERTAINLY NOT REQUIRED.

BUT IT IS CONSIDERED VERY, VERY FAVORABLY BY OUR CREDIT RATING AGENCIES. THEY ALWAYS REFERENCE THAT IN THEIR REPORTS. WHAT IT DOES IS INSTEAD OF HAVING TO FINANCE ALL EVER YOUR ASSETS, SO EVERY TIME YOU HAVE I.T. EQUIPMENT OR PARK RENOVATIONS OR REPLACING PLAYGROUND OR FIRE DEPARTMENT, WE HAVE A READILY AVAILABLE SOURCE OF REVENUES IN ORDER TO FUND THOSE.

WE LOOKED OUT, WE HIRED AN OUTSIDE ORGANIZATION, TO DEVELOP A 30 YEAR CAPITAL PLAN OR CAPITAL REPLACEMENT RESERVE IS BUILT ON THAT. AND THEN FINALLY WE HAVE OTHER, NONDISCRETIONARY RESERVES, $15 MILLION.

MOST OF THESE ARE TIED DOWN BY CONTRACT OR BY LAW IN TERMS OF WHAT WE HAVE TO SET ASIDE. SO NOW WAS THE INCORPORATION RESERVE FUNDED, AND HOW WILL IT BE USED? THE RESERVE WAS FUNDED BY FAVORABLE SALES TAX REVENUE AND EXPENSE VARIANCES, I'LL TALK ABOUT WHAT THAT MOANS IN A SECOND. PROPERTY TAX REVENUES WERE NOT USED TO FUND THIS RESERVE. IF VOTERS APPROVE INCORPORATION THE FUNDS WILL BE USED FOR POLICE DEPARTMENT AND CAPITAL WORKS EXPENDITURES. WE'LL GO THROUGH AN ILLUSTRATION WHERE TAX FUNDS CANNOT BE USED TO FUND ONGOING OPERATIONS BECAUSE THEY ARE CONSIDERED A ONE TIME FUNDING SOURCE.

WHAT DO I MEAN BY FAVORABLE VARIANCES? THIS IS A REGULARLY OCCURRING, NOT UNIQUE TO THE TOWNSHIP, SO EVERY YEAR WE DO OUR BEST TO SEN BASED ON A SET OF ASSUMPTIONS AND BASED ON BEST PRACTICES, ALL THE THINGS WE HAVE TALKED ABOUT, WHAT OUR REVENUE AND EXPENSE BUDGET IS GOING TO BE.

BECAUSE WE BUDGET CONSERVATIVELY, INEVITABLY WE ALWAYS HOPE WE WOULD HAVE MORE REVENUE THAN WE ACTUALLY BUDGETED AND LESS EXPENSE THAN WE ACTUALLY BUDGETED.

WE TRY TO KEEP THOSE AS CLOSE AS POSSIBLE BUT UNDER CONSERVATIVE BUDGETING YOU ARE GOING TO GENERATE FAVORABLE BUDGET VARIANCES. WHAT THIS BOARD AND PREVIOUS BOARDS HAVE USED THOSE VARIANCES FOR ARE TO RETIRE DEBT, TO FUND BUDGET INITIATIVES IN CAPITAL PROJECTS AND TO FUND RESERVES.

AND YES SOME VERIFIABLE VARIANCES WERE USED TO FUND THE INCORPORATION RESERVES AFTER ALL THESE OTHER ITEMS WERE TAKEN CARE OF. LET'S LOOK AT THE INCORPORATION RESERVE, THIS IS HOW IT WAS FURNISHED.

YOU CAN SEE THAT MOST OF IT CAME IN 2018.

THERE WAS A 12.6 MILLION TRANSFER OUT OF A CONTINGENCY

[01:15:04]

NOT PROPERTY TAX VARIANCES, BUT FAVORABLE EXPENSES.

THAT FUNDING WAS AVAILABLE, AND THAT MONEY WAS PUT IN THERE AND THERE'S BEEN NO ADDITIONAL FUNDING ADDED TO THE INCORPORATION RESERVE SINCE 2018.

SO THIS IDEA THAT WE HAVE THAT THE BOARD HAS BEEN OVER-TAXING AND FREE FUNDING AND INCORPORATION RESERVE LEADING UP TO THIS YEAR IN ORDER FOR THE INCORPORATION ELECTION IS JUST NOT ACCURATE. SO I WANT TO SHOW YOU WHAT HAPPENED IN 2018 WHICH CAUSED US TO HAVE ALL THAT ADDITIONAL MONEY TO BE ABLE TO FUND INTO A RESERVE.

FIRST OF ALL THE TOWNSHIP BOARD IN 2017 INHERITED IF YOU WILL AND ACCUMULATED FUNDS THAT HAD BEEN GENERATED BY FAVORABLE VARIANCES FROM 14 TO 16. SO IN 2014 AND 15 AND 16, TO GO BACK TO THE FIRST SLIDE, CHAIRMAN BUNCH WATT NOT CHAIRMAN. I BELIEVE --

>> IT HAD BEEN BRUCE TUFF AROUND ED ROBB.

>> IN 2014 IT WAS BRUCE TOUGHF AND 26TH, ED ROBB.

WHAT THIS IS SHOWING IS IN THE 18 BUDGET WE WERE PROJECTING FOR 18. YOU HAVE TO REMEMBER WE WERE IN 2017. WE HAD PROJECTED THAT WE WOULD HAVE $7.9 MILLION IN ENDING BALANCE IN THE UNDESIGNATED.

WHAT WE ENDED UP WITH WAS WHAT WAS SHOWN AT THE TOP, WE ENDED UP WITH $14.6 MILLION AND THE REASON FOR THAT, AND THIS IS A VERY SIMPLE CHART, IT'S WAY MORE COMPLICATED THAN THIS, THIS GETS TO THE GIST OF IT. YOU CAN SEE IN 2017 AROUND IN 2018 WE HAD BIG FAVORABLE VARIANCES IN SALES TAX REVENUES.

IT WAS JUST WHAT WAS GOING ON AT THE TIME AND IRONICALLY IT WAS PROBABLY BECAUSE I USED TOO CONSERVATIVE OF A SALES TAX PROJECTION. AND THAT'S WHAT HAPPENS WHEN YOU DO. AND THEN IN OPERATING EXPENSES IN 2017 ALSO THERE WAS A MUCH LARGER FAVORABLE VARIANCE THAT YEAR THAN IS NORMALLY. SORRY GO AHEAD.

>> YOU SAID THIS IS A VERY SIMPLE CHART.

BUT I WOULD KIND OF SAY THAT I'M NOT SURE WE COULD MAKE IT SIMPLE ENOUGH FOR SOME OF THE MUNICIPAL FINANCIAL MODELING EXPERTS THAT ARE OUT THERE CREATING THEIR OWN MUNICIPAL FINANCIAL MODELS.

BUT I APPRECIATE THE ATTEMPT YOU MADE.

>> THANK YOU. SO AGAIN, THIS WAS UNIQUE TO THESE YEARS. IT WAS ONE OF THE REASONS ALONG WITH THE $9 MILLION THAT WAS ALREADY AVAILABLE COMING INTO THAT YEAR, AND THEN THE BIG FAVORABLE VARIANCES THAT WERE GOING ON THESE TWO YEARS. IT DID GENERATE A LOT OF UNDESIGNATED REVENUE. SO I WANT TO ADDRESS ALSO THAT THE BOARD OF DIRECTORS DID NOT JUST STAY ALL OF THAT MONEY THAY THAT WAS AVAILABLE AND PUT IT ALL INTO THE INCORPORATION RESERVE. THIS IS THE THING DURING THAT TIME PERIOD THAT THE BOARD DID FIRST.

THESE WERE THE FIRST PRIORITIES OF THE BOARD BEFORE ANY MONEY WAS EVER DESIGNATED, ALLOCATE INTERMEDIATE THE INCORPORATION RESERVE. THE BOARD OF DIRECTORS PAID OFF DEBT. THEY STARTED ACCUMULATING THOSE FUNDS IN 2018. AS YOU CAN SEE.

AND THEN MORE IN 2019. IN ORDER TO PAY OFF DEBT IN 2019 WHEN IT BECAME CALLABLE. AND ON THIS PARTICULAR DEBT INSTRUMENT IT SAVED THE TAXPAYERS $1.7 MILLION IN INTEREST EXPENSE BY THE BOARD TAKING THAT ACTION.

SO THAT ONE THING THAT WAS DONE WITH THE FAVORABLE VARIANCES THAT WERE AVAILABLE DURING THIS TIME PERIOD.

THIS IS WHAT THE RESULT WAS AGAIN SO YOU CAN SEE DURING THAT TIME PERIOD THAT THE DEBT DECREASED, THE DEBT BALANCE DECREASED. THE BOARD ALSO, THE BOARD OF DIRECTORS SETTLE THE TAX RATE BELOW THE NO NEW REVENUE RATE.

SO THEY TOOK THAT MONEY THAT WAS AVAILABLE, LOOKING AT EVERYTHING, THEY DIDN'T KEEP -- THE BOARD DID NOT KEEP THE TAX RATE THE SAME. THEY WERE NOT TRYING TO GENERATE ADDITIONAL MONEYS TO FUND THE INCORPORATION RESERVE.

IF THAT WAS TRULY THE GOAL THE BOARD WOULD NOT HAVE SET THE RATE BELOW THE NO NEW REVENUE RATE.

YOU PAID OFF DEBT, YOU DROPPED THE RATE BELOW THE NO NEW REVENUE RATE. THIS IS SOME WHAT THE BOARD OF DIRECTORS FUNDED SOME MAJOR NEW INITIATIVES DURING THAT TIME.

ADDITIONAL LAW ENFORCEMENT STAFFING OUT IN HARRIS COUNTY, CREEK SIDE YMCA. EVENTUALLY KNOWN AS THE RECREATION OFFICER AT ROB FLEMING.

DRAINAGE IMPROVEMENTS, SOME CONTRIBUTIONS OR PARTNERSHIPS WITH OTHERS TO PROVIDE FUNDING. THE SMALL CUL-DE-SAC MAINTENANCE

[01:20:05]

PROJECTS RELATED TO THE BEXAR GREEN WAY PROGRAM, CULTURAL ARTICLES STUDY, I COULD HAVE GONE FOR PAGES.

BUT WHAT I WAS TRYING TO SHOW HERE IS DURING THAT TIME PERIOD WHEN THE CONTRIBUTION WAS MADE TO THE INCORPORATION RESERVE, THESE WERE THE OTHER THINGS THAT WERE GOING ON.

THESE WERE THE FIRST PRIORITIES OF THE BOARD, AFTER ACCOUNTING FOR ALL OF THAT THE BOARD ALLOCATED THE REMAINING CONTINGENCY UNDESIGNATED RESERVE TO THE INCORPORATION RESERVE.

I'M SHOWING THIS BECAUSE IN THE FOLLOWING YEAR, THE BOARD, HAD THEY BEEN BUILDING A WAR CHEST FOR INCORPORATION, HAD ANOTHER OPPORTUNITY TO DO SO. BECAUSE THIS IS ANOTHER YEAR WHERE WE ENDED UP WITH $6 MILLION MORE THAN WHAT WE HAD ORIGINALLY PROJECTED IN OUR CONTINGENCY ACCOUNT.

BUT THE BOARD DID NOT DO THAT. AS I MENTIONED EARLIER, 2018 WAS THE ONLY YEAR AND THERE HAS BEEN NO FUNDING ADDED TO THE INCORPORATION RESERVE SINCE THEN.

SO ALL OF THIS ADDITIONAL MONEY WAS USED TO FUND OTHER RESERVES AND CAPITAL PROJECTS AND BUDGET INITIATIVES.

SO I HAD TALKED ABOUT THIS BEFORE AND THE MAIN THING THAT I WANT TO TALK ABOUT HERE AS WE MOVE INTO THE NEXT SECTION IS THAT GFOA BEST PRACTICES, AND CREDIT AGENCIES, REQUIRE THAT YOU FUND ONGOING EXPENSES SO YOUR OPERATING EXPENSES WITH ONGOING REVENUES. THAT IS WHAT IS CALLED A STRUCTURALLY BALANCED BUDGET. IT IS WHAT THE TOWNSHIP BOARD HAS ALWAYS INSISTED ON AND IT HAS ALWAYS BEEN WHAT HAS BEEN ADOPTED. AND END BALANCE OVER THERE IN THE YELLOW, END BALANCE IN THE BUDGET IF RESERVES ARE BEING USED TO FUND ONGOING OPERATING EXPENDITURES INDICATES A PROBLEM PROBLEM. THAT IS SOMETHING CREDIT AGENCIES WOULD ALWAYS LOOK FOR. SO FIRST I WANT TO LOOK AT THIS.

THE OUTSIDE DEVELOPER TALKED ABOUT ONE OF THE BENEFITS OF NOT INCORPORATING WOULD BE TO RELEASE THE $20.8 MILLION IN RESERVES AND TURN THAT INTO A 9.9 CENT PROPERTY TAX DECREASE.

SO THIS IS WHAT WOULD HAPPEN IF YOU DID THAT.

IN YEAR 1 IF YOU LOWERED THE PROPERTY TAX RATE AND YOU USED THE INCORPORATION RESERVE TO FUND EXPENSES OF $21 MILLION THEN YOU ARE NOT USING ONGOING REVENUES TO FUND ONGOING EXPENSES, THE GFOA BEST PRACTICES AND BOARD POLICY WOULD HAVE BEEN VIOLATED AND THE VIOLATION WOULD HAVE HAD TO BE REPORTED TO THE CREDIT AGENCY. IN THE SECOND YEAR THE INCORPORATION RESERVE IS DEPLETED AND A FUNDING SHORTFALL EXISTS. BECAUSE YOU STILL HAVE YOUR 120,000 -- OR 121 MILLION WORTH OF EXPENSES, WE DON'T WANT TO DECREASE SERVICES, NOBODY WANTS THAT SO YOU HAVE A $21 MILLION FUNDING GAP AND YOUR TAX HAS BEEN LOWERED TO 9.9 CENTS AND WITH PROPERTY TAX LAWS YOU CAN'T INCREASE IT BY ABOUT .7 CENTS A YEAR LESS THAN A PENNY A YEAR IN ORDER TO HAVE THAT FUNDING.

SO THIS IS WHY I PUT THIS THERE. WE DON'T DO THIS.

WE HAVE -- THE BOARD HAS NEVER DONE THIS.

STAFF WOULD NEVER PRESENT A BUDGET LIKE THIS.

AND THIS IS EXACTLY WHY YOU DO NOT USE RESERVES TO LOWER THE PROPERTY TAX RATE. SO HERE, I'M GOING TO GO BACK TO THIS SLIDE, WHERE THE ANALYSIS WAS SAYING THAT IF THE BOARD REDUCED THE TAX RATE TO 17 CENTS BEGINNING IN 2018, THEY COULD HAVE CARRIED THAT OUT THROUGHOUT THIS CURRENT FIVE YEAR PLAN AT 2026 FIVE YEAR PLAN AND MAINTAINED $56 MILLION IN RESERVES. SO I RAN THAT THROUGH OUR BUDGET MODEL, ME AND JOHN BRUCE, I'LL GIVE JOHN CREDIT, WE RUN THAT THROUGH THE BUDGET MODEL TO SEE EXACTLY WHAT WOULD HAPPEN IF WE DID THAT. I DON'T KNOW WHERE OR WHAT TYPE OF BUDGET MODEL OR HOW THIS CAME ABOUT, I COULDN'T FIGURE IT OUT BUT WE JUST RAN IT THROUGH OURS TO BE CLEAR.

IF YOU DO THAT WHAT YOU END UP WITH IS ABOUT A $11 MILLION DECREASE IN REVENUE BY LOWERING THE TAX RATE TO THAT.

AND THIS IS WHAT YOU END UP HAVING, I'M ASSUMING NOW WE DON'T WANT TO CUT EXPENSES RIGHT? I AM ASSUMING WE WANT TO MAINTAIN SERVICE LEVELS.

SO WITHOUT THIS THIS IS WHERE YOU END UP.

I'M GOING TO LOOK AT 2018 THROUGH 2022.

YOUR INCORPORATION RESERVE IS GONE, THAT'S THAT.

AND YOUR CAPITAL RESERVE IS DOWN TO $3.5 MILLION.

SO THAT WOULD HAVE A NEGATIVE IMPACT ON YOUR CREDIT RATING.

IT WOULD REQUIRE FINANCING OF CAPITAL ASSETS AND THE DEBT SERVICE COMPONENT OF YOUR TAX RATE WOULD HAVE TO INCREASE IF

[01:25:01]

>> I SAW THIS CHART A COUPLE OF WEEKS AGO AND I WAS WONDERING, I MEAN, WHAT WOULD THE TAX RATE INCREASE BE REQUIRED IN THAT NEXT YEAR BECAUSE THEY DECIDED TO BLEED OUT ALL THE RESERVES? I KNOW YOU SAID THEY COULD ISSUE DEBT BUT YOU COULD INCREASE THE

PROPERTY TAX. >> RIGHT YOU COULD.

>> FROM THEIR 17 CENTS WHAT WOULD THEY NEED NOW AS THEY HAVE BRILLIANTLY CUT THE TAXES FOR 75 YEARS USING RESERVES, NOW IN YEAR 6 TIME TO PAY THE PIPER WHAT IS THE TAX RATE REQUIRED?

>> WE CAN CALCULATE THAT AND GET THAT FOR YOU.

>> THEN THAT HAS TO GO TO THE VOTERS.

>> RIGHT. >> BECAUSE IT'S GOING TO BE MORE THAN THE THREE AND A HALF CENT CAP.

>> A LOT MORE YES, SIR. >> RIGHT.

AND THEN YOU'D HAVE TO START FINANCING ALL YOUR CAPITAL WHICH INCREASES THE DEBT SERVICE, RIGHT.

SO THEN WE TOOK -- SO THIS IS WHERE WE END UP IN 2022 AND THEN WE EXTENDED IT OUT INTO THE FIVE YEAR PLAN.

AND WE USED THE SAME ASSUMPTIONS, THE GROSS SALES TAX, THE HIEFER SALES TAX ASSUMPTIONS THAN WE ARE USING IN THE CURRENT MODEL. WE DIDN'T DUMB DOWN, USING WHAT IT WAS, USING THE 17 CENT TAX RATE.

YOUR INCORPORATION RESERVE IS GONE YOUR CAPITAL RESERVE IS GONE WHY OPERATING RESERVE IS GONE AND NOW YOU'RE DIPPING INTO NONDISCRETIONARY RESERVES WHICH YOU ACTUALLY CAN'T DO BUT THAT JUST SHOWS HERE WHERE WE WOULD BE.

>> SO THE ADVICE THAT THEY'RE PROVIDING OUT THERE IS A FINANCIALLY SOUND WAY TO LOWER TAXES WOULD BANKRUPT THE

COMMUNITY. >> YES, SIR, IT WOULD.

>> ILLE >> LET'S HOPE THEY DON'T GET

ELECTED TO THIS BOARD. >> THE OTHER THING NOT TAKEN INTO ACCOUNT HERE IF WE STARTED DOING THAT IN 2017 WE WOULDN'T HAVE BEEN ABLE TO PAY DOWN 25 OR $30 MILLION IN DEBT HEATER.

WE WOULD HAVE ANOTHER $30 MILLION OF DEBT SITTING ON THE

BALANCE SHEET ON TOP OF IT. >> THAT'S A GREAT POINT, YOU'RE

EXACTLY RIGHT. >> BRUCE YOU'RE CONFUSING THE

NARRATIVE. >> SO AGAIN, SHOWING HERE THIS IS THE BROWN BARS ARE WHAT THE OUTSIDE DEVELOPER SAID THAT WE COULD DO, THAT WE COULD MAINTAIN A RESERVE BALANCES OF $56 MILLION. WITH A 17 CENT PROPERTY TAX OVER THIS PERIOD OF TIME. WHEN YOU ACTUALLY RUN THOSE NUMBERS THROUGH THE TOWNSHIP'S BUDGET MODEL, THAT IS NOT TRUE.

IT IS WHAT WE JUST SAID, WE'RE DOWN TO ABOUT 26 MILLION IN RESERVES, AND THAT IS NOW WE'RE DIPPING INTO NONDISCRETIONARY RESERVES WHICH WE ACTUALLY CAN'T DO.

SO THIS IS A SUMMARY, THIS IS THE LAST SLIDE.

THIS IS A SUMMARY OF THIS CHART, AGAIN JUST TO PUT ALL OF THAT INTO PERSPECTIVE. SO THE OUTSIDE DEVELOPER'S FINANCIAL PLAN AS SHOWN IN THIS REPORT VIOLATES GFOA AND GATB STANDARDS. VIOLATES THE BOARD'S FISCAL POLICY, RESULTS IN A STRUCTURALLY UNBALANCED BUDGET, DEPLETES THE OPERATING RESERVE AND CAPITAL RESERVE, REQUIRES LARGE INCREASES IN DEBT TO FINANCE CAPITAL, ABSOLUTELY NOT SUSTAINABLE WHICH WOULD RESULT IN A DECLINE IN SERVICES.

>> I HAD THIS CONVERSATION ON TUESDAY WITH COMMISSIONER NOVAK WHERE HE WAS TELLING US WE SHOULD DO A 20% HOMESTEAD EXEMPTION WHICH WE DID AN ANALYSIS ON THAT SEVERAL YEARS AGO, SHOWS AN EQUALLY UNSTABLE OUTCOME.

SHOWS HIM HOW THE EASIEST WAY FOR HIM TO TAKE ON MORE COUNTY EXPENSES. WE FUND.

IN THIS CALENDAR YEAR BUDGET, ABOUT $12 MILLION IN LAW ENFORCEMENT RESOURCES TO THE COUNTY AND LANDSCAPE MAINTENANCE NEARLY $6 MILLION. THERE IS CERTAINLY ONGOING EXPENSES THAT THE COUNTY COULD RELIEVE IF THEY REALLY WANT US TO LOWER THE TOWNSHIP TAX. BECAUSE WE'RE ARTIFICIALLY LOWERING THEIR BUDGET WITH THE AGREEMENTS THAT WE HAVE THAT WE'RE FUNDING. AND SO THANK YOU FOR DOING THIS

ANALYSIS AGAIN. >> YOU'RE WELCOME.

>> I SUSPECT BASED ON TODAY'S ADVERTISING AND YESTERDAY'S ADVERTISING WE'LL PROBABLY BE SEEING MORE CREATIVE WAYS TO

CONFUSE THE PUBLIC. >> IT'S ALREADY OUT THERE.

SOMEONE JUST SENT ME A SCREEN SHOT ABOUT SOMETHING THE COMMISSIONER POSTED ABOUT HOW WE'RE REALLY MAKING A PLAN FOR AS FAULT ROAD MAINTENANCE AND IMPROVEMENTS BECAUSE WE CAN'T AFFORD TO DO CONCRETE IN OUR BURMT.

>> IT'S ACTUALLY TO FIX ASPHALT HE HASN'T FIXED AND IT'S LESS THAN 3% OF OUR ROADWAY TO BRING IT UP TO EXCELLENT LEVELS.

>> THAT'S NOT WAY IT'S PRESENTED.

[01:30:02]

>> OF COURSE, WHY PRESENT THE FACTS?

>> THANK YOU. >> THANK YOU.

>> THANK YOU MONIQUE. OKAY I DON'T THINK WE HAVE ANYTHING ELSE FOR THIS AGENDA ITEM.

AND I KNOW THAT WE APPRECIATE YOUR EXTRA EFFORTS, YOU DID MORE THAN YOU DID A COUPLE OF WIEKS AGO, SOME EXTRA POINTS FOR US AND FOR THE FLIRK. WE'RE GOING TO NEED A MOTION AND

[ CLOSED MEETING (if applicable)]

SECOND. >> MOTION.

>> SECOND. >> DIRECTOR SNYDER HAS LEFT, SHE IS NOT FEELING ABOUT. WE ARE NOW GOING TO RECESS TO MATTERS RELATED TO REAL ESTATE, ECONOMIC NEGOTIATION PURSUANT TO 557.071. 557.04, PURSUANT TO 551.08N TEXAS GOVERNMENT CODE AND TO CONSULT WITH THE ATTORNEY

PURSUANT TO 551.051 PUR >> ALL RIGHT, WE ARE NOW RECONVENING INTO PUBLIC SECTION AT 8:20.

WE WILL TAKE ACTION ON ITEM 11, WHICH IS RECEIVE AND ACT ON AN ADDENDUM WITH THE LAW FIRM OF MESSER, FORT, MCDONALD, PLLC.

WE WERE PRESENTED WITH AN ADDENDUM FOR SCOPE OF WORK, DO WE HAVE A MOTION AND SECOND TO APPROVE THE ADDENDUM?

>> SO MOVED. >> SECOND.

>> ALL IN FAVOR SAY AYE?

>> ANY OPPOSED? THAT WILL CARRY.

WE ARE DEFERRING AGENDA ITEM 10 TO A FUTURE SPECIAL MEETING.

DO WE HAVE ANY AGENDA ITEMS TO BE PLACED ON NEXT MONTH'S MEETING? ANY BOARD ANNOUNCEMENTS?

MOTION TO ADJOURN? >> SO MOVED.

>> SECOND. >> ALL IN FAVOR SAY AYE.

* This transcript was compiled from uncorrected Closed Captioning.