[1. Invocation / Pledge of Allegiance;] [2. Call meeting to order;] [00:00:11] >> WOODLANDS TOWNSHIP BUDGET WORKSHOP NUMBER 1 TO ORDER. VICE- CHAIRMAN I.C.E.. ER IS GOING TO LEAD US IN A PRAYER. >> PLEASE BOW YOUR HEADS. HEAVENLY FATHER, THANK YOU FOR THIS DAY. THANK YOU FOR THIS BEAUTIFUL MORNING. THANK YOU FOR AIR-CONDITIONING. AND LORD, WE JUST ASK YOU BE WITH US TODAY AS WE DISCUSS IMPORTANT ITEMS FOR THIS WONDERFUL COMMUNITY, AND WE ASK YOU CONTINUE TO WATCH OVER US IN ALL THAT WE THINK, SAY, AND DO. PLEASE LET US HONOR YOU. IN YOUR NAME WE PRAY, AMEN. >> DIRECTOR FRANKS, WOULD YOU LEAD US IN THE PLEDGE? >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS ONE NATION UNDER GOD INDIVISIBLE WITH LIBERTY AND JUSTICE FOR ALL. >> HONOR THE TEXAS FLAG. I FLEDGE ALLEGIANCE TO THEE TEXAS BY ONE STATE, UNDER GOD, ONE INDIVISIBLE. >> ALL RIGHT, MOVING ON. IT'S 831 A.M. I DECLARE IN ACCORDANCE TO STATE LAW NOTICE WAS POSTED 72 HOURS IN ADVANCE OF THIS MEETING. POSTING OCCURRED IN THE TOWNSHIP OF THIS OFFICE BUILDING. IN COORDINATION OF A QUORUM. I ASK EACH BOARD MEMBER TO IND GREAT YOUR PRESENCE AND RESPOND WITH AN AUDIBLE SOUND TO ACKNOWLEDGE AS I CALL ROLL. VICE- CHAIRMAN EISSLER. >> PRESENT. >> DIRECTOR ANYBODY ELSEN. >> [3. Receive, consider and act upon adoption of the meeting agenda;] HERE. >> DIRECTOR SNYDER. >> PRESENT. >> BY ROLL CALL SUFFICIENT MEMBERS ARE PRESENT THAT WE HAVE A QUORUM. PLEASE REVIEW IN YOUR AGENDA PACKETS PAGES 1 THROUGH 2 FOR ADOPTION OF THE AGENDA. DO I HAVE A MOTION AND SECOND TO ADOPT THE AGENDA IN. >> SECOND. >> MOVED BY DIRECTOR FRANKS, SECONDED BY DIRECTOR HEISER. WE DO NOT HAVE ANY PUBLIC OFFICIALS HERE TODAY, AND WE DO NOT HAVE ANY PUBLIC [6. Receive, consider and accept a report regarding the 2025 no-new-revenue tax rate and voter-approval tax rate; ] COMMENT. >> ARE WE GOING TO READ ANYWAYS? >> I'M NOT GOING TO READ ANYWAY. MOVINGEN TO AGENDA 6, RECEIVE, CONSIDER, AND ACCEPT A REPORT REGARDING THE 2025 NO-NEW-REVENUE TAX RATE AND VOTER APPROVAL TAX RATE. I CALL ON MONIQUE SHARP TO PRESENT. >> THAT'S THE WRONG ONE. HOLD ON A SECOND. >> MONIQUE, DO YOU WANT TO KIND OF START THIS -- >> I'M SORRY. YES, SIR? >> DO YOU WANT TO START THIS PROCESS, AND THEN WHEN SHELLEY GETS HERE, WE CAN GO INTO EXECUTIVE SESSION. >> THAT'S A GOOD IDEA. >> WE WANT TO GO INTO EXECUTIVE SESSION PRETTY QUICK. THERE'S SOMETHING WE WANT TO RUN BY EVERYONE. MONIQUE, IT'S ALL YOURS. >> GOOD MORNING, EVERYONE. WE'RE GOING TO SPEND SOME QUALITY TIME TOGETHER THIS WEEK GOING OVER THE BUDGET. I'LL TRY TO MAKE IT AS INTERESTING AS POSSIBLE. NUMBERS PEOPLE LIKE ME YOU'LL FIND IT INTERESTING. OTHERWISE, WE'LL SEE. DIRECTOR EISSLER VERY IMPORTANT WORK FOR OUR COMMUNITY, ONE OF THE MOST IMPORTANT RESPONSIBILITIES THAT THE BOARD DEALS WITH EACH YEAR, AND STAFF ALSO SPENDS A LOT OF TIME ON THAT. SO I'M VERY HAPPY, PLEASED TO BE ABLE TO START THE BUDGET PROCESS WITH YOU THIS MORNING. AND TO START THAT PROCESS, WE'RE GOING TO LOOK AT OUR TAX RATES. BECAUSE AT THE END OF THIS BUDGET PROCESS -- THE END OF THIS WEEK AT LEAST ONE OF THE LAST THINGS YOU'RE GOING TO DO IS VOTE ON A PROPOSED RATE. IT'S NOT YOUR ADOPTED TAX RATE, BUT IT WILL BE YOUR PROPOSED RATE. AND THAT PROPOSED RATE THEN DETERMINES WHAT PUBLIC NOTICES ARE REQUIRED, IF A PUBLIC HEARING IS REQUIRED ON THE TAX RATE, AND THEN WE'LL SET A DATE TO ADOPT THE BUDGET AND THE TAX RATE, WHICH RIGHT NOW IS SET FOR THURSDAY, SEPTEMBER 5TH. SO WITH THAT, I WANT TO GO OVER THE TAX RATES. THESE ARE THE CERTIFIED TAX RATES CERTIFIED BY THE MONTGOMERY COUNTY TAX ASSESSOR. AND ACTUALLY WANT TO START OFF BY GIVING A SHOUTOUT TO TAMMY MCRAY. SHE DOES AN AWESOME JOB FOR THIS COUNTY. SHE IS RESPONSIVE TO [00:05:01] EVERY QUESTION WE ASK, ALWAYS VERY HELPFUL, SO SHE IS AN ABSOLUTE -- SHE AND HER ENTIRE TEAM ARE A PLEASURE TO WORK WITH. RESIDENT. OODLANDS - >> AND A WOODLANDS RESIDENT, THAT'S RIGHT. THE CURRENT TAX RATE THAT'S IN PLACE FOR THIS YEAR, THAT WAS ADOPTED BY THE BOARD FOR THIS YEAR IS 17.14. THE ENO NEW REVENUE RATE FOR THIS YEAR IS $16. 03, SO A DROP OF ABOUT A PENNY. JUST A REMINDER THE NO NEW REVENUE RATE IS THAT RATE WHICH WHEN APPLIED TO THE TAXABLE PROPERTIES IN BOTH THE CURRENT YEAR AND THE COMING YEAR, THE ROLLS THAT HAVE BEEN CERTIFIED GENERATES THE EXACT SAME AMOUNT OF REVENUE. SO THAT'S WHY IT'S CALLED THE NO NEW REVENUE RATE. THE NEW PROPERTIES THAT CAME ONTO THE ROLL THIS YEAR, THOSE ARE NOT INCLUDED IN EAR, BUT THE OVERWHELMING MAJORITY OF OUR PROPERTIES WOULD BE SUBJECT TO THIS. THE VOTER APPROVAL RATE IS HIGHER THAN OUR CURRENT RATE AT 18.89. THAT IS THE RATE AT WHICH A VOTE IS REQUIRED IN THE NOVEMBER ELECTION TO GO ABOVE THIS AMOUNT. BUT IF YOU'LL RECALL THE WAY THAT THE CALENDER WAS SET FOR THIS BUDGET PROCESS, THAT'S NOT EVEN A POSSIBLE FOR US. WE COULDN'T GET THROUGH EVERYTHING, SO THE BOARD ALREADY TOOK THAT OFF THE TABLE, WHICH IS FINE BECAUSE WE DO NOT NEED ANYWHERE NEAR 18. 89 TO BALANCE THE BUDGET. ON THAT $17. 49 IT'S COMPOSED OF TWO DIFFERENT RATES. IT'S 16.12. AND THEN WE HAVE A DEBT SERVICE RATE OF JUST OVER A PENNY THAT PAYS OUR DEBT SERVICE ON OUR GENERAL OBLIGATION BONDS. AND WE'LL TALK MORE ABOUT DEBT POSITION HERE IN JUST A LITTLE BIT. SOMETHING THAT'S IMPORTANT TO REMEMBER AS WE GO THROUGH THIS AND START TALKING ABOUT BUDGET INITIATIVES AND RATE SCENARIOS IS THAT EACH PENNY OF THE TAX RATE GENERATES RIGHT ABOUT $3 MILLION IN REVENUE. SO TAKING THAT INTO CONSIDERATION, JUST WANTED TO PUT IT INTO PERSPECTIVE WHEN WE TALK ABOUT THE TAX RATE VERSUS NO NEW REVENUE RATE AS WELL AS WHAT IT MEANS FOR THE TOWNSHIP AS WELL AS OUR HOME OWNERS. HERE ARE DIFFERENT SCENARIOS, WHICH AGAIN WE DON'T HAVE TO SPEND A BUNCH OF TIME TODAY. JUST WANT TO PUT IT INTO IN PERSPECTIVE. WE SHOWED THIS DROPPING IN A POINT -- IN QUARTER OF A PENNY INCREMENTS. IF WE WERE GOING TO GO TO THE NO NEW REVENUE RATE OF 16. 3, IT REDUCES TOWNSHIP REVENUES BY $3. 3 MILLION. AND WHAT THAT EQUATES TO THE OWNER OF A $500,000 HOME IS A SAVINGS OF $53 A YEAR OR $4. 49 A MONTH. SO ANY QUESTIONS ON THAT? >> YEAH, MONIQUE. IT SAYS NO NEW REVENUE RATE, BUT THAT YOU'RE SAYING REDUCES THE REVENUE? >> YEAH, SO WHAT THAT MEANS IS RIGHT NOW AT SET AT 17. 4, WE ARE GENERATING NEW PROPERTY TAX REVENUE BASED ON THE REVALUATION OF PROPERTIES THIS YEAR. SO IF WE WERE TO GO AT THE NO NEW REVENUE RATE SO WE WERE NOT GENERATING NO NEW REVENUE BASED ON THE REGENERATION OF PROPERTIES, THAT'S WHY IT'S CALLED NO NEW REVENUE. >> RIGHT, OKAY. >> SO THAT WOULD DECREASE THE CURRENT BUDGET THAT WE'RE GETTING READY TO LOOK AT, THE BASE BUDGET BY $3. 3 MILLION. >> THANK YOU. >> OKAY. WOULD YOU LIKE FOR ME TO PROCEED UNTIL DR. SHELLEY GETS HERE? >> THE CALENDER? >> YEAH, WE CAN GO OVER SOME OF THE -- >> YEAH, GO OVER THE CALENDER. >> OKAY, I'LL TALK SLOW. SO TODAY WE ARE STARTING THE PROCESS, AND WE ARE GOING TO LOOK AT ALL ELEMENTS OF THE CONSOLIDATED BUDGET. SO THAT INCLUDES OUR REVENUE SOURCES. WE'RE GOING TO LOOK AT PERSONNEL -- PERSONNEL COUNTS AND EXPENDITURES. WE'RE GOING TO LOOK AT OUR OPERATING EXPENDITURES. OPERATING MEANING OUR ANNUAL, ONGOING YEAR AFTER YEAR COSTS. WE'RE GOING TO TAKE A QUICK LOOK AT THE VISIT OF THE WOODLANDS FUND AND THE TRANSPORTATION FUND. WE ARE GOING TO GO OVER AT LEAST AT A HIGH LEVEL THE CAPITAL PROJECTS. WE'RE GOING TO LOOK AT OUR DEBT PROFILE AND THEN OUR RESERVES AND FUND BALANCES. AND I AM PROBABLY GOING TO DEFER LOOKING AT THE FIVE YEAR FIVE-YEAR PLAN TODAY UNTIL WE GET FURTHER ALONG IN THE PROCESS. BUT THE REST OF THESE WE WILL COVER. DO WANT TO MENTION THAT IN YOUR BUDGET BINDERS THAT YOU RECEIVED LAST WEEK, AND THAT IS POSTED [00:10:01] ONLINE FOR ANY RESIDENTS THAT WANT TO VIEW IT. THE WAY THAT THAT BOOK IS DESIGNED IS FOR THE CLOSER YOU ARE TO THE FRONT OF THE SECTION LIKE THE OVERVIEW SECTION GIVES YOU A VERY GOOD OVERVIEW OF EVERYTHING THAT WE'RE GOING TO TALK ABOUTCH AND THEN EACH SECTION ITSELF HAS A SUMMARY PAGE. SO LIKE IF YOU GO TO EXPENDITURES, YOU'RE GOING TO SEE A SUMMARY PAGE. BUT IF YOU DRILL DOWN INTO IT, YOU WILL GET TO A LINE ITEM BUDGET DETAIL. SO LITERALLY DOWN TO OFFICE SUPPLIES FOR THE FINANCE DEPARTMENT EQUALLED THIS MUCH THIS YEAR AND IS GROWING OR DECREASING OR STAYING THE SAME, WHATEVER THE CASE MAY BE, FOR THE CURRENT YEAR. LEVEL OF DETAIL FOR ANYBODY -- BECAUSE I JUST WANT IT TO BE APPARENT THAT WE'RE VERY TRANSPARENT IN OUR PROCESS. SO WE LITERALLY -- THAT'S NOT WHAT WE'RE GOING TO BE TALKING ABOUT HERE TODAY, INITIAL ANYONE HAS A SPECIFIC QUESTION, I'M HAPPY TO DO THAT. BUT I WANT YOU TO KNOW THAT DETAIL IS AVAILABLE IN YOUR BOOKS AND ONLINE. AFTER TODAY WE ARE GOING TO SPEND WHATEVER DAYS WE NEED TO FOR THE REST OF THE WEEK LOOKING AT THE BUDGET INITIATIVES. SO, AGAIN, TODAY IS THE BASE BUDGET, WHICH IS THE CONTINUATION OF EXISTING SERVICES, BUT THEN WE WILL BE DISCUSSING A HOST OF BUDGET INITIATIVES. THE BOARD CAN CHOOSE TO VOTE ON ANY PROPOSED BUDGET ADJUSTMENTS. THEN WE WILL, AS I MENTIONED EARLIER, THE BOARD WILL TAKE A RECORDED VOTE ON THE PROPOSED 2025 TAX RATE. # SO WHEN I SAY BASE BUDGET, AGAIN, THAT'S WHAT WHAT'S EXACTLY WHAT'S IN YOUR BOOKS AND WHAT WE'RE GOING TO BE GOING OVER TODAY. THIS BASE BUDGET MAINTAINS OUR EXISTING SERVICE LEVELS. IT ACCOMMODATES GROWTH IN THE COMMUNITY. IT ACCOUNTS FOR OUR CHANGING ECONOMIC FACTORS, MEANING WHERE APPROPRIATE WE HAVE FACTORED IN CONTRACT RATE INCREASES OR CPI INDEX INCREASES, THOSE TYPES OF THINGS. IT DOES CONTINUE, THE CAPITAL PROJECTS AND OTHER INITIATIVES THAT HAVE BEEN PREVIOUSLY APPROVED BY THE BOARD. IT IS BASED ON THE CURRENT PROPERTY TAX RATE OF 17. 14, AND AS I MENTIONED DOES NOT INCLUDE BUDGET INITIATIVES. IN TERMS OF WHERE WE SIT TODAY, WE ARE IN A VERY GOOD POSITION. THE TOWNSHIP HAS A -- A GREAT FINANCIAL POSITION. ONE OF THE REASONS FOR THAT IS OUR DEBT POSITION. AND THE WOODLANDS TOWNSHIP DOES CONTINUE TO EFFECTIVELY MANAGE OUR DEBT. WE MAINTAIN A DOUBLE A- PLUS BOND RATING FOR STANDARD AND A DOUBLE "A" RATING FOR MOODIES. WE ACTUALLY ARE NOT ELIGIBLE FOR A TRIPLE A BOND RATING. I GET THIS QUESTION A LOT. WE WOULD EXCEPT FOR OUR OVERLAPPING DEBT WITH OTHER COMMUNITIES. SO BECAUSE THE SCHOOL DISTRICT AND THE COUNTY IN PARTICULAR CARRY QUITE A BIT OF DEBT, THAT DOES IMPACT OUR CREDIT RATING, SO WE ARE NOT ABLE TO AKEEVE THAT TRIPLE- A RATING PRIMARILY BECAUSE OF THAT. ALWAYS LIKE TO COMMENT ON WHAT OUR CREDIT AGENCIES ARE LOOKING AT WHEN TLA THEY REVIEW OUR FINANCIALS AND OUR BUDGET. THEY COMMENT WE HAVE A STRONG HISTORY OF MANAGEMENT WITH MAINTENANCE AND LUSQUID FAE. OUR CREDIT STRENGTH INCLUDE A LARGE AND DIVERSE TAX BASE AND FINANCIAL OPERATIONS AGAIN WITH SOUND RESERVES AND LOW DEBT AND PENSION BIRDSENS, AND THAT WE BENEFIT FROM CONSERVATIVE BUDGETING AND CAREFUL EXPENSE MANAGEMENT. SO THE WOODLANDS, AGAIN, AS I SAID WE'RE IN A POSITION OF FINANCIAL STRENGTH, AND WE WANT TO CONTINUE THAT. SO THIS '26 BUDGET PROVIDES RESOURCES TO MAINTAIN HIGH LEVELS FOR OUR CITIZENS. THIS BUDGET PROVIDES FLEXIBILITY, AND WE'LL TALK ABOUT THAT A LITTLE MORE LATER. WE MAINTAIN THE POSITIVE CASH FLOWS AND RESERVE BALANCES THAT ARE EVALUATED FAVORABLY BY OUR CREDIT AGENCIES, AND WE'RE NOT BURDENED WITH UNFUNDED PENSION COSTS AND LARGE VACATION AND SICK LEAVE AND OTHER TYPES OF BENEFITS BECAUSE OF WHAT WE HAVE IMPLEMENTED. AND AGAIN, IT REFLECTS LOW ON DECREASING DEBT BALANCES. I AM BRINGING THESE FORWARD BECAUSE I WANT YOU TO KNOW THE REASON HOW -- IN ADDITION TO ALL OF THIS WHEN WE PREPARE THE BUDGET, WE ALSO WANT TO MAKE SURE WE'RE FOLLOWING BEST PRACTICES WITH OUR GOVERNMENT FINANCE OFFICE ASSOCIATION, WHO REVIEWS THE BUDGET EACH YEAR AND MAKES A DETERMINATION ON WHETHER WE RECEIVE THE DISTINGUISHED BUDGET PRESENTATION AWARD. TO DO THAT WE HAVE TO CHECK OFF MANY, MANY BOXES. THERE IS A LOT OF CRITERIA IN ORDER TO BE ABLE TO DO THAT, AND OUR FINANCE TEAM DOES A WONDERFUL JOB OF MAKING SURE WE DO THAT. SO THIS BUDGET IS PREPARED WITH THAT IN MIND. IT IS ALSO PREPARED WITH THE -- AGAIN FROM THE GFOA AND [00:15:06] IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, WE WANT TO MAKE SURE WE MAINTAIN A BUDGET AND PRESENTATION THAT ALLOWS US TO ACHIEVE EXCELLENCE IN FINANCIAL REPORTING. >> OKAY, I THINK THIS IS A GOOD PLACE TO PAUSE, BECAUSE DR. SHELLEY JUST WALKED IN. WE ARE GOING TO TAKE A QUICK RECESS TO EXECUTIVE SESSION, AND WE WILL COME BACK SHORTLY. IT'S 8:45 A.M. READ THE WHAT? >> YOU HAVE TO READ THE REASONS THAT WE'RE GOING INTO EXECUTIVE SESSION BEFORE WE -- >> I'M SORRY. MY BAD. WE'RE GOING TO BE GOING INTO EXECUTIVE SESSION SHORTLY. I HERE BY ANNOUNCE THE BOARD WILL RECESS IN EXECUTIVE SESSION DISCUSS MATTERS RELATED TO REAL PROPERTY TEXAS GOVERNMENT CODE ECONOMIC DEVELOPMENT NEGOTIATIONS PURSUANT TO 5551.087. DISCUSS I.T. NETWORK AND CRITICAL INFRASTRUCTURE PURSUANT TO SECURITY STRUCTURE OF TEXAS GOVERNMENT AND CONSULT WOODLANDS COUNTY. NO ACTION WILL BE TAKEN IN EXECUTIVE SESSION. THE BOARD WILL RECONVENE IN PUBLIC SESSION >> ALL RIGHT, IT'S 9:17. RETURNING BACK TO REGULAR AGENDA ITEM. MONIQUE? TAKE IT OVER. >> THANK YOU. OKAY. I DO WANT TO MENTION THIS IS, AS YOU CAN SEE IN FRONT OF YOU, A VERY THICK COPY OF A POWERPOINT PRESENTATION. THIS IS NOT REALLY INTENDED TO BE A PRESENTATION WHERE I STAND UP HERE AND TALK FOR THE NEXT COUPLE OF HOURS BEFORE THE BOARD GETS TO ENGAGE. IT'S REALLY JUST A EFFICIENT WAY TO WALK US THROUGH THE BUDGET BINDERS AS OPPOSED TO HAVING TO FLIP PAGES BACK AND FORTH. SO THIS IS INTENDED TO BE VERY INTERACTIVE. PLEASE STOP ME AND ASK QUESTIONS AND HAVE YOUR BOARD DISCUSSIONS AS WE GO THROUGH THIS. OKAY, WE'LL START WITH AN OVERVIEW OF THE CONSOLIDATED BUDGET. JUST AS A PICTURE REMINDER OF ALL OF THE DIFFERENT THINGS THAT WE ARE GOING TO BE TALKING ABOUT TODAY. AND REALLY WHAT THIS IS INTENDED TO SHOW AS -- AS THE BOARD MAKES DECISIONS IN ONE OF THESE AREAS, IT IS ALMOST ALWAYS GOING TO IMPACT ANOTHER AREA. SO THIS IS A BIG BALANCING GAME. IT'S A BIG PUZZLE TO PUT ALL OF THE PIECES TOGETHER, THERE WE FIND IN- DEPTH THE PROPERTY TAX RATE IS WHAT DRIVES THIS WHOLE THING, AND THAT'S WHY IT'S IN THE CENTER. WHAT WE ARE GOING TO END UP WITH, ONE OF THE LAST THINGS THAT WE WILL TALK ABOUT IS THE UNDESIGNATED FUND BALANCE AND HOW THAT PLAYS INTO BEING ABLE TO FUND ALL OF THE SERVICES THAT THE BOARD WISHES TO PROVIDE TO THE WOODLANDS COMMUNITY. SO WHAT IS THE UNDESIGNATED FUND BALANCE? IT IS THE AMOUNT REMAINING AFTER WE TAKE INTO ACCOUNT ALL OF REVENUES, ALL THE OPERATING EXPENDITURES. ALL OF CAPITAL, ALL OF DEBT, ALL OF THE RESERVES. THAT'S WHAT WE END UP AT THE END OF THE DAY. SO IT'S JUST A WAY OF TAKING THE THOUSANDS OF NUMBERS THAT ARE IN YOUR BUDGET BINDER AND REALLY SUMMARIZING IT DOWN INTO A SIMPLE NUMBER. AND WE'LL TALK MORE ABOUT THAT IN TODAY AND IN THE UPCOMING WEEK. SO THIS IS A LOOK IN TERMS OF WHAT OUR BUDGET IS -- IS -- WHAT WE ARE LOOKING AT IN TERMS OF UNDESIGNATED FUND BALANCES. FOR 2025 BASED ON CURRENT PROJECTIONS WE BELIEVE WE WILL END THE YEAR WITH SOMEWHERE AROUND $2. 3 MILLION. THAT NUMBER COULD BE A LITTLE HIGHER, COULD BE A LITTLE LOWER, BUT SOMEWHERE IN THAT RANGE. WHAT THIS -- YOU CAN SORT OF THINK OF IT AS A SAVINGS ACCOUNT OR A PIGGY BANK. AND THEREFORE WHAT IT IS GOOD FOR IS FOR ONE- TIME PURCHASES. BY ONE- TIME PURCHASES I MEAN CAPITAL WHERE WE'RE JUST SPENDING AN INITIAL AMOUNT. BECAUSE IT IS A SAVINGS ACCOUNT, WE DON'T USE THAT TO PAY YEAR AFTER YEAR AFTER YEAR [00:20:03] ONGOING EXPENSES. NOT ONLY IS THAT A GOOD PRACTICE, THAT IS WHAT IS REQUIRED BY OUR CREDIT RATING AGENCIES AND REQUIRED BY GFOA AND GAP. SO THAT'S WHAT'S IMPORTANT TO REMEMBER THERE. IN 2026 BASED ON THE BASE BUDGET WE'RE GOING TO BE DISCUSSING TODAY, WE BELIEVE WE'RE ESTIMATING WE'LL END UP WITH UNDESIGNATED FUNDS OF ABOUT $655,000. SO, AGAIN, AFTER EVERYTHING THAT WE'RE GOING TO TALK ABOUT HERE TODAY AND DURING THIS WEEK, THAT IS THE AMOUNT THAT HAS NOT BEEN ALLOCATED FOR EXPENSES, FOR CAPITAL, FOR DEBT PAYMENTS, OR FOR RESERVE ALLOCATIONS. AND THAT IS THE MONEY THAT IS GOOD TO FUND ONGOING EXPENDITURES YEAR AFTER YEAR. SO THESE ARE GOING TO BE -- WHAT BOTH OF THESE BALANCES WILL BE USED FOR IS ONCE WE GET TO BUDGET INITIATIVES DISCUSSION, THEN THIS IS THE BALANCE OF FUNDS YOU HAVE TO WORK WITH YOUR BUDGET INITIATIVES, PENDING ANY OTHER ADJUSTMENTS YOU MIGHT MAKE TO THE BASE BUDGET. LOOKING AT OUR 2026 BUDGET BASED ON THE PRELIMINARY RATE OF 17. 14 ZLZ, WE BELIEVE WE'LL GENERATE ABOUT $175,000 IN REVENUES, AND HOW THAT WILL BE ALLOCATED IS ABOUT $116 MILLION OF IT TO OPERATING EXPENSES. RESERVES ABOUT $8 MILLION. THAT'S PRIMARILY OUR HOTEL TAX RESERVE AND OUR CAPITAL REPLACEMENT RESERVE. DEBT SERVICE PAYMENTS OF ABOUT $6 MILLION, AND CAPITAL THAT IS FUNDED FROM THE GENERAL FUND, NOT FROM THE CAPITAL RESERVE BUT THE GENERAL FUND ABOUT $400, AND THAT'S WHAT LEAVES US OUR 655,000. THIS IS JUST AN OVERVIEW. WE'RE GOING TO TALK ABOUT ALL THESE COMPONENTS IN MORE DETAIL. SO ANY QUESTIONS SO FAR? OKAY. FIRST THING WE'RE GOING TO TALK ABOUT IS OUR REVENUE SOURCES. AS I MENTIONED, OUR TOTAL OPERATING REVENUES ARE PROJECTED TO BE ABOUT $175 MILLION FOR 2026. THAT IS A 5. 4 OR A 3. 2% INCREASE FROM THE CURRENT BUDGET. THIS IS A LOOK OF OUR REVENUES BY TYPE OUR SALES AND USE TAX $81 MILLION MAKES UP ABOUT 47% OF OUR BUDGET. PROPERTY TAX MAKES UP ABOUT 30% OF THE BUDGET, AND THEN YOU CAN SEE -- I'M NOT GOING TO READ THROUGH ALL OF THOSE -- BUT THE OTHER DIFFERENT CATEGORIES THAT MAKE UP OUR BUDGET. AND WHAT I WANT TO POINT OUT HERE IS THIS IS -- THIS IS ONE OF IT PRIMARY THINGS THAT PUTS THE TOWNSHIP IN SUCH GREAT FINANCIAL POSITION. THIS IS VERY UNIQUE ESPECIALLY FOR COMMUNITIES OF OUR SIZE. MOST COMMUNITIES RELY MUCH MORE HEAVILY ON PROPERTY TAX THAN THEY DO ON SALES TAX. AS A MATTER OF FACT, YOU CAN SEE THE NOTE DOWN THERE AT THE BOTTOM ACCORDING TO THE STATE COMPTROLLER. LOCAL GOVERNMENTS TYPICALLY RAISE ABOUT $1 IN SALES TAX REVENUE FOR EVERY $7 IN PROPERTY TAX REVENUE. WE ARE OBVIOUSLY WAY BEYOND THE OPPOSITE OF THAT. AND THAT IS GREAT. THAT IS BECAUSE OF OUR BUSINESS COMMUNITY AND THE GREAT DECISIONS MADE BY THIS BOARD AND OUR COMMUNITY PARTNERS IN BEING ABLE TO PUT US IN THIS POSITION. HERE'S A LOOK AT WHY OUR -- THE CATEGORIES OF OUR REVENUE INCREASES. WE'VE GOT SALES AND USE TAX GROWING BY ABOUT $4. 1 MILLION. PROPERTY TAX GROWING BY ABOUT $3. 7 MILLION. AND THEN THE OTHER ONES THERE ARE -- OBVIOUSLY THOSE ARE THE PRIMARY COMPONENTS. WE'RE GOING TO TALK A LITTLE BIT MORE ABOUT EACH ONE OF THESE AND THEIR CATEGORIES, AND PARTICULARLY I WANT TO PINT OUT THE INTEREST INCOMES DROPPING BY 1.4 NOT BECAUSE SHE'S NO LONGER DOING HER JOB. SHE'S DOING A MARVELOUS JOB BUT SHE'S NOT MAGIC. BUT INTEREST RATES ARE DROPPING AND OUR FUND BALANCES ARE DROPPING BECAUSE WE'VE USED SOME OF THEM UP AS WE'RE SUPPOSED TO, SO WE ARE PLANNING FOR THAT DECREASE THIS YEAR. >> WOULD YOU SAY SALES AND USE TAX AND PROPERTY TAX ARE SIMILAR TO WHAT THEY HAVE BEEN IN THE PAST? >> YES, THEY ARE. YES, AND WE'RE GOING TO GO THROUGH THE DIFFERENT GROWTH RATES. SO IN SALES AND USE TAX, HERE IS A LOOK HISTORICALLY FROM 2021 THROUGH OUR 26 BUDGET. THE 2021, IF YOU'LL RECALL THAT WAS DURING COVID. THAT'S WHY IT WAS SO LOW. SO WE -- THIS GRAPH SHOWS WE HAVE DONE A WONDERFUL JOB OF COMING OUT OF COVID AND GETTING BACK AND EXCEEDING WHERE WE WERE PRE- COVID, ACTUALLY. WHAT WE HAVE BUILT INTO OUR 2026 BUDGET IS A 3% GROWTH FACTOR OVER WHAT ARE FORECASTING. SO THE 25 BUDGET WAS ACTUALLY $77 MILLION. WE'RE NOWFORE TASTING $79 MILLION, SO WE DO FEEL [00:25:01] LIKE WE'RE GOING TO COME IN ABOUT $2 MILLION MORE. AND WE BUILT THAT GROWTH FACTOR OFF THE FORECAST. IF WE LOOK AT THE 2025 BUDGET I THINK THAT'S CLOSER TO 5%. LET'S LOOK AT THE 3% AND WHY WE HAVE CHOSEN THAT AMOUNT. HERE IS A HISTORIC -- HISTORICAL LOOK AT THE GROWTH IN SALES TAX REVENUES ALL THE WAY BACK TO 2014. BACK 2014 AND PRIOR LIKE IF THIS GRAPH ACTUALLY WENT A LITTLE FURTHER BACK, YOU WOULD SEE VERY HIGH GROWTH NUMBERS, AND THAT WAS BECAUSE WE WERE BUILDING OUT TOWN CENTER. WE WERE BUILDING OUT STERLING RIDGE. WE WERE BUILDING OUT HUGHES LANDING. THERE WAS A BUNCH OF COMMERCIAL ACTIVITY AND MUCH HIGHER GROWTH THAN WHAT WE HAVE NOW, BOTH RESIDENTIAL AND COMMERCIAL, SO THOSE NUMBERS WERE HUGE. 2017 THROUGH '19 WERE PROBABLY OUR MOST NORMAL PERIOD OF TIME, IF YOU WILL. 2020 WAS COVID. '21 AND '22 WE'RE COMING OUT OF COVID. AND THEN RECENTLY IN THE PAST TWO YEARS YOU SEE THOSE 4. 5% INCREASES, THOSE ARE HIGHER THAN WHAT IT'S TYPICALLY BEEN. AND A LOT OF THAT WAS BECAUSE OF INFLATION. SO WE'VE BENEFITTED FROM GETTING THE SALES TAX ON HIGHER CONSUMER PRICES TO THE EXTENT THAT THOSE ARE STARTING TO COME DOWN. WE ARE SEEING THAT DECLINE. JUST MARGINALLY, BUT WE ARE SEEING IT. AND I'M GOING TO SHOW YOU HERE IN JUST A SECOND. HERE WHEN WE LOOK AT SALES TAX REVENUES BY INDUSTRY CODE, IT'S IMPORTANT TO REMEMBER THAT ALTOGETHER WE GET PROBABLY ABOUT 20 TO 25 CATEGORIES OF WHERE WE GENERATE SALES TAX FROM. BUT THE OVERWHELMING MAJORITY OF IT COMES FROM RETAIL TRADE, AS YOU CAN SEE THERE. ALMOST 50% OF OUR SALES TAX COMES FROM RETAIL. ABOUT 12% COMES FROM FOOD SERVICES, SO RESTAURANTS, IF YOU WILL. MANUFACTURING INFORMATION, WHOLESALE TRADE. BUT OBVIOUSLY THE FIRST -- BETWEEN RETAIL, TRADE, ACCOMMODATIONS AND MANUFACTURING, THAT'S MOSTLY WHERE WE ARE GENERATE OUR REVENUE. >> MONIQUE, I HAVE A QUESTION. UNDER REAL ESTATE LEASING, WE HAVE RIVERFRONT OPENING UP SOON AND PROBABLY IN THE NEXT FEW MONTHS WE HAVE THE RITZ. ARE THOSE PLACES REFLECTED IN ANY OF THIS THROUGHOUTTHROUGH OUT BUDGET? >> WE HAVE REFLECTED THAT IN OUR FIVE YEAR FIVE- YEAR PLAN. AND FOR RIVER ROW RUN HERE ACTUALLY WE ARE PROJECTING AN INCREASE IN LEASING AND RENTAL. IT'S NOT EVERYTHING OVER THERE THAT IS, BUT WE ARE SEEING AN INCREASE. AND WE'VE EVEN SEE AN INCREASE THIS YEAR IN THAT. CONSTRUCTION, UNFORTUNATELY, IS WAY DOWN ON THOSE. EVEN WITH THOSE BEING BUILT BECAUSE WE'RE NOT GETTING ALL THE SALES TAX FROM THAT BECAUSE OF THE WAY THE CONSTRUCTION CONTRACTS WERE EXECUTED. SO, UNFORTUNATELY, WE'RE NOT GETTING SOME OF THE CONSTRUCTION SALES TAX THAT WE WERE HOPING TO GET. >> MONIQUE, GIVEN THE HISTORICAL GROWTH OF SALES AND USE TAX, WOULD YOU SAY THERE'S PERHAPS SOME OTHER CORRELATIONS DRIVING THAT? I MEAN, IS IT UNEMPLOYMENT RATE, YOU KNOW, RECESSIONARY FACTORS AND SO FORTH THAT WILL HELP KIND OF GIVE US A BETTER IDEA OR ANOTHER IDEA OF WHERE THE GROWTH IS GOING TO BE GOING? >> WE -- WE LOOK AT VARIOUS FACTORS, AND ACTUALLY THIS -- THIS IS ONE OF THEM RIGHT HERE. BECAUSE RETAIL SALES TAX IS SUCH A LARGE COMPONENT, THAT IS WHERE WE FOCUS A LOT OF OURS. AND SO WE SEE THIS MONTH HAS BEEN -- THIS YEAR SO FAR HAS BEEN SORT OF CHOPPY. WE'VE HAD REALLY GOOD MONTHS AND WE HAVE HAD SOME REALLY NOT SO SO GOOD MONTHS. IN TOTAL YEAR TO DATE RETAIL IS AT 3. 1%, SO THAT WAS PART OF THE DECISION FOR GOING WITH A 3% RATE. WE ALSO LOOK -- TO YOUR POINT, WE LOOK AT THE STATE COMPTROLLER ISSUES A BIANNUAL REPORT. WE LOOK AT THE DIFFERENT COMPONENTS IN THAT. THEY'VE GOT SOME INCREASES -- OVERALL THEIR INCREASE IS HILAR THAN OURS BUT THAT'S BECAUSE THEY HAVE DIFFERENT CLASSES OF SALES TAX REVENUES THEY CAN COLLECT FROM THAT DON'T APPLY TO US. WHEN WE LOOK AT THE PIECES THAT APPLY TO US, WE COME IN AROUND THAT 3% CATEGORY. WE ALSO ARE MORE CONSERVATIVE -- I HOPE THIS NUMBER IS WAY BEYOND 3% NEXT YEAR. EACH QUARTER OF A PERCENT HIGHERHIGHER GOING TO GENERATE ABOUT $200,000 IN REVENUE. SO IF IT COMES IN OR IF THE BOARD WANTS TO BUDGET 3. 25, WE CAN ADD $2,000. IF YOU WANT TO BUDGET 3. 5%, WE CAN ADD $400,000. BUT THE REASON, AGAIN, WE DO THAT IS BECAUSE WE WANT TO BE CONSERVATIVE BECAUSE SALES TAX IS VOLATILE. IT'S NOT LIKE PROPERTY TAX. OUR CREDIT AGENCIES SALES TAX MAKES [00:30:01] THEM NERVOUS. THERE'S EVEN SOME COMMUNITIES, FOR INSTANCE, SUGARLAND, THAT WILL BUDGET FOR THEIR SALES TAX INCREASE BUT ONLY ALLOW 1. 5 OF IT TO BE USED FOR INCREASES. WE DON'T DO THATCH WE BUDGET CONSERVATIVELY BECAUSE OF THAT. >> I THINK IT'S IMPORTANT TO POINT OUT, MONIQUE, SALES TAX WE'RE -- I KNOW YOU CAN'T SAY WHO'S THE NUMBER ONE SALES TAX GENERATOR, BUT CLASSES YOU CAN SAY IT'S NOT JUST THE MALL AND ALL THE RETAIL OUTLETS IN THE MALL. WE HAVE BUSINESSES, CORPORATE HEADQUARTERS, AND THINGS LIKE THAT THAT GENERATE SALES TAX AND THE IMPORTANT ROLE THEY PLAY IN OUR ECONOMY. >> RIGHT, RIGHT. AND THAT'S WHAT THIS -- YOU'RE EXACTLY RIGHT. THAT'S WHAT THIS IS INTENDED TO SHOW. >> SO ONE QUESTION ON THIS. SALES TAX IS GENERALLY WHEN DURING BOARD MEETINGS WHEN REPORTED, IT'S TWO MONTHS IN ARREARS. SO WAS THE 11. 9% ACTUALLY OCCURRING IN JUNE, OR WAS THAT APRIL? >> NO, THAT WAS APRIL ACTIVITY COLLECTED IN JUNE. I MEAN, WE DIDN'T GET THE MONEY FROM THE STATE UNTIL JUNE. >> CLARIFICATION, THANK YOU. >> THANK YOU. IT'S A BIT OF CLARIFICATION. AND I ALSO WANT TODAY SHOW EVEN THOUGH RETAIL IS STILL GROWING 3. 1 -- IS VERY HEALTHY, WE ARE SEEING AN EVEN GREATER INCREASE IN TERMS OF OUR ACCOMMODATION FOOD SERVICE SALES TAX. THAT MAKES UP ABOUT 12%F OUR SALES TAX REVENUES, SO THIS IS VERY GOOD NEWS. AND THEN HERE ARE SOME OF THE OTHER CATEGORIES THAT ARE -- THAT SORT OF ROUND OUT OUR TOP CATEGORIES. MANUFACTURING IS BOOMING. IT IS WHAT IS CAUSING US TO BE OVER BUDGET THIS YEAR. MY ONLY CAUTION THERE IT IS ALMOST ENTIRELY FROM ONE TAXPAYER. SO THAT TAXPAYER IS GOING RIGHT NOW, AND IT IS HELPING TO CONTRIBUTE THAT SAME TAXPAYER IN THE PAST HAS NOT CONTRIBUTED QUITE THAT MUCH. SO IT'S JUST HARD TO SAY HOW LONG THAT WILL CONTINUE. WE HOPE FOR THEIR SAKE AND THE COMMUNITY'S SAKE IT STAYS VERY HEALTHY LIKE THAT. IF I KNEW IT WAS GOING TO, I'D PROBABLY GO HIGHER THAN 3%, BUT I DON'T KNOW THAT. AND IT'S ALWAYS A CAUTION WHEN YOU HAVE SO MUCH DEPENDENT ON A SINGLE TAXPAYER. BUT WE ARE DOING WELL IN THERE. WE ARE DOING WELL IN INFORMATION AND WHOLESALE TRADE. AND THEN YOU SEE WE'VE GOT A DECREASE IN PROFESSIONAL SERVICES. THAT ONE DOES TEND TO BUMP UP AND DOWN. AND THEN CONSTRUCTION IS WHERE WE'RE DOWN. THE GOOD NEWS IS CONSTRUCTION ONLY MAKES UP ABOUT 3% OF OUR SALES TAX ACTIVITY, SO IT'S NOT KILLING US. BUT IT IS -- IT IS DOWN FROM WHERE IT WAS THE SAME TIME LAST YEAR. ANY QUESTIONS ON THIS? >> I DO HAVE A QUESTION ABOUT -- EXCUSE ME, PRESIDENT SHARP, REGARDING THE CONSTRUCTION YOU ALLUDED TO SOME CONTRACT TOOL DIFFERENCES IN HOW THE SALES TAX WAS ALLOCATED TO WHICH CITY. ARE THOSE -- IS IT GOING TO ANOTHER TEXAS CITY, OR IS IT GOING OUT OF TEXAS? OR YOU DON'T HAVE ANY IDEA? >> I DON'T HAVE ANY IDEA BECAUSE I HAVE NOT SEEN THE CONTRACT. I JUST KNOW FROM THE FACT WE'RE NOT GETTING THE REVENUE. AND PART OF IT COULD BE A DELAY. I'M NOT SAYING WE'RE NOT GETTING ANY REVENUE FROM THESE PROJECTS, TO BE CLEAR. WE ARE GETTING SOME, NOT WHAT WE EXPECTED TO GET. TO YOUR POINT THE WAY CONTRACTS ARE STRUCTURED IN CONSTRUCTION IT CAN EITHER BE CALLED A SEPARATED CONTRACT -- AND I'M DRAW AGBLANK ON THE OTHER TYPE OF CONTRACT. BUT ONE OF THEM IS WHERE THE SALES TAX IS COLLECTED BECAUSE THE ACTIVITY, THE CONSTRUCTION IS GOING ON HERE. AND THE OTHER ONE IS, LIKE, WHEREVER THEY'RE BUYING THE MATERIALS FROM, WHICH COULD BE OTHER PLACES IN TEXAS, ANYWHERE IN THE COUNTRY, AND THEY'RE BENEFITTING FROM THAT SALES TAX. >> THANK YOU. >> GOING TO MOVE ONTO HOTEL TAX REVENUES. SO WE ARE BUDGETING FOR A 1. 5% GROWTH FACTOR BETWEEN THE '25 FORECAST AND THE '26 BUDGET. WE ARE ON TARGET TO MEET OUR '25 BUDGET AMOUNT OF $10. 6 MILLION. AND BASED ON THE WAY THAT WE -- THAT WE CAME UP WITH THIS PROJECTION IS LOOKING AT REV PAR, WHO PROJECTS OUT INTO THE FUTURE IN TERMS OF VACANCIES AND ROOM RATES. AND WE LOOKED AT THAT REPORT TO COME UP WITH OUR 1. 5% GROWTH FACTOR. >> MONIQUE, IS THIS THE 2% SUPPLEMENTAL HOTEL TAX THAT WE DISCUSSED DURING STRATEGIC PLANNING, OR IS THIS DIFFERENT? >> THIS IS DIFFERENT. SO THIS HAS BEEN IN PLACE FOR QUITE A WHILE, AND IT IS DEDICATED TO FUNDS STRICTLY FOR THE VISIT THE WOODLANDS EXPENSES. AND VISIT THE WOODLANDS ALSO USES A PORTION WHICH SHOWS ON THIS SLIDE BASED OF THE HOTEL TAX. SO THE WAY WE ARE -- WE [00:35:04] GENERATE ARE PROJECTING IN '26 TO HAVE $10.27 MILLION IN HOTEL TAX REVENUE. ABOUT 37% OF THAT OR $4 MILLION COMES FROM THE -- FROM BOTH THE BASE HOTEL TAX OF 7% AND THE 2% SUPPLEMENTAL TAX. AND THEN THOSE BONDS ARE PLEDGED FOR DEBT SERVICE. THE 7% BASE, SO WE HAVE TO PAY OUR CONTENTION CENTER BONDS, AND THAT'S ABOUT $2. 9 MILLION, AND THE REST FLOWS INTO A RESERVE OF $3. 8 MILLION. WE'RE GOING TO TALK WAY MORE ABOUT THAT BECAUSE THAT IS -- WE HAVE AS A SPECIAL PURPOSE DISTRICT AND NOT AS A CITY, WE HAVE -- THOSE FUNDS ARE NOT RESTRICTED IN ANY WAY LIKE THEY WOULD BE FOR A CITY. WE HAVE BEEN SAVING THOSE FUNDS FOR DEBT SERVICE ON AN ECONOMIC DEVELOPMENT PROJECT. WHATEVER WE HAVE IDENTIFIED THAT, AS YOU ALL KNOW, THERE ARE SEVERAL OPTIONS UP IN THE AIR, BUT THAT IS WHAT THAT IS BEING SAVED FOR RIGHT NOW. >> WILL YOU ADDRESS LATER THE CONVENTION CENTER WHEN IT'S PAID OFF? >> I WILL, YES. YES, MA'AM. THANK YOU. >> HERE'S OUR MIXED BEVERAGE TAX REVENUE THANKS TO MANY PEOPLE ON THIS BOARD. IN OCTOBER OF 2023 WE BECAME ELIGIBLE TO RECEIVE THIS. THIS IS NOT A NEW TAX TO OUR RESIDENTS. IT WAS ALREADY TAXED. IT WAS JUST BEING COLLECTED BY THE STATE. AND WITH LEGISLATION PASSED IN 2023, WE HAVE BECOME NOW THE TOWNSHIP CAN RECEIVE ITS SHARE, SO THAT WAS $1. 5 MILLION THAT WE USED TO NOT HAVE BEFORE IT'S GOING TO THE STATE, AND IT IS NOW COMING TO US TO HELP US OFFSET OUR PROPERTY TAX REQUIREMENTS. TALKED ABOUT THIS FROM OUR INTEREST÷÷ INCOME. AGAIN, WE REALLY ENJOYED THE BENEFIT OF HIGHER RATES ASAS TOWNSHIP, NOT AS PERSONALLY. BUT FROM THE HIGHER RATES THAT IN '23 AND IN '24 -- FROM '24 TO '25 WE HAD BUDGETED A DECREASE OF $3. 2 MILLION AND BASED ON OUR PROJECTIONS WE'LL GO DOWN ANOTHER $1. 4 MILLION. SO THIS WASN'T UNEXPECTED. WE PROJECTED THAT BALANCE OF INTEREST RATES WOULD GO DOWN. WE KNEW WHEN OUR RESERVES WAS PROJECTED TO GO DOWN. BUT IT IS HAVING AN IMPACT ON OUR BUDGET. AS YOU CAN SEE IT'S ABOUT $4. 5 MILLION WE USED TO HAVE TO FUND ONGOING EXPENSES WE NO LONGER HAVE, SO WE HAVE TO ACCOUNT FOR THAT. OKAY, BEFORE I GO INTO PROPERTY TAX REVENUE, ANY QUESTIONS? OKAY. AS YOU ALL KNOW PROPERTY TAX REVENUE IS GENERATED BY PROPERTY TAX -- TAXABLE PROPERTY VALUES TIMES A TAX RATE. AND THIS IS WHAT WE USE TO BALANCE OUR BUDGET. IN TERMS OF OUR VALUES, OUR VALUES DID INCREASE IN 2026 FROM $28.1 BILLION TO $30. 3 BILLION IN VALUE. THE CHART AT THE BOTTOM SHOWS WHERE THOSE INCREASES ARE COMING FROM, SO THE REVALUATION OF EXISTING PROPERTIES IS CONTRIBUTED TO ABOUT 7. 1% OF THAT TOTAL GROWTH IN VALUE. AND OUR INCREASE FROM NEW PROPERTIES JUST OVER A HALF PERCENT. AS YOU CAN SEE THERE AT THE BOTTOM, THAT'S BEEN THE CASE FOR QUITE A WHILE AS RESIDENTIAL HAS TAPERED OFF. AS A MATTER OF FACT, WE'RE ALMOST BUILT OUT FROM A RESIDENTIAL STANDPOINT. >> MONIQUE, I THINK YOU SHOULD PAUSE HERE A WEE BIT FOR THE PEOPLE AT HOME WHO ARE WATCHING. BECAUSE IT'S THIS INCREASE IN VALUATION OF YOUR PERSONAL PROPERTY, YOUR HOMEHOME I SAY AND YOUR RENTAL PROPERTIES AS WELL, BUT HABITATIONS THAT REALLY HURTS OUR RESIDENTS WHENEVER THEY'RE ON FIXED INCOME OR EVEN IF THEY'RE JUST RAISING A FAMILY AND ARE TRYING TO LIVE ON THEIR OWN. IT'S VALUABLE TO SEE THAT 7. 1% GOING UP NEXT YEAR AND PAY HEED TO THAT BECAUSE THAT'S WHY WE ASPIRE AS A CONSERVATIVE BOARD TO HIT THE NO NEW REVENUE RATE. BECAUSE THAT'S EXACTLY WHERE IT'S COMING FROM, THAT 7.1%. IF WE DON'T HIT THE NO NEW REVENUE RATE -- AND I KNOW IT'S HARD. I KNOW IT'S HARD. BUT IF WE DON'T HIT IT, THEN THIS IS THE INCREASE OR AROUND THAT NUMBER THAT OUR PROPERTY TAXPAYERS WILL PAY. AM I WRONG? OR CORRECT ME IF I AM. >> YOU'RE RIGHT, THEY WILL PAY HIGHER. IT DOES NOT EQUATE TO A 7. 1% INCREASE, AND THERE'S A LOT OF REASONS FOR THAT. I HAD STARTED THE PRESENTATION BEFORE YOU ARRIVED AND ONE OF THE FIRST THINGS WE TALKED WAS THE NO NEW REVENUE RATE. SO DROPPING THE NO NEW REVENUE RATE ON AN AVERAGE HOME OF $500,000 WOULD INCREASE THE TEX LEVY TO THE OWNER OF THAT [00:40:03] HOME TO $55,000 A YEAR. >> WELL, YOU CAN MINIMIZE IT LIKE THAT, THAT'S THE AVERAGE HOME. OR YOU CAN LOOK AT THATINABLE OF 7.1%. LAST YEAR IT WAS 3.6%. THE FACT WE DIDN'T -- WE MISSED IT. WE DIDN'T HIT THE NO NEW REVENUE RATE. IT WAS A 6. 3% INCREASE IN PROPERTY TAXES, EVEN THOUGH WE KEPT THE RATE FLAT. >> RIGHT. >> SO I JUST WANT TO PAUSE RIGHT THERE BECAUSE IT ISN'T ALWAYS NOTABLE TO THE PEOPLE WATCHING AT HOME, LIKE THE CHAIRMAN SAYS, THE MILLIONS OF PEOPLE WATCHING AT HOME. >> I WOULD SAY, THOUGH, JUST TO MAKE SURE WE ALL UNDERSTAND, THERE'S STILL A LOT OF NEGOTIATION ON PROPERTY TAXES GOING ON IN THE TEXAS LEGISLATURE RIGHT NOW, A TREMENDOUS AMOUNT. IT'S A MOVING, MOVING TARGET. SO AS YOU GUYS ARE PLANNING FOR THE FUTURE, IT'S KIND OF HARD TO WHEN THINGS LIKE THIS ARE STILL IN LIMBO, SO WE NEED TO MAKE SURE WE KEEP OUR FINGER ON THE PULSE OF THAT. I KNOW TODD IS -- >> I AGREE. WE ARE TRACKING THAT, AND YES, I DO UNDERSTAND. THAT IS AN IMPORTANT COMPONENT AND I WASN'T TRYING TO MINIMIZE IT. I WAS JUST TRYING TO PUT IT IN PERSPECTIVE. >> YOU ALSO MENTIONED AT THE NO NEW REVENUE RATE NOT ONLY THE $55,000 PER YEAR, BUT WHAT IT WOULD DO TO THE BASE BUDGET BEING PROPOSED. HOW WOULD IT AFFECT THAT? >> IT REDUCES REVENUES TO THE TOWNSHIP BY $3. 3 MILLION, SO OBVIOUSLY WHEN WE'RE TALKING ABOUT AN UNDESIGNATED SURPLUS OF $655,000, IF WE REMOVE $3. 3 MILLION FROM THAT, THEN WE DO NOT HAVE A BALANCED BUDGET, AND WE WOULD NEED TO HAVE DEEPER CONVERSATIONS ABOUT WHERE TO -- OR HOW TO BALANCE THE BUDGET. >> WHERE TO DOGE IT. >> WHERE TO DOGE IT, THERE YOU GO. OKAY. ALSO AFFECTING VALUES ARE OUR PROPERTY TAX EXEMPTIONS. THE BOARD HAS AUTHORIZED EXEMPTIONS FOR 65 AND OLDER OR DISABLED PERSONS, AN EXEMP SOMEONE OF 50,000 PLUS A 3% HOMESTEAD EXEMPTION. SO IN TOTAL THOSE LOWER TAXABLE VALUES BY 89 OR RIGHT AT $189 MILLION FOR UPCOMING TAX YEAR AND RESULTS IN A $5. 1 MILLION IN REDUCTION IN TAX REVENUE. HERE IS OUR PROPERTY TAX REVENUE RATES. OUR PROPERTY TAX RATES OVER -- SINCE THE INCEPTION OF THE TOWNSHIP. SO PRIOR TO 2010 WHEN WE WERE THE COMMUNITY ASSOCIATIONS OF THE WOODLANDS, WE HAD A COMPOSITE RATE OF ABOUT 42 CENTS PER $100 OF VALUATION THAT WAS NOT TAX DEDUCTIBLE. AND NOW WE HAVE PROPERTY TAXES YOU HAVE SEEN HAVE STEADILY GONE DOWN THROUGH THEN. YOU REMEMBER EARLIER WHEN I WAS TALKING ABOUT THE SALES TAX REVENUE BEING SO HIGH PRIOR TO 2014, YOU CAN SEE IT HERE. ALL THAT SALES TAX IS WHAT REALLY HELPED US BE ABLE TO LOWER THE RATE DURING THAT PERIOD OF TIME. SO THIS IS A LOOK AT OUR PROPERTY TAX RATES WHEN WE COMPARE TO THE NO NEW REVENUE RATES. SO YOU CAN SEE HISTORICALLY OVER TIME WE HAVE TRAKSED PRETTY CLOSE TO THE NO NEW REVENUE RATE. MOST OF THE TIME BEING RIGHT ON IT. A COUPLE OF YEARS WE'VE BEEN ABLE TO BE EVEN BELOW IT. AND A COUPLE OF YEARS THE ADOPTED RATE WAS JUST SLIGHTLY OVER THE NO NEW REVENUE RATE. I PUT THE CHART -- THE LITTLE BOX OVER THERE IN THE GRAY ON THE RIGHT- HAND SIDE OF THE CHART TO EXPLAIN IN '25 AND '26 WHY THE BOARD AND WHY AS A COMMUNITY WE HAVE LEFT THE TAX RATE THE SAME. SO IN 2024 THE BOARD WAS ABLE TO LOWER TO THE NO NEW REVENUE RATE. THEN WE HAVE KEPT IT THE SAME IN 2025, AND NOW WE ARE PROJECTING THE SAME BASED ON THIS BASE BUDGET 26. DURING THAT PERIOD OF TIME THE BOARD HAS SIGNIFICANTLY ENHANCED LAW ENFORCEMENT, SIGNIFICANTLY. WE HAVE ALSO SIGNIFICANTLY ENHANCED OR FORESTRY MANAGEMENT PROGRAMS, AND THE BOARD HAS SIGNIFICANTLY ENHANCED COMMUNITY MAINTENANCE. THOSE WERE THREE AREAS WE WERE HEARING FROM OUR RESIDENTS, AND THE BOARD HAS ADDRESSED THOSE BY BEING ABLE TO MAINTAIN THE TAX RATE BUT STILL BEING ABLE TO -- TO ADD ADDITIONAL FUNDS TO ADDRESS THOSE. THE OTHER -- DURING THAT TIME WHEN WE WERE -- WHEN THE BOARD WAS ENHANCING THOSE SERVICES, WE WERE DEALING WITH TWO PRIMARY THINGS. ONE THING I JUST TALKED ABOUT -- THE INTEREST INCOME. SO THAT WAS GOING DOWN. WE HAD BEEN RELYING ON THAT. IT WENT DOWN. THE OTHER THING IS WE HAD $8. 1 MILLION IN CARES ACT FUNDING TO FUND OUR TRANSPORTATION FOR OUR TROLLEYS AND OUR PARK AND RAID, FUND OUR PORTION SO THAT WE DIDN'T HAVE TO MATCH THAT. THOSE HAVE EXPIRED. THOSE WERE ALL USED UP IN 2024, AND WE ARE NOW HAVING TO FUND THOSE. SO IN ORDER TO MAINTAIN PUBLICPUBLIC TRANSPORTATION, THAT IS ANOTHER REASON THAT WE HAVE HAD TO MAINTAIN THE RATE. IT'S EITHER THAT OR WE GO BACK AND WE LOOK AT BUS FARES, WHICH WE'VE HAD THAT CONVERSATION. YOU CAN INCREASE BUS FARES, BUT YOU ALSO PROBABLY DECREASE RIDERSHIP. THERE'S A -- THERE'S A BALANCE THERE THAT WE HAVE FOLLOWED. SO JUST POINTING OUT THAT [00:45:01] THAT, IF I HAD TO -- OF COURSE IT'S MUCH MORE THAN THIS, RIGHT? BUT IF I HAD TO NARROW IT DOWN TO THE BIG DRIVERS OF MAINTAINING THE TAX TAX RATE OVER THE FIRST TWO YEARS, THAT'S WHAT IT IS. AND HERE'S JUST WHAT I WAS TALKING ABOUT. I SAID 8.1. IT WAS $8. 9 MILLION OVER FIVE YEARS THAT WE WERE ABLE TO USE FOR OUR TRANSPORTATION PROGRAMS. WE USED UP THE REST OF THAT IN 2024. AND AS OF '25 WE ARE FUNDING 100% OF THAT NOW. SO HERE'S A LOOK AT OUR PROPERTY TAX REVENUE. THROUGH '21 THROUGH '26. AS I MENTION IN '26 WE ARE PROJECTING BASED ON THE CURRENT RATE OF $52 MILLION. HERE'S A LOOK AT OUR PROPERTY TAX REVENUE PER CAPITA. SO IN 2020 IT WAS AT $405 PER CAPITA. IN 2026 IT'S $414. AGAIN, THAT SAME BOX THAT I HAD ON THE OTHER PAGE, I'M GOING TO SAY HERE AGAIN THE REASON THAT IT'S INCREASING PER CAPITA BY A MODERATE AMOUNT IS BECAUSE OF THE ENHANCED SERVICES WE'RE PROVIDING WHILE ALSO RECOGNIZING SOME MAJOR DECREASES IN A COUPLE OF OUR REVENUE SOURCES. >> BUT IF YOU WOULD COMPARE THE PER CAPITA WITH OTHER, LIKE, CITIES, WE ARE VERY LOW. >> WE ARE VERY LOW, THAT IS EXACTLY RIGHT. BECAUSE MOST OTHER CITIES RELY, AS WE TALKED ABOUT EARLIER, MUCH HEAVIER ON THEIR PROPERTY TAX. I ALSO THINK THIS IS A GREAT CHART THAT SORT OF SHOWS WHERE WE'VE BEEN OVER A PERIOD OF TIME ON OUR PROPERTY TAX RATE. SO WHAT THIS IS SHOWING IS IN 2012 WE HAD AN AVERAGE PRICED HOME OF $312,000, AND THESE ARE BASED ON REAL FIGURES. YOU CAN GO FIND A REAL HOME OUT THERE LIKE THAT. OVER TIME THIS HOME HAS EXPERIENCED REVALUATION. THEIR VALUE HAS INCREASED WHEREAS TODAY THAT SAME HOME WOULD BE VALUED AT $595,000. IN 2012 THE TAX RATE WAS 32.5 CENTS, AND THEY WERE PAYING 114 TO THE TOWNSHIP FOR SERVICES PROVIDED. IN 2026 BASED ON OUR CURRENT BUDGET, THAT SAME HOUSEHOLD WOULD BE PAYING A LESSER AMOUNT OF $989. SO WHAT I REALLY THINK THIS SHOWS IS THAT THE TAX RATE HAS BEEN CAREFULLY MANAGED BY THE BOARD TO ACHIEVE THE BALANCE BETWEEN FISCAL RESPONSIBILITY AND THE PROVISION OF SERVICES DESIRED BY OUR RESIDENTS. AND ONE WAY IT'S NOT JUST ME SAYING IT. ONE WAY WE KNOW THAT THE RESIDENTS FEEL THIS WAY IS BECAUSE IF YOU RECALL OUR SURVEY FROM SEVERAL MONTHS AGO THE RESEARCH FIRM SAID THAT 95 -- DURING THAT SURVEY 95% OF OUR RESIDENTS SAID THAT THEY GET VERY GOOD OR GOOD VALUE FOR THEIR MONEY FOR TOWNSHIP SERVICES. THAT IS ANOTHER NUMBER IN AND THE CONSULTANT COMMENTED ON THIS THAT IS ALMOST UNHEARD OF IN A CITY. THIS SLIDE HERE, IF THERE'S ONE SLIDE I CAN SHOW SHOWS THAT HOW OUR RESIDENTS IN GENERAL FEEL ABOUT THE TAX RATE IN RELATION TO THESE SERVICES THAT THEY RECEIVE. ALSO WANTED TO LOOK AT A COMPARISON OF THE '24 TAX RATES WHICH FUNDED THE '25 BUDGET. SO NOT EVERYBODY HAS REPORTED THIS YEAR. THEY'RE IN THE SAME PHASE THAT WE ARE, MOST OF IT THINGS HERE, SO WE DON'T KNOW WHAT THEY -- MOST OF THEM HAVEN'T EVEN SET A PROPOSED RATE. NONE OF THEM HAVE ADOPTED A BUDGET, BUT I JUST WANTED TODAY SHOW WHERE WE WERE IN COMPARISON TO LAST YEAR FOR THE SPECIFIC TAXING ENTITIES AT OUR 17. 14% RATE. I ALSO WANTED TO POINT OUT WHEN A PROPERTY OWNER IN MONTGOMERY COUNTY RECEIVES THEIR TAX BILL ON A $500,000 HOME WITH $7,340, THE TOWNSHIP ONLY MAKES UP 831 OF THAT. WE GET THOSE A LOT HERE WHEN PEOPLE HAVE QUESTIONS ABOUT THEIR BILLS AND WE ALWAYS SHOW THEM THIS INFORMATION TO HELP THEM UNDERSTAND WHERE THEY ARE IN RELATION TO OUR TAX BILL. FOR MONTGOMERY COUNTY -- I'M SORRY, ON HARRIS COUNTY AT 10,255 BUT, AGAIN THE TOWNSHIP ONLY REPRESENTS 8331 OR 8% OF A HARRIS COUNTY TAX BILL. SO BEFORE WE GO INTO PERSONNEL, ANY QUESTIONS ON PROPERTY TAX OR ANY OF THE OTHER REVENUES? GOOD. OKAY. SO WITH THAT, I'M GOING TO MOVE INTO OPERATING EXPENDITURES, AND ONE OF OUR LARGEST OPERATING EXPENDITURES IS PERSONNEL. [00:50:01] I DON'T THINK THAT SURPRISES ANYBODY. WE ARE A HEAVILY SERVICE ORIENTED ORGANIZATION, AND SALARIES AND BENEFITS MAKE UP A LARGE PORTION OF OUR BUDGET. I WANTED TO START OFF BECAUSE SEVERAL OF YOU EARLIER BACK IN THE STRATEGIC PLANNING RUTREAT AND SOME OF OUR EARLIER PRE- BOARD WORKSHOPS WERE ASKING ABOUT STAFF AND HOW STAFF HAS GROWN OVER THE YEARS. AND SO I HAVE SEVERAL SLIDES TO SHOW THAT. IT GOES INTO A LITTLE BIT OF DETAIL BUT MOSTLY HIGH SUMMARY LEVEL. WE COULD SPEND AN ENTIRE WORKSHOP ONLY TALKING ABOUT PERSONNEL, IF WE WANT TO DO A DEEP DIVE. THERE'S LOTS OF INS AND OUTS, BUT THIS WILL GIVE YOU A BASIC IDEA. FROM 2016 THROUGH 2025 WE HAVE HAD AN INCREASE OF ABOUT 162 STAFF. AND THE -- YOU CAN SEE DOWN AT THE BOTTOM THE PER CAPITA HAS INCREASED FROM 20. 41 TO 25. 17 BASED ON 5,000 POPULATION. SO LET'S LOOK AT THE REASONS FOR THIS INCREASE. OUT OF THAT INCREASE 66% OF THEM OR 107 POSITIONS ARE RELATED TO THESE THREE PIE CHARTS. WE HAVE ADDED A 38 POSITIONS IN RECREATION OF AQUATICS. THOSE POSITIONS WHILE THE FTE ACCOUNT IS GREAT HAVE BEEN OFFSET BY REVENUES, SO IT HASN'T BEEN AT COST TO TAXPAYERS TO ADD THOSE. THIS IS IN RESPONSE TO THE RECREATION PROGRAMS THAT ARE DESIRED BY OUR RESIDENTS. AGAIN, GOING BACK TO THE SURVEY, WE RECEIVED A 99% SATISFACTION RATING IN RECREATION. AND IF YOU LOOK AT THE COMMENTS, MOST OF THE COMMENTS WERE FOR MORE RECREATION, NOT LESS. MORE OPPORTUNITIES, MORE DIFFERENT TYPES OF THINGS. SO WE RESPOND TO THAT, AND THAT HAS BEEN A BIG PART OF OUR BUDGET. WE HAVE ALSO ADDED SIX DISPATCH POSITIONS. OUR FIRE DEPARTMENT DISPATCH DISPATCHES FOR MOST OF MONTGOMERY COUNTY, AND SO WHEN WE HAVE TO ADD DISPATCHERS, IT'S NOT JUST BECAUSE OF GROWTH IN THE WOODLANDS, IT'S ALSO GROWTH THROUGHOUT THE COUNTY. AND WE HAVE A CONTRACT, AND WE ARE ABLE TO RECOVER THOSE FEES FOR ADDING THOSE DISPATCHERS. WE HAVE BROUGHT IN- HOUSE, AGAIN, WITH BOARD APPROVAL -- THROUGH THE YEARS WE BROUGHT IN STREET SCAPE MAINTENANCE. WE STILL USE SOME OF OUR STREET SCAPE MAINTENANCE IS STILL CONTRACTED OUT, BUT WE ALSO HAVE A PORTION OF IT IN- HOUSE TO BE ABLE TO BETTER RESPOND TO CERTAIN AREAS WHERE WE WERE HAVING ISSUES. THAT HAS RESULTED IN THE ADDITION OF 35 FTE. AGAIN, IT DIDN'T INCREASE COST BY THOSE AMOUNTS BECAUSE WE SIMPLY SWITCHED OUT THE CONTRACTED SERVICES. WE ACTUALLY HAVE SAVED A BIT OF MONEY BY BRINGING IT IN-HOUSE. TROLLEYS -- WE USED TO BE CONTRACT WITH BRAZIT TRAIN DISTRICT AND BROUGHT THAT IN-HOUSE. AND THE FIRE DEPARTMENT ADDED A TENTH COMPANY, AS Y'ALL KNOW SEVERAL YEARS AGO, AND THAT WAS EQUIVALENT TO 15 FTE. >> HOW WAS THE DISPATCH OFFSET BY REVENUE? >> WE HAVE A CONTRACT WITH OTHER AGENCIES THAT WE DISPATCH FOR, SO THEY HELP OFFSET OUR COST. >> ALL OF IT OR PARTIAL? >> SOME OF IT -- ALL OF THEIR COSTS -- NOW, SOME OF THIS GROWTH HAS BEEN BECAUSE OF OUR OWN GROWTH IN OUR OWN COMMUNITY, AND SO WE OBVIOUSLY COVER THAT EXPENSE. WE DON'T ASK THEM TO COVER OUR EXPENSE. >> SO, AGAIN, THIS ACCOUNTED FOR ABOUT 66% OF THE GROWTH IN TOTAL POSITIONS, AND SO NOW WE'RE GOING TO LOOK AT THE OTHER 33%, WHICH IS EQUIVALENT TO ABOUT 55 FTE. AND HERE IT IS BROKEN OUT BY DEPARTMENT EXCEPT I WAS WORKING ON THIS THIS WEEKEND AND I LEFT OFF COMMUNICATIONS, SO THAT'S MY MISTAKE SO I'M GOING TO POINT OUT MY MISTAKE. COMMUNICATION SHOULD BE ON HERE, AND THEY HAVE HAD AN INCREASE EITHER 3 OR 4. SO THE NEXT TIME I SHOW THIS SLIDE I WILL MAKE THAT CORRECTION. IN TOTAL WE'VE HAD 55. WE ALSO HAD 12.75. YOU SEE THAT AT THE VERY TOP OF REDUCTIONS IN STAFF SO I THINK WHAT I'D LIKE TO POINT OUT HERE IS EACH TIME WE HAVE A STAFF VACANCY, WE DON'T AUTOMATICALLY FILL IT, OBVIOUSLY. WE TAKE THAT IS AN OPPORTUNITY TO LOOK AT WHAT THAT POSITION WAS DOING, IF WE CAN DO IT IN A DIFFERENT WAY, EITHER THROUGH CONTRACTED SERVICES, IF CURRENT STAFF COULD POSSIBLY ABSORB IT, WHETHER, AGAIN, WE SHOULD CONTRACT IT OUT. SHOULD WE RECLASSIFY THE POSITION? THERE'S ALL TYPES OF THINGS WE LOOK AT, AND SOMETIMES WE DON'T END UP FILLING THE POSITION AT ALL. THE NATURE OF THE JOB HAS CHANGED. WE HAVE TECHNOLOGY THAT WE CAN USE INSTEAD OF FUNDING THE POSITION. SO OVER THIS PERIOD OF TIME WE HAVE REDUCED STAFF BY ABOUT 13 POSITIONS. BUT HERE ARE THE AREAS, AGAIN, BY DEPARTMENT WHERE WE HAVE INCREASED. THIS IS WHERE I WAS SAYING WE COULD SPEND A DAY GOING [00:55:01] THROUGH WHY WE INCREASED EACH ONE OF THESE, BUT IF YOU HAVE A SPECIFIC QUESTION, I AM HAPPY TO ANSWER THAT AND TRY TO TELL YOU WHAT HAS GONE ON IN THAT SPECIFIC DEPARTMENT. >> QUESTION, CHAIRMAN, IF I MAY. THE TOP LINE, THE MINUS 12. 75, WHAT DOES THAT APPEND TO? >> THAT'S WHAT I WAS JUST TALKING ABOUT. SO THE LABEL FELL OFF, SO AGAIN -- >> THAT'S COMMUNICATIONS? >> NO. 12. 75 IS THE NET REDUCTIONS IN STAFF. THOSE ARE WHERE WE HAVE -- A POSITION HAS BECOME OPEN AND WE ARE HAVE CHOSEN NOT TO FILL IT. >> OKAY. OKAY, VERY GOOD. AND THEN THE QUESTION ABOUT THE CITY SECRETARY. I REMEMBER ADDING MS. MORGAN, BUT I DON'T REMEMBER HAVING TWO CITY SECRETARIES. >> WE DON'T. THAT'S A POSITION BESIDES THE CITY SECRETARIES OFFICE ALSO COVERS ALL OF OUR RECORDS AND OUR PUBLIC INFORMATION REQUESTS. WHAT WE DO IS A CITY SECRETARY AND AN ASSISTANT CITY SECRETARY. MOST OF THAT WORKLOAD WAS DONE OVER IN THE PRESIDENT'S OFFICE UNTIL WE DECIDED TO CREATE OUR CITY SECRETARY OFFICE BECAUSE WE WERE GOING TO NEED TO ADD TO THAT ONE OR CREATE. >> I'M SORRY, I MEANT TOWNSHIP SECRETARY, BUT IT IS IN MOST PLACES A WELL- KNOWN POSITION NOT AVAILABLE HERE UNTIL RECENTLY. SO IT'S PUBLIC INFORMATION REQUESTS, WHICH ARE GOING UP. >> TREMENDOUSLY. I DON'T HAVE THAT CHART BUT IT'S TREMENDOUSLY. AND IT'S AGAIN OUR WHOLE RECORDS MANAGEMENT÷÷ SYSTEM. >> AND AREN'T THEY ALSO WORKING AT DIGITIZING ALL OF THE -- ALL THE RECORDS? >> WE ARE. AS A MATTER OF FACT, WE WILL HAVE A BUDGET. YOU PROBABLY SAW THAT IN THE BUDGET, SO, YES, WE ARE LOOKING AT THAT. >> AND PARK OPERATIONS IS DUE TO ABSORBING THE STREET SCAPES IN-HOUSE AND THEN JUST OUR FOCUS ON MAINTENANCE IN THE COMMUNITY? >> STREET SCAPES IS ITS OWN LINE ITEM, BUT, YES. PARK OPERATIONS HAS TO DO WITH GROWTH IN THE COMMUNITY. OVER THIS PERIOD OF TIME WE HAVE ADDED MILES OF PATHWAYS. WE HAVE ADDED NEW PARKS. WE HAVE -- THE BOARD CHOSE TO IMPLEMENT A CUL-DE- SAC MAINTENANCE PROGRAM. CUL-DE- SACS ARE COUNTY LAND, BUT WE GOT PERMISSION FROM THE COUNTY TO GO IN AND START MAINTAINING ALL CUL-DE- SACS WITHIN THE TOWNSHIP, SO PART OF THAT INCREASE WAS TO ADDRESS THOSE. CHRIS -- CHRIS COULD PROBABLY GO ON AND ON. >> THERE'S ONE MORE GROUP THAT WE ADDED, THAT WE TOOK OFF THAT I DON'T KNOW IF IT'S HERE OR -- BECAUSE IT WAS IDENTIFIED AS STREET SCAPE. BUT WE ACTUALLY WITH ARTIFICIAL FIELD TURF FIELDS, WE ACTUALLY BROUGHT THAT GROUP IN-HOUSE. IT WAS A TWO MEMBER CREW WE LOOKED AT SAVING $200,000 PER YEAR BY FINALLY BRINGING IT IN-HOUSE. WE REACHED A PINNACLE THERE WHERE IT ACTUALLY MADE SENSE FOR US TO BRING IT IN- HOUSE AS OPPOSED TO CONTRACT OUT THUS THE RESULT OF THE SAVINGS. THERE'S THIS CONSTANT NIP AND TUCKS WHEN WE GO OUT FOR BID, A LOT OF TIMES WE'LL DO A SELF- BID IF WE WERE TO DO IT IN- HOUSE IS THE STAFF AND THE EQUIPMENT AT A PRICE POINT WHERE WE COULD POTENTIALLY DO IT AT A LESS EXPENSIVE OPTION. >> BEFORE YOU GO, DOCTOR, WHERE ARE THE EMPLOYEES WHO WERE ADDED TO PAINT THE BRIDGES? >> I WAS JUST GOING TO COMMENT. SO OUT OF THAT PARK OPERATION, SIX OUT OF 13. 5 INCREASE WAS RELATED TO THE ADDITION LAST YEAR OF THAT CREW. >> THANK YOU. >> MONIQUE, WOULD YOU SAY THE COMMUNICATIONS ADDITIONS WERE? >> THERE ARE EITHER THREE OR FOUR NEW POSITIONS. WE HAVE DONE -- AS YOU ALL KNOW, COMMUNICATIONS HAS REALLY BEEN ENHANCED OVER THE PAST FIVE YEAR PERIOD, SO WE DIDN'T EVEN USE TO HAVE SOCIAL MEDIA PRESENCE AT THE BEGINNING OF THIS TIME FRAME. SO BETWEEN SOCIAL MEDIA, VIDEO, ALL OF THAT, AND THEN WE HAVE A DEDICATED DIRECTOR NOW INSTEAD OF NICK'S TIME BEING SPLIT BETWEEN VISIT THE WOODLANDS AND COMMUNICATIONS. ANY OTHER QUESTIONS? SO NOW I'M GOING TO MOVE TO THE '26 BUDGET, TALK ABOUT WHAT'S GOING ON THERE. SO WHAT WE HAVE BUDGETED IS A 3. 5% GENERAL WAGE INCREASE. AND ANGELA ACTUALLY HAS A PRESENTATION, SO IN JUST A SECOND WE'RE GOING TO BRING HER UP HERE TO SHOW YOU WHERE WE DERIVE THAT. IN TOTAL FOR BOTH THE FIRE DEPARTMENT AND FOR GENERAL EMPLOYEES, THAT EQUATES TO A 1.7 -- ALMOST $1. 8 MILLION INCREASE WITH THE BENEFIT IMPACT. WE ARE INCREASING HEALTH -- OUR HEALTH INSURANCE RATES ARE [01:00:06] AT 7.5%. THEY ACTUALLY -- THE CURRENT RATE RENEWAL IS CLOSER TO 9% ON THAT. HOWEVER, WE NEVER UTILIZE OUR FULL HEALTH INSURANCE BENEFITS. I LIKE TO THINK THAT'S BECAUSE WE HAVE A HEALTHY STAFF. AND IF FOR SOME REASON IT WAS TO GO OVER THE 7. 5%, WE HAVE A RESERVE SINCE WE'RE SELF- FUNDED THAT WE COULD TAP INTO. SO I HAVE BUDGETED A 7. 5% INCREASE OR $610,000. NATIONAL TREND IS PROJECTED TO BE ABOUT 8. 8% FOR MEDICAL AND 11.4% FOR PHARMACY. OTHER EMPLOYEE INSURANCE WE'RE EXPECTING ABOUT A 3% INCREASE, PROJECTED INCREASE IN DENTAL INSURANCE. AND I DIDN'T MENTION BUT, ANGELA, WE DO SHARE THE COST OF INCREASES BETWEEN THE EMPLOYER AND THE EMPLOYEE. AND WE DID GET HIT WITH AN 18.8% WORKERS' COMPENSATION INCREASE THIS YEAR AT $77,000. WORKERS' COMPENSATION INCREASE IS SORT OF LIKE A ROLLING THREE- YEAR AVERAGE. AND WE JUST HAD A REALLY GOOD YEAR FALL OFF AND A NOT SO GREAT YEAR COME ON, SO THAT'S THE REASON FOR THE INCREASE. AND WITH THAT, ANGELA, WOULD YOU LIKE TO PRESENT? >> GOOD MORNING. SO MONIQUE MENTIONED THE 3. 5% GENERAL INCREASE FOR THE STAFF THIS YEAR, AND I WANTED TO GIVE YOU A LITTLE BIT OF BACKGROUND INFORMATION ON HOW WE CAME UP WITH 3.5%. SO JUST TO START, WANTED TO REMIND YOU OF THE COMPENSATION PHILOSOPHY THAT THE BOARD HAS APPROVED FOR US TO FOLLOW. WE TRY TO ALIGN OUR COMPENSATION AND BENEFITS WITH OUR MARKET PEERS, WHO WE'VE IDENTIFIED AS LEADERS IN PROVIDING MUNICIPAL SERVICES SIMILAR IN SCOPE AND STANDARD TO THE WOODLANDS TOWNSHIP. WE DON'T EXPECT TO MATCH PRIVATE SECTOR, BUT WE DO TAKE THAT INTO ACCOUNT AS WELL BECAUSE FOR MANY OF OUR POSITIONS WE ARE RECRUITING FROM THE PRIVATE SECTOR IN ADDITION TO OTHER PUBLIC ENTITIES. AND WE LOOK AT BOTH TIME AND POSITION AS WELL AS TIME WITH THE TOWNSHIP AS FACTORS IN DETERMINING HOW PEOPLE MOVE UP IN THEIR COMPENSATION OVER TIME. BUT THE BOTTOM LINE IS WE TRY TO MATCH THE AVERAGE OF WHAT OUR MARKET PEERS DO. SO AS YOU CAN SEE IN THAT GRAPH, HALF OF OUR PEERS ARE GOING TO PAY ABOVE US. HALF OF OUR PEERS GOING TO PAY BELOW US. THAT'S WHAT WE TRY TO ACHIEVE IN TERMS OF STAYING COMPETITIVE WITH OUR SALARIES AND BENEFITS. SO THE GENERAL INCREASE IS WHAT THE BOARD APPROVES FOR US. FOR ALL ELIGIBLE STAFF IN THE PAST THE BUDGET CONSIDERATIONS AND MARKET INFORMATION HAVE BEEN THE KEY DRIVERS IN DETERMINING THE GENERAL INCREASE. THE GENERAL INCREASE HAS NOT BEEN TIED TO COST OF LIVING OR TO EMPLOYEE PERFORMANCE. SO HERE'S A LITTLE HISTORY OF THE INCREASES THAT THE BOARD HAS APPROVED IN THE PAST. GOES BACK TO 2018. WHAT I WANT TO POINT OUT HERE IS THAT THE GENERAL INCREASE IS REALLY, REALLY IMPORTANT IN HELPING US TO ADDRESS COMPETITIVENESS, GET THOSE HIGH QUALITY STAFF THAT WE'RE LOOKING FOR AND TO DECREASE TURNOVER. SO IN 2022, WE SPIKED THE HIGHEST TURNOVER WE HAD. THAT WAS PARTIALLY, I THINK, COMING OUT OF COVID AND THE VOLATILITY AND THE LABOR FORCE AT THAT TIME. BUT WE HAD REACHED ABOUT ALMOST 20% TURNOVER RATE IN 2022, AND RESPOND AS OTHER EMPLOYERS WERE AS WELL AS OTHER CITIES IN INCREASING RATES TO KEEP UP, BUT THE BOARD DID APPROVE IN 2023 A 6% INCREASE TO HELP GET US BACK TO A UMCOMPETITIVE MARKET POSITION, AND THAT BROUGHT DOWN OUR TURNOVER SIGNIFICANTLY ABOUT 2. 5 POINTS, 2. 5 PERCENTAGE POINTS. THAT WAS GREAT. AND THEN IN 2023 WE DID OUR LAST COMP STUDY WERE AND THAT ALSO HELPED US SIGNIFICANTLY. BROUGHT TURNOVER DOWN ANOTHER ABOUT 2. 5 PERCENTAGE POINTS. SO THE COMP CITY PREDICTED WE WOULD NEED TO BE ABOUT A 3% INCREASE. FOR 2025 WE DID A 3% AND THEN THIS YEAR WE'RE PROPOSING 3.5. SO NOT ALL OF OUR PEER CITIES [01:05:02] HAVE INDICATED WHAT THEY'RE DOING YET FOR THEIR WAGES, BUT SOME OF THEM HAVE EITHER IN THEIR PROPOSED BUDGETS OR THROUGH OUR HR NETWORKS. WE'VE GOT A NUMBER OF OUR PEER CITIES THAT WE DETERMINED WERE OUR PEER CITIES IN THE COMP STUDY. THE AVERAGE COMING OUT ABOUT 3.9%. AGAIN, WE'RE PROPOSING 3.5. IN OUR TML REGION 14 CITIES, THOSE ARE CITIES THAT ARE MORE GEOGRAPHICALLY CLOSE TO US, THE AVERAGE THERE IS ABOUT 3.6%. I WILL NOTE THAT SUGARLAND AND PAIRLAND AND LEAGUE CITY ARE IN THAT TML REGION, AND IF WE INCLUDE THEM IN THIS CHART, THAT WOULD BE UP ABOUT 3% AS WELL. AGAIN, WE'RE LOOKING AT 3.5. SOME OF OUR ORGANIZATIONSTHALITY ARE REPUTABLE THAT REPORT KIND OF U.S. WORKFORCE TRENDS ARE PUTTING NUMBERS OUT THERE FOR 2026 AND WHAT THEY'RE PROJECTING EMPLOYERS WILL PAY FOR THEIR WAGE INCREASES. AS YOU CAN SEE A COUPLE OF THEM ACTUALLY BREAK DOWN TO THE GOVERNMENT SECTOR ARE PREDICTING ABOUT 4%, IS THAT'S WHAT OUR PEERS ARE SHOWING AS WELL. SO THAT IN MY OPINION VALIDATES WHAT THESE ORGANIZATIONS ARE PUTTING OUT. SO WE'RE ALIGNING THERE WITH THE PRIVATE SECTOR, THE U.S. WORKFORCE. WE MAY BE A BIT SHY OF WHERE THE MARKET'S GOING TO TURN OUT IF THESE NUMBERS ARE CORRECT IN TERMS OF OUR PEERS AND OUR -- THESE DATA POINTS HERE. 3.5 MIGHT PUT US A BEHIND. WE DO HAVE ANOTHER COMP STUDY THAT'S PLANNED FOR 7, '28. MEANING WE WOULD DO THE BUDGET IMPACT STUDY. IF WE FEEL WE'RE NEEDING TO TICK FORWARD, WE MIGHT CONSIDER MOVING THE COMP STUDY TO 2026 FOR A 2027 IMPLEMENTATION. THOSE STUDIES COST 75, $80,000. I'VE SUGGESTED THIS NEXT ONE WE DO A LITTLE BIT MORE OF A FOCUS ON THE FIRE DEPARTMENT. IN SOME CITIES WE'VE SEEN OVER THE PAST COUPLE OF YEARS THERE'S BEEN A DIFFERENCE IN WHAT THEY'VE IMPLEMENTED FOR THEIR GENERAL STAFF VERSUS THEIRTHEIR SAFETY STAFF, AND SO I'D LIKE TO REALLY MAKE SURE THAT WE LOOK AT THAT CLOSELY IN THE NEXT COMP STUDY. QUESTIONS? >> I HAVE A QUESTION ABOUT THE TOTALS ON THE EMPLOYEES. WE ARE REFERRING TO GENERAL EMPLOYEES. AND, BY THE WAY, WE DON'T HAVE A LOT OF YOUR SLIDES. DID YOU KNOW THAT? IN OUR PACKET OR I DON'T HAVE THEM. >> I DON'T EITHER. >> SO WE'RE MISSING SOME. COULD YOU PROVIDE THOSE? THANK YOU. BUT BACK TO THE -- THIS CHART THAT MONIQUE PRESENTED TO US ABOUT THE NUMBER OF STAFF PER CAPITA, THAT CHART, HOW DOES THAT -- WHERE'S THE DELTA THERE? WHERE IS THE DISCREPANCY? I CAN'T FIND IT RIGHT NOW, BUT HERE WE ARE. 630 STAFF POSITIONS IN 2025, BUT YOU REPORT 438. WHERE IS THE DELTA? >> SUPPLIER PLUS THE GENERAL. >> FIRE. SO THOSE ARE -- THAT'S ALL FIRE? >> WE'VE BROKEN OUT THE PRESENTATION BETWEEN FIRE AND GENERAL. >> THAT'S WHAT I WANTED TO KNOW BECAUSE IT WASN'T TOO CLEAR THERE. THANK YOU VERY MUCH. >> I HAVE A QUESTION. WHAT DOES THE RETIREMENT LOOK LIKE HERE? WHAT DO OUR BENEFITS WE PROVIDE RANK AND FILE EMPLOYEES, ALL EMPLOYEES, WHAT DOES THAT LOOK LIKE? WHAT IS OUR MATCH, ALL THAT? >> OKAY. SO FOR RETIREMENT WE HAVE TWO SEPARATE PROGRAMS, ONE FOR GENERAL EMPLOYEES AND ONE FOR FIRE. FOR GENERAL EMPLOYEES WE HAVE TWO RETIREMENT FIVE-YEAR PLANS, A 457 AND A 401. THOSE ARE GOVERNMENT VERSIONS OF WHAT YOU MIGHT SEE IN THE PRIVATE SECTOR AS A 401K. SO FOR GENERAL EMPLOYEES WE HAVE A TWO FOR ONE MATCH UP TO 14%. SO THAT'S THE MAX THAT THE TOWNSHIP PUTS IN. IF YOU PUT IN 6%, THE TOWNSHIP PUTS IN 12. IF YOU PUT IN 7%, THE TOWNSHIP PUTS IN 14. IF YOU PUT IN 8%, THE TOWNSHIP PUTS IN 14. 9%, THE TOWNSHIP PUTS IN 14. SO THE 14% IS THE TOWNSHIP LIMIT. SO THE REASON THAT WE HAVE THAT TWO FOR ONE MATCH, WHICH IN THE PRIVATE SECTOR HAVING COME FROM THE PRIVATE SECTOR AS WELL AS OTHER NON- PROFIT, THAT'S VERY, VERY GENEROUS. IT SEEMS LIKE, WOW, CRAZY. THE REASON THAT WE HAVE THAT IS BECAUSE WE ARE NOT A CITY, BUT WE ARE TRYING TO BE COMPETITIVE WHEN WE ARE TRYING TO ATTRACT AND RETAIN EXPERIENCED PROFESSIONALS FROM OTHER CITIES. THEIR RETIREMENT PROGRAM IS THE TMRS PENSION FIVE- YEAR PLAN. AND THAT IS THE RATE AT WHICH [01:10:01] OTHER CITIES CONTRIBUTE TO THEIR PENSION FIVE-YEAR PLANS. SO IN ORDER FOR US TO ATTRACT PEOPLE FROM OTHER CITIES, WE HAVE TO HAVE A RETIREMENT BENEFIT THAT IS COMPETITIVE WITH THAT. AND SO -- SO THAT'S WHY YOU SEE THAT TWO FOR ONE MATCH. THE FIRE DEPARTMENT HAS A PENSION FIVE-YEAR PLAN THAT THE ASSOCIATION PROVIDES FOR THEM, AND THE TOWNSHIP CONTRIBUTES TO THAT. SO FIREFIGHTERS PUT IN 12%, AND THE TOWNSHIP PUTS IN 14%, SAME AS THE GENERAL EMPLOYEE. BUT BECAUSE THEY ARE REQUIRED TO PUT IN 12, WE PUT IN 14. >> CAN YOU SPEAK -- I KNOW AT THE BEGINNING WEWE THE TWO FOR ONE MATCH, AND THEN THE BOARD DECIDED NOT TO DO THAT. AND ANOTHER FIVE-YEAR PLAN AND THEN WE CAME BACK. COULD YOU GIVE SOME HISTORICAL KNOWLEDGE? >> SO I MIGHT NEED SOME HELP BECAUSE THIS IS BEFORE I WAS HERE. BUT I DO KNOW THERE WERE A COUPLE OF -- I DON'T KNOW HOW MANY YEARS THERE WAS THAT WE WERE NOT MATCHING WHAT TMRS DID, BUT WHAT I KNOW WE HEARD THAT IN OUR RECRUITMENT AND RETENTION EFFORTS, AND WE HAD TO MAKE A CASE TO PUT IT BACK IN. >> THANK YOU. >> I DO HAVE A QUESTION. ANGELA, WHAT ARE SOME OF THE POSITIONS WE HAVE TO GET FOR OTHER CITIES VERSUS JUST THE GENERAL PUBLIC LOOKING FOR POSITIONS? I KNOW I.T. IS NORMAL, HR. WHAT ARE THOSE CITY POSITIONS YOU'RE REALLY JUST PULLING FROM OTHER CITIES? >> WELL, FOR MOST OF OUR POSITIONS, WE PREFER EMPLOYEES WHO HAVE HAD OTHER MUNICIPAL EXPERIENCE. SO IT'S NOT NECESSARILY REQUIRED BUT IT'S DEFINITELY PREFERRED. CERTAINLY IN FINANCE, THE WORLD OF ACCOUNTING AND FINANCE FOR CITIES IS VERY DIFFERENT THAN IT IS IN PRIVATE SECTOR. I KNOW THAT IN HUMAN RESOURCES THE RULES AND LAWS ARE VERY DIFFERENT, SO HAVING PUBLIC SECTOR EXPERIENCE IS IMPORTANT, IT'S PREFERRED. ADMINISTRATION, CERTAINLY. THERE ARE A LOT OF DIFFERENT POSITIONS WHERE IT IS PREFERRED. THAT'S WHY WE HAVE THIS -- WE HAVE TO STRIKE THIS BALANCE WITH OUR COMPENSATION BETWEEN PRIVATE AND PUBLIC SECTOR BECAUSE WE'RE NOT ALWAYS DRAWING FROM ANOTHER CITY, RIGHT? WE'RE ALSO DRAWING FROM THE LOCAL LABOR MARKET, WHICH IS MOSTLY PRIVATE SECTOR. BUT WE DO HAVE NEIGHBORING CITIES, AND WE DO RECRUIT FROM THOSE. SO IT'S A BALANCE. WE'VE GOT TO HAVE A BALANCE. BUT, YES, FOR MOST POSITIONS IT'S PREFERRED THAT WE HAVE SOMEONE WITH LOCAL GOVERNMENT EXPERIENCE. >> OKAY. >> I JUST -- I THINK AS WE LOOK AT THIS, IT'S IMPORTANT FOR THE BOARD TO REALIZE THAT WHEN WE ADD POSITIONS THERE'S THIS COST AS WELL TO MAINTAIN COMPETITIVE, BUT TWO FOR ONE UP TO 14% IS A BIG NUMBER. HOW MUCH DO WE SPEND ANNUALLY ON RETIREMENT? SO OUR FIREFIGHTERS HAVE A DEFINED BENEFIT PENSION FIVE-YEAR PLAN, AND THE TOWNSHIP -- GENERAL EMPLOYEES HAVE A DEFINED CONTRIBUTION. SO THE DIFFERENCE IS THAT THE DEFINED CONTRIBUTION, WE PUT IN A CERTAIN AMOUNT. ON THE DEFINED BENEFIT, THERE IS A FORMULA THAT TELLS YOU WHAT YOUR BENEFIT IS GOING TO BE WHEN YOU RETIRE. >> ON THE DEFINED BENEFIT, WHICH IS PENSION, ARE WE FLUSH WITH THAT, OR DO WE HAVE ANY DEFICIENCIES? BECAUSE I KNOW MANY BIG CITIES ARE EXTREMELY DEBT RIDDEN IN THEIR PENSION FUNDS. >> WELL, WE'RE FULLY FUNDED. WE SEND OVER EVERY PAY PERIOD ALL THE MONEY THAT'S REQUIRED TO FUND THE EMPLOYERS CONTRIBUTION. >> THAT'S EXCELLENT. >> BUT DOUG ADAMS IS HERE, IF YOU WANT MORE INFORMATION ON THE FIREFIGHTERS PENSION FIVE-YEAR PLAN, I'D LOVE TO HAVE HIM COME UP. >> I THINK IT'S RELEVANT BECAUSE IF WE ARE MAYBE CONTRIBUTING ADEQUATELY, SUFFICIENTLY. BUT, DOUG, IS THE REST OF THE STATE THAT'S PART OF THIS PROGRAM? ARE THEY MAINTAINING THEIR SHARE OF THE PENSION FUND? AND WOULD THAT EVER KICK BACK ON THE FIREFIGHTERS IN THE WOODLANDS? WOULD THAT HAVE ANY REPERCUSSIONS AGAINST US -- AGAINST YOU IN THE WOODLANDS? >> WE ALWAYS LOOK AT IT. WE'RE 103% FUNDED CURRENTLY AFTER THE LAST VALUATION, SO WE'RE IN REALLY GOOD SHAPE. [01:15:07] WHEN THINGS HAPPEN, WE HAVE TO ADDRESS THOSE, AND WE'RE PREPARED TO DO THAT. WE'RE FORTUNATE WHERE WE ARE RIGHT NOW. >> YOU FEEL INSULATED AGAINST THE INADEQUATE FUNDING THAT'S COMING FROM OTHER CITIES? LIKE, IF OTHER PEOPLE ARE UNDER WATER, OTHER CITIES ARE UNDER WATER -- >> IT DOES NOT AFFECT US. >> IT DOES NOT AFFECT YOU. YOU HAVE YOUR OWN SILOED PENSION FUND. OKAY, THAT'S GOOD TO HEAR. THANK YOU. >> SO FOR GENERAL EMPLOYEES THE ANNUAL RETIREMENT EXPENSE IS 3. 2 MILLION DOLLAR FOR FIRE DEPARTMENT EMPLOYS IT'S 3. 0 MILLION. >> DUE TO THE NATURE OF DIFFERENCE BETWEEN DEFINED BENEFIT AND DEFINED CONTRIBUTION, DEFINED BENEFIT OUR HANDS ARE PRETTY MUCH TIED BUT DEFINED CONTRIBUTION THERE'S MORE FLEXIBILITY. >> THEY ARE. THERE'S MORE PARTICIPATION IN THE FIRE DEPARTMENT BECAUSE THEY'RE REQUIRED IN ORDER TO BE ABLE TO PARTICIPATE IN THAT FIVE-YEAR PLAN. >> BUT THAT FUNDING IS ALREADY DEFINED AGAINST HENCE THE DEFINED BENEFIT. >> EXACTLY. THEIR 14% IS FOR SURE. WE HAVE -- ALTHOUGH WE ENCOURAGE ALL OF OUR EMPLOYEES TO CONTRIBUTE TO THEIR RETIREMENT FOR THEIR FUTURE BENEFIT, NOT ALL DUE AND CERTAINLY NOT ALL CAN DO 7% TO GET THE 14% MATCH. SO OUR -- ON GENERAL EMPLOYEES, THAT CONTRIBUTION IS USUALLY IN THE SINGLE DIGITS. IT'S NOT AT 14%. I THINK THE LAST TIME WE LOOKED IT WAS 8- ISH, SOMETHING AROUND THAT. I'D HAVE TO GO BACK AND LOOK. >> I'M NOT FAMILIAR WITHWITH BUSINESS WITH 401KS YOU CAN DO AUTO ENROLLMENT OR AUTO ESCALATION. DO YOU HAVE THAT? >> WE DO. >> GREAT. >> ANY OTHER QUESTIONS? >> THANK YOU. SO THESE ARE OUR CURRENT STAFFING LEVELS FOR THE GENERAL EMPLOYEES FOR 2026. 438.7 FULL TIME EQUIVALENCE. WHEN I SAY FTES, THAT'S WHAT I'M REFERRING TO, WHICH IS THE SAME AMOUNT FOR 2025. SO WE ARE PROPOSING, AND I'LL SHOW YOU HERE IN A SECOND, TWO NEW POSITIONS. YOU CAN SEE THERE ONE IN INFORMATION TECHNOLOGY, ONE IN STREET SCAPE OPERATIONS, BUT WE ARE REDUCING TWO FTES IN RECREATION, SO THE NET IS A ZERO INCREASE IN FTES. FOR OUR GENERAL EMPLOYEES, THE ANNUAL -- FOR SALARIES AND BENEFITS TOTAL $335. 1 MILLION FOR 2026. WE ARE PROPOSING A NEW STAFF POSITION AT 174,000, SO THAT WOULD BRING THE TOTAL SALARIES AND BENEFITS BUDGET UP TO $35. 3 MILLION, WHICH OVERALL IS A 44. 3% INCREASE. FOR THE NEW POSITIONS WE ARE PROPOSING A RADIO ANALYST, WHICH WOULD SERVE THE FIRE DEPARTMENT. WE CENTRALIZE ALL OF OUR I.T. INCLUDING RADIO OUT OF THE INFORMATION TECHNOLOGY DEPARTMENT, BUT THIS WOULD BE A RESOURCE DEDICATED TO THE FIRE DEPARTMENT. WE HAVE NOT ADDED A RADIO ANALYST SINCE 2015. SINCE THAT TIME WE HAVE ABOUT 163% INCREASE IN THE PIECES OF EQUIPMENT, NOT TO MENTION THE TECHNOLOGY THAT NEEDS TO BE SUPPORTED. TO US THIS IS A CRITICAL MISSION THING. WE SIMPLY CANNOT HAVE DOWN TIME IN OUR RADIO OPERATIONS ON AN EVERYDAY BASIS MUCH LESS DURING AN EMERGENCY RESPONSE. FOR STREET SCAPE FORESTRY, WE ARE ONLY PROPOSING ONE POSITION THIS YEAR. THAT WILL DIRECTLY [01:20:01] IMPROVE EFFICIENCIES WITH OUR DEMANDS OF OUR IN- HOUSE CREWS. WHAT WE ARE DOING IS WE ARE TRYING TO SEPARATE OUR ARBORESTS, WHO HAS MANY DUTIES INCLUDING LEADING A CREW, SO THAT PERSON CAN FUNCTION MORE EFFICIENTLY AND HAVE WAY MORE TIME TO FOCUS ON THE FOREST HEALTH AND FOREST MANAGEMENT. AND THESE ARE THE TWO POSITIONS THAT WE ARE ELIMINATING. THEY ARE ALL IN RECREATION -- SPECIALISTS AND RECREATION AIDES. WE ARE NOT PURSUING PROGRAMS RIGHT NOW RELATED TO BATTING CAGES OR A SAILING PROGRAM -- THAT HAS BEEN FROM SEVERAL YEARS AGO, SO THIS BOARD DIDN'T EVEN REVIEW THAT. THAT WAS FROM A PREVIOUS BOARD. IT WAS A GREAT CONCEPT, BUT WE HAVEN'T BEEN ABLE TO FIND WAYS TO MAKE THAT WORK, SO WE NO LONGER WANT TO HOLD ONTO THAT POSITION. >> SO THESE AREN'T REDUCTION IN STAFF THAT WE HAVE ALREADY EMPLOYED. THESE ARE JUST -- >> AUTHORIZED POSITIONS. >> YEAH. >> THAT WE -- THAT WE ARE ELIMINATING. WE ARE TAKING THEM OFF THE BOOKS. >> SO HELP ME -- WALK ME THROUGH THIS AUTHORIZED POSITIONS. I DON'T UNDERSTAND. ARE WE -- BECAUSE I KNOW I NEVER VOTED ON A SAILING COORDINATOR. SO I GUESS THAT WAS A PREVIOUS BOARD THAT DID THAT. HOW MANY -- HOW MANY OPEN POSITIONS DO WE HAVE THAT ARE -- THAT ARE ON THE BOOKS COMING THAT WE DON'T KNOW ABOUT? >> YOU'RE LOOKING AT THEM. >> THIS IS IT? >> THIS IS IT. SO, AGAIN, THESE ARE PROGRAMS. THE BATTING CAGES I BELIEVE THIS BOARD DID WEIGH IN AT ONE TIME. FOR A VARIETY OF REASONS WE HAVE NOT BEEN ABLE TO MAKE THAT WORK YET, SO WE WANTED TO RELEASE THESE POSITIONS, IF AT A FUTURE DATE. IF THE BOARD DECIDES TO MOVE FORWARD WITH THIS PROJECT, THESE MAY COME BACK. >> IF YOU GO BACK TO PAGE 48 WHERE WE HAD THOSE TWO POSITIONS THAT ARE IN PARENTHESES. SO WE'RE ADDING TWO POSITIONS BUT NOT TAKING TWO POSITIONS AWAY. WE'RE NOT GOING FORWARD WITH THOSE POSITIONS? >> WHAT WE WANT TO MAKE SURE IN OUR REPORTS THAT THE F TERKS ACCOUNT DARB THE FULL TIME EQUIVALENT ACCOUNT, APPROVED BY THIS BOARD OR THIS ONE MATCHES. SO YOU'RE RIGHT, WE'RE NOT TAKING -- WE'RE NOT ELIMINATING TWO POSITIONS, WE'RE NOT HAVING A REDUCTION IN WORKFORCE IN THAT REGARD, BUT WHAT WE ARE DOING IS GETTING OUR FTE ACCOUNT CORRECT. >> WERE THEIR SALARIES BUDGETED IN THE BASE BUDGET? >> THERE WAS. $70,000 WERE BUDGETED FOR THOSE RECREATION POSITIONS WE'VE BEEN CARRYING IN THE BUDGET IN CASE WE HIRED THEM, SO WE ARE RELEASING THOSE $70,000 IN FUNDS. >> SO NET NET TWO NEW EMPLOYEES. >> RIGHT. HERE WE HAVE $174,000 FOR THE TWO NEW POSITIONS. WE ARE REDUCING -- I GUESS I DON'T HAVE THAT SLIDE BY $70,000, SO NET INCREASE OF $100,000. >> YEAH, YOU CAN GO FORWARD. I THINK IT WAS ON THERE. >> THERE IT IS DOWN AT THE BOTTOM. 74,000. ANY QUESTIONS? >> GOOD WORK. >> SO I ALSO WANTED TO EXPLAIN SORT OF HOW WE GO THROUGH OUR PROCESS. SO THERE WERE OTHER POSITIONS SUBMITTED IN THIS BUDGET PROCESS BY OUR MANAGERS. I COMMEND OUR MANAGERS AND OUR LEADERSHIP STAFF. THEY DON'T SUBMIT POSITIONS THAT ARE FRIVOLOUS. THEY SUBMIT THEM BASED ON DATA THAT THEY HAVE AND ON WHAT THEY FEEL IS A REAL NEED. THIS YEAR BECAUSE WE WERE DEALING WITH SOME CHALLENGES THAT WE'RE GOING TO TALK ABOUT ESPECIALLY BECAUSE OUR LAW ENFORCEMENT PARTNERS, WE WANT TO MAKE SURE THEY ARE FAIRLY COMPENSATED BECAUSE WE WANT THE BEST OF THE BEST THERE, WE HAD TO MAKE SOME DECISIONS. SO THESE ARE I JUST WANT YOU TO KNOW POSITIONS THAT CAME CAME FORWARD FROM OUR MANAGERS. IN DIFFERENT CIRCUMSTANCES WE MAY HAVE BEEN PRESENTING MORE NET ZERO POSITIONS THAT WE REALIZE WE COULDN'T DO THIS YEAR. AGAIN, I THINK IT'S IMPORTANT FOR YOU TO SEE THAT WE DO HAVE OTHER NEEDS IN THIS ORGANIZATION AND AT SOME POINT IN TIME WE MAY BE BRINGING SOME OF THESE BACK FORWARD. IN OUR TRANSIT ANALYST POSITION, SHE IS AT CAPACITY. I CAN'T -- I CAN'T DESCRIBE IT MORE. SHE IS AT CAPACITY WITH EVERYTHING SHE DOES, SO WE CANNOT GROW THE TRANSIT PROGRAM WITHOUT HAVING ADDITIONAL STAFF. SAME THING WITH COMMUNICATIONS. WE ARE PRETTY MUCH AT CAPACITY. WHAT WE DID IS WE INCREASED CONTRACTED SERVICES IN BOTH OF THESE AREAS TO TRY TO COMPENSATE FOR THE FACT THAT WE NEED SOME OTHER KIND OF RESOURCES. AND THE SAME IN STREET SCAPE. Y'ALL KNOW HOW STREET SCAPE IS. WE'VE TALKED ABOUT ALL TYPES OF PROGRAMS. AT SOME POINT IN TIME IF WE CONTINUE WITH THE CURRENT LEVEL OF SERVICE, WE WILL HAVE TO ADD ANOTHER CREW. >> YEAH, I'M IN FAVOR OF MORE OUTSOURCING WE CAN DO THE [01:25:06] BETTER BECAUSE, YEAH. WHEN LOOKING AT THE RETIREMENT, WE DON'T HAVE TO PAY THAT HUGE ALLOTMENT IF WE'RE CONTRACTING IT OUT. >> AND WE WILL, WE'LL GO THROUGH THAT -- WE GO THROUGH THAT ANALYSIS. SOMETIMES YOU ARE PAYING MORE FOR CONTRACTED SERVICES BECAUSE EVEN THOUGH WE DON'T HAVE TO PAY IT, THEY'RE HAVING TO PAY SOMETHING. SOME THINGS IT MAKES PERFECT SENSE TO CONTRACT OUT AND SOME THINGS NOT ALWAYS, BUT WE'LL ALWAYS PRESENT THAT TO YOU. OKAY, SO STAFFING LEVELS FOR FIRE DEPARTMENT ARE GOING UP FROM 192 FTES TO 193. THAT IS FOR A FIRE FLEET TECHNICIAN. I'LL DESCRIBE THAT MORE IN JUST A SECOND. SO OUR CURRENT EMPLOYEE -- FOR CURRENT EMPLOYEES IN THE FIRE DEPARTMENT, THERE'S A $31. 8 MILLION SALARIES AND BENEFITS BUDGET. THAT IS INCREASING BY ABOUT 1. 7 IN THIS COMING YEAR. THERE IS ONE STAFF REQUEST, AS I JUST MENTIONED. IT IS FOR A FIRE FLEET TECHNICIAN. WE HAVE A FLEET THAT CURRENTLY CONSISTS OF 24 HEAVY APPARATUS, WHICH ALL REQUIRE ONGOING PREVENTATIVE MAINTENANCE, DIAGNOSTICS, FIELD REPAIRS. WE HAVE COME TO A POINT WHERE OUR CURRENT FLEET TECHNICIANS CANNOT KEEP UP WITH THE PACE OF MAINTENANCE THAT IS REQUIRED. WHEN WE CAN'T GET TO MAINTENANCE QUICKLY, THEN THOSE VEHICLES GO OUT OF SERVICE OR HAVE TO TAKE ADDITIONAL TIME TO BE SENT TO OTHER REPAIR SHOPS, OUTSIDE REPAIR SHOPS, WHICH ALMOST ALWAYS COST MORE THAN WHAT WE CAN DO FOR IN-HOUSE. >> CAN YOU OUTSOURCE THAT? >> IT'S WHAT I JUST SAID, WE CAN. BUT THEN YOU HAVE DOWN TIME. IT TAKES LONGER TIME, AND IT'S ALWAYS MORE COSTLY TO SEND THAT OUT RATHER THAN HAVE OUR OWN STAFF MAINTAIN IT. AND, AGAIN, THEIR FIRE DEPARTMENT IN ORDER TO BE ABLE TO CONTINUE TO PROVIDE A HIGH LEVEL OF SERVICE AND TO ADDRESS THE GROWING MULTI- FAMILY, HIGH DENSITY PROJECTS THATTHAT PARTICULARLY WITHIN THE TOWN CENTER, WE ARE GOING TO NEED AT SOME POINT IN TIME, SOONER RATHER THAN LATER SOME STAFF TO BE ABLE TO ADDRESS THAT, IN ORDER TO BE ABLE TO MAINTAIN OUR RESPONSE TIMES AND TO MAKE SURE THAT WE HOLD ONTO THAT ISO 1 RATING. THE FIRE CHIEF IS GOING TO PRESENT THESE WHEN WE GET TO THE BUDGET INITIATIVES, BUT THEY ARE CURRENTLY NOT IN THE BUDGET. >> IT'S A WHOLE NEW BATTALION, RIGHT? >> IN THIS CASE IT'S 6 FOR AN ADVANCED LIFE SAFETY SQUAD THAT WOULD EVENTUALLY GROW INTO THE 11TH COMPANY THAT WOULD BE STATIONED OUT AT TOWN CENTER, AND THEN WE HAVE TWO OTHER POSITIONS, A BATTALION CHIEF AND A LIEUTENANT. AGAIN, HE'LL GO OVER ALL THAT IN DETAIL. >> YOU SAID THESE ARE NOT IN THE BASE BUDGET? >> THESE ARE NOT INCLUDED IN THE BASE BUDGET. >> OKAY. >> I ACTUALLY DON'T HAVE THAT OFF THE TOP OF MY HEAD. SO ANYTHING ON PERSONNEL? BEFORE WE E ON? NO, OKAY. WE'RE GOING TO TAKE A LOOK AT EXPENDITURES. ON A PER CAPITA BASIS YOU CAN SEE WHAT THAT HAS DONE THROUGH 2018 THROUGH 2026. AS WE TALKED ABOUT EARLIER, THE REASON THAT YOU ARE SEEING THAT MODERATE JUMP IN THE PER CAPITA AMOUNT IS BECAUSE OF CONTRACTED LAW ENFORCEMENT AND THE ENHANCEMENTS THERE IN THE FORESTRY PROGRAM AND IN COMMUNITY MAINTENANCE AND FOR TRANSPORTATION -- FUNDING FOR TRANSPORTATION SERVICES. SO, AGAIN, THESE ARE OUR FOUR KEY FACTORS OF WHAT HAS INCREASED THE BUDGET OVER THE LAST TWO YEARS. IN TERMS OF CONSOLIDATED EXPENSES, OVERALL OUR BUDGET IS DECREASING BY 11.5%. AND THE REASONS ARE PRIMARILY BECAUSE WE HAVE A DECREASE IN CAPITAL EXPENDITURES. AND I GET THIS QUESTION ALL IT TIME. IT'S NOT BECAUSE WE'RE NO LONGER KEEPING UP WITH OUR CAPITAL EXPENDITURES. NOW WE'RE GETTING BACK TO WHAT THE 26 CAPITAL FIVE-YEAR PLAN CALLS FOR. SO CAPITAL CAN GO UP AND DOWN DEPENDING ON THE LEVEL OF ASSETS THAT NEED TO BE REPLACED THAT YEAR. OUR TRANSPORTATION EXPENSES ARE DECREASING PRIMARILY BECAUSE OF CAPITAL, ABOUT 1. 4 MILLION. EDZ EXPENDITURES IS THE SALES TAX WE HAVE TO PAY -- OH, NO, THAT'S FOR OUR ECONOMIC ZONE ON PAYMENTS. SO THE SALES TAX THAT'S COLLECTED IN THE TWO ZONES, WE PAY THOSE OUT. WE HAVE A 2. 2 MILLION INCREASE IN LAW ENFORCEMENT WHICH WAS AT 11. 9% INCREASE. AND THEN ALL OTHER OPERATING [01:30:05] EXPENDITURES, NON- LAW ENFORCEMENT EXPENDITURES WE'RE HAVING AN INCREASE OF 3. 4% OR $4. 2 MILLION. AND WE'RE GOING TO GO OVER THE DETAILS. SO HERE'S A LOOK BY DEPARTMENT OF WHERE THE MONEY IS ALLOCATED BY THE BOARD TO FUND THESE SERVICES. THIS IS PERFECTLY IN LINE WITH WHAT WE SEE ON OUR COMMUNITY SURVEYS IN TERMS OF WHAT THE RESIDENTS HAVE INDICATED ARE THEIR HIGHEST PRIORITIES. SO PARKS AND RAEK RECREATION MAKES UP ABOUT 20% OF OUR BUDGET, FIRE DEPARTMENT AT 20, LAW ENFORCEMENT $20 MILLION AT 12%. AND I'M NOT GOING TO READ, BUT YOU CAN SEE THE DIFFERENT CATEGORIES. THE REASON FOR OVERALL DECREASE, BUT WE ALSO HAVE INCREASES MIXED IN THAT. FIRE DEPARTMENT INCREASING 2 MILLION, GENERAL GOVERNMENT AT 922. AND AGAIN, I'M NOT GOING TO READ THOSE BECAUSE WE ARE GETTING READY TO GO THROUGH EACH ONE OF THOSE. THE OTHER NET DECREASE OF 244 IS PRIMARILY RELATED BECAUSE WE HAVE LOWERED THE EVENT SUBMISSION TAX REVENUE WE EXPECT TO GET NEXT YEAR. AND TO THE EXTENT THAT WE PAY 90% OF THAT TO THE PAVILION, THAT IS WHAT'S SHOWING UP HERE AS A DECREASE, AND THEN OUR CAPITAL PROJECTS WE JUST TALKED ABOUT. WE HAD A SIGNIFICANT DECREASE THERE. >> MOMENTARY GO BACK TO THAT SLIDE, PLEASE, PRESIDENT SHARP. ON THE EXPENDITURES INCREASE, I'D LIKE A LITTLE MORE CLARITY ON THE CUSTOMER ENGAGEMENT PIECE THERE. >> YES, MA'AM, WE'RE GOING TO GET TO THAT SLIDE. >> MORE DEFINITIVE. >> YES. >> OKAY, THANK YOU. >> IT'S PRIMARILY OUTFUND OMEGA, BUT WE'LL GET TO THAT. OKAY, CONTRACTED LAW ENFORCEMENT. THIS, AGAIN, OUR BIGGEST INCREASE IN THE BUDGET. I THINK Y'ALL ARE ALL AWARE OF THE PAY PARITY ISSUE THAT OUR LAW ENFORCEMENT PARTNERS HAVE BEEN DEALING WITH. AND THIS IS IN RELATION TO WHAT THE CITY OF HOUSTON HAS DECIDEDDECIDED DO WITH THEIR POLICE DEPARTMENT, HAD A SIGNIFICANT INCREASE IN WAGES IN ORDER TO BE COMPETITIVE. OF COURSE, WE WANT OUR LAW ENFORCEMENT PARTNERS TO BE ABLE TO BE COMPETITIVE LOCALLY AND TO BE ABLE TO RECRUIT HIGH QUALITY OFFICERS TO PROTECT US. AND SO THIS IS A NECESSARY STEP THAT WE FEEL LIKE WE NEED TO TAKE. THE BOARD HAS DISCUSSED THIS. STAFF HAS DISCUSSED THIS, AND WE HAVE PRIORITIZED THIS REQUEST IN OUR BUDGET, AS YOU CAN SEE. SO THE PAY PARITY INCREASES WILL CONTRIBUTE ABOUT $1. 1 MILLION INCREASE. THERE IS A REQUEST FOR INCREASES IN VEHICLES, EQUIPMENT, AND AS YOU ALL KNOW THE BODY VEHICLE CAMERAS THAT THEY CHANGED SOFTWARE VENDORS, SO THEY HAD TO GET ALL NEW EQUIPMENT AND SOFTWARE LAST YEAR IMPLEMENTED THIS YEAR. SO THAT IS AN ON- GOING COST WE HAVE ALREADY PAID. BY MADE TWO IT'S OUT OF THREE PAYMENTS AND WE HAVE THE MONEY RESERVED FOR THE THIRD PAYMENT FOR THE ACTUAL INITIAL PURCHASE OF THE CAPITAL ITSELF. BUT THERE'S AN ONGOING PAYMENT REQUIRED TO SUPPORT THE SOFTWARE OF DIFFERENT AMOUNTS. CAN BE ANYWHERE BETWEEN 540 AND $640,000. SO THAT IS WHAT YOU ARE SEEING REFLECTED HERE IN THE INCREASE -- AND THE COST OF THEIR VEHICLES HAS ALSO GONE UP. THE HARRIS COUNTY CONSTABLE INCREASE, THEY'RE GOING TO IMPLEMENT THEIR INCREASE NOT -- NOT UNTIL OCTOBER OF '26, SO THEIR AMOUNTS MUCH LOWER. THEY'RE GOING TO HAVE A SIMILAR INCREASE, BUT IT'S NOT GOING TO HIT US EXCEPT FOR THE LAST THREE MONTHS OF 2026. THE CONSTABLES BECAUSE WE EMPLOYEMPLOY FEW OF THOSE ON OUR CONTRACT, THEIR PAY PARITY AMOUNTS, IT'S THE SAME PERCENTAGE BUT A LESS AMOUNT. SO HERE IS THE PRESENTATION MADE TO COMMISSIONERS COURT -- MONTGOMERY COUNTY COMMISSIONERS COURT LAST TUESDAY. THIS IS A SLIDE I SCREENSHOTED AND PUT OVER HERE, BUT THIS IS A SLIDE THAT THEY PREPARED, SO I'M GOING TO START OFF WITH HAD THE DETECTIVES. WE DO EMPLOY EIGHT DETECTIVES THROUGH OUR CONTRACT, AND THIS IS WHAT THEY ARE SUGGESTING FOR THEIR PARITY PAY. SO I TOOK IT AND DID IT THIS WAY SO WE CAN SEE WHAT THE ACTUAL COST IMPACT IS AND YOU CAN SEE THEY'RE GROWING OVER A FOUR- YEAR PERIOD. OVER A FOUR-YEAR PERIOD THAT'S AN INCREASE OF $57,000 OR 80% INCREASE FROM WHT WE ARE PAYING NOW WITH [01:35:02] THE LARGEST PERCENTAGE INCREASE HITTING US IN THE FIRST YEAR AT 37.4%. AGAIN, THIS IS WHAT THEY PRESENTED. THEY HAD A COMMITTEE THAT STUDIED EXTENSIVELY, AND THIS IS WHAT THEY FEEL THEY NEED TO DO IN ORDER TO GET TO PARITY AND COMPETE WITH OTHER LOCAL LAW ENFORCEMENT AGENCIES. >> I THINK IT'S IMPORTANT WE DRIVE THIS HOME AND EXPLAIN HOW THIS ALL HAPPENED. HARRIS COUNTY STARTED IT, WAS THAT RIGHT? HARRIS COUNTY SHERIFF'S LAW ENFORCEMENT A MASSIVE RAISE. >> RIGHT. >> CITY OF HOUSTON THEN FOLLOWED, DOUBLED DOWN WITH IT. SO TO BE COMPETITIVE AND NOT HAVING A LOT OF LAW ENFORCEMENT OFFICERS LEAVE MONTGOMERY COUNTY, THE SHERIFF'S OFFICE AND THE COUNTY KIND OF LED THIS ROUTE. >> RIGHT. >> THIS IS AFFECTING OTHER CITIES BECAUSE I KNOW THE ARGUMENT'S GOING TO COME IF WE WERE A CITY, THIS WOULDN'T HAPPEN TO US. NO, SHENANDOAH'S FACING THIS IN A BIG WAY. >> THIS IS UNIVERSAL ACROSS THE UNITED STATES, AND IT'S HIGH TIME BECAUSE THERE WAS SO MUCH PUSH TO DEFUND, UNDERFUND, PUSH OUT THE POLICE IN THE BIG CITIES. NOW THEY'RE RECOGNIZING THAT THAT WAS A FOOLISH AND FLAWED ARGUMENT, AND THEY'RE TRYING TO CORRECT THEMSELVES, REDIRECT THEIR FUNDS BACK TO LAW ENFORCEMENT. AND IT'S A GOOD THING. AND I SUPPORT IT. >> YEAH. I JUST WANT TO MAKE SURE PEOPLE KNOW THIS WAS SOMETHING THAT WAS STARTED AND THE DOMINO EFFECT IS NOW HITTING MONTGOMERY COUNTY IN A BIG WAY ACROSS THE BOARD. >> ABSOLUTELY. SO THIS IS THE SLIDE FOR -- THAT WAS PRESENTED AGAIN TO MONTGOMERY COUNTY KMIGSER'S COURT FOR OUR DEPUTIES AND AGAIN IMPLEMENTED OVER A FOUR- YEAR FIVE-YEAR PLAN. YOU SEE THAT COH PARITY, THAT STANDS FOR THE CITY OF HOUSTON. SO THAT IS WHAT THEY'RE TRYING TO ACHIEVE WITH THE CITY OF HOUSTON. FOR THE FIRST ONE A DEPUTY MOVING FROM A CURRENT $60,528 UP TO 101,000, IN ORDER TO GET TO 16% PARITY WITH THE CITY OF HOUSTON. FOR US THIS IS WHAT IT MEANS. AGAIN, JUST WROTE THEIR SAME CHART BUT SHOWED IT IN TERMS OF PERCENTAGE INCREASES. SO THE HIGHEST PERCENTAGE INCREASES ARE COMING FOR THIS FIRST YEAR. BUT AGAIN WANT TO HIGHLIGHT THIS IS NOT JUST A '26 BUDGET ISSUE OR CHALLENGE, IF YOU WILL, FOR THE TOWNSHIP OR FOR ANY OF THE OTHER CITIES OR JURISDICTIONS, LIKE WE TALKED ABOUT. THIS WILL BE SOMETHING WE WILL NEED TO FIVE-YEAR PLAN FOR OVER THE NEXT FOUR YEARS IN ORDER TO GET OUR LAW ENFORCEMENT PARTNERS UP TO PARITY. AND THEY ARE CHANGING THE WAY THEY DO A STIPEND. IF YOU HAVE A SPECIAL SKILL OR SPECIALLY TRAINED FOR ANY OF THESE OTHER ONES, THERE WILL BE AN ADDITIONAL STIPEND OF 26 PER YEAR. POINTING THIS OUT BECAUSE I AM NOT CLEAR THAT THESE NUMBERS HAVE BEEN FACTORED INTO OUR BUDGET BASED ON SOME NUMBERS I WAS GIVEN BY THE COUNTY. SO WE ARE TRYING TO CLARIFY THAT. SO I KNOW THE PAY PARITY IS IN THERE. BEFORE I MOVE ON, ARE THERE ANY QUESTIONS? >> THAT'S AT FOUR- PLUS YEARS, RIGHT? >> WHICH IS WHERE THE DETECTIVES ARE. >> OKAY, GO TO THE NEXT SLIDE. OVER HERE, IT WAS $60,000 FOR THE ZERO TO THREE YEARS. 60,000 FOR THE ZERO TO THREE, THE INTRODUCTORY LEVEL. I WANT TO OFFER A QUESTION TO YOU. I UNDERSTAND THAT THE SHERIFF'S DEPARTMENT AT THIS LEVEL AND THE DEPUTIES IS PAID LESS THAN WE ARE PAYING FOR ALPHA AND OMEGA, NOT OUR POLICE OFFICER, NOT OUR SHERIFF'S DEPUTY, AND THEY ARE GETTING MORE THAN $60,000 A YEAR. AND THEY CANNOT ARREST, THEY'RE NOT LICENSED, [01:40:02] THEY DON'T CARRY WEAPONS. THEY'RE A CELLPHONE ON A PONY. SO IS THAT RIGHT? >> THAT IS CORRECT. THERE'S A LITTLE NUANCE THERE. SO WITH A AND O, THEY GET CHARGED -- WE ONLY GET CHARGED ONE AMOUNT. THAT'S SUPPOSED TO COVER NOT ONLY THEIR WAGES, THEIR ADMINISTRATION, CARE OF THEIR HORSES. WE DO HAVE A SEPARATE PAYMENT THAT WE MAKE FOR THE HORSES, TOO, BUT NOT FULLY. SO THIS IS JUST SALARIES, SO I DON'T KNOW IN TERMS OF THE ACTUAL WAGE -- THE ACTUAL PERSON ON -- THAT'S PATROLLING ON A HORSE IS MAKING MORE THN THEM, BUT THE COST. >> SO YOU'VE GOT TO PAY FOR A DEPUTY AND A PONY. >> I WANTED EVERYBODY TO SEE THAT. >> OKAY, MOVE ONTO THE FIRE DEPARTMENT. SO THE FIRE DEPARTMENT TOTAL BUDGET FOR 2026 IS $36 MILLION. IT REPRESENTS ABOUT A $2 MILLION INCREASE. WE HAVE THREE DIVISIONS. WE HAVE FIRE PROTECTION, WHICH IS, OF COURSE, OUR LARGEST DEPARTMENT AND FIRE AND EMS MANAGEMENT AND OUR DISPATCH AND THAT OBVIOUSLY A HEAVILY STAFFED POSITION SO THAT WE CAN MEET OUR ISO 1 RATING AND HAVE RESPONSE TIMES THAT ARE 5 MINUTES OR LESS. AND ALSO THESE ARE RELATED TO THE KAD SYSTEM. CAD IS COMPUTER AIDED DISPATCH. WE ARE HAVING CERTAIN COMPONENTS OF THAT SYSTEM THAT WILL IMPROVE THE EFFICIENCY. IT ALLOWS THEM TO RUN MULTIPLE PROGRAMS ON THE SAME SERVER AT THE SAME TIME. WE HAVE THIS IN OUR CONTRACT AND SO THE HOSPITAL COUNTY DISTRICT IS A GOOD ONE. >> IF THEY'RE A TAXING AUTHORITY, I THINK IT'S LIKE 7% THEY GET ON THE AVERAGE TAX BILL. IS THAT RIGHT? >> ON THAT CHART, I BELIEVE THAT'S CORRECT. >> SOMETHING LIKE THAT. IF THEY'RE A TAXING AUTHORITY PROVIDING THAT AND WE'RE PROVIDING THEM SPACE IN ALL OUR FIRE DEPARTMENTS, WE JUST BUILT A BRAND NEW FIRE DEPARTMENT, $15 MILLION. >> WHICH THEY LEASE THAT SPACE. >> WHY CAN'T THEY COVER THE $134,000? >> FOR OUR CONTRACT WE SHARE THE CAD, SO WE PAY FOR 43% OF THE CAD. SO IT'S REALLY HELPFUL IN THE TAXPAYER SAVINGS THAT WE HAVE IN THIS CONTRACT, AND THEN WE SHARE A CAD. >> CAN YOU EXPLAIN WHAT THE CAD SYSTEM DOES AND IS? >> BASICALLY WHEN YOU CALL 911 ALL THE INFORMATION IS ENTERED THERE, AND THAT'S HOW WE GET ALL THE INFORMATION IN THE FIELD. >> SO IT LOCATES THE CELLPHONE, IF THEY'RE CALLING FROM A CELLPHONE. >> PART OF THE TECHNOLOGY, YES. >> TELLS YOU WHERE THE CALLER IS COMING FROM. >> YES. >> HOW MUCH MONEY DO WE MAKE IN LEASING THE HOSPITAL TO DISTRICT? >> IT'S $1,000 A MONTH PER STATION PER TRUCK. AND THEN THEY PAY $2 MILLION FOR STATION 5 ALSO WITH THE REBUILD OF THAT STATION. >> THEY CONTRIBUTED THAT IN CAPITAL? >> YES. >> OKAY. I DIDN'T KNOW THAT. >> WELL, IT'S A GOOD PARTNERSHIP. NOTHING WOULD WORK IF WE DIDN'T HAVE THAT PARTNERSHIP. WE HAVE TO HAVE THEM. >> WHAT ABOUT THE ONE NEW POSITION FOR A FLEET TECHNICIAN THAT'S TAKING CARE OF THE FLEET, WE'VE ADDED TO THE FLEET A LOT SINCE MY TERM ON THIS BOARD. >> WE'RE GETTING REALLY BEHIND IN PREVENTATIVE MAINTENANCE, AND THAT'S WHAT DRIVES DOWN OUR COSTS. AND IT'S HARD TO KEEP [01:45:02] UP. WHEN WE OUTSOURCE, IT'S EXTREMELY EXPENSIVE. AND WE GET IN LINE WITH EVERYBODY ELSE. SO REALLY OUT AFFSERVICE TIME COSTS US MONEY. >> I DIDN'T KNOW WE HAD A MASSIVE APARTMENT LIKE THAT. THERE'S TWO CURRENTLY RIGHT NOW, AND WE'RE ADDING A THIRD. WHEN WERE THE FIRST TWO ADDED, EARLY ON OR LATELY? >> WE HAD PART- TIME UNTIL -- WE HAD ONE PART- TIME UNTIL 2017, AND THEN IN 2018 WE GOT OUR FIRST FULL- TIME FIRE FLEET TECHNICIAN, AND THEN WE ADDED ANOTHER ONE IN 2019, I BELIEVE, AND WE STILL HAVEN'T CAUGHT UP. I MEAN, IT'S -- >> I GUESS MY QUESTION IS, AND WE'LL GET INTO BUDGET INITIATIVES, BUT IF WE SPENT $20 MILLION ON THE FIRE DEPARTMENT LAST YEAR, THAT'S A LOT OF MONEY -- A LOT OF MONEY AND WELL WORTH IT. AND IT'S GOING TO BE AN INCREDIBLE STATION. CAN WE GET A YEAR OFF OF INCREASING PAYROLL AND ADDITIONS? AND WE, LIKE, JUST -- BECAUSE WE'RE GOING TO BE ASKED TO MAKE A VOTE HERE SOON, AND ALL OF US ARE GOING TO HAVE TO TAKE A -- WE'RE GOING TO HAVE TO LOOK AT ALL THESE THINGS. WE'RE GOING TO HAVE TO LOOK AT EXPENSES AT THE CENTER OF THE LAYER. HOW DO WE GO ABOUT THAT? >> WELL, THAT'S A CHALLENGE, I GET IT. WE BRING FORWARD EVERYTHING WE NEED. WE'RE NOT -- WE'RE TRYING TO BE -- WE'RE TRYING TO LOOK FORWARD TO ADD THE POSITIONS IN ORDER TO PREVENT OTHER COSTS BY, LIKE I SAID ON THE PREVENTATIVE MAINTENANCE SIDE, WHEN WE DON'T STAY IN FRONT OFOF THAT, IT LEADS TO COSTLY REPAIRS. RIGHT NOW WE ARE REPLACING A MOTOR IN A FIRE TRUCK THAT WAS $40,000. OUR STAFF IS REPLACING THAT AT A MAINTENANCE FACILITY RIGHT NOW. INSTEAD OF OUTSOURCING THAT, WHICH WOULD DOUBLE THE PRICE WHICH ULTIMATELY WOULD BE ABOUT $50,000 IN LABOR. >> I JUST -- I'M HAVING A HARD TIME OF -- OF -- WE'RE CONTINUING TO ADD AND ADD AND ADD. THIS LAST YEAR WE PAID 680,000 FOR A BRUSH TRUCK AND WE NEED IT AND MAKE SURE YOU GUYS HAVE THE TOOLS YOU NEED. JUST AT SOME POINT YOU CAN'T CONTINUE TO ADD, ADD, ADD, AND ADD. >> AND WE -- I UNDERSTAND. AND WE CONTINUE TO GET BUSIER AND BUSIER AND BUSIER. SO IT'S -- >> I WOULD RATHER SEE -- I WOULD RATHER SEE THAT $104,000 GO TOWARDS INCREASED PAY FOR OUR FIREFIGHTERS INSTEAD OF JUST ADDING APPARATUS UPON APPARATUS UPON APPARATUS. >> SO I THINK TO SUM UP THE QUESTION OR THE ANSWER TO THE QUESTIONS YOU'RE ASKING IS AS THE TOWNSHIP HAS GROWN, AS THE POPULATION HAS GROWN, WE'VE INCREASED THE SIZE OF THE FIRE DEPARTMENT TO ANSWER THE CALLS THAT HAVE INCREASED, OVER 14,000 COMING UP THIS YEAR. AND WITH THAT COMES THE ANCILLARY COSTS OF MECHANICS AND VEHICLES AND FACILITIES. SO YOUR INITIAL QUESTION WAS CAN YOU TAKE A YEAR OFF, ABSOLUTELY. IF YOU WANT TO DECREASE SERVICE OR STOP WHERE IT IS, YOU CAN DO THAT. WE'RE JUST TELLING WHAT YOU NEED TO CONTINUE TO PROVIDE THE SERVICE THAT THE RESIDENTS EXPECT. >> BECAUSE ONE OF THE REASONS FOR THE FIRE STATION 5 WAS TO ENSURE THAT THE WESTERN PART OF OUR COMMUNITY HAD THE SAME RESPONSE TIME, HAD THE SAME AMENITIES AS THE EASTERN PART OF OUR COMMUNITY. >> CORRECT. THE BUILD OUT OF, AS WE TALKED ABOUT EARLIER, AS THAT AREA HAS BUILT OUT, MORE POPULATION HAS INCREASED THE CALL VOLUME, AND WE WERE FALLING BEHIND ESPECIALLY WHEN ONE UNIT WOULD GO OUT, THE LAG TIME FOR THE SECOND OR FOLLOWING YEARS TO GET THERE INCREASED DRAMATICALLY. >> SO YOU'RE SAYING OUR POPULATION INCREASE -- >> CORRECT. >> -- HAS GONE UP AT SUCH A RAPID RATE YOU GUYS ARE TRYING TO CATCH UP WITH IT? IF YOU LOOKED AT SINCE I'VE BEEN HERE IN 2022, WE'VE ADDED A LOT OF FIREMEN. >> WE ADDED ONE COMPANY, YES, SIR. >> BUT FROM THE TIME I'VE BEEN ON THE BOARD WE HAVEN'T SEEN THAT KIND OF GROWTH IN POPULATION. >> I WILL TELL YOU ANYWHERE YOU GO IN ANY MUNICIPALITY THE PUBLIC SAFETY IS ALWAYS CATCHING UP TO THE GROWTH THAT OCCURRED BEFORE. >> AND I CAN -- THAT'S WHY WE BUILT A NEW FIRE STATION. >> WE'RESTILL TRYING TO CATCH UP. >> YEAH. >> CHIEF, WE WERE TALKING EARLIER ABOUT POLICE DEPARTMENTS ACROSS COUNTIES AND AREAS, YOU KNOW, SIGNIFICANTLY HIKING [01:50:01] PAY AND BENEFITS AND WHAT NOT. ARE YOU SEEING THAT ACROSS FIRE DEPARTMENTS AS WELL? >> YES. WITH MANY OF NORTH HARRIS COUNTY, MONTGOMERY COUNTY FIRE DEPARTMENTS THAT ARE BECOMING PAID, THAT USED TO BE VOLUNTEER, NOW THERE'S HARDLY ANY VOLUNTEER FIRE DEPARTMENTS LEFT IN THE GREATER HOUSTON REGION. WITH THAT COMES COMPETITION. AND WE SEE SIGNIFICANT SALARY INCREASES. WHERE WE USED TO BE FAIRLY CLEARLY NEAR THE TOP, WE'RE NOT ANY LONGER. AND SO WE'RE SEEING OUR SURROUNDING JURISDICTIONS INCREASE PAY RATES AND BENEFITS ACROSS THE BOARD. >> HOW ABOUT IN RELATION TO THE LAW ENFORCEMENT COUNTER PARTS IN THAT SAME -- IN THOSE SAME AREAS? PRETTY COMPARABLE? >> YES. AGAIN, THE FIRE DEPARTMENT MAKES LESS, BUT YOU SEE THE SAME TYPE OF COST PRESSURE AND POTENTIAL FOR LOSING EMPLOYEES TO OTHER DEPARTMENTS THAT ARE -- THAT ARE GOING TO WHERE IT'S MOREMORE -- WELL, BETTER COMPENSATED. >> WHAT IS OUR AVERAGE RESPONSE TIME NOW? >> 6 MINUTES, 22 SECONDS, I THINK. 6:14. 6:14. >> WHAT WAS IT FIVE YEARS AGO OR THREE YEARS AGO? >> 5 MINUTES. >> 5 MINUTES. >> YES. >> SO IT'S GONE FROM 5 MINUTES TO 6. -- >> 6. 14 WITH THE TRAFFIC INCREASES. WE MADE A CONSCIOUS DECISION AS A COMMUNITY WITH OUR MOBILITY FROM WHERE WE RESTRICTED -- WHEN YOU HAVE THE BEAUTIFUL CUL-DE-SACS AND THE CUL-DE- SACS WITHIN THE CUL-DE- SACS, WE KNOW WE'RE GOING TO HAVE AN ISSUE GETTING PLACES. WE DON'T MAKE THE BLOCK- TYPE NEIGHBORHOODS. AND SO WE HAVE HAD TO COMBAT THAT. ONE OF THE THINGS THAT WE HAVE SPENT SIGNIFICANT DOLLARS ON IS THE SYSTEM THAT CONTROLS TRAFFIC LIGHTS. WE'RE HOPEFULTHAT THE COUNTY'S GOING TO TAKE OVER COUNTY- WIDE MONITORING OF TRAFFIC LIGHTS, THAT WE MIGHT BE ABLE TO SEE A COST DECREASE TO US, BUT WE NEED TRAFFIC LIGHT CONTROL IN ORDER TO GET TO PLACES WITHIN TRYING TO KEEP TO THAT 5- MINUTE RESPONSE TIME BECAUSE WITH OUR PRE- SCREENED INTERSECTIONS YOU HAVE TO HAVE THAT LIGHT CONTROL TO KNOW THAT YOU'RE SAFE TO PROCEED. >> SO WE DON'T HAVE THAT RIGHT NOW? >> WE DO HAVE IT, BUT WE -- THE TOWNSHIP IS PAYING FOR IT. WE PAY A SIGNIFICANT PRICE FOR THAT LIGHT CONTROL. THE COUNTY WANTS TO TAKE OVER AND HAVE THAT ACROSS THE BOARD. AND THEY'RE WORKING TOWARDS TWO TO THREE- YEAR PROCESS OF HAVING ALMOST EVERY INTERSECTION IN MONTGOMERY COUNTY SNLIZING AND THE ABILITY FOR AS EMERGENCY VEHICLES APPROACH, THAT THEY WOULD TAKE POSSESSION OF THEIR LIGHTS. >> GREAT. THAT'S GOOD NEWS. YOU'RE TALKING ABOUT THE ARRIVAL OF THE PARAMEDICS, RIGHT, IN THE SUBURBAN. THAT'S 6. 14, NOT A BIG FIRE TRUCK. >> BIG FIRE TRUCK, YES, MA'AM. >> YOU'RE TALKING ABOUT THE FIRE TRUCK. WELL, WHAT ABOUT THE PARAMEDICS HOW FAST DO THEY ARRIVE? >> OUR PARTNERS AT MCHD? THEY HAVE TO MEET A 9- MINUTE RESPONSE TIME TO CALL CPR, DIFFICULTY BREATHING, CARDIAC ARREST. >> NO, I DIDN'T MEAN AMBULANCE. I MEANT YOUR TEAMS, YOUR SUBURBANS. >> MY TEAMS -- AGAIN, WE JUST HAVE THE ONEE HAVE IN THE BUDGET POTENTIAL WE CAN TALK ABOUT TOMORROW. WHAT WE SEE IS NOT ONLY THE CONGESTION AND TRAFFIC AND INCREASE IN TOWN CENTER, BUT AS IT'S NOT ONLY -- WE TRY TO TRACK BY PATIENT SIDE. THE FACT WE CAN DRIVE UP NUMBER ONE IN A MINUTE AND HALF IS ONE THING. BUT THE PATIENT IF THEY'RE 16 FLOORS UP, IT'S GOING TO TAKE US MORE TIME TO GET THERE. SO THE FIRST FIREFIGHTER, PARAMEDIC TO ARRIVE, IT DOESN'T MATTER HOW THEY GOT THERE? >> CORRECT. WHETHER IT'S ON AN AMBULANCE OR FIRE TRUCK OR SQUAD, IT DOESN'T STOP THERE. >> THANK YOU. >> ONE OF THE THINGS WE TAKE GREAT PRIDE IN IS YOUR ISO 1. SO HOW DOES THIS AFFECT OR DOES IT AFFECT MAINTAINING THE ISO 1 RATING THAT WE TAKE SUCH GREAT PRIDE? >> GREAT QUESTION. SO WHAT WE SEE IN -- RESPONSE TIME IS A BIG PART OF THE ISO. WE TALKED ABOUT -- EARLIER THIS YEAR WE TALKED ABOUT THE FACT THAT THE WATER SYSTEM A BIG PART OF OUR RATING. RESPONSE TIME IS HUGE. WE'VE SEEN A GREAT INCREASE IN ABILITY TO MAINTAIN RESPONSE TIMES TO STRUCTURE FIRES IN THE PERSON PART AFTER WE INSTITUTED THE 10TH COMPANY GETTING NOT ONLY AN ENGINE BUT LADDER TRUCK. AND IT'S HOW MANY FIREFIGHTERS GET ON SCENE IN A TIME IN YOUR AFFECTED FIREFIGHTER FORCE, WHICH IS 14 FOR A SIMPLE HOUSE [01:55:01] FIRE. THAT HAS MADE OUR RESPONSE TIME, WHERE WE'RE MEETING OUR GOALS INCREASE ALMOST TO 80% IN THAT AREA. SO WE'VE SEEN A DEFINITE INCREASE SINCE THAT. WHERE WE ARE HAVING A PROBLEM IS WHAT WE TALK ABOUT WITH THE SQUAD IS IF THE ENGINE FROM FIRE STATION CENTER GOES ON A CALL AND THERE'S ANOTHER CALL AND A TRUCK GOES AND THERE'S A THIRD CALL AND A FOURTH CALL, WHICH HAPPENS ON A REGULAR BASIS, WE'RE HAVING TO PULL UNITS FROM FURTHER OUT TO MAKE THAT CALL. THEIR RESPONSE TIME IS GOING TO BE MUCH GREATER. AND THEN THOSE AREAS THEY'RE LEAVING TO COME TO THE CENTRAL AREA OF THE TOWNSHIP ARE GOING TO BE BACK FILLED BY PEOPLE COMING FROM EVEN FURTHER AWAY. SO IT'S JUST THAT DOMINO EFFECT THAT WE KNOW HAVING AN ADDITIONAL INCREASE IN FIREFIGHTERS WE WOULD BE ABLE TO STOP THAT DOMINO EFFECT. >> THANK YOU. >> YES, MA'AM. >> ANY OTHER QUESTIONS? >> OKAY, MOVING ONTO GENERAL GOVERNMENT. THE GENERAL GOVERNMENT WE CATEGORIZE ALL THESE DEPARTMENTS IN THAT. SO CONSISTS OF THE BOARD, THE TOWNSHIP SECRETARY, LEGAL FACILITIES, THE PRESIDENT'S OFFICE, INSURANCE, ALL DEPARTMENTS AND INFORMATION AND TECHNOLOGY. SO ALL OF THOSE COMBINED. I THINK WHAT THIS SLIDE SHOWS BEST IS THAT WHILE WE ALL WORK IN SERVICE TO THE COMMUNITY, THERE'S ONLY ONE GROUP OF US THAT DOES IT FOR FREE. AND THAT IS THE BOARD OF DIRECTORS. >> I WAS GOING TO SAY NONE OF US ARE GETTING ANY PART OF THAT $66,000. >> THAT'S RIGHT. RIGHT, THAT'S ALL FOR YOUR I.T. SUPPORT AND SOME MEETING EXPENSE EXPENSES, SO HERE IS A LOOK OF WHY THE COMPONENTS OF THE GENERAL INCREASE THAT WE JUST TALKED ABOUT. SO WE DO HAVE STAFFING, THE ONE NEW POSITION IN I.T. FOR THE RADIO ANALYST. WE TALKED ABOUT THE 3. 5% ANNUAL SALARY ADJUSTMENT AND THE HEALTH INSURANCE. SO THAT'S INCREASING BY 457. WE DO HAVE THE I.T. SUPPORT INCREASING BY 306,000. IF YOU GO BACK YEARS IT IS ALWAYS AROUND THIS AMOUNT. FOR ANYONE WHO WORKS IN I.T. , YOU'LL RECOGNIZE THESE TYPES OF INCREASES. MICROSOFT, OUR COPILOT LICENSES, WE ARE TRYING TO UTILIZE A.I. I THINK WE HAD A PRESENTATION ON THAT EARLIER THIS YEAR FROM WILLIAM, AND STAFF IS EMBRACING THAT TECHNOLOGY. AND THEN ALSO SOME CYBER SECURITY SOFTWARE THAT WE FEEL LIKE WE NEED TO IMPLEMENT. >> THE -- ARE YOU SEEING EVERY YEAR -- JUST A QUESTION FOR BACKGROUND -- THE INCREASE IN PROPERTY AND LIABILITY INSURANCE AT THAT RATE? >> NO, NO. THIS IS A LARGER THAN NORMAL RATE. >> HAPPENING ALL ACROSS THE STATE. >> IT IS. AND SO THIS IS ONE OF THOSE I THINK WE TALKED EARLIER ABOUT HOW -- LIKE DOUG WAS -- CHIEF ADAMS WAS ANSWERING THEY'RE INSULATED IN THERE. IT DOESN'T MATTER WHAT OTHER RETIREMENT FIVE-YEAR PLANS ARE DOING IN THE STATE. THIS ISN'T JUST PART OF OUR EXPERIENCE. WE ARE PART OF A POOL, TEXAS MUNICIPAL INSURANCE LEAGUE POOL. SO TO THE EXTENT THERE ARE OTHER EVENTS HAPPENING IN THE DALLAS AREA WITH ALL THEIR STORMS AND THE HAIL AND FLOODING AND ALL OF THAT TYPE OF STUFF, WE ARE IMPACTED. SO THIS IS AN ABNORMALLY HIGH AMOUNT THIS YEAR. >> MONIQUE, THIS LAST YEAR WE ALLOCATED $10,000 A MONTH FOR TWO LOBBY GROUPS. AND YOU'RE POSTING HERE $125,000 REDUCTION. ARE WE NOT GOING TO HIRE ANY LOBBY GROUPS THIS YEAR? >> THAT WILL BE UP TO THE BOARD. >> BECAUSE THE LEGISLATURE IS NOT IN SESSION. IS THAT THE REASON? I MEAN IT IS. >> TYPICALLY IN NONLEGISLATIVE -- YEAH, WHEN THEY'RE NOT IN SESSION WE USUALLY DECREASE THAT. I THINK WE LEFT $40,000 IN THE BUDGET. IF WE WANTED TO -- IF THE BOARD HAD A LEGISLATIVE PRIORITY THEY WANTED TO PURSUE AND ASSUMING THAT LOBBYISTS ARE STILL ALLOWED, THAT THERE WOULD BE MONEY IN ORDER TO START GETTING AHEAD OF THE GAME BEFORE THE LEGISLATURE ACTUALLY MEET IN JANUARY. THAT'S WHY IT'S THERE. >> OKAY. SO THERE'S STILL 40,000 IN >>> $10,000 , AT LEAST THAT IS WHAT THEY DID THIS YEAR. ANY OTHER QUESTIONS? I AM GLAD TO ANSWER ANY QUESTIONS. >> PARKS AND RECREATION, A BUDGET OF $42 MILLION , AN [02:00:05] INCREASE OF 651,000 OR 1.6%, WE HAVE SOME CATEGORIES THAT ARE GOING UP IN EXPENSES AND SOME THAT ARE GOING DOWN AND WE WILL GO THROUGH THAT, YOU SEE HERE THAT DIFFERENT, SEPARATE TOTAL PARKS AND RECREATION. LET'S TAKE THOSE BY DIVISION , PARKS AND ADMINISTRATION AND PLANNING IS GROWING BY ABOUT .7% , THAT IS BECAUSE OF SOME STAFFING WE HAVE ALREADY TALKED ABOUT AND WE ARE REDUCING CONSULTANCIES BY $100,000 AND MADE SOME MINOR ADJUSTMENTS IN OTHER AREAS, PRIMARILY IN OUR VEHICLE FUEL COSTS AND EQUIPMENT REPAIRS AND MAINTENANCE. >> WHAT WAS THE CONSULTANT FEES? >> WE STILL HAVE $200,000 REMAINING, WE DROPPED IT FROM $300,000 TO $200,000 AND WE HAVE BEEN USING CONSULTANCIES ON THE 242 PATHWAY THAT CONNECTS 1488 AND I-45 WE PROBABLY HAVE SOME CONSULTANCIES LEFT BUT NOT AS MUCH. PARK OPERATIONS IS INCREASING BY FOUR TO $21,000 OR 4.1%, STAFFING COSTS AND AN INCREASE IN OUR CONTRACTED PARK PATHWAY AND LAKE MAINTENANCE, A 4.2% INCREASE. UTILITIES, WE ARE HAVING TO ADJUST, NOT THAT WE ARE GOING UP A BUNCH IN UTILITIES BUT A LOW BUDGET ESTIMATE IN 2025 AND WE ARE MAKING THE CORRECTION.'S WE HAVE EXPENSES ON MAINTENANCE PERFORMED BY STAFF AND YOU WILL SEE THESE IN PARTS, WE HAVE A BLEND OF WHAT IS PERFORMED BY STAFF AND WHAT IS PAID THROUGH CONTRACTED SERVICES SOMETHING WE TRY TO LOOK AT AND ANALYZE CONSTANTLY TO SEE WHAT MAKES SENSE, FROM A COST AND MAINTENANCE PERSPECTIVE. AQUATICS DECREASING BY $31,000, BASICALLY BECAUSE OF WAGES AND BENEFITS, NOT BECAUSE WE ARE DECREASING WAGES BUT, AS STAFF ROTATE OUT OF THOSE POSITIONS, WE HIRED THEM AT THE BEGINNING OF THE MARKET USUALLY FOR ENTRY-LEVEL POSITIONS SO YOU HAVE THAT STUFF AND BENEFITS GOING ON. SO PEOPLE MAY DECREASE RETIREMENT BENEFITS AND WE HAVE A SALARY AND BENEFITS BUDGET MODEL BASED ON CURRENT EMPLOYEES AT THE TIME, IT ADJUSTS EVERY YEAR BASED ON THAT. >> RECREATION DECREASING BY 2.3% AND WE ARE IN RECREATION PROPOSING THE DISCONTINUATION OF THE WOMAN'S TRIATHLON, AND A REDUCTION IN PRESCHOOL PROGRAMS BECAUSE WE ARE NOT SEEING THE PARTICIPATION IN THOSE EVENTS WE HAVE SEEN IN THE PAST AND WE DO FEEL LIKE IT IS PRUDENT TO PROPOSE THAT TO THE BOARD. WE DO SEE INCREASES IN OUR ATTENDANCE AND DAYCARE PROGRAMS AND WE DO HAVE SOME INCREASES RELATED TO THAT. >> I APOLOGIZE FOR PAYING ATTENTION TO THAT AND BRINGING THAT INITIATIVE TO DROP THESE PROGRAMS TO US. THAT IS WHAT WE NEED TO HEAR. >> WE ARE VERY DATA-DRIVEN DECISION MAKERS ON THE LEADERSHIP TEAM AND WE HAVE ALL KINDSOF DEAD REPORTS, SOFTWARE, WE UTILIZE THOSE TO HELP US MAKE THOSE DECISIONS. THE BOARD HAS A POLICY OF RECOVERING 100% OF OUR RECREATION OPERATING EXPENSES . YOU CAN SEE HERE, THE 2026 BUDGET, WE ARE RECOVERING , PROJECTED TO RECOVER MORE THAN 100%, CONSISTENT WITH THE PAST SEVERAL YEARS AND IN AQUATICS THE GOAL IS TO RECOVER 50% OF OPERATING EXPENSES, SO YOU SEE THAT ALSO REFLECTED HERE. PARKS AND RECREATION TEAM DOES AN OUTSTANDING JOB OF MAKING SURE THAT WE CAN LIVE UP TO THESE METRICS. TOWNCENTER FACILITIES OPERATION , THIS IS WHERE WATERWAY MAINTENANCE IS ONE OF THE PRIMARY RESPONSIBILITIES OUT OF THIS DIVISION . AGAIN, WE ARE SEEING A DECREASE OF 1.1% OF THAT IS TIED PRIMARILY TO THE EXPRATION OF THE LEASE AT 20 WATERWAY. THAT LEASE , WE HAVE HAD IN PLACE FOR THE LAST SEVERAL YEARS, WE WERE PAYING THE VISION OF HOWARD HUGHES , CORRECT? PERTAINING TO ELEVATORS , PARKING, A BUNCH OF DIFFERENT REQUIREMENTS BUT NO LONGER NEEDED AND WE HAVE DONE A GOOD JOB OF RENEGOTIATING THAT TO THE POINT WHERE THAT LEASE HAS EXPIRED ALREADY AND WE DID NOT NEED TO RENEW IT. >> WHAT THE ELEVATORS FIXED ALONG THE WATERWAY? [02:05:01] >> NOT COMPLETELY, WE HAD A CAPITAL BUDGET ITEM TO REPLACE TWO ELEVATORS, THEY ARE BEYOND THEIR USEFUL LIFE. SOME OF THEM ARE NOT FIXABLE AT THIS POINT. >> ELEVATORS WITHIN 20 WATERWAY ? >> THIS IS A DIFFERENT TYPE , IT IS UP AND DOWN. >> THE BEST PART OF THE CONVEYANCE OF THE WATERWAY? THE ELEVATORS? WE TOOK THAT ON AND I AM SURE HOWARD HUGHES WILL NOT PAY FOR IT? >> WE HAVE WORKED WITH THEM ON THE ELEVATORS , PUNCHLIST ITEMS, THAT AGREEMENT WAS APPROVED IN 2023 AND DODGING EVERYBODY WE CAN TO REPAIR AND REPLACE THE THINGS . PART OF THE ISSUE IS SOME OF THESE ELEVATORS ARE 20 YEARS OLD AND NOT LIKE THEY ARE BRAND-NEW. SOME OF THEM ARE OUT THE END OF THE USABLE LIFE. >> WENT WE TOOK THE WATERWAY OVER , WE ASKED A LOT OF QUESTIONS ABOUT THESE ELEVATORS AND THEY WILL WORK WITH US ON THAT , ARE WE GETTING ANYWHERE? >> I THINK IN THE WEEKLY REPORT, THERE IS AN UPDATE ON THE PROJECT THAT ARE OUTSTANDING AS PART OF THE CONVEYANCE THAT WE DO. WHAT WE HAVE IS , 20-YEAR-OLD ELEVATORS , IN SOME LOCATIONS, IN AN OUTDOOR ENVIRONMENT AND OUR GLASS , WHICH MAGNIFIES THE ISSUES. >> WE ARE GOING TO HAVE TO PAY FOR IT? >> YES . >> WE ARE PAYING FOR IT , OKAY. MY BIG THING IS, THE DEVELOPER IS VERY STRICT ABOUT A LOT OF THINGS, LOOKING RIGHT, BEING RIGHT, THEY HAVE SEATS ON THE DSC. WHEN YOU HAVE VISITORS AND REGULAR RESIDENTS USE THESE FACILITIES AND AN ELEVATOR IS DOWN, I FIND IT HARD THAT YOU CAN HOLD THE REST OF THE COMMUNITY TO A STANDARD BUT THEY ARE NOT HOLDING THEIR SELF TO THAT STANDARD AND THEY THROW THEIR STANDARD OFF ON US THAT WE WILL HAVE TO PAY FOR IT. IT GOES BACK TO THE THOUGHT PROCESS OF THE WOODLANDS BANK AND TRUST , THE WAY PEOPLE LOOK AT THIS, IF WE HAD KNOWN THAT GOING IN, I MAY HAVE LOOKED AT THAT CONVEYANCE OF THE WATERWAY A LITTLE BIT DIFFERENT. >> WHAT IS THE COST TO REPLACE THOSE ELEVATORS? >> THERE ARE TWO -- >> $200,000 EACH. >> IN ADDITION TO THAT, IN THE NEXT THREE YEARS, PUTTING PLACEHOLDERS FOR THE REMAINING THREE ELEVATORS. >> WATERWAY AVENUE, $410,000 , THIS YEAR, AND WOODLOCK BRIDGE , 2027 , NO AMOUNT, WATERWAY SQUARE BRICK ELEVATOR, 2028, NO AMOUNT LISTED, GLASS ELEVATOR 2029, NO AMOUNT LISTED. IT IS A BIG HIT COMING FOR ALL THESE ELEVATORS . >> THE WORST PART, FOUR YEARS UNTIL WE HAVE THOSE ELEVATORS ALL UP AND WORKING . >> SOME OF THEM WORK RIGHT NOW . THE TWO THAT ARE BEING REQUESTED THIS YEAR'S BUDGET IS THROUGH THE BUDGET INITIATIVE ARE THE MOST PRUDENT WE NEED TO FIX TO ADDRESS THE MAJORITY OF THE CONCERNS, ALONG THE OTHER THREE TO THE NEXT THREE YEARS. >> I KNOW WE HAVE HAD THIS CONVERSATION , EVEN TODAY AND PREVIOUSLY, ABOUT STAFF PERFORMING WORK AS OPPOSED TO CONTRACTED SERVICES, THIS IS A GREAT EXAMPLE , WHAT I AM SHOWN ON HERE, IN OUR ANALYSIS, THERE ARE CERTAIN THINGS ON THE WATERWAY MAINTENANCE WE FEEL IT WOULD BE MORE EFFICIENT TO HAVE CONTRACTED SERVICES PERFORMED AS OPPOSED TO STAFF , YOU CAN SEE THE ADJUSTMENT, WHERE WE ARE REDUCING MAINTENANCE EXPENSES PERFORMED BY STAFF AND MOVING US UP TO THE CONTRACTED SERVICES LINE ITEM. HERE IS TOWNSHIP EVENTS. THE LARGEST INCREASE IS FOR THE RED HOT AND BLUE FESTIVAL, 250TH ANNIVERSARY. THE DIRECTOR , SEKULA-GIBBS , SEMI SAYS WHAT MEAL EVENT, -- WE ARE CALLING IT THE 250TH ANNIVERSARY, ONE-TIME EXPENSE, MOST OF THIS NUMBER IS FOR A DRONE SHOW, WHEN WE GET TO BUDGET INITIATIVES, WE WILL SHOW [02:10:01] WHAT WE HAVE PROPOSED AND CHRIS AND HIS TEAM HAVE DONE A GOOD JOB OF COMING UP WITH OTHER SPECIAL EVENTS RELATED TO THE 250TH ANNIVERSARY. WE HAVE IT IN HERE AND IN THE FIVE-YEAR PLAN, WE TAKE IT BACK OUT THE NEXT YEAR, NOT A PERMANENT INCREASE. STREETSCAPE MAINTENANCE, WE HAVE A SERIES OF INCREASES RELATED TO MAINTENANCE. BUT WE HAVE REDUCED OUR TREE REMOVAL BUDGET BY $800,000. THE REASON FOR THAT IS, WE HAVE A HEALTHY BALANCE , BUT WHAT I AM PROPOSING IS THAT WE GET THE BASE AMOUNT DONE BECAUSE WE HAVE HAD TO HAVE SUCH HIGH EXPENSES OVER THE PAST TWO YEARS, YOU MADE A BUDGET AMENDMENT EARLIER THIS YEAR FOR $1.4 MILLION, I THINK, WE ARE UP AT $2.6 MILLION , I AM SUGGESTING WE BRING IT BACK DOWN TO $1.8 MILLION AND IF WE NEED TO SPEND THAT MONEY, TAP INTO OUR DESIGNATED FUND BALANCE TO DO THAT ON A ONE-TIME BASIS. THAT IS THE REASON FOR THAT. ARE WE READY TO MOVE ON TO COMMUNITY SERVICES? COMMUNITY SERVICES IS OUR STREETLIGHTING, OUR SOLID WASTE CONTRACT, AND OUR COMMON ADMINISTRATION DEPARTMENT CAN WE PUT THIS TOGETHER AND CALL THEM COMMUNITY SERVICES. OVERALL, THE INCREASES RELATED TO THE SOLID WASTE CONTRACT, THEY HAVE A 5% INCREASE BASED INTO THE CONTRACT , MAXIMUM 5% INCREASE. COULD BE , DEPENDING ON WHAT THE INDEXES ARE WE WILL NOT SPEND THAT ENTIRE AMOUNT BUT EVERY YEAR WE BUDGET FOR THAT JUST IN CASE . STREETLIGHTING, EXPECTING ABOUT A 5.3% INCREASE, OR $63,000 AND SOME VARIOUS EXPENSES RELATED TO COVENANT ADMINISTRATION. OUR TRANSPORTATION EXPENSES, WE ARE ANTICIPATING GOING UP BY ABOUT $563,000 , OR 6.3%, THIS IS OUR PARK-AND-RIDE, OUR TROLLEYS, OUR STAFF AND OTHER IS OUR CONSULTANT, THE MONEY WE PAID TO INTERFAITH FOR SERVICES PROVIDED. THIS IS A LOOK AT THE INCREASES IN TRANSPORTATION THAT IS PRIMARILY TIED TO OUR CONTRACTED PARK-AND-RIDE BUS SERVICE . WE DO HAVE A NEW CONTRACT RATE WITH THEM , WHICH PROVIDES FOR VARIABLE MAINTENANCE EXPENSES. THAT IS BECAUSE OUR FLEET , OUR PARK-AND-RIDE FLEET IS APPROACHING THE END OF ITS USEFUL LIFE AND WE ARE IN THE PROCESS OF PROCURING NEW BUSES . BUT THE MAINTENANCE COSTS HAVE INCREASED SIGNIFICANTLY. THE CONTRACT NOW REFLECTS THAT WE ARE PAYING FOR THE ACTUAL MAINTENANCE INCREASE INSTEAD OF JUST A SPECIFIC ONE . WE EXPECT THIS NUMBER TO COME DOWN AS SOON AS THE NEW BUSES ARE PLACED IN SERVICE, WHICH IS A YEAR OUT. WE NEED TO DO THIS IN ORDER TO ADHERE TO THE CONTRACT. MOST OF THESE EXPENSES YOU SEE HERE DO HAVE -- THESE ARE THE GROSS EXPENSES AND WE DO HAVE GRANT FUNDS THAT OFFSET AT LEAST PARTIALLY MOST OF THE THINGS LISTED HERE. COMMUNICATIONS, WE HAVE AN INCREASE OF $136,000 AND WE HAVE BUDGETED FOR A RESIDENT SURVEY OF $40,000 FOR NEXT YEAR WHICH KEEPS US IN LINE WITH EVERY 18 MONTHS TO TWO YEARS. ASSUMING THE BOARD WANTS TO CONTINUE WITH THAT PATTERN, WE HAVE THAT BUDGETED IN. WE DO HAVE CONTRACTED SERVICES, ADDITIONAL BUDGET IN FOR VIDEO PRODUCTION , IN ADDITION TO SMALLER ONES, WE'RE LOOKING AT DOING A LARGER ONE, WE HAVE UPDATED THE OVERALL TOWNSHIP ONE THAT CAN BE SHOWN AT DIFFERENT PRESENTATIONS . WE WANT TO UPDATE THAT AT UTILIZING CONTRACTED SERVICES. HERE IS CUSTOMER ENGAGEMENT. THAT IS COMPRISED OF OUR NEIGHBORHOOD SERVICES DEPARTMENT , THERE ARE ENVIRONMENTAL SERVICES, OUR CUSTOMER ENGAGEMENT, WHICH MOST OF THE -- AND MOUNTED PATROL . OUR CUSTOMER ENGAGEMENT INCLUDES A LOT OF OUR FRONT DESK AND LOBBY, OUR CUSTOMER SERVICE REPRESENTATIVES AND I THINK YOU KNOW ANGEL AND HER STAFF, THEY ARE INCLUDED, THEY MANAGE ALL OF THE LAW ENFORCEMENT CONTRACTS AND THE SOLID WASTE CONTRACT. BIG JOB. YOU CAN SEE THE INCREASES LISTED. WE DO HAVE MOUNTED PATROL BUDGETED IN AT A 3.5% INCREASE . >> IS THAT HER CONTRACT? >> TIED TO A CPI INDEX AND WE ARE PROJECTING 3.5% AT THIS POINT. IT COULD BE A LITTLE BIT LOWER, DEPENDING ON CURRENT PROJECTIONS . >> AT WHAT POINT WILL WE DIG INTO THIS MORE? >> WHAT? >> EACH OF THE LINE ITEMS. [02:15:03] >> TALK ABOUT MOUNTED PATROL, IT LENDS ITSELF TO A DISCUSSION >> THIS WOULD BE AN ADJUSTMENT TO THE BASE BUDGET, YOU CAN DO IT NOW, IF SOME OF YOU ARE MAKING A LIST OF THINGS YOU WANT TO GO BACK AT THE END OF THE PRESENTATION AND TALK ABOUT, WE CAN DO IT THEN. UP TO THE BOARD. >> WE DISCUSSED REPLACING SOME OF THE MOUNTED CONTROL WITH ACTUAL OFFICERS FROM THE SHERIFF DEPARTMENT AND I THINK THAT WAS GOING BACK TO THE PUBLIC SAFETY COMMITTEE. TO BE DISCUSSED , IS THAT TRUE, DO YOU HAVE ANY UPDATE? >> WE DON'T . >> WE ARE WORKING ON THE MAIN CONTRACT WE ARE RENEGOTIATING . >> ANY THOUGHTS ON MOVING FORWARD ? >> I THINK THE SHERIFF DID MENTION, CASUALLY, HE IS LOOKING, HE WILL LOOK AT BRINGING A SHERIFF'S DEPARTMENT MOUNTED PATROL WITH PEACE OFFICERS WHO ARE LICENSED TO CARRY WEAPONS AND MAKE ARRESTS TO THE WOODLANDS . THEY DO NOT HAVE SPACE RIGHT NOW TO ACCOMMODATE THAT. ANYWHERE IN THE WOODLANDS. IT IS NOT ON THE TOP OF HIS LIST. BUT IT IS ON HIS LIST. IT IS SOMETHING THEY ARE THINKING ABOUT AND CHAIRMAN BAILEY HAS BROUGHT THAT UP AND MAYBE OTHERS HAVE. IT WOULD BE VERY NICE. THEY COULD ACTUALLY PROVIDE TRUE LAW ENFORCEMENT AND NOT JUST CALL 911 LIKE ANY OTHER INDIVIDUAL CALLS 911. THERE MAY BE SOME PROBLEM HERE. IT IS $1.5 MILLION PER YEAR THAT WE ARE GIVING TO A GROUP THAT BASICALLY SAYS ON THEIR HORSES AND WATCHES. THEY DO NOT ACTUALLY DO ANY LAW ENFORCEMENT. A LOT OF DISCUSSION BETWEEN THE BOARD, BEEN DISCUSSED BEFORE, WE HAVE DROPPED THE NUMBER OF EMPLOYEES BUT THEY ARE ASKING FOR MORE EMPLOYEES. I THINK WE HAVE AN OBLIGATION TO LOOK AT OTHER SERVICES LIKE FIRE, LAW ENFORCEMENT , AS PRIMARY AND THIS IS A SECONDARY AMENITY THAT HAS BEEN TRADITIONAL , A SACRED COW IN THE WOODLANDS . THIS COULD BE THE YEAR TO REDUCE IT AT THE VERY LEAST, OR I WOULD LIKE TO ELIMINATE IT AND USE THAT MONEY FOR LAW-ENFORCEMENT AND FIREFIGHTERS, I THINK IT IS A PRIORITY FOR US AT THE SENTIMENT OF -- IF THE RESIDENTS UNDERSTOOD THE COST OF GOING UP AND TAKING A PICTURE WITH THEIR CHILDREN WITH THE PONIES , $1.5 MILLION TO TAKE COMMUNITY ENGAGEMENT PICTURES. >> I THINK THAT IS A LITTLE MISLEADING AS FAR AS WHAT THEY DO. IT IS WORTHWHILE TO TALK ABOUT THE SHERIFF MOUNTED PATROL WHEN THAT TIME COMES. BUT THERE IS NO REPLACEMENT AT THIS TIME. >> THERE IS, EACH BUSINESS CAN HIRE THEM TO PAY FOR THE ROAD -- IF THEY CALL SECURITY, IF THE BUSINESS WANTS THEM, IF THE MALL AND MARKET STREET WANTS THEM, ALMOST EVERY OTHER BUSINESS PROVIDES THEIR OWN MOUNTED PATROL . IT IS UNIQUE IN THE WOODLANDS THAT THE TOWNSHIP PROVIDES A MOUNTED PATROL . >> I WILL CONCUR WITH THAT. I DO THINK THE MALL -- I DO THINK THEY PROVIDE VALUE, THEY ARE A DETERRENT OF CRIME, ARE THEY CUFFING THE BAD GUYS? NO , BUT I WOULD LIKE TO SEE THIS COME UNDERNEATH THE SHERIFF'S DEPARTMENT PURVIEW WHERE THEY ARE MANAGING THE CONTRACT WITH THE MOUNTED PATROL AND WORKING THE SAME RADIOS. I GOT A HARD NO FROM THE SHERIFF DEPARTMENT BUT THEY ARE INTERESTED IN FORMING THEIR OWN MOUNTED PATROL BUT IT WILL TAKE TIME, THEY HAVE A BIG TO DO LIST. THOSE PONIES ARE EXPENSIVE. GETTING THEM TRAINED . BUT THEY ARE ALSO TALKING WITH A DEVELOPER, FOR PROPERTY IN AND AROUND TOWN CENTER WHERE THESE PONIES CAN BE STORED. HAVE A LITTLE STABLE TYPE THING. THEY ARE ACTIVELY LOOKING INTO IT BUT NOT THERE YET . >> ON THE FRONT END OF THAT. THE OTHER PART OF THE QUESTION, AS WE TALKED ABOUT TECHNOLOGY, IT COULD REPLACE, OR BE USED AS AN ADDITIONAL DETERRENT, THAT WAS THE CAMERAS THAT THE SHERIFF IS TALKING ABOUT USING. I WONDER, HAVE YOU DISCUSSED THAT AT ALL IN THE PUBLIC SAFETY COMMITTEE? THAT IS A DETERRENT. IN A BIG WAY. >> WE HAVE LITERALLY BEEN WORKING ON THE CONTRACT. IT IS A BRAND-NEW SHERIFF WITH A BRAND-NEW CHAIRMAN , SEVERAL BOARD MEMBERS, WE HAVE NEVER NEGOTIATED THESE CONTRACTS BEFORE. BEING ABLE TO LOOK AT [02:20:01] WHAT THE NEW CONTRACT LOOKS LIKE IS TOP OF MIND. TECHNOLOGY IS A HUGE ONE WE ARE LOOKING AT, WHEN WE GET INTO THE SHERIFF DEPARTMENT, LICENSE PLATE READERS , CAMERAS, THINGS LIKE THAT THAT GO TO THE REAL TIME CRIME CENTER, HOW TO USE TECHNOLOGY MORE EFFICIENTLY IS IMPORTANT . >> THE RECOMMENDATION GOING FORWARD IS STATUS QUO , CONTINUING TO LOOK AT THESE THINGS ? WHAT IS THE RECOMMENDATION FROM THE PUBLIC SAFETY COMMITTEE? AS FAR AS CONTINUING WITH MOUNTED PATROL ? >> MOUNTED PATROL IS NOT IN OUR PURVIEW, THAT IS CUSTOMER ENGAGEMENT . >> I FEEL LIKE IT FALLS INTO THAT CATEGORY A LITTLE BIT. >> NOT IN THE BUDGET THAT WAY? >> WHEN IS THE CONTRACT OVER FOR MOUNTED PATROL? >> 2027. >> AT THE END OF NEXT YEAR, THERE ARE OUT CLAUSES BUT THE TERM IS THROUGH THE END OF NEXT YEAR. >> I DO WANT TO SAY, I UNDERSTAND THE MONEY WE DO NOT HAVE BOATS ANYMORE, THINKING ABOUT NOT HAVING THE HORSES, SOME OF THESE THINGS MAKE UP WHAT THE WOODLANDS IS AND WE HAVE TO BE CAREFUL NOT TO THROW OUT EVERYTHING AT ONE TIME. I THINK WE NEED TO LOOK AT THIS SERIOUSLY. EASY TO SAY THAT THEY DO NOT DO THIS, THEY ARE A DETERRENT, NO MATTER WHAT YOU SAY, OF ALL THE OTHER CARS VERSUS SOMEBODY RIDING IN A PATROL CAR, A FEW YEARS AGO, IT WAS UNDER THE PUBLIC SAFETY, THEY MOVED IT INTO COMMUNITIES ABOUT FIVE OR SIX YEARS AGO, AT ONE POINT, THEY WERE CONSIDERED PUBLIC SAFETY , THAT WAS MOVED AWAY. BEFORE WE JUST STOP ALL OF THAT AND SAY IT IS NOT WORKING, I THINK IT NEEDS TO HAVE A LONG CONVERSATION, THE HORSES HAVE BEEN HERE A LONG TIME. THERE NEEDS TO BE A DISCUSSION . >> SOME OF THESE BUSINESSES CAN CHIP IN . THEY HAVE A LOT OF COVERAGE . THE PAVILION USES THE MOUNTED PATROL IN A SUCCESSFUL WAY FOR CONCERT AND CROWD CONTROL AND THE PAVILION PAYS FOR THAT AS A SEVER CONTRAC AND WE NEED TO HAVE A MORE THOROUGH CONVERSATION WITH THE MALL, MARKET STREET , ABOUT SUPPLEMENTING SOME OF THIS BECAUSE IT SHOULD NOT BE THE BURDEN ON THE TAXPAYER TO PAY FOR ALL OF THIS . >> THE INDIVIDUAL BUSINESSES HAVE NOT EVEN RESPONDED TO ACCEPTING THE LIABILITY OF ANY ACCIDENT THAT HAPPENED WITH THE HORSES ON THEIR PROPERTY. THIS HAS BEEN REQUESTED BY STAFF FOR A NUMBER OF YEARS, PLEASE ACCEPT LIABILITY ON THEIR PROPERTY, THEY HAVE NOT RESPONDED TO THAT. I DO NOT THINK WE WILL HAVE A LOT OF LUCK IN GOING HAT IN HAND, SAYING, WOULD YOU SHARE THE COST? THEY WILL ONLY RESPOND IF WE SAY THAT WE ARE TERMINATING AND ON TO YOU TO HELP. >> THERE HAS NEVER BEEN EITHER OR , IT HAS BEEN ASKING THEM, MAYBE IF WE GET THEM IN THE ROOM AND TALK ABOUT IT AND SEE WHAT THE OPTIONS ARE. >> THAT WAS FROM THE GENERAL FUND, WE COVERED ALL OF THE DIFFERENT OPERATING EXPENDITURES , IF THERE ARE NO MORE QUESTIONS -- >> CAN WE TAKE A 10 MINUTE RECESS? ENVIRONMENTAL BREAK . 11:23 AND WE WILL TAKE A LITTLE BREAK. >> 11:32 AND WE ARE BACK IN SESSION. WRAPPING UP BY NOON TODAY , MONIQUE ? >> NEED TO TALK FAST . >> NOT GOING TO SPEND A LOT OF TIME ON THIS, VISIT THE WOODLANDS BOARD HAS VETTED THIS BUDGET UNDER THE LEADERSHIP OF CHAIRMAN LINDA NELSON AND THE TOWNSHIP CAMARO HOTEL TAX THAT FUNDS THIS BUDGET AND NOT THE GENERAL FUND, IN TERMS OF REVENUES, THE TOTAL BUDGET, EXPENSES EQUAL REVENUE , $4 MILLION AND A MODEST INCREASE OF $28,000 IN 2025 AND 2026 . THIS IS A LOOK AT THE DIFFERENT EXPENSES. AGAIN , JUST A MODERATE INCREASE. THIS IS THE FUND BALANCE. AT THIS POINT IN TIME, WANTED TO POINT OUT, THE BOARD DID APPROVE A VEHICLE THAT THE AMOUNT AND NUMBER DID NOT IT, I BELIEVE YOU WERE DISCUSSING THIS IT WILL BE ADDED TO THE BUDGET. WE HAVE NOT FORGOTTEN ABOUT IT. WE KNOW WE NEED TO FUND IT . [02:25:02] >> TRANSPORTATION FUND , IN TERMS OF REVENUES FROM OUR GRANT REVENUE PAYS -- WE GET ABOUT $6 MILLION IN GRANT REVENUE THAT PAYS FOR 52% OF OUR EXPENSES -- 62% OF OUR EXPENSES AND BUS FARES PAY FOR ANOTHER 27% AND THE GENERAL FUND FUNDS ABOUT $1 MILLION , AND THAT IS BASICALLY TO COVER THE MATCH FOR THE DIFFERENT GRANTS . OUR EXPENDITURES, 75% GO FOR THE PARK-AND-RIDE PROGRAM , $1.9 MILLION FOR TROLLEYS , THE OTHER IS FOR INTERFAITH AND SOME CONSULTING FEES. AND MISCELLANEOUS EXPENSES LIKE THAT. WE LOOK AT THIS EARLIER, AGAIN , THE AMOUNTS, THIS IS HOW OUR PROPERTY TAX RATE IS AFFECTED , IN TERMS OF WHAT WE HAD TO TRANSFER FROM THE GENERAL FUND TO THE TRANSPORTATION FUND TO MAKE THEM WHOLE WITH THEIR BUDGET . IN 2020 THROUGH 2023 OF THOSE AMOUNTS WERE LOW BECAUSE WE WERE NOT UTILIZING CARE ZACH AND ARPA FUNDS THAT WERE AVAILABLE THOSE FUNDS EXPIRED SOMETIMES DURING 2024 WHICH HAD TO PICK UP THE DIFFERENCE AND THE 2025, WE FUNDED ALMOST $2 MILLION FROM THE GENERAL FUND AND THAT DROPPED FROM 2025 TO 2026 , THANKFUL FOR THAT AND THANKFUL FOR RUTH ANN AND HER TEAM, THE TRANSPORTATION DEVELOPMENT CREDITS UTILIZED TO BRING OUR COSTS DOWN. THAT WAS TREMENDOUS WORK. >> ALMOST $1 MILLION . >> SHE HAS DONE GREAT WORK . STILL HAVE $4,250,000 LEFT FOR THE FUND BALANCE FOR TRANSPORTATION INITIATIVES AND UNDER CONTRACT WITH HARRIS COUNTY FOR THE BETTERMENT OF THE SPRING CREEK TRAILS, THERE HAS BEEN THE START OF THAT BUT SOME DELAYS AND I BELIEVE CHRIS IS HAVING MEETINGS WITH THEM AND HOPE TO GET BACK ON THAT, I THINK IT WILL BE A GREAT AMENITY . >> IS IT A PRIORITY WITH COMMISSIONER RAMSEY? MORE INTEREST ? I HAVE HEARD FROM SEVERAL PEOPLE THAT THERE IS MORE INTEREST TO MOVE FORWARD A LITTLE BIT QUICKER . >> I AM NOT SURE, THIS IS JUST ONE SMALL PROJECT CONSIDERING THE STUFF HE DOES MOVING IT THROUGH , IF YOU LOOK AT THE GEOGRAPHY , THE TOPOGRAPHY , IT IS AN ENGINEERING CHALLENGE. >> THANK YOU. >> MOVING ON TO CAPITAL PROJECTS , WHAT I WANT TO POINT OUT, OUR CAPITAL PROJECTS ARE FUNDED ALMOST EXCLUSIVELY, 97% FROM OUR CAPITAL REPLACEMENT RESERVE. THE GENERAL FUND CONTRIBUTION TO FUND CAPITAL, OUR NEW CAPITAL, IS LIMITED THIS YEAR TO $400,000, WHICH IS 3% . I TALK ABOUT THE CAPITAL REPLACEMENT RESERVE ALL THE TIME, IT IS NOT A REQUIREMENT FOR LOCAL GOVERNMENTS TO HAVE IT, MOST DO NOT . THIS IS ONE OF THE THINGS OUR CREDIT AGENCY ALWAYS COMMENTS ON. WHAT THIS DOES IS ALLOWS US TO , FIRST OF ALL, KEEP UP ON A TIMELY BASIS , WITH THE REPLACEMENT FOR THE CAPITAL REPAIR OF ASSETS WE NEEDED , MORE PORTLY, WE DO NOT HAVE TO ISSUE BONDS IN ORDER TO FUND THOSE TYPE OF PROJECTS . THAT IS WHAT MOST DISABILITIES AND COUNTIES DO, THEY HAVE TO ISSUE BONDS AND INCUR INTEREST RATE, INTEREST EXPENSE AND ALL OF THAT, WE DON'T, THIS HAS BEEN A HUGE BENEFIT TO THE COMMUNITY WE STARTED THIS IN 2012 AND IT HAS REALLY BENEFITED US. SO, AGAIN, MOST EVERYTHING YOU SEE HERE IS FUNDED BY THE CAPITAL REPLACEMENT RESERVE. I KNOW WE ARE TRYING TO FINISH UP BY NOON , SO I WAS NOT GOING TO GO THROUGH ALL THE CAPITAL PROJECTS IN YOUR BOOK , IN YOUR CAPITAL SECTION AND ONLINE, THERE IS A FAIRLY SIGNIFICANT DESCRIPTION WITH PHOTOS AND OTHER THINGS , ANYTHING YOU WOULD WANT TO KNOW ABOUT ANY OF THESE PROJECTS. IF YOU HAVE A SPECIFIC QUESTION, I WILL ADDRESS THE BIG ONE , THE ASSESSMENT PROJECTS FROM OUR 2022 NEEDS ASSESSMENT, $3,250,000 FOR THE SPORTS PARK , BEEN IDENTIFIED AND COME TO THE BOARD. WHAT I WOULD LIKE TO POINT OUT, THE OVERWHELMING MAJORITY OF THESE COME BACK TO THE BOARD FOR APPROVAL, EVEN THOUGH WE HAVE INCLUDED THEM IN OUR CAPITAL IMPROVEMENT PLAN, THEY ALMOST , UNLESS THEY'RE VERY SMALL THINGS, THEY WILL COME BACK TO THE BOARD FOR APPROVAL AS THEY ARE FURTHER DEVELOPED. ANY QUESTIONS? >> I DO WANT TO MAKE A COMMENT, [02:30:04] BECAUSE WE'RE GOING OVER THIS , NOTHING HAS BEEN APPROVED , THESE ARE OUT LAID IDEAS WITH NOTHING APPROVED? THE MILLIONS OF PEOPLE WATCHING, UNDERSTAND , WE'RE LOOKING AT IT AND ASKING QUESTIONS, WE WILL COME BACK WITH BUDGET INITIATIVES BUT NOTHING -- >> NOT UNTIL YOU ADOPT THE BUDGET IN SEPTEMBER . >> WE WILL GO BACK THROUGH THIS ON A MORE DETAILED BASIS , THEN THIS OVERVIEW WHICH IS WHAT WE ARE DOING TODAY, CORRECT? >> NO, NOT REALLY. AGAIN, I AM TRYING TO WALK US TO THE BOOK, WE DO NOT HAVE TIME TODAY BUT WE CAN GO TO THE BOOK AT THIS POINT IN THE PAST, SOME BOARDS HAVE GONE PROJECT BY PROJECT BUT WE USUALLY DON'T, THE POINTS I MADE, THIS IS FUNDED ALMOST EXCESSIVELY OUT OF THE RESERVE. >> WE HAVE DETAILS ON EACH ONE OF THESE WITHIN OUR BOARD BOOK GIVEN TO US LAST WEEK. >> I AM HAPPY TO COME BACK TOMORROW, WEDNESDAY , WHENEVER WE COME BACK, GO THROUGH EACH PROJECT, I HAVE NO PROBLEM DOING THAT. >> THAT IS WHY I ASKED THE QUESTION. THAT IS A PRETTY BIG DOLLAR ITEM WE HAVE TO MAKE A BIG DECISION ON. >> I AGREE, I WOULD LIKE TO GO INTO THIS A LITTLE BIT MORE. WE DID GET A BOOK BUT FRIDAY AFTERNOON AND IT IS A LOT TO DIGEST. >> OKAY. WE WORKED HARD TO GET THOSE BOOKS TO YOU SOONER THAN FRIDAY. >> IT IS NOT YOU. >> YOU DID A GREAT JOB. >> WE CAN DO THAT, START NOW OR GET TO THE REST OF THE PRESENTATION? >> LET'S FINISH UP THE GENERAL OVERVIEW AND COME BACK. HAVE SOME TIME TO DIGEST THE OVERVIEW . I AM SURE WE WILL HAVE MORE QUESTIONS. >> WHAT ABOUT THE FOUNTAIN AT WATERWAY? >> IT WAS APPROVED IN TERMS OF FUNDED FROM HOTEL TAX LAST YEAR AT $3.5 MILLION, BUT, WHEN WE PRESENT BUDGET INITIATIVES, EVEN THOUGH NOT TRULY AN INITIATIVE FOR THIS YEAR, WE PLAN TO BRING BOARD CAN DECIDE TO NOTIT BACK UP AND THE -- THE BOARD CAN DECIDE NOT TO MOVE FORWARD WITH THE PROJECT . WE HAVE SOME ENGINEERS AND CONTRACTORS LOOK AT IT AND WE ARE CLOSE TO HAVING A PRESENTATION ON IT IF YOU WANT TO SEE WHAT IT WOULD LOOK LIKE. OTHERWISE , YOU CAN TAKE IT OUT OF THE HOTEL TAX, YOU CAN RETURN IT TO THE HOTEL TAX. >> ONE OF THE THINGS WE DISCUSSED , IT WOULD BE GREAT IF WE CAN WE DO THAT AND HAVE THE FOUNTAIN HERE, THAT WE TALKED ABOUT OTHER OPTIONS THAT MAY BE AVAILABLE BESIDES THE FOUNTAIN BECAUSE THE FOUNTAIN, EVEN THOUGH IT WAS BEAUTIFUL AT ONE POINT, IS THERE SOMETHING THAT CAN TELL US, YES, IT WILL WORK FOR THE NEXT 10 YEARS? CHRIS SAID YOU CANNOT TELL HOW LONG IT WOULD WORK AND I THINK $3.5 MILLION, WHATEVER THE AMOUNT WAS, SEEMED EXTREMELY HIGH WHEN WE ARE LOOKING AT BUDGET CUTS, OR BUDGET CHANGES . JUST A THOUGHT. >> WE WILL BRING THAT BACK, WE HAVE DETAILED INFORMATION TO BRING BACK AS A SPECIFIC PROPOSAL. WE RESERVED THE FUNDS BUT HAVE NOT SPENT THEM. >> WATERWAY , THAT WATER FOUNTAIN IS RIGHT ACROSS, A FEW FEET AWAY FROM WHERE THE GLASS ELEVATORS ARE SAYING THEY NEED TO UPGRADE WITHIN THE NEXT THREE YEARS. JUST ABOVE , TWO ELEVATORS ARE NOT WORKING. SOMETIMES , WHEN YOU LOOK AT WHERE THE ALLOCATION FUNDS SHOULD GO, MAYBE THEY SHOULD GO TO THINGS -- THE FOUNTAIN IS NOT WORKING, BUT OTHER OPTIONS FOR THE FOUNTAIN? EVERYTHING IS GOOD SHAPE. I AM NOT MAKING IT SOUND LIKE EVERYTHING IS BAD >> THE ELEVATORS ARE A NECESSITY . >> FOR SOMEBODY WHO HAD AN HANDICAPPED PERSON THAT THEY ARE NECESSARY. >> A.D.A. ACCESSIBLE >> WHETHER IT COMES BACK IN THIS BUDGET CYCLE OR FOR THE SPECIFIC PROPOSAL, WE ARE NOT MOVING FORWARD WITH ANYTHING UNTIL THE BOARD APPROVES IT, JUST RESEARCH AT THIS POINT. >> OKAY. >> PARKS AND REC. IS A LOT, FIRE DEPARTMENT, CAPITAL, THE LARGEST ONE IS $1,375,000, REPLACEMENT OF A 2019 FIRE ENGINE THIS BOARD HAS ALREADY APPROVED. FIVE-YEAR LEAD TIMES ON THESE ENGINES, WE CAME FORWARD WITH THE PACKAGE , I THINK MAYBE FIVE DIFFERENT REPLACEMENT VEHICLES, IN ORDER TO GET THE SAVINGS ON THAT, THIS [02:35:05] HAS ALREADY BEEN APPROVED BUT WE ARE SETTING UP AS A SPECIFIC CAPITAL PROJECT AT THIS POINT. WE HAVE THREE REPLACEMENT VEHICLES, ONE NEW FOR THE FLEET TECHNICIAN IF THAT POSITION IS APPROVED , WE HAVE THAT INCLUDED HERE AND THERE ARE EQUIPMENT REPLACEMENTS WHICH ARE THE FIRE DEPARTMENT'S BUNKER GEAR, SELF-CONTAINED BREATHING APPARATUS, DRONE, ALL FUNDED OUT THE CAPITAL RESERVE AND NOT WITH CURRENT YOUR TAX DOLLARS . FIRE STATION IMPROVEMENTS OF $240,000 AND COMPUTER EQUIPMENT AT $80,000, DETAILS ARE ALL IN YOUR BUDGET BINDER. IN TERMS OF THIS BUILDING, THE TOWNHALL, IT IS TIME TO REPLACE SIX OF OUR HVAC UNITS , THAT IS THE MAJOR COST . THE INTERIOR IMPROVEMENTS THAT WE HAVE BEEN DISCUSSING FOR THIS BUILDING TO COMPLETE THE BUILDOUT AND THE RENOVATIONS, $340,000 RENOVATION FOR THE EXISTING , WE HAVE REPLACEMENT FURNITURE IN THERE. IT IS TIME TO UPDATE OUR LIGHTING ON THE SIDE OF THE BUILDING AND IN OUR UNINTERRUPTED POWER SUPPLY BACKUP. AN HOUR SECURITY SYSTEM . AGAIN, THIS IS PAID FOR , 100% COME OUT OF THE CAPITAL RESERVE . >> REMINDED ME ABOUT THE ADDITION OR THE RENOVATION WE DID IN THE BACK? WAS THAT PAID FOR OUT OF CAPITAL? >> IT WAS . >> PERFECT . >> YES . HERE IS OUR INFORMATION TECHNOLOGY CAPITAL BUDGET . AGAIN, THIS IS ALL TIED TO , LOOKING THROUGH YOUR REAL QUICK, I DON'T THINK ANY OF THIS , VERY LITTLE OF THIS IS NEW STUFF, THE REPLACEMENT OF THE EXISTING EQUIPMENT WHICH HAS REACHED THE END OF ITS USEFUL LIFE OR ABOUT TO RUN OUT OF THE WARRANTY WHICH MEANS WE CANNOT GET SUPPORT OR PARTS FOR IT. AGAIN, EVERY SINGLE PROJECT IS LISTED IN YOUR BINDER. TO THE DEGREE YOU WANT TO, WE CAN GO OVER THIS . EVERYTHING I MENTIONED IS PAID OUT OF THE CAPITAL REPLACEMENT EXCEPT FOR THESE PROJECTS RIGHT HERE IN THIS IS THE ONLY ONE WHERE THE GENERAL FUND IS DOING IT, WE HAVE A LITTLE BIT OF DESKTOPS AND LAPTOPS, MOBILE DATA COMPUTERS, AND SOME SOFTWARE THAT IS BEING FUNDED . IN PARKS AND RECREATION . WE HAVE MAINTENANCE TRUCKS , WE WILL ONLY NEED LESS THAN HALF OF THAT, IF WE FIND THE STREETSCAPE POSITION AND WE NEED TO ADJUST THAT IN THE NEXT ROUND OF ADJUSTMENTS. FOR THE FIRE DEPARTMENT, THE VEHICLE FOR THE NEW POSITIONS, 140, $50,000 IS PUBLIC SAFETY ACCESS POINT AND WE WOULD NOT SPEND THOSE FUNDS UNLESS WE RECEIVE THE GRANT. I WILL GO THROUGH DEBT , OR DO YOU WANT TO STOP? >> KEEP GOING >> THIS SHOULD GO PRETTY QUICK. OVER THE LAST 10 YEARS, THE TOWNSHIP, RESPECTIVE BOARDS HAVE PAID OFF ABOUT $22.7 MILLION IN DEBT WHICH HAS RESULTED IN $6.8 MILLION OF INTEREST EXPENSE , HAVE REFINANCED FROM $6.5 MILLION , RESULTING IN $5.7 MILLION, ALREADY TALKED ABOUT THE FACT THAT WE HAVE ACHIEVED THE HIGHEST BOND RATING AVAILABLE TO US AT A AA PLUS. THIS IS A LOOK, DOES NOT COME FROM STAFF, A PAGE THAT WAS SCREENSHOT FOR THE TAXES ON REVIEW BOARD AND WE HAD TO SPEND OUR INFORMATION ANNUALLY AND THEY HAVE CHOSEN WHICH COMMUNITIES THEY FEEL LIKE MOST MATCHED US IN TERMS OF A VARIETY OF THINGS AND WE ARE BY FAR, IN THIS GROUP, IN TERMS OF TAXABLE DEBT PER CAPITA AT $143. >> THAT IS PRETTY INCREDIBLE. WE DO THINGS DIFFERENTLY. >> A LOT OF THIS IS THE CAPITAL RESERVE I JUST TALKED ABOUT. THESE BOND PAYMENTS COME OF THIS IS RELATED TO THEM HAVING TO FINANCE SOME OF THE VERY PROJECT WE ARE JUST TALKING ABOUT. HERE IS A LOOK AT THE DEBT SUMMARY, $2.8 MILLION REMAINING IN PRINCIPAL ON THE CONVENTION CENTER AND $12.7 MILLION WHEN WE TRANSITION FROM COMMUNITY ASSOCIATIONS TO THE TOWNSHIP . THERE WERE SOME PROJECTS , FROM PARKS AND REC AND FIRE DEPARTMENT WE HAD TO CONVERT TO BONDS. YOU CAN SEE THE ANNUAL DEBT SERVICE IS $6 MILLION . THE CONVENTION CENTER IS PAID OUT OF THE BASE HOTEL TAX AND THE DEBT SERVICE RATE ON YOUR PROPERTY TAX OF ONE PENNY IS WHAT PAYS FOR THE GENERAL OBLIGATION BONDS. >> WOULD YOU ELABORATE -- INAUDIBLE ] PEOPLE HAVE ASKED, WHY DON'T YOU PAY IT ALL ? [02:40:08] >> WHEN WE REFINANCED TO THAT DEBT, ACCORDING TO THE BOND REGULATIONS THAT WE ARE SUBJECT TO, YOU CAN ONLY REFINANCE ONE TIME , AND THEN YOU HAVE TO LET IT GO AHEAD AND ROLL UNTIL ITS MATURE DATE, THAT IS FAIR TO THE BONDHOLDERS SO THAT THEY CAN BE ASSURED OF SOME TYPE OF THEIR EARNINGS. EXACTLY . BUT THAT IS WHY. WE CAN'T , EVEN THOUGH WE HAVE SOME MONEY IN UNDESIGNATED SURPLUS, IN PREVIOUS BOARDS, WE DID PAY DOWN SOME DEBT AND WE USED THOSE RESERVES TO PAY DOWN THE DEBT . BUT THAT IS NOT AVAILABLE TO US NOW, OR THAT WOULD BE THE FIRST THING YOU WOULD WANT TO TALK ABOUT AS OPPOSED TO SOME OF THESE OTHERS. HERE IS OUR OUTSTANDING DEBT BALANCE FROM 2016 THROUGH THE PRESENT , WE HAVE HAD $62.4 MILLION OR 80% REDUCTION IN OUR DEBT BALANCES . IN 2026, THIS IS LOOKING , GOING FORWARD, WE WILL CONCLUDE 2026 AND $15.5 MILLION AND WE ARE FULLY PAID OFF BY 2031. THESE ARE , IN TERMS OF OUR DEBT SERVICE PAYMENTS , WHEN THE CONVENTION CENTER BONDS ARE PAID OFF IN 2027, THAT WILL GENERATE $2.9 MILLION IN REVENUE , HOTEL TAX, THAT WE NO LONGER HAVE TO PAY . THAT WILL BE AVAILABLE FOR OTHER PURPOSES. IN 2030, THE $2.4 MILLION DECREASE, IN 2031, IS TIED TO THAT RECENT PROPERTY TAX RATE AND THAT RATE WILL GO DOWN EVENTUALLY BY 2032 TO BE ELIMINATED OUT OF OUR PROPERTY TAX RATE. THIS IS THE LAST SECTION. IN OUR RESERVES , WE HAVE RESERVES AND FUND BALANCES EQUAL TO $100.1 MILLION , WE GET QUESTIONS ABOUT THIS A LOT, WHY DO YOU HAVE SO MUCH MONEY, USE THIS TO REDUCE THE TAX RATE OR DO OTHER THINGS, I WILL EXPLAIN EACH OF THESE RESERVES AND WHY THEY ARE IMPORTANT AND/OR RESTRICTED FOR USE. THESE ARE THE RESERVES THAT HAVE SIGNIFICANT IMPACT ON OUR CREDIT AGENCY RATING . THE OPERATING RESERVE , WE NEED TO KEEP AT 25% OF OPERATING EXPENSES . THAT IS EQUAL TO BASICALLY THREE MONTHS WORTH OF OPERATIONS . IF WE WERE TO HAVE SOME TYPE OF NATURAL DISASTER OR OTHER EVENT, THE TOWN CENTER AREA, NO LONGER ABLE TO COLLECT SALES TAX REVENUES OR OTHER THINGS WE HAVE A CUSHION . WHERE WE CAN TAP INTO THIS OPERATING RESERVE WHILE AWAITING TO GET THAT BACK UNDER OR WAITING FOR INSURANCE PROCEEDS TO KICK IN. THE CAPITAL REPLACEMENT RESERVE , WE CURRENTLY HAVE A BALANCE OF $28.7 MILLION AND WE HAVE A DEBT SERVICE RESERVE THAT IS EQUAL TO A YEAR OF PRINCIPAL AND INTEREST ON OUR OUTSTANDING LOANS AND WE REACQUIRED BY OUR BOND COVENANTS IN ORDER TO KEEP THAT IN THE RESERVES. THESE ARE BASICALLY, IN MY OPINION, WHAT CANNOT BE USED UNLESS THE OPERATING RESERVE TURNED INTO A DISASTER , IF WE WERE TO UTILIZE THEM OR TAKE THEM DOWN, IT WOULD DEFINITELY HAVE AN IMPACT ON OUR CREDIT RATING. HERE IS A LOOK AT OUR OPERATING RESERVE WE DO HAVE $33.7 MILLION , AS OPERATING EXPENSES , INCREASING EACH YEAR, WE HAD TO MAKE SMALL CONTRIBUTIONS IN ORDER TO KEEP THAT AT THE 25% LEVEL. HERE IS OUR CAPITAL REPLACEMENT RESERVE , CURRENTLY AT ABOUT $28.7 MILLION , WE HAVE A PRETTY SIGNIFICANT PAYDOWN OF THAT OVER THE NEXT THREE YEARS BASED ON OUR CAPITAL REPLACEMENT PLAN. YOU SEE , 2030 , DOES BACK UP AND IT FLUCTUATES DEPENDING ON WHAT OUR CAPITAL IMPROVEMENT PLAN IS SAYING WE NEED TO REPLACE. HERE ARE OUR RESERVES THAT ARE TIED TO CONTRACTUAL OBLIGATIONS WITH THE TRANSPORTATION FUND BALANCE THAT WE TALKED ABOUT, WE HAVE UNDER CONTRACT WITH HARRIS COUNTY , THE CULTURAL EDUCATION RESERVE , WE ARE RESTRICTED BY LEGISLATION , WHERE WE CAN ONLY SPEND THE 10% WE COLLECT FROM A TICKET TAX ON CULTURAL EDUCATION TYPE PROJECTS. WE HAVE NOT SPENT THAT MONEY IN SEVERAL YEARS. ACTUALLY, LONGER THAN THAT, IT ACCUMULATES. WE ARE UNDER AGREEMENT WITH THE DEVELOPER, YOU ARE ALL FAMILIAR BECAUSE IT WAS RENEGOTIATED DURING YOUR TIME FOR THE COMPREHENSIVE COMMUNITY SERVICE AGREEMENT WHERE WE AGREED ON CERTAIN PROJECTS TO FUND ONE HALF OF THOSE THAT WOULD BE COMMUNITYWIDE PROJECTS . WHEN THAT BALANCE WAS SET AT $4 MILLION TO DATE, SUBMITTED VERY LITTLE PROJECTS . [02:45:01] >> CAN WE PAY FOR THE ELEVATORS WITH THOSE? >> NO, WE CAN TALK TO THEM, BUT THAT IS NOT TYPICALLY WHAT IT IS USED FOR BUT WE CAN TRY TIED TO THE CONTRACT, THERE WAS A LIST OF PROJECTS, THAT IS NOT IN IT. WE CAN GO DOWN THAT ROUTE. HERE IS A LOOK AT THE EDUCATION RESERVE, INCREASES BY APPROXIMATELY $200,000 PER YEAR. WE HAVE WHAT WE CALL A TEMPORARY SERVE WHICH IS BEING DEPLETED , SPECIFIC PROJECT ARE COMPLETED, WE HAVE $8.3 MILLION IN THE PARK NEEDS ASSESSMENT PRIMARILY THAT HAS , THE BOARD HAS LOOKED AT PROJECTS RELATED TO THE SPORTS PARK ENHANCEMENTS AND PROJECTS, THAT IS WHAT THAT MONEY SET ASIDE FOR BUT NOT ALL OF IT. THE BALANCE, WE HAVE PLANS ON ALL OF THE SPORTS PARK TO UTILIZE THAT , AND BEGINNING IN 2028, THERE WAS TO BE $3.9 MILLION THAT THE BOARD HAS NOT WEIGHED IN ON WHAT THE PROJECT COULD BE FUNDED OUT OF THIS RESERVE . FINALLY, OUR SMALLER ONES, VISIT THE WOODLANDS HAS $800,000 AND A SELF-FUNDED HEALTH INSURANCE RESERVE , I REFERRED TO EARLIER, AND $1 MILLION. I WILL GET YOUR PERMISSION , GRANTED TO THE BUDGET, I CAN RESTORE IT, $100,000 IN A FUND FOR A RESERVE WHICH I MOVED TO THE CAPITAL REPLACEMENT RESERVE IN THIS BUDGET BECAUSE $100,000 IS NOT ENOUGH TO DO ANYTHING TO IMPACT DRAINAGE. YOU CAN PULL SOMETHING OUT OF THE CAPITAL REPLACEMENT IF WE NEED TO. FINALLY, THESE ARE , THIS GETS TO OUR UNRESTRICTED RESERVES . WE DO HAVE A HOTEL OCCUPANCY TAX RESERVE THAT IS CURRENTLY, WE PROJECTED AT THE END OF THE SHIP WILL BE $8.8 MILLION , WE HAD ABOUT $3.8 MILLION PER YEAR TO IT , EXCESS HOTEL TAX I TALKED ABOUT EARLIER THAT WE DO NOT NEED TO FUND FOR DEBT SERVICE AT THE WOODLANDS . WE ARE FUNDING OUT OF THIS YEAR, HOLIDAY DECORATIONS , THAT IS WHAT WE HAVE DONE CONSISTENTLY OVER THE LAST TWO YEARS, THE BOARD HAS AUTHORIZED , I AM SUGGESTING THAT THE ADDITIONAL AMOUNT FOR THE DRONE SHOW FOR THE RED HOT AND BLUE FESTIVAL BE FUNDED OUT OF HOTEL TAX INSTEAD OF THE GENERAL FUND . >> COULD WE ALSO FIND THE ELEVATORS OUT OF THE HOTEL TAX BECAUSE IT IS UNRESTRICTED? >> WE COULD . NOW FUNDED OUT OF THE RESERVE BUT WE COULD DO THAT. >> I THOUGHT, DR. SNYDER, WE WERE TRYING TO SEQUESTER THAT FOR A BIGGER PROJECT DOWN THE ROAD, LIKE THE PERFORMING ARTS CENTER OR SOME CHANGES IN THE CONVENTION CENTER . >> WAS A CONVERSATION. >> VERY IMPORTANT . >> I AGREE, THEY ARE. >> THIS HOTEL TAX WILL BE $12 MILLION BY THE END OF 2026, AS DIRECTOR SEKULA-GIBBS POINTED OUT , WE HAVE BEEN SAVING , RESERVING THIS FOR AN ECONOMIC DEVELOPMENT PROJECT OF SOME KIND. HOWEVER , IF THERE IS A NEED TO SPEND ONE-TIME MONEY OUT OF IT, WE COULD DO THAT . WE TALKED ABOUT A 2025 UNDESIGNATED BALANCE , THAT IS OUR PIGGY BANK THAT WE CAN USE FOR ONE-TIME PURCHASES OF $2.4 MILLION, KEEP THAT IN MIND, WHEN WE GET TO OUR BUDGET INITIATIVES DISCUSSION, I WILL REMIND YOU. FINALLY , ALMOST DONE, HOTEL TAX RESERVE, THIS PROVIDES A LOT OF FLEXIBILITY AND A LOT OF ABILITY TO ADDRESS AN ECONOMIC DEVELOPMENT PROJECT. WHEREAS , THIS BOARD, PREVIOUS BOARDS , COULD HAVE CHOSEN TO SPEND ALL OF THIS DOWN , IN MY OPINION, WISELY IT HAS BEEN RESERVED TO RESPOND TO ECONOMIC DEVELOPMENT. YOU CAN SEE , IF WE DID NOT USE IT , IT GROWS TO A LARGE AMOUNT AT THE CONCLUSION OF FIVE YEARS THAT HOPEFULLY WE CAN IDENTIFY A PROJECT. FINALLY, WE HAVE ALREADY TALKED ABOUT THIS, $655,000, WHAT WE HAVE AS OF RIGHT NOW IN THE BASE BUDGET BASED ON EVERYTHING WE LOOK AT. IN ORDER TO FUND ONGOING ALTERATIONS. THAT IS WHERE WE WILL END IT. >> ANY QUESTIONS , COMMENTS, FEEDBACK? >> WELL DONE. >> I WOULD LIKE TO SUGGEST, I DO NOT KNOW IF IT IS A MOTION, MAKE A MOTION WE GIVE STAFF TOMORROW TO DO ADDITIONAL RESEARCH ON THINGS BEFORE WE COME BACK FOR BUDGET INITIATIVES ON WEDNESDAY AT 8:30 A.M. , BEFORE WE JUMP INTO OTHER THINGS, WE NEED QUESTIONS ANSWERED. >> SECOND. [02:50:02] >> ALL IN FAVOR? >> AYE. >> OPPOSED. >> WE WILL RECONVENE WEDNESDAY AT 8:30 P.M. -- A.M. WHICH ONE TO ACCEPT? >> CERTIFIED TAX RATES , THE FIRST -- >> I NEED A MOTION TO ACCEPT THE REPORT. >> SO MOVED. >> THE 2025 TAX WORKSHEETS -- >> SO MOVED >> SECOND. >> I MOVED. >> MOVED BY DIRECTOR HEISER, -- ANYTHING ELSE? NO. >> WE IN RECESS UNTIL WEDNESDAY AT 8:30 A.M.? >> NOT RECESS , NOT RECESSED FROM THIS MEETING , WE ARE CLOSING UP THIS MEETING AND WE WILL NOT START AGAIN WEDNESDAY -- UNTIL WEDNESDAY AT 8:30 . >> NOLLIE FOR EXECUTIVE SESSION OR TO RECONVENE? A MOTION TO ADJOURN THE MEETING, 12 NOON ON THE.. -- 12:00 * This transcript was compiled from uncorrected Closed Captioning.