Link

Social

Embed

Download

Download
Download Transcript

>> ALL RIGHT.

[00:00:01]

WELCOME TO THE WOODLANDS TOWNSHIP BOARD OF DIRECTORS BUDGET MEETING.

WE HAVE FIVE OF THESE THIS WEEK.

WE MOST LIKELY WILL NOT HAVE INVOCATION FOLKS IN ADVANCE.

SO IF ANYBODY WOULD LIKE TO SAY A QUICK PRAYER BEFORE WE START OUR BUDGET, TAKE A

[1. Invocation / Pledge of Allegiance;]

VOLUNTEER NOW.

>> I'LL DO IT.

FATHER WE COME TO YOU THIS MORNING, WATCH OVER AND GUIDE US, FATHER.

WE ASK US TO HELP US AS WE GO THROUGH THIS BUDGET AND MAKE DECISIONS THAT AFFECT OUR COMMUNITY, AFFECT OUR ROLES AS TOWNSHIP DIRECTORS AND PUT OUR COMMUNITY IN A POSITION TO WHERE WE CAN NOT ONLY CONTINUE TO PROVIDE FOR BUT PLAN FOR.

WE ASK YOU TO BE WITH OUR COMMUNITY AND THE GREATER WORLD AS A WHOLE AS WE CONTINUE TO FIGHT COVID 19 AND WE ASK FOR YOUR LEADERSHIP, YOUR GUIDANCE, WE ASK FOR YOU TO BRING UPON US THE HEALING POWERS THAT YOU CAN BRING IN SITUATIONS LIKE THIS.

WE ASK YOU TO LEAD AND GUIDE US TODAY AS TOWNSHIP DIRECTORS HELP US TO BE RESPONSIBLE, RESPECTFUL AND CONTRIBUTED TO OUR CONVERSATIONS AND DEBATE.

WE ASK THIS IN YOUR HOLY NAME, AMEN.

>> AMEN.

>> WE'LL NOW CALL THE MEETING TO ORDER.

I DON'T HAVE AN OUTLINE.

I DO KNOW THAT WE NEED TO TAKE ROLE.

SO I WILL START WITH.

>> CHAIRMAN.

>> DID YOU WANT TO DO THE PLEDGES?

>> I'M SITTING HERE LOOKING AT THE AGENDA.

SLASH PLEDGE.

I DON'T HAVE MY RED LINE VERSION.

IS THERE A POSSIBLE WAY YOU GUYS COULD SEND ME THAT ONE.

>> YES, SIR.

>> ALL RIGHT.

WE CAN DO THE PLEDGES TO THE FLAGS.

THANK YOU, KAREN.

START WITH THE AMERICAN FLAG I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA, AND TO THE REPUBLIC FOR WHICH IT STANDS, 1 NATION, UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL AND TO THE TEXAS FLAG.

I PLEDGE ALLEGIANCE TO THEE TEXAS, ONE STATE, UNDER GOD, ONE AND INDIVISIBLE.

>> OKAY.

ALL RIGHT.

[2. Call meeting to order;]

NOW I CALL THE MEETING TO ORDER.

I'LL TAKE ROLL.

I DON'T HAVE THE RED LINE VERSION.

SO I'M GOING TO DO IT ALL BY HAND REAL QUICK.

CHAIRMAN: .

>> ROLL CALL.

CHAIRMAN: SIX OF THE SEVEN OF US HERE.

IF DIRECTOR RIESER POPS ON, LET US KNOW.

WE NEED A MOTION TO ADOPT OUR AGENDA.

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

>> SO MOVED.

>> SECOND.

CHAIRMAN: ALL IN FAVOR SAY AYE.

WE HAVE AN AN AGENDA.

WE DO HAVE PUBLIC COMMENT.

[4. Public comment;* ]

PUBLIC COMMENT OR ACTUALLY NOTICE, THIS MEETING WAS POSTED IN ADVANCE ONLINE.

PUBLIC COMMENT INFORMATION AND NUMBERS WERE PROVIDED IN ORDER TO HAVE PUBLIC ENGAGEMENT.

WE WILL TAKE THOSE CALLS IN ORDER THAT THEY WERE RECEIVED.

AND WE WILL START WITH OUR FIRST CALLER, IF WE HAVE ANY.

CHAIRMAN: FIRST CALLER, IF YOU COULD GIVE US YOUR NAME.

>> GOOD MORNING, THIS IS MARK UNLUNG.

THANK YOU FOR THE EFFORT THAT Y'ALL ARE PUTTING INTO THE BUDGET WORK.

I THINK THIS PROCESS IS AN EXAMPLE OF WHY THE WOODLANDS IS A GREAT COMMUNITY BECAUSE OF THE THOUGHTFULNESS THAT Y'ALL GO THROUGH AND YOUR PLANNING EFFORTS.

AS YOU GO THROUGH THE WORK, I HAVE THREE COMMENTS SLASH SUGGESTIONS THAT I HOPE YOU WILL CONSIDER.

THE FIRST IS SINCE THE HURDLE RATE TO INCREASE THE TAX IS HIGH, TO ME IT SEEMS

[00:05:07]

LIKE THE TAX RATE IS EFFECTIVELY FIXED, SO YOU SHOULD BE CRAFTING A BUDGET TO FIT WITHIN THE CONSTRAINTS OF THAT TAX RATE RATHER THAN CRAFTING A BUDGET OF WHAT WE WOULD LIKE TO DO AND THEN CALCULATE THE RESULTING TAX RATE TO FUND IT.

SO TO ME, THE TAX RATE IS FIXED AND YOU CALCULATE THE REVENUE THAT YOU'LL GET FROM THE CURRENT TAX RATE AND THEN DECIDE HOW BEST TO SPEND IT.

THAT JUST SEEMS TO BE THE WORLD WE LIVE IN TODAY.

AND THAT MAY BE WHAT YOU'RE DOING.

HARD TO TELL SOMETIMES.

SECOND THAT WAS MY FIRST COMMENT.

SECOND, SINCE THE RATE OF RECOVERY IS UNKNOWN, YOU KNOW, WE MIGHT HAVE A SLOW RECOVERY, MIGHT HAVE A FAST RECOVERY, MIGHT HAVE WAVES RECOVERY, SEEMS LIKE WE JUST ASSUME A BUDGET FOR THE LOW SIDE OF REVENUE.

NOT THE MOST LIKELY OR MOST OPTIMISTIC.

IT SEEMS LIKE THE LOCKDOWN REQUIRED US TO DO A LOT OF THINGS THAT WE WOULDN'T NORMALLY DO.

WE CANCELLED SOME THINGS.

WE REDUCED EXPENSES IN VARIOUS WAYS AND WE REDUCED AMENITIES.

THERE WASN'T A HUGE BACKLASH BY THE RESIDENTS FOR FEWER AMENITIES.

I THINK PEOPLE ACCEPT WE DON'T GET EVERYTHING WE WANT.

SO IT SEEMS LIKE THIS IS A GOOD TIME TO CONSIDER STOPPING OR REDUCING EXISTING BUDGET EXPENDITURES THAT ARE NOT HIGH VALUE.

AND AT THE SAME TIME NOT STARTING NEW PROJECTS OR NEW EXPENSES.

AGAIN, THAT ARE NOT HIGH VALUE TO THE COMMUNITY AS A WHOLE.

THIS IS NOT THE TIME TO SPEND A LOT OF MONEY ON DISCRETIONARY THINGS OR ITEMS THAT ARE JUST LIMITED VALUE TO THE COMMUNITY.

THIS IS A GREAT TIME TO FIND LESS EXPENSIVE WAYS OF ACCOMPLISHING THINGS THAT WE MIGHT CONSIDER ESSENTIAL.

AND NOT JUST CONTINUE TO DO THINGS IN OLD OR EXPENSIVE WAYS.

SO COVID OPENED UP OUR EYES THAT WE CAN DO A LOT OF THINGS DIFFERENTLY.

AND THE COMMUNITY WILL SURVIVE.

AND THE COMMUNITY WILL THRIVE BECAUSE IT WILL BE SOMETHING DIFFERENT AND MAYBE WE'LL GET RID OF SOME THINGS THAT WE NEVER NEEDED IN THE FIRST PLACE.

AND THIRD, SINCE INCORPORATION IS OFF THE TABLE, AT LEAST FOR THE NEXT FOUR YEARS, WE SHOULD NOT SIT ON THOSE RESERVES.

TO ME, WE SHOULD BE REDIRECTING ALL RESERVES, NOT JUST INCORPORATION, BUT ALL RESERVES TOWARDS BOOSTING ECONOMIC RECOVERY.

THIS IS A GOOD TIME TO MOVE ON PROJECTS THAT WILL BRING IN TOURISM, EXPAND CONVENTIONS, BRING IN MONEY TO THE COMMUNITY.

THIS INCLUDES THE CORPORATION RESERVES OR ANY OTHER RESERVES THAT WE HAVE SQUIRRELLED AWAY, EXCEPT CAPITAL REPLACEMENT, WHICH IS ALREADY PART OF A PROGRAM.

SO GOOD TIME TO BUILD THINGS, TO BRING IN REVENUE, TOURISM, HELP THE ECONOMIC RECOVERY.

NOT JUST SIT ON MONEY IN THE HOPE THAT SOME TIME WAY DOWN THE ROAD IT MIGHT BE OF SOME BENEFIT.

SO THOSE ARE MY THREE SUGGESTIONS THIS MORNING.

I APPRECIATE THE CHANCE TO PROVIDE INPUT AND I HOPE YOU'LL CONSIDER THOSE THOUGHTS AS YOU GO THROUGH THE BUDGET PROCESS.

GOOD LUCK.

THANK YOU.

CHAIRMAN: THANK YOU, MARK.

WE'LL TAKE OUR NEXT CALLER.

>> THIS IS STEVE LAKY.

GOOD MORNING, EVERYONE.

FEW COMMENTS ON THE PLANNING INITIATIVES, BUDGET INITIATIVES, NUMBER 12 THAT SUGGESTS REDUCTION OR ELIMINATION OF ALMA OMEGA, THAT SUBJECT OF COURSE COMES UP VIRTUALLY EVERY BUDGET CYCLE IN A VARIETY OF DIFFERENT WAYS.

THE THING THAT STRUCK ME PARTICULARLY ABOUT THE INFORMATION THAT WAS SUPPLIED THIS YEAR WAS THE QUANTITY, QUALITY AND DIVERSITY OF SERVICES THAT ARE IN FACT OFFERED BY ALMA OMEGA, OR PROVIDED.

IF ANYTHING, I THOUGHT THE DATA ACTUALLY LOOKED LIKE YOU'RE TRYING TO INCREASE THE BUDGET OF ALMA OMEGA, THEY'RE DOING SUCH A DIVERSE JOB IN THE COMMUNITY, IF ANYTHING, THE DOLLARS SHOULD GO UP.

OF COURSE THIS YEAR YOU ARE GOING TO BE LOOKING AT EVERYTHING TIGHTLY, WHICH OF COURSE YOU MUST DO.

IF FOR WHATEVER REASON, WE DO HAVE TO REDUCE OUR ALPHA OMEGA EXPENDITURES, FOR SOME REASON, SO BE IT.

BUT I CERTAINLY WOULD NOT SUGGEST, I WOULD BE VERY DISAPPOINTED IF WE ACTUALLY

[00:10:02]

ELIMINATED THE SERVICE.

THERE IS A VERY SOFT BENEFIT TO IT AS WELL AND THAT IS THAT IT ADDS GREATLY TO OUR BRAND, WHICH IS THE PREVIOUS CALLER MENTIONED IN TERMS OF ATTRACTING AND KEEPING NEW EMPLOYERS AND MAKING US A UNIQUE COMMUNITY WHICH OF COURSE, WE ARE.

AND CONTINUING THAT MOMENTUM.

I WOULD SUBMIT TO YOU THAT ALMA OMEGA IS CERTAINLY A SIGNIFICANT PART OF THAT.

SO I AGAIN, I THOUGHT THE DATA REFLECTED IF ANYTHING THAT BUDGET OUGHT TO GO UP.

NUMBER 17, THE ADDITIONAL ENTRANCE AND MONUMENT SIGNS THAT DIRECTOR BROWN SUGGESTED, YOU KNOW, BACK TO THE NOTION OF OUR BRANDING, I THINK ALL OF OUR SIGNS INTO OUR NEIGHBORHOODS, DIRECTION SIGNS, INFORMATION SIGNS AROUND THE WOODLANDS ARE ALWAYS VERY WELL RECEIVED BY RESIDENTS AND VISITORS.

SO I'M NOT FAMILIAR WITH THE DETAILS OF WHAT DIRECTOR BROWN IS SUGGESTING, I DID SEE A LOT OF OPTIONS THAT WERE OFFERED IN THE HANDOUT.

SO I CLEARLY BELIEVE THAT ADDITIONAL SIGNAGE AND THAT IS NOT TOO EXPENSIVE, AROUND OUR COMMUNITY AND ENHANCING PRESENT SIGNAGE EITHER WITH LIGHTING OR WHATEVER, I THINK MAKES GOOD SENSE.

WITH REGARDS TO NUMBER 19, HAZARDOUS WASTE COLLECTION, IT'S BEEN THE FACILITY ON PRUITT ROAD DOES AN OUTSTANDING JOB.

I FOUND THE SERVICES THAT THEY PROVIDE WHEN WE BRING TRASH BACK ARE OUTSTANDING.

UNLESS THERE IS A TRULY DANGER OR HEALTH ELEMENT TO THE WHOLE THING, THEN WE HAVE A LOT OF STUFF SITTING IN HOUSES THAT POSE A DANGER IN THE WOODLANDS, I WOULD SUGGEST THAT WE STICK WITH THE COUNTY SERVICE THAT IS PRESENTLY IN PLACE AND AGAIN, THAT I THINK IS VERY EFFECTIVE.

LASTLY, I SEE THE RESIDENTIAL SURVEY NUMBER 29 IS BACK IN THE COOKER.

I CERTAINLY SALUTE HAVING THE RESIDENTIAL SURVEY.

IT SEEMS LIKE IT'S BEEN A WHILE SINCE WE'VE HAD ONE.

AGAIN, AS THE PREVIOUS CALLER MENTIONED, EVEN THOUGH INCORPORATION HAS BEEN DEFERRED FOR HOWEVER LONG, HAVING TARGETED QUESTIONS ABOUT INCORPORATION IN THAT SURVEY I THINK WOULD MAKE ALL OF THE SENSE IN THE WORLD.

IT IS THE ONLY OPPORTUNITY THAT WE HAVE EVERY 18 MONTHS TO TWO YEARS TO HAVE A STATISTICALLY VALID SET OF DATA FROM OUR RESIDENTS.

ELECTIONS CERTAINLY AREN'T IT, BECAUSE TURNOUT UNFORTUNATELY REMAINS AT VERY LOW LEVELS.

THE FACT THAT THE STATISTICAL VALIDITY OF THE SURVEYS THAT WE TAKE AND HAVE FOREVER, SEEMS LIKE, IS PARTICULARLY CRITICAL AND I THINK AT THIS STAGE OF THE GAME IT'S PARTICULARLY IMPORTANT.

AGAIN, THANK YOU ALL FOR YOUR SERVICE.

AND LET'S FORGE AHEAD THROUGH THIS BUDGET PROCESS AND I KNOW YOU ALL WILL DO AN EXCELLENT JOB.

THANKS VERY MUCH.

>> THANK YOU, STEVE.

AND DO WE HAVE ANY ADDITIONAL CALLERS?

>> NO, SIR.

CHAIRMAN: ALL RIGHT.

WE'LL CLOSE PUBLIC COMMENT.

WE'LL NOTE DIRECTOR HAS JOINED US.

2020 TAX RATE AND VOTER APPROVAL TAX RATE.

[5. Receive, consider and accept a report regarding the 2020 no-new-revenue tax rate and voter-approval tax rate; ]

MONIQUE.

>> UNFORTUNATELY, WE DO NOT HAVE THAT INFORMATION YET FROM THE TAX ASSESSOR'S OFFICE.

WE HAD PLACED THIS ON THE AGENDA IN HOPES OF HAVING RECEIVED THE INFORMATION BY NOW BUT WE HAVE NOT.

SO IT'S ON THE AGENDA FOR EVERY DAY THIS WEEK.

SO AS SOON AS WE DO RECEIVE THAT INFORMATION, IT WILL BE SHARED WITH THE BOARD.

BUT FOR THIS MORNING, I DON'T HAVE INFORMATION REGARDING CERTIFIED PROPERTY TAX VALUES OR THE EFFECTIVE RATE AND ROLLBACK RATES.

>> ALL RIGHT.

SO WE'RE GOING TO DEFER AGENDA 5.

SOMEHOW BY A MIRACLE, WE HEAR SOMETHING IN THE MIDDLE OF THIS MEETING, WE CAN COME BACK TO IT.

I THINK IT'S A CRITICAL DATA ELEMENT FOR US TO REALLY MAKE GOOD DECISIONS HAVING THE EFFECTIVE RATES AND HAVING A BETTER IDEA WHAT WE'RE LOOKING AT FROM THAT STANDPOINT.

SO I APPRECIATE THE UPDATE.

AND HOPEFULLY WE CAN GET THAT SOONER THAN LATER.

[6. Receive, consider and act upon the 2021 Preliminary Budget for The Woodlands Township;]

WE'LL GO TO AGENDA ITEM 6, RECEIVE, CONSIDER, ACT UPON THE 2021 BUDGET.

MONIQUE IS GOING TO CONTINUE.

>> THANK YOU.

LET ME PULL THIS UP HERE FOR US.

[00:15:03]

THE FIRST THING I WOULD LIKE TO SAY ABOUT THIS PRESENTATION THIS MORNING IS IT'S NOT SO MUCH, AT LEAST IT'S NOT MY ATTENTION THAT IT BE SO MUCH OF A PRESENTATION, AS JUST A SERIES OF SLIDES TO HELP GUIDE ME AND THE BOARD OF DIRECTORS THROUGH ALL OF THE DIFFERENT ELEMENTS OF THE BASE BUDGET THAT WE'RE GOING TO DISCUSS THIS MORNING.

SO I HOPE THIS IS VERY JUST INTERACTIVE.

THIS ISN'T JUST ME PRESENTING SLIDE AFTER SLIDE AT ANY POINT IN TIME THAT THE BOARD MEMBERS WANT TO STOP AND HAVE A DISCUSSION AROUND THAT TOPIC, THEN I THINK THAT WOULD BE THE BEST WAY TO GO THROUGH THIS.

HAVING SAID THAT, FIRST I WANTED TO GO OVER WHAT THIS WEEK IS GOING TO LOOK LIKE WITH OUR BUDGET WORKSHOPS.

SO THE PRIMARY PURPOSE OF TODAY IS TO REVIEW AND DISCUSS THE, THAT SAYS 2020, I MEAN FOR THAT TO SAY THE 2021 BASE BUDGET.

AND IF WE HAVE TIME AT THE END OF THE MEETING TODAY, THE BOARD CAN CHOOSE TO START ON THE BUDGET INITIATIVES.

BUT AGAIN, THE PRIMARY GOAL IS THE BASE BUDGET TODAY.

HOPEFULLY BY TOMORROW, IF NOT DURING TODAY'S MEETING, WE WILL HAVE THE CERTIFIED PROPERTY TAX VALUES AND THE EFFECTIVE IN THE ROLLBACK RATES AND THEN WE WOULD ALSO DISCUSS, START OUR DISCUSSION OF THE BUDGET INITIATIVES.

AND THEN ON THE 5TH AND REALLY ALSO FOR THE AUGUST 6TH AND 7TH, AGENDAS ARE ALL THE SAME.

WE MAY NOT NEED ALL OF THE MEETINGS, BUT IF WE DO, THESE ARE THE ITEMS THAT WE WOULD NEED TO CONTINUE TO WORK THROUGH.

WHICH WOULD BE AGAIN, RECEIVING THE RATES AND ANALYZING WHAT THE IMPACTS OF THOSE ARE.

COMPLETING THE DISCUSSION OF THE BUDGET INITIATIVES.

IN THE PAST, THE PROCESS HAS WORKED AS THE BOARD WOULD THEN VOTE ON PROPOSED BUDGET ADJUSTMENTS, MEANING THOSE INITIATIVES THAT THE BOARD WANTED TO ADJUST THE BASE BUDGET BY.

AND THEN YOU WILL TAKE A RECORDED VOTE ON THE PROPOSED 2020 TAX RATE AND THE 2020 TAX RATE FUNDS THE 2021 BUDGET.

DEPENDING ON WHAT THAT PROPOSED TAX RATE IS, LET ME CLARIFY THAT, THAT IS NOT THE ADOPTION OF THE TAX RATE.

THAT COMES LATER ON IN THE PROCESS.

THIS IS JUST THE PROPOSED TAX RATE.

DEPENDING ON WHAT THAT IS SET AT, WILL DETERMINE WHAT TYPES, IF ANY, OF PUBLIC NOTICES AND WHETHER A PUBLIC HEARING WILL BE REQUIRED.

WE'VE TALKED ABOUT THIS LAST WEEK.

BUT THE BASE BUDGET, THE PRIMARY THINGS TO TAKE AWAY FROM HERE IS IT MAINTAINS EXISTING SERVICE LEVELS, BASED ON THE CURRENT PROPERTY TAX RATE OF 22.4 CENTS AND IT DOES NOT INCLUDE BUDGET INITIATIVES.

AS WE MOVE INTO BUDGET INITIATIVES, THE BOARD WILL DISCUSS THOSE AND DETERMINE ADJUSTMENTS TO THE BASE BUDGET AND EXAMPLES OF BUDGET INITIATIVES IN THE PAST HAVE INCLUDED LOOKING AT DIFFERENT PROPERTY TAX RATE SCENARIOS, ENHANCED NEW SERVICES OR AMENITIES, COULD BE A REDUCTION IN SERVICE LEVELS OR A CHANGE TO RESERVE GUIDELINES OR CHANGES TO THE DEBT MANAGEMENT PLAN.

WANTED TO REMIND ALL OF US THAT AS WE GO INTO THIS PROCESS, THERE IS A LOT OF UNCERTAINTY REGARDING THE PROJECTIONS AND THE ASSUMPTIONS WE USE.

THE BUDGET TASK FORCE LOOKED AT THIS IN DETAIL.

WE DISCUSSED IT LAST WEEK.

SO THERE ARE RISKS ON THE HIGH SIDE AND LOW SIDE OF WHATEVER ASSUMPTIONS END UP BEING IN THE BASE BUDGET.

BUT ONE OF THE KEY PRINCIPLES OR SOME OF THE KEY PRINCIPLES THROUGHOUT THIS BUDGET PROCESS IS WANTING TO MAKE SURE THAT WE MAINTAIN FINANCIAL STABILITY AND THAT WE CONTINUE THE HIGH LEVEL SERVICES THAT OUR RESIDENTS EXPECT.

ALSO WANTED TO AVOID MAKING PERMANENT CHANGES TO OUR SUCCESSFUL SERVICE MODEL.

OR AT LEAST SIGNIFICANT PERMANENT CHANGES.

BECAUSE WE DO BELIEVE THE FINANCIAL IMPACTS OF THE PANDEMIC ARE GOING TO BE TEMPORARY.

AND THAT THE TOWNSHIP IS IN A GREAT POSITION TO COME OUT OF THIS AS CONDITIONS IMPROVE.

SO TO THAT END, WE HAVE BUILT IN A LOT OF FLEXIBILITY INTO OUR BUDGET SO THAT IF OUR REVENUE PROJECTIONS ARE TOO OPTIMISTIC, WE HAVE WAYS THAT AUTOMATICALLY DEAL WITH THAT IN TERMS OF BEING ABLE TO REDUCE EXPENSES OR DEFER

[00:20:01]

CAPITAL PROJECTS OR EXPENSES.

WE DO HAVE RESERVE BALANCES THAT WE COULD USE AS A TEMPORARY FUNDING MEASURE, AS WE GO THROUGH THIS BUDGET PROCESS, WE'LL TALK ABOUT ALL OF THOSE DIFFERENT ELEMENTS OF BUDGET FLEXIBILITY BECAUSE THAT REALLY IS THE KEY TO A SUCCESSFUL BUDGET PROCESS DURING THESE UNCERTAIN TIMES.

SO JUST A REMINDER OF WHERE WE LEFT OFF LAST THURSDAY, WE DO HAVE TOTAL OPERATING BUDGET, THAT IS BASICALLY FLAT.

IT'S DECREASING BY ABOUT 400,000, BASED ON CURRENT ASSUMPTIONS, WHICH IS ABOUT 0.3 PERCENT DECREASE.

AND IN TERMS OF EXPENDITURES, WE HAVE DECREASED THE BUDGET BY FIVE PERCENT OR $6.7 MILLION.

AGAIN, A LOOK OF HOW WE ARE ALLOCATING OUR $129 MILLION IN ANTICIPATES REVENUES.

THEY ARE BEING DISTRIBUTED TO THE OPERATING EXPENSES.

OUR RESERVE BALANCES, PAYMENT OF DEBT SERVICE.

THERE IS A SMALL PORTION OF CURRENT YEAR TAX REVENUES USED FOR CAPITAL EXPENDITURES, THE REST ARE FUNDED THROUGH OUR CAPITAL RESERVE.

AS WE DISCUSSED LAST WEEK, AFTER WE ACCOUNT FOR ALL OF THAT, WE HAVE AN UNDESIGNATED FUND BALANCE.

A BALANCE THAT HAS NOT BEEN ALLOCATED TO ANY SPECIFIC CATEGORY YET OF ABOUT 640,000.

AND SO WE'RE GOING TO TALK ABOUT EACH OF THESE ELEMENTS SHOWN ON THIS PAGE TODAY AS WE GO THROUGH THE BASE BUDGET.

SO HERE IS A LOOK AT OUR REVENUES BY TYPE.

OUR SALES AND USE TAX IS OUR PRIMARY REVENUE SOURCE, MAKING UP 42 PERCENT OF TOTAL REVENUES.

PROJECTED AT $54 MILLION FOR 2021.

PROPERTY TAX MAKES UP ABOUT 36 PERCENT OF OUR REVENUE SOURCES, PROJECTED UNDER 46 MILLION.

HOTEL TAX IS AT 6 PERCENT.

AT ABOUT $8.2 MILLION.

AND THEN THE REST OF THE ITEMS SHOWN THERE MAKE UP THE REMAINING 16 PERCENT OF OUR BUDGET AND MOST OF THOSE REVENUE SOURCES HAVE A DIRECT OFFSET IN EXPENSES.

>> MONIQUE.

>> YES, MA'AM.

>> CHAIRMAN, IF I MAY ASK A QUESTION.

IF YOU COULD GO BACK ONE SLIDE.

YOU MAY BE COMING TO THIS.

I DON'T MEAN TO JUMP AHEAD.

BUT WHEN YOU SPEAK TO REVENUE TYPE HOTEL TAX, MADE.2 MILLION, HOW MUCH OF THIS IS PROJECTED LOWER THIS YEAR, IT CONCERNS ME SIMPLY BECAUSE AS MUCH AS I WANTED TO RECOVER, I WANT TO ENSURE THAT WE HAVE PROJECTIONS ALSO ARE CONSERVATIVE.

>> THE HOTEL TAX THAT IS BUILT RIGHT NOW INTO THE 2021 BUDGET, 85 PERCENT OF THE 2020 BUDGET LEVELS.

BUT I DO HAVE A SERIES OF SLIDES COMING UP TALKING SPECIFICALLY ABOUT HOTEL TAX THAT WE CAN GO INTO MORE DETAIL.

IF THAT IS OKAY.

>> OF COURSE.

THANK YOU.

>> SO AS A REMINDER, THESE ARE THE DIFFERENT COMPONENTS OF OUR REVENUE SOURCES AND WHAT EACH IS DOING IN THE 202 IS BUDGET COMPARED TO THE 2020 BUDGET.

GRANT FUNDS IS OUR LARGEST INCREASE.

OF COURSE, THOSE ARE DIRECTLY OFFSET BY EXPENSES.

SO IT'S NOT LIKE IT'S TRULY GENERATING CASH FLOW.

AND WE'LL TALK MORE ABOUT THOSE IN A LITTLE BIT.

OUR OTHER INCOME IS CONTRACT REVENUE.

THAT WAS NEGOTIATED BY THE BOARD TOWARDS THE END OF LAST YEAR.

RELATED TO THE COMPREHENSIVE COMMUNITY SERVICES AGREEMENT.

RIGHT NOW, UNTIL WE GET THE CERTIFIED PROPERTY TAX INFORMATION, PROPERTY TAX IS PRETTY MUCH FLAT IN THE BUDGET.

SALES AND USE TAX ASSUMPTIONS HAVE THE BUDGET FOR 2021 EQUAL TO THE 2020 BUDGET.

AND AGAIN, WE'LL TALK ABOUT THAT IN MORE DETAIL.

AND THEN WE'RE SEEING DECLINING REVENUES IN INTEREST INCOMES, DUE TO LOWER INTEREST RATES, OUR BUS FARES DUE TO LOWER RIDERSHIP AND HOTEL TAX, DUE TO THE IMPACTS OF THE PANDEMIC ON THAT PARTICULAR INDUSTRY.

I'M NOT GOING TO SPEND ANY TIME REALLY ON PROPERTY TAX REVENUE UNTIL WE GET THE CERTIFIED PROPERTY TAX ROLLS.

BUT AS I MENTIONED CURRENTLY IN THE 2021 BUDGET, WE ARE FLAT ON PROPERTY TAX REVENUE.

SO WE'LL MOVE ON TO SALES AND USE TAX.

OUR TOTAL BUDGET IS 54.5 MILLION, THAT IS MADE UP OF A BASE ONE PERCENT TAX LEVIED IN THE TOWNSHIP AND THEN THERE IS AN ADDITIONAL 1 PERCENT LEVIED IN THE

[00:25:01]

ECONOMIC DEVELOPMENT, NO RESTRICTIONS ON THE BASE 1 PERCENT TAX IN TERMS OF USE.

BUT THE ECONOMIC DEVELOPMENT ZONE IS USED TO FUND TWO PROJECTS, THE OUTSIDE PORTIONS OF THE MALLS, AND MARKET STREET, THE PUBLIC PORTIONS OF THAT.

AND THEN THE OVERWHELMING MAJORITY OF THE EDZ IS USED TO FUND PUBLIC SAFETY, SPECIFICALLY THE FIRE DEPARTMENT COSTS.

THIS IS JUST A LOOK BACK HISTORICALLY AND THEN IF YOU FOCUS ON THE LAST FOUR COLUMNS, IN 2019, WE DID, WE HAD A STRONG YEAR, ENDING AT $55.9 MILLION, UP UNTIL THE PANDEMIC, THE FIRST COUPLE OF MONTHS OF 2020 LOOKED REALLY GOOD.

WE HAD A BUDGET OF $54.5 MILLION.

BUT WE HAVE DECREASED THAT FORECAST TO $48.4 MILLION.

AND THEN AS I MENTIONED, WE SET THE 2021 BUDGET AT THE SAME LEVEL AS 2020.

WE LOOKED AT THIS LAST WEEK, BUT HERE IS A REMINDER IN TERMS OF THE GROWTH RATES FOR SALES AND USE TAX.

VERY HIGH GROWTH RATES IN THE EARLIER PARTS OF THIS CHART BETWEEN 2012 AND 2014, LARGE GROWTH IN THE TOWNSHIP.

MORE RECENTLY, PRIOR TO THE PANDEMIC, WE WERE IN THE TWO AND A HALF TO THREE PERCENT ANNUAL GROWTH RANGE AND THEN AS WE'VE DISCUSSED, WE LOWERED THE FORECAST.

AND THEN BOUNCED BACK UP IN 2021 TO THE 2020 BUDGET LEVEL.

SO HERE I'M GOING TO GO INTO MORE DETAIL ABOUT SALES TAX.

AGAIN, IF THERE IS ANY QUESTIONS, LET ME KNOW OR IF THE BOARD WANTS TO DISCUSS THIS FURTHER.

THIS IS OUR LATEST SALES TAX REPORT FOR THE MONTH, THERE IS A TWO MONTH LAG ON SALES TAX.

SO WHAT I MEAN BY THAT IS WHEN WE LOOK AT THE JUNE NUMBERS THAT RELATED BACK TO APRIL ACTIVITY, AS WE LOOK AT THE JULY NUMBERS, THAT RELATES BACK TO MAY ACTIVITIES.

SO OBVIOUSLY, WE'RE SEEING THE EFFECTS OF THE PANDEMIC DURING THOSE TIMES AND WE WERE 26 PERCENT IN JUNE BELOW OUR BUDGET ESTIMATES, AND 23 PERCENT BELOW IN THE JULY REPORT.

ON AN ANNUAL BASIS, WE ARE OFF OUR BUDGET BY 5.6 PERCENT.

>> MONIQUE, CAN YOU SHARE WITH US THE INCREASE IN SALES TAX COLLECTIONS FROM THE INTERNET SALES TAX?

>> YES, SIR.

THAT IS COMING UP IN JUST A COUPLE OF SLIDES.

SO WHEN WE LOOK AT SOME OF OUR MAJOR CATEGORIES OF SALES TAX COLLECTIONS, THIS IS WHERE WE ARE, YEAR TO DATE, JULY 2020, COMPARED TO YEAR TO DATE 2019, SO IN TERMS OF RETAIL, WE ARE ONLY OFF BY ABOUT THREE PERCENT OR 439 PERCENT AND I MEAN, I KNOW THAT IS ALWAYS SIGNIFICANT FOR US.

BY FAR OUR LARGEST SOURCE OF SALES AND USE TAX REVENUE, BUT TO BE ONLY OFF THREE PERCENT AT THIS POINT IN TIME IS FORTUNATE FOR US.

COMPARED TO OTHER CITIES THAT WE'VE BEEN LOOKING AT.

AND I'M GOING TO TALK ABOUT THE RETAIL, ONLINE IMPACT ON THAT IN JUST A SECOND.

THE FOOD SERVICES IS WHERE WE ARE SEEING ONE OF OUR LARGEST DECREASES, ALMOST $810,000 OR ALMOST 20 PERCENT DROP COMPARED TO WHERE WE WERE LAST YEAR.

AND I THINK I MENTIONED LAST WEEK, OIL AND GAS HAS ALSO SEEN A SIGNIFICANT DROP, 65 PERCENT, COMPARED TO LAST YEAR.

SOME OF THIS HAS TO DO WITH THE PANDEMIC.

MOST OF THIS IS RELATED TO SOMETHING THAT WE WERE ALL AWARE OF, WHICH IS WITH THE ACQUISITION OF ANADARCO, WHO HAD ITS HEADQUARTERS HERE IN THE TOWNSHIP, WE HAVE LOST A SIGNIFICANT AMOUNT OF SALES TAX ASSOCIATED WITH THAT.

AS I MENTIONED, RETAIL IS DOWN THREE PERCENT.

ONE OF THE REASONS THAT IT'S ONLY DOWN THREE PERCENT IS BECAUSE OF THE SALES TAX WE'RE RECEIVING ON OUR INTERNET SALES.

YOU CAN SEE FROM THIS TIME LAST YEAR, WE HAVE HAD AN ALMOST TWO MILLION DOLLARS IN GROWTH, ABOUT 167 PERCENT.

SO THAT IS VERY SIGNIFICANT AND WE FEEL LIKE WE STILL HAVE ROOM FOR GROWTH IN THAT AREA.

SOME OTHER POSITIVE THINGS IN OUR SALES TAX REVENUES AND WHY WE HAVE A, WHEN I SAY WE HAVE A POSITIVE OUTLOOK AND FEEL LIKE WE ARE WELL POSITIONED TO BOUNCE BACK WHEN THE EFFECTS OF THE PANDEMIC EASE UP SOME, WE HAVE THESE, OTHER THAN RETAIL AND FOOD SERVICES, THESE ARE OUR NEXT FOUR HIGHEST CATEGORIES OF REVENUE SOURCES FOR SALES TAX AND ALL OF THOSE ARE POSITIVE.

[00:30:04]

SO FOR INFORMATION, YOU CAN SEE WE'RE UP ABOUT 13.6 PERCENT.

MANUFACTURING, 5.2 PERCENT, PROFESSIONAL SERVICES, 5.4 AND WHOLESALE TRADE, 11 PERCENT.

SO THAT REALLY HELPS OVERALL IN OUR POSITION FOR SALES TAX.

THIS WE TALKED ABOUT A COUPLE OF WEEKS AGO, BUT I WANTED TO REMIND THE BOARD AND SEE IF THERE WAS ANY FURTHER DISCUSSION ON THIS.

THE BUDGET TASK FORCE LOOKED AT THIS AND THIS WAS SHARED WITH THE BOARD BACK AT THE FIRST BOARD MEETING IN JULY.

WHAT IS SHADED IN BLUE ARE ACTUAL SALES TAX COLLECTIONS FOR THE YEAR.

AND THEN WHAT IS SHADED IN YELLOW IS PROJECTIONS, LOOKING AT DIFFERENT EXAMPLES OR SCENARIOS OF WHERE WE MIGHT END UP FOR THE YEAR.

SO IF WE WERE TO CONTINUE AT ABOUT A 25 PERCENT OFF BUDGET FOR THE REST OF THE YEAR, AT THE END OF THE YEAR, YEAR TO DATE, WE WOULD HAVE ABOUT 13.5 PERCENT DECREASE IN SALES TAX REVENUES COMPARED TO WHAT WE BUDGETED.

ANOTHER SCENARIO THAT WE LOOKED AT WAS IF WE WERE, HAD SLIGHT IMPROVEMENT AND WE WERE AT ABOUT 20 PERCENT OFF BUDGET FOR THE REMAINDER OF THE YEAR AND THAT WE WOULD END UP WITH 11.2 PERCENT OFF OF WHERE WE ARE FROM OUR ORIGINAL 2020 BUDGET.

AND THIS BASED ON THE INFORMATION AND THE DATA THAT WE WERE LOOKING AT ABOUT A MONTH AGO IS WHERE WE SETTLED AND WHAT IS REFLECTED IN THE 2021 PRELIMINARY BUDGET.

IS THIS SCENARIO RIGHT HERE AT 11.2 PERCENT LOSS.

DON'T TRY TO LOOK AT ALL OF THE DIFFERENT THINGS ON THIS SHEET.

THIS IS OUR SNAPSHOT OF OUR FINANCIAL PLAN FOR 2020.

I'VE CUT OFF SOME OF THE DIFFERENT LINE ITEMS TO MAKE IT LESS BUSY, BUT THE POINT HERE IS AT THAT 11.2 PERCENT LOSS, AND EVEN AT A 15 PERCENT LOSS, WHICH IS EVEN GREATER THAN A 25, WE WERE LOOKING AT 25 PERCENT LOSS SCENARIO AND WE WERE AT 13.5 PERCENT LOSS FOR THE YEAR.

SO EVEN IF IT WAS BEYOND THAT, 15 PERCENT, WHAT IS HIGHLIGHTED IN BLUE THERE ARE THE DIFFERENT ADJUSTMENTS THAT WE HAVE MADE TO THE 2020 BUDGET WITH THE GUIDANCE OF THE BUDGET TASK FORCE AND THEN THE BOARD OF DIRECTORS, IN ORDER TO MAKE SURE THAT WE HAD A BALANCED BUDGET GOING FORWARD.

AND THEN WHAT IS SHOWN IN THE PINK IS THAT, IT SHOWS THAT WE DO HAVE A BALANCED BUDGET BECAUSE WE ARE NOT UTILIZING ANY RESERVES UNDER 11.2 PERCENT LOSS AND EVEN UNDER THE 15 PERCENT LOSS, IT'S ONLY SHOWING 40,000 HERE, WHICH I KNOW WE HAVE, WE HAVE ADDITIONAL SAVINGS IN THE 2020 BUDGET FROM WHAT IS SHOWN HERE.

REALLY, ANYWHERE BETWEEN THESE LOSS SCENARIOS, 15 PERCENT, WE WOULD NOT BE UTILIZING OUR RESERVE BALANCES IN ORDER TO MAINTAIN A BALANCED BUDGET.

SO BASED ON ALL OF THAT INFORMATION, THIS IS HOW WE LOOKED AT COMING UP WITH A PROJECTION FOR THE 2021 BUDGET.

SO BASED ON THE 11.2 PERCENT LOSS IN SALES TAX REVENUES ON THE 2020 FORECAST, WHICH IS THE DARKER BROWN SHADED BAR THERE, WE LOOKED AT SOME DIFFERENT SCENARIOS FOR PROJECTIONS FOR THE 2021 BUDGET.

THOSE ARE HIGHLIGHTED AND SORT OF SHADED IN THE LIGHT GREEN ON YOUR SCREEN.

SO ONE OF THE OPTIONS WAS LOOKING AT A 95 PERCENT OF WHAT WE ACTUALLY COLLECTED IN 2019.

A SECOND OPTION, WHICH IS THE OPTION REFLECTED IN YOUR PRELIMINARY BUDGET, IS USING 100 PERCENT OF THE 2020 BUDGET.

AND THAT IS WHERE WE'RE COMING UP WITH 12.7 PERCENT GROWTH FACTOR.

AND THEN WE ALSO LOOKED AT USING 100 PERCENT OF THE 2019 ACTUAL, WHICH WOULD HAVE MADE A GROWTH FACTOR OF 16 PERCENT.

AND AGAIN, THE BUDGET TASK FORCE AND BOARD ENDED UPLANDING IS SOMEWHERE IN THE RIGHT NOW AND USING THAT 12.7 PERCENT GROWTH FACTOR.

SO ANY QUESTIONS ON THIS?

>> YEAH.

I KNOW I RAISED MY CONCERN ON THURSDAY.

I'M STILL HESITANT TO THINK THAT WE'RE GOING TO HAVE THAT GOOD OF A SALES TAX COLLECTION YEAR.

MY THEORY BEHIND THAT IS AS BAD AS THE TWO MONTHS WE'VE COLLECTED DURING COVID BEING DOWN, MID 20S, ALL OF THOSE MONTHS INCLUDED PPP FUNDING AS WELL AS AN ADDITIONAL $600 TO UNEMPLOYMENT BENEFITS THAT CAME IN THAT FEDERAL STIMULUS.

WE HAVE NO CERTAINTY OF THAT KIND OF FUNDING TO PROP UP THE ECONOMY GOING FORWARD.

[00:35:03]

I KNOW IT'S IN CONGRESS RIGHT NOW AND THEY'RE DEBATING ANOTHER MEASURE.

BUT I THINK WE GOT AN ARTIFICIAL SAFETY NET THROUGH THE PPP PROGRAM, THROUGH THE UNEMPLOYMENT ENHANCED BENEFITS.

AND AS THAT MONEY EXITS THE ECONOMY, AND IF WE CONTINUE TO HAVE A COVID PRESENCE WITHOUT A VACCINE, I THINK WE'RE LOOKING AT THE LAST FEW MONTHS ARE HARDLY GOING TO BE PREDICTIVE OF THE FOREGOING MONTHS.

ONE OF THE THINGS THAT IS INTERESTING, YOU HAVE THE ONE SLIDE WHERE WE SHOW A DECREASE THROUGH THE END OF THE YEAR.

WHAT A SLIDE WOULD HAVE TO LOOK LIKE SHOWING NONE OF THOSE DECREASES CONTINUING BEYOND DECEMBER.

BECAUSE WE WOULD BE AT 100 PERCENT OF THE 2020 BUDGET.

SO I KNOW ONE OF THE BIG QUESTIONS I DID HAVE IS THE SALES TAX FROM INTERNET SALES.

BECAUSE THAT IS PROBABLY WHERE EVERYBODY IS SHOPPING RIGHT NOW.

I DON'T KNOW IF I MISSED THE SLIDE.

BUT HOW MUCH OF THAT IS GROWING OVER WHAT WE EXPECTED?

>> 167 PERCENT, GORDY.

>> IT MIGHT BE A HUGE NUMBER BUT IT MIGHT NOT BE THAT MUCH TOTAL DOLLAR WISE.

>> I THINK IT'S 1.6 MILLION SO FAR THIS YEAR, ISN'T IT?

>> YES.

LET ME GO BACK.

>> 1.9 MILLION.

>> THANK YOU, BOB.

>> RIGHT HERE.

>> OKAY.

BUT WHAT DID WE HAVE BUDGETED FOR 2020?

>> IN TERMS OF INTERNET SALES? CHAIRMAN: CORRECT.

>> I WANT TO SAY AROUND 250,000, BECAUSE WE DIDN'T KNOW WHERE WE WOULD BE IN TERMS OF THAT.

WE HAD STARTED SEEING COLLECTIONS FROM OUR INTERNET SALES, SOME OF THE MAJOR PLATFORMS. WE WERE REALLY CONSERVATIVE IN THAT GROWTH PERCENTAGE FOR 2020.

CHAIRMAN: OKAY.

BUT THIS 1.9 IS STILL REFLECTIVE IN THE NEGATIVE 13.5 PERCENT PROJECTED?

>> THAT IS CORRECT.

YES, SIR.

CHAIRMAN: EVEN THOUGH IT'S GREATER THAN EXPECTED, THE AMOUNT COLLECTED IS STILL IMPACTED DRAMATICALLY?

>> YES, SIR.

THAT IS CORRECT.

IN TERMS OF THE BRICK AND MORTAR STORES, WE HAVE SEEN A SHARP DECLINE IN THAT.

IT'S OUR INTERNET SALES THAT ARE HELPING.

CHAIRMAN: PROP IT UP.

>> YES.

>> MONIQUE, 1.9, AS OF JUNE AND JULY NUMBERS, IS THAT REALLY APRIL AND MAY?

>> IT'S YEAR TO DATE THROUGH MAY.

SO YES.

BECAUSE IT'S TWO MONTH LAG.

>> YES.

SO WE DON'T KNOW REALLY FOR THE NEXT, FOR THE NEXT 6 MONTHS, IF IT WILL CONTINUE OR IF THERE WILL BE A LAG IN PEOPLE BEING ABLE TO SPEND THAT MONEY.

I JUST I HAVE CONCERN WITH DOING 100 PERCENT OF THE SALES TAX FROM THAT SLIDE THAT YOU SHOWED.

I WOULD THINK 95 PERCENT WOULD BE MORE CONSERVATIVE WHERE WE ARE RIGHT NOW.

95 PERCENT OF THE 2019 ACTUAL.

IS WHAT I FEEL IS A BETTER REFLECTION OF WHAT WE NEED TO USE.

CHAIRMAN: I'M PROBABLY MORE PESSIMISTIC THAN THAT.

AND I'M AN OPTIMIST.

>> THE ONLY THING I WILL SAY ABOUT THIS IS, THE POINT I GUESS WHERE WE'RE GOING WITH THIS WHOLE THING IS PRETTY CONFIDENT THAT WE'RE GOING TO END UP THE YEAR, BECAUSE OF THE STEPS WE TOOK EARLY ON TO GET OUR BUDGET UNDER CONTROL, TO COME IN HAVING ALMOST, YOU KNOW, A VERY NEGLIGIBLE IMPACT ON ANY RESERVES.

FRANKLY, IF THE NUMBERS CHANGE IN THE NEXT 6 MONTHS, WE WILL BE LOOKING AT NEXT YEAR'S BUDGET AGAIN AND STARTING TO DO THE SAME EXERCISE.

I MEAN, I JUST IF WE DO THIS, TAKE IT DOWN TWO OR THREE, FOUR MILLION DOLLARS.

TAKE THE SALES TAX REVENUE DOWN TO 95 PERCENT, I DON'T THINK YOU HAVE A SURPLUS, AN UNDESIGNATED SURPLUS IN THE BASE BUDGET, IS THAT NOT CORRECT, MONIQUE?

[00:40:01]

>> YOU'RE CORRECT.

WE WOULD HAVE A NEGATIVE UNDESIGNATED BALANCE.

WE WOULD NO LONGER BE IN BALANCE.

YES, SIR.

>> THAT'S RIGHT.

SO YOU GUYS CAN DEBATE THIS.

BUT I MEAN, IT JUST MEANS CUTS TO SOME OTHER DEPARTMENTS TO GET THE BUDGET BACK DOWN TO BALANCE.

AND PROBABLY A COMPLETE REJECTION OF ALL OF THE BUDGET INITIATIVES GOING FORWARD.

>> I HAVE A QUESTION WITH THAT MONIQUE.

DO WE NOT HAVE CLOSE TO, WE'VE BEEN SO FISCALLY RESPONSIBLE ALL OF THESE YEARS, THE BOARD HAS.

DO WE NOT HAVE A VERY HEALTHY RESERVE?

>> YES, MA'AM.

WE DO.

AND WE'RE GOING TO TALK ABOUT THE DISCRETIONARY RESERVE BALANCES AVAILABLE.

THAT WAS THE KEY TO PROVIDING FLEXIBILITY IN THIS BUDGET.

BECAUSE WE KNOW THERE IS A LOT OF UNCERTAINTY.

IT'S IMPOSSIBLE TO, YOU KNOW, WHEREAS BEFORE WE USUALLY HAVE AT LEAST ENOUGH, TO MAKE SOME PRETTY EDUCATED PROJECTIONS ON WHERE WE ARE.

THIS YEAR WE CAN'T.

BUT IT'S THOSE RESERVES, THE ABILITY TO FURTHER DEFER CAPITAL, THE ABILITY TO FURTHER CUT EXPENSES, THAT IS THE ADJUSTMENTS WE WERE GOING TO CONTINUE TO MAKE, JUST AS DIRECTOR RIESER JUST MENTIONED, WE WOULD CONTINUE TO DO WHAT WE'VE DONE IN 2020.

>> MONIQUE, THIS IS DR. SHELLEY.

REGARDING THE CARES ACT THAT THE CHAIRMAN WAS DISCUSSING EARLIER, ARE WE ANYWHERE FURTHER ALONG ON ACTUALLY RECEIVING ANY FUNDS FROM HARRIS COUNTY OR FROM MONTGOMERY COUNTY THAT MIGHT ASSIST US IN ANY OF OUR EXPENDITURES HERE? I KNOW WE WERE TALKING 750,000 FROM HARRIS.

AND 6 MILLION FROM MONTGOMERY COUNTY POSSIBLY EVEN MORE.

WHERE DO WE STAND ON THAT? AND HOW COULD THAT ASSIST US IN OUR BUDGET?

>> TAKE THOSE IN SEVERAL PARTS.

IN TERMS OF BEING FURTHER ALONG WITH HARRIS, WE HAVEN'T RECEIVED WE HAVE NOT DIRECTLY RECEIVED ANY FUNDS YET.

BUT WE ARE FURTHER ALONG IN THE PROCESS PARTICULARLY WITH HARRIS COUNTY.

THEY HAVE SET UP A PROCESS AND WE HAVE ATTENDED SOME ONLINE MEETINGS AND SOME TRAINING ASSOCIATED WITH THAT.

WE HAVE RECEIVED THE FORMS THAT WE WOULD NEED IN ORDER TO DOCUMENT OUR REQUEST AND ARE CURRENTLY IN THE PROCESS OF DOING THAT.

IN LINE WITH THAT, THOUGH, IS A REQUEST TO FEMA.

SO IF WE, WHICH WE HAVE BEEN WORKING FROM THE BEGINNING, FOR SEVERAL MONTHS NOW, WITH AN FEMA REP THAT HAS BEEN ASSIGNED SPECIFICALLY TO THE TOWNSHIP.

THEY ARE NOT QUITE READY, THEIR PROCESS IS SET.

BUT THEY HAVEN'T OPENED UP THE WINDOW FOR US TO APPLY YET.

AND WHAT THE HARRIS COUNTY IS RECOMMENDING THAT WE APPLY TO FEMA FIRST, BECAUSE WE CAN GET 75 PERCENT REIMBURSEMENT.

AND THEN THE REMAINING 25 PERCENT REIMBURSEMENT WOULD COME FROM HARRIS COUNTY, IF THAT IS HOW WE CHOSE TO REQUEST.

BUT AGAIN, THEY HAVE TO HAVE PROOF THAT WE HAVE FILED WITH FEMA BEFORE THEY WILL DO THAT.

AND THAT IS WHAT WE'RE WAITING ON NOW.

>> BASED ON PER CAPITA? OR IS THAT BASED ON SERVICES PROVIDED BECAUSE OF COVID?

>> THE APORTIONMENT IS BASED ON PER CAPITA.

BUT IT'S NOT LIKE THEY'RE GOING TO GIVE US A POOL OF MONEY BASED ON PER CAPITA.

WE HAVE TO FILE QUALIFIED EXPENSES FOR REIMBURSEMENT.

>> THROUGH FEMA.

>> OR FOR HARRIS COUNTY.

BOTH OF THOSE PROCESSES ARE THE SAME.

>> FOR PURPOSES OF THIS DR. SHELLEY, IF I MIGHT, I KNOW IT'S RELATIVE IN INFORMATION, BUT THE COVID CARES ACT FUNDING ISN'T GOING TO BE GERMANE TO OUR BUDGET, AS ALL OF THE CARES ACT FUNDING ARE NON BUDGET REIMBURSABLE ITEMS. SO I DON'T KNOW THAT WE CAN ACTUALLY BE GOING DOWN THE RABBIT HOLE ON CARES ACT FUNDING FOR TOWNSHIP REIMBURSEMENT BECAUSE THAT WOULD BE A SEPARATE TYPE OF AGENDA.

THE BUDGET, IT CAN'T BE A BUDGETED ITEM TO BE CARES ACT ELIGIBLE.

>> THE ONLY CARES ACT FUNDING THAT IS HELPING US IS THE TRANSPORTATION FUNDING.

IT'S NOT SET UP DID WE EXPEND FUNDS.

THIS IS PART OF THE TRANSPORTATION PROP UP THAT THEY DID FOR THE AIRLINES

[00:45:02]

AND EVERYBODY ELSE.

THAT WAS AN UNEXPECTED WINDFALL.

WE DID GET THAT MONEY AND WE DON'T HAVE TO GO BACK AND PROVE THAT WE HAD ADDITIONAL NON BUDGETED ITEMS IN TRANSPORTATION.

SO THAT DOES HELP US.

HOWEVER, I'LL JUST STATE THIS, YOU KNOW, AS CLEARLY AS I CAN.

IF THERE IS THAT MUCH UNCERTAINTY IN OUR REVENUE PROJECTIONS GOING FORWARD, I WILL NOT SUPPORT ANY SPENDING OF RESERVES IN THIS PARTICULAR BUDGET CYCLE.

WE TALKED ABOUT SPENDING RESERVES LAST YEAR.

IF WE HAD DONE THAT, LOOK WHERE WE WOULD HAVE BEEN THIS YEAR.

THERE IS NO WAY WHEN WE HAVE THIS MUCH UNCERTAINTY, STANDING HERE SAYING I DON'T THINK WE'RE GOING TO COLLECT THAT MUCH SALES TAX, HOTEL TAX TO TURN AROUND AND SAY LET'S SPEND RESERVES.

I CAN'T SUPPORT THAT.

RESERVES SHOULD NOT BE USED FOR OPERATING EXPENSES, PERIOD.

IT'S NOT GOOD BUSINESS.

THAT IS WHERE I STAND ON THIS.

I MEAN, WE HAVE TO, THIS BUDGET IS GOING TO BE REALLY REALLY TIGHT AND THERE IS GOING TO BE A LOT OF PEOPLE IN MY VIEW THAT MAY BE DISAPPOINTED BECAUSE I WANT TO SEE A VERY TIGHT OSTEER BUDGET BECAUSE WE MAY HAVE TO COME BACK AND MAKE CUTS IN THE MIDDLE OF THE YEAR NEXT YEAR.

I WANT TO HAVE THOSE RESERVES AVAILABLE IF THE WHOLE THING COLLAPSES.

>> WE COULD END UP HAVING TO COME BACK AT THE END OF THE YEAR AND MAKE ADJUSTMENTS TO A BUDGET WE'VE ALREADY APPROVED IF THE TREND DOES NOT CONTINUE IN A FLAT OR POSITIVE MANNER BETWEEN NOW AND THE END OF THE YEAR TOO.

>> GOOD POINT, BOB.

>> I THINK IT'S FAIR TO SAY THAT WE'RE FIVE MONTHS INTO AN ECONOMIC CYCLE THAT NONE OF US HAVE LIVED THROUGH.

AND YOU KNOW, IT'S PRUDENT TO BE CONSERVATIVE AND REVENUE AND EXPENSE AND WE ARE FORTUNATE, AS A COMMUNITY TO HAVE RESERVES TO BACKSTOP ANY ADDITIONAL SWINGS.

BUT IF YOU JUST LOOK AT IT, GO BACK TO LAST YEAR'S BUDGET TO THIS YEAR'S BUDGET, WE HAD A LONG DEBATE OVER UNCERTAIN REVENUES RECURRING IN THIS CURRENT BUDGET YEAR.

AND ALL OF THAT CAME INTO FRUITION.

AND YOU KNOW, IF YOU LOOK AT THE HOUSTON GALVESTON UPDATED CPI, WE'RE GOING INTO A DEFLATIONARY PERIOD.

YOU KNOW, AND WE HAVE TO START THINKING ABOUT YOU KNOW, WE HAVE A COUPLE OF OUR CONTRACTS HAVE YOU KNOW, AUTOMATIC INCREASES TO THEM.

AND SO THERE IS GOING TO BE YOU KNOW, GROWTH AND EXPENSE.

WE DO HAVE A LARGE, YOU KNOW, BUDGET INITIATIVE BINDER THAT HAS TENS OF MILLIONS, UP TO 30 MILLION IN VARIOUS CAPITAL PROJECTS AND ONGOING OPERATING EXPENSES THAT WOULD BE VERY DIFFICULT TO YOU KNOW, ROLLOUT AND APPROVE AND WE DON'T HAVE COMPLETE INFORMATION YET.

WE STILL DON'T HAVE THE EFFECTIVE TAX RATE TO GIVE US INFORMATION ON WHERE OUR REAL BOTTOM LINE IS AS A STARTING POINT.

SO YOU KNOW, I'LL ECHO WHAT DIRECTOR RIESER IS SAYING IT'S GOING TO BE HARD TO APPROVE A WHOLE LOT OF THINGS WHEN THERE IS THIS MUCH UNCERTAINTY.

I'M GLAD THAT THE SALES TAX REVENUE IS COMING IN AT A HIGHER CLIP, BUT IT IS INCLUDED IN THESE REDUCED REVENUES.

AND I DON'T KNOW HOW ANYBODY ELSE FEELS ABOUT YOU KNOW, THE PPP AND THE $600 OF UNEMPLOYMENT BENEFITS HITTING ALL THE CONSUMERS AND BUSINESSES, BUT THAT HELPED SOME BUSINESSES FROM SHUTTERING THEIR DOORS, AS THOSE FUNDS GET UTILIZED, THERE IS A LOT OF BUSINESSES ON THE EDGE OF CLOSING IN OUR AREA.

AND I GET THE WARN NOTICES WHEN EMPLOYERS ARE DOING LARGE LAYOFFS.

AND WE'RE GETTING MORE OF THOSE COMING IN AS MORE COMPANIES CHOOSE TO SHUTTER THEIR EMPLOYEES.

>> I AGREE WITH YOU ON THAT STANDPOINT, GORDY.

I DON'T THINK WE'VE SEEN THE BOTTOM OF THIS.

UNLESS YOU START TO IT LOOKS PRETTY CERTAIN THAT AT LEAST A SIGNIFICANT PORTION OF THE ECONOMY IS GOING TO BE SHUT DOWN AT LEAST THROUGH NOVEMBER.

BUT I CAN TELL YOU IN THE AVIATION SECTOR, JUST A COUPLE OF QUICK ANECDOTAL POINTS.

DELTA AIRLINES HAD 14,000 PILOTS.

THIS MONTH THEY'VE GOT 9,000.

2500 WERE FURLOUGHED.

ANOTHER 2500 CHOSE TO TAKE EARLY RETIREMENT AND LEAVE THE COMPANY.

THAT IS BEING, YOU'RE SEEING THAT KIND OF, ESPECIALLY IN THE AVIATION SECTOR, UNITED

[00:50:02]

HAS GOT FURLOUGH NOTICES OUT FOR A SIGNIFICANT PORTION OF THEIR STAFF.

AND ALL OF THIS IS PROBABLY, A LOT OF THIS IS PUTTING PRESSURE ON CONGRESS TO TRY TO COME UP WITH ANOTHER STIMULUS PACKAGE.

BUT IN THE END, I'M NOT SURE THAT LAYERING ON ANOTHER TWO OR THREE TRILLION DOLLARS OF FEDERAL DEBT IS GOING TO HELP US IN THE LONG TERM EITHER.

WE HAVEN'T SEEN THE BOTTOM YET.

AS A MATTER OF FACT, I WOULD GUESS IT WILL PROBABLY REALLY COME HOME BETWEEN OCTOBER AND DECEMBER.

>> IN TERMS OF THE POTENTIAL STIMULUS THAT MIGHT BE COMING, THERE HAS BEEN A PUSH TO, THERE HAS BEEN A PUSH TO HAVE, INSTEAD OF AN UNEMPLOYMENT BENEFIT OF $600, TO HAVE A BONUS, WHEN PEOPLE GO BACK TO WORK TO STIMULATE PEOPLE'S ABILITY AND WILLINGNESS TO RETURN TO WORK, BECAUSE THERE'S SOME CONCERN ABOUT EMPLOYEES OR EMPLOYERS NOT BEING ABLE TO FIND EMPLOYEES.

AND THAT IS A SIGNIFICANT WAY TO REDIRECT FUNDS.

AND THEN THERE IS ALSO INITIATIVE TO GIVE A DIRECT PAYMENT TO INDIVIDUALS.

NOT TIED TO UNEMPLOYMENT BENEFITS.

BUT JUST A DIRECT STIMULUS.

AND THAT CAME BEFORE.

AND THERE IS CONSIDERATION OF DOING THAT AGAIN, WHICH WOULD HELP.

>> I GET ALL OF THAT DR. SHELLEY.

IS DEVILS IN THE DETAILS, I GET THAT.

I STILL ECHO GORDY'S POINT THAT A LOT OF THESE SMALL BUSINESSES ARE RIGHT ON THE EDGE.

AND THE NEXT TWO OR 3 MONTHS WILL BE CRITICAL.

WE'LL JUST HAVE TO SEE IF PEOPLE CAN KEEP THEIR DOORS OPEN.

EVEN IF THEY HAD THE EMPLOYEES, YOU STILL GOT TO HAVE THE REVENUES COME IN IN ORDER TO MAKE IT.

IT'S VERY VERY DIFFICULT.

ONCE AGAIN, WE'RE LOOKING AT A TON OF UNCERTAINTY.

>> SO WE'RE THINKING PROBABLY JUNE WHEN WE GET THE SALES TAX REPORTS, WE'RE THINKING JUNE AND JULY IS GOING TO INCREASE.

BUT BASED ON THE CURRENT PROJECTIONS WE'RE THINKING IT WOULD DIP BACK DOWN AS WE MOVE INTO AUGUST AND SEPTEMBER.

SO NEEDING A MORE CONSERVATIVE PICTURE OF OUR ACTUAL 2019, I HEAR OUR STAFF SAYING 95 PERCENT OF THE 2019 ACTUAL, BUT WHAT ARE WE REALLY SAYING? GORDY, WHAT ARE YOU THINKING MORE WOULD BE A PERCENTAGE OF 2019 ACTUAL OR 2020 BUDGET?

>> WELL, WHEN YOU LOOK AT THE SLIDE THAT IS UP RIGHT NOW, YOU CAN SEE THAT YOU KNOW, OUR 2020 BUDGET STARTED OFF WITH A CONSERVATIVE, WE DON'T WANT TO PLAN ON A BOOM.

AND ACTUALLY, PART OF THAT WAS WE KNEW WE WERE GOING TO HAVE SALES TAX LOSS FROM THE OIL AND GAS SIDE.

WHEN YOU LOOK AT CURRENT FORECAST, I THINK IT'S FAIRLY ACCURATE.

I THINK YOU GUYS ON THE BUDGET TASK FORCE ARE DOING A FANTASTIC JOB, MAKING QUICK ADJUSTMENTS AND GETTING US TO A GOOD POINT.

MY CHALLENGE MENTALLY IS HOW CAN YOU THEN ON JANUARY 1ST PRETEND LIKE THERE IS NO DOWNWARD TREND.

THERE HAS GOT TO BE SOME 2021 IMPACT TO COVID.

IT DOESN'T GO AWAY.

I DON'T THINK WE HIT THE BOTTOM YET ON THE ECONOMY BECAUSE OF THOSE THINGS I MENTIONED EARLIER THAT WE'RE PROPPING UP BUSINESSES AND PROPPING UP YOU KNOW, CONSUMERS.

SO I DO THINK WE HAVE TO LOOK AT YOU KNOW, SOME 2021 REDUCED REVENUE IN SALES TAX FOR SOME PERIOD OF TIME.

I THINK YOU KNOW, ONCE YOU HAVE A VACCINE AND ONCE YOU HAVE THERAPEUTICS AND EVEN IF VACCINE IS APPROVED AT THE END OF THE CALENDAR YEAR, IT'S GOING TO TAKE A WHILE BEFORE YOU CAN INOCULATE THE ENTIRE AREA.

THERE WILL BE PEOPLE HESITANT TO GET A VACCINE DAY ONE.

SO IT'S NOT LIKE IT'S A FLIP THE SWITCH VACCINE APPROVED AND EVERYBODY ALL OF A SUDDEN HAS IT.

IT WILL TAKE TIME FOR THAT, THE MANUFACTURING TO MEET UP WITH DEMAND, ACTUALLY GET INTO THE COMMUNITY.

SO I THINK YOU STILL HAVE A QUARTER OR TWO OF 2021 THAT ARE GOING TO BE IMPACTED.

I'VE TALKED TO SOME OF THESE RESTAURANT OWNERS.

AND THEY'VE DONE ALL THEY CAN TO JUGGLE YOU KNOW, EVER SHIFTING REQUIREMENTS OF THEM.

AND AT THE CURRENT CAPACITY RESTRAINTS, MANY OF THEM, IT'S JUST NOT WORTH STAYING OPEN.

AND YOU KNOW, THEY HAVE BLED THROUGH THEIR PPP.

SO I'M NOT GOING TO BE SHOCKED IF WE HAVE MORE RESTAURANTS, SMALLER

[00:55:03]

BUSINESSES CLOSING IN THE NEAR TERM.

>> I'M JUST ASKING, WHAT ARE WE SAYING THAT WE REALLY BELIEVE WILL COME IN FOR, I HEARD ONE DIRECTOR SAY 95 PERCENT, WE'RE OKAY WITH THE 95 PERCENT PROJECTION IN THE 2019 ACTUAL.

BUT I'M HEARING OTHERS SAYING LOWER THAN THAT.

WHAT DO OTHER DIRECTORS THINK ACTUALLY THAT NUMBER IS GOING TO COME IN TO MEAN? 90 PERCENT, 85 PERCENT?

>> JASON, IT'S A LITTLE CONFUSING BECAUSE WHAT WE'RE LOOKING AT HERE, WE'RE TALKING ABOUT THIS YEAR, THE PROJECTIONS THAT WE'VE DONE THIS YEAR, ARE A SNAPSHOT AS TO SETTING A TARGET FOR WHAT KIND OF REDUCTIONS WE NEEDED TO MAKE IN THE BUDGET IN ORDER TO KEEP THE BUDGET IN BALANCE.

SO WE TOOK A LOOK AT THE PROJECTIONS FOR THE REST OF THE YEAR.

WE SETTLED ON ASSUMING A 20 PERCENT REVENUE, YOU KNOW, 20 PERCENT LESS REVENUE EVERY MONTH THROUGH THE END OF THE YEAR EXCEPT FOR DECEMBER, WHICH IS 17 PERCENT.

THAT PUT US BACK INTO BALANCE.

WE COULD SUSTAIN A 25 PERCENT LOSS EVERY MONTH FOR THE REST OF THE YEAR AND THEN LAND AT 15 PERCENT REDUCTION IN OUR OVERALL SALES TAX REVENUES AND WE WOULD STILL HAVE A BALANCED BUDGET.

SO WE GOT ONE THAT GOT US IN BALANCE, BUT WE DIDN'T GO QUITE AS OSTEER AS WE COULD HAVE TO KEEP US IN BALANCE.

DOES THAT HELP YOUR UNDERSTANDING? AS FAR AS NEXT YEAR IS CONCERNED, GORDY, I AGREE WITH YOU THAT WE'LL HAVE A REAL STRUGGLE ON THE FOOD AND BEVERAGE SIDE, BUT THERE IS A LOT OF PENT UP DEMAND ON THE MEDICAL SIDE, MAJOR PURCHASES, WAITING TO SEE WHAT THE ECONOMY IS GOING TO DO.

I MEAN, IF WE COULD PREDICT THIS RIGHT, WE PROBABLY SHOULD OFFER OURSELVES UP AS FOR THE NOBEL PRIZE IN PREDICTING WHAT THE ECONOMY IS GOING TO DO.

BECAUSE THE EXPERTS HAVEN'T GOTTEN IT RIGHT.

SO THE ONLY QUESTION IS HOW OSTEER DO YOU WANT TO GET? IF WE GO BELOW 100 PERCENT OF 2020 BUDGET ON SALES TAX REVENUES, ESSENTIALLY THE BASE BUDGET IS NOW NOT BALANCED.

YOU'RE GOING TO HAVE TO MAKE CUTS IN THE BASE BUDGET TO GET BACK.

>> I RECOGNIZE THAT AS A REALITY THAT WE'RE REALLY LOOKING AT.

AND WE DO HAVE, I THINK WE PUT OUT A SALES TAX RESERVE LAST YEAR, ABOUT TWO AND A HALF MILLION.

AND SO YOU CAN HEDGE THAT TWO AND A HALF MILLION AGAINST ANY REVENUE SHORTFALLS FROM SALES TAX PROJECTIONS.

IF I TAKE THAT INTO CONSIDERATION AT THE 100 PERCENT LEVEL, THAT GETS YOU DOWN TO ABOUT 49 MILLION, YOU HAVE COVERED IF YOU PRIORITIZE THE SALES TAX RESERVE TO COVER ANY SHORTFALLS.

NOW, IF WE TOOK A 95 PERCENT OF ACTUAL, THAT GETS US YOU KNOW, IF THE SALES TAX REVENUE COMES IN AT 48 MILLION, OR 47.7, WE STILL HAVE IT COVERED BY THAT SALES TAX RESERVE.

SO THAT IS KIND OF WHERE I'M LOOKING AT JASON, IS I KNOW WE HAVE THAT 2.5 MILLION SALES TAX RESERVE.

I THINK WE SHOULD BE HEDGING A LITTLE BIT DOWN ON WHAT WE EXPECT TO COME IN ON THE REVENUE SIDE.

BECAUSE IF WE HAVE YOU KNOW, REVENUE DECLINE OVER BUDGET IN DECEMBER, YOU WOULD EXPECT THAT TO BE CONTINUED IN JANUARY, FEBRUARY, MARCH, APRIL, INTO NEXT YEAR AT SOME LEVEL.

AND IT DOES MAKE US, FORCE US TO LOOK AT OUR BASE BUDGET.

WHICH FRANKLY, WE NEED TO DO.

THE FIRST CALLER SAID, LOOK AT YOUR ESSENTIAL SERVICES.

YOU KNOW, LOOK AT THE THINGS THAT YOU HAVE TO PROVIDE THE COMMUNITY AND MAKE SURE YOU PROVIDE THOSE THINGS.

AND GO THROUGH THE REST AND SEE WHAT THERE IS.

LIKE DIRECTOR MILNER SAID THERE IS NOTHING SAYING WE WON'T COME BACK AND ADDRESS 2020 EVEN FURTHER.

WE DON'T KNOW.

>> I WOULD LIKE US TO LOOK AT THE 95 PERCENT OF 2019.

I KNOW DIRECTOR RIESER SAID NOT LOOKING AT RESERVES.

BUT WE DO HAVE THAT 2.5 IN SALES TAX.

I WOULD MUCH RATHER BE ON THE CONSCIOUS SIDE AND ALSO MAINTAIN OUR FINANCIAL STABILITY THAT WE HAVE, THAT HAS PUT US IN A POSITION TO HAVE THE COMMUNITY THAT WE

[01:00:07]

HAVE.

AND I JUST THINK BEING 100 PERCENT OF THE 2020 BUDGET IS A CHALLENGE.

AND WOULD LIKE IT TO BE AT THE 95 PERCENT OF THE 2019 ACTUAL.

>> I DON'T HAVE ANY HEARTBURN WITH THAT IN PRIORITIZING THE 2.5 MILLION SALES TAX RESERVE FOR ANY SHORTFALLS AS A PRIORITY DRAWDOWN.

THAT GIVES US COVERAGE DOWN TO YOU KNOW, 48 MILLION OR 47.7 IN ACTUAL, SLIGHTLY PRIOR THAN WHAT WE PROJECTED THIS YEAR.

>> THE OTHER OPTION WOULD BE TO GO WITH 100 PERCENT AND TAKE THE UNDESIGNATED FUND BALANCE AND PUT IT IN YOUR SALES TAX RESERVE.

EITHER WAY, WE'RE GOING TO BE PLAYING THE GAME ONE WAY OR THE OTHER.

WE GO DOWN TO 95 PERCENT, IT'S ALL MOVING NUMBERS AROUND IN THE END.

YES, WE'VE GOT THAT RESERVE AND WE'VE GOT A RESERVE ON THE HOTEL TAX REVENUES AS WELL.

WE DON'T KNOW THAT FOR SURE, GORDY UNTIL THE END OF THE YEAR.

>> I'M PRETTY WELL RESOLVED AS HOW WE ADDRESS THE HOTEL TAX, AS WE DISCUSSED ON THURSDAY, THE EXCESS HOTEL TAX IS CURRENTLY DESIGNATED FOR PROJECTIONS, THE ARTS THEATER, OR NEW CONVENTION CENTER EXPANSION.

IF WE HAVE SHORTFALLS IN HOTEL TAX, EVEN IF IT'S BELOW THE BASE BUDGET, IT DOESN'T IMPACT OPERATIONS OR THE BALANCE OF THAT BUDGET, IT IMPACTS THE SERVICE RESERVE.

>> AGREE.

THAT IS ONE OF THE THINGS THAT OBVIOUSLY, WE'LL NEED TO MAKE A FORMAL ADJUSTMENT TO AS WE GO THROUGH THE BUDGET PROCESS, TRANSFER THAT BACK TO UNDESIGNATED HOTEL TAX RESERVES.

>> I THINK IT HAS TO STAY IN THE DEBT SERVICE RESERVE IN ORDER TO BE ALLOCATED THAT WAY THROUGH THE BUDGET PROCESS.

IS THAT RIGHT, MONIQUE?

>> AT THE TIME THAT YOU AUTHORIZE A BOND ISSUANCE, IT HAS TO HAVE BEEN DESIGNATED IN YOUR BUDGET.

>> BUT SINCE WE'RE NOT GOING TO A BOND ISSUE THIS YEAR, WE PUT IT IN THERE THINKING THAT WE MIGHT BE IN A POSITION TO DO THAT THIS YEAR.

BUT WHAT THE BUDGET TASK FORCE IS RECOMMENDING IS THAT WE SHIFT THOSE BACK INTO AN UNDESIGNATED CATEGORY FOR THE TIME BEING BECAUSE I DON'T SEE US GOING INTO A CAPITAL PROGRAM FOR PERFORMING ARTS CENTER OR THE CONVENTION CENTER IN THE NEXT 12 MONTHS.

>> I THINK THAT MAY BE TRUE.

BUT I THINK IF YOU DON'T LEAVE IT THE WAY IT'S DESIGNATED, IT PULLS IT OUT OF THE AUTHORIZED TAX RATE.

>> MONIQUE, I DON'T THINK THAT IS THE CASE.

>> NO, SIR, IT WOULDN'T DO THAT.

YOU CAN UNDESIGNATE IT WITHOUT ANY IMPACT ON THE DEBT SERVICE RATE.

AGAIN, IF TWO OR THREE YEARS FROM NOW, YOU'RE LOOKING SERIOUSLY AGAIN AT ISSUING BONDS RELATED TO THE PERFORMING ARTS OR THE CONVENTION CENTER AT THAT TIME YOU WOULD NEED TO REDESIGNATE IT.

>> ALL RIGHT.

THANKS FOR THE CLARIFICATION.

>> YES, SIR.

ALL RIGHT.

SO DIRECTOR RIESER WAS SUGGESTING YOU ADD THE UNDESIGNATED BALANCES TO THE SALES TAX RESERVE AND KEEPING THE 100 PERCENT BUDGET REVENUE OR SALES TAX TARGET WE HAVE IN OUR CURRENT BUDGET.

WHAT WOULD THAT CREATE AS A TOTAL SALES TAX RESERVE? I KNOW THERE ARE TWO UNDESIGNATED BALANCES.

>> YES, THERE IS.

FOR 2020, YOU HAVE A $2.2 MILLION UNDESIGNATED BALANCE.

AND FOR 2021, YOU HAVE 640,000.

HOWEVER, THOSE NUMBERS ARE BASED THAT IS NOT MONEY IN THE BANK.

THAT IS BASED ON THE CURRENT ASSUMPTIONS BUILT INTO THE FORECAST OF THE 2021 BUDGET.

SO I THINK LAST WEEK I REFERRED TO THEM AS SQUOOSHY NUMBERS.

THE BOARD CAN DIRECT THAT ANYTHING REMAINING AT THE END OF THIS YEAR BE ALLOCATED TO THE SALES TAX RESERVE.

WE CAN DO THAT.

MAYBE IT WILL BE 2.2 MILLION.

IT COULD BE HIGHER.

IT COULD BE LOWER.

>>.

CHAIRMAN: I'M GOING TO ASK A GENERAL QUESTION, MONIQUE.

[01:05:03]

BECAUSE WE DON'T HAVE THE CURRENT EFFECTIVE TAX RATE FROM THE COUNTY.

IF THAT EFFECTIVE TAX RATE CAME IN BELOW THE CURRENT.2240 RATE WE'RE USING, HOW DOES THAT ALSO THEN IMPACT THIS BUDGET?

>> OKAY.

SO EACH, THERE'S SEVERAL THINGS GOING ON THERE.

EACH PENNY OF THE TAX RATE EQUATES TO ABOUT $2.1 MILLION.

SO LET'S SAY THE EFFECTIVE TAX RATE IS A HALF PENNY LESS THAN THE.2240, THEN THAT IS GOING TO REDUCE OUR REVENUES BY A MILLION DOLLARS.

HAVING SAID THAT, THOUGH, WE BELIEVE BASED ON, IT'S NOT CERTIFIED PROPERTY TAX DATA, BUT IT'S THE LATEST DATA THAT WE HAVE RECEIVED FROM THE TAX ASSESSOR'S OFFICE THAT WE ARE UNDER STATED ON PROPERTY TAX RIGHT NOW.

IT COULD BE ANYWHERE BETWEEN 5 AND $600,000 THAT WE ARE UNDERSTATED.

YOU KNOW HOW WE'RE FLAT RIGHT NOW.

I CAN'T GUARANTEE THAT BECAUSE I HAVEN'T SEEN THE CERTIFIED ROLLS, BUT BASED ON THE LATEST INFORMATION.

I'M SAYING IS THAT WE MAY GET A BOOST IN THAT, BASED OFF CERTIFIED ROLL, BUT THEN WE WOULD TAKE THAT RIGHT BACK AWAY BY LOWERING TO THE EFFECTIVE TAX RATE.

DID THAT MAKE SENSE? CHAIRMAN: IT DID.

I JUST WANT TO MAKE SURE THAT WE DON'T HAVE SOME OTHER MINE FIELD OUT THERE THAT WE DON'T HAVE CERTAINTY AROUND THAT DOES IMPACT THE REVENUE SIDE.

>> IF THE TAX ASSESSOR DID MAKE MAJOR ADJUSTMENTS IN THE CERTIFIED VALUES DOWNWARD FROM THE REPORT THAT WE SAW TWO WEEKS AGO, THEN IT'S BACK TO THE SCENARIO WE WERE TALKING ABOUT AT FIRST.

THEN YOU WOULD SEE A MILLION DOLLAR DROP FROM WHERE WE ARE NOW.

THAT'S WHY IT'S SO CRITICAL TO GET THAT INFORMATION BEFORE WE KNOW WHAT WE'RE DEALING WITH.

>> BUT MONIQUE, IF THEY WERE TO REVALUE THE TAX BASE DOWNWARD, WOULD THAT NOT RESULT IN A HIGHER EFFECTIVE TAX RATE?

>> IT WOULD.

SO I'M NOT SAYING THAT IT WOULD BE DOWNWARD IN TOTAL.

I'M SAYING IT WOULD BE DOWNWARD FROM WHERE WE, FROM WHAT WE HAVE IN THE BUDGET MODEL RIGHT NOW.

>> OKAY.

BUT JUST HOLD ON.

JUST MAKE SURE I'VE GOT THIS IN MY HEAD STRAIGHT.

IF THE ROLLS COME IN LOWER, THE ODDS ARE THAT YOU KNOW, THAT IS WHAT THE EFFECTIVE TAX RATE BASICALLY DOES, ISN'T IT THE BALANCING MECHANISM? IF APPRAISALS GO UP SHARPLY, THE EFFECTIVE TAX RATE TENDS TO SHRINK? IF THE VALUES GO DOWN THE EFFECTIVE RATE WOULD GO UP.

IS THAT A FAIR SIMPLIFIED VERSION OF HOW THAT WORKS.

>> YES, SIR, THAT IS ACCURATE.

>> ESSENTIALLY WHAT WE'RE TALKING ABOUT FOR THIS YEAR, THE PROPERTY TAX REVENUE FOR THIS YEAR HAS BEEN COLLECTED.

SO IT WOULDN'T HAVE AN IMPACT ON THE FUND BALANCES AT THE END OF THE YEAR.

WOULDN'T HAVE A NEGATIVE IMPACT ON THE FUND BALANCES AT THE END OF THE YEAR.

BUT GORDY IS ABSOLUTELY 100 PERCENT CORRECT, WE NEED TO KNOW WHAT THE EFFECTIVE TAX RATE IS AND ROLLBACK RATE IS BEFORE WE CAN MAKE TOO MANY DECISIONS IN THIS BUDGET.

>> YES, SIR, I AGREE.

THOSE ARE KEY TO BEING ABLE TO PUT ALL OF THE PIECES TOGETHER.

>> MONIQUE, DOES THE NO NEW REVENUE OR EFFECTIVE TAX RATE, DOES THAT INCLUDE 3.5 PERCENT ALLOWED INCREASE IN REVENUE OR DOES IT NOT?

>> NO, MA'AM.

THAT HAS MORE TO DO WITH WHAT IS CALLED THE VOTER APPROVAL RATE OR THE ROLLBACK RATE.

SO THE EFFECTIVE TAX RATE IS GOING TO BE THE RATE THAT WHEN APPLIED TO THE SAME PROPERTIES THAT WERE EXISTING IN BOTH TAX YEARS, IT GENERATES THE SAME AMOUNT OF REVENUE.

SO BASICALLY IT'S SAYING THAT YOU'RE NOT GOING TO HAVE ANY INCREASE FROM PROPERTY, FROM THE REVALUATION OF PROPERTIES.

>> BUT IT DOESN'T AFFECT NEW PROPERTIES ADDED?

>> NO, MA'AM.

IT DOES NOT.

>> NO NEW REVENUE, 3.5 PERCENT DOES?

>> 3.5 PERCENT HAS TO DO WITH THE ROLLBACK RATE.

WHAT THAT IS IS SAYING THAT IT'S TAKING YOUR MAINTENANCE AND OPERATIONS RATE AND MULTIPLYING IT BY 3.5 PERCENT AND SAYING THAT YOU CAN'T GO ANY HIGHER THAN THAT WITHOUT RECEIVING VOTER APPROVAL.

>> AND THEN THIS YEAR WE'RE ACTUALLY I THINK SUBJECT TO THE 8 PERCENT PRIOR BECAUSE OF THE DISASTER DECLARATION.

>> THAT IS CORRECT, YES, SIR.

>> SO WE'RE NOT WORRYING ABOUT THAT AT ALL.

THAT IS OFF THE TABLE RIGHT NOW.

CHAIRMAN: I'M NOT WORRIED ABOUT THAT, BETWEEN THE EFFECTIVE RATE AND 8

[01:10:03]

PERCENT, WHAT I'M CONCERNED WITH IS NOT KNOWING OUR STARTING POINT WHILE WE'RE ALL STILL GOING THROUGH THIS DISCUSSION ON WHAT WE SHOULD USE AS A REVENUE PROJECTION.

I CAN BE COMFORTABLE WITH THE REVENUE PROJECTION STAYING THE WAY THE STAFF AND BUDGET COMMITTEE PUT IT TOGETHER, SO LONG AS WE DESIGNATE THE SALES TAX RESERVES AND LEAVE THE SALES TAX RESERVES UP TO ACCOMMODATE THE LIKELY UNDER COLLECTION OF THOSE SALES TAX REVENUES BASED ON THE UNCERTAINTY THAT IS OUT THERE.

IT HAS THE SAME EFFECT.

>> YES, SIR, THAT'S CORRECT.

AND I WILL CONTINUE TO BEG FOR OUR CERTIFIED NUMBERS.

SO HOPEFULLY WE WILL HAVE THEM TOMORROW.

CHAIRMAN: I KNOW YOU WORKED OVER THE WEEKEND TRYING TO EXTRACT THEM FROM EVERYONE.

IT'S AN IMPORTANT PART OF OUR PUZZLE.

>> HAVE THEY BEEN PROVIDED TO ANY OTHER JURISDICTION?

>> I KNOW THEY'VE BEEN PROVIDED TO MONTGOMERY COUNTY BECAUSE THEY HAD THOSE NUMBERS AVAILABLE TO THEM ON FRIDAY DURING THEIR BUDGET WORKSHOP, WHEN THEY SET THEIR PROPOSED RATE.

AS FAR AS ANY OTHER JURISDICTIONS, I DO NOT KNOW THE ANSWER TO THAT.

CHAIRMAN: IT'S FAIR TO SAY THAT WE'RE NOT ONE COUNTY ONLY RELATED, WE HAVE TO RELY ON HARRIS COUNTY AS WELL AND THEN WE'RE FORTUNATE THAT THE MONTGOMERY COUNTY ASSESSOR TAKES THE HARRIS COUNTY DATA AND COMES UP WITH OUR COMBINED EFFECTIVE RATE.

>> YES, SIR.

CHAIRMAN: IT MAY BE HARRIS COUNTY THAT HISTORICALLY HAS BEEN PART OF THE CHALLENGE ON GETTING IT DONE QUICKER.

WE CAN'T CALCULATE IT OFF OF ONE.

ALL RIGHT.

SO I KNOW WE'VE SPENT AN EXTENDED PERIOD OF TIME ON THIS SLIDE.

I THINK WE SHOULD CONTINUE TO MAKE PROGRESS UNDERSTANDING THAT WE'RE NOT LIKELY TO MAKE ANY SIGNIFICANT DECISIONS TODAY.

BUT WE CAN CONTINUE TO GO THROUGH THE ADDITIONAL INFORMATION YOU HAVE TO SHARE MONIQUE.

>> OKAY.

LET ME GET BACK THERE WE GO.

SO WE'VE BEEN THROUGH I SORRY.

SO THAT CONCLUDED OUR SALES TAX DISCUSSION, AT LEAST FOR NOW.

SO WE'LL MOVE ON TO HOTEL TAX, WHICH WE'VE DISCUSSED A LITTLE BIT.

BUT THIS IS THE LATEST HOTEL TAX REPORT.

WE HAVE THIS THROUGH JULY COLLECTIONS.

AND WHAT YOU SEE HIGHLIGHTED IN YELLOW IS THE MONTHS THAT HAVE BEEN SIGNIFICANTLY IMPACTED BY THE PANDEMIC.

HOTEL TAX IS ONLY ONE MONTH LAG.

SALES TAX WE TALKED ABOUT BEING A TWO MONTH LAG.

BUT WHAT YOU'RE LOOKING AT HERE ARE ONE MONTH LAG.

JULY COLLECTIONS REFERRED TO, RELATE BACK TO JUNE ACTIVITIES.

SO WHAT WE ARE LOOKING AT HERE IN TERMS OF HOTEL TAX REVENUES, CURRENTLY WE ARE ABOUT 54 PERCENT LESS THAN OUR BUDGET PROJECTIONS.

WHEN THE TASK FORCE AND MORE IMPORTANTLY, WHEN THE VISIT THE WOODLANDS BOARD WERE LOOKING AT THESE NUMBERS, IT HAS BEEN ABOUT A MONTH, AND WE'VE HAD NEW DATA COME IN SINCE THEN, BUT THIS IS THE PROJECTIONS THAT WE WERE DEALING WITH AND WHAT IS CURRENTLY REFLECTED IN THE 2021 PRELIMINARY BUDGET.

SO THE 2020 BUDGET FOR HOTEL TAX WAS 9.7 MILLION.

IT WAS DECIDED TO LOWER THE FORECAST BY 40 PERCENT.

SO WE HAVE A FORECAST OF 5.8 MILLION.

AND THEN TO INCREASE BACK UP TO 2021 BUDGET TO BE BACK WITHIN 85 PERCENT OF THE 2020 BUDGET LEVEL.

SO IF YOU WERE TO DO THAT, IF THAT CAME TO FRUITION, WHERE WE WOULD END UP WITH THE $8.2 MILLION, THIS IS HOW IT WOULD BE ALLOCATED, TO OUR DEBT SERVICE AT 2.8 MILLION.

VISIT THE WOODLANDS EXPENSES, AT 2.5 MILLION.

AND THEN ALLOCATED TO THE HOTEL TAX RESERVE, ALMOST $2.9 MILLION.

THAT IS WHAT WE WERE TALKING ABOUT EARLIER, THAT WE ARE NOT NEEDING ALL OF THAT MONEY IN ORDER TO CONTINUE OPERATIONS, VISIT THE WOODLANDS OPERATIONS.

THAT IS FLOWING INTO A HOTEL TAX RESERVE, AS DIRECTOR RIESER DISCUSSED, THOSE PROJECTS, AT LEAST FOR NOW, IN TERMS OF THE PERFORMING ARTS FACILITY, CONVENTION CENTER HAVE BEEN DEFERRED.

SO THAT GIVES US SOME WIGGLE ROOM IN TERMS OF OUR HOTEL TAX PROJECTIONS.

AND THIS JUST SORT OF DEMONSTRATES THAT.

THESE ARE MY NUMBERS.

THESE ARE NOT NUMBERS THAT HAVE COME FROM VISIT THE WOODLANDS OR VISIT THE

[01:15:06]

WOODLANDS BOARD OF DIRECTORS.

BUT SAY IF WE WERE EVEN TO LOWER THE PROJECTIONS FURTHER, FOR THE FORECAST BY 55 PERCENT, AND INSTEAD OF SAYING 85 PERCENT OF THE 2020 BUDGET, WE WERE GOING TO SAY 65 PERCENT OF THE BUDGET FOR 2021, WHAT CHANGES FOR YOU IS NOT HAVING ENOUGH MONEY FOR THE TOWNSHIP DEBT SERVICE, WE'RE OKAY THERE.

WE CAN STILL FUND VISIT THE WOODLANDS, IT'S JUST THAT PIECE OF THE PIE HAS SHRUNK.

INSTEAD OF THE 2.9 MILLION WE WERE LOOKING AT, NOW WE'RE AT 946,000.

ANOTHER WAY OF LOOKING AT IT THIS IS WAY, SIDE BY SIDE.

REGARDLESS IF WE'RE TOO OPTIMISTIC RIGHT NOW IN OUR REVENUE PROJECTIONS, WE ARE STILL ABLE TO FUND EXPENSES FOR VISIT THE WOODLANDS, STILL ABLE TO FUND DEBT SERVICE, IT'S JUST THE HOTEL TAX RESERVE THAT IS IMPACTED.

CHAIRMAN: I GOT COMFORTABLE WITH THAT, YOU KNOW, AS I'VE THOUGHT THROUGH THAT.

I DO ANTICIPATE WE'LL COME SOMEWHERE BETWEEN WHAT YOU HAVE PROJECTED AND YOUR NEW NUMBER.

AND IT'S GOING TO BE FINE.

BECAUSE IT DOESN'T IMPACT THE BALANCE OF TOWNSHIP OPERATIONS.

>> RIGHT.

>> ON TOP OF THAT, GORDY, 35 PERCENT CUT IN THIS YEAR'S BUDGET AND NEXT YEAR'S IS CUT WHAT, MONIQUE, 20 PERCENT?

>> YES.

I BELIEVE THAT IS THE NEXT SLIDE.

>> YEAH.

WE TOOK A 20 PERCENT HIT ON THE BUDGET FOR NEXT YEAR AS WELL.

AND WE'RE STILL SITTING ON A 1.6, OR $1.7 MILLION RESERVE IF NECESSARY.

SO WE'RE IN REASONABLY GOOD SHAPE WITH THAT.

BARRING A TOTAL COLLAPSE.

AND THAT IS THE ONLY REASON WHY THAT IS MY ONLY CONCERN.

WE CAN SUSTAIN UP TO A 70 PERCENT LOSS THIS YEAR WITHOUT YOU KNOW, AND STILL MANAGE.

I BELIEVE THAT WAS THE NUMBER WE CAME UP WITH.

IS THAT NOT RIGHT, MONIQUE?

>> THAT IS CORRECT, SIR.

>> THIS IS SHOWING EXACTLY WHAT DIRECTOR RIESER WAS TALKING ABOUT.

VISIT THE WOODLANDS STAFF AND BOARD DECREASED EXPENSES BY ABOUT A THIRD.

FOR THE 2021 BUDGET, IT'S DECREASED BY 20 PERCENT.

SO THEY ARE MANAGING THEIR EXPENSES IN THE CONSTRAINTS OF THE REVENUES.

>> IF I MAY, I HAVE A QUESTION, I MAY HAVE MISUNDERSTOOD DIRECTOR RIESER, BUT YOU SAID SOMETHING ABOUT NOT APPROVING A BUDGET THAT TOUCHED THE RESERVES.

BUT I'VE HEARD THE LAST TWO COMMENTS THAT BOTH IN SALES TAX AS WELL AS THE HOTEL TAX RESERVE THAT THOSE WERE ITEMS THAT YOU AS CHAIR OF THE BUDGET TASK FORCE WOULD LOOK AT USING IN ORDER FOR US TO HAVE A BALANCED BUDGET?

>> YOU'RE ON MUTE.

BRUCE, YOU'RE MUTED.

>> NO, THAT IS NOT WHAT WE'RE TALKING ABOUT.

WE'RE NOT GOING INTO ANY RESERVE ACCOUNTS.

IT'S ONLY THAT WE GET DOWN TO 70 PERCENT THAT WE'VE GOT A PROBLEM.

WE MAY HAVE TO DIG INTO OUR RESERVES IN ORDER TO MANAGE NOT JUST OUR BUDGET, BUT THE DEBT SERVICE NUMBERS THAT WE HAVE THAT ARE PROJECTED AGAINST HOTEL TAX REVENUES.

THERE IS NO GUARANTEE WE WON'T HAVE TO GO INTO RESERVES BEFORE THE END OF THE YEAR IF IT ALL BLOWS UP.

THERE IS ZERO.

WE'VE TALKED ABOUT THAT TODAY.

WHAT I'M SAYING IS I'M NOT GOING IN PROJECTING FOR NEXT YEAR THAT WE'RE GOING TO NEED TO GO INTO RESERVES IN ORDER TO BE BALANCED.

THAT SLIDE IS VERY CLEAR.

WE'RE NOT DOING THAT.

WE'VE REDUCED OUR EXPENSES AND EVEN IF WE LOSE YOU KNOW, 35 PERCENT OF THE REVENUE FOR NEXT YEAR, 40 PERCENT, WE'RE STILL IN BALANCE WITH A MILLION DOLLAR CUSHION.

SO THAT IS NOT WHAT I SAID AT ALL.

I'M SORRY IF YOU MISUNDERSTOOD.

>> I THINK DR. SNYDER THE DISTINCTION ON THE HOTEL TAX PART THAT MONIQUE JUST SHOWED, YOU'RE NOT USING RESERVES, YOU'RE NOT CREATING AS MANY NEW RESERVE DOLLARS AVAILABLE.

SO IT'S NOT PULLING DOWN FROM AN EXISTING ACCOUNT.

THE BUDGET IS PROJECTING ALMOST THREE MILLION IN EXCESS HOTEL TAX RESERVES

[01:20:03]

BEING CREATED IN 2021.

WHAT THIS SLIDE NOW SHOWS IS INSTEAD OF CREATING THAT 2.8 MILLION, YOU'RE ONLY CREATING 946.

IT'S NOT COMING OUT OF A CURRENT RESERVE BALANCE.

DOES THAT MAKE MORE SENSE?

>> YES.

THANK YOU.

BUT WHEN WE WERE TALKING ABOUT THE SALES TAX, I KNOW WE'RE NOT MAKING ANY DEFINITE DECISIONS NOW, BUT DID WE NOT SAY SOMETHING ABOUT THAT 2.5? CHAIRMAN: I DID.

I THINK THAT IS WHAT WE SET IT ASIDE FOR, IS FOR A SITUATION LIKE THIS.

AND SO IT'S YOU KNOW, SALES TAX, THE SALES TAX RESERVE WAS SET ASIDE FOR SHORTFALLS AND SALES TAX.

SO IT SHOULD BE USED FOR THAT PURPOSE, IF WE HAVE A SHORTFALL IN REVENUE AGAINST OUR 2021 BUDGET.

AND ADDING ADDITIONAL FUNDS FROM UNDESIGNATED BALANCES TO THAT SALES TAX RESERVE MAKES SENSE BECAUSE IT'S DESIGNATED TO OFFSET A KNOWN UNKNOWN.

WE KNOW WE DO NOT KNOW WHAT OUR 2021 REVENUES WILL BE.

AND WE KNOW THAT IT WOULD BE DIFFICULT FOR US, AND IT IS ANTICIPATED TO BE YOU KNOW, A YEAR OR TWO IMPACT.

SO YOU DON'T WANT TO YOU KNOW, GUT YOUR ENTIRE ORGANIZATION DOWN TO THE BONE IF YOU CAN MAKE IT WORK AND PROVIDE THE SERVICES THE COMMUNITY IS EXPECTING.

AND MAKE THOSE ADJUSTMENTS AS NEEDED.

SO USING THE SALES TAX RESERVE TO COVER A SALES TAX SHORTFALL IS IN ALIGN WITH ITS INTENDED PURPOSE.

>> THANK YOU.

CHAIRMAN: DRAWING FROM OTHER RESERVES WOULD BE DIFFERENT.

>> I WILL MOVE ON HERE.

SO THAT CONCLUDES THE DISCUSSION AT LEAST FOR NOW REGARDING REVENUES.

UNTIL WE GET MORE INFORMATION OR IF THERE IS NO ADDITIONAL QUESTIONS, I'LL MOVE ON TO EXPENDITURES.

SO AS WE DISCUSSED PREVIOUSLY, WE HAVE A 2021 BUDGET FOR CONSOLIDATED EXPENDITURES TOTALING 127 MILLION AND THAT REPRESENTS A 6.7 MILLION OR ABOUT A 5 PERCENT DECREASE FROM THE 2020 BUDGET.

THIS IS A LOOK AT HOW OUR, THE DISTRIBUTION OF OUR EXPENDITURES BY DEPARTMENT WITH THE FIRE DEPARTMENT, PARKS RECREATION, COMMUNITY SERVICES AND LAW ENFORCEMENT BEING THE LARGEST OF THOSE.

THAT MAKES UP ABOUT 65 PERCENT OF OUR EXPENDITURE BUDGET.

WE LOOKED AT THIS LAST WEEK.

SO WANTED TO REMIND AGAIN WHAT THE COMPONENTS ARE IN OUR CONSOLIDATED BUDGET RIGHT NOW AND WHERE THE BOARD CAN START LOOKING AND ANALYZING TO SEE IF THERE IS ANY FURTHER ADJUSTMENTS.

AND WE'RE GOING TO GO INTO EACH OF THESE IN MORE DETAIL.

SOLID WASTE CONTRACT, LAW ENFORCEMENT AND FIRE DEPARTMENT ARE THE THREE DEPARTMENTS WHERE WE HAVE PROJECTED INCREASES IN THE BUDGET.

AND ALL OF THE OTHER DEPARTMENTS ALONG WITH THE TRANSPORTATION FUND, VISIT THE WOODLANDS DEBT SERVICE AND CAPITAL PROJECTS, WE ARE PROJECTING DECREASES.

WE ARE SEEING AN INCREASE IN OUR SOLID WASTE EXPENSES.

THERE WAS A NEW CONTRACT EXECUTED IN FEBRUARY OF 2020 AND THAT CONTRACT INCLUDED A 3.5 PERCENT ANNUAL ESCALATION.

ALSO WE HAVE ONE MONTH IN THE 2020 BUDGET THAT IS AT THE OLD RATES.

2021 BUDGET AT THE NEW RATES.

THESE ARE THE COMPONENTS OF THE INCREASE, HAVING TO ACCOUNT FOR THE HIGHER JANUARY 2021 EXPENSE IS CONTRIBUTING ABOUT 127,000.

THE THREE AND A HALF PERCENT ESCALATOR IS INCREASING THE BUDGET BY 236,000.

AND THEN WE HAVE SOME NEW UNITS THAT WE'RE ACCOUNTING FOR WITH THE SMALLER AMOUNT AT 6600.

WE TALKED ABOUT HOW OUR LAW ENFORCEMENT EXPENSE IS ONE OF THE OTHER AREAS WHERE WE ARE SEEING AN INCREASE.

IT'S INCREASING BY ABOUT 366,000 OR 2.7 PERCENT.

AND HERE IS A LOOK AT THE MAJOR COMPONENTS, PARTICULARLY IN TERMS OF CONTRACT SERVICES OF OUR LAW ENFORCEMENT BUDGET.

HARRIS COUNTY CONSTABLE BUDGET IS INCREASING BY FOUR PERCENT.

THERE IS NO NEW PERSONNEL CONTRACTED PERSONNEL IN ANY OF THESE, IN ANY OF THESE

[01:25:05]

CONTRACTED SERVICES.

THIS IS JUST IN TERMS OF COSTS, NOT THAT WE'RE ADDING PERSONNEL.

THE FUEL FOR THE MONTGOMERY COUNTY SHERIFF'S OFFICE CONTRACT, THAT IS REMAINING THE SAME.

WE ARE SEEING AN INCREASE, TEN PERCENT INCREASE IN OVER TIME.

THAT OVERTIME BUDGET HAS NOT BEEN ADJUSTED SINCE REALLY I THINK ABOUT 2012.

AND FOR A WHILE THERE, WE WERE NOT UTILIZING ALL OF THAT BUDGET OR THE SHERIFF'S OFFICE WASN'T.

JUST BECAUSE OF I THINK PARTLY BECAUSE OF PHILOSOPHY AND ALSO BECAUSE THE TOWNSHIP DIDN'T HAVE TARGETED OVERTIME PROGRAMS, WHICH IS WHAT THIS IS FOR.

BUT IN THE PAST COUPLE OF YEARS, THIS ACCOUNT HAS BEEN USED HEAVILY.

SO WE HAVE MADE A 10 PERCENT ADJUSTMENT TO THAT.

AND THEN IN TERMS OF THE LARGEST CONTRACT WITH LAW ENFORCEMENT, MONTGOMERY COUNTY SHERIFF'S OFFICE WE'RE SEEING A 2.7 PERCENT INCREASE THERE.

ALSO INCLUDED IN CONTRACTED SERVICES IS THE TOWNSHIP FUNDS, A CLERK FOR THE JUSTICE OF THE PEACE PRECINCT THREE.

SLIGHT INCREASE THERE.

WE FUND TWO PROGRAMS FOR INTERNET CRIMES AND SAFE HARBOR.

AND WE ARE SEEING ACTUALLY BECAUSE OF A CHANGE IN PERSONNEL, THE INTERNET CRIMES IS GOING DOWN SLIGHTLY COMPARED TO THE TWO YEARS.

AND THEN THE ALPHA AND OMEGA CONTRACT IS INCREASING BY THREE PERCENT.

ANY QUESTIONS THERE?

>> YEAH.

I THINK YOU KNOW, WE'VE LONG HAD ALPHA AND OMEGA SITTING IN THE LAW ENFORCEMENT CATEGORY BUT THEY'RE NOT TECHNICALLY LAW ENFORCEMENT.

HAVE WE EVER HAD THEM IN LIKE COMMUNITY SERVICES OR SOME OTHER CATEGORY? HAVE THEY ALWAYS JUST BEEN IN HERE?

>> THEY HAVE ALWAYS BEEN INCLUDED IN THE LAW ENFORCEMENT BUDGET.

CHAIRMAN: REALLY, THEY DON'T HAVE ANY LAW ENFORCEMENT AUTHORITY.

>> AREN'T THEY MORE LIKE COMMUNITY SERVICES? CHAIRMAN: I MEAN, ACTUALLY OUR PARK RANGERS HAVE MORE AUTHORITY THAN THE ALMA AND OMEGA TEAM.

>> WE CAN CERTAINLY MAKE AN ADJUSTMENT AND PUT IT IN ANOTHER DEPARTMENT, IF THAT IS THE DESIRE.

CHAIRMAN: I WOULD RATHER HAVE IT IN A DIFFERENT DEPARTMENT BECAUSE THEY'RE NOT PEACE OFFICERS.

IT MAKES IT SOUND LIKE THEY ARE.

>> I THINK THAT IS REASONABLE AS WELL.

CONSIDERING THE PIE CHART THAT SHOWS THE SERVICES THAT ARE PROVIDED.

>> PLUS TO ADD SOMETHING, I'M SORRY, DR. SNYDER.

>> GO AHEAD, JOHN.

>> I THINK THE PERSPECTIVE IS ESPECIALLY SINCE THAT IS IN THAT LINE ITEM, IS THAT ANY REDUCTION IN THAT IS BASICALLY, THEY THINK IT'S A REDUCTION IN LAW ENFORCEMENT, WHICH IT'S NOT.

SO HAVING THAT NOT IN LAW ENFORCEMENT, IF THERE IS ANY ADJUSTMENTS FOR YOU KNOW, MORE OR LESS, IS REALLY NOT IN OUR LAW ENFORCEMENT BUDGET.

>> MY FEELINGS WHICH YOU KNOW ARE THAT THEY DO GIVE A PRESENCE OF LAW ENFORCEMENT IN OUR HIGHLY POPULATED AREAS.

SEEING THEM AT THE WOODLANDS MALL, AT THE DIFFERENT, AT MARKET STREET, AT THE DIFFERENT SHOPPING VENUES, AS A CONSUMER GIVES ME A SENSE OF PEACE.

I THINK IT'S VERY IMPORTANT TO HAVE THESE, IF WE'RE SHIFTING THEM BECAUSE WE DON'T THINK THEY'RE LAW ENFORCEMENT, I WOULD BE INTERESTED TO HEAR WHAT PERHAPS CAPTAIN OR CONSTABLE GABLE HAVE TO SAY REGARDING THEIR VALUE IN LAW ENFORCEMENT.

I THINK THEY'RE HIGHLY VALUED AND IT'S SOMETHING THAT I HAVE BEEN A PROPONENT ON SINCE THEY VERY FIRST STARTED IN THE WOODLANDS.

CHAIRMAN: YEAH.

I'M LESS CONCERNED ABOUT HOW CAPTAIN HOLYFIELD OR CONSTABLE GABLE FEEL ABOUT THEM BECAUSE THEY'VE ALREADY EXPRESSED HOW THEY FEEL ABOUT THEM TO US NUMEROUS TIMES.

BUT THEY ARE NOT LAW ENFORCEMENT.

AND NEITHER CONSTABLE GABLE OR CAPTAIN HOLYFIELD WOULD ASSERT THAT THEY HAVE LAW ENFORCEMENT AUTHORITY.

THEY DO NOT.

YOU KNOW, THEY HAVE NO MORE AUTHORITY THAN A SECURITY GUARD GOING AROUND THE MALL IN HIS CAR OR AND ACTUALLY OUR PARK RANGERS HAVE AUTHORITY TO WRITE TICKETS

[01:30:04]

AND THINGS.

THAT MAKES PEOPLE FEEL GOOD WHEN THEY'RE WALKING AROUND THE COMMUNITY WHEN THEY SEE OUR PARK RANGERS OUT AND ABOUT AS WELL.

THEY'RE COMMUNITY SERVICES.

AND THE SUMMARY PROVIDED TO US DOES A GOOD JOB ARTICULATING THAT.

THE VAST MAJORITY OF WHAT THEY DO IS MORE OF A COMMUNITY SERVICE RELATION THING THAN LAW ENFORCEMENT.

>> I DON'T THINK THIS TAKES AWAY FROM THE VALUE OF IT.

I JUST THINK IT'S ADMINISTRATIVELY, THEY DON'T BELONG IN THE LINE ITEM.

THAT IS ALL.

>> I JUST WANT TO BE SURE THAT IT'S NOT A PLOY TO, I KNOW THEY'RE PART OF OUR BUDGET INITIATIVES TO NEGATE THE VALUE THAT THEY HAVE IN OUR COMMUNITY BY MOVING THEM FROM ONE ENTITY TO ANOTHER.

CHAIRMAN: I GOT A TEXT THIS WEEKEND YOU KNOW, ASSERTING THAT THEY'RE LAW ENFORCEMENT.

AND THEY'RE NOT.

AND I DON'T THINK ANYBODY SHOULD PERCEIVE THEM TO BE PEACE OFFICERS BECAUSE THEY DON'T HAVE A PEACE OFFICERS LICENSE.

THEY'RE UNARMED AND THEY HAVE NO LAW ENFORCEMENT AUTHORITY.

SO WE SHOULD NOT CATEGORIZE THEM AS SUCH.

EVERY OTHER GROUP ON HERE IN LAW ENFORCEMENT IS AN ACTUAL PEACE OFFICER.

SO MOVING THEM TO COMMUNITY SERVICES DOESN'T CHANGE ANYTHING.

IT GETS THEM OUT OF THE LAW ENFORCEMENT CATEGORIZATION.

>> GORDY, I AGREE.

FRANKLY, I GOT SEVERAL E MAILS, ACTUALLY SCRIPTED E MAILS FROM PEOPLE IN THE COMMUNITY, TALKING ABOUT OUR COMMITMENT NOT TO REDUCE LAW ENFORCEMENT EXPENSES.

THIS IS NOT A LAW ENFORCEMENT EXPENSE IN MY VIEW EITHER.

IT IS A COMMUNITY SERVICES FUNCTION.

I KNOW IT'S, A LOT OF PEOPLE LIKE THE ALMA AND OMEGA SERVICE, I DO THINK THAT THEY PROVIDE SOME VALUE.

I AGREE THAT THE IDEA OF THIS SOAKING UP ABOUT 18 PERCENT, 15 PERCENT OF OUR TOTAL LAW ENFORCEMENT BUDGET, AND THEN YOU KNOW, BEING LUMPED IN AS BEING YOU KNOW CO EQUALS WITH OUR FIRE DEPARTMENT AND OUR ACTUAL LAW ENFORCEMENT PERSONNEL JUST DOES NOT MAKE SENSE.

I AGREE WITH THE ARGUMENTS THAT I'VE HEARD THAT THIS SHOULD BE MOVED TO COMMUNITY SERVICES AND I'M NOT SAYING THAT WE GET RID OF IT.

BUT I DON'T LIKE THE IDEA OF BEING TIED TO YOU KNOW, IN MY VIEW ESSENTIAL SERVICES FOR MAINTAINING THE PEACE IN THE TOWNSHIP.

>> I JUST WANT TO KNOW I'M OUT NUMBERED ON THIS, AS ALWAYS.

BUT TO ME, THEY'RE HIGHLY VISIBLE DETERRENTS TO CRIME.

WITH THE PATROL.

I WOULD LIKE US TO AT LEAST CONSIDER THEIR IMPORTANCE AND THEIR VALUE TO OUR COMMUNITY.

I THINK IF THERE IS EVER A TIME THAT THEY'RE IMPORTANT, AS WELL AS OUR RELATIONSHIP WITH THE MONTGOMERY COUNTY SHERIFF'S OFFICE AS WELL AS HARRIS COUNTY, AS WELL AS OUR CONSTABLE, IT'S NOW.

AND THEY ARE A DETERRENT TO CRIME.

I FEEL STRONGLY ON THAT.

>> NOW THE QUESTION AT HAND IS CAN WE MOVE THEM INTO COMMUNITY SERVICES OUT OF THE LAW ENFORCEMENT CATEGORY? THERE WILL BE FURTHER DIALOG ON THEIR SERVICES IN THE BUDGET AS THAT IS AN INITIATIVE.

>> FROM THE FINANCE PERSPECTIVE, WE CERTAINLY CAN, IF THAT IS WHAT THE BOARD WANTS.

>> DO WE NEED A MOTION?

>> I DON'T KNOW THAT WE NEED A MOTION.

WE HAD A MAJORITY SPEAK FAVORABLY OF THE RECLASSIFICATION.

MONIQUE, YOU TELL ME.

>> TO ME, THAT IS JUST AN ADMINISTRATIVE MOVE.

SO I DON'T I'M CLEAR THAT Y'ALL WANT IT IN COMMUNITY SERVICES.

I'M FINE WITH THAT.

MR. NORRELL MIGHT FEEL DIFFERENTLY.

>> I'M TRYING TO FIGURE OUT WHAT THAT WOULD LOOK LIKE.

WE WOULD SHOW ANOTHER LINE ITEM THEN IN COMMUNITY SERVICES.

IN SOMETHING, COMMUNITY SERVICES SLASH COMMERCIAL AREAS OR COMMERCIAL, OR REALLY THE PATROLS ARE IN OUR HIGH TICKET AREAS IN YOU WILL IN TERMS OF WHERE WE

[01:35:03]

GENERATE SALES TAX.

SO WE'LL TRY TO MAKE A DESIGNATION THERE OF HOW WE DESCRIBE IT.

>> HOW ABOUT THIS, DON, COMMERCIAL AREA ADDITIONAL SECURITY SERVICES.

>> WE COULD DO THAT.

YES.

CHAIRMAN: ALL RIGHT.

THAT DOESN'T CHANGE ANYTHING IN THE BUDGET.

IT MOVES IT FROM A CATEGORY THAT THE MAJORITY FEELS IS MISCLASSIFIED.

>> OKAY.

GREAT.

THANK YOU.

SO NOW WE'LL MOVE INTO THE FIRE DEPARTMENT EXPENSES.

THIS WAS OUR FINAL CATEGORY, WHERE WE WERE SEEING INCREASES IN THE BUDGET AT AROUND 237,000, OR JUST LESS THAN ONE PERCENT.

AND THESE ARE THE COMPONENTS OF THAT INCREASE.

WE ARE SEEING, IT'S PRIMARILY RELATED TO INCREASES IN SALARIES AND BENEFITS AND FACILITY MAINTENANCE.

DECREASE IN CONTRACTED SERVICES.

IT HAS A LOT TO DO WITH WHAT WAS BUDGETED IN 2020.

INCREASE IN ADMINISTRATIONS.

SO I'M GOING TO MOVE ON TO PARKS AND RECREATION DEPARTMENT.

WE SAW AN OVERALL DECREASE IN THIS BUDGET OF ABOUT $108,000.

AGAIN, THESE ARE THE COMPONENTS RELATED TO THAT OVERALL DECREASE.

SO WE ARE SEEING AN INCREASE IN MAINTENANCE, BUT THAT IS DIRECTLY OFFSET BY THE DECREASE THAT YOU SEE UP THERE IN CONTRACTED SERVICES.

SO WE ARE MOVING THE PARKS AND REC DEPARTMENT HAS DETERMINED IT'S BEST TO MOVE SOME EXPENSES OUT OF THE CONTRACT AND FOR THEM TO BE PERFORMED DIRECTLY BY STAFF.

SO THAT IS WHAT IS GOING ON THERE.

AND THEN INCREASES IN SALARIES AND BENEFITS IN EQUIPMENT, OFFSET BY DECREASES IN FACILITIES, PROGRAMS, TRAINING.

>> ON THE MAINTENANCE, IS THAT MAINTENANCE SOMEWHAT OR MAJORITY TIED TO OR DEALING WITH COVID?

>> NO, MA'AM.

THAT IS PARK MAINTENANCE.

IT'S HAVING TO DO WITH LANDSCAPING AND IRRIGATION.

>> YES, THAT IS CORRECT.

IF YOU REMEMBER ONE OF THE CONTRACTS, I BELIEVE IT WAS THE SPORT FIELD CONTRACT, CHANGED SOME OF THE TERMS WHERE WE WOULD BE BUYING SOME OF THE SUPPLIES TO ENSURE THAT THEY WERE GETTING APPLIED RIGHTFULLY, SO IT TOOK MONEY FROM ONE POCKET AND PUT IT IN ANOTHER POCKET.

>> I JUST WANTED TO SHOW YOU THAT INCLUDED IN THE 2021 BUDGET, WE ARE BACK TO ASSUMING, AGAIN, WE KNOW THERE IS A LOT OF UNCERTAINTY IN THIS.

FOR THE 2021 BUDGET, WE'RE ASSUMING WE'RE BACK TO NORMAL FOR RECREATION AND AQUATICS.

FOR THE 2021 BUDGET, WE ARE BACK TO OUR FULL COMPLIMENT OF THESE EVENTS LISTED HERE.

AND AS WE DISCUSSED PREVIOUSLY, IF THE IMPACTS OF THE PANDEMIC ARE STILL, OF THE VIRUS ARE STILL GOING ON, THEN OBVIOUSLY THIS WOULD BE DISCUSSED WITH THE BOARD NEXT YEAR.

IN TERMS OF GENERAL GOVERNMENT, AND THAT IS COMPRISED OF A VARIETY OF DEPARTMENTS, INCLUDING THE BOARD OF DIRECTORS, PRESIDENT'S OFFICE, LEGAL, LEGISLATIVE AFFAIRS, HUMAN RESOURCE, FINANCE, INFORMATION TECHNOLOGY RECORDS AND NON DEPARTMENTAL ARE ALL INCLUDED IN THE GENERAL GOVERNMENT BUDGET.

IN TOTAL, WE'RE JUST ABOUT FLAT.

BUT WE ARE SEEING A DECREASE OF ABOUT $13,000, WHEN WE COMPARE BUDGET TO BUDGET, AND LISTED HERE ARE THE COMPONENTS OF THAT OVERALL NET DECREASE.

SO IF THERE ARE NO OTHER QUESTIONS ON EXPENDITURES, THIS IS JUST WHAT I HAVE SHARED ON THE SCREEN.

IF THERE ARE ANY, IF WE WANT TO GET INTO MORE DETAIL IN THE EXPENDITURES, WE CAN

[01:40:04]

MOVE TO THE BUDGET BINDERS, WHERE THE DEPARTMENTS, THE EXPENSES ARE LISTED IN LINE ITEM DETAIL IN THE BUDGETS.

IN TERMS OF THE PROCESS, SO THAT YOU KNOW THAT LINE ITEM DETAIL HAS BEEN REVIEWED BY THE FINANCE DEPARTMENT AS THEY WERE SUBMITTED FROM THE BUDGET MANAGERS, THERE WAS ADDITIONAL REVIEWS WITH THE PRESIDENT, WITH MR. NORRELL WITH EACH DEPARTMENT AND THEN THE BUDGET TASK FORCE ALSO REVIEWED IN DETAIL THE EXPENDITURES OF THE DEPARTMENTS.

>> SO MONIQUE, THIS IS KEEPING ALL OF THE PREVIOUSLY APPROVED ANNUAL ESCALATIONS AND BONUS POOLS INTACT?

>> ACTUALLY, THAT IS THE NEXT SECTION I'M GOING TO MOVE TO.

YES.

SO INCLUDED IN WHAT WE, THE NUMBERS WE WERE JUST LOOKING AT WERE INCREASES IN PERSONNEL COSTS.

SO IN THE BASE BUDGET, THERE ARE NO NEW POSITIONS ADDED.

WE HAVE ADDED NO NEW STAFF.

THERE ARE SOME PRESENTED TO THE BOARD AS BUDGET INITIATIVES, BUT THEY ARE NOT INCLUDED IN THE BASE BUDGET.

OVERALL WE'RE SEEING A.25 DECREASE IN FULL TIME EQUIVALENCE THAT IS BECAUSE THE NEIGHBORHOOD SERVICES HAD A VACANT INTERN POSITION THAT THEY NO LONGER NEEDED.

SO WE TOOK THAT OUT OF THE HEAD COUNT.

WHAT IS INCLUDED IN THE BUDGET FOR PERSONNEL COST IS, WE'LL START OFF WITH THE GENERAL WAGE INCREASE, WHICH IS 1.69 PERCENT AND THE WAY THAT THIS WAS DERIVED IS MAINTAINING THE 2.25 PERCENT GENERAL WAGE INCREASE THAT WAS RECOMMENDED BY THE COMPENSATION STUDY THAT WAS APPROVED AT THE END OF LAST YEAR, WHICH HAS BEEN OUR, FOR THE PAST SEVERAL, THREE OR FOUR FIVE YEARS, HAS BEEN THE STANDARD.

BUT WHAT STAFF PROPOSED TO THE BUDGET TASK FORCE IS THAT WE WOULD DEFER THAT WAGE INCREASE FROM JANUARY 1ST UNTIL AT LEAST APRIL 1ST.

AND THAT IS WHAT IS RESULTING IN AN ANNUAL EFFECTIVE RAISE OF THE 1.69 PERCENT.

AND ONE OF THE REASONS THAT WE, THE REASON WE TALKED ABOUT DOING THAT IS IN RESPONSE TO THE PANDEMIC.

AND THERE MAY BE LINGERING EFFECTS.

SO WE DIDN'T WANT TO W WANTED TO SEE WHAT PROPERTY TAX REVENUE CAME IN.

THE DUE DATE FOR THAT IS JANUARY 31ST.

AND ALSO SEE WHAT SALES TAX REVENUES WERE DOING AT LEAST THROUGH THE FIRST QUARTER OF 2021.

SO WHAT THIS IS DOING IS IT IS AN APPROPRIATING THE COSTS IN THE 2021 BUDGET, BUT NOT AUTHORIZING IT.

THIS WOULD HAVE TO COME BACK TO THE BOARD FOR FURTHER IMPLEMENTATION IN 2021.

MOVING ON TO HEALTH INSURANCE, WE ARE SEEING AN OVERALL DECREASE OF 4.2 PERCENT.

SOME OF THE TOPICS I WANTED TO COVER IN HEALTH INSURANCE IS WE HAVE SAVED OVER $3 MILLION SINCE TRANSITIONING TO SELF INSURANCE.

I BELIEVE THAT WAS IN 2012.

WE DO HAVE AN ESTIMATED INCREASE IN HEALTH INSURANCE IN 2021 OF ABOUT FOUR PERCENT, ALTHOUGH WE DO FEEL THAT THAT MAY COME DOWN.

WE ARE NOT, SUSAN IS STILL CONTINUING THOSE NEGOTIATIONS WITH OUR CONSULTANT AND WITH OUR HEALTH INSURANCE PROVIDER.

BUT WE DID HAVE ADJUSTMENTS THAT WE WANTED TO MAKE TO THE 2020 BUDGET, WHICH WAS OVERSTATED.

WE HAVE SEEN SOME POSITIVE FAVORABLE EFFECTS IN OUR HEALTH INSURANCE PREMIUMS OVER THE PAST COUPLE OF YEARS.

BUT REALLY HAD NOT MADE THAT ADJUSTMENT IN THE BUDGET BECAUSE THOSE CAN TEND TO BE CYCLICAL RATHER THAN AS A PATTERN.

BUT NOW WE BELIEVE THOSE ARE SELF SUSTAINING AND SO WE HAVE MADE THOSE ADJUSTMENTS.

OUR INCREASE, EVEN IF IT ENDS UP STAYING AT FOUR PERCENT IS MORE FAVORABLE TO THE NATIONAL TREND TO 5.9 PERCENT FOR MEDICAL COSTS AND 8.5 PERCENT FOR PRESCRIPTION COST.

SO OVERALL WE DO BELIEVE THAT OUR SELF FUNDED HEALTH INSURANCE PLAN IS A SUCCESS STORY FOR THE TOWNSHIP AND CONTINUES TO BE.

3 YEAR RATE GUARANTEES FOR OUR OTHER TYPES OF EMPLOYEE INSURANCE.

SO WE HAVE NO INCREASE THERE.

WE ARE SEEING A SIGNIFICANT INCREASE OR PROJECTING A SIGNIFICANT INCREASE IN OUR UNEMPLOYMENT INSURANCE.

BUT EVEN THOUGH THAT IS A BIG NUMBER, 63 PERCENT, WE'RE ONLY TALKING ABOUT $30,000 IN ACTUAL COSTS.

AND THEN WE ARE PROJECTING WORKER'S COMP TO GO DOWN BY 24 PERCENT, WHICH EQUATES TO 63 PERCENT.

ANY QUESTIONS ON THIS BEFORE I MOVE ON? SO THE OTHER COSTS THAT WE HAVE FOR BENEFITS IS IN OUR RETIREMENT PLANS.

[01:45:03]

WE HAVE TWO DIFFERENT RETIREMENT PLANS FOR OUR GENERAL EMPLOYEES.

WE HAVE THE 401A, 457B DEFINED CONTRIBUTION PLAN.

ORIGINAL PLAN.

THE TOWNSHIP CONTRIBUTION INTO THAT PLAN FOR 2019 WAS 8.1 PERCENT.

AND THEN IN THE NEWER PLAN THAT WAS IMPLEMENTED IN 2019, THAT CONTRIBUTION IN 2019 WAS 3.4 PERCENT.

AND THEN WHAT WE'RE PROJECTING FOR 2021 BUDGET INCREASE OVERALL IS 1.7 PERCENT, OR $24,000.

AND THEN WE HAVE THE WOODLANDS FIREFIGHTER RETIREMENT SYSTEM.

DEFINED BENEFIT PLAN.

AND THAT CONTRIBUTION FOR THE TOWNSHIP IS 12 PERCENT, ASSET BY LAW.

JUST AN IMPORTANT REMINDER ON THAT PLAN, THE TOWNSHIP IS NOT RESPONSIBLE FOR ANY UNFUNDED LIABILITIES OF THE PLAN IF THEY WERE TO OCCUR.

AND OVERALL WE'RE SEEING THE TOWNSHIP'S CONTRIBUTION TO THAT PLAN INCREASE BY 30,000 IN 2021.

SO WHEN WE LOOK AT ALL OF THOSE TOGETHER, TRY TO GET IT ON, MAKE IT MORE SUCCINCT ON THOSE SLIDES, IN TERMS OF THE FIRE DEPARTMENT, THE PERSONNEL COST OVER ALL ARE $22 MILLION IN 2021, THAT IS ABOUT A 230,000 OR 1 PERCENT INCREASE FROM THE 2020 BUDGET.

AND THEN FOR THE GENERAL EMPLOYEES PAYROLL COSTS, SALARIES AND BENEFITS ARE 21.9 MILLION, WHICH REPRESENTS ABOUT 307,000 OR 1.4 PERCENT INCREASE.

AND THEN HERE IS LOOKING AT IT IN MORE DETAIL.

SOME OF WHAT WE JUST TALKED ABOUT, IN TERMS OF THE SPECIFIC COMPONENTS OF THE PERSONNEL COSTS FOR THE FIRE DEPARTMENT.

AND THEN HERE IT IS FOR THE GENERAL EMPLOYEES.

SO ARE THERE ANY QUESTIONS ON PERSONNEL BEFORE I MOVE ON? OKAY.

WITH THAT, WE ARE GOING TO MOVE INTO THE TRANSPORTATION FUND.

THE TRANSPORTATION FUND PRIMARILY COVERS OUR PARK AND RIDE PROGRAMS AND OUR TROLLY PROGRAMS AND SOME OTHER EXPENSES, WHICH I WILL TALK ABOUT HERE IN A MINUTE.

WE HAVE REVENUES OF 8.5 MILLION.

EXPENDITURES OF $8.4 MILLION.

AND THE DIFFERENCE BETWEEN THOSE TWO IS WE GENERATE ADDITIONAL $150,000 THAT WE ALLOCATE TO A BUS REPLACEMENT RESERVE.

THESE ARE THE OTHER EXPENSES I WAS TALKING ABOUT.

SO ALSO INCLUDED IN THE TRANSPORTATION FUNDS, WE HAVE MONEYS FOR TRANSIT PLANNING, WHICH IS REIMBURSED 80 PERCENT BY GRANTS.

MAINTAINING THE CURRENT LEVEL OF CONTRIBUTIONS FOR TRANSPORTATION SERVICES PROVIDED BY INTER FAITH AND SENIOR RIDES.

THIS IS THE WHERE WE'LL TALK ABOUT THE CARES ACT FUNDING.

THIS IS THE CARES ACT FUNDING THAT THE TOWNSHIP HAS RECEIVED SO FAR, I SAY WE RECEIVE, WE STILL HAVE TO APPLY FOR IT, BUT IT'S BEEN APPROPRIATED TO US.

SPECIFICALLY RELATED TO THE TRANSPORTATION.

THIS IS A LOOK AT HOW RIGHT NOW WE ARE PROJECTING IN THE FIVE YEAR PLAN OUR ALLOCATION WAS $7.4 MILLION.

AND HOW WE WOULD UTILIZE THOSE FUNDS FOR PARK AND RIDE AND TROLLEYS OVER THE NEXT SEVERAL YEARS.

THIS IS TAKING A LOOK AT HOW WE'RE ACTUALLY USING THE CARES ACT FUNDING, SO OUT OF THAT 2.6 MILLION OF IT IS BEING USED TO OFFSET THE REDUCED BUS FARES REVENUE THAT WE ARE SEEING IN 2020 AND PROJECTING TO CONTINUE INTO 2021.

2.7 MILLION OF IT IS BEING USED TO OFFSET PRIMARILY THE TOWNSHIP HAS TO FUND 50 PERCENT OF THE OPERATING COSTS OF THE TROLLEY PROGRAM.

BUT THE CARES ACT ALLOWS US TO USE THAT MONEY TO FUND 100 PERCENT.

>> WITH THAT, MONIQUE, IF WE WOULDN'T HAVE RECEIVED THAT MONEY, OUR BUDGET WOULD HAVE HAD TO START OFF DIFFERENT THAN IT IS?

>> YES, SIR.

I ACTUALLY HAVE A SLIDE HERE IN A LITTLE BIT BASED ON YOUR QUESTION FROM LAST WEEK THAT SHOWS WHAT THAT DIFFERENCE WOULD HAVE BEEN, YES, SIR.

AND THEN WE'RE USING ABOUT 2.1 MILLION OF IT TO DEFER WHAT WE WOULD HAVE TAKEN DOWN IN OUR 5307 GRANT PROCEEDS.

SO THAT IS GOOD, IN THAT IT EXTENDS THE GRANT PROCEEDS AVAILABLE TO US FURTHER OUT.

[01:50:09]

THIS IS OUR PARK AND RIDE PROGRAM.

EXPENSES.

AND THEN HOW THOSE EXPENSES ARE FUNDED OVER THE FIVE YEAR PLAN.

THIS DOES NOT INCLUDE THE ENERGY CORRIDOR.

I'M GOING TO HAVE A SEPARATE SLIDE ON THAT.

BUT YOU CAN SEE FOR 2021, OUR STANDARD BUS FARES HAVE BEEN WHAT WE'VE BEEN BUDGETING, 3.6 MILLION.

IN 2021, WE'RE STILL REMAINING ABOUT A MILLION DOLLARS BELOW THAT.

AND THEN WE START GROWING THOSE IN THE FIVE YEAR PLAN TO KEEP UP WITH THE PACE AND GROWTH IN EXPENSES.

THE CARES ACT IS TAKING, AS WE MENTIONED, IS SUPPLANTING BUS FARE REVENUE LOSS, AND ALSO SOME OF OUR OPERATING COSTS.

THE PART THAT WE ARE SHORT FOR 22 AND 23, AS THE CARES ACT FUNDING STARTS TO RUN OUT, THEN THE TOWNSHIP CONTRIBUTION FOR PARK AND RIDE OPERATIONS, WE SEE THAT INCREASE IN 24 AND 25.

SO TO ELIMINATE OR TO REDUCE THAT CONTRIBUTION BY THE TOWNSHIP WOULD REQUIRE EITHER AN INCREASE IN BUS FARES OR A DECREASE IN EXPENDITURES POSSIBLY BY REDUCING ROUTES OR CONSOLIDATING ROUTES.

FOR THE ENERGY CORRIDOR, YOU CAN SEE THERE AT THE TOP, THE PROJECTED EXPENSES ARE.

WE DO HAVE FARES THAT ARE ASSOCIATED WITH THAT TO HELP FUND IT.

WE HAVE A GRANT FOR THE NEXT THREE YEARS, CMAC GRANT THAT IS HELPING FUND IT.

AFTER THE CMAC GRANT EXPIRES, THEN THE 5307 GRANT FUNDS WILL BE AVAILABLE TO FUND IT.

AND WHERE THE TOWNSHIP IS PICKING UP COSTS IN THE LAST TWO YEARS IS WE DO NOT HAVE A GUARANTEE THAT THE ENERGY CORRIDOR DISTRICT WILL CONTINUE TO PROVIDE FUNDING FOR THIS PROGRAM.

SO WE ARE HOPEFUL THAT THEY WILL.

PARTICULARLY IF IT'S A SUCCESS.

WE THINK THEY WILL.

BUT FOR CONSERVATIVE BUDGETING PURPOSES, WE HAD THE TOWNSHIP PICK UP THAT CONTRIBUTION IN THE LAST TWO YEARS.

AND THEN FINALLY, HERE IS THE TROLLEY PROGRAM, WHERE WE'RE SEEING THE MOST BENEFIT FROM THE CARES ACT FUNDING.

I MENTIONED AGAIN, TYPICALLY WE SHARE THE EXPENSES, IT'S 50 PERCENT FUNDED BY A GRANT AND 50 PERCENT BY THE TOWNSHIP.

BUT THE CARES ACT ALLOWS US TO USE THOSE FUNDS SO THAT THE TOWNSHIP DOES NOT HAVE TO MAKE A CONTRIBUTION.

BUT YOU CAN SEE AS THOSE FUNDS START TO EXPIRE IN 2024, WE PICK UP PART OF THAT CONTRIBUTION AND THEN IN 2025, WE'RE BACK TO OUR FULL 50 PERCENT.

SO WHEN YOU LOOK AT ALL OF THAT TOGETHER, WE LOOKED AT THIS SLIDE LAST WEEK.

WHEN WE GET TO OUR FIVE YEAR PLAN SLIDE, YOU'LL SEE THAT THERE IS A BIG INCREASE IN THE UNDESIGNATED NEGATIVE FUND BALANCE FROM 24 AND 25, THAT IS LARGELY BECAUSE WE'RE PICKING UP THESE ADDITIONAL COSTS SINCE THE CARES ACT FUNDING IS EXPIRING.

AND THEN WE'RE HAVING TO PICK UP THOSE COSTS.

>> MONIQUE, IF WE MADE ADJUSTMENTS TO ROUTES AND SERVICE TIMES FOR ANY OF THESE, WOULD THAT JUST EXTEND THE AVAILABLE FUNDING AND POSSIBLY ELIMINATE SOME OF THESE OUT YEARS?

>> THAT GETS COMPLICATED.

YES, IT COULD.

AND I CAN GET JOHN TO SORT OF MAYBE TALK MORE ABOUT THE DETAILS OF THE ROUTES.

BUT WE HAVE MADE ADJUSTMENTS TO THE ROUTES BASED ON RIDERSHIP.

THE EXPENSES THAT ARE PAID TO FIRST CLASS TOURS FOR THE BUS RIDES ARE CONSIDERED CAPITAL COSTS TO CONTRACTING.

AND THEY'RE NOT AN ELIGIBLE EXPENSE RECOVERY UNDER THE CARES ACT.

IT'S ONLY OPERATING EXPENSES.

SO TO THE EXTENT THAT WE REDUCE THOSE COSTS AND THE BUS FARES ARE SUFFICIENT ENOUGH TO NOT HAVE TO, WHERE THEY'RE NOT IMPACTED, THEN YES, IT COULD HAVE A SMALL BENEFIT IN THE OUT YEARS.

IT'S COMPLICATED.

I WOULD NEED TO HAVE A WHOLE DIFFERENT SLIDE TO SHOW THAT.

IT COULD HAVE A BENEFIT BUT MAYBE NOT AS LARGE AS ONE WOULD THINK.

AND THEN FINALLY, WANT TO REMIND YOU THAT WE DO HAVE ABOUT $1.4 MILLION IN OUR TRANSPORTATION INITIATIVES FUND BALANCE.

THE BOARD SEVERAL YEARS AGO AUTHORIZED THE TRANSFER OF $500,000 ANNUALLY INTO THIS FUND.

TO DATE, THERE HAS NOT BEEN A WHOLE BUNCH SPENT ON THAT.

[01:55:02]

BECAUSE AS YOU'LL RECALL, REALLY THE PURPOSE WAS TO LEVERAGE THESE MONIES AGAINST AVAILABLE GRANT FUNDS TO FUND OUR TRANSIT PROJECTS.

AND THOSE GRANT FUNDS HAVE NOT MATERIALIZED.

SO TO THE EXTENT THAT THEY HAVEN'T, THEN WE HAVEN'T HAD TO USE THESE FUNDS TO LEVERAGE.

BUT THEY STILL REMAIN THERE IF THAT WERE TO HAPPEN IN THE FUTURE.

OKAY.

WITH THAT I'M GOING TO MOVE ON TO CAPITAL PROJECTS.

AGAIN, WE TALKED ABOUT THIS LAST WEEK.

THE KEY TO OUR CAPITAL, THERE IS A COUPLE OF IMPORTANT POINTS HERE WHEN WE TALK ABOUT OUR CAPITAL PROJECTS BUDGET.

FIRST OF ALL, THE GENERAL FUND IS ONLY FUNDING $400,000 OUT OF THE TOTAL $8.8 MILLION IN PROJECTS.

THIS IS PART OF OUR BUDGET FLEXIBILITY.

WE CAN CERTAINLY DEFER CAPITAL PROJECTS THAT ARE FUNDED WITH GENERAL FUND MONIES IF THAT BECOMES NECESSARY.

SO THIS $400,000 WHILE NOT A WHOLE BUNCH, GIVES US FLEXIBILITY IN THAT REGARD.

THESE, I'M GOING TO HAVE SEVERAL DIFFERENT SLIDES HERE SHOWING WHAT THE CAPITAL PROJECTS ARE FOR EACH OF THE DEPARTMENTS.

THESE WERE LOOKED AT BY THE BUDGET TASK FORCE IN SOME DETAIL AND INCLUDED IN YOUR BUDGET BINDERS IS A LISTING OF EVERY SINGLE ONE OF THESE PROJECTS.

NOT JUST A LISTING, BUT DETAILS REGARDING THE JUSTIFICATION FOR THEM OR WHY STAFF SUBMITTED THEM AS PROJECTS.

WHAT I WANT TO CONCENTRATE ON HERE IS WE ARE LOOKING AT OUR CAPITAL PROJECT PLAN AND THE FACT THAT IT'S FUNDED OUT OF THE CAPITAL REPLACEMENT RESERVE AS PROVIDING A SIGNIFICANT SOURCE OF BUDGET FLEXIBILITY FOR US, 2020 AND 2021, DUE TO THE UNCERTAINTY OF THE REVENUE FUNCTIONS AS WE DISCUSSED FURTHER.

MOST OF THE CARRY OVER AMOUNTS THAT YOU SEE IN EACH OF THESE, AND THE LAST COLUMN FUNDED WITH THE RESERVE FUND, THESE PROJECTS, WITH FEW EXCEPTIONS COULD CONTINUE TO BE DEFERRED IF NECESSARY AND THEREFORE, WE COULD USE THE CAPITAL RESERVE FUNDING AS A TEMPORARY SOURCE OF FUNDING IF NECESSARY.

SO THIS WAS ONE OF THE THINGS THAT STAFF TALKED ABOUT QUITE A BIT AND WITH THE TASK FORCE IN TERMS OF BUDGET FLEXIBILITY.

SO AGAIN, WE CAN GO OVER ANY OF THESE THAT YOU HAVE A SPECIFIC QUESTION ABOUT, EITHER TODAY OR LATER ON IN THE BUDGET WORKSHOPS.

ALL OF THE DETAILS ARE IN YOUR BOOK.

BUT AGAIN, THE IMPORTANT PART HERE IS THAT THE OVERWHELMING MAJORITY OF THIS IS BEING FUNDED THROUGH RESERVE FUNDS.

INFORMATION TECHNOLOGY.

LAW ENFORCEMENT HAS A GENERAL EQUIPMENT BUDGET OF 70,000.

AND THERE'S A LOOK AT SOME OF THE NON DEPARTMENTAL.

ANY QUESTIONS ON CAPITAL? OKAY.

WITH THAT I'M GOING TO MOVE TO OUR RESERVES AND FUND BALANCES.

SO THIS IS A BUSY CHART, BUT IT DOES LIST ALL OF OUR DIFFERENT RESERVES THAT WE HAVE, AND WHAT THE PROJECTED 2020 BALANCE AND 2021 BALANCE IS FOR EACH.

WE'RE GOING TO TALK ABOUT SOME OF THESE IN MORE DETAIL.

SO THIS GETS BACK TO WHAT I WAS JUST TALKING ABOUT IN TERMS OF BUDGET FLEXIBILITY.

OUR ANNUAL FUNDING ALLOCATION TO THIS RESERVE IS $5.3 MILLION.

WE HAVE ALSO ADDED FOR 2021, AN ALLOCATION FOR LAW ENFORCEMENT VEHICLES FOR $800,000, WHICH WILL REPLACE 15 VEHICLES.

WE HAVE CAPITAL EXPENDITURES PROJECTED BASED ON ALL OF THE SHEETS THAT WE JUST LOOKED AT, IF YOU ADDED THEM ALL UP TOGETHER ABOUT 4.6 MILLION.

BUT WHAT WE'RE SAYING IS, I KNOW WE'VE TALKED ABOUT THE SALES TAX RESERVE, PROVIDING THAT FLEXIBILITY.

BUT THIS IS A RESERVE THAT STAFF FELT LIKE, WHEN WE TALKED WITH THE BUDGET TASK FORCE THAT COULD BE USED.

BECAUSE WE COULD, WE BELIEVE EASILY IDENTIFY SOME CAPITAL PROJECTS THAT COULD BE EXTENDED FURTHER OUT INTO THE FIVE YEAR PLAN AND THEREFORE, USE THIS $5.3 MILLION IN FUNDING TO SUPPLANT ANY REVENUE SHORTFALLS THAT WE SEE NEXT YEAR.

SO DOES EVERYONE UNDERSTAND THE THEORY BEHIND THAT? OKAY.

THESE ARE OTHER RESERVES.

WE DO HAVE FLEXIBILITY IN TERMS OF BEING ABLE TO UTILIZE THESE.

[02:00:06]

ONLY BECAUSE THEY'RE DISCRETIONARY.

THEY'RE NOT TIED TO A SPECIFIC MANDATE.

THEY'RE NOT REQUIRED FOR OUR BOND COVENANTS.

SO WE DO CONSIDER THOSE DISCRETIONARY.

BUT AGAIN, IN OUR DISCUSSIONS, WE ARE ATTEMPTING TO NOT USE THESE.

AND YOU'VE HEARD SOME OF THAT DISCUSSION EARLIER THAN THAT.

INSTEAD, AGAIN, BACK ON THIS ONE, WE WOULD RELY ON USING THIS AS A FUNDING MECHANISM IF NECESSARY, THE CAPITAL REPLACEMENT RESERVE FUNDING AND NOT THESE BALANCES.

THESE ARE THE NON DISCRETIONARY RESERVES THAT I WAS TALKING ABOUT THAT THAT ARE TIED TO SPECIFIC THINGS THAT ARE MANDATED BY LEGISLATION OR BY OUR BOND COVENANTS.

FLOOD AND DRAINAGE IS NOT INCLUDED IN THAT.

BUT IT'S A SMALL AMOUNT.

SO WE JUST INCLUDED IT ON THIS SLIDE.

>> CHAIRMAN, IF I MAY ASK MONIQUE ANOTHER QUESTION.

SHARE MONIQUE, HOW THIS REFLECTS ON OUR CREDIT RATING.

WE'VE BEEN SO PROUD OF OUR HIGH CREDIT RATING.

>> I BELIEVE AT LAST WEEK'S MEETING, I SHOWED COMMENTS FROM THE RATING AGENCIES.

AND SOME OF THE FAVORABLE THINGS.

ONE OF THE THINGS THAT HAS CONSISTENTLY BEEN MENTIONED IN THE LAST THREE, FOUR YEARS OF RATING MEETINGS THAT WE'VE GONE THROUGH IS OUR HIGH LEVEL OF RESERVES.

OUR OPERATING RESERVE, THEY'RE AT $21 MILLION.

BY POLICY, THAT IS SET AT 20 PERCENT OF GENERAL FUND EXPENDITURES.

WE HAVE NOT HAD TO TOUCH THAT.

AND I WOULD RECOMMEND NOT TOUCHING THAT UNLESS WE GOT INTO THAT DIRE OF STRAITS, WHICH I CAN'T IMAGINE ANY OF THE SCENARIOS THAT WE'RE TALKING ABOUT THAT WE WOULD GET THERE.

THAT IS A POSITIVE THING FOR US.

AS IN JUST IN GENERAL HAVING THESE OTHER RESERVES.

THE FACT THAT THE BOARD HAS SET POLICIES AND HAS MADE IT A PRIORITY TO HAVE RESERVES AT THIS LEVEL IS VERY IMPORTANT TO THE CREDIT AGENCIES.

>> I'M SORRY.

EXCUSE ME.

>> I WAS GOING TO MENTION, HAVING THE CAPITAL REPLACEMENT RESERVE IS REALLY VERY UNIQUE FOR THE TOWNSHIP.

THERE ARE NOT MANY CITIES THAT FUND THEIR ASSETS THIS WAY.

AND THE CREDIT AGENCIES REALLY HAVE A FAVORABLE REACTION TO THE FACT THAT THIS IS HOW WE CHOOSE TO FUND OUR CAPITAL PROGRAM.

>> THERE HAS BEEN DISCUSSION NOW IN THE CAPITAL REPLACEMENT RESERVE AS WELL AS THE SALES TAX RESERVE.

SO BOTH OF THOSE COULD BE USED TO MAINTAIN BUDGET FLEXIBILITY AND IDENTIFYING THINGS THAT WE NEED IN 2021.

>> YES, MA'AM.

>> I THINK IT'S IMPORTANT TO NOTE THAT AS MONIQUE IS TALKING ABOUT THIS CAPITAL RESERVE, LET'S SAY THE WHEELS COME OFF THE WAGON IN 2021, IT'S A WAY OF FUNDING CAPITAL TO GIVE YOU THAT ONE TIME FUNDING THAT YOU WOULD BE REPLACING THEN, AS YOU GO DOWN THE ROAD.

BUT IT'S NOT A LONG TERM FUNDING SOURCE.

>> CORRECT.

THANK YOU.

>> MONIQUE, ONE OTHER SMALL POINT, IT'S VERY SMALL.

BUT IN THE FLOOD AND DRAINAGE RESERVE, THE BOARD ACTUALLY AUTHORIZED THE USE OF THAT FUND TO PAY FOR THE STUDY, AT THE BOARD MEETING TWO WEEKS AGO.

I THINK IT'S MINUS 45,000 OUT OF THAT NUMBER.

>> YES, SIR.

THANK YOU.

I HAVE FURTHER ADJUSTMENTS THAT I HAVE TO MAKE.

YOU'RE CORRECT, THAT IS NOT REFLECTED IN THAT BALANCE.

THANK YOU FOR POINTING THAT OUT.

>> NO PROBLEM.

THANK YOU.

>> SO WHERE WE GET DOWN TO AFTER WE'VE TALKED ABOUT OUR REVENUES AND FUNDING EXPENDITURES FROM THAT AND FUNDING OUR RESERVES AND WE HAVEN'T TALKED ABOUT DEBT SERVICE, WE TALKED ABOUT IT LAST WEEK, THE FUNDING DEBT SERVICE, WE HAVE REMAINING NOW IN OUR UNDESIGNATED FUND BALANCE, 2020, 2.2 MILLION, 2021, 640,000, AS I MENTIONED, THAT IS NOT MONEY IN THE BANK RIGHT NOW.

THOSE ARE JUST PROJECTIONS BASED ON CURRENT ASSUMPTIONS.

WE DO BELIEVE THAT WE'LL HAVE SOMETHING.

IT COULD BE HIGHER THAN THESE NUMBERS, IT COULD BE LOWER.

[02:05:01]

BUT WE WILL HAVE SOMETHING.

ANOTHER IMPORTANT THING THAT I WANT TO POINT OUT HERE IS PARTICULARLY IN TERMS OF THE 2021 UNDESIGNATED BALANCE, A LOT OF THAT IS BEING GENERATED BECAUSE OF THE CARES ACT FUNDING THAT WE GOT AND THEREFORE, NOT HAVING TO SPEND MONEY ON THE TROLLEYS.

THIS WOULD NOT BE CONSIDERED AN ONGOING REVENUE SOURCE THAT YOU COULD USE TO FUND ONGOING EXPENDITURES, WHEN YOU START LOOKING AT YOUR BUDGET INITIATIVES, THIS IS GOING TO BE CONSIDERED MORE ONE TIME TYPE OF FUNDING, SAY, FOR EXAMPLE, FOR CAPITAL PROJECTS.

>> MONIQUE, WHEN WE WERE TALKING ABOUT THE SALES TAX PROJECTIONS AND TRYING TO KEEP IT AT THE 100 PERCENT, BASE BUDGET, WE MENTIONED THAT WE COULD UNDESIGNATE ANY TOWARDS THE SALES TAX RESERVE.

IF WE AS A BOARD PRIORITIZE POOLING FROM THE SALES TAX RESERVE MONTHLY IN 2021, SO MY EXAMPLE IS GOING TO BE JANUARY'S BUDGET HAD A PROJECTED REVENUE OF $4.5 MILLION, WE ONLY RECEIVED 4 MILLION, WE IMMEDIATELY DRAW DOWN 400,000 FROM THAT SALES TAX RESERVE, SO WE KEEP OUR BUDGET NEUTRAL.

WE START DRAWING THAT RESERVE DOWN THROUGHOUT THE CALENDAR YEAR NEXT YEAR?

>> YES, SIR.

I UNDERSTAND WHAT YOU'RE SAYING, YES.

>> THAT IS A GOOD IDEA, GORDY.

I LIKE THAT.

CHAIRMAN: BECAUSE I THINK THAT IS WHAT THE INTENDED PURPOSE OF A SALES TAX RESERVE.

AND IF WE ADD ADDITIONAL AND DESIGNATED FUND BALANCE TO THAT SALES TAX RESERVE GETS ME MORE COMFORTABLE WITH YES, WE'RE USING A HIGHER THAN ANTICIPATED REVENUE EXPECTATION, WE'VE OFFSET THAT, IT CAN BE DRAWN DOWN MONTHLY ON THE SALES TAX RESERVE, WHICH GETS US CLOSER TO MORE LIKELY TO RECEIVE REVENUES.

ALLOWS US TO KEEP ESSENTIAL SERVICES INTACT ON A GOING FORWARD BASIS WITHOUT PLANNING ON ONE TIME MONEY BEYOND THE ONE YEAR.

>> YOU COULD, AS A FURTHER REFINEMENT OF THAT, AS WE START YOU KNOW, IF WE START TO SEE POSITIVE VARIANCES, WE COULD ALSO REDESIGNATE THAT MONEY BACK INTO THE SALES TAX RESERVE.

CHAIRMAN: YEAH.

THAT GIVES YOU THE ABILITY TO SHOW YOU'RE COVERING THE REVENUES FROM THAT SET ASIDE FUND UP FRONT.

>> I AGREE WITH YOU COMPLETELY.

SMART IDEA.

>> OKAY.

WANTED TO TAKE A LOOK QUICKLY AT OUR FIVE YEAR PLAN.

WE WENT OVER THIS LAST WEEK, UNLESS THERE IS QUESTIONS, THESE ARE THE ASSUMPTIONS THAT WERE USED TO BUILD THE FIVE YEAR PLAN.

AND AS WE SAW, WE ALWAYS MAKE SURE THAT OUR ONGOING REVENUES, WHICH ARE SHOWN HERE IN BLUE ARE SUFFICIENT TO COVER OUR ONGOING OPERATING EXPENSES AND DEBT SERVICE PAYMENTS, WHICH IS SHOWN HERE IN RED.

AND THEN THAT GAP THAT YOU SEE BETWEEN THE TWO IS USED PRIMARILY TO FUND OUR RESERVES.

SO SPEAKING OF RESERVES, THIS IS JUST A LOOK AT ALL OF OUR DIFFERENT RESERVES, WHICH WE JUST TALKED ABOUT AND HOW THEY LOOK IN TERMS OF BALANCES OVER THE FIVE YEAR PLAN.

WE'RE MAINTAINING A HEALTHY PLAN IN OUR CAPITAL REPLACEMENT RESERVE, EVEN IF WE HAD TO USE ANY PORTION OF THIS AS A TEMPORARY MEASURE BECAUSE OF REVENUE SHORTFALLS, WE CERTAINLY HAVE THE CAPACITY TO DO THAT.

OUR OPERATING RESERVE IS BEING MAINTAINED AT THE 20 PERCENT OF GENERAL FUND EXPENDITURES AND THEN THE COMPREHENSIVE COMMUNITY SERVICES AGREEMENT CAPITAL PROJECTS RESERVE, $4 MILLION THAT WAS AGREED TO IN THE AGREEMENT.

SO THAT IS ALLOCATED AT A MILLION DOLLARS PER YEAR UNTIL 2022.

2023 ACTUALLY.

THIS IS A LOOK AT SOME OF OUR DISCRETIONARY RESERVE BALANCES.

$2.5 MILLION SALES TAX RESERVE THAT WE'VE BEEN TALKING ABOUT.

THESE ARE TIED TO OUR BOND COVENANTS AND OUR NON DISCRETIONARY AND WE ACTUALLY CANNOT AND SHOULD NOT DIP INTO THOSE.

THIS WE TALKED ABOUT LAST WEEK, HOTEL TAX RESERVE.

THIS IS THE AMOUNT THAT, ESPECIALLY AMOUNTS HIGHLIGHTED IN GREEN BASED ON CURRENT ASSUMPTIONS WOULD BE ADDED EACH YEAR INTO THE RESERVE, TO THE EXTENT THAT OUR PROJECTIONS ARE TOO OPTIMISTIC AT THIS POINT, THOSE AMOUNTS WOULD BE LOWER.

BUT AGAIN, IT'S NOT GOING TO IMPACT OPERATIONS.

[02:10:01]

THIS IS A LOOK AT OUR TOTAL ENDING FUND BALANCES OVER THE FIVE YEARS.

SO WE ARE NOT HAVING TO UTILIZE THOSE BASED ON CURRENT PROJECTIONS.

AND FEEL LIKE WE WOULD NEED TO MAKE OTHER ADJUSTMENTS BEFORE WE STARTED SIGNIFICANTLY DIPPING INTO ANY OF OUR RESERVES.

SO AT THE VERY END, IF WE HAD TO WRAP UP THE ENTIRE BUDGET DISCUSSIONS AND BUDGET DOCUMENT INTO ONE SLIDE, FOR ME, THIS IS IT.

BECAUSE THIS SAYS THAT AFTER WE FUND COMPLETELY EVERYTHING THAT WE'VE BEEN TALKING ABOUT, THIS IS WHERE WE ARE LEFT.

SO WE'VE TALKED ABOUT THE 2020 AND 2021.

I HAVE CIRCLED THOSE TWO WITH A CLOUD AROUND THEM.

CLOUD OF UNCERTAINTY.

AGAIN, IT'S NOT MONEY IN THE BANK.

BUT IT IS BASED ON CURRENT PROJECTIONS WHAT WE WOULD HAVE.

WE STAY POSITIVE IN THE FIVE YEAR, THROUGH 2023, BECAUSE OF THOSE TRANSPORTATION, PRIMARILY BECAUSE OF THE TRANSPORTATION INCREASED EXPENSES WE'RE TAKING ON IN 24 AND 25, WE SEE THE UNDESIGNATED FUND BALANCE GO NEGATIVE.

AND CHAIRMAN BUNCH, THIS WAS SORT OF TO SHOW WHAT YOU WERE TALKING ABOUT LAST WEEK AND HAD A QUESTION EARLIER TODAY, IF WE HAD NOT HAD THE FUNDS FROM THE ABATEMENT RECAPTURE AND FROM THE COMMUNITY COMPREHENSIVE COMMUNITY SERVICES AGREEMENT AND THE CARES ACT, INSTEAD OF HAVING THE FUND BALANCES IN YELLOW, OUR FUND BALANCES WOULD HAVE LOOKED MORE LIKE WHAT YOU'RE SEEING IN THE BLUE.

>> OKAY.

CHAIRMAN: THEN THE CARES ACT FUND REALLY WAS BENEFICIAL OBVIOUSLY THROUGH EARLY YEARS TOO.

SO I APPRECIATE THIS SLIDE BECAUSE IT DOES SHOW HOW VOLATILE THINGS CAN BE WHEN YOU ARE DEALING WITH UNCERTAINTY.

BUT WE'RE BLESSED TO HAVE BEEN FORTUNATE IN GETTING THOSE ABATEMENT RECAPTURES AND NEGOTIATE A GOOD AGREEMENT WITH THE DEVELOPMENT COMPANY AT THE END OF LAST YEAR AND ALSO FOR THE FTA FUNDING THAT WAS NOT ANTICIPATED COMING IN.

OTHERWISE WE WOULD BE STARING DOWN A DEEP NEGATIVE HOLE RIGHT NOW, OF WHICH WE WOULD BE HAVING TO DEAL WITH REDUCING OUR GENERAL OPERATING BUDGET.

>> YES, SIR.

>> ALL FAIRNESS, GORDY, FORTUNATELY KNOWING THESE THINGS BEFORE WE WENT INTO THIS, AS THE TASK FORCE WAS WORKING THROUGH THESE ISSUES, WHAT WOULD HAVE HAPPENED IS YOU WOULD HAVE SEEN A DRASTIC REDUCTION IN THE BASE SERVICE LEVELS THAT WE WERE PROVIDING THIS YEAR, IN ORDER TO GET WELL.

OR YOU KNOW, GOING SIGNIFICANTLY INTO RESERVES IN ORDER JUST TO MAKE THE NUMBERS THAT WE NEED THE NUMBERS THAT HAVE BEEN PRESENTED.

SO FORTUNATELY, YOU KNOW, IT ALL WORKED OUT.

BUT THERE IS A LOT OF OTHER WORK IN THERE TOO.

LIKE TAKING CLOSE TO $8 MILLION OUT OF THE EXPENDITURES THIS YEAR AS WELL.

SO IT WAS A TEAM EFFORT.

CHAIRMAN: APPRECIATE EVERYBODY CONTRIBUTING TO THAT.

>> SO WHERE WE END UP WITH EVERYTHING THAT WE'VE DISCUSSED, IS FLAT REVENUES AND DECLINING EXPENDITURES, MAINTAINING HEALTHY RESERVE BALANCES AND CONTINUING TO HAVE A LOW DEBT BALANCE.

WHICH AGAIN IS SORT OF REFLECTED ON THIS PAGE.

THIS GETS BACK TO THE SLIDE WE LOOKED AT AT THE BEGINNING, WHICH WAS STAFF AND CERTAINLY THE BUDGET TASK FORCE AND THEN THE BOARD'S PRIMARY OBJECTIVES GOING INTO THIS IS THAT WE WOULD MAINTAIN OUR FINANCIAL STABILITY, CONTINUE TO PROVIDE THOSE HIGH LEVEL SERVICES AND TO DEAL WITH THE UNCERTAIN TIMES THAT WE'RE IN, BUT CONSIDERING IT A TEMPORARY FINANCIAL IMPACT, WE'VE BUILT A LOT OF BUDGET FLEXIBILITY INTO THIS BUDGET INTO ADDRESS THOSE.

THAT CONCLUDES WHAT I HAVE TO SHARE.

AND THEN I'LL TURN IT OVER TO THE BOARD OF COURSE FOR ANY FURTHER DISCUSSION.

CHAIRMAN: MONIQUE, YOU DO A FANTASTIC JOB EVERY YEAR.

APPRECIATE YOU AND YOUR STAFF AND OUR BUDGET TASK FORCE COMMITTEE'S EFFORTS IN HELPING US GET ALL OF THIS ORGANIZED IN A WAY THAT MAKES US FEEL CERTAIN THAT WE CAN PROVIDE THE LEVEL OF SERVICES THAT THE COMMUNITY ASKS AND OUR RESIDENTS DESERVE.

I KNOW WE STARTED OFF SAYING WE WON'T MAKE A LOT OF DECISIONS TODAY.

[02:15:02]

I THINK IT'S CRITICAL THAT WE GET OUR EFFECTIVE TAX RATE IN HAND.

THAT IS ONE VARIABLE THAT WE KNOW WE CAN GET RESOLVED IN THE NEXT DAY OR TWO.

BUT I'LL LET THE REST OF THE BOARD COMMENT.

ANY COMMENTS OR QUESTIONS FROM MONIQUE?

>> AWESOME JOB.

>> I WAS GOING TO SAY, IT'S REALLY HARD TO HAVE ANY COMMENTS, WHEN MONIQUE DOES THIS SO ROUTINELY, IT SEEMS LIKE.

BUT I KNOW THAT THERE IS A TON OF WORK THAT GOES INTO IT.

AND PROBABLY A LOT OF OVER TIME OVER THE WEEKEND TO GET THIS THING READY FOR MONDAY MORNING.

BUT I REALLY APPRECIATE WHAT YOU'RE DOING, MONIQUE.

I MEAN, ESPECIALLY RUNNING THE BUDGET TASK FORCE, JUST IT'S REMARKABLE.

AND YOU KNOW, I KNOW THAT WE ROUTINELY TELL YOU THAT YOU'RE REMARKABLE, BUT MAYBE NOT ENOUGH.

GREAT JOB.

THANK YOU SO MUCH.

>> THANK YOU.

>> CHAIRMAN, I WOULD LIKE TO THANK THE BUDGET TASK FORCE AS WELL AS THE STAFF LED BY MS. SHARP.

THEY HAVE DONE AN EXCELLENT JOB.

I APPRECIATE ALL OF THEIR HARD WORK AND I THINK ALL OF THE RESIDENTS DO AS WELL.

THANK YOU TO BOTH GROUPS.

CHAIRMAN: I KNOW THAT WE HAVE FOUR MORE DAYS OF BUDGET MEETINGS SCHEDULED.

I THINK YOU KNOW, MY PREFERENCE WOULD BE WE RECONVENE ONCE WE HAVE AN EFFECTIVE TAX RATE SO WE KNOW WHAT OUR BASELINE IS, THEN WE CAN GET INTO THE BUDGET INITIATIVES, WHICH MAY NOT BE A LONG DISCUSSION, BASED ON ALL OF THE UNCERTAINTIES WE HAVE.

THERE ARE BUDGET INITIATIVES THAT ARE REVENUE NEUTRAL OR REVENUE POSITIVE.

SO THEY'RE NOT ALL DETRIMENTAL TO THE TAX RATE.

WITHOUT AN EFFECTIVE TAX RATE, IT'S HARD TO MAKE ANY DECISIONS WHEN YOU DON'T KNOW IF YOUR NUMBER IS MOVING UP OR DOWN.

I KNOW TAMMY MCGRAY, OUR TAX ASSESSOR.

I GUESS WE WILL CONVENE TOMORROW AND SEE WHAT THE PLEASURE OF THE BOARD IS TOMORROW.

MAYBE TOMORROW IS A QUICK DAY AND WE DEFER FURTHER ACTION UNTIL WE GET THE EFFECTIVE TAX RATE UNTIL WEDNESDAY.

>> IF WE DO RECEIVE IT THIS AFTERNOON, MONIQUE, WILL YOU SEND IT TO ALL OF US?

>> YES, MA'AM.

I WILL DISTRIBUTE THAT INFORMATION TO THE BOARD AS SOON AS I RECEIVE IT.

I HAVE BEEN CHECKING MY E MAIL DURING THIS MEETING.

AND HAVE NOT YET.

BUT YES, YOU WILL GET IT AS SOON AS I DO.

>> THANK YOU.

>> YOU'RE WELCOME.

CHAIRMAN: ALL RIGHT.

THANK YOU, MONIQUE.

AS ALWAYS, AN EXCELLENT PRESENTATION.

GET BACK TO MY AGENDA.

WE DO NOT HAVE TO TAKE ANY ACTION RIGHT NOW.

LET'S SEE HERE.

WELL, I DON'T KNOW IF WE WANT TO RECOMMEND APPROVING IT IF WE DON'T KNOW THE TAX RATE IS GOING TO CHANGE.

WE'LL DEFER THE APPROVAL OF THE BASE BUDGET, WHICH WILL TAKE US TO AGENDA ITEM 7.

[7. Receive and consider Budget Initiatives related to the 2021 Preliminary Budget and Five-Year Plan;]

WE'RE DEFERRING UNTIL WE HAVE A BASE BUDGET AND EFFECTIVE TAX RATE.

SO THAT WILL MOVE US QUICKLY ON TO, WE DO NOT HAVE AN EXECUTIVE SESSION.

FUTURE BOARD AGENDA ITEMS. AGENDA ITEM 10.

IF NONE, WE HAVE BOARD ANNOUNCEMENTS.

NO BOARD ANNOUNCEMENTS.

WE'LL TAKE A MOTION TO ADJOURN.

>> SO MOVED.

>> SECOND.

CHAIRMAN: ALL IN FAVOR SAY AYE.

ALL RIGHT.

WE'LL SEE Y'ALL IN THE MORNING AND HOPEFULLY WE HAVE AN EFFECTIVE TAX RATE.

IF NOT, WE'LL MAKE IT A SHORT MEETING.

APPRECIATE EVERYBODY'S INPUT.

* This transcript was compiled from uncorrected Closed Captioning.