[1. Invocation / Pledge of Allegiance;]
[00:00:06]
>>> I WOO -- I WOULD LIKE TO CALL THE MEETING TO ORDER AND THE CHAIRMAN IS ON THE WAY. IT IS 8:30 AND WE NEED TO GET STARTED. WE HAVE A LONG WEEK AHEAD OF US HOPEFULLY WE CAN GET THESE THINGS DONE.
ANYBODY SCHEDULED TO LEAD THE INVOCATION? THEN I WILL DO SO. THANK YOU FOR THOSE WHO HAVE COME TO WATCH THE PROCEEDINGS AND I PRAY YOU WILL WATCH OVER OUR DELIBERATIONS AND OUR DECISIONS TODAY AND THAT WE WILL MAKE WISE, YOU KNOW, APPROPRIATE DECISIONS FOR THIS TOWNSHIP.
I PRAY YOU WATCH OVER THE DIRECTORS AND I PRAY THESE THINGS IN YOUR SON'S NAME. AMEN.
WE WILL START WITH OUR PLEDGES TO THE FLAGS.
I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA.
AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION, UNDERGOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL.
>> HONOR THE TEXAS FLAG. I PLEDGE ALLEGIANCE TO THEE, TEXAS. ONE STATE UNDERGOD.
ONE, AN INDIVISIBLE. >> WE CALL THE MEETING TO ORDER
[2. Call meeting to order;]
AT 8:34 A.M. I DECLARE IN ACCORDANCE WITH STATE LAW THIS MEETING WAS POSTED 72 HOURS IN ADVANCE OF THE MEETING. IT OCCURRED WITHIN THE BOUNDARIES OF THIS BUILDING. STATE LAW REQUIRES AT LEAST FOUR BOARD MEMBERS BE IN ATTENDANCE TO ESTABLISH A QUORUM FOR CONDUCTING BUSINESS. I ASK EACH BOARD MEMBER TO INDICATE YOUR PRESENCE BY RESPONDING WITH AN AUDIBLE SOUND OF ACKNOWLEDGMENT AS I CALL ROLE.>> AND I'M HERE. WE DO HAVE A QUORUM AND WE CAN
[3. Receive, consider and act upon adoption of the meeting agenda;]
CONDUCT BUSINESS. ITEM THREE ON THE AGENDA IS RECEIVE, CONSIDER AND ACT UPON ADOPTION OF THE MEETING AGENDA.>> ANY OPPOSED? ANY ABSTENTIONS?
[4. Recognize public officials;]
MOTION CARRIED UNANIMOUSLY. DO WE HAVE ANY PUBLIC OFFICIALS? STEVE LAWRENCE IN THE AUDIENCE, PRECINCT CHAIR 48.THANK YOU, STEVE. OUR FIRST PERSON ON THE -- WELL, I HAVE TO READ THROUGH THE PUBLIC COMMENT STUFF.
>> THAT WILL TAKE ME TIME TO HOBBLE UP THERE.
[5. Public comment;]
>> NUMBER 5 IS PUBLIC COMMENT. PARTICIPATION BY MEMBERS OF THE PUBLIC IN OPEN MEETINGS OF THE BOARD OF DIRECTORS IS WELCOMED AND ENCOURAGED. A PUBLIC COMMENT AGENDA ITEM IS AT THE BEGINNING OF ALL AGENDAS. IN ACCORDANCE WITH THE POLICY TO PRODUCE THE MOST EFFICIENT AND EFFECTIVE PROCESS FOR ALLOWING CONSTITUENTS TO ADDRESS THE BOARD, THE BOARD OF DIRECTORS ACCEPTS PUBLIC COMMENTS IN ACCORDANCE WITH THE FOLLOWING GUIDELINES OF PARTICIPATING IN THE FOLLOWING MEETINGS.
THEY MUST SIGN A SPEAKER'S ROSTER PROVIDED BY THE BOARD'S SECRETARY. INDIVIDUALS WHO WISH TO MAKE GENERAL ANNOUNCEMENTS, ADDRESS A TOPIC NOT INCLUDE I HAD IN THE AGENDA OR WHO WISH TO ADDRESS SPECIFIC AGENDA ITEMS MUST DO SO BY THE PUBLIC AGENDA ITEMS. INDIVIDUALS ARE LIMITED TO 3 MINUTES REGARDLESS OF THE NUMBER OF TOPICS.
ANY SPEAKER ON A SINGLE SUBJECT MAY YIELD THEIR TIME TO ANOTHER ON THE LIST. STATE LAW PROHIBITS THE BOARD FROM FORMALLY ACTING ON A PUBLIC ITEM OR PUBLIC COMMENT UNLESS IT APPEARS ON THE POSTED AGENDA. ANY BOARD DISCUSSION OF ITEMS NOT INCLUDED ON THE POSTED AGENDA IS LIMITED TO QUESTIONS FOR CLARIFICATION OR WHETHER OR NOT IT SHOULD BE PLACED ON A FUTURE BOARD AGENDA. SPEAKERS MUST NOT USE PROFANITY.
IT CAN BE MADE TO A BOARD AS A WHOLE OR INDIVIDUAL DIRECTORS.
PLEASE PLACE YOUR PHONE ON SILENT MODE.
WITHOUT FURTHER ADIEU, STEVE LEAKY.
>> THANK YOU, MR. VICE CHAIRMAN. GOOD MORNING, EVERYONE.
THIS IS THE MOST IMPORTANT WEEK OF THE YEAR, IN MY OPINION, THE TOWNSHIP BUDGET. I ALWAYS DO MY BEST TO TRY TO BE HERE. NUMBER ONE.
BEFORE WE GET INTO THE BUDGET, LET ME FIRST ADDRESS THE SUBJECT WHICH I WILL CONFESS I AM CONFUSED AND THAT'S LAW ENFORCEMENT. I SAW A REPORT LAST WEEK THAT WE ARE GOING TO STOP PAYING THE LONG-STANDING ANNUAL $10 MILLION TO $12 MILLION TO THE MONTGOMERY COUNTY SHERIFF FOR PAW PROLS -- PATROLS AND EQUIPMENT FOR LAW ENFORCEMENT COVERAGE FOR THE WOODLANDS. WHEN ASKED FOR COMMENT AT LEAST IN THIS REPORT, THE CHAIRMAN WAS QUOTED AS DECLINING COMMENT.
[00:05:01]
I HOPE THIS IS A MISUNDERSTANDING ON MY PART AND THAT THIS REPORT IS NOT TRUE. IF THIS REPORT IS TRUE I ASK A DIRECTOR, ONE OF YOU, PLACE THIS SUBJECT ON A BOARD MEETING AGENDA AND THAT WE HAVE A FULL TRANSPARENCY, OPEN MEETING DISCUSSION OF THIS SUBJECT WHICH WOULD DISCUSS THE IMPACT OF REDUCING OUR SAFETY PROTECTION. I WILL ADD AS A FOOT NOTE AND IT IS NOT IN MY TEXT THAT AS YOU KNOW BECAUSE OF THE LIBERAL LIESED BOND PRACTICES TO OUR NEIGHBORS TO THE SOUTH, TO ME IF THIS IS TRUE IT IS AN INVITATION TO SAY, HEY, COME ON DOWN.WE'VE FEWER COSTS THAN WE USED TO.
SECOND, WE WERE TOLD WE COULD INCORPORATE AND MAINTAIN THE TAX RATE OF 23 CENTS FOR THE NEXT FIVE YEARS.
SINCE WE ARE NOT INCORPORATING IN THE FORESEEABLE FUTURE AND THEREFORE NOT REALIZING THE ASSOCIATED COSTS INVOLVED, I EXPECT AND PRESUME THAT WE SHOULD EXPERIENCE A SIGNIFICANT TAX RATE REDUCTION. IT IS MY HOPE THESE DISCRETIONARY RESERVES CAN BE RETURNED TO THE OWNER/TAXPAYER OR USED FOR COMMUNITY-WIDE PROJECTS LIKE THE OFTEN PROPOSED, DISCUSSED AND PRE-PLANNED INDOOR ARTS PERFORMING -- INDOOR PERFORMING ARTS FACILITY WHICH WE NEED.
WELCOME NEW MEMBERS OF THE BOARD THIS MORNING.
GOOD TO SEE YOU. I APPRECIATE THIS OPPORTUNITY TO PRESENT TO YOU AND BEST WISHES FOR A PRODUCTIVE WEEK.
>> THANK YOU, STEVE. I WILL TURN THE GAVEL OVER TO
OUR CHAIRMAN. >> DO WE NEED TO VOTE ON IT?
>> STILL IN PUBLIC COMMENT. >> UP NEXT, ANNA COSIO.
>> GOOD MORNING, BOARD. MY NAME IS ANNA ANNA CASTILLO.
THANK YOU FOR ALLOWING ME TO SPEAK.
MY COMMENTS ADDRESS ITEMS 7 AND 8 AND SIX WOULD BE INCLUDED.
ON JULY 27TH, HERE AT OUR BOARD MEETING, THERE WAS PRESENTED THE PARKS AND RECREATION NEEDS ASSESSMENT.
ALTHOUGH THERE ARE MANY NEEDS THROUGHOUT THE PARKS IN OUR TOWNSHIP, I WOULD LIKE TO REQUEST THAT SPECIAL ATTENTION BE DEVOTED TO IMPROVEMENTS TO THAL DEN BRIDGE -- TO THE ALDEN BRIDGE SPORTS PARK. IT IS A SUCCESSFUL MARKET KING ARM OF THE WOODLANDS TOWNSHIP THAT IS STAFFED WITH KNOWLEDGEABLE AND RESOURCEFUL STAFF.
VISIT THE WOODLANDS IS 100% FUNDED BY HOTEL TAX AS DIRECTOR RIESER HAS CLARIFIED. AND VISIT THE WOODLANDS SINCE IT IS MAINTAINED BY TAXES IT KEEPS THE TAXES AT A LOWER PERCENTAGE.
THIS IS FROM THE WOODLANDS TOWNSHIP WEBSITE.
ANNUAL SUPPORT AND SPONSORSHIP OF NUMEROUS SPORTS EVENTS IN THE PARKS GENERATES APPROXIMATELY 20 MILLION OF ECONOMIC -- $20 MILLION OR MORE OF ECONOMIC I'M PABLGT INCLUDING THE MEMORIAL HARMON, THE WOODLANDS MARATHON, SOCCER, LACROSSE, RUGBY AND FLAG AND FOOTBALL TOURNAMENTS.
BY DEVELOPING THE ALDEN SPORTS PARK FOR RESIDENTS AND BUSINESSES ALIKE I BELIEVE IT WOULD BE A GREAT ECONOMIC DEVELOPMENT FOR OUR 14 TOWNSHIP PROPERTIES THAT VISIT THE WOODLANDS CURRENTLY IMPACTS. AND AS MONIQUE STATED AND IT IS POSITIVE TO SAY WE CONTINUE TO HAVE POSSIBLE -- POSITIVE VARIANCES IN THE FINANCIALS. PLEASE CONSIDER PLACING IMPROVEMENTS TO THE ALDEN BRIDGE SPORTS PARK A HIGH PRIORITY AS I BELIEVE THIS INVESTMENT WILL ULTIMATELY MAKE THE TOWNSHIP A SPORTS MECCA WITH FAVORABLE REWARDS FOR THE TOWNSHIP AS WELL AS RESIDENTS. THANK YOU FOR ALLOWING ME TO
SPEAK. >> DO WE HAVE ANYONE ELSE WHO WISHES TO COMMENT AND MISSED THE SIGN UP SHEET?
[6. Receive, consider and accept a report regarding the 2022 no-new-revenue tax rate and voter-approval tax rate; ]
WE -- SEEING NONE WE WILL MOVE TO AGENDA ITEM 6, RECEIVE AND CONSIDER AND ACCEPT A REPORT REGARDING THE 2022 NO NEW REVENUE TAX RATE AND VOTER APPROVAL TAX RATE.LET ME GET THIS PULLED UP. >> OKAY.
[00:10:31]
WE ARE GOING TO START OFF THIS MORNING TALKING ABOUT THE RATES THAT WERE CERTIFIED BY THE TAX ASSESSOR'S OFFICE LAST WEEK FOR THE WOODLANDS TOWNSHIP. SO AS A POINT OF REFERENCE THE CURRENT TAX RATE IS 22.31 CENTS PER $100 OF TAXABLE VALUE BASED ON THE INCREASE OF THE UH PRAISED VALUES AND WE WILL TALK ABOUT THAT IN A LITTLE BIT. BUT BASED ON THAT, THE NO NEW REVENUE RATE IS 19.64 CENTS. WHAT THE NO NEW REVENUE RATE MEANS IS WHEN THE TAX -- THIS IS THE TAX RATE THAT WOULD GENERATE THE SAME AMOUNT OF PROPERTY TAX REVENUE AS THE PREVIOUS YEAR WHEN YOU LOOK AT THE PROPERTIES THAT WERE THERE FOR BOTH TAX YEARS. IN OTHER WORDS, IT EXCLUDES ANY NEW PROPERTIES THAT WERE TAXABLE, BUT ANYTHING ON THE GROUND LAST YEAR BOTH IN TERMS OF COMMERCIAL AND RESIDENTIAL, THIS TAX RATE WHEN APPLIED ACROSS THE BOARD WOULD RESULT IN ZERO INCREASE IN PROPERTY TAX REVENUE FOR THOSE PROPERTIES.THE VOTER APPROVAL RATE IS 2106. THE 20.23 PERCENT RATE IS THE BASE VOTER APPROVAL RATE FOR THIS TAX YEAR, 2022 TAX YEAR THAT BURNS THE 2023 BUDGET OF THE TOWNSHIP.
AND WITH THE PROPERTY LAWS WE HAVE UNCREWED INCREMENTS WE -- WE HAVE INUSED INCREMENTS THAT WE DID NOT USE.
THAT'S WHAT THE OTHER TWO NUMBERS ARE.
IN TPOET TALL THAT'S -- IN TOTAL THAT'S THE 2106.
IT IS THE MAXIMUM RATE THAT THE BOARD CAN ADOPT WITHOUT GOING TO THE VOTERS IN THE NOVEMBER GENERAL ELECTION.
ANYTHING ABOVE THAT RATE WOULD REQUIRE A VOTE.
AND JUST SO THAT YOU KNOW AND THE BOARD HAS DISCUSSED THIS, BUT WE ARE BEYOND THAT DEADLINE FOR SUBMITTING TO THE SECRETARY OF STATE FOR NOVEMBER. THE MAXIMUM RATE THAT THE BOARD CAN HAVE THIS YEAR WOULD NOT BE KEEPING UP THE 2231.
IT IS THE 2106. AND THEN THERE IS THE BREAKOUT THAT STANDS FOR MAINTENANCE AND OPERATIONS.
AND THEN WE HAVE A DEBT SERVICE TAX RATE.
THAT'S WHAT IS NEEDED TO FUND DEBT SERVICE ON OUR OUTSTANDING -- WE HAVE OUTSTANDING BONDS THAT WERE ISSUED IN 2010, 2011 AND 2012 AND HAVE BEEN REFINANCED THAT HAVE APPLIED WITH OUR DEPARTMENT AND PARKS AND RECREATION.
THAT'S HOW WE GET TO THE TAX RATE OF 2106.
AND AGAIN, THIS IS JUST A STARTING POINT FOR THE BOARD.
ONE OF YOUR BIG -- AS IT IS EVERY YEAR, ONE OF THE BIG DISCUSSIONS AS WE GO THROUGH THE PROCESS WILL BE TO DETERMINE WHAT THE PROPOSED RATE IS AND THEN FINALLY WHAT YOUR ADOPTED TAX RATE IS. AND THEN AGAIN AS A POINT OF REFERENCE WHEN WE ARE TALKING THROUGHOUT THE PROCESS, EACH PENNY OF THE TAX RATE GENERATES APPROXIMATELY $2.5 MILLION IN REVENUE. I DO NEED A MOTION FOR THE BOARD
TO ACCEPT THIS REPORT. >> MOVED.
[7. Receive, consider and act upon the 2023 Preliminary Budget for The Woodlands Township;]
THAT PASSES. IT MOVES US TO AGENDA ITEM 7.RECEIVE, CONSIDER AND ACT UPON THE 2023 PRELIMINARY BUDGET.
STILL WITH MONIQUE. >> FIRST I WILL START OFF WITH A LITTLE OUTLINE OF WHAT WE ARE GOING TO DO THIS WEEK.
IF WE FOLLOW PREVIOUS PATTERNS AND WE FOLLOW WHAT IS ON THE AGENDA, TODAY IS PRIMARILY THE DISCUSSION OF THE BASE BUDGET.
WE ALSO DO HAVE INCLUDED ON TODAY'S AGENDA IF WE GET THROUGH THAT AND IF THE BOARD WISHES WE WILL HAVE HISTORICALLY BUDGET -- BUDGETED INITIATIVES AND THE BOARD IS TYPICALY TAKING THOSE UP ON TUESDAY. YOU HAVE THE ABILITY TO START DISCUSSING IF YOU WANT TO. THE MAJOR GOAL OF THIS WEEK BESIDES SETTLING ON A PRELIMINARY BUDGET IS THE PROPOSED TAX RATE WHICH IS NOT YOUR ADOPTED TAX RATE.
YOU WILL TAKE A VOTE ON THE PROPOSED TAX RATE EITHER STARTING AS EARLY AS TOMORROW OR WEDNESDAY OR THURSDAY.
[00:15:01]
WE HAVE IT ON THE AGENDA FOR EVERY DAY.THE PROPOSED RATE DETERMINES IF A PUBLIC HEARING IS GOING TO BE REQUIRED. ANY RATE -- IF THERE IS A PROPOSED RATE THAT IS ABOVE THE NO NEW REVENUE RATE, THEN ONE PUBLIC HEARING WILL BE REQUIRED. IF THE PROMOTED RATE IS -- PROPOSED RATE IS SET BELOW, THEN A NO NEW MEETING IS SCHEDULED AND YOU WILL ADOPT BUDGET ON SEPTEMBER 8TH.
>> MONIQUE, ISN'T IT ALSO TRUE WE NEED TO HAVE A SUPER MAJORITY OF THE BOARD IF WE GO ABOVE THE NO-NEW-REVENUE RATE?
>> YES, SIR. IN THIS CASE IT REQUIRES FIVE
>> YOU'RE WELCOME. SO WITH THAT, THEN I WILL START THE PRESENTATION OF THE PRELIMINARY BUDGET.
I WANT TO START OFF BY REMINDING EVERYONE THAT WOODLANDS TOWNSHIP CONTINUES TO BE IN A POSITION OF FINANCIAL STRENGTH.
BY THAT I MEAN THE 2023 BUDGET PROVIDES THE RESOURCES TO MAINTAIN HIGH LEVELS OF SERVICES AND AMENITIES DESIRED BY THE CITIZENS. THE BOARD JUST RECEIVED ITS RESIDENT SURVEY AT YOUR MEETING LAST WEEK AND WE ARE ACTUALLY GOING TO TALK ABOUT THAT A LITTLE MORE TODAY.
VERY, VERY HIGH MARKS WERE RECEIVED BY THIS ORGANIZATION FROM OUR RESIDENTS REGARDING THE SERVICES AND THE AMENITIES WE PROVIDE, AND THIS BUDGET HAS THE FUNDING TO CONTINUE THAT.
OUR BUDGET BENEFITS FROM STRONG AND DIVERSE REVENUE SOURCES.
IT PROVIDES FLEXIBILITY. WE SAW THE NEED OF THE FLEXIBILITY IN THE PANDEMIC AND IN PREVIOUS ECONOMIC DOWNTURNS.
SO BY FLEXIBILITY I MEAN IT HAS RESERVES AND IT HAS AUTOMATIC MIX TPHEUFPLS WHERE WE CANDY CREASE -- WHERE WE CANDY CREASE EXPENSES. IT MAINTAINS THE POSITIVE CASH FLOWS AND THE RESERVE BALANCES EVALUATED FAVORABLY BY THE CREDIT RATE WILLING AGENCIES -- CREDIT RATING AGENCIES.
WE RECEIVED A AA PLUS RATING LAST YEAR.
THE HIGHEST RATING FOR ANY SPECIAL PURPOSE DISTRICT IN TEXAS. ONE OF THE PRIMARY REASONS FOR THAT STATED BY THE AGENCY IS THE CREDIT BALANCE.
WE ARE NOT BURDENED BY LARGE PENSION COSTS AND LARGE SICKLY BALANCES DUE TO THE TYPES OF BENEFIT PLANS IMPLEMENTED AND APPROVED BY THE BOARD. AND WE WILL LOOK AT THIS FURTHER TOO, BUT IT REFLECTS LOW AND DECREASING DEBT BALANCES.
SO AGAIN, ALL DIFFERENT TYPES OF COMPONENTS REFLECTED THERE.
ALL CONTRIBUTE TO OUR VERY STRONG POSITION OF FINANCIAL HEALTH. WITH THAT WE WILL MOVE INTO THE NUMBERS. BASED ON THE VOTER APPROVAL RATE OF 2106 REARE GENERATING REVENUES OF $150 MILLION AND IN THE CHART TO THE RIGHT, THE GRAPH -- THE BAR TO THE RIGHT SHOWS HOW THE $150 MILLION IS BEING ALLOCATED.
$124 MILLION IS GOING TO OPERATING EXPENSES.
$8 MILLION IS BEING ALLOCATED TO RESERVES THAT IS PRIMARILY AN APPROXIMATE $5 MILLION ALLOCATION TO OUR CAPITAL REPLACEMENT RESERVE. AND THEN THE OTHER ONE IS THE -- THE OTHER PART OF THAT IS WHAT WE ARE GENERATING IN EXCESS HOTEL TAX. WE ARE USING $6 MILLION TO PAYOFF DEBT SERVICE AND PAYOFF DEBT.
WE HAVE ABOUT $3.9 MILLION IN CAPITAL THAT IS FUNDED BY THE GENERAL FUND OR THE GRANTS. AND THEN WHAT THIS DOES -- I WILL GO THROUGH A SERIES OF THINGS, BUT AT THE 2106 RATE, WE ARE GENERATING 7.4 MILLION IN WHAT IS CALLED THE UNDESIGNATED FUND BALANCE FOR 2023. IT IS THE LEFT OVER MONEY FOR 2023. SO AFTER WE ACCOUNT FOR EVERY REVENUE THAT WE ARE GETTING READY TO TALK ABOUT TODAY, EVERY EXPENSE THAT WE ARE TALKING ABOUT, EVERY CAPITAL EXPENDITURE , ALL DEBT SERVICE, AFTER WE ACCOUNT FOR ABSOLUTELY EVERY SINGLE THING IN THE BASE BUDGET AT THIS RATE WE ARE GENERATING ALMOST $7.5 MILLION IN EXCESS REVENUE.
IF THE BOARD WERE TO DECIDE TO LOWER THE TAX RATE TO THE NO NEW REVENUE RATE OF 1964, THEN OUR REVENUE GOES DOWN TO 147 MILLION AND OUR UNDESIGNATED FUND BALANCE, SO OUR LEFT OVER FUNDS GO DOWN TO 3.9 MILLION. THIS IS A I MADE UP.
THIS IS NOT WHAT THE BOARD MADE UP.
THIS IS JUST TO SHOW YOU THAT THE BOARD CAN GO LOWER THAN THE NO NEW REVENUE RATE AND GENERATE EXCESS FUNDS OF ABOUT $2.4 MILLION. WHAT I WAS JUST TRYING TO DO
[00:20:01]
HERE IS SET THE STAGE FOR THE REST OF THIS CONVERSATION THIS MORNING THAT EVERYTHING WE ARE TALKING ABOUT ALLOWS FOR EVERY TYPE OF EXPENSE AND HAVE LEFT OVER MONEY.THE OTHER THING IS BUDGET INITIATIVES.
WITH THAT I WILL MOVE INTO REVENUE SOURCES.
STOET TALL OPERATING -- TOTAL OPERATING REVENUES BASED ON THE VOTER APPROVAL RATE OF 2106 ARE 150 MILLION WHICH ARE GENERATING 16.9 MILLION IN ADDITIONAL REVENUE OR 12.7% INCREASE.
HERE ARE THE REASONS FOR THAT INCREASE.
SALES TAX IS GROWING BY 8.7 MILLION.
AS YOU ALL KNOW BASED ON THE SALES TAX REPORTS I PRESENTED THIS YEAR WE ARE FAR EXCEEDING OUR 2022 BUDGET BY AROUND 16% RIGHT NOW. WE FACTORED ALL OF THAT GROWTH IN THE TAX BASE AND WE WILL TALK MORE ABOUT THAT IN A MINUTE.
WE FACTORED THAT INTO THE BUDGET AND DETERMINED A SALES AND USE TAX THAT IS GROWING 8.7 MILLION. THE PROPERTY TAX, I AM PUTTING TO BE DETERMINED. RIGHT NOW IT IS GROWING BASED ON THE 2106 VOTER APPROVAL RATE DEPENDING ON WHAT THE BOARD DECIDES WILL DETERMINE WHAT THE PROPERTY TAX RATE GROWTH IS.
HOTEL TAX IS GROWING BY 1.6 MILLION.
THE PROGRAM REVENUE WHICH IS OUR PARKS AND RECREATIONS, RECREATION AND AQUATICS PRIMARILY IS GROWING HALF A MILLION. AND THEN WE HAVE OTHER CONTRACTUAL CONTRACT THAT'S ARE GROWING.
IT IS MAINLY CONTRACTS RELATED TO THE FIRE DEPARTMENT AND THERE IS PARKING GARAGE CONTRACTS REVENUE INCREASING AND THAT IS REFLECTED IN THAT NUMBER. HERE IS A LOOK AT THE REVENUES BY TYPE. SO SALES AND USE TAX AT ALMOST 67 MILLION IS OUR LARGEST SOURCE OF REVENUE FOLLOWED BY PROPERTY TAX AT 52 MILLION. THIS IS BASED ON THE VOTER APPROVAL RATE AND THEN HOTEL TAX AT 8.9 MILLION.
RENT PROGRAMS ARE 7.2 MILLION AND LARGELY OFFSET OUR EXPENSES RELATED TO THOSE. I AM NOT GOING TO READ ALL THOSE, BUT YOU CAN SEE DOWN THE CHART.
SO IN TERMS OF WHAT -- JUST LOOKING AT IN TERMS OF PERCENTAGES OUR REVENUE SOURCES CONTRIBUTED AT THE APPROVAL RATE OF 21.06 WE HAVE PROPERTY TAXES CONTRIBUTING ABOUT 36% OF FUNDS.
IF THAT RATE -- IF IT IS THE NO-NEW-REVENUE RATE IT IS 30% OF FUNDS. EITHER ONE OF THOSE SHOWS A POSITIVE TREND AND SOMETHING ENJOYED BY THE TOWNSHIP THAT IS NOT ENJOYED BY ALL CITIES. THAT'S THE NOTE DOWN AT THE BOTTOM ACCORDING TO THE STATE COMPTROLLER.
TYPICALLY IT RAISES $1 IN SALES TAX REVENUE FOR EVERY $7 IN PROPERTY TAX REVENUE. OBVIOUSLY WE EXCEED THAT BY A LARGE MARGIN. HERE IS A LOOK AT OUR SALES AND USE TAX REVENUES. YOU CAN SEE OVER ON THE LEFT SIDE OF THE CHART, THAT WAS PRE-COVID, 2018, 2019 AND 2020 IS WHEN WE TOOK THE HIT. THAT WAS COVID.
WE CLIMBED BACK IN 2021 AND CLIMBING BACK IN A LARGE WAY IN 2022. IN 2023 WE HAVE A CONSERVATIVE BUDGET ESTIMATE WHEN WE ARE GROWING FROM THE FORECAST.
THAT IS BECAUSE WE ARE FACTORING IN -- WE DO NOT KNOW HOW HARD THAT WALL MIGHT BE IF WE RUN INTO A RECESSION.
SO WE ARE TAKING THAT INTO ACCOUNT.
IF IT IS A SOFT LANDING, THEN THAT NUMBER WILL BE HIRED.
THAT'S WHAT IS FACTORED IN TO BE CONSERVATIVE.
>> MONIQUE, I THINK YOU NEED TO, AT THIS POINT -- BECAUSE I HAVE SEEN THE INFORMATION THAT YOU HAVE LOOKED AT IN YOUR RESEARCH BASIC -- BASICALLY ON THE GROWTH RATE THAT MOST OF THE RATING AGENCIES AND THE FINANCIAL ORGANIZATIONS ARE PREDICTING AND YOU MIGHT WANT TO GO INTO THAT A LITTLE BIT.
THEY ARE BASICALLY PROJECTING 1% GROWTH BY NEXT YEAR.
>> WE ARE. ARE YOU TALKING IN TERMS OF SALES TAX GROWTH OR SPECIFICALL. IT IS ALL OVER THE BOARD.
BUT YOU'RE RIGHT. SOME ARE ONLY GROWING 1%.
WE HAVE SOME FURTHER, 3%. THE POINT IS THEY ARE MUCH LOWER
[00:25:04]
THAN WHAT WE ARE EARNING RIGHT NOW.WE DO BENEFIT FROM THE DIVERSE SALES TAX.
WE HAVE A LOT OF OTHER TYPES OF CATEGORIES WHICH WE ARE GOING TO TALK ABOUT. BASED ON OUR TREND LINES, THAT'S WHERE WE CAME UP WITH THE 2.5, BUT CERTAINLY WE COULD ENTERTAIN STPH-G LOW -- SOMETHING LOWER. AND WE HAVE THE FLEXIBILITY.
IF WE DON'T ACHIEVE WHAT WE ARE PROJECTING HERE, WE HAVE THE FLEXIBILITY TO ABSORB SOME OF THAT IN OUR RESERVES.
HERE IS A LOOK AT THE SALES AND USE TAX GROWTH IN THE EARLIER YEARS, BACK IN THE EARLY PART OF THE CHART, 2013, 2014.
THIS IS WHEN TOWN CENTER WAS BEING HEAVILY DEVELOPED, HUGHES LANDING WAS BEING DEVELOPED, CREEK SIDE.
WE HAD A LOT, A LOT OF GROWTH BACK THEN.
WHAT IS CIRCLED IN THE BLUE IN THE MIDDLE, THAT IS OUR TYPICAL TYPE OF GROWTH THAT WE SEE WHEN SOMETHING STRANGE IS NOT GOING ON 2020 OF COURSE IS COVID. 21 AND 22 ARE THE BOUNCE BACKS FROM COVID. AND 2023 AS WE DISCUSSED, WE HAVE SETTLED ON A MORE TYPICAL CONSERVATIVE GROWTH FACTOR.
>> REMIND ME, IF YOU WOULD, WHAT DID YOU PROJECT OUR FIVE-YEAR GROWTH WHEN WE WERE -- YOU DID THE STUDIES WITH FIVE YEARS WITH THE INCORPORATION, BUT WHAT WAS YOUR ESTIMATE THEN?
>> IT WAS 2.75 WHICH WAS VERY CONSERVATIVE.
WE WANTED TO BE CONSERVATIVE GOING INTO THE INCORPORATION STUDY. WE STEPPED BACK BASED ON THE RECESSIONARY PRESSURES RIGHT NOW.
WE STEPPED BACK A QUARTER OF A PERCENT.
>> AND YOU USUALLY TAKE A CONSERVATIVE POSITION I
OBSERVED. >> I ALWAYS TAKE A CONSERVATIVE POSITION. YES, MA'AM.
I WOULD MUCH RATHER COME IN HERE AND TELL YOU YOU HAVE FAVORABLE REVENUES THAN TELLING YOU WE ARE NOT MEETING RECEIVE GNAW PROJECTIONS. REVENUE PROJECTIONS.
I TRY NOT TO BE TOO CONSERVATIVE, BUT YES.
I WILL GO THROUGH THIS SERIES OF SLIDES QUICKLY, BUT THESE ARE THE DIFFERENT TYPES OF SOURCES THAT WE GET -- THAT WE GENERATE SALES AND USE TAX FROM. YOU WILL SEE ON ALL OF THESE THAT WE HAVE A POSITIVE TREND LINE COMING.
2019 REFLECTS PRE-COVID AND THEN THE BLUE LINES SHOWS POST COVID AND COMING BACK. RETAIL, STRONG GROWTH THERE.
E-COMMERCE SALES, SO THE INTERNET SALES IN 2019 WAS WHEN THEY FIRST GOT THE BENEFITS FROM THE SUPREME COURT ACT.
YOU CAN SEE THAT THOSE HAVE REALLY, REALLY GONE UP AND CONTINUE TO. FOOD SERVICES, AGAIN, POSITIVE TREND LINE. THIS IS THE ONE WHERE IT IS STILL GOOD, BUT IT IS NOT LIKE BACK TO WHERE WE WERE PRE-COVID.
IT IS CLIMBING IN THE RIGHT DIRECTION FROM 2021 TO 2022.
AND BY THE WAY, THE CHARTS WE ARE LOOKING AT COMPRISE OF 93% OF ALL OF OUR SALES TAX REVENUE. MANUFACTURING, GOING UP.
WHOLESALE TRADE, SALES AND USE TAX, POSITIVE TREND LINE, PROFESSIONAL AND TECHNICAL SERVICES, POSITIVE.
STOP RIGHT THERE. I KNOW WE WENT THROUGH THEM QUICKLY, BUT WE HAVE A DIVERSE SOURCE OF SALES TAX REVENUE AND ALE ARE STREPBDING POSSIBLE -- TRENDING POSITIVE.
AND NOW TO THE HOTEL TAX REVENUE.
THE HOTEL INDUSTRY TOOK A STRONG HIT, EVEN MORE SO THAN SALES TAX IN TERMS OF THE HOTEL TAX REVENUE AS HOTELS AND THE CONVENTION BUSINESS AND TRAVEL WAS PARTICULARLY SHUTDOWN.
IF YOU LOOK AT THE GROWTH THERE, THE VISIT THE WOODLANDS BOARD AND STAFF DID A PHENOMENAL JOB OF MANAGING THROUGH THAT AND ARE GROWING BACK IN A BIG WAY. WE WERE ALMOST BACK TO 2023
LEVELS AND BY 2024 WE ARE THERE. >> IN JUNE WE HAD THE SECOND HIGHEST TAX REVENUE MONTH COLLECTED IN THE HISTORY OF THE
>> ONLY JUNE 2019 WAS MORE. AND IF WAS BY LESS THAN
>> I THINK IT IS SAFE TO SAY THAT IT IS BACK.
>> BEFORE WE LEAVE THIS SLIDE, WOULD YOU POINT OUT OR ELABORATE A BIT ON THE 7% BASE HOTEL TAX AND EXPLAIN WHERE THAT GOES AND THE DIFFERENCE BETWEEN THE 2% SIP PHRAU MENTAL -- SUPPLEMENTAL? AND THEN ALSO ADDRESS TWO OTHER POINTS. WHAT CONROW IS DOING WITH THE
[00:30:06]
CONVENTION CENTER EXPANSION AND HOW THEY ARE RECOVERING FOR A PERIOD OF TIME, THAT 7% BASE TAX AND HOW WE ARE EXCLUDED FROM THAT OPPORTUNITY BECAUSE WE ARE NOT A CITY.AND ALSO HOW I'VE HAD COMPLAINTM RESIDENTS WHO SAY SOMETIMES WHEN THEY HAVE A BILL, THEY WILL SEE THAT THE SUPPLEMENTAL TAX IS NOT GOING TO THE TOWNSHIP. IT IS GOING TO SOMETHING ELSE.
I CAN'T REMEMBER THE LANGUAGE ON THE REPEAT.
IT IS CORRECT. IT IS A SEPARATE PAYOFF OF THE -- OF ONE OF THE EXPANSIONS THAT WENT ON.
IT IS EITHER THE WATERWAY PLAZA PARK AREA --
>> ARE YOU TALKING ABOUT THE ECONOMIC DEVELOPMENT CENTER?
>> YES. THAT'S WHAT I'M TRYING TO SAY.
THANK YOU. IT SHOWS ON THE RECEIPT AND IT IS CONFUSING TO PEOPLE. CAN YOU ADDRESS THAT, PLEASE?
>> I WILL START WITH THAT ONE. THAT IS BASED OFF THE SALES TAX
AND NOT A HOTEL TAX. >> SORRY.
>> NO PROBLEM. THE TOWNSHIP HAS A 1% BASE SALES TAX AND THAT IS GENERATED AND THEN THERE IS A ECONOMIC DEVELOPMENT ZONE THAT IS THE EXACT BOUNDARIES OF THE TOWNSHIP THAT LAY OVER THE TOWNSHIP THAT ALSO GENERATE AN ADDITIONAL 1% TO GET US TO THE MAXIMUM 2% ALLOWED BY STATE LAW.
YOU'RE RIGHT. THE 1% SALES TAX, WE HAVE AN ECONOMIC DEVELOPMENT JOAN -- ZONE THAT IS MARKET -- THAT IS ACTIVE. ONE IS MARKET STREET AND THE OTHER IS THE OUTDOOR PORTIONS OF THE MALL LIKE CHEESECAKE FACTORY AND BARNES & NOBLE AND THAT AREA.
EVERY ONCE IN AWHILE YOU WILL SEE 1% TOWNSHIP AND ONE% E -- 1%
EDC, ECONOMIC DEVELOPMENT ZONE. >> USUALLY IT 1% FOR TOWNSHIP
AND 1% FOR EDZ. >> DO THEY HAVE DIFFERENT --
>> THERE IS AN ECONOMIC DEVELOPMENT ZONE 1 AND 2 AND 3.
>> AND IT SHOWS UP ON THE RECEIPT.
>> YES. ALL OF THAT IS COMING TO THE TOWNSHIP. PER THE EDZ AGREEMENT WE REFUND A PORTION OF THE SALES TAX BACK TO THE EDZ.
TO BE CLEAR, IT IS NOT FOR THE ACTUAL STORES THAT WERE DEVELOPED BY THE MALL. IT IS FOR THE PUBLIC AREAS.
IT IS FOR THE GARAGE OR THE PARK AREA, THE GREEN AREA.
IT IS THE PUBLIC AREA. >> AND WHEN THOSE EDZ'S ARE PAID
OFF WE CAN USE THAT FOR OTHER -- >> THEN IT IS STILL PART OF AN EDZ, BUT IT IS THE BASE THAT CAN BE USED FOR A VARIETY OF PURPOSES. WE USE IT TO FUND PUBLIC SAFETY.
>> AND THEN 7%? >> THE 7% IS THE BASE HOTEL TAX AND THAT IS PLEDGED TO PAYOFF DEBT SERVICE ON ANY BONDS THAT ARE BACKED BY OUR SALES TAX AND HOTEL TAX.
RIGHT NOW THE OUTSTANDING BOND WAS ISSUED IN 2001 AND REFINANCED ABOUT FIVE YEARS AGO. ALL OF THAT TAX IS PLEDGED TO THE -- OR ALL OF THE REVENUE IS PLEDGED TO THE DEBT SERVICE.
THE DEBT SERVICE ON THAT BOND IS 2.8 MILLION ANNUALLY.
SO WE GET TO USE ANYTHING THAT IS IN EXCESS OF THE DEBT SERVICE. AND WE DO USE IT PRIMARILY TO FUND VISIT THE WOODLANDS. THE 2% SUPPLEMENTAL TAX IS DEDICATED TO VISIT THE WOODLANDS.
TECHNICALLY BY LAW ONLY 75% HAS TO BE DEDICATED TO IT.
IN REALITY, EVERYTHING GENERATED BY THE 2% TAX IS DEDICATED TO
VISIT THE WOODLANDS. >> SO THAT IS ON TOP OF ANOTHER
THE STATE HAS -- >> THAT'S WHAT I'M TALKING
>> YES. THAT'S WHAT I'M LOOKING FOR.
THAT'S NOT LISTED HERE. THAT GOES DIRECTLY TO THE STATE.
>> RIGHT. >> BUT THAT ALSO IS RECOVERABLE
IN CERTAIN CIRCUMSTANCES. >> YOU'RE RIGHT.
FOR EXAMPLE, THE CITY OF CONROW, SO CERTAIN ECONOMIC DEVELOPMENTS, LIKE CONVENTION-STYLE PROJECTS CAN RECAPTURE FROM THE STATE THE 6.25%.
THEY HAVE TO BE CODIFIED IN THE LEGISLATION IN ORDER TO DO THAT, IN ORDER TO RECEIVE THAT FOR A CERTAIN PERIOD OF TIME.
IT DOES NOT GO ON FOR -- FOREVER.
10 YEARS AND THEY ARE USING IT FOR THE PROJECT.
WOODLANDS TOWNSHIP DOES NOT QUALIFY BECAUSE OF HOW THE CURRENT LEGISLATION READS IS IT APPLIES TO MUNICIPALITIES.
[00:35:01]
>> THAT'S RIGHT. AS A SPECIAL PURPOSE DISTRICT WE DO NOT QUALIFY. I APPRECIATE IT.
>> HERE IS A LOOK AT THE HOTEL TAX GROWTH RATE.
WE WERE CLIPPING ALONG AT AROUND 3% AND WE REALLY TOOK A HIT DURING COVID. WE WENT DOWN ALMOST 60% AND YOU CAN SEE THE GREAT REBOUND BACK IN 2021, THE CONTINUED REBOUND BACK IN 2022. AND THEN FOR 2023 WE ARE CONTINUING SOMETHING ABOVE WHAT WE ARE LOOKING AT IN SALES TAX.
THIS IS BASED OFF WHAT IS CALLED THE STAR REPORT THAT THE HOTEL INDUSTRY GENERATES. WHEN WE LOOK AT PROJECTED ROOM NIGHTS AND THE COST FOR THE ROOM NIGHTS, THAT'S HOW WE CAME UP WITH THE 8.2. AND I SORT OF TALKED ABOUT THIS, BUT THE HOTEL TAX, THE WAY THAT IT IS ALLOCATED IS IT GOES TO TOWNSHIP DEBT SERVICE, THAT IS A REQUIREMENT AND THEN WE USE ANY EXCESS THAT IS NEEDED -- WE USE WHAT VISIT THE WOODLANDS NEEDS TO FUND THEIR BUDGET AND THEN ANY EXCESS IS ACCUMULATED IN A
HOTEL TAX RESERVE. >> MONIQUE, WE WILL GET A LITTLE BOUNCE TOO FOR NEXT YEAR BECAUSE IN SUMMER HALF OF THE MARRIOTT ROOMS WERE NOT AVAILABLE FOR RENOVATION.
THAT'S WHY WE WERE PREDICTING A LITTLE ROSIER OUTLOOK THAN WE
>> WENT THROUGH CONVENTION DATES NEXT YEAR AND NOT FINDING AVAILABILITY. SEEMS LIKE MARRIOTT AND CONVENTION CENTER ARE BOOKED FOR 2023.
I WILL PAUSE THERE -- >> MONIQUE?
>> YES. >> LOOKING AT THE RECREATION PROGRAMS, OUR RECREATION DEPARTMENT IS GROWING AND EXPANDING THE $7.2 MILLION PROJECTED REVENUE FOR 2023 AND IT IS NOT FAR OFF FROM THE HOTEL TAX REVENUE.
MAYBE I MISSED THE INFORMATION ON HOW THAT COMPARES TO YEARS PAST. AND REMIND US WHAT ARE THE PRIMARY ACTIVITIES BRINGING IN THAT REVENUE.
>> YES. WE WILL GET TO -- I DON'T HAVE IT IN TERMS OF REVENUE AND WE CAN LOOK AT THAT IN TERMS OF THE GROWTH. I THINK IT IS AROUND A 5% GROWTH THIS YEAR. AS YOU KNOW WE HAVE RECREATION PROGRAMS ACROSS THE BOARD WHERE WE ARE REALLY SEEING HUGE INCREASES ARE OUR PRE PRE PRE SREPB -- OUR TREE VENTURE COURSES. WHEN YOU SEE THE INCREASE IN THE BUDGET FOR THIS YEAR, IT IS RELATED TO TENNIS PROGRAMS. TENNIS HAS TAKEN OFF IN A BIG WAY.
HERE, THE PRE -- THE PRESCHOOL PROGRAMS ARE POPULAR AND GROWING AND SO ARE THE SUMMER CAMPS. WE HAVE MADE THE ADJUSTMENTS IN
THIS BUDGET. >> WE HAVE SEEN THE REVENUE OFFSET THE EXPENSES FOR ALL OF THOSE.
ESPECIALLY FOR THIS ONE. >> THEY HAVE BEEN HUGELY POPULAR. THEY OFFSET BY 8%.
THAT INCLUDES THE STAFF EXPENSES AS WELL.
DID I ANSWER YOUR QUESTION? >> YES.
>> OKAY. ANY OTHER QUESTIONS ON REVENUES BEFORE I MOVE TO SPINS -- TO EXPENSES? OUR CONSOLIDATED EXPENSES FOR THE YEAR TOTAL 142 MILLION.
THAT IS ACTUALLY A 5.7 MILLION DECREASE FROM CONSOLIDATED EXPENDITURES FROM THE PREVIOUS YEAR, ABOUT 3.9.
LET'S LOOK AT THE DIFFERENT COMPONENTS THAT ARE LISTED AT THE BOTTOM. THE PRIMARY REASON IT IS DECREASING OVERALL IS BECAUSE OF OUR CAPITAL EXPENDITURES.
WE HAVE A 14.6 MILLION DECREASE, BUT IT IS NOT BECAUSE WE ARE NOT DEFERRING CAPITAL AND WE ARE NOT CONTINUING TO UPDATE AND ADD NEW AMENITIES ACCORDING TO THE RESERVE PLAN AND AS REQUESTED BY THE BOARD OF RESIDENTS, WE HAD A WHOLE BUNCH OF CAPITAL IN 2022 AND THAT WAS SORT OF A BUILD UP FROM DEFERRING CAPITAL IN THE COVID YEARS. IN 2020 AND 2021, WE PARTICULARLY SHUTDOWN CAPITAL EXPENDITURES EXCEPT FOR WHAT WAS NEEDED FOR SAFETY REASONS OR I.T. EXPIRING HR-PBSZS.
LICENSES. 2022 WAS A BIG YEAR IN TERMS OF CAPITAL AND NOW WE ARE GETTING BACK TO SOMETHING MORE NORMAL IN 23. THERE WAS ALSO AN $800,000 INCREASE IN TRANSPORTATION EXPENDITURES.
THIS LARGELY HAS TO DO WITH THE PARK AND RIDE, IN THE CONTRACTUAL INCREASES AND THEN STAFFING INCREASES.
THESE ARE -- ALL OF THE PARK AND RIDE IS COVERED 100% BY GRANT
[00:40:04]
FUNDS THAT WE HAVE. MOST OF THOSE INCREASES RIGHT THERE ARE OFFSET BY REVENUE. EDZ WHICH WE TALKED ABOUT, THE ECONOMIC DEVELOPMENT ZONE, WITH SALES TAX INCREASES.WE ARE TALKING ABOUT THE SALES TAX INCREASE AND THEN OUR EDZ EXPENSES ARE GOING TO NATURALLY INCREASE AS WE RETURN A PORTION OF THOSE MONIES TO THE DEVELOPERS OF THE PROJECTS.
THE WOODLANDS EBGDZ PENNED TOUR -- EXPENDITURES ARE INCREASING 500,000. THIS IS JUST GETTING -- THIS IS FINALLY GETTING VISIT THE WOODLANDS BACK TO PRE-COVID
LEVELS. >> IT IS LESS THAN OUR 19
IT IS NOT EVEN THAT. WE WILL SEE THE MARKETING PROGRAMS AND THOSE TYPES OF THINGS.
IT IS FINALLY GETTING THEM BACK TO WHERE THEY USED TO BE.
WE HAD A $100,000 DECREASE IN DEBT SERVICE AND OUR OVERALL OPERATING EXPENDITURES ARE INCREASING $7.2 MILLION AND WE WILL TALK ABOUT THE REASONS FOR THAT NEXT.
WHOOPS. THAT DID NOT COME THROUGH.
MAYBE IF I CLICK ENOUGH TIMES IT WILL.
THERE WE GO. BEFORE WE START TALKING ABOUT THE EXPENDITURES, I WANTED TO TALK ABOUT THE SURVEY YOU RECEIVED LAST WEEK -- AT YOUR LAST BOARD MEETING.
ONE OF THE THINGS THAT THE CONSULTANT WHO PERFORMED THE INDEPENDENT SURVEY FOR US TALKED ABOUT WAS HOW OUR RESIDENTS RATED SEVEN-DAY FORECAST -- RATED SERVICES THAT ARE IMPORTANT TO THEM. THESE RIGHT HERE, THESE THAT YOU SEE LISTED WERE RATED 94% OR HIGHER IN TERMS OF IMPORTANCE BY OUR RESIDENTS. PATHWAYS, STREET SKAEUPS, CRIME PREVENTION, GARBAGE COLLECTION, THE NATURAL ENVIRONMENT AND OUR PARKS AND RECREATION FACILITY. THIS WILL HAVE THE SAME ISSUE.
THERE WE GO. THEN ANOTHER SLIDE SHOWED HOW WOULD YOU RATE YOUR SATISFACTION WITH THE FOLLOWING? OUR RESIDENTS TALKED ABOUT A 96% HIGHER SATISFACTION LEVEL WITH ALL OF THOSE THINGS LISTED. AS A POINT OF REFERENCE OUR CONSULTANT MENTIONED THAT MOST CITIES ARE VERY HAPPY WITH AN 85% RATING. THEY ARE PLEASED WITH THAT.
SHE REALLY EXPOUNDED UPON THE FACT THAT OURS AT 96% WAS EXTRAORDINARY. SHE TALKED ABOUT HOW SHE WAS DOING THIS FOR 40 YEARS, MAKING THESE PRESENTATIONS AND DOING THESE SURVEYS AND THIS WAS BY FAR ONE OF THE HIGHEST SHE HAD SEEN. I JUST WANTED TO BRING THAT UP BEFORE WE STARTED TALKING ABOUT WHERE WE INVEST OUR DOLLARS IN
TERMS OF ALIGNING WITH THIS. >> MONIQUE, I UNFORTUNATELY MISSED THURSDAY'S MEETING. IS 96% SATISFACTION THE HIGHEST SCORE THE TOWNSHIP HAS EVER RECEIVED?
>> THAT'S ANOTHER GOOD POINT. YES.
WE HAVE ALWAYS BEEN IN THE 90S AND TYPICALLY THE MID-90S, BUT
96% IS THE HIGHEST. >> SO I WOULD LIKE TO THANK ALL OF THE STAFF, EXECUTIVE TEAM, VOLUNTEERS, BOARD MEMBERS FOR ACHIEVING THE HIGHEST SATISFACTION RATE IN THE HISTORY OF OUR COMMUNITY'S 40 PLUS -- WHAT, 47 YEARS? WE ARE ALMOST THERE. [APPLAUSE].
THE OTHER THING IS, IT WAS THE LARGEST SAMPLE SIZE EVER RETURNED FOR THE SURVEY. IT IS MORE STATISTICALLY CREDIBLE THAN ANYTHING IN THE PAST.
WITH THAT, THIS IS AN ALLOCATION OF WHEN -- OF WHERE WE SPEND OUR REVENUE SOURCES IN TERMS OF THE EXPENSE CATEGORIES.
THEY GO AND THE ONES HIGHLIGHTED IN BLUE ALIGN EXACTLY WITH WHAT WE JUST SAW IN THE PREVIOUS SLIDES IN TERMS OF IMPORTANCE WITH THE FIRE DEPARTMENT, OUR PARKS AND RECREATION, OUR COMMUNITY SERVICES WHICH ARE OUR STREETSCAPE AND FORESTRY MANAGEMENT, A LOT OF LAW ENFORCEMENT AND UH -- A LOT OF OUR CAPITAL THAT TIES DIRECTLY BACK TO THE FIRE DEPARTMENT AND
PARKS AND RECREATION. >> I WANTED TO BRING MR. LAKEY'S ATTENTION TO OUR SLIDE. WE HAVE FOUR FUNDED LAW ENFORCEMENT IN OUR BUDGET. I KNOW YOU MADE A COMMENT DURING PUBLIC COMMENT, BUT THERE HASN'T BEEN A CHANGE AT THIS POINT.
IT IS SITTING THERE IN OUR BUDGET.
WE ARE OPERATING AS IF IT IS IN OUR BUDGET.
>> CORRECT. IN TERMS OF THE REASON THE BUDGET -- THE OVERALL CONSOLIDATED BUDGET IS INCREASING, WE TALKED ABOUT THIS A LITTLE BIT, SO I WILL SKIP
[00:45:01]
OVER THOSE. THE FIRE DEPARTMENT HAS A $3.4 INCREASE. PARKS AND RECREATION IS JUST OVER 2 MILLION. COMMUNITY SERVICES IS ABOUT 900,000. GENERAL GOVERNMENT IS ABOUT 800,000. THOSE ARE THE CATEGORIES I WILL DELVE DOWN INTO A LITTLE DEEPER. IN TERMS OF THE FIRE DEPARTMENT EXPENSES -- FIRST OF ALL WE WILL START OFF WITH THE TOP BULLET THAT WE ARE AN ISO1 RATED FIRE DEPARTMENT FOR INSURANCE PURPOSES AND THAT IS A RATING ACHIEVED BY LESS THAN ONE-FOURTH OF 1% OF ALL FIRE DEPARTMENTS IN THE COUNTRY.THAT'S A WONDERFUL ACHIEVEMENT AND SOMETHING THE BOARD HAS CONTINUED TO PUT RESOURCES INTO THE FIRE DEPARTMENT TO MAINTAIN THAT ISO1 RATING. I WILL START AT THE BOTTOM.
LONG HAS BEEN DISCUSSED OVER THE PAST THREE OR FOUR YEARS OF ADDING A 10TH COMPANY OVERALL.
IT WOULD BE THE SECOND COMPANY STATIONED AT FIRE STATION 5 TO SERVE THE WESTERN PORTIONS OF OUR COMMUNITY.
WHEN THE FIRE DEPARTMENT LOOKS AT THE STATISTICS IN TERMS OF RESPONSE CALLS EVEN THOUGH WE ARE IN THE APPROPRIATE RANGE, THAT IS THE AREA WHERE WE FEEL LIKE, THAT WE FEEL WE CAN IMPROVE UPON. A 10TH COMPANY WITH A NEW STAFF THAT IS ASSOCIATED WITH THAT IS INCLUDED IN THE BASE BUDGET NUMBERS THAT WE ARE LOOKING AT NOW AND THAT COST IS ABOUT $2 MILLION FOR STAFFING AND RELATED TRAINING, EQUIPMENT AND THE ASSOCIATED COSTS THERE. OUR EXISTING STAFF, INCREASES FOR SALARIES AND BENEFITS, IS GOING UP ABOUT $1.2 MILLION.
WE ARE GOING TO TALK ABOUT SALARIES AND BENEFITS MORE IN A SECOND. AND THE OTHER COSTS ARE MUCH SMALLER, BUT THEY ARE LISTED. RECREATION AT THE TOP IS A BRIEF LISTING OF ALL OF THE AMENITIES THAT WE PROVIDE AND AS YOU ALL KNOW THIS IS OUR COMPLEMENT OF AMENITIES THAT FAR SURPASSES WHAT MOST CITIES AND EVEN CITIES OF OUR SIZE AND LARGER OFFER ON A COMPARISON BASIS. THE PARKS AND REC BUDGET IS INCREASING OVER THE 2022 BUDGET. I I WILL START DOWN AT THE BOTTOM. OVER HALF A MILLION, 542,000 OF THAT IS RELATED BY CONTRACT. THE WOODLANDS TOWNSHIP WILL ASSUME THE OWNERSHIP, RESPONSIBILITIES AND THE COSTS FOR THE WOODLANDS WATERWAY FROM HOWARD HUGHES CORPORATION ABOUT MIDNEXT YEAR. SO WE HAVE ALREADY STARTED WORKING WITH HOWARD HUGHES ON THAT TRANSFER, ON THAT PROCESS, AND THERE IS A LOT MORE TO COME AS WE FINALIZE THE LEGAL OBLIGATIONS. THERE ARE ASSOCIATED COSTS IN TERMS OF THE MAINTENANCE AND THE AMENITIES AND WE HAVE BUDGETED 541 AND THAT INCLUDES AN ADDITIONAL STAFF PERSON.
IN TERMS OF RECREATION, WE ARE INCREASING BY ABOUT $513,000.
AS WE MENTIONED, THAT IS OFFSET MORE THAN 100% BY REVENUE.
WE HAVE A $300,000 INCREASE IN PARK AND PATHWAY STAFF, FACILITY AND EQUIPMENT EXPENSES. AQUATICS IS GROWING BY 300,000 AND THAT IS OFFSET ALMOST 50% BY REVENUE WHICH IS -- THE TARGET IS ALWAYS 50%. IT HAS FALLEN A LITTLE LOWER THAN THAT THIS YEAR. AS YOU HAVE READ ALL SUMMER LONG , PEOPLE ARE HAVING TROUBLE HIRING LIFEGUARDS AT THE RATES THEY USED TO BE PAID. ON A TARGETED BASIS IN ORDER TO KEEP OUR POLLS OPEN WE ARE HAVING TO INCREASE WHAT WE ARE PAYING THE LIFEGUARDS IN ORDER TO DO THAT.
THAT'S WHAT IS REFLECTED THERE. >> PARK AND PATHWAY MAINTENANCE.
THIS IS THE CONTRACT BY STAFF. AT YOUR BOARD MEETING WE WILL BE PRESENTING -- WE JUST RE -- RELANDSCAPING AND A LOT OF THE PARK AND PATHWAY MAINTENANCE. THAT'S SOMETHING YOU WILL BE RECEIVING ON WEDNESDAY. OUR ROUTINE WATERWAY MAINTENANCE, SO THE WATERWAY MAINTENANCE YOU PROVIDE IS GOING UP BY 116,000. COMMUNITY EVENTS IS 98,000.
WE DID BUMP UP THE TREE REMOVAL BUDGET BECAUSE YOU CAN SEE THE BROWN TREES OUT THERE. WHEN THIS HAPPENS, WE TYPICALLY
WILL HAVE AN INCREASE. >> I WAS GONNA SAY, PROBABLY SHOULD CONSIDER FUNDS FOR REFOR RES STATION -- FOR REFORESTATION
[00:50:05]
TOO. >> BECAUSE OF 2011'S DROUGHT, WE HAD AN ONGOING BUDGET ITEM FOR REFORESTATION.
IT WAS MORE AGGRESSIVE IN THE PAST WHICH IS WHY THE ADJUSTMENT FOR TREATMENT IS NOT AS LARGE AS PEOPLE WOULD EXPECT.
IT IS THAT WE ALWAYS HAVE THAT IN OUR BASE BUDGET AND RESPONSES TO THE CURRENT CONDITIONS. I SUSPECT WE HAVE ENOUGH FUNDING AND IF NOT, WE CAN REQUEST MORE. WE DON'T HAVE TO DO IT NOW.
WE CAN DO IT LATER. >> YOU ARE RIGHT.
FORESTRY MANAGEMENT AND STREETSCAPE, WE HAVE POCKETS OF MONEY FOR THAT. ANY QUESTIONS ON THIS BEFORE WE MOVE FORWARD? RECREATION AND AQUATICS, WE TALKED ABOUT THAT A MINUTE AGO. WE ARE SEEING ABOUT 108% RECOVERY ON OUR RECREATION PROGRAMS AND A 48% RECOVERY ON OUR AQUATIC PROGRAMS. COMMUNITY SERVICES.
WHAT THIS INCLUDES IS ADMINISTRATION, STREETLIGHTS, THE STREETSCAPE AND SOLID WASTE SERVICES.
OUR SOLID WASTE CONTRACT IS GOING UP 380,000 AND OUR NEXT SLIDE WILL GO INTO MORE DETAIL ON THAT.
OUR CONTRACTED STREETSCAPE IS GROWING 300,000.
THAT'S A LARGE CONTRACT SO THAT IS WITHIN OUR CTI ADJUSTMENT.
I THINK IT IS A 5% INCREASE OVERALL.
STREETLIGHTS ARE GOING UP 70,000 BASED ON RATE NOTICE AS WE RECEIVED FROM THE PUC REGARDING WHAT IS EXPECTED NEXT YEAR.
AND THEN THE OTHER ONES ARE SMALLER IN COMPARISON.
>> IF YOU WANT TO JUST STAY THERE REAL QUICK.
>> SURE. >> MOST CITIES DON'T COVER THE TRASH SERVICE WITHIN THEIR TAX RATE.
>> THAT IS CORRECT. >> AND SO IT WOULD BE REALLY HELPFUL, I THINK, IF WE BROKE OUT HOW MUCH IN TOTAL -- I KNOW IT IS IN GROSS, BUT THIS IS INCREMENTAL INCREASE, BUT A LARGE PORTION OF THE PROPERTY TAX THAT WE COLLECT GOES DIRECTLY BACK INTO RESIDENTIAL SERVICES.
KHREBLGT -- COLLECTING THE TRASH, FIRE SERVICE, OTHER THINGS, I JUST WANTED TO KIND OF HIGHLIGHT THAT.
MR. LAKEY MADE A COMMENT OF RETURNING THE EXCESS FUNDS TO THE TAXPAYERS. THE FUNDS THAT WERE COLLECTED THAT WERE EXCESS WERE SALES TAX-RELATED AND WE WOULD HAVE A HARD TIME TRACKING DOWN THE VISITORS WHO CAME HERE AND SPENT MONEY TO RETURN THE POSITIVE VARIANCES.
>> THANK YOU. I HAVE THE WRONG BOOK, BUT SOMEBODY CAN LOOK IT UP AND TELL US WHAT THAT IS.
IN TERMS OF SOLID WASTE -- WELL, THERE IT IS.
WE ARE SPENDING ABOUT 7.5 MILLION.
IF A PENNY IS WORTH TWO AND A HALF MILLION, THEN WE ARE LOOKING AT 3 CENTS OF OUR TAX RATE GOES TO SUPPORT OUR SOLID WASTE SERVICES. AND AGAIN, CHAIRMAN BUNCH IS RIGHT. THERE IS A SEPARATE FEE FOR THE SERVICE AND THE TOWNSHIP THAT IS COVERED IN YOUR PROPERTY TAX BASE. THE REASON THE SOLID WASTE EXPENSE IS INCREASING ABOVE THE BASE AMOUNT IS IN THE CONTRACT THERE IS A $ -- THERE IS A 3.5% CPI ADJUSTMENT.
THE RECYCLING CENTER, WE ARE SEEING AN INCREASED USE OF OUR RECYCLING CENTER AND ARE ESTIMATING BASED ON THE CURRENT USAGE ABOUT A 33,000 INCREASE. APARTMENTS, ABOUT 15,000.
IT IS A LITTLE COMPLICATED, BUT IT IS TO GET US TO A STANDARD.
WE HAVE SOME APARTMENT COMPLEXES THAT ARE EXCEEDING WHAT IS ALLOWED BY THE CONTRACT AND SOME THAT ARE LESS THAN.
OUR STAFF IS DOING A GREAT JOB TIEING THAT TOGETHER AND REORGANIZING THINGS IN THE CONTRACT AND WORKING WITH OUR PROVIDER IN ORDER TO DO THAT. BUT OVERALL IT IS ABOUT A $15,000 INCREASE. IF WE DON'T ADDRESS IT, THE COST WOULD BE MUCH MORE THAN THAT. WE ARE DOING WHAT WE NEED TO DO
TO GET THAT BACK IN LINE. >> THE WASTE MANAGEMENT CONTRACT
WE EXTENDED WAS FIVE YEARS? >> YES, SIR.
>> WE WERE ABLE TO LOCK IN A FAVORABLE RATE.
I MEAN, YOU TAKE TODAY'S INFLATION AND IF WE HADN'T NEGOTIATED THE CONTRACT, THE COST WOULD BE SUBSTANTIVELY
HIGHER. >> IT WOULD BE BASED ON A CPI AS OPPOSED TO THE THREE AND A HALF. AND THEN WE HAVE NEW PROPERTIES
THAT ARE CONTRIBUTING. >> MONIQUE, COULD YOU ELABORATE A LITTLE ON THE DIFFERENCE BETWEEN THE RECYCLING CENTER THAT'S MENTIONED HERE AND THE INCREASE OF 33,000 VERSUS THE
[00:55:04]
WEEKLY RECYCLING THAT WE ACTUALLY PAY FOR WITHIN THE CONTRACT TO WASTE MANAGEMENT? THEY ARE TWO OPERATIONS.>> THEY ARE. THE RECYCLING CENTER, THE ONE WE ARE TALKING ABOUT, IS OFF RESEARCH FOREST.
AND WITHIN YOUR -- WHAT IS ALLOWED AT CURB PICK UP, THEY ARE THE MORE TRADITIONAL ITEMS ON THE LID OF YOUR CONTRACT.
THE THINGS THAT ARE NOT LISTED ON THE LID OF YOUR BIN THINGS LIKE RECYCLING CAN BE TAKEN TO THE LARGE RECYCLING CENTER.
AND THAT'S WHAT THE COST IS THERE.
>> BUT THIS COST HERE, THE COST WE PAY WITHIN THE CONTRACT IS VERY DIFFERENT THAN THE AMOUNT FOR THE INDIVIDUAL BUILDING.
>> I DON'T KNOW IF WE KNOW EXACTLY WHAT WE PAY ADDITIONAL
TO PROVIDE RECYCLING TO OUR -- >> IT IS A SUBSTANTIVE AMOUNT.
>> I KNOW. I WOULD LIKE TO SEE THAT BECAUSE I THINK SOME PEOPLE MIGHT THINK BECAUSE I WAS ONE OF THEM MANY YEARS AGO, I THOUGHT WE ACTUALLY COULD MAKE MONEY ON RECYCLING.
THEN WAS UN -- UNFORTUNATELY INFORMED IT IS A GIFT TO THE PLANET, BUT WE ACTUALLY HAVE TO PAY QUITE A BIT TO PROVIDE THAT SERVICE TO OUR RESIDENTS. IT IS WORTH IT, BUT WE HAVE TO PAY. WE DON'T MAKE ANY MONEY OFF OF
IT. >> WE DON'T MAKE MONEY ON IT.
MOST OF THE THINGS GOING INTO THE RECYCLING BIN DON'T GET RECYCLED. SOME OF THE THINGS THAT YOU PUT IN INCREASE THE OVERALL WASTE CONTRACT.
THERE IS A FEE CHARGED BACK IF THEY HAVE TO DO TOO MUCH SORTING OUT OF WHAT WAS IN THE RECYCLING CONTAINERS.
WE HAD TO PAY AN EXTRA SURCHARGE.
I CAN'T REMEMBER THE WASTE MANAGEMENT COMMENT, BUT I THINK MORE THAN HALF OF WHAT GOES IN THE BIN DOESN'T GO ANYWHERE AND ENDS UP IN A LANDFILL. WE SPEND A LOT OF MONEY ON IT AND IT DOES FEEL GOOD, BUT THE ULTIMATE EFFECTIVENESS IS NOT AS EFFECTIVE AS PEOPLE THINK. THAT'S BECAUSE THERE IS NO SECONDARY MARKET FOR MOST OF THE RECYCLABLE GOODS.
CHINA USED TO BUY IT ALL, AND NOW THERE ARE NO BUYERS.
EVEN THE THINGS THAT CAN BE RECYCLED, DON'T GET RECYCLED.
>> THOSE ARE ALL CORRECT STATEMENTS.
OUREN SRAOEURPB -- OUR ENVIRONMENTAL TEAM DOES GOOD AT GETTING SERVICES OUT THERE. ANYTHING OTHER THAN WHAT IS ON THE LID YOU ARE CONTAMINATING THE RECYCLING STRING.
I DON'T KNOW IF OFF THE TOP OF MY HEAD, BUT I CAN GET THAT FOR YOU. THIS IS A LOOK AT THE GENERAL GOVERNMENT EXPENSES AND WHERE THOSE INCREASES ARE GOING UP ABOUT $790,000. INFORMATION TECHNOLOGY IS THE LARGEST INCREASE OF 371. THERE IS ABOUT $80,000 IN THERE FOR SOME REQUIRED NEW SOFTWARE, SECURITY SOFTWARE WE HAVE TO GET WITHOUT THAT SOFTWARE WE ARE NOT ELIGIBLE TO PARTICIPATE IN THE INSURANCE PROGRAM FOR CYBER SECURITY WHICH WE MOST DEFINITELY WANT TO DO. THAT IS A REQUIREMENT.
WE HAVE ONE NEW STAFF PERSON INCLUDED IN THERE WHICH WE WILL TALK ABOUT LATER, A SENIOR ASSISTANCE ADMINISTRATOR.
AND THEN THE REST OF IT IS ALWAYS INCREASING COSTS FOR LICENSING, COMPUTER SUPPORT AND VARIOUS TYPES OF SOFTWARE.
THOSE ARE THE AREAS WHERE WE CONTINUE TO SIGNIFICANT SUPPLY CHAIN ISSUES -PLTD -- ISSUES. OUR FACILITIES ARE GROWING BY 2 JUAN -- 217 AND THAT IS REPRESENTING NEW STAFF.
OUR TOWNSHIP SECRETARY'S OFFICE IS INCREASING BOO -- BY 125,000.
WE HAVE RECEIVED NOTICES FROM OUR INSURANCE PROVIDER, TEXAS MUNICIPAL AND INTER GOVERNMENTAL RISK POOL THAT INSURANCE IS GOING UP 10% AND IT IS NOT BECAUSE OF OUR EXPERIENCE, THE TOWNSHIP'S EXPERIENCE. IT IS GOING ON STATEWIDE.
WE LOOK BACK AT FREEZES, HAIL DAMAGE, STORM DAMAGE, ALL OF THAT IS ON A STATEWIDE BASIS OVER THE PAST TWO YEARS.
TML IS INCREASING 10%. >> AND 10% IS REALLY LOW COMPARED TO THE INDUSTRY. RIGHT NOW WE ARE SEEING RATES BETWEEN 20 AND FOURS -- 40%. THE GOVERNMENT IS ACTUALLY DOING
A BETTER JOB. >> TML HAS BEEN GOOD FOR THE TOWNSHIP. CHAIRMAN BUNCH WHEN HE CAME ON
BOARD HELPED US GET THERE. >> WHILE I MAY HAVE HELPED RE-DO
[01:00:02]
OUR INSURANCE, BUT I DID NOT GET COMPENSATED NOR DID MY COMPANY NOR ANYBODY RELATED TO ME OR ANYBODY I KNOW.>> THAT SHOULD GO WITHOUT SAYING.
>> I DID SAVE A THOUSAND DOLLARS A YEAR.
>> LEGAL SERVICES AND THE REST OF THEM ARE FLAT AND MINOR ADJUSTMENTS. I WANTED TO TALK TO YOU IN TERMS OF FACILITIES. I THINK I MENTIONED AT OUR JUNE BUDGET WORKSHOP THAT THIS WAS AN AREA WE WOULD BE FOCUSING ON.
WHEN THE STAFF REQUEST CAME IN FOR THE ■BUDGET, WHENWEWERE%-ÚW,
[01:06:05]
THAT'S WHY YOU HAVE THE DECREASE THERE.THE OTHER CONTRACTED LAW ENFORCEMENT ARE PROGRAMS FOR THE INTERNET CRIMES AGAINST CHILDREN AND SAFE HARBOR ARE INCLUDED IN THERE AND THE MONTGOMERY COUNTY PRECINCT 3 JUSTICE OF THE PEACE CLERK THAT WE HAVE BEEN FUNDING. AND THEN THE HARRIS COUNTY CONSTABLES CONTRACT FOR THE SERVICES DUE TO THE VILLAGE OF CREEK SIDE PARK IS ALSO IN THERE.
AGAIN, THIS IS FULLY LOADED INTO THE BUDGET AT THIS POINT.
>> COULD YOU POINT OUT OR WOULD YOU POINT OUT IF THERE IS AN INCREASE IN THE NUMBER OF STAFF IN HARRIS COUNTY CONSTABLES SECTION? DOES THAT INCLUDE AN INCREASE IN
STAFF? >> THESE NUMBERS DO NOT.
HOWEVER, WHEN WE GET TO BUDGET INITIATIVES, HARRIS COUNTY REQUESTED ONE ADDITIONAL CONSTABLE AND WE WILL BE PRESENTING THAT TO YOU TO SEE IF YOU WOULD LIKE TO ADD THAT TO
THE BUDGET. >> I WOULD DEFINITELY LIKE TO.
THANK YOU. ANY QUESTION ON THOSE BEFORE WE
MOVE TO PERSONNEL? >> MONIQUE, CAN YOU CLARIFY HOW MANY CON TABL -- CONSTABLES WE HAVE?
MOVING TO PERSONNEL COSTS. WE TALKED ABOUT SOME OF THE PERSONNEL THAT WAS EMBEDDED -- EVERYTHING WITH PERSONNEL COSTS EMBEDDED. AND I WANT TO TALK ABOUT THEM SEPARATELY. WHAT WE ARE BASE -- BASING OUR PERSONNEL BUDGET ON THIS YEAR IS A 6% GENERAL WAGE INCREASE AND WE WILL TALK MORE ABOUT HOW WE CAME UP WITH THAT NUMBER.
A 3.4% HEALTH INSURANCE RATE INCREASE, THIS IS LOWER THAN OUR NATIONAL TREND WHICH IS EXPECTED TO BE ABOUT 6.7%.
SINCE MOVING TO A SELF--FUNDED INSURANCE PLAN WE SAVED $3.1 MILLION IN THIS PLAN COMPARED TO TRADITIONAL PLANS.
THIS HAS BEEN GOOD FOR OUR EMPLOYEES AS WELL AS OUR TAXPAYERS. IT IS A GOOD MODEL.
WE ARE STILL GOING OUT FOR OUR STOP LOSS INNINGS -- INSURANCE THAT WILL GO TO MARKET. I WON'T GO INTO DETAIL, BUT WE FEEL SEPTEMBER IS THE MOST FAVORABLE MARKET FOR US.
THERE IS A POTENTIAL THAT IT WILL GO DOWN SLIGHTLY.
IT IS NOT GOING TO BE ANYTHING EARTH SHATTERING, BUT WE FEEL LIKE WE HAVE THE POTENTIAL FOR THE NUMBER TO GO DOWN LOWER.
AND I WANT TO MENTION THAT OUR NEW -- AT SOME POINT I WILL STOP CALLING HER NEW, BUT THE DIRECTOR OF HUMAN RESOURCES, SHE HAS TAKEN THEM ON AND HAS DONE A WONDERFUL JOB WITH US IN TERMS OF GETTING THIS INCREASE DOWN. IN TERMS OF OTHER EMPLOYEE INSURANCE, THERE ARE NO INCREASES.
WE ARE STILL IN A THREE-YEAR RATE GUARANTEE.
UNEMPLOYMENT INSURANCE IS GOING DOWN 56,000, BUT IT IS OFFSET BY AN EXPECTED INCREASE IN WORKERS COMPENSATION.
IN TERMS OF WHERE WE CAME UP WITH A 6% INCREASE FOR THE 2023 BUDGET FOR OUR EMPLOYEES, WHAT WE DID WAS LOOK AT -- ANGELA HAS BEEN HELPFUL, BUT WE LOOKED AT A BUNCH OF AGENCIES.
THE TOP 10 THAT YOU HAVE SEEN SEPARATED BY THE BROWN LINE THERE, THEY ARE THE ONES THAT THE CITIES THAT WE USE FOR COMPARISON PURPOSES IN OUR LAST COMPENSATION STUDY THAT WAS DONE IN 2019. WE WANTED TO MAKE SURE TO TRACK THOSE. DOWN BELOW THE LINE ARE A REPRESENTATIVE OF MULTIPLE AGENCIES THAT WE CONTINUED TO LOOK AT IN TERMS OF THEIR BUDGET.
WE HAVE A LIST OF 12 OR 15 THAT I CAN PROVIDE YOU SEPARATELY IF
[01:10:04]
YOU WOULD LIKE. THESE ARE WHAT THEY ARE DOING.WE LOOKED AT WHAT THE 22 INCREASE WAS AND WHAT WE HAVE PLANNED FOR 2023 AND WHAT THESE AGENCIES HAVE PLANNED AND LOOKING AT A TWO-YEAR TOTAL. THE REASON WE DID THAT WAS IN 2022, THERE WERE A LOT OF AGENCIES THAT DID MID-YEAR ADJUSTMENTS AND TARGETED ADJUSTMENTS AND SIGNING BONUSES.
I'M SURE Y'ALL HAVE READ ABOUT IT.
WE JUST LIKE EVERYBODY ELSE ARE HAVING A DIFFICULT TIME IN SOME CASES FILLING OPEN POSITIONS. WE HAVE NOT DONE AND HAVE NOT APPROACHED THE BOARD ABOUT DOING A MID-YEAR ADJUSTMENT.
INSTEAD, NOW WE'VE GOT TO THIS POINT AND WE ARE LOOKING AT IT OVER A TWO-YEAR PERIOD. WHEN YOU LOOK AT THAT ALL AGENCY AVERAGE OF EVERYBODY WE HAVE BEEN ACCUMULATING.
THESE ARE SIMILAR CITIES AND OUR LOCAL ENTITIES LIKE THE SCHOOL DISTRICT AND MONTGOMERY COUNTY, THE ALL AGENCY AVERAGE OVER TWO YEARS IS 8.9%. WHEN YOU LOOK AT THE TOP 10 AGENCIES WHICH AGAIN ARE THE ONE THAT'S WE COMPARED OURSELVES TO IN THE LAST COMPENSATION STUDY, IT WAS AT 9.5%.
WHEN YOU LOOK AT WHAT THE TOWNSHIP DID IN TERMS OF A SALARY ADJUSTMENT IN 2022 OF 3% AND THE PROPOSED WAGE INCREASE OF 6%, THEN THAT'S HOW WE ARE GETTING TO THE 9%, TWO-YEAR TOTAL WHICH COMPARES TO WHERE THE ALL AGENCY AND THE TOP 10
AGENCY AVERAGES ARE. >> WE HAVE THIS IN THE BASE BUDGET SO WE CAN ADJUST ACCORDINGLY.
>> YES, SIR. >> I THINK WE SHOULD LET OUR EMPLOYEES KNOW, WE HAVE A COMPENSATION STUDY THAT WE WERE GOING TO DO LAST YEAR, BUT THE REST OF OUR PEERS WEREN'T REPORTING, SO THE CONSULTANT DELAYED THE COMP STUDY WHICH WOULD HAVE GIVEN US MORE GRANN -- GRANULAR FEEDBACK POSITION BY POSITION, WHAT IS THE MARKET FOR ALL ROLES INCLUDING THE FIRE SERVICE AND INCLUDING THE BENEFITS AND HOW THOSE BENEFITS ARE ALLOCATED. WE ARE STILL MOVING FORWARD WITH THAT, BUT IN THE INTERIM, WE WILL MAKE A SUBSTANTIVE CHANGE THIS CALENDAR YEAR IN ORDER TO GET CLOSER TO WHERE WE BELIEVE THINGS ARE GOING TO COME IN ON THAT COMP STUDY.
WHEN THE COMP STUDY COMES IN, WE CAN MAKE ADJUSTMENTS EVEN
FURTHER. >> THANK YOU FOR BRINGING THAT UP. FOR A VARIETY OF REASONS COMING OUT OF COVID AND INFLATION, AT THE BEGINNING OF THE YEAR WE WERE LOOKING TO DO THE COMP STUDY.
THE RESULTS WERE JUST TERRIBLE. AND AFTER WE STARTED TALKING TO OUR PEERS, MATTER OF FACT A LOT OF THE AGENCIES, THERE IS A WHOLE DETAILED COMMENTS LIST. A LOT OF THEM HAVE PULLED THEIR COMP STUDIES AND ARE WAITING TO DO IT NEXT YEAR LIKE WE ARE.
>> GOING INTO LAST YEAR WE INTENDED TO HAVE ONE PERFORMED
FOR THIS BUDGET CYCLE. >> EXACTLY.
>> IT WOULDN'T JUST BE WAGE INCREASES AND WE HAVE A COMBINATION OF THE TWO WHICH IS WHY WE ARE WAITING.
WE ARE NOT GOING TO WAIT FOR THE FEEDBACK.
WE WILL GO WITH THE MARKET ADJUSTMENT THE BOARD DETERMINES AND THEN YOU WILL STILL GET THE BROADER VIEW NEXT YEAR.
>> YES, SIR. HERE IS A LOOK AT OUR OVERALL PERSONNEL COSTS. FIRST THE FIRE DEPARTMENT JUST IN TERMS OF THE CURRENT EMPLOYEES AND OVERALL A 5.1% INCREASE. I KNOW I JUST SAID 6, BUT WHEN YOU LOOK AT EVERYTHING TOGETHER, FOR INSTANCE WHEN POSITIONS LEAVE, WE MAY HIRE THEM IN AT A LOWER SALARY THAN WHAT THE PERSON JUST LEFT WAS, SO THAT HAS AN IMPACT.
THAT MAY CHANGE THE HEALTH INSURANCE COVERAGE OR THE RETIREMENT CONTRIBUTIONS. THERE ARE ALL KINDS OF THINGS THAT CAN IMPACT THESE NUMBERS. WE DO A SALARIES AND BENEFITS BUDGET BY EMPLOYEE. SO WE KNOW WHAT IS GOING ON CURRENTLY WITH EVERY SINGLE EMPLOYEE AND WE CONSIDER ALL OF TOSS THINGS AND THEN WE COME UP WITH THESE NUMBERS.
WE TALKED ABOUT THE FIRE DEPARTMENT'S NEW REQUEST OF $2 MILLION AND THAT IS RELATED TO THE 10TH COMPANY.
AND THEN FOR GENERAL EMPLOYEES OUR CURRENT EMPLOYEES HAVE AN INCREASE OF 3.9%. 6% WAS BUILT IN FOR A MERIT ADJUSTMENT, BUT BECAUSE OF OPEN POSITIONS, A FEW POSITIONS WE HAVE CHOSEN NOT TO FILL ON A GO FORWARD BASIS CHANGES TO HEALTH INSURANCE OR RETIRE MEANT ELECTIONS AND WE END UP A 3.9% INCREASE. AND THEN THERE ARE NEW REQUESTS THAT WE ARE ABOUT TO TALK ABOUT THAT ARE OFFSET BY REVENUE.
[01:15:05]
THE TOTAL NET COST IS $695,000. ALSO BEFORE WE GET INTO THE NEW BUDGET -- THE NEW STAFF POSITION REQUESTS, THEY ARE MORE THIS YEAR THAN IS TYPICAL. I JUST WANTED TO REMIND EVERYBODY WHERE WE HAVE BEEN FOR THE PAST THREE YEARS BECAUSE OF COVID. WE DID NOT HIRE ANY NEW POSITIONS WITH THE EXCEPTION OF ONE IN 2020 WHICH WAS A BOAT HOUSE BRIGADE WHICH IS THE ONE PLACE PEOPLE WANTED TO GO BECAUSE IT WAS OUTSIDE. IN ORDER TO MEET THE DEMAND WE HIRED THAT POSITION. THE BOARD AUTHORIZED IT AND IT WAS 100% OFFSET BY REVENUE. WE HAVE HAD, OTHER THAN BRINGING JUST IN TERMS OF FULL DISCLOSURE, WE DID CONVERT SOME CONTRACTED SERVICES TO STAFF. WE DID BRING THOSE STAFF IN.THAT WAS A SPECIFIC THING. IN TERMS OF NEW STAFF, WE HAD NOT HAD ANY INCREASES SAVE THE ONE RECREATION POSITION OVER THE
LAST THREE YEARS. >> AND IN REALITY, EVEN WITH ALL OF THE PEOPLE WE ARE ADDING -- YOU CAN GO TO THE NEXT SLIDE.
WHILE PICKING UP ADDITIONAL WORK WE DON'T GO ON THE WATERWAY OR THE LAKE. IT IS A PUBLIC SAFETY ENHANCEMENT TO THE WESTERN PORTIONS OF THE WOODLANDS THAT WILL IMPROVE RESPONSE TIME FOR OUR PARAMEDIC, FIREFIGHTERS TO BE RESPONSIVE TO THE WESTERN AREAS WHERE THE SPAN BETWEEN THE FIRE STATIONS IS FARTHER AND SERVICES ARE LOWER.
IT FILLS THE GAP AND IT IS 100% IN LINE WITH EXPECTATIONS OF 96% CARE ABOUT OUR FIRE SERVICE AND THE RESPONSIVENESS AND IT ANSWERS A LONG-AWAITED NEED THAT THE FIRE DEPARTMENT HAS BEEN
THANK YOU. THAT'S A GREAT SUMMARY.
>> YOU JUST SPOKE TO THIS SLIDE SO THIS IS THE 10TH COMPANY.
OTHER FIRE DEPARTMENT POSITIONS THAT ARE INCLUDED IN THE 2023 BUDGET ARE A FLEET SUPERVISOR AND AS YOU ALL KNOW WE HAVE NUMEROUS EXPENSIVE, HIGHLY TECHNICAL FIRE APRIL RAT -- APPARATUS THAT WE USE TO RESPOND TO EMERGENCIES.
WE HAVE COME PAST A POINT WHERE WE NEED A FLEET SUPERVISOR THAT WILL HELP REDUCE HAVING TO OUT -- HAVING TO OUT SOURCE THOSE VEHICLES TO CONTRACTED SERVICES THAT THEN TAKES THEM OUT OF SERVICE. WE REALLY NEED THIS AND IT REUL HELP. THERE IS A REQUEST FOR A FIREFIGHTER TO BALANCE OUT OUR SHIFTS WHEN WE ARE ONE FIREFIGHTER SHORT WHEN WE LOOK AT THE DIFFERENT SHIFTS AND IT WILL REDUCE OVERTIME DEMANDS. AND THEN TWO DISPATCHERS TO COVER INCREASED CALL VOLUME. THAT COST IS MOSTLY OFFSET BY INCREASING CONTRACT REVENUE ON OUR DISPATCH SERVICES AGREEMENT.
IN TERMS OF RECREATION, HERE ARE THE POSITIONS THAT WE ARE PROPOSING TO ADD. IN TOTAL 6.25.
THIS IS TO KEEP UP WITH JUST REALLY STRONG, STRONG DEMAND FOR OUR EXCELLENT RECREATION PROGRAM.
THIS IS WITH SEASONAL CAMPS AND DIFFERENT RECREATION AIDES AND THAT'S TREE VENTURE. AND THEN WE ARE ADDING A -- WE ARE REQUESTING A COMMERCIAL OPERATION SUPERVISOR THAT WOULD OVERSEE ALL OF OUR COMMERCIAL OPERATIONS THAT ARE THE BOAT HOUSES AND THE TREE VENTURE IN ORDER TO COORDINATE THAT.
IT IS EXPANDING REALLY, REALLY QUICKLY.
IN TOTAL THOSE POSITIONS ARE $247,000 AND THEY ARE MORE THAN OFFSET BY INCREASE IN PROGRAM REVENUES.
THE NET COSTS IS ACTUALLY A NET INCREASE IN TERMS OF PROGRAM REVENUE. IN TERMS OF OUR PARKS, THESE ARE THE POSITIONS WE ARE REQUESTING, 3.5.
AS THE CHAIRMAN JUST MENTIONED WE ARE REQUESTING A WATERWAY SUPERVISOR THAT IS IN LINE WITH U TAKING OVER THE WOODLANDS WATERWAY NEXT YEAR. THAT IS A LOT OF ADDITIONAL MAINTENANCE AND OF COURSE A VERY IMPORTANT AREA TO ALL OF US, OUR TOWN CENTER COMMERCIAL AREA. AND THEN THE OTHER ONES ARE TO ADDRESS WHERE WE ARE HAVING SERVICE LAGS RIGHT NOW THAT WE
WOULD LIKE TO SHORE UP. >> COULD YOU EXPLAIN GOING BACK TO THE WATERWAY SUPERVISOR AND TAKING OVER THAT RESPONSIBILITY? COULD YOU ELABORATE ON HOW THAT CAME TO BE, QUICKLY, AND THE TIMING OF WHY NOW THAT IS HAPPENING AND WHO IS TRANSFERRING IT TO US? AND ALSO, DO THEY GIVE US ANY KIND OF NOTION OF WHAT THE COST WILL BE TO TAKE ON THIS
THIS HAS BEEN PLANNED FOR 15 AT LEAST YEARS.
[01:20:06]
SO THERE'S A CONTRACT THAT WE'VE HAD THAT HAS ANTICIPATED THE -- THE ORIGINAL AGREEMENT ANTICIPATED THAT ACTUALLY ALL DEVELOPMENT IN THE COMMERCIAL AREA WOULD BE COMPLETED BY NOW AND THAT'S WHY THIS DATE WAS SELECTED.FOR A VARIETY OF REASONS IT IS NOT QUITE COMPLETE, BUT IT IS SUBSTANTIALLY COMPLETE. SO WE ARE MOVING FORWARD WITH THAT. THIS HAS BEEN A CONTRACTUAL OBLIGATION WE HAVE KNOWN ABOUT FOR A LONGTIME.
WE ARE ASSUMING THIS FROM THE HOWARD HUGHES CORPORATION.
THE DEVELOPER WHO UP TO THIS POINT HAS DEVELOPED THE TOWN CENTER AREA AND WANTED TO MAINTAIN RESPONSIBILITY AND CONTROL, IF YOU WILL, OF THAT AREA.
IN TERMS OF THE COST, YES, WE WORKED CLOSELY WITH THEM IN DETERMINING WHAT THE ADDITIONAL COSTS WILL BE TO TAKE OVER THE
MAINTENANCE. >> WHEN DID THE CONTRACT GET EXECUTED THAT CREATED THE TRANSITIONING OF THE WATERWAY AND LAKE IN 2023? I KNOW IT HAS AGED.
>> I DON'T REMEMBER -- >> I THINK IT WAS THERE BEFORE I WAS ELECTED AND THAT WAS 10 AND A HALF YEARS.
IT WAS A LONG-STANDING AGREEMENT WITH PROBABLY THE OLD HOA'S.
>> IT WAS PRE TOWNSHIP. >> I MEAN, THE BIGGER QUESTION WOULD BE, AND I THINK THE TEAM WILL LOOK AND IT IS MAKING SURE THE CONDITIONS OF THE WATERWAY, THE LAKE, THE DAM, THE LIABILITIES WE WILL BE ASSUMING ARE IN GOOD CONDITION PRIOR TO ASSUMING THOSE LIABILITIES. THAT WOULD BE THE BIGGEST CONCERN THAT WE NEED TO MAKE SURE THAT MAINTENANCE HAS BEEN PROPERLY DONE AND WE ARE NOT INHERITING SOMETHING THAT IS LAGGING WITH THINGS THAT SHOULD BE DONE.
>> I DIDN'T BREAK IT OUT AS A SEPARATE LINE ITEM, BUT WE HAVE $100,000 TO PERFORM AN ENGINEERING-TYPE STUDY TO ADDRESS EXACTLY WHAT YOU JUST MENTIONED.
YES, SIR. AND THEN FINALLY HERE OTHER PERSONNEL COSTS THAT DIDN'T FALL INTO THE OTHER CATEGORIES.
A CONTRACT MANAGEMENT ANALYST, THIS IS SOMETHING -- WE HAVE A GREAT SOFTWARE PROGRAM THAT HELPS US DO THAT, BUT AS YOU KNOW, THE SOFTWARE IS ONLY AS GOOD AS THE INPUT THAT COMES INTO IT AND THE OUT -- THE OUT -- OUTPUT.
WE ARE AT A POINT AT THE NUMBER AND THE LEVEL OF CONTRACTS WE HAVE IN THIS ORGANIZATION TO CENTRALIZE THAT ONE PERSON TO MONITOR IT AND TO PHAEBG -- MAKE SURE WE ARE RENEWING ON TIME WITH THE VARIOUS TERMS AND THE INSURANCE IS IN PLACE AND DOCUMENTED AND ALL OF THE THINGS THAT GO WITH CONTRACT MANAGEMENT. THAT'S THE REASON FOR THAT POSITION. WE ARE REQUESTING A TRANSPORTATION OPERATIONS MANAGER WHICH WILL BE 50% OF THAT COST THAT WILL BE FUNDED BY FDA GRANTS.
A MEDIA PRODUCTION SPECIALIST IN THE COMMUNICATIONS DEPARTMENT.
WE ARE WORKING NOW ON THE BOARD'S REQUEST TO ENHANCE OUR COMMUNITY LOCATIONS. SO IN TERMS OF SOCIAL MEDIA AND IN TERMS OF MEDIA PRODUCTION AND BUDGET COMMUNICATION INITIATIVES THAT WE WILL BE LOOKING AT AND IT WILL HELP SUPPORT THAT.
AND THEN AN I.T. SENIOR SYSTEM ADMINISTRATOR.
WE CAN INCLUDE THIS IN THE MOTION IF THE BOARD SO CHOOSES, BUT THE STAR NEXT TO THE TRANSPORTATION OPERATIONS MANAGER IS WE WOULD LIKE PERMISSION TO HIRE THAT POSITION IN ADVANCE OF 2022, PERHAPS AS EARLY AS SOON AS SEPTEMBER 15TH. THE REASON IS THE TRI-ANNUAL REVIEW IS NEXT YEAR. AND THIS POSITION WILL BE CRITICAL IN ORDER TO HELP US PREPARE FOR THAT.
AND THEN WE ARE ASKING FOR TWO RECLASSES FOR THE OPEN POSITIONS WE CURRENTLY HAVE. WE HAVE IN THE RECORDS DEPARTMENT A OPEN RECORDS SPECIALIST POSITION.
WE WOULD LIKE TO RECLASS THAT FOR A SECRETARY POSITION THAT IS PREPARATION AND MANAGEMENT AND ELECTIONS AND ALL OF THE THINGS THAT GO ALONG WITH TOWNSHIP SECRETARY'S OFFICE.
AND THEN WE HAVE AN OPEN POSITION FOR AN ADMINISTRATIVE ANALYST IN THE FINANCE DEPARTMENT THAT WE WOULD LIKE TO ABOUT -- WE WOULD LIKE TO REQUEST AN ACCOUNTANT.
AND WE WOULD LIKE PERMISSION TO GO AHEAD AND FILL THOSE IN 2022 AS OPPOSED TO WAITING UNTIL 2023.
BEFORE I LEAVE, PERSONNEL -- BEFORE I LEAVE PERSONNEL, ANY OTHER QUESTIONS OR COMMENTS? OKAY.
[01:25:03]
JUST VERY QUICK LOOK AT VISIT THE WOODLANDS.I AM NOT GOING TO SPEND A BUNCH OF TIME ON HERE.
THERE IS WAY MORE INFORMATION ONLINE OR YOUR BUDGET BINDERS.
WE TALKED ABOUT THIS BEFORE. BASICALLY WE ARE CONTINUING TO SEE AN INCREASE IN WHAT WE ARE PRO -- PROJECTING FOR OUR HOTEL TAX REVENUES IN THE 2022 BUDGET. THERE IT IS BROKEN DOWN TO SUPPLEMENTAL HOTEL TAX WHICH IS THE 2% TAX AND THEN THE TRANSFER OF THE PORTION OF THE TOWNSHIP TO SUPPORT THAT BUDGET.
HERE IS A LOOK AT THE OPERATING EXPENSES.
THIS IS GETTING VISIT THE WOODLANDS BACK TO AND ACTUALLY NOT EVEN BACK TO WHAT IT WAS PRE COVID LEVELS.
HERE IS A LOOK AT OUR TRANSPORTATION FUND.
THE TOWNSHIP PROGRAM INCLUDES A PARK AND RIDE SYSTEM AND THE TROLLEYS ARE THE TWO PRIMARIES. WE HAVE EXPENDITURES OF 8.7 MILLION AND WE HAVE REVENUES OF 8.8 MILLION AND REVENUES ARE HIGHER THAN EXPENDITURES BECAUSE WE CONTRIBUTE $150,000 TO A BUS REPLACEMENT RESERVE. AND AGAIN ALMOST ALL OF THESE EXPENSES ARE BEING FUNDED -- AT LEAST FOR 2023 WE HAVE CARES ACT AND ARPA FUNDING. THESE WERE ISSUED OUT OF FTA FOR TRANSPORTATION ONLY. AND WE ARE PROJECTING THAT WE WILL UTILIZE THOSE FUNDS COMPLETELY BY 2023.
AND I WANTED TO POINT OUT THAT RESAOEUFED -- WE RESERVED THE GREEN WAY TRAILS. AND WE IS A -- WE HAVE A SMALL AMOUNT OF MONEY FOR PROJECTS AND WE WILL TALK MORE ABOUT THAT WHEN WE GET TO THE BUDGET INITIATIVES.
MOVING ON TO DEBT. THIS IS A HIGH LIGHT FOR THIS AND PREVIOUS BOARDS, IN MY OPINION.
WE HAVE PAID OFF -- THE BOARD HAS PAID OFF 22.7 MILLION OF DEBT IN THE PAST EIGHT YEARS WHICH RESULTED IN 6.8 MILLION IN SAVINGS AND INTEREST EXPENSE. THE BOARD HAS REFINANCED 46.5 MILLION OF DEBT IN THE PAST SIX YEARS RESULTING IN 5.7 MILLION IN SAVINND EXPENSE.
AS I MENTIONED EARLIER WE ACHIEVED A BOND RATING OF AA PLUS. THIS IS THE HIGHEST BOND RATING AND HELD BY A SPECIAL PURPOSE DISTRICT.
SOME OF THE AGENCY COMMENTS INCLUDE STRONG FISCAL MANAGEMENT AND HISTORY OF SOUND RESERVES AND CONSERVATIVE BUDGETING PRINCIPALS AND THE LARGE AND DIVERSE TAX RATE AND POST
EMPLOYMENT BENEFIT BURDENS. >> WHILE WE ARE ON THIS PAGE HOW DID WE PAYOFF THE DEBT? I KNOW IT IS A LOADED QUESTION
BECAUSE I KNOW THE ANSWER. >> BY FAVORABLE VARIANCES IN THE SALES TAX AND THE EXPENSES WHICH THE BOARD ALLOCATED TO A BOND RESERVE. AND THEN THEY USED THE MONEY WHEN THE BONDS WERE CALLABLE IN ORDER TO PAY THEM OFF.
>> SO THE RESERVE BALANCES ARE NOT NECESSARILY A BAD THING?
>> NO, SIR. >> IF YOU SAVE $7 MILLION IN SAVINGS TO THE TAXPAYERS THAT IS REALIZED BY THE PROPERTY
TAXPAYERS. >> AND THAT IS CORRECT.
>> AND IT WAS ACHIEVED THROUGH SALES TAX RESERVING.
>> YES, SIR. >> HERE IS A LOOK AT WHERE WE ARE CURRENTLY IN TERMS OF OUR OUTSTANDING DEBT.
WE HAVE CONVENTION CENTER DEBT AT THE END OF 2023 AND THE BALANCE IS 10.3 MILLION. THAT IS SUPPORTED AND THE DEBT SERVICE IS PAID BY OUR BASE HOTEL TAX.
AND I MENTIONED EARLIER THAT WE HAVE PARKS AND REC AND FIRE DEPARTMENT BONDS THAT WERE ISSUED ABOUT 10 YEARS AGO.
OUTSTANDING DEBT ON THAT IS 20.2 MILLION.
AND THAT IS SUPPORTED BY A PROPERTY TAX RATE OF 1.21 CENTS.
HERE IS A LOOK AT THE DEBT THAT HAS BEEN PAID OFF SINCE 2013 THROUGH WHERE WE WILL BE IN 2023.
SO A 76.8 MILLION OR A 70% REDUCTION IN OUTSTANDING DEBT
DURING THIS TIME PERIOD. >> AT WHAT POINT WILL THE DEBT SERVICE AND PROPERTY TAX ROLL OFF?
>> HERE IS OUR NEXT SLIDE. WHEN WE LOOK OUT OVER THE NEXT 10 YEARS, THIS IS WHERE I MENTIONED WE HAD A $30.5 MILLION OUTSTANDING DEBT BALANCE IN 2023.
[01:30:03]
IT WILL BE STEADY PAID OFF UH -- ACCORDING TO THE REQUIREMENTS OVER THE NEXT 10 YEARS. AND THIS IS SORT OF LOOK AT WHERE OUR DEBT SERVICE IS. IN 2027, THAT'S THE LAST YEAR WE WILL BE PAYING ON THE CONVENTION CENTER DEBT.SO THE $2.8 MILLION OF DEBT SERVICE WILL BECOME AVAILABLE FROM OUR HOTEL TAX. THAT WILL GENERATE AN ADDITIONAL HOTEL TAX THAT CAN BE USED FOR GENERAL PURPOSES IF THE BOARD CHOOSES. AND THEN IN 2030 WILL BE THE LAST YEAR ON A PORTION -- ON A LARGE PORTION OF OUR PROPERTY TAX DEBT. SO WE WILL SEE ANOTHER 2.4 MILLION DECREASE THERE. AND THEN EVERYTHING WILL BE PAID
OFF IN 2032. >> AND WE CAN'T REALLY PAY IT
WE REFINANCED AND THEY ARE HISTORICALLY LOW RATES.
WHEN YOU RE FINANCE YOU HAVE TO LET THOSE PAY OUT.
OKAY. I AM NOT GOING TO SPEND A LOT OF TIME ON CAPITAL PROJECTS. THEY ARE ALL IN YOUR BOOK.
MOST ARE FUNDED BY THE CAPITAL REPLACEMENT RESERVE, BUT CERTAINLY IF THERE ARE QUESTIONS ON THE PROJECTS WE CAN BRING THE DEPARTMENT DIRECTORS UP HERE TO TALK ABOUT THOSE AND YOU CAN GO TO THE BOOK AND SEE WHAT IS POSTED ONLINE.
>> WE HAVE NEW PEOPLE IN THE AUDIENCE WHO ARE NOT TYPICALLY IN THE BUDGET HEARINGS SO FOR THE GENERAL PUBLIC'S PURPOSE WE REPLACED A 30-YEAR CAPITAL REPLACEMENT PLAN THAT WE ARE FUNDING TO MAINTAIN THE AMENITIES AND REFRESH THE AMENITIES WITHIN THE COMMUNITY. THOSE FUNDS ARE SET ASIDE FOR PARK REHABILITATION AND REMODELING AND POOL REPLASTERINGS AND -- REPLASTERING AND UPDATING AND IMPROVEMENTS AND FIRE APPARATUS REPLACEMENTS ON THE SCHEDULED USE AND REMODELING THE FACILITIES AND THE TOWNSHIP.
THAT'S ONE OF THE REASONS WE HAVE A STABLE TAX RATE.
THE THINGS THAT REQUIRE THE CAPITAL OUTLAYS ON THE VARIOUS INTERVALS ARE PLANNED ON A 30-YEAR BASIS.
>> THAT'S EXACTLY RIGHT. THE RESERVE HAS SERVED US WELL AND THEY ARE VERY WELL RECEIVED BY OUR CREDIT AGENCY.
WE ARE A RARITY AMONG CITIES IN TERMS OF DOING THIS AND IT HELPS US NOT HAVE THE LARGE DEBT BALANCE.
>> AND IT PREVENTS US FROM HAVING TO GO OUT AND ISSUE DEBT WHEN A LARGE CAPITAL PROJECT COMES UP.
AN EXAMPLE OF THAT -- I KNOW WE GET LOST IN THE WEEDS WITH THE POSITIVE VARIANCES AND THE LARGE RESERVES, IF THE TOWNSHIP DIDN'T OPERATE IN THIS MANNER, WE WOULDN'T HAVE THE CASH ON HAND TO BUY A REC CENTER FROM THE YMCA OR HAVE THE EXTRA OF MILLIONS TO INVEST IN TREE VENTURES OR BUILD A WHOLE NEW SPORTS COMPLEX. ALL OF THE THINGS AND ENHANCEMENTS RESIDENTS RESPOND WELL TO IS BECAUSE WE KEEP THE RESERVES ON HAND. WHEN WE HAVE THESE OPPORTUNITIES WE CAN PAY CASH FOR THEM AND NOT HAVE TO GO OUT TO THE DEBT MARKET. AND ALTHOUGH THE LAST SEVERAL YEARS OF THAT HISTORICALLY LOW INTEREST RATE, THAT'S WHY WE REFINANCED INSTEAD OF USING CASH ON HAND.
YOU LOOK AND INTEREST RATES ARE CREEPING UP AND THAT CASH ON HAND IS GOING TO COME IN HANDY WHEN IT IS TIME TO EXPEND ON CAPITAL PROJECTS AND NOW RISING INTEREST RATES.
>> EXACTLY. >> DON'T BE SO QUICK TO ASK US
TO BLEED OUT OUR RESERVES. >> IT HELPED US RESPOND TO RESIDENTS' REQUESTS. AND HERE IS A LOOK AT DIFFERENT PARKS AND RECREATION CAPITAL. THESE AREN'T THE ONE THAT'S ARE INCREASING. THESE ARE OUR TOTAL EXPENDITURES BY CATEGORY. AGAIN, I'M NOT GOING TO GO INTO DETAIL HERE. ALL OF THIS DETAIL IS IN YOUR BUDGET BINDERS IN THE CAPITAL SECTION AS WELL AS ONLINE.
WE CAN TALK ABOUT SPECIFIC PROJECTS IF YOU WOULD LIKE.
IN TERMS OF INFORMATION PECK TPHOLG -- TECHNOLOGY, HERE ARE THE DIFFERENT CATEGORIES WE ARE LOOKING AT.
FOR THE FIRE DEPARTMENT I THINK THIS IS THE FIRST YEAR IN AWHILE WHERE WE DON'T HAVE LARGE APRIL RAT -- WE DON'T HAVE LARGE APPARATUS AND IT IS ACCORDING TO YOUR SCHEDULE, BUT WE PURCHASED THEM THIS YEAR FOR DELIVERY NEXT YEAR BECAUSE OF THE SUPPLY CHAIN ISSUES. THERE IS NONSPECIFICALLY IN THE 2023 BUDGET BECAUSE THE FUNDING HAS BEEN PROVIDED.
>> THERE IS A PRETTY BIG LEAD TIME.
THERE WERE SEVERAL PIECES OF APPARATUS DELIVERED AND ALL OF
[01:35:01]
>> HERE IS OTHER CAP IT WILL -- THIS IS FOR THE TOWN BUILDING EXPANSION. WE TALKED ABOUT IT EARLIER OF 750,000. IT IS JUST A PLACE HOLDER.
THIS WILL BE COMING BACK TO THE BOARD.
THE TOWN HALL BUILDING IMPROVEMENTS UP 223 AND IF I REMEMBER CORRECTLY THERE ARE HVAC UNITS BEING FUNDED OUT OF THE CAPITAL REPLACEMENT RESERVES.
THERE IS AN IN -- THERE IS AN INTERIOR PAINTING AND WATER
HEATER AND SOME OTHER THINGS. >> ARE WE CHANGING YOUR
HANDLERS? >> ACTUALLY THAT IS PART OF IT.
THESE ARE THE PROJECT THAT'S ARE SPECIFICALLY FUNDED BY THE GENERAL FUND AS OPPOSED TO THE CAPITAL REPLACEMENT RESERVES.
SO THESE ARE MORE ALONG THE NEW TYPES OF ITEMS, IF YOU WILL.
SO EACH YEAR WE JUST -- WE ALWAYS LIST THESE FOR YOU SO YOU CAN SEE -- AND AGAIN I AM NOT GOING OVERALL OF THEM.
BUT IF THERE IS ANYTHING THAT YOU CAN SEE IN PARTICULAR WE CAN TALK ABOUT THAT LATER TODAY, OR WE CAN BRING IT BACK UP TOMORROW. INFORMATION TECHNOLOGY.
THERE IS A SUMMARY IN THE RIGHT HAND CORNER BY DEPARTMENT.
ANY QUESTIONS ON CAPITAL AND WE'LL MOVE FORWARD.
NOW I WILL TALK ABOUT OUR RESERVES AND OUR FUND BALANCES.
OUR RESERVES ARE AFTER EVERYTHING THAT WE JUST TALKED ABOUT, SO ALL OF THE DIFFERENT REVENUE SOURCES, OUR OPERATING EXPENDITURES AND OUR CAPITAL EXPENDITURES AND OUR DEBT SERVICE. WHAT WE ARE LEFT WITH ARE OUR RESERVE AND OUR FUND BALANCES. FOR 2023 WE HAVE -- WE ARE PROJECTING RESERVE AND FUND BALANCES EQUAL TO ABOUT 116POINT MILLION. I WILL TALK ABOUT EACH OF THESE -- WELL, NOT EACH OF THESE, BUT MOST OF THESE.
I WON'T READ THROUGH ALL OF THESE, BUT YOU CAN SEE AT THE BOTTOM WE HAVE THE 2023 UNDESIGNATED FUND BALANCE.
I HAVE IT LISTED AS TO BE DETERMINED.
AS WE TALKED ABOUT EARLIER DEPENDING ON THE TAX RATE THAT THE BOARD DECIDES ON, THAT NUMBER WILL CHANGE.
YOU WILL RECALL THERE HAS BEEN RECENT DISCUSSIONS ON WHEN OUR RESERVES ARE INCREASING AND WHERE THOSE FUNDS ARE GOING TO.
HERE IS A RECONCILIATION BETWEEN 2022 AND 2023 OF WHAT IS CHANGING. WE ARE DRAWING DOWN ON OUR CAPITAL REPLACEMENT RESERVE TO FUND SOME OF THE PROJECT THAT'S WE JUST LOOKED AT ON THE PREVIOUS SLIDES.
WE HAVE CAPITAL CARRYOVER FROM PREVIOUS YEARS THAT ARE DECREASING. OUR HOTEL TAX RESERVE IS INCREASING BY ABOUT $2.6 MILLION.
AND AGAIN, THIS IS MONIES THAT ARE LEFT OVER FROM OUR HOTEL TAX GENERATION THAT ARE NOT USED FOR DEBT SERVICE OR VISIT THE WOODLANDS. IN CHANGES IN OUR OPERATING RESERVE. I'LL KEEP GOING.
CULTURAL EDUCATION RESERVE IS TIED TO A STATUTORY REQUIREMENT THAT IS OUR EVENT TAX AND REFUN. IT GENERATES 1.3 MILLION.
OUR 10% IS RESERVED IN A COUL TOUR -- A CULTURAL EDUCATION RESERVE AS REQUIRED BY LAW UNTIL DETERMINED.
CCSA STANDS FOR COMPREHENSIVE COMMUNITY SERVICES AGREEMENT.
THIS IS THE AGREEMENT WE HAVE WITH HOWARD HUGHES FOR COMMUNITY-WIDE PROJECTS. IT WAS $4 MILLION OVER FOUR YEARS TO BE MATCHED KWULLY. MATCHED EQUALLY.
2023 IS THE LAST YEAR OF THAT RESERVE REQUIREMENT.
SO WE ARE PROJECTING TO SPEND ANOTHER MILLION DOLLARS WITH THAT. AND THEN THE ONES HIGHLIGHTED IN YELLOW WE WILL TALK MORE ABOUT AND THESE WILL BECOME IMPORTANT AS WE MOVE INTO BUDGET INITIATIVES DISCUSSION.
I THINK THE NEXT SLIDE -- NO. IT TALKS ABOUT THOSE.
I WILL COME BACK TO THOSE. THIS IS WHAT I MENTIONED.
IN TERMS OF THE 2023 UNDESIGNATED FUND, AGAIN, TO BE DETERMINED. HERE IS A LOOK AT THE DIFFERENT TAX RATES. AS WE TALKED ABOUT EARLIER, IF THE BOARD WENT WITH A VOTER APPROVAL RATE OF 2106, WE WOULD BE GENERATING EXCESS CASH OF 7.5 MILLION DOLLARS THAT COULD
[01:40:02]
BE USED TOWARD THE BUDGET INITIATIVES AND AT A NO-NEW-REVENUE RATE IT WILL GENERATE 3.9.AND THEN MY MADE UP OF RATE, IT WOULD GENERATE 2.4 MILLION.
AS WE GET TO THE END OF TODAY OR FIRST THING TOMORROW IT WILL BE A DISCUSSION FOR THE BOARD IN TERMS OF A TAX RATE.
THESE ARE -- REGARDLESS OF -- WHATEVER THAT AMOUNT IS, WE CAN PUT ASIDE FOR A SECOND. THESE ARE THE RESERVE -- THESE ARE THE UNDESIGNATED RESERVE BALANCES EXISTING AS OF NOW THAT THE BOARD CAN UTILIZE IN TERMS OF FUNDING CAPITAL ASSETS OR ALLOCATIONS TO OTHER RESERVES. THESE RESERVE BALANCES ARE FOR ONE-TIME USES IN ACCORDANCE WITH BEST PRACTICES AND WITH THE CREDIT AGENCY'S EXPECTATIONS. WHEN YOU HAVE A RESERVE BALANCE, IT IS NOT USED TO FUND ONGOING OPERATIONS OR TO FUND SOMETHING ONGOING LIKE A RE-- REDUCTION IN REVENUE BASED ON A TAX RATE DECREASE. THAT'S WHY WE DON'T USE OUR RESERVES TO FUND -- TO FACILITATE TAX DECREASES.
>> WE MIGHT AS WELL JUST ADDRESS THE QUESTION.
CAN I LEGALLY SEND OUR RESIDENTS PRIOR YEAR TAX COLLECTIONS IN A CHECK? LIKE WE DON'T HAVE THE ABILITY
-- >> WE DON'T EVEN HAVE THE CAPABILITY OF DOING THAT. YOU COULDN'T JUST TAKE IT AND -- AND SEND A CHECK, NO. IT WOULD HAVE TO BE DONE IN THE
CURRENT YEAR TAX RATE. >> WHICH WOULD BE IMPOSSIBLE.
>> EXACTLY. >> BECAUSE OF THE NEW 3.5% LAW THAT WOULD NOT ALLOW YOU TO REDUCE YOUR RATE ONE YEAR IN ORDER TO PROVIDE SOME TAX RELIEF BASED ON RESERVES.
>> RIGHT. >> BECAUSE THEN THE NEXT YEAR YOU WOULD HAVE TO* -- TO GO FOR VOTER APPROVAL TO APPROVE THE RATE YOU NEED TO FUND BASIC SERVICES.
>> IT IS LIKE A YO-YO. >> I WANT TO DEBUNK THE REALITY OF YOU CAN'T GO BACK AND TAKE RESERVES TO REDUCE THE TAX RATE OR GIVE TO CON STIFF WENT. -- CONSTITUENTS.
>> THAT IS TRUE FROM THE LEGAL STANDPOINT AND FROM A PRACTICAL STANDPOINT IF I DO THAT WE WOULD GET A CALL FROM A CREDIT AGENCY AND IT WOULD IMPACT OUR CREDIT RATING.
IF YOU THINK IN TERMS OF YOUR PERSONAL -- IT IS LIKE YOU HAVE A SAVINGS ACCOUNT, BUT YOU DON'T USE THE SAVINGS ACCOUNT, OR YOU SHOULDN'T TO PAYOFF YOUR MORTGAGE OR CAR PAYMENT.
IF YOU DO THAT OVER A PERIOD OF TIME IT WILL RUN OUT.
AND THAT'S HOW THE CREDIT AGENCIES LOOK AT IT AND THAT'S HOW BEST PRACTICES WORK. YOU USE THE ON GOING REVENUES TO SUPPORT ON GOING EXPENDITURES. THEY ARE USED FOR ONE-TIME-TYPE EXPENSES -- ONE-TIME-TYPE EXPENSES.
AND SO THE GOOD NEWS HERE IS THE BOARD OF DIRECTORS HAS THESE FUNDS AVAILABLE WHEN WE START LOOKING AT BUDGET INITIATIVES IN ORDER TO FUND THE TYPES OF EXPENSES.
THEY ARE ACCUMULATED AND IT IS 7.4 MILLION.
WE HAVE WHAT IS CALLED A CAPITAL CONTINGENCY RESERVE.
THERE ARE POSITIVE SALES TAX VARIANCES OF 4.2 MILLION.
AND THEN IN 2022 WE ARE PROJECTING BASED ON OUR FAVORABLE SALES TAX REVENUES AND THE FAVORABLE EXPENSE VARIANCES TO HAVE A TOTAL OF ABOUT $8.2 MILLION.
>> I KNOW YOU HAVE ALREADY ADDRESSED IT, BUT JUST IN THE LAST CALENDAR YEAR, THE 5.2 MILLION OF INTERNET SALES TAX, IT IS REVENUE WE DIDN'T RECEIVE.
WE COULDN'T PLAN FOR IT BECAUSE WE DIDN'T REALIZE IT BEFORE.
>> CORRECT. >> IN ADDITION TO THAT, IN THE LAST SEVERAL YEARS, WE HAVE HAD A WIND FALL OF PRIOR PROPERTY TAX ABATEMENT AGREEMENTS THAT WERE TERMINATED.
>> RIGHT. >> AND IT WOULD BE HELPFUL I THINK IF WE CAN PROVIDE THAT INFORMATION.
WHEN PEOPLE LOOK AT THE NUMBERS HOW DID YOU END UP WITH EXCESSIVE AMOUNTS OF EXTRA CASH? WELL, WE RECEIVED REVENUE WE DIDN'T RECEIVE BEFORE AND COULDN'T HAVE POSSIBLY PROJECTED. AND WE RECEIVED MULTIPLE YEARS OF BACK TAXES FROM MULTIPLE LARGE PROPERTIES WITHIN THE TOWNSHIP EITHER ABATEMENT AGREEMENTS OR PRIOR TAX RECEIPTS THAT HADN'T BEEN PAID. WE SHOULD QUANTIFY THE MILLIONS OF DOLLARS THAT ARE ACTUALLY THERE.
>> THAT IS ACCURATE AND WE CAN QUANTIFY THAT.
>> YOU MIGHT ADD THAT THOSE ABATEMENTS WERE REQUESTED BY THE BOARD OR REQUIRED TO COME BACK TO US.
THAT WAS NOT ON A GOODWILL OFFERING THAT THE BOARD COULD WASH IT AWAY. LIKE SOME TAXING AUTHORITIES HAVE DONE IN THE PAST. THEY WILL JUST SAY, NO, YOU DON'T HAVE TO PAY. WE SAID, YES, YOU DO HAVE TO
[01:45:01]
PAY. WE LOOK AT THE TAXPAYERS AND THE RESIDENTS FIRST IN THAT REGARD. HERE ARE SOME OF THE BALANCES IN OUR OTHER RESERVES. WE HAVE A CAPITAL REPLACEMENT RESERVE WE TALKED ABOUT AND AN OPERATING RESERVE AND AN INCORPORATION RESERVE AND A PROPERTY RESERVE.THESE HAVE BEEN LARGELY FUNDED. THE CAPITAL RESERVE AND OPERATION RESERVE HAVE DEDICATED ALLOCATIONS FROM THE SALES TAX OR THE PROPERTY TAX AND I WILL TALK MORE ABOUT THOSE IN A MINUTE. THE INCORPORATION RESERVE WAS ENTIRE FUNDED BY THE FAVORABLE VARIANCES IN SALES TAX REVENUE AND THE GROVER MILL PROPERTY RESERVE WAS PAID BY GE BETTS WHO WAS THE PREVIOUS OWNER OF THE BUILDING ON THAT SITE.
>> I HAVE A QUESTION. >> YES, MA'AM.
>> GOING BACK TO THAT CAN THE RESERVE BE MOVED TO ANOTHER
RESERVE OR BE USED FOR CAPITAL? >> BOTH.
>> THAT'S SOMETHING WHICH -- OR IS IT A DESIRE OF THE BOARD THAT BOTH OF THOSE SHOULD BE PUT INTO CAPITAL TO PERHAPS PAY FOR THE FIRE DEPARTMENT OR OTHER CAPITAL NEEDS THAT WE MIGHT REVIEW AND
INITIATIVES THIS WEEK. >> YEAH.
ONE OF THE -- I HAD A PRE-BUDGET MEETING WITH MONIQUE AND STAFF.
ONE OF THE THINGS BE WANT TO DO IS COLLAPSE.
WE HAVE WAY TOO MANY RESERVE FUNDS WITH UNIQUE NAMES.
SOME OF THEM ARE SO OLD AND NEVER UTILIZED THAT WE SHOULD COLLAPSE THEM DOWN TO SMALLER BUCKETS.
>> THIS DOES NOT HAVE THE RESTRICTIONS.
CULTURAL ARTS. >> OR THE DEBT RESERVE FUNDS OR ANYTHING LIKE THAT. ALL OF WHAT WE WOULD CONSIDER USABLE FUNDS, WE SHOULD COLLAPSE DOWN AND RENAME.
>> I THINK MONIQUE BROUGHT IT TO MY ATTENTION LAST WEEK THAT THAT WAS HER PLAN TO REQUEST THAT COLLAPSING.
>> IT IS NOT MY PLAN. I HEARD FROM SEVERAL OF THE BOARD MEMBERS THAT THAT WAS AN IDEA THEY HAD.
WHEN WE GET TO BUDGET INITIATIVES LATER TODAY OR FIRST THING TOMORROW, THAT IS ONE OF THE THIGS.
>> IT IS REASONABLE FROM THE CREDIT AGENCY STANDPOINT TO DO
IN ALL HONESTLY, THE RESERVE DOESN'T MEAN MUCH TO THE CREDIT AGENCIES, BUT USING THEM FOR CAPITAL AND TO SAY THE CAPITAL REPLACEMENT RESERVE WOULD BE MEANINGFUL.
>> SO IT IS BENEFICIAL. >> I THINK MAYBE THE CHANGING ECONOMIC CONDITIONS ARE REALLY MORE OF A DRIVER OF THIS THAN ANYTHING ELSE. THE COST OF DEBT IS ACCELERATED.
WE WERE IN AN ENVIRONMENT WHERE MONEY WAS PARTICULARLY -- PRACTICE PARTICULARLY -- WAS PRACTICALLY FREE.
THAT'S NOT THE CASE ANYMORE. WE ARE LOOKING AT 4, 4 AND A HALF PERCENT MINIMUM. IT WILL GO UP THE NEXT FEDERAL RESERVE MEETING. AND SO THE OPTION OF GOING TO DEBT WOULD BE A BAD CHOICE AT THIS PARTICULAR POINT IN TIME.
IT REALLY DOES CALL FOR THE USE OF RESERVES TO DO AS MUCH OF THIS IN CASH AS WE CAN. FRANKLY IF THIS WAS THREE YEARS AGO AND SOME OF THE CAPITAL STUFF WE ARE TALKING ABOUT, IT WOULD HAVE MADE MORE SENSE TO GO TO A BOND, BUT IT DOESN'T ANYMORE. I THINK EVERYBODY NEEDS TO UNDERSTAND THAT WHEN YOU ARE LOOKING AT 8.5% INFLATION YEAR OVER YEAR, AND IT IS GOING UP MUCH FASTER THAN THAT IN SPECIFIC AREAS, ESPECIALLY THINGS LIKE BUILDING SUPPLIES AND SO ON AND SO FORTH, THERE'S NO END TO THAT RIGHT NOW.
I DON'T SEE HOW THE FEDERAL RESERVE IS GOING TO GET THIS UNDER CONTROL IN THE NEXT 18 MONTHS.
YOU ARE PROBABLY LOOKING AT TWO OR THREE CONSECUTIVE BUDGET CYCLES WHERE YOU WILL SEE CREDIT COSTS CONTINUE TO ACCELERATE.
>> YES, SIR. AGREE AND GREAT POINT.
>> IN TERMS OF THE CAPITAL REPLACEMENT RESERVE, THE BOARD'S POLICY AND THIS IS IN ACCORDANCE WITH THE RESERVE STUDY IS WE FUND AN ADDITIONAL -- EVERY YEAR WE FUND 4,000,250,000 INTO THIS RESERVE. THE RESERVE STUDY SAYS 5,000,250, BUT IN ANALYZING IT IN PREVIOUS YEARS, PARTICULARLY HARD LAST YEAR, THE BOARD MADE THE DECISION TO LOWER THAT BECAUSE WE COULD SUSTAIN THAT WITH THE UNDERSTANDING THAT AS WE HAD FAVORABLE VARIANCES EACH YEAR WE COULD ADD THOSE INTO
[01:50:01]
THIS FUND TO MAINTAIN. >> IF WE CAN JUST STOP RIGHT THERE BECAUSE THAT IS EXACTLY WHAT MR. LAKEY WAS ASKING FOR.
WHERE CAN WE LEGALLY USE RESERVES TO HELP PROPERTY TAXPAYERS? WAS IT 5.7 MILLION-ISH?
AND THAT REDUCTION REDUCED THE TAX RATE FROM USING RESERVES TO OFFSET OUR ANNUAL CONTRIBUTION THAT'S ARE ACTUALLY PART OF THE TAX RATE. AS WE GO THROUGH THIS CYCLE, WE WILL SEE IF THERE IS FURTHER IMPROVEMENTS THAT CAN BE MADE
>> THAT IS THE ONLY WAY RESERVES CAN BE UTILIZED TO RETURN CAPITAL OR RETURN BENEFITS TO THE TAXPAYERS.
THAT AND NOT ISSUING DEBT TO PAY FOR CERTAIN CAPITAL PROJECTS WHICH IS NOT A DIRECTORY DUCKS, BUT IT IS AN ELIMINATION OF A NEW ADDED. THE DEBT SERVICE IS NOT
RESTRICTED BY THE 3.5% TAX RATE. >> YES.
THAT'S HOW WE CAN FAVORABLY IMPACT TAXPAYERS ON THEIR PROPERTY TAX RATE. SO ON THIS AGAIN THERE IS AN ANNUAL CONTRIBUTION OF 4 MILLION 250.
THERE ARE LARGE PROJECTS PLANNED IN THE RESERVE STUDY FOR YEARS.
THE DRAW DOWN OF THE RESERVE, THE DECLINING BALANCE IS SOMETHING WE HAVE KNOWN ABOUT. THIS IS NOTHING NEW TO STAFF OR TO THE BOARD OR TO THE RESIDENTS EITHER.
PER THE RESERVE STUDY THERE IS A MINIMUM BALANCE IN 2027 WHEN WE LOOK AT THAT PARTICULAR YEAR OF AROUND $22 MILLION.
SO EVEN WITH WHAT WE ARE DOING HERE WITH THE BIG DRAW DOWNS FOR THE LARGE PROJECTS WE ARE MAINTAINING A BALANCE ABOVE THE MINIMUM WHICH PUTS OUR RESERVES IN GOOD STANDING.
IN TERMS OF OPERATING RESERVE, THIS IS ANOTHER EXAMPLE OF WHAT THE CHAIRMAN WAS JUST TALKING ABOUT.
SO IN TERMS OF ALLOCATING SOME BUILDING UP OF FAVORABLE SALES TAX REVENUE, THE BOARD MADE THE DECISION LAST YEAR TO INCREASE THE BALANCE THAT WAS IN THE OPERATING RESERVE.
SO RATHER THAN CONTINUING TO HAVE ABOUT A MILLION -- ANYWHERE FROM 800,000 AND A MILLION DOLLARS EACH YEAR GOING INTO THE OPERATING RESERVE TO KEEP IT AT A MINIMUM BALANCE OF 20%, AND THAT 20%, THE BOARD ADOPTED THE POLICY AND THAT'S WHAT THE CREDIT AGENCIES REQUIRE. YOU WOULD HAVE A BALANCE EQUAL TO 20% OF GENERAL FUND OPERATING EXPENDITURES.
BUT THE BOARD TOOK THE FAVORABLE VARIANCES THAT WE HAD FROM PRIMARILY FROM THE SALES TAX AND THEY INCREASED THE BALANCE IN THE OPERATING RESERVE WHICH HELPS WITH OUR CREDIT RATING.
AS YOU CAN SEE HERE IT MAINTAINS EVEN OVER THE FIVE-YEAR PLAN AND MAINTAINS A BALANCE ABOVE THAT MINIMUM.
>> I WAS GOING TO SUGGEST THAT AS A BOARD WE ADAPT A POLICY OF 25% MINIMUM OPERATING RESERVE. I KNOW 20% IS THE BEAR MINIMUM, BUT 25%, THREE MONTHS WORTH OF OPERATING EXPENSES CASH ON HAND IS PROBABLY A BETTER PRACTICE THAN JUST ADHERING TO THE MINIMUM. AND THEN ALSO ALLEVIATES THE VARIABLE OF HAVING TO REINSTITUTE ON TO OUR TAX RATE NEW FUNDS BY ADDING THAT EXTRA QUESTION.
>> I AGREE WITH THAT. THANK YOU.
>> BEFORE I LEAVE THAT, ANY QUESTIONS ON OUR RESERVES AND FND BALANCES? OKAY.
THE FIVE-YEAR PLAN. I WANT TO SHOW YOU THAT THIS IS THE TOWNSHIP ALWAYS DEVELOPS IS A FIVE-YEAR PLAN IN CONJUNCTION WITH THE CURRENT-YEAR BUDGET. AND THAT IS BECAUSE DECISIONS THAT THE BOARD MAKES FOR THE CURRENT YEAR NATURALLY HAVE A IMPACT FOR THE LONG-TERM. AND THEN WE WANT TO KEEP UP WITH THE CHANGING CONDITIONS AND THE ECONOMIC FACTORS.
WE WANT TO MAKE SURE THAT WHATEVER IS BEING DONE NOW, AND AGAIN THIS IS SUSTAINABLE INTO THE FUTURE.
WHAT WE HAVE INCLUDED IN THE FIVE-YEAR PLAN ASSUMPTIONS IS A 1% INCREASE IN PROPERTY TAX REVENUE GROWTH.
I WANT TO POINT OUT OBVIOUSLY WITH THE APPRAISALS THAT JUST CAME OUT WHICH WERE HUGE, OUR ORIGINAL ROLE WAS 27% AND FOR HOMESTEAD PROPERTIES THE AMOUNT IS CAPPED AT 10%.
IN FUTURE YEARS THE ADDITIONAL, AND THAT WAS ABOVE THE 10% CAN BE CAPTURED. WE EXPECT THAT WILL HAPPEN.
OUR EVALUATION RATE NEXT YEAR WILL LIKELY BE MUCH HIGHER THAN
[01:55:05]
1% BECAUSE OF THE EXCESS CAPACITY.WE ARE SEEING IN THIS PLAN, JUST LIKE THIS BOARD AND THE PREVIOUS BOARDS HAVE ALWAYS DONE. THEY HAVE MANAGED THE PROPERTY TAX REVENUE GROWTH BI-LOORING THE -- BY LOWERING THE RATE IN ORDER TO RESPOND TO THAT. ALL WE ARE SAYING WITH THIS 1% IS IT IS NOT THE REVALUATION RATE.
THAT'S WHERE WHERE WE EXPECT THE REVENUE TO GROW AND IT IS ACCOUNTING FOR NEW PROPERTIES. IT IS TO CAPTURE THE NEW
PROPERTIES. >> THE COMMENT HAS BEEN MADE THAT WE DO NOT HAVE HOMESTEAD EXEMPTION FOR ALL.
BUT IT WAS CLARIFIED THAT BY LOWERING THE TAX RATE AT THE EFFECTIVE TIFF TAX RATE OR MORE, IT HAS BEEN MORE FISCALLY RESPONSIBLE AND HAS HELPED THE RESIDENTS MORE THAN IF IT WAS THE OTHER. IS THIS A GOOD PLACE FOR YOU TO
I WOULD BE GLAD TO RESPOND TO THAT AND I HAVE A FEW SLIDES.
ONCE THE BOARD KHAOGS -- KHAOSZ -- CHOOSES -- THAT'S OWE -- OKAY. WHEN THEY CHOOSE A PROPOSED RATE I WILL EXPLAIN IN MORE DETAIL. I UNDERSTAND THE POPULARITY OF HOMESTEAD EXEMPTIONS. THOSE APPLY TO HOMESTEAD PROPERTIES. THEY DON'T APPLY TO COMMERCIAL PROPERTIES. THERE IS A LOT OF INS AND OUTS OF THAT. WHAT THIS BOARD AND WHAT PREVIOUS BOARDS HAVE DONE IS MANAGED THE TAX RATE BY LOWERINY TO SEE SEVEN OUT OF THE 9 LAST YEAR AND SO UNLESS WE ARE HAVING AN ECONOMIC SITUATION GOING ON, THE BOARD HAS LOWERINGED -- HAS LOWERED TO THE NO-NEW-REVENUE RATE.
AND IT IS OTHER THAN WHAT IS GENERATED FROM THE PROPERTIES WHICH IS EXACTLY WHAT THE ASSUMPTION CARRIES FORWAR.
>> THE OTHER PART OF IT IS 62% OF THE RESIDENTIAL PROPERTIES ARE OWNED BY THE OWNER. THAT MEANS 35% OF OUR RESIDENTS ARE RENTERS. THEY ARE EITHER RENTING A HOUSE OR AN APARTMENT. THE HOMESTEAD EXEMPTION WOULD NOT GIVE ANY TYPE OF RELIEF. IT WOULD GO TO -- THEY WOULD END WITH INCREASED COSTS. IT ONLY SATISFIED TWO-THIRDS OF OUR CONSTITUENTS AND NONE OF OUR COMMERCIAL INTERESTS THAT ARE RENTERS THAT ARE POSSIBLY LESS OF A CONDITION TO ABSORB THE PAST OF A HIGHER COST. SO --
>> SO THEY DON'T BENEFIT FROM A HOMESTEAD EXEMPTION.
IF YOU LIVE IN A NURSING HOME A LONG-TERM CARE HOME.
WHEN THE PROPERTY TAX INCREASES THAT COST IS PASSED ON THROUGH YOUR MONTHLY RENT. THEY ARE LOOKING AT PROVIDING THE TAX RATE REDUCTION IN TERMS OF LOWERING THE TAX RATE.
>> LOWERING TAXES ON OUR SMALL BUSINESSES IS ABSOLUTELY VITAL BECAUSE IT COSTS MORE MONEY TO HAVE YOUR SMALL BUSINESS IN THE WOODLANDS THAN IT DOES IN UNINCORPORATED AREAS SURROUNDING US. THEY DO NOT HAVE THE SERVICES.
THE VIABILITY IS BASED ON PEOPLE INVESTING WITHIN OUR BOUNDARIES.
THERE IS NO QUESTION ABOUT THAT. I THINK THE BOARD HAS BEEN VERY WISE. IT IS NOT JUST THIS BOARD, BUT EVERY BOARD SINCE 2010 WHEN THE TOWNSHIP WAS FOUNDED AND THEY WERE SMART TO FOCUS ON GETTING THE PROPERTY TAX RATE AS LOW AS WE CAN GO. INSTEAD OF CHERRY PICKING HERE AND THERE AND GIVING FAVOR TO SOME TAXPAYERS AND OTHER PEOPLE TO THE AS MUCH. IT MAKES MORE SENSE TO ME.
>> IN TERMS OF THE SALES TAX GROWTH, WE TALKED ABOUT THIS.
WE HAVE 2.5% THROUGHOUT THE FIVE-YEAR PLAN.
HOTEL TAX GROWTH IS 8.2% IN 2023 AND THEN LOWERING TO THROUGHOUT THE FIVE-YEAR PLAN AND THEN WE HAVE A CPI ADJUSTMENT AS YOU CAN SEE THERE IN 24 THROUGH 2027. SOME PEOPLE MAY SAY THAT LOOKS LIKE A REALLY LOW CPI ADJUSTMENT BASED ON WHAT WE ARE DOING RIGHT NOW. IT IS, BUT WHAT IS IMPORTANT TO REMEMBER THAT THIS IS THE PLAN GOING FORWARD.
IF THE RATES ARE DIFFERENT, HIGHER OR LOWER, THEN WE ADJUST ACCORDINGLY. I DID A LOT OF ANALYSIS AND LOOKING AT WHAT OTHER ENTITIES WERE DOING -- WHAT THEY WERE USING FOR CPI AND THIS IS COMING FROM THE TEXAS STATE
[02:00:01]
COMPTROLLER'S OFFICE IN A REPORT THAT THEY RELEASED ABOUT THREE WEEKS AGO. YOU CAN SEE THE LINES AND THE ARROW POINTING TO THE ANNUAL CPI CHANGE FOR 2022.IT IS LARGER THIS YEAR, 5.9% AND IN 2023 IT IS 3%.
WE BUILT IN COSTS THAT WE KNOW OF FOR 2023.
AND THEN GOING OUT FOR 2024, THEY EVENTUALLY GET BACK TO THE 2% WHICH IS SORT OF A TARGET THAT THE FEDERAL RESERVE HAS, ACTUALLY 2.2%. AND SO AGAIN IN TERMS OF A LONG-TERM PLANNING, THAT'S WHERE WE WOULD EXPECT OR WOULD WANT THINGS TO GO. THAT'S WHAT WE ARE DOING -- ACTUALLY THE TOWNSHIP PLAN IS A LITTLE BIT HIGHER THAN WHAT'S SHOWING HERE. THAT'S WHY WE ARE GOING BACK TO
THOSE. >> AND YOU CAN ALSO AT THE BOTTOM OF THIS SLIDE, YOU CAN SEE THE INTEREST RATE EXPECTATIONS FROM THE STATE ARE GOING TO BE BACK INTO THE 6 PERCENTILES. THAT'S THREE TIMES WHAT WE WERE
LOOKING AT THIS TIME LAST YEAR. >> RIGHT.
YES, SIR. >> AND SO THE CASH FOR CAPITAL GOING FORWARD FOR THE NEXT FIVE YEARS, HAVING THAT CASH ON HAND MAKES A LOT MORE SENSE BECAUSE THE DEBT SERVICE COSTS WOULD BE HIGHER AND THAT WOULD INCREASE PROPERTY TAXES.
>> YES, SIR. AND I SHOULD HAVE AN ARROW TWO LINES FROM THERE. THAT'S THE CPI INDEX.
IT STARTS OFF AT 7.5 AND THEN IT GETS TO THE TARGET OF 2.2.
AND THEN THE, THIS CE IS -- THE PCS IS PERSONAL EXPENDITURES.
>> AND YOU SAID IT. WE ARE CAPTURING 22 AND 23'S INFLATION -- INFLATIONARY HITS IN THE BASE BUDGET.
>> RIGHT. >> IT IS NOT BEING SHOWN BECAUSE LAST YEAR'S BUDGET WE HAD A SMALLER PROJECTION.
BUT WE UPDATE TO REALIZE. AND I THINK IN OUR THIRD YEAR CAPITAL PLAN WE DID AN ADJUSTMENT TO ACKNOWLEDGE THE INCREASED COST OF MATERIALS AND GOODS.
YOU'RE EXACTLY RIGHT. IT IS BUILT INTO WHAT YOU HAVE SEEN IN THE BASE BUDGET FOR 22 AND 23.
>> THE OTHER BEAUTY IS THAT 65% USED TO BALANCE THE BUDGET ARE
INFLATION INDEXED. >> THAT'S A GOOD POINT.
>> BECAUSE WHEN THE PRICES GO UP, WE GENERATE MORE SALES TAX AND HOTEL TAX REVENUE. WHEN YOU LOOK AT THE 3%, IT IS PROBABLY PRETTY ACCURATE WHEN YOU REALIZE IT WAS TWO-THIRDS OF THE FUNDS WE USE ESSENTIALLY ARE INDEXED.
>> YES, SIR. THAT'S A GREAT POINT.
THANK YOU. >> SO ONE OF THE THINGS WE ALWAYS WANT TO MAKE SURE OF IS IN OUR FIVE-YEAR PLAN BASED ON OUR PROJECTED EXPENDITURES THAT INCLUDE CAPITAL AND NEW STAFFING COSTS AND CONTRACTUAL OBLIGATIONS AND ALL OF OUR CONTRACTED SERVICES, EVERYTHING LOADED IN, THE REVENUE LINES AND THERE ARE THREE OPTIONS IN BLUE ARE EXCEEDED -- ARE EXCEEDING THE BROWNISHREDISH LINES. THE GAP IS WHAT IS USED TO FUND CAPITAL FUNDED BY THE GENERAL FUND.
IT IS USED TO MAKE OUR ALLOCATIONS TO OUR CAPITAL REPLACEMENT RESERVE AND THEN A PORTION OF THAT IS THE EXCESS HOTEL TAX THAT WE TALKED ABOUT. THE THREE LINES YOU CAN SEE AT THE TOP ARE BASED ON WHATEVER -- AGAIN, THEY ARE THREE DIFFERENT PROPERTY TAX RATE REVENUES. REGARDLESS OF WHETHER WE ARE USING AND WHETHER THE BOARD CHOOSES THE VOTER APPROVAL RATE OR NO-NEW-REVENUE RATE OR SOMETHING LOWER THAN THE RATE WE ARE STILL COVERING ALL CASH REQUIREMENTS.
ONE OF THE QUESTIONS I GET A LOT IS IF YOU LOOK AT THE FIVE-YEAR PLAN, YOU WILL SEE OUR RESERVE BALANCES GROWING.
THE REASON THAT THEY ARE GROWING IS THIS RIGHT HERE.
JUST LIKE WE TALKED ABOUT BEFORE, WE ARE NOT INCREASING OUR OPERATING RESERVE AT THIS POINT.
ALL OF THOSE RESERVES THAT WE LOOKED AT, WHAT IS DRIVING OUR INCREASE IN OUR FIVE-YEAR PLAN RESERVE BALANCE, THIS IS EXCESS HOTEL TAX AND WHAT THE BOARD HAS SET IN THE PAST AND THAT IS OUR CURRENT ASSUMPTION HERE IS THAT THE EXCESS GENERATED EACH YEAR, THE 2.7 AND GOING UP TO 3.0, THE BOARD IS RESERVING TO USE AS DEBT SERVICE ON AN ECONOMIC PROJECT.
WILL -- IT WAS MENTIONED ABOUT THE PERFORMING ARTS CENTER AND THIS IS A FUNDING SOURCE. THREE MILLION AT OLD RATES WOULD FUND ABOUT $9 MILLION IN PROJECTS WITH THAT SERVICE ON
[02:05:01]
TODAY'S RATES, THAT NUMBER IS NOT BAD ANYMORE.THAT IS WHAT IS BEING RESERVED FOR.
IT IS WHEN ECONOMIC DEVELOPMENT OPPORTUNITIES COME ALONG, THEN THIS TYPE OF ANNUAL ONGOING EXCESS -- GENERATED COMPLETELY FROM VISITORS OR ALMOST COMPLETELY FROM VISITORS, BUT A HOTEL TAX CAN BE USED TO FUND THAT.
>> IT IS NOT JUST PERFORMING ARTS.
THERE IS A CONVENTION CENTER EXPANSION.
>> RIGHT. >> THERE COULD BE ANOTHER HOTEL DEVELOPMENT THAT WOULD HAVE ROOM FOR A CONVENTION CENTER
>> IT COULD BE AN EXPANSION. WE HAVE TWO CONVENTION CENTERS.
THE TOWNSHIP OWNS THE ONE ATTACHED TO THE MARRIOTT.
WE DON'T OWN THE ONE THAT'S ATTACHED TO THE WOODLANDS
>> BOUGHT THESE FUNDS CAN BE -- BUT THESE FUNDS CAN BE UTILIZED FOR EXPANSION OF THE EXISTING FACILITY WITH THE MARRIOTT, OR NEW FACILITIES IF ANOTHER FACILITY PRESENTS ITSELF AS WELL AS THE PERFORMING ARTS THEATER. IT IS TO ADDRESS THE QUESTIONS ABOUT THE POSSIBILITY. THE INTEREST RATE ENVIRONMENT HAS SHIFTED SO THAT THE VIABILITY OF FINANCES IN A FOUR-MONTH WINDOW OF TIME HAS ELIMINATED THE FUNDING MECHANISM THROUGH FINANCE. INTEREST RATES CAN HAVE THAT MUCH OF A DETRIMENTAL IMPACT. THE PERFECT WINDOW OF OPPORTUNITY WAS PROBABLY SIX MONTHS AGO FROM A BONDING
PERSPECTIVE. >> A -- COUPLED WITH A RAPID
INCREASE IN BUILDING COSTS. >> YES.
WE HAVE SEEN THAT. >> THE COST OF CAPITAL IS GOING UP. OUR BONDING LIMIT IS SHRINKING AND THE BUILDING COSTS ARE GOING UP.
>> RIGHT. >> WE TALKED ABOUT 8.5% AND
BUILDING IS GOING UP 3%. >> RIGHT.
>> ANYWAY. >> BEFORE YOU GO OFF, A QUESTION, IF WE WERE TO SEE A NEW HOTEL BUILT IN THE WOODLANDS , PERHAPS NEW CONVENTION FACILITY, BUT JUST THE HOTEL, HOW MUCH INCREASE IN OUR HOTEL TAX WOULD WE SEE FROM A HOTEL ROUGHLY FROM 300 ROOMS, SOMETHING LIKE THAT?
>> IT WOULD DEPEND ON WHAT THEY BUILD.
I MEAN, IF WE GOT A 4 S*P CONDITIONS -- FOUR SEASONS OR A RITZ-CARLTON, THEN YES, BUT IF IT WAS A HOLIDAY INN, MAYBE NOT.
>> YOU WOULD SEE SOMETHING MORE NICE.
>> THERE ARE 14 HOTELS IN THE BOUNDARIES.
FIVE FULL SERVICE PROPERTIES. THEY ACTUALLY ACCOUNT FOR ABOUT 80% OF THE TOTAL REVENUE. YOU COULD ARGUE THAT ANOTHER FULL SERVICE HOTEL WOULD PROBABLY ADD ANOTHER 10 TO 12% OF HOTEL CAPACITY. AND WE ARE ACTUALLY IN NEED OF ANOTHER HIGH-SERVICE HOTEL TO SERVICE THE COMMUNITY, AND WE DO NEED AN EXPANSION OF THE CONVENTION CENTER FACILITIES BECAUSE WE HAVE PEAKED. WE NEED MORE DOORS IN PROXIMITY TO CONVENTION CENTERS IN ORDER TO ATTRACT LARGER GROUPS AND TO RETAIN EXISTING GROUPS THAT ARE GROWING BEYOND OUR CAPACITY.
>> RIGHT. SO 10% ON TOP OF THIS IF WE HAD ANOTHER HOTEL FOR DEBT SERVICE. I'M JUST LOOKING AT GROWING THE ABILITY TO PROVIDE A DEBT SERVICE TO A PROJECT, A BIG
THAT WOULD CERTAINLY -- WHAT WE ARE GENERATING WOULD CERTAINLY BE ABLE TO COVER THAT. I WOULD HAVE TO GO BACK AND DO A LITTLE MORE WORK TO GET UH REVENUE NUMBER.
>> THANK YOU. >> YOU'RE WELCOME.
>> WITH THAT. WE WILL MOVE INTO OUR FINAL SECTION WHICH IS PROPERTY TAX. I WANT TO REMIND EVERYONE WHERE WE STARTED AND WHERE WE ARE NOW. AFTER EVERY -- EVERYTHING WE TALKED ABOUT TODAY, ALL OF THE EXPENSES, THE PERSONNEL, THE OPERATING CAPITAL, DEBT SERVICE, ALL OF THAT HAS BEEN BUILT INTO WHAT YOU HAVE -- ALL OF THE NUMBERS WE HAVE TALKED ABOUT IN THE RESERVE BALANCES. SO NOW WHAT WE GET TO -- WHAT THE BOARD GETS TO DO IS LOOKING AT THAT IN TERMS OF A PROPERTY TAX RATE. AND AGAIN THIS WEEK ALL THAT NEEDS TO BE ACHIEVED, ALL THAT CAN BE ACHIEVED IS A PROPOSED TAX RATE AND NOT THE ADOPTION OF THE TAX RATE.
WE WILL LOOK AT DIFFERENT THINGS THAT IMPACT WHAT THAT RATE MIGHT BE. JUST A REMINDER FOR EVERYBODY, THE PROPERTY TAX REVENUE IS GENERATED AND THERE ARE TWO PRIMARY FACTORS. THE PROPERTY VALUE, THE TAXABLE PROPERTY VALUE AND THEN THE RATE ITSELF.
AND SO IN TERMS OF OUR PROPERTY TAX VALUES FOR 2018 THROUGH 2023 , HERE IS A LOOK AT THOSE. THEY HAVE STEADILY INCREASED
[02:10:01]
WITH A REALLY LARGE INCREASE AS WE ARE ALL AWARE.THE CERTIFIED ROLLS ONCE THEY LIMIT THE HOMESTEAD PROPERTIES WAS APPLIED AND THE BOARD AUTHORIZED WHICH I WILL TALK ABOUT IN A MINUTE. THE INCREASE IS NOW DOWN TO ABOUT 14 AND A HALF PERCENT WITH 1% OF THAT RELATED TO THE NEW PROPERTY AND 13.6 IN REY'ALL -- IN REVALUATION.
AS CHAIRMAN BUNCH MENTIONED, THE HOMESTEAD VALUE ACCOUNTED FOR
14% OF OVERALL PROPERTIES. >> AND COMMERCIAL PROPERTY IS EXEMPT FROM ANY SORT OF EXEMPTIONS.
>> EXACTLY. >> THAT'S WHERE YOU CAN GET OVER
>> EASILY. >> AS I MENTIONED, THE BOARD AUTHORIZED AN INCREASE IN THE EE 65 OR OLDER OR DISABLED.
PREVIOUSLY THE EXEMPTION WAS 25,000 AND THAT WAS INCREASED TO 40,000 AND IT IS REFLECTED IN THE NUMBERS WE HAVE BEEN LOOKING AT TODAY. THIS IS A HISTORY OF THE PROPERTY TAX SINCE THE -- PROPERTY TAX RATE SINCE THE INCEPTION OF THE TOWNSHIP. WE HAVE SEEN A DECREASE OF ALMOST 50% FROM 2010. THIS IS A LOOK AT THE RATES.
THIS IS WHEN YOU COMPARE IT TO WHAT WAS THE ADOPTED RATE WHICH IS SHOWN IN BLUE VERSUS THE NO NEW REVENUE TAX RATE WHICH IS SHOWN IN BROWN. WE CAN SEE FOR 7 OF THE PREVIOUS 9 YEARS THIS AND PREVIOUS BOARDS HAVE LOWERED THE TAX RATES TO THE NO-NEW-REVENUE RATE WHICH DOES NOT GENERATE ANY ADDITIONAL PROPERTY TAX REVENUE OTHER THAN FOR NEW PROPERTIES.
THIS IS A LOOK AT OUR PROPERTY TAX REVENUE GROWTH OVER THE YEARS. SO THE GROWTH THAT YOU DO SEE THERE IS ACTUALLY TOUCHED UPON A MINUTE AGO.
SOME OF THE REVENUE IS DUE TO THE EXPIRATION OF TAX ABATEMENTS ON UNUSED PROPERTIES THAT WAS UNEXPECTED.
THE COMPANIES WERE NOT ABLE TO PHAOEFP THE TERMS OF THE UH -- PHAOEFP THE TERMS OF THE ABATEMENT AND THEN WE HAVE NEW AND RESIDENTIAL KPHER -- COMMERCIAL PROPERTIES.
IT DID NOT COME FROM THE EXISTING PROPERTIES.
THIS IS SOMETHING THAT WE TALKED ABOUT EARLIER.
WHEN YOU LOOK ON AN AVERAGE -- WHAT TODAY WOULD BE AN AVERAGE $500,000 HOME AND YOU LOOK BACK TO THE DECISIONS THAT THE BOARD HAS MADE IN TERMS OF LOWERING THE PROPERTY TAX RATE OVER THOSE YEARS TO THE NO-NEW-REVENUE RATE, THE SAME HOMEOWNER WHO OWNS AN AVERAGE VALUED HOME OF $500,000 TODAY IS ACTUALLY PAYING A LITTLE BIT LESS THAN THEY WERE 10 YEARS AGO.
>> AND THAT'S NOT INFLATION ADJUSTED.
>> NO. >> WE SHOULD SHOW AN INFLATION-ADJUSTED COMPARABLE. $1126 IN 2012, IN TODAY'S DOLLARS IS PROBABLY $1700, $1800.
>> THIS IS JUST A DE PUCKS -- A DEPICTION OF WHAT THE POLICY OF THE BOARD HAS BEEN IN TERMS OF THE NO-NEW-REVENUE RATE, THE IMPACT IT HAS HAD ON THE ACTUAL PROPERTY OWNER.
AND THIS IS JUST BASED ON 2022 SO I WILL UPDATE ALL OF THESE SLIDES THAT WE ARE LOOKING AT, A PROPERTY TAX WHEN THEY DECIDE ON THE PROPOSED RATE. IF YOU WANT ME TO BRING IT BACK TOMORROW, I CAN SHOW YOU THE IMPACT.
BASED ON THIS YEAR IN 2022, WHEN A PROPERTY OWNER LOOKS AT THEIR PAX BILL AND -- TAX BILL AND SEES A TAX BILL IN MONTGOMERY COUNTY OF 9,670, THE TOWN'S PORTION OF THAT IS A LITTLE OVER A THOUSAND DOLLARS. SO IT IS ABOUT 12% OF YOUR TOTAL TAX BILL. AND THEN THE OTHER ENTITIES ARE LISTED IN THIS CHART OF WHERE YOUR TAXES ARE GOING.
AND THEN THIS IS FOR HARRIS COUNTY AND IT IS THE SAME TAX DOLLAR OF A LITTLE OVER A THOUSAND, BUT IN TERMS OF THEIR TAX, IT WAS ABOUT 9% OF THE TOTAL HARRIS COUNTY BILL.
AND THEN WE GET TO -- THIS IS THE FINAL SLIDE FOR TODAY UNLESS THE BOARD CHOOSES TO GO ON WITH BUDGET INITIATIVES.
SO WHAT WE CAN START LOOKING AT IS AS THE BOARD HAS A COUPLE OF OPTIONS. FIRST THEY CAN CHOOSE NOT TO EVEN TALK ABOUT THE PROPERTY TAX RATE UNTIL WE GET TO BUDGET
[02:15:04]
INITIATIVES. BUT IF THERE IS A TAX RATE GOAL THAT THE BOARD WOULD LIKE TO GO AHEAD AND AT LEAST DIRECT STAFF TO BRING BACK TOMORROW IN TERMS OF WHEN WE START LOOKING AT BUDGET INITIATIVES AND IN TERMS OF WHAT WOULD BE AVAILABLE FROM THE 2023 TAX RATE THESE ARE DIFFERENT SCENARIOS.AS WE TALKED ABOUT BEFORE AT THE VOTER APPROVAL RATE YOU WOULD HAVE $7.5 MILLION IN EXCESS CASH AND AGAIN THIS DOESN'T -- THIS IS IN ADDITION TO THE CAPITAL CONTINGENCY WHICH IS 4.2 MILLION AND THE HOTEL TAX RESERVE AT 7.5 MILLION AND THEN ABOUT AN 8.2 MILLION IN 2022 PROJECTIONS. THIS *R THIS IS -- THIS IS FOR
2023. >> I THINK WE ARE OKAY ELIMINATING THE TOP TWO, AT LEAST FOR ME.
I THINK WE HAVE AMPLE EVIDENCE HERE THAT THE .19 RATE IS PROBABLY EVEN MORE THAN WE NEED. I THINK WE CAN ELIMINATE THE TOP
>> THAT WOULD MEAN THAT WE ARE ABSOLUTELY GOING TO PROVIDE OUR RESIDENTS A TAX DE -- TAX DECREASE.
AND WE WILL GET DOWN TO THE 18 AND A HALF DEPENDING ON THE
>> IF ANYBODY ELSE HAS ANY OTHER SUGGESTIONS?
>> I CERTAINLY, YOU KNOW -- I MEAN I WOULD NOT HAVE ENTERTAINED ANYTHING OVER THE NEW -- YOU KNOW, THE NEW REVENUE RATE. WE DECIDED AS A BOARD TWO MONTHS AGO WHEN WE SET THESE BUDGET MEETINGS AS LATE AS WE DID.
WE KNEW THAT WE WERE GOING TO DO THIS.
I THINK YOU'RE RIGHT. WE START AT 19 CENTS AND SEE HOW
MUCH MORE WE CAN TAKE OUT. >> I AGREE.
>> SOUNDS GOOD TO ME. >> ALL RIGHT.
SO WE CAN START TOMORROW WITH 19 CENTS.
>> GOOD. >> AND THEN TOMORROW WE WILL GO THROUGH THE BUDGET INITIATIVES AND THE CAPITAL OPTIONS AND UNLESS THERE IS ANYTHING ELSE FOR TODAY?
MONIQUE, AS ALWAYS, EXCELLENT, AND THE WHOLE FINANCIAL SUPPORT TEAM AS WELL AS THE EXECUTIVE TEAM AND THEIR DEPARTMENTS THAT HAVE TO ALL WORK TOGETHER FOR THIS, AND THE FIRE SERVICE.
I WANT YOU TO KNOW I INCLUDE YOU WHEN I MENTIONED THOSE BROAD-BRUSHED APPRECIATIONS. WE WILL CLOSE OUT -- WE DON'T
HAVE TO DO MOTIONS OR ANYTHING? >> NO, SIR.
>> THIS AGENDA ITEM STAYS OPEN UNTIL WE ARE DONE.
SO WE DO NOT HAVE ANYTHING TO DO FOR AGENDA ITEM 8.
WE DON'T HAVE EXECUTIVE SESSION TODAY.
>> NO, SIR, WE DON'T. >> AND SO WE WILL ESSENTIALLY GO ALL THE WAY TO A MOTION TO ADJOURN FOR THE DAY.
>> WE ARE ADJOURNED
* This transcript was compiled from uncorrected Closed Captioning.