1 00:00:00,000 --> 00:00:07,400 Okay, good afternoon. This is the special bond program financial presentation 2 00:00:07,400 --> 00:00:13,540 convening at 3 o 6 p.m. for our television viewers and we'll turn over 3 00:00:13,540 --> 00:00:16,440 to David Gaines. All right well good afternoon everyone thanks for being 4 00:00:16,440 --> 00:00:20,960 here as we go over the the financial forecasts that we have right now for the 5 00:00:20,960 --> 00:00:27,480 bond program that we're that is up for consideration for 2019. So during this 6 00:00:27,480 --> 00:00:31,040 presentation we're gonna touch on an overview of our of our debt structure 7 00:00:31,040 --> 00:00:35,240 talk talk about what our current debt service outstanding debt services and 8 00:00:35,240 --> 00:00:38,720 look at a little bit of our issuance history over the past few years for 9 00:00:38,720 --> 00:00:43,400 both CEOs and for our bond programs touch on our bond ratings and then 10 00:00:43,400 --> 00:00:47,680 really get into the details of what our financial assumptions are right now and 11 00:00:47,680 --> 00:00:51,080 to talk through some of the scenarios that the committee has asked for and 12 00:00:51,080 --> 00:00:55,320 some other scenarios to help kind of see how things could play out with different 13 00:00:55,320 --> 00:01:00,120 assumptions moving forward with the bond program. So here's our current tax 14 00:01:00,120 --> 00:01:04,000 breakdown for our property tax. Our property tax is broken up into 15 00:01:04,000 --> 00:01:08,560 maintenance operations and debt service rate and so you can see our forty point 16 00:01:08,560 --> 00:01:12,040 five cents for maintenance operations and then twenty one point five cents is 17 00:01:12,040 --> 00:01:16,160 our our property tax rate for debt service which goes specifically to make 18 00:01:16,160 --> 00:01:20,000 our general government debt service payments and you can see there our tax 19 00:01:20,000 --> 00:01:23,720 rate has declined six cents over the past three years by a combination of 20 00:01:23,720 --> 00:01:29,000 SS value growth throughout the city and having a emphasis at a management level 21 00:01:29,000 --> 00:01:35,920 to stay near the effective tax rate to those past three years. So just want to 22 00:01:35,920 --> 00:01:39,920 talk a little bit at a high level about what the considerations we have when we 23 00:01:39,920 --> 00:01:44,240 look at debt for the city. Our outstanding debt that we have right now 24 00:01:44,240 --> 00:01:49,120 is comprised of three components general obligation bonds which are a lot of what 25 00:01:49,120 --> 00:01:54,240 we're discussing today for the bond programs for our 2014-2012 bond programs 26 00:01:54,240 --> 00:01:57,880 those are five bond programs that have outstanding debt associated with them and 27 00:01:57,880 --> 00:02:01,760 debt service payments to them. Next is our certificates of obligation which 28 00:02:01,760 --> 00:02:05,120 I'll touch a little bit more on later about the amounts of certificates of 29 00:02:05,120 --> 00:02:08,520 obligation that we've issued but and what those are here in just a couple 30 00:02:08,520 --> 00:02:12,840 slides but they make up a big portion of what we have outstanding. With those COs 31 00:02:12,840 --> 00:02:16,840 what you'll see if you look at our total amount of debt a lot of that debt is 32 00:02:16,840 --> 00:02:21,120 self-supporting debt so within our COs you're gonna see a lot of our utilities 33 00:02:21,120 --> 00:02:25,000 that have debt that are not better technically backed by property tax but 34 00:02:25,000 --> 00:02:29,640 they're not paid for by property tax they're paid for through revenues from 35 00:02:29,640 --> 00:02:33,760 the utilities or wherever the other self-supporting funds are. We do have 36 00:02:33,760 --> 00:02:38,320 limited revenue bonds outstanding a lot of those are associated with that with 37 00:02:38,320 --> 00:02:42,360 the DEC with the Denton Energy Center but and I'll touch on this later too but a 38 00:02:42,360 --> 00:02:45,560 practice we have now is for those utilities we don't use revenue bonds 39 00:02:45,560 --> 00:02:49,880 where we say the revenue is gonna be the sole source to pay this debt service we 40 00:02:49,880 --> 00:02:53,800 issue those with certificates of obligation and thus getting a lower 41 00:02:53,800 --> 00:02:59,720 interest rate which we then divert to our street maintenance fund. So our 42 00:02:59,720 --> 00:03:03,880 debt service fund is ultimately what pays our debt our debt service payments 43 00:03:03,880 --> 00:03:08,080 so we have property tax and other revenue sources come into the debt 44 00:03:08,080 --> 00:03:13,280 service fund and then that that fund makes our usually about twice a year 45 00:03:13,280 --> 00:03:20,520 payments on the debt service that we have outstanding. Maturity schedule what 46 00:03:20,520 --> 00:03:24,280 we're for this for this program for the bonds we're looking at we're looking at 47 00:03:24,280 --> 00:03:29,400 20 year 20 year bonds for each of the issuances we have for the 2019 program 48 00:03:29,400 --> 00:03:35,200 all of those bonds have nine-year callable options and as a principal you 49 00:03:35,200 --> 00:03:41,040 try to keep the debt to correspond with useful life that's not that's not a rule 50 00:03:41,040 --> 00:03:44,560 and it's and a lot of times when you look at will issue 20-year debt for a 51 00:03:44,560 --> 00:03:47,800 street that is gonna last longer than 20 years but it's more prudent for us to 52 00:03:47,800 --> 00:03:54,000 issue that 20-year debt for those pieces for those projects. I will say on this as 53 00:03:54,000 --> 00:03:58,760 you know as we mentioned the nine-year call option one of the changes in the 54 00:03:58,760 --> 00:04:02,760 tax reform bill a couple years ago it does not allow us to do any more 55 00:04:02,760 --> 00:04:08,240 advanced refundings as a municipality which is a tool that we had in the past 56 00:04:08,240 --> 00:04:12,840 where we could refund essentially refund our bonds early and you go for interest 57 00:04:12,840 --> 00:04:17,520 rate savings that is no longer an option for us. So when you say nine-year call 58 00:04:17,520 --> 00:04:24,080 option what do you mean by that specifically? Is that where you can resell? 59 00:04:24,080 --> 00:04:28,800 We can refund yeah we could refund or we could we could pay it off early 60 00:04:28,800 --> 00:04:33,640 okay at that point but before that point you can't do anything. So you can't 61 00:04:33,640 --> 00:04:39,480 accelerate payments prior to nine years? Correct. Can you accelerate them after the nine years? 62 00:04:39,480 --> 00:04:45,000 You could issue I mean if you refund them and on a different schedule you 63 00:04:45,000 --> 00:04:51,880 could but that would be there. So it's basically a one-time refinance option 64 00:04:51,880 --> 00:04:58,080 at nine years after it's issued? Not one time you could do it after that. 65 00:04:59,880 --> 00:05:06,480 But it doesn't have to be a full refinance at nine years it could be just 66 00:05:06,480 --> 00:05:12,640 accelerate payments right well starting in year 10 yeah you can accelerate the 67 00:05:12,640 --> 00:05:17,000 payments to pay it off in 15 years for instance. Right it would be years 10 through 20 in this 68 00:05:17,000 --> 00:05:23,840 case that you either refinance or pay off. Yes sir. And you can choose whatever amount you'd like to do. 69 00:05:23,840 --> 00:05:28,960 And our debt service payments are real they're they're essentially level 70 00:05:28,960 --> 00:05:31,440 payments it's not gonna be the exact dollar amount because of the way we have 71 00:05:31,440 --> 00:05:34,080 to issue the debt but it's essentially level payments just like a mortgage 72 00:05:34,080 --> 00:05:37,640 payment where you're paying a lot of interest up front and then principal 73 00:05:37,640 --> 00:05:40,240 later and I have a chart that will show our current debt service and you can see 74 00:05:40,240 --> 00:05:46,120 how that how that works. So the the state limitation that recently passed that's 75 00:05:46,120 --> 00:05:50,880 a limitation on the zero through nine year period? That's a it's a I have a 76 00:05:50,880 --> 00:05:55,880 later on I can start getting the weeds on that but really that focuses on the M&O 77 00:05:55,880 --> 00:05:58,980 side. Okay. And then the debt service is just kind of added on top but I'll get into that. 78 00:05:58,980 --> 00:06:05,320 Okay. In detail with you. So we did we just touched on these but again general 79 00:06:05,320 --> 00:06:09,320 obligations these are these are the voter approved a for voter approved 80 00:06:09,320 --> 00:06:13,200 bonds which we're talking through today have a uniform election date you do get 81 00:06:13,200 --> 00:06:16,880 lower interest rates with certificate then certificates obligation or revenue 82 00:06:16,880 --> 00:06:20,840 bonds but you and you go through this the process of an election where a 83 00:06:20,840 --> 00:06:25,860 certificates of obligation you don't go through a process of an election but we 84 00:06:25,860 --> 00:06:31,340 do have to do a notice of intent to sell certificates of obligation currently as 85 00:06:31,340 --> 00:06:35,240 of today the notice of intent window is 30 days you have to tell her you have to 86 00:06:35,240 --> 00:06:38,680 put that notice out for 30 days in advance that we're gonna sell sell this 87 00:06:38,680 --> 00:06:43,720 amount of CO's with the legislation that was just passed by the state that is 88 00:06:43,720 --> 00:06:48,360 extending to 45 days and some different requirements on how you post those so 89 00:06:48,360 --> 00:06:52,120 that starts in September we currently just we just issued a notice of intent 90 00:06:52,120 --> 00:06:56,720 for some CEOs this year that were under the old regulation so starting next year 91 00:06:56,720 --> 00:07:00,080 we'll have some new stipulations with those and those are that also that 92 00:07:00,080 --> 00:07:05,440 legislation also applies to our bond bond language which I'll get to in the 93 00:07:05,440 --> 00:07:08,840 next slide as well. Can you explain what the rationale is for the change in the 94 00:07:08,840 --> 00:07:14,880 law? I would I would defer but I would say mostly it's just transparency they're 95 00:07:14,880 --> 00:07:18,240 trying to get more time more window more people to see those certificates of 96 00:07:18,240 --> 00:07:21,720 obligation because there's no election associated with them. That's right just trying to 97 00:07:21,720 --> 00:07:26,780 give voters more time to basically petition if they want to. 98 00:07:26,780 --> 00:07:34,160 So here's some of that some of the additional pieces of that legislation 99 00:07:34,160 --> 00:07:38,800 that was really going to impact how we would go forward with a potential 2019 100 00:07:38,800 --> 00:07:43,640 program the legislation updates some of the language that we have to post within 101 00:07:43,640 --> 00:07:47,840 the each proposition including showing the principal and interest we have on 102 00:07:47,840 --> 00:07:52,760 all of our outstanding debt obligations you know since we have our own utilities 103 00:07:52,760 --> 00:07:56,480 since we have our own electric our number looks can look inflated to other 104 00:07:56,480 --> 00:07:59,840 cities just by the simple fact that we we have our own electric we have our own 105 00:07:59,840 --> 00:08:04,160 solid waste we have water and wastewater so that number can look larger than 106 00:08:04,160 --> 00:08:09,040 other cities of comparable size you have to you have to include in the language 107 00:08:09,040 --> 00:08:12,120 your estimated interest rate that you're using in the program what you've 108 00:08:12,120 --> 00:08:17,080 anticipated for your for your principal and interest payments the debt tax rate 109 00:08:17,080 --> 00:08:21,080 associated with the Brown program so as we go through this a lot of a lot of 110 00:08:21,080 --> 00:08:24,880 discussion rightfully so has been talked about can we keep it out keep our rate 111 00:08:24,880 --> 00:08:29,400 of the total tax rate or keep it at the effective tax rate but for the actual 112 00:08:29,400 --> 00:08:33,720 language itself we have to show what we anticipate to happen to the debt service 113 00:08:33,720 --> 00:08:37,320 tax rate so even if our total tax rates stay in the same and we're just 114 00:08:37,320 --> 00:08:42,280 decreasing the M&O increasing the debt service the language has to reflect that 115 00:08:42,280 --> 00:08:48,200 debt service increase that ballot language or ballot language right the 116 00:08:48,200 --> 00:08:52,240 ballot language is pretty it's pretty it's gonna be pretty long now there's a 117 00:08:52,240 --> 00:08:58,360 table and there's a lot of information included yeah so does that become a 118 00:08:58,360 --> 00:09:03,960 concern in terms of helping people understand what is going on here what was 119 00:09:03,960 --> 00:09:08,920 being proposed I I think I think it's just something we need to be aware of 120 00:09:08,920 --> 00:09:13,480 and make sure that we understand understand that we obviously hit 121 00:09:13,480 --> 00:09:18,800 everything that we need to hit understand the implications of it and 122 00:09:18,800 --> 00:09:22,000 then another piece of that along with the debt tax rate they did have a 123 00:09:22,000 --> 00:09:25,840 stipulation there to show what that impact would be on just they picked a 124 00:09:25,840 --> 00:09:29,080 hundred thousand dollar appraised resident home stay which obviously is 125 00:09:29,080 --> 00:09:34,480 lower than our average but just as a reference I assume for so they can have 126 00:09:34,480 --> 00:09:42,480 a comparison to all other municipalities or anyone else issuing those bonds the 127 00:09:42,480 --> 00:09:51,240 impact of the debt tax rate on 100,000 is that is that impact based on what we 128 00:09:51,240 --> 00:09:59,400 are assuming in terms of property value growth in a way it is because it's 129 00:09:59,400 --> 00:10:03,360 trying to you're trying to guess what your max so we'll end up saying what our 130 00:10:03,360 --> 00:10:08,280 max debt service rate will increase so whether it's five or six cents and I 131 00:10:08,280 --> 00:10:12,460 assume I don't know if they have detail on how we calculate this yet but I assume 132 00:10:12,460 --> 00:10:16,160 you take that number in and apply it to a hundred thousand dollars right basically 133 00:10:16,160 --> 00:10:22,100 be like what's the impact of you know the five cents all right what's the 134 00:10:22,100 --> 00:10:26,320 impact of five cents basically the five cent increase so basically you would be 135 00:10:26,320 --> 00:10:31,720 showing your tax rate today plus the five cents and what's the word I'm sorry 136 00:10:31,720 --> 00:10:36,160 where the five cents come from later on we get to our base case right now it's 137 00:10:36,160 --> 00:10:39,320 between five and six cents that we're anticipating the debt service rate to go 138 00:10:39,320 --> 00:10:43,400 up so we're just kind of jumping ahead in reference to what we'll probably if 139 00:10:43,400 --> 00:10:47,360 we go with what our 210 number is and our base assumptions it would it's going 140 00:10:47,360 --> 00:10:50,160 to end up between five and six cents that the debt service tax rate would 141 00:10:50,160 --> 00:10:59,240 increase so here's a history just to kind of to put these in terms for 142 00:10:59,240 --> 00:11:03,160 everyone so you can see what we what we've issued over the past since 2012 143 00:11:03,160 --> 00:11:08,060 2013 with the the first issuance of the 2012 bond program as we've talked 144 00:11:08,060 --> 00:11:11,800 previously we've already we've issued the entirety of the 2012 program and 145 00:11:11,800 --> 00:11:17,480 then next year we'll issue the in 2020 we'll issue the final amount of fourteen 146 00:11:17,480 --> 00:11:23,720 point six six million of the 2014 program and you can see how we've issued 147 00:11:23,720 --> 00:11:28,480 those year after year to get to it to get to our totals you can also see our 148 00:11:28,480 --> 00:11:33,760 CEO funded projects here just added at a subtotal range there's a lot of detail 149 00:11:33,760 --> 00:11:38,120 within those on what we've issued each year to equal our total that's just for 150 00:11:38,120 --> 00:11:48,880 just for reference for everyone so we've issued for 41 million and 17 and 18 for 151 00:11:48,880 --> 00:11:56,720 CEO funded projects why the what was the spike there in CEO funding that was when 152 00:11:56,720 --> 00:12:00,360 we were I can pull up the detail I want to say is it was when we added the 153 00:12:00,360 --> 00:12:06,760 additional money to streets to some of our bond program projects but I can pull 154 00:12:06,760 --> 00:12:16,640 that up very quickly so it looks like it's it coincides with the issuance of 155 00:12:16,640 --> 00:12:27,320 all the 2012 that because it dropped off it dropped off the year before I'll put 156 00:12:46,640 --> 00:13:06,400 I think this could have something to do with when when the reality of price 157 00:13:06,400 --> 00:13:15,200 increases started hitting that year and there was a lot of there was a lot of 158 00:13:16,000 --> 00:13:20,560 you know trying to find how to fund projects right because I mean we had we 159 00:13:20,560 --> 00:13:25,800 had projects that doubled in cost that was basically the funding the gap 160 00:13:25,800 --> 00:13:30,440 between it was kind of a catch-up here right for cost increase it just struck 161 00:13:30,440 --> 00:13:34,320 me that it was a significant increase compared to the also you can see these 162 00:13:34,320 --> 00:13:41,960 are all the projects that we issued in 17 18 so you know obviously it adds up a 163 00:13:41,960 --> 00:13:44,280 lot of that was that street reconstruction about ten million 164 00:13:44,280 --> 00:13:47,560 dollars to the street reconstruction in association with the previous bonds 165 00:13:47,560 --> 00:13:52,600 airport roads mayhill bridge was included in that the five million 166 00:13:52,600 --> 00:13:57,880 dollars that was not a bond package right this is just see these are all CEO's 167 00:13:57,880 --> 00:14:02,800 yeah but some of those were to make up the shortfall in the bond correct I 168 00:14:02,800 --> 00:14:07,800 think and a lot of that's going to be in the street reconstruction down and the 169 00:14:07,800 --> 00:14:20,680 fire station yeah okay so that detail on what that was all right thank you sure 170 00:14:20,680 --> 00:14:26,240 the fire station number eight is that the one that so that was for the design 171 00:14:26,240 --> 00:14:29,800 but we're gonna reimburse that aren't we with this we're not we're not gonna 172 00:14:29,800 --> 00:14:33,080 reimburse me that that 500 the money that we've already issued that we won't 173 00:14:33,080 --> 00:14:36,080 come back and reimbursement we just already spent that that amount for it is 174 00:14:36,080 --> 00:14:39,920 the design but what that allows us is that first year when we issued the money 175 00:14:39,920 --> 00:14:43,840 in 2020 we're able to get started on the fire station right away since we've 176 00:14:43,840 --> 00:14:52,480 already paid for that so here's just a reference and you can see how the 177 00:14:52,480 --> 00:14:56,280 principal interest falls off as we go forward and then our principal this is 178 00:14:56,280 --> 00:14:59,520 our total debt service outstanding at the beginning of this fiscal year so 179 00:14:59,520 --> 00:15:03,920 before we've issued the debt that we're issuing right now in FY 18 19 where we 180 00:15:03,920 --> 00:15:07,960 said about 25 million dollars and you can see how you know over the next 40 181 00:15:07,960 --> 00:15:12,720 years that at that entire amount will or over the next 20 years that entire 182 00:15:12,720 --> 00:15:16,880 amount will will go away but you can see kind of how that slopes down and 183 00:15:16,880 --> 00:15:21,600 obviously as we look forward to a 2019 program it would just kind of increase 184 00:15:21,600 --> 00:15:25,720 it where it stays steady and actually increases over that 25 million dollar 185 00:15:25,720 --> 00:15:31,600 debt service number this is all general government so it's general geo and CEO 186 00:15:31,600 --> 00:15:40,400 that are paid for with property tax program so one I want to touch just very 187 00:15:40,400 --> 00:15:45,120 briefly on our bond ratings we have just had bond ratings from all three of the 188 00:15:45,120 --> 00:15:51,080 rating entities over the past few months the first two associated with our bond 189 00:15:51,080 --> 00:15:56,560 influences our CEO NGO issuances this year and you can see there we've been 190 00:15:56,560 --> 00:16:00,440 rated by all three of the entities at that that's here right below that prime 191 00:16:00,440 --> 00:16:05,000 grade for each they all have different lettering and numbering combinations but 192 00:16:05,000 --> 00:16:10,160 that's where we sit the Moody's rating was an increase for us we increased from 193 00:16:10,160 --> 00:16:15,680 the double a two to a double a one so that we're now with Moody's equaled 194 00:16:15,680 --> 00:16:19,720 where we are with Fitch and S&P on that same level and ultimately what that does 195 00:16:19,720 --> 00:16:24,480 it helps our interest rates by having our having higher bond ratings it helps 196 00:16:24,480 --> 00:16:27,120 our interest rates well we can project for and what we actually pay in our 197 00:16:27,120 --> 00:16:30,320 interest rates as we issued debt here are some of the pieces that they pointed 198 00:16:30,320 --> 00:16:34,960 to for increase our tax base having a healthy and stable financial profile and 199 00:16:34,960 --> 00:16:39,000 some of those other strength strengths like having the steady universities our 200 00:16:39,000 --> 00:16:47,160 population growth so we'll start getting into the forecasting and want to first 201 00:16:47,160 --> 00:16:51,800 touch on our assessed value it before we get to what our projections are look in 202 00:16:51,800 --> 00:16:55,600 the past and see how our ourselves value has grown you know as we all know our 203 00:16:55,600 --> 00:17:00,000 assessed values growing significantly over the past few years you can see here 204 00:17:00,000 --> 00:17:05,280 since 2014 the large amount of increases that we've had in 2014 about 11 and a 205 00:17:05,280 --> 00:17:09,840 half percent and each year going forward all above that eight percent growth in 206 00:17:09,840 --> 00:17:17,080 assessed value but prior to that in 2010 to 2013 you know we weren't seeing that 207 00:17:17,080 --> 00:17:21,560 that massive amount of growth where it was it was it was lower even in 2010 208 00:17:21,560 --> 00:17:27,480 after the recession where it actually decreased I do want to make a note as we 209 00:17:27,480 --> 00:17:31,680 talk about our assessed value and it'll be a footnote that we have for a while 210 00:17:31,680 --> 00:17:35,780 as we show these history reports when we're showing these just for comparison 211 00:17:35,780 --> 00:17:41,360 sakes we have the frozen values included so starting in 2018 going forward all of 212 00:17:41,360 --> 00:17:47,320 the over 65 freeze values are taken out of our assessed values total that as we 213 00:17:47,320 --> 00:17:51,880 do some projections so we a lot of times we'll look at our freeze adjusted 214 00:17:51,880 --> 00:17:55,960 assessed values for this purpose we've kept them in there for comparison sake 215 00:17:55,960 --> 00:18:00,120 if you take and so you can see that eight point seven six cents percent that 216 00:18:00,120 --> 00:18:03,960 we're projecting right now as an increase next year but if you take out 217 00:18:03,960 --> 00:18:12,880 the frozen values it's really right at eight percent of an increase so yeah 218 00:18:12,880 --> 00:18:17,000 that's the blue line is just showing kind of our total increasing so if you 219 00:18:17,000 --> 00:18:20,760 look on the right here it's saying you know we're up to 12 billion over 12 220 00:18:20,760 --> 00:18:27,200 billion around 12 billion in assessed value so in 2010 we're closer we're 221 00:18:27,200 --> 00:18:31,640 around 6 billion in assessed value so it's been increasing you know steadily 222 00:18:31,640 --> 00:18:36,880 to get up to that 12 billion whereas the bars are just showing that year over 223 00:18:36,880 --> 00:18:42,720 year percentage increase in our assessed value so it's billions not millions it's 224 00:18:42,720 --> 00:18:46,840 bill yeah so this is 14,000 no debt for this like it's billions on the side 225 00:18:46,840 --> 00:18:54,220 there are there a couple of projects in 14 and 17 that caused that larger value 226 00:18:54,220 --> 00:18:59,800 increase that maybe we should take into account because you can't count on a 227 00:18:59,800 --> 00:19:04,440 large commercial value coming in I think it's really just been steady I mean if 228 00:19:04,440 --> 00:19:07,800 you look at our history it's really just been steady growth on our existing 229 00:19:07,800 --> 00:19:11,080 values that's just driven it hasn't been a lot of the new value our new values 230 00:19:11,080 --> 00:19:14,000 been steady we have we do see an increases here in our new value but it's 231 00:19:14,000 --> 00:19:18,400 not enough to really to drive these increases it's really just our total 232 00:19:18,400 --> 00:19:22,760 base having those value increases each year 233 00:19:22,760 --> 00:19:40,080 so right of this total right now so for 2019 our preliminary we're looking at 234 00:19:40,080 --> 00:19:46,080 off the top of my head between 420 to 440 million in new value previous year 235 00:19:46,080 --> 00:19:49,440 it was and I can get these exact numbers for you so these are just estimates 236 00:19:49,440 --> 00:19:55,600 around 330 million in new value and so that was fairly consistent that's been 237 00:19:55,600 --> 00:19:59,640 growing as well but just you can see kind of as a perspective we're looking at 238 00:19:59,640 --> 00:20:06,440 12 almost 12 billion in total AB at 400 to 450 million in the new value mix up 239 00:20:06,440 --> 00:20:11,400 that amount but that does as we talk later about the effective tax rate and 240 00:20:11,400 --> 00:20:15,120 that three and a half percent rollback that does come into play with that as 241 00:20:15,120 --> 00:20:17,280 well 242 00:20:17,280 --> 00:20:30,640 so just to make a conclusion here that 12 billion 400 new value is about four 243 00:20:30,640 --> 00:20:37,080 or five percent yeah yes you know it's not much but it does have just have an 244 00:20:37,080 --> 00:20:41,440 impact on on us when we're doing a lot of our rate calculations and that new 245 00:20:41,440 --> 00:20:51,600 value helps us so I want to talk a little about these are these are some of 246 00:20:51,600 --> 00:20:55,040 the assumptions that we have in each one of the scenarios for our out years 247 00:20:55,040 --> 00:20:58,520 moving forward so I'm going to touch on each of these and we can kind of keep 248 00:20:58,520 --> 00:21:02,280 these in the back of your mind as we look at any other scenarios these are 249 00:21:02,280 --> 00:21:07,520 pretty much baked into each one that we look at so start with for next year's 250 00:21:07,520 --> 00:21:11,320 debt issuance is we have the fourteen point six six which we reference 251 00:21:11,320 --> 00:21:16,040 frequently to close out that 2014 bond program that's baked in assuming we're 252 00:21:16,040 --> 00:21:19,880 gonna we're going to do that next year I think what you'll see is by having that 253 00:21:19,880 --> 00:21:26,000 fourteen point six six in already any we're also planning on issuing bonds 254 00:21:26,000 --> 00:21:29,520 next year if the program goes forward so it just adds to that and increases our 255 00:21:29,520 --> 00:21:34,600 issuance in 2020 and then we also have five million dollars not only in next 256 00:21:34,600 --> 00:21:39,680 year's program but also five million plan but five million dollars in each of the 257 00:21:39,680 --> 00:21:44,000 following years for certificates of obligation for vehicle replacements and 258 00:21:44,000 --> 00:21:48,720 facility improvements this has been pretty much an ongoing ongoing amount 259 00:21:48,720 --> 00:21:53,480 that we've used for those for those projects where we take that one point 260 00:21:53,480 --> 00:21:56,960 five million for facility improvements and then we're able to use those on all 261 00:21:56,960 --> 00:22:01,320 of our municipal facilities throughout throughout the city and then that three 262 00:22:01,320 --> 00:22:04,280 point five million on vehicle replacement is again that's just a 263 00:22:04,280 --> 00:22:09,320 placeholder amount for all of our general government vehicles obviously 264 00:22:09,320 --> 00:22:13,240 the utilities pay for themselves and even we get new vehicles a lot of the 265 00:22:13,240 --> 00:22:16,680 internal service funds will pay for those that initial cost of the new 266 00:22:16,680 --> 00:22:21,120 vehicles and it is a drive of ours what one of the initiatives that we've had 267 00:22:21,120 --> 00:22:24,600 this year as we've gone through the budget process and really before the 268 00:22:24,600 --> 00:22:28,360 budget process was to take a hard look at our vehicles and see how we can 269 00:22:28,360 --> 00:22:32,800 utilize our current fleet instead of replacing fleet kind of share vehicles 270 00:22:32,800 --> 00:22:37,160 across departments so it's very likely that three and a half million number 271 00:22:37,160 --> 00:22:40,560 will come down in out years even next year I think we're looking at a lower 272 00:22:40,560 --> 00:22:43,920 number than three and a half million but we just that's just plug number just so 273 00:22:43,920 --> 00:22:48,280 to stay conservative and what that amount might be we have we are showing 274 00:22:48,280 --> 00:22:53,140 beginning in 2020 through 2023 a drawdown of our fund balance in our debt 275 00:22:53,140 --> 00:22:58,560 service fund the debt service fund currently has an inflated fund balance 276 00:22:58,560 --> 00:23:03,340 of close to five million dollars which really isn't necessary for what the debt 277 00:23:03,340 --> 00:23:07,240 service fund does the debt service fund essentially is just a pass through of 278 00:23:07,240 --> 00:23:11,960 the revenues we get in to pay out for debt service because property tax values 279 00:23:11,960 --> 00:23:16,560 are pretty stable in a year to year where we get our certified values and we 280 00:23:16,560 --> 00:23:21,000 essentially know about 99% collections what we're going to get in for revenue 281 00:23:21,000 --> 00:23:25,520 in the property tax in the debt service fund we don't need a straw a really 282 00:23:25,520 --> 00:23:30,500 inflated fund balance to cover any mitigating circumstances so our goal 283 00:23:30,500 --> 00:23:34,560 right now is to draw that fund balance down to a million dollars you know that 284 00:23:34,560 --> 00:23:40,200 fund balance increases simply because we get our certified values from the CAD 285 00:23:40,200 --> 00:23:45,320 saying here's here's what your assessed value is that's the number we use for 286 00:23:45,320 --> 00:23:48,520 budgeting purposes but it's a fluid number so throughout the year we get 287 00:23:48,520 --> 00:23:53,160 supplemental assessed values from the appraisal district that can increase 288 00:23:53,160 --> 00:23:57,760 that the actual AV and then we end up with more revenue than we budgeted so 289 00:23:57,760 --> 00:24:01,640 that that's what can increase the fund balance so our plan is to use that fund 290 00:24:01,640 --> 00:24:07,640 balance to mitigate some of the debt service payments so is that that's used 291 00:24:07,640 --> 00:24:15,480 to pay down existing that accelerate the payment on that that's yeah you got to 292 00:24:15,480 --> 00:24:18,560 use it for debt service so yeah yeah you do have to use it for debt service so 293 00:24:18,560 --> 00:24:21,760 essentially that's what it does and I mean it's always just when you use those 294 00:24:21,760 --> 00:24:25,760 the one-time hit essentially but you know in those years it does help us 295 00:24:25,760 --> 00:24:29,560 mitigate some of that increase that we would need on the debt service side in 296 00:24:29,560 --> 00:24:34,760 those years as we as we do all that down so going back to the slide the 297 00:24:34,760 --> 00:24:41,360 outstanding debt service or are the numbers we just saw the fourteen point 298 00:24:41,360 --> 00:24:46,920 six and the five million it's gonna be issued in 2020 is that reflected in this 299 00:24:46,920 --> 00:24:51,440 debt service there it's not this is this is just before we issue even the 2019 300 00:24:51,440 --> 00:24:56,500 okay so this is what we have outstanding at the beginning as of 18 right yeah as 301 00:24:56,500 --> 00:24:59,680 we move forward it's in it's in all of our forecast moving forward but this is 302 00:24:59,680 --> 00:25:02,880 just where we sit right now so obviously that would increase with those amounts 303 00:25:02,880 --> 00:25:12,520 in the 2019 amounts so as far as our interest rate assumptions that we have 304 00:25:12,520 --> 00:25:16,160 in each each of these forecasts we're showing we're reflecting an interest rate 305 00:25:16,160 --> 00:25:22,120 of 3.75 percent on all of our geo debt for that we issue in 2020 and that's 306 00:25:22,120 --> 00:25:27,440 really based on issue interest rates are low right now so we want to be 307 00:25:27,440 --> 00:25:31,480 conservative and expect that they'll increase but instead of expecting they're 308 00:25:31,480 --> 00:25:35,220 gonna increase all the way back up to four and a half percent next year we 309 00:25:35,220 --> 00:25:38,200 built in saying okay even if they increase they're probably not gonna go 310 00:25:38,200 --> 00:25:44,360 out that much next year to kind of ladder that increase up before we get to 311 00:25:44,360 --> 00:25:49,320 2021 where we've just put in a four and a half percent conservative interest 312 00:25:49,320 --> 00:25:53,440 rate number you know interest rates can just fluctuate so quickly and when you're 313 00:25:53,440 --> 00:25:58,560 looking at a six-year window it's really tough to try to anticipate that a low 314 00:25:58,560 --> 00:26:05,840 interest rate I think you can get in some trouble with that so we wanted to 315 00:26:05,840 --> 00:26:09,840 just as we start getting to the forecast just do a step back on the current 316 00:26:09,840 --> 00:26:13,960 projects these about as you've seen throughout all of our presentations thus 317 00:26:13,960 --> 00:26:17,600 far these amounts have to have our fluid and have changed as we've had 318 00:26:17,600 --> 00:26:22,440 discussions and they will I'm sure they will continue to change as we discuss 319 00:26:22,440 --> 00:26:25,960 these with the committee especially as we get into some prior virtualization 320 00:26:25,960 --> 00:26:29,800 discussions with the committee but just as an update of where we are right now 321 00:26:29,800 --> 00:26:35,200 with some of these changes notably the street rehab program which which we had 322 00:26:35,200 --> 00:26:39,080 a lower number but based on the conversation we had on the 13th on June 323 00:26:39,080 --> 00:26:44,400 13th have increased that amount and then decreased at Ryan Road amount because 324 00:26:44,400 --> 00:26:48,320 some of those discussions where that need for that larger road isn't isn't as 325 00:26:48,320 --> 00:26:54,200 necessary now and then these are also now prioritized by our our staff 326 00:26:54,200 --> 00:26:57,200 prioritizations on what these road projects would be where we have Bonnie 327 00:26:57,200 --> 00:27:01,720 Bray first Hickory Creek second and in the street rehab programs are number 328 00:27:01,720 --> 00:27:05,960 three priority at that inflated amount so we'll get we obviously get into more 329 00:27:05,960 --> 00:27:10,240 detail on those specific programs with those presentations that we have coming 330 00:27:10,240 --> 00:27:15,480 up but wanted to show those there and then just have essentially taken that 331 00:27:15,480 --> 00:27:19,240 and kind of just move some move some of the dollars around as necessary to get 332 00:27:19,240 --> 00:27:23,540 to our 210 million total but again this will be a bigger discussion for the 333 00:27:23,540 --> 00:27:26,800 committee as we get to those prioritizations and you got you all 334 00:27:26,800 --> 00:27:32,200 really talk internally about where those dollars need to go first obviously first 335 00:27:32,200 --> 00:27:35,840 talking about what is that total pie and then how does it break how does the pie 336 00:27:35,840 --> 00:27:40,280 break down one piece that's not in here and on this chart is public art that 337 00:27:40,280 --> 00:27:43,840 would also that would be whatever public art amount would be in addition to this 338 00:27:43,840 --> 00:27:49,880 or or come from another spot and you pulled street lighting and open space 339 00:27:49,880 --> 00:27:54,360 off we've listed them here we have not had street lighting and open space in our 340 00:27:54,360 --> 00:27:58,480 recommend recommendations since we've come from council not to say that it 341 00:27:58,480 --> 00:28:02,960 shouldn't be on here it's just as as we put forward options it was on the on the 342 00:28:02,960 --> 00:28:07,640 bottom of the prioritization scale but definitely open to including those and 343 00:28:07,640 --> 00:28:11,660 seeing how we can work can you remind me again what was the discussion on Jim 344 00:28:11,660 --> 00:28:17,160 Crystal why was it on there and then taking off the Jim Crystal is simply a 345 00:28:17,160 --> 00:28:22,520 prioritization of trying to get to 210 million dollars and as as staff 346 00:28:22,520 --> 00:28:26,800 prioritized the roads Jim Crystal was a little bit lower than because other areas 347 00:28:26,800 --> 00:28:30,080 went up we cut that 348 00:28:30,080 --> 00:28:40,800 and that construction would be paid for by the developers as they build that out 349 00:28:40,800 --> 00:28:47,640 right it's gonna be a combination yes would be a combination of the West Park 350 00:28:47,640 --> 00:28:56,760 clients is necessary and can you remind us of with the FM 428 that's gonna be 351 00:28:56,760 --> 00:29:02,480 all other sources of correct yeah we initially put this together based on 352 00:29:02,480 --> 00:29:05,640 this is where we're here and people really yell right now from these roads 353 00:29:05,640 --> 00:29:13,120 we try to get these for communication purposes we're currently talking to the 354 00:29:13,120 --> 00:29:15,520 state right now 355 00:29:27,480 --> 00:29:36,120 so Ryan Road we were thinking that four million could get both intersections and 356 00:29:36,120 --> 00:29:42,200 maybe just the maintenance kind of thing but now it's at eight six nine so what I 357 00:29:42,200 --> 00:29:46,000 think we're still in a stage where there's a range and we don't have 358 00:29:46,000 --> 00:29:48,960 precise numbers on what it's gonna be with the changes that's happened have 359 00:29:48,960 --> 00:29:51,600 happened with the Ryan Road this is obvious this is a number that's a 360 00:29:51,600 --> 00:29:55,120 placeholder to some extent as we look at how we shift money around and get more 361 00:29:55,120 --> 00:30:00,880 detail it can change but that's where we know our option contemplated 362 00:30:00,880 --> 00:30:24,040 so we don't know so just I drive that road so the intersection at Teasley it's 363 00:30:24,040 --> 00:30:30,880 pretty wide looks okay got lights what I'm not sure all the redesign is I know 364 00:30:30,880 --> 00:30:34,160 that there's a business that's going to be in play but you're going to be 365 00:30:34,160 --> 00:30:37,560 pulling it back the side triangles we've got new development that's actually 366 00:30:37,560 --> 00:30:43,360 coming in there's another proposal council we see in the next meeting for 367 00:30:43,360 --> 00:30:51,960 significant multifamily use right there across from the Walmart and so the idea is 368 00:30:51,960 --> 00:30:56,000 trailer what do you have to do with all different parts of that intersection to 369 00:30:56,000 --> 00:31:07,480 get it to its ultimate build out okay thanks so I want to move on I want to be 370 00:31:07,480 --> 00:31:12,480 cautious with this with this slide this is really just one scenario that could 371 00:31:12,480 --> 00:31:16,680 play out for how we would sell our how we would issue our bonds for these 372 00:31:16,680 --> 00:31:20,200 programs and really just for planning purposes so everyone understands the 373 00:31:20,200 --> 00:31:26,640 impact of timing on these on our issuances you know we up it up until 374 00:31:26,640 --> 00:31:31,720 today I've been have been working on this model to get to a point where we to 375 00:31:31,720 --> 00:31:35,760 show amounts that would be feasible to actually accomplish the goals that we 376 00:31:35,760 --> 00:31:40,360 have with these projects and stay at our goal with 210 million dollars of being 377 00:31:40,360 --> 00:31:45,360 below our current tax rate our current total tax rate so this this this plan 378 00:31:45,360 --> 00:31:50,640 does that so I'll touch on a few pieces of it you can see in the plan now we've 379 00:31:50,640 --> 00:31:55,360 issued all of our amount all of our dollars for the public for the police 380 00:31:55,360 --> 00:32:03,000 department substation and renovation in 2021 in 2021 to have those dollars 381 00:32:03,000 --> 00:32:07,400 completely out so that we can meet our goals of getting it complete we 382 00:32:07,400 --> 00:32:12,280 previously had that in later years but moved it up and we also obviously have 383 00:32:12,280 --> 00:32:16,280 big numbers there for Bonnie Brand Hickory Creek in the first couple of 384 00:32:16,280 --> 00:32:21,580 years and then starting kind of ramping up into our street rehab program even 385 00:32:21,580 --> 00:32:26,320 with a 70 million dollar total we we're not gonna need a full 10 million dollars 386 00:32:26,320 --> 00:32:31,080 the first year because we still have that for some of that 14.66 million is 387 00:32:31,080 --> 00:32:34,880 street rehab so that millions really gonna be for design for this the 388 00:32:34,880 --> 00:32:41,080 program so that we can hit the ground running in 2021 David did I just hear 389 00:32:41,080 --> 00:32:46,840 this wrong but I thought chief Dixon wanted to do the substation first so he 390 00:32:46,840 --> 00:32:50,480 could move some functions out of City Hall East to the substation then then 391 00:32:50,480 --> 00:32:55,840 renovate the substation right yeah that that is his plan so it looks like you're 392 00:32:55,840 --> 00:32:59,640 doing both at the same time well for the issuance we have some to issue the 393 00:32:59,640 --> 00:33:03,320 dollars because even though they're staggered they're pretty condensed to 394 00:33:03,320 --> 00:33:06,880 the point that we would need to issue all the dollars in 2021 to get them 395 00:33:06,880 --> 00:33:12,280 both complete on the schedule I believe we have this another slide second in 396 00:33:12,280 --> 00:33:17,280 another presentation I could bring it up I believe it was December 2022 that we're 397 00:33:17,280 --> 00:33:28,240 planning on having this the station complete so again these numbers these 398 00:33:28,240 --> 00:33:31,840 numbers can really be affected by the decision that we make and what our 399 00:33:31,840 --> 00:33:35,440 targets are as far as you know if you push some of these out and you push 400 00:33:35,440 --> 00:33:40,000 some of the issuance to later years it will it will change our impact on our 401 00:33:40,000 --> 00:33:43,760 tax rate but obviously will mean the delay in getting any project started 402 00:33:43,760 --> 00:33:47,560 especially with some of these projects that are tied to other funding sources 403 00:33:47,560 --> 00:33:50,880 so we can continue to have those discussions as we look at 404 00:33:50,880 --> 00:33:55,520 prioritizations and the pieces associated with those so I'm going to 405 00:33:55,520 --> 00:34:00,720 get into the details on a number of different scenarios a lot of these the 406 00:34:00,720 --> 00:34:04,640 committee's request to kind of see the full impact of these scenarios a lot of 407 00:34:04,640 --> 00:34:08,720 these slides are gonna have be in the weeds on a lot of numbers so I'll try to 408 00:34:08,720 --> 00:34:14,000 to call out what we're looking at but definitely ask any questions as we go 409 00:34:14,000 --> 00:34:18,120 along here's a summary page of the programs that we'll be looking at this 410 00:34:18,120 --> 00:34:23,000 first one is essentially our base case and our recommendation that you saw 411 00:34:23,000 --> 00:34:28,400 previously and that's what we've been working on throughout the process of a 412 00:34:28,400 --> 00:34:35,360 210 million dollar program assuming assessed values increase at 4% and all 413 00:34:35,360 --> 00:34:38,560 the other assumptions we looked at earlier and as you'll see in the next 414 00:34:38,560 --> 00:34:42,920 slide that equates to between a five and six cent increase on the debt service 415 00:34:42,920 --> 00:34:48,920 tax rate but does keep us total below our current tax rate or current total 416 00:34:48,920 --> 00:34:58,800 tax rate so it's that same five cents or 56 cents that's just a type it's five zero five cents zero five six 417 00:34:58,800 --> 00:35:09,120 yeah it's a big difference yeah and it's that same case with the 33 cents there 418 00:35:09,120 --> 00:35:12,160 that should be three point three cents it is correct and you'll see those on 419 00:35:12,160 --> 00:35:18,520 later slides too okay and I just want to just confirm the point one nine is 420 00:35:18,520 --> 00:35:24,000 correct zero one nine on that aggressive yeah so if we get as we get to that 421 00:35:24,000 --> 00:35:27,960 aggressive approach you'll see if we were if we're assuming 8% AV growth 422 00:35:27,960 --> 00:35:32,440 throughout the life of the program we would anticipate only about a two cent 423 00:35:32,440 --> 00:35:42,800 increase in our debt service tax rate so that was just really a layout as we go 424 00:35:42,800 --> 00:35:48,160 through these scenarios what you'll see here so this is our base case scenario 425 00:35:48,160 --> 00:35:53,600 at 210 million dollars and the 4% growth in those out years I will say on each of 426 00:35:53,600 --> 00:35:58,160 these we'd have updated our preliminary 2020 with our estimated assessed value 427 00:35:58,160 --> 00:36:03,360 which I saw earlier was about 8% over our last our previous years assessed 428 00:36:03,360 --> 00:36:07,240 value so that piece has been updated but all out years are going to have the 429 00:36:07,240 --> 00:36:12,000 assumptions that we list here below so the base case 210 million dollars it 430 00:36:12,000 --> 00:36:18,520 keeps the total tax rate below our our current tax rate of about 62 cents as we 431 00:36:18,520 --> 00:36:23,680 go as we go forward even on this 22 is that it's below our current tax rates 432 00:36:23,680 --> 00:36:28,840 surrounding issue that makes it look like it's level with that so as you go 433 00:36:28,840 --> 00:36:34,520 forward the total tax rate stays below the our current total tax rate but as 434 00:36:34,520 --> 00:36:39,680 as mentioned the debt service tax rate does go up between five and six cents 435 00:36:39,680 --> 00:36:43,280 that will be the piece that has to be on the ballot language of what will it how 436 00:36:43,280 --> 00:36:48,280 much will our debt service tax rate increase some of the other pieces here 437 00:36:48,280 --> 00:36:52,600 you can see here's our our effective tax rate in each of these years and again 438 00:36:52,600 --> 00:36:56,040 as we look at these effective rates and some of this rollback rates these are 439 00:36:56,040 --> 00:37:00,840 all just projected calculations a lot of assumptions made moving forward but a 440 00:37:00,840 --> 00:37:05,760 range of where we might end up on those rates in future years so you can see 441 00:37:05,760 --> 00:37:10,920 we're about two cents on average above the effective tax rate in this model at 442 00:37:10,920 --> 00:37:16,760 the 210 million dollars for reference here I've included the some estimates in 443 00:37:16,760 --> 00:37:20,720 what we might anticipate for the three and a half percent rollback rate this is 444 00:37:20,720 --> 00:37:24,760 the new based on the new legislation of that rate coming down from eight percent 445 00:37:24,760 --> 00:37:29,640 three and a half percent and because that's mainly on the because it's on the 446 00:37:29,640 --> 00:37:34,280 maintenance and operation side as we go through these slides you'll see that the 447 00:37:34,280 --> 00:37:37,880 range is really going to be you're going to see mostly around 12 or 13 cents I 448 00:37:37,880 --> 00:37:41,000 would say just for precaution I'll say it's probably going to be between one 449 00:37:41,000 --> 00:37:46,520 cents and two cents that we are below the three and a half rollback in future 450 00:37:46,520 --> 00:37:50,900 years and that's probably just going to be a circumference what we have to to 451 00:37:50,900 --> 00:37:54,440 live with moving forward and that's not affected by the debt service tax rate 452 00:37:54,440 --> 00:37:59,360 but it'll just it'll be a constraint on us as we go through our operating budget 453 00:37:59,360 --> 00:38:04,080 each year I think one of the pieces but I think what it's good to reference that 454 00:38:04,080 --> 00:38:08,840 as we look at adding a station as we look at adding a substation or fire 455 00:38:08,840 --> 00:38:12,960 station and we consider what are the operating costs that that we need as a 456 00:38:12,960 --> 00:38:18,040 city to be able to point back to these things and say you know we know that we 457 00:38:18,040 --> 00:38:21,440 have these needs so if we ever get to a point where we need to have a election 458 00:38:21,440 --> 00:38:24,880 on our rollback rate which will be associated directly with operating cost 459 00:38:24,880 --> 00:38:29,360 we can we can talk to it and point to those specifics that that increase would 460 00:38:29,360 --> 00:38:35,480 be related to we've shown the overall the average tax bill here on this 461 00:38:35,480 --> 00:38:38,480 scenario and this is about as you look at these scenarios are going to be about 462 00:38:38,480 --> 00:38:44,360 the same because our M&O rate is at that effective rate it drives these to be 463 00:38:44,360 --> 00:38:49,120 fairly similar as you look across the board but about a 3% increase to the 464 00:38:49,120 --> 00:38:53,200 average tax bill and this is increasing that average tax bill by the same amount 465 00:38:53,200 --> 00:38:59,480 that we're increasing AV in those future years so is the three and a half percent 466 00:38:59,480 --> 00:39:05,400 rollback which we'll have a new name I guess going forward is that applied just 467 00:39:05,400 --> 00:39:09,960 to the M&O rate or is that applied to the total rate how does that so it can 468 00:39:09,960 --> 00:39:14,160 get a little complicated but I'll at a high level what it does is it goes you 469 00:39:14,160 --> 00:39:18,280 with your M&O rate you say what is your effective M&O rate what M&O rate do you 470 00:39:18,280 --> 00:39:24,000 need now to pay for your existing values next year then you add three and a half 471 00:39:24,000 --> 00:39:28,660 first you do a three and a half percent one point zero three five to that then 472 00:39:28,660 --> 00:39:32,400 add the debt service tax rate on top of it so that's the way the debt service 473 00:39:32,400 --> 00:39:36,520 tax rate stays out of the calculation yeah you can increase on it's on but 474 00:39:36,520 --> 00:39:41,640 there's also a piece to it where because we get it we have a sales tax relief that 475 00:39:41,640 --> 00:39:45,760 comes from our additional half half cent of sales tax comes through our general 476 00:39:45,760 --> 00:39:49,280 fund for property tax relief that also plays into our formula a little bit so 477 00:39:49,280 --> 00:39:56,600 it's not as clean as seeing that okay so I got a high level if you look at 40 478 00:39:56,600 --> 00:40:02,200 cents you know at three and a half percent you get close to that twelve to 479 00:40:02,200 --> 00:40:07,320 thirteen so one point three to one point four cents and that's kind of how it 480 00:40:07,320 --> 00:40:11,080 rolls out in the rollback difference okay 481 00:40:13,000 --> 00:40:16,400 so I'll just start going through some of these scenarios and connect answer 482 00:40:16,400 --> 00:40:23,160 questions as we go along here's here's a chart showing the tax rate impact of 483 00:40:23,160 --> 00:40:27,880 that to it of the 210 million base case scenario so you can see our property 484 00:40:27,880 --> 00:40:31,680 total rate really staying stable fairly stable throughout the process dipping a 485 00:40:31,680 --> 00:40:35,760 little at the end with that operations rate essentially coming down the debt 486 00:40:35,760 --> 00:40:39,600 service rate coming up in those two years to pay for the program and offset 487 00:40:39,600 --> 00:40:43,760 that five to six cent difference in those out years and keeping our total 488 00:40:43,760 --> 00:40:51,040 tax rate stable so one I want to make sure we hit all of the the scenarios 489 00:40:51,040 --> 00:40:56,000 that were mentioned this is a moderate growth scenario so this would be instead 490 00:40:56,000 --> 00:41:00,360 of a four percent AV growth in each year we had six percent AV growth what would 491 00:41:00,360 --> 00:41:04,400 that look like so in this scenario we're looking at between three and four cents 492 00:41:04,400 --> 00:41:09,640 that service tax rate increase because we're obviously you're with the increase 493 00:41:09,640 --> 00:41:13,160 AV we don't need the debt service rate to go up as much but you're gonna see a 494 00:41:13,160 --> 00:41:16,620 lot of the sim a lot of similar things on the on the difference here with the 495 00:41:16,620 --> 00:41:20,720 rollback and then our average tax bill just because the average tax bulls on 496 00:41:20,720 --> 00:41:25,800 based on a larger amount so that's how it comes out especially as we're focused 497 00:41:25,800 --> 00:41:29,880 on these scenarios of keeping our operations rate M&O rate at the effect 498 00:41:29,880 --> 00:41:37,760 nearly effective tax rate so this is six percent growth and again between three 499 00:41:37,760 --> 00:41:46,200 and four percent increase to the debt service tax rate if you if you want to 500 00:41:46,200 --> 00:41:50,840 get it we have we have additional detail we can get into the weeds of exactly 501 00:41:50,840 --> 00:41:54,560 what we're using for fund balance drawdown what we're we're showing for our 502 00:41:54,560 --> 00:41:57,840 tax rate everything that happens in our debt service fund if you want to get in 503 00:41:57,840 --> 00:42:01,760 into those but for now this is more of a summary of kind of all the machinations 504 00:42:01,760 --> 00:42:08,560 that got us here so here's a here's an aggressive growth scenario so say we you 505 00:42:08,560 --> 00:42:11,960 know we ended up with eight percent growth over each year this bond program 506 00:42:11,960 --> 00:42:16,280 looks similar to last bond program over the past few years we've had that growth 507 00:42:16,280 --> 00:42:20,560 each year what would the tax rate look like and if we were to hit eight percent 508 00:42:20,560 --> 00:42:24,720 growth each year we'd be looking at about a only two percent increase to the 509 00:42:24,720 --> 00:42:30,280 debt service tax rate you know I I think it would we would obviously want to be 510 00:42:30,280 --> 00:42:34,240 cautious with making this our we're gonna bank on this this is what we're 511 00:42:34,240 --> 00:42:38,960 gonna put forward but it is useful to see how much it can change but it is it 512 00:42:38,960 --> 00:42:44,440 is what we've average over the last five years or more right it it absolutely is 513 00:42:44,440 --> 00:42:50,280 I just I think as we go to the voters it would be we definitely want to be 514 00:42:50,280 --> 00:42:55,720 conservative to not it and I appreciate that but I also think that we have to 515 00:42:55,720 --> 00:43:01,680 you know I don't think we we need to short sheet this bond package because 516 00:43:01,680 --> 00:43:07,560 we're afraid we won't grow at 8% I did in all indications would say we have 517 00:43:07,560 --> 00:43:13,480 every reason to expect to continue to grow at 8% or more yeah and I think I 518 00:43:13,480 --> 00:43:16,000 think it's just two different conversation as far as the bond language 519 00:43:16,000 --> 00:43:19,400 itself I think we definitely don't want to go to the voters and say it's only 520 00:43:19,400 --> 00:43:22,440 going to be a three cent when it could be higher but as far as the discussions 521 00:43:22,440 --> 00:43:25,760 amongst the committee of where you expect it to actually happen I think that 522 00:43:25,760 --> 00:43:28,760 that's definitely a discussion that committee can have and this can 523 00:43:28,760 --> 00:43:34,000 definitely add to that discussion in 14 we asked for two cents three three and 524 00:43:34,000 --> 00:43:42,360 we didn't take any of it right well it's I mean the right is a variable here in 525 00:43:42,360 --> 00:43:49,240 the SS value the real what's the average tax it's gonna be a function of those 526 00:43:49,240 --> 00:43:54,000 two and so if if your growth is more your rates last if your growth is less 527 00:43:54,000 --> 00:44:01,640 your rates more is there any feeling for I guess all these scenarios are computed 528 00:44:01,640 --> 00:44:06,360 with the M&O staying at the effective rate is there any feeling for whether 529 00:44:06,360 --> 00:44:11,440 that's more or less likely given the conservative or medium or aggressive 530 00:44:11,440 --> 00:44:16,840 scenarios presented here as opposed to I don't know I get up nearer to that three 531 00:44:16,840 --> 00:44:21,400 point five percent increase I don't know that it would be I'll say two things I 532 00:44:21,400 --> 00:44:25,840 don't know that would be necessarily tied to the the aggressive scenarios 533 00:44:25,840 --> 00:44:29,620 maybe tied to the total obviously if we don't have the this the new station we 534 00:44:29,620 --> 00:44:33,240 we came we're not necessarily gonna be able to hire as quickly to fill it like 535 00:44:33,240 --> 00:44:36,480 we would plan to but I will say as we get to the end you'll see some 536 00:44:36,480 --> 00:44:39,320 variations being in the details of this as we look at the aggressive scenario 537 00:44:39,320 --> 00:44:43,720 included is also assuming our new value is gonna grow additionally so that new 538 00:44:43,720 --> 00:44:47,960 value comes and helps the M&O rate I do think it's gonna be tough and as we look 539 00:44:47,960 --> 00:44:51,880 at this this three and a half percent rollback rate I mean it's it's very 540 00:44:51,880 --> 00:44:56,440 difficult to stay at the effective rate for multiple years and it's that's gonna 541 00:44:56,440 --> 00:45:00,600 be a constraint on us I even when you look at this forecast this I want to 542 00:45:00,600 --> 00:45:03,480 make sure that everyone knows this is not our proposed budget that's going to 543 00:45:03,480 --> 00:45:07,760 counsel but for planning purposes we've already said that for this planning 544 00:45:07,760 --> 00:45:10,960 scenario we've assumed that we're gonna go two cents above the effective tax 545 00:45:10,960 --> 00:45:18,120 rate in next year's budget well if you look at preliminary 2020 we're showing 546 00:45:18,120 --> 00:45:21,640 us we're showing a two percent two cent increase right as we've shown as we've 547 00:45:21,640 --> 00:45:23,920 gone through the budget process we've counseled we've tied each of those 548 00:45:23,920 --> 00:45:27,600 increases to kind of a tier of supplemental packages so we're not 549 00:45:27,600 --> 00:45:31,280 saying that's going to happen but I think it's worthwhile to include in our 550 00:45:31,280 --> 00:45:36,040 in our forecast for now I guess what I mean it's difficult because it's 551 00:45:36,040 --> 00:45:42,160 predicting the future but what I'm trying to assess from a risk perspective 552 00:45:42,160 --> 00:45:50,440 is with the various growth scenarios right they present a different burden on 553 00:45:50,440 --> 00:45:57,120 the debt service rate in order to pay back the bonds right and so does the 554 00:45:57,120 --> 00:46:03,120 projected burden on the M&O rate go in the same direction or does it go to the 555 00:46:03,120 --> 00:46:08,920 opposite such that the risk is is mitigated you know yeah I think it's tough 556 00:46:08,920 --> 00:46:12,720 to tie it directly to AV growth because a lot of AV growth is just a single home 557 00:46:12,720 --> 00:46:16,080 just appreciating in value sure whereas that doesn't have any demands but if 558 00:46:16,080 --> 00:46:19,720 we're talking about new developments coming in that does change the equation 559 00:46:19,720 --> 00:46:23,000 okay so we don't have that in here that would be probably a different discussion 560 00:46:23,000 --> 00:46:29,400 but I think I think this is also tied to the larger discussion on how much does 561 00:46:29,400 --> 00:46:34,720 growth sustain itself as we've continued sort of peeling back what it's costing 562 00:46:34,720 --> 00:46:39,520 us to provide services to developers versus what they're actually paying in 563 00:46:39,520 --> 00:46:45,160 we've had those discussions of council particularly water waste water we're 564 00:46:45,160 --> 00:46:48,360 about ready to have it on the street impact fees and then our cost for 565 00:46:48,360 --> 00:46:53,320 providing planning and development services if the council decides that you 566 00:46:53,320 --> 00:46:56,680 know the growth should be paying for much more the cost of the staffing it 567 00:46:56,680 --> 00:47:00,360 requires and the capital projects then there is another lever here but right 568 00:47:00,360 --> 00:47:03,840 now they haven't made that policy decision because we really have only 569 00:47:03,840 --> 00:47:08,800 framed it recently for him so David's overseeing a study right now on those on 570 00:47:08,800 --> 00:47:14,200 those fees and that could provide a little bit of relief to the M&O rate 571 00:47:14,200 --> 00:47:17,680 moving forward if they decide that they're going to start subsidizing left 572 00:47:17,680 --> 00:47:21,640 so that that's the other important variable even if you're seeing increased 573 00:47:21,640 --> 00:47:25,320 growth but it's not paying for the services on an ongoing basis you're 574 00:47:25,320 --> 00:47:29,560 getting nowhere and so that's the that's the policy discussion that you'll be 575 00:47:29,560 --> 00:47:34,480 who will be having with council here in the next 45 days or so 576 00:47:34,480 --> 00:47:48,680 we wanted to add a fourth scenario as we go through each of these kind of high level 577 00:47:48,680 --> 00:47:52,360 scenarios and dollar amounts and this one is hey let's say obviously the ones 578 00:47:52,360 --> 00:47:54,920 we've been looking at so far are consistent growth each year what about a 579 00:47:54,920 --> 00:47:59,360 scenario where we start off where we kind of see the trajectory around now 580 00:47:59,360 --> 00:48:04,520 was a person next year maybe a dip in 2022 but then maybe we hit some sort of 581 00:48:04,520 --> 00:48:07,560 recession or at least a downturn to some degree and we see it trail off in the 582 00:48:07,560 --> 00:48:11,440 future years I think what you see in a lot of these mixed scenarios is they 583 00:48:11,440 --> 00:48:15,160 basically come in at that 4% number essentially you know the hero we're 584 00:48:15,160 --> 00:48:18,960 looking again right under a six cent taxing to increase on the debt service 585 00:48:18,960 --> 00:48:23,280 tax rate not meant for anything other than just another comparison that to 586 00:48:23,280 --> 00:48:26,880 kind of include in your decision-making as you look at each of these scenarios 587 00:48:26,880 --> 00:48:30,080 and think through what could play out 588 00:48:30,080 --> 00:48:46,320 so we can definitely go back and touch on any of these as we go through but I'll 589 00:48:46,320 --> 00:48:51,200 kind of move on to the next kind of round of scenarios we included numbers 590 00:48:51,200 --> 00:48:55,680 for 150 million dollar package again this is just a comparison when we started 591 00:48:55,680 --> 00:48:59,800 the process we said we would look at a 200 million dollar package which we said 592 00:48:59,800 --> 00:49:02,520 would keep us around the total tax rate we would look at a hundred million dollar 593 00:49:02,520 --> 00:49:05,840 package which would keep us around the effective tax rate which we'll have 594 00:49:05,840 --> 00:49:08,880 later but also just wanted to show here's what a hundred fifty million dollar 595 00:49:08,880 --> 00:49:12,560 package would do I think an important consideration as we look at these other 596 00:49:12,560 --> 00:49:17,040 packages hundred and fifty and a hundred million dollar package the piece that we 597 00:49:17,040 --> 00:49:20,000 would have to then go back and do is go back and look at that schedule and not 598 00:49:20,000 --> 00:49:24,320 only say what projects do we need to do with this new amount but how do we plan 599 00:49:24,320 --> 00:49:30,080 them out and what are the priorities on timing of these so with a hundred fifty 600 00:49:30,080 --> 00:49:34,280 million dollar scenario at our base case the four percent growth looking at 601 00:49:34,280 --> 00:49:38,840 between the two and three cent tax increase at two point four cent tax 602 00:49:38,840 --> 00:49:44,120 increase on the debt service tax rate and again as I say those tax increases 603 00:49:44,120 --> 00:49:48,720 that's the maximum tax rate increase you know it'll be what where's that number 604 00:49:48,720 --> 00:49:52,640 where it's the highest and then it'll in most years it's going to be below that 605 00:49:52,640 --> 00:50:01,960 but we want to make sure we're focused on what is the maximum rate as we move 606 00:50:01,960 --> 00:50:06,440 to the moderate growth the six percent growth on 150 million dollars looking at 607 00:50:06,440 --> 00:50:10,960 just about a cent and a half increase a maximum tax rate increase on the debt 608 00:50:10,960 --> 00:50:16,960 service side and you can see the total the total percentage tax bill increase 609 00:50:16,960 --> 00:50:20,000 is going to be less in this scenario than it was in the previous scenario 610 00:50:20,000 --> 00:50:23,560 just because our debt service tax rates going to be lower whereas previously it 611 00:50:23,560 --> 00:50:27,840 was at three three and a half now it's around two two percent growth I know we 612 00:50:27,840 --> 00:50:31,480 had a question of how would these compare to inflation no inflation kind 613 00:50:31,480 --> 00:50:40,560 of nationwide right now is it about two percent so there's that comparison and 614 00:50:40,560 --> 00:50:43,360 if you if we do an aggressive approach say hey we're going to do 150 million 615 00:50:43,360 --> 00:50:46,600 we're going to think through what would that be at eight percent growth each of 616 00:50:46,600 --> 00:50:50,200 those out years really you're in a situation where you're looking at maybe 617 00:50:50,200 --> 00:50:56,960 a cent maximum taxing tax rate increase on your debt service tax rate but as 618 00:50:56,960 --> 00:50:59,640 you can see as we go through all these scenarios that rollback rate doesn't 619 00:50:59,640 --> 00:51:06,400 change much because of the way the calculation right right and again here's 620 00:51:06,400 --> 00:51:10,880 that mixed variable rate growth moving forward and you kind of end up back 621 00:51:10,880 --> 00:51:23,280 where we started on the four percent growth a final scenario was the hundred 622 00:51:23,280 --> 00:51:28,880 million dollar program the goal with this was to remain you're at right at 623 00:51:28,880 --> 00:51:32,240 near the effective tax rate as the numbers shake out we're really right 624 00:51:32,240 --> 00:51:36,600 there as on average a little less than a cent away from the effective tax rate a 625 00:51:36,600 --> 00:51:41,840 hundred million dollars moving forward and these are 4% growth I think what 626 00:51:41,840 --> 00:51:46,040 you'll notice on this is if we were to do a hundred million dollar program we 627 00:51:46,040 --> 00:51:51,520 would not have the increase in the in the debt service tax rate other than a 628 00:51:51,520 --> 00:52:02,120 small increases by kind of a few a few percentages of it of a cent moderate 629 00:52:02,120 --> 00:52:07,800 growth again same story where you're not seeing increase over that current 2.15 630 00:52:07,800 --> 00:52:13,600 debt service tax rate in those out years but I you know a hundred million dollar 631 00:52:13,600 --> 00:52:17,480 program I think we'd have to make some pretty significant choices and I think 632 00:52:17,480 --> 00:52:20,400 even if you say we were going to do a hundred million dollar program but we 633 00:52:20,400 --> 00:52:25,040 were going to include the police station and fire station and some of those big 634 00:52:25,040 --> 00:52:28,520 roads that really have to have those dollars up front if we were going to 635 00:52:28,520 --> 00:52:32,360 front load this we kind of showed it more spread out for these purposes if we 636 00:52:32,360 --> 00:52:36,480 were going to front load those and do maybe a four-year program a three-year 637 00:52:36,480 --> 00:52:40,200 program instead of a six-year program then you might you might have those 638 00:52:40,200 --> 00:52:44,160 increases that we're looking at now it would just be a shorter program to be 639 00:52:44,160 --> 00:52:53,560 hit with that burden and then you can see the eight eight first 8% AV growth 640 00:52:53,560 --> 00:52:57,080 really seeing a steady decline in that debt service tax rate moving forward 641 00:52:57,080 --> 00:53:06,040 with a hundred million dollar program and then our mixed our mixed scenario 642 00:53:06,040 --> 00:53:09,960 comes out pretty pretty close where you're not you're not up to your debt 643 00:53:09,960 --> 00:53:13,320 service tax rate in those out years 644 00:53:13,320 --> 00:53:23,560 that's all we have for the presentation for the scenarios I hope I hit on 645 00:53:23,560 --> 00:53:26,600 everything you all were looking for for this initial presentation but would be 646 00:53:26,600 --> 00:53:30,640 happy to answer any questions talk through any of the details on this or 647 00:53:30,640 --> 00:53:33,640 any other questions you have there's a lot of information that you're just not 648 00:53:33,640 --> 00:53:37,840 getting so if you need to digest it and come back and now you can ask any 649 00:53:37,840 --> 00:53:46,600 questions of me obviously today later anytime any general questions is this 650 00:53:46,600 --> 00:53:51,240 the same presentation that's going to be made to the entire bond committee or 651 00:53:51,240 --> 00:53:56,120 will there be one I think that's I think as we talk with the committee we look at 652 00:53:56,120 --> 00:53:59,600 the schedule we can talk through that I'm sure at some point we need to do a 653 00:53:59,600 --> 00:54:02,160 high-level I don't know we want to it's up to the committee we can go into this 654 00:54:02,160 --> 00:54:05,640 much detail we can go into high level whatever the committee would like kind 655 00:54:05,640 --> 00:54:09,920 of the thought was is let's all of us go through the laborious task of talking 656 00:54:09,920 --> 00:54:14,200 about this and then bring back a proposal or you know I don't think we 657 00:54:14,200 --> 00:54:18,240 need to bring everything to the full committee or else we'll probably swallow 658 00:54:18,240 --> 00:54:26,600 their tongue and have their eyes roll back in their head. Basically I was doing 659 00:54:26,600 --> 00:54:30,360 your averages and your so your five-year average of growth right now the last 660 00:54:30,360 --> 00:54:35,480 five years is nine point six seven six percent and your ten-year average is six 661 00:54:35,480 --> 00:54:40,040 point nine six four percent so I don't really know why we're using a four 662 00:54:40,040 --> 00:54:44,520 percent if literally the last ten years average growth is nearly seven percent 663 00:54:44,520 --> 00:54:49,320 so what I was gonna ask is this committee are we supposed to make a 664 00:54:49,320 --> 00:54:54,680 recommendation for what percentage the other committee the main committee uses 665 00:54:54,680 --> 00:54:58,600 when considering this bond program should we define a number say we're 666 00:54:58,600 --> 00:55:01,600 gonna go with X. I think that was the intent is we would bring back a 667 00:55:01,600 --> 00:55:06,640 recommendation to the larger body to consider. I mean this data also doesn't 668 00:55:06,640 --> 00:55:15,320 include the 2008-2009 recession numbers so it's a little bit skewed. Well it is but 669 00:55:15,320 --> 00:55:19,720 we're ten years removed from that. You know you could you can you could say 670 00:55:19,720 --> 00:55:25,480 well it doesn't include the Great Depression of 1929 but we're we're well 671 00:55:25,480 --> 00:55:32,400 past some of that and I think we have to also begin to project what we think the 672 00:55:32,400 --> 00:55:42,040 growth rate is likely to be based on what we know is coming. Based on those 673 00:55:42,040 --> 00:55:46,800 numbers I don't see where eight percent is aggressive at all I feel like your 674 00:55:46,800 --> 00:55:52,880 average over ten years is six point nine six four so six would be your lowest 675 00:55:52,880 --> 00:55:56,760 number not four yeah and I feel like you should be looking at you know six eight 676 00:55:56,760 --> 00:56:02,680 ten. So what is the risk if you sell this package saying we anticipate eight 677 00:56:02,680 --> 00:56:07,280 percent growth and you end up before. I think the risk the risk for that is 678 00:56:07,280 --> 00:56:13,260 significant in that we lose our validity with with residents to some degree if we 679 00:56:13,260 --> 00:56:17,080 go to them and say here's what we can do for you at this tax rate and then we 680 00:56:17,080 --> 00:56:34,240 can't can't follow through on that I think that reflects. So your bond program you're 681 00:56:34,240 --> 00:56:37,280 eventually going to issue the projects right but it just might take you a lot 682 00:56:37,280 --> 00:56:43,280 longer to do it so right now you're talking about five six year program if 683 00:56:43,280 --> 00:56:47,720 you come in a lower you know growth it may take you seven years or it just 684 00:56:47,720 --> 00:56:51,680 depends on how you have to rebalance you know your tax rate or what all else is 685 00:56:51,680 --> 00:56:55,880 going on at the city so basically just could prolong the whole process. And that 686 00:56:55,880 --> 00:57:06,800 gives you more opportunity for inflation. I think you can look you can look back 687 00:57:06,800 --> 00:57:13,760 from a historic standpoint look back at the 2005 bond issue and what happened then because that 688 00:57:13,760 --> 00:57:19,960 basically 2005 I can't remember what the desk what the projection was on growth 689 00:57:19,960 --> 00:57:27,880 then you get 2008 recession and so you can see what would happen and that bond 690 00:57:27,880 --> 00:57:37,920 program stretched out ten years versus five. So staying more 691 00:57:37,920 --> 00:57:43,760 conservative we can I wouldn't say guarantee we wouldn't come close to 692 00:57:43,760 --> 00:57:49,160 doing what we needed to do in projects by staying more conservative because if 693 00:57:49,160 --> 00:57:53,800 we don't if we do eight and then we don't hit that. Well if you stay 694 00:57:53,800 --> 00:57:59,160 conservative and you don't you don't hit yeah and you only hit four percent 695 00:57:59,160 --> 00:58:06,680 growth or you have a two percent in there in some year the double-edged sword 696 00:58:06,680 --> 00:58:11,920 of value that assess value going up is the cost of construction is going up as 697 00:58:11,920 --> 00:58:18,120 well and so you can do less projects with the money that you have and so you 698 00:58:18,120 --> 00:58:23,460 know if we're think it's going to be eight percent increase every year we 699 00:58:23,460 --> 00:58:28,360 better build everything first year yeah because inflation is going to eat into 700 00:58:28,360 --> 00:58:33,680 the project. Yeah but I think what also comes with that is if you go with a 701 00:58:33,680 --> 00:58:38,840 conservative estimate you're talking about asking the voters to authorize a 702 00:58:38,840 --> 00:58:45,000 larger tax increase and that and that becomes the other side of that sword 703 00:58:45,000 --> 00:58:50,160 really is that that the voters at some point might say I don't think I don't 704 00:58:50,160 --> 00:58:56,160 think we can afford to do this and if we and if we're if we were to assume a more 705 00:58:56,160 --> 00:59:01,160 what I'm gonna call more accurate growth rate then we're able to really have a 706 00:59:01,160 --> 00:59:04,960 conversation with the voters based on what our history is telling us rather 707 00:59:04,960 --> 00:59:11,520 than than a sense of the what-ifs and and the what-ifs are always going to be 708 00:59:11,520 --> 00:59:16,800 out there but but but there's a bigger a bigger issue if you're asking the 709 00:59:16,800 --> 00:59:20,720 voters for a for a significant tax increase that they don't want to support 710 00:59:20,720 --> 00:59:27,000 and do you believe five cents is significant that's a that's a pretty big 711 00:59:27,000 --> 00:59:35,640 chunk three cents wasn't it five cents so David when we were first getting 712 00:59:35,640 --> 00:59:40,680 started I think you mentioned that you were gonna check on the legal 713 00:59:40,680 --> 00:59:45,840 requirements of SB 2 or maybe it's some other legislation that stipulates what 714 00:59:45,840 --> 00:59:49,760 assumptions and how that has to be worded on the bond measure is that 715 00:59:49,760 --> 00:59:56,280 correct yes HB 477 I'm sorry I was thinking SB 2 yeah and that's that's 716 00:59:56,280 --> 00:59:58,720 kind of that's what we're basically referring to here I think there's there's 717 00:59:58,720 --> 01:00:01,320 more to it these are some of the bullet points of what we have to do in that 718 01:00:01,320 --> 01:00:04,640 bond language but it's really focusing on what we have we have to really feel 719 01:00:04,640 --> 01:00:08,040 say what was I increase on the debt service tax rate gonna be and what is 720 01:00:08,040 --> 01:00:12,560 that impact on this hundred thousand dollar residential homes that gonna be 721 01:00:12,560 --> 01:00:18,760 for yeah I think just as we talk through this it may be and maybe helpful to 722 01:00:18,760 --> 01:00:22,640 understand what the requirements of the bond language that goes on the 723 01:00:22,640 --> 01:00:27,920 proposition would be because to some extent right now it just feels like we 724 01:00:27,920 --> 01:00:33,000 come up with a number and then that's what people read I think that's what I 725 01:00:33,000 --> 01:00:36,160 think that's where it gets back to you know what they've asked for now is you 726 01:00:36,160 --> 01:00:38,960 include the interest rate that you're projecting a lot of those different 727 01:00:38,960 --> 01:00:41,400 pieces and there's a table that goes along with it but we can come back and 728 01:00:41,400 --> 01:00:48,120 kind of show you what that table would look like in this scenario and also so 729 01:00:48,120 --> 01:00:53,440 as I look at the in these various scenarios that the one or direction the 730 01:00:53,440 --> 01:00:57,600 difference in the debt service rate from you know fiscal year to 2019 to the end 731 01:00:57,600 --> 01:01:05,480 in 2026 am I correct in assuming that if that trends up that our ability to 732 01:01:05,480 --> 01:01:11,940 issue another bond program at that six to seven to eight year out range would 733 01:01:11,940 --> 01:01:18,480 be curtailed and that if it trends down then the difference there would suggest 734 01:01:18,480 --> 01:01:22,560 a certain size of a bond program that that we could afford at that point if 735 01:01:22,560 --> 01:01:28,080 the D turns up if the debt service rate trends up versus trending down the let 736 01:01:28,080 --> 01:01:33,320 me try to explain some background so I think in our first meeting maybe there 737 01:01:33,320 --> 01:01:38,280 was some discussion about how road maintenance is paid for and how you know 738 01:01:38,280 --> 01:01:42,480 the general crack ceiling and that sort of thing is paid out of the the general 739 01:01:42,480 --> 01:01:47,840 fund but the end-of-life road reconstructions have typically been 740 01:01:47,840 --> 01:01:53,880 paid for out of out of bond monies right so right now we're we're planning this 741 01:01:53,880 --> 01:01:58,520 bond to reconstruct a certain number of roads over the six-year period but after 742 01:01:58,520 --> 01:02:01,480 that six years is up that we're not just going to magically not have to 743 01:02:01,480 --> 01:02:07,600 reconstruct any roads right so the the question would be how much future debt 744 01:02:07,600 --> 01:02:12,960 service relief do we or gap do we need to plan for to be able to continue 745 01:02:12,960 --> 01:02:19,360 operating like that if that's what we do I wonder so I mean I think we can 746 01:02:19,360 --> 01:02:23,080 definitely as far as scenarios in that case as you look at okay here's our debt 747 01:02:23,080 --> 01:02:27,280 service falling off we add on the new programs here a new program we issue 748 01:02:27,280 --> 01:02:30,720 those then it falls off obviously by debt falling off there's gonna be some 749 01:02:30,720 --> 01:02:34,440 capacity there within the current debt tax rate to add more debt in future 750 01:02:34,440 --> 01:02:38,040 years but maybe we go a little higher so that would be a whole nother you know we 751 01:02:38,040 --> 01:02:41,440 can get to that point where we try to make them projections in future years but 752 01:02:41,440 --> 01:02:45,680 ultimately that's going to be kind of a decision that you make later on but we 753 01:02:45,680 --> 01:02:48,800 could I mean essentially we could do we can definitely show something like this 754 01:02:48,800 --> 01:02:52,960 where we show if we did a 210 million dollar package on our scenarios how does 755 01:02:52,960 --> 01:02:57,560 that debt fall off where do we sit on your seven of what our different debt 756 01:02:57,560 --> 01:03:00,800 rate is what we the tax rate do we can go into those I think that'd be helpful 757 01:03:00,800 --> 01:03:10,560 sure that's gonna ask I know this is a ridiculous question having my 758 01:03:10,560 --> 01:03:18,440 experience but your Hillwood Hilltop securities guy where do y'all see 759 01:03:18,440 --> 01:03:29,960 long-term debt going in terms of interest rates when I was doing I was 760 01:03:29,960 --> 01:03:37,280 doing private partnerships and you know we hit it in 2000 2004 to 2006 we were 761 01:03:37,280 --> 01:03:44,360 like just getting these incredible deals and everyone wanted to you know do more 762 01:03:44,360 --> 01:03:49,400 do more do more and all of our consultants kept saying hey what goes 763 01:03:49,400 --> 01:03:54,840 down has to go back up and you know we talked with you earlier it sounds like 764 01:03:54,840 --> 01:04:01,160 we're in the bottom of a trough so you know here in the last two or three years 765 01:04:01,160 --> 01:04:05,000 we've been fluctuating at bottom trough so like last year rates were up this 766 01:04:05,000 --> 01:04:09,560 year they're they're way back down again and so next year you know they're most 767 01:04:09,560 --> 01:04:12,280 likely gonna go up what's happening now with the Fed rates you know they're 768 01:04:12,280 --> 01:04:16,320 cutting the short end of the curve but that's making the curve a lot flatter so 769 01:04:16,320 --> 01:04:20,240 it's not really affecting the long end where you all are issuing you know 20 770 01:04:20,240 --> 01:04:26,840 year debt okay so you know right now a 20 year deal at a double a rate you're 771 01:04:26,840 --> 01:04:30,320 looking around you know 3% I know the current issue is a little bit lower than 772 01:04:30,320 --> 01:04:34,440 that but that's just because there's a refunding that's shortening the life but 773 01:04:34,440 --> 01:04:39,960 going forward I mean I think you know adding 50 basis points on the next year 774 01:04:39,960 --> 01:04:43,480 issue just looking out a year from now I think that's you know a conservative 775 01:04:43,480 --> 01:04:47,680 and prudent estimate and then looking into the future you know a hundred base 776 01:04:47,680 --> 01:04:50,640 points on top of that you know getting you to around the four and a half five 777 01:04:50,640 --> 01:04:55,380 percent range that's that's not unlikely if you look at you know a chart from the 778 01:04:55,380 --> 01:05:00,540 80s I know what the 80s was really high but to today I mean if you take an 779 01:05:00,540 --> 01:05:04,280 average across that I mean you're gonna be a lot higher than than where we are 780 01:05:04,280 --> 01:05:07,480 today and it's gonna be you know a lot closer to you know probably that five 781 01:05:07,480 --> 01:05:14,080 year you know the five percent interest rate but you know there's no telling but 782 01:05:14,080 --> 01:05:18,480 right now we're at historically low rates and I wouldn't assume that they're 783 01:05:18,480 --> 01:05:23,520 gonna stay around two and a half three percent so you that's what you were 784 01:05:23,520 --> 01:05:33,760 showing previously is kind of four and a half percent in the long term right now 785 01:05:33,760 --> 01:05:37,880 as I've said we go we show that incremental increase next year about four 786 01:05:37,880 --> 01:05:41,320 and a half is just for planning purposes what we want to show in those out years 787 01:05:41,320 --> 01:05:46,440 because it just gets almost dangerous to kind of assume those going to be low in 788 01:05:46,440 --> 01:05:52,000 those out years because it fluctuates so much so that doesn't go that doesn't 789 01:05:52,000 --> 01:06:00,520 directly address Tim's question which is are we using a you know putting the guy 790 01:06:00,520 --> 01:06:04,440 in the street if you say well we're assuming four percent this you know 791 01:06:04,440 --> 01:06:11,040 assess value growth and everyone says heck my property is going up eight 792 01:06:11,040 --> 01:06:23,480 percent why don't I get some credit for that is that a fair remark so I'm just 793 01:06:23,480 --> 01:06:28,680 trying to think how do you how do you slice the baby well I think 794 01:06:28,680 --> 01:06:35,000 let's use a different metaphor I guess what I'll say to that is that for both 795 01:06:35,000 --> 01:06:40,440 the 2005 bomb program and Tim you were right for that certainly you know 2014 796 01:06:40,440 --> 01:06:45,120 bomb program we use very conservative estimates around four percent we're very 797 01:06:45,120 --> 01:06:49,020 clear with the voters that at four percent this could take up to a four 798 01:06:49,020 --> 01:06:53,200 cent tax rate increase or a three cent tax rate increase and be the new one of 799 01:06:53,200 --> 01:06:58,160 those materialized I think what makes it very difficult is that if you go too 800 01:06:58,160 --> 01:07:02,520 aggressive and we can argue whether that it's aggressive or not is you can get a 801 01:07:02,520 --> 01:07:07,040 situation where you've now told voters we're gonna be at a percent and this 802 01:07:07,040 --> 01:07:12,000 isn't gonna cost you any any tax rate increase how do you then go back to them 803 01:07:12,000 --> 01:07:17,360 when that doesn't happen and now you've got to raise the tax rate I think it 804 01:07:17,360 --> 01:07:21,440 puts you in a very difficult position with the voters about that so so I think 805 01:07:21,440 --> 01:07:25,320 for other arguments about being or not being conservative I think I think the 806 01:07:25,320 --> 01:07:28,800 four percent is really conservative is certainly what staff feels comfortable 807 01:07:28,800 --> 01:07:33,880 with and the idea would be if if rates come in higher right praise values come 808 01:07:33,880 --> 01:07:37,640 in higher then we'll be anticipated that we were not we're not gonna do those 809 01:07:37,640 --> 01:07:40,720 tax rate increases which is exactly what's happened over the last two bomb 810 01:07:40,720 --> 01:07:44,960 programs and potentially even further yeah correct it gives you from a 811 01:07:44,960 --> 01:07:49,040 staffing perspective I think a little more flexibility and at least you're 812 01:07:49,040 --> 01:07:53,240 being open with them with the voters where you may or may not be if you say 813 01:07:53,240 --> 01:07:57,520 8% and it's not gonna take a tax rate increase and that doesn't come in I 814 01:07:57,520 --> 01:08:02,840 think really all you have at that point is to extend that bond program it's 815 01:08:02,840 --> 01:08:05,880 gonna think it's not a contract with the voters but it's gonna be very 816 01:08:05,880 --> 01:08:13,760 difficult so if we're kind of a contract with the voters so so the question the 817 01:08:13,760 --> 01:08:16,880 logical question that comes with that would be whether or not we think that 818 01:08:16,880 --> 01:08:23,080 telling the rest of the committee and and the community that this could cost 819 01:08:23,080 --> 01:08:30,320 five and a half to six cents are we comfortable doing that or do we have to 820 01:08:30,320 --> 01:08:34,680 begin to talk about cutting the package and cutting back on the projects we're 821 01:08:34,680 --> 01:08:40,000 gonna do and I don't know and I would just say my view I don't think we can 822 01:08:40,000 --> 01:08:44,500 cut the projects that we have in line I think they're not really they're all 823 01:08:44,500 --> 01:08:48,880 desperately needed and this does not include anything related to parks right 824 01:08:48,880 --> 01:08:54,720 and lighting or lighting and if we add park money and now are we talking about 825 01:08:54,720 --> 01:09:06,160 seven cents that's a that that's that's asking a lot of the voters even if we're 826 01:09:06,160 --> 01:09:09,320 able to say well yeah but you know it'll grow faster than that and it won't 827 01:09:09,320 --> 01:09:13,320 happen and that was a question as you were talking Tony I was thinking you 828 01:09:13,320 --> 01:09:21,180 know how many voters are gonna remember the last two bond packages and they 829 01:09:21,180 --> 01:09:25,160 didn't have a tax increase that's you know people typically don't remember 830 01:09:25,160 --> 01:09:28,600 what things they didn't lose yeah well or they know what happened to their tax 831 01:09:28,600 --> 01:09:37,540 bill right they know what they happen to their tax bill right so how would we 832 01:09:37,540 --> 01:09:42,480 like to pursue pursue this would you want to someone put forward a motion of 833 01:09:42,480 --> 01:09:48,160 at least one yeah I was actually gonna say I'm a numbers guy I mean I run a 834 01:09:48,160 --> 01:09:52,840 business I know you got everything else besides numbers but numbers are for me 835 01:09:52,840 --> 01:09:56,080 very key in understanding where the business is going whether we're making a 836 01:09:56,080 --> 01:09:59,480 profit whether or not making a profit what needs to change what needs to be cut 837 01:09:59,480 --> 01:10:04,240 but when you're looking at these numbers I feel like a 10-year average should be 838 01:10:04,240 --> 01:10:07,680 the number they're using if it's six point nine six four and that's exactly 839 01:10:07,680 --> 01:10:12,420 what it is and that should be what it is not six or five or some made up number I'm 840 01:10:12,420 --> 01:10:16,040 really not to get bad at the city but I feel like y'all throwing a number out by 841 01:10:16,040 --> 01:10:20,960 throwing out a four percent or a six or an eight it came out of the sky no no I 842 01:10:20,960 --> 01:10:23,880 don't know where that number came from then I haven't heard of any definitive 843 01:10:23,880 --> 01:10:28,640 of where you get that number from but I'm looking at numbers on the screen and 844 01:10:28,640 --> 01:10:33,880 they tell me what the average is so that's what I'm saying I'm more concerned about the 845 01:10:33,880 --> 01:10:41,160 impact as Tony was saying of going with an eight and then losing losing not not 846 01:10:41,160 --> 01:10:46,200 kidding eight and having to then say oh never mind we said it wasn't gonna cost 847 01:10:46,200 --> 01:10:50,840 you anything but by the way it's gonna cost you five cents that I think is 848 01:10:50,840 --> 01:10:58,880 suicide basically I with regard to selling them yeah yeah I agree yeah yeah 849 01:10:58,880 --> 01:11:03,800 I mean I think a lot of this may become more clear when we get an example sheet 850 01:11:03,800 --> 01:11:08,600 of what the ballot initiative we have to look like given those regulations right 851 01:11:08,600 --> 01:11:13,920 yeah that's a good point and I guess just a couple things well it may look 852 01:11:13,920 --> 01:11:18,000 like these things came out of sky the previous committees have used the four 853 01:11:18,000 --> 01:11:21,480 percent as a planning standard you're never gonna meet a finance director 854 01:11:21,480 --> 01:11:26,440 that's going to suggest that we should go a bit more aggressive than that you 855 01:11:26,440 --> 01:11:32,200 just won't because they don't like being wrong and I also don't agree yeah I also 856 01:11:32,200 --> 01:11:36,320 don't agree with your 10-year average I think if you take if you take the the 857 01:11:36,320 --> 01:11:40,200 two peaks out I can probably defend that more and you're probably still around 858 01:11:40,200 --> 01:11:45,000 seven - because you take that last year the recession that our highest year out 859 01:11:45,000 --> 01:11:49,720 and you may have a little bit more of a case to make here in terms of we are 860 01:11:49,720 --> 01:11:53,720 being you know too conservative so if you're if you're landing that six to 861 01:11:53,720 --> 01:11:57,200 seven - you've got some you've got a story to tell this sort of right in the 862 01:11:57,200 --> 01:11:59,920 middle where you're all talking about and the whole point to give you those 863 01:11:59,920 --> 01:12:05,800 scenarios just just to get your thoughts start a conversation I agree with Tim 864 01:12:05,800 --> 01:12:12,960 that the four percent is just how you explain that I mean we tend to look at 865 01:12:12,960 --> 01:12:16,280 in the municipal side you do the victory dance when you know you assume four and 866 01:12:16,280 --> 01:12:19,040 you're able to get eight the problem is you left all that money on the table for 867 01:12:19,040 --> 01:12:21,840 projects that are needed now and they're going to cost a lot more down the road 868 01:12:21,840 --> 01:12:26,160 so I think if you can get somewhere in that six to seven two percent we can 869 01:12:26,160 --> 01:12:30,280 explain that you could put an audit the oversight committee together every year 870 01:12:30,280 --> 01:12:33,280 saying okay here was it here was the what we were planning on in terms of 871 01:12:33,280 --> 01:12:35,920 growth assumptions here's how it measured up that's something that we're 872 01:12:35,920 --> 01:12:40,560 not doing as overtly as we probably should be because staff is you know 873 01:12:40,560 --> 01:12:45,240 taking credit for well we haven't raised the tax levy for the bonds but we were 874 01:12:45,240 --> 01:12:48,720 not really showing it every year that this is what we planned on and here's 875 01:12:48,720 --> 01:12:52,280 what actually happened so I think I think that's an important part of the 876 01:12:52,280 --> 01:12:56,280 audit process moving forward is just sort of changing how we position that 877 01:12:56,280 --> 01:13:00,960 because the other side of this is this the city has become so reliant on 878 01:13:00,960 --> 01:13:07,480 issuing CEOs I would argue you couldn't backtrack it and trace it anyway so you 879 01:13:07,480 --> 01:13:10,280 know that's one of the things that we're trying to do is getting our general fund 880 01:13:10,280 --> 01:13:14,680 a little bit more structured in terms of let's get all the subsidization of 881 01:13:14,680 --> 01:13:19,560 growth over to the side make sure that those programs are standing on its own 882 01:13:19,560 --> 01:13:23,360 that we really can have discussions about what is happening once you isolate 883 01:13:23,360 --> 01:13:27,400 the growth variable because it's clear there's millions of dollars a year of 884 01:13:27,400 --> 01:13:32,040 subsidy happening in that area but I think if we build the formula this is 885 01:13:32,040 --> 01:13:35,520 how we're going to go back and audit it and explain it to everybody each year 886 01:13:35,520 --> 01:13:40,200 and make sure that we're on track and that becomes the subject of a you know 887 01:13:40,200 --> 01:13:44,040 of an annual report or two something like that it makes it a whole lot easier 888 01:13:44,040 --> 01:13:48,520 to get by it but I still think that 8% is way too aggressive and you're gonna 889 01:13:48,520 --> 01:13:52,120 regret it because even if you hit it most years those years you don't 890 01:13:52,120 --> 01:13:58,000 inflation is outpacing that right so you probably gonna want to end up in the 891 01:13:58,000 --> 01:14:02,200 middle somewhere and I would agree with you probably more than the 7% but you 892 01:14:02,200 --> 01:14:05,200 take those two out and you've got a really strong argument to what you're 893 01:14:05,200 --> 01:14:10,640 trying to say so just kind of a little context for how how we're helping you 894 01:14:10,640 --> 01:14:15,640 work through this but it I like I like your I like your question I like Tim's 895 01:14:15,640 --> 01:14:20,320 point - you can you can get so conservative that these numbers seem 896 01:14:20,320 --> 01:14:24,440 monstrous and people are scared right now you've just had the 750 million hit 897 01:14:24,440 --> 01:14:30,800 from the school districts you know in that bond issue the city is 15% of the 898 01:14:30,800 --> 01:14:35,000 tax bill 20% of tax bill at the most and yet that's what people are gonna 899 01:14:35,000 --> 01:14:42,940 remember so the story you tell is important so let me make a motion which 900 01:14:42,940 --> 01:14:49,400 is not to take a definitive position but rather that if we were to use a six and 901 01:14:49,400 --> 01:14:58,340 a half percent assumption rate growth rate and what the ballot language might 902 01:14:58,340 --> 01:15:02,720 look like if we could see all of that together with a six and a half percent 903 01:15:02,720 --> 01:15:09,760 rate then then maybe take action on how we feel about that once we sort of see 904 01:15:09,760 --> 01:15:22,960 it that's a really really vague way of making a motion in formal since there's 905 01:15:22,960 --> 01:15:25,800 no not a quorum of the whole committee won't be a right motion but it's an 906 01:15:25,800 --> 01:15:36,880 informal so any feedback on that Susan you're uncomfortable yeah okay 907 01:15:40,280 --> 01:15:44,400 people feel more comfortable my understanding is like the main reason 908 01:15:44,400 --> 01:15:48,800 this bond proposals before the city and for us is because we're expecting growth 909 01:15:48,800 --> 01:15:53,120 we're expecting to need these roads to be wider and have more traffic and to 910 01:15:53,120 --> 01:15:59,000 handle more growth I mean it seems counterintuitive to not expect to have 911 01:15:59,000 --> 01:16:02,360 this growth that you're planning for to make these streets wide otherwise why 912 01:16:02,360 --> 01:16:06,520 would you be widening the streets so I mean it's it's kind of to me they feed 913 01:16:06,520 --> 01:16:09,640 off each other if you're gonna project the growth and you're gonna project you 914 01:16:09,640 --> 01:16:14,120 need these roads couple of these roads it's already that should have been done 915 01:16:14,120 --> 01:16:20,160 ten years ago yeah and I think you have a high school that's really yeah one and 916 01:16:20,160 --> 01:16:25,120 I think the community is gonna say yes we have to have this for the high school 917 01:16:25,120 --> 01:16:30,680 because there's too many parents who have waited in line so my to my CPA and 918 01:16:30,680 --> 01:16:36,720 to my former city CFO what would be a great that you know taking Tim's idea 919 01:16:36,720 --> 01:16:41,040 what would you a rate be you would be comfortable with I'd be comfortable with 920 01:16:41,040 --> 01:16:51,520 five going between six and four yeah five okay or four and a half you're 921 01:16:51,520 --> 01:16:54,240 getting too conservative at that point I'll just be honest with you I think that 922 01:16:54,240 --> 01:16:58,000 when you do that you're you're asking the voters for a big number if you want 923 01:16:58,000 --> 01:17:06,840 to do all the projects that need to be done well well but I think I mean I like 924 01:17:06,840 --> 01:17:14,800 the more conservative approach that if you it's it's if you under promise and 925 01:17:14,800 --> 01:17:22,000 over deliver because if you say five percent and with this here's here's a 926 01:17:22,000 --> 01:17:25,880 rate increase we're gonna have to have a five which is not as high as four but 927 01:17:25,880 --> 01:17:34,320 certainly less than six and how do you defend five percent well you know go 928 01:17:34,320 --> 01:17:39,200 back to when it was negative in 2010 and you know there's a lot of other things 929 01:17:39,200 --> 01:17:47,560 in there too that we have the sales tax which is part of the part of the half 930 01:17:47,560 --> 01:17:51,440 cent that comes back you know we've seen what's happened to sales tax in the last 931 01:17:51,440 --> 01:18:00,800 year so and it's the fact that most of the growth has been driven by value on 932 01:18:00,800 --> 01:18:10,280 existing properties not not this point in fact we probably lost many properties 933 01:18:10,280 --> 01:18:19,240 that were paying tax to University of North Texas or hospitals becoming not 934 01:18:19,240 --> 01:18:26,520 for profits I mean I'm having said that I'm good with five Eric how about you 935 01:18:26,520 --> 01:18:32,680 well I just to repeat what I tried to say earlier maybe not very effectively I 936 01:18:32,680 --> 01:18:38,780 think I I just want to see what the ballot initiatives is gonna have to look 937 01:18:38,780 --> 01:18:47,320 like yeah so if we need to be the ones who direct what growth percentage is 938 01:18:47,320 --> 01:18:51,720 used for that assumption then I think we need to look at the recommendation of 939 01:18:51,720 --> 01:18:55,160 four percent and maybe a different recommendation and understand what 940 01:18:55,160 --> 01:19:00,640 governs our ability to actually claim a percentage on that language on the 941 01:19:00,640 --> 01:19:05,840 ballot you mean we need definitely as far as writing the knowledge we can we 942 01:19:05,840 --> 01:19:08,800 can write in whatever scenarios you'd lying multiple scenarios that's no 943 01:19:08,800 --> 01:19:18,800 problem so we have that we have to five or six cents per thousand dollars what 944 01:19:18,800 --> 01:19:24,640 is that on the average house that's that's different right your average tax 945 01:19:24,640 --> 01:19:29,760 bill is different than the language we have to have on the ballot correct yeah 946 01:19:29,760 --> 01:19:39,480 so it's $100,000 so right on the debt service side also when you think of a 947 01:19:39,480 --> 01:19:43,680 percentage tax bill increase they're not just thinking of the city they're 948 01:19:43,680 --> 01:19:47,800 thinking about the entire right you know they're thinking about school districts 949 01:19:47,800 --> 01:19:53,080 and everything and so somehow if we can I don't know how you saw it but it's got 950 01:19:53,080 --> 01:19:58,040 a bit smaller say it's about about a sense about $30 it's $30 a year so then 951 01:19:58,040 --> 01:20:07,520 that makes a lot of difference I mean I need that exact amount but also the the 952 01:20:07,520 --> 01:20:12,720 part of the equation that's within the city's control is a right it's not the 953 01:20:12,720 --> 01:20:20,000 assessed value right right so if you if you build in you go into a bond and you 954 01:20:20,000 --> 01:20:27,400 say this is a potential rates we could be based upon this growth rate if you 955 01:20:27,400 --> 01:20:32,280 exceed the growth rate you always have the ability to back down on the rate 956 01:20:32,280 --> 01:20:38,320 increase right but you're not gonna have the ability if you don't have the growth 957 01:20:38,320 --> 01:20:45,280 rate to say well we missed it instead of five cent increase it's gonna have to be 958 01:20:45,280 --> 01:20:50,720 seven cents because that's when you start cutting programs for extending the 959 01:20:50,720 --> 01:20:57,800 projects yeah well I guess to my early concern you know if your growth or if 960 01:20:57,800 --> 01:21:01,160 the actual growth falls short of projected growth and your debt service 961 01:21:01,160 --> 01:21:06,120 rate has to increase you have lower flexibility to you know replace roads 962 01:21:06,120 --> 01:21:09,060 that you need to replace later which then means we're in the same boat where 963 01:21:09,060 --> 01:21:16,400 everybody's gonna be on the roads continuously playing catch-up yeah John 964 01:21:16,400 --> 01:21:23,320 I know you're you're biting your tongue I'm not a banker so I but if you're 965 01:21:23,320 --> 01:21:26,520 going to a bank they ask for a five or ten-year business plan they look past 966 01:21:26,520 --> 01:21:30,920 that's six point nine six four percent of course I just took the numbers that 967 01:21:30,920 --> 01:21:34,640 you had on the screen it is the last ten years includes the negative one and a 968 01:21:34,640 --> 01:21:39,720 half percent and that's where I came up with almost seven I'd probably be fine 969 01:21:39,720 --> 01:21:43,480 with six percent because that's what they presented was a four and six and 970 01:21:43,480 --> 01:21:47,040 eight and it sounds like everybody in this committee threw the four out 971 01:21:47,040 --> 01:21:51,960 actually because nobody said four so as far as my understanding is I think the four 972 01:21:51,960 --> 01:21:56,680 should be out and we need to be deciding something closer to six that's not what 973 01:21:56,680 --> 01:22:07,440 I said I would prefer four actually I was thinking five was a compromise so yes 974 01:22:07,440 --> 01:22:12,400 since we're in the since we're in the court in the military you always look at 975 01:22:12,400 --> 01:22:18,680 three courses of action so we're gonna look at three courses of action so about 976 01:22:18,680 --> 01:22:25,120 language for four percent a five percent and a six percent if I could add a small 977 01:22:25,120 --> 01:22:32,640 thing to that perhaps if there's I think those are great I don't really know what 978 01:22:32,640 --> 01:22:39,400 area cities in Texas or what the right region is to consider how how have they 979 01:22:39,400 --> 01:22:42,920 what percentage have they put on their ballot initiatives say in the last five 980 01:22:42,920 --> 01:22:50,480 years is there a general rule what's the methodology as far as the verbiage or 981 01:22:50,480 --> 01:22:56,520 the adult percentage the assumed AV growth I mean up to this I don't know 982 01:22:56,520 --> 01:23:02,360 that the assumed AV growth even is included now moving forward so I think 983 01:23:02,360 --> 01:23:05,400 it's really just been focused on what is that depth increase and that's really 984 01:23:05,400 --> 01:23:09,240 gonna be yeah that right that's gonna be so determined it on the size of the bond 985 01:23:09,240 --> 01:23:14,940 package and other considerations yeah it just it strikes me as odd that you you 986 01:23:14,940 --> 01:23:18,560 put a ballot initiative in front of people where you have to give specific 987 01:23:18,560 --> 01:23:21,720 numbers and those specific numbers are based on a growth assumption that you're 988 01:23:21,720 --> 01:23:26,200 not putting an initiative well yeah I think when you see the language it's 989 01:23:26,200 --> 01:23:29,840 pretty complicated already and there's a lot of numbers so the more you put on 990 01:23:29,840 --> 01:23:33,640 there but I think there's two things there's there's what the ballot 991 01:23:33,640 --> 01:23:41,700 language is and there's also what the what the explanation of the program is 992 01:23:41,700 --> 01:23:47,600 going to be and you can all you can always include that information in that 993 01:23:47,600 --> 01:23:52,480 area but yeah I appreciate the four five and six examples and what that would 994 01:23:52,480 --> 01:23:58,600 look like could I just also ask do we have any kind of projections about 995 01:23:58,600 --> 01:24:02,360 housing developments that are going to be coming online over the course of the 996 01:24:02,360 --> 01:24:06,040 next five to six years commercial development that's going to be coming 997 01:24:06,040 --> 01:24:13,360 online in that time frame that would it would in turn be something that informs 998 01:24:13,360 --> 01:24:20,080 our projected growth rate because of these things that are at various stages 999 01:24:20,080 --> 01:24:27,240 of coming online well isn't that there's 707 approved 1000 01:24:27,240 --> 01:24:40,600 developments I Tim when he's looking at a number of projects or projected value 1001 01:24:40,600 --> 01:24:49,560 yes well we haven't obviously yeah I mean we haven't said here's the 1002 01:24:49,560 --> 01:24:53,120 development we haven't have coming on next year and made those assumptions we 1003 01:24:53,120 --> 01:25:01,400 can definitely look at that and see what the best way to incorporate that is so 1004 01:25:01,400 --> 01:25:05,200 my suggestion would be to bring those three courses of action back to us and 1005 01:25:05,200 --> 01:25:18,120 that changes quarter to quarter but but we also know for example that and and 1006 01:25:18,120 --> 01:25:22,320 and admittedly it's it's still very vague but that you've got Hunter Ranch 1007 01:25:22,320 --> 01:25:29,600 and coal ranch that could be at the end of this because it conceivably when 1008 01:25:29,600 --> 01:25:33,560 they're starting to come online or that there are other developments that are 1009 01:25:33,560 --> 01:25:36,720 occurring somebody was telling me about the development that's occurring over 1010 01:25:36,720 --> 01:25:48,000 by the Walmart grocery store that's now now coming on well and PNC just 1011 01:25:48,000 --> 01:25:57,520 approved chairman drive that's a major development got approved yeah you're 1012 01:25:57,520 --> 01:26:05,620 right so that come to council this month so I mean even if you ignored on our 1013 01:26:05,620 --> 01:26:12,520 bridging coal ranch there's other significant developments that are 1014 01:26:12,520 --> 01:26:18,960 definitely wheels are turning will start will be coming online in this time frame 1015 01:26:18,960 --> 01:26:29,040 but historically we only had 420 440 million right that's why big number to 1016 01:26:29,040 --> 01:26:35,080 make an impact on valuation you know 12 billion so are you comfortable with that 1017 01:26:35,080 --> 01:26:40,480 approach yeah absolutely we can come back with everything requested thus far 1018 01:26:40,480 --> 01:26:44,840 as far as a timeline I'm assuming you want to have another one of the this 1019 01:26:44,840 --> 01:26:50,520 group meet again we can talk about that now not next week so not not every two 1020 01:26:50,520 --> 01:26:54,400 weeks do you want it we can do it all the same 1021 01:26:54,400 --> 01:26:58,440 I actually have one question it goes back to my original question the purpose 1022 01:26:58,440 --> 01:27:04,400 of our committee is it to pick and help the committee establish a percent and 1023 01:27:04,400 --> 01:27:09,200 all I've heard us do not to be this you know the thorn in everyone's side is 1024 01:27:09,200 --> 01:27:13,920 three more numbers so I thought our committee was supposed to pick a number 1025 01:27:13,920 --> 01:27:19,080 and then that's what's presented to the other committee not three more I agree 1026 01:27:19,080 --> 01:27:23,680 but I think to see the three numbers to pick a number so I think Eric's point is 1027 01:27:23,680 --> 01:27:31,680 is and I agree with it is there's language and it's all in the a lot of it 1028 01:27:31,680 --> 01:27:35,880 has to do with the presentation and to the public and to see those three 1029 01:27:35,880 --> 01:27:42,280 scenarios and then we can then I think bring a motion or we can't bring a 1030 01:27:42,280 --> 01:27:45,600 motion in this group please make a recommendation to the larger group this 1031 01:27:45,600 --> 01:27:51,160 is what we think should should it be you know is it four percent probably not but 1032 01:27:51,160 --> 01:27:57,960 you know these guys put a lot of effort into it and haven't been a government 1033 01:27:57,960 --> 01:28:03,320 bureaucrat for most of my life I want to honor their hard work and and their 1034 01:28:03,320 --> 01:28:11,040 understanding implications the wording is going to be identical in all three if 1035 01:28:11,040 --> 01:28:16,320 we see if we don't if we don't look at all three then we're basically in my 1036 01:28:16,320 --> 01:28:21,440 opinion making a decision without really understanding what the sensitivity is of 1037 01:28:21,440 --> 01:28:24,560 those decisions that makes sense I understand if you're gonna have three 1038 01:28:24,560 --> 01:28:29,480 options but I would really like one of them to be based on historical data can 1039 01:28:29,480 --> 01:28:44,360 can it can we not go with these numbers that everyone keeps pulling out of here can one of them be whether it's 10 year, 15, 20, you all want to pick what that data is based on, can we have a number that's actually based on historical data? 1040 01:28:44,360 --> 01:28:51,760 I've built a lot of performance you know I just did a ten million dollar deal in you 1041 01:28:51,760 --> 01:28:55,760 keep you don't have to have the exact number sometimes we're trying to 1042 01:28:55,760 --> 01:29:02,840 communicate very complicated topics to a very uninformed public and to be able to 1043 01:29:02,840 --> 01:29:06,400 just say well you know this is a range that we looked at I think is not 1044 01:29:06,400 --> 01:29:16,240 unreasonable so am I wrong in that? I don't think you're wrong you know I guess my question is so then what I'm hearing the committee saying is you're 1045 01:29:16,240 --> 01:29:21,520 comfortable with 210 is that is that what I'm hearing the subcommittee saying 1046 01:29:21,520 --> 01:29:26,840 is it you're comfortable with 210 it's a matter of is it four is it five is it six 1047 01:29:26,840 --> 01:29:30,340 percent is it eight percent and then what does that mean on a potential tax rate 1048 01:29:30,340 --> 01:29:51,360 increase is that kind of what I'm hearing yeah in my business I have to wear many hats for government's sales and I'm totally agreeing this has to be sold to the general public if we pick a 210 million dollar bond program or whatever that number is this eventually has to be sold to the citizens of Denton and the more 1049 01:29:51,360 --> 01:30:21,240 conservative we are on that number the harder it is to get the citizens to approve it and that's why I'm really focused on the statistics and the historical data because that is helping us I don't really I feel like everyone's fighting me in this room because the better and closer we are to the statistical data of 6.9% over 10 years is going to help us sell this to the citizens and that's why I'm kind of like not understanding why y'all fight so much you want to be conservative and all this but so I'm gonna take the opposite standpoint did you 1050 01:30:21,240 --> 01:30:50,040 live here in the 1980s okay what happened to home values in the 1980s what happened home values in 2001 what happened home values in 2008 great so instead just follow that pattern and every seven to ten years you can expect an economic downturn so we can 1051 01:30:50,040 --> 01:30:54,520 realistically expect an economic downturn sometime in the future we are in the 1052 01:30:54,520 --> 01:31:02,300 longest bull run bull market ever is that accurate statement so let's hedge our 1053 01:31:02,300 --> 01:31:18,360 bets a little I think John if if I thought 8% was was was a realistic number 1054 01:31:18,360 --> 01:31:22,500 I'd be I would have brought to you a 400 million dollar bomb program not a 200 1055 01:31:22,500 --> 01:31:26,000 million dollar bomb program I think you know by staying conservative and I think 1056 01:31:26,000 --> 01:31:30,420 6% probably still a conservative number just to be clear with you you know the 1057 01:31:30,420 --> 01:31:35,640 reality is if if in three years things work out the way we hope that they're 1058 01:31:35,640 --> 01:31:40,260 going to work out then likely we'll be back to you or to another committee for 1059 01:31:40,260 --> 01:31:44,520 another bomb program you know that could be parked it could be far more extensive 1060 01:31:44,520 --> 01:31:49,760 than what we've presented here you know and so but but again I think I think the 1061 01:31:49,760 --> 01:31:54,000 210 if the committee the subcommittees making that recommendation that's you 1062 01:31:54,000 --> 01:31:58,360 know we're at the 210 and then we can bring back as many scenarios you want 1063 01:31:58,360 --> 01:32:02,480 with the ballot language and have you make make a recommendation on what that 1064 01:32:02,480 --> 01:32:07,540 needs to be so I I think the one thing that goes with that 210 question because 1065 01:32:07,540 --> 01:32:12,400 I think it's a really important question is are we leaving something out that the 1066 01:32:12,400 --> 01:32:16,780 committee as a whole is going to want is that are we going to need to put park 1067 01:32:16,780 --> 01:32:23,720 land into this bond to go above the 210 to go above the 210 I think and I'm 1068 01:32:23,720 --> 01:32:28,660 really saying is that something that the committee is going to you know if we if 1069 01:32:28,660 --> 01:32:33,360 we were to assume 210 and the committee says no it needs to be 1070 01:32:33,360 --> 01:32:43,120 250 21 what you know are we then yeah are we then trimming something else and 1071 01:32:43,120 --> 01:32:48,080 up I have a point I'd like to agree with that comment because there's a lot of 1072 01:32:48,080 --> 01:32:51,200 things that I actually haven't really pushed for in the committee meetings 1073 01:32:51,200 --> 01:32:55,760 and one of them is street lighting I agree yeah I agree street another thing 1074 01:32:55,760 --> 01:33:00,160 that I've talked to the city about is East McKinney Street and I don't have to 1075 01:33:00,160 --> 01:33:03,680 make a formal comment in the meeting later tonight but I don't I want to see 1076 01:33:03,680 --> 01:33:08,000 East McKinney as a possibility on here for us to consider and think about and 1077 01:33:08,000 --> 01:33:12,120 I'm talking about the section of the city took over thanks to the city for 1078 01:33:12,120 --> 01:33:15,720 doing that but now the city is responsible for widening McKinney all 1079 01:33:15,720 --> 01:33:20,920 the way to Luke 28 and that's a very busy road it's I'm just saying there's 1080 01:33:20,920 --> 01:33:24,880 those are two things that one's on here and one's not that would definitely 1081 01:33:24,880 --> 01:33:30,240 impact why I'm saying we need to be better on our rate here because I don't 1082 01:33:30,240 --> 01:33:36,040 think two tens enough well if you if you're moving towards a five to a six 1083 01:33:36,040 --> 01:33:42,280 percent area you can probably obviously bump that number up to 230 240 my only 1084 01:33:42,280 --> 01:33:47,000 concern with you know I think we just need to crunch the numbers more because 1085 01:33:47,000 --> 01:33:51,100 the city's never been in a position growing this fast where we've had to 1086 01:33:51,100 --> 01:33:56,220 face a rate rollback and I think what I'm concerned about to be honest is if 1087 01:33:56,220 --> 01:34:00,400 we're wrong and we don't perform on the you know and hit these numbers and then 1088 01:34:00,400 --> 01:34:04,600 we have to go to voters saying we've got to hire more police officers and we need 1089 01:34:04,600 --> 01:34:08,040 you know is that going to get held against the city at that point and 1090 01:34:08,040 --> 01:34:11,840 there's a there's a fine I totally agree we could probably come up with a billion 1091 01:34:11,840 --> 01:34:16,880 dollars in need here and there's no question but the question is every time 1092 01:34:16,880 --> 01:34:19,680 you go out to the voters you need to be able to say this is what we told you 1093 01:34:19,680 --> 01:34:23,880 this is what we did and I have it just David never talked about this yesterday 1094 01:34:23,880 --> 01:34:28,400 it's just apparent to me that in three four years we're probably going to be 1095 01:34:28,400 --> 01:34:32,600 going to a rollback election given our public safety needs in particular where 1096 01:34:32,600 --> 01:34:36,960 I've been taking vacant positions since I got here and we've moved 20 of those 1097 01:34:36,960 --> 01:34:42,600 over to the PD but they're way behind and so I'm worried that we'd be able to 1098 01:34:42,600 --> 01:34:46,080 perform you know do what we say we're going to do report back that we did that 1099 01:34:46,080 --> 01:34:49,800 so when we need them for operational help down the road given this new 1100 01:34:49,800 --> 01:34:58,120 legislation that we've built that track record when do you think if if ever 1101 01:34:58,120 --> 01:35:02,120 assuming no downturns those kinds of things when do you think the next bond 1102 01:35:02,120 --> 01:35:06,080 package would be needed to come back to the voters probably three or four years 1103 01:35:06,080 --> 01:35:11,520 and so that parkland could be in that street lighting could be in that so 1104 01:35:11,520 --> 01:35:17,040 probably so one of the things I was wrestling through thinking through is 1105 01:35:17,040 --> 01:35:26,040 what are there other sources of to pay for some of these requirements so yes it 1106 01:35:26,040 --> 01:35:35,120 parts the answer is yes and street lights we are looking other other 1107 01:35:35,120 --> 01:35:39,120 electric utilities then municipally only the utilities in other communities about 1108 01:35:39,120 --> 01:35:46,320 50% it's a 50/50 split about 50% put in everything and the other 50% the city 1109 01:35:46,320 --> 01:35:53,000 puts it in and and in the MOU takes it over in Denton the city puts it in and 1110 01:35:53,000 --> 01:35:59,480 then the DME takes it over we're looking at how can we phase that onto existing 1111 01:35:59,480 --> 01:36:03,760 streets that already that we had not new streets existing street corridors how 1112 01:36:03,760 --> 01:36:07,600 much can we afford within the DME budget and so that is something we're currently 1113 01:36:07,600 --> 01:36:11,920 working on and could help address some of that but again we're still looking at 1114 01:36:11,920 --> 01:36:15,760 that and I'm on the park side we're also looking at what are essentially impact 1115 01:36:15,760 --> 01:36:19,480 fees for you right that go into funds that can be used for parkland acquisition 1116 01:36:19,480 --> 01:36:22,320 that Gary mentioned last time as well so those are some other sources of funds 1117 01:36:22,320 --> 01:36:28,200 that could be used for open space piece so it's $24.99 a text out route yes and 1118 01:36:28,200 --> 01:36:33,880 did they not put in light no text out apparently made that change a couple 1119 01:36:33,880 --> 01:36:37,880 years ago on new roadways that are constructed they no longer put in 1120 01:36:37,880 --> 01:36:44,680 streetlights so we're now having to account for that and we actually we had 1121 01:36:44,680 --> 01:36:57,320 to pay for an upgrade to I-35 for lighting otherwise you'd be coming up 1122 01:36:57,320 --> 01:37:05,160 from Dallas and all this and be dark and Denton so I think the consensus is 210 1123 01:37:05,160 --> 01:37:12,320 is what we want to shoot for and then we're still thinking through whether 1124 01:37:12,320 --> 01:37:18,080 open space and street lighting are above the line or below the line and that we 1125 01:37:18,080 --> 01:37:25,280 then want to look at a four percent five percent and six percent ballot language 1126 01:37:25,280 --> 01:37:33,000 and what that looks like to meet after on July 11th seems that three o'clock so 1127 01:37:33,000 --> 01:37:36,360 if we did say we met here at three o'clock to go through the scenarios I 1128 01:37:36,360 --> 01:37:40,360 think as we talked to the schedule for the whole committee agile dry 11th 1129 01:37:40,360 --> 01:37:43,400 meeting for the committee in the hole I think we really have to get to that 1130 01:37:43,400 --> 01:37:46,520 point where you all start talking about poor prioritization and going through 1131 01:37:46,520 --> 01:37:50,240 that exercise so they don't kind of set the stage for your conversation as a 1132 01:37:50,240 --> 01:37:57,440 committee on what goes below and above the line and you've already prioritized 1133 01:37:57,440 --> 01:38:02,600 right these are priorities are just staff we're showing a recommendation 1134 01:38:02,600 --> 01:38:06,560 this is not we're not set with this but this is just for discussion purposes for 1135 01:38:06,560 --> 01:38:10,200 the committee there just aren't that many projects here that we're gonna you 1136 01:38:10,200 --> 01:38:23,600 know we're gonna really be and I and and if it is the case that we're at 210 then 1137 01:38:23,600 --> 01:38:28,440 I I don't see that we're gonna be talking about cutting anything it's 1138 01:38:28,440 --> 01:38:37,200 already been cut the staff has already done that no I'm talking about it 1139 01:38:37,200 --> 01:38:42,920 street lighting is not in their open space that in essence the staff 1140 01:38:42,920 --> 01:38:49,680 recommendation right now has cut it to 210 or 209 whatever that right but is 1141 01:38:49,680 --> 01:38:55,880 there any flexibility in the current staff option column like on Ryan Road 1142 01:38:55,880 --> 01:39:01,280 to divide that back down to 4 million and then you know use the other four to 1143 01:39:01,280 --> 01:39:07,240 buy street lighting or sure and in the grim Jim Crystal we can take it we can we 1144 01:39:07,240 --> 01:39:11,800 can try to find other funds for that especially if the council increases the 1145 01:39:11,800 --> 01:39:16,040 impact the which will be recommending shortly so you do you do have a little 1146 01:39:16,040 --> 01:39:21,920 bit of flexibility we moved we moved the street rehab program that that number 1147 01:39:21,920 --> 01:39:26,100 has essentially doubled after we met with the committee last time and we had 1148 01:39:26,100 --> 01:39:30,440 that in-depth discussion about our OCI rating so yeah you could you could say 1149 01:39:30,440 --> 01:39:35,480 you know what let's move that back to 55 million or whatever and between that 1150 01:39:35,480 --> 01:39:39,040 and Ryan Road we've got some money for street lighting open space you can 1151 01:39:39,040 --> 01:39:44,480 certainly do that but to your point Tim yeah we did prioritize the the projects 1152 01:39:44,480 --> 01:39:51,480 I would the only exception that is I put the firing range last up on prop one so 1153 01:39:51,480 --> 01:39:55,240 the committee could see it and you know we just don't get very many opportunities 1154 01:39:55,240 --> 01:39:58,160 where we can possibly bring in two to three hundred million dollars of other 1155 01:39:58,160 --> 01:40:05,040 people's money so that was that was a huge that was a huge driver for us you 1156 01:40:05,040 --> 01:40:09,400 know and then the street rehab we've got dollars going through 2020 so we need 1157 01:40:09,400 --> 01:40:12,560 dollars starting in 2021 again but that number could go down a little bit we 1158 01:40:12,560 --> 01:40:16,680 just wouldn't be able to make as big of a run on the OCI but if you felt like 1159 01:40:16,680 --> 01:40:20,200 that was the trade-off to get street lighting and open space dollars that's 1160 01:40:20,200 --> 01:40:27,960 fine so I think to the question of is 210 the right number I'm kind of I'm not 1161 01:40:27,960 --> 01:40:34,600 as concerned about a specific number as I am about making sure the projects on 1162 01:40:34,600 --> 01:40:40,000 there will easily pay for themselves with the assessed value of the residents 1163 01:40:40,000 --> 01:40:45,480 that they support right but that will be a full committee discussion I'm sure as 1164 01:40:45,480 --> 01:40:55,680 we go through them all right as far as dollars go I think I think actually maybe 1165 01:40:55,680 --> 01:41:01,120 I should ask what's more important the dollar amount are how it affects the 1166 01:41:01,120 --> 01:41:05,040 taxes and the effective tax rate I think that's really what we're supposed to be 1167 01:41:05,040 --> 01:41:11,400 deciding if we want to keep the effective tax rate below 0.05 and and we 1168 01:41:11,400 --> 01:41:17,800 agree on you know whatever the percent it's five percent let's just say then 1169 01:41:17,800 --> 01:41:27,040 that should be what determines how much this and I push back on that and that 1170 01:41:27,040 --> 01:41:33,880 I'm more concerned about preparing for when I 35 becomes a mud hole in five 1171 01:41:33,880 --> 01:41:41,680 years and preparing for Denton High School and preparing for all the growth 1172 01:41:41,680 --> 01:41:50,600 and that's good experience mainly on the south side of town and you know we can 1173 01:41:50,600 --> 01:41:54,920 say well we're gonna we can pat ourselves on the back that we kept the 1174 01:41:54,920 --> 01:41:59,920 growth rate under a certain amount but we shortchanged ourselves for future 1175 01:41:59,920 --> 01:42:04,040 growth that we know is going to come and people are going to behave in life 1176 01:42:04,040 --> 01:42:07,640 because we don't do everything that we knew we should have done like we should 1177 01:42:07,640 --> 01:42:12,520 have done with Mayhill Road and Luke 288 does that make sense 1178 01:42:12,520 --> 01:42:16,760 I'm actually gonna bring up later tonight about Ryan but it's because I 1179 01:42:16,760 --> 01:42:20,560 think Ryan and vintage should be connected so I don't I don't agree with 1180 01:42:20,560 --> 01:42:24,320 making it a two-lane road in the center median because I think it should be 1181 01:42:24,320 --> 01:42:26,880 connected to vintage but that's something I'm gonna talk about later 1182 01:42:26,880 --> 01:42:30,960 just leave it alone taking it out yeah well I wouldn't spend any money on it if 1183 01:42:30,960 --> 01:42:34,240 the city doesn't what I'm getting at is I would take it out and say don't do it 1184 01:42:34,240 --> 01:42:36,840 till you know what you're gonna do with the road if you don't know if you're 1185 01:42:36,840 --> 01:42:41,200 gonna connect it don't spend the money right now but that's because I feel we 1186 01:42:41,200 --> 01:42:44,680 should do street lights and I feel there are things that may be more important 1187 01:42:44,680 --> 01:42:49,080 make you know I'm just saying as far as the long term we don't know I mean it's 1188 01:42:49,080 --> 01:42:51,640 kind of up in the air whether they're connected or not connected it's all I'm 1189 01:42:51,640 --> 01:42:55,400 getting at and I've seen cities build things and then ten years later like I 1190 01:42:55,400 --> 01:42:59,040 35 actually five years later tear it all up again because they want to put an 1191 01:42:59,040 --> 01:43:03,160 express lane down the middle but well that's not the city events that's the 1192 01:43:03,160 --> 01:43:11,560 thing well I don't think that's gonna happen with Bonnie gray I don't think 1193 01:43:11,560 --> 01:43:16,620 there's any intention to tie Ryan in the vintage of Todd's data that he shared 1194 01:43:16,620 --> 01:43:21,100 last week or maybe two weeks ago I mean we haven't shared with the committee yet 1195 01:43:21,100 --> 01:43:28,040 basically that Hickory Creek provides such a significant reliever they just 1196 01:43:28,040 --> 01:43:32,160 didn't think it was worth moving forward it does need to be rebuilt or 1197 01:43:32,160 --> 01:43:36,400 upgraded at least resurfaced if not and improved in some areas which is where we 1198 01:43:36,400 --> 01:43:40,560 came down that four million but there's no intention we have one committee 1199 01:43:40,560 --> 01:43:44,360 member advocating to tide in the village but Todd it was not in agreement with 1200 01:43:44,360 --> 01:43:46,360 her 1201 01:43:50,360 --> 01:44:02,800 any other thoughts so right now we're probably two propositions if you were to 1202 01:44:02,800 --> 01:44:06,800 add open space you'd have to add a we'd add a third of proposition but street 1203 01:44:06,800 --> 01:44:12,400 lighting could likely just roll into our so so actually what's not here and you 1204 01:44:12,400 --> 01:44:16,800 spoke to it earlier but there's nothing related in the public art component 1205 01:44:16,800 --> 01:44:21,240 there's got to be added in the price so that's about nine hundred thousand and we 1206 01:44:21,240 --> 01:44:24,240 have this kind of five hundred thousand gap here so that we would have to find 1207 01:44:24,240 --> 01:44:28,600 a way to fit it in depending on councils direct or the committee's direction and 1208 01:44:28,600 --> 01:44:34,640 that would that would likely all be in public safety because we no longer do 1209 01:44:34,640 --> 01:44:39,320 public art on the correct correct with the current policy but we'll bring that 1210 01:44:39,320 --> 01:44:42,720 up again with the committee this afternoon 1211 01:44:47,800 --> 01:44:55,120 well we discussed or that I mentioned having this group come back together on 1212 01:44:55,120 --> 01:45:00,240 July 11th wanted to finish that thought so David and I talked we really need to 1213 01:45:00,240 --> 01:45:07,480 wrap up business as a whole committee on July 18th correct I think as we look at 1214 01:45:07,480 --> 01:45:10,560 the schedule and we'll talk about this layer 18th is one goal I think we can 1215 01:45:10,560 --> 01:45:15,000 easily do the 25th as well as was our original plan we've kind of pushed our 1216 01:45:15,000 --> 01:45:19,640 dates go to council to August 1st so we can easily fit in the July 25th date 1217 01:45:19,640 --> 01:45:22,440 given where we are now that we haven't gotten to the prioritization 1218 01:45:22,440 --> 01:45:25,960 conversation it's I imagine we're probably gonna need that July 25th so 1219 01:45:25,960 --> 01:45:29,160 that would give us three more meetings all right so if we could meet July 11th 1220 01:45:29,160 --> 01:45:34,360 and come up kind of commit to come out of that meeting with a recommendation to 1221 01:45:34,360 --> 01:45:43,160 the full committee right of a specific dollar size as a target and then 1222 01:45:43,160 --> 01:45:50,520 recommended a B or tax increase which is what you're looking for right yeah 1223 01:45:50,520 --> 01:45:54,360 it's well I feel like when you're talking to voters that's what they care 1224 01:45:54,360 --> 01:45:58,760 about is their pocket yeah that percent increase and how it's gonna affect them 1225 01:45:58,760 --> 01:46:03,000 and that's why for me to be closer to the seven like said I'd agree to six 1226 01:46:03,000 --> 01:46:06,080 because it's a percent lower than seven and a percent higher than five I don't 1227 01:46:06,080 --> 01:46:09,320 know but but we're our committee we're supposed to make that recommendation as 1228 01:46:09,320 --> 01:46:15,800 a whole so as far as I just feel like the better we project closer to what we 1229 01:46:15,800 --> 01:46:19,000 think it's really gonna be the easier it is probably to sell because that 1230 01:46:19,000 --> 01:46:22,960 projection is higher than what the conservative number is and it may allow 1231 01:46:22,960 --> 01:46:30,640 us to go above 110 but that's still a debatable whatever the county to ten 1232 01:46:30,640 --> 01:46:37,920 that's all right yeah I think that's a good direction one thing I heard city 1233 01:46:37,920 --> 01:46:43,340 managers say earlier was that the city hadn't faced a rollback election 1234 01:46:43,340 --> 01:46:47,360 recently and that it's looking increasingly likely that that may happen 1235 01:46:47,360 --> 01:46:52,280 in the next three five years so I think I said this earlier but I'd really like 1236 01:46:52,280 --> 01:46:56,480 to understand if if there is any relationship between these different 1237 01:46:56,480 --> 01:47:05,040 options and how soon or how much that is likely to happen because I think that 1238 01:47:05,040 --> 01:47:09,960 plays into what is responsible to ask the voter for at this point so does 1239 01:47:09,960 --> 01:47:12,320 everyone understand what they mean by the three and a half percent rollback 1240 01:47:12,320 --> 01:47:18,160 election no so kind of back to the understand that's great to the 1241 01:47:18,160 --> 01:47:21,120 discussion I'll just pull this up so you can see which other three and a half 1242 01:47:21,120 --> 01:47:25,000 percent rollback here this was eight percent it's now gone to three and a 1243 01:47:25,000 --> 01:47:27,200 half percent so it's what we were talking about a little bit earlier where 1244 01:47:27,200 --> 01:47:31,600 that maintenance and operations piece for our operations our property tax that 1245 01:47:31,600 --> 01:47:37,080 goes to the general fund if that rate goes the calculation kind of works is 1246 01:47:37,080 --> 01:47:41,040 really focused on that if that rate goes up to the to the taxpayer to an average 1247 01:47:41,040 --> 01:47:45,360 taxpayer essentially from existing values to current values if it goes up 1248 01:47:45,360 --> 01:47:49,360 over three and a half percent with a tax rate we're putting forward we would have 1249 01:47:49,360 --> 01:47:54,120 to go to the voters on it for an election on our operations now if that 1250 01:47:54,120 --> 01:47:58,040 in November of that year that election failed we have to go back to our current 1251 01:47:58,040 --> 01:48:04,440 tax rate okay so the election would say do you want to hire these police officers 1252 01:48:04,440 --> 01:48:08,480 or roll your taxes back how does that work all the specifics on the language 1253 01:48:08,480 --> 01:48:12,760 are still being developed so that it's all fresh but it's most likely I'm sure 1254 01:48:12,760 --> 01:48:16,040 we have some kind of justification we can put forward for the operations cost 1255 01:48:16,040 --> 01:48:20,160 but it's gonna be specifically on do you approve us going to this tax rate or do 1256 01:48:20,160 --> 01:48:23,680 we or do you think we should go back to that lower tax rate and it's 1257 01:48:23,680 --> 01:48:28,360 automatically triggered this on now it's automatically triggered whereas previously 1258 01:48:28,360 --> 01:48:31,920 it was a petition that you had when it's 8% you had to have a petition to get to 1259 01:48:31,920 --> 01:48:34,600 that point so now if you go over that three and a half you're automatically 1260 01:48:34,600 --> 01:48:38,000 there so what we've tried to show here is that it's really me between that one 1261 01:48:38,000 --> 01:48:43,040 and two cents increase is gonna trigger that for us in future years there are 1262 01:48:43,040 --> 01:48:46,760 some caveats with that one piece of it is if we don't go up say all the way to 1263 01:48:46,760 --> 01:48:51,600 that 1.3 that we get to bank some of that for future years but it is a 1264 01:48:51,600 --> 01:48:54,760 significant constraint on us in those future years especially as we're looking 1265 01:48:54,760 --> 01:48:58,400 to hire significant amount of officers and different things and I think I just 1266 01:48:58,400 --> 01:49:02,280 want to be clear for Eric to that my understanding is we back out the debt 1267 01:49:02,280 --> 01:49:06,600 service rate so it's not as if it's not as if the debt service it's really 1268 01:49:06,600 --> 01:49:10,040 convoluted it's not as if the debt service rate hurts us there it's the 1269 01:49:10,040 --> 01:49:15,040 story we tell the voters this was our plan we've been able to execute our plan 1270 01:49:15,040 --> 01:49:21,920 so go ahead and support this next it's it's all about credibility right here's my point 1271 01:49:21,920 --> 01:49:26,760 do you want to meet at three again on that 11th or is going to be a three or 1272 01:49:26,760 --> 01:49:52,960 would forward what would be better for the city staff for for is fine to keep 1273 01:49:52,960 --> 01:50:00,520 you guys from having to wait around for school okay so we'll meet again on July 1274 01:50:00,520 --> 01:50:07,160 11th at 4 p.m. in here yep and we'll come out there with a recommendation of 1275 01:50:07,160 --> 01:50:23,420 full committee all right thank you all thank you thank you I will miss the July