All right everyone, we have the forum and we have time and I'm going to determine that forum is
present. The economic and development partnership will convene and write a meeting on this day.
I guess I'd liken it to 11.05 p.m. and training room is one thing. For those of you that are
familiar with the service center 401 North Elm Street, get in Texas in case you did not know
where you are. We have a lot of short segments that are just like that and we built these around
things that we work on with utility clients across the country and we bring their best practices
to these classes but maybe there's some areas that don't really apply to you. Well, if they don't,
just sit tight. Although I would listen a little bit because we're running business surprises,
so you're not going to get pulled down. But in any case, if there's a topic that doesn't necessarily
you and I just want to thank Tony for sitting in the forum last minute. We do have a number of
things for consideration today such that we've been given some rough time. The first is item
number EDP-24-041, our agenda to consider. Let's move right into item number EDP-24-039,
receive a report. And as we get more modern, things like that, data analytics is going to be
a big driver of our business. And for some of us, some of our bigger customers are going to be data
centers. And we'll talk about that a little bit. Regulatory accounting, how you can make accounting
rewrite history, which is something you probably don't hear too often but we're going to talk about
that next week. And then finally, industry trends and how the novel dreams of our business are
changing and how, you know, for your own knowledge purposes but also the folks that you're going to
hire as you go through your career, what kind of skills you should be looking for as the business
does change in a big and fast manner. So those expectations also will be about rates and internal
controls. All of that is next week, but today we're going to focus on at the top of the community
landing. So our upcoming session will be considered tomorrow. You'll have Bethany Ryers,
our partner at Baker-Tilley, who will talk through some of the latest gas beans
and applying those. I'll be back next Wednesday and then she'll wrap it up next Thursday with
some more GASB stuff. So here's our agenda for today. So if you were to be able to attend,
one of these hearings, you can reach out to your staff. We'll talk early about the basic financial
statements and how to analyze them. Then if you guys were able to see in your backup, there's a
briefing. We'll take a break at one extra to talk about financing, cost allocations, one more break
and many cost allocations again, forecasting methods. And then we'll wrap it up and finish
off the day. You will be amazed at how fast the time passes here as we go throughout this session.
But as a reminder, if you'd like to ask questions along the way, just use your chat box
for those or if you dare, I'm after you and speak through your microphone as well. And don't wait
for the end of each segment, but we do have a slide at the end of each segment talking about
discussing and things like that. If you have something, pop it in the chat box. We'll get to
it as soon as we can and we won't leave today until all your questions are answered. And if
we don't get up to date, you can pick up something later. My contact information is on the list of
today's steps. So here's today's learning outcomes for session one. Today we'll explain the foundation
of utility accounting. Early discussion. We'll talk about benchmarking, key performance indicators,
how to measure utility performance in the financial statements, some of the high level areas that you
look for. Actually, Bethany on her session, we'll get to the high water marks today. We'll also
talk about the makeup of the financial statements. We'll talk about how a strong binding, especially
in today's registered environment, is vitally important to maintaining your earnings, but also
freeing up cash flow for your operations, capital improvements, and things of that nature. And then
we'll talk about utility financing tools, the importance of managing your capital, different ways
to finance utility construction, some background on the business for you newer folks on how
utility projects are financed, and all of that. We have a number of examples of that as well.
So this is my background. I was a part of that background for 20 years. I've been in the business
a long time. I've worked for a lot of utilities around the country, and as I said, what you see
in this course is more practical in application. What we'd like to do is give you the theory,
but also how do you do it on a day-to-day basis, because the two don't always mesh very well. So we
want to give you those things. This project started in 1955, and completed sometime around 1970.
The Energy and Utilities Group of Baker's Philly works for over 1,700 utility clients nationwide,
and has been around for a long time. Many of you are familiar with Baker's Philly outside,
and as it just joins back in '35, we greatly appreciate that as well.
So to get things rolling, as I said, we are going to use the CooCoo mobile app, and those of you
that have been in these classes before know how that works, but some of you may not. So we're
going to give this a dry run right now. So hopefully that's loaded on your phone, and we're going to
kick it off with an introductory practice, Cahoot. And later on, after that, we're going to have five
more quizzes at the end of this session, and then come up for prizes and a prize at the same time.
So right now, if you would get out your phone, or you can even do this on your computer. Now we're
going to do a practice Cahoot, just to get a little more background. On the west side, west,
northwest side of Denton, it's starting at I-35, and joins them in the south side at U.S. 380.
And then further, the second segment starts from U.S. 380, and then joins back at 35 west.
So what's going to happen is I'm going to hit start.
You know, the stages are, it will be constructed in stages. You know, it becomes a four-lane when
it comes to, you know, functional classification. It will be urban-divided, a parkway-type facility.
And when it comes to programming, it is part of all 38 programs, including
MTB, which is looking at around 30 years' horizon, and UTP, which is 25, and which is 10 years' horizon, and then also, which is looking at three years' horizon.
It has multi-phases, and it just, you know, traverses through all these phases when it comes
to these programming efforts, and it's part of all these three programs, when it comes to MPO,
on the co-op side, and then city-wide programming.
When we do the actual quiz codes for prizes, we pay gift certificates for the top winners.
This slide just briefly presents the project features, including, you know, this red section
that we are seeing showing the tentative dates for these sections, including, both of them will be in 2026,
but if you ask me precisely, it's not given yet, because it's so much into planning right now,
but we have, you know, tentative dates of 2026 for both segments, in purple and red.
The red section will be around 3.5 miles, and the southern segment, which, you know, starts from 380,
and then goes back to the west, would be around 5.5 miles, a total of around 9 miles of the segment,
and this bar line that shows us the trends, how one steps are being followed, and, you know,
by 1.6, that date where things will be happening, generally speaking.
Less than a year, one to five years, five to ten, one more and ten years.
The important aspect of this project is 380 bypass, and the idea is that this 380,
when it intersects with Route 288, it would just create a head-grade intersection and would be,
it would induce a lot of traffic, a lot of cross traffic, which would be causing traffic congestion
at this intersection, if it is a head-grade intersection. So the idea is to provide a bypass on 380,
and hook up, connect it to Route 288, and provide this truck traffic, and any traffic that doesn't
have to go through the whole area, and that could just bypass, and using this connector would be
possible. So this 380 connector, this 380 bypass, would essentially be providing six-lane bypass,
which would be through movement, connecting 380 traffic directly to Route 288 without having to go
through intersection, and which would be very helpful in maintaining the level of service
at the intersection, head-grade intersection, and providing better traffic flow.
All right, let's see what we got here. Avoiding any intersection, related issues,
especially for truck traffic would be very helpful. Well, it enhances the connectivity.
So you got the whole gamut of what we're doing, and of course, in class. It helps with the connectivity,
it helps with traffic, but then there are certain geometric limits that it sets from the existing
infrastructure. For instance, we have King's Loop, that is a two-speed that goes through loop
to 88, it's a signalized intersection, head-grade, and so when this bypass connects through
loop to 88, it just lands very close to this King's Loop street, and when, due to the proximity
of this landing of the connector, it's impossible to have this through movement,
because the signalized intersection would induce a lot of traffic, queuing, if we just wait for the
traffic to pass. So naturally, what is happening is that the next part is making this intersection,
it won't be, once this is implemented, it won't be a two-intersection, it will be writing right up.
And so the whole geometry of it, we could discuss further, but before going to King's Loop,
let's just focus on this area. Since we are losing King's Loop as a two-intersection,
TechStore suggested that maybe we could connect Windsor and have an head-grade
intersection at loop to 88, and then a bypass, or sorry, underpass through this connector.
So what essentially the arrangement is that this Windsor connector, East Windsor connector, will
have head-grade intersection at loop to 88, then it will just move further, and then have an
underpass at this elevated 380 connector, and then continue forward to Friday Street. So that's the
alternative. Okay, well, you get the idea. That's how the winds work, it's going to be a mixture of
questions. And as a facility, this Windsor connector is still in line on the map. In planning
stage, we are taking it to mobility plan amendment right now, and there are certain cross-section
which we are discussing right now, but it still is a snapshot in time. What cross-section? It will
be a major collector, and at this point in time, I will show you in the next two slides what
cross-section I mean, what cross-section is possible. So these are the two arrangements that are very
important. One is Windsor. We are using a true intersection, a true connection, and it will be
right in, right out, and we'll have some arrangement on this community as well to make sure that they
have connectivity to loop to 88. Since we are using this one, TechDrop is proposing a true
intersection that will connect loop to 88, act great, and be underpassed in the proposed
elevated tree of Windsor. With that, it is again this snapshot in time, drawing a change because
TechDrop is proposing this process of discussing ideas. They are taking it to public as
well, so based on the feedback, this already changed slightly, but this shows the 380
bypass landing near Kingsrow, this area. Kingsrow becoming right in, right out,
and this shows Windsor connector that has an act great intersection at loop to 88, and then
it further goes forward and uses underpass at this six lane 385, and then connects to Firestore.
So that's, this is the high level, 10,000 foot level, which I could draw right now,
I could paint right now, but if you ask me the specifics, we'll have to wait because it's still
in planning stage, we are discussing with TechDrop what arrangements could be done. There will be
many arrangements, for example, how we will be able to connect this community, how Kingsrow
arrangement will be done, there will be a training movement here as well provided for any left-turners
to come and draw down here, and then just take a reference to this arrangement. So all of these
things in that are in the picture, we are discussing on the planning level right now, and we'll update
the board main benefits and employee benefit plans must follow when presenting their financial information.
GAP supports the economy in three ways. Yes, we do. First, GAP provides concise relevant financial data
to global markets. That's because high quality financial... So these are possible future Windsor
roadway sections. Again, for clarity, this is Windsor roadway. So for this, the proposed...
These are again proposed, we will have multi-use path, so essentially multi-use paths would be that
we'll have an arrangement of bike lanes on road bike lanes, or we could have bike lanes on the
side, adjacent to multi-use path, all competitions are possible. So multi-use path will be typically
more than around 10 foot, it will have five foot of sidewalk and that arrangement of bikes going back
and forth. So it will be a facility that is accommodating all modes, not only autos, but it
will be accommodating pedestrians, it will be accommodating life users, and to that end, I would say
micro-incredible users as well. Then, of course, safety will be the prime aspect, especially at the
ad grade intersection, we'll be looking at other stakeholders. Transportation services at City of
Denton is already looking into this area. There were some concerns that we need to look at the safety
and traffic flow characteristics in this area, looking into how we could make it safer, how
other interventions could be done. We have been auditing this area in general, and we will come
up, we will not wait until the, we'll deploy some of the interventions early in the next few months.
So when I started on my career, there was not a GASB. In fact, there was only FASB and other
states that were applied to government and things like that. Once again, we are losing, in a way,
we are losing the true connection of things where things grow, and we are converting it to,
and that is right out of the city, but then we are trying to ensure that before this
bypass, this 380 bypass is developed, we have a true connection across DUPU88, and we are
nominating both sides, both sides. It is later, once this bypass is developed, and later if we
go to the municipal utilities, joint action agencies, public power utilities, any utility
that is formed at the unit of government or by government statute. So the idea is that we do it
right now, when the tax dollars are planning this, they make these plans, and make sure that we have
a spot there, and maybe we connect these communities and provide safer ways of traffic flow under the
GASB, like it. There is a lot of big things they have in the hoppers when it comes to financial
reporting, and the financial reporting model, and things like that, but I do not want to steal
Bethany's thunder. She will talk about those over the next couple of days, but just remember this,
could be a co-hoo question. What should co-ops follow FASB, municipal utilities follow GASB,
and when it comes to the financial statements, the real purpose of the financial statements
is to provide information that is useful to investors and creditors. Yes, so we had two
meetings, two public engagement sessions, and in the first session, I think one of the main concerns
was that what it will do to the community from the west. So when winter comes, so this community
it starts this area, they are concerned that would it draw traffic for outsiders, or you have an
outside audit firm coming, do your audit, which will be a major connector and can file money from
most of the financial statements. But those are really for distribution, which is not ready to
tackle that kind of traffic. And so, transportation, so this was the first public engagement session,
and in second, it was reiterated and we were able to address those concerns, not only from the
standpoint of traffic inducing traffic, but also from the standpoint of safety. And that's why I
mentioned that transportation services is already working on clearing. But the audit, safety audits
in this area will be looking at many interventions. Your audited financials are looking at the
short-term and long-term. And from a government's perspective then, they should be understandable,
useful rather than the archival information, timely and prepared using consistent methods.
And that's where accounting standards come in. So that utility A and utility B don't account for the
same transactions in different ways. You want comparability, you want some kind of standard
foundation. The number was sometime, somewhere around 80 or 40 trips. How many trips were there?
So they tell you 40 additional trips were reduced. Maybe the connectivity or the loop to it is
a movement is on loop to 88, and the added benefit is in terms of this bypass that is being directed.
If we take a lot of traffic, a lot of movement in terms of truck traffic, autos,
all of those will be bypassing this average essentially loop to 88. Another added benefit is
that the flow is still being maintained. Things will be righted and righted out, but it will still
have a comparability amongst the same type of industries indirectly. We have some assurance on
that what you're reading is really useful for the most part. Later on in our session, we talked
about fraud and financial statements and things like that. So you'll see the other side of the coin as well.
On our side of the coin, this is really what they are trying to address for us right now.
Because people use information in different ways. For example, many folks came to us and they
were interested in your financial results, performance, what the progress is towards
implementing strategy and executing strategy. Your board is interested in results and strategy,
more of a high level. But now if you dig down another layer, you go to line managers and
department heads. They are special for performance and implementing strategy and running the utility.
And they would have other supplementary reports that they would use for budget actions and things
like that. And then you get outside the organization. As I mentioned, you get the bond holders
that are bought in your bonds if you have debt. Are you credit worthy? Are you investment worthy?
Should they loan you money? Pension plans? The rating agencies give you a thumbs up or a thumbs
down when it comes to your financial rating. And the worse your rating is, the more interest you
pay in it. We'll talk about it in our next segment. Let me get to the demo part. Most
utilities always have a substantial subset of people, rate payers that are interested
in a detailed look at the utility, the need for rate increases, also information on community
investments and things like that. And some of you also have media that looks like you're
reporting. This is just as a reminder, this is one of the things that are storyworthy for their
publications and things like that. Because your financials have a wealth of information.
Like I said, there's gems in there. If I'm looking at your financials and I look at items that are
reported on your financials and liabilities, there's also backup for those in the notes of
the financial statements. And as you read those, you'll see how far those go out. Maybe what your
construction commitments are, maybe there's some regulatory issues with your utility, things like
that. We have a number of reports coming up, so I'm going to just identify EDP 24-040 for
staff reports. And we'll start with Jamie Adams. So the basic financial statements, when you get an audit report, we call these the basic financial statements and the
components of the basic financial statements are what we call requires supplementary financial information.
I'm going to give a report on my five minutes on four areas I've been working on. One is business
receipts and visits. I'm guessing vacancy, tax returns, and then business networking. New investors.
So it's my pleasure to tell a story of a great business in town that's doing some good work.
Today I want to talk about Tetra Pak. So you know Tetra Pak this year is celebrating their 40th anniversary
being indented in 1984. It's amazing all the products Tetra Pak has when you're in your grocery store from
So what I'm going to do is take a moment here. Now this is not in your materials, so you'll need to look at your
screen for this. And what we have is a financial statement that we're just going to watch. There's some of the elements, but this is too hard to put this on a
slide. It's better to look at the real deal. Now one of the cool things about our business is that a lot of us put our financial statements on our website.
The challenge that we're working on with competitively 5% turnover in staff this past year. A lot of that is for younger staff. So we're trying to connect them on blogs.
We have part of them partnered with Grown Academy. It's a key program. We've kind of developed the next pipeline of workers.
If you wanted to look for a note that you could also use in your financial statements or maybe what a disclosure looked like.
You could find another utility online that probably Russell looked at. It's a great business and I just want to celebrate it for a second.
So if you're addressing vacancy concerns, questions asked, things like that. Sharing from West Park industrial areas. For example, this is a
four-year-old warehouse in that area. Seven are occupied. Seven right now are open. The reason that seven warehouses are open are all been built in the last 18 months. I'm working with the developers to make sure we get some people in there and show them and hopefully we can get those deals pretty soon.
Office space, I just want to touch on that. There are 5 million square feet of office space in Denton. For higher-end, 4-star, 5-star offices on space. And we are in Denton around the 9%.
There we have the MD and EFW coverage and analysis. That's required supplemental information. Here we have the basic financial statements. And then we have some more RSA or requirements. Continuing to work to fill the office space.
So as you go through here, you have the independent audit report. Business to business networking. Last month we had a big firm. And so there's a new page where we host an industrial roundtable.
Independent audit report. In New York as well. And the money paragraph, the one they're representing for is this one right here. The second paragraph. The company and financial statements are represented fairly. That's what you're looking for.
If your industry has a problem, you can bring them to UNT and they can help solve it. Industrial could be at the bottom paragraph and there may be some exceptions. All those resources are available for them. The utility business is a pretty solid business.
We have one tomorrow. Our next investor roundtable is at the airport. Future mediation. If you haven't signed up yet, we'll take an RSVP. We had a parking meeting yesterday so we can park out there.
And you can see the rest of the stuff in here. It'll be a great, the event starts at 8am in the morning. But the first segment here, the MD&A management discussion and analysis.
And the last thing I want to touch on is we added a new investor last month in our chairman's circle, which is our highest member of the PDP at that synergy. I just want to make sure that they can get in front of all of our business leaders in town. If you can get them to read the MD&A and also be able to answer questions about their communications or where they're from, come on board, be a PDP investor and help lead the team.
So you can go about 95% of what went on in the utility, where you're going, how money was spent. They will have a solid background to your business. So if you get them to do that, they can skip the rest of it.
So the MD&A, there is very little prescribed in the standards for the management discussion and analysis. So you can have one that is four pages, three pages, 30 pages. But there are just a few required elements and we'll talk about a couple as we go through here.
I've just known that one time I was presenting to this board for the most well played in my absence. Anyone else want me to not be present?
The other required element of the MD&A is to have a summary balance sheet or statement in that position. And our downtown investor program is starting off their fourth full month of operation.
And they provide cleaning and hospitality in the downtown area. So you can see I've provided a little data update. I'm sorry the top one is a little hard to see, but these are the different data points that they're collecting, basically stuff around, feeding, removing stickers, cleaning up different trash.
The next section goes on and talks about the comparability of one number to the next. And what happens when a number changes? In this case we compare if somebody has a flat tire, they assist with that.
The next section is leaving some place late at night, they want help getting back to the vehicle. This is what happened, this is what we expended, this is what influenced our business, all of that kind of stuff.
You can see how many stickers they've removed in graffiti over time. Again, we have a three year table for a two year financial statement. And we separate these by just rolling up the financials until much more condensed package that a reader can look at that and say, oh yeah, this is high level, this is what happened.
So that's pretty much it for the requirements of the MDMA. So after that you can have graphics, more words, less words, things like that. So I guess they're collecting the same weight of trash, but less individual pieces over time.
And then here are the different business contacts, hospitality assistance, motorist assistance, and safety escort. You can see with how they've done each month. The safety escort and motorist, they don't get a lot of requests for those, but they do get some.
Like Gatsby says, high level financials, where to get it, and that's pretty much it for the MDMA. Providing directions. Not so the rest of the financials, there's a lot more requirements for that.
This is what we call a statement on net position, also known as a balance sheet. And Gatsby 34 says that a statement on net position should be in liquidity order. So at the top we can see that the referrals have kind of gone down a little, but I wanted to share that specifically because you can also see the observations that people want now.
So that's actually good information, sounds like maybe they're connecting folks to resources. And that might be because of the less people girls that are going out. So those are the major data updates. Does anyone have any questions about that information?
And then down here we have what we call deferred outflows of resources. So transactions that have taken place that are going to benefit or are going to recognize in future periods.
So again, liquidity order, although there is one or two sentences right in Gatsby 34 that says if you want to show the balance sheet in the traditional format, you have utility service up at the top, which is a standard utility practice up until Gatsby 34 came around, and then you have everything that comes after that is a totally acceptable presentation as well.
So we'll see a few other items in here. We have restricted assets, restricted cash. So these would be if you have debt, you would restrict some funds for bond payments to that bondholder, certain that they'll get paid back in the future.
And so we have items like that in here. Let me go to the liabilities section. But again, sometimes that information is a little hard to get out of the past month. In case I want to point out about the observation and one of the reasons it's not featured up here is because we don't really know how many people saw it, they just made observations.
But we're going to recognize those in future periods. We'll see those items here as well. And then we have a net position. A net position is retained earnings. And net position, retained earnings of the utility is not necessarily funds that are out there.
Net position is really the running track record of gains or losses since we opened the doors for business back when the utility was formed. So we break that out into three variables.
For example, Kevin, who is the operations manager, spends time over at DiscoverDent. And so he said we have a net investment in capital assets. This is a portion of our system that we don't owe to bondholders.
So it is doing a positive outlook. But you're right, we should do more to spread that positive story. To that point, we also are working with debt management to do surveys throughout the time.
So a survey was conducted with business owners at the initial point of how they felt about the program. And now after the first quarter, they're collecting the surveys and they kind of see over time how they've been changing their flow as far as how they're feeling about the program.
And if it's doing what it's supposed to be doing, or if there are other things that business owners are feeling like it should be doing.
Lastly, we have our operating expenses. These are the expenses that we incur to generate those operating revenues. We have our operation and maintenance expenses. And then we also have our depreciation expense on our fixed assets. And then we come down to a line called operating income. Operating income and your blood pressure.
You know, when you go to the doctor and they take your blood pressure, when they're reading like 120 over 80 is really good. When the utility operating income is like a 120 over an 80. If you have that good operating income, that means your utility is healthy.
And so operating income is operating revenues minus operating expenses. And we're not going to go into a lot of detail on how to calculate this.
If you have an operating income divided by your next plant and service, which is the investment you've made in infrastructure, this number right here, you divide those two and if that number comes out to about 5%, 5 to 6% because interest rates are higher, that's a 120 over 80 blood pressure.
And the reason that is, is you want an operating income of about your cost of capital, which is a combination of your cost of debt and return on equity and where interest rates are these days, that's right around the 5 or 6% number.
And what that does is provide you with enough cash flow to pay for your operating expenses, your O&M expenses, and also provide enough cash for replacement of routine capital improvements through depreciation expenses.
So remember that blood pressure is 120 over 80. And then we have a non-operating section here, this is all the other stuff, investment income, interest expense, things like that, some amortizations, you see the items here as well.
And then we get down to the change in net position, that's like your net income, and then we balance down here.
Okay, a couple of other items in here, and the notes to the financial statements, we'll go through the statement of cash flow if you can check that out, like the cash flow of the organization.
But the notes have a couple of big items in here that you should be aware of if you aren't already.
First you have a note on the nature of the business, all your government, you know, a little historical background, this is kind of lengthy, I've seen them fairly short sometimes.
But it does talk about how life obtained to be and other things that impact their business right now, so it makes for a good read by the time you're done reading it, you have a good healthy background on their business and what you're dealing with.
But then we have a note called a Summary of Significant Accounting Policies, which is required, and what that does is state what accounting standards you follow, and then for every material balance on your statement on net position, you have a little word that talks about this is how we account for this.
This is how we account for cash flow, materials and supplies, you see the listing here is on scrolling, so that note is in there, every material balance should probably have an item in here that speaks to that.
And after that we have more notes for some of the bigger items, for example, we have notes on regulatory accounting.
Regulatory accounting, you know, Governmental Standards 62 talks about the required disclosures you have there, you see all the regulatory items that LIPE has, we'll be talking about regulatory accounting next week.
We have a note on revenue before the plane, we'll be talking about that next week. Also, it's kind of an interesting area that maybe some of you might find interesting depending on how revenues impact your budget.
LIPE uses derivatives, we'll give you a note on there, it's required by GASB 50 free, Plant and Service has specific formats to follow, debt coverage, which we're going to talk about in the next segment here.
We'll talk about what's their debt coverage compared to their bond principal and interest payments, their debt covenants, their requirements for that, and also retirement, there's a big note on retirement.
So you have two bedrooms, but then you have one income, right?
Is that actually an indication of that? Why would we...
So realistically, for every big GASB... Would they have an outside income? Maybe the child support doesn't have the time? Occasionally, yeah. This is just a general...
Here's a question, what was the asset? Not everyone needs a two bedroom, I don't need a two bedroom if I was able to live by myself.
I'm sorry, I'm not sure which asset you mean. Oh, for the blood pressure. Okay, thank you. Net, Plant, and Service. So we pop up here...
But if they are in a situation where you have other stuff going on that's helping, not just their income, right? This is just a depiction of what those typical incomes look like.
So that's net of accumulated depreciation, so your cost plan minus accumulated depreciation, that's the back of the envelope calculation you would do.
Okay, so just as a quick overview of the toolkit, we are talking about five strategies. Make sure that question by the way...
Again, you know, pop your questions in there, we'll go get to them. That's not the way to do it. All right, well, that's the overview.
You know, I've done this for a while, I think that this is, you know, a nice approach for a student financial analysis. It's too hard to put on slides, but again, if you...
We're looking for notes to the financials, things to beef up your own statements. Again, you can go to big utilities or even small utilities, but a utility, check them out on the internet, a lot of statements are out there, you'll find them very helpful.
But to wrap up this session and come to our first quiz, GASB and FASB, they're the rule makers. When some of you talk about maybe, well, we follow FERC and things like that, when you go through the hierarchy of accounting, GASB is first for public power, municipal utilities, FASB is second, and FERC is third.
So you can do a lot of FERC things within the confines of GASB, and we'll talk about regulatory accounting and how that applies as well as some of the standards that don't necessarily make sense to our business, but the hierarchy is GASB/FASB FERC.
And the basic financial statements are the foundation for financial analysis, and again, those notes, they tell the story, it's all back in there, and the nuggets of information really is forward looking, not necessarily so much backwards looking.
And remember, the basic financial statements are the RSA, statement in that position, income statement, statement of cash flows, and then those are the financial statements, so those comprise the package that you get when you do an audit and they tell the story.
All right, so other questions? Just put a few on here, food for thought, little seed questions, I guess, if you have anything, what about new standards, early implementing standards, insights from your peers, you know, things like that, or other things that you want to ask right now as we wrap up this segment.
All right, well, you know what that means, it's Kvot time, so here's how the Kvots work. We're going to do seven questions on the topic we just talked about, and then question seven is what we call the wild card, has absolutely nothing to do with what we just talked about, and the points are double.
You could be behind or back in the pack, kind of like the Kentucky Derby a little bit on Sunday, or Saturday rather, and you can storm out and make it to the finish line based on that last question, but let's fire up your phones and give it a shot for our first Kahoot.
Also here, capacity building match grants provided to our non-profit developers working in our city, as well as a low income home ownership program. It's actually a little abstract, but a housing choice voucher can be used to pay towards an homage, so this is a really great way to increase economic mobility and help some low income households move on and build equity.
I'll go quickly, everyone. Kahoot, who's next here? Well, you guys are fast, I bet a lot of you have been in our session. We're looking at the list, we have a lot of influence too, so thanks for signing up.
This is another amendment that we're working on with planning to offer that slight zoning relief in exchange for vulnerability in residential projects. And then lastly, preservation and expansion. We are exploring some land acquisition, we're exploring a home employer based home ownership program.
So you might have heard before, some employees will offer us a benefit down payment assistance. We are exploring the idea of partnering with some of our largest employers, Peterbilt and ISD, lots of other schools, to help run that program with our in-department experience, if they can contribute into the project.
Okay, here we go. 20 seconds of questioning.
Again, expanding down payment assistance and a landlord rental maintenance grant, which is actually already online.
If you want to learn more, we do have a website. What accounting standards do municipal utilities follow?
I think really large assisted living complex is going out there on 288 McKinney. What's the capacity of both of those? Do you have any idea? I don't know about those two specifically, but I will say assisted living is fantastic.
Great job guys. Let's see where we are right out of the chute. A thousand. Whoa. I haven't seen a thousand in a long time. That's impressive. Okay.
Thank you very much for your time. I appreciate it. All right. Nicely there. It's still pretty wide open. Question two. In the MD&A for a two-year audit report, the financial table should show how many years of balance.
Can I actually have a director's report on how to present if Kristin is not here today? So I'll be taking you to the spot.
All right. Hello board director. It's great to see you. Have a great day.
We're on a strike. Two for three. So how is one more year? Because I've been here for seven weeks and it's been a little bit crazy, but fun. And Christine wanted me to present a director's report to see if you're not paid for what we're currently working on.
Here we are with the standings. Okay. Still some folks moving up here. A little change on the leaderboard. With the changes in the chamber contract, everyone has kind of shifted roles a little bit. The statement on that position is also known here.
We're going to start at the top. I report to Christine Taylor, who is the ATM, and then she then achieves versus Sarah Hensley. We'll start with Erica Sullivan on the left. She's our economic development program administrator. She's our incentives bureau. She handles all incentive proposals whenever a prospect contacts an officer or goes to the ADP.
She manages compliance on the agreement, so each agreement that is passed in the city talks about that. You can do the traditional presentation and ensure that those companies are meeting performance measures. She tries those every year. She manages our budget. She does a variety of things and we're lucky to have her. She will continue to manage those.
For Christina Davis, she's our business development program administrator. She's worked her way up from admin to administrator. She's done a little bit of everything. She's worked in downtown. She was part of installing lights. Lights downtown. I don't know. I haven't seen them yet, but I hear they're pretty awesome. And now she's going to be focusing on recruitment, so she'll be responding to RFIs. She will be assisting direct leads to our office anytime that a site selector is meeting websites.
Right as right. Follow FASB, blocks follow FASB, unis follow. Kristen Polito, she's our main street manager. She's been with us since the November of last year. She's doing an excellent job. She's now managing our TURS 1 and debit committees. She is the lead on the downtown investment grants. She's done a lot of great work. I'm trying to remember what else she does. She does a lot.
She's our economic development specialist. She also does a little bit of everything. She's been with us for a year and a half. Her new role will shift towards focusing on recruiting green tech jobs. Her background is in sustainability. She worked on that in college at Baylor University. And so there's a lot of opportunities.
That is true. Find it all in there. That's cool. She'll be focusing on that. She's also been with our film permitting. Any time that a company wants to film a video or maybe an individual, they will apply for a film permit until the handle goes. Golden Chick is a perfect example. When they shot their video, they went through our office and until the handle got closed. They had great reviews. And then Dick's Boring Goods is probably coming out as well.
So she also handles our music friendly task force. We have a bake up position. We have a business analyst position who manages databases. And also our economic trends. They also assisted Erika with incentive compliance. And so that position will still assist in those efforts. But we've changed the name.
Who was right? Gross Margin or Operating Income?
Is it a board? Here we go.
Other projects on the side. It's pretty much anybody's game. We're going into the last question. So this is the last card. Double points. And again, not related to our topic. What is this a picture of?
Development Services. They are assisting us with so many different projects. So Charlie Rosendahl, he's the Business Services Manager for Development Services. We call him our Special Projects Manager because he can turn chaos into efficient and...
Who was right? He can turn chaos into efficiency. There's tons of great stuff that he's working on with us. But we appreciate him. Things that we're working on, which I'm going to mention next, that he's just helping us accelerate the projects to get done faster.
And then Vanessa Esparza, she's our Business Services Assistant too. She's in the Development Services. She does a variety of things. So for Development Services, she serves many different departments. But she is taking a role in helping us with our board meeting. All our boards actually. Maybe in the next day or so. And we'll get those out.
Okay. So any other questions? She helps with our meetings, scheduling, catering. She does a variety of things. So we're thankful to have both of her and Charlie on our team.
So just about 1 o'clock Eastern, we'll be back in 10 minutes.
So in addition to streamlining our roles and responsibilities, we're just working on streamlining our processes.
So right now we're updating our CRM database. Right now we use HubSpot and that system is not particularly customized for economic development. And so we have identified a system that is focused on economic development that will help us provide better performance metrics to our boards and city council.
We want to be able to track whenever we receive a RFI, whatever it is, so that we can track our witnesses.
Updating our marketing materials. It's important to be competitive with other cities. Whenever we're responding to RFIs with the state, some companies may be receiving 20 slides across the state. And so we need to make sure that we are competitive with other cities.
We're also creating a site database. So this is something that we had in Corpus Christi where we could list any site, whether it was online or it may have been working with the individual landowners to market their sites.
And so what was needed about the system was we could add infrastructure layers and zoning so that anytime that we got an RFI through the state, it was quick for us to quickly identify a site to respond.
So we're working on that right now and that's what Charlie is helping us with. So this special project manager and we're hoping that next meeting he's going to be able to present what that looks like.
Recruitment strategy. So we're currently working on building a recruitment strategy. We have a few things in mind and especially I think we have a few low hanging fruit projects that we can work on.
So, in our strategic plan, we have existing strategic growth areas. And so this is what tip charge is listed in the plan. So, on the left side, you'll see supply chain, logistics, manufacturing, aviation, renewable energy, information, technology, research and development.
That's probably the same unless you have any industries that you can share. But on the right side is our strategic growth areas where Erica and tips try to talk together and they put a separate list of Max codes.
And so on the left side, I do think that we have low hanging fruit and aviation, advanced manufacturing, supply chain, logistics. So on this next page, I'll kind of go over what we plan to do to focus on recruiting some of the companies in those industries.
So, for, I know we have a few new board members and so I kind of want to go over how we currently receive leads. One of them is through state already mentioned that already. Anytime that accompanies wanting to move to Texas, typically they'll start with the state first.
Then the state will then distribute that lead to different regions across the U.S. And so then it's our turn to make sure that we're responding and being competitive.
So that's one way to get leads. We get direct calls to our office. We get referrals from our partners through the Dallas region chamber, the court chamber, the EDP James sent one the other day.
And so on the other side is what we're going to really start focusing on lead generation. That's what I call fishing going out and getting our own fish to eat.
And so we plan on attending at least five plus trade shows a year. We've already identified a few. We went to the earth conference a few weeks ago in Dallas, which was focused on sustainability, and I attended that one.
They talked about carbon sequestration and all the new green technology available, but they're being in Dallas in general. There's tons of different conferences that we can attend. And I think it's important to that. We're getting the name out there.
In September, there is a drone expo that I've been attending the past two years while working in purpose, but we do plan to attend this year with Ryan Adams at the airport utilizing databases to target companies directly.
So, this is something that the new position, the business recruitment specialist will assist with using our current databases, like jobs, and I think there's reference. There's other databases that I'm still learning that we have access to, but we want them to utilize those to research what companies are available for us to reach out to.
Whether it's in a specific max code, they can research it. Maybe a company has recently received series B funding, and so that's where the new position will come in handy. Collaborating with universities to generate new leads.
So, you and he's working on the engine grant to build a corridor corridor from here to talk to a nation. So, there's tons of opportunity to work with them. But in addition, I think it's working on virtualizing some of the research products that the professors have been working on for years.
And so there's an opportunity on our end to maybe develop develop incentive programming to help them in that effort and also maybe recruitment companies. And as Jamie said earlier, that if there's a company that may want to move to the receive help from the university, there's opportunity there because they've offered it.
So, there's definitely tons of opportunity to partner and as well. And then, of course, networking in general, like I said earlier, there's tons of conferences. It's just time to get the name out there.
Hey, one thing that we've talked about this and Peter built that came up before is if you're looking to target green industries, I think it would be good. A leverage DMA, but be either the city or the dent and start really the county didn't really start thinking about offering some like environmental leadership awards.
Yeah, because like companies look to put those types of things in their annual like reports.
So as you start growing that and you can say, Hey, we've got this percentage of our businesses are green certified or whatever the heck you want to call it.
Right, or, you know, these guys clean air these guys are zero waste the landfill these like that kind of portfolio will start attracting other businesses that kind of think that way.
I like that you know, especially with the IRA tax credit there's tons of new startup companies are taking advantage of it. And so there's opportunity. Thank you for sharing that.
Okay, so right now we're exploring a few programs. Um, we're exploring a qualified types program. So this is a common economic development strategy where we work with plan owners to certify their sites where they're shovel ready.
So that includes completing phase one environmental reports where they're checking for maybe pipelines, gas wells, soil samples, utility lines, so that whenever we're competing with other cities and sites, we can say it shovel ready.
So, most likely those companies don't want to choose our site because it's where you go. And so Charlie is again, helping us with that effort partner with therefore to develop economic development strategy.
We've met with Ryan a few times and we've met with Dr. Terry Poland as well. And so there's a lot of good opportunities there and we look forward to the aviation form tomorrow to learn more.
We're partnering with the chamber for workforce development programming. As Jamie mentioned earlier, we met with Tetra pack and they mentioned that they could use some assistant with workforce. And so there's a lot of opportunity to develop full programming for that, which I'm excited about.
And then we're evaluating an incentive study. Again, we need to be competitive with other cities. Are our incentives currently competitive? Can we do better? Are there other options? And so as soon as I write that RFI, then we'll be on the road to getting bids from different firms that complete incentive studies.
What's your gut on that? My gut? Yeah. In terms of just my intuition. Yeah. Okay. On that last bullet point, where do you think we rank in the incentive?
Well, I can say she hasn't. She's only been here seven weeks. I think we do need to do a look at are we being competitive because we don't have some of those tools that other communities have. We don't have the half cent sales tax as cash options to incentivize. So are we being creative? Are we utilizing the best? And are there more tools out there that maybe we haven't leveraged?
We've talked about in the past, other communities have sometimes offset with the development fees. We've never explored that. We've never necessarily used where we purchase the land and use it as an incentive to get what we want. So we need to look at how else can we be creative other than our standard rebates?
What's the timeframe it usually takes for them to get a study together? I'm sure maybe it's at least two months. It depends on what we want them to examine. I reached out to Ernest and Young and they have actual national incentive study. So I can share that with you if you're interested, but we just want them to examine locally.
Two months I think is great. I didn't know if it was going to be six months to a year before we get some information back, but obviously the sooner the better.
Sure. If you have any additional thoughts on that, I'll be comparing them. So since Kristen is not here, I'm providing her report for downtown. So I want you to brace yourself because there's a lot of great stuff coming out of downtown pretty quickly.
So the feedback finale for the downtown master plan is tomorrow at 530 at the Ditton Arts Council. MEND, the consultant on the master plan, has put together tons of different items and catalytic proposal projects for downtown and so this is an opportunity for residents to come out and provide their list of priorities moving forward for the plan.
It should be completed pretty quickly and it'll be presented to council in June. So mark the day. Make sure to go up tomorrow. I think Kristen also sent out an email to everybody to attend and then the imagine the possibilities for this is something that Chris has been working really hard on since I arrived.
This is an opportunity to invite developers across the state to come out to downtown and evaluate the downtown redevelopment opportunities. And so they can learn about the TERS grants. They can learn about the downtown historic preservation grants as well.
The camera man was back there and this starts at 11 a.m. on May 17th and then that's where Cameron and Paris Rutherford with MEND will be able to provide more details on the downtown master plan.
And just a side note, Paris Rutherford who was working on the downtown master plan worked in Arlington as well. So I had just arrived in Arlington and if anyone has visited downtown Arlington lately, it's completely transformed over the past five years.
So he was very instrumental in changing that. And so he's working on our downtown master plan, which we're excited about. And then from 12 to 3, there's a self-guided tour downtown and at 6 p.m. there's a private dinner for just developers.
And so it's important to note that we were one of seven cities chosen by the Texas Historic Commission to host this tour. So we're excited. There's a lot of great stuff going on. Any questions?
Unmask and talk. Either way. All right. Thank you. Thank you for your kind attention. Very well done. For seven weeks in.
Just keep it in here.
Christine, you have to wrap up. Yeah, very last item for us. We're trying to give you a look into the future of what these agendas will look like and this is the opportunity for if there are topics that you want to discuss in a future meeting,
we can get them plugged in, start doing the research to bring them back. The Loop 288 project that you just heard an update on is an example of this. You wanted to hear about it.
So recapping May, that's what happened today. Looking in June, we'll be bringing forward an economic development incident presentation for you. That's an expansion opportunity.
We will get the update from Jamie. He's working on his recording. He and Brittany came online at the same time, so they're both doing amazing things and exciting during those updates.
Thinking with Brittany, Main Street and future agenda items will continue to stay on there. So mostly, I think another one I want to point out is in July, there's discussion from Razor Ranch. They want to discuss implementing a public improvement district in their area.
It has some initial conversations with city staff and other community leaders to talk about what should that look like. They are looking to provide a presentation to council in July, so we're wanting to get this to EDP before it goes to the council session too.
So we kind of communicated to them ahead of that what goals we'll be looking for to see. There was a discussion a couple years ago, but the PID did not come to fruition.
At that time in July also, Cameron will probably do a more in-depth presentation on that downtown master plan where she identifies and presents here some of the catalyst projects that could go in downtown and the hope on all of those is to spur additional development in this downtown.
So that will be exciting to come to. And then your chair of your subcommittee for the downtown economic development committee, Jerry Fikes, will give an update. They've been doing a ton of work on their committee.
They had some really great updates on the capital projects going on downtown, so he'll provide an update on what they've been digging into for that committee.
Other than that, it's just our general items that we're plugging in on quarterly reports from STOKE, on the partnership, and if there's any other future items you're interested in, please let us know now. We can work through that with your chair.
Please let us know now. Yeah, you can let us know now and then or you can email us if you don't want to do it.
The plan is, it's always wise to have a really crisp strategy, and it's very simple and then it drives your slashing tactics and your calendar along.
So, the economic development strategy that we've adopted is how much we recite all the time about connected, creative, sustainable, and competitive.
Competitive dent in part and other than time. Pre-folk is largely centered around the idea that beyond too aspirational you have more Class A office space.
Now the world has changed. Maybe, but that's the discussion point. Should that, shouldn't we re-examine?
Has there been enough of a significant change in the reality of the real estate market? Should we re-examine what that competitive chunk of the strategy ought to be?
And if so, you know, what are the defining attributes of a competitive scenario? Probably from a real estate asset's point of view.
What should we be looking to develop in this end hour or even level up to our competitors if it's not Class A office space?
Okay, well that was from Zion's Direct, which more from the viewpoint of the bond buyer, but I thought it'd give a good synopsis of how the rating agencies are and how they work for the most part.
For the three rating agencies, Mitch, Moody's, and S&P, they're organizations that you pay as a power and they give a rating for the bond boardings. In effect, they don't really work for you. They work more for the bond holders, even though they pay more to give you a rating.
And the other thing about the rating agencies is that they each have a playbook. So it's kind of like, you know, in football, your favorite team, this is the Monday before the game where you play your hated rival, and all of a sudden the hated rival's playbook shows up in your coach's office and has all the players for next week.
Well, of course, I would send it back after a couple of pages there. In any case, it's like you have the playbook of what they're going to do, playing against you. Well, the rating agencies are the same thing.
Those links there will take you to each one of the rating agencies and it will tell you that the playbook that they have and what they're going to be evaluating as an organization in effect on your ratings.
So in other words, if you're lacking in some of the areas, and we're going to talk about those in a moment here, be it cash reserves, be it the ability to raise rates and things like that, if those are areas that you have to work on, you can work on them and then go get a rating and get a better rating.
So it's kind of an odd system, but it's been around for many, many decades.
For example, though, Standard & Poor's says at their website, here's 10 ways to improve your rating. And you'll notice a lot of these have to do with cash flow, cash reserves, rate increase, ability, long-range planning. They're all the same thing in each agency, even though they have a different, slightly different rating scale, it's all the same stuff. If you please one, chances are you're going to please all three.
So S&T says here's 10 ways to improve your rating, have rate stabilization reserves, establish regular economic and revenue reviews to identify potential budget problems early, prioritize spending, have a formalized capital improvement plan, have a debt affordability model.
We have our develop a free-as-you-go financing strategy for your long-term and your long-range forecast of capital improvements. Also developing a long-range financial forecast for future spending and financing needs, rate increases, things like that.
Developing plans for funding long-term obligations such as post-employment benefits, other things like that, establishing and maintaining effective management systems, having a risk management program, enterprise risk management, mitigation plans in place, things like that.
I think when we met in January, there were some questions and we wanted to feedback to and ask questions, Mayor. The Logistics General, I think it was mostly centered around that. Were they planning to get back to us on any of those?
Yeah, the deposit requirement to study, I did see that added into the budget, so I'll put that in the Q on TBD, but in the several months out. Thank you.
I mean, our revenue requirement for the additional debt service and to maintain our earnings and all of that, that would be a REIT strategy. So long-term, not REITing rates when you look at your financial results for last year and saying, you know...
Okay, any other conversation on board? I did hear a couple of comments about looking forward to the July agenda and some video questions that were used with mics.
That's just a few to assure them. I don't get an audience very long, so I'm probably going to keep it as long as I can.
Mayor, it seemed that there is an extra discussion. We'll go ahead and adjourn at 1218. Thank you all for your attendance today.