Aug 21, 2023 Board Budget Workshop #1

[00:00:11]

>>DR. ANN SNYDER: OUR THE WOODLANDS TOWNSHIP BUDGET

[1. Pledge of Allegiance;]

I PLEDGE ALLEGIANCE TO THEE, TEXAS, ONE STATE UNDER GOD, ONE

[2. Call meeting to order;]

>>DR. ANN SNYDER: I DECLARE IN ACCORDANCE WITH STATE LAW, NOTICE OF THIS MEETING WAS POSTED 72 HOURS IN ADVANCE OF THE MEETING. THE POSTING OCCURRED WITHIN THE BOUNDARY OF THE WOODLANDS TOWNSHIP AT THIS OFFICE BUILDING. STATE LAW REQUIRES THAT AT LEAST FOUR OF OUR BOARD MEMBERS BE IN ATTENDANCE TO ESTABLISH A QUORUM FOR CONDUCTING BUSINESS. I ASK EACH BOARD MEMBER TO INDICATE HIS OR HER PRESENCE BY RESPONDING WITH SOME AUDIBLE SOUND OF ACKNOWLEDGMENT AS I CALL ROLL.

DIRECTOR BAILEY. >>BRAD BAILEY: HERE.

>>RICHARD FRANKS: HERE. >>BOB MILNER: HERE.

>>LINDA NELSON: HERE. >>KYLE WATSON: HERE.

>>DR. ANN SNYDER: AND DIRECTOR.SNYDER HERE AND DIRECTOR SEKULA-GIBBS IS SON THE WAY BY ROLL CALL A SUFFICIENT

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

PLEASE REVIEW THE AGENDA ON PAGE 1 AND 2 FOR ADOPTION OF THE AGENDA. IS THERE A MOTION.

>> SO MOVED. >> SECOND.

. >>DR. ANN SNYDER: IT HAS BEEN MOVED AND SECONDED BY DIRECTOR FRANKS, WATSON AND NELSON.

ALL THOSE IN FAVOR, SIGNIFY BY SAYING AYE.

OPPOSED? MOTION PASSES.

I DON'T SEE THAT WE HAVE PUBLIC OFFICIALS WITH US TODAY.

[5. Public comment;]

IN ACCORDANCE WITH THE BOARD'S DIRECTIVE POLICY FOR THE MOST EFFECTIVE PROCESS FOR CONSTITUENTS TO ADDRESS THE BOARD, THE WOODLANDS BOARD OF DIRECTORS ACCEPTS PUBLIC COMMENT IN ACCORDANCE WITH THE FOLLOWING GUIDELINES WHEN PARTICIPATING IN PUBLIC MEETINGS. EACH PERSON WISH TO ADDRESS THE BOARD MUST FIRST SIGN THE SPEAKER'S ROSTER PROVIDED BY THE BOARD SECRETARY. INDIVIDUALS WHO WISH TO MAKE GENERAL ANNOUNCEMENTS, ADDRESS A TOPIC THAT IS NOT INCLUDED ON THE AGENDA OR WHICH TO ADDRESS SPECIFIC AGENDA ITEMS MUST DO SO UNDER THE PUBLIC COMMENT AGENDA ITEM AT THE BEGINNING OF THE MEETING. INDIVIDUALS WILL BE LIMITED TO A TOTAL OF THREE MINUTES REGARDLESS OF THE NUMBER OF TOPICS.

SPEAKER ALSO BE TAKEN IN THE ORDER IN WHICH THEY SIGN.

AND ANY SPEAKER ON A SINGLE SUBJECT MAY YIELD HIS OR HER TIME TO ANOTHER SPEAKER ON THE LIST.

STATE LAW PROHIBITS A BOARD FROM SPECIFICALLY ACTING ON AN ITEM OR PARTICULAR PUBLIC COMMENT UNLESS IT APPEARS ON THE.PUBLIC AGENDA. THEREFORE, A ANY BOARD'S DISCUSSION OF ITEMS NOT POSTED ON THE AGENDA IS LIMITED FOR QUESTIONS FOR CLARIFICATION AND WHETHER OR NOT THE ITEM SHOULD BE PLACED ON A FUTURE BOARD AGENDA.

SPEAKER MACE EXPRESS THEIR OPINIONS AND VIEWPOINTS ON AN ISSUE BUT ARE NOT PERMIT TO PARTICIPATE IN THE DEBATE ON AN ISSUE. SPE SPEAKERS WILL NOT USE PROFANITY. COMMENTS CAN BE MADE AS A WHOLE OR INDIVIDUAL BOARD MEMBER. ALSO I WILL REMIND EVERYONE TO PLEASE PLACE HIS OR HER CELL PHONES ON THE SILENT MODE.

WE DO HAVE ONE INDIVIDUAL WANTING -- SIGNING UP FOR PUBLIC COMMENT. BRUCE RIZZO.

WELCOME, BRUCE. >> HOW ARE YOU?

>>DR. ANN SNYDER: I AM GOOD. HOW ARE YOU? WE ALL KNOW THAT BRUCE IS A FORMER DIRECTOR AND VICE-CHAIRMAN OF THE BOARD OF THE WOODLANDS FOR SEVERAL YEARS.

>> JUST COULDN'T STAY AWAY. I WOULD PARTICIPATE OR WATCH THE LAST BUDGET SESSIONS FOR THE TOWNSHIP.

I FELT COMPELLED TO BE HERE TODAY TO ADD MY VOICE TO YOURS.

YOU KNOW, THE SUBJECT AT HAND, $$\.17.134 14.

[00:05:04]

NUMBER ONE, INCREDIBLY INVERTED FED BOND YIELD CURVE WHICH IS NEVER A GOOD THING. MANUFACTURING ORDERS HAVE SLOWED. GASOLINE, FOOD, RENT, MORTGAGES, HOUSING ALL AT RECORD HIGHS. THE AVERAGE FAMILY IN AMERICA IS SPENDING $709 MORE A MONTH FOR NECESSITIES THAN THEY DID JUST TWO YEARS AGO, WHICH MEANS THAT INFLATION IS RAMPANT.

THE LAST THING WE WANT TO DO IS TO OVERTAX, YOU KNOW AND ADD TO THAT BURDEN AS THE WOODLANDS TOWNSHIP.

SO I APPLAUD YOUR PREFERENCE TO GET DOWN TO THE NO NEW REVENUE RATE. AND THE -- AS I SAID, ONCE AGAIN, YOU KNOW, THE WOODLANDS COUNTY WASN'T ABLE TO DO IT.

IF YOU REMEMBER JUST THREE SHORT YEARS AGO, A LOT OF BALLYHOO ABOUT A 20% REDUCTION IN HOMESTEAD EXEMPTION OR 20% HOMESTEAD EXEMPTION THAT THE COUNTY PASSED TO MUCH FANFARE.

LAST TWO BUDGET CYCLES THEY HAVE TAKE THAT AWAY.

BOTH YOURS 17% OVER THE NO NEW. AND THIS YEAR 3 TO 4%.

THE 60% OF HOMEOWNER WHO GOT THE EXEMPTION IN MONTGOMERY COUNTY ARE BACK TO THE 40% WHO ARE NOT ARE 20% WORSE OFF THAN 100% OF THE BUSINESSES OPERATING IN THE COUNTY ARE 20% WORSE OFF.

I JUST HOPE THAT, YOU KNOW, YOU GUYS WILL FIND THE WAY TO GET THESE THINGS DONE. YOU KNOW, I AM GLAD TO SEE THAT, YOU KNOW, WE ARE BLESSED IN THIS TOWNSHIP BY HAVING, YOU KNOW, AMPLE NONTAX REVENUE TO BALANCE OUR BUDGET.

AND LIKE I SAID, I KNOW THIS IS A TOUGH SLOG.

I APPLAUD YOU FOR DOING IT, BUT IT IS WORTH THE WORK.

THANK YOU SO MUCH FOR LETTING ME SPEAK.

>>DR. ANN SNYDER: OF COURSE. AND THANK YOU FOR BEING HERE THIS MORNING AND YOUR PAST LEADERSHIP AT THE TOWNSHIP.

[6. Receive, consider and accept a report regarding the 2023 no-new-revenue tax rate and voter-approval tax rate; ]

OUR PRELIMINARY BASE BUDGET'S FOCUS IS TO MAINTAIN A REMINDER OF THE EXCELLENT SERVICES, AMENITIES AND OUTSTANDING STAFF THAT WE HAVE. MONIQUE, I TURN IT OVER TO YOU.

>>MONIQUE SHARP: GREAT. THANK YOU.

AND GOOD MORNING, EVERYONE. WE ARE GOING TO START OFF BEFORE WE GET INTO THE BUDGET. THE FIRST ACTION THAT THE BOARD NEEDS TO TAKE IS TO ACCEPT THIS REPORT ON THE CERTIFIED TAX RATES. THESE RATES WERE PROVIDED BY THE TAX ASSESSOR, TAMMY MCCREA LAST WEEK.

AND SHE HAS CERTIFIED THAT THE NO NEW REVENUE RATE FOR THE 2023 TAX YEAR, WHICH FUNDS THE 2024 BUDGET YEAR IS 17.14 PER $100 OF TAXABLE VALUE. VOTER APPROVAL RATE IS 18.14 CENTS. AND ACTUALLY, THE -- WHAT IS ALLOWED BY LAW IS YOU CAN ADD ON THREE YEARS OF -- TO THE EXTENT THAT YOU HAVE NOT USED YOUR FULL VOTER APPROVAL RATE, YOU CAN ADD THOSE ON. THAT IS WHAT YOU ARE SEEING RIGHT THERE. THOSE THREE NUMBERS ADD TO THE 18.14 TO GET TO 70. THE 20 .70 THE IS THE MAXIMUM RATE THIS BOARD CAN VOTE ON THIS BUDGET CYCLE.

I DON'T THINK WE ARE ANYWHERE NEAR THAT RATE AND NOT A BIG TOPIC OF DISCUSSION, BUT I JUST NEED FOR TO YOU KNOW THAT.

THE VOTER APPROVAL RATE OF 18.14, TWO COMPONENTS.

THE M&O, 16.6. THE AT THE TIME SERVICE COMPONENT TO PAY DEBT SERVICE ON OUR GENERAL OBLIGATION BONDS IS 1.18. JUST AS POINT OF REFERENCE THROUGH THE BUDGET WORKSHOP THIS WEEK, EACH PENNY OF THE TAX RATE

[00:10:04]

SO THAT CONCLUDES MY REPORT. >>DR. ANN SNYDER: SO WITH THAT.

THIS IS NOT ADOPTING A PROPOSED TAX RATE.

THIS IS ACCEPTING A REPORT REGARDING THE 2023 NO NEW REVENUE TAX RATE AND THE VOTER APPROVAL TAX RATE.

JUST ACCEPTING THE REPORT. IS THERE A MOTION.

>> SO MOVED. >> SECOND.

>>DR. ANN SNYDER: IT HAS BEEN MOVEDED AND SECONDED TO RECEIVE AND ACCEPT THE 2023 TAX RATE WORKSHEETS THAT WERE PREPARED BY THE MONTGOMERY COUNTY TAX ASSESSOR'S OFFICE.

ALL THOSE IN FAVOR -- >> DISCUSSION.

>>DR. ANN SNYDER: SORRY, DIRECTOR GIBBS.

>>DR. SHELLEY SEKULA-GIBBS: THAT'S OKAY.

BASED ON THE PRELIMINARY YOU HAVE HERE, IS THERE A WAY THAT YOU ARE SEEING ANY CHANGES THAT ARE COMING? BECAUSE I KNOW THAT THIS WAS A LAST-MINUTE PRESENTATION FROM THE COUNTY.

ANYTHING CHANGING THAT IS COMING, ANY LAWSUITS, ANY CHANGES IN APPRAISALS, ANY OTHER THINGS THAT ARE OUT THERE THAT WE CAN COUNT ON IN THE NEAR FUTURE?

. >>MONIQUE SHARP: THIS -- I THINK I UNDERSTAND YOUR QUESTION. SO THE COUNTY DID -- WHEN THEY WERE ADOPTING THEIR TAX RATE AND MISS CRAY HAS -- HAS SAID THIS PUBLICLY TOO, THAT PART OF THE REASON WE SAW SOME OF THE BIG DROPS IN RATES THIS YEAR AND THE LOSS IN VALUE COUNTYWIDE BECAUSE OF LAWSUIT THAT WERE PENDING, NOT NECESSARILY SETTLED.

WE HAVE FACTORED THOSE IN THERE. WE ACCOUNTED FOR ALL OF THE ONES THAT HAVE BEEN SETTLED AND ALLOWED FOR AN UNCOLLECTIBLE RATE FOR THE ONES THAT ARE PENDING.

WE DID NOT GET HIT -- THE TOWNSHIP DID NOT GET HIT AS HARD AS LOCAL TAXING ENTITIES PARTICULARLY THE WOODLANDS COUNTY, I THINK WE ARE FULLY ACCOUNTED FOR IN THIS.

>> WHERE DID YOU RECEIVE THESE NUMBERS FROM THE COUNTY? >MONIQUE SHARP: I RECEIVED THE NUMBERS FROM THE COUNTY ON --

>> THURSDAY? >>MONIQUE SHARP: PARDON? TUESDAY OR WEDNESDAY. WEDNESDAY NIGHT.

>>DR. ANN SNYDER: WEDNESDAY NIGHT.

>>MONIQUE SHARP: WEDNESDAY NIGHT.

AND I WANT TO BE CLEAR THAT TAMMY MCCREA DID A WONDERFUL JOB OF TURNING AROUND THESE NUMBERS AS QUICKLY AS POSSIBLE.

NOTHING WITH HER OFFICE, BUT THE HARRIS COUNTY DISTRICT AND TARRANT COUNTY APPRAISAL DISTRICT.

KUDOS FOR TAMMY FOR TURNING THIS AROUND AND GETTING THE NUMBERS.

GIBRALTAR GIBRALTAR WE ARE VERY APPRECIATIVE.

>>DR. ANN SNYDER: MOVED BY.DIRECTOR MILNER.

>>DR. SHELLEY SEKULA-GIBBS: I AM ASKING A QUESTION.

>>DR. ANN SNYDER: I THOUGHT YOU SAID YOU WERE DONE.

>>DR. SHELLEY SEKULA-GIBBS: CAN YOU CLARIFY THE ACTION WE ARE TAKING RIGHT NOW. .

>>DR. ANN SNYDER: THE APPLICATION IS A MOTION AND A SECOND TO REVIEW THE 2023 TAX WORKSHEETS COMPARED BY THE 2023 COUNTY ASSESSOR'S OFFICE. THAT'S ALL IT IS.

>>DR. SHELLEY SEKULA-GIBBS: THANK YOU.

>>DR. ANN SNYDER: CLARIFIED AROUND AND MOVED BY DIRECTOR MILNER AND SECONDED BY DIRECTOR FRANKS.

[7. Receive, consider and act upon the 2024 Preliminary Budget for The Woodlands Township;]

>>MONIQUE SHARP: THANK YOU. YOU HAVE YOUR -- I SEE YOU ALL BROUGHT YOUR BUDGET BOOKS. THAT IS GREAT.

AND ALSO A POWERPOINT. DON'T -- DON'T FRET.

I KNOW IT IS 115 PAGES OR SOMETHING LIKE THAT.

I AM NOT GOING TO STAND UP HERE AND PRESENT 115 PAGES.

THIS IS REALLY JUST A GUIDE, IF YOU WILL, TO WALK US THROUGH IN A SYSTEMIC WAY THE BUDGET BOOKS. INSTEAD OF FLIPPING PAGES THROUGH 550 PAGES OF THE BUDGET BINDER THAT WE CAN ALWAYS GO BACK TO REFERENCE FOR DETAIL. THIS IS SORT OF HELP GUIDE THE CONVERSATION. SPEAK UP AND INTERRUPT WHAT I AM SAYING. WE CAN PAUSE AND HAVE AS MUCH DISCUSSION AS YOU WOULD LIKE AS WE GO THROUGH THESE POINTS.

OKAY. WITH THAT, WE WILL GET STARTED.

FIRST, I WANT TO TALK ABOUT HOW THIS WEEK -- HOW I ENVISION IT GOING. TODAY WE WILL REVIEW AND DISCUSS THE 2024 PRELIMINARY BUDGET. SO WE WILL TALK OF ALL ASPECTS OF THAT: THE REVENUE, THE EXPENDITURES, TRANSPORTATION FUND, VISIT THE WOODLANDS FUND. WE LOOK AT OUR CAPITAL PROJECT, RESERVES AND FINALLY THE FIVE-YEAR PLAN.

TOMORROW, IF WE DO NOT COMPLETE OUR REVIEW OF THE PRELIMINARY BUDGET, WE WILL CONTINUE THAT. THEN WE WILL REVIEW AND DISCUSS

[00:15:01]

AND THEN ON WEDNESDAY, WE CAN, AGAIN, REVIEW AND DISCUSS -- LET ME GO BACK ONE HERE. BY BUDGET ADJUSTMENTS, ANY DECISIONS THAT THE BOARD WANTS TO MAKE ON THE PRELIMINARY BUDGET, THE BOARD -- WE WILL KEEP TRACK OF THOSE COMMENTS.

ANYTHING ON THE BUDGET INITIATIVES THAT CAN WE DISCUSS ON TUESDAY. WE WILL KEEP TRACK OF THOSE.

WE WILL BE ABLE TO UPDATE THE BUDGET MODELS AND SEE WHAT THE IMPACT AS YOU TAKE VOTES ON THOSE ADJUSTMENTS.

AGAIN, THAT IS PART OF THE PROCESS TO HELP US GET TO OUR ULTIMATE GOAL THIS WEEK WHICH IS FOR THE BOARD TO VOTE ON THE PROPOSED TAX RATE. IT IS NOT THE ADOPTED TAX RATE.

IT IS JUST THE PROPOSED TAX RATE THAT WILL DETERMINE IF PUBLIC NOTICES AND PUBLIC HEARINGS ARE NECESSARY.

AND WE WILL DISCUSS THAT IN A LITTLE BIT MORE TOO.

ON WEDNESDAY, I BELIEVE DEPENDING ON THE LEVEL OF DISCUSSION THIS WEEK, THAT WE SHOULD BE ABLE TO CONCLUDE THE BUDGET WORKSHOPS. SO THAT IS THE DATE THAT I AM SUGGESTING RIGHT NOW WE WOULD -- THE BOARD WOULD PROBABLY TAKE A VOTE ON THAT PROPOSED TAX RATE. AND, AGAIN, THAT IS TO -- IF -- IF THE BOARD DOES ADOPT A RATE THAT IS HIGHER THAN THE LOWER OF THE VOTER APPROVAL RATE OR THE NO NEW REVENUE RATE, THAN A PUBLIC HEARING ON A TAX INCREASE WILL BE REQUIRED.

AND THE BOARD LOOK HAVE TO TAKE A VOTE ON THE DATE AND TIMES FOR THAT. THAT IS REQUIRED BY LAW.

>>DR. ANN SNYDER: BUT TO CLARIFY, IF THAT DOES NOT HAPPEN AND WE ADOPT THE NO NEW REVENUE RATE.

THEN THE PUBLIC HEARING -- >>MONIQUE SHARP: THE PUBLIC HEARING AND OR PUBLIC NOTICE IS NOT NECESSARY.

THAN THE BOARD -- THE NEXT MEETING WILL CAN TO VOTE ON THE BUDGET AND THE TAX RATE. TO ADOPT THE BUDGET AND TAX

RATE. >>DR. ANN SNYDER: THANK YOU.

>>MONIQUE SHARP: YES. SOMETIMES THERE IS CONFUSION, SO I JUST WANTED TO POINT OUT IF THE BOARD -- IF WE DO NOT GET TO THE NO NEW REVENUE RATE, THIS IS THE TYPE OF NOTICE -- THESE ARE EXAMPLES OF WHAT WILL BE POSTED. IT IS CONSIDERED A TAX INCREASE.

SO EVEN IF THE BOARD WOULD LOWER THE TAX RATE OF 18.5 AND ABOVE THE IN NEW REVENUE OF 17.14, A PUBLIC HEARING ON A TAX INCREASE WILL BE REQUIRED. YOUR WEB SITE WILL TALK ABOUT A TAX INCREASE. YOUR BUDGET BOOK POSTED ONLINE WILL HAVE A TAX INCREASE. NOT THAT THE RATE IS INCREASING BUT THE TAX BURDEN, THE TAX LIABILITY TO THE RESIDENT IS INCREASING. OKAY, TODAY AND WHAT YOU HAVE -- WHAT WAS DISTRIBUTED IN YOUR BUDGET BINDER AND TODAY WHAT WE ARE GOING TO TALK ABOUT IS THE PRELIMINARY BASE BUDGET.

WHAT THIS BASE BUDGET DOES IS MAINTAIN EXISTING SERVICE LEVELS. IT MEETS ALL OF OUR CONTRACTUAL AND STATUTORY OBLIGALGSS. IT D-- OBLIGATIONS AND ACCOUNT FOR ECONOMIC GROWTH AND INFLATION.

OUR CAPITAL PROJECTS AND OTHER INITIATIVES PREVIOUSLY APPROVED BY THE BOARD. WE ARE STARTING OFF TODAY PACED ON THE VOTER APPROVAL PROPERTY TAX RATE OF 18.14.

ONE OF YOUR FIRST BUDGET INITIALS TIFFS, $\.1814 TO 2KR07 THAT RATE TO THE VOTER APPROVAL RATE AND WE WILL TALK ABOUT THAT IN A SECOND WHAT THE IMPACT WILL BE.

THIS BASE BUDGET DOES NOT INCLUDE THE BUDGET INITIATIVES THAT WERE INCLUDED IN THE BACK OF YOUR BUDGET BINDERS.

THOSE WILL BE REVIEWED SEPARATELY BECAUSE THOSE ARE CONSIDERED BASICALLY ENHANCED LEVELS OF SERVICE AND THEY ARE NOT INCLUDED IN YOUR BASE BUDGET.

THE TYPES OF BUDGET INITIATIVES WE WILL LOOK AT, AS I JUST MENTIONED IS THE PROPERTY TAX RATE SCENARIOS.

SEVERAL SCENARIOS FOR YOU TO CONSIDER AND LOOK AT ENHANCED AND NEW SERVICES AND AMENITIES COULD ALSO INCLUDE THINGS LIKE REDUCTION IN SERVICE LEVELS. I HAVE NOT RECEIVED ANY BUDGET INITIATIVES RELATED TO THAT. BUT THOSE ARE SORT OF THE EXAMPLES. ALSO, BEFORE WE START INTO THE NUMBERS, I JUST WANT TO DO A QUICK OVERVIEW ON THE FINANCIAL CONDITION OF THE WOODLANDS TOWNSHIP AS WE ARE ALL HERE TODAY. WE DO CONTINUE TO BE IN A POSITION OF FINANCIAL STRENGTH. AND THE 2024 BUDGET CONTINUES THAT BY PROVIDING RESOURCE TO MAINTAIN OUR HIGH LEVELS OF SERVICES AND AMENITIES. WE BENEFIT FROM A STRONG AND DIVERSE REVENUE SOURCE. WE WILL TALK ABOUT THAT IN A MINUTE. THE BUDGET PROVIDES FLEXIBILITY WHICH IS ALSO IMPORTANT BECAUSE THIS -- THE BUDGET IS A PLANNING DOCUMENT. IT IS NOT A COMMITMENT TO EVERYTHING. AND WE ARE AT A POINT IN TIME

[00:20:02]

WE WANT TO BE ABLE TO PROVIDE THAT FLEXIBILITY.

WE MAINTAIN THE POSITIVE CASH FLOWS AND RESERVE BALANCES THAT ARE EVALUATED FAVORABLY BY CREDIT RATING AGENCIES.

THAT IS IMPORTANT TO CONSIDER. ANY ACTION WE TAKE THAT MAY HAVE A NEGATIVE IMPACT ON OUR CREDIT RATING.

WE ARE NOT -- WE ARE NOT BURDENED WITH UNFUNDED PENSION COST OR LARGE VACATION AND SICK LEAVE BALANCES DUE TO THE TYPE OF BENEFIT PLANS THAT THE TOWNSHIP HAS IMPLEMENTED.

AND THE BUDGET CONTINUES TO INCREASE LOW DEBT BALANCES.

ALL POSITIONS OF STRENGTH FOR THE WOODLANDS.

WE DO EFFECTIVELY MANAGE OUR LONG-TERM DATE DEBT PLAN.

DOUBLEA BOND RATE FOR STANDARD & POOR'S AND MAINTAINING OUR DOUBLEA BOND RATING FROM MOODY'S.

THE HIGHLIGHT OF OUR CREDIT AGENCY.

SOME OF THE COMMENTS THEY MADE, THEY TALK OF OUR HISTORY OF STRONG FISCAL MANAGEMENT WITH HEALTHY FUND BALANCES AND LIQUIDITY AND LARGE AND DIVERSE TAX BASE.

CONSERVATIVE BUDGETING AND IF MANAGEMENT.

GREAT CAN BE THAT OF WHICH WE FIND OURSELVES TODAY.

ALSO WANTED TO MENTION THAT THE TOWNSHIP HAS RECEIVED FOR IT'S 23 BUDGET, WE RECEIVED THE DISTINGUISHED BUDGET PRESENTATION AWARD. I -- I AM SHOWING THIS FOR TWO REASONS. ONE IS BECAUSE I HAVE A BUNCH OF FINANCE STAFF HERE WITH ME THIS MORNING AND THEY WORK VERY HARD TO MAKE SURE WE ADHERE TO THE REQUIREMENTS AND TOWARD THE END OF THIS MEETING, I AM GOING TO ANNOUNCE THEM.

I WANT TO GIVE THEM RECOGNITION BY NAME.

I WILL DO THAT. BUT, ALSO, WANTED -- SHOWING THIS TO POINT OUT THAT AS WE GO THROUGH THIS BUDGET DOCUMENT AND THE WAY IT IS LAID OUT, WE ARE FOLLOWING BEST PRACTICES AND STANDARDS THAT ARE SET BY THE GOVERNMENT FINANCE OFFICERS ASSOCIATION. EVEN THOUGH SEEMS TO BE.R IN ACCOUNTING WONKY, THE REASON WE ARE DOING IT BECAUSE OF THIS.

>>DR. ANN SNYDER: THIS SAN AWARD THAT IS NOT PRESENT TO MANY MUNICIPALITIES OR ENTITIES SUCH AS OURS.

>>MONIQUE SHARP: YOU ARE RIGHT. WE ARE AT ABOUT THE TOP 5% OF ORGANIZATIONS THAT GET IT. SO THIS IS A BIG DEAL.

THERE IS A LOT THAT GOES INTO IT.

A LOT OF POLICY REQUIREMENTS, COMMUNICATION REQUIREMENTS, ACCOUNTING REQUIREMENTS. THINGS THAT ARE AFFECTED IN

HERE. >> I DROPPED MONIQUE A NOTE LAST NIGHT AND SOME OF HUSBAND DISCUSSED -- WE ALL WORK FOR PRETTY DECENT-SIZED COMPANIES SOME OF THE MOST THOROUGH BUDGET PRESENTATION I EVER SEEN. WHEN I STARTED LOOK THROUGH THIS BINDER, I WAS VERY, VERY IMPRESSED AND VERY OBVIOUS THERE WAS A TON OF TIME AND WORK THAT WENT INTO THIS.

. >>DR. SHELLEY SEKULA-GIBBS: ALL HAND DELIVER TO OUR HOMES. VERY WELL-DONE.

>>MONIQUE SHARP: THANK YOU, KUDOS TO OUR BUDGET TEAM WHO ARE AWESOME, VERY DEDICATED AND VERY KNOWLEDGEABLE.

RIGHT ALONG WITH THAT THE TOWNSHIP RECEIVED A CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING THAT GOES ALONG HOW WE PREPARE OUR BUDGET AND FINANCIALS.

WITH THAT, I AM GOING TO GET INTO THE BUDGET ITSELF.

Y'ALL HAVE SEEN THIS SLIDE BEFORE.

THIS IS JUST AN IMPORTANT REMINDER THAT AS WE TALK OF THE DIFFERENT BUDGET PRIORITIES, THOSE BEING REVENUE SOURCES OTHER THAN PROPERTY TAX REVENUE, SERVICES AND AMENITIES, SO THAT IS OPERATING EXPENSES AND CAPITAL, IS HE SERVES IN OUR DEBT PROFILE. AND FINALLY WHAT SORT OF BALANCES ALL THAT OUT IS OUR PROPERTY TAX REVENUE AND WHAT WE, AS I MENTIONED EARLIER, ARE ALL HERE FOR, TO GET TO THAT PROPOSED TAX RATE AT THE END OF THE BUDGET WORKSHOPS.

FIRST THING I WANT TO TALK ABOUT, I SORT OF WANT TO SET -- WHAT I WANT TO DO IS SET THE STAGE FOR AS WE GO INTO THE DISCUSSIONS OF THE PRELIMINARY BUDGET TODAY AND EVEN THE BUDGET INITIATIVES TOMORROW OF A HIGH-LEVEL BOTTOM LINE, IF YOU WILL, WHAT WE ARE LOOKING AT IN TERMS OF OUR RESOURCES.

SO WHAT I AM GOING TO TALK ABOUT NEXT ARE THOSE TWO ITEMS HIGHLIGHTED DOWN THERE IN THE RIGHT-HAND CORNER OF OUR UNDESIGNATED FUND BALANCES. WHAT IS AN "UNDESIGNATED FUND BALANCE?" WHEN WE ARE PREPARING THE BUDGET, A PAGE IN THE BUDGET MODEL OUT OF ALL OF THE PAGES IN THE BUDGET MODEL THAT WE CONTINUOUSLY REFERENCE BACK AND FORTH BECAUSE THE AMOUNT THAT IS LEFT OVER ONCE WE ACCOUNT FOR ALL REVENUES, ALL EXPENSES, ALL OF OUR CAPITAL, ALL OF OUR DEBT SERVICE AND ALLOCATIONS TO AND FROM RESERVE IS THE AMOUNT THAT SO OBVIOUSLY IF THAT NUMBER WAS NEGATIVE, THAT WOULD BE A PROBLEM AND WOULD NOT BE A BUDGET THAT I EVER WOULD PROPOSE TO YOU ALL. SO WE HAVE TO MAKE SURE THAT WE ARE GENERATING ENOUGH REVENUE TO COVER ALL OF OUR FINANCIAL

[00:25:03]

CURRENTLY AT $\.1814 AND OUR NO NEW REF RUE RIGHT IS $\.1714.

WHAT WE ARE LOOKING AT RIGHT NOW, IF YOU WANT TO LOOK AT ONE NUMBER TO FOCUS ON IN ALL OF THIS BUDGET, IS IN 2023, WE CURRENTLY HAVE $11.5 MILLION IN -- IN UNDESIGNATED FUND BALANCE.

SO THIS -- THIS IS A POT OF MONEY, IF YOU WILL, THAT COULD BE USED TO FUND ONE-TIME PURCHASES.

YOU CAN'T FUND ONGOING EXPENSES FROM THIS.

BECAUSE IT IS JUST LIKE A SAVINGS ACCOUNT, ONCE YOU USE IT, IT IS GONE. NOT LIKE A TAX REVENUE SOURCE THAT CAN BE USED OVER AND OVER AND OVER.

THE $11.5 MILLION, WE WILL SEE AS WE GET INTO BUDGET INITIATIVES, CAN BE USED FOR THINGS TO FUND LIKE THE GOSLING SPORTS FIELDS. USE TO FUND IMPROVEMENTS AT THE VILLAGE CENTERS, THE FIRE STATION AND EQUIPMENT THAT WE HAVE SOME NEEDS. IT CAN BE USED TO BIKE THE COALITION PROJECT. HIGHWAY CONNECTORS.

HIGHWAY 242 PATHWAY CONNECTORS. WE WILL GO THROUGH ALL SORTS OF THINGS BUT WHERE THE POT OF MONEY IS FOR.

>> DOES THAT CARRY FOR THE PRIOR YEAR?

>>DR. ANN SNYDER: WITH REGARD TO LAW ENFORCEMENT, IT CAN BE USED

FOR CAPITAL SUCH AS -- >>.

>>MONIQUE SHARP: CAN BE USED TO FUND FIRE VEHICLES.

NOT THE ONGOING SALARY OF THE PEOPLE.

BUT THE VEHICLES INCLUDED IN THAT.

>>DR. ANN SNYDER: THE TEN CARS. >> THE FUND TRANSFERRED, $6

MILLION -- HOW MUCH WAS THAT? >>MONIQUE SHARP: IT WAS $15 MILLION. AND THAT MONEY WAS ACCOUNTED FOR IN FIRE STATION 5 REBUILD AND THE PARKS NEEDS ASSESSMENT.

THAT WAS GONE LAST YEAR. >> EXCEPT FOR $270,000 FROM

CAPSTONE. >>MONIQUE SHARP: YES, SIR.

>> SORRY, IS THAT TOO EARLY? [LAUGHTER].

>>MONIQUE SHARP: SORRY, MA MONEY RE

REMAINS. >>DR. ANN SNYDER: IF I RECALL THE $15 MILLION PLUS AND $5 MILLION ALLOCATED --

>>MONIQUE SHARP: THE JEANNIE BETTS PROPERTY.

YOU ARE RIGHT, ALL OF THAT MONEY WENT INTO THE EMERGENCIES I JUST MENTIONED. FOR 2024, WHEN WE LOOK AT USING THE VOTER APPROVAL RATE OF $\.1814.

AND WE ACCOUNTED FOR EVERY OTHER EXPENDITURE AND CASH REQUIREMENT, WHAT WE HAVE RIGHT NOW IN UNDESIGNATED FUND BALANCE IS A LITTLE OVER $5 MILLION. IF -- THIS IS WHERE I SORT OF WANT TO SET THE STAGE SO YOU CAN THINK AS WE GO THROUGH THIS BUDGET, THE PRELIMINARY BUDGET, WE CAN AFFORD EVERYTHING IN THERE. THAT IS NOT MEANING THAT YOU HAVE TO ACCEPT EVERYTHING IN THERE.

OF COURSE, WE WILL HAVE THOSE DISCUSSIONS.

I AM JUST TELLING YOU WE CAN AFFORD EVERYTHING THAT WE ARE GOING TO TALK ABOUT TODAY. WE CAN AFFORD AND STILL HAVE $5 MILLION LEFT OVER. IF YOU CHOOSE -- IF THE BOARD -- IF IT IS A PRIORITY OF THE BOARD A NEW NEW REF RUE RIGHT OF $\.1714. IT IS AS I SAID, WE CAN AFFORD -- WE CAN FUND EVERYTHING THAT IS IN THE PRELIMINARY BUDGET AND WILL HAVE $2.4 MILLION REMAINING AFTERWARDS.

JUST AS A POINT OF REFERENCE, THE CORD OF OUR ONGOING, OUR OPERATING BUDGET INITIATIVES WHEN WE GET TO THAT TOTALS -- YOU SEE THE NUMBER AT THE BOTTOM, ABOUT $1.9 MILLION.

EVEN IF WE FUNDED EVERY SINGLE BUDGET INITIATIVE AND LOWER TO THE NO NEW REVENUE RIGHT, WE ARE STILL GOING TO HAVE OVER $500,000 REMAINING IN OUR UNDESIGNATED FUND BALANCE THAT COULD BE USED FOR OTHER TYPES OF THINGS AND/OR BUDGET FLEXIBILITY. AGAIN, TRYING TO SET THE STAGE FOR TODAY, AS WE GO THROUGH THIS, UNLIKE SOME LOCAL GOVERNMENT ENTITIES THAT MAY ENTER A BUDGET PROCESS LOOKING LIKE, OH, WE ARE NOT BALANCED. WE HAVE TO FIND SAVINGS.

WE HAVE TO DO SOME THINGS WE MAY NOT WANT TO DO TO HAVE A BALANCED BUDGET. THAT IS NOT WHERE THE WOODLANDS IS. YOU ALL CAN LOOK AT THIS BUDGET IN TERMS OF THE MOST PHYSIOLOGICAL, THE SERVICES TO PROVIDE, ENHANCE OR LOWER IF THAT IS THE CASE MAY BE.

IN DOING THAT LOWER TO THE NO NEW REVENUE RATE AND STILL FUND EVERYTHING. SO ANY QUESTIONS ON THAT? OKAY. SO WE WILL NOW MOVE INTO THE ACTUAL NUMBERS. THE -AGAIN, BASED ON THE VOTER

[00:30:01]

AND YOU CAN SEE THE BAR CHART ON THE RIGHT IS HOW WE ALLOCATE THOSE FUNDS. OUT OF THAT, $137 MILLION IS ALLOCATE TO OPERATING EXPENDITURES.

WE HAVE RESERVES OF $9.5 MILLION.

AND WE WILL GO THROUGH THAT IN -- HERE IN A LITTLE BIT.

WE HAVE DEBT REQUIREMENTS OF ABOUT $6 MILLION.

CAPITAL REQUIREMENTS OF $1.8 MILLION.

AND UNDESIGNATED REVENUE THAT IS REMAINING THAT I TALKED ABOUT JUST A COUPLE OF SECONDS AGO OF $5 MILLION.

I DIDN'T CATCH THE COLORS ON THAT ONE, BUT WHAT THAT IS SAYING, THIS IS SHOWING IF WE DROP TO THE NO NEW REVENUE RATES, WE WILL HAVE AN UNDESIGNATED.

THE SAME THING WE JUST TALKED ABOUT BUT UNDESIGNATED OF $2.4 MILLION. ANOTHER WAY TO SHOW WHAT I WAS TALKING ABOUT ON THE PREVIOUS SLIDE.

WITH THAT, I WILL GO INTO OUR REVENUE SOURCES.

OUR 2024 BUDGET PROJECTS REVENUES OF ABOUT $160 MILLION.

$14.8 MILLION OR 10.2% HIGHER THAN THE '23 BUDGET.

AND THESE ARE THE REASONS -- OR THESE ARE THE COMPONENTS OF THAT INCREASE. SALES AND USE TAX IS INCREASING FROM BUDGET YEAR TO BUDGET YEAR BY A WHOPPING $9.1 MILLION.

MOST OF THAT IS JUST FROM -- WHEN WE BUDGETED FOR SALES TAX FOR 2023, YOU HAVE TO REMEMBER THIS WAS IN AUGUST OF 2022, WE WERE COMING OUT OF COVID, BUT WE WERE -- EVERYBODY WAS TALKING ABOUT WE ARE GOING TO RUN HEADLONG INTO A MAJOR RECESSION IN THE FOURTH QUARTER OF 2022. SO WE WERE VERY CONSERVATIVE IN HOW WE BUDGETED FOR SALES TAX REVENUES.

THANKFULLY THAT DID NOT MATERIALIZE TO THE DEGREE THAT -- THAT THE ECONOMISTS WERE PREDICTING SO WE HAD A HUGE SURGE IN SALES TAX REVENUE, AND THAT HAS CONTINUED THROUGH MOST OF THIS YEAR. SO THAT IS WHY YOU SEE THE BIG

INCREASE. >>DR. ANN SNYDER: BUT CONSERVATIVE BUDGETING HAS BEEN -- THROUGHOUT THE HISTORY OF THE TOWNSHIP. AND THAT ALLOWS US NOW TO BE ABLE TO CONSIDER THE NO NEW REVENUE RATE BECAUSE OF PAST DECISIONS BEING AS CONSERVATIVE AND FISCALLY RESPONSIBLE.

>>MONIQUE SHARP: COULDN'T AGREE WITH YOU MORE.

I STRONGLY RECOMMEND IT. I AM CRITICIZED OF BEING TOO CONSERVATIVE AND I THREAD THE NEEDLE AND PREFER TO COME IN HERE AND SAY WE HAVE MORE REVENUE THAN BUDGETED THAN LESS REVENUE. WE FOLLOW THAT AS WE BUDGET.

THE NICE SURPRISE INCREASE IN INCOME OF 2.8 MILLION.

YOU REMEMBER BACK AGAIN WHEN WE BUDGETED IN AUGUST 2022, INTEREST RATES WAS 0.2%. THEY WERE TERRIBLE.

AND BAD NEWS IS, THE INFLATION. THE GOOD NEWS IS THE INTEREST RATES HAVE COME UP ON INVESTMENTS.

AND WE HAVE BENEFITED STRONGLY FROM THAT.

BASED ON THE VOTER APPROVAL RATE OF $\.1814, KERR CURRENT WILL HE GENERATING PROPERTY TAX OF $1.9 MILLION OVER THE PREVIOUS YEAR.

IF YOU GO TO THE NO NEW REVENUE RATE WHICH WILL DROP AT A PENNY AND REMEMBER WE SAID THAT A PENNY WAS ABOUT -- EQUIVALENT TO $2.6 MILLION. SO YOU WILL WIPE OUT THAT ENTIRE GAIN AND WILL ACTUALLY BE RINGING IN LESS PROPERTY TAX REVENUE THAN THE PREVIOUS YEAR. BUT THAT IS STILL OKAY.

AS WE ALSO TALKED ABOUT, WE HAVE OTHER REVENUE SOURCES THAT ARE MORE THAN MAKING UP FOR THAT. THE MIXED BEVERAGE TAX THIS YEAR. WE ALL KNOW THAT WAS A STRONG GOAL, PRIORITY, OF THIS BOARD OF DIRECTORS.

AND IT DID GET ACHIEVED WITH THIS PAST LEGISLATIVE SESSION.

THE TAX WILL START BEING COLLECTED -- ACTUALLY IT IS ALREADY BEING COLLECTED. LET ME MAKE THAT CLEAR.

JUST THE TOWNSHIP WILL BE ELIGIBLE ON OCTOBER 1 TO RECEIVE A PORTION OF THAT MIXED BEVERAGE TAX THAT IS CURRENTLY GOING TO THE STATE. WITH OUR LEGISLATION, WE WILL START RECEIVING IT. WE WILL RECEIVE OUR FIRST PAYMENT IN DECEMBER. AND WE ARE IN CONTACT WITH THE COMPTROLLER'S OFFICE TO HAVE THAT ALL SET UP, LOOKING AT THEIR VERY DETAILED RECORDS ON THE DIFFERENT ENTITIES THAT QUANTIFY. WE ARE PROJECTING $1,230,000 FOR 2024 AND EXPECT THAT TO GROW TO $1.5 MILLION THROUGHOUT THE

FIVE-YEAR PLAN. >> CAN WE MAKE OCTOBER 1 TOWNSHIP HAPPY HOUR DAY. TO SUPPORT YOUR LOCAL WATERING HOLE. WILL MAKE MONEY.

REVENUE. .

>>MONIQUE SHARP: THAT IS RIGHT. >>DR. SHELLEY SEKULA-GIBBS: WHAT

[00:35:01]

TOWNSHIP? >>MONIQUE SHARP: ABOUT 10%.

TWO DIFFERENT TAXES.88.25. AND BEVERAGE, DRAWING A BLANK, 7.6, NOT FOR THE CONSUMER BUT A PROVIDER OF ITS MIXED BEVERAGE.

THOSE TWO TAXES COMBINED, THE TOWNSHIP WILL GET 10.7% BACK

FROM THAT. >>DR. SHELLEY SEKULA-GIBBS:

THANK YOU. >>MONIQUE SHARP: HOTEL TAX WILL GROW $961,000. WE WILL TALK ABOUT THAT IN A MINUTE. OUR PROGRAM REVENUES IS OUR -- OR OUR TRANSPORTATION PROGRAMS AND OUR RECREATION PROGRAMS AND THOSE WE USE TO OFFSET THE COST FOR PROVIDING THOSE SERVICES.

OUR EVENTS ADMISSION TAX IS THE TAX THAT THE CYNTHIA WOODS ONLY QUALIFYING VENUE AND WE DO SEE AN INCREASE IN TAX REVENUE FROM THAT WHICH -- 90% OF THAT IS RETURNED TO THE PAVILION TO PROVIDE CULTURAL ARTS PROGRAMMING.

THE OTHER INCREASE REALLY -- THAT PRIMARILY RELATES TO FIRE DEPARTMENT CONTRACTS FOR PROVIDING SERVICES.

AND GRANT FUNDS IS DECREASING BY $2.9 MILLION BECAUSE WE HAVE HAD THE BENEFIT OVER THE PAST SEVERAL YEARS OF HAVING CARES ACT FUNDING TO PROVIDE FOR TRANSPORTATION PROGRAMS, AND THAT WILL ALL BE EXPIRED -- I THINK WE GET THROUGH A COUPLE OF MONTHS IN 2024 AND THAT WILL ALL BE GONE.

THAT IS YOUR SEEING THE DECREASE.

HERE IS A LOOK AT OUR REVENUE BUSINESS TYPE.

AGAIN TOTALING THAT $160 MILLION.

YOU CAN SEE THERE, OUR SALES AND USE TAX, 47%.

THAT IS OUR GREATEST SOURCE OF REVENUE.

FOLLOWED BY PROPERTY TAX AT 30%. I AM NOT GOING TO READ THROUGH ALL OF THESE, BUT YOU CAN SEE THE DIFFERENT COMPONENTS THERE.

HAND THIS IS WHAT IS IMPORTAT. IN VERY UNUSUAL IN TERMS OF LOCAL GOVERNMENT ENTITIES. WE HAVE OUR SALES TAX.

YOU CAN SEE IN THE FIRST -- OF THE FIRST COLUMN THERE FUNDS AT THE $\.1814. 40% OF OUR TOTAL REVENUE SOURCES AND THEN HOTEL TAX FUNDS ANOTHER 6%.

SO WE ARE OVER 50% OF OUR REVENUE SOURCE ARE BEING FUNDED BY THOSE TWO. PROPERTY TAXES ONLY AT 30%.

AND YOU CAN SEE THE NOTE DOWN THERE AT THE BOTTOM ACCORDING THE STATE COMPTROLLER, LOCAL GOVERNMENTS USUALLY RAISED 1 IN SALES TAX REVENUE IN EVERY $7 IN PROPERTY TAX REVENUE.

OBVIOUSLY WE HAVE COMPLETELY FLIPPED THAT ON ITS HEAD, AND THAT IS THE REASON THAT WE CAN EVEN SIT UP HERE AND TALK ABOUT A PROPERTY TAX RATE FOR THE LEVEL OF SERVICES AND AMENITIES WE PROVIDE AT SOMEWHERE BETWEEN $\.17 AND $\.18.

SO I WANT TO GO INTO OUR SALES TAX REVENUES.

HERE IS A LOOK BACK FROM 2019 THROUGH OUR -- WHAT WE ARE PROJECTING FOR 2024. YOU CAN SEE PRECOVID IS OUR 2019 LEVEL. AND IN 2024, WE ARE EXPECTED TO BE STILL AT 35.4% OVER WHERE WE WERE PRECOVID.

YOU CAN SEE THERE IN 2020, THE BIG DROP THAT WE HAD.

AND THEN AS WE CLIMBED OUT OF THAT DROP IN 2021, 2022, AND 2023. WE ARE -- LET ME GO TO -- NO, I WILL STAY WITH THIS ONE FOR A SECOND.

WE HAVE -- WE ARE PROJECTING A 3.5% GROWTH FACT FROM OUR 2023 FORECAST OF '24. AND I WILL TALK -- EXPLAIN TO YOU WHY I HAVE CHOSEN 3.5%. ONE OF THOSE REASONS, YOU CAN SEE HERE. THIS IS OUR SALES TAX DEPOSIT FOR AUGUST. SO OUR LATEST REPORT.

AND YOU CAN SEE OUT OF THE LAST THREE MONTHS, WE DID HAVE IN JULY, WE HAD A BIG INCREASE THERE AT 12.5, BUT WE HAVE SEEN FOR TWO OUT OF THE THREE MONTHS REMEMBER COME BACK TO EARTH, FULL, IN TERMS OF WHAT OUR SALES TAX REVENUE GROWTH IS.

SO THIS IS JUST SOMETHING FOR US TO LOOK AT THAT WE SHOULD NOT BE ABLE -- WE SHOULD PROBABLY NOT BE LOOKING AT A DOUBLE-DIGIT INCREASE IN SALES TAX GOING FORWARD.

THIS IS HISTORICAL LOOK AT OUR RATE OF GROWTH IN SALES TAX.

IN THE EARLIER YEARS OF THIS CHART IN 2013, THAT IS WHEN TOWN CENTER WAS HEAVILY UNDER CONSTRUCTION, HUGHES LAND SOMETHING IN SOME OF THIS TIME FRAME.

STILL BUILDING OUT STERLING RIDGE.

HEAVY SALES TAX GROWTH DURING THAT PERIOD.

2017, '18 AND '19, IF WE HAVE A NORMAL PERIOD OF GROWTH WHERE WE WERE NOT BEING IMPACT TODAY MUCH BY INFLATION OR OTHER ECONOMIC CONDITIONS OR HEAVY, HEAVY GROWTH AND BUILDOUT, THOSE WERE

[00:40:01]

IN 2020, THAT IS WHEN COVID HAPPENED.

THE NEXT YEAR, YOU CAN SEE, 2021, WE HAD THE HUGE CLIMB OUT OF COVID. AND THEN YOU CAN SEE OVER THE NEXT FEW YEARS, HOW WE HAVE STILL PHENOMENAL GROWTH.

I MEAN ANY COMMUNITY WILL BE HAPPY TO HAVE THIS TYPE OF SALES TAX GROWTH, BUT IT IS JUST A LOOK AT SAYING THAT WE ARE TRENDING BACK TO SOMETHING MORE NORMAL AS WE -- AS WE COME OUT OF THOSE UNIQUE CONDITIONS. THIS ALSO SHOWS HOW VOLATILE SALES TAX REVENUE CAN BE. THUS THE REASON TO BUDGET CONSERVATIVELY. THIS IS -- I WANTED TO REMIND EVERYBODY THAT OUR SALES TAX REVENUE COMES FROM MANY DIFFERENT SOURCES. BUT THE LARGEST, ALMOST 50% OF IT, COMES FROM RETAIL TRADE AT 48%.

AND THEN A COMBINATION OF FOOD SERVICES.

SO BASICALLY RESTAURANTS AT 12.5%.

THOSE ARE BY FAR OUR TWO LARGES CATEGORIES, BUT WE ARE WELL SUPPORTED BY THE OTHER CATEGORIES THAT ARE LISTED HERE.

THE REASON I AM SHOWING YOU THIS IS BECAUSE THIS IS ANOTHER REASON WHY I HAVE CHOSEN TO BUDGET AT A CONSERVATIVE 3.5% RATE. IF YOU LOOK AT OUR SALES TAX, OUR RETAIL SALES TAX GROWTHS, AGAIN, THIS IS POSITIVE GROWTH.

WE ARE VERY HAPPY TO HAVE THIS. THIS IS NOT A RED FLAG OF ANY SORT. I DON'T WANT ANYONE TO TAKE AWAY FROM THAT. BUT I DO WANT TO SHOW THAT IT HAS COME BACK DOWN TO SOMETHING MORE NORMAL.

THIS IS WHAT WE WOULD EXPECT TO SEE ON A LONG-TERM BASIS AS OPPOSED TO SOME OF THE 8%, 9%, 10% GROWTH WE HAVE HAD IN THE PAST BECAUSE OF UNIQUE CIRCUMSTANCES.

ALSO IN ACCOMMODATION AND FOOD SERVICES -- AGAIN, THESE NUMBERS ARE HIGHER THAN RETAIL, BUT REMEMBER THIS IS OUR SECOND HIGHEST CATEGORY OF SALES TAX. EVEN THOUGH THESE ARE WONDERFUL NUMBERS, WE ARE SEEING THE TREND A LITTLE -- I WOULDN'T CALL IT A TREND. ONLY SEVERAL MONTHS.

BUT WE ARE SEEING, AGAIN, THAT IT IS COMING TO SOMETHING MORE NORMAL AND IF WE WERE TO LOOK AT THE DETAILED ANALYSIS WHICH I DON'T KNOW IF PATTY IS IN THE AUDIENCE.

I DON'T THINK SHE IS. SHE IS PHENOMENAL.

SHE TAKES EVERY SINGLE ONE OF OUR SALES TAX VENDORS AND ANALYZES EVERY SINGLE MONTH THE HIGHS AND THE LOWS AND GIVES US A GOOD FEEL WHERE WE NEED TO BE. WHILE WE ARE SEEING RETAIL AND HOTEL -- AND RESTAURANTS COME DOWN A LITTLE BIT, WE ARE BEING SUPPORTED IN OTHER SALES TAX GROWTH AREAS AND YOU CAN SEE SOME OF THOSE HERE. TRANSPORTATION IS UP VERY HIGH.

THE TRANSPORTATION OF NATURAL GAS THROUGH PIPELINE IS WHAT IS CAUSING THIS. SO WE HAD A COMPANY COME ON THAT GIVEN US A BOOST THIS YEAR. THAT COMPANY HAS FILED SOLUTION PAPERS. SO THIS WILL NOT BE -- THIS WILL NOT CONTINUE. WE ARE JUST MAY HAVE GONE A NICE LITTLE BOOST THIS YEAR AND NOT SOMETHING WE SHOULD EXPECT TO

COME -- CARRY FORWARD. >> THIS PIPELINE TRANSPORT GUYS UNDERNEATH THE TOWNSHIP? THIS IS NOT GOING TO CONTINUE?

>>MONIQUE SHARP: THIS PARTICULAR COMPANY THAT IS DRIVING -- TRANSPORTATION IS USUALLY 1% OF OUR SALES TAX REVENUE SOURCES.

SO IT IS NOT A HIGH -- WE ARE SEEING VERY HIGH THIS YEAR BECAUSE OF ONE COMPANY BASICALLY.

IT IS MORE THAN THAT, BUT PRIMARILY THAT COMPANY HAS FILED DISSOLUTION PAPERS. SO WE CAN NOT COUNT ON THIS

GOING FORWARD. >> WHAT ARE THOSE REVENUES FOR,

BONUS OR -- >>MONIQUE SHARP: SALES TAX REVENUES. QUALIFY FOR SALES TAX.

>> WHAT COMPANY IS IT? >>MONIQUE SHARP: IT IS CONFIDENTIAL. WE CAN TALK TO YOU PRIVATELY BUT

I CAN'T DISCLOSE IN HERE. >> CONSTRUCTION FEE REVENUE.

CAN YOU TALK TO US -- SALES TAX ON CONSTRUCTION, WHERE IS THAT

COMING FROM? >>MONIQUE SHARP: BASICALLY BY NEW DEVELOPMENT BY HOWARD HUGHES CORPORATION.

PRIMARILY WHERE CONSTRUCTION ARE COMING.

OTHER COMPANIES ARE RENOVATING AND WE ARE SEEING THAT.

THAT IS PRIMARILY -- AGAIN, THAT IS VERY VOLATILE.

WE HAVE SEEN VERY HIGH YEARS OF CONSTRUCTION SALES TAX REVENUE.

AND THEN -- AS BUILD-OUT OCCURS, THAT WILL EBB AND FLOW AND I DON'T WANT TO GET TOO MUCH IN DETAIL.

DEPENDS ON HOW CONSTRUCTION CONTRACTS ARE STRUCTURED ON WHETHER THE TOWNSHIP GETS THE REVENUE -- THE SALES TAX REVENUE OR THE ENTITY WHERE THE SUPPLIES ARE BEING SOURCED FROM GET THE

REVENUE. >> TAX ON MATERIALS, IS THAT --

>>MONIQUE SHARP: YES. >> IF SOMEONE IS REMODELING A CORPORATE OFFICE OR SOMETHING LIKE THAT, WE WOULD GET THAT?

>>MONIQUE SHARP: TYPICALLY WE WOULD, YES.

IF THERE ARE ANY MORE QUESTIONS ON SALES TAX.

THEN I WILL MOVE ON TO HOTEL. OKAY.

OUR HOTEL TAX HAS CLIMBED IMMENSELY OUT OF OUR 2020 YEAR

[00:45:02]

THE REST OF IT, ABOUT 33%, ABOUT A THIRD OF IT, GOES TO WHAT WE CALL "A HOTEL TAX RESERVE." THESE ARE UNALLOCATED FUNDS THAT THE POINT. AND WE WILL TALK MORE ABOUT THE IMPORTANCE OF HAVING THE FLEXIBILITY THAT THIS PROVIDES IN TERMS OF BEING ABLE TO USE THIS MONEY TO FUND POTENTIAL ECONOMIC DEVELOPMENT PROJECTS. I MENTIONED A MINUTE AGO, THAT WE HAVE SEEN A REALLY NICE BUMP IN OUR INTEREST INCOME.

YOU CAN SEE THE HISTORIC HERE OF WHERE WE HAVE BEEN.

THE REASON WE ARE GOING DOWN FROM '23 TO '24 BECAUSE WE ARE -- WE WILL SEE THIS LATER BUT A LOT OF OUR MONEY THAT IS IN RESERVE RIGHT NOW FOR -- FOR FIRE STATION, FOR INSTANCE, THE $13 MILLION FOR FIRE STATION 5 IN THE EMERGENCY TRAINING CENTER, MONIES WE HAVE SET ASIDE FOR PARKS NEEDS ASSESSMENT.

MONIES WE HAVE IN THE CAPITAL RESERVE, WE ARE PLANNING ON SPENDING THOSE DOWN OVER THE NEXT YEAR AS WE WILL SEE IN A MINUTE AND WE WILL NOT BE EARNING INTEREST ON AS HIGH OF A BALANCE AS WE HAVE RIGHT NOW. MIXED BEVERAGE TAX REVENUE THAT WE TALKED ABOUT, AGAIN, GENERATING $1.2 MILLION FOR 2024. WITH THAT I WILL MOVE INTO PROPERTY TAX UNLESS THERE ARE OTHER QUESTIONS ON REVENUE SOURCE. NO? OKAY. THE BOARD HAS ALREADY IMPLEMENTED FOR THIS YEAR -- AND IT IS ALREADY IMPACTING THE NUMBERS YOU ARE SEEING HERE, AN INCREASE IN THE AGE 65 AND OLDER OR DISABLED PERSON EXEMPTION FROM $40,000 TO $50,000.

YOU RECALL AT THE END OF JUNE, THE BOARD MADE THAT DECISION.

THIS LOWERED OUR TAXABLE VALUE BY $442 MILLION AND RESULTED IN A $803,000 REDUCTION IN THE TOWNSHIP TAXABLE REVENUE OR ANOTHER WAY TO LOOK AT THAT A $803,000 SAVINGS -- TAX SAVINGS FOR THE PEOPLE IMPACTED. THE BOARD IMPLEMENTED A 3% HOMESTEAD EXEMPTION LOWERED OUR TAXABLE VALUE BY $459 MILLION AND RESULTED IN $832,000 REDUCTION DUNKS IN TAXABLE REVENUE FOR THIS YEAR. HERE IS A LOOK AT OUR TAXABLE PROPERTY VALUES. YOU CAN SEE IN 2024, THEY WERE ESTIMATED TO BE $26.4 MILLION. THAT IS AN INCREASE OF 6% FROM THE PREVIOUS YEAR AND DOWN THERE IN THE BOTTOM RIGHT-HAND CORNER, YOU CAN SEE MOST OF THAT INCREASE CAME FROM AN INCREASE OF REVALUATION. REVALUATION MEANS HOMES REVALUED. IF YOUR HOME WAS $400,000 LAST YEAR AND INCREASED TO $40,000, THAT IS CAPTURED IN THAT REVALUATION NUMBER. AS WE ALL KNOW, NEW PROPERTY ADDED TO THE ROLLS IS -- IS IN TERMS OF RESIDENTIAL, WE ARE ALMOST COMPLETELY BUILT OUT. IN COMMERCIAL STILL IT HAVE SOME TO GO, IN TERMS OF COMMERCIAL GROWTH OF THE ENTIRE $26 BILLION ASSETS, PROPERTY VALUES AND RESULTS IN A SMALL PERCENTAGE INCREASE OF ABOUT 0.4%. HERE IS A LOOK AT OUR PROPERTY TAX RATE. HISTORICALLY, WE HAVE DECREASED IT 57% FROM THE INCEPTION OF THE TWNSHIP.

THE PREVIOUS BOARDS AS THEY HAVE GONE THROUGH THIS SAME PROCESS LOOKED HARD AT THE TAX RATE AND TAKEN INTO ACCOUNT NOSE OTHER REVENUE SOURCES SUCH AS SALES TAX, THAT WE JUST TALKED ABOUT, IN ORDER TO EFFECTIVELY MANAGE THE TAX BURDEN FOR OUR PROPERTY OWNERS. YOU CAN SEE IT EVEN MORE HERE WHEN WE LOOK AT THE NO NEW REVENUE RATE COMPARED TO THE ADOPTED RATE. SO A NO NEW REVENUE RATE PRODUCES THE SAME AMOUNT OF REVENUE IN BOTH YEARS MEANING THAT THE PROPERTY OWNERS ARE NOT EXPERIENCING THE INCREASE IN THE AMOUNT THEY HAVE TO PAY. AND FOR EVERY YEAR, OTHER THAN IN 2017 AND 2022, WE HAVE BEEN AT OR LOWER THAN THE NO NEW REVENUE RATE. 2017 AND '22, IF YOU RECALL BACK, YEARS WHERE WE WERE HAVING ECONOMIC CHALLENGES, AND SO THE BOARD DURING THOSE YEARS CHOSE TO KEEP THE RATE AT THE SAME LEVEL THAT THEY WERE. HERE IS A LOOK BACK AT OUR

[00:50:01]

AGAIN, YOU ARE SEEING THAT INCREASE FROM 2023-'24 BASED ON A RATE OF $\.1814. IF THE BOARD CHOOSES TO LOWER THAT TAX RATE TO THE NO NEW REVENUE RATE, THAT ENTIRE INCREASE WILL BE -- WILL BE EVAPORATED.

OKAY, I AM GOING TO STOP FOR A SECOND AND TAKE A DRINK AND -- [LAUGHTER]-- AND SEE IF YOU HAVE ANY QUESTIONS ON REVENUES BEFORE WE MOVE FORWARD.

. >>DR. SHELLEY SEKULA-GIBBS: WOULD YOU REPEAT -- WHEN YOU CATCH YOUR BREATH THERE -- WHAT YOU SAID IF WE LOWER THE BUDGET TO THE NO NEW REVENUE RIGHT WHICH A PENNY LESS THAN WHAT WAS WRITTEN ON PAGE 41.

INCREASED FROM $46 MILLION TO $48 MILLION WILL EVAPORATE.

IS THAT WHAT YOU ARE SAYING? WOULD YOU REPEAT THAT.

>>MONIQUE SHARP: A PENNY WORTH $276 MILLION.

THE PENNY OF TAX RATE EQUATES TO $276 MILLION.

IF THE BOARD WOULD LOWER TO A PENNY, SUBTRACT $2.6 MILLION FROM THAT $48 MILLION AND THEREFORE BE BELOW THE 2023

NUMBER. >>DR. SHELLEY SEKULA-GIBBS:

OKAY, THANK YOU. >>MONIQUE SHARP: YOU ARE WELCOME. .

>>DR. ANN SNYDER: DO YOU NEED TO TAKE A BREAK?

>>MONIQUE SHARP: JUST NEED A DRINK OF WATER.

>>DR. ANN SNYDER: YOU ARE DOING VERY WELL.

>>MONIQUE SHARP: I WAS EXPECTING MORE QUESTIONS.

TALKING FAST. >> ON THE PROPERTY TAX RATE GRAPH YOU SHOW THERE. IN 2022 AND 2023.

GO BACK ONE MORE. THAT LARGE DROP, WHAT IS THE

REASON FOR THAT LARGE DROP? >>MONIQUE SHARP: WE HAD -- THAT WAS THE YEAR FOR THE HUGE INCREASE IN REVALUATION.

IF YOU GO BACK THERE, YOU SEE THE 13.8% INCREASE IN REVALUATION. AND SO THAT IS THE BOARD BIG INCREASE IN SALES TAX REVENUE. TO ACCOUNT FOR THAT BIG INCREASE IN THE REVALUATION AND HAVING OTHER RESOURCE AVAILABLE, THE BOARD CHOSE TO LOWER THE RATE TO BELOW THE NO NEW REVENUE RATE.

>>DR. ANN SNYDER: BUT COULD IT BE SAID THE BIG DROP WAS BECAUSE WE DID NOT INCORPORATE, AND SOME OF THE EXPENSES THAT WE POSSIBLY WOULD HAVE INCURRED AS A CITY WERE NOT NEEDED.

THAT IS WHEN WE ALSO DID THE -- THE 19.6 TO PARKS AND RECREATION

AND THE FIRE STATION >>DR. SHELLEY SEKULA-GIBBS: I DON'T THINK SO. THAT WAS CAPITAL.

THAT WAS CAPITAL AND NOT ONGOING INCOME, CHAIRMAN.

>>MONIQUE SHARP: THE DECREASE IN '23 IS NOT RELATED TO INCORPORATION. HAD WE INCORPORATED WE WOULD BE LOOKING AT A WHOLE DIFFERENT NUMBER.

IF I RAN THOSE NUMBERS, SO MANY THINGS THAT CHANGED.

THE REAL CHANGE OF INCORPORATION WHEN THE VOTE IN 2021 WOULD HAVE HAPPENED BETWEEN '21 AND '22. THE '23 NUMBER WAS DRIVEN DOWN BY THE HUGE INCREASE IN REVALUATION.

I AGREE WITH YOU, HAD WE INCORPORATED WOULD MAY NOT HAVE BEEN ABLE TO GET TO 18.5. I CAN'T DEFINITIVELY ABLE TO ANSWER THAT. THERE ARE SO MANY FACTORS.

>>DR. ANN SNYDER: THANK YOU. >>MONIQUE SHARP: OKAY.

I WILL MOVE ON IT TO EXPENDITURES.

IN TERMS OF OUR CONSOLIDATED EXPENDITURES, WE HAVE -- WE ARE PROJECTING A BUDGET OF $173.8 MILLION.

THAT IS A $3.9 MILLION INCREASE FROM -- OR 2.3% INCREASE FROM THE PREVIOUS BUDGET, BUT IT IS IMPORTANT TO LOOK AT WHAT THE DIFFERENT COMPONENTS ARE THERE. WE ARE SEEING A $4 MILLION DECREASE IN CAPITAL EXPENDITURES.

AND A $2.8 MILLION DECREASE IN TRANSPORTATION EXPENDITURES.

WE WILL GO OVER NOSE WHEN WE GET TO THOSE FUNDS, BUT THE BIG ONE IS DOWN AT THE BOTTOM IN TERMS OF OPERATING EXPENDITURES.

WE ARE LOOKING AT A $10 MILLION OR 8.9 INCREASE IN OPERATES EXPENDITURES HAND THIS IS WHAT WE ARE GOING TO TAKE A LOOK AT, WHAT IS DRIVING THOSE COSTS. I WANTED TO GO BACK TO OUR PREVIOUS SURVEY. IT IS ALWAYS -- WHEN WE -- WHEN STAFF IS LOOKING AND THE PREVIOUS BOARDS WERE LOOKING AT OUR OPERATING EXPENDITURES, IT ALWAYS IS IMPORTANT TO FOCUS ON WHAT OUR RESIDENTS ARE LOOKING AT, WHAT ARE THE DESIRES OF OUR RESIDENTS. SO THIS IS THE RESULT FROM THE LAST COMMUNITY SURVEY. WE WANT TO MAKE SURE WE ARE FOCUSING OUR RESOURCES ON THE AREA THAT ARE MOST IMPORTANT TO OUR TAXPAYERS. SO YOU CAN SEE HERE THAT HOW WOULD YOU RATE THE FOLLOWING IN TERMS OF IMPORTANCE? AND WE HAVE -- WE HAVE 94% OR HIGHER RATED THE FOLLOWING

[00:55:02]

GARBAGE COLLECTION. SUSTAINING OUR TREES AND OUR NATURAL ENVIRONMENT. AND OUR PARKS AND RECREATION

FACILITIES. >> WHEN WAS THIS TAKEN?

. >>MONIQUE SHARP: THIS WAS -- WE HAD THE RESULTS ON THIS ONE IN THE BEGINNING OF 2022.

>>DR. SHELLEY SEKULA-GIBBS: IS THIS IN THE ORDER -- THEY CAME

IN THIS ORDER OR JUST THE TOP? >>MONIQUE SHARP: THEY ARE NOT NECESSARILY IN ORDER BUT THEY WERE ALL WITHIN THAT 94% OR HIGHER. I CAN GET YOU THOSE DETAILS.

I DON'T HAVE THEM WITH ME. AND THEN WE ALSO WANT TO ALWAYS TRACK ON HOW OUR RESIDENTS RATE OUR -- THE SATISFACTION WITH OUR DIFFERENT SERVICES. SO YOU CAN SEE IN EACH OF THESE CATEGORIES, WE HAD A 96% OR HIGHER SATISFACTION RATE.

AGAIN, OUR EMERGENCY MEDICAL SERVICES, OUR GARBAGE COLLECTION, PARKS AND RECREATION, OUR SWIMMING.

SO THOSE TYPE OF THINGS. AGAIN, JUST A GOOD LOOK IN TERMS. A GOOD REMINDER OF HOW WE WANT TO ALLOCATE OUR RESOURCES. AND I THINK THIS IS IMPORTANT TOO. IN ADDITION TO PROVIDING THE SERVICES, WE WANT OUR RESIDENTS TO FEEL LIKE THEY ARE GETTING A GOOD VALUE. FOR THEIR MONEY AND WHAT WE SEE HERE IS THAT A LARGE PERCENTAGE OF OUR -- OF OUR 95% OR HIGHER RATED OUR VALUE FOR THE MONEY AT 95% OR HIGHER.

SO THAT IS GREAT. I THINK WE CAN SEE THE IMPROVEMENT THERE FROM THE LAST SURVEY TO THE -- FROM THE PREVIOUS SURVEY TO THE LAST SURVEY.

AGAIN, SOMETHING IMPORTANT TO REM REMEMBER AGAIN AT A $\.18 RATE FOR WHAT WE PROVIDE, THAT IS EXCELLENT AND YOU SEE IT REFLECTED HERE FROM THE RESULTS FROM THE SURVEY. OKAY, HERE IS A LOOK AT EXPENDITURES BY DEPARTMENT. THIS IS -- THIS IS NOT REALLY CHANGED IN YEARS. THIS IS WHAT I THINK YOU WOULD ALL EXPECT. OUR FIRE DEPARTMENT, OUR CAPITAL -- OUR CAPITAL IS HIGHER THAN NORMAL RIGHT NOW BECAUSE WE HAVE $13 MILLION INCLUDED IN THERE FOR FIRE WHICH WE DON'T ALWAYS HAVE. AND THEN WE ALSO HAVE ALL THE NEEDS ASSESSMENT PROJECTS. WE ARE AT A HIGHER CAPITAL LEVEL THAN WE TYPICALLY ARE. PARKS AND RECREATION, COMMUNITY SERVICES IS OUR STREETSCAPE MAINTENANCE, OUR SOLID WASTE REMOVAL, AND OUR COVET A ADMINISTRATION MAKES UP -- PRIMARILY MAKE UP THAT CATEGORY. I AM NOT GOING TO READ TO YOU HERE, BUT A GOOD LOOK AT HOW ALL OUR RESOURCES ARE ALLOCATED.

NOW WANT TO LOOK FOR THE 2024 BUDGET, WE ARE SEEING, WHY OVERALL, IN INCREASE IN THE BUDGET AS I TALKED ABOUT, A $3.9 MILLION OR 2.3%. THIS IS WHERE YOU ARE SEEING -- THESE ARE THE AREAS THAT YOU ARE SEEING THE INCREASES TAKE PLACE.

SO, AGAIN, OUR COMMUNITY SERVICES.

AND WE WILL GO THROUGH THIS IN A LITTLE MORE DETAIL AND I AM NOT GOING TO SPENDS A BUNCH OF TIME ON THIS SLIDE.

STILL WE CAN TALK ABOUT IT MORE LATER.

BUT, AGAIN, COMMUNITY SERVICES, PARKS AND RECREATION, FIRE DEPARTMENT, LAW ENFORCEMENT. ARE SOME OF OUR LARGER -- WHERE WE ARE SEEING SOME OF OUR LARGER INCREASES.

THE CAPITAL PROJECTS DOWN BELOW WHERE WE ARE SEEING OUR LARGEST DECREASE. DOESN'T MEAN -- I GET THIS QUESTION A LOT. DOESN'T MEAN THAT THE BOARD OR STAFF IS PROPOSING THAT WE ARE PULLING BACK ON THE LEVEL OF AMENITIES THAT WE ARE PROVIDING, JUST THAT CAPITAL CAN BOUNCE AROUND A LOT DEPENDING ON WHAT THE NEEDS ARE FOR A PARTICULAR YEAR. SO LET'S LOOK AT WHERE -- THIS SLIDE GOT REALLY MESSED UP FROM WHEN I LOOKED AT IT LAST NIGHT AND WE WILL MAKE THE BEST OF IT. OUR COMMUNITY SERVICES BUDGETED AT $3.1 MILLION. A $2 MILLION OR 9.7% INCREASE OVER THE '23 BUDGET. IGNORE ALL THE STUFF AT THE TOP THAT ARE ACTUALLY DECREASE THERE IS.

THE MAJORITY OF IT IS COMING IN OUR SOUTHWEST CONTRACT, WHICH IS CURRENTLY INCLUDED IN THE BUDGET AT A 3.5% INCREASE WHICH IS THE CONTRACTUAL INCREASE. SO WE ARE SEEING THERE OUR STREETSCAPE IS GROWING BY ABOUT $728,000.

AND THEN WE HAVE STAFF COSTS THAT ARE INCREASING BY ABOUT $855. A WHOLE SECTION ON PERSONNEL AND STAFF COST. WE WILL SKIP OVER THAT AND TALK ABOUT IT GLOBALLY IN JUST A MINUTE.

>> MONIQUE, IF YOU DON'T MIND. STREETSCAPE.

WE TEXTED OVER THE WEEKENDS. INCLUDING THE REFORESTATION EFFORTS. I KNOW LOST A TREMENDOUS AMOUNT OF TREE DUES TO THE DROUGHT AND THE LATE JUNE STORM.

CAN YOU GO INTO THAT A LITTLE BIT OR ANOTHER SECTION YOU WILL

GO INTO. >>MONIQUE SHARP: AT PERFECT PLACE TOO GO INTO IT. WE DID, BUDGETED IF ALMOST A

[01:00:01]

OUR TYPICAL REPLACEMENT OF TREES CAN BE ANYWHERE FROM 1500 TO 2,000 A YEAR. AND WE HAVE BUDGETED -- WE HAVE DOUBLED THAT FOR 4,000 TREES NEXT YEAR, RECOGNIZING THE IMPACT THAT THE STORM AND THE DROUGHT ARE LIKELY TO HAVE.

>>DR. SHELLEY SEKULA-GIBBS: IS THIS INCLUDED THE REFOREST RATION OF SOUTH OF THE CREEKSIDE OR LAST YEAR'S BUDGET?

>>MONIQUE SHARP: THAT IS THIS YEAR'S BUDGET.

WE ALREADY INCLUDED -- WE HEARD THE COMMENTS THAT SOME TREE ARE DYING AND WE EXPECTED THAT. WE ARE IN DIFFICULT SITUATION RIGHT NOW. BUT THAT IS INCLUDED IN THIS

BUDGET AS WELL. >> I DON'T KNOW WHEN WITH WE GO INTO IT. FIRST-YEAR BUDGET, BUT THE NUMBER ONE COMPLAINT I GET FROM RESIDENTS I TALK TO ARE TREES COMING DOWN. AND, A LOT OF IT NOT ANYONE'S FAULT, DISEASE AND THINGS LIKE THAT HAVE HAPPENED OR MASSIVE STORM, BUT YOU LOOK AT THE AMOUNT OF DEBRIS THAT THE TOWNSHIP STAFF HAS COLLECTED AND YOU LOOK AT HOW MUCH THE DEBRIS THAT MONTGOMERY WOODLANDS COUNTY -- MONTGOMERY COUNTY ALSO -- THE COMMISSIONER DID A GREAT SLIDE OF AN AERIAL OF HOW MANY CUBIC FEET OF DEBRIS THAT THEY PICKED IS UP JUST ASTOUNDING.

THOSE ARE TREES THAT ARE GONE. I DON'T KNOW -- WHEN WE DIAL INTO THAT SECTION OR WHEN THAT IS, BUT HOW WE CAN LOOK AT MAYBE INCREASING THAT OR THINKING OUTSIDE THE BOX ON REFOREST RATION EFFORTS, BECAUSE WHAT MAKES US WHAT WE ARE IS LIVING IN A LIVABLE FOREST. BUT THINGS HAPPEN.

AND WE NEED TO MAKE SURE THAT WE RO KIND OF REPLANTING AS MUCH AS POSSIBLE. .

>>DR. ANN SNYDER: I WANT TO REITERATE THAT I AGREE WITH YOU 100%. ONE OF THE BIGGEST CALLS THAT I GET IS WHAT IS GOING ON.AND WHY ARE WE NOT REPLANTING TREES, PARTICULARLY ALONG THE STREETS WHERE PEOPLE SEE IT THE MOST ALONG THE STREETS. SO DO WE ANTICIPATE NEEDING MORE FOR THE FUTURE, I GUESS THAT IS REALLY THE QUESTION.

DO WE NEED TO -- TO INCREASE THAT? ESPECIALLY WITH THE DROUGHT WE ARE IN.

YOU ARE PROBABLY LOOKING AT EVEN MORE TREE LOSS IN THE NEXT FIVE MONTHS. WHAT DO YOU -- WHAT DOES DR.

NUNES THINK OF THAT. >>MONIQUE SHARP: JOHN OR CHRIS, EITHER ONE OF YOU WANT TO TAKE I

IT. >> WELCOME BACK.

>> WHERE DO I START. THE WOODLANDS TOWNSHIP EVER SINCE 2012, THE DROUGHT OF 2012, HAS IN PAST INTROORDZ BEEN VERY, VERY INSTRUMENTAL IN PROVIDING FUNDING IN THAT RANGE OF ABOUT 3,000 TREES PER YEAR. DURING THE EARLY YEARS, 2012, '14 AND '15, MANY OF THOSE TREES WERE ACTUALLY TO REANSWER A LOT OF THE CUL-DE-SAC TO TREAT THOSE CUL-DE-SACS AS BUFFERED FOREST AND ISLANDS. IN ADDITION, MOST TREE GOES ALONG THE STREET RIGHT-OF-WAY IN THE FOREST PER RESERVES THE WOODLANDS TOWNSHIP OWNS. NOT NECESSARILY IN THE RIGHT-OF-WAY, BUT JUST TO THE ACTUAL PROPERTY, THE THE

WOODLANDS TOWNSHIP OWNS. >>DR. SHELLEY SEKULA-GIBBS: WHAT

ABOUT THE ESPLANADE, DOCTOR. >> SPECIFICALLY THOSE TREES WERE PLANTED IN STERLING RIDGE, CREEKSIDE PARK AND SO ON TO GET THOSE AREAS JUMP STARTED. ESPLANADE.

WHERE ARE YOU REFERENCING? >>DR. SHELLEY SEKULA-GIBBS: IN GENERAL THE ESPLANADE SEEMS TO BE THINNING.

>> THE LAKE WOODLANDS MEDIAN, NOT THE ESPLANADE, BUT SHADOW BEND MARSH AREA, SOMETHING WE WILL HAVE TO GET INTO MORE THAN ANYTHING ELSE PAUSE NOW THAT YOU HAVE SEEN THAT PROGRAM THROUGH CREEKSIDE RIDGE AND PARK THAT IS GETTING ESTABLISHED.

TO THE WEST THAT NEEDS TO BE DONE AND AREAS YOU ARE MENTIONING WILL PROBABLY BE THE PLAN OF ATTACK FOR 2024 AND BEYOND BECAUSE WE HAVE SEEN SOME -- ESPECIALLY THOSE LARGER PINES ON LAKE WOODLANDS GET HIT THROUGH THE DROUGHT, LIGHTNING OR WHATEVER. DROUGHT TREES, A SIX TO EIGHT-MONTH LAG TIME. WE WILL NOT KNOW WITH THE EXCEPTION OF PINES THAT WE ARE SEEING TURN RIGHT NOW, WE WILL NOT KNOW ON THE HARD WOODS. WE WERE VERY, VERY SHOCKED THAT THE AMOUNT OF HARD WOODS THAT CAME OUT OF THE DROUGHT AND FROST OF LAST YEAR THAT IT WAS NOT AS BAD AS WE WERE THINKING IT MIGHT BE. BUT, AGAIN, WE KEPT TALKING IN OUR MEETINGS APRIL, MAY, ARE ALL THE OAKS OUT? YES, YES, AND NOT LOOKING AS BAD AS THEY WERE.

NEXT YEAR WE WILL MAKE THAT ASSESSMENT AND WE ARE BEHIND IT.

4,000 TREES THAT MONIQUE IDENTIFIED ARE A LOT OF TREEANCE

[01:05:02]

60-GALLON TREES. AND A LOT OF LABOR.

A LOT OF FOLLOW-UP. THE WATERING SCHEDULE FOR THESE -- OFTENTIMES THEY ARE IN REMOTE AREA THAT DO NOT HAVE WATERING.

HAND WATERED FIVE TO SIX TIMES IF NOT MORE IF WE TRIGGER A DROUGHT. CAN MORE BE DONE? YES, A CERTAIN AMOUNT OF ABILITY TO MANAGE THAT MANY TREE IN THAT AR AREA.

>> QUICK QUESTION. I THINK YOU WILL BE THE ONE TO ASK THIS. YOU KNOW, YOU GOT, YOU KNOW, JUST GENERAL WEATHER CONDITIONS. YOU GOT STORMS. YOU HAVE DROUGHTS, YOU HAVE FREEZES, YOU HAVE ALL THOSE THINGS. IS THERE ANY WAY THAT WE COULD -- I DON'T THINK IT SHOULD ALL FALL ON THE TOWNSHIP ALSO.

NOT THE TOWNSHIP'S JOB TO REFOREST THE ENTIRE WOODLANDS.

A LOT OF THINGS THAT HAPPEN HERE THAT AREN'T OUR FAULT OR ANYTHING. CAN WE EXPLORE A WAY OF LAUNCHING KINDS OF A REFORESTATION EFFORT.

WE HAVE SUCH A PHILANTHROPIC COMMUNITY HERE.

WE HAVE A LOT OF CORPORATIONS THAT FOCUS ON ESG THAT LIVE HERE. NOTHING IS MORE ENVIRONMENTALLY CONSCIOUS THAN PLANTING TREES -- THAT WE CAN CALL ON.

AND SOMEHOW FILL OUT -- I KNOW THIS IS NOT MAYBE FOR THE DISCUSSION TODAY, BUT OUTSIDE-THE-BOX THINKING, A NONPROFIT SO TO SPEAK FOR PEOPLE TO CONTRIBUTE TO, TO SPONSOR ESPLANADES. TO PUT REFOREST RATION IN.

OBVIOUSLY THE TOWNSHIP COULD HELP TARGET THE AREAS, BUT I THINK LOOKING AT NEW WAYS WE CAN DO THAT SO IT DOESN'T ALL FALL ON THE TAXPAYER TO DO THAT AND WE HAVE SUCH A PHILANTHROPIC COMMUNITY WITH THINGS THAT WILL RESONATE.

>> TWO THINGS, ONE, THE RESIDENTS ARE ACTIVE IN THE REFOREST RATION EFFORTS. MEGAN'S TEAM AND ENVIRONMENTAL SERVICES HAVE TAKEN THE LEAD IN ARBOR DAY AND OTHER EDUCATIONAL PROGRAMS. ARBOR DAY GIVES OUT THOUSANDS AND THOUSANDS OF SEEDLINGS AND RUNNING FOR 40 YEARS.

AND NOT ONLY TO TAKE THOSE SEEDLINGS AND FIVE-GALLON TREE AND PLANT THEM IN THEIR YARDS, BUT ONE OF THE THINGS WE ASK THEM -- INTO THEIR CUL-DE-SAC AND INTO THE NEXT -- INTO THE RESERVES NECK TO THEIR HOMES. WE ENCOURAGE THEM TO PLANT.

BECAUSE PROBABLY MORE RESPONSIBLE FOR THEM.

WATERING THEM MORE THAN WE CAN DO ON SEEDLINGS.

SO THAT IS AN ACTION THAT RESIDENTS HAVE TAKEN.

AND MANY SUCCESSFUL STORIES ACROSS THE TOWNSHIP WHERE PEOPLE HAVE PLANTED FIVE, TEN, 15, 20 TREES AND NOW LIVING HERE FOR TEN, 15 YEARS AND GROWING INTO REALLY A SUBSTANTIAL SERVICES.

YOU ARE -- YOUR ASPECT OF AN ADOPT A MEDIAN PROGRAM OR SOME FIND OF FOUNDATION, WE CAN LOOK WHAT THAT WOULD ENTAIL.

>>BRAD BAILEY: I AM TALKING A 60-GALLON VARIETAL.

MEGAN AND HER TEAM DOES GREAT, GREAT JOB, BUT FWOOS FOR REFORESTATION EFFORTS. I WOULD LIKE TO THINK OUTSIDE

THE BOX ON HOW TO DO THAT. >> SURE.

>>MONIQUE SHARP: HERE IS A LOOK AT OUR PARKS AND RECREATION DEPARTMENT AND HOW THE EXPENSES ARE GROWING IN THAT AREA.

WE HAVE A 2024 BUDGET OF $27.8 MILLION.

ABOUT $1.9 MILLION HIGHER THAN THE 2023 BUDGET.

THE COMPONENTS OF THAT ARE SHOWN BELOW.

WE HAVE SPECIAL EVENTS INCREASING.

AND THAT IS PRIMARILY RELATED TO OUR 50TH ANNIVERSARY EVENT.

SO IT WILL BE -- WE WILL SEE THAT THIS YEAR AND THEN WE WILL SEE THAT I DID CREASE IN FUTURE YEARS, BUT, AGAIN, VERY EXCITING EVERNT AS WE APPROACH OUR 50TH ANNIVERSARY.

I KNOW WE HAVE BEEN WORKING HARD ON THAT AND WILL BE SHARING SOME DETAILS ON THAT COMING UP VERY SOON.

THE AQUATICS IS GROWING BY $259,000.

REMEMBER, WE HAVE A GOAL OF OFFSETTING THOSE EXPENSES WITH 50% OF REVENUE. AND WE HAVE ACHIEVED THAT THIS YEAR. RECOGNIZES RATION BY $363,000.

WE ARE SEEING HUGE INCREASES OF DEMANDS FOR A VARIETY OF OUR PROGRAMS, BUT 100% OF THAT COST -- ACTUALLY MORE THAN 100% IS OFFSET BY REVENUES. WE ARE, AS YOU ALL KNOW, IN JULY OF THIS YEAR, WE ACCEPTED OWNERSHIP.

OWNERSHIP OF THE WATERWAY WHICH TRANSFERRED FROM HOWARD HUGHES CORPORATION TO THE TOWNSHIP. WE ARE ACCOUNTING FOR THOSE EXPENSES. WE HAVE TAKEN ON HALF YEAR OF EXPENSE THIS YEAR, BUT YOU ARE SEEING THE INCREASE NEXT YEAR IS

[01:10:02]

FINALLY, WE HAVE SOME STAFF INCREASES.

WE WILL TALK ABOUT THAT AGAIN IN THE PERSONNEL SECTION.

THIS IS WHAT I WAS TALKING ABOUT IN TERMS OF RECREATION.

WE HAVE REVENUES THAT ARE MORE THAN OFFSETTING OUR EXPENDITURES AND AQUATICS. WE HAVE ABOUT 50% OF OUR EXPENSES ARE BEING OFFSET BY REVENUES.

. >>DR. SHELLEY SEKULA-GIBBS: CAN I ASK A QUESTION REALLY OF CHRIS AGAIN, THE DROUGHT LOOKS LIKE IT WILL CONTINUE. WHEN YOU LOOK AT THE WEATHER, IT LOOKS LIKE IT IS GOING FOR A QUITE A WHILE AS THESE EXCESSIVE TEMPERATURES. HOW LONG CAN WE EXPECT THE -- WITH THE WOODLANDS, HOW LONG CAN WE EXPECT THE WOODS TO CONTINUE WITH LACK OF WATER LIKE THAT? I AM NOT TALKING ABOUT INDIVIDUAL HOMES. WE ARE TAKING CARE OF THAT.

I AM TALKING ABOUT EVERYTHING ELSE.

>> IT -- HOW WOULD I SAY THIS. I WAS AT -- ON A TRAINING THE LAST FOUR OR FIVE DAYS AND CAME BACK AND I SAW A NOTICEABLE DIFFERENCE. THE GOOD NEWS, WHEN I CAME FROM THE AIRPORT INTO HERE, OUR AREAS ARE DOING A HECK OF A LOT BETTER THAN SOME OF THE AREAS I SAW FROM THE AIRPORT INTO HERE LOOKING AT THE CREPE MYRTLES AND OTHER LANDSCAPE.

I CAN'T TELL YOU SIGNIFICANTLY WE WILL LOSE EVERYTHING ON A CERTAIN DAY. I WILL TELL YOU THAT NATURE IS VERY, VERY, VERY RESILIENT. WE HAVE SEEN FREEZES, FROSTS THAT HAVE COME THROUGH. WE HAVE SEEN DROUGHT CYCLES COME THROUGH. AND WHAT IT DOES TO THE FOREST, WHAT IT DOES TO THE POND, WHAT IT DOES TO THE WILDLIFE, YOU KNOW. WE HAVE WILDLIFE IN OUR COMMUNITY THAT ALL OF A SUDDEN PEOPLE SAY WE DON'T SEE DEER ANYMORE. THERE IS A REASON THAT WE DON'T SEE DEER ANYMORE. THEY ARE ACTIVELY LOOKING FOR WATER. ONE OF THE THINGS AS I WAS PREPARING FOR THIS, I AM SURPRISED WE HAVEN'T SEEN MORE HOGS RIGHT NOW IN NEIGHBORHOODS BECAUSE TYPICALLY THEY WILL GO AFTER -- IF NO WATER WHERE THEY ARE AT, INTO THE NEIGHBORHOODS.

I AM SURPRISED WE ARE NOT SEEING THAT.

SO WE ARE LOOKING FOR CUES ON IT.

ONE OF THE THINGS I HAVE BEEN WORKING WITH JOHN MCGOWAN AS WELL AS HIS ENTIRE TEAM, IS TALKING ABOUT OVER THE LAST THREE, FOUR YEARS WITH -- WITH THE HEAT THAT WE ARE HAVING, THE FREEZE THAT WE ARE HAVING, YOU KNOW, ARE WE -- SHOULD WE -- ARE WE REPLACING THE PLANTS WITH THE RIGHT PLANT FOR THE FUTURE? AGAIN, THAT DISCUSSION WITH RESILIENCE.

MOST PEOPLE DON'T KNOW, THERE ARE A NUMBER OF AREAS THAT ACTUALLY HAVE NO IRRIGATION. AND WE HAVE PLANTS IN THERE -- DOES THAT MAKE SENSE? SHOULD WE NOT CEMENT IT OVER, BUT SOMETHING ELSE THAT IS VERY MUCH MORE DROUGHT TOLERANT BUT STILL IS GREEN AND SUCH LIKE THAT.

THOSE ARE DISCUSSIONS WE ARE HAVING BASED ON SOME OF THE CONCERNS WE ARE HAVING SUCH AS THIS MIGHT BE HERE TO STAY OF THESE EXACERBATED DROUGHT AND EVEN MORE IMPORTANTLY, THE RAIN

SPELL TOO THAT WE ARE HAVING. >>DR. SHELLEY SEKULA-GIBBS:

THANK YOU. >> QUESTION.

YOU WERE GOING FAST AND I WANT TO MAKE SURE I AM CORRECT.

OPINION ARE WE INCREASING 300,000 IN REFORESTATION EFFORTS AND $200,000 TO THE CREEKSIDE PROJECT THAT WAS -- $100,000 IS GOING TO THE REST OF THE WOODLANDS OR AM I WRONG ON THAT?

>>MONIQUE SHARP: THE $300,000 IS THROUGHOUT THE ENTIRE COMMUNITY.

WE ADDRESSED CREEK SIDE. IT IS ALREADY IN AND WE SPENT THAT MONEY AND HAVE ADDITIONAL MONIES IN THE BUDGET IF WE ARE NEED TO REPLACE SOME. TREES THAT ARE STRUGGLING.

>> OKAY. I WAS WRONG.

THA THANKS.

>>MONIQUE SHARP: HERE IS A LOOK AT OUR FIRE DEPARTMENT EXPENSES.

THEY ARE INCREASING BY ABOUT $1.9 MILLION.

THIS IS PRIMARILY RELATED TO STAFF INCREASE.

THIS IS -- THIS IS A FAIRLY TYPICAL AMOUNT.

I KNOW IT LOOKS LIKE A LARGE AMOUNT, BUT WE HAVE A LARGE FIRE DEPARTMENT AND THIS IS A TYPICAL ANNUAL INCREASE IN STAFF AND BENEFITS. HERE IS A LOOK AT OUR CONTRACT OF LAW ENFORCEMENT. OUR 2024 BUDGET AND, AGAIN, THIS DOES NOT INCLUDE ANY OF THE INITIATIVES THAT WERE SUBMITTED.

I THINK MOST, IF NOT ALL OF YOU ARE AWARE THAT OUR LAW ENFORCEMENT AGENCIES HAVE SUBMITTED REQUESTS FOR ADDITIONAL STAFFING AND EQUIPMENT THIS YEAR WHICH WILL BE TALKED ABOUT IN THE BUDGET INITIATIVES.

SO THIS IS JUST WHERE WE ARE WITH A THE CURRENT LEVEL OF SERVICES. AND WHAT IS INCREASING THERE, WE ARE SEEING ABOUT A 10.6 PERCENT INCREASE OVER THE 2023 BECOME.

YOU CAN SEE DOWN AT THE BOTTOM, THE LARGEST INCREASE OF THAT IS COME FROM THE MONTGOMERY COUNTY SHERIFF'S OFFICE AT OVER 1 MILLION. BASED ON THEIR PAY, WHAT THEY BUDGETED FOR, STEP INCREASES FOR THEIR LAW ENFORCEMENT.

STEP AND OTHER TYPE OF PAY INCREASES.

[01:15:01]

THAT IS JUST PER HOUR IN ORDER TO MAINTAIN THOSE 92 DEPUTIES THAT WE CONTRACT WITH. THAT IS WHAT IT WILL COST US.

AND THE COST OF THEIR VEHICLES HAVE GONE UP BY $320,000.

YOU CAN SEE HARRIS COUNTY CONSTABLE HAS GONE UP $128,000, AGAIN, JUST FOR THE CURRENT 13 STAFF THAT WE HAVE IN THAT CONT CONTRACT.

THIS IS JUST -- I AM NOT GOING TO SPEND ANY TIME ON THIS SLIDE.

IT IS IN YOUR PACKETS IF YOU NEED IT.

BUT A LOOK AT THE LAW ENFORCEMENT BUDGET, COMPARING '23 TO 2024. YOU CAN SEE DOWN AT THE BOTTOM, THE MONTGOMERY COUNTY SHERIFF'S OFFICE PERSONNEL THAT IS DRIVING OUR INCREASE RIGHT NOW. HERE IS A LOOK AT OUR GENERAL GOVERNMENT EXPENSES, WHICH INCLUDES THE DEPARTMENTS THAT YOU SEE LISTED HERE. OVERALL, WE ARE GROWING BY ABOUT 9.7%. THE LARGEST INCREASE IS IN OUR INCHING INFORMATION TECHNOLOGY DEPARTMENT, THAT INCLUDES TWO NEW STAFF POSITIONS, THE COMP BENEFIT -- THE COMP AND STUDY BENEFIT CHANGES THAT WERE IMPLEMENTED THAT WERE ONE OF THE DEPARTMENTS THAT WAS -- THAT WAS MORE BEHIND MARKET THAN A LOT OF THE OTHER DEPARTMENTS. SO WE ARE SEEING THE INCREASE THERE. PLUS WE HAVE SOME -- ANY OF YOU WHO IN YOUR OWN BUSINESSES KNOW THAT THE ANNUAL COST FOR LICENSING AND THOSE TYPE OF THINGS, POSTING ON WEB SITES, JUST CONTINUES TO INCREASE AND INCREASE.

AND WE ALSO HAVE SOME ADDITIONAL COST IN HERE TO ADDRESS SECURITY CONCERNS TO MAKE SURE WE STAY AHEAD OF ANY TYPE OF SECURITY SITUATIONS WE MIGHT HAVE. THE INCREASE IN HUMAN RESOURCES AGAIN IS RELATED TO -- WE WILL GO OVER THIS IN PERSONNEL, TO NEW POSITIONS IS PRIMARILY WHAT IS DRIVING THIS INCREASE.

OKAY. ANY QUESTIONS ON WHAT WE WENT OVER BEFORE WE GO INTO PERSONNEL?

>>DR. SHELLEY SEKULA-GIBBS: I DO HAVE A QUESTION ABOUT THE FIRE -- FIRE FIGHTERS' INCREASE. IS THAT INCLUDING THE NEW

COMPANY THAT WE ADDED? >>MONIQUE SHARP: YES, MA'AM.

>>DR. SHELLEY SEKULA-GIBBS: THAT IS PROBABLY ONE OF THE BIG

FACTOR THERE IS. >>MONIQUE SHARP: IT WAS MAINLY ACCOUNTED FOR THIS YEAR. SO THAT'S -- IT -- IT IS NOT HAVING TOO BIG OF AN IMPACT ON '23 TO '24.

>>DR. SHELLEY SEKULA-GIBBS: HOW MANY EMPLOYEE ARE INVOLVED IN

THE NEW COMPANY? >>MONIQUE SHARP: 15.

>>DR. SHELLEY SEKULA-GIBBS: THAT IS AN ONGOING EXPENSE?

>>MONIQUE SHARP: IT IS, YES, MA'AM.

>>DR. SHELLEY SEKULA-GIBBS: THANK YOU.

>>MONIQUE SHARP: OKAY, LOOK AT OUR PERSONNEL COSTS.

OPINION PERSONNEL COST IS ALWAYS A LARGE COMPONENT OF OUR BUDGET.

ONE OF THE LARGEST COMPONENTS OF OUR BUDGET AS YOU WOULD EXPECT IN A -- IN AN ORGANIZATION THAT IS VERY SERVICE DRIVEN.

WHAT WE HAVE INCLUDED IN THE BUDGET FOR THIS YEAR IS A 3.5% GENERAL WAGE INCREASE. THIS IS ABOUT 1.7 MILLION INCLUDING THE BENEFITS IMPACT, INCREASING OUR BUDGET BY ABOUT 1.7. WE ARE ALSO FACTORED IN A 13.5% HEALTH INSURANCE RATE INCREASE, WHICH EQUATES TO $912,000 INCREASE. OUR NATIONAL -- OUR NATIONAL TRENDS IS EXPECTED TO BE 8.2%. OURS IS HIGHER THAN THAT, PRIMARILY BECAUSE WE HAVE HAD SEVERAL LARGE CLAIMANTS THIS YEAR THAT ARE REALLY DRIVING -- DRIVING THIS.

THEY HAVE REACHED THE STOP LOSS. WE ARE IN STOP LOSS SITUATIONS AND ALL OF THIS HAD AN IMPACT. SOME YEARS WE DON'T HAVE ANY LARGE CLIMATES OR NONE, THIS YEAR WE HAVE THREE IN PARTICULAR, MAYBE MORE UP -- SHE IS SAYING -- I KNOW OF THREE IN PARTICULAR. EVEN MORE THAN THAT.

JUST A REALLY HEAVY YEAR FOR US. AND THAT GETS BAKED INTO THE THE RATE INCREASE. 4% UNDERWRITING ASSUMPTION THAT DID NOT MATERIALIZE. THAT ASSUMPTION IS WHAT WOULD HAPPEN TO HEALTH CARE UTILIZATION COMING OUT OF COVID.

WE THOUGHT MAYBE THAT THAT WOULD DECREASE.

AND IT HASN'T. IT HAS -- IT HAS REMAINED STEADY IF NOT INCREASED. SOME WITH WE ARE HAVING TO TAKE INTO CAN ACCOUNT FOR THAT. THE TOWNSHIP IS IMPLEMENTING DESIGN. WE HAVE INCLUDED IN THESE COST DESIGN PLAN CHANGES TO MANAGE THE EMPLOYER'S COST OF INSURANCE. AS WE LOOK AT THE HIGH CLAIMANTS, WE ARE MAKING DECISIONS THAT AS YOU UTILIZE MORE OF OUR HEALTH INSURANCE PLAN, YOU WILL TAKE ON A GREATER C COST.

SO, AGAIN, NOT PENALIZING EVERYBODY BECAUSE WE ARE IN A GROUP PLAN, BUT LOWER UTILIZATION -- THOSE WHO USE IT LESS WILL HAVE YOU SOMEWHAT A OF A BENEFIT AND THE ONES THAT USE IT MORE WILL STAKE ON AN INCREASING AMOUNT OF THE PREMIUMS THAT ARE ASSOCIATED WITH THAT.

>> WHAT DO WE USE FOR WORKER'S COMP INSURANCE?

. >>MONIQUE SHARP: THROUGH TML.

[01:20:02]

>> OKAY. DO WE REVISIT THAT ON AN ANNUAL BASIS? .

>>MONIQUE SHARP: WE DO. WE DO.

THOSE ARE DRIVEN BY LAWS ON THE BOOKS.

SO AS WE ADD STAFF AND HAVE CERTAIN TYPE OF EXPERIENCE LOSSES, THAT EBBS AND FLOWS. SOME YEARS IT INCREASES.

SOME YEARS IT DECREASES. I WILL SAY THE SELF-INSURANCE PLAN, SINCE WE IMPLEMENTS IT IN 2012 OR '13 HAS WORKED VERY WELL FOR THE TOWNSHIP. WE TRACK -- HAD WE STAYED ON A MORE TRADITIONAL INSURANCE PLAN IF WE HAVE BEEN BETTER OFF, WE SAVED $376 MILLION COSTS BY DOING THIS.

ANGELA AND HER TEAM DOES A GREAT JOB WORKING WITH OUR CONTRACTORS

AND MANAGING IN OVERAALL. >> I THINK THEY ARE DEFINITELY IN NEED BECAUSE YOU MANAGED THAT THROUGH COVID.

>>MONIQUE SHARP: YES. >> THAT SAYS A LOT.

>>MONIQUE SHARP: RIGHT. THIS IS ONE OF THOSE YEARS.

NOT SOMETHING WE USUALLY SEE. WE WERE SURPRISED WHEN WE GOT THE INFORMATION. THE RATE INCREASE WAS SIGNIFICANTLY HIGHER THAN THAT WHEN WE FIRST GOT IT AND WE -- ANGELA A, AGAIN, AND HER TEAM HAS DONE A WONDERFUL JOB OF COMING WITH THESE PLAN DESIGN CHANGES TO GET THIS DOWN TO SOMETHING MORE MANAGEABLE. AND THERE ARE -- PART DEFENDANT SIGN PLAN CHANGES AS EXPERIENCES INCREASE, THE INCREASES ARE BEING PASSED ALONG TO THE EMPLOYEE.

SO NOT LIKE THE EMPLOYER IS PICKING UP THE WHOLE AMOUNT.

THE EMPLOYEES' PREMIUM ALSO INCREASE AS WELL.

THIS IS A LOOK AT OUR PERSONNEL COSTS.

FIRST FOR THE FIRE DEPARTMENT. OUR TOTAL PAYROLL FOR FIRE DEPARTMENT IN '24 IS PROJECTED TO BE $26.7 MILLION.

AS WE MENTIONED A SECOND AGO, A $1.7 MILLION, 1.6% INCREASE OVER THE CURRENT LEVEL. THE FIRE DEPARTMENT'S COMPENSATION PLAN WORKS DIFFERENTLY THAN THE GENERAL EMPLOYEES. THEY GO THROUGH A SERIES OF STEP INCREASES AS THEY UNDERGO CERTAIN CERTIFICATIONS.

THEY ARE ELIGIBLE FOR THE STEP INCREASES AND BASED ON THE PERIOD OF TIME THEY ARE HERE. FACTORS IN -- WHAT YOU SEE HERE GETTING FACTORED IN FROM THE COMP AND BENEFIT STUDY AND PLUS THE ADDITIONAL TO KEEP US AT MARKET FOR 2024.

THEN FOR THE GENERAL EMPLOYEES, OUR -- BASED ON EXISTING STAFF, WE ARE SEEING THAT INCREASE BY 2.2 MILLION OR 8%.

AGAIN THAT INCREASE -- WHAT YOU ARE SEEING IS HIGHER THAN THE 3.5% I JUST MENTIONED BECAUSE OF THE COMP AND BENEFIT STUDY.

JUST TO MAKE SURE WE UNDERSTAND THE COMP AND BENEFITS STUDY DID NOT IMPACT EVERY EMPLOYEE. IT IMPACTED A CERTAIN NUMBER, ABOUT A THIRD OF OUR EMPLOYEES, A LITTLE OVER A THIRD.

AND THAT WAS A ONE-TIME -- THAT WAS AN ADJUSTMENT TO THEIR SALARY TO GET US TO CURRENT MARKET CONDITIONS.

AND THEN THE 2024 INCREASE IS IN ORDER TO -- AT 3.5% IS IN ORDER TO MAINTAIN THAT MARKET CONDITION.

IF -- I WENT OVER SO MUCH THAT WAS PRESENTED DURING THE -- DURING THE COMP STUDY, BUT IF YOU RECALL, THE CONSULTANT WAS SAYING FOR MARKET FOR 2024 WILL BE SOMEWHERE BETWEEN 3% AND 4%.

WE HAVE PICKED THE MIDDLE OF THAT, JUST LIKE THE BOARD HAD CHOSE TO PICK THE MIDDLE, THE AVERAGE, IF YOU WILL, RANGE IN TERMS OF WHERE WE KEEP OUR COMPENSATION.

SO WE ARE NOT AT THE LOWEST AND WE ARE NOT AT THE HIGHEST.

WE STAY IN THE MIDDLE. AND THAT IS WHAT THIS WAS BASED ON AS WELL. WE ALSO -- WE ARE INCREASING STA STAFF COSTS BY ABOUT $890,000 FOR NEW STAFF REQUESTS.

AND I WILL GO INTO THAT, IF YOU ALL ARE READY.

DO YOU HAVE ANY QUESTIONS? OKAY.

HERE IS WHAT WE ARE REQUESTING FOR OUR NEW STAFF POSITION FOR 2024. IN TERMS OF FUNDING COST, ALL NEW POSITIONS $889 DHURN RECREATION FULLY OFFSET BY REVENUE, A COUPLE OF PART-TIME POSITIONALITIES $22,000 VISIT THE WOODLANDS IS REQUESTING TWO AND A HALF NEW POSITIONS THAT WILL BE OFFSET -- PAID FOR THROUGH HOTEL OCCUPANCY TAX AND NOT THROUGH THE GENERAL FUND. SO THESE ARE THE NEW STAFF POKES. JUST MENTIONED IN RECREATION, WE ARE REQUESTING A SEASONAL.5 FTE OF CAMP SUPERVISOR.

SALARY AND BENEFITS OF $22,600. AGAIN, FULLY OFFSET BY PROGRAM REVENUES. HERE IS THE VISIT THE WOODLANDS POSITIONS. TWO AND A HALF POSITIONS IN TOTAL. $255,000 ESTIMATED COSTSES,

[01:25:03]

THESE ARE THE EMPLOYEES THAT WE ARE PROPOSING FOR THE NEW EMPLOYEES FOR THE -- FOR GENERAL.

OUR HR DEPARTMENT HAS NOT HAD A STAFF INCREASE, I BELIEVE, IN EIGHT YEARS. STAFF -- THE NUMBER OF STAFF HAVE GROWN A TREMENDOUS AMOUNT DURING THAT TIME.

WE REALLY KNEW A COUPLE OF YEARS AGO WE NEEDED TO ADD STAFF HERE, BUT WE WERE WAIT TO GET THE DIRECTOR -- TO HIRE THE DIRECTOR OF HR THAT ANGELA HAS. SPENT THE PAST YEAR EVALUATING.

DOES A GREAT JOB CHANGING PROCESSES.

MAKING THEM MORE EFFECTIVE. BUT EVEN WITH THAT, WE ARE -- THE HR -- IT IS MY TOP PRIORITY. WE NEED MORE HELP IN HR IN ORDER TO MAINTAIN THE LEVEL OF SERVICES THAT WE NEED.

SO WE ARE PROPOSING A SENIOR HR GENERALIST AND A BENEFITS ADMINISTRATOR IN ORDER TO SHORE UP THAT DEPARTMENT.

IN I.T., THIS IS ANOTHER HIGH PRIORITY OF MINE WHEN I LOOKED AT ALL THE DIFFERENT STAFFING REQUESTS.

THE SECURITY, I.T. SECURITY IS HUGELY IMPORTANT.

AND RIGHT NOW SECURITY IS HANDLED BY THREE OR FOUR DIFFERENT STAFF MEMBERS DURING CERTAIN THINGS.

SOMETIMES WHEN WE GET A HIT ON SECURITY, TAKES US A WHILE.

ALWAYS WITHIN HOURS, BUT A LOT OF DAMAGE CAN BE DONE WITHIN HOURS. WHAT THIS DOES RIGHT HERE, THIS WILL GIVE US A DEDICATED PERSON TO CONCENTRATE ON OUR INFORMATION SECURITY. FROM A NETWORK BASE IS AND ALSO FROM TRAINING OF EMPLOYEELESS. THEN OUR CACHE SENIOR ENTERPRISE ANALYST. A BIG FANCY NAME, BUT NEW SOFTWARE IN A VARIETY OF DEPARTMENTS.

ALL KIND OF EFFICIENCIES THAT WE BELIEVE CAN BE GAINED, BUT IN ORDER TO DO THAT, WE NEED SOMEBODY WHO IS DEDICATED WITH WORKING WITH THE DEPARTMENTS TO ENSURE THAT OUR TECHNOLOGY IS WORKING THE MOST EFFECTIVE WAY FOR US.

OUR SPECIAL EVENTS SUPERVISOR. WE ARE PROPOSING THAT STAFF -- THE SPECIAL EVENTS DEPARTMENT HAS NOT HAD A STAFF INCREASE IN 6 OR 7 YEARS. THEY PUT ON PHENOMENAL EVENTS.

SECOND TO NONE IN ANY OPINION. AMAZING WHAT THEY DO WITH THE AMOUNT OF STAFF THAT THEY HAVE, BUT IT IS TIME TO HAVE AN ADDITIONAL STAFF PERSON IN THERE IF WE WANT TO MAINTAIN THE QUALITY OF THE EVENTS THAT WE HAVE.

THEN FINALLY, WE ARE PROPOSING THREE NEW ADDITION TO OUR STREETSCAPE DEPARTMENT. AS DIRECTOR BAILEY MENTIONED, HE GETS A LOT OF CALLS RELATED TO STREETSCAPE.

I KNOW OTHERS OF YOU DO. YOU PASSED THAT ON TO ME IN A STAFF LEVEL IN TERMS OF OUR WORK ORDERS.

THAT IS WHERE WE GO SEEING THE MOST INCREASE AND MAINTAINING OUR STREETS. THE TREE REMOVAL VISION.

THE FORESTRY MANAGEMENT DIVISION.

IN ORDER TO NOT ONLY MAINTAIN BUT IN SOME REASONS ENHANCE WHAT WE HAVE OUT THERE TO BE MORE RESPONSIVE TO THOSE TYPES OF THINGS, WE ARE REQUESTING THOSE THREE POSITION.

SO, AGAIN, THESE ARE EIGHT POSITIONS THAT YOU ARE SEEING HERE IN TOTAL THAT WERE OVER 26 POSITIONS, I THINK, THAT WERE REQUESTED SO WE REALLY DID AS -- AS A STAFF, AS AN EXECUTIVE MANAGEMENT TEAM, SPENT TIME GOING THROUGH THESE AND TRYING TO PRIORITIZE THE HIGHEST NEEDS. SOME OF THE OTHER POSITION THAT WERE REQUESTED, WE PUSHED BACK FURTHER INTO THE FIVE-YEAR PLAN.

>>DR. SHELLEY SEKULA-GIBBS: WHAT WILL THAT BRING OUR TOTAL EMPLOYEE COUNT TO? ABOUT?

>>MONIQUE SHARP: 608. ANY QUESTIONS THERE? OKAY, I WILL MOVE ON TO VISIT THE WOODLANDS IF THERE ARE NO OTHER QUESTIONS ON EXPENSES RIGHT NOW.

THIS IS ACTUALLY PRETTY SIMPLE. VISIT THE WOODLANDS IT PROVIDED FOR A HOTEL TAX CONTRIBUTING $2.2 MILLION.

IN 2024 AND THE REMAINING PART OF THEIR BUDGET IS FUNDED BY A TRANSFER OF THE TOWNSHIPS BASE HOTEL TAX.

WE SAW THAT BACK ON THE SLIDE WHERE WE SHOWED WHERE HOTEL TAX ARE ALLOCATED. THAT AMOUNT IS PROJECTED TO BE $1.5 MILLION IN 2024 TO FUND THEIR TOTAL BUDGET OF $3.7 MILLION. AND THEN THIS IS HOW THE $3.7 MILLION IS BEING SPENT. THEY HAVE SOME GENERAL -- WHICH IS BASICALLY THEIR STAFFING COSTS AND STRATEGIC MAVSHTH MARKETING AND CONVENTION SALES. HOTEL TAX REVENUE IS100%

[01:30:02]

IT IS A BIG OPERATION. AND WE ARE ACTUALLY GOING TO BE BRINGING MORE INFORMATION BACK TO THIS BOARD IN THE COMING MONTH. PROBABLY IN SEPTEMBER, BECAUSE WE DO -- IN ORDER TO MANAGE THE AMOUNT OF GENERAL FUND REVENUE THAT IS BEING CONTRIBUTE TO THIS PROBLEM, WE ARE LOOKING AT A BUS FARE INCREASE. WE HAVE BEEN PROJECTING ONE FOR MANY YEARS, FOR THE PAST FIVE YEARS, WE HAVE KNOWN WE WOULD NEED SOME TYPE OF FAIR INCREASE AND WE BELIEVE THAT 2024 WILL BE THAT YEAR. NORTHWEST PART OF THIS DISCUSSION TODAY, BUT JUST KNOW THAT IS COMING AND WE HAVE FACTORED THAT INTO THESE NUMBERS THAT YOU SEE HERE.

IF THE FARE INCREASE DOESN'T HAPPEN, THE TOWNSHIP'S CONTRIBUTION WILL HAVE TO BE EVEN MORE.

BUT THIS IS WHERE WHAT WE ARE LOOKING AT TODAY.

>>BRAD BAILEY: CAN I ASK A QUESTION ON THAT.

DO WE CHARGE DIFFERENTLY OF WOODLANDS RIDING BUS OR NONWOODLANDS RESIDENTS RIDING THE BUS.

>>MONIQUE SHARP: THERE ARE REGULATION TO PRO EVENT US.

YOU CAN DO THAT BUT IT IS LIMITED.

>>BRAD BAILEY: BUT WE ACCEPT FEDERAL FUNDS.

>>MONIQUE SHARP: EXACTLY. YOU NEED EXCESS IF IT SERVES A PUBLIC PURPOSE, WHICH OURS DOES. SO, AGAIN, THE REVENUE ARE BY DESIGN SET TO EXACTLY OFFSET THE EXPENDITURES IN TERMS OF HOW WE FUND EXPENDITURES, GRANT REVENUES FUND 54% OR $4 HAD MILLION OF OUR EXPENSES. OUR BUS FARES ON PARK AND RIDE FUND 28%. AND THEN WE HAVE GENERAL FUND TRANSFERS OF ABOUT $1.2 MILLION OR 16% TO FUND OUR TROLLEY.THIS IS BASICALLY TO FUND OUR TROLLEY AND OUR PARK AND RIDE.

THIS IS WHAT I WAS TALKING ABOUT EARLIER.

WE HAVE BEEN -- WE WERE THE RECIPIENTS OF SOME CARES ACT AND ARPA FUNDING SINCE 2020 HAS HELPED US FUND.

WE GOT $8.9 MILLION THAT HAVE BEEN COVERING OUR COSTS FOR THE PROGRAM THAT WILL BE USED UP IN 2024 PRETTY EARLY ON IN THE FIRST QUARTER OF 2024, AND THAT IS WHEN THE TOWNSHIP WILL HAVE TO TAKE BACK OVER COVERING THE COSTS.

THAT IS A PRETTY BIG HIT FOR US FOR THIS BUDGET YEAR THAT WE

HAVE TO FACTOR IN. >> ARE WE LOOK AT NEW GRANT OPPORTUNITIES? SEEMS LIKE WITH A LOT OF BILLS COMING FROM CONGRESS, OUR OWN CLEAN ENERGY AND TRANSPORTATION EFFORTS, I MEAN, ARE THERE OTHER OPPORTUNITIES FOR US TO EXPLORE? CAN WE HIRE A CONSULTANT TO HELP US WITH THAT?

>>MONIQUE SHARP: YES. WE ALREADY HAVE AND I CAN LET

CHRIS TALK ABOUT THAT. >>CHRIS NUNES: A NUMBER OF GRANTS WE ARE LOOKING FOR. A LOT OF THEM CENTER AROUND CARBON NEUTRALITY. HAND THIS IS ONE FUNCTION OF THAT. WE JUST HAD A MEETING, I THINK, LAST WEEK REGARDING A GRANT FROM THE FEDS.

WE HAVE GOODMAN, WHO IS OUR TRANSPORTATION CONSULTANT WHO MAKES US AWARE OF VARIOUS GRANT OPPORTUNITIES.

THEY ALL COME COME WITH A PRICE AT CERTAIN POINT, 20% MATCH, 50% MATCH, THAT THEY WILL BE BRINGING TO YOU IN THE NEAR FUTURE. AGAIN A LOT OF THESE PURCHASES ARE LONG TERM DOWN THE ROAD. AS WE LOOK AT BUS REPLACEMENT, AS WELL AS TROLLEY REPLACEMENT. THE GOOD NEWS IS, I BELIEVE, WE WILL BE STARTING THE TROLLEY REPLACEMENT PROGRAM OR THE RFQ-P PROCESS SOME TIME NEXT YEAR. SO IT IS IN THE WORKS.

>>MONIQUE SHARP: I WAS LOOK TO SEE IF RUTH ANN IS HERE AND I WOULD GIVE HER KUDOS. SHE CHASES DOWN GRANTS LIKE NO OTHER AND RESPONSIBLE FOR FINDING US GRANTS THROUGH CREDITS WILL PAY FOR 100% OF OUR EQUIPMENT LIKE OUR TROLLEY WHEN WE HAVE TO REPLACE TROLLEYS AND OUR UPCOMING BUSES.

WE ARE VERY ACTIVE IN THAT. AND JUST WANT TO REMIND THE BOARD, THAT -- HAD THE NEWER BOARD MEMBERS MAY NOT EVEN BE AWARE OF THIS, BUT WITHIN OUR TRANSPORTATION FUND, WE HAVE SET ASIDE -- ORIGINALLY IT WAS $5 MILLION TO FUND A PROJECT IN PARTNERSHIP WITH HARRIS COUNTY FOR THE STRING CREEK GREENWAY.

THOSE DOCUMENTS HAVE BEEN SIGNED AND WE ALREADY SPENT ABOUT $800,000 ON THAT. AND MORE TO COME.

WE WILL END UP SPENDING THIS ENTIRE AMOUNT.

IT WILL BE A WONDERFUL, MALL AMENITY ONCE IT IS COMPLETED OVER THE NEXT COUPLE OF YEARS, 18 MONTHS OR SO.

OKAY THIS THEN I WILL MOVE INTO CAPITAL PROJECTS.

THE TOWNSHIP IS VERY FORTUNATE TO BE ABLE TO FUND -- I

[01:35:05]

THIS WAS THROUGH THE PREVIOUS BOARD SETTING UP A CAPITAL REPLACEMENT RESERVE IN ORDER TO FUND OUR ASSETS.

AND IT HAS WORKED TREMENDOUS LY WELL FOR USES.

HELP US WITH ASSETS AS IT DETERIORATES AND AGES TO THE END OF ITS USEFUL LIFE AND FUND WITH US CASH OBJECT HAND AS WE GO OUT AND ISSUE BONDS FOR THEM. INSTEAD OF PAYING INTEREST EXPENSE, IN ORDER TO DO THIS, WE ARE BRINGING, FOR INSTANCE, THIS YEAR, $2.5 MILLION, $2.7 MILLION OF INTEREST INCOME THAT HELP US FUND THESE ASSETS. A COMPLETE REVERSAL OF WHAT MANY ENTITIES EXPERIENCE. THE IDEA WE HAD A RESERVE STUDY IN 2013, AND LOOKED AT 30 YEARS OF ASSETS.

AS THE ASSETS ARE USED UP, IF YOU WILL, ON AN ANNUAL BASIS, AS THEY ARE USED OR WE DEPRECIATED. RESIDENTS CONTRIBUTED AROUND 4.5 MILLION, $4,250,000 A YEAR INTO THIS RESERVE.

SOMETIMES WE SPEND MORE THAN $4 HAD,250 THOUSAND IN.

SOME YEARS WE SPEND MORE. OVERALL, WE HAVE A RESERVE BALANCE WHERE WE CAN EASILY REPLACE OUR ASSETS AS WE NEED TO IN A TIMELY MANNER. THIS, AGAIN, IS THE CREDIT AGENCIES COMMENT ON OUR RESEARCHS.

FRISCO IS NUMBER ONE THAT HAS A GREAT PROGRAM FOR A RESERVE.

OUT OF $27.9 MILLION CAPITAL PROJECT FUND, WE ARE ABLE TO FUND 49% OF THAT OR $27.8 MILLION THROUGH OUR CAPITAL RESERVES. GENERAL FUND IS PICKING UP 6% OR $1.9 MILLION OF THAT. HERE IS A LOOK AT OUR TOTAL EXPENDITURES BY DEPARTMENT. FIRE DEPARTMENT, $14.8 MILLION.

AN UNUSUALLY HIGH NUMBER AS WE SAID BEFORE, $13 MILLION OF THE REBUILD OF FIRE STATION 5 AND THE RENOVATIONS TO THE EMERGENCY TRAINING CENTER. AND YOU CAN SEE THERE, WE HAVE SOME OTHER MISCELLANEOUS EQUIPMENT IN TERMS OF EQUIPMENT AND VEHICLES. HERE IS A LOOK AT OUR PARKS AND RECREATION CAPITAL FOR 2024 OF $11.7 MILLION.

$3 MILLION OF THAT WAS RELATED TO MONEY SET ASIDE FOR THE PARKS NEEDS ASSESSMENT PROJECT. $19 MILLION BY PREVIOUS BOARDS.

THIS $3 MILLION IS A PLACEHOLDER.

WE MAY END UP.DOING MORE OF THAT.

AS WE DO THESE PROJECTS WE COME BACK TO THE BOARD AND YOU APPROVE THEM. WE WANT TO SHOW THAT WE ARE CONTINUING TO USE UP THAT MONEY FOR THE PROJECTS IDENTIFIED IN

PHASE ONE. >> ARE WE GOING TO GO THROUGH EACH ONE OF THESE AT A LATER TIME OR IS THIS KIND OF A BRIEF -- BEING OUR FIRST TIME. WHEN DO WE --

>>MONIQUE SHARP: THAT IS UP TO YOU.

RIGHT NOW THIS IS AN OVERVIEW OF THEM.

WE CAN GO THROUGH THE BUDGET BOOK AND GO THROUGH EVERY SINGLE CAPITAL BUDGET OR THE ONES YOU WOULD LIKE TO.

THAT IS UP TO YOU. >> THE NEEDS ASSESSMENT PROJECT OF $3 MILLION. I THINK LAST NIGHT I WAS ABLE TO UNDERSTAND SOME OF THESE. WHAT IS INCLUDED IN THAT.

>>MONIQUE SHARP: PHASE 1 PROJECTS.

I CAN'T REMEMBER IF WE HAVE ANYTHING ON THE BOOKS ON THAT.

DO YOU WANT TO TALK ABOUT WHAT IS COMING UP FOR PHASE ONE

PROJECT IF. >>CHRIS NUNES: WHAT THE BOARD APPROVED OVER THE LAST YEAR. APPROVED THE $19 MILLION AS MONIQUE ALLUDE TO IN AUGUST OF 2022.

WE ARE IN '23 RIGHT NOW. WE HAVE PUSHED FORWARD TAMPA 2.3 MILLION IN $19 MILLION IN L.E.D. LIGHTS.

WE ARE WELL UNDER WAY WITH THE SPORTS COMPLEX THAT WILL BE IN THE BALLPARK OF $8 MILLION TO $10 MILLION THAT WE ARE LOOKING AT. JOHN MCGOWAN AND HIS TEAM IS FINALIZING THE CONCEPT. ACTUALLY WE GOT 95% CONCEPTUAL DRAWINGS LAST WEEK. THE FIRST.

WE HAVE $1.2 MILLION, $1.3 MILLION IN TENNIS COURTS, PICKLEBALL COURTS. WE ARE WAITING FOR GET MORE COMMENTS AT THE PICKLEBALL COURTS TO SEE HOW IT PLAYS.

ARE THERE ANY CHANGES THAT THE COMMUNITY WANTS.

THAT PROJECT WILL START GETTING KICKED OFF.

THE BOARD HAS APPROVED $300,000 FOR THE SUNDANCE REST ROOM FAST

[01:40:07]

WHAT HAS NOT BEEN COMPLETED IS THE 3MILLION REST ROOM RENOVATIONS WHICH IS SYSTEM-WIDE.

IT IS A CHALLENGE BECAUSE WE ARE TRYING TO FIND A STANDARD FOR ALL THE REST ROOM IN TERMS OF FIXTURE, PAINT, COLOR, LIGHTING AND THAT TYPE OF STUFF. THAT IS WHY WE REALLY HAVEN'T ACTIVATED THAT. THERE ARE MORE PROJECTS COMING IN THAT WERE ADDITIONAL 'LIE PROVED; HOWEVER, ALL THE PROJECTS WILL BE COMING TO YOU AT SOME POINT FROM A BID PERSPECTIVE, D.F.Q. RFP PERSPECTIVE IN THE NEAR FUTURE.

>> A CARRY{SUFFIX}OVER FROM LAST YEAR'S BUDGET -- YOU THE BUDGET PASSED IN AUGUST OF 2022. RIGHT?

>>MONIQUE SHARP: IT IS. 23409 NEW MONEY BUT MONEY FUNDED OUT OF THE RESERVE. OUT OF THESE PROJECTS, 94% ARE BEING FUNDED OUT OF THE RESERVE. THIS IS PRIMARILY THE REPLACEMENT OF EXISTING ACCESS. .

>>DR. ANN SNYDER: FOR CLARIFICATION, THE $11.5 MILLION THAT YOU MENTIONED EARLIER WE WILL DISCUSS THAT UNDER

INITIATIVES. >>MONIQUE SHARP: YES, MA'AM.

>>DR. ANN SNYDER: THIS IS TO GIVE ALL OF US WHAT THE BASE BUDGET HAS BEEN PROPOSED BY STAFF FOR 2024.

>>MONIQUE SHARP: THIS IS A LOOK AT WHAT IS IN THE BUDGET FOR OUR FACILITIES DEPARTMENT. OUR FACILITIES CAPITAL.

AS YOU KNOW THE BOARD PREVIOUSLY APPROVED $750,000 TO EXPAND THE AREA OUT IN THE -- ON THE OPPOSITE SIDE OF THE BUILDING.

WE ARE HERE. WE ARE OUT OF SPACE, OUT OF OFFICE SPACE FOR OUR STAFF, SO THAT AREA IS BEING EXPANDED, BUT WHAT THAT $600,000 IS, IS ALSO WITHIN THE RESERVE STUDY.

2024 WAS THE YEAR -- IF YOU REMEMBER, WE MOVED INTO THIS BUILDING IN 2011 OR 2012. SO WE ARE 12 YEARS OUT.

THIS IS FOR THE REPLACEMENT OF CARPET AND OTHER INTERIOR IMPROVEMENTS PLANNED FOR A WHILE AND, GUN, FUNDED THROUGH THE RESERVE -- THROUGH THE -- TO THE CAPITAL RESERVE.

SAME ANYTHING WITH OURU OW HVAC, OUR AIR CONDITIONING, HEATING SYSTEM. .COMPONENTS THAT NEED TO BE REPLACED. EXPENSIVE FOR A BUILDING THIS SIZE AND THIS THANK IS WHAT YOU SEE HERE.

WE HAVE BUDGETED ADDITIONAL $250,000 ON TOP OF THE $750,000 INITIALLY FOR THE TOWN HALL BUILDING EXPANSION.

WE DON'T KNOW THAT WE NEED ALL OF THAT, BUT ONE OF THE THINGS WE HAD TO DO WAS LOOK AT DOING SOMETHING DIFFERENT WITH THE VISIT THE WOODLANDS SPACE TO MAKE SURE WE ARE PROVIDING ENOUGH SPACE SO WE DON'T HAVE TO COME BACK TWO FOR THREE YEARS AND SPAY WE ARE OUT OF SPACE AGAIN.

WE WANTED TO DO IT IN BUDGE PROJECT.

THE PLACEHEELED FOR THAT. THE TOWN FURNITURE.

THE NATURE OF US BEING IN THIS BUILDING FOR 12 YEARS.

AND THIS WAS SCHEDULED TO LOOK AT SOME OF THE FURNITURE THAT IS LITERALLY FALLING APART THAT EEDS TORN REPLACED .

ANY QUESTIONS ON THIS? HERE IS OUR LOOK AT INFORMATION TECHNOLOGY CAPITAL. MOST OF THIS IS RELATED TO RESERVES BEING FUNDED OUT OF THE CAPITAL RESERVE FOR EXISTING EQUIPMENT THAT NEEDS TO BE REPLACED AS IT REACHES THE END OF ITS USEFUL LIFE. WHAT I DID WANT TO DO -- BECAUSE IF WE DO WANT -- IF THE BOARD WANTS TO LOOK AT SOME CAPITAL PROJECTS BEING FUNDED FROM CURRENT YEAR TAX REVENUES OR 2024 CURRENT TAX REVENUES ADDS OPPOSE TO THE CAPITAL RESERVE, THIS IS A LIST OF THOSE. TOTALS $1.9 MILLION.

AGAIN, REPRESENTS 6% OF OUR TOTAL CAPITAL BUDGET BUT THESE ARE THE TYPES OF THINGS THAT GET FUNDED FROM -- THINGS ARE NOT FUNDED BY THE RESERVE. IN PARKS, WE HAVE VEHICLES FOR NEW STAFF. WE HAVE SET ASIDE $200,000 FOR -- I -- IT IS CALLED "HOLIDAY DECORATIONS" IN HERE BUT ANYTHING TO ENHANCE THE WATER WYE.

WE HAVE LOOKED TOWARD -- AS WHICH HAVE TAKEN OWNERSHIP OF THE WATERWAY, CONVERSATIONS, I KNOW, SPECIFICALLY BY VISIT THE WOODLANDS OF HOW TO EN SANS SOME OF THOSE FEATURES AND EVENTS AND AMENITIES IN ORDER TO ATTRACT MORE VISITORS TOP OF OUR AREA, AS WELL AS THINGS WILL BENEFIT OUR RESIDENTS.

THAT IS JUST A PLACEHOLDER. NOTHING SPECIFICALLY IDENTIFIED

[01:45:03]

>> I DO HAVE A QUESTION ABOUT THE DISH DON'T SEE IT IN HERE, BUT IT MAY BE BECAUSE IT IS NOT IN HERE.

AND THAT IS THE GROGAN'S MILL INTERSECTION WITH SOUTH MILL BEND. ANYTHING IN HERE FOR THE LANDSCAPING AT THAT INTERSECTION?

OR WAS THAT ALREADY FUNDED? >>MONIQUE SHARP: THAT IS A BUDGET INITIATIVE. THE VILLAGE ASSOCIATION REQUESTED THAT AND WE WILL TALK ABOUT IF THAT IS SOMETHING THE

BOARD WANTS TO FUND. >>DR. SHELLEY SEKULA-GIBBS: THAT WASN'T PREVIOUSLY FUNDEDED, EVER?

>>MONIQUE SHARP: CAN BE FUNDED WITH THE $11.5 MILLION.

>>DR. SHELLEY SEKULA-GIBBS: OKAY, THANK YOU.

>>MONIQUE SHARP: YOU ARE WELCOME.

HERE AGAIN IS -- NOT BEING FUNDEDED FROM THE CAPITAL RESERVE PROJECTS FROM INFORMATION TECHNOLOGY AND FACIL FACILITIES.

OKAY. SO, AGAIN, IS THERE A DESIRE AT THIS POINT TO LOOK AT ANY SPECIFIC CAPITAL PROJECTS WITHIN THE BOOK OR JUST GO ON AND COME BACK TO IT.

UP TO Y'ALL. >>DR. ANN SNYDER: IF THE BOARD IS GOOD WE WOULD WAIT -- IF YOU WERE GOOD, PRESIDENT SHARP UNTIL WE BECAME -- WE CAME TO BUDGET INITIATIVES, UNLESS THE.DEBT PROFILE YOU WOULD LIKE TO GO AHEAD AND TAKE A BREAK, RECESS

FOR TEN MINUTES. >>MONIQUE SHARP: WHATEVER YOU WOULD LIKE TO DO. WHAT IS YOUR PLEASURE? RECESS NOW? WE WILL RECESS FOR TEN MINUTES.

IT IS 10:16

. >>DR. ANN SNYDER: IT IS 10:30.

WE WILL RECONVENE. ITEM 7.

.DR. SHARP. >>MONIQUE SHARP: THANK YOU.

BEFORE WE LEAVE, ONE OF THE THINGS I CROSS INNED OVER.

ONE OF THE BEAUTIES OF HAVING THE RESERVE.

WHEN I TALK OF THE BUDGET WITH FLEXIBILITY, THAT IS ONE OF THE KEY KEYWAYS WE HAVE IN FLEXIBILITY.

SAY, FOR INSTANCE, SOMETHING HAPPENS DURING THE YEAR OR WE HAVE PLANNED FOR A CAPITAL ASSET BUT IT ENDS UP COSTING US MORE THAN WE THINK. WE CAN ALWAYS TAP INTO THAT CAPITAL RESERVE BALANCE IN ORDER TO FUND THOSE ADDITIONAL -- WHETHER IT IS A HIGHER COST ESTIMATE OR AN ENTIRELY NEW PROJECT IN ORDER TO DO THAT. THAT IS ALSO WHAT THE $11.5 MILLION IS FOR. SO WHEN WE GET TO THAT, MY RECOMMENDATION WILL BE THAT WE DON'T BLEED THAT DOWN TO ZERO.

WE LEAVE -- WHAT PREVIOUS BOARDS HAVE DONE, YOU LEAVE SOME TYPE OF BALANCE IN THERE THAT IS UNDESIGNATED SO YOU DO HAVE THAT FLEXIBILITY DURING THE YEAR, BECAUSE, AGAIN, WE ARE AT ONE MOMENT IN TIME. WE HAVE GOT 18 MONTHS BEFORE THE END OF '24 COMES HERE. WE WANT TO MAKE SURE WE HAVE THOSE TYPE OF THINGS. I WANTED TO MENTION THAT BEFORE IT WE GET OFF OF CAPITAL, FLEXIBILITY BUILT IN THIS BUDGET TO ADDRESS OTHER THINGS AS THEY COME UP.

>>DR. ANN SNYDER: THANK YOU. >>MONIQUE SHARP: YOU ARE WELCOME. WE WILL LOOK AT OUR DEBT PROFILE FOR THE TOWNSHIP. I TALKED ABOUT THIS A LITTLE BIT AT THE PETITION BEGINNING OF THE MEETING AND I WILL GO THROUGH THIS QUICKLY. THE TOWNSHIP BOARDS HAVE DONE A TREMENDOUS JOB IN MANAGING THE DEBT OF THE TOWNSHIP.

THEY HAVE PAID OFF $22.7 MILLION OVER THE PAST EIGHT YEARS.

$6.8 MILLION OF SAVINGS IN INTEREST EXPENSE.

WHEN I SAY PAID OFF, I DON'T MEAN THE DEBT SERVICE PAYMENTS.

BUT RETIRE EARLY. THEY RETIRED DEBT EARLIER AS IT BECAME A CALLABLE INSTEAD OF LETTING IT GO ON.

AS THESE FAVORABLE VARIANCES THAT YOU ARE TALKING ABOUT TODAY IN OUR UNDESIGNATED FUND BALANCE, PREVIOUS BOARDS HAVE CHOSEN TO AUTO US THAT MONEY. THEIR FIRST PRIORITY.

USE THAT MONEY IN ORDER TO RETIRE DEBT EARLY AND SAVE ON INTEREST EXPENSE SAVINGS -- TO SAVE ON INTEREST EXPENSE FOR THE RESIDENTS. WE DO NOT HAVE THAT OPPORTUNITY NOW, BECAUSE ALL OF OUR DEBT HAS EITHER BEEN PAID OFF OR REFINANCED AND IS NOT CALLABLE UNTIL ITS MATURITY DATE.

NOT AN OPTION HERE FOR THIS BOARD, BECAUSE IT IS JUST NOT -- JUST NOT AVAILABLE OTHERWISE WE WOULD HAVE PRESENTED IT.

REFINANCED $46.5 MILLION DEBT WHICH SAVED $5.7 MILLION IN SAVINGS. AS I MENTIONED EARLIER ACHIEVED A BOND RATING OF AA-PLUS, AND THAT PUTS US WITHIN THE TOP 4%

[01:50:01]

THIS IS A -- THE BOND REVIEW BOARD.

THE TEXAS BOND REVIEW BOARD EXAMINES DEBT POSITIONS OF ALL LOCAL TAXING ENTITIES ON AN ANNUAL BASIS.

THIS IS SOMETHING WE ALWAYS LOOK AT AND SEE WHERE WE ARE COMPARED TO SOME OF THE CITIES THAT HAVE SIMILAR POPULATION.

BY TAX-SUPPORTED DEBT, THIS MEANS PROPERTY TAX-SUPPORTED DEBT AND EXCLUDING ITEMS THAT ARE DONE WITH REVENUE BONDS.

THIS IS NOT LIKE WATER, INFRASTRUCTURE, AIRPORTS, ALL OF THAT IS NOT INCLUDED. THIS IS REALLY JUST SORT OF GETTING DOWN TO FIRE DEPARTMENT, PARKS AND RECREATION, I.T. TYPE OF CAPITAL. AND YOU CAN SEE -- HARD TO READ HAVING TO CLIP IT FROM ANOTHER PAGE, THE TOWNSHIP, THE LITTLE BITTY BAR COMPARED TO OUR PEERS IN TURNS OF POPULATION THE LOWEST DEBT PER CAPITA OF PROPERTY TAX SUPPORTED DEBT.

A LOOK AT OUR DEBT SUMMARY. CURRENTLY -- OR AT THE END OF 2024, $25.7 MILLION IN OUTSTANDING DEBT.

$7.9 MILLION FROM THE CONVENTION CENTER AND $17.8 MILLION FOR BONDS ISSUED IN 2012 AS WE TRANSITIONED FROM COMMUNITY ASSOCIATION TO A SPECIAL PURPOSE DISTRICT.

ANNUAL DEBT SERVICE ON THAT IS ABOUT $6 MILLION.

AS WE MENTIONED EARLIER THE PROPERTY TAX -- THE DEBT SERVICE RATE FOR THE PROPERTY TAX RATE IS ABOUT 1.18 IN ORDER TO SUPPORT THAT DEBT SERVICE. THE TOWNSHIP BOARD HAS SINCE 2014 HAVE REDUCED DEBT BY ABOUT $62 MILLION OR 71%.

SO YOU CAN SEE HERE, AGAIN, AT 2024, PROJECTING $25.7 MILLION IN OUTSTANDING DEBT. I ALSO WANTED TO SHOW YOU GOING FROM 2024, THE 25. WHAT WE CAN LOOK FORWARD TO OVER THE NEXT EIGHT YEARS. BY 2032, IF WE WERE TO ISSUE ANY ADDITIONAL DEBT, THAT WE WOULD BE FULLY PAID OFF.

ALSO, I WANT TO SHOW YOU IN TERMS OF OUR DEBT SERVICE PAYMENTS, ALL OF OUR DEBT. A LOT OF THIS DEBT IS BEING PAID FROM OUR HOTEL TAX. AS WE -- AS WE PAY OFF -- WHEN WE GET TO 2028, THAT IS WHEN THE CONVENTION CENTER BONDS WILL BE PAID OFF. SO WE WILL SEE OUR DEBT SERVICE DECREASE BY ABOUT $2.9 MILLION WHICH BECOME FUNDS AVAILABLE TO THE TOWNSHIP TO SPEND IN OTHER AREAS.

AND WE ARE GOING TO TALK ABOUT WHERE THAT MIGHT BE.

AND THEN IN 2031, WE NEED AN ADDITIONAL $2.4 MILLION IN PAYOFF FROM DEBTS AS SOME OF OUR G. OFG.O. BONDS ARE PAID OFF.

ANY QUESTION ON DEBT BEFORE I MOVE FORWARD.

>> IMPRESSIVE. HE.

>>MONIQUE SHARP: NOW I WANT TO TALK ABOUT OUR RESERVES AND OUR FUND BALANCES AND WHERE WE ARE AFTER TAKE INTO ACCOUNT ALL THE DIFFERENT THINGS THAT WE HAVE BEEN TALKING ABOUT SO FAR DURING THIS MEETING. EXCUSE ME.

IN TOTAL FOR 2024, WE ARE PRO PROJECT TO HAVE RESERVE THE FUND BALANCES OF $113 MILLION. THIS CHART SHOWS WHAT THE DIFFERENT COMPONENTS OF THAT ARE.

SO OUR OPERATING RESERVE IS OUR LARGEST RESERVE AT $31.8 MILLION. THIS BY BOARD POLICY, CURRENT BOARD POLICY IS TIE TO MAINTAINING A BALANCE OF 25% OF GENERAL FUND OPERATING EXPENDITURES.

THAT IS ABOUT -- THAT IS THREE MONTHS OF OPERATIONS.

SO WHAT THIS IS, IS, SAY, FOR INSTANCE, WE HAD A -- WE HAD A SOME TYPE OF NATURAL DISASTER THAT WIPED OUT THE MALL OR THE TOWN CENTER FOR A PERIOD OF TIME AND WE WEREN'T ABLE TO GENERATE ALL OF THIS SALES TAX REVENUE THAT WE ENJOYED FROM THAT AREA.

THIS IS A RESERVE THAT WOULD ALLOW US FOR THREE MONTHS TO BE ABLE TO CARRY ON WITHOUT HAVING A HUGE IMPACT IN SERVICES.

. >>DR. ANN SNYDER: AND WE REALLY

SAW THIS DURING COVID. >>MONIQUE SHARP: CORRECT.

>DR. ANN SNYDER: AT THE VERY BEGINNING AND HOW IT HELPED US OF SUSTAIN THE CVB. .

>>MONIQUE SHARP: THAT'S CORRECT. THAT IS RIGHT.

WE HAD THESE RESERVES AND ABLE TO HAVE A SIGNIFICANT LOSS OF INCOME IN SALES TAX AND HOTEL TAX RESERVE.

REVENUES. THESE RESERVES HELP US SUSTAIN SERVICES DURING THAT PERIOD OF TIME SO WE DIDN'T HAVE TO

SIGNIFICANTLY PULL BACK. >> THEY WERE SUBSEQUENTLY REPL REPLENISHED?

>>MONIQUE SHARP: THEY WERE, SIR. WE ARE BACK UP TO HAVING THAT AMOUNT. ONE OF THE FIRST QUESTIONS IN MY

[01:55:01]

WHAT PERCENTAGE. DID YOU HAVE TO TAP INTO IT.

IF YOU DID, DID YOU HAVE TO REPLENISH IT? THE FIRST QUESTION OUT OF THE BOX.

VERY IMPORTANT FOR US TO MAINTAIN THIS LEVEL OF RESERVE.

THE CAPITAL REPLACEMENT RESERVE. WE TALKED ABOUT THE SIGNIFICANCE AND IMPORTANCE OF HAVING THIS TYPE OF FUND.

NOT A REQUIRED FUND, BUT ABSOLUTELY SOMETHING THAT HAS WORKED TREMENDOUSLY WELL FOR THE TOWNSHIP.

HAND THIS IS AT $31.5 MILLION. BELL SIGNIFICANTLY UTILIZE THAT OVER THE NEXT FIVE YEARS AS A PLANNED UTILIZATION.

WE HAVE KNOWN THIS IS COMING LAND TELL YOU ABOUT THAT IN JUST AMINUTE. THE PARKS NEED ASSESSMENT RESERVE STARTED OUT AT $19 MILLION.

WILL BE DOWN TO $11.4 BY THE END OF NEXT YEAR.

THESE ARE THE PROBLEMS APPROVED BY THE BOARD IN PHASE ONE, IN TERMS OF THE NEEDS ASSESSMENT AND SPENDING THOSE.

HOTEL TAX RESERVE ARE MONIES GENERATED BY THE HOTEL TAX THAT ARE NOT NEED BY OTHER PURPOSES THAT ARE AROUND $8 MILLION.

CCSA RESERVE BY THE COMPREHENSIVE COMMUNITY SERVICES AGREEMENT, THE AMENDMENT ONE THAT THE BOARD JUST APPROVED, SET ASIDE $4 MILLION FOR PROJECTS THAT WOULD BE JOINTLY FUNDED WITH THE HOWARD HUGHES CORPORATION IN TERMS OF PUBLIC AMENITIES THROUGHOUT THE WOODLANDS PRIMARILY IN THE TOWN CENTER AREA. AT THE TIME SERVICE RESERVE IS REQUIRED BY BOND CONVENANCE IN OUR OUTSTANDING TENT.

THERE IS NOTHING -- WE HAVE TO MAINTAIN THAT ONE.

TRANSPORTATION FUND OF $3.1 MILLION.

THE GREENWAY, THE SPRING CREEK TRAIL SYSTEM, THAT PROJECT.

WE WILL CONTINUE TO SPEND THAT ONE.

OUR CULTURAL EDUCATION RESERVE IS REQUIRED -- WHAT WE ARE REQUIRED TO DO THE TOWNSHIP IS -- THE 10% OF EVENTS.TAX THAT IS TOWNSHIP RETAINS HAS TO BE PUT IN THE RESERVE AND USED -- STATUTORILY ARE TO REVIEW THE CULTURAL TYPES OF EVENTS AND EDUCATION. FOR EXAMPLE, IF WE WERE TO MOVE FORWARD WITH THE WITH A PERFORMING ARTS FACILITY, MONEY TO BE USED OR ARCHITECTURAL COSTS OR OTHER TIME OF STUDY.

>> COULD BE? SHARP SHAFRPZ COULD BE ARE, YES.

THE VISIT THE WOODLANDS OF REVENUE THAT WERE LESS.

A INSURANCE REP SERVE BECAUSE WE ARE A SELF-INSURED HEALTH INSURANCE PLAN AND TALK OF THE BENEFITS OF THAT.

AND THIS THE AMOUNT RECOMMENDED BY OUR MUCH A WARY TO HAVE IN CASE OUR CLAIMS DO EXCEED OUR PARTICULAR FUNDING IN A PARTICULAR YEAR. RIGHT NOW -- WE TALKED ABOUT IN THE TOP OF THE BUILDINGS, OF THE $13 MILLION, $5 MILLION THAT IS BEING GENERATED IN 2024 OF UNDESIGNATED FUNDS BASED ON THE 18% -- 18.4 VOTER APPROVAL RATE. THIS WOULD DECREASE BY ABOUT 2.5 MILLION, $2.6 MILLION, IF THE BOARD WENT TO THE NO NEW REVENUE RATE. AND YOU WILL LOOK AT A SERIES OF BUDGET INITIATIVES, PRIMARILY RELATED TO LAW ENFORCEMENT THAT WILL FURTHER TAKE THIS BALANCE DOWN TO ALMOST -- ALMOST NOTHING. I THINK YOU WILL HAVE ABOUT $500,000 LET'S AS I SAID EARLIER.

THEN FINALLY, THE 2023 UNTESS IG NATED FUND BALANCE OF $11.5 MILLION THAT WE TALKED ABOUT EARLIER THAT CAN BE USED TO FUND ONE-TIME CAPITAL PROJECTS, A SERIES OF WHICH WE ARE GOING TO GO THROUGH WHEN WE GET TO YOUR BUDGET INITIATIVES.

>> QUICK QUESTION. >>MONIQUE SHARP: YES, SIR.

>> HELP ME UNDERSTAND THE PARKS NEEDS ASSESSMENT RESERVE.

AUGUST 2022, THE BOARD AT THIS TIME, WHICH IS DIFFERENT THAN THE BOARD HERE. DECIDED ON THE PROJECTS BASED ON

THE NEEDS ASSESSMENT. >>MONIQUE SHARP: RIGHT.

A LIST OF FRANCE WILL COME TO US ONE BY ONE AS THEY ARE BEING

LOOKED AT. >>MONIQUE SHARP: YES, SIR.

>> DO WE EVER LOOK BACK AT THAT TO SEE WHAT THE CURRENT BOARD WANTS TO DO AS FAR AS THE ASSESSMENT?

OR JUST ONESIES AND TWO SEES. >> WE HAD PRESENTED THAT TO THE BOARD IN THE PREVIOUS BUDGET WHEN WE WENT OVER FINANCIAL PLANS. WE CAN CERTAINLY BRING IT BACK TOMORROW IF YOU WOULD LIKE TO SEE IT AGAIN.

SOME OF THE PROJECTS ARE ALREADY MOVING ALONG.

THEY HAVE ALREADY BEEN CONTRACTED WITH BECAUSE APPROVED BY THE PREVIOUS BOARD AND THIS BOARD HAS APPROVED A COUPLE OF PROJECTS AS WELL. CHRIS MENTIONED A COUPLE OF THOSE PROJECTS EARLIER. OF THE ONES WE HAVE NOT STARTED ON, WE CAN BRING THEM BACK AND SHOW YOU AND THIS BOARD CAN LOOK

[02:00:05]

THESE WERE PRIORITIZED BY THE RESIDENTS.

>> MAYBE NOT DURING BUDGET TIME BUT A BETTER UNDERSTANDING.

THINGS HAVE CHANGED SINCE AUGUST '22.

I BELIEVE IN PARKS, BUT SOMETIMES YOU MIGHT HAVE TO GIVE AND TAKE. I WANT TO SEE MAYBE DOWN THE ROAD OF WHERE WE ARE AT IN THAT WHOLE PROCESS AND WHAT IS STILL OUT THERE AND WHAT HAS BEEN APPROVED AND SO ON.

>>MONIQUE SHARP: THAT IS A GOOD COMMENT.

WE CAN BRING THAT BACK TO YOU TOMORROW, IF YOU WOULD LIKE.

>>DR. ANN SNYDER: IF IT IS ALL ACCEPTABLE TO THE BOARD, WE CAN PRESENT IT AT THE SEPTEMBER BOARD MEETING.

UNLESS YOU WANT IT TOMORROW. YOUR PLEASURE.

>> I ALSO WOULD LIKE TO SEE IT AT WHAT YOU BELIEVE IS THE MOST

CONVENIENT TIME. >> THIS IS NOT NECESSARY FOR US

IN THIS BUDGET PROCESS? >>MONIQUE SHARP: NO, SIR.

I WOULD DAY IF YOU DON'T AND TWO SPEND IT ON THE PROJECTS ALLOCATED ABOUT $30 MILLION -- $100 MILLION OF OTHER PROJECTS IDENTIFIED IN THE NEEDS ASSESSMENT AND YOU CAN ALWAYS REALLOCATE THOSE FUNDS. AND THAT IS ALWAYS AN OPTION.

THIS -- I WANTED TO SHOW YOU WHY OUR -- THIS IS A LOOK AT THE COMPONENTS THAT ARE INCREASING OUR RESERVE BALANCE FROM '23 TO '24. END OF THIS YEAR WE ARE PROJECTED TO HAVE $127 MILLION IN RESERVE THAT WILL DECREASE TO $113 MILLION. ABOUT A $13.8 MILLION AT THE CREASE OVER THE NEXT YEAR. AND YOU CAN SEE THE REASONS THERE IN THE LAST COLUMN. MOST OF IT IS RELATED TO THE ASSUMPTION THAT WE WILL SPEND THE $13 MILLION ON THE FIRE STATION 5 AND THE EMERGENCY TRAINING CENTER.

OUR CAPITAL REPLACEMENT RESERVE DECREASING $6 MILLION.

MOST OF THOSE CAPITAL ASSETS THAT YOU SAW EARLIER ARE BEING FUNDED FROM THE RESERVE AND A PLANNED UTILIZATION OF THAT.

THE PARKS NEEDS ASSESSMENT, PLACE HOLDER FOR $13 MILLION.

OUR HOTEL TAX RESERVE IS INCREASING, BECAUSE, AGAIN, WE ARE NOT INCREASING THE AMOUNT OF MONEY GENERATED FROM THE HOTEL TAX. FIRST GOES TO PAY OFF DEBT SERVICE, ABOUT $2.8 MILLION. NEXT PIECE GOES TO FUND THE REMAINING OF WHAT VISIT THE WOODLANDS NEEDS AND THE REST OF IT FLOW INTO A RESERVE. WE WILL TALK ABOUT THAT THAT CAN BE USED TO PAY DEBT SERVICE ON AN ECONOMIC DEVELOPMENT PROJECT.

THAT IS WHY THAT IS JUST UNALLOCATED HOTEL TAX THAT IS FLOWING INTO THAT RESERVE CULTURAL EDUCATION.

THAT IS A STATUTORY REQUIREMENT THERE RERESERVE THOSE FUNDS FOR A CULTURAL EDUCATION PROJECT. FINALLY THE 2023 -- THAT SAYS '3. IT SHOULD SAY '24 UNDESIGNATED FUND BALANCE OF $5 MILLION THAT WILL BE GENERATED THIS YEAR BUT I BELIEVE WILL BE EVAPORATED ONCE THE BOARD STARTS TALKING OF BUDGET INITIATIVES. I WANTED TO SHOW YOU OVER A FIVE-YEAR PERIOD WHAT OUR RESERVES LOOK LIKE.

WE ALWAYS GET. I KNOW THE AMOUNT OF THE RESERVES MONEY WHEN YOU SAY $113 MILLION.

SOUNDS REALLY HIGH. AND IT IS VERY HIGH.

THERE ARE REASONS TIED UP ON OUR CAPITAL REPLACEMENT RESERVE AND ALLOCATED FUNDS SPENT DURING THIS CYCLE CYCLE.

A HOOK AT OUR OPERATING RESERVE AND THE IMPORTANCE OF KEEPING THAT. THE IMPORTANCE OF MAINTAINING THAT AT 25% OF GENERAL FUND OPERATING EXPENSES AND WE DO JUST THAT DURING OUR 28 -- IN OUR FIVE-YEAR PLAN, WE MADE ADDITIONAL ALLOCATION TO MAKE SURE WE KEEP IT AT THAT PERCE PERCENTAGE.

A LOOK AT OUR CAPITAL REPLACEMENT RESERVE AND WHAT I WAS TALKING ABOUT EARLIER, WE DO PLAN TO UTILIZE THIS RESERVE HEAVILY OVER THE NEXT FIVE YEARS AS CERTAIN MAJOR PROJECTS COME DUE FOR REPLACEMENT OR REVITAMINIZATION AND THOSE PROJECTS WILL COME TO THE BOARD. NOT AN AUTOMATIC.

ALL OF THESE GET TO THE BOARD IN TERMS OF OUR PROCUREMENT REQUIREMENTS. WE DO GET DOWN -- WE WILL DECREASE THAT RESERVE BY $10 MILLION OVER THE NEXT FIVE YEARS, BUT YOU CAN SEE THERE IN 2028, WE ARE STILL ADHERING TO OUR RESERVE STUDY AND MAINTAINING THE MINIMUM BALANCE FOR THE TIMELY REPLACEMENT OF ASSETS.

HERE IS A LOOK AT OUR PARKS NEEDS ASSESSMENT RESERVE, $11.4 MILLION IN THAT RESERVE. AND WE DO PLAN TO SPEND IT DOWN ON PROJECTS OVER THE NEXT FIVE YEARS.

AGAIN, IT DOESN'T HAVE TO BE AT THE PROJECTS THAT ARE CURRENTLY PLANNED. THE BOARD CAN MAKE DECISION TO

[02:05:01]

HERE IS A LOOK AT OUR CULTURAL EDUCATION RESERVE.

GROWS BY $200,000 TO $300,000 A YEAR TYPICALLY.

AND THEN FINALLY, I WANTED TO SPEND A LITTLE BIT OF TIME ON THIS. SO OUR -- THE REASON OUR RESERVES ARE GROWING. THE PRIMARY REASON THEY ARE GROWING IN THE FIVE-YEAR PLAN BECAUSE OF THE UNALLOCATED.HOTEL TAX. FOR THE VISIT THE WOODLANDS AND REST GOES IN THE RESERVE. OUR MONEY IS UNRESTRICTED BECAUSE OF OUR STATUS AS A SPECIAL DISTRICT.

AND THE BOARD CAN USE THESE MONIES FOR ANY PURPOSES THEY WINS. THERE ARE NO RESTRICTIONS.

WHAT I AM RECOMMENDING BECAUSE I KNOW THIS BOARD HAS DISCUSSED VARIOUS -- THE IMPORTANCE, I GUESS I SHOULD SAY OF ECONOMIC DEVELOPMENT, THAT WE DON'T WANT TO REST ON OUR LAURELS.

THAT IS IMPORTANT IF YOU WANT TO MAINTAIN THESE LOW TAX RATES THAT WE FIND WAY TO SUPPLEMENT OUR HOTEL TAX AND SPECIFICALLY OUR TAX. WHAT THIS DOES IF WE MAINTAIN IT EVEN THOUGH WE DON'T HAVE A SPECIFIC PROJECT RIGHT NOW THAT WE ARED TO SAY, YES, WE CAN ISSUE BONDS ON.

WHAT THIS TELLING US THAT WE HAVE THE DEBT SERVICE IN TERMS OF THESE ANNUAL AMOUNTS $3.6 MILLION, $378 MILLION, GROWING TO $6.8 MILLION WHEN WE PAY OFF OUR CONVENTION CENTER DEBT COULD BE TO ISSUE PONDS. BEFORE YOU HAVE TO ISSUE BONDS, YOU HAVE TO SHOW TO THE SECRETARY OF STATE'S OFFICE AND OTHERS YOUR POTENTIAL BOND UNDERWRITERS THAT YOU HAVE SET SERVICE SET ASIDE. YOU CAN'T SAY WE HAVE THIS.

YOU HAVE TO SHOW WHAT YOUR PLAN IS IN ORDER TO DO THAT AND THIS IS WHAT THIS GIVES YOU. THIS GIVES YOU A TON OF FLEXIBILITY. NOT MONEY WE NEED TO FUND OPERATIONS RIGHT NOW. AND GIVES YOU A TON OF FLEXIBILITY IN ORDER TO ADDRESS ECONOMIC DEVELOPMENT IN THE FUTURE. OKAY.

THIS IS OUR LAST SECTION BEFORE WE ARE DONE WITH THE PRELIMINARY BUDGET AND I ONLY WANT TO SHOW THIS TO YOU -- EXC-ME.

YOU DO NOT ADOPT A FIVE-YEAR PLAN WITH YOUR BUDGET.

ALL YOU ARE GOING TO DO THIS YEAR, THE ONLY OTHER OBLIGATION IS TO ADOPT A 2024 BUDGET AND TAX RATE; HOWEVER, IT IS IMPORTANT -- I AM SURE YOU DO THIS IN YOUR PERSONAL LIVES AND YOUR OTHER BUSINESS LIVES, WHEN YOU MAKE DECISION IN YOUR CURRENT YEAR, IT OBVIOUSLY HAVE IMPACTS ON FUTURE YEARS.

WE ALWAYS WANT TO LOOK OUT BASED ON A SERIES OF ASSUMPTIONS ON WHERE WE MIGHT BE IN OUR FIVE-YEAR PLAN.

SO THESE ARE VERY CONSERVATIVE GROWTH ASSUMPTION IN OUR PROPERTY TAX, OUR SALES TAX, OUR HOTEL TAX, AND INFLATION.

WE ARE SAYING WE ARE GOING TO GET BACK DOWN TO SOMETHING NORMAL. THIS IS WHAT THE TREASURY DOES, EVERYTHING THAT THEY ARE DOING IS TRY TO GET US BACK TO THE LEVELS. WHAT THE TEXAS STATE COMPTROLLER PROJECTING FOR THE CPI INTO THE FUTURE.

WE PUT THOSE ALL IN AND PLACE THEM IN OUR BASE BUDGET, WE WANT TO MAKE SURE THAT OUR OPERATING REVENUES ARE CONTINUING TO OUTPACE OUR OPERATING EXPENDITURES AND THAT IS WHAT YOU SEE AT THE CHART ON THE BOTTOM.

BLUE LINE ARE REVENUES. RED LINE IS EXPENDITURES.

THAT GAP IN BETWEEN THOSE TWO LINES MEAN THAT WE ARE GENERATING REVENUES THAT CAN THEN BE USED TO FUND OUR RESERVES AND OTHER TYPE OF THINGS.

IT IS REAL SIMPLE. I DON'T WANT TO GO TOO 67 INTO THE FIVE-YEAR PLAN OTHER THAN WE ARE IN GOOD SHAPE.

>>DR. SHELLEY SEKULA-GIBBS: MISS SHARP, DISCUSSION AT THE STATE LEVEL OF ELIMINATING PROPERTY TAX IN TEXAS.

THIS MAY BE A TODD QUESTION, BUT IF THAT WERE TO HAPPEN, DO WE HAVE CONTINGENCIES TO THINK WHAT THIS 2%, HOW WE WOULD FILL THAT 2 2%.

>> MY UNDERSTANDING IF THE STATE WENT THAT WAY, IT WOULD BE REPLACED BY HIGHER SALES TAX. WOULDN'T TAKE AWAY THE PROPERTY TAX WITHOUT GIVING OTHER WAY TO GENERATE REVENUE.

INSTEAD OF USING PROPERTY TAX, WE WILL USE THE OTHER MEANS THAT ARE AVAILABLE. IF IT WAS ELIMINATE THE COMPLETELY, YEAH, WE WOULD BE LOOKING INTO AT CUTTING SERVICES AND I DON'T THINK THAT IS THE INTENTION AT ALL.

>>DR. SHELLEY SEKULA-GIBBS: I DON'T THINK THAT IS THE INTENTION, BUT I WANTED TO MAKE SURE WE ARE KEEPING OUR EYE ON

[02:10:03]

THAT. >>MONIQUE SHARP: YES, MA'AM.

THAT IS A GOOD POINT. THANK YOU.

THAT CONCLUDES MY PRESENTATION. >>DR. ANN SNYDER: THANK YOU, EXTREMELY NEUROAND ENORMOUS AMOUNT OF INFORMATION FOR WE AS A BOARD TO CONSIDER A 2024 PROPOSED TAX RATE AS WELL AS MAINTAINING ALL THE AMENITIES AND SERVICES AND STAFF THAT WE HAVE. .OTHER COMMENTS? IS THERE A MOTION TO ACCEPT THE REPORT.

>> I MOTION TO ACCEPT THE REPORT.

>> SECOND. .

>>DR. ANN SNYDER: MOVED AND SECOND TO ACCEPT THE REPORT.

ALL IN FAVOR, SIGNIFY BY SAYING AYE.

OPPOSED. MOTION PASSES.

[8. Receive, consider and act upon Budget Initiatives related to the 2024 Preliminary Budget and Five-Year Plan;]

>>MONIQUE SHARP: WELL-DONE. >>DR. ANN SNYDER: WELL-DONE,

MONIQUE. >>MONIQUE SHARP: THANK YOU VERY

MUCH. >>DR. ANN SNYDER: THAT WILL

BRING US BUDGET INITIATIVES. >>MONIQUE SHARP: WE ARE MOVING THROUGH THIS FAST. I DIDN'T KNOW IF WE WOULD IT

TOMORROW. >> I DON'T KNOW EVERYONE'S TEMPERATURE IS. I AM ALMOST GOOD BREAKING TODAY SO HE CAN SPEND A LITTLE MORE TIME STUDYING THE INITIATIVES.

YOU KNOW, THIS HAS BEEN -- WE ARE DRINKING FROM A FIRE HOSE, MANY OF US UP HERE. PUN INTENDED.

BUT -- BUT -- I -- I JUST -- I THINK IT MIGHT BE GOOD FOR US AS WE ARE STARTING TO GET MAYBE MENTALLY FATIGUED WITH ALL THIS INFO TO DIGEST IT. COME BACK TOMORROW MO MORNING FRESH AND HIT THE BUDGET INITIATIVE.

>> MAY I MOVE THAT AS A MOTION? >>DR. ANN SNYDER: THAT A MOTION? OTHER COMMENTS? IF NOT, ALL IN FAVOR.

OPPOSED? HE SECONDED.

MR. FRANKS. IT WAS MOVED BY DIRECTOR WATSON.

SECONDED BY DIRECTOR FRANKS. THAT WILL BRING US TO THE AGENDA ITEM 9, EXECUTIVE SESSION. WE ARE NOT IN NEED OF EXECUTIVE

[11. Consideration of items to be placed on the agenda for next month's meeting;]

IS THERE ANYTHING? I KNOW THERE WAS MENTION OF THE CAPITAL IMPROVEMENT FOR PARKS AND OTHER ITEMS THAT WILL PUT IN

[12. Board announcements; and]

THEN BOARD ANNOUNCEMENTS. >> I HAVE ONE ANNOUNCEMENT.

TODAY IS THE FIRST DAY OF CLASSES AT SAM HOUSTON STATE.

AND TOMORROW IS MY FIRST DAY IN THE CLASSROOM, SO I WILL NOT BE HERE TOMORROW MORNING. I WILL BE IN THE CLASSROOM

TEACH. >> CONGRATS.

THAT IS SCARY. >>DR. ANN SNYDER: RETURN ON WEDNESDAY. IS THERE A MOTION TO ADJOURN.

>> SO MOVED. >> SECOND.

>>DR. ANN SNYDER: MOVED AND SECONDED BY DIRECTOR MILNER AND DIRECTOR FRANKS. 10:56.

ALL THOSE IN FAVOR SIGNIFY BY SAYING AYE.

THE MEETING IS ADJOURNED.

* This transcript was compiled from uncorrected Closed Captioning.